Bangalore District Court
Syndicate Bank vs Smt. Rajalakshmi on 12 February, 2015
IN THE COURT OF THE XXIX ADDL. CITY CIVIL
& SESSIONS JUDGE AT BANGALORE CITY. (CCH-30)
DATED THIS THE 18th DAY OF OCTOBER, 2014.
PRESENT: SRI. PATIL MOHAMMADGOUSE MOHIDDIN
B.Com.,LL.B., (Spl.) ,
C/c. XXIX ADDL CITY CIVIL JUDGE, BANGALORE.
O.S.No. 4160 of 2012
Plaintiff: Syndicate Bank, No.81, 6th
Main, 36th Cross, Good
shepherd Education Society
Branch, Jayanagar,
Bangalore-560 041.
Represented by its Senior
Branch Manager, Sri. S.L.
Srinath, S/o Sri. S.
Lakshminarayanaiah, aged
about 59 years.
(Sri. M. Mohan Rao, Adv)
Vs.
Defendant/s: 1. Smt. Rajalakshmi, W/o
Sri. D.M. Srinivas
Murthy, aged 40 years,
r/at No.95, 6th Cross,
Dollars Colony, BTM
2
O.S.No.4160/2012
2nd Stage, Bannerghatta
Road, Bangalore-76.
2. Vijaya Bank, Sarakki
Branch, Bangalore-78,
represented by its
Branch Manager.
3. Mr. L.N. Balakrishna
Shetty, Father's name
not known to the
plaintiff, Major in age,
No.1, Srivari Residency,
3rd A Cross, 18th Main,
BTM 2nd Stage,
Bangalore-76.
(Defendant No.1- Sri.
Rajaram Bhat, O. Advocate)
Defendants No.2 & 3- Sri.
Prakasha Hegde, Advocate)
Date of institution of the suit 13-06-2012
Nature of the suit (suit on Recovery of money
pronote. Suit for declaration
and possession suit for
injunction, etc.)
Date of the commencement of 15-06-2013
recording of the evidence.
Date on which the judgment 18-10-2014
3
O.S.No.4160/2012
was pronounced
Total duration Year/s Month/s Day/s
02 04 05
JUDG M ENT
The plaintiff Bank has filed this suit for recovery of
Rs.2,88,450-00 with future interest @19.5%p.a. compounded
with monthly rests alleged to be due by the defendants.
2. The brief facts of the plaintiff's case as averred in the plaint
are that, the defendant No.1 is one of the customers of the
plaintiff bank and operating the current account bearing
No.04741010000862 regularly. On 17-12-2011, the defendant
No.1 has deposited demand draft bearing No.139891
dt:26-11-2011 drawn in her favour at Vijaya Bank, Sarakki
Branch, Bangalore, payable at service Branch, Bangalore. The
said demand draftwas purchased by defendant No.3 Mr. L.N.
Balakrishna Shetty. On presenting the said demand draft for
4
O.S.No.4160/2012
clearing through her account, she has requested the plaintiff bank
to discount the demand draft and to pay a sum of Rs.4,00,000-00
as temporary Over Draft through her said current account.
Considering the previous transaction of the defendant No.1, the
plaintiff bank has permitted to defendant No.1 to over draw a sum
of Rs.4,00,000-00 through her current account out of the afore
said demand draft amount. The defendant No.2 returned the
demand draft on 21-12-2011 with an endorsement
"Instrument cancelled''. Thereafter the plaintiff bank intimated
the same to the defendant No.1 and called upon her to reimburse
the debit the amount in her account. Thereafter she has deposited
a sum of Rs.2,30,000-00 on 28-12-2011 and on such credit her
account remained at the debit balance of Rs.2,66,775-00.
Thereafter the defendant No.1 deposited a cheque for
Rs.1,00,000-00. The said cheque was also returned. The
defendant No.2 has no right to cancel the demand draft. As such,
5
O.S.No.4160/2012
due to the cancellation of the demand draft by the defendant No.2,
the plaintiff bank has to recover the said amount from it. The
defendant No.3 is not entitled to issue any letter to the defendant
No.2 to stop the payment or cancel the instrument. Therefore, the
defendant No.2 and 3 have made wrongful loss to the plaintiff
bank on account of their negligence and deficiency in service.
