Delhi District Court
State Bank Of India vs Ramvir on 3 May, 2024
DLST010081542023
Presented on : 23.8.2023
Registered on : 23.08.2023
Decided on : 03.05.2024
Duration : 8 months & 11 days
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT) (DIGITAL-04),
SOUTH, SAKET COURTS, NEW DELHI
Presiding Officer: Sh. SANJEEV KUMAR SINGH
CS (Comm) No. 493/2023
In the matter of:
STATE BANK OF INDIA
Branch Sake Court Complex
Utility Block, Saket Court,
New Delhi-110017.
Through Its AR. ............Plaintiff
Vs.
1. RAMVIR
S/o Banke Lal
R/o S-211, near Abhay Tent House
Indra Gandhi, Camp-1,
Taimoor Nagar, New Delhi-110025.
2. THE SALARY DRAWING & DISBURSING OFFICE
Administrative Officer, DEMS, MCD
DEMS, MCD DEMS, South Zone,
Green Park, New Delhi-110016.
3. THE COMMISSIONER (MCD)
Municipal Corporation Delhi
Shyama Center, 4th Floors,
Minto Road, New Delhi-110002. .........Defendants
Date of institution : 23.08.2023
Date on which argument was concluded : 03.05.2024
Date of pronouncement of the order : 03.05.2024
CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 1 of 10
Digitally signed
SANJEEV by SANJEEV
KUMAR SINGH
KUMAR Date:
SINGH 2024.05.03
18:04:41 +0530
EX-PARTE JUDGMENT
1. This suit has been filed for recovery of an amount of Rs.
8,11,647/- along with pendente-lite and future interest @ 11.1 % per
annum with till payment/realization in favour of the plaintiff.
BRIEF FACTS AS PER PLAINT ARE AS UNDER:
2. The version of the plaintiff is that the plaintiff bank is a body corporate constituted under the State Bank of India, 1955 having its Corporate Office at Madame Cama Road, Nariman Point, Mumbai- 400021. It is further stated that the present suit has been filed through Sh. Lokesh Kumar, Branch Manager / AR of the plaintiff bank, who has been authorized by the Bank vide Gazette Notification dated 27.03.1987.
3. It is further the version of the plaintiff that on 16.07.2020 defendant no. 1 approached the plaintiff bank at Saket Branch with loan application for grant of personal loan of Rs. 10 Lakhs. It is further stated that defendant no. 2 is the employer of the defendant no. 1 (principal borrower), who is a permanent / regular under Employee ID 72241696 at the post of Safai Karamchari and has been getting regular monthly salary. It is further stated that after executing necessary and relevant documents i.e. loan application form, arrangement letter, personal loan agreement, sanction letter, SI report all dated 18.07.2020, Letter of obetention of NOC issued by defendant no. 2 and irrevocable standing instruction both dated 16.07.2020, the plaintiff bank sanctioned personal loan (under Xpress Credit Scheme) of Rs. 10,0,000/- to defendant no. 1 on 18.07.2020 vide Loan Account No. 3951 1535 631. It is further stated that the said Loan was repayable in 72 EMIs of Rs. 19,551/- each, carrying interest @ 12.00 % p.a. CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 2 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.05.03
18:04:49 +0530
4. It is further stated that defendant no. 2, in support of loan application and as security of grant of personal loan to defendant no. 1, had issued irrevocable letter of authority dated 18.07.2020, vide which it had authroized the plaintiff bank to sanction and disburse loan amount to defendant no. 1 and further defendant no. 2 had undertaken to pay the loan amount dues from the terminal benefits and / or gratuity, provident fund and any other dues payable to the defendant no. 1 in the event of his retirement or discontinuation of his service or in occasion of his death. It is further stated that defendant no. 2 had issued consent / letter of obetention of NOC dated 16.07.2020 for the assurance and security of the plaintiff bank, wherein defendant no. 2 had undertaken that in case of death, retirement , resignation or discontinuance of service of defendant no. 1 they shall obtain an NOC from the plaintiff bank before selling the dues of borrower / defendant no. 1.
5. It is further stated that defendant no. 1 proceeded on unsanctioned and unauthorized leave from his services with defendant no. 2 and due to that reason salary account of defendant no. 1 has been put on hold which has further hindered the deduction of EMIs towards loan account. It is further stated that in such circumstances, it is the liability of defendant no. 2 to settle the outstanding loan account.
