Bangalore District Court
Canara Bank vs M/S L N Hyginics on 22 October, 2024
KABC170013422024
IN THE COURT OF LXXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE (CCH-85) (COMMERCIAL COURT),
BENGALURU
DATED THIS THE 22nd DAY OF OCTOBER 2024
PRESENT
SRI.RAMAKANT CHAVAN,
B.Com., LL.B.(Spl)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.704/2024
PLAINTIFF:
Canara Bank, (E-Syndicate Bank)
Nobo Nagar Branch,
Bengaluru
Rep. by its Senior Manager
Sri. Sunil P.
(By Sri.M.E.Madhu Sudhan, Adv.)
AND
DEFENDANTS:
1. M/s L.N. Hygienics,
Prop. Vani B.V.
O/at Near Hulimavu Lake,
Vinayaka Nagar,
No.107, 108, KVA Plaza,
Opp. Maruthi Dental College,
2nd Gate, Doddakammanahalli,
Bengaluru - 560 076
2. Vani B. V.,
W/o Arun Shima,
2 Com.O.S.No.704/2024
Prop. M/s L.N. Hygienics,
R/at No.210, 2nd Floor,
ACAS Creasent Square Apartment,
Kammanahalli Main Road,
Bengaluru - 76
(By Sri.D.Lokesh, Adv.)
Date of Institution 27.04.2024
Nature of suit For recovery of money
Date of First Case
10.07.2024
Management Hearing
Date of commencement of
16.07.2024
recording of evidence
Date on which judgment
22.10.2024
pronounced
Time taken for disposal Years Months Days
1) From the date of First Case 00 03 12
Management Hearing
2) Total duration 00 05 25
LXXXIV Addl. City Civil & Sessions Judge
(CCH-85) Commercial Court, Bengaluru
JUDGMENT
This is a suit filed by the plaintiff for recovery of Rs.6,13,892.12 as on 30.04.2023 along with interest from the date of filing the suit till the date of recovery along with future interest at 15.5% p.a. and cost of the suit.
3 Com.O.S.No.704/20242. Brief facts of the plaintiff's case are that, the defendant No.1 approached the plaintiff bank for a loan of Rs.5.00 lakhs as Over Draft facility against the stock on 13.04.2020 and the same was sanctioned vide loan A/c No.06831400001303. The defendant has executed Take delivery letter, Pronote, Agreement cum Deed of Hypothecation etc., dated 15.04.2020 agreeing to repay the loan amount yearly, with floating interest at 14.45% below Canara Bank advance rate, with a minimum of 8.50% p.a. The defendant has produced Udyog Aadhar issued by Ministry of MSME, GST Registration certificate, ITR for AY-2019-20 etc. It is further pleaded that the defendant has not cleared the loan well within time, hence, the plaintiff issued a legal notice to the defendants on 13.06.2022 demanding the balance amount of the loan account with floating interest around 15.5% as per the agreement. But, the defendants neither cleared the outstanding loan nor replied for the said notice. The defendant are in due of Rs.6,13,892.12 with interest as on 30.04.2023 with future interest at 15.5% p.a. till the entire amount is paid. Hence, the plaintiff bank is constrained to file this suit and prays for decree the suit.
3. On service of summons, the defendants have appeared through their counsel and filed their written statement denying most of the contents of the plaint averments. It is further contended that, the suit is not sustainable and requires to be dismissed in limine. The plaintiff has filed the frivolous suit on 4 Com.O.S.No.704/2024 concocted facts with respect to overdraft facilities said to granted in Micro scheme in Mudra Canara Atithi with respect to secured overdraft being valid upto only 13.04.2022. The plaintiff claimed unfounded false amount without taking into consideration of the statement of accounts in proper prospective to claim the amount of Rs.6,13,892.12 as on 30.04.2023, hence the suit being devoid of any merits requires to be dismissed in limine. The defendant not availed any loan of Rs.5.00 lakhs for purchase of stitching machines and not filed any application to the plaintiff bank. The plaintiff sought untenable reliefs on the concocted facts and fabricated documents for vexatious claim to cause harassment to the defendants. The averments of the plaint which are not specifically traversed. Hence, on these grounds prays for dismissal of the suit.
4. The defendants have also filed their additional written statement denying most of the contents of the plaint by contending that the defendants repaid the overdraft loan of Rs.2,06,205/- during the year 2020 due to Covid-19 critical financial situation unable to pay the full amount and further repaid Rs.37,000/- during the year 2021 and also repaid the amount of Rs.2,04,422/- during 2023 in all total amount of Rs.4,47,627/- has been repaid to the plaintiff bank, hence, by suppressing the repaid amount the false case filed against the defendants. Hence, on these grounds prays for dismissal of the suit.