Hence all the defendants are jointly and severally liable to pay the
suit amount to the plaintiff bank. The plaintiff bank has issued
legal notice to defendant No.1 and 2 dt:14-01-2012. The
defendant No.2 has issued untenable reply on 24-01-2012. The
same has been intimated to the Reserve Bank of India,
Department of Banking Supervision on 27-03-2012.The current
account of the defendant No.1 shows a debit balance of
Rs.2,88,450-00. Hence, the defendants are liable to pay the suit
amount with interest @ 19.25%p.a. compounded with monthly
rests on the aforesaid amount from the date of this suit till
6
O.S.No.4160/2012
realization.
3. On service of the summons the defendants have appeared
through their respective counsels. The defendant No.1 filed her
written statement admitting the presentation of demand draft for
Rs.25,00,000-00 issued by defendant No.3 to the plaintiff bank
and over drawn a sum of Rs.4,00,000-00 from the plaintiff bank
through her current account out the said demand draft amount.
Further it is contended that defendant No.1 is not aware of the
surprise of the plaintiff bank the defendant No.2 returned demand
draft on 21-12-2011 with an endorsement "Instrument
Cancelled''. It is true that the plaintiff bank informed about the
cancellation of the instrument by Vijaya Bank to defendant No.1
and called upon her to reimburse the debit balance amount in her
current account. It is also true that this defendant has deposited a
sum of Rs.2,30,000-00 on 28-12-23011 and on such credit her
account remained at the debit balance of Rs.2,66,775-34.
7
O.S.No.4160/2012
4. The defendant is not liable to pay a sum of Rs.2,88,450-00
as on 31-05-2012 along with interest @19.5%p.a. compounded
with monthly rests on the aforesaid amount from the date of this
suit till realization to the plaintiff bank as claimed. Hence prays
for dismissal of the suit.
5. The defendant No.2 filed its written statement contending
that on 16-12-2011 demand draft bearing No.92011789 for
Rs.25,00,000-00 was issued by the Bank in the name of
Smt. Rajalaxmi purchased by defendant No.3. The defendant
No.3 on 18-12-2011 had requested the defendant No.2 to stop and
cancel the payment of amount covered under the demand draft on
the ground that demand draft dt:15-11-2011 issued by the plaintiff
bank to him was lost. For that reason the defendant No.2 has
cancelled the demand draft. Hence defendant No.2 is not liable to
pay any amount to the plaintiff bank and hence prays to dismiss
the suit.
8
O.S.No.4160/2012
6. The defendant No.3 has filed written statement contending
that defendant No.3 and defendant No.1 were negotiating for the
purchase of property at Bangalore. That on 16th day of December
2011 he had purchased demand draft for Rs.25,00,000-00 in
No.9201189of Vijaya Bank, Sarakki Branch, Bangalore, and got
for discussion with the defendant No.1. In the meeting between
defendant No.1 and defendant No.3 papers are exchanged for
verification and since the deal could not be completed, plaintiff
bank returned to his office. On coming to his office the defendant
No.3 noticed that the demand draft dt:16-12-2011 was misplaced.
Immediately, thereafter the defendant No.3 contacted the
defendant No.1 and enquired to whether she got the demand draft
and she replied in negative. Thereafter the defendant No.3
approached defendant No.2 and issued a letter requesting to stop
the payment and cancel the demand draft only to see that the
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O.S.No.4160/2012
demand draft shall not go to the wrong hands. Accordingly, the
defendant No.2 has cancelled the demand draft. There is no
negligent on the part of the defendants. Hence defendant No.3 is
not liable to pay any amount to the plaintiff bank. Hence prays to
dismiss the suit.
7. On the basis of the above pleadings, the then Presiding
Officer has framed the following issues:
1. Whether the plaintiff bank proves that the
defendant No.1 has presented the DD bearing No.
139891 purchased by defendant No.3 in her name
with the plaintiff bank and overdraw a sum of
Rs.4,00,000-00 through her current account bearing
No.04741010000862 as pleaded?
2. If so, whether the plaintiff bank proves that the
DD cannot be cancelled and the intimation
regarding cancellation of the said DD is not proper
as contended?
3. Whether the plaintiff bank is entitled for
recovery of Rs.2,88,450-00 along with future interest
@19.25%p.a. compounded with monthly rests from
defendants jointly and severally as claimed?
4. What order or Decree?
10
O.S.No.4160/2012
8. The plaintiff bank got examined it's Branch Manager as
PW.1 and got produced Ex.P.1 to Ex.P.14 documents. On the side
of defendants, the defendant No.3 is examined as DW.1 and
defendant No.1 is examined as DW.2 and no evidence is adduced
on behalf of the defendant No.2. No documents are produced on
behalf of the defendants 1 to 3.
9. I have heard the arguments.
10. My findings on the above noted issues are as follows:
Issue No.1: In the Affirmative.
