STATE BANK OF INDIA vs RAJESH SHAH on 21 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 1993 Act’) to recover ₹14,57,019.75/- (Rupees Fourteen Lakhs Fifty-Seven Thousand Nineteen and paisa Seventy-Five Only) with all costs, charges and interest pendente lite and future interest @ 9% per annum with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 01.04.2015 till payment/realization and to enforce the mortgaged security.

The details of the claim amount are as under: - Sr No Nature of Facility O/s. as on 07.02 .2011 Interest f rom 01.01 .2006 u pto 30.03 .2015 Total A m ou nt

Housing Finan ce (Ter m L oan) ₹6,22, 440. 30/ - ₹8,34, 579. 45/ - ₹14,57,019.75/-

It is undisputed fact in the matter that the Defendant nos.1 and 2 were duly served with the summons vide order-sheet dated 24.05.2018. Despite service, the defendants did not enter their appearance and therefore, they were set ex-parte on 20.11.2025.

Defendant no.1 is the borrower who approached the Applicant Bank seeking financial assistance by way of Housing Finance (Term Loan) Facility wherein Defendant No.2 acted as the Guarantor of the said loan. Pursuant to the loan application vide State of Saurashtra Housing Loan Application Form for Individuals dated 31.10.2003 made by defendants, the Applicant sanctioned the loan vide Sanction Letter i.e. Arrangement Letter- Housing Finance dated 13.11.2003 in sum of ₹6,75,000/- (Rupees Six Lakhs Seventy-Five Thousand Only) payable in 120 EMIs of ₹8,190/- (Rupees Eight Thousand One Hundred Ninety Only) each commencing from 2 month after completion of construction of the flat or after 18 months from disbursement of first instalment with interest, cost, expenses etc is fully paid-up alongwith interest at the rate of 3.25% per annum below Prime Lending Rate/ Long-term Prime Lending Rate which is equivalent to 11.25% per annum (the current effective rate being 8% per annum) with monthly rests.

The details of the Sanction amount are as under: - Sr No Date of Sanction Amount ROI Secu rity

13.11. 2003 ₹6,75, 000/- @ 3.25% per ann um bel ow Prime L en ding Rate/ L ong-t erm Prime L en ding Rate whi ch is equival ent to @

1. Flat Nos.1 and 2, 1st Floor, Buil di ng “MAUL I”, S urvey no. 89, New S urvey n o. 168/11- A, Hi ssa n o.11( P), near Col our Ch emical Fact ory, Vil lag e

11.25% per ann um (the current effective rate bei ng 8% per ann um) with month ly rest s. Bal kum, Tal uka & Distri ct-Th ane val ued at ₹12, 00, 000/ - bel ongi ng to Shri Rajesh s/ o Ar un Kumar Shah in favour of the Ban k.

2. Thir d Party Guarantee of Shri Shekhar M. Shetty.

Total Amount ₹6,75,0 00/- - -

On the dates given below, defendants signed and executed the loan and security documents as set out in paragraph nos.5.3 to 5.9 of the Transferred Original Application. Defendants mortgaged Flat Nos.1 and 2, 1st Floor, Building “MAULI”, Survey no.89, New Survey no.168/11-A, Hissa no.11(P), near Colour Chemical Factory, Village Balkum, Taluka & District-Thane valued at ₹12,00,000/- belonging to Shri Rajesh s/o Arun Kumar Shah in favour of the Bank to secure the loan.

The details of the documents executed by the Defendants are as under: - (a) Loan Application dated 31.10.2003;

(b) Arrangement letter dated 13.11.2003 for an amount of ₹6,75,000/- (Rupees Six Lakhs Seventy-Five Thousand Only);

(c) Memorandum of Term Loan Agreement for housing loan granted to public dated 14.11.2003;

(d) Guarantee Agreement dated 14.11.2003;

(e) Agreement for Sale dated 23.05.2006;

(f) Registration receipt bearing no.5923 dated 12.09.2003;

(g) No Objection Letter dated 03.11.2003;

(h) Letter dated 14.11.2003;

(i) Payment Receipt issued by M/s. Om Sai Construction Co. in the name of Defendant no.1 dated 03.11.2003, 10.11.2003 and 19.11.2003;

(j) Letter dated 07.05.2004;

(k) Memorandum of Entry dated 15.11.2003;

(l) Revival Letters dated 30.10.2006 and 30.01.2009.

After availing the loan, defendants 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 borrowers were declared as N.P.A on 31.12.2005 as per RBI Guidelines. Therefore, on 20.03.2015, the applicant, through its advocate, called upon defendants to liquidate the outstanding in the sum of ₹14,47,029.30/- (Rupees Fourteen Lakhs Forty-Seven Thousand Twenty-Nine and paise Thirty Only) with interest is due and payable as on 28.02.2015 alongwith further interest @ 9% p.a. with monthly rest from 01.03.2015 and legal notice charges of ₹7,500/- (Rupees seven thousand five hundred only) aggregating a sum of ₹14,54,529.30 (Rupees Fourteen Lakhs Fifty-Four Thousand Five Hundred Twenty-Nine and paise Thirty Only) is due and payable alongwith further interest @ 9% as mentioned hereinabove by you to our clients, forthwith, or under any circumstances immediately from the receipt of the said notice. Despite notice, defendant nos. 1 and 2 failed and neglected to pay.

As on 30.03.2015, there was owing, due and payable by defendants to the applicant the aggregate sum of ₹14,57,019.75/- (Rupees Fourteen Lakhs Fifty-Seven Thousand Nineteen and paisa Seventy-Five Only) with all costs, charges and interest pendente lite and future interest @ 9% per annum 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, defendants 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 01.04.2015.

The applicant has filed affidavit (exhibit-16) in lieu of examination in chief of Mr Sanjay A. Hanphode, Branch Manager of the Applicants and list of documents (exhibit-17) thereby adducing in evidence the documents at AW-1 to AW-15, which are admitted in evidence, read, recorded and exhibited.

Accordingly, in the Transferred Original Application was filed for the recovery of ₹14,57,019.75/- (Rupees Fourteen Lakhs Fifty- Seven Thousand Nineteen and paisa Seventy-Five Only) with all costs, charges and interest pendente lite and future interest @ 9% per annum with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 01.04.2015 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 Transferred 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, Transferred Original Application filed by the applicant deserves to be allowed.

Hence, the following order:

ORDER

(A) The Transferred Original Application No.214 of 2017 in Original Application No.542 of 2015 is allowed with costs. (B) Defendant nos. 1 and 2 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹14,57,019.75/- (Rupees Fourteen Lakhs Fifty-Seven Thousand Nineteen and paisa Seventy-Five Only) with all costs, charges and interest pendente lite and future simple interest @ 9% per annum thereon from the date of presentation of the Transferred Original Application i.e. 01.04.2015 till payment/realization after adjusting the recoveries made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrowers after filing of this T.O.A. No.214 of 2017. (C) The aforesaid adjudicated amount is secured by the valid and subsisting mortgaged immovable properties, that is, Flat Nos.1 and 2, 1st Floor, Building “MAULI”, Survey no.89, New Survey no.168/11-A, Hissa no.11(P), near Colour Chemical Factory, Village Balkum, Taluka & District-Thane valued at ₹12,00,000/- belonging to Shri Rajesh s/o Arun Kumar Shah in favour of the Bank. (D) Defendant nos. 1 and 2 are entitled to redeem the mortgaged properties as per law failing which the applicant has right to proceed to sell the mortgaged properties 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