UNION BANK OF INDIA vs NOVA MEX I PVT LTD AND ORS on 24 February 2026

FINAL ORDER

1. This application filed u/s 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 originally filed before the Debts Recovery Tribunal-I, and got numbered as OA No. 55/2017 stood transferred to this Tribunal and got renumbered as TA No. 241/2017. The above Transfer Application is filed by the applicant bank seeking issuance of the recovery certificate for Rs. 6,31,50,140/- (Rupees Six Crore Thirty One Lakh Fifty Thousand One Hundred Forty Only) which the applicant claims to be due in respect of various credit facilities availed by the 1st defendant company.

2. It is the case of the applicant that the first defendant M/s. Joyfill India Pvt Ltd., now known as M/s. Novamexx India Pvt Ltd., represented by the defendants No. 2 & 3 had applied for a term loan of Rs. 2,63,00,000/- (Rupees Two Crore Sixty Three lakh Only) which was dispersed on execution of the documents in the term loan account No. TLS/01/090003. It is also contended that the said facility was secured by mortgage which was created executing memorandum of deposit of title deeds of ‘A’ & ‘B’ schedule- immovable property and hypothecation of schedule ‘C’ movables.

3. The applicant is contending that the first defendant represented by 2nd defendant availed another term loan of Rs. 1,25,00,000/- (Rupees One Crore Twenty Five Lakhs Only) on the security of mortgage of schedule ‘A’ & ‘B’ property and hypothecation of schedule ‘C’ movables.

4. It is also contended by the applicant that the 1st defendant represented by 2nd defendant availed Foreign Documentary Bills Negotiation (FDBN) loan of Rs. 1,00,00,000/- (Rupees One Crore Only) on 21.07.2015, which also was dispersed on execution of loan documents; apart from creation of mortgage of schedule ‘A’ & ‘B’ and hypothecation of Schedule ‘C’. It is also contended that other than the above facilities defendants availed another credit facility Packing credit loan of Rs. 3,40,00,000/- (Rupees Three Crore Forty Lakhs Only) against mortgage of immovable property and hypothecation of movables on 21.07.2015 in loan account Nos. PCLS/01/150019, PCLS/01/150028, PCLS/01/150032, PCLS/01/150036, PCLS/1/150043, PCLS/01/150046/ PCLS/01/160005, PCLS/1/160006 & PCLS/01/160011. In respect of the above facilities the defendants Nos. 2 to 5 stood as guarantors for the loans availed by the 1st defendant which also stood secured by mortgage of schedule ‘A’ & ‘B’ and hypothecation of schedule ‘C’ .

5. It is the specific contention of the applicant that after availing the various credit facilities, the defendant failed to pay the installments as per the terms of the loan agreement, despite the applicant calling upon the 1st defendant to repay the outstanding loan amount. The defendants acknowledged the debts in loan account by executing the demand promissory note and take delivery letter to DPN agreeing to repay the loan amount along with interest as per the terms of the loan agreement. It is also stated that since the defendants failed to make prompt repayments the loan accounts were classified as NPA and the applicant-initiated measures under the SARFEASI Act pursuant to which the possession of mortgage property has been taken over by the applicant.

6. Defendants Nos. 1 to 5 have filed their written statement contending that the present application is not maintainable as the applicant bank has not filed the documents which have been referred and relied upon for the purpose of adjudication.

7. It is also contended that the applicant institution generally obtained blank documents from the borrower which was later filed up without the consent or knowledge of the borrower and the same is done in the case of defendants. The defendants further state that the applicant bank had printed forms of contract and when the blank spaces are filed in, the contract came into existence.

8. It is also contended that the applicant bank has taken possession of the unit by issuing notice under the SARFEASI Act without giving reply to the queries raised in the defendants representation under S.13(3) of the Act. The applicant bank has charged excessive rate of interest in violation of RBI guidelines and the statement of accounts had not been certified in accordance with the provisions under the Bankers Book of

Evidence Act. The defendants further alleges the bank of charging arbitrary, illegal rate on interest. The defendants further alleges that the claims of the applicant bank and the alleged transaction relief upon and the cause of action for instituting the present TA are in direct contraventions with law for the time being in force including to various statutory guidelines issued by the Government of India, Reserve Bank of India as well as under Foreign Exchange Management (Foreign Exchange Derivative Contract). Apart from the above contention the defendants had also para wise reply to the contention of the applicant bank put forth in the TA.

