Bangalore District Court
Bank Of Baroda vs Anitha F Gandhi on 9 January, 2025
KABC170029322023
IN THE COURT OF LXXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE (CCH-85) (COMMERCIAL COURT),
BENGALURU
DATED THIS THE 9th DAY OF JANUARY 2025
PRESENT
SRI.RAMAKANT CHAVAN,
B.Com., LL.B.(Spl)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.1375/2023
PLAINTIFF:
Bank of Baroda,
(Earlier Dena Bank)
A Body Corporate constituted by and
under the Banking Companies
(Acquisition & Transfer of Undertakings)
Act, 1970, having Head Office situated at
Baroda Bhavan, R. C. Dutt Road, Alkapuri,
Vadodara, Gujarat State and interalia
Branch office at Ganganagar Branch,
Bengaluru
Rep. by its Chief Manager and PA holder
Sri. N. Vishwanath Naik,
S/o Krishna Naik
Aged about 44 years
(By Sri.Nagaraj N. Damodar, Adv.)
AND
DEFENDANT:
Mrs. Anitha F. Gandhi
W/o Ashok Gandhi
Aged about 47 years
2 Com.O.S.No.1375/2023
Proprietrix
M/s Flawless Enterprises,
No.29, 5th Cross, 2nd Main,
Nandi View Layout,
Ex-Servicemen Colony, Dinnur Road,
R. T. Nagar, Bengaluru - 560 032
(By Sri.S. Raj Prabhu, Adv.)
Date of Institution 02.12.2023
Nature of suit For recovery of money
Date of First Case Management 02.04.2024
Hearing
Date of commencement of 18.04.2024
recording of evidence
Date on which judgment 09.01.2025
pronounced
Time taken for disposal Years Months Days
1) From the date of First Case 00 09 07
Management Hearing
2) Total duration 01 01 07
LXXXIV Addl. City Civil & Sessions Judge
(CCH-85) Commercial Court, Bengaluru
JUDGMENT
This is a suit filed by the plaintiff against the defendant for recovery of Rs.7,07,434.06 with court costs and future normal interest at the rate of 10.45% and 9.55% p.a. respectively together with penal interest at the rate of 2% p.a. compounded 3 Com.O.S.No.1375/2023 monthly from 07.11.2023 to till realization in full and thereby direct the defendant to pay the said sum.
2. Brief facts of the plaintiff's case are that the defendant availed a Term loan facility of Rs.8.00 lakhs for business purpose by executing necessary documents on 28.06.2016 under loan account No.106509041000042 (New A/c No.73750600000311) in 84 EMIs of Rs.13,470/- each along with agreed rate of interest at 10.45% p.a. and also additional default interest at the rate of 2% p.a. in case of default to repay the loan before the due date.
It is further pleaded that, the defendant had also been sanctioned Working Capital loan facility of Rs.2.00 lakhs on 15.09.2016 under loan A/c No.106506211000022 (New A/c No.7375050000004), agreed to repay the same within One year along with agreed rate of interest at 10.45% p.a. and also additional default interest at the rate of 2% p.a. in case of default. The said Working capital facility was renewed on 22.03.2018 and 31.08.2019 agreeing to repay the within one year with interest at 10.35% and 9.55% p.a. and additional default interest at 2% p.a. respectively.
It is further pleaded that, the defendant has failed to adhere to the repayment schedule and thus became chronic defaulter, even after repeated demands and requests by the plaintiff. Thus, the plaintiff bank got issued demand notices to the defendant on 09.08.2017, 07.10.2017, 06.12.2017, 05.02.2018, 08.03.2018, 09.04.2018, 04.02.2019, 16.05.2019, 01.10.2022 and 11.05.2022 demanding the repayment of the outstanding 4 Com.O.S.No.1375/2023 due, and in spite of the same the defendant did not come forward to pay the outstanding dues, instead the defendant got issued a legal notice dated 15.06.2021 to the plaintiff bank and the same was replied on 28.06.2021. As on 06.11.2023, the defendant is in due of Rs.6,99,434.06 together with future interest at 10.45% and 9.55% p.a. respectively penal interest of 2% p.a. compounded monthly from 07.11.2023 till realization in full.
It is further pleaded that, prior to institution of the suit, the plaintiff also approached the DLSA, Bengaluru vide PIM No.3047/2022 on 26.12.2022, but, the defendant filed an untenable response, hence, the matter could not be settled and the DLSA has issued non starter report on 15.11.2023. Hence, the plaintiff is constrained to file this suit and prays for decree the suit.
3. On service of summons, the defendant has appeared through her counsel and filed her written statement. She has denied most of the contents of the plaint averments. She has contended that the suit filed by the plaintiff is not maintainable and liable to be dismissed in limine. The defendant in the year 2015 had approached District Industries and Commerce for a startup business loan, after scrutinizing the loan papers the plaintiff sanctioned Rs.10.00 lakhs with bifurcation of Rs.2.00 lakhs as OD and Rs.8.00 lakhs as Term loan/working capital and had released Rs.7.79 lakhs for purchase of machinery. The defendant had claimed subsidy of Rs.2.50 lakhs on 07.12.2016.
5 Com.O.S.No.1375/2023The defendant's account already restructured without her consent during March 2020 for housing loan. Later, when there was no positive response from the plaintiff, the defendant approached the HDFC Bank for her housing loan, while generating the CIBIL score, that reflected FITL loan raised by the plaintiff for outstanding of Rs.9595/- and also term loan with a tenure of 84 months on 20.03.2020. She has repaid 44 EMIs of Rs.13,470/- with respect to her PMEGP loan due to non issuance of covid moratorium facility. Due to the said reason, the HDFC bank had rejected the loan application and same was communicated to the defendant on 22.04.2022. The defendant learnt about the FITL loan raised by the plaintiff bank and she approached the plaintiff bank seeking clarification. The defendant requested the plaintiff bank to furnish her statement of accounts along with amortization of statement. But, the plaintiff did not furnish the same.
It is further stated that, the defendant approached the banking Ombudsman Bengaluru and make a representation on 03.08.2021. The plaintiff bank had furnished the actual documents as required by the defendant and it is clear that the defendant was deprived of liberty to availing moratorium facility as declared by the RBI. The defendant's scheduled repayment was for a sum of Rs.13,467/- p.m. for a tenure of 84 months, in case of moratorium availed, the tenure had to change from 84 months to 90 months. The statement forwarded to the Banking Ombudsman, it shows the fact that the term loan was 6 Com.O.S.No.1375/2023 restructured with 12 months free look moratorium with EMI Rs.13,000/- instead of Rs.13,470/- with a tenure of 40 months, which communicates to the CIBIL Authority that, the customer was incapable to pay Rs.13,470/-, hence, restructured to Rs.13,000/- p.m. without any notice or intimation to the customer, the plaintiff had also unauthorizedly opened an additional loan for an amount of Rs.9595/- as FITL loan even without securing instructions from the defendant and the same is admitted by the plaintiff bank that, the FITL loan was opened from the backened office without the consent of the defendant and the term loan moratorium also differs with the Covid moratorium.
