Delhi District Court
Punjab National Bank vs M/S Hari Om Industries on 14 December, 2023
IN THE COURT OF SH. RAKESH SYAL,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
SOUTH-WEST DISTRICT, DWARKA COURTS,
NEW DELHI.
CS (COMM) 82/2022
Punjab National Bank
Having its Corporate Office at
Plot No-04, Sector-10,
Dwarka, New Delhi-110075.
And Inter-alia having its Branch Office(s) at:
Punjab National Bank, through its Manager/Authorized
Representative Sh. Edmund Pradeep Aind, S/o Sh. Ignace Aind, at
Circle Sastra Centre, West Delhi at First Floor, P 9/90, JC Building, P
Block, Outer Circle, Connaught Place, New Delhi-110001.
Also at
B-1/504, Janakpuri,
Opposite BSES Office, New Delhi-110058. ... Plaintiff
VERSUS
1. M/s Hariom Industries
Through its Proprietor Sh. Pappu Verma,
Plot No. 11 B, Bhagat Enclave, Nandram Park,
Bindapur Village, Uttam Nagar, New Delhi-110059.
2. Sh. Pappu Verma
Proprietor M/s Hariom Industries,
RZG-202,Vishwas Park, Raja Puri,
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 1 of 26
Uttam Nagar, New Delhi-110059. ...Defendants
Date of institution : 08.03.2022
Date of final arguments : 01.11.2023
Date of decision : 14.12.2023
JUDGMENT
1.1 The plaintiff bank, in which erstwhile Oriental Bank of Commerce has amalgamated, vide Gazette Notification no. 133 dated 04.03.2020) has filed the present suit, through its Manager, Sh. Edmund Pradeep Aind, against the defendants, for recovery of Rs.12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only), along with pendente-lite and future interest @ 9.12% per annum, and penal interest @ 2.00%, per annum, till its realization and costs of the suit.
2.1 The plaintiff's case is that defendant no. 1, a proprietorship concern, through its proprietor, defendant no. 2 approached the plaintiff, vide Loan Application dated 04.12.2019, for availing Cash Credit Limit of Rs. 10,00,000/-. Defendant no. 2 submitted GST Registration Certificate in the legal name of defendant no. 2 and trade name of defendant no. 1. The plaintiff sanctioned Cash Credit Working Capital Facility of Rs. 10,00,000/- to defendant no. 1. Defendant no. 2 executed Agreement of Hypothecation of Assets and Common Agreement along with Sole Proprietorship Letter.
2.2 It is further stated that due to COVID-19 pandemic, defendant no. 1 was also provided moratorium with respect to interest CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 2 of 26 acrrued in Cash Credit Facility Account from March 2020 to August, 2020, to ease the burden of repayment. A Covid Funded Interest Term Loan (hereinafter referred to as the 'CFITL') Account was opened with respect to the same and an amount of Rs. 48,824/- was granted to the defendant. The defendant was irregular in making payments. Thus, verbal and written communications were made and defendant no. 2 was advised to regularize his account so as to avoid the slipping of the same into Non-Performing Asset, but the same were of no use. Letter dated 01.02.2021 was also issued stating that the defendants were not routing the sale proceeds through the account and that they must deposit the overdue amount. When no payment was received by the defendants, both the accounts, i.e. Cash Credit Account no. 16654011000705 and CFITL Account no. 16657201000158 were classified as Non- Performing Asset on 31.03.2021.
2.3 It is further stated that after exhausting all the efforts for recovery, when the defendants did not adhere to the banking norms, the plaintiff issued Notice dated 07.04.2021, u/s 13(2) of SARFAESI Act, 2002, to defendant no. 1, recalling the loan facitility. As no payment was received from the defendants, the CFITL loan account was closed on 02.06.2021 and an amount of Rs. 51,591/- from the said account was transferred to the Cash Credit Account. As the account of the defendant had been classified as Non-Performing Asset, Notice dated 02.07.2021 was issued to defendant no. 1 that all the loan facilities granted had been recalled. The statement of account of Cash Credit Account shows the amount due to the plaintiff till 29.01.2022 CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 3 of 26 as Rs. 12,37,801/-. The same includes Memoranda dues calculated up to 29.01.2022. Apart from Rs. 12,37,801/-, the defendants are also liable to pay pendente lite and future interest @ 9.15%, per annum, plus penal interest @ 2.00% , per annum, on the aforesaid amount. The plaintiff has, thus, prayed for a decree against the defendants for a sum of Rs.12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only), along with pendente lite and future interest @ 9.12%, per annum, and penal interest @ 2.00%, per annum, till its realization and costs of the suit.
