Delhi District Court
(Central) Delhi vs Associates India Financial Services ... on 7 November, 2013
1
IN THE COURT OF SH. SANJEEV AGGARWAL ADJ03
(CENTRAL) DELHI
Suit No. 188/07
Niti Raj Kapoor
S/o Sh. Subhash Chand Kapoor
R/o WZ275C, Janta Colony,
Shivaji Vihar, New Delhi. .....Plaintiff
Versus
Associates India Financial Services Pvt. Ltd
3 LBC, Pushp Vihar, New Delhi62 ...Defendants
Date of Institution of the Suit : 22.09.2007
Date on which order was reserved : 31.10.2013
Date of decision : 07.11.2013
J U D G M E NT
1. Vide this judgment I shall dispose off the suit for the recovery
of Rs. 5,28,803/ filed by the plaintiff.
2. Brief facts are it is stated that defendant is a Private Limited
Company engaged in the business of financing/lending money
on interest.
3. It is stated that in the month of December, 2000 the plaintiff
approached the defendant company for grant of loan of Rs.
3,65,000/. The defendant company agreed to advance the
said loan to the plaintiff and a loan agreement dated
16.12.2000 was executed between the parties. As per the
terms of the said loan agreement the plaintiff was to repay the
said loan with interest in 10 years in equal monthly
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
2
installments of Rs. 7298/.
4. It is further stated that the said loan amount was disbursed by
the defendant company to the plaintiff on 29.12.2000 and
that on account of delay in the payment of few installments by
the plaintiff, the defendant company invoked the arbitration
clause contained in the loan agreement dated 16.12.2000 and
referred the dispute to Sh. G.S.Gugti, Sole Arbitrator on
28.05.2003 without notice to the plaintiff on his back.
5. It is further stated that the above Sole Arbitrator entered into
an reference on 28.05.2003, but the plaintiff was not at all
aware about the arbitration proceedings, as no notice was
received by the plaintiff from the Arbitrator. The said
Arbitrator gave an exparte award on 10.09.2003, wherein he
awarded the claim of Rs. 3,57,340.63 to the defendant, as
outstanding principal amount as well as overdue installment
upto 14.05.2003. The Arbitrator also awarded a sum of Rs.
11,594.86 as interest, penal interest, foreclosure charges and
cheque bouncing charges as on 14.05.2003. Apart from the
above the Arbitrator also awarded interest @ 2% on the above
awarded amount i.e Rs. 3,68,935.49 w.e.f 14.05.2003 till
payment and also cost and expenses of Rs. 15000/.
6. It is further stated that during the time the defendant was
pursuing the arbitration proceedings at the back of plaintiff
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
3
they were regularly accepting the loan installments being paid
by the plaintiff, which fact was never brought to the
knowledge of the Arbitrator by the defendant.
7. It is further stated that on 24.09.2004, the defendant
alongwith the bailiff and few other persons came at the house
of the plaintiff in order to attach/recover the aforesaid
awarded amount and for attachment of the property bearing
No. WZ275C, Janta Colony, Shivaji Vihar, New Delhi. The
plaintiff who was totally taken by surprise was left with no
option but to pay a sum of Rs. 4,00,000/ by means of four
cheques of Rs. 1,00,000/ each and Rs. 75000/ in cash to the
officers of the defendant company in order to avoid the
attachment of the above said property.
8. It is further submitted that as per the statement of account
dated 25.09.2004 issued by the defendant the plaintiff had
paid in all a sum of Rs. 7,36,897/ to the defendant. Copy of
the statement of account is filed alongwith the plaint.
9. It is further submitted that according to the award passed by
the Arbitrator the defendants were entitled to recover in all a
sum of Rs. 5,04,453.49 from the plaintiff the break up of
which is given below:
(a) Awarded Principal amount Rs. 3,57,340.63
(b) Penal Interest and cheque bouncing
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
4
charges Rs. 11,594.86
(c)Interest on Rs. 3,68,935.49
@ 2% per month upto 24.09.94 Rs. 1,20,518.00
(d)Cost of Arbitration Rs. 15,000.00
___________________
TOTAL Rs. 5,04,453.49
___________________
10.It is further submitted that whereas the plaintiff had paid a
total sum of Rs. 8,11,897/ to the defendant which includes
Rs. 7,36,897/ and Rs. 75000/ which amount according to
defendant was spent on obtaining the warrants of
attachment/possession.
11.It is further submitted that the plaintiff has thus paid a sum
of Rs. 3,07,444/ to the defendant in excess which the
plaintiff is entitled to recover from the defendant together
with interest @ 2% per month amounting to Rs, 2,21,359/.
The total amount thus recoverable from the defendant come
to Rs. 5,28,803/.
12.It is further stated that plaintiff had approached the
defendant on various occasions for refund of the said excess
amount, which has been paid in excess, but the defendant has
failed to pay the same. Hence, it is prayed that a decree of Rs.
5,28,803/ with pendentlite and future interest @ 2% per
month be passed in favour of the plaintiff and against the
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
5
defendant.
