Delhi District Court
Canara Bank vs Alam Geer And Anr on 22 July, 2024
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT-2)
SOUTH DISTRICT, SAKET COURTS: NEW DELHI
CS (COMM) 62/2023
Canara Bank (erstwhile Syndicate Bank) ........Plaintiff
Head office at 112, JC Road,
Bangalore-560002, Karnataka
Having its Branch office at
S-2, Green Park Extension,
New Delhi - 110016
Versus
Alam Geer .....Defendant no. 1
S/o Mohd. Jasimuddin
Sole Proprietor of M/s A S Fashion
236, Hauz Rani, Malviya Nagar,
New Delhi -110017
Also at
155-236, Hauz Rani, Malviya Nagar
New Delhi - 110017
Mohd. Yusuf .....Defendant no. 2
s/o Mohd. Rehman
195, Hauz Rani, Malviya Nagar
New Delhi - 110017
Also at
206, Hauz Rani, Malviya Nagar
New Delhi - 110017
Date of institution : 06.02.2023
Date of submissions : 22.07.2024
Date of Judgment : 22.07.2024
Canara Bank vs Alam Geer & ors. Page no. 1 of 9
JUDGMENT
1. This is a suit for recovery of Rs. 5,96,530.51/- having been filed by the plaintiff bank against the defendant.
2. The plaintiff bank is a corporate body constituted under the Banking Companies (Acquisition and Transfer of Undertaking) having its Corporate office at 112, JC Road, Bangalore and its branch at S-2, Green Park Extension, New Delhi-110016.
3. Case of the plaintiff bank is that Alam Geer (D-1) as a sole proprietor of M/s A S Fashion carried his business of stitching & manufacturing of garments. D-1 approached the Plaintiff bank at Green Park Extension Branch, New Delhi for grant of SOD Limit. Plaintiff bank considered the request of D- 1 and sanctioned SOD Limit of Rs. 5Lacs on 16.06.2015. Mohd. Yusuf (D-2) agreed to become the guarantor for the SOD limit of D-1. Defendant no. 1 executed various loan and security documents on 16.06.2015. Plaintiff bank opened SOD limit account no. 9048-140-0000-370 on 16.06.2015 in the name and style of D-1. The SOD limit was fully utilized by D-1 by withdrawing and depositing diverse sums in the account from time to time.
4. On 04.01.2017, the SOD limit of Rs. 6.50 lacs was sanctioned in favour of D-1 subject to the condition that 25% of the stocks and book debts (present and future) was to be Canara Bank vs Alam Geer & ors. Page no. 2 of 9 maintained by D-1 in the form of margin money. The said SOD limit amount of Rs. 6.50lacs was repayable on demand with interest @ 10.45% per annum. On 04.01.2017, D-1 filed Letter of Proprietorship; ASD-4, Composite Hypothecation Agreement dated 04.01.2017 for Rs. 6.50lacs; Letter of Indemnity; Power of Attorney; Letter for Power of Attorney; Undertaking dated 04.01.2017 for handing over of cheques, drafts or bills of exchange for collection etc.,; Letter from Borrower/Guarantor regarding undrawn Limits dated 04.01.2017; Letter of Undertaking from the Borrower for compliance of Post release terms and conditions ; Annexure-6, Undertaking Letter/Declaration from borrowers; Abiding Rules - undertaking dated 04.01.2017 and Undertaking letter dated 04.01.2017. Mohd. Yusuf D-2 executed Agreement of Guarantee on 04.01.2017 to secure the liability undertaken by D-1 in respect of above facility. The guarantee of D-2 was continuing in nature and liability of D-2 was joint, several and co-extensive with D-1.
5. Case of Plaintiff is that on 14.03.2017, D-1 had requested Plaintiff bank for additional funds of Rs. 20,000/- for urgent need of payment to suppliers for purchasing thread, spare parts etc . Plaintiff bank allowed temporary overdraft of Rs. 20,000/- for five days repayable on 19.03.2017 by D-1. On 30.04.2018, D-1 visited the branch of Plaintiff bank and executed Acknowledgment of Debt & Security and acknowledged Rs. 7,41,923.49/- due and payable by D-1.