3.1 Summons of the suit was served upon defendant no. 2. Sh. Pappu Verma on 18.04.2022. He appeared on 31.05.2022 and submitted that he is the owner of defendant no. 1. He accepted notice on behalf of defendant no. 1. He has filed written statement dated 23.07.2022, on 26.07.2022.
4.1 In the written statement, it is stated that the suit is barred by Section 17 of the India Contract Act, 1872. The Application Form annexed with the suit is having telephone number/Email ID. The email ID given in loan application form is '[email protected]'. Taruwar is the son of one Sh. Umesh Gupta and he is studying in DPS School. The correspondence ID belong to Sh. Umesh Gupta and is not related to him. Blank Account Opening Form and subsequent applications were got signed from the defendant to lure him to take loan. Neither loan was given to him nor any communication regarding the same was given to him, prior to his summoning by the court.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 4 of 26 4.2 It is further stated that the areas in the proximity of M/s Hariom Industries were residential areas. Thus, in September-October, 2019, more than 400 small and medium sized factories were closed. The same included defendant no. 1, which though registered in his name was never operated by him. Therefore, it is an example of benami industry operated by Sh. Umesh Gupta. He had been lured by his employer, Sh. Umesh Gupta to establish/register a firm and get the loan. Sh. Umesh Gupta took him to Oriental Bank of Commerce, at the time of opening of account in the name of M/s Hariom Industries, but he did not receive cheque book or any further correspondence. All the banks' affairs were single handedly managed by Sh. Umesh Gupta. Prior to summons, he was unaware of the alleged loan. He had been falsely framed as the defendant, whereas the plaintiff knows that the main culprit is Sh. Umesh Gupta, S/o Sh. Shivkanta Gupta, R/o House no. 20, Jain Park, Matiala Road, Uttam Nagar, New Delhi-110059, and the Manager of the erstwhile Oriental Bank of Commerce had actively connived with him.
4.3 It is further stated that the loan application form was filled by the plaintiff without verifying his academic qualification. In the year 2018, Sh. Umesh Gupta induced him to open a current account in the name of M/s Hariom Industries by showing him as its proprietor, whereas he had nothing to do with the said firm. Rather, Sh. Umesh Gupta had told him that he would become the owner of the said firm to which he had refused saying that he is not interested in becoming the proprietor of any firm as he was happy with his job of CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 5 of 26 worker and was also not having any money for running the said firm. On this, Sh. Umesh Gupta told him that he was having links with the Bank Manager and would manage the things for opening the current account and he would himself invest in the said business. Thus, on his inducement, the defendant handed over his Aadhaar Card, PAN Card and photographs and accompanied him to Oriental Bank of Commerce, Jail Road, Hari Nagar, New Delhi, for opening the current account. After opening the current account, Sh. Umesh Gupta took him to Oriental Bank of Commerce, B-1, Janakpuri, New Delhi, for taking loan in the name of the firm, where his signatures were obtained on certain papers, by the bank officers without reading out its contents. It was never told either by Sh. Umesh Gupta or by the Bank Manager that his loan has been sanctioned. No cheque book was ever given to him by the bank. No message to this effect was ever sent on his mobile number. His mobile numbers are 9873646045 and 8368762399, but the same have not been shown in the bank account by the Bank Manager. Rather Mobile no. 8287403354 of Sh. Umesh Gupta had been mentioned. The alleged bank account was never operated by his signatures and no money has been utilized by him.
4.4 It is also stated that the defendant, for the first time, came to know about the scam, when he received the summons from the court. From the call details of Sh. Umesh Gupta, it would become clear that he was hand in glove with the bank employees and the defendant has been deceived by them. He has already made a written complaint to S.H.O. P.S. Bindapur, New Delhi on 13.07.2022. The CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 6 of 26 current account in which the loan amount was disbursed was operated by Sh. Umesh Gupta through his mobile no. 8287403354, and Email ID [email protected], which is mentioned in the loan application form. In the aforesaid facts and circumstances, Sh. Umesh Gupta was a necessary and proper party, but the plaintiff did not add him as the defendant. All the bills of Hariom Industries were prepared by Sh. Umesh Gupta and he has himself signed on authorized signatory space. Other averments made in the plaint have also been generally denied.
