Bangalore District Court
Union Bank Of India vs S.G. Industries on 6 January, 2022
IN THE COURT OF XLII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (CCH-43)
Present: Sri. Kengabalaiah,
B.Com., LL.B.
XLII Addl. City Civil & Sessions Judge.
Dated this 6 th Day of January, 2022
O.S.No. 5560/2020
Plaintiff/s : Union Bank of India
E-Corporation Bank,
Nagarabhavi Branch,
No.527, Ground floor,
II Stage, 3rd block, Nagarbhavi,
Bengaluru.
Rep.by its Branch Manager, M.S.
Santhosh Kumar.
[By Sri. M.V.S, Adv.]
-Vs-
Defendant/s : S.G. Industries,
No.112/5-22,
Doddanna Industrial Estate,
13th cross, old 15th cross,
Vishwaneedam Post,
Peenya 2nd stage,
Bengaluru.
Represented by its proprietor Mrs.
N. Manjula W/o Karuna Murthy.
[Ex-parte]
Date of institution of the suit 10.11.2020
Nature of the suit Money suit
Date of commencement of 03.12.2021
recording the evidence
2 OS.No.5560/2020
Date on which the judgment 06.01.2022
was pronounced
Total duration Years Months Days
01 01 27
(Kengabalaiah),
XLII Addl. City Civil & Sessions Judge.
*********
J UD GM E N T
The plaintiff bank has filed this suit against the
defendant for recovery of money.
2. The case of the plaintiff bank is that, the plaintiff
bank is the banking company governed under provisions of
banking companies Act 1970, formerly Corporation Bank
amalgamated with Union Bank of India its head office at
Mumbai and its Branch office at Interalia at Nagarabhavi,
Bengaluru. The defendant is a proprietary ship represented
by its proprietor Manjula and defendant carrying on
business. The defendant availed the term loan of
Rs.5,00,000/- vide account No.560656000016166 for
expansion of her business. The plaintiff bank has granted
loan on 19.02.2016 on the hypothication of machinery which
repayable in monthly installments of Rs.10,972/- per month
with a period of 60 months commencing from 31.03.2016.
3 OS.No.5560/2020
The defendant has executed loan documents agreeing to
repay the loan amount on demand together interest @
11.40% p.a. compounded monthly for value received and also
agreed to pay the overdue interest at the rate of 2% p.a. in
case of default in repayment of the loan. But the defendant
has failed to repay the EMI has agreed upon inspite of
repeated request of the plaintiff and regularized the account.
Thus, the loan account of the defendant slipped to NPA.
Inspite of demand and request defendant failed to clear the
dues. However, the defendant has executed on demand
promissory note and take delivery letter. The defendant is
due of Rs.3,10,913-68/- as on 07.11.2020 along with interest
at 12.10% from 20.10.2020 to 07.11.2020.
3. The defendant also plaintiff bank for grant of loan
of OD facility of Rs.1,00,000/- towards working capital of her
existing business and the plaintiff bank granted the OD
Rs.1,00,000/- and the defendant on the hypothication of
machine and defendant has availed SOD of Rs.1,00,000/- on
18.02.2017 which tenable for a period of one year, renewable
thereafter by regularizing the account. In this regard
defendant has executed necessary loan document agreeing to
repay the loan on demand together with interest at the rate of
4 OS.No.5560/2020
10.60% p.a compounded monthly for value received.
Defendant agreed to pay the over due interest at the rate of
2% p.a. in default in payment of loan.
4. Though the defendant has availed the OD facility
but has not brought the OD account in order within one year
and promising to operate the OD account briskly and to bring
the OD account in order but has failed and defendant has
executed fresh promissory note on 08.02.2019 and take
delivery letter.
5. The defendant is due to pay a sum of Rs.79,490-
31/- and interest from 01.11.2020 to 07.11.2020 at the rate
of 12.25% p.a Rs.186-31 total 79,490-31. The defendant
failed to clear the outstanding dues. Hence, the plaintiff
bank issued notice demanding the defendant to clear the
entire outstanding dues.
6. The defendant is liable to pay interest at the rate
of 12.10% p.a compounded monthly including penal interest
at the rate of 2% p.a on term loan and also liable to pay
interest at 12.25% p.a on OD account along with penal
interest from 08.11.2020 till the date of payment.
5 OS.No.5560/2020
7. The cause of action for the suit arose on
19.02.2016. When the 1st installments commence in respect
of term loan and on 08.02.2019 when the defendant executed
fresh demand promissory note and take delivery letter
confirming the execution of fresh demand promissory note
and on 18.03.2019 when the defendant made last payment.
