Delhi District Court
Union Bank Of India vs M/S Purple Line Productions (P) Ltd. & ... on 18 April, 2012
: 1 :
IN THE COURT OF DR. NEERA BHARIHOKE, ADJ1 (SOUTH)
SAKET COURTS, NEW DELHI
Suit no. 361/11
IN THE MATTER OF:
Union Bank of India ........Plaintiff
VERSUS
M/s Purple Line Productions (P) Ltd. & Ors. .........Defendant
18.042012
ORDER:
1 Vide this order, I shall decide the leave to defend application of the defendant no.1 filed under Order XXXVII Rule 3 (5) CPC.
Brief facts of the case are as under:
2 Plaintiff bank had sanctioned granted the TOD facility in favour of the defendant no.1 at the request of the defendant no.1 vide letter dated 24.03.2008, which was converted into Working Capital Term Loan Facility to the tune of Rs. 9,58,627.07/ and the same was disbursed on 31.03.2008. Defendant no.1 is the principal borrower and defendant no.2 and 4 are the guarantors. The said loan was repayable in 24 EMIs of Rs. 39,943/ each. In pursuance of the Loan, defendant no.1 executed loan documents such as Demand Promissory note dated 28.03.2008, General Term Loan Agreement (SD18) Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....1 of 8 : 2 : dated 28.03.2008. Letter of Guarantee executed by defendant no.2 to 4. Simple Debit Balance Confirmation dated 28.03.2008, Affidavit/undertaking executed by defendant no.1 through defendant no.2, Letter dated 28.03.2008 and Debit Balance Confirmation dated 28.03.08 and also defendant no.1 no.2 to 4 executed the hypothecation agreement dated 14.07.08.
3 Defendant no.1 failed to adhere to the fiscal discipline and as per the plaintiff defendant no.1 lastly on 18.06.08 paid Rs. 5 lacs and thereby acknowledged the liability on its part towards the repayment of the dues. Thereafter defendant no.1 despite various requests, reminders and letters, failed to pay the outstanding dues to the plaintiff bank and accordingly a legal notice dated 27.04.2010 and letter dated 01.12.2010 were issued by the plaintiff bank upon the defendant no.1, but defendant no.1 paid nothing towards the dues payable to the plaintiff bank. Hence this suit.
4 By way of present leave to defend application it is submitted by the defendant no.1 that defendants have substantial defences to raise and hence plaintiff is not entitled to decree as prayed for and the defendants no. 1 to 4 are entitled to leave to defend and contest the suit.
5 It is submitted by the defendant no.1 that suit of the plaintiff is not maintainable under Order XXXVII CPC as the amount of Rs. 7,91,599/ claimed in the suit is not a fixed sum of money specified anywhere in the written contract or any documents filed by the plaintiff with the suit , however as per Order XXXVII Rule 1 2 (b) CPC, the suit has to be a fixed sum of money.
Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....2 of 8 : 3 : 6 As per the defendant no.1, statement of account filed by the plaintiff shows that penalty has been levied and penal interest has been calculated and added to the alleged loan account of the defendant no.1 which cannot be claimed under Order XXXVII CPC.
7 Defendants have submitted that statement of account further shows that debit balance of Rs. 2,612.50/ allegedly belonging to one 'INTRAVISION' has been added to the loan account of the defendant no.1 8 It is further submitted by the defendant no.1 that all the documents dated 28.03.08 filed by the plaintiff shows that there were 24 instalments of Rs. 39,943/ with interest to be paid monthly in 24 months, however, documents of subsequent date titled credit facilities dated 29.03.08 shows that loan was to be repaid in 12 monthly instalments of Rs. 79,886/ which is falsity the averment of the plaintiff in its suit. 9 Plaintiff has filed the false suit against the defendants as the alleged working capital term loan was settled between defendant no.1 and the plaintiff way back on 18.06.08, whereby plaintiff agreed to accept Rs. 5 lacs as full and final payment against the said working capital term loan to the plaintiff and hence question of liability of defendants no.2 to 4 as directors and guarantors of the defendant no.1 to pay any amount to the plaintiff does not arise.