5.1 In replication dated 11.08.2022, it is stated that the plaintiff has no role to play in any manner whatsoever with Sh. Umesh Gupta. Sh. Umesh Gupta is connected to defendant no. 2 only, as he himself had stated that he was employer of the defendant and he along with defendant no. 2 approached the plaintiff bank while taking the loan from the plaintiff. The plaintiff does not have any kind of association with Sh. Umesh Gupta. It is defendant no. 2, who in connivance with Sh. Umesh Gupta is taking unnecessary excuses to gulp down the bank's money. While taking the loan from the plaintiff, defendant no. 2 had submitted GST Registration Certificate dated 27.09.2018, which authenticates the fact that the firm of defendant no. 2 was registered. The phone number of Sh. Umesh Gupta on the application form may have been filled as per the directions of the defendant. The phone number, mentioned on the loan application, must had been intentionally given so that afterwards the defendant can deny his liability and both the defendants and Sh. Umesh Gupta can CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 7 of 26 put blame on each other to get away without paying the dues of the bank. The loan was granted to the defendant and he has used the said money. Other contentious averments made in the written statement have been generally denied and those made in the plaint have been reiterated.
6.1 From the pleadings, the following issues were framed on 17.08.2022, by my Ld. Predecessor :-
"1. Whether the plaintiff has played the fraud upon the defendant as pleaded in the written statement? OPP.
2. Whether the plaintiff is entitled to decree of recovery of Rs. 12,37,801/-, as payed for in the plaint? OPP.
3.If answer to the issue no. 2 is in affirmative, whether the plaintiff is entitled to interest? If yes, at what rate andfor which period? OPP.
4. Relief."
No other issue was pressed.
7.1 In order to prove its case, the plaintiff has examined one witness, namely, PW-1 Sh. Edumnd Pradeep Aind, Manager/ Authorized Representative of the plaintiff bank.
8.1 In order to prove its case, the defendant has examined two witnesses, namely, defendant no. 2 Sh. Pappu Verma as DW-1 and Sh. Ram Murat Verma as DW-2.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 8 of 26 9.1 It is pertinent to mention that the defendant has moved an application dated 20.12.2022, u/o I Rule 10 CPC for impleading Sh. Umesh Gupta. Vide order dated 01.02.2023, the said application was dismissed. The defendant has also moved an application dated 04.03.2023, u/o VIII Rule 1 A, r/w Section 151 CPC, for taking on record pen drive containing recorded conversation between him and Sh. Umesh Gupta. Vide order dated 05.09.2023, the said application was also dismissed.
10.1 Sh. Sourav Bhasin, Ld. Counsel for the plaintiff has generally argued on the lines of the evidence led by the plaintiff. He has stated that the defendant has admitted his signatures on all the loan documents. As per the order sheet dated 31.05.2022, defendant no. 2 has submitted that he was the owner of defendant no. 1 and he has also accepted the notice on behalf of defendant no. 1, which shows that he is the actual proprietor of defendant no. 1. Since he has admitted his signatures on all the loan documents, he cannot now deny taking of loan from the plaintiff. The story made by defendant no. 2 that he was cheated by one Sh. Umesh Gupta and the officials of the plaintiff is an after-thought. If at all cheating had taken place, defendant no. 2 along with Sh. Umesh Gupta had cheated the plaintiff bank to siphon off the public money. He further contended that the complaints, Ex. DW1/B and Ex. DW1/C were made by the defendant after receipt of summons from the court. He also contended that the address on the Aadhaar Card of the defendant, Non Starter Report, Memo of Parties and Written statement is the same. Further, copy of CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 9 of 26 GST Registration Certificate, Mark-A, submitted by the defendant with the plaintiff also show that defendant no. 2 is the proprietor of defendant no. 1. He also contended that the Tax Invoices, Ex. DW1/D (Colly) of M/s Hariom Industries, filed by the defendant along with the written statement also show that the same have been signed by him for M/s Hariom Industries. If the version of defendant no. 2, that Sh. Umesh Gupta was the actual owner of M/s Hariom Industries, is to be believed, it has not been explained as to how defendant no. 2 has came into possession of the Tax Invoices, Ex. DW1/D (Colly). The defendant has not stated that the same did not bear his signatures. Thus, apparently, defendant no. 2 was the proprietor of defendant no. 1 and has taken loan from the plaintiff. It appears that in order to avoid his liability, he has concocted story about his being cheated by one Sh. Umesh Gupta and officials of the plaintiff. He further contended that DW-1, during his cross examination, has admitted signatures on the loan documents. He also stated that he has been doing all the bank transactions since 1997. Thus, he is aware of the banking procedures. It is further argued that the defendant has not stated about making any complaint with regard to GST Registration. He further argued that DW-2 is not at all reliable since he has blatantly made a false statement with regard to his address. Ld. Counsel for the plaintiff has, thus, contended that the plaintiff has been able to prove its case against the defendant and that the suit may be decreed in favour of the plaintiff.