Delhi District Court
Canara Bank vs Sh. Rambir Singh on 27 January, 2011
IN THE COURT OF MS. SAUMYA CHAUHAN :
CIVIL JUDGE-7 (CENTRAL) : DELHI
Civil Suit No. : 396/10/04
Unique Case ID No : NA
In the matter of:
Canara Bank, A Body Corporate
Consituted under the Banking Companies
(Acquisition And Transfer of Undertaking) Act,
1970 with its Head Office at
112, J. C. Road
Bangalore
................. Plaintiff
Versus
Sh. Rambir Singh
Proprietor of M/s Euro Tours And Travels (India)
1961/4, Urban Estate
Gurgaon, Haryana
................ Defendant
Date of institution of the Suit : 23.02.2004
Date on which order was reserved : 15.01.2011
Date of decision : 27.01.2011
SUIT FOR RECOVERY OF RS.2,68,338/-
EX-PARTE JUDGMENT :-
1.By this judgment, I shall dispose of the present suit for recovery of Rs.2,68,338/- along with pendentelite and future interest filed by the plaintiff against the defendant. The brief facts of the case are that the plaintiff is a bank constituted and functioning under the Banking Companies (Acquisition and Transfer of Undertaking) Act 1970 having its Head office in CANARA BANK vs RAMBIR SINGH 1/11 Bangalore and branch office in Delhi. The defendant is the proprietor of M/s Euro Tours and Travels (India).
2. The defendant had opened a current account no. 22938 with the plaintiff bank on 03.01.1997 and executed a letter of Proprietorship on the same date in favour of the plaintiff bank. Thus, the defendant was transacting through the said account and was availing temporary overdraft facility from time to time in the above said account for which he was charged with interest as per prevailing rates.
3. It is the plaintiff's contention that in may 1997, the plaintiff, on defendant's request, sanctioned a regular Overdraft facility for Rs.3,50,000/- against the hypothecation of Book debts along with interest @ 7.75 % per annum over and above RBI with the minimum of 19.75 % per annum compounded quarterly subject to rates notified by the RBI from time to time. The defendant executed the following documents in favour of the plaintiff bank:-
1. Demand Promissory note dated 12.05.1997
2. Request for over-draft facility dated 12.05.1997.
3. Agreement regarding advances against book debts as prime security.
4. The defendant also pledged the LIC policy bearing no.
120357239 dated 23.11.1996 having face value of Rs.
1,00,000/- on the same date. He also pledged the Fixed
CANARA BANK vs RAMBIR SINGH 2/11
Deposit (KDR) bearing no. 686/97 of Rs.1,00,000/- on 29.05.1997 to the plaintiff.
5. It is further contended that in the month of September 1998, the defendant approached the plaintiff bank with request to transfer the above-said overdraft loan account to the Green Park Branch of the plaintiff bank. The said request was allowed and the loan account was closed in the month of May 1999 at the fountain branch of the plaintiff and then it was transferred to the Green Park branch. However, again at the request of the defendant, the said account was re-transferred to the fountain branch in November 1999. The defendant acknowledged the outstanding liability in favour of the plaintiff bank on 28.12.1999.
6. It is averred that the defendant continued to avail the above- said overdraft limit and further executed the following documents on 13.10.2000:-
1. Letter of Proprietorship
2. Letter of undertaking not to avail OCC elsewhere.
7. It is contended that the above said credit limit continued to be secured by the pledge of LIC policy bearing no. 120357239 dated 23.11.1996 for Rs.1 Lac and also another LIC policy no. 112257205 dated 12.06.1998 having face value of Rs.3 Lacs in favour of plaintiff. The defendant further acknowledged the outstanding liability to the plaintiff bank on 13.10.2000.
CANARA BANK vs RAMBIR SINGH 3/11
8. It is further the contention of the plaintiff that the defendant approached the plaintiff for renewal of the credit limits to meet his working capital requirements in July 2001. The plaintiff granted the following credit limit to the defendant:-
Overdraft facility of Rs.3,50,000/- against hypothecation of book debts along with interest @ 3.50 per cent per annum over and above RBI and minimum 15.25 per cent per annum compounded quarterly subject to RBI rates.
In consideration of the above-said credit limit, the defendant executed the following documents:-
1. Demand promissory note dated 14.07.2001.
2. Agreement regarding advances against book debts as prime security dated 14/07.2001.
The above-said credit limit continued to be secured by the above mentioned book debts and LIC policies earlier pledged by the defendant.
