DENA BANK vs M S SARVESH INDUSTRIES on 27 August 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 an aggregate sum of ₹28,99,000/- (Rupees Twenty-Eight Lakhs Ninety-Nine Thousand Only) wherein the sum of ₹7,59,000/- (Rupees Seven Lakhs Fifty-Nine Thousand Only) under Term Loan Account No.079957022755 and the sum of ₹21,40,000/- (Rupees Twenty-One Lakhs Forty Thousand Only) Cash Credit Hypothecation Account No.079913023831 both together with future interest @ 13% per annum with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 29.04.2015 till payment/realization and to enforce the hypothecated securities.

The details of the claim amount are as under: - S r N o N a t ur e of F a c i li t y O/s . i nc lus i ve of i nt e r e s t 13 % p.a . a s o n 3 1. 12 .2 0 14

T e rm Lo a n A c c o u n t N o . 0 7 9 9 5 7 02 2 7 5 5 ₹ 7 , 5 9 , 0 0 0 / -

C a s h C re d i t Hyp o the c a ti on A c c o u n t N o . 0 7 99 1 3 0 2 38 3 1 ₹ 2 1 , 4 0 , 0 0 0 / -

Tot a l A m ou nt ₹ 2 8 ,9 9 ,0 00 / -

It is undisputed fact in the matter that the Defendant no.1 was duly served with the summons vide order-sheet dated 11.03.2021. Despite service, the defendant did not enter its appearance and therefore, it was set ex-parte on 09.06.2026.

Defendant no.1, is the principal borrower who approached the Applicant Bank and sought financial assistance by way of Term Loan and Cash Credit (Hypothecation) Facility. Pursuant to the loan application made by defendant, the Applicant sanctioned the Cash Credit (Hypothecation of Stocks and Book Debts) Loan and Term Loan vide Sanction Letter dated 24.03.20152 in sum of ₹52,50,000/- (Rupees Fifty-Two Lakhs Fifty Thousand Only) payable in equitable EMIs with interest at the rate of 12.35% per annum. The said loan is covered under CGTMSE scheme.

The details of the Sanction amount are as under: - D a te of S a nct i on N at ur e of F ac il it y L i mi t I nte re st S e cu r ity 24 .03 .2 012 C as h C re d i t H ypo the ca tio n ( S tock s- cum Book De b ts ) ₹1 0,00,000/ - B ase R a te + 2 .15 %- 0.5 0% ( Co nce s sio n fo r CGTM S E i .e ., 1 2 .3 5 % P r im ary : H ypo the ca tio n o f S tock -i n - T rade suc h as Te nde r Co co nu t, Co i r, Cocope a t, Co i r P i th , B ri que tte s an d H ypo the ca tio n o f Boo k De b ts . Te rm Loa n a g ai n s t M ac h ine ry i .e . , Ho ne y co mb B riq ue tti n g M ac h ine , S h re dde r G ri nde r, ful l y Au to ma ti c H yd ro l ic p re e ₹42 ,5 0,000/- B ase R a te +2 .15 %+ 0 .5 0%- 0.5 0% ( Co nce s sio n fo r CGTM S E) i .e ., 1 2 .8 5 % P r im ary : P la n t & M ac h i ne ry suc h a s Ho ne y Comb B riq ue tti n g M ac h ine , S h re dde r G ri nde r, fu l ly au to ma ti c h y d ro li c p re e to be pu rc hase d from p rop ose d te rm loa n and a ll e x is ti n g a nd Fu tu re m ac h i ne ry . T ota l A m ou nt - ₹ 5 2, 5 0, 0 00 / - - -

On the dates given below, defendant signed and executed the loan and security documents as set out in paragraph nos.5 (5.3) to (5.11) of the Original Application. Defendants hypothecated goods which are in nature of raw material semifinished and finished goods viz Dry Coconut waste, Cocopeat, Briquettes & Tender Coconut Waste, Book Debts and Receivables and Plant & Machinery such as Honey Comb Briquetting Machine, Shredder Grinder, Fully automatic hydrolic pree to secure the loan.