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 10 of 26 11.1 Sh. Sushil Ahlawat, Ld. Counsel for the defendant has argued that defendant no. 2 has been cheated by Sh. Umesh Gupta and officials of the plaintiff bank. Defendant no. 2 had no clue about the application for loan. He further submitted that no notice was served upon defendant no. 2 by District Legal Service Authority u/s 12 A of the Commercial Courts Act, 2015. All the loan documents produced by the plaintiff was signed by defendant no. 2 in the office of Sh. Umesh Gupta, where Manager of the bank was present. Defendant no. 2 came to know about the loan, only after receipt of summons from the court. He further contended that during cross examination of PW- 1, he stated that he does not know as to how the sanction of loan was communicated to defendant no. 2. He was not present at the time of filling documents. He also does not know as to who has paid the process fee for the loan. Ld. Counsel further contended that the Email ID [email protected], given in the application form does not belong to defendant no. 2 but belongs to Sh. Umesh Gupta, whose son's name is Taruwar. He also contended that during cross examination of DW-2, no suggestion has been given that he was not working with Sh. Umesh Gupta or that defendant no. 2 was not running M/s Hariom Industries or that the said concern was of defendant no. 2. He also contended that the plaintiff has not led any evidence to show that the cheque books were issued to defendant no.
2. He has, thus, submitted that the plaintiff has failed to prove its case against the defendant.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 11 of 26 12.1 I have heard Sh. Sourav Bhasin, Ld. Counsel for the plaintiff and Sh. Sushil Ahlawat, Ld. Counsel for the defendant and also perused the record.
13.1 It may be mentioned that both the defendants i.e. defendant no. 1, being proprietorship concern, and defendant no.2, being proprietor thereof, are one legal entity. Any reference to defendant no. 1 means and include defendant no. 2 and vice versa. In this regard, reference can be made to P.D.Verma and Company vs. Laxmi Builders, 2014 SCC Online Del. 2160.
13.2 It is well settled that a civil case is to be decided on the basis of preponderance of probabilities. As per section 3 of The Indian Evidence Act, 1872, a fact is said to be 'proved' when, after considering "the matters before it", the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. A fact is said to be 'disproved' when after considering the "matters before it", the court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. A fact is said to be 'not proved' when it is neither proved nor disproved. It is well settled that the expression, "the matters before it" is wide enough to cover even matters which are other than "evidence". It includes statements of the witnesses, admissions, oral or written, documents proved in evidence, CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 12 of 26 demeanour of witnesses, local inspections and presumption etc. Further, while appreciating the evidence, a court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Courts of Justice are to use their own common sense and experience in judging the effect of particular facts, and they are to be subject to no particular rule whatever on the subject. In this regard, a reference can be made to V ed Parkash Kharbanda Vs. Vimal Bindal, (2013) 198 DLT 55.
14.1 The issue wise findings are as under:-
Issue nos. 1 and Issue no. 2 "1. Whether the plaintiff has played the fraud upon the defendant as pleaded in the written statement? OPD.
2. Whether the plaintiff is entitled to decree of recovery of Rs. 12,37,801/-, as payed for in the plaint? OPP."
Both the above issues, being interconnected, are being discussed together. The onus to prove Issue no. 1 was on the defendant. PW1 Sh. Edmund Pradeep Aind has tendered his affidavit, Ex. PW1/A. In his affidavit, Ex. PW1/A, he has generally reiterated the same facts as stated in the plaint. He has also deposed about Relevant Extracts of the Gazette of India Notification (Internet generated) and the Power of Attorney, Ex. PW1/1 (Colly), Application Form dated 04.12.2019, Ex. PW1/2, Certificate issued in the name of defendant no.1, Mark A, Sanction Letter dated 10.12.2019, Ex.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 13 of 26 PW1/4, Copy of Agreement of Hypothecation of Assets dated 10.12.2019, Ex. PW1/5, Common Agreement dated 10.12.2019, along with sole proprietorship letter, Ex. PW1/6, Letter dated 01.02.2021 written by plaintiff bank to defendant no.1, Ex. PW1/7, Notice under Section 13(2) of SARFESI Act, Ex. PW1/8, Statement of Account of CFITL, Ex.PW1/9, Legal Notice dated 02.07.2021, Ex.PW1/10, Statement of Account of Cash Credit Facility, Ex. PW1/11, Certificate under Section 2A of The Bankers' Books Evidence Act, 1891 and 65 B of the Indian Evidence Act, 1872, Ex. PW1/12 and Non Starter Report, Ex. PW1/13.