It is further stated that the defendant paying her EMI regularly, the plaintiff had restructured the term loan and FITL loan was processed by the plaintiff bank without any kind of instructions from the defendant. The CIBIL score of the defendant was shown as defaulter, even through the defendant had regularized her loan till September 2021, the defendant had to pay only 24 EMIs to complete the loan tenure, when the defendant got to know that her loan account was restructured and shown the defendant as a defaulter in the CIBIL report, the defendant demanded for detailed statement of her loan accounts and the plaintiff bank failed to comply with the same. The defendant as a law abiding citizen raised a complaint with Banking Ombudsman and also got issued a legal notice to the plaintiff bank and the plaintiff bank had given untenable reply to the legal notice.
7 Com.O.S.No.1375/2023It is further stated that, the defendant thereafter, filed a WP No.15963/2022 before the Hon'ble High Court of Karnataka seeking action against the plaintiff bank and same is pending for consideration. The defendant was never a defaulter as claimed, and the plaintiff bank has no authority to put her account into NPA and report the defendant's score with CIBIL as sub standard. The defendant has admitted that, she had furnished the documents to the plaintiff bank for availing loan, but, she had never authorized the plaintiff bank to do unauthorized transactions in her account and not authorized the plaintiff to open multiple loans without her consent. The defendant had sent an email to the plaintiff bank stating that, she will not be liable to pay the EMI till her accounts not rectified. The defendant has filed her objections before the Forum and the plaintiff bank who did not appear before the DLSA and the case was closed as the plaintiff bank failed to appear and not on the ground of settlement could not be arrived. In fact the DIC and commerce allotted 2.00 acres of land in Vasantha Narsapura near Tumkur to the defendant in the name of Flawless Enterprises and the defendant had paid EMD margin money and due to the willful flatulent act of the plaintiff bank, the defendant could not process the industry development. There is no cause of action to institute the suit.
It is further stated that, the defendant had repeatedly raising her grievance and approached the banking Ombudsman in the year 2021 as an arm twisting tactics declared the defendant's 8 Com.O.S.No.1375/2023 loan account as SUB (Sub standard), which was brought to the notice of the defendant in the month of August 2021 inspite of the defendant has regularly paid her EMIs upto 2021 August. The plaintiff bank has done multiple fraudulent transactions in the accounts of the defendant, till date it is not rectified. Due to the negligence and irresponsible act of the plaintiff bank, the defendant has faced inexpressible hardship and suffered a huge loss as her CIBIL score has been affected and due to her poor CIBIL score and wrong assessment, the defendant's house loan request have been rejected and now by virtue of the wrong assessment made by the plaintiff bank, the defendant is unable to raise loan from any of the financial institutions / banks not only with respect to Flawless Enterprises, but, also the other entities of the defendant.
It is further stated that, the plaintiff bank ought to have given PMEGP loan only for women Entrepreneurs to do start-ups and the plaintiff bank instead of maintaining the accounts in the name of the Firm Flawless Enterprises, the plaintiff bank executed the loan in the individuals loan with an understanding that, the transaction would be done in the account of Flawless Enterprises.
It is further stated that, the defendant had filed WP.No.15963/2022 against the plaintiff and others seeking a writ of certiorari to quash notices which is cause of action in the aforesaid suit and for further reliefs,same is pending adjudication 9 Com.O.S.No.1375/2023 before the Hon'ble High Court of Karnataka. The defendant has also filed an application seeking for stay of the present suit and the same is pending adjudication before the Hon'ble High Court of Karnataka. Hence, on these grounds prays for dismissal of the suit.
4. The defendant has also filed counter claim for declaring the plaintiff bank having brought frivolous litigation sans resolution, granting relief, concession etc., directing the plaintiff bank to pay damages of Rs.12.00 Crores towards damages, losses and mental agony and cost.
It is further stated that, on 28.06.2016 the defendant had availed loan of Rs.10.00 lakhs under PMEGP to set up manufacturing of high end well designed silky, crafted and ultra designed garments worn in marriage and parties. The loan had two components i.e. Rs.8.00 lakhs as term loan and Rs.2.00 lakhs as working capital loan categorized as Cash Credit Limit. The aforesaid credit facility carried back end subsidy of Rs.2.50 lakhs and in addition interest subsidy by DIC as applicable to be obtained by the plaintiff bank from time to time, the original tenure is 84 months. The credit facility is also backed by 100% coverage under CGTMSE. The activity carried on by the defendant was worst affected as is evident from various Disaster Management Policy promulgated by the State under NDMA and follow-up measures and directives issued by the RBI to mitigate the hardship in the national economic activity especially small 10 Com.O.S.No.1375/2023 business. The PMEGP unit set up by the defendant came to a standstill thereby incurring huge loss. The plaintiff bank itself not only responsible for the defendant's failure but also the account turning NPA since the plaintiff bank did not extend resolution plan as per RBI Directives, especially when her repayment of EMI towards Term loan was regular and her Working capital facility viz., Cash credit account was on the face eligible for resolution plan communicated by the RBI, the account would have slipped to NPA. The plaintiff bank suffocated the defendant's unit as well as her sustenance and livelihood.
It is further stated that, in her A/c No.73750200000040 there was sufficient balance as on the date of marking of NPA to service her Term loan account vis-a-vis policy of the plaintiff bank as well as Regulatory Directives which favoured regularizing her Working Capital facility i.e. cash credit account with short review and renewal thereby prevent slippage as per the IRAC Norms as per material on record. In banking parlance the plaintiff bank ruined its finance as well as defendant's business not to speak of her sustenance and livelihood besides flagrant disregard to Regulatory Directives, its own policy and guidelines. The plaintiff bank did not initiate steps to Revive her business unit despite repeated request though as pr Regulatory Directives, the plaintiff Bank should have initiated steps of Resolution plain on their own. Therefore, the counter claim herein preferred sustains on all the fours.
11 Com.O.S.No.1375/2023It is further stated that, the defendant had also applied for housing loan of Rs.85.00 lakhs which the plaintiff bank received and did not communicate further took shelter under the garb that her housing loan proposal file is misplaced and lost categorically brings to fore the negligent attitude of plaintiff bank. The defendant is having sanction of machinery subsidy letter of NSIC for Rs.62.00 lakhs, which carried subsidy of 40%, to set up an industry within 3 years from the allotment date on the industrial plot allotted by KIADB and due to biased act of plaintiff bank classifying her credit facility as NPA, she could not raise finance to develop her industry on the allotted plot. Consequently, the KIADB cancelled the allotment of industrial plot allotted to the defendant.
