Bangalore District Court
M/S Canara Bank vs M/S Balalji Distributors on 14 June, 2024
1
COM.O.S.222/2024
KABC170004232024
IN THE COURT OF LXXXIV ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.85)
THIS THE 14th DAY OF JUNE 2024
PRESENT:
SMT. SUMANGALA S BASAVANNOUR.,B.COM,L.L.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.222/2024
BETWEEN:
Canara Bank,
(Previously known as
Syndicate Bank)
Peenya 3rd phase
Branch, No.16, Laggere
Main Road,
Parvathinagar,
Bengaluru - 560 058.
Represented by its
Senior Manager.
: PLAINTIFF
(Represented by Sir.
Raviraj Malali -Advocate)
AND
2
COM.O.S.222/2024
1. M/s.Balaji
Distributors,
Represented by its
Proprietrix Smt.Pushpa,
No.72/73, 1st Floor,
Sanjeevininagar, Opp.
Mathrushree
Kalyanamantapa,
Hegganahalli Main Road,
Bengaluru - 560 091.
2. Smt.Pushpa,
W/o.Ashok B., Aged
about 35 years,
Proprietrix M/s.Balaji
Distributors, No.66, 8th
Cross, Hegganahalli
Cross, Vishvaneedam
Post, Bengaluru - 560
091.
: DEFENDANT
(Defendant No.1 and 2
are placed exparte as
per order dated
28.05.2024.)
Date of Institution of the
08.02.2024
suit
Nature of the suit (suit on
pronote, suit for
Suit for recovery of money
declaration & Possession,
Suit for injunction etc.)
3
COM.O.S.222/2024
Date of commencement of
05.06.2024
recording of evidence
Date on which judgment
14.06.2024
was pronounced
Total Duration Year/s Month/s Day/s
00 04 06
(SUMANGALA S BASAVANNOUR),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This suit is filed by the Plaintiff for recovery of money a sum of Rs.19,86,229/- along with future interest @ 24% p.a. from the date of the suit till realization upon the total decreetal amount including costs.
2. The Brief facts of the Plaint are as follows:-
The defendants, had approached the plaintiff Bank (formerly M/s Syndicate Bank) seeking business loan, and accordingly the Bank had sanctioned the following loans;
a. The Bank had sanctioned Over Draft Loan of Rs. 15,00,000/- (Rupees Fifteen Lakhs Only) to defendants, on 15.07.2016 Loan Account No:07691400000, interest payable at 10.4%,. The current outstanding is Rs.16,94,137/- (Rupees 4 COM.O.S.222/2024 Sixteen Lakhs Ninety Four Thousand One Hundred Thirty Seven Only), including interest as on 15.12.2022, and defendants account has become NPA on 01.05.2022.
b. The Bank had sanctioned Guaranteed Emergency Credit Loan of Rs.3,00,000/- (Rupees Three Lakhs only) to defendants, on 02.07.2020, Loan Account No:07699160000323, interest payable at 9.40%,. The current outstanding is Rs.2,58,823/- (Rupees Two Lakhs Fifty Eight Thousand Eight Hundred and Twenty Three Only), including interest as on 15.12.2022, and defendants account has become NPA on 01.05.2022.
c. The Bank had sanctioned Add on Credit Loan of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand Only) to defendants, on 04.05.2020, Loan Account No:
07699580000052, Interest payable at 9.55%,. The current outstanding is Rs.30,269/- (Rupees Thirty Thousand Two Hundred and Sixty Nine Only), including interest as on 15.12.2022 and defendants account has become NPA on 01.05.2022.