14.2 During his cross examination, PW-1 admitted that he has never worked in the Branch from which the loan was sanctioned. He further admitted that he does not have any personal knowledge regarding the processing/sanctioning of the loan in question. For grant of business loan, Registration Certificate of the firm is required. They have filed copy of GST Certificate in the name of defendant no. 1. In case of proprietorship, they take a declaration of proprietorship. Physical inspection of the business premises is carried out before grant of loan. Record of the same is prepared. He does not know whether record of physical inspection was prepared in this case or not. No such record of physical inspection has been filed in this case. No separate proof of address of the business is taken. He denied that in collusion with Sh. Umesh Gupta, the present loan was granted without physical inspection and without proof of address of the business in order to cause loss to the defendant and the bank. He stated that a cheque book CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 14 of 26 was issued in this case. The said cheque book has been used. They have not filed any document to show as to whom the said cheque book was issued or at which address the same was delivered. He does not remember the numbers of the said cheques. To the suggestion that no such cheque book was handed over to the defendant or delivered to him, he stated that he does not know about the same. He admitted that they have not filed the said cheques. He stated that the amount of the cheques used is mentioned in the Statement of Account. He does not know as to how the sanction of the loan was communicated to the defendant. He denied that since the sanction of the loan was not communicated to the defendant, that is why he is not able to tell the same. He voluntarily stated that the defendant had come to the bank and executed the documents. He stated that he has no idea as to where M/s Hariom Industries is situated. He has no knowledge as to whether M/s Hariom Industries does not exist at the address given in the loan documents. To the suggestion that none of the loan documents filed in this case have been filled in the handwriting of the defendant, he stated that he has no knowledge about the same. The signatures of the defendant are not there on first three pages of the Application, Ex PW-1/2. On the first page of Application, Ex. PW1/2, at the bottom, the customer ID and name of the defendant had been written by the bank official. To the suggestion that the Loan Application Form. Ex PW1/2, and other loan documents were filled by the bank official, he stated that he was not present at that time and, thus, he cannot say anything about the same. The General Power of Attorney, Ex. PW1/1, was issued by Oriental Bank of Commerce. He has not filed any CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 15 of 26 Power of Attorney given by Punjab National Bank. He voluntarily stated that Punjab National Bank has not issued any such Power of Attorney. He admitted that there is process fee for the loan. He does not know what was the process fee in the present case or who has paid the same. To the suggestion that the defendant has not paid any process fee, he stated that he does not know about the same. To the question, as to whose Email ID is "taruwar_dps@ yahoo.com", he stated that the applicant writes his Email ID in the Application Form. He does not know whose mobile number is 8287403354. To the suggestion that by using the said number, transactions have been made in the loan account, he stated that he has no knowledge about the same. He stated that the loan was sanctioned by Ms. Priya Kaira. He does not know whether any communication was made by the bank with the defendant at the Email ID mentioned in the Loan Application Form. They have not filed any communication between the bank and the defendant at the said Email ID. He denied that the defendant has not taken any loan or that he is not liable to make any payment to the plaintiff or that no amount of the loan was used by the defendant. He does not remember the facts stated in his affidavit, Ex. PW1/A. He also does not remember the contents of Certificate u/s 65 of the Indian Evidence Act, 1872.
14.3 DW-1 Sh. Pappu Verma has tendered his affidavit, Ex. DW1/1. In his affidavit, Ex. DW1/1, he has generally reiterated the same facts as stated in his written statement. He has also deposed about his Aadhaar Card, Ex. DW1/A, Complaint dated 13.07.2022 to CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 16 of 26 S.H.O. P.S. Bindapur, New Delhi, Ex. DW1/B, Complaint dated 18.07.2022 to DCP, Dwarka, Sector 19, Ex.DW1/C, and Tax Invoices of defendant no. 1, Ex. DW1/D (Colly).