Issue No.2: In the Negative.
Issue No.3: Partly in the Affirmative.
Issue No.4: As per final order for the following:
REASONS
11. Issue No.1: The plaintiff bank claims that the defendant No.1
being is customer having current account presented the demand draft
bearing No.139891 dt:16-12-2011 purchased by defendant No.3 in her
11
O.S.No.4160/2012
name with the plaintiff bank and drawn a sum of Rs.Four lakhs
through her current account bearing No.04741010000862.
12. On appearance the defendant No.1 has filed her written
statement admitting the fact that she has deposited a demand draft
bearing No.139891 dt: 16-12-2011 drawn in her favour at Vijaya
Bank, Sarakki Branch, Bangalore, payable at service branch,
Bangalore. The said demand draft was purchased by defendant No.3.
The plaintiff bank permitted this defendant to overdraw a sum of
Rs.Four lakhs through her current account out of the said demand
draft amount.
13. The plaintiff bank's Branch Manager who is examined as
PW.1. In his evidence he has specifically deposed that on 17-12-2011
the defendant No.1 being its customer presented the demand draft for
Rs.25,00,000-00 purchased by defendant No.3 in her favour at Vijaya
Bank, Sarakki Branch, Bangalore. On request of the defendant No.1
the plaintiff bank permitted the defendant No.1 to over draw a sum of
12
O.S.No.4160/2012
Rs.Four lakhs through her current account out of the aforesaid demand
draft amount.
14. During the course of cross-examination PW.1 has specifically
denied that the plaintiff bank on its own account has permitted the
defendant No.1 to over drawn a sum of Rs.Four lakhs, through her
current account out of the said demand draft amount. The defendant
No.1 who examined as DW.2 during her cross-examination has
specifically admitted that Rs.Four lakhs has been over drawn by her
out of the demand draft amount and the same has been drawn by her
through her current account from the plaintiff bank. Therefore, it
clearly evident that the defendant No.1 has presented the demand draft
bearing No.139891 purchased by defendant No.3 in her name with the
plaintiff bank and over drew a sum of Rs.Four lakhs through her
current account bearing No.04741010000862. Therefore, I have no
hesitation whatsoever to come to the conclusion that the plaintiff bank
has proved that the defendant No.1 has presented the demand draft
13
O.S.No.4160/2012
bearing No.139891 purchased by defendant No.3 in her name with the
plaintiff bank and over drew a sum of Rs.Four lakhs through her her
current account bearing No.04741010000862. Accordingly, I answer
this issue No.1 in the affirmative.
15. Issues No.2 and 3: Both these points are inter linked and in
order to avoid possible repetition of evidence and facts, I took these
points simultaneously for discussion.
16. It is contention of the plaintiff bank that the defendant No.2 who
has issued demand draft purchased by defendant No.3 in the name of
the defendant No.1 had no right to cancel the instrument. The
defendants No.2 and 3 colluding with the defendant No.1 in order to
cause wrongful loss to the plaintiff bank has cancelled the demand
draft. On the basis of the presence of demand draft by the defendant
No.1, the plaintiff bank has permitted the defendant No.1 to over
drawn a sum of Rs.Four lakhs out of the said demand draft amount.
Thereafter they issued legal notices to the defendants then the
14
O.S.No.4160/2012
defendant No.1 deposited a sum of Rs.2,30,000-00 to her account and
thereafter issued a cheque for Rs.One lakh which is returned
un-cashed. As on the date of the suit there is a debit balance of
Rs.2,88,450-00 as such the defendants are jointly and severally liable
to pay the said amount to the plaintiff bank with the future interest
@19.25%p.a. compounded with monthly rests.
17. The plaintiff bank's Manager who examined as PW.1 has
specifically stated in his evidence that on the basis of the demand draft
purchased by defendant No.3 from the defendant No.2 presented by
defendant No.1 they have permitted the defendant No.1 to over draw
an amount of Rs.Four lakhs from the plaintiff bank through her
current account bearing No.04741010000862. The said fact is proved
by the plaintiff bank. Further PW.1 in his evidence has stated that due
to the act of the defendant No.2 i.e., cancellation of the demand draft
which it had no right to cancel once it issued demand draft and the
defendant No.3 who has handed over the demand draft to the
15
O.S.No.4160/2012
defendant No.1 for consideration, it has no right to apply for stopping
the payment of the demand draft. As such, due to the act of the
defendants No.1 to 3 the plaintiff bank has suffered loss. Therefore
the act is joint and several, as such, the defendants No.1 to 3 are
jointly and severally liable to pay the said suit amount.