5 Com.O.S.No.704/20245. After perusing the pleadings of the parties, the following issues have been framed :
ISSUES
1. Whether the plaintiff bank proves that the defendant No.2 had availed OD facility of Rs.5.00 Lakhs by executing necessary documents?
2. Whether the plaintiff bank proves that the defendants are liable to pay an interest at the rate of 14.45% p.a. with a minimum of 8.5% p.a.?
3. Whether the plaintiff bank is entitled for the relief sought?
4. What order or decree?
(* Issue No.1 is corrected as per the plaint averments subsequent to the amendment on 19.08.2024)
6. To prove the case, the Senior Manager of the plaintiff bank is examined as PW1 and he has produced some documents at Ex.P1 to P20. The Manager of the defendant No.1 Firm is examined as DW1 and got marked Ex.D1 and D2.
7. Heard the learned counsel for the plaintiff. The learned counsel for the defendants has submitted his written arguments and perused the records.
8. My findings on the above issues are:
Issue No.1: In the affirmative Issue No.2: In the affirmative 6 Com.O.S.No.704/2024 Issue No.3: In the affirmative Issue No.4: As per the final order for the following REASONS
9. Issue Nos.1 and 2: The Senior Manager of the plaintiff bank has filed his affidavit and he is examined as PW1. He has narrated the contents of the plaint in his affidavit. He has produced some documents at Ex.P1 to P20 i.e. Loan application, Process Note, Sanction Letter, take delivery letter, DPN, Agreement cum Deed of hypothecation, copy of Udhyog Aadhar, copy of registration certificate, IT Returns, AOD, letter of revival, office copy of legal notice, statement of account with certificate, PIM report, certificate U/Sec.65B of the Evidence Act, copy of Power of Attorney, statement of accounts and DPN.
10. In the cross examination, it is forthcoming that, the defendants availed OD facility in the year 2020 April, Ex.P1 is the loan application. He has admitted that, there is mention in his affidavit regarding availment of loan for purchasing sewing machines. Because of typographical error, it is mentioned in the plaint that, the OD facility was availed for sanitary work. In Ex.P12 there is no mention regarding OD facility. It is also admitted by PW1. The recent statement of account is produced. He has further deposed that, if OD facility is availed, there is no issuance of receipt.
7 Com.O.S.No.704/202411. It is further forthcoming in the cross examination that, the plaintiff bank transferred from Doddakammanahalli to Nobo Nagar. Notice has not issued to the defendant. But, the defendant is the owner of the building where the plaintiff bank runs its business. He has admitted that, the defendant had not availed loan for purchase of sewing machines. In Ex.P11 the name of Bannerghatta Branch is mentioned. There is no mention in the notice regard OD facility, but, it is clearly mentioned regarding availment of loan. At the time of suit, the balance due from the defendants is Rs.6,13,892/-. Notice has been issued to the defendants as per Ex.P11 on 13.06.2022. The defendants prayed time to pay the dues. Ex.P3 is the loan sanction letter and it bears the signature. In Ex.P5 there need not be signature of the officials of the plaintiff bank. But, name of the bank official is mentioned in Ex.P5.
12. In the further cross examination, it is forthcoming that, since the loan was for working capital, hence, the rate of interest is not mentioned in Ex.P9. It bears the loan account as well as OD. In Ex.P11 i.e. copy of the notice, rate of interest is mentioned, principle amount of Rs.5.00 lakhs is also mentioned. The interest is calculated at Rs.81,590.45. The Ex.P12 shows that when the defendants made the last payment. The last payment was on 11.04.2023. He has identified the Ex.P16 to P19. Since the loan account is for working capital, the customer / borrower can deposit the amount at any time and at any time he can withdraw the amount also. He has denied that, the defendants 8 Com.O.S.No.704/2024 have made payments of Rs.4,47,627/- from 2020 to 31.12.2023 towards OD facility. He has denied the other suggestions.
13. The Manager of the defendant No.1 firm has filed his affidavit and he is examined as DW1. He has narrated the contents of the plaint in his affidavit. He has produced some documents at Ex.D1 and D2. In the cross examination, it is forthcoming that, he knows that the defendants had availed loan from the plaintiff bank. He was also present and executed DPN as per Ex.P20, he has identified the same. The rate of interest was at 8.4% p.a. He availed loan and made NEFT also. He has paid Rs.4.5 lakhs and sought for NOC. He has not produced the application submitted for issuance of NOC. He was informed by the plaintiff bank that, still some amount is pending and he sought three months time for repayment of the balance amount, it was during Covid-19. Even it is forthcoming that, he has not made any queries before the Higher Officials of the plaintiff bank. According to him, he has paid some amount in the year 2023. He has denied that, he was not appered before the DLSA. He has admitted that, the plaintiff bank has issued legal notice through its counsel and he went to bank and sought three months time to pay the balance amount. He has also admitted that, the plaintiff branch was running in his building on rental basis. Now, the bank is running in Nobo Nagar.
