Delhi District Court
State Bank Of India vs M/S Satguru Boutique on 28 September, 2022
IN THE COURT OF SH. RAKESH SYAL,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI
CS (COMM) 84/2021
STATE BANK OF INDIA
(Formerly known as State Bank of Travancore constituted under State
Bank of India Subsidiary Bank Act of 1959 and now amalgamated
with State Bank of India vide Gazatte of India dated 22.02.2017),
having its Corporate Centre Office at State Bank Bhawan, Nariman
Point, Mumbai and one of its local head office at 11, Parliament
Street, New Delhi and also having many branches all over India
including one i.e. State Bank of India, SME CCC, 59, Community
Centre, Naraina Industrial Area, Phase-I, Near Payal PVR, New
Delhi-110028)
............Plaintiff
VERSUS
1. M/s SATGURU BOUTIQUE
Through its sole proprietor Mrs. Rajni Singh,
Having Shop at G-112, Manish Global Mall,
Sector 22, Dwarka, New Delhi 110077
Mob: 9811383254
Email ID: [email protected]
2. Mrs. RAJNI SINGH
W/o Mr. Ishwar Singh,
CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page1 of 13
R/o Flat no. 126, DDA Flats, Pocket-1, Plot no. 1,
Sector 23, Dwarka, New Delhi-110075
Mob: 9811383254/8750753063
Email ID: [email protected]
.......Defendants
Date of Institution : 02.03.2021
Date of final arguments : 21.09.2022
Date of decision : 28.09.2022
JUDGMENT
1.1 The plaintiff, a nationalised bank, has filed the present suit, through its authorized representative Sh. Dilip Kumar, against the defendants for recovery of Rs. 10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only), along with pendente-lite and future interest @ 12% per annum, till its realization. 2.1 As per the plaint, defendant no. 1, through defendant no. 2, had approached the plaintiff bank for financial assistance in the name of defendant no. 1. The plaintiff bank granted to the defendant no. 1, a loan/financial assistance of Rs. 4,00,000/- in form of Cash Credit Limit Facility @ 15.5% per annum, in Account no. CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page2 of 13 67197530922, vide Sanction Letter & Hypothecation cum Working Capital Agreement dated 04.10.2012. It was agreed by the defendants that the rate of interest will be applied @ 5% margin above the plaintiff's base rate, which was then 10.5% per annum. Thus, the effective rate of interest was 15.5% per annum, calculated on daily balance, at monthly rests, to be debited to the account on the last working day of each month/quarter, which was to become part of principal, if the same was not paid on the due date. It was further agreed by defendant no. 1 that stock statements would be submitted half yearly and audited balance sheet would be submitted within 7 days of due date, failing which a penal interest of Rs. 200/- would be charged. It was also agreed by defendant no. 1 that penal interest @1% per annum will be charged for the entire quarter/period for any default in respect of overdrawing in sanctioned limit/delay or non- submissions of stock statements/delay or non submission of renewal data or non-payment of quarterly interest.
2.2 It is further stated that defendant no. 1, by way of execution of Hypothecation cum Working Capital Agreement dated 04.10.2012, as security for the loan granted by the plaintiff, CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page3 of 13 hypothecated and charged all the goods, assets, book debts, securities, movable properties and fixed assets.
2.3 It is further averred that defendant no. 2 stood as guarantor to defendant no. 1, in the aforesaid Cash Credit Facility and vide Guarantee Agreement for Working Capital Limit dated 01.10.2012, under which defendant no. 2 guaranteed repayment of all moneys at any time payable by defendant no. 1 to the plaintiff with interest, cost and charges and the due performance and observance by defendant no. 1 of the terms pertaining to the Credit facility, as contained in Hypothecation cum Working Capital Agreement dated 04.10.2012.
2.4 It is further stated that thereafter, defendant no. 1 through defendant no. 2 applied for enhancement of cash credit limit to Rs. 8,00,000/- and the plaintiff bank, enhanced the Cash Credit Limit facility upto Rs. 8,00,000/-, vide Sanction Letter dated 20.01.2014. Defendant no. 1 executed Supplemental Hypothecation Cum working Capital Agreement dated 20.01.2014 in favour of the plaintiff. Defendant no. 2 also executed Supplemental Guarantee CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page4 of 13 Agreement for enhancement of Working Capital Limit dated 20.01.2014. As per Sanction Letter dated 20.01.2014, defendant no. 1 was to pay interest @ 5% above plaintiff's base rate, which was then 10.25% and the effective rate of interest was 15.25 % per annum, with montly rests.
