KARNATAKA BANK LIMITED vs M/S S K TRADING AND ORS on 21 October 2026

**ORDER**

This original application has been filed by the applicant bank on 16.09.2020 before DRT-III Delhi and then transferred to DRT-I Delhi under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.1,08,16,194.95 (Rupees One Crore Eight Lacs Sixteen Thousand One Hundred Ninety Four and paisa Ninety *sd*

Five only) as on 15.09.2020 along with interest @15.85% per annum with monthly rests from the date of filing of this application till the final realization along with costs.

2. The brief facts of the case are that on the request of defendant no.1 being partnership concern of defendant no.2 and defendant no.3, the applicant bank sanctioned Overdraft / Cash Credit limit of Rs.75,00,000/- (Rupees Seventy Five Lacs only) on 26.08.2015 @12.75% interest per annum as working capital for trading business of electrical appliances against hypothecation of stock in trade, book debts as prime security and mortgage of property at Pandav Nagar, Delhi. The defendant no.4 stood as guarantor for the credit facility in favour of defendant no.1 by the applicant bank. On the request of defendant no.1, the applicant bank renewed the credit facility of Rs.75.00 lacs @10.85% interest per annum on 26.09.2017. The defendants undertake to pay overdue interest @5% per annum above the rate of interest charged in the account.

3. In order to avail the credit facility, the defendant no.2 and 3 as partners / guarantors of defendant no.1 along with defendant no.4 & 5 executed Request for Overdraft facility, Demand Promissory Note, Take Delivery Letters, Cheque Collection Letter, Declaration Letters, Letter of Authority, Guarantee Letters, Hypothecation Agreement, Undertakings, and Partnership Letter on 09.09.2015 and 28.09.2017 in favour of the applicant bank.

4. That in order to secure the credit facility, the defendant no.1 through its partners executed Hypothecation Agreement and hypothecated the stocks in Trade of electrical home Sd-

appliances & kitchen appliances etc., and General Power of Attorney for book debts in favour of applicant bank on 09.09.2015 & 28.09.2017. Further, the father of defendant no.4 and 5, late Shri Roshan Lal Khanna executed Memorandum of Deposit of Title Deed mortgaging the built up old constructed Property No.S-6, measuring 78 sq.yds out of Khasra No.27/02, Block-S, South Pandav Nagar, Village Samaspur Jagir, Delhi-92 as collateral security on 09.09.2015 by depositing Sale Deed dated 30.12.2011 executed by Smt.Shalini Verma in favour of late Sh.Roshan Lal Khanna with applicant bank.

5. The defendants executed Acknowledgement of Debt towards the applicant bank on 04.06.2020 for an amount of Rs.1,03,58,230.95 as of 01.06.2020.

6. It has been submitted by the applicant bank that after availing the credit facility, the defendants stopped the regular payments despite several requests and reminders. The applicant bank classified the account as NPA on 28.12.2018 as per RBI guidelines and issued recall notice dated 28.12.2018 but the defendants failed to abide by the liability under the overdraft facility and failed to repay the debt, hence the applicant bank has approached this Tribunal for recovery of their dues.

7. Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to absent from the proceedings. As per order dated 28.10.2024, the defendant no.4 to 5 have proceeded ex-parte, due to non-appearance, however, the applicant bank requested for deletion of defendant no.5 from the array of parties, which was permitted on 28.09.2026. Further, vide dated 29.04.2026, the Sd-

defendant no.1 to 3 have been proceeded ex-parte as not appeared before the Tribunal and even no written statement, evidence and affidavit of assets have been filed by the defendants.

8. The applicant bank took symbolic possession of mortgaged property on 21.08.2019 to defendant no.1 to 5 by serving possession notice u/s 13(4) of SARFAESI Act read with Rule 8 & 9 of Security Interest Enforcement Rules 2002.

9. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Deepak Sharma, authorized representative of the applicant bank who has proved the documents such as General Power of Attorney, Sanction Letters, Hypothecation Agreements, General Power of Attorney for Book Debts, Memorandum of Deposit of Title Deed, Sale Deed, Request for Renewal of limit, Letters of Authority, Guarantee Letters, Take Delivery Letters, Demand Promissory Notes, Cheque Collection Letters, Declarations, Undertakings, Partnership Letter, Request for Overdraft facility, Recall Notice and Statement of Account marked as Exb.AW1/1 to Exb.AW1/38.

10. The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly approved.

11. The case filed by the applicant bank gone unrebuted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

Sd-

12. In the light of the above discussions, the Original Application deserves to be allowed.

**FINAL ORDER**

I, allow this OA and direct the defendant no.1 to 4 to pay to the applicant bank within 30 days, jointly or severally, a sum of Rs.1,08,16,194.95 (Rupees One Crore Eight Lacs Sixteen Thousand One Hundred Ninety Four and paisa Ninety Five only) as on 15.09.2020 together with pendentelite future interest @15.85% per annum with monthly rests from 15.09.2020 along with costs failing which the aforesaid amount shall be recovered from the sale of hypothecated stock, book debts and mortgage property bearing Property No.S-6, measuring 78 sq.yds, out of Khasra No.27/02, Block-S, South Pandav Nagar, Village Samaspur Jagir, Delhi-92. In case of shortfall, the same shall be recovered from the sale of moveable and immovable properties of the defendant no.1 to 4.

(II) The recovery certificate be issued forthwith and be sent the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 21.12.2026.

(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

*e sd- [Signature]* **(GOVIND BALLABH SHARMA)** **PRESIDING OFFICER** **DRT-I, DELHI**

(Dictated and pronounced in open court) Dated: 21.10.2026