18. The defendant No.3 who is examined as DW.1. In his evidence
has specifically stated that due to the transaction taken place in
between the defendant No.1 and himself, he had purchased the
demand draft for Rs.25,00,000-00 from the defendant No.2's bank.
During negotiation and handing over the papers in between himself
and defendant No.1, the demand draft was misplaced. Immediately, he
contacted the defendant No.2 and gave a letter requesting him to stop
the payment and cancelled the demand draft with an intention to see
that the amount should not go to the wrong person. Inspite of enquiry
the defendant No.1 has not given proper answer. Hence he got
cancelled the demand draft from the defendant No.2's bank. During
16
O.S.No.4160/2012
the course of cross-examination of defendant No.1 who examined as
DW.2, in her evidence specifically stated that after cancellation of the
demand draft by the defendant No.3 she has not taken any action
against defendant No.3. Therefore, it clearly evident that there is no
transaction taken place in between the defendant No.1 and defendant
No.3 so as to issue demand draft for any consideration. The demand
draft can be called only if the same is not issued for any consideration.
If the demand draft are lost, stolen or misplaced the purchaser has got
right to apply for cancellation of the demand draft or stopping the
payment. Therefore, in the instant case the defendants No.2 and 3
have specifically pleaded and adduced evidence that the demand draft
purchased by defendant No.3 from the defendant No.2's bank
presented by defendant No.1 to the plaintiff bank is cancelled on the
ground of misplace of the demand draft by defendant No.3 purchaser.
The said fact is also admitted by the defendant No.1 who presented
the demand draft to the plaintiff bank and over drawn a sum of
17
O.S.No.4160/2012
Rs.Four lakhs through her current account of the said demand draft
amount. Therefore, I have no hesitation whatsoever to come to the
conclusion that there is no negligence or any wrongful act on the part
of the defendant No.2 and 3 which cause any wrongful loss to the
plaintiff bank. Therefore, I have no hesitation whatsoever to come to
the conclusion that the plaintiff bank has failed to prove that there is
any wrongful act on the part of the defendants 2 and 3 which resulting
any wrongful loss to the plaintiff bank. Therefore, I am of the view
that the plaintiff bank is not entitled to recover the suit amount from
the defendants 2 and 3.
19. The defendant No.1 in her cross examination admits that she has
presented the demand draft to the plaintiff bank for encashment and
she has availed over drawn an amount of Rs.Four lakhs from the
plaintiff bank at the instance of the plaintiff bank only. As the plaintiff
bank itself released over drawn amount of Rs.Four lakhs to her out of
the demand draft amount, she is not entitled to pay any interest to the
18
O.S.No.4160/2012
plaintiff bank. Thereafter after receipt of the notice or intimation from
the plaintiff bank she has deposited Rs.2,30,000-00 out of the said
amount. Further DW.2 not disputed that she has issued a cheque for
Rs.One lakh which is dishonoured. Therefore it clearly evident that
the amount of Rs.Four lakhs which is over drawn out of the demand
draft amount through current account of defendant No.1 is utilized by
the defendant No.1. During the course of cross examination DW.2
i.e., defendant No.1 admits she is not taken any action against
defendant No.3 for the cancellation of the demand draft. The plaintiff
bank permitted the defendant No.1 to over draw an amount of Rs.Four
lakhs out of the demand draft amount only on the basis of the demand
draft presented by defendant No.1, issued by defendant No.3 from
defendant No.2's bank. Therefore considering the demand draft is a
cash, the plaintiff bank has permitted the defendant no.1 to over
drawn an amount of Rs.Four lakhs out of the DD amount. Therefore,
there is no negligent act on the part of the plaintiff bank for permitting
19
O.S.No.4160/2012
the defendant No.1 to over drawn an amount of Rs.Four lakhs out of
the DD amount through her current account. The accounts extract
produced by the plaintiff bank and documents produced by the
plaintiff bank DD at Ex.P.1, challan at Ex.P.2, returned instrument as
a DD at Ex.P.3, letter by defendant No.1 at Ex.P.4, office copy of
notice at Ex.P.5, another notice dt:29-12-2011 at Ex.P.6, reply issued
by defendant No.2 at Ex.P.7, copy of notice at Ex.P.8, letter issued by
plaintiff bank at Ex.P.9, reply notice by defendant No.2 at Ex.P.10,
letter of complaint to RBI at Ex.P.11, reply by RBI at Ex.P.12,
statement of account at Ex.P.13 and encumbrance certificate at
Ex.P.14, it clearly evidence that defendant No.1 presented the DD at
Ex.P.1 purchased by defendant No.3 from defendant No.2's bank to
the plaintiff bank and over drawn an amount of Rs.Four lakhs from the
plaintiff bank and thereafter the DD has been cancelled by defendant
No.2's bank at the instance of the defendant No.3 as the said DD was
misplaced and thereafter the plaintiff bank issued legal notice to the
20
O.S.No.4160/2012
defendant No.1 calling upon her to pay the said over drawn amount
out of the DD's amount and defendant No.1 has paid Rs.2,30,000-00
towards the same and issued cheque of Rs.One lakh which is
dishonoured. As on the date of the suit as per the accounts maintained
by the plaintiff bank i.e., current account of defendant No.1 there is a
debit balance amount of Rs.2,88,450-00 by the defendant No.1.