9. It is contended that defendant again acknowledged his outstanding liability on 13.03.2003.
10.The plaintiff has alleged that the defendant failed to keep with the financial discipline of the plaintiff bank and the sale proceeds/ transactions were not routed through the above- mentioned loan account. Several requests and reminders were made to the defendant to regularize the outstanding loan CANARA BANK vs RAMBIR SINGH 4/11 account and a letter dated 26.12.2003 was also sent to the defendant regarding the same. However, the defendant failed to regularize his account. Therefore, the loan account of the defendant was transferred to the Loan Passed Due Account on 02.01.2004.
11.It is further contended that the plaintiff adjusted the FDRs to the outstanding loan account. However, nothing could be recovered from the pledged LIC policies as their surrender value was nil as informed by the LIC. Since the account had become sticky, it was to be treated as non-performing assets as per the norms of accounting laid by RBI.
12. Since the defendant had failed in paying the outstanding amount, the present suit was filed by the plaintiff for a sum of Rs.2,68,338.60/- along with pendentelite and future interest at 16% per annum.
13.The defendant has denied all the contentions and allegations of the plaintiff in his written statement. Though he has admitted that he is carrying the business of ticketing and tours in the name and style of M/s Euro Tours and Travels ( India) as proprietor, he denies having ever approached the plaintiff for grant of Overdraft facility or executing any documents in favour of the plaintiff.
14. The plaintiff, in its replication, has denied the contentions of CANARA BANK vs RAMBIR SINGH 5/11 the defendant and reiterated his claim.
15.On the basis of the pleadings of parties, following issues were framed on 08.05.2007:-
1. Whether the suit has been filed by a competent and authorised person? OPP
2. Whether the plaint has been properly verified? OPD
3. Whether the plaintiff bank is entitled to the recovery of the suit amount as prayed for? OPP
4. Whether the plaintiff bank is entitled to the recovery of any interest if so at what rate and for which period? OPP
5. Whether the suit is within time? OPD
6. Relief
16.Both the parties led evidence and examined witnesses to substantiate their case.
17.I have heard the arguments and perused the material available on record. My issue wise findings are as under:-
18. Issue No. 1:
"Whether the suit has been filed by a competent and authorised person? OPP"
PW-1 Sh. P. C. Bhandari, Manager of Ashok Vihar Branch of the plaintiff bank entered the witness box. In his affidavit he has stated that he is authorised and competent to file and institute the present suit and sign and verify the pleadings CANARA BANK vs RAMBIR SINGH 6/11 being the Manager of the plaintiff Bank, by virtue of the power of attorney dated 04.02.1982 executed and signed by the then Executive Director of the Plaintiff Bank. He exhibited the following documents:-
1. General Power of Attorney dated 04.02.1982 (Ex.PW1/1).
2. Letter dated 26.12.03 (Ex.PW1/2) and the postal receipt (Ex.PW1/3).
3. Statement of Accounts of the account No.22938 (Ex.
PW1/4).
No suggestion was put to the said witness regarding his authority or competence to file the present suit. The plaint is signed by the said witness and is also accompanied with the affidavit of said witness. Thus, the plaintiff has proved that the suit is instituted by a competent person. Thus, this issue is decided in favour of the plaintiff and against the defendant.
19. Issue No. 2:
"Whether the plaint has been properly verified? OPD"
The onus of proving this issue was on the defendant. However, no evidence has been led by the defendant on this issue. As such, this issue is decided in favour of the plaintiff and against the defendant.
20. Issue No.3:
"Whether the plaintiff bank is entitled to the recovery of the suit amount as prayed for? OPP"
CANARA BANK vs RAMBIR SINGH 7/11 The onus of proving this issue was on the plaintiff. The plaintiff examined PW-2 Sh. R. M. Singla, Senior Manager of the Plaintiff Bank who exhibited the acknowledgment of the debt and security dated 28.12.1999 as Ex. PW2/1, the letter of proprietorship dated 13.10.2000 Ex. PW2/2, letter of undertaking dated 13.10.2000 Ex. PW2/3 and the letter of loan against valuable securities dated13.10.2000 as Ex. PW2/4. The acknowledgment of debt and security i.e 13.10.2000 as Ex. PW2/5 and the pronote dated 14.07.2001 for the amount of Rs.3,50,000/- is Ex. PW2/6. The agreement regarding advances against book debt as prime security dated 14.07.2001 is Ex. PW2/7. Acknowledgment of debt and security made by defendant on 13.03.2003 is Ex. PW2/8.