6. It is further stated that defendant no. 1 had miserably failed to adhere to financial discipline and defaulted in making regular payments even after several reminders issued by the plaintiff to the defendants. It is further stated that on 19.12.2022, plaintiff issued a Legal Notice to the defendant, calling upon the defendant to make the payment of due and outstanding. However, despite being duly notified, the defendant did not come forward to pay the outstanding CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 3 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.05.03
18:04:57 +0530
amount despite expiry of notice period and subsequently his Loan Account No. 3951 1535 631 was declared as NPA on 09.12.2022, and thus constrained the plaintiff to institute the present suit for recovery of the outstanding amount of Rs. 8,11,647/- as per the account maintained by plaintiff bank.
7. It is further stated that the amount was not paid by the defendant despite issuance of notice and hence, the plaintiff bank invoked Section 12-A of the Commercial Courts Act by approaching South District Legal Services Authority on 29.04.2023, but the defendant did not appear in Pre Institution Mediation proceedings and hence, a Non-Starter Report was issued by South District Legal Services Authority on 06.07.2023, where-after, the present Suit was filed by the plaintiff on 23.08.2023 for recovery of Rs. 8,11,647/- (which included the loan amount with interest) with pendente lite and future interest @ 11.1% p.a. till the date of realization.
8. It is further the version of the plaintiff that cause of action accrued in favour of the plaintiff and against the defendant on 01.07.2020, when the loan was applied. It is further stated that the cause of action further arose on 18.07.2020 when the said loan was sanctioned to the defendant and he had executed various documents in favour of plaintiff bank. It is further stated that cause of action further arose on 19.12.2022, when legal notice was sent to the defendant. Thus, the plaintiff bank has accordingly prayed that the suit be decreed in the sum of Rs. 8,11,647/- along with interest. Costs of the suit have also been prayed for.
CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 4 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date: SINGH 2024.05.03 18:05:09 +0530 DEFENDANT IS EXPARTE:-
9. The defendant no. 1 was served on 09.10.2023 and defendant no. 2 was served on 10.10.2023. On 12.02.2024, Sh. Krishan Gopal, Advocate appeared for defendant no. 1 alongwith defendant no. 1 and Sh. Shivashish Gunwal, Advocate appeared for defendant no. 2. There on the same day, defendant no. 1 gave assurance that he has applied for a fresh loan from some other bank and the entire dues of the plaintiff bank shall be paid by the defendant no. 1 on or before 15.04.2024. The defendant no. 1 and 2, however, being served on 09.10.2023 and 10.10.2023 respectively, did not file any Written Statement within the statutory period of 120 days from the date of service and hence, right of the defendant no. 1 and 2 to file the Written Statement was closed vide order dated 12.02.2024 and the matter was directed to be proceeded for recording uncontested PE.
10. In order to prove the case, the plaintiff bank has led its evidence wherein Sh. Lokesh Kumar, AR of the plaintiff bank was examined and he reiterated the contents of plaint in his evidence by way of affidavit Ex. PW1/A and has relied upon the following documents:-
S. No. Documents Exhibit
1. Gazette Notification dated 27.03.1987 Mark A
2. Loan Application Form dated 16.07.2020 with ID Ex. PW1/1
(OSR)
3. Arrangement Letter dated 18.07.2020 Ex. PW1/2
(OSR)
4. Loan Agreement dated 18.07.2020 Ex. PW1/3
(OSR)
5. Sanction Letter dated 18.07.2020 Ex. PW1/4
(OSR)
6. Letter of Obetention of NOC dated 16.07.2020 Ex. PW1/5
(OSR)
7. Standard Instructions Report Ex. PW1/6
CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 5 of 10
Digitally signed
SANJEEV by SANJEEV
KUMAR KUMAR SINGH
Date: 2024.05.03
SINGH 18:05:18 +0530
(OSR)
8. Irrevocable Letter of Authority dated 16.07.2020 Ex. PW1/7
(OSR)
9. Office Copy of Legal Notice Ex. PW1/8
(OSR)
10. Statement of Account alongwith Certificate u/s Ex. PW1/9
65-B of the Indian Evidence Act
11. Non-Starter Report dated 06.07.2023 Ex. PW1/10
12. Letter / Statement depicting calculation of suit Ex. PW1/11
amount
11. I have heard learned counsels for the parties and have perused the records of the case.
12. At the very Outset, I may observe that the provisions of Section 2 (1) (c) (i) of Commercial Courts Act, 2015 are very clear which reads as under :-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x)management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 6 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.05.03
18:05:26 +0530
and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
13. The provisions of Section 2(1)(c)(i) of the Commercial Courts Act, 2015 as above are very much clear. It is important to notice that the crucial expression that connects the classes of persons i.e. merchants, bankers, financiers and traders to the expression mercantile documents are the words "such as".
