DBS Bank India Ltd., vs M/s Star Roofing Sheets on 17 December 2025

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’ seeking issuance of a Recovery Certificate for recovery of a sum of Rs.28,64,414.98p with further interest at the rate of 13.20% per annum with monthly rests from the date of the application till the date of realisation along with costs of the application.

2. The subject matter of the case is the OCC Loan facility availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the 1st defendant represented by its Partners defendants 2 and 3 approached the applicant bank in the year 2015 for grant of OCC Limit of Rs.35,00,000/- towards working capital requirements vide Loan application dated 07.04.2015 and the applicant considering the said request vide sanction dated 06.06.2015 sanctioned OCC Limit of Rs.35,00,000/-. It is stated that at the request of the defendants the limit was periodically renewed and lastly in the year 2019 and the 1st defendant represented by defendants 2 and 3 executed various loan and security documents on 06.08.2019.

4. It is also the case of the applicant that the said limit was finally renewed and reduced to Rs.25,00,000/- in the year 2020 vide sanction dated

10.02.2020 and the defendants executed the loan documents on 18.02.2020. It is stated that the said facility was covered under CGTMSE Scheme.

5. It is also the case of the applicant that the defendants were highly irregular in repayment and failed and neglected to regularize the loan account despite repeated demand and hence the applicant classified the loan account as NPA on 29.03.2021. As the defendants did not come forward to the outstanding dues, the present OA is filed for recovery of its dues.

6. Summons was taken out to the defendants were served and was represented by Ld. Counsel. As the defendants did not choose to file their reply statement despite granting sufficient time the defendants were set ex-parte on 9.2.2023. Applicant Bank filed Proof Affidavit along with 12documents, which were marked as Ex. A-1 to A-12 on 10.10.2023. The Ld. Counsel for Applicant Bank made his submissions on 17.11.2025and thereafter the matter stood till this date for passing final orders.

7. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

8. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-12 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and rebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

10. In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

11. In view of the fact that the loan facility availed by the defendants is a OCC Loan under CGTMSE Scheme and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates.

12. In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: - (a) TA No.154 of 2022 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.28,64,414.98p with further interest @10% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendant.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants 2 and 3 are personally liable for all such amounts due as ordered above.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

13. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 17th day of December, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 07.04.2015 Loan Application Form A-1

2. 06.06.2015 Credit Sanction Intimation A-2

3. 06.08.2019 Demand Promissory Note A-3

4. 06.08.2019 Letter of hypothecation (for securing goods / book debts / existing machineries) A-4

5. 06.08.2019 Agreement of hypothecation of book debts A-5

6. 10.02.2020 Credit Sanction Intimation A-6

7. 18.02.2020 Demand Promissory Note A-7

8. 18.02.2020 Letter of continuity A-8

9. 18.02.2020 Letter of concurrence A-9

10. 18.02.2020 Letter of undertaking A-10

11. 18.02.2020 Addendum to loan account A-11

12. Statement of Accounts along with certificates under Bankers’ Book Evidence Act A-12

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DESCRIPTION OF PROPERTY

NIL

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