Bangalore District Court
Is A Banking Company Constituted And ... vs Have Executed Composite Hypothecation on 20 September, 2022
KABC170019762022
IN THE COURT OF LXXXV ADDL. CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH-86)
(Commercial Court)
THIS THE 20TH DAY OF SEPTEMBER 2022
PRESENT:
SMT. LATHAKUMARI M.
M.A., LL.M.,
LXXXV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com. O.S. No. 1056/2022
BETWEEN:
CANARA BANK
(Erstwhile SYNDICATE BANK),
K.R. Puram Branch,
No.47, above Mahindra Showroom,
Near Nandana Palace,
K.R. Puram Main Road,
Krishnarajapuram,
Bangalore - 560 036.
Represented by its Branch Manager
Ms. SAPNA RANI, D/o S. Barla
Aged about 36 years. : PLAINTIFF
(Represented by Sri. Veeresh
Kumar Javali - Advocate)
AND
1. M/s. SUPERTRONIC SERVICES SOLUTIONS
Shop: L.P. Innovative
2
Com. O.S. No.1056/2022
No.4, 1st Cross, Kurudosanahalli,
Near Lake Montfront School,
Virgonagar Post, Bengaluru-560049.
Represented by its Proprietor
M. Hemanth Kumar
S/o Muniramaiah
2. SRI. M. HEMANTH KUMAR
S/o. Muniramaiah
Proprietor of M/s. SUPERTRONIC SERVICES SOLUTIONS
Shop: L.P. Innovative
No.4, 1st Cross, Kurudosanahalli,
Near Lake Montfront School,
Virgonagar Post, Bengaluru-560049.
: DEFENDANTS
(Ex-parte)
Date of Institution of the suit 25.07.2022
Nature of the suit (suit on
pronote, suit for declaration & Suit for recovery of money
Possession, Suit for injunction
etc.)
Date of commencement of ----
recording of evidence
Date on which judgment was
pronounced 20.09.2022
Total Duration Year/s Month/s Day/s
00 01 25
(LATHAKUMARI M.),
LXXXV Addl.City Civil & Sessions Judge,
Bengaluru.
3
Com. O.S. No.1056/2022
JUDGMENT
This is a plaintiff's suit to pass judgment and decree against the defendants and thereby directing defendants to pay to the plaintiff bank a sum of Rs.10,00,743/- together with current and future interest @ 11.50% p.a., compounded monthly in respect of term loan account No. 04201400001729 from the date of this suit till realization of the amount. Further directing the 1st defendant to pay to the plaintiff bank a sum Rs.2,17,163/- together with current and future interest thereon at the rate of 9.90% p.a., compounded monthly in respect of Guaranteed Emergency Credit Line (GECL) loan account No. 04209160000228 from the date of suit till realization for a total sum of Rs. 12,17,906/- against above two loans with cost and such other reliefs as this court deems fit to grant in the facts and circumstances of the case.
2. The brief facts of the plaintiff's case is that, the plaintiff is a banking company constituted and functioning under the Banking Companies (Acquisition and Transfer of undertakings) Act, 1970 having its Head Office at J.C. Road, Bengaluru and a branch inter alia at K.R.Puram, Old Madras Road, Bengaluru. As per Gazette notification dated 4 Com. O.S. No.1056/2022 04.03.2020 of Department of Financial Services, Ministry of Finance, Government of India, then Syndicate Bank was amalgamated with plaintiff's Canara Bank and hence, plaintiff has filed this suit against defendants for recovery of the money. It is further mentioned that 1 st defendant represented by 2nd defendant has approached then Syndicate Bank on 10.12.2019 for grant of Secured Over Draft Loan Facility of Rs.10,00,000/- for working capital requirement. Considering the request of 1 st defendant represented by 2nd defendant, then Syndicate Bank sanctioned the said Over Draft loan facility of Rs.10,00,000/- in favour of 1st defendant under loan Account No. 04201400001729 in respect of this loan defendants have executed Composite Hypothecation Agreement dated 10.01.2020 agreeing to operate the over draft account regularly and also to pay the interest at the rate of 11.5% p.a., and another 3.25% p.a., in case of default. It is plaintiffs further case that defendants also hypothecated their stocks as security to the aforesaid loan and also made some part payments towards loan up to 20.05.2022. Later the defendants operated the Over Draft Account unsatisfactorily and failed to operate the same regularly and thereby defendants account declared as NPA 5 Com. O.S. No.1056/2022 and thereafter defendants failed to repay the balance loan amount as per the agreed terms, in spite of repeated requests and demands made by the plaintiff's bank. It is plaintiff's further case