Bangalore District Court
Bank Of India vs Rathna Bai C S on 30 October, 2025
1
COM.O.S.582/2025
KABC170014002025
IN THE COURT OF LXXXII ADDL.CITY CIVIL &
SESSIONS JUDGE, COMMERCIAL COURT,
BENGALURU (CCH-83)
PRESENT: SRI. VIDYADHAR SHIRAHATTI, LL.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE,
BENGALURU.
Com.O.S.No.582/2025
Dated on this 30th Day of October 2025
Plaintiff BANK OF INDIA, A body
corporate constituted under
the Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1970 and
Having its Head office At
'Star House', C-5, G-block,
Bandra Kurla Complex,
Bandra (East), Mumbai-
400051 and, having a branch
office Amongst other places
at at JC Road Branch, At
No.4/2, O. T. C. Road, Off. J.
C. Road, Behind LIC Building,
2
COM.O.S.582/2025
near Sharada Talkies,
Bangalore-560 002,
represented by its Chief
Manager & Authority Letter
Holder Mr.Kotrugouda M, S/o
Channappa, Aged about
years,
(By Sri. K. Raveendran -
Advocate)
//versus//
Defendant Mrs. Rathna Bai .C S, W/o Sri.
Narasimha Murthy HS, Aged
about 40years, No.9, 9th
Cross, 35th Main 9th Phase,
JP Nagar Bengaluru - 560053.
(Defendant is Placed exparte
on 27.09.2025)
Date of Institution of the
21.04.2025
suit
Nature of the suit (suit
on pronote, suit for
declaration & Suit for recovery of money
Possession, Suit for
injunction etc.)
Date of commencement
17.10.2025
of recording of evidence
Date on which judgment 30.10.2025
3
COM.O.S.582/2025
was pronounced
Total Duration Year/s Month/s Day/s
00 06 09
(VIDYADHAR SHIRAHATTI),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This suit is filed by the Plaintiff bank against the Defendant for recovery of Rs.11,87,657/- under Term Loan account No.840777710000006 along with current and future interest at the rate of 11% per annum compounded monthly and 2% penal interest from the date of filing of suit till its realization.
2. The Brief facts as per Plaint are as follows:-
2.1. The Plaintiff Bank is engaged in banking activities and services, including lending and extending credit facilities to its customers under various categories. The First Defendant approached the Plaintiff Bank through a Loan Application dated 19.12.2018 seeking financial 4 COM.O.S.582/2025 assistance under the Prime Minister's Employment Generation Programme (PMEGP) for a Term Loan for the purpose of working capital. After considering the request, the Plaintiff Bank sanctioned a Term Loan of ₹9,50,000/- to the Defendants vide Sanction Letter dated 20.05.2019, subject to certain terms and conditions, which the Defendants duly accepted.
2.2. The Defendants executed an On Demand Promissory Note dated 20.05.2019 for ₹9,50,000/-, agreeing to repay the same with interest at 11% per annum with monthly rests in favour of the Plaintiff Bank. They also executed an Agreement in Form L-516 dated 20.05.2019 for the said Term Loan amount of ₹9.50 lakhs in favour of the Plaintiff Bank. As per the terms of the loan agreement, the Defendants agreed to repay the Term Loan in installments along with the agreed rate of interest. Further, the Defendants executed a Hypothecation-cum-Loan Agreement dated 20.05.2019 towards the above credit facility, agreeing to repay the loan in 84 monthly installments, along with interest as agreed. The Defendants also hypothecated sewing machines in favour of the Plaintiff Bank as 5 COM.O.S.582/2025 security for the said loan. The Defendants executed Bearer Letters in Form L-435 dated 20.05.2019 for the Term Loan amount of ₹9.50 lakhs, and an Installment Letter in Form L-440 dated 20.05.2019, agreeing to repay the Term Loan in 84 installments of ₹16,267/-
each along with interest. They also executed an MCLR Agreement - New Loans dated 20.05.2019, acknowledging awareness of RBI guidelines on the subject and confirming that the rate of interest shall be determined by adding the applicable spread/premium to the Bank of India's Marginal Cost of Funds Based Lending Rate (MCLR) as fixed or reset from time to time.