14. In Good year India Ltd. Vs. Collector of Customs (AIR 1999 SC 1558), the words "Such as" were construed by the Hon'ble Apex Court to mean that the words following it were to be read as illustrative of the matter and not as limitations. Consequently, it would be difficult to say that the words "mercantile documents" which follow the words "Such as" in Section 2(1)(c) are the only classes falling within the net of this definition. In other words, it would appear that the expression "such as those relating to mercantile documents" cannot be construed as words of limitation while construing this definition.
15. Hon'ble Calcutta High Court in Ladymoon Towers Private Ltd. Vs. Mahendra Investment Advisors Private Limited (I.A No. G.A 4 of 2021 in C.S 99 of 2020 order dated 13.08.2021) after setting out the dictionary meanings of the expressions "merchants" "bankers"
"traders" and "financiers" the learned judge proceeded to observe as under :-CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 7 of 10 Digitally signed
SANJEEV by SANJEEV
KUMAR SINGH
KUMAR Date:
SINGH 2024.05.03
18:05:33 +0530
"The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a non-commercial cause. The graduation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The insolvency and Bankruptcy Cod, 2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt - Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It would not include an agreement where profit-making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom."
16. Therefore, the facts which are alleged in the plaint come under the commercial dispute.
17. Now, the next question is whether this Court has the pecuniary jurisdiction to adjudicate the matter which is in dispute. The provisions of Section 3 of Commercial Courts Act, 2015 provides that :-
Section 3: Constitution of Commercial Courts:
3. (1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 8 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.05.03
18:05:40 +0530
notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.] 3[(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
18. The Commercial Courts Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the amendment and by virtue of notification, the pecuniary jurisdiction of the commercial courts shall not be less than Rs. 3,00,000/-. In the present case, the claimed amount as mentioned in the plaint is of Rs. 8,11,647/- and as such this court is having jurisdiction to adjudicate the matter which is in dispute.
19. This Court has territorial jurisdiction to try the present suit since the loan was disbursed from the office of the plaintiff situated at Saket Court Complex, New Delhi-110017 and that the loan is repayable at the said branch, which falls within the territorial jurisdiction of this Court.
20. The suit has been filed within a period of limitation since last payment was made on 01.11.2022 in loan account no. 3951 1535 631 as per Ex. PW-1/9 and suit was filed on 23.08.2023.
21. PW-1, by way of his unrebutted testimony has been able to prove that the defendant failed and neglected to clear the outstanding dues against the loan facility issued to him by the plaintiff bank as CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 9 of 10 Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.05.03
18:05:47 +0530
contended in the plaint, a sum of Rs. 8,11,647/-, was due and payable by the defendant to the Plaintiff-Bank, which the defendant failed to pay.
22. The plaintiff has claimed a sum of Rs. 8,11,647/- along with interest. Costs of the suit has also been prayed.
23. So far as the interest component is concerned, the plaintiff has claimed interest @ 11.1% per annum which is in my considered opinion is excessive and, therefore, in the interest of justice, the plaintiff is entitled to the recovery of principal amount of Rs. 8,11,647/- along with interest @ 9% per annum from the date of filing of the suit till realization from the defendant no. 1.
RELIEF
24. In view of the above, I hereby pass:-
An ex parte money decree in the sum of Rs. 8,11,647/- in favour of the plaintiff and against the defendant no. 1 with interest @ 9% per annum from the date of filing of the suit till the realization of the amount alongwith costs of the suit.
The suit is accordingly decreed with cost. Decree Sheet be prepared accordingly. File be consigned to be Record Room.Digitally signed by
SANJEEV SANJEEV KUMAR
Announced in open Court KUMAR SINGH
Date: 2024.05.03
on 03.05.2024 SINGH 18:05:54 +0530
(SANJEEV KUMAR SINGH)
District Judge
(Commercial Court) (Digital-04)
South,Saket,ND/03.05.2024
CS (Comm) No. 493/23 State Bank of India vs. Ramvir & Ors. Page 10 of 10