Delhi District Court
Bank Of Baroda vs Digitools on 15 January, 2026
IN THE COURT OF
SH. N. K. MALHOTRA
DISTRICT JUDGE, (COMMERCIAL COURT)-06,
EXTENSION BLOCK, WEST DISTRICT,
TIS HAZARI COURTS
DELHI
CNR No. DLWT010000222025
CS(COMM) 15/2025
Bank of Baroda,
Through its Branch at-
Nangloi, Near Bimal Hospital,
Rohtak Road, New Delhi-110041
Through Branch Head/Authorized Officer/AR ....Plaintiff
Versus
Sh Hemant Verma,
(Proprietor of M/s Digitools) at
1. EG-54, Inderpuri, New Delhi-110012.
2. C-18, DSIDC Complex Industrial Area,
Nangloi, New Delhi-110041.
3. Plot No. 223, Sector-3, Pkt-D,
DSIDC, Bawana, Delhi-110039. ....Defendant
Date of Institution : 07.01.2025
Date of Arguments : 14.01.2026
Date of Judgment : 15.01.2026
Suit for recovery of Rs.13,32,524.47/-
CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 1 of 13
JUDGMENT
1. Vide this judgment I am deciding the suit for recovery of Rs.13,32,524.47 paise filed by the plaintiff against the defendant.
2. In the plaint it is mentioned that the plaintiff is a body corporate constituted under the banking companies (Acquisition and Transfer of Undertakings) Act, 1970 having its registered office at Baroda House, Mandavi, Baroda-390006 and one of its branch at Nangloi branch, New Delhi. The plaintiff bank is engaged in the business of advancing various types of credit/loan facilities including but not limited to car loan/commercial vehicle, housing and personal loans besides other financial activities. In pursuance of the scheme of amalgamation notified in the gazette of India by the Ministry of Finance, Deptt. of Financial Services vide G.S.R. No. 2(E) on 02.01.2019, Vijaya Bank and Dena Bank have been amalgamated with Bank of Baroda w.e.f 01.04.2019.
3. The present suit is instituted through Sh Arun Gupta who is the Branch Head of the plaintiff bank and fully conversant with the facts of the present case. He has been authorized by Power of Attorney/Authority dated 31.12.2013 executed by the plaintiff bank in his favour and as such he is competent to institute the present proceedings on behalf of the plaintiff bank and is competent to sign and verify the present suit.
4. The defendant approached the plaintiff bank for grant of credit facility in the nature of Cash Credit Limit to the CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 2 of 13 tune of Rs.15,00,000/- for meeting its working capital requirements and meeting its business obligations. Accordingly, the credit facility of Rs.15,00,000/- was sanctioned by the plaintiff bank on 20.06.2020 against the Hypothecation of Stocks and book debts. In consideration of the grant of Credit Facility, the defendant executed the following documents on 20.06.2020:
a) D.P. Note date 20.06.2020
b) Composite Hypothecation Agreement
c) General Undertaking
d) Letter of Sole Proprietorship and
e) Letter of Continuing Security.
The defendant also submitted Certificate of Importer-Exporter Code (IEC) issued by the office of Zonal Director General of Foreign Trade, Govt. of India in support of Loan application. The plaintiff disbursed the loan amount by opening the loan account in the name of the defendant at its branch vide account no. 410806000001077 and the same was credited in the loan account of the defendant. On the request of the defendant, the loan account was re-structured through an application for restructuring of loan account signed by the defendant on 08.03.2021. The defendant undertook to make the repayment of loan amount in respect of aforesaid credit facility alongwith interest @ 8.35% p.a. The defendant also agreed to pay penal interest @ 2% p.a. above the rate of interest that is charged in the defendant's account, in the event of any default in payment of any installment. The plaintiff further averred that after availing the credit facilities, the defendant became very irregular in making the payment. Notice dated 30.12.2022 was served upon the defendant. Due to non payment of EMIs, the CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 3 of 13 account of the defendant was classified as Non Performing Assets (NPA) on 02.11.2023. As per the plaint, a sum of Rs.13,32,524.47/- is due towards the defendant as on 30.11.2022. The plaintiff has also claimed interest @ 18% p.a. from 01.12.2022 till payment inclusive of 2% penal interest.