that defendants are due of Rs.10,00,743/-. Apart from this loan, defendants also availed GECL Loan under loan Account No. 04209160000228 by approaching plaintiff's bank on 23.07.2020 for the said loan of Rs. Two lakhs. The defendants though availed the said loan of Rs.Two lakhs agreeing to repay the same along with interest at the rate of 7.50% p.a., compounded quarterly. In this regard, defendants have maintained separate loan account with plaintiff's bank as per loan account No. 04209160000228. By availing the said loan defendants have executed agreement cum deed of hypothecation dated 23.07.2020, pronote dated 23.07.2020, take deliver of on demand promissory note on the same day and also hypothecation deed for having availed such a loan. It is plaintiff's further case that defendants have availed the same and utilizing the said loan later became defaulter and not at all come forwards to close the loan account by paying the amount due. Hence, plaintiff bank got issued legal notice dated 04.02.2022 to the defendant through his counsel. In spite 6 Com. O.S. No.1056/2022 of issuance of the same, defendants neither replied to the same nor present and contested the same. It is plaintiff's further case that 1st defendant is due to the plaintiff bank a sum of Rs.2,17,163/- as per the statement of account produced by them in respect of GECL loan and another Rs.10,00,743/- towards secured loan liability and thereby liable to pay the same along with interest. Even defendants have nor responded to the PIM case No. 598/2022 plaintiff bank before the District Legal Services Authority. Hence, this suit for recovery of the amount from the defendants.
3. On issuance of suit summons to the defendants through court and RPAD, same was returned with postal shara 'left the address' and 'addressee left' respectively. Considering that summons issued to the last known address of the plaintiff's bank, service of summons against defendants was considered as deemed service and held sufficient. Since defendants remained absent, they were placed ex-parte.
4. Since there was no defence and plaint averments being in consistent with the documents produced, this court dispensed with plaintiff's evidence as per the 7 Com. O.S. No.1056/2022 provisions of Order VIII Rule 10 CPC.
5. I have carefully scrutinized the entire records placed before me. Heard the arguments.
6. Now the following points that arise for my consideration are:-
1) Whether the Plaintiff's bank is entitled to recover a sum of Rs.10,00,7430/ together with current and future interest at the rate of 11.50% p.a., compounded monthly in respect of term loan and another Rs.2,17,163/- together with current and future interest at the rate of 9.90% p.a., towards GECL Loan in all amounting to a sum of Rs.12,17,906/- from the defendants with interest from the date of suit till realization of the amount with cost as claimed?
2) What Order?
7. My answers to the above Points are as under:
Point No.1 :- In the Affirmative Point No.2 :- As per the final Order for the following reasons.8
Com. O.S. No.1056/2022 REASONS
8. Point No.1:- It is the case of the plaintiff's bank that defendants approached then Syndicate Bank and availed cash credit loan facility and also GECL loan by executing various documents agreeing to repay the same along with interest, later became defaulter and very much irregular in operating their accounts and thereby the accounts of defendants declared NPA. It is further mentioned that as per the Notification issued by Central Govt., of India then Syndicate Bank was amalgamated with plaintiff's Canara Bank and hence plaintiff bank has filed this suit against the defendants. To substantiate the claim against defendants, plaintiff has produced along with the plaint original loan application dated 10.12.2019 submitted by defendants herein as per document No.1. Document No.2 is the letter of sanction. 3rd document is the composite hypothecation agreement executed by the defendants. 4 th document is the statement of account with respect to overdraft facility availed by the defendants herein. As I have already stated apart from the said Over Draft facility defendants also availed GECL loan by submitting their application on 23.07.2020. Plaintiff's bank has also produced said loan application as per document No.5.