14. The learned counsel for the plaintiff has submitted his arguments basing on the plaint averments, evidence of PW1, DW1 and the documents referred above. He has pointed out 9 Com.O.S.No.704/2024 towards the defense made out by the defendants. Because of some typographical error, it was mentioned in the plaint regarding loan for purchase of stitching machine. Subsequently it is amended. He has drawn my attention towards the plaint averments also. The OD facility was availed by the defendants. He has further drawn my attention towards the cross examination of DW1 and he has admitted that, he himself executed DPN as per Ex.P20. The DW1 is the Manager of the defendant No.1 firm. He knows the loan transactions i.e. term loan and OD facility. He has also drawn my attention towards the evidence of PW1 as well as the documents produced on behalf of the plaintiff bank. The Ex.P1 is the loan application submitted in the year April 2020. Ex.P3 is the sanction letter, Ex.P4 is the take delivery letter and DPN, Ex.P5 is the agreement cum hypothecation deed, Ex.P8 is the copy of the IT returns, Ex.P9 is the AOD dated 15.04.2020 and letter of revival dated 18.10.2022 as per Ex.P11. Prior to the institution of this suit, the plaintiff bank has filed PIM application No.1554/2022 before DLSA, Bengaluru Urban on 24.06.2022. The defendant did not appeared there also. Hence, non starter report has been issued on 12.01.2023 as per Ex.P13.
15. Per contra, the learned counsel for the defendants has submitted his written arguments and he has pointed out towards the defense made by the defendants. He has also drawn my attention towards the evidence of PW1 and documents produced at Ex.P1 to P20 as well as the evidence of DW1 and documents 10 Com.O.S.No.704/2024 Ex.D1 and D2. It is further stated that, the suit filed in violation of law under amended Order VI Rule 2(a) of CPC. The plaintiff bank seeks interest shall contain statement to that effect within the meaning of Sec.34 of CPC. The plaintiff has not sent any legal notice as per Ex.P11. The suit requires to be rejected as it is filed without adhering to the mandatory provisions of Sec.12A of Commercial Courts Act. No notice regarding PIM was served on the defendants. The plaintiff bank has not produced any documents to show that the defendants had availed OD facility. The PW1 admitted in his cross examination that the defendants had availed OD facility. There is Two years delay and the plaintiff bank has not taken any steps to recovery the amount. The last payment as per PW1 was date 11.04.2023. The plaintiff bank has admitted that, the defendants' account being a working capital there was sufficient balance in the account to repay the alleged loan amount, that can be recovered till the year 2023. But, that has been recovered on 31.12.2023. The defendants have produced the Udhyog Adhar and also other documents. They have cleared the loans well within time, the plaintiff has not issued any legal notice to the defendants in view of OD amount, has been cleared from current account from which the plaintiff bank got deducted the alleged amount. The defendants are not in due to pay a sum of Rs.6,13,892.12 with interest as on 30.04.2023. The future interest is 15.5% p.a. The Ex.P14 to P16 go to show that, the defendants have sufficient amount in their account. The defendants paid amount in the year 2020 and 2021 11 Com.O.S.No.704/2024 i.e. Rs.31,000/-, Rs.2,04,422/- and totally amounting to Rs.4,47,627/-.
16. During his arguments, he has relied upon a decision reported in 2022 Live Law (SC) 678 in M/s Patil Automation Pvt. Ltd. and Ors. Vs Rakheja Engineers Pvt. Ltd.
17. After hearing the learned counsel for the plaintiff and after going through the written arguments submitted by the learned counsel for the defendants and the evidence of the witnesses and pleadings of the parties, the admitted facts are, the proprietor fo the defendant No.1, who is a defendant No.2 availed OD facility of Rs.5.00 lakhs.
18. The Manager of the defendant No.1 i.e. DW1 has admitted that, he has executed Ex.P20 i.e. DPN. Even he knows regarding OD facility availed by the defendants. As per his say, he made some payments in the year 2020 and 2021. But, in spite of sufficient opportunity granted to the defendants or DW1, they have not produced any documents to show the payments made. The further defence of the defendants is that, no notice has been issued to the defendants from DLSA, Bengaluru Urban regarding PIM application. The Ex.D1 is the authorization letter for DW1 and DW2 is the certified copy of the order sheet in PIM No.1554/2022. After perusing the Ex.D2, it bears the report also. It shows that the petition was filed on 24.06.2022 and notice has been issued to the defendants and the matter was posted for 12 Com.O.S.No.704/2024 appearance of the opposite party i.e. defendants herein on 25.07.2022, 10.08.2022, 07.09.2022, 27.09.2022, 14.10.2022, 05.11.2022, 25.11.2022, 22.12.2022 and 11.01.2023. On all these days, the matter was pending before the DLSA. The defendants did not appeared before the DLSA, Bengaluru Urban.