Canara Bank vs Alam Geer & ors. Page no. 3 of 9
6. On 31.08.2018, SOD Limit of Rs. 9.00 lacs was sanctioned in favour of D-1, who executed Letter of Proprietorship; ASD-4, Composite Hypothecation Agreement dated 31.08.2018 for Rs. 9.00 lacs; Charge & Hypothecation Agreement; Letter of Indemnity; Power of Attorney; Letter for Power of Attorney; Undertaking dated 31.08.2018; Letter from Borrower/Guarantor regarding undrawn limit; Annexure-6, Undertaking letter/Declaration from Borrowers and Abiding Rules - Undertaking in favour of Plaintiff bank. D-2 executed Guarantee Agreement on 31.08.2018 in favour of Plaintiff Bank. On 18.01.2021, the SOD Limit of Rs. 9.00 lacs was renewed/sanctioned in favour of D-1, who executed various loan and security documents on 31.08.2018 in favour of Plaintiff Bank.
7. Case of Plaintiff bank further is that on 18.01.2021 request of D-1 was considered for renewal of SOD Limit to Rs. 9.00 lacs against hypothecation of stocks for the business and it was sanctioned under the terms and conditions mentioned therein. On 18.01.2021, D-1 executed documents i.e. NF-493, Letter of Renewal ; NF-855 and Agreement cum Deed of Hypothecation. It is stated that SOD Limit of Rs. 9.00 Lacs was fully utilized by D-1 by withdrawing diverse sums from the account.
8. It is stated that D-1, after availing the SOD Limit, did not maintain financial discipline and SOD Limit account of D-1 became sticky and overdue. On 21.05.2020, D-1 deposited amount of Rs. 87,778/- in the account. On 31.08.2021, D-1 Canara Bank vs Alam Geer & ors. Page no. 4 of 9 executed Acknowledgment of Debt & Security letter to the Plaintiff bank and acknowledged Rs.9,44,335.38/- due and payable by him as on 31.08.2021. D-1 suddenly stopped operation in SOD Limit account. As no steps were taken by D-1 for regularization of SOD Limit account, same was classified as Non-Performing Assets (NPA) on 17.01.2022. Hence, plaintiff bank preferred present suit for recovery of Rs. 5,96,530.51/- dues reflected in the account as on 31.12.2022 .
9. After filing of suit, summons for settlement were issued to defendants. On 04.09.2023, it was noted that summons sent to D-2 Mohd. Yusuf were received back with report that he had left the address. Summons were served upon D-1 Alam Geer on 04.07.2023. No one appeared on behalf of D-1 Alam Geer. No written statement was filed by this defendant. The matter was fixed for completion of pleadings qua D-1 Alam Geer and fresh summons on filing of current address were directed to be issued to D-2 Mohd. Yusuf. On 06.11.2023, suit was dismissed in default as no one appeared on behalf of Plaintiff despite repeated calls and waiting.
10. On 05.12.2023, an application u/O IX rule 9 CPC for restoration of suit was filed by the Plaintiff bank. The said application was allowed on 27.01.2024 . Suit was restored to its original number.
11. On 06.05.2024, application u/O V rule 20 CPC was allowed in respect of D-2. There was no appearance on behalf of Canara Bank vs Alam Geer & ors. Page no. 5 of 9 D-2 despite service publication in the newspaper "The Statesman" dated 02.06.2024. Written statement was also not filed by D-2. D-2 was proceeded as exparte on 15.07.2024 and matter was fixed for exparte arguments.
12. In the present case, written statement was not filed by defendants and they were proceeded Exparte. This Court has heard submissions advanced by Ms. Ritu Mishra Ld. Counsel appearing for plaintiff and has perused the material on record. It was argued by Ld counsel for plaintiff that there are no issue of facts or law to be tried and having regard to the Order VIII rule 10 CPC, Plaintiff is entitled to the judgment forthwith against the Defendants.
13. Ld. counsel for Plaintiff submitted that her plaint is supported with the affidavit in the form of statement of truth of AR of plaintiff Sh. Rohit Kumar, Senior Manager, Canara Bank, therefore no exparte evidence is required to be adduced in view of the observations of our Hon'ble High Court in this regard.
14. In Parsvnath Developers Limited vs Mr. Vikram Khosla CS (Comm) 618/2019 & CM No. 8431/2020 decided on 03.03.2021 wherein Satya Infrastructure Ltd. and Ors. v. Satya Infra and Estates Pvt. Ltd., 2013 (54) PTC 419 (Del) was quoted in para 2 thereof which held as under:
"4. I am of the opinion that no purpose will be served in such cases by directing the plaintiffs to lead ex parte evidence in the form of affidavit by way of examination-
Canara Bank vs Alam Geer & ors. Page no. 6 of 9 in chief and which invariably is a repetition of the contents of the plaint. The plaint otherwise, as per the amended CPC, besides being verified, is also supported by affidavits of the plaintiffs. I fail to fathom any reason for according any additional sanctity to the affidavit by way of examination-in-chief than to the affidavit in support of the plaint or to any exhibit marks being put on the documents which have been filed by the plaintiffs and are already on record. I have therefore heard the counsel for the plaintiffs on merits qua the relief of injunction."