9. The applicant bank formerly M/s. Corporation Bank amalgamated to Union Bank of India during the course of the case and the necessary amendments were carried out by the applicant bank.

10. The applicant has let in evidence through Chief Manager of Union bank along with accompanying affidavit and got documents marked as Exhibits A-1 to A-44. Even though the applicant evidence was taken on 04.12.2025, the defendants were given chance to adduce the evidence on 18.12.2025 and 05.01.2026. On 05.01.2026 there was no representation for the defendants and on 21.01.2026 the chance for filing defendant evidence stood closed and the applicant counsel was heard.

11. In view of the pleadings raised by both sides and in view of the arguments heard from both the sides, the following issued arise for consideration in this matter:-

1) Whether the applicant bank had proved that the credit facilities were sanctioned to the defendants and whether the applicant had succeeded in proving the OA claim as against the defendants?

2) What orders to be passed ? Both these issues are gone into and decided together.

12. The applicant had let in evidence through Piyush Kumar, Chief Manager of the Union Bank of India executed evidence as AW-1 who filed proof affidavit in support of the pleadings as taken in the OA and got the evidence marked as Ex-A-1 to A-44. Exhibit A-1 documents is the Board resolution which clearly authorized the directors of the defendant No.1 company to avail two loans and defendants No. 2 & 3 are authorized to execute the loan documents to the satisfaction of the bank. It is further resolved that the 2nd defendant is authorized to apply and use 1st defendant company’s common seal on all papers of loan, documentations and the defendants got the amounts dispersed. Exhibit A-2 is the intimation as to the terms of sanction of the credit facilities to M/s Joyfill India (Pvt) Ltd, now M/s. Novamexx India Pvt. Ltd. The defendants have executed Demand Promissory note and agreement of term loans dated 02.05.2009 and 13.12.2013, export credit agreement dated 21.07.2015 and memorandum of deposit of title deeds. The case of the applicant that credit facilities were sanctioned and dispersed pertaining to the execution of loan documents and same were secured against the mortgage of ‘A’ and ‘B’ properties and deed of hypothecation executed against each credit facilities also substantiate the case of the applicant that the hypothecation of movables is also executed for the credit facilities which also supports the case of the applicant.

13. The statement of account produced by the applicant clearly evidences that the repayments were not clearly made and the amounts due in the loan accounts as claimed in the OA are clearly established in the Statement of accounts produced there is no capitalization of penal interest.

14. Even though the defendant had filed their Written statement no serious contention as to the availment of the credit facilities or execution of loan documents is taken, infact the defendants are not disputing the availment of the credit facilities. Even though the defendants have taken up the contention that the exorbitant interest and charges are levied in the loan account no specific instant case of such levying if any had been put forth nor any document is produced to prove the same. The statement of accounts produced by the applicant evidenced the hollowness of the above contention. Though the defendants have filed the written statement rebutting the contentions of the applicant bank, they failed to adduce any evidence to substantiate their case, even though chances were provided.

15. The documents produced by the applicant bank is sufficient to prove the facts as stated in the TA and documents are found to be admissible in the evidence. Taking note of the facts that the applicant is claiming interest higher rate of interest and also that the TA claim is arrived at calculating interest at the above rate with all penal charges, this Tribunal is of the view that thought the transaction is purely commercial one, the pendent-elite and future charges can be awarded at reduced rate of 12 percent (12%).

16. In the result, TA.No.241/2017, stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs. 6,31,50,140/- (Rupees Six Crore Thirty One Lakh Fifty Thousand One Hundred Forty Only) with further interest @12.00 % p.a.(simple) from the date of filing TA till the realization, from the defendants jointly, severally & personally, after giving credit to all the amount recovered and received during the pendency of the TA and allowed the same to be recovered by proceeding against the schedule properties. Schedule to the OA be the schedule to the recovery.

