PUNJAB NATIONAL BANK vs M/s. K.P. International on 19 May 2026

J U D G M E N T

This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the

Act’) to recover aggregate sum of ₹35,81,248.68/- (Rupees Thirty Five Lakhs Eighty One Thousand Two Hundred Forty Eight and paisa Sixty Eight Only) with future interest @ 14.10% per annum on Cash Credit and 14.60% per annum on Term Loan plus 2% penal interest on a simple basis with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 13.10.2015 till payment/realization and to enforce the hypothecated securities.

The details of the claim amount are as under: - S r N o Nat ure of Facil ity O/s . amo unt I nteres t I nteres t Tota l Amo unt

Cas h Credit Accou nt No .436 4008 7 000031 2 ₹ 16,31 ,763 .1 3/- @ 14 .10 % R OI up to 08.1 0.2 015₹ 1,87 ,697 .04 1 /- @ 2% (S imp le) R OI up to 23.0 9.2 015₹ 13,60 6.9 0/- ₹ 18,33 ,06 7.0 7/ -

Term L oan Accou nt No .436 400I B0 000003 5 ₹ 15,24 ,999 .1 3/- @ 14 .60 % R OI up to 08.1 0.2 015 ₹ 2,06, 229 .28 5/- @ 2% (S imp le) R OI up to 08.1 0.2 015₹ 16,95 3.2 0/- ₹ 17,48 ,18 1.6 1/ -

G rand T otal Amoun t - - - ₹ 35,81 ,24 8.6 8/ -

It is undisputed fact in the matter that the Defendant was duly served with the summons vide order-sheet dated 31.05.2017. Despite service, the defendant did not enter its appearance and therefore, it was set ex-parte on 31.07.2017.

Defendant no.1 is the borrower who approached the Applicant Bank seeking financial assistance by way of Cash Credit and Term Loan Facilities. Pursuant to the loan application vide Application for Small and Medium Enterprises for Credit facilities over ₹50,00,000/- (Rupees Fifty Lakhs Only) and upto ₹2,00,00,000/- (Rupees Two Crores Only) dated 30.04.2012 made by defendant, the Applicant sanctioned the loan vide Sanction Letter dated 30.05.2012 in sum of ₹81,00,000 (Rupees Eighty-One Lakhs Only) wherein a sum of ₹60,00,000/- (Rupees Sixty Lakhs Only) was sanctioned under Cash Credit limit and a sum of 21,00,000/- (Rupees Twenty- One Lakhs Only) was sanctioned under Term Loan Facility payable in 84 EMIs of ₹25,000/- (Rupees Twenty-Five Thousand Only) with interest at the rate of 14.50 % per annum per the performance with monthly rests. Thereafter, as of the borrower the Applicant bank reduced the said Working Capital Facility from ₹60,00,000/- (Rupees Sixty Lakhs Only) to ₹15,50,000/- (Rupees Fifteen Lakhs Fifty Thousand Only) vide Letter dated 20.01.2014.

The details of the Sanction amount are as under: - S r No Da te o f S a n c ti on Na tu re of F a c i li ti e s A m ou n t RO I S e c u ri ty

3 0 . 0 5 . 20 1 2 Ca s h Cr e d it ₹ 6 0 , 00 , 0 0 0 / - - Hy p o th e c a te d G o o d s s u c h a s v a r io u s r a w ma te r ia ls v iz ma n u f a c tu r in g ma te r ia l, r a w ma te r ia ls in c lu d in g e x c i s a b le r a w ma te r ia ls , s to c k s in p r o c e s s , s e mi - f in is h e d g o o d s , f in is h e d g o o d s (in c lu d in g b o u g h t o u t f in is h e d g o o d s ) a n d Bo o k d e b ts , o u ts ta n d in g d e c r e e s , mo n e y r e c e iv a b l e s , G o v e r n me n t s u b s id ie s , c la i ms , b i ll c o n tr a c ts in v e s t me n ts , e tc .

T e m L o a n ₹ 2 1 , 00 , 0 0 0 / - 1 4 . 5 0 % p e r a n n u m p e r th e p e r f o r ma n c e w ith mo n th ly r e s ts

T ota l A m ou n t - ₹ 8 1 ,0 0 ,0 0 0 / - - -

2 0 .0 1 .2 0 1 4 Ca s h Cr e d it ₹ 1 5 , 50 , 0 0 0 / - - Hy p o th e c a te d G o o d s s u c h a s v a r io u s r a w ma te r ia ls v iz ma n u f a c tu r in g ma te r ia l, r a w ma te r ia ls in c lu d in g e x c i s a b le r a w ma te r ia ls , s to c k s in p r o c e s s , s e mi - f in is h e d g o o d s , f in is h e d g o o d s (in c lu d in g b o u g h t o u t f in is h e d g o o d s ) a n d Bo o k d e b ts , o u ts ta n d in g d e c r e e s , mo n e y r e c e iv a b l e s , G o v e r n me n t s u b s id ie s , c la i ms , b i ll c o n tr a c ts in v e s t me n ts , e tc .