5. Notice of the suit was sent to the defendant. Defendant has filed written statement and has taken preliminary objections that there is no cause of action in filing the present suit. The suit is barred as per the High Court Rules, 1962, Chapter-IV as the alleged attorney holder is neither the principal officer of the plaintiff nor legally competent to institute, sign and pursue the present suit against the defendant. The suit of the plaintiff is also barred under Order 29 Rule 1 CPC. The general power of attorney on the basis of which the present suit is filed is not a valid authority letter as the same is not issued by a competent officer of the plaintiff. Neither the Auditor's report nor the Notes on Accounts are filed on record. There was no legal relation between the plaintiff and the defendant. The plaintiff has no locus standi to file and pursue the present suit. The suit is not properly valued for the purpose of Court fee and jurisdiction. The suit has not been filed and verified by the competent and duly authorized person. The suit is also hit by Section 124 of the Indian Contract Act, 1872 as no contract of indemnity exists or existed between the plaintiff and the defendant at any point of time.
6. In reply on merits, it is not denied that the defendant is proprietorship firm being run by Sh. Hemant Verma. It is CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 4 of 13 admitted that credit facility of Rs. 15,00,000/- was sanctioned by the plaintiff bank on 20.06.2020 against Hypothecation of Stocks and book debts. The business of the defendant was already closed, so there is no question of existence of any stock. No loan was granted to the defendant on 20.06.2020 as alleged. The plaintiff bank took signatures of the defendant upon certain documents and only documentation was done. The defendant was made to sign certain blank papers on the pretext of transferring some loan but no loan was granted to the defendant on 20.06.2020. All the documents were already in power and possession of the plaintiff bank as the defendant had earlier availed the loan facility from the plaintiff and the plaintiff had misused the said documents for their own personal gain and benefit. No amount was disbursed in the account of the defendant. The plaintiff kept on levying exorbitant rate of interest without any basis. It is denied that any cause of action arose within the jurisdiction of this Court. Dismissal of the suit is prayed by the defendant.
7. Plaintiff has not filed replication.
8. On 29.03.2025 following issues were framed by this Court:-
Issues
(i) Whether the plaintiff is entitled for recovery of Rs.13,32,524.47/- ? (OPP)
(ii)Whether the plaintiff is entitled for interest on the amount of Rs. 13,32,524.47/-, if yes at what rate and for what period ? (OPP)
(iii) Relief.
CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 5 of 13
9. In evidence, plaintiff produced Sh Arun Gupta, Manager of the plaintiff bank as PW1. This witness filed affidavit on the lines of the plaint and proved True copy of General Power of Attorney as Ex. PW-1/1, Copy of sanction letter dated 20.06.2020 as Ex. PW-1/2, Copy of D.P. note dted 20.06.2020 as Ex. PW-1/3 (colly), Copy of Composite Hypothecation Agreement as Ex. PW-1/4 (colly), Copy of General Undertaking as Ex. PW-1/5 (Colly), Copy of letter of Sole Proprietorship as Ex. PW-1/6 (colly), Copy of letter of continuing security as Ex. PW-1/7 (colly), Copy of certificate of Importer-exporter Code (IEC) as Ex. PW-1/8 (colly), Copy of the application for restructuring of loan account as Ex. PW-1/9 (colly), the copy of notice of demand dated 30.12.2022 as Ex. PW-1/10 (colly), Copy of statement of account of the defendant duly certified under the Banker's Book Evidence Act as Ex. PW-1/11 (colly), Copy of ID as Ex. PW-1/12 and Copy of designation letter as Ex. PW-1/13 (colly).
10. In cross examination, this witness stated that he has not placed on record any document to show that loan amount was credited in the account of the defendant. The witness voluntarily stated that plaintiff has placed on record Loan Account Form, Account Statement and credit facility was to be used by the defendant as and when need arises. The defendant had used the credit facility. The plaintiff bank has placed on record account statement to show that defendant has used credit facility. Witness admitted that plaintiff has not placed on record any document to show that amount was credited in the account of defendant on 20.06.2020. Witness further stated that if the CC Limit is granted to any customer then the amount of CC Limit is automatically CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 6 of 13 available to any person to utilize the same. Witness stated that he can place on record the statement of account with respect to the defendant showing the payment of Rs. 15 lacs on 20.06.2020. Witness also placed on record Account Statement Ex.PW-1/DX-1. Witness stated that on 20.06.2020 no payment of Rs. 15 lacs was made to the defendant. Witness voluntarily stated that the sanction of Rs. 15 lac was renewed on 20.06.2020. Witness admitted that on 20.06.2020 no fresh loan was advanced to the defendant. Witness admitted that as per Ex. PW-1/9, the loan was granted on interest @ 7.65% per annum.