10 Further present suit is bad for misjoinder of parties as the loan was taken by defendant no.1 alone which is a private limited company and hence the defendant no.2 to 4 as directors of the defendant no.1 are not at all liable personally and hence could not have been made parties to the present suit.
Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....3 of 8 : 4 : 11 It is further contended by the defendant no.1 that grant of working capital term loan by the plaintiff itself is illegal and irregular as the plaintiff could not have converted temporary overdraft of huge amount of Rs. 9,58,627.07 into alleged working capital term loan.
12 Further, application dated 24.03.08 does not even bear the common seal of the defendant no.1 and also all the documents filed by the plaintiff bank shows that all the documents are only signed by the defendant no.3 alone. However, all the documents and deeds were required to be executed by two directors of defendant No.1 and, thereafter common seal of defendant No.1 to be affixed and further countersigned by defendant No.
2. 13 It is further submitted by the defendant no.1 that alongwith suit plaintiff has not filed any GPA and hence suit of the plaintiff is illegal and without any authority and accordingly defendants are entitled to leave to defend the present suit. 14 Reply to the leave to defend application filed by the plaintiff, in which it is submitted by the plaintiff that plaintiff bank has filed the present suit as per the laws and provisions of the order 37 Rule 2 CPC and all the documents and the statement of accounts of all the defendants are duly certified under the Bankers Book of Evidence Act. It is also submitted by the plaintiff bank that defence raised by the defendants in their leave to defend application does not raise any defence and plaintiff is entitled for decree in its favour. All the other averments of the defendants made in their leave to defend application have been denied and plaintiff bank has prayed that leave to defend application of the defendants may be dismissed and suit of the plaintiff may be decreed as Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....4 of 8 : 5 : prayed for.
15 Arguments advanced by the Ld. counsels for parties. Arguments heard. Record perused.
16 A perusal of the documents filed by the plaintiff bank reveals that the amount of Rs.7,91,599/ has arisen according to the terms of loan agreement which was duly accepted by defendant no.1 through its Directors at the time of executing the loan agreement and order 37 specifically allows the plaintiff to recover liquidated amount with or without interest. The statement of accounts of all the defendants are duly certified under the Bankers Book of Evidence Act.
17 The defendant No.1 has challenged the rate of interest of BPLR plus 4.50% to be variable and, therefore, the sum claimed through the present suit to be not to be a fixed sum of money. However, a perusal of loan agreement reveals that rate of interest is variable, was a part of term of agreement of loan under its clause 2. As regards the imposition of penal interest which according to defendants cannot be claimed u/o 37 CPC, a perusal of clause III of the Agreement reveals that defendant no.1 had agreed to pay penal interest under the terms of agreement dated 28.03.08 and plaintiff has not claimed the penal interest through this suit and has claimed penal interest only as per terms of the loan agreement.
18 The defendant no.1 has challenged the debit balance of Rs.2,612.50 belonging to one Intra Vision. The plaintiff bank has submitted that the said debit transaction was allowed by the defendant no.1 firm in favour of said intra vision, however, Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....5 of 8 : 6 : to avoid controversy, the plaintiff bank gave up its claim with respect to the debit balance of Rs.2,612.50.
19 Defendant no.1 has claimed that plaintiff has imposed the interest twice on the same amount for the period 01.04.2009 to 02.03.11, however, a perusal of statement of account reveals that the calculation for the said period are based on Dummy ledger as per the regular practice of bank law when an account becomes NPA.