14.4 During his cross examination, DW-1 Sh. Pappu Verma admitted that he has signed his affidavit, Ex. DW1/1, in the chamber of his counsel. Whatever he had told is recorded in his affidavit. He admitted that at the time of signing of his affidavit, he had not signed any other document. He stated that he came to know about this case on receipt of notice from the court around 09 th or 10th of March, 2022. He was residing at RZG-202, Vishwas Park, Rajapuri, Uttam Nagar about 10 years back. He admitted that his Aadhaar Card is having the same address. He is residing in a rented house and therefore he has not got his address changed in the Aadhaar Card. He denied that he was served with Legal Notice dated 02.07.2021, Ex. PW1/10, at the above address. He voluntarily stated that he is residing in a rented house at Bindapur. He had also received notice at his residence at Bindapur. He denied that he had received notices dated 29.09.2021 and 26.10.2021 from DLSA, Dwarka Courts, Dwarka. He admitted that he can write his name in English. To the suggestion that he had deliberately obtained GST Certificate, Mark-A, for the purpose of taking loan, he stated that it is known to Sh. Gupta. To the suggestion that he had deposited his Aadhaar Card, PAN Card etc. for obtaining GST Certificate, he stated that he was working with Sh. Umesh Gupta and his Aadhaar Card and PAN Card were lying with him. He had not signed any document for obtaining GST Certificate.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 17 of 26 He had signed Ex. PW1/2, Ex. PW1/4, Ex. PW1/5, Ex. PW1/6, and Ex. PW1/7. He voluntarily stated that when he had signed these document, the same were blank. To the suggestion that he had signed the above loan documents while sitting in the bank, he stated that he had signed these documents in the office of Sh. Umesh Gupta, where Manager of the bank was present. He had filed first complaint to the police after receipt of notice from the court. He is having account in the bank since 1997. He has deposited and withdrawn money from his bank account. He admitted that since 1997, he is himself doing all the transactions of his bank account. He is doing such transactions for his personal bank account. To the suggestion that he is trying to mislead the court by saying that Sh. Umesh Gupta has taken the loan or that he has not taken the loan, or that due to loss in business, he did not want to repay the loan amount, he stated that the loan was taken by Sh. Umesh Gupta, he had no knowledge about the same, he had not received any money and that Sh. Umesh Gupta and Manager of the Bank have connived with each other and they have used the money. He denied that the bank officials had written number of letters to him and also called him telephonically. He stated that his mobile number is given in his Aadhaar Card. He had not been given any information on his said mobile number. He voluntarily stated that he has never been issued any cheque book by the bank nor he has used the money. To the question as to whether he had made any complaint that GST Certificate has been issued in his name, he stated that he had no knowledge about the said Certificate and that he had not made any such complaint. He voluntarily stated that the said GST number is not CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 18 of 26 operative. After receipt of notice from the court also, he had no knowledge of the GST Certificate and, therefore, he has not made any complaint. He has not filed any complaint w.r.t. the GST Certificate, Mark-A. He denied that he has not intentionally got address in his Aadhaar Card changed to use it for the purpose of obtaining loan. He denied that he had signed all the loan documents and cheque himself. He voluntarily stated that he had not received any cheque. He denied that he has made a false story in order to avoid his liability for repayment of the loan. He further denied that every document he had signed was with the intention to obtain loan from the bank. He also denied that he had used the loan amount as reflected in the Statement of Account, Ex. PW1/11. He denied that he has received cheque book from the plaintiff. He also denied that he has used the cheques reflected in the Statement of Account, Ex. PW1/11.
14.5 DW2 Sh. Ram Murat Verma has tendered his affidavit Ex. DW2/A, wherein he has deposed about his Aadhaar Card, Mark- DW2/1. He stated that he and Sh. Pappu Verma used to work together in the factory of Sh. Umesh Gupta till 2020, when the said factory was closed. Sh. Pappu Verma has left the factory few months back. Sh. Umesh Gupta had told him that he would take GST in his (DW-2) name, and would also make a company for him, so that he could earn from it. Sh. Umesh Gupta has told him that just like he has created a company in Pappu's name, he would also create a company in his name and just like he has applied for loan in the name of Pappu's company, he would apply for loan in the name of his company also.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 19 of 26 But he told him (Sh. Umesh Gupta) not to do so. He further stated that Sh. Pappu never ran any company. Sh. Umesh Gupta used to make bills/challans in the name of Hariom Industries and use them. Many times the employees of Punjab National Bank came to meet Sh. Umesh Gupta.