11. On the other hand, defendant examined himself as DW1 and filed affidavit on the lines of the written statement. In cross examination, defendant admitted that he is the proprietor of M/s. Digitools. He has done diploma in Tool & Die Making. He admitted that he can understand English but he can not speak fluently. This witness stated that he started the business in the year, 2009. He had signed bunch of blank papers of the plaintiff bank and every year, he used to sign the documents at the time of renewal of the CC Limit. He admitted that he has not made any complaint against the bank officials in this regard. He also admitted that earlier he had taken a loan from Vijaya Bank in the year, 2013 and Vijaya Bank is amalgmated with Bank of Baroda. He had almost made the payment of this loan. He admitted that no NOC was given by the plaintiff bank in this regard. He admitted that he had closed his business in the year, 2019. He stated that he cannot tell the exact date when he had surrendered the GST number. He deposed that he had not intimated to the plaintiff bank about the surrender of GST document. The CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 7 of 13 document Ex. PW-1/8 bears his photograph at point-A. He admitted that this certificate Ex. PW-1/8 was issued to him. He had not intimated to Import & Export Department regarding closure of his business. Witness voluntarily stated that this certificate is required to be renewed yearly. He stated that he cannot tell without seeing the record as to when he had made the last payment with the plaintiff bank. He does not remember if he had made the last payment on 01.09.2022.
12. I have heard Ld. Counsel for the parties and perused the record carefully. Written arguments also filed on behalf of the plaintiff. My issue wise findings are as under:
Issue No. 1.
(i) Whether the plaintiff is entitled for recovery of Rs.13,32,524.47/- ? (OPP)
13. The burden to prove this issue is on the plaintiff. To prove this issue, plaintiff has produced its Manager Sh Arun Gupta as PW1. This witness proved the sanction letter dated 20.06.2020 as Ex. PW-1/2, Copy of D.P. note dated 20.06.2020 as Ex. PW-1/3 (colly), Copy of Composite Hypothecation Agreement as Ex. PW-1/4 (colly) and Copy of General Undertaking as Ex. PW-1/5 (Colly). I have gone through these documents. The Sanction letter dated 20.06.2020 shows that the credit facility was sanctioned by the plaintiff bank on 20.06.2020. The D.P. Note dated 20.06.2020 is signed by the defendant. The Composite Hypothecation Agreement is also signed by the defendant. The general undertaking is also signed by the defendant. Likewise, letter of continuing security dated 20.06.2020 is also signed by the defendant. The copy of CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 8 of 13 certificate of Importer-Exporter Code (IEC) is also placed on record by the plaintiff. It is proved on record as ExPW1/8. The copy of the application for restructuring of loan account dated 08.03.2021 is proved as Ex. PW-1/9 (colly).The defendant has not denied to sign these documents. In the written statement in para 5 of reply on merits, it is specifically mentioned by the defendant that "The requested credit facility of Rs.15,00,000/- (Fifteen Lacs Only) was sanctioned by the plaintiff bank on 20.06.2020 against the Hypothecation of Stocks and book debts......... However, the plaintiff bank took signatures of the defendant upon certain documents and only documentation was done." In para 6, it is mentioned by the defendant that " the defendant was made to sign certain blank papers, on the pretext of transferring some loan, in fact, no loan was granted to the defendant on 20.06.2020". It is also mentioned in para 7 that " all the documents were already in power and possession of the plaintiff bank, as the defendant had earlier availed the loan facility from the plaintiff and the plaintiff had misused the said documents, for their own personal gain and benefit ." Thus the defendant has admitted that he has taken loan from the plaintiff bank. He also admitted that official of plaintiff has taken his signatures on blank papers. When the defendant came in the witness box as DW1, he admitted that he had signed bunch of blank papers of the plaintiff bank. DW1 also stated that he used to sign the documents at the time of renewal of the CC Limit. Thus, it is admitted by the defendant that he had signed the documents and he used to sign the documents at the time of renewal of the CC Limit every year. DW1 also admitted that he had earlier taken a loan from Vijaya Bank in the year 2013 and CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 9 of 13 he had admitted that he had almost made the payment of this loan. Thus, the defendant has also admitted to have taken from from the plaintiff bank but it is submitted that he had made the payment but no document has been placed on record to show that he has cleared the loan of the plaintiff bank. DW1 also admitted his signatures on document ExPW1/8. He admitted his photograph at point A on ExPW1/8. He also admitted that certificate was issued to him. However, the defendant is not able to clarify as to how document ExPW1/8 came in possession of the plaintiff. Thus, it is proved that defendant has availed the cash credit facility from the plaintiff bank and thereafter defaulted in making the payment of installments.
14. Now, I am dealing with the contentions of ld counsel for defendant one by one.
15. It is the contention of ld counsel for defendant that no loan amount was disbursed in the account of the defendant and no loan was given on 20.06.2020, so, the plaintiff is not entitled to any amount. PW1 came in the witness box. This witness in cross examination stated that plaintiff bank has placed on record Loan Account Form, Account Statement and Credit Facility was to be used by the defendant as and when need arises. In the present case, the defendant has used the credit facility. PW1 has produced the document ExPW1/DX1 and this document shows that the cash credit facility was used by the defendant on multiple occasions. I am of the view that this contention of ld counsel for defendant carries no force.
CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 10 of 13
16. It is also the contention of ld counsel for defendant that suit is barred by limitation. I have perused the statement of account filed by the plaintiff. PW1 has proved the statement of account as ExPW1/11. The Application Form for restructuring of loan account is ExPW1/9. The defendant has lastly made the payment on 01.09.2022. Specific question was asked from the defendant as to when he had lastly made the payment. The defendant has stated that he does not remember if he had made the last payment on 01.09.2022. If we count the period from 01.09.2022, the present suit is filed within the period of limitation.
17. The next contention raised by ld counsel for defendant is that the plaintiff has taken signatures of the defendant on blank documents. The defendant in the cross examination admitted that he has done diploma in Tool & Die Making. Witness also admitted that he can understand English. I am of the view that defendant is well qualified and understands English. It can not be believed that he has signed the commercial documents without going through their contents. This contention of ld counsel for defendant carries no force. Moreover, the defendant in his cross examination admitted that every year, he used to sign the documents at the time of renewal of the CC Limit. It indicates that defendant was renewing the CC Limit every year, so it can not be said that the defendant has signed blank documents. Moreover, the defendant has not made any complaint against any of the bank officials. I am of the view that this contention of ld counsel for defendant also carries no force.
CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 11 of 13
18. It is also the contention of ld counsel for defendant that no loan was granted to the defendant on 20.06.2020. The defendant admitted that he had taken loan from Vijaya Bank in the year 2013 and Vijaya Bank was amalgamated with Bank of Baroda. PW1 has categorically stated that sanction of Rs. 15 lacs was renewed on 20.06.2020. The defendant also admitted that he used to sign the documents at the time of renewal of the CC Limit. PW1 has also categorically stated that CC Limit is granted to any customer then the amount of CC Limit is automatically available to any person to utilize the same. In my view, this contention of ld counsel for defendant carries no force.
19. In the present case, the plaintiff has placed on record the statement of account and supporting certificate under Section 63B of the Bhartiya Sakshya Adhiniyam. Ld counsel for defendant asked PW1 to bring the statement of account with respect to the defendant showing the payment of Rs.15 lacs on 20.06.2020 and PW1 has proved the statement ExPW1/DX1. I am of the view that plaintiff is able to prove this issue and this issue is accordingly decided in favour of the plaintiff and against the defendant.
Issue no. 2.
(ii)Whether the plaintiff is entitled for interest on the amount of Rs.13,32,524.47/-. If yes at what rate and for what period ? (OPP)
20. The burden to prove this issue is also on the plaintiff. plaintiff has claimed interest @ 18% per annum on the outstanding amount of Rs.13,32,524.47/-. I have perused the Sanction letter ExPW1/2 and D.P Note ExPW1/3. As per D.P CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 12 of 13 Note, the defendant agreed to pay interest @ 8.35% p.a. (at present), which is sum of RBI Repo Rate 4.40% (at present), Mark Up of 2.85% (at present), Strategic Premium of 0.25% (at present), Credit Spread of 0.85% (at present) and Risk Premium of 0.00% (at present). The interest shall he payable at monthly rests. The Bank shall be entitled to reset the Interest rate (including any of its components mentioned above) on monthly basis. As per statement of account, a sum of Rs.13,32,524.47/- was due towards the defendant on 30.11.2022. As per the document ExPW1/9, the plaintiff has claimed interest @ 7.65% p.a. I am of the view that interest @ 9.65% (7.65% + 2% penal interest) would be appropriate to be granted to the plaintiff. The issue is accordingly decided in favour of the plaintiff and against the defendant.
RELIEF:
21. In view of my above discussions, the suit of the plaintiff is decreed and a decree of Rs.13,32,524.47/- is passed in favour of the plaintiff and against the defendant. The plaintiff is also entitled to interest @ 9.65% per annum on the amount of Rs.13,32,524.47/- from 01.12.2022 till realization of the decreetal amount. Plaintiff is also entitled to the cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the open court on 15.01.2026. (N. K. Malhotra) Distt. Judge, (Comm. Court)-06, NARESH by NARESH Digitally signed West District, Extension Block, KUMAR KUMAR MALHOTRA THC, Delhi/15.01.2026.
MALHOTRA Date: 2026.01.15 16:51:19 +0530 CS(COMM) 15/2025 Bank of Baroda Vs Hemant Verma Page No. 13 of 13