13.Written statement has been filed by the defendant. In
preliminary objections it is stated by the defendant that the
present suit is neither maintainable or competent and is
otherwise barred U/s 47 of CPC and Section 42 of the
Arbitration & Conciliation Act. In this regard, it is submitted
that the plaintiff had availed loan facility from the defendant
herein to the tune of Rs. 3,65,000/ and the same were
payable alongwith interest in terms of a written loan
agreement. The plaintiff committed repeated defaults in
repayment of the said loan facilities and eventually in terms of
the arbitration clause in the loan agreement, duly executed
between the parties, the matter was referred to the Sole
Arbitrator of Sh. G.S.Jugti. The Ld. Arbitrator had infact
passed an arbitral award dated 10.09.2003, whereby the
plaintiff was directed to pay the amounts so mentioned in the
said arbitral award. Thereafter, the defendant herein, filed an
execution petition and in pursuance thereof, the amounts
due/payable to the defendant were recovered. It is submitted
that the present suit is really in the nature of seeking
adjudication relating to the execution of the arbitral award
and thus the same is barred U/s 47 of CPC and Section 42 of
the Arbitration & Conciliation Act, 1996, therefore the present
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
6
suit is not maintainable and is liable to be dismissed.
14.It is further stated that suit of the plaintiff is barred by
limitation. Even otherwise the present suit cannot be filed
independently and the only remedy available with the plaintiff
is to file objections in the execution proceedings, which
objections were barred by time, therefore the suit is liable to
be dismissed.
15.On merits, it is stated that the name of the defendant is now
known as M/s Citifinancial Consumer Finance India Ltd. It is
admitted that a loan transaction was entered into between the
parties and the loan agreement provided that in case of any
dispute the matter shall be referred to arbitration. It is
submitted that plaintiff committed defaults in repayment of
the loan amounts and accordingly the matter was referred to
arbitration bearing case No. GSJ/78/2003 and Ld. Arbitrator
also passed an award in favour of the defendant and the said
arbitral award now stands satisfied in the execution
proceedings, therefore the suit is not maintainable.
16.It is stated that plaintiff also admitted that he had committed
defaults in the payment of the installments, therefore the
defendant was fully justified invoking the arbitration clause. It
is denied that the plaintiff was not aware about the arbitration
proceedings or had not received any notice as alleged. It is
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
7
further stated that the plaintiff was duly served with the
arbitrator notice and the Ld. Arbitrator had passed a legally
and valid arbitral award in favour of the defendant.
17.It is further stated that the arbitral award has become final
and the plaintiff cannot be permitted to assail the findings
therein. It is denied that defendant was regularly accepting
the loan installments, as alleged or otherwise.
18.It is stated that the correct fact is that as on 14.05.2003, a
sum of Rs. 3,68,935.49 was due and payable by the plaintiff
to the defendant and the Ld. Arbitrator has given a finding of
fact in this regard vide award dated 10.09.2003, which has
become final, therefore the plaintiff is estopped from
challenging the same again, as the said findings has become
resjudicata.
19.It is stated that the defendant had also filed execution
proceedings for the execution of the arbitral award, which
became satisfied for the recovery of amount, therefore
nothing remains due to the plaintiff. It is denied that any
statement of account was given to the plaintiff and it is stated
that on 14.05.2003, a sum of Rs. 3,68,935.49 was due and
payable by the plaintiff to the defendant, which included the
arrears of equated monthly installments, future principal,
bouncing charges, alongwith interest and other charges,
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
8
which is duly reflected in the arbitral award dated 10.9.2003.
The plaintiff cannot be permitted to adjudicate the same issue
as arbitration award has become final. It is denied that
plaintiff has paid a sum of Rs. 8,11,897/ as alleged. It is
denied that plaintiff has paid a sum of Rs. 75000/ as alleged
or otherwise. It is also denied that plaintiff has paid a sum of
Rs. 3,07,444/ in excess to the defendant, therefore it is
prayed that suit is liable to be dismissed.
20.Replication has been filed by the plaintiff to the Written
Statement of defendant in which the allegations made in
the Written Statement have been denied in toto and those
made in the plaint have been reiterated as correct.
21.Vide order dated 22.12.05, from pleadings of the parties
following issues were framed:
(i) Whether the plaintiff has paid the
defendant in excess of his liability
under the award ? OPP
(ii)Whether the plaintiff is entitled to
recovery of any amount. If so, how
much ? OPP
(iii)Whether plaintiff is entitled to any
interest on the excess amount ? If so
how much ?
(iv)Relief
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
9
22.The plaintiff in support of her case has examined
herself as PW1 and has relied upon documents which
are ExPW1/1 to ExPW1/5 and ExPW1 to ExPW21.