14.6 During his cross examination, DW-2 has stated that he knows Sh. Pappu Verma for the last about six-seven years. His address is WZ G-202, Vishwas Park, Gali no. 13, Rajapuri, Uttam Nagar, New Delhi. He is residing about two to four galis away from Sh. Pappu Verma's house. They have never resided in the same house. He has seen Aadhaar Card, DW1/A of Sh. Pappu Verma. He admitted that the address of Sh. Pappu Verma is RZ-202, Vishwas Park, Rajapuri Uttam Nagar, New Delhi. He admitted that his address is also the same as that of Sh. Pappu Verma in Aadhaar Card. Sh. Pappu Verma is residing in RZ-202, Vishwas Park, Rajapuri Uttam Nagar, New Delhi. However, neither he nor Sh. Pappu Verma are residing at the above address. They have made Aadhaar Card at the said address. The address given in the Affidavit, Ex. DW2/A is RZ-202, Vishwas Park, Gali no. 13, Uttam Nagar, New Delhi 110059. He denied that he has deliberately given wrong address in his affidavit. He stated that he is presently residing at Tihar Village. He denied that in order to falsely depose in favour of Sh. Pappu Verma, he had intentionally given his wrong address, so that he can not be traced later on. He further stated that before working with Sh. Umesh Gupta, he had not worked anywhere else with Sh. Pappu Verma. He denied that he has deposed CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 20 of 26 falsely in his affidavit, Ex. DW2/A, or that the same has been prepared at the behest of Sh. Pappu Verma. He denied that in conspiracy with Sh. Pappu Verma, he is trying to mislead the court, so that Sh. Pappu Verma does not have to repay the loan. He denied that both he and Sh. Pappu Verma are residing in the same house as mentioned in their respective Aadhaar Cards.
14.7 It is pertinent to note that as per the order sheet dated 31.05.2022 of my Ld. Predecessor, defendant no. 2 has appeared in person on the said day and submitted that he was the owner of defendant no. 1. He also accepted the notice on behalf of defendant no. 1. The said admission clearly shows that defendant no. 2 is the proprietor of defendant no. 1. Further, in his written statement, defendant no. 2 has stated that in the year, 2018, Sh. Umesh Gupta induced him for opening current account in the name of M/s Hariom Industries by showing him as its proprietor, whereas he has nothing to do with the said firm. Rather, Sh. Umesh Gupta told him that he would become owner of the said firm to which defendant no. 2 refused, saying that he was not interested in becoming proprietor of any firm as he was happy with his job of worker and he was also not having any money for running the said account. On this, Sh. Umesh Gupta told him that he was having links with the Bank Manager and would manage the things for opening current account and he would himself invest in the said business. So, on his inducement, defendant no. 2 handed over his Aadhaar Card, PAN Card and photographs and accompanied him to Oriental Bank of Commerce, Jail Road, Hari CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 21 of 26 Nagar, New Delhi for opening the current account and after opening the current account, Sh. Umesh Gupta took him to Oriental Bank of Commerce, B-1 Janakpuri, for taking loan in the name of firm, where his signature were obtained by the Bank Officers on certain papers, without reading out its content. From the aforesaid, it is clear that defendant no. 2 was aware of the fact that a current account was being opened and loan was being taken in the name of M/s Hariom Industries, of which he was the proprietor.
14.8 It is pertinent to note that defendant no. 2 has filed the Tax Invoices of M/s Hariom Industries, Ex. DW1/D (Colly). The same have been apparently signed by Sh. Pappu i.e. defendant no. 2. However, he has not testified that the said invoices do not bear his signature or that his signatures on the same have been forged. In his affidavit, Ex. DW1/1, defendant no. 2, while deposing as DW-1, testified that he has also filed copies of the tax invoices of defendant no. 1 with his written statement. During his cross examination, to the suggestion that he had signed Ex. PW1/2, Ex. PW1/4, Ex. PW1/5, Ex. PW1/6 and Ex. PW1/7 in the bank, he stated that he had signed these documents in the office of Sh. Umesh Gupta, where Manager of the bank was present. His said statement is contrary to the averments made in the written statement and the complaints, Ex. DW1/B and Ex. DW1/C to S.H.O. Bindapur and DCP, Sector-19, Dwarka, respectively, wherein he has stated that one day Sh. Umesh Gupta had taken him to Oriental Bank of Commerce, Jail Road, Hari Nagar, where his account was opened and later, in the year 2019, Sh. Umesh CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 22 of 26 Gupta had taken him to Oriental Bank of Commerce, B-1, Janakpuri for taking loan where his signatures were obtained on certain documents. From the aforesaid, it is clear that defendant no. 2 is the proprietor of defendant no. 1 M/s Hariom Industries and he was aware that the loan was being taken in his name.