8. In respect of OD account when defendant availed
the OD facility on 18.02.2017 executed loan documents and
on 08.02.2019 when the defendant executed fresh demand
promissory note and take delivery letter confirming the
execution of fresh demand promissory note. Hence, the suit.
9. The suit summons issued to the defendant,
returned unserved. The plaintiff bank got issued the
summons by substitute service through paper publication,
but the defendant remained absent and placed exparte.
10. In order to prove the case of the plaintiff bank, the
Senior Branch Manager of the plaintiff bank namely
Vijayaraj.K.P himself examined as P.W.1 and got marked the
documents at Ex.P1 to P15 and thereafter the matter was
posted for arguments.
6 OS.No.5560/2020
11. Heard the arguments of the plaintiff bank.
12. The points that would arise for my consideration
are : -
1) Whether the plaintiff bank proves that
the defendant has borrowed the loan?
2) Whether plaintiff bank proves that
defendant availed OD facility?
3) Whether the plaintiff Bank is entitled to
the relief sought for ?
4) What order or decree?
13. My findings on the above points are as under:-
Point No.1: In the affirmative
Point No.2: In the affirmative
Point No.3: Partly in the affirmative
Point No.4: As per final order, for the following:
R E A S ON S
14. Point No.1 to 3 :- Since these points are inter-
related each other then they are hereby discussed commonly
in order to avoid repetition of facts.
15. The plaintiff bank has filed this suit against the
defendant for recovery of the loan amount. The plaintiff bank
submits that, the defendant has availed term loan of
Rs.5,00,000/- on 19.02.2016 from the plaintiff bank for
expansion of business by hypothication of machinery by
7 OS.No.5560/2020
executing loan documents and the plaintiff bank has
sanctioned the said loan in favour of the defendant. The
defendant agreeing to repay the loan in monthly installments
10,972/- with interest at the @ 11.4% p.a. compounded 2%
p.a in default of repayment of the loan. But the defendant
failed to clear the loan inspite of repeated request and
demand made by the plaintiff. Defendant has executed on
demand promissory note and take delivery letter. The
defendant is due Rs.3,10,913-68/- in terms of loan account
along with interest @ 12.10% from 20.10.2020 to 7.11.2020.
16. It is further contended that the defendant also
approached the plaintiff bank for grant of loan of OD facility
of Rs.1,00,000/- towards working capital of her existing
business and the plaintiff bank granted the OD
Rs.1,00,000/- and the defendant on the hypothication of
machine and defendant has availed OD facility of
Rs.1,00,000/- on 18.02.2017 which tenable for a period of
one year, renewable thereafter by regularizing the account.
In this regard defendant has executed necessary loan
document agreeing to repay the loan on demand together
with interest at the rate of 10.60% p.a compounded monthly
for value received.
8 OS.No.5560/2020
17. The defendant has due of Rs.79,490-31/- as on
07.11.2020 from 01.11.2020 @ 12.25% p.a.
18. In support of the case of the plaintiff bank, the
Senior Branch Manager namely Vijayaraj.K.P. has filed
affidavit in lieu of her examination-in-chief as PW.1 by
reiterating the contents of the pleadings and has relied upon
the documents, i.e., Term loan executed by the defendant
marked at Ex.P.1, The common deed hypotication of movable
executed by defendant marked at Ex.P2, Take delivery of
demand promissory note marked at Ex.P3, Demand
promissory note executed by the defendant marked at Ex.P4,
the statement of account of term loan of defendant marked
at Ex.P5. The letter executed by the defendant with respect
to seeking of over draft facility marked at Ex.P6 and demand
promissory note executed by defendant request for over draft
facility on 18.02.2017 marked at Ex.P7. Take delivery letter
executed by the defendant marked at Ex.P.8. The common
deed of hypotication of movables executed by the defendant
marked at Ex.P9. The letter of confirmation of fresh demand
promissory note executed by the defendant on 08.02.2019
marked at Ex.P.10. Demand Promissory note executed by
the defendant on 08.02.2019 marked Ex.P.11. Take delivery
9 OS.No.5560/2020
letter executed by the defendant on 08.02.2019 marked at
Ex.P.12. The statement of OD account of the defendant
maintain by the plaintiff bank Marked at Ex.P.13. Copy of
the demand notice issued to the defendant on 02.11.2020
marked at the Ex.P.14. RPAD receipt marked at Ex.P.15.
