Bangalore District Court
Canara Bank vs M/S Sriram Digital World on 14 June, 2024
1
COM.O.S.1526/2023
KABC170032472023
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.1526/2023
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.1526/2023
1. M/s.Sriram Digital
World.
Represented by its
Proprietor
Sri.Sampatraj, No.72,
Opp. Kalyanamantapa,
Sanjeevininagar,
Hegganahalli Cross,
Bengaluru - 560 058.
2. Sri.Sampatraj,
S/O.Babulal, Aged about
40 years, Proprietor
M/s.Sriram Digital
World, No.72, Opp.
Kalyanamantapa,
Sanjeevininagar,
Hegganahalli Cross,
Bengaluru - 560 058.
: DEFENDANT
(Defendant No.1 and 2
are placed exparte as
per order dated
28.05.2024.)
Date of Institution of the
21.12.2023
suit
Nature of the suit (suit on
pronote, suit for
Suit for recovery of money
declaration & Possession,
Suit for injunction etc.)
Date of commencement of
05.06.2024
recording of evidence
3
COM.O.S.1526/2023
Date on which judgment
14.06.2024
was pronounced
Total Duration Year/s Month/s Day/s
00 05 24
(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.15,04,353.70 along with future interest @ 24% p.a. from the date of the suit till realization.
2. The Brief facts of the Plaint are as follows:-
The defendants, had approached the plaintiff Bank seeking business loan, and accordingly the Bank had sanctioned the following loans;
a. The Bank had sanctioned Over Draft Loan of Rs. 10,00,000/- (Rupees Ten Lakh Only) to defendants, on 23.12.2019 Loan Account No:07691400002101, interest payable at 10.4%,. The current outstanding is Rs.10,28,497/-
(Rupees Ten Lakhs Twenty Eight Thousand Four Hundred Ninety Seven Only), including interest as on 15.12.2022, and 4 COM.O.S.1526/2023 defendants account has become NPA on 29.04.2022.
b. The Bank had sanctioned RFITL Loan Rs.2,00,000/- (Rupees Two Lakh Only) loan to defendants, on 24.06.2020 Loan Account No: 07699160000191, interest payable at 15.80%,. The current outstanding is 1 ,99,356/- (Rupees One lakh Ninety Nine Thousand Three Hundred Fifty Six Only), including interest as on 15.12.2022 and defendants account has become NPA on 29.04.2022.
c. The Bank had sanctioned Add on Credit Loan of Rs.1,00,000/- (Rupees One Lakh Only) to defendants, on 30.04.2020, Loan Account No: 07699580000041, Interest payable at 9.55%,. The current outstanding is Rs.84,704/- (Rupees Eighty Four Thousand Seven Hundred Four Only), including interest as on 15.12.2022 and defendants account has become NPA on 29.04.2022.
d. The Bank had sanctioned Guaranteed Emergency Credit Loan of Rs.79,714/- (Rupees Seventy Nine Thousand Seven Hundred Fourteen Only) to defendants, on 28.06.2021, Loan Account No:173000061230, interest payable at 9.40%,. The current outstanding is Rs.49,382/- (Rupees Forty Nine Thousand Three Hundred Eighty Two Only), including interest as on 15.12.2022, and defendants account has become NPA on 29.04.2022. The defendants, while securing the above loan, had submitted and executed application dated 08.11.2019 seeking loan, the loan 5 COM.O.S.1526/2023 being sanctioned vide Sanction Letter dated:23.12.2019, the defendants had executed acknowledgment of loan, Composite Hypothecation Agreement, Demand Promissory Note, Letter of Renewal, Pronote. The defendants, being chronic defaulters in repayment of the above loans, the entire assets were treated as Non- performing Assets as on 29.04.2022, and with regard to the above loans, the defendants were liable to pay outstanding of Rs.10,28,497/- as on 15.12.2022 pertaining to Over Draft Loan, Rs.1,99,356/- as on 15.12.2022 pertaining to RFITL Loan, a sum of Rs.84,704/- as on 15.12.2022 pertaining to add on credit loan and Rs.49,382/- as on 15.12.2022, pertaining to Guaranteed Emergency Credit Loan. Even prior to treating the assets as non-performing assets, the plaintiff Bank had restructured the loans as per the request sent through mail / letter, as the accounts were identified as stress account, on account of Covid-19, and in terms of the request for extending RESOLUTION FRAME WORK 2.0 Resolution of Covid-19 related stress of Micro, Small & Medium Enterprises (MSMEs) as per RBI Circular dated 05.05.2021, all the four loans of the defendants were restructured. 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 In spite of service of legal notices, the 6 COM.O.S.1526/2023 defendants neither replied nor complied with the reasonable demand made by the plaintiff Bank seeking repayment of the above four 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.3059/2022 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 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 "Response not filed. No representation. Hence closed". The plaintiff, having waited even thereafter requesting orally the defendants to repay the loan, and there being no response, is now constrained to file this suit seeking recovery of the loan dues. 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. 15,04,353.70 as on 11.10.2023. Hence, this suit.