It is further stated that, the insurmountable pressure and mental agony caused by the bank's lackadaisical attitude, took a toll on the health of the defendant and ruined the career of her two dependent sons due to non availability of attention of the defendant and funds required to pursue their education in the interest of their choice, more so, in view of the fact that CIBIL Score and status not only make a bearing on defendant's credibility and capacity but on her children's prospects and education. Therefore, the plaintiff bank is also liable for the consequences and impact of its ill advised act is classifying the defendant's credit facility as NPA which has caused deprivation of industrial plot allotted by KIADB and Credit facility sanction to her by NSIC. The impact of loss in this regard is not less than 12 Com.O.S.No.1375/2023 Rs.12.00 Crore even on the conservative estimate though it is not sufficient for the mental agony and health and time loss. It is further stated that, the plaintiff bank had sent Five blank envelopes through RPAD to make believe notice is given to the defendant, which shows the bad intention of the plaintiff bank. Because of this unethical and negative attitude, the defendant's credit facility was marked as NPA, as a result, her CIBIL rating is adversely affected resulting in denial of credit facility in the banking system. The defendant has also sent email to the plaintiff's reason for marking her credit facility NPA though she has paid the documented EMI regularly.
It is further stated that, the defendant had lodged a complaint with the Banking Ombudsman at Bengaluru in No.202122002006891 on 15.06.2021 wherein she had focused the aforesaid authority on the hardship heaped on her by the plaintiff bank and the said matter was under consideration of the said authority, curiously the plaintiff bank marked her credit facility NPA on 29.06.2021. Under normal circumstances especially Units financed under PMEGP backed by CGTMSE coverage as well as impact of extraneous factors such as impact Covid-19, recover proceeding not initiated. Therefore, the act of plaintiff bank in setting up litigation smacks ulterior motive and soaked with malafide intentions as is evident as per material on record, especially, in the given situation the defendant a beleaguered Women lends credence to the defendant's allegations, more so, the plaintiff bank itself was conspicuous by 13 Com.O.S.No.1375/2023 its absence in the Mediation, which is not only prelude but mandatory before this court in PIM proceedings.
It is further stated that, the plaintiff bank Officials have even forged the signature of the defendant as can be seen from their own record and material on this court i.e. Ex.P1 and P20 which on the face lends credence to the defendant's allegation herein and also goes to buttress her contention that, the bank is relying on sham documents with a sole oblique motive to harass, cause loss and hardship to her. The plaintiff bank deliberately and negligently refused to revive the defendant's unit thereby rendering the loan document a sham. As such the plaintiff bank is liable to compensate the defendant for the loss heaped on the defendant. The Directives were issued pursuant to State policy under NDMA. In the above back drop the defendant lays claim for counter claim for about Rs.12.00 Crore. Viewed from any angle the credit facility granted by the plaintiff bank to the defendant was not NPA as on the relevant date. Therefore, the litigation foisted on the defendant does not hold either scrutiny of law or banking ethics and policy as such this court should dispassionately view the claim and award hefty compensation and damages in the interest of justice and equity as well as deterrent to prevent avoidable litigation, especially by public sector banks. Hence, prays for allowing the counter claim.
5. The plaintiff bank has filed rejoinder to this counter claim. It has denied most of the contents of the counter claim.
14 Com.O.S.No.1375/2023There are no grounds to consider the counter claim sought by the defendant. The plaintiff bank has followed the guidelines of RBI with regard to grant of Covid-19 moratorium to the loan accounts of its borrowers extended the said facility to those loan accounts where the scheduled EMIs were not paid during the period from 01.03.2020 to 31.08.2020. The defendant herein also requested for moratorium benefit to her loan accounts, the bank following the guidelines of RBI, applied moratorium benefit to the loan account of the defendant by converting the accumulated unserviced interest for the deferment period from 01.03.2020 to 31.08.2020 into FITL loan account No.73750600000529. The object behind the permission granted by the RBI to convert the unserviced accumulated interest into FITL is to save the loan accounts of the borrowers from slipping into NPA for non payment of EMIs due to the ongoing pandemic. The request of the defendant for a housing loan by the plaintiff bank was rejected for the reason that, the proposed property to be offered as a security to the housing loan had no sanction plan and occupancy certificate. This reason of rejection of housing loan was informed personally to the defendant.
It is further stated that, it could be seen from the statement of accounts that, the defendant failed to pay EMIs and when the same fell due into the term loan account i.e. on 04.09.2021, the defendant had paid a sum of Rs.13,470/- into the loan account and thereafter, no payments have been made, same resulted in classification of the defendant as defaulter and the said account 15 Com.O.S.No.1375/2023 came to be classified as NPA on 29.06.2021. The defendant had not submitted the stock statement in respect of the cash credit loan facility. It is an undisputed fact that, the defendant had approached the Banking Ombudsman by lodging a complaint against the plaintiff bank and the plaintiff bank has replied on 18.09.2021 to the complainant and the Banking Ombudsman, after considering the said reply, it has dropped the complaint.
It is further stated that, with regard to the extension of moratorium period to the loan accounts of the borrowers appears to be under confusion, as such the moratorium in respect of term loan and working capital facilities were granted by converting accumulated unserviced interest into FITL. The defendant herself has accepted in the WP No.15963/2022 that she has made the payment of EMIs only upto the month of August 2021 and thereafter, no payments have been made. The CIBIL score of the defendant is solely calculated based on the credit behaviour as reflected in the Accounts and Enquiries section of the credit information report of the account holder. This being the basis for CIBIL score, the default committed by the defendant in repayment of the loan availed from the plaintiff bank, has adversely affected the CIBIL score of the defendant. Absolutely, there is no reason for the defendant to be a defaulter in repaying the EMIs from the month of August 2021 with respect to the term loan and also with effect to CCH loan which was last renewed on 31.08.2019 for a period of One year. Hence, on these grounds prays for rejection of the counter claim.
16 Com.O.S.No.1375/20236. Based on the above, this court has framed the following:
ISSUES
1. Whether the plaintiff bank proves that the defendant had availed a Term Loan facility of Rs.8.00 Lakhs by executing necessary documents on 28.06.2016?
2. Whether the plaintiff bank proves that the defendant had also got sanctioned Rs.2.00 Lakhs on 15.09.2016 as working capital loan facility by executing necessary documents?
3. Whether the plaintiff bank further proves that the defendant had also once again got renewed working capital loan facility on 31.08.2019 by executing necessary documents?
4. Whether the plaintiff bank proves that the defendant had agreed to pay interest at the rate of 10.45% p.a. and 2% p.a. as penal interest?
5. Whether the plaintiff bank is entitled for the relief sought?
6. What order or decree?
ADDITIONAL ISSUES FRAMED ON 26.07.2024
1. Whether the defendant proves that her account number 73750200000040 was held sufficient balance as on the date of marking of NPA Service her term loan, as pleaded?
17 Com.O.S.No.1375/20232. Whether the defendant proves that she has sustained loss because of the acts of the plaintiff bank?
3. Whether the defendant is entitled for the reliefs sought in the Counter Claim?
7. To prove the case, the Chief Manager of the plaintiff is examined as PW1 and got marked some documents at Ex.P1 to P34. The defendant is examined as DW1 and got marked some documents at Ex.D1 and D23.