The defendants, while securing the above loan, had submitted and executed application dated:08.07.2016 seeking loan, the loan being sanctioned vide Sanction Letter dated:15.07.2016, the defendants had executed acknowledgment of loan, Renewal Letter for all facilities, Composite Hypothication Agreement, Link Letter, Agreement, 5 COM.O.S.222/2024 Demand Promissory Note, Letter of Renewal, Deed of Hypothecation. The defendants, being chronic defaulters in repayment of the above loans, the entire assets were treated as Non- performing Assets as on 01.05.2022, and with regard to the above loans, the defendants were liable to pay outstanding of Rs.16,94,137/- as on 15.12.2022 pertaining to Over Draft Loan, Rs.2,58,523/- as on 15.12.2022 pertaining to Guaranteed Emergency Credit Loan Rs.30,269/- as on 15.12.2022 pertaining to add on credit loan. In so far as the Over Draft Loan Facility is concerned, the same has been renewed from time to time, and the defendants being chronic defaulters, the Bank was as such constrained to cause individual Legal Notices dated:24.12.2022 through its Advocate. In spite of service of legal notices, the defendants neither replied nor complied with the reasonable demand made by the plaintiff Bank seeking repayment of the above three loan dues. The transaction between the plaintiff & defendants being a commercial transaction and the plaintiff Bank, in terms of the provisions of the Commercial Courts Act, 2015, had instituted Pre-Litigation Mediation Proceedings against the defendants, having filed PIM No.3058/2022 before the District Legal Services Authority, Bengaluru Urban, Bengaluru. The defendants who were respondents therein, in spite of service of notice from the said Authority, and the matter being posted for appearance of defendants on 6 COM.O.S.222/2024 10.01.2023, 31.01.2023, 22.02.2023, 14.03.2023 and 11.04.2023, having not entered appearance, the said proceedings were closed with an Endorsement "Respondent Absent. No representation. Response not filed, Hence closed". The plaintiff, having waited even thereafter requesting orally the defendants to repay the loan, and there being no response from defendants, plaintiff constrained to file this suit. The loan amount advanced to the defendants is "Public Money" and it is the primary duty of the plaintiff Bank to recover the said money from the defendants, who have deliberately stopped payment, for reasons best known to themselves. Thus, the defendants are liable to the plaintiff Bank in a total sum of Rs.19,86,229/- as on 15.12.2022. Hence, this suit.
3. Inspite of paper publication, the Defendant has not appeared before this court, after waiting for 30 days, i.e., the time limit for filing written statement, the Defendant No.1 and 2 are placed exparte as on 28.05.2024.
4. The Plaintiff has examined PW-1 and got marked Ex.P.1 to Ex.P.42. I have heard the arguments of the Advocate for the Plaintiff.
7COM.O.S.222/2024
5. Based on the above pleadings of the Plaintiff, the following points arise for my consideration :-
1. Whether the Plaintiff is entitled for the Suit Claim from the Defendant ?
2. What Order ?
6. My findings on the above Points are as under:
1. Point No.1 :- In the Partly Affirmative.
2. Point No.2 :- As per the final Order for the following reasons.
REASONS
7. Point No.1 :- The Plaintiff Bank substantiate of this case examined its Senior Manager as PW.1. PW.1 in his evidence reiterated averments of the Plaint, and got marked Ex.P.1 to Ex.P.42.
8. In the decision reported in A.I.R. - 2000 - Karnataka - 234 (Syed Ismail vs. Smt. Shamshia Begum), the Hon'ble High Court of Karnataka has held as follows :-
"3. The impugned order does not disclose the nature of pleading placed by the plaintiff and whether there is prima facie material to grant a decree in his favour. A judgement in favour of the plaintiff is not automatic. The Court has to 8 COM.O.S.222/2024 consider the case of the plaintiff and grant a decree in his favour. The learned trial Judge has not referred to the pleadings of the plaintiff and the documents produced by him to substantiate even a prima facie case for grant of a decree in his favour. Therefore, the judgement and decree in favour of the plaintiff is not automatic on failure of the opposite party to put his defence. The Court can grant a judgement in favour of the party only upon consideration of the case of the plaintiff including appreciation of pleadings and evidence."