2.3. The Defendants executed an Agreement dated 20.05.2019 consenting to the disclosure of their financial and other information as defined under Section 3(13) of the Insolvency and Bankruptcy Code, 2016. They also executed a document titled Credit Facilities/Limits Sanctioned to Me/Us dated 20.05.2019, wherein they confirmed that non-compliance with any of the stipulated terms and conditions would disentitle them from claiming any compensation, damages, or 6 COM.O.S.582/2025 otherwise from the Plaintiff Bank. The Defendants further executed a UCC Agreement dated 20.05.2019, confirming that the documents executed in favour of the Plaintiff Bank would remain valid even in cases where cancelled, modified, suspended, reduced, or temporarily held limits are subsequently reinstated. They also executed a Letter for Compliance of Bank's Guidelines on Responsible Financing dated 20.05.2019, undertaking to provide the Plaintiff Bank with all required information, statements, and data from time to time in connection with the said facilities.
2.4. An Authorization Letter dated 25.09.2019 was also executed by the Defendants, authorizing the Plaintiff Bank to debit their account for CGTMSE guarantee fees, installments, and other applicable charges. Subsequently, the Defendants acknowledged the said Term Loan by executing Acknowledgment of Debt/Securities in Form L-444C dated 18.05.2022, thereby confirming their indebtedness and reviving the loan documents and securities. However, after availing the said credit facility, the Defendants failed to adhere to the terms and conditions of the sanctioned Term 7 COM.O.S.582/2025 Loan. They also failed to repay the dues as and when they became payable and did not clear the outstanding loan amount or the accrued interest. Despite repeated demands and requests made by the Plaintiff Bank, the Defendants remained irregular in repayment of the principal and interest amounts in connection with the said credit facility. The Plaintiff filed an application for pre-institution mediation before the District Legal Services Authority, Bengaluru Urban vide PIM No.2479/2024 against the Defendant on 08.01.2025 and the said authority issued the Form-3: Non Starter report.
3. Inspite of service of summons through Paper Publication, the Defendant is not appeared before this court. Hence, the Defendant is placed ex-parte. In support of the plaintiff case the Chief Manager of the Plaintiff Bank present and filed affidavit in the form of chief-examination and examined as Pw.1 and relied upon 10 documents marked as Ex.P.1 to Ex.P.18.
4. Heard the arguments of the counsel for the plaintiff on the points was arise by this court.
8COM.O.S.582/2025
5. Based on the above pleadings of the Plaintiff, the following points arise for my consideration :-
1. Whether the Plaintiff is entitled for the Suit Claim from the Defendant ?
2. What Order ?
6. My findings on the above Points are as under:
1. Point No.1 :- In the Affirmative.
2. Point No.2 :- As per the final Order for the following reasons.
REASONS
7. Point No.1 :- The Plaintiff filed this suit for recovery of Rs.11,87,657/- with interest at the rate of 11.00% per annum from the date of suit till its realization.
8. The Defendant has borrowed the loan from Plaintiff Bank under Prime Ministers employment Generation programme (PMEGP) for term loan of Rs.9,50,000/- on dtd.19.12.2018 for the purpose of working capital. The Plaintiff bank sanctioned the loan as per order dated 20.05.2019. The Defendant has executed Agreement in firms C-516 and also executed 9 COM.O.S.582/2025 Demand Promissory Note dated 20.05.2019, also executed Loan Agreement cum Hypothication deed dtd.20.05.2019, bearers letters in form L435, dtd.20.05.2019 for Rs.9,50,000/- executed in favour of the Bank. It is also undertaken in form L440 dtd.20.05.2019 to repay the loan amount in 84 installments of Rs.16,267/- per month.
9. Defendant has also executed MCLR Agreement new loans dtd.20.05.2019, where by the Defendant declares that, she is aware of RBI guidelines. Also executed UCC Agreement, MCLR Agreement, Financial information Agreement and letter of compliance of bank guidelines. However, the defendant has not repaid the loan. Hence, the plaintiff has approached DLSA in PIM No.2479/2024. However, the matter is not settled. Hence, the plaintiff has constrained to file this suit for recovery.