8. Heard the learned counsel for the parties.
9. My findings on the above issues are:
Issue No.1: In the affirmative Issue No.2: In the affirmative Issue No.3: In the affirmative Issue No.4: In the affirmative Issue No.5: Partly in the affirmative Additional Issue No.1: In the negative Additional Issue No.2: In the negative Additional Issue No.3: Partly in the affirmative Issue No.6: As per the final order for the following REASONS
10. Issue Nos.1 to 4: The burden of proving these issues lies on the plaintiff bank. To avoid repetition of facts and evidence on record, I have taken up these issues for a common discussion. The Chief Manager of the plaintiff has filed his affidavit. He has 18 Com.O.S.No.1375/2023 examined as PW1. He has narrated the plaint averments. The documents produced by PW1 are loan applications, sanction letters, On demand promissory note, letter of repayment, loan cum hypothecation agreement, statement of account, supplementary agreement, DPN, Composite hypothecation Agreement, acknowledgment of liability, notice, reply, AODs, declaration cum undertaking, office copies of demand notices, postal documents, PIM report at Ex.P1 to P34.
11. In the cross examination, it is forthcoming that he cannot produce the lending policy, supervision and monetary of the loan accounts of Vijaya Bank during the year 2016 at present. The loan availed by the defendant under PMEGP Scheme and Nodal Agency being KVIC and DIC. He has admitted that, the plaintiff bank has submitted subsidy claim to DIC and also admitted that, the said amount is credited to cash credit account. According to him, the plaintiff bank has not claimed interest subsidy from DIC. He knows that the defendant has filed a Writ Petition in WP.No.15963/2022, DIC is also one of the respondent. He has identified the copy of the statement of objections filed by DIC in the said WP. He has admitted that, for an applicant to claim that on the request of the applicant necessary particulars have to be filed by the bank in the prescribed Form and thereafter, it has to be forwarded to DIC as per the Industrial Policy - 2014-19, this is the objection filed by the DIC in the said objection.
19 Com.O.S.No.1375/202312. In the further cross examination, there is no record found and the plaintiff bank has no instruction from the DIC or from the defendant to claim subsidy. He has denied that, because of this, the defendant sustained a loss of more than Rs.5.00 lakhs. Based on the hypothecation, the plaintiff bank has lent the amount to the defendant. He is aware regarding CGTMSE scheme. He has denied that, the claim upto Rs.10.00 lakhs is to be waived under this scheme. He has also denied that, the loans and advances under PMEGP Star-up scheme of the borrower advanced by the bank was eligible for coverage under CGTMSE scheme. The defendant has to pay 1% of the loan amount towards CGTMSE coverage for every year till the term of the loan. He has admitted that, the last date of renewal of CC loan was on 31.08.2019 and also admitted that, when the secured SL account was standard as on the date of renewal of cash credit loan.
13. It is further forthcoming that, during Covid-19 pandemic, RBI has issued regulatory guidelines for not to demand monthly installments in secured loan account and also to give relief in cash credit accounts. According to him, Six months time has been extended to pay the installment and interest. The officials of the plaintiff bank had visited the garment factory of the defendant. He has admitted that, the cash credit facility pertaining to the defendant on 29.06.2021 was marked as NPA, since cash credit was not renewed. According to him, there is a mistake crept in Ex.P14(b) regarding marking of NPA date. He 20 Com.O.S.No.1375/2023 has admitted that, the annual renewal was on 31.08.2020 and generally CC operative limits can be revived by 180 days. He has admitted that, the first short revive was held on 17.02.2021 and also admitted that, the competent authority to revive of credit facility is his higher authority. He has also admitted that, his higher authority has directed him on 17.02.2021 to continuously follow up the firm for obtaining the action plan for revival of the unit. The RBI has issued Two directives on 23.05.2020 as per Ex.D4 and D5.
14. It is further forthcoming that, he has admitted that, during Covid-19 several industries have been failed. The defendant's unit was in production of fashionable garments for Women and Children. He has identified the Ex.D6 i.e. the copy of the Circular dated 20.12.2023 issued by Deputy CEO (PMEGP). He has denied that, in spite of repeated direction by the higher officials, the plaintiff bank had not extended the benefit for revival of the unit of the defendant and second loan as per PMEGP scheme. According to him, the defendant had not requested for anything, instead of the plaintiff bank requested the defendant for restructuring of loan account to avoid NPA. But, the defendant had refused for restructuring the loan account.
15. It is further forthcoming that, he is conversant with NPA accounts. He is not aware that, the defendant has been granted Two acres of land from KIADB for industry purpose. He has admitted that, the credit facilities became NPA that too 21 Com.O.S.No.1375/2023 during Covid-19 period is common, the plaintiff bank has to take necessary action by issuing demand notice, personal request then approached to the court under SURFAESI Act.
16. It is further forthcoming in his further cross examination that, he has admitted that the defendant has created an asset out of the bank finance and also the Policy of the bank to ensure asset credited to the bank finance. He does not aware regarding DICGCI Insurance coverage. He has also admitted that, the credit facility of the defendant was due for renewal on 31.08.2020. The defendant is having Two accounts in the plaintiff bank, one is SB account and another one is current account in the name of M/s Flawless Enterprises. He is not aware whether the defendant had applied any loan, other than NISE - KAIDB Project. He has admitted that, the defendant had applied for housing loan in June 2020. He has identified the signatures of the defendant on Ex.P5(a) to (u). The signatures found on Ex.P20 and other loan documents are similar. He has denied the other suggestions.
17. The defendant is examined as DW1, she has filed his affidavit. The documents produced by DW1 are copy of loan approval, loan release letter, copy of notice, RBI letters, certified copies of petition, judgment, orders, objections and IA in W.P.No.15963/2022, original KIABD allotment of Industrial plot original DIC, medical report, RBI directive, report on Radiograph X-ray No.27851, copy of the CGTMSE scheme, letter issued by 22 Com.O.S.No.1375/2023 NSIC Ltd., copy of the PMEGP and certificate U/Sec.65B of the Evidence Act at Ex.D1 and D23.
18. In the cross examination, it is forthcoming and she has admitted that, she had availed loan under PMEGP for her unit and also availed loan of total sum of Rs.10.00 lakhs for her business, also availed loan of Rs.8.00 lakhs as term loan towards setting of the units. She has also admitted that, she had availed these loans from E-Vijaya Bank. She has admitted the Ex.P6. She has also admitted that, after amalgamation of E-Vijaya Bank with the plaintiff bank, she has been allotted with new loan account number. She has also identified Ex.P14. She also admitted that, the said loan account is with E-Vijaya Bank.
19. In her further cross examination, she has also admitted that, she has executed Ex.P3 to P5 in favour of the plaintiff bank and she knew the terms and conditions mentioned in Ex.P2, it is regarding term loan. She also admitted that, she has executed Ex.P7 in favour of the plaintiff bank in respect of CC Facility of Rs.2.00 lakhs and also admitted that, it was extended from time to time till 2019. According to her, it was for Two times. The CC facility was renewed on 22.03.2018 as per Ex.P9 i.e. sanction letter. She has also admitted regarding the execution of Ex.P10 i.e. Supplementary Agreement.