20 Defendant no.1 has submitted that the last payment was made by defendant No.1 on 18.06.2008, however, statement of account shows credit of Rs.52,757/ dated 19.10.2009 in the said loan account. However, the said objection was disposed of and was not pressed for vide order of this court dated 27.03.12. Thus, the amount of Rs. 52,757/ is the amount of interest reversed after the account of defendant no.1 became NPA on 16.10.09. Plaintiff has shown in the statement of account of defendant no.1 that the account became NPA on 16.10.2009. As regards showing different EMIs with different interest rates, the sanction letter dated 29.03.2008 in response to request of defendant no. 1 for conversion of temporary overdraft account into a loan account allowed the defendant no.1 to repay the loan in 12 instalments of Rs.79,886/ plus interest commencing from April, 2008 which was the modified acceptance / sanction of the loan agreement which was signed on 28.03.2008 whereby defendant no.1 had agreed to pay back the loan amount in 24 instalments of Rs.39,943/ with interest. The two sums when calculated total to return of same amount by the defendant no.1 to the plaintiff and defendant no.1 has not placed any document on record to show that it had not accepted or agreed to pay back the loan amount as shown in the loan agreement or sanction letter. Plaintiff has claimed that on 18.06.2008, the plaintiff had agreed to accept Rs.5 lacs as full and final Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....6 of 8 : 7 : payment against the said working capital term loan and defendant no.1 paid the sum of Rs. 5 lacs in full and final settlement. However, the plaintiff has denied of any such full and final settlement and defendant no.1 has also not filed any proof or document in support of its averment. Thus, this contention of defendant no.1 cannot be accepted to be correct. 21 Defendant No.1 has also submitted that there is misjoinder of parties as the loan was taken by defendant no.1 alone and there is no personal liability of its Directors i.e. defendants No.2 to 4. It is a settled law that Directors of the company who had complete knowledge of the documents and had signed on behalf of defendant no.1 are bound to repay the loan. Otherwise also, defendants No.2 to 4 stood as guarantors to the loan agreement and are accordingly liable to repay the loan amount. 22 Defendant No.1 has submitted that future interest cannot be claimed or ordered u/o 37 CPC, however, it is a settled law that the court can allow future interest if the suit u/o 37 is allowed after hearing the arguments on application for leave to defend. 23 Defendant No.1 has submitted that temporary overdraft cannot be converted into working capital term loan which is not correct and it is pertinent to mention here that the said conversion was done at the request of defendant no.1 as is apparent from the sanction letter dated 29.03.2008. Defendant No.1 has denied the suit to have been filed without any GPA of plaintiff bank in favour of Mr. Kailash Colony. During the course of arguments, ld. counsel for plaintiff accepted the same to be a typographical error in para No.1 of the plaint. The said error is typographical as is evident from the affidavit filed in support of the plaint which is of Mahavir Verma and plaintiff has filed copy of GPA as well as resolution of defendant company Sh. Mahavir has been authorized to file the present Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....7 of 8 : 8 : suit.
24 In view of all these observations, the defendants have failed to raise any triable issue and accordingly, the application for granting leave to defend is declined. 25 Accordingly, the suit of the plaintiff is decreed in its favour and against the defendants jointly and severally for a sum of Rs.7,88,987/ after deducting the given up claim of Rs.2612/.being principal amount. The plaintiff has prayed for pendente lite and future interest @ 17.25% p.a. with monthly rests w.e.f. 01.03.2011. However, this court is not inclined to grant interest at such an exorbitant rate and is of the firm view that pendent lite interest @ 12% p.a. And future interest @ 10% will serve the ends of justice. 26 Hence suit of the plaintiff is decreed for the sum of Rs.7,88,987/ being principal amount alongwith pendente lite interest @ 12% and future interest @ 12%. No order as to costs. Decree sheet be prepared accordingly.
27 File be consigned to Record Room after necessary compliance.
Announced in the open court (Dr. Neera Bharihoke)
on 18.04.12 ADJ1 (South) Saket Courts
18.04.12
Union Bank of India Vs.M/s Purple Line Productions (P) Ltd. & Ors. Contd.....8 of 8