The said witness was cross examined at length by Ld. Counsel for defendant. In his cross examination PW-2 has stated that he had affixed his signature on Ex. PW2/1 i.e acknowledgment of debt and security dated 28.12.1999 as witness and that the said document was filed by the defendant and bank officer Sh. Atul Mangla. He further states that account of the defendant was declared NPA, however, he could not tell when it was declared so. In the entire cross examination neither any suggestion was given nor any question was asked on the point that the plaintiff is not entitled to the relief claimed, or that the defendant never had any account in the plaintiff bank. On the other hand, the witness was given suggestion that the account was never renewed and on the point of account being declared CANARA BANK vs RAMBIR SINGH 8/11 NPA.
The plaintiff examined another officer Sh. Arun Kumar Khanna as PW-3. The said witness has exhibited the account opening form dated 03.01.1997 as Ex. PW3/1. He has stated in his evidence that the loan documents dated 12.05.1997 were signed and executed by the defendant in favour of the plaintiff in his presence and he can identify the signatures of Sh. V. K. Malhotra, the then Manager of the plaintiff bank and signatures of Sh. K. G. Shinoy. The said loan agreement are exhibit PW3/3, PW3/4 and PW3/5. The said witness has also identified the signatures of the defendant on the letter of pledge dated 12.05.1997 (Ex.PW3/6) & dated 29.05.1997 (Ex. PW3/7) as both the documents were signed in his presence. The testimony of PW-3 has remained unrebutted as he was never cross examined by the defendant.
All the documents pertaining to the account of the defendant and the pledge documents have been duly proved by the plaintiff.
On the other hand, the defendant has failed to rebut the evidence of plaintiff. Despite opportunities, the defendant failed to adduce any evidence in his favour. In fact, it is interesting to note that though the defendant has denied in his written statement having opened any current account or having any overdraft facility with the plaintiff bank, or even executing any CANARA BANK vs RAMBIR SINGH 9/11 loan or pledge documents in plaintiff's favour, in para 18 of his written statement, he has admitted that the plaintiff bank had adjusted the FDR (KDR) to the Outstanding Loan Account. This statement of the defendant amounts to an admission that he had a loan account with the plaintiff and that there was some outstanding amount for which the defendant had pledged his FDR to the plaintiff. In view of the above findings, this court has come to the conclusion that plaintiff has successfully proved its case, and is entitled to the relief claimed in the plaint. Thus, this issue is decided in favour of the plaintiff and against the defendant.
21. Issue No.4:
"Whether the plaintiff bank is entitled to the recovery of any interest if so at what rate and for which period? OPP The onus of proving this issue was on the plaintiff. The statement of account i.e Ex. PW1/3A shows that the account no. 22938 has an outstanding balance of Rs.2,04,981.60/- as on 02.01.2004 and an unapplied interest from 01.07.2002 to 01.01.2004 to be Rs.57,810/- and further interest from 02.01.2004 to 18.02.2004 at the rate of 16.05 per cent is Rs. 5547/-, amounting to a total of Rs.2,68,338.60/-. Therefore, the plaintiff has proved that he is entitled to the interest which has accrued prior to the institution of the suit.
The plaintiff has also claimed pendentelite and future interest @ 16.05 %. However, keeping in mind the prevailing CANARA BANK vs RAMBIR SINGH 10/11 commercial rate, in the court's opinion, interests of justice would be met if the interest is calculated @ 12% per annum. Therefore, this issue is also decided in favour of the plaintiff and against the defendant.
22. Issue No. 5:
"Whether the suit is within time? OPD"
No evidence has been led by the defendant on this point. The letter regarding payment of outstanding balance was sent to the defendant by the plaintiff on 26.12.2003 and the suit has been instituted in the year 2004. Therefore, the suit is well within the limitation period . Hence this issue is decided in favour of the plaintiff and against the defendant.
23. Issue No.6 Relief In view of the above mentioned findings, this suit is decreed in favour of the plaintiff and against the defendant for an amount of Rs.2,68,338.67/- along with pendentelite and future interest @ 12% per annum.
24.No order as to cost is being made. Decree sheet be prepared accordingly. File be cosigned to the record room.
ANNOUNCED IN THE OPEN COURT
ON 27th January 2011
(SAUMYA CHAUHAN)
CJ-07 (CENTRAL):DELHI
CANARA BANK vs RAMBIR SINGH 11/11