20. She has denied that, she has executed Ex.P11 i.e. DPN, but, admitted that, she has executed Ex.P12 i.e. Hypothecation Agreement. She has identified her signatures on 23 Com.O.S.No.1375/2023 Ex.P4 and also Ex.P9. She has admitted that, she had produced the copy of the email dated 24.07.2018 before the Hon'ble High Court of Karnataka in WP.No.15963/2022. She questioned regarding FITL loan sanctioned by the plaintiff bank before the Hon'ble High Court of Karnataka in the said WP. According to her, the plaintiff bank had not taken any consent at the time of FITL loan. She has admitted that, the FITL loan was sanctioned to service the accumulated unpaid interest during the Covid pandemic and the bank was requested for restructuring of loan and she has rejected the same. It is also forthcoming that, the plaintiff bank who gave her the option of debiting, because the term loan was not attached to her current account. The loan was granted in the name of her unit and it was not operated in her name.
21. It is further forthcoming that, she has not produced the account statement of current account pertaining to Flawless Enterprises to show the sufficient balance. She has denied that, the FITL loan was raised for Rs.9,595/- and it was repaid and stands closed. According to her, the said amount was adjusted for her term loan account. She has admitted that, the term loan account and ODCC account were sanctioned under PMEGP scheme during 2015-16 and she has admitted that, the subsidy of Rs.2.5 lakhs was given by the Govt. has been credited to her ODCC account on 07.12.2016 from KVIC and it was given as per the direction of DIC. She has identified the Ex.P32 i.e. the copy of the complaint dated 02.08.2021, she has further admitted 24 Com.O.S.No.1375/2023 that, the contents of Ex.P32 are correct and the plaintiff bank had replied the notice issued by Banking Ombudsman as [per Ex.P33. She has not preferred any appeal against the orders passed by the Banking Ombudsman.
22. It is further forthcoming that, she has admitted that, the plaintiff bank has not deducted any amount as premium from her account towards CGTMSE scheme and also admitted that, she has not questioned the plaintiff bank regarding why premium is not deducted. According to her, it is to be in the documented compulsory. She has admitted that, the CGTMSE scheme protects the plaintiff bank in the event of default committed by a borrower. In the event of default the said scheme will not absolve the borrower from the liability towards the bank. According to her, it is only upto Rs.10.00 lakhs, there is no legal action. Her CIBIL issue was raised because of NPA. She has identified the Ex.P34 i.e. copy of the email by HDFC bank on 22.04.2022. The Ex.D2 copy of the letter given by the plaintiff bank, it is between plaintiff bank and DIC. The Ex.D13 is also an internal letter between the plaintiff bank and the DIC.
23. It is further forthcoming that, the allotment process of site from KIADB is under process. According to her, the last payment made by her was on 04.09.2021 towards her term loan account. It is also admitted that, her term loan account and ODCC account were declared as NPA on 29.06.2021. She has denied the other suggestions.
25 Com.O.S.No.1375/202324. The learned counsel for the plaintiff has submitted his arguments based on the plaint averments and evidence of PW1 and DW1 as well as the documents produced on behalf of the parties. The defendant had availed loan of Rs.8.00 lakhs on 28.06.2016 and executed necessary documents. The loan ought to be repaid in 84 EMIs of Rs.13,470/-, the defendant had also sanctioned working capital loan facility of Rs.2.00 lakhs on 15.09.2016. She has executed the necessary documents. She has also agreed to pay interest as and when accrued. The said working capital loan was once again renewed on 31.08.2019 and then also the defendant agreed to pay the loan with interest. She also agreed for additional interest in case of default. He has further submitted that, the plaintiff bank has issued demand notice on several occasions. He has drawn my attention towards the Ex.P22 to P27, P29 and 30. The defendant also executed AODs in the year 2018 and 2020 as per Ex.P17 and P18. He has further submitted that, obtaining insurance for CGTMSE scheme is not mandatory. He has also drawn my attention towards the cross examination of DW1 and she has admitted that, she has not paid the insurance premium.
25. He has also pointed out towards the defence raised by the defendant in her counter claim. She sought an amount of Rs.12.00 Crores in the counter claim. The defendant has not produced the statement of account deliberately. The say of the defendant is that, she started Flawless Entity, but, it is a separate. The CGTMSE scheme is only to safeguard the banks.
26 Com.O.S.No.1375/2023The defendant is irregular in making payments of EMIs as agreed. The FITL is closed. He has further submitted that, the plaintiff bank is ready to give some concession to the defendant, but, she had not accepted the same. He has also drawn my attention towards the documents produced on behalf of the defendant - Ex.D1 to D6. If the defendant is ready to pay the installments, it will help the defendant also to improve her CIBIL score. But, the defendant did not come forward. He has further pointed out that, no accounts became NPA during the Covid pandemic period. Because of NPA, the RBI has issued guidelines on 29.06.2021. Both the loan accounts of the defendant became overdue. Till today, the defendant is in due. The defendant has not submitted the FIR regarding the alleged stolen goods. No loss sustained by the defendant as alleged. The KIDBA's correspondence was of the year 2017 and the NPA was of the year 2021, it was because of the default committed by the defendant. Even she has not paid the initial payments. Prior to the institution of the suit, the plaintiff bank had approached the DLSA, Bengaluru Urban and filed PIM application on 26.12.2022. Even today, the plaintiff bank is ready for settlement of the matter with the defendant, penalty interest will be waived and she has to pay only contractual rates of interest.
26. Per contra, the learned counsel for the defendant submitted his arguments basing on the defence made out in the written statement. He has pointed out towards the plaint averments also. He has also drawn my attention towards the 27 Com.O.S.No.1375/2023 evidence of PW1 as well as documents produced on behalf of the plaintiff bank. The PW1 who is the Senior Manger of the plaintiff bank, deliberately not speaking the truth. He has concealed the true facts before the court. Because of the negligence on the part of the bank during Covid pandemic, the defendant has sustained loss. The defendant is a widow and she is an Artisan and making Wedding Garments. There is no cause of action to the plaintiff bank to institute this suit. The plaintiff bank has treated the defendant's loan account as NPA, because of this reason, the defendant did not get housing loan and other loans from the banks. There was sufficient balance in the account of the defendant, in spite of that, the plaintiff bank has declared the loan account as NPA. The plaintiff bank has not extended benefits of the borrowers as per the directions of the RBI, especially in Covid-19 pandemic situation.
27. He has further submitted that, the defendant is not disputed the debt. But, the formula adopted by the plaintiff bank is not correct. The defendant is running an industry and Two acres of land has been granted by the KIADB. The defendant has refused for restructuring the loan, if restructure is done, the interest goes up. The plaintiff bank did only one review, but, it did not do the second review deliberately. The PW1 has deposed that, bank officials had visited the defendant's unit, but, nobody has visited.