7COM.O.S.1526/2023
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.
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.
8COM.O.S.1526/2023
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 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 defendants had approached the plaintiff Bank seeking business loan, and accordingly the Bank had sanctioned the Over Draft Loan of Rs. 10,00,000/- to defendants, on 23.12.2019 Loan Account No:07691400002101, interest payable at 10.4%,. The current outstanding is Rs.10,28,497/- , including interest as on 15.12.2022, and defendants account has become NPA on 29.04.2022. The bank had sanctioned 9 COM.O.S.1526/2023 RFITL Loan Rs.2,00,000/- loan to defendants, on 24.06.2020 Loan Account No: 07699160000191, interest payable at 15.80%,. The current outstanding is 1,99,356/-, including interest as on 15.12.2022 and defendants account has become NPA on 29.04.2022. The Bank had sanctioned Add on Credit Loan of Rs.1,00,000/- to defendants, on 30.04.2020, Loan Account No: 07699580000041, Interest payable at 9.55%,. The current outstanding is Rs.84,704/-, including interest as on 15.12.2022 and defendants account has become NPA on 29.04.2022. The Bank had sanctioned Guaranteed Emergency Credit Loan of Rs.79,714/- to defendants, on 28.06.2021, Loan Account No:173000061230, interest payable at 9.40%,. The current outstanding is Rs.49,382/-, including interest as on 15.12.2022, and defendants account has become NPA on 29.04.2022.
10. The defendants, while securing the above loan, and executed application dated 08.11.2019 seeking loan, the loan being sanctioned vide Sanction Letter dated:23.12.2019 at Ex.P.3, the defendants had executed acknowledgment of loan at Ex.P.14 and 15, Composite Hypothecation Agreement at Ex.P.5, Demand Promissory Note, Letter of Renewal at Ex.P.11, Pronote at Ex.P.6, 10, 29.
10COM.O.S.1526/2023
11. The defendants, being chronic defaulters in repayment of the above loans, the entire assets were treated as Non- performing Assets as on 29.04.2022, and with regard to the above loans, the defendants were liable to pay outstanding of Rs.10,28,497/- as on 15.12.2022 pertaining to Over Draft Loan, Rs.1,99,356/- as on 15.12.2022 pertaining to RFITL Loan, a sum of Rs.84,704/- as on 15.12.2022 pertaining to add on credit loan and Rs.49,382/- as on 15.12.2022, pertaining to Guaranteed Emergency Credit Loan. Even prior to treating the assets as non-performing assets, the plaintiff Bank had restructured the loans as per the request sent through mail / letter, as the accounts were identified as stress account, on account of Covid- 19, and in terms of the request for extending RESOLUTION FRAME WORK 2.0 Resolution of Covid-19 related stress of Micro, Small & Medium Enterprises (MSMEs) as per RBI Circular dated 05.05.2021, all the four loans of the defendants were restructured.
12. 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.13 through its Advocate. In 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 11 COM.O.S.1526/2023 above four loan dues.
13. From Ex.P.12, the Statement of account of Over draft of loan speaks to the effect that total amount payable towards principle amount of Rs. 11,37,294.69/-. 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.
14. From Ex.P.22, the Statement of account of RFITL loan account speaks to the effect that total amount payable towards principle amount of Rs. 2,16,510.80/-. The plaintiff claimed the interest for current and future interest at the rate 15.80% per annum. However by considering the interest prevailing, it is proper to award interest @ 10% per annum from the date of suit till realization.
15. From Ex.P.32, the Statement of account of Add on credit loan speaks to the effect that total amount payable towards principle amount of Rs. 93,340.59/-. The plaintiff claimed the interest for current and future interest at the rate 9.55% per annum from the date of suit till realization.
12COM.O.S.1526/2023
16. From Ex.P.36, the Statement of account of Guaranteed Emergency Credit Loan on credit loan speaks to the effect that total amount payable towards principle amount of Rs. 57,207.62/-. The plaintiff claimed the interest for current and future interest at the rate 9.40% per annum from the date of suit till realization.
17. The above mentioned transactions commenced from 23.12.2019 and the last payment was made by the Defendant on 24.12.2020 at Ex.P.12, 22.09.2022 at Ex.P.22 and 27.09.2022 at Ex.P. 32, 36 and the suit filed on 21.12.2023 is within the limitation period.