19. From the evidence of PW.1 and the documents
relied at Ex.P1 to 12, it reveals that the defendant has
borrowed the term loan of Rs.5,00,000/- for expansion of
business by executing necessary documents and
hypothication agreement at Ex.P2 by agreeing to the terms
and conditions of the loan. But the defendant did not repay
the loan amount as agreed. Further defendant availed OD
facility of Rs.1,00,000/- towards working capital for her
existing business by executing D.10 to 12 agreeing to repay
the loan together with interest but the defendant has default
in repayment of the loan for which the plaintiff bank issued a
legal notices to the defendant calling upon to repay the said
amount, which evidence from Ex.P.14, inspite of service of
notice the defendant, but the defendant did not come forward
to repay the loan amount. From Ex.P5-statement of account,
it reveals that the defendant is due in a sum of Rs.3,07,447/-
as on 04.11.2020 to the plaintiff bank. From Ex.P.13 reveals
10 OS.No.5560/2020
that the defendant has due of Rs.65,431/- in OD account as
on 07.11.2020.
20. The evidence of PW.1 and the documents at Ex.P1
to P.15 are remained unchallenged and hence, an inference
can be drawn that the plaintiff bank is entitled to the suit
claim amount of Rs.3,10,913-68/- with respect to loan
amount and also due sum of Rs.79,490-31/- with respect to
OD account in total the defendant due sum of Rs.3,80,403-
99/- as on filing of suit along with interest. When the
defendant did not enter into witness box to give her evidence
an adverse inference can be drawn against her. In this aspect
there is a decision of the Hon'ble Supreme Court reported in
1999 (3) SCC 573 Vidhyadhar Vs. Manik Rao, wherein
their lordship has held that, "Evidence Act, 114, 111(g) -
Presumption - If party abstain from entering the witness box
an adverse inference would arise against him". As such an
adverse inference can be drawn that the plaintiff bank has
proved that he is entitled for the relief sought in the plaint.
21. So far as future interest is concerned, the plaintiff
bank has claimed future interest at the rate of 12.25% p.a.
on outstanding balance amount from the date of suit.
Considering the facts and circumstances, the defendant avoid
11 OS.No.5560/2020
the loan for business purpose and agree to repay the same
along with interest at the rate of 11.40% p.a. and penal
interest at the rate of 2% as such the defendant is liable to
pay the interest at the rate of 12.10% on Rs.3,10,913-68/-
and also liable to pay the interest at the rate of 12.25% p.a
on 79,490-31/- from the date of suit till realization. In the
light of the above discussion, I hold point No.1 to 3 in the
affirmative.
22. Point No.3:- In view of the above discussion, I
proceed to pass the following order:-
ORDER
The suit of the plaintiff Bank is hereby decreed with cost.
The defendant is hereby directed to pay the suit sum of Rs.3,80,404/- along with future interest at the rate of 12.10% p.a. on the loan amount of Rs.3,10,913/- and at 12.25% on OD account of Rs.79,490/- the date of suit till realization within three months from the date of decree to the plaintiff bank.
Draw a decree accordingly.
(Dictated to the Judgment Writer, typed by him, the transcript thereof corrected and then pronounced by me, in open court, on this the 6th day of January, 2022).
(Kengabalaiah), XLII Addl. City Civil & Sessions Judge, Bengaluru.
12 OS.No.5560/2020ANNEXURE List of witnesses examined for plaintiff:
P.W.1 Vijayaraj.K.P. List of documents exhibited for plaintiff:
Ex.P1 Term loan executed by the defendant Ex.P2 Common deed hypotication of movables Ex.P3 Take delivery of demand promissory note Ex.P4 Demand promissory note Ex.P5 Statement of account of term loan Ex.P6 Letter executed by the defendant for OD facility.
Ex.P7 Demand promissory note executed by the defendant on 18.02.2017 Ex.P.8 Take delivery note executed by defendant Ex.P9 Common deed of hypothication of movables executed by the defendant Ex.P10 The letter of confirmation of fresh demand promissory note executed by the defendant on 08.02.2019. Ex.P11 The demand promissory note executed by the defendant on 08.02.2019 Ex.P12 Take delivery note executed by the defendant on 08.02.2019 Ex.P.13 Statement of OD account of defendant Ex.P.14 Demand notice issued to the defendant Ex.P.15 RPAD receipt List of witnesses examined for defendant:
Nil List of documents exhibited for defendant:
Nil XLII Addl. City Civil & Sessions Judge, Bengaluru.