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants jointly, severally & personally and their assets are liable for the respective amounts due under the respective loan accounts.

iii) The applicant bank is allowed cost of the proceedings which applicant to file cost memo within 7 days from the date of receipt of the order.

iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

v) Interim application pending, if any, stands disposed of in terms of this final order.

17. 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. [Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24th Day of February, 2026]. Sd/- (T. RAJESH) PRESIDING OFFICER

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Lakshmeesha K Bhargav, Chief Manager, of Applicant Bank Exhibits on the part of the Applicant:

Annexure List of Documents

A) Loan Account No. TLS/01/090003 A1 Resolution dated 15.04.2009 A2 Credit sanction intimation A3 On demand promissory note dated 02.05.2009 A4 Take delivery letter to DPN dated 02.05.2009 A5 Agreement for term loans dated 02.05.2009 A6 Memorandum of deposit of title deeds dated 02.05.2009 A7 Lease agreement dated 21.02.2009 A8 Memorandum of deposit of title deeds dated 28.04.2009 A9 Common deed of hypothecation of movables/ assets/ debts dated 02.05.2009 A10 On demand promissory note dated 13.02.2012 A11 Take delivery letter to DPN dated 13.02.2012 A12 On demand promissory note dated 17.10.2014 A13 Take delivery letter to DPN dated 17.10.2014 A14 Account extract

B) Loan account No. TLS/01/130007 A15 Credit sanction intimation

A16 Agreement for term loans dated 13.12.2013 A17 General power of attorney for book debts and supply bills dated 13.12.2013 A18 Memorandum of deposit of title deeds dated 12.12.2013 A19 Letter of continuity dated 10.12.2013 A20 Common deed of hypothecation of movables/ assets/ debts dated 13.12.2013 A21 Account extract

C) Loan account No. PRTBL/01/160001 A22 Resolution dated 18.07.2015 A23 Credit sanction intimation A24 On demand promissory note dated 21.07.2015 A25 Take delivery letter to DPN dated 21.07.2015 A26 For inland/ foreign bills dated 21.07.2015

D) Loan account No. PCLS/01/150019, PCLS/01/150028, PCLS/01/150032, PCLS/1/150036/ PCLS/1/150043, PCLS/1/150046/ PCLS/01/160005, PCLS/01/160005 & PCLS/01/160011 A27 On demand promissory note dated 21.07.2015 A28 Take delivery letter to DPN dated 21.07.2015 A29 Form IV dated 21.07.2015 A30 General power of attorney for book debts and supply bills dated 21.07.2015

Common documents A31 Guarantee agreement dated 10.12.2013 A32 Guarantee agreement dated 13.12.2013 A33 Letter of undertaking dated 10.12.2013 A34 Letter of undertaking dated 13.12.2013 A35 Letter of undertaking dated 13.12.2013 A36 Guarantee agreement dated 21.07.2015

A37 Guarantee agreement dated 21.07.2015 A38 Letter of undertaking dated 21.07.2015 A39 Supplemental deed of memorandum of deposit of title deeds (letter of continuity) dated 21.07.2015 A40 Supplemental common deed of hypothecation of movables/ assets/ debts dated 21.07.2015 A41 Account extract PRTBL/01/160001 A42 Account extracts PCLS/01/150019/PCLS/01/150028/ PCLS/01/150032, PCLS/01/150036/ PCLS/01/150043, PCLS/01/150046/ PCLS/01/160005, PCLS/01/160005 & PCLS/01/160011 A43 Notice dated 12.082016 issued under Sec. 13(2) r/w 13(3) of SARFEASI Act A44 Possession notice dated 28.10.2016 issued under sec. 13(4) of SARFEASI Act.

Witness Examined for the Defendants: -Nil - List of Documents Exhibited for the Defendants: -Nil –

Sd/- (T. RAJESH) PRESIDING OFFICER