Delhi District Court
State Bank Of India vs Uma Shankar on 14 January, 2025
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT) (DIGITAL-04),
SOUTH, SAKET COURTS, NEW DELHI
Presiding Officer: Sh. SANJEEV KUMAR SINGH
CS (COMM.) NO. 279/2024
IN THE MATTER OF:
STATE BANK OF INDA
At: Branch NCERT, N.I.E Campus
Sri Aurobindo Marg, New Delhi - 110016
Through It's Authorized Representative
Avinash Kumar Prasad
....... Plaintiff
Versus
UMA SHANKAR
R/o Vill- Goliapur, PO & PS. Barnahal
Distt- Mainpuri, Uttar Pradesh - 205261
..... Defendants
Date of Institution : 06.06.2024 (through e-filing)
Judgment Reserved on : 10.01.2025
Date of Decision : 14.01.2025
EX-PARTE JUDGMENT
1. This is a suit filed by the plaintiff under The Commercial Courts Act,
2015 for recovery of Rs. 9,62,642/- along with interest @ 10.10% per
annum from the date of filing of the suit till realization of the decretal
amount u/S 2 (1) (C)(i) Commercial Act, 2015.
State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 1/9
BRIEF FACTS OF THE CASE ARE AS UNDER:
2. The case of the plaintiff is that plaintiff is a body corporate constituted under the State Bank of India Act, 1955 having its corporate1 office at Madame Cama Road, Nariman Point, Mumbai - 400021 and one of its branch office at Branch NCERT, N.I.E Campus, Sri Aurobindo Marg, New Delhi - 110016. The present suit has been filed on behalf of the plaintiff through AR Mr. Avinash Kumar Prasad, who is duly authorized to file the present case.
3. It is further the version of plaintiff that the defendant/ borrower is an employee at Home Ministry (BSF), approached the plaintiff bank at Branch NCERT, N.I.E Campus, Sri Aurobindo Marg, New Delhi - 110016 in 2021 for sanction and grant of personal loan with loan application form dated 03.06.2021.
4. It is further averred that the consequent to the request of the defendant and taking into consideration the facts submitted by him in his loan agreement application and also an executing necessary and relevant documents/ information in favor of the plaintiff, such as the defendant/ borrower is a permanent/regular employee at Home ministry (BSF) under Identity Card No. 442225 at the designation/post of constable and has been getting regular monthly, the plaintiff bank sanctioned/granted the personal loan (under Xpress Credit Scheme) of Rs. 13,32,000/-(Rupees thirteen lacs. Twenty two thousand only) to the defendant on certain terms and conditions as stipulated in arrangement letter as well as loan agreement both dated State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 2/9 06.03.2021 which were duly accepted and acknowledged by the defendant.
5. It is further averred that the employer, in support of the loan application of the defendant and as security of grant of personal loan to him, had issued Irrevocable Letter of Authority and consent form for personal loan 06.03.2021 vide which it had authorized the plaintiff bank to sanction and disburse loan amount to the defendant and the employer had undertaken to pay the loan amount dues from the terminal benefits and/or from gratuity, provident fund and any other dues payable to the defendant in the event of his retirement/termination or discontinuance of his/her service or in the occasion of his/her death and the employer had further issued irrevocable letter dated 06.03.2021 for the assurance and security of the plaintiff bank, wherein the employer had undertaken that in case of death, retirement, resignation or discontinuance of service of defendant they shall obtain a N.O.C from the plaintiff bank branch before selling the dues of borrower i.e defendant herein.
6. It is further averred that thereafter in view of the documents submitted and executed by defendant and the surety and assurance given by the employer by way of these documents, assuming that the rights of the plaintiff bank are completely secured, the plaintiff bank sanctioned, granted and disbursed aforementioned Personal Loan in favor of Defendant on 06.03.2021 against the Loan Account no. 40059585889 upon terms and conditions agreed upon by the Defendant No. 1 including the repayment of Loan along with interest @10.10% p.a. to be repaid in 72 Monthly Installments of Rs. 24,744/-/- (Rupees twenty State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 3/9 four thousand seven hundred forty four one only) and authorizing the plaintiff bank for debiting loan EMI amount of Rs. 24,744/- from his savings bank account for payment towards the above loan.
7. It is further stated that as per the information received by the plaintiff bank the defendant has for long been unauthorized and unsanctioned leave from her services/duties with the employer and has also not been paying his EMIs. For the above reason her salary account has been put on hold which has hindered the deduction of EMI towards the loan account. Thus, under these circumstances it is the liability of the employer to settle the outstanding loan account from the benefits of its employee (i.e. defendant/borrower) in accordance with the documents issued by the employer.
8. It is further stated that despite several requests, defendants failed to make the payment of outstanding amount on some pretext or other. Thereafter, the plaintiff sent a legal demand notice dated 24.03.2023 to the defendants which was neither replied to by the defendants nor the outstanding payment was made to the plaintiff. Post expiry of the above notice period, subsequently the defendant's Loan Account no. 40059585889 was declared NPA, resulting into plaintiff invoking the pre-litigation mediation under section-12A of Commercial Courts Act, 2015 before South District Legal service Authority, Utility Block, Saket Court, New Delhi on 03.02.2024 however, despite issuance of two notices and the same being duly delivered upon the defendant, the party failed to appear and consequently a Non-starter Report dated 13.05.2024 had been issued. Hence, plaintiff has filed the present suit, State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 4/9 praying for recovery of Rs. 9,62,642/- along with interest @ 10.10% per annum.