10. The plaintiff to substantiate its case, the Chief Manager of the Plaintiff bank examined as PW.1 and relied 18 documents marked as Ex.P.1 to Ex.P.18. Ex.P.1 is the authorization letter. Ex.P.2 is the application form for financial assistance 10 COM.O.S.582/2025 dtd.19.12.2018. Ex.P.3 is the Sanction letter dtd.20.05.2019. Ex.P.4 is the Demand Promissory Note dtd.20.05.2019. Ex.P.5 is the Agreement in form L516 dtd.20.05.2019. Ex.P.6 is the Loan agreement cum hypothication deed dtd.20.05.2019. Ex.P.7 is the bearer letter in form L435. Ex.P.8 is the Installment letter dtd.20.05.2019. Ex.P.9 format for MCLR Agreement new loan dtd.20.05.2019. Ex.P.10 is Agreement dtd.20.05.2019. Ex.P.11 is Credit Facilities limit sanctioned to me dtd.20.05.2019. Ex.P.12 is UCC Agreement dtd.20.05.2019. Ex.P.13 is compliance of Banks guidelines on the responsible financing. Ex.P.14 is authorization letter. Ex.P.15 acknowledgment of debt. Ex.P.16 is PIM report. Ex.P.17 Statement of Accounts. Ex.P.18 is the Certificate U/s 2A(b) and 2A(c) of Banker's book of evidence Act.
11. I have gone through the documents and oral evidence of PW.1. The loan borrowed by the Defendant as per loan application marked as Ex.P.2 on dated 19.12.2018 and the same is sanctioned as per Ex.P.3 on 20.05.2019 for monthly installment of 84 EMI's total at Rs.16,267/- per month. The Defendant has executed Demand Promissory Note as per Ex.P.4 and 11 COM.O.S.582/2025 acknowledgment of debt dtd.18.05.2022 is Ex.P.15. Ex.P.6 is the Loan agreement cum hypothication deed dated 20.05.2019.
12. The Installment letter as per Ex.P.8 is agreed to pay 84 EMI's of Rs.16,267/- per month for every month. Therefore, the suit of the plaintiff is well within the period. Ex.P.2 to Ex.P.15 and 17 clearly reveals about the defendant has borrowed the loan from Plaintiff bank. Ex.P.17 is the Statement of Account which reveals that, the defendant is due a sum of Rs.10,21,727/- and which is supported by the Certificate U/s 2A(b) and 2A(c) of Banker's book of evidence Act. The Defendant have acknowledged of liability as per Ex.P.15. Ex.P.16 is PIM report as Defendant has not appeared before the DLSA, Bengaluru. The Defendant is due for Rs.11,87,657/-. Therefore, the Defendant has not appeared. Hence, the claim of the Plaintiff remained unchallenged. The Defendant has agreed to pay interest the rate of 11.00% per annum from the date of suit till its realization. Therefore, in view of the above discussions, I answer point No.1 in ' Affirmative'.
12COM.O.S.582/2025
13. Point No.2 : -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is hereby decreed with cost.
The Defendant is hereby directed to pay a sum of Rs.11,87,657/- with Interest @11.00% per annum and 2% per annum penal interest in respect to Term Loan Account number No.840777710000006 from the date of the suit till its realization.
Draw Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendant to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by her, verified and corrected by me and then pronounced by me in open Court on this the 30th day of October, 2025).
(VIDYADHAR SHIRAHATTI), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.
13COM.O.S.582/2025 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF PW-1 I Sabeena.
LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Authorization letter Ex.P.2 Application form for financial assistance dated 19.12.2018.
Ex.P.3 Sanction letter dated 20.05.2019. Ex.P.4 On demand Promissory note dated 20.05.2019.
Ex.P.5 Agreement in form L-516 dated 20.05.2019. Ex.P.6 Hypothication cum loan agreement dated 20.05.2019.
Ex.P.7 Bearer letter in form L-435 dated 20.05.2019. Ex.P.8 Installment letter dated 20.05.2019. Ex.P.9 Format for MCLR agreement new loan dated 20.05.2019.
Ex.P.10 Agreement dated 20.05.2019. Ex.P.11 Credit facilities limit sanctioned tome/us dated 20.05.2019.
Ex.P.12 UCC agreement dated 20.05.2019. Ex.P.13 Compliance of Bank's guidelines on the responsible financing dated 20.05.2019. Ex.P.14 Authorization letter dated 20.05.2019.
14COM.O.S.582/2025 Ex.P.15 Acknowledgment of debt dated 18.05.2022. Ex.P.16 PIM report dated 08.01.2025.
Ex.P.17 Statements of accounts.
Ex.P.18 Certificate U/sec.2A(b) and 2A(c) of Bankers
book of evidence Act
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT NIL LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT NIL (VIDYADHAR SHIRAHATTI), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.