The details of the documents executed by the Defendant are as under: - (a) Sanction Letter for ₹10,00,000/- (Cash Credit Hypothecation) + ₹42,50,000/-

(Term Loan) dated 24.03.2012;

(b) Demand Promissory Note for ₹10,00,000/- (Cash Credit Hypothecation) dated 24.03.2012;

(c) Demand Promissory Note for ₹42,50,000/- (Term Loan) dated 24.03.2012;

(d) Hypothecation Agreement for ₹52,50,000/- dated 24.03.2012;

(e) Letter of Guarantee dated 24.03.2012; (f) Letter of General Lien and Set Off for borrowing arrangements from the Borrower dated 24.03.2012; (g) Letter of Continuity dated 24.03.2012; (h) Notarized Power of Attorney dated 24.03.2012;

(i) General Undertaking dated 24.03.2012; (j) Acknowledgement of Debt and Security dated 31.05.2014; (k) Valuation Report dated 24.02.2015.

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 31.08.2014 as per RBI Guidelines. Therefore, on 27.04.2015, the applicant, through its advocate, called upon defendant to liquidate the outstanding in the sum of ₹28,99,000/- (Rupees Twenty-Eight Lakhs Ninety-Nine Thousand Only) is due from receipt of the said notice. Despite notice, defendant no.1 failed and neglected to pay.

As on 31.12.2014, there was owing, due and payable by defendant to the applicant the aggregate sum of ₹28,99,000/- (Rupees Twenty- Eight Lakhs Ninety-Nine Thousand Only) wherein the sum of ₹7,59,000/- (Rupees Seven Lakhs Fifty-Nine Thousand Only) under Term Loan Account No.079957022755 and the sum of ₹21,40,000/- (Rupees Twenty-One Lakhs Forty Thousand Only) Cash Credit Hypothecation Account No.079913023831 both together with future interest @ 13% 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, 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 29.04.2015.

The applicant has filed affidavit (exhibit-21) in lieu of examination in chief of Mr. Jayaraman S, and list of documents (exhibit-22) thereby adducing in evidence the documents at AW-1 to AW-13, which are admitted in evidence, read, recorded and exhibited.

Accordingly, in the Transferred Original Application was filed for the recovery of an aggregate sum of ₹28,99,000/- (Rupees Twenty- Eight Lakhs Ninety-Nine Thousand Only) wherein the sum of ₹7,59,000/- (Rupees Seven Lakhs Fifty-Nine Thousand Only) under Term Loan Account No.079957022755 and the sum of ₹21,40,000/- (Rupees Twenty-One Lakhs Forty Thousand Only) Cash Credit Hypothecation Account No.079913023831 both together with future interest @ 13% per annum with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 29.04.2015 till payment/realisation.

The Tribunal has scrutinised and examined the averments 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.1817 of 2016 is allowed with costs. (B) Defendant no.1 is ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹28,99,000/- (Rupees Twenty- Eight Lakhs Ninety-Nine Thousand Only) wherein the sum of ₹7,59,000/- (Rupees Seven Lakhs Fifty-Nine Thousand Only) under Term Loan Account No.079957022755 and the sum of ₹21,40,000/- (Rupees Twenty-One Lakhs Forty Thousand Only) Cash Credit Hypothecation Account No.079913023831 both together with future simple interest @ 12% per annum thereon from the date of presentation of the Original Application i.e. 29.04.2015 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 Transferred Original Application No.1817 of 2016. (C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Goods which are in nature of raw material semifinished and finished goods viz Dry Coconut waste, Cocopeat, Briquettes & Tender Coconut

Waste, Book Debts and Receivables, Plant & Machinery such as Honey Comb Briquetting Machine, Shredder Grinder, Fully automatic hydrolic pree. (D) Defendant no.1 is entitled to redeem the hypothecated properties as per law failing which the applicant has right to proceed to sell the hypothecated properties and recover dues as per law. (E) The Applicant is also hereby directed to submit the details of claim amount received from the Central Government since the facility is granted under CGTMSE Scheme. (F) Issue Recovery Certificate. (G) 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