Therefore, I am of the view that the defendant No.1 is only liable to
pay the amount i.e., suit amount of Rs.2,88,450-00 from the defendant
No.1.
20. The plaintiff bank has sought for future interest @19.5%p.a.
compounded with monthly rests. There is no agreed rate of interest in
between the plaintiff bank and defendant No.1 with regards to the
over drawn amount. The said over drawn amount is paid by the
plaintiff bank out of the regular business. Therefore, looking into the
nature of the transaction between the plaintiff bank and the defendant
No.1 and the other legal complications taken place in between the
21
O.S.No.4160/2012
plaintiff bank and defendants No.1 to 3 if the future interest is
awarded @ 6%p.a. from the date of the suit till its complete
realization the purpose would be served and no harm would cause to
the any of the parties. Further, it is well settled that the court can grant
future interest at yearly rests but not monthly rests or quarterly rests.
According to Section 34 of CPC, the court can grant interest at any
rate in its discretion by considering the loan transactions between the
parties. Therefore I am of the view that the plaintiff bank is entitled to
recover the suit amount with interest @ 6% p.a., from the date of the
suit till its complete realization from the defendant No.1 only.
Accordingly, I answer issue No.2 in the negative and issue No.3 partly
in the affirmative.
21. Issue No.4: In view of my answer to the above issues, the suit
filed by the plaintiff bank deserves to be decreed. Hence, I proceed to
pass the following:-
22
O.S.No.4160/2012
ORDER
The suit filed by the plaintiff bank is decreed against defendant No.1 with costs for Rs.2,88,450-00 with future interest @6%p.a., from the date of the suit till complete realization.
The defendant No.1 is hereby directed to pay or to deposit the decree amount within two months from the date of this order.
The suit of the plaintiff bank is dismissed against defendants No.2 and 3.
Draw decree accordingly.
(Dictated to the Judgment-writer, after transcription, corrected by me and then pronounced and signed by me in the open court, on this the 18th day of Oct. 2014.) (PATIL MOHAMMADGUOUSE MOHIDDIN) PRESIDING OFFICER, FTC-X and C/c XXIX Addl. City Civil Judge, Bangalore City.
ANNEXURE LIST OF WITNESSES EXAMIEND FOR PLAINTIFF:
PW.1 : Sri. Sreenivasa. P.B. PW.2: M. Udaya Suryan.
LIST OF DOCUMENTS EXHIBITED FOR PLAINTIFF:23
O.S.No.4160/2012 Ex.P.1: Demand draft.
Ex.P.2: Challan.
Ex.P.3: Returned instrument as a DD. Ex.P.4: Letter by defendant No.1. Ex.P.5: Office copy of notice. Ex.P.6: Another notice dt:29-12-2011. Ex.P.7: Reply issued by defendant No.2. Ex.P.8: Copy of notice.
Ex.P.9: Letter issued by plaintiff bank. Ex.P.10: Reply notice by defendant No.2. Ex.P.11: Letter of complaint to RBI. Ex.P.12: Reply by RBI.
Ex.P.13: Statement of account. Ex.P.14: Encumbrance certificate.
LIST OF WITNESES EXAMINED BY THE DEFENDANTS;
DW.1: Sri. N. Balakrishna Shetty.
DW.2: Smt. Rajalakshmi.
LIST OF DOCUMENTS MARKED BY THE DEFENDANTS;24
O.S.No.4160/2012 NIL.
(PATIL MOHAMMADGUOUSE MOHIDDIN) PRESIDING OFFICER, FTC-X and C/c XXIX Addl. City Civil Judge, Bangalore City.
25 O.S.No.4160/2012 26 O.S.No.4160/2012 Order pronounced in the open court vide separate ORDER The suit filed by the plaintiff bank is decreed against defendant No.1 with costs for Rs.2,88,450-00 with future interest @6%p.a., from the date of the suit till complete realization.