14.9 Further, the plaintiff has also filed GST Registration Certificate, Mark-A, of legal name 'Pappu Verma' and trade name 'Hariom Industries'. No question has been put to PW-1 that the said GST Registration Certificate, Mark-A, does not pertain to him. The defense raised by defendant no. 2 that in the loan application form, the mobile number 8287403354 or the Email ID does not belong to him is of no help to the defendant, because if such contention is accepted, the borrowers can fill up wrong information in connivance with other persons and later on take advantage of the said wrong information by contending that the loan was not taken by them. Since, defendant no. 2 was aware that he had gone to the bank for the purpose of opening current account and for obtaining loan, it was incumbent upon him to ensure that correct information is given in the loan application form/loan documents, admittedly signed by him. Since all the loan documents have been admittedly signed by defendant no. 2 and as per his written statement, he was well aware of the purpose for which the documents were being signed, it cannot be held that he was cheated by the plaintiff for obtaining loan from the plaintiff bank. Rather, from the from the matters before the court, it appears that defendant no. 2 has, in connivance with Sh. Umesh Gupta, obtained loan from the CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 23 of 26 plaintiff without any intention to repay the same. Further, the Complaint dated 13.07.2022, Ex. DW1/B and Complaint dated 18.07.2022, DW1/C have been made after defendant no. 2 appeared in the court on 31.05.2022 and admitted that he was owner of defendant no. 1 and also accepted notice on behalf of defendant no. 1. It appears that the said complaints were made as an afterthought to avoid his liability towards the plaintiff.
14.10 From the evidence led by the plaintiff, it is clear that on 04.12.2019, the plaintiff has sanctioned to defendant no. 2, CC- Working Capital (Cash Credit) loan of Rs. 10,00,000/- (Rupees ten lac only), with interest @ 9.15%, per annum, vide Sanction Letter dated 10.12.2019, Ex. PW1/4. The defendant has executed Agreement of Hypothecation of Assets and Common Agreement both dated 10.12.2019. Later, due to COVID-19 pandemic, the defendant was also provided with Moratorium w.r.t. interest accrued in the Cash Credit Facility Account from March, 2020 to August, 2020. The said CFITL facility dated 01.09.2020 was of Rs. 48,824/- (Rupees forty eight thousand eight hundred and twenty four only). As the defendants were irregular in repaying the loan amount, the CFITL Account was closed on 02.06.2021 and the outstanding amount of Rs. 51,591/- (Rupees fifty one thousand five hundred and ninety one only) was transferred to the Cash Credit Account. The Statement of Account, Ex. PW1/11, reveal the defaults committed by the defendants in repayment of the loan. It also show that as on 29.01.2022, Rs.
CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 24 of 26 12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only) is outstanding against the defendants.
14.11 The mere fact that PW-1 was not present at the time of sanction of loan or that the plaintiff has not produced the cheques used by defendant no. 2 does not negate the plaintiff's case. The plaintiff has also filed Certificate u/s 2A of The Bankers' Books Evidence Act, 1891 and u/s 65 B of the Indian Evidence Act, 1872, Ex. PW1/12, with regard to Statement of Account, Ex. PW1/11. As per the Bankers' Books Evidence Act, 1891, a certified copy of entry in a Bankers' Books is prima facie evidence of the existence of such entry. From the matters before the court, it is considered that the plaintiff has been able to prove its case against the defendants. Thus, it is held that the plaintiff is entitled to recover from the defendants, jointly and severally, a sum of Rs. 12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only). Issue nos. 1 and 2 are decided accordingly, in favour of the plaintiff and against the defendants.
15.1 Issue No.3.
"If answer to the issue no. 2 is in affirmative, whether the plaintiff is entitled to interest? If yes, at what rate and for which period? OPP."
The plaintiff has also claimed pendente-lite and future interest on the outstanding amount @ 9.15%, per annum, till its realization. In the facts and circumstances of the case, it is considered that pendente-lite and future interest @ 09.00 % per annum, would be just and reasonable. Thus, it is held that the plaintiff is entitled to recover from the defendants, jointly and severally, a sum of Rs. CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 25 of 26 12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only), alongwith pendente-lite and future interest @ 9.00%, per annum, till realization of the entire amount. Issue no. 3 is decided accordingly.
16.1 Relief.
In view of the aforesaid discussion, the suit is decreed in favour of the plaintiff and against both the defendants, jointly and severally, for a sum of Rs. 12,37,801/- (Rupees twelve lac thirty seven thousand eight hundred and one only), alongwith pendente-lite and future interest @ 9.00% per annum, till the realization of the entire amount.
17.1 The plaintiff is also awarded costs of the suit.
18.1 Decree be drawn accordingly.
19.1 A copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise, in terms of Order XX Rule 1 of the Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015).
20.1 File be consigned to Record Room.
Announced in open Court on 14.12.2023.
(Rakesh Syal) District Judge (Commercial Court)-03 South-West, Dwarka Courts, New Delhi 14.12.2023 CS(Comm) No. 82/2022 Punjab National Bank vs M/s Hariom Industries & Anr. Page no. 26 of 26