15. In this case, Sh. Rohit Kumar, Manager, Canara Bank filed his Statement of Truth on 02.05.2023. In his statement of truth, he stated that statements made in paragraphs 1 & 2 are true to his personal knowledge and para 3 to 34 were true and correct to his knowledge based upon the records/account of defendant maintained by Plaintiff bank and para 35 was correct and para no. 36 to 38 were based on legal information received and believed to be true. He further stated that there was no false statement or concealment of any material facts, documents or records. He further stated that all documents in his power, possession, control or custody had been disclosed.
16. Ms. Ritu Mishra Ld. Counsel appearing for plaintiff filed list of documents as per Order XI rule 1 (2) of CPC as amended by the First Schedule of the Commercial Court Act 2015 i.e. Loan application dated 30.12.2016 for Rs. 10 lacs; ADV-80A, Sanction letter dated 03.01.2017 for Rs. 6.50lacs; ASD-4, Composite Hypothecation Agreement for 6.50lacs; Letter of Indemnity; Letter from Borrower/Guarantor regarding undrawn limits dated 04.01.2017; Letter of Undertaking from the Canara Bank vs Alam Geer & ors. Page no. 7 of 9 Borrower for compliance of Post Release Terms and Conditions dated 04.01.2017; Guarantee Agreement dated 04.01.2017 for Rs. 6.50lacs; Annexure 7, Request letter for Exceeding/Over withdrawal dated 14.03.2017; Acknowledgment of debt & Security Letter on 30.04.2018; Loan Application dated 20.05.2018 for Rs. 9.00 Lacs; ADV-80A, Details of Particulars of Assets & Liabilities of the individual dated 31.08.2018; ADV- 80A, Details of Particulars of Assets & Liabilities of the individual dated 31.08.2018; Sanction letter dated 31.08.2018 for Rs. 9.00 Lacs; Composite Hypothecation Agreement dated 31.08.2018 for Rs. 9.00 lacs; Letter from Borrower /Guarantor regarding undrawn Limits dated 31.08.2018 thereby agreeing that the Plaintiff bank is at liberty to stop making further advances; Guarantee Agreement dated 31.08.2018 for Rs. 9.00 lacs; Loan application dated 13.01.2021 for Rs. 9.00 Lacs; NF-589, Particulars of Guarantor/co-borrower dated 13.01.2021; Process Note cum Sanction Letter dated 18.01.2021; Acknowledgment of Debt & Security Letter on 31.08.2021; Letter/Notice dated 05.10.2021 with postal receipts; Statement of account w.e.f. 16.06.2015 to 31.12.2022 and Certificate as per Banker's Books Evidence Act.
17. After hearing the submissions advanced and perusal of material on record, this Court finds no reason to disbelieve the averment of plaint supported by the statement of truth of Sh. Rohit Kumar, Manager, Canara Bank which has remained unchallenged. As per the copy of statement of account w.e.f . 16.06.2015 to 31.12.2022, defendants are liable to pay a sum of Canara Bank vs Alam Geer & ors. Page no. 8 of 9 Rs.5,96,530.51/- to the Plaintiff bank. On appreciation of material on record, this Court is satisfied that plaintiff has proved its entitlement of claimed amount.
18. Plaintiff has claimed Pendente Lite and future interest on the outstanding amount in the SOD Limit account @ 11.15% per annum monthly rests alongwith additional penal interest @ 2% . Having regard to the lending rate of the bank in the commercial transaction, this Court is of the view that claimed interest @10% is reasonable and would serve the ends of restitutive justice. Plaintiff is entitled to the said interest from the date of filing of present suit till the realization of the entire amount.
19. In the result, a decree is hereby passed in favour of plaintiff and against defendants in the sum of Rs.5,96,530.51/- alongwith costs and interest @ 10% per annum on the entire aforenoted total amount from the date of filing of present suit till its realization. Decree sheet be prepared accordingly. Suit stands disposed of. File be consigned to record room.
(Dictated and announced on 22nd July 2024 ) (ANURADHA SHUKLA BHARDWAJ ) District Judge (Commercial Court-02) South Distt., Saket, New Delhi Canara Bank vs Alam Geer & ors. Page no. 9 of 9