She has also been cross examined by counsel for
defendant, thereafter matter was listed for defendant'
s
evidence. Despite various opportunities and
imposition of cost and affording last and final
opportunity defendant failed to lead defendant'
s
evidence. Consequently, Defendant'
s evidence was
closed vide order dated 10.10.13, thereafter matter was
listed for final arguments and an opportunity to file
written submission or address oral arguments was also
given to the defendant, which the defendant has failed
to avail, therefore it is presumed that defendant has
got nothing to say in the matter, except what is already
on the record.
23.I have heard Ld. counsel for the plaintiff Sh. Gurpreet
Singh Sethi and M.S.Sethi Ld. counsel for the plaintiff
and also perused the record.
24.My issue wise findings are as under:
ISSUES NO. 1 to 3
25.All these issues are taken up together as they are
interconnected with each other.
26.Regarding the legal contention raised in the written
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
10
statement that the present suit is barred U/s 47 of CPC
and Section 42 of Arbitration & Conciliation Act which
provides that all questions arising between the parties
to the suit for which decree was passed and relating to
the execution satisfaction or discharge of decree would
be determined by the executing court and not by
separate suit. This issue has already been adjudicated
by the Ld. Predecessor vide order dated 07.05.08,
which order has become final, as no appeal against the
same was preferred by the defendant, therefore the
same need not be laboured upon again.
27.PW1 has reiterated the contents of her plaint in her
affidavit, while appearing as PW1. She has proved the
arbitration award ExPW1/1, Statement of account Ex
PW1/2, notice dated 26.08.08 U/o 12 Rule 8 CPC which
is ExPW1/3, Postal receipt and AD card thereto are
ExPW1/4 & 5(colly) respectively and ExPW1 to Ex
PW21 are the receipts of payment made by the
plaintiff, which are even otherwise admitted by the
defendant during admission/denial.
28.Perusal of the arbitration award ExPW1/1 reveals that
Ld. Arbitrator entered into reference dated 28.05.03
and it is also reflected in para 4 of the said award that
respondent who is plaintiff herein was duly served.
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
11Therefore the contention of the plaintiff to the contrary does not appear to be correct. In any case, the plaintiff has proved on record the statement of account issued by the defendant which is ExPW1/2. It is not the case of defendant in the cross examination of PW1 that said statement of account was never issued by the defendant bank. Therefore the said statement of account is clearly relevant U/s 34 of Indian Evidence Act. The perusal of the said statement of account reveals that even after the Ld. Arbitrator entered into reference on 28.05.03 the defendant bank continued to accept various installments being paid by the plaintiff to the defendant and the same was never brought to the notice of the Arbitrator who passed the award dated 10.09.03, as no adjustment of the said award has been given in the said amount.
29.The defendants are not entitled to claim any excess amount other than that was due from the plaintiff towards the loan transaction(s) and the interest accruing thereon. A perusal of the statement of account also reveals that plaintiff had also paid an amount of Rs. 4,00,000/ on 24.09.05, which the plaintiff claims was paid towards the execution of the arbitration award. Further an amount of Rs. 39,615/ is Suit No. 188/07 Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
12also reflected to have been paid to the defendant on 20.09.04. PW1 has also claimed that she had also paid an amount of Rs. 75000/ in cash to the defendant, but the same is not reflected in the statement of account relied upon by the plaintiff ExPW1/2. In any case, since the defendant was a Private Limited Company, it is hard to believe that the plaintiff who had paid the remaining amount by way of four separate cheques would have paid an amount of Rs. 75000/ in cash without insisting upon the receipt of the same. Infact in the cross examination, PW1 has admitted that there is no receipt of the payment of the said amount of Rs. 75000/ and it was correct that she has not made any such averments or application in the execution proceedings with regard to payment of Rs. 75000/. Therefore plaintiff is not entitled to the amount of Rs. 75000/, as claimed in the present suit.
30.The statement of account ExPW1/2 reveals that plaintiff has paid an amount of Rs. 7,36,897/ to the defendant against the awarded amount of Rs. 504453.49. Therefore the defendant is not entitled to claim more amount than which was due from the plaintiff as per the loan transaction between the parties, as it would be a case of undue enrichment. In Suit No. 188/07 Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
13any case, nothing has come in the cross examination of PW1, which shows that the defendant had only realized the amount which was due towards the loan transaction and as per arbitral award ExPW1/1. On preponderance of probabilities, the case of the plaintiff is found to be credible, as there is no contrary evidence lead by the defendant despite various opportunities, as discussed above. These issues are answered accordingly in favour of the plaintiff and against the defendant.
RELIEF
31.In view of my findings on the above issues, the suit of the plaintiff is decreed for a sum of Rs. 4,53,803/alongwith interest @ 12% per annum from the date of filing of the suit till its realization alongwith costs. Decree be drawn.
32.File be consigned to Record Room.
ANNOUNCED IN THE OPEN (Sanjeev Aggarwal)
COURT ON 07.11.2013 ADJ(Central03)
Delhi/07.11.2013
Suit No. 188/07
Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.
14 Suit No. 188/07Sh.Niti Raj Kapoor Vs. Associates India Financial Services Pvt. Ltd.