The defendant No.1 is hereby directed to pay or to deposit the decree amount within two months from the date of this order.
The suit of the plaintiff bank is dismissed against defendants No.2 and 3.
Draw decree accordingly.
PRESIDING OFFICER, FTC-X and C/c. XXIX Addl. City Civil Judge, Bangalore City.
27 O.S.No.4160/2012 28 O.S.No.4160/2012 IN THE COURT OF THE XXIX ADDL. CITY CIVIL 29 O.S.No.4160/2012 & SESSIONS JUDGE AT BANGALORE CITY. (CCH-30) DATED THIS THE 11th DAY OF AUGUST, 2009.
PRESENT; SMT. S. MAHALAXMI NERALE, B.A.LL.B., (Hons.) LL.M., XXIX ADDL CITY CIVIL JUDGE, BANGALORE.
O.S.NO. 2061 of 2008
Plaintiff: State Bank of India,
Specialized Personalized
Banking Branch, No.65, St.
Mark's road,
Bangalore-01.
By its Assistant General
Manager.
(Smt. Indu R. Raj, Adv)
Vs.
Defendant/s: 1. Smt. P. Janaki Rao
W/o Sri. P.
Subbarao, aged
major, No.352,
Upstairs, 8th Main,
Gokula, Near
Ramaiah college,
30
O.S.No.4160/2012
Bangalore-58.
2. Smt. R. Jayachitra,
W/o Sri. Francies,
aged major,
Basavaraj
Compound, Peenya,
Bangalore-58.
3. Sri. R. Ravi, Father's
name not known,
Aged major,
T.No.9739 Sec.
No.276, HMT I & II,
Jalahalli,
Bangalore-31.
4. Sri. A. Prathaban,
Father's name not
known, aged Major,
I.E. Paste-Up
Department, Indian
Express, No.1,
Queen's Road,
Bangalore-01.
(Defendants - Exparte)
Date of institution of the suit 13-03-2008 Nature of the suit (suit on Recovery of money pronote. Suit for declaration and possession suit for 31 O.S.No.4160/2012 injunction, etc.) Date of the commencement of 02-06-2008 recording of the evidence.
Date on which the judgment 11-08-2009 was pronounced Total duration Year/s Month/s Day/s 01 04 28 JUDG M ENT This is a suit filed by the plaintiff bank against the defendants jointly and severally for recovery of a sum of Rs. 3,10,298-00 with costs and future interest @ 16% p.a. compounded monthly rests, from the date of the suit till the date of realization of the decretal amount and to direct recovery of the suit sum by a preliminary decree on mortgage giving defendants time to pay the decretal dues and on failure thereof to pass a final decree for sale of suit schedule property under equitable mortgage to the plaintiff bank to recover the decretal dues with interest and to pass such other relief deemed fit to be granted in the circumstances of the case.32
O.S.No.4160/2012
2. The brief facts of the case as per the plaint averments are as under:
It is the case of the plaintiff bank that the defendants 1 and 2 approached the SBI Home Finance Limited for housing term loan in the year 1996. The SBI House Finance Limited, a housing finance company constituted and functioning under the Companies Act 1956 executed a deed of assignment and transfer dtd: 02-06-2003 in favour of the plaintiff bank/SBI under which all the rights in respect of the loan to the defendants were transferred to State Bank of India i.e., the plaintiff bank. Hence, the suit is filed by the State bank of India as the plaintiff bank. The defendants 1 and 2 who had sought a loan of Rs. 90,000-00 by their application dtd: 20-02-1996 as housing term loan, the SBI Home Finance Limited had sanctioned the said loan on 31-03-1997 as housing loan for construction in the suit schedule property with interest at the rate of 16% p.a. repayable in 180 equated monthly installments of Rs. 1346-00. The 3rd and 4th defendants stood as guarantors and executed guarantee agreement. As security for due repayment of the loan the defendants 1 and 2 created an equitable mortgage by deposit of title deeds of the suit immovable residential property block No.s. II, V and VIII along with flat No. 4017 in Janapriya Town Ship situated at Sy.No.10/1, Katha Nos. 192 and 193, 33 O.S.No.4160/2012 Kadabagere village, Machohalli village Panchayat, Dasanapura Hobli, Bangalore North Taluk. After availing the loan, the defendants did not regularly pay the EMI's and therefore notices were issued to the defendants by SBI House Finance Limited to regularize their loan. On 11-02-2003, the SBI House Finance Limited also issued notices to the defendants regarding the transfer of the loan account to the plaintiff bank. The plaintiff bank also issued notice on 211-03-2005 to the defendants that their loan was taken over and calling upon them to regularize their account by registered post. Further, notice U/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 also came to be issued on 13-12-2004. As on 10-03-2008 the defendants were due a sum of Rs. 3,10,298-00. Hence, the suit.