18. 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 loan amount of Rs. 11,37,294.69/- with interest @ 10% per annum, under the RFITL loan amount of Rs. 2,16,510.80/- with interest at 10%, under the Add on Credit loan amount of Rs. 93,340.59/- with interest at 9.55% per annum and under the Guaranted Emergency Credit Loan amount of Rs, 57,207.62 with interest at 9.40% per annum from the date of suit till realization. Hence, I answer this Point in "
Partly Affirmative".13
COM.O.S.1526/2023
19. Point No.2 : -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed in part with cost.
The Defendant is hereby directed to pay total aggregate sum of Rs.15,04,353.70/- together with interest as mentioned below.
A sum of Rs. 11,37,294.69/- for Over draft loan account No.07691400002101 along with interest 10% per annum from the date of suit till the realization.
A sum of Rs. 2,16,510.80/- for RFITL loan account No. 07699160000191 along with interest 10% per annum from the date of suit till the realization.
A sum of Rs.93,340.59/- for Add on Credit Loan account No. 07699580000041 along with interest 9.55% per annum from the date of suit till the realization.
A sum of Rs.57,207.62/- for Guaranteed Emergency Credit loan account No. 173000061230 along with interest 9.40% per annum from the date of suit till the realization.
Draw Decree accordingly.
14COM.O.S.1526/2023 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.
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 (pg no.1 to 6) Ex.P.3 Loan Sanction memorandum dtd.23.12.2019 (pg no.7 &
8) Ex.P.4 Overdraft letter dtd.27.12.2019 (pg no.9 to 13) Ex.P.5 Composite hypothication agreement dtd.27.12.2019 (pg no.14 to 29) Ex.P.6 Pronote note dtd.27.12.2019 (pg no.30) Ex.P.7 Original renewal loan application dtd.28.06.2021 (pg no.31 to 38) 15 COM.O.S.1526/2023 Ex.P.8 Sanction memorandum dtd.28.06.2021 (pg no.39 & 40) Ex.P.9 Original link letter dtd.28.06.2021 (pg no.41 & 42) Ex.P.10 Pronote dtd.28.06.2021 (pg no.43 & 44) Ex.P.11 Letter of renewal dtd.28.06.2021 (pg no.45 to 49) Ex.P.12 Statement of Account along with certificate (pg no.50 to
88) Ex.P.13, O/C of Legal notice dtd.24.12.2022 along with two postal Ex.P.13(a) receipts (pg no.89 & 90) and (b) Ex.P.14 Postal acknowledgment Ex.P.15 Postal acknowledgment Ex.P.16 Original loan application dtd.24.06.2020 (pg no.92 to
96) Ex.P.17 Sanction letter dtd.24.06.2020 (pg no.97 & 98) Ex.P.18 Letter of undertaking from borrower dtd.24.06.2020 (pg no.99 & 100) Ex.P.19 Original pronote dtd.24.06.2020 (pg no.101 & 102) Ex.P.20 Letter of undertaking dtd.24.06.2024 (pg no.103 to 106) Ex.P.21 Deed of hypothication dtd.24.06.2024 (pg no.107 to 117) Ex.P.22 Statement of account along with certificate (pg no.118 & 119) Ex.P.23, O/C of Legal notice dtd.24.12.2022 along with two postal Ex.P.23(a) receipts (pg no.120 & 121) and (b) Ex.P.24 Postal acknowledgment Ex.P.25 Postal acknowledgment Ex.P.26 Loan application dtd.13.02.2021 (pg no.123 to 130) Ex.P.27 Sanction memorandum dtd.13.02.2021 (pg no.131 &
132) Ex.P.28 Undertaking letter dtd.30.04.2020 (pg no.133) Ex.P.29 Pronote dtd.30.04.2020 (pg no.134 & 135) Ex.P.30 Letter of undertaking (pg no.136 to 139) Ex.P.31 Deed of hypothication dtd.30.04.2020 (pg no.140 to 148) Ex.P.32 Statement of account along with certificate (pg no.149 &
150) 16 COM.O.S.1526/2023 Ex.P.33, O/C of Legal notice dtd.24.12.2022 along with two postal Ex.P.33(a) receipts (pg no.151 & 152) and (b) Ex.P.34 Postal acknowledgment Ex.P.35 Postal acknowledgment Ex.P.36 Statement of account along with certificate (pg no.154 &
155) Ex.P.37, O/C of Legal notice dtd.24.12.2022 along with two postal Ex.P.37(a) receipts (pg no.156 & 157) and (b) Ex.P.38 Postal acknowledgment Ex.P.39 Inter office memorandum dtd.25.06.2021 (pg no.159) Ex.P.40 Original re-structuring loan agreement dtd.17.07.2021 (pg no.160 tp 170) Ex.P.41 Debtor and Creditor agreement (pg no.171 to 174) Ex.P.42 PIM report dtd.12.04.2023 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.