9Com. O.S. No.1056/2022 Sanction Memorandum as per document No.6. Even in this regard defendants have executed agreement cum deed of hypothecation as per the document No.7. Apart from these documents, defendants have also executed On Demand Promissory Note as per document No.8 and Take Deliver of On Demand Promissory Note as per document No.9 and letter of undertaking dated 23.07.2020 as per document No.10 and also letter of proprietorship and there is particulars of hypothecated stock etc., as per document No.12. Document No.13 is the office copy of demand notice. For having served the said demand notice issued by the plaintiff bank on 21.06.2019, plaintiff's bank has produced not only postal receipts but also postal acknowledgement. It is the specific contention of plaintiff bank that, in spite of service of demand notice to defendants, they neither approached plaintiff nor filed any written statement nor paid the amount due. Another vital document is the statement of account in respect of second loan facility i.e., GECL loan, statement of account produced by the plaintiff as per document No.4 and 16 in respect of two loan facilities availed by the defendants from the plaintiff bank has been produced along with necessary certificate.
10Com. O.S. No.1056/2022 Plaintiff has also produced Non-Starter Report. Summons issued through this court to the address mentioned in the loan application came to be returned as 'address left'. Defendants have availed huge loan, if they have changed the place of residence or business place, it is probable that they shall inform the same to the plaintiff's bank or then Syndicate Bank so that the plaintiff's bank conveniently discuss/approach with defendants. The claim made by the plaintiff's bank is in accordance with statement of account produced and relied upon by the plaintiff. Apart from these documents, plaintiff's bank has also produced hypothecation agreement and all necessary documents discussed supra. Inspite of executing all necessary documents, the defendants failed to pay the amount due. The statement of account produced by plaintiff's bank establishes that defendants were very irregular in operating the account. Having availed such a huge loan the duty casted on the defendants to clear the same as agreed. Even before this court defendants not at all appeared and represent the matter. Under such circumstances, there is no reason to disbelieve the case of the plaintiff. That apart plaint averments are inconsistent with the supportive 11 Com. O.S. No.1056/2022 documents produced and relied upon by the plaintiff's bank. There is nothing which required to be proved by way of deemed admission. The facts set out in the plaint even if treated to have been admitted, this court is satisfied that suit is required to be decreed in favour of the plaintiff without requiring defendants to prove any fact mentioned in the plaint. Considering these circumstances, this court proceed to pass the judgment as per the provisions of Order VIII Rule 10 CPC. Accordingly, I have answered Point No.1 in the Affirmative.
9. Point No.2 : - In view of my findings on Point No.1, I proceed to pass the following:
ORDER The Suit filed by the plaintiff's bank against defendants for recovery of a sum of Rs.10,00,743/- together with current and future interest at the rate of 11.50% p.a., compounded monthly in respect of 12 Com. O.S. No.1056/2022 term loan account No. 04201400001729 and another sum of Rs.2,17,163/-
together with current and future interest @ 9.90% p.a., compounded monthly in respect of GECL loan account No. 04209160000228 from the date of suit till realization of the amount is decreed with cost.
Further defendants are liable to pay total sum of Rs.12,17,906/- from the above two loan accounts.
Draw decree accordingly.
(Dictated to the Judgment Writer, transcribed by him, corrected and then pronounced by me in open Court on this the 20th day of September, 2022).
(LATHAKUMARI M.), LXXXV Addl. City Civil & Sessions Judge, Bengaluru.13
Com. O.S. No.1056/2022 ANNEXURE LIST OF DOCUMENTS PRODUCED ON BEHALF OF THE PLAINTIFF ALONG WITH PLAINT (DEFENDANT EX-PARTE)
1) Original Loan Application dated 10.12.2019.
2) Original Letter of Sanction dated 10.01.2020.
3) Original Composite Hypothecation agreement executed by the defendants dated 10.01.2020.
4) Certified copy of statement of account in respect of Secured Over Draft Loan Facility.
5) Original Loan Application dated 23.07.2020.
6) Original Sanction Memorandum dated 23.07.2020.
7) Original Agreement Cum Deed of Hypothecation executed by the defendants dated 23.07.2020
8) Original Pronote executed by the defendants dated 23.07.2020
9) Original Take Delivery of On Demand Promissory Note executed by the defendants dated 23.07.2020
10) Original Letter of Undertaking executed by the defendants dated 23.07.2020
11) Original Letter of Proprietorship executed by the defendant No.2 dated 23.07.2020
12) Original Particulars of Hypothecated stock.
13) Office copy of the notice dated 21.06.2019.
14Com. O.S. No.1056/2022
14) Original postal receipt.
15) Original Acknowledgement
16) Certified copy of statement of account
17) Non starter report issued by the DLSA Bengaluru.
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANTS NIL LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANTS NIL (LATHAKUMARI M.), LXXXV Addl.City Civil & Sessions Judge, Bengaluru.