28 Com.O.S.No.1375/202328. He has also further drawn my attention towards the Ex.D4 and D5 i.e. the letter dated 23.05.2020 by RBI. The Ex.D6 is the Circular dated 20.12.2023 issued by PMEGP Scheme. The plaintiff bank has created the documents, without the consent of the defendant. He has also drawn my attention towards the Ex.D19 i.e. the Scheme of CGTMSE. The defendant is also eligible for interest subsidy of Rs.1.80 lakhs from 01.02.2019. The plaintiff bank has to refund the interest. At the time of granting loan to the defendant, the plaintiff bank had obtained blank documents.
29. In regard to counter claim, he has also pointed out towards the defence made out in the written statement. The defendant is made victim of the incident. It is because of the bank officials negligence. Even though sufficient balance was there in the account of the defendant, unnecessarily the loan account of the defendant was declared as NPA. Hence, the defendant sustained huge loss, now because of this, the defendant is not getting any loan from any banks, because of this, her CIBIL score is also gone up. He has also drawn my attention towards the petition filed by the defendant before the Banking Ombudsman and also the WP before the Hon'ble High Court of Karnataka.
30. During his arguments, he has relied upon the decisions held in MAT No.916/2019 in Bank of Baroda & Anr. Vs Indian Oil Corporation Ltd. & Ors., (1977) 1 SCC 791 in Gurdit 29 Com.O.S.No.1375/2023 Singh & Ors. Vs Munsha Singh & Ors., (1985) 3 SCC 217 in State of Rajasthan Vs M/s Swaika Properties & Anr., WA No.445/2024 in Trans Union CIBIL Vs RBI, (2008) 4 SCC 131 in Srinivas Desai (Dead) by LRs Vs V. Kumar Vamanrao & Ors. and IA No.20612/2023 before the High Court of Judicature at Bombay in Shera Noshir Vajfdar (Dead) Savji Goker Devda Vs Bank of Baroda & Ors.
31. After hearing the learned counsel for the parties, I have gone through the pleadings and evidence of the parties. The admitted facts are, the defendant had availed term loan facility on 28.06.2016 of Rs.8.00 lakhs and another loan i.e. Working capital loan facility of Rs.2.00 lakhs on 15.09.2016.
32. After perusing the evidence of DW1 as discussed supra, she has categorically admitted that, she had availed a total loan of Rs.10.00 lakhs and executed the necessary documents as per Ex.P3 to Ex.P7 and P9, and also admitted the Supplementary Agreement in respect of CC Facility on 22.03.2018 as per Ex.P10. After perusing these Ex.P1 to P7, P9 and P10, these are the necessary loan documents, executed by the defendant who is the borrower of these loans. After perusing the same, the rate of interest is also mentioned. The defendant has not disputed the rate of interest also. The DW1 has denied the Ex.P11 i.e. DPN dated 31.08.2019.
33. The defendant is an educated woman, completed her MBA in Finance from Wales University, United Kingdom in the 30 Com.O.S.No.1375/2023 year 2018 and it is also forthcoming that, she worked in Centurion Bank of Punjab about 10 years from 2004 to 2014. Therefore, it cannot be said that, the defendant had no knowledge of the terms and conditions of the Ex.P3 to P7, P9 and P10 as well as Ex.P12 and also rate of interest, as well as Ex.P11. Since the DW1 has categorically admitted regarding the availment of loans and rate of interest mentioned in these documents. There is no much discussion is necessary to hold that, the plaintiff bank has succeeded in proving that the defendant had availed term loan facility of Rs.8.00 lakhs on 28.06.2016 and working capital loan facility of Rs.2.00 lakhs on 15.09.2016. Therefore, in the light of discussions made supra, I am of the opinion that the plaintiff bank has succeeded in proving the Issue Nos.1 to 4 by placing cogent evidence. Therefore, I answer Issue Nos.1 to 4 in the affirmative.
34. Additional Issue Nos.1 and 2: The burden of proving these Issues lies on the defendant. The defendant has taken several defence in her written statement and also sought for counter claim as stated supra. According to the defendant, she was having sufficient balance in her account No.73750200000040 as on the date of NPA. Her another defence is that, because of the acts of the officials of the plaintiff bank, she has sustained loss.
35. The defendant has produced the Ex.D1 to D23. The Ex.D4 is the letter of RBI dated 23.05.2020, Ex.D5 is copy of the 31 Com.O.S.No.1375/2023 letter by RBI dated 23.05.2020, Ex.D6 is the Circular dated 20.12.2023 issued by PMEGP Scheme. The Ex.D7 to D10 and D21 are the petition and objections in WP.No.15963/2022 filed by the defendant. The Ex.D11 and D12 are the allotment letters dated 04.05.2017 and 25.04.2017 by KIADB regarding allotment of land. The Ex.D16 to D18 are the copies of RBI directives of the year 2015, 2019 and 2021. The Ex.D19 is the copy of the CGTMSE scheme. Ex.D20 is the copy of the letter dated 26.11.2018 issued by NSICL, Ex.D22 is the copy of the PMEGP Scheme. The defendant has not produced her bank account bearing No.73750200000040 of the written statement.
36. The Ex.P14 is the statement of bank account pertaining to the defendant with plaintiff bank at Ganganagar Branch pertains to A/c No.73750500000004. It opened on 15.09.2016, it is also an admitted fact, DW1 has admitted during her cross examination. It is for the period 12.09.2020 to 14.10.2022. The NPA date as per the plaintiff bank is on 29.06.2021. After going through the page No.4 of Ex.P14, the balance due was Rs.1,98,175/- as on 30.06.2021. The loan ought to be repaid in 84 EMIs of Rs.13,470/- per month. The Ex.P14 is the bank account pertaining to the defendant bearing No.106506211000022, it starts from 15.09.2016 and it has been given new number referred above and it is marked at Ex.D14(a), which is also admitted by DW1 during her cross examination. After perusing the particulars, the defendant has paid some installments commencing from 02.11.2016 and the last 32 Com.O.S.No.1375/2023 installment was on 31.08.2020 as could be seen in page No.3 of Ex.P14. Page No.8 of Ex.P14(b) shows the date of NPA, it is dated 29.06.2021.
37. The learned counsel for the plaintiff has submitted that, the defendant has not produced her bank details pertaining to the account standing in the name of M/s Flawless Enterprises, A/c No.73750200000040. But, he has filed a memo on 07.12.2024, it is for the period of 02.04.2019 to 02.12.2024. There is no balance as such, as on the date of NPA dated 29.06.2021.
38. The balance as could be seen on 05.12.2020 it was Rs.2,624.10, as on 07.12.2020 Rs.2,124.10, as on 08.10.2020 Rs.2,125.60, as on 09.12.2020 Rs.1,800.60, as on 12.12.2020 it was Rs.1,302.60, as on the same day it was Rs.5,302.60 (Rs.4,000/- was deposited on the same day), as on 12.12.2020 Rs.3,302.60 (Rs.2,000/- was withdrawn on the same day), as on the same day Rs.3,002.60 (Rs.300/- was withdrawn on the same day), as on 14.12.2020 it was Rs.979.00, as on 26.12.2020 it was Rs.7,534.85, as on 28.12.2020 it was Rs.3,534.85, as on 29.12.2020 it was Rs.3,537.48, so on and so forth, as on 05.04.2021 Rs.8,840.64 and as on 12.04.2021 it was Rs.1,163.64, as on 04.06.2021 it was Rs.10,199.04, as on 25.06.2021 it was Rs.1,624.04. By perusing the same, it was crossed Rs.10,000/- only once i.e. Rs.10,199.04.