DEFENDANT IS EX-PARTE
9. In the present case, defendants did not appear before the court to contest the matter despite service through Speed Post on 09.07.2024 nor any written statement was filed on their behalf and matter was directed to be proceeded ex-parte against the defendants vide order dated 17.09.2024.
EVIDENCE & LIST OF WITNESSES:
10. In order to prove its case, the plaintiff examined Mr. Avinash Kumar Prasad, its AR as PW-1, who by way of his affidavit Ex.PW1/A reiterated the contents of the plaint and exhibited the following documents:-
(a) Ex. PW-1/1 (OSR) is ID Card of the plaintiff.
(b) Ex. PW-1/2 (Colly) is ID of defendant and loan application form dated 03.06.2021.
(c) Ex. PW-1/3 is Arrangement letter dated 06.03.2021.
(d) Ex. PW-1/4 is Loan Agreement dated 06.03.2021.
(e) Ex. PW-1/5 is Letter of Authority dated 06.03.2021.
(f) Ex. PW-1/6 is Consent Form dated 06.03.2021.
(g) Ex. PW-1/7 is Service certificate dated 23.02.2020.
(h) Ex. PW-1/8 is Legal Notice along with postal receipts.
(i) Ex. PW-1/9 is Loan account of defendant alongwith Certificate under Section 65B of Indian Evidence Act.
(j) Ex. PW-1/10 is Non-Starter Report dated 13.05.2024.
(k) Ex. PW-1/11 is Letter depicting the calculations of suit amount.
State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 5/9
(l) Ex. PW-1/A is Evidence by way of affidavit.
11. I have heard the arguments advanced by learned counsel for the plaintiff and also gone through the entire record.
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:-
13. (c) "commercial dispute" means a dispute arising out of-
14. (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
15. (ii) export or import of merchandise or services;
16. (iii) issues relating to admiralty and maritime law;
17. (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
18. (v) carriage of goods;
19. (vi) construction and infrastructure contracts, including tenders;
20. (vii) agreements relating to immovable property used exclusively in trade or commerce;
21. (viii) franchising agreements;
22. (ix) distribution and licensing agreements;
23. (x)management and consultancy agreements;
24. (xi) joint venture agreements;
25. (xii) shareholders agreements;
26. (xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
27. (xiv) mercantile agency and mercantile usage;
28. (xv) partnership agreements;
29. (xvi) technology development agreements;
30. (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
31. (xviii) agreements for sale of goods or provision of services;
32. (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
33. (xx) insurance and re-insurance;
34. (xxi) contracts of agency relating to any of the above; and State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 6/9
35. (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 :-
"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 State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 7/9 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."
Therefore, the facts which are alleged in the plaint come under the commercial dispute.
16. 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 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.] State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 8/9
14. The Commercial Courts Act was amended on 03.05.2018 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. 9,62,642/- and as such this court is having jurisdiction to adjudicate the matter which is in dispute.
15. This Court has territorial jurisdiction to try the present suit since the loan was disbursed from the office of the plaintiff situated at Sri Aurobindo Marg, New Delhi and that the loan is repayable at the said branch, which falls within the territorial jurisdiction of this Court.
16. The suit has been filed within a period of limitation as the last payment towards the said loan was made on 30.01.2024 in Loan Account No. 40059585889, and the suit has been filed on 06.06.2024.
Thus, the suit has been filed within the limitation period of 03 years.
17. Let us now turn towards the entitlement of the plaintiff to the recovery as prayed in the plaint, the plaintiff has examined Mr. Avinash Kumar Prasad, AR of plaintiff and proved the documents on record in support of its claim.
18. 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 contended in the plaint, a sum of Rs. 9,62,642/-, was due and payable State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 9/9 by the defendants to the plaintiff bank, which the defendants failed to pay.
19. The plaintiff has claimed a sum of Rs.9,62,642/- along with interest. Costs of the suit has also been prayed.
20. As per the updated account statement of Loan Account No. 40059585889 filed till 09.01.2025, the defendant during the pendency of this suit has made a payment of Rs. 20,475.35/- and with this the final discharge amount stood at 9,66,792/-.
21. So far as the interest component is concerned, the plaintiff has claimed interest @ 10.10% 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. 9,62,642/- along with interest @ 09 % per annum from the date of filing of the suit till realization from the defendant namely, Uma Shanker.
RELIEF
22. In view of the above, I hereby pass:-
An ex parte money decree in the sum of Rs. 9,62,642/- in favour of the plaintiff and against the defendant namely, Uma Shanker, 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.
State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 10/9 Decree Sheet be prepared accordingly.
File be consigned to be Record Room.Digitally signed by
SANJEEV SANJEEV KUMAR
KUMAR SINGH
Date: 2025.01.14
Announced in open Court SINGH 16:56:47 +0530
on 14.01.2025
(SANJEEV KUMAR SINGH)
District Judge
(Commercial Court) (Digital-04)
South,Saket,ND/14.01.2025
State Bank of India v/s Uma Shankar . CS (Comm.) No.279/24 11/9