3. After the institution of the suit, the defendant despite service of the suit summons have remained absent and hence, they have been placed exparte. Thereafter, the plaintiff bank was called upon to adduce its evidence.
4. The plaintiff bank has examined one Sri. Abdul Khader Dafedar, its Deputy Manager, as PW.1 to prove its case and has got marked 30 documents as per Ex.P.1 to P.30 and closed its side. After 34 O.S.No.4160/2012 hearing arguments of the learned counsel for the plaintiff bank the case was posted for judgment.
5. On the basis of the material available on record, the points that arise for my consideration are as under:-
1. Whether the plaintiff bank is entitled to a decree as prayed for?
2. What order or decree?
6. My findings to the above points are as under:-
Point No.1: In the affirmative.
Point No.2: As per final order for the following:-
REASONS
7. POINT NO.1: It is the case of the plaintiff bank that the defendants had been advanced housing loan of Rs. 90,000-00. But the defendants have been irregular in the matter of repayment and in spite of demands and notice they have failed to clear the out standing dues. Hence, the suit. In support of its case, the plaintiff bank has examined its Deputy Manager as PW.1 and got exhibited 30 documents as Ex.P.1 to Ex.P.30.
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8. PW.1 in his affidavit evidence filed in lieu of examination in chief has reiterated the plaint averments and has further maintained that the defendants have not paid any amounts towards their loan account after the institution of the suit. The oral evidence of PW.1 is sought to be corroborated by the exhibited documents at Ex.P.1 to Ex.P.30.
8. Ex.P.1 is the loan application, Ex.P.2 is the loan sanctioned letter, Ex.P.3 is the loan agreement, Ex.P.4 and 5 are the letters of guarantee executed by defendant No.4 and defendant No.3 respectively, Ex.P.6 is the on demand promissory note, Ex.P.7 is the letter of undertaking executed by defendants 1 and 2, Ex.P.8 is the letter of undertaking and indemnity executed by the defendants 1 and 2, Ex.P.9 is the special power of attorney executed by the defendants 1 and 2 in favour of the plaintiff bank, Ex.P.10 is the letter of deposit of title deeds, Ex.P.11 is the recital for having deposited the title deeds, Ex.P.12 is the confirmation letter confirming the deposit of title deeds, Ex.P.13 is the original sale deed executed by the builders M/s Engineers Syndicate (India) Ltd., in favour of the 1st defendant, Ex.P.14 is the agreement of sale executed by builders M/s Engineers Syndicate (India) Ltd., in favour of the 1st defendant, Ex.P.15 and 16 are the office copies of the loan disbursal letters, Ex.P.17 to 19 are the 36 O.S.No.4160/2012 three revival letters executed by the defendants 1 and 2, Ex.P.20 is the office copy of the demand notice, Ex.P.21 is the notice issued U/s 13(2) of the SARFAECI ACT, Ex.P.22 is the letter of requesting time for repayment given by the 1st defendant, Ex.P.23 is the office copy of the legal notice, Ex.P.24 to 29 are the unserved RPAD covers and Ex.P.30 is the certified statement of accounts.
9. These documents clearly go to show that the defendants 1 and 2 on the guarantee of the defendants 3 and 4 have obtained a loan of Rs. 90,000-00 which has been agreed to be repaid with interest @ 16% p.a. and repayment schedule being equated monthly installments of Rs. 1346-00 payable in 180 months. As security to the loan, the defendants 1 and 2 have deposited title deeds in respect of the suit schedule property in favour of the plaintiff bank and have created equitable mortgage. The defendants have not been regular in the matter of repayment of the loan as can be seen from the certified statement of accounts as per Ex.P.30. The defendants have executed revival letters on 31-03-2000, 01-02-2003 and 22-12-2005. In spite of issue of demand notice and legal notice the defendants have not come forward to clear the outstanding dues. The 1st defendant has given a letter as per Ex.P.22 after institution of the suit requesting time for one time settlement of the housing loan obtained by her. The certified 37 O.S.No.4160/2012 statement of accounts at Ex.P.30 shows an amount of Rs. 3,10,298-00 as out standing together with interest as on 10-03-2008. The defendants have not contested the suit of the plaintiff bank in spite of service of suit summons upon them. Therefore, the evidence of the plaintiff bank, both oral and documentary on record has remained unchallenged by the defendants. I have no reasons whatsoever to disbelieve or to discard the said evidence. Hence, I hold that the plaintiff bank is entitled to recover the outstanding balance amount of Rs. 3,10,298-00 from the defendants.