33 Com.O.S.No.1375/202339. Though the defendant has pleaded in her written statement / counter claim that, her account number referred above was having sufficient balance as on the date of marking of NPA service. But, the defendant has not produced any cogent evidence to prove her defence. The the learned counsel for the plaintiff bank has produced the copy of the bank statement of account No.73750200000040. Since the defendant has not produced the said account extract, hence, adverse inference can be drawn.
40. The further say of the defendant is that, the plaintiff bank has given subsidy of Rs.2.5 lakhs out of the loan sanctioned as per the scheme. Admittedly, the loan of Rs.8.00 lakhs was availed on 28.06.2016 and the EMI was Rs.13,470/-, 84 months time was there to repay the said loan. Another sum of Rs.2.00 lakhs has been sanctioned by the plaintiff bank in the month of August 2016. The said loan was renewed on 31.08.2019. The Ex.P17 is the AOD executed by the defendant on 18.12.2018 and Ex.P18 is also another AOD dated 19.06.2020. The defendant has issued a legal notice on 15.06.2021 as per Ex.P15 and it was replied by the plaintiff bank as per Ex.P16 on 28.06.2021. The Ex.P32 is the letter issued by the defendant on 02.08.2021 to the Banking Ombudsman, RBI, Bengaluru. After going through the same, she had admitted the availment of loan of Rs.10.00 lakhs from the plaintiff bank including OD facility of Rs.2.00 lakhs. It is also stated that, as per the provisions of the Govt., she was eligible for the Covid Moratorium. It is also stated that, she has 34 Com.O.S.No.1375/2023 given the said facility by the plaintiff bank and accepted by her. Her grievance is, in spite of her repeated reminders and letters to Zonal Office, Executive Desk Grievance Cell, the issues have not been resolved. The bank is refusing to do the necessary rectifications. It is also forthcoming in Ex.P32.
41. The Ex.P33 is the letter / clarification given by the plaintiff bank to the Banking Ombudsman, Nrupathunga Road, Bengaluru dated 18.09.2021. It has stated and clarified that, the accounts of Mrs.Anitha Gandhi was not restructured by the bank, however the loans were under the MSME category and due to the lack of turnover and also due to Covid-19 lock-down, bank has initiated the restructuring of the MSME small loans by taking out the overdue interest amount as the FITL loan account from the back-end for supporting for such type of borrowers for not allowing loans slipping to NPA. The complainant (defendant herein) was also extended with the moratorium of Six months, as per RBI's directives as it was applicable to all. It is also clarified that, in CIBIL report, the repayment period as shown as 40 instead of 84 for the term loan. It is due to the left over period of repayment of term loan is showing as 40 months instead of complete period of repayment as 84 months. This is the clarification given by the plaintiff bank to the Banking Ombudsman, to whom the defendant herein had lodged a complaint / petition. It is also on record that, the complaint/petition submitted by the defendant is closed.
35 Com.O.S.No.1375/202342. The defendant raised a defence that, reconstruction of the loan account is not carried out by the plaintiff bank during the Covid-19 pandemic, inspite of the directions of the RBI. But, after going through the cross examination of DW1 discussed above, she has categorically admitted that, "It is true to suggest that, plaintiff bank was requested for restructuring of loan and I rejected the same". There is no dispute regarding subsidy of Rs.2.5 lakhs and moratorium of Six months, it is also admitted by the defendant through her letter.
43. I have gone through the decisions relied upon by the plaintiff bank. The principles laid down in these decisions are well founded. These decisions come to the aid of the plaintiff bank. I have gone through the decisions relied upon by the defendant. The principles laid down in these decisions are well founded. These decisions do not come to the aid of the defendant.
44. After considering the evidence and materials on record, the defendant has failed to prove these additional Issues. Therefore, I answer these Additional Issue Nos.1 and 2 in the negative.
45. Issue No.5 and Additional Issue No.3: The plaintiff bank has sought for relief of recovery from the defendant to the tune of Rs.7,07,434.06 with cost and future interest at the rate of 10.45% p.a. and 9.55% p.a. and penal interest at 2% per year compounded monthly from 07.11.2023 to till realization. The 36 Com.O.S.No.1375/2023 plaintiff bank has succeeded in proving the Issue Nos.1 to 4 as discussed herein above.
46. The availment of loan is not in dispute in the year 2016 and renewed in the year 2019, even the defendant had executed AODs as per Ex.P17 and P18 in the year 2018 and 2020. Notices exchanged between the parties. Suit is filed in the year 2023. Admittedly, RBI has issued guidelines regarding Covid-19 pandemic and defendant also availed moratorium of Six months, which is also an admitted fact. Regarding reconstruction of the loan account as stated supra and as could be seen in the evidence of DW1, she herself has refused for reconstruction of the loan account. During the pandemic - Covid 19, the RBI has given some concession for interest and also recovery of interest from the borrowers.
47. As per the Circular produced at Ex.D16 issued by the RBI, Clause No.2.3 reads - "Overdue - Any amount due to the bank under any credit facility is 'overdue', if it is not paid on the due date fixed by the bank." Clause No.3.1.1 reads - "The policy of income recognition has to be objective and based on the record of recovery. Internationally, income from non performing asset (NPA) is not recognized on accrual basis but is booked as income only when it is actually received. Therefore, the banks should not charge and take to income account interest on any NPA. This will apply to Government guaranteed accounts also." Clause No.3.3 - "Appropriation of recovery in NPAs - 3.3.1 -
37 Com.O.S.No.1375/2023Interest realized on NPAs may be taken to income account provided the credits in the accounts towards interest are not out of fresh/additional credit facilities sanctioned to the borrower concerned". Clause No.3.4 reads - "Interest Application - On an account turning NPA, banks should reserve the interest already charged and not collected by debiting Profit and Loss account, and stop further application of interest. However, banks may continue to record such accrued interest in a Memorandum Account in their books. For the purpose of computing Gross Advances, interest recorded in the Memorandum account should not be taken into account.
48. By perusing the records and evidence of the parties referred above, 84 months time was granted for repayment of the loan/s in EMIs. But, the defendant has not paid the EMIs, though she has paid some EMIs in the earlier stage of the loan/s. Therefore, in looking into the condition of the defendant and her unit, and in view of the directions given by the RBI during Covid-19 pandemic, the banks cannot charge interest. After perusing the plaint, the plaintiff bank has charged interest of Rs.65,672.49 and compound interest of Rs.22,294/- on the outstanding balance of Rs.3,47,617.99 in regard to one loan and in regard to another loan, it has charged interest of Rs.48,523.58 and compounding interest of Rs.15,651/- on outstanding balance of Rs.1,99,675/-. Hence, the plaintiff bank has charged not only interest but, also compound interest. It amounts to Rs.1,52,141.07. The defendant is entitled for rebate of interest.