9. The averments of the Plaint, evidence of PW.1 discloses that the Defendant, had approached the plaintiff Bank seeking business loan, and accordingly the Bank had sanctioned the Over Draft Loan of Rs. 15,00,000/- to defendants, on 15.07.2016 Loan Account No:07691400000, interest payable at 10.4%,. The current outstanding is Rs.16,94,137/- including interest as on 15.12.2022, and defendants account has become NPA on 01.05.2022. The Bank had sanctioned Guaranteed Emergency Credit Loan of Rs.3,00,000/- to defendants, on 02.07.2020, Loan Account No:07699160000323, interest payable at 9.40%,. The current outstanding is Rs.2,58,823/-, including interest as on 15.12.2022, and defendants account has become NPA on 01.05.2022. The Bank had sanctioned Add on Credit Loan of Rs.1,50,000/- to defendants, on 04.05.2020, Loan Account No: 07699580000052, Interest payable at 9.55%,. The current outstanding is Rs.30,269/-, including interest as on 9 COM.O.S.222/2024 15.12.2022 and defendants account has become NPA on 01.05.2022.
10. The defendants, while securing the above loan, had submitted and executed application dated:08.07.2016 seeking loan, the loan being sanctioned vide Sanction Letter dated:15.07.2016 at Ex.P.3, the defendants had executed acknowledgment of loan at Ex.P.18, 19, 27, 28 and 39, Renewal Letter for all facilities, Composite Hypothication Agreement Ex.P.4, 9, Link Letter, Agreement, Demand Promissory Note at Ex.P.13, Letter of Renewal at Ex.P.6, Deed of Hypothecation at Ex.P.32.
11. The defendants, being chronic defaulters in repayment of the above loans, the entire assets were treated as Non- performing Assets as on 01.05.2022, and with regard to the above loans, the defendants were liable to pay outstanding of Rs.16,94,137/- as on 15.12.2022 pertaining to Over Draft Loan, Rs.2,58,523/- as on 15.12.2022 pertaining to Guaranteed Emergency Credit Loan Rs.30,269/- as on 15.12.2022 pertaining to add on credit loan. In so far as the Over Draft Loan Facility is concerned, the same has been renewed from time to time, and the defendants being chronic defaulters, the Bank was as such constrained to cause individual Legal Notices dated:24.12.2022 at Ex.P.17, 26 and 38 through its Advocate. In spite of service 10 COM.O.S.222/2024 of legal notices, the defendants neither replied nor complied with the reasonable demand made by the plaintiff Bank seeking repayment of the above three loan dues.
12. From Ex.P.20 the Statement of account of Over draft of loan speaks to the effect that total amount payable towards principle amount of Rs. 16,97,137/-. The plaintiff claimed the interest for current and future interest at the rate 10.4% per annum. However by considering the interest prevailing, it is proper to award interest @ 10% per annum from the date of suit till realization.
13. From Ex.P.29 the Statement of account of Guaranteed Emergency credit loan account speaks to the effect that total amount payable towards principle amount of Rs.2,58,823/-. The plaintiff claimed the interest for current and future interest at the rate 9.40% per annum from the date of suit till realization.
14. From Ex.P.40 the Statement of account of Add on credit loan account speaks to the effect that total amount payable towards principle amount of Rs. 30,269/-. The plaintiff claimed the interest for current and future interest at the rate 9.55% per annum from the date of suit till realization.
11COM.O.S.222/2024
15. The above mentioned transactions commenced from 15.07.2016 and the Defendant executed letter of renewal dated 17.10.2018, 02.02.2021 at Ex.P.6, Ex.P. 15 and Ex.P.20, 29 and Ex.P.40 statement of account discloses that the last payment was made by the Defendant on 30.04.2022 and the suit filed on 08.02.2024 is within the limitation period.
16. In this case in spite of paper publication, the Defendant is not appeared and denied the claim of the Plaintiff Hence, it shows the Defendants admitted the case of the Plaintiff. The evidence of PW.1 and Ex.P.1 to Ex.P.42 are remained unchallenged. Therefore, the Plaintiff is entitle for recovery of the suit claim of over draft/working capital loan amount of Rs. 16,97,137/- with interest @ 10% per annum, under the Guaranted Emergency Credit Loan amount of Rs. 2,58,823/- with interest at 9.40% and under the Add on Credit loan amount of Rs. 30,269/- with interest at 9.55% per annum from the date of suit till realization. Hence, I answer this Point in "
Partly Affirmative".
17. Point No.2 : -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed in part with cost.
12COM.O.S.222/2024 The Defendant is hereby directed to pay total aggregate sum of Rs.19,86,229/- together with interest as mentioned below.