T e m L o a n ₹ 2 1 , 00 , 0 0 0 / - 1 4 . 5 0 % p e r a n n u m p e r th e p e r f o r ma n c e w ith mo n th ly r e s ts

T ota l A m ou n t - ₹ 3 6 ,5 0 ,0 0 0 / - - -

On the dates given below, defendant signed and executed the loan and security documents as set out in paragraph nos. V (2) to (6) to of the Transferred Original Application. Defendant hypothecated Goods such as various raw materials viz manufacturing material, raw materials including excisable raw materials, stocks in process, semi-finished goods, finished goods (including bought out finished goods) and Book debts, outstanding decrees, money receivables, Government subsidies, claims, bill contracts investments, etc. to secure the loan.

The details of the documents executed by the Defendant are as under:- (A) Sanction Letter dated 30.05.2012; (B) Term Loan Agreement dated 10.07.2012 executed by executed by the Defendant in favour of Applicant; (C) Supplementary Agreement dated 09.07.2012 executed by Defendant in favour of Applicant; (D) Deed of Hypothecation of Goods and Book Debts dated 09.07.2012 executed by Defendant in favour of Applicant; (E) Deed of Hypothecation of Assets dated 09.07.2012 to secure term loan executed by Defendant in favour of Applicant; (F) Letter dated 20.01.2014 renewed the aforesaid facility by reducing the Cash Credit Limit ₹15.50 Lakhs; (G) Letter dated 21.01.2014 acknowledged the reduction in working capital Limit.

After availing the loan, defendant did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the borrower was declared as Non-Performing Assets (N.P.A.) on 15.04.2015 as per RBI Guidelines. Despite the defendant no.1 being declared NPA, defendant no.1 failed and neglected to pay.

As on 13.10.2015, there was owing, due and payable by defendant to the applicant the aggregate sum of ₹35,81,248.68/- (Rupees Thirty- Five Lakhs Eighty-One Thousand Two Hundred Forty-Eight and paisa Sixty-Eight Only) with future interest @ 14.10% per annum on Cash Credit and 14.60% per annum on Term Loan plus 2% penal interest on a simple basis with monthly rest thereon. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

Since, defendant failed and neglected to make the payment, the applicant was left with no other alternate but to file the Transferred Original

Application which was presented on 13.10.2015.

The applicant has filed affidavit (exhibit-9) in lieu of examination in chief of Mr A. Ramachandran, Chief Manager and list of documents (exhibit-4) thereby adducing in evidence the documents at Exhibit-A to Exhibit-L, which are admitted in evidence, read, recorded and exhibited. The Applicant has not provided any original documents to this Tribunal.

Accordingly, in the Transferred Original Application was filed for the recovery of ₹35,81,248.68/- (Rupees Thirty-Five Lakhs Eighty-One Thousand Two Hundred Forty-Eight and paisa Sixty-Eight Only) with future interest @ 14.10% per annum on Cash Credit and 14.60% per annum on Term Loan plus 2% penal interest on a simple basis with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 13.10.2015 till payment/realisation.

The Tribunal has scrutinised and examined the allegations contained in the Transferred Original Application and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

Upon careful scrutiny and the examination of the Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

In view of the observations made hereinabove, Original Application filed by the applicant deserves to be allowed.

Hence, the following order:

ORDER

(A) The Transferred Original Application No.1181 of 2016 in Original Application No.781 of 2016 is allowed with costs. (B) Defendant is ordered and directed to pay to the applicant, the aggregate sum of ₹35,81,248.68/- (Rupees Thirty-Five Lakhs Eighty-One Thousand Two Hundred Forty-Eight and paisa Sixty-Eight Only) with future simple interest @ 12% per annum on Cash Credit and 12% per annum on Term Loan thereon from the date of presentation of the Transferred Original Application i.e. 13.10.2015 till payment/realization after adjusting the recoveries made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrower after filing of this T.O.A. No.1181 of 2016. (C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Goods such as various raw materials viz manufacturing material, raw materials including excisable raw materials, stocks in process, semi- finished goods, finished goods (including bought out finished goods) and Book debts, outstanding decrees, money receivables, Government subsidies, claims, bill contracts investments, etc. (D) Defendant is entitled to redeem the hypothecated property as per law failing which the applicant has right to proceed to sell the hypothecated property and recover dues as per law. (E) Issue Recovery Certificate. (F) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

(Harish Kumar Kaushik) Presiding Officer, DRT-2, Mumbai