UNION BANK OF INDIA vs MS DMS HEATING ELEMENTS AND OTHERS on 16 October 2025

FINAL ORDER

1. The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.36,22,307.72 (Rupees Thirty Six Lakh Twenty Two Thousand Three Hundred Seven and Seventy Two Paise only) with further interest thereon from the date of filing the Application till realization from the Defendants.

2. It is the case of the applicant that, the defendant No.1 is a Partnership Firm, the defendant Nos. 2 to 5 are the partners of the defendant No.1 firm availed Cash Credit (Hypothecation) loan of Rs.35,00,000/- on 28.03.2016.

3. It is also the case of the applicant that, in view of the above financed credit facility, the defendants have executed necessary loan documents. The defendants executed hypothecation agreement of Goods & Debts dated 28.03.2016.

4. It is further contended that, despite availing the credit facility, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan account as NPA.

5. In the above circumstances, the applicant approached this Tribunal by filing this TA seeking issuance of Recovery Certificate for the balance amount due in the account.

6. Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 05.03.2025.

7. The applicant had let in evidence through AW-1, who filed their Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A27 and got the same marked in evidence.

8. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the TA in the light of documentary evidence and proof affidavit.

9. The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants? ii) What order are to be passed?

Both these issues are gone into and decided together.

10. The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facility as stated in the TA and execution of hypothecation agreement agreeing creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

11. Taking into consideration the facts that the credit facility was availed for business purpose and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the TA can be allowed with a reduced interest of 12.00% (simple).

12. Hence in view of the above finding which cover both the issues raised in this manner, this Tribunal is of the view that TA is liable to be allowed.

13. In the result, TA.No.05/2020 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.36,22,307.72 (Rupees Thirty Six Lakh Twenty Two Thousand Three Hundred Seven and Seventy Two Paise only) with further interest of 12.00% p.a.(simple) from the date of filing TA till the realization from defendants jointly, severally and 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 their asset including the schedule. The schedule to the OA be the schedule to the Recovery certificate.

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

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

iv) Interim Application pending, if any, stands disposed of with this Final Order.

14. 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 (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 16th Day of October 2025].

(T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mrs. V. Sudha, Chief Manager of the applicant bank.

Exhibits on the part of the Applicant: Annexure Date Particulars A1 28.03.2016 Letter of sanction A2 28.03.2016 Demand Promissory Note A3 28.03.2016 Hypothecation Agreement of Goods and Debts A4 28.03.2016 Letter of (Cibli) undertaking from borrower(s) A5 28.03.2016 Lette of (Cibil) undertaking from Guarantor(s) A6 28.03.2016 Letter of continuity A7 28.03.2016 Letter of Guarantee A8 28.03.2016 Letter of undertaking not to alienate hypothecated goods A9 28.03.2016 Letter of undertaking from partners A10 28.03.2016 Declaration of Partnership A11 31.08.2017 Letter of sanction A12 28.03.2018 Demand Promissory Note A13 28.03.2018 Simple Agreement A14 28.03.2018 Letter of Continuity A15 28.03.2018 Letter of Confirmation A16 28.03.2018 Interest Agreement A17 - Statement of accounts A18 01.08.2019 Demand notice issued by applicant bank A19 to A23 01.08.2019 Five postal receipts A24 & A25 - Two returned postal envelop covers A26 & A27 - Two postal acknowledgments

(T. RAJESH) PRESIDING OFFICER