A sum of Rs. 16,97,137/- for Over draft loan account No.07691400000009 along with interest 10% per annum from the date of suit till the realization.
A sum of Rs. 2,58,823/- for Guaranteed Emergency Credit loan account No. 07699160000323 along with interest 9.40% per annum from the date of suit till the realization.
A sum of Rs.30,269/- for Add on Credit Loan account No. 07699580000052 along with interest 9.55% per annum from the date of suit till the realization.
Draw Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendant to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
( Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 14th day of June, 2024).
(SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.
13COM.O.S.222/2024 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF PW-1 Nakka Bikshapathi LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Authorization letter Ex.P.2 Loan application Ex.P.3 Loan Sanction letter dtd.15.07.2016 Ex.P.4 Composite hypothication agreement dtd.15.07.2016 (pg no.7 to 27) Ex.P.5 Loan Application dtd.17.10.2018 (pg no.28 to 31) Ex.P.6 Renewal letter dtd.17.10.2018 Ex.P.7 Application for credit facilities (pg no.34 to 39) Ex.P.8 Sanction letter dtd.30.10.2019 (pg no.40 to 42) Ex.P.9 Composite hypothication agreement dtd.30.10.2019 (pg no.43 to 58) Ex.P.10 Application for credit facilities dtd.02.02.2021 (pg no.59 to 66) Ex.P.11 Sanction memorandum dtd.02.02.2021 (pg no.67 & 68) Ex.P.12 Loan Agreement dtd.02.02.2021 (pg no.69 to 73) Ex.P.13 Demand Promissory note dtd.02.02.2021 Ex.P.14 Sanction memorandum dtd.02.02.2024 (pg no.75 & 76) Ex.P.15 Letter of renewal dtd.02.02.2021 (pg no.77 to 81) Ex.P.16 Agreement cum deed of hypothication dtd.02.02.2021 (pg no.82 to 91) Ex.P.17, Copy of Legal notice dtd.24.12.2022 (pg no.92 & 93) Ex.P.17(a) and two postal receipts and (b) Ex.P.18 Postal acknowledgment Ex.P.19 Postal acknowledgment 14 COM.O.S.222/2024 Ex.P.20 Statement of Loan account with certificate (pg no.95 to
348) Ex.P.21 Applicant for credit facilities dtd.02.07.2020 (pg no.349 to 353) Ex.P.22 Sanction Memorandum dtd.02.07.2020 (pg no.354 &
355) Ex.P.23 Letter of undertaking dtd.02.07.2020 (pg no.356 to 359) Ex.P.24 Pronote dtd.02.07.2020 Ex.P.25 Agreement cum deed of hypothication dtd.02.07.2020 (pg no.362 to 372) Ex.P.26, O/C of Legal notice dtd.24.12.2022 along with two postal Ex.P.26(a) receipts and (b) Ex.P.27 Postal acknowledgment Ex.P.28 Postal acknowledgment Ex.P.29 Statement of account with certificate (pg no.376 to 380) Ex.P.30 Applicant for credit facilities dtd.04.05.2020 (pg no.381 to 386) Ex.P.31 Request letter along with annexure-1 (pg no.387 to 389) Ex.P.32 Deed of hypothication (pg no.390 to 397) Ex.P.33 Request letter for availing credit facility under Canara Credit Support to COVID-19 (pg no.398 & 399) Ex.P.34 Pronote dtd.04.05.2020 Ex.P.35 Take delivery letter to DPN dtd.04.05.2020 (pg no.402 to
407) Ex.P.36 Letter of undertaking dtd.04.05.2020 (pg no.408 to 411) Ex.P.37 Undertaking letter from non corporate borrower dtd.04.05.2020 Ex.P.38, O/C of Legal notice dtd.24.12.2022 and two postal Ex.P.38(a) receipts and (b) Ex.P.39 Postal acknowledgement Ex.P.40 Statement of account with certificate (pg no.418 to 422) Ex.P.41 Acknowledgment of debt dtd.30.06.2022 Ex.P.42 PIM report dtd.12.04.2023 15 COM.O.S.222/2024 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT NIL LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT NIL (SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.