10. The loan financed to the defendants is a housing loan and the defendants have created equitable mortgage in respect of the suit schedule property . The frame of the suit is a mortgage suit for sale. Therefore, the plaintiff bank is entitled to current and future interest @ 6% p.a. Accordingly, I answer point No.1 in the affirmative.
11. Point No.2: In view of the reasons stated supra, I pass the following:-
ORDER The suit of the plaintiff bank is decreed with costs against the defendants jointly and severally for a sum of Rs. 3,10,298-00 (Rs. Three lakh Ten thousand, two hundred and ninety-eight only) with interest @ 6% p.a. from the date of the suit till the date of realization 38 O.S.No.4160/2012 of the decretal amount. The defendants are granted six months time to pay the decretal amount from the date of this order.
In case of default in payment by the defendants, the plaintiff bank is at liberty to move the court for FDP as per the decree and to proceed on the suit schedule property for sale and appropriate the sale proceeds realized thereon towards the satisfaction of the decree passed by this court and in case the amount realized from the sale of the suit schedule property is insufficient to satisfy the decree, then the plaintiff bank is at liberty to proceed against the defendants 1 to 4 personally for recovery of the balance decretal amount.
Draw preliminary decree accordingly.
(Dictated to the Judgment Writer, the computerized transcription is corrected and then pronounced by me in the open court, this the 11th day of August, 2009).
( S.Mahalaxmi Nerale) XXIX Addl. City Civil Judge, Bangalore City.
ANNEXURE LIST OF WITNESSES EXAMIEND FOR PLAINTIFF :
PW.1 Sri. Abdul Khader Dafedar.
LIST OF DOCUMENTS EXHIBITED FOR PLAINTIFF :
Ex.P.1: Loan application.39
O.S.No.4160/2012 Ex.P.2: Loan sanctioned letter. Ex.P.3: The loan agreement.
Ex.P.4: Letter of guarantee executed by defendant No.4. Ex.P.5: Letter of guarantee executed by defendant No.3. Ex.P.6: On demand promissory note. Ex.P.7: Letter of undertaking executed by defendants 1 and 2. Ex.P.8: Letter of undertaking and indemnity executed by defendants 1 and 2.
Ex.P.9: Special power of attorney. Ex.P.10: Letter of deposit of title deeds. Ex.P.11: Recital for having deposited the title deeds. Ex.P.12: Confirmation letter. Ex.P.13: Original sale deed.
Ex.P.14: Agreement of sale.
Ex.P.15 & 16: Office copies of the loan disbursal letters. Ex.P.17 to 19: Three revival letters. Ex.P.20: Office copy of the demand notice. Ex.P.21: Notice issued U/s 13(2) of Sarfaeci act. Ex.P.22: Letter of request dtd: 10-02-2007. Ex.P.23: Office copy of the legal notice. Ex.P.24 to 29: Unserved RPAD covers. Ex.P.30: Certified statement of accounts.
LIST OF WITNESES EXAMINED & DOCUMENTS EXHIBITED FOR DEFENDANTS;
...Nil....
( S.Mahalaxmi Nerale) XXIX Addl. City Civil Judge, Bangalore City.40
O.S.No.4160/2012 Judgment pronounced in open Court (vide separate Judgment) as under:
ORDER The suit of the plaintiff bank is decreed with costs against the defendants jointly and severally for a sum of Rs. 3,10,298-00 (Rs. Three lakh Ten thousand, two hundred and ninety-eight only) with interest @ 6% p.a. from the date of the suit till the date of realization of the decretal amount. The defendants are granted six months time to pay the decretal amount from the date of this order.41
O.S.No.4160/2012 In case of default in payment by the defendants, the plaintiff bank is at liberty to move the court for FDP as per the decree and to proceed on the suit schedule property for sale and appropriate the sale proceeds realized thereon towards the satisfaction of the decree passed by this court and in case the amount realized from the sale of the suit schedule property is insufficient to satisfy the decree, then the plaintiff bank is at liberty to proceed against the defendants 1 to 4 personally for recovery of the balance decretal amount.
Draw preliminary decree accordingly.
XXIX Addl. City Civil Judge, Bangalore City.
42 O.S.No.4160/2012