38 Com.O.S.No.1375/2023Hence, the plaintiff bank is entitled for Rs.5,47,293/- [Rs.6,99,434.06 - Rs.1,52,141.07 (interest)] only with cost.
49. In regard to counter claim sought by the defendant is concerned, the defendant has failed to prove the Additional Issue Nos.1 and 2 and she has not produced the cogent evidence in regard to her counter claim. Her further defence is that, because of the acts of the officials of the plaintiff bank, she sustained loss in her business as well as her CIBIL rate is also disturbed. It is on record that, the defendant was allotted with a bit of land (2.00 acres) by KIADB. After perusing the records and cross examination of DW1, it is forthcoming that, the allotment process of site from KIADB is under revival process. It shows that, because of this non allotment of land from KIADB, the defendant has not suffered any loss, as pleaded. In regard to subsidy of Rs.2.5 lakhs is concerned, which is pleaded in the written statement, after going through the bank statement produced on behalf of the plaintiff, the said amount of Rs.2.5 lakhs was credited to the loan account of the defendant.
50. It is also on record that, the defendant had approached the Banking Ombudsman and putforth her grievance, after call for the explanation / clarification from the plaintiff bank, the matter was closed. The defendant also filed a Writ Petition referred above before the Hon'ble High Court of Karnataka, same is pending for consideration. The defendant is a lady entrepreneur, dealing in ready-made garments, by considering all 39 Com.O.S.No.1375/2023 these aspects and grievances putforth by the defendant before the Banking Ombudsman, the defendant has made the counter claim. She has paid court fee also in part. These aspects go to show that the defendant suffered mental agony and she has produced the medical documents also. The defendant is also entitled for Rs.1.00 lakh towards mental agony.
51. By looking into the facts and circumstances of the case, the plaintiff bank is entitled for the balance loan amount as referred above and as pleaded in the plaint. The plaintiff bank is not entitled for the interest as well as compound interest and other expenses as sought. Hence, the plaintiff bank is entitled for Rs.5,47,293/- with cost. The defendant is not entitled for the relief as sought in her counter claim, but, she is entitled for Rs.1.00 lakh towards mental agony. Accordingly, I answer the Issue No.5 partly in the affirmative and Additional Issue No.3 partly in the affirmative.
52. Issue No.6: In the result, I pass the following:
ORDER Suit of the plaintiff is decreed in part with cost.
The plaintiff is entitled for Rs.5,47,293/- from the defendant.
The plaintiff is also entitled for future interest at the rate of 6% p.a. till realization of the decreetal amount. The counter claim made by the defendant is hereby allowed in part.40 Com.O.S.No.1375/2023
The defendant is entitled for Rs.1.00 lakh.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/Or. XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer directly on the computer, typed by her, corrected and then pronounced by me in the open court on this the 9th day of January 2025) (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.
ANNEXURE List of witnesses examined for the plaintiff:
PW1 N. Vishwanath Naik List of documents marked for the plaintiff:
Ex.P1 Loan application dated 16.06.2016
Ex.P2 Sanction letter dated 28.06.2016
Ex.P3 On Demand Promissory note
Ex.P4 Letter of Repayment dated 28.06.2016
Ex.P4
Signatures
(a to c)
Loan agreement cum Hypothecation Deed dated Ex.P5 28.06.2016 Ex.P6 Statement of accounts along with certificate 41 Com.O.S.No.1375/2023 Ex.P6(a) Statement of new loan account No.7375060000311 Loan Agreement cum Hypothecation Deed dated Ex.P7 15.09.2016 Ex.P8 Loan application dated 18.03.2018 Ex.P9 Sanction letter dated 22.03.2018 Ex.P9 Signatures (a to c) Ex.P10 Supplementary Agreement dated 22.03.2018 Ex.P11 DP Note dated 31.08.2019 Composite Hypothecation Agreement dated Ex.P12 31.08.2019 Ex.P13 Acknowledgment of liability dated 31.03.2019 Ex.P14 Statement of accounts Ex.P14 Relevant Entry (a to c) Ex.P15 Notice dated 15.06.2021 Ex.P16 Reply dated 28.06.2021 Ex.P17 AOD dated 18.12.2018 Ex.P18 AOD dated 19.06.2020 Ex.P19 Loan application dated 08.09.2016 Ex.P20 Sanction letter dated 31.08.2019 Declaration cum undertaking cum authority dated Ex.P21 31.08.2019 Ex.P22 Letter of continuing the security dated 31.08.2019 Ex.P23 O/c of the demand notice dated 05.02.2018 42 Com.O.S.No.1375/2023 Ex.P24 O/c of the demand notice dated 08.03.2018 Ex.P25 O/c of the demand notice dated 09.04.2018 Ex.P26 O/c of the demand notice dated 04.02.2019 Ex.P27 O/c of the demand notice dated 16.05.2019 Ex.P28 Postal receipt Ex.P29 O/c of the demand notice dated 01.10.2022 Ex.P30 O/c of the demand notice dated 11.05.2022 Ex.P31 PIM report Ex.P32 Copy of the complaint dated 02.08.2021 Ex.P33 Copy of the reply dated 18.09.2021 Ex.P34 Copy of email dated 22.04.2022 List of witnesses examined for the defendant:
DW1 Anitha Florence Gandhi List of documents marked for the defendant:
Ex.D1 Copy of the loan approval dated 30.05.2016 Ex.D2 Copy of loan recall letter dated 30.05.2016 Ex.D3 Copy of the notice dated 11.05.2022 Ex.D4 RBI letter dated 23.05.2020 Ex.D5 RBI letter dated 23.05.2020 Ex.D6 Copy of the Circular dated 20.12.2023 C/c of the application filed U/Or 6 Rule 17 of CPC Ex.D7 in WP No.15963/2022 Ex.D8 C/c of the petition in WP No.15963/2022 43 Com.O.S.No.1375/2023 Ex.D9 C/c of the judgment in WP No.15963/2022 C/c of the order passed on IA filed U/Or 6 Rule Ex.D10 17 of CPC in WP No.15963/2022 Original KIADB allotment of Industrial plot dated Ex.D11 04.05.2017 Original letter dated 25.04.2017 issued by Govt.
Ex.D12 of Karnataka Ex.D13 Original DIC letter dated 07.09.2022 Ex.D14 Original report on Radiograph X-ray No.27851 Ex.D15 Medical report dated 28.05.2024 Ex.D16 Copy of RBI directive dated 01.07.2015 Ex.D17 Copy of RBI directive dated 01.10.2021 Ex.D18 Copy of RBI directive dated 07.06.2019 Ex.D19 Copy of the CGTMSE scheme Copy of the letter dated 26.11.2018 issued by Ex.D20 National Small Industries Corporation Ltd.
C/c of the objections filed by the plaintiff bank in Ex.D21 WP No.15963/2022 Ex.D22 Copy of the PMEGP Ex.D23 Certificate U/Sec.65B of the Evidence Act (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.