19. I have also gone through the evidence of PW1 also and the documents produced on behalf of the plaintiff bank. It is also one of the admitted fact that, the branch of the plaintiff bank was running in the building of the defendants. The defendants have executed necessary documents as stated supra. The defendants have taken defence there is no water in their defence. Because DW1 prayed three months time for payment of the arrears of balance, but, the defence is otherwise.
20. Because of typographical error it is mentioned in the plaint regarding loan was availed for purchase of stitching machine, later it is got amended suitably. The Issue No.1 is also corrected as per the amended plaint averments. The OD facility was availed by the defendants, as per the say of the PW1, the customer / borrower can withdraw amount from the OD and even he can deposit the amount in the account. Such being the case, the plaintiff bank has produced all the necessary documents including bank statement. The DW1 has admitted that, he has not made any complaints to the higher officials fo the plaintiff bank for demand of more amount. Even he has admitted in the cross examination that, he sought three months time to repay the balance amount, even he has admitted that, he has received 13 Com.O.S.No.704/2024 the suit summons in the suit. He cannot remember the exact amount sought by the plaintiff bank in the notice. The plaintiff bank has issued legal notice also prior to institution of the suit as per Ex.P11. The PW1 has clearly deposed that the said notice states regarding the availment of OD facility of the Rs.5.00 lakhs and interest thereon of Rs.81,590.45.
21. Prior to the institution of the suit, the plaintiff bank had filed PIM application No.1554/2022 on 26.04.2022 and sufficient opportunity was granted to the opponents / defendants herein for their appearance. But, they did not appeared. I have also gone through the decision relied upon by the learned counsel for the defendants. The principles laid down in this decision are well founded. Since the plaintiff bank had filed PIM application as referred above, wherein the defendants did not appeared. The plaintiff bank has complied the mandatory provisions of Sec.12A of the Commercial Courts Act. merely because the defendants did not appeared, it cannot be a ground for rejection of the plaint as argued by the other side. This decision is not come to the aid of the defendants in the present facts and circumstances of the case. In view of the discussion made, the plaintiff bank has succeeded in proving the Issue Nos.1 and 2 by placing cogent evidence. Accordingly, I answer the Issue No.1 in the affirmative and Issue No.2 in the affirmative.
22. Issue No.3: The plaintiff has sought Rs.6,13,892.12 and interest at the rate of 15.5% p.a. The interest claimed by the 14 Com.O.S.No.704/2024 plaintiff bank is higher side. The defendants availed OD facility. Hence, the plaintiff bank is entitled for Rs.6,13,892/-. Accordingly, I answer this Issue No.3 in the affirmative.
23. Issue No.4: In the result, I pass the following :
ORDER Suit of the plaintiff is decreed with cost.
The plaintiff is entitled for Rs.6,13,892/- and future interest at the rate of 6% p.a. till realization of the decreetal amount.
The defendants are directed to pay the decreetal amount within Three months from the date of this order.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/o XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer, transcribed and typed by her, corrected and then pronounced by me in the open court on this the 22nd day of October 2024) (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.15 Com.O.S.No.704/2024
ANNEXURE List of witnesses examined for the plaintiff:
PW1 Sunil P. List of documents marked for the plaintiff:
Ex.P1 Loan application dated 13.04.2020 Ex.P2 Process note Ex.P3 Sanction letter dated 13.04.2020 Ex.P4 Take delivery letter and DPN dated 15.04.2020 Ex.P5 Agreement cum deed of hypothecation Ex.P6 Copy of Udhyog Aadhar Ex.P7 Copy of the registration certificate Ex.P8 Copy of the IT Returns Ex.P9 AOD dated 15.04.2020 Ex.P10 Letter of revival dated 18.10.2022 Ex.P11 Office copy of legal notice dated 13.06.2022 Ex.P12 Statement of account with certificate Ex.P13 PIM report dated 12.01.2023 Ex.P14 Certificate U/Sec.65B of the Evidence Act Ex.P15 Copy of Power of Attorney Ex.P16-P19 Statement of accounts Ex.P20 DPN
List of witnesses examined for the defendants:
DW1 Arun Simha K. A. 16 Com.O.S.No.704/2024 List of documents marked for the defendants:
Ex.D1 Authorization letter dated 29.07.2024 Certified copy of the order sheet in PIM No.1554/2022 Ex.D2 dated 02.07.2022 (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.