2.5 It is also averred that again the defendants applied for renewal of the above said cash credit limit of Rs. 8,00,000/-. The plaintiff bank renewed the above said limit vide Sanction Letter dated 29.01.2016. Defendant no. 1 was to pay interest @ 2.75% above plaintiff's base rate which was then 9.95% and the effective rate of interest was 12.70 % per annum with monthly rests. 2.6 It is further stated that defendant no. 1 failed to adhere to the financial discipline and on various occasions defaulted in depositing amount & repayment of due amount along with interest, despite repeated requests made by the plaintiff to pay the defaulted payment. Consequently, the plaintiff declared the above said loan account as NPA on 28.08.2018. The plaintiff bank recalled the above said credit facility vide Legal Notice dated 01.10.2020, calling upon CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page5 of 13 the defendants to pay the outstanding amount. No response was received by the plaintiff to the legal notice dated 01.10.2020, nor defendant no. 1 paid the outstanding amount to the plaintiff bank. 2.7 It is also stated that as on 23.09.2020, an amount of Rs. 10,50,105/- was due and payable by the defendant to the plaintiff in respect of above said loan facility. The plaintiff has sought interest @ 12% per annum, being normal & prevalent commercial rate of interest on the balance outstanding amount from 23.09.200 till 17.12.2020. It is stated that the plaintiff is entitled to recovery of Rs. 10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only). The plaintiff has, thus, prayed for a decree for Rs. 10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only), along with pendente-lite and future interest @ 12% per annum, from 17.12.2020, till its actual realization.
3.1 Summons of the suit was served upon the defendants on 26.03.2021. However, the defendants have neither appeared nor filed the Written Statement. Vide order dated 04.04.2022 of my Ld. Predecessor, the opportunity to file the Written Statement was closed. CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page6 of 13 4.1 In order to prove its case, the plaintiff has examined one witness i.e. PW-1 Sh. Parvesh Kumar, Manager, State Bank of India, SME CCC, 59, Community Centre, Naraina Industrial Area, Phase-I, Near Payal PVR, New Delhi 110028.
5.1 Sh. Pradeep Kalher, Ld. Counsel for the plaintiff has argued that PW-1 has proved the sanction of Cash Credit Limit Facility of Rs. 4,00,000/- @ 15.5% per annum by the plaintiff to the defendant vide Sanction Letter dated 04.10.2012, Ex. PW1/3, Hypothecation cum Working Capital Agreement dated 04.10.2012, Ex. PW1/4, enhancement of limit to Rs. 8,00,000/- vide Sanction Letter dated 20.01.2014, Ex. PW1/6 and Supplemental Hypothecation Working Capital Agreement dated 20.01.2014, Ex. PW1/7 and renewal of the said limit vide Sanction Letter dated 29.01.2016, Ex. PW1/9. He further contended that PW-1 has also proved Statement of Account, Ex. PW1/14 (Colly), which shows the defaults in repayment made by the defendant and recall of the loan vide Legal Notice dated 01.10.2020, Ex. PW1/13. He has also submitted that as on 17.12.2020, the total outstanding amount was Rs. 10,79,796/- (Rupees ten lacs CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page7 of 13 seventy nine thousand seven hundred and ninety six only). Ld. Counsel for the plaintiff has, thus, submitted that the plaintiff has been able to prove its case and is, thus, entitled to a decree for Rs. 10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only). He also submitted that interest on the outstanding amount may be awarded from the date of filing of the suit till realisation of the entire amount.
6.1 I have heard Sh. Pradeep Kalher, Ld. Counsel for the plaintiff and perused the record.
7.1 It may be mentioned that defendant no. 1, M/s Satguru Boutique, through its sole proprietor Mrs. Rajni Singh is not a legal entity separate from its proprietor i.e. defendant no. 2, Mrs. Rajni Singh. They are one and the same person. In this regard, reference can be made to Miraj Marketing Corporation vs Vishaka Engineering And Anr., 115 (2004) DLT 471, Bedi Sons Steels & Wires vs B.G. Brothers, (Crl. M. No. 50086/M of 2001 decided by Hon'ble Punjab & Haryana High Court on 22.01.2022), and N. Vaidyanathan Deepika Milk Marketing vs Dodla Dairy Limited, 2000(1) CCC 182. CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page8 of 13 8.1 PW-1 Sh. Parvesh Kumar has tendered his affidavit, Ex. PW1/A. In his affidavit, Ex. PW1/A, he has generally reiterated the facts stated in the plaint. He has also deposed about Gazette Notification dated 02.05.1987, Ex. PW1/1, Loan Application dated 27.09.2012, Ex. PW1/2, Sanction Letter dated 04.10.2012, Ex. PW1/3, Hypothecation cum Working Capital Agreement dated 04.10.2012, Ex. PW1/4, Guarantee Agreement for Working Capital Limit dated 04.10.2012, Ex. PW1/5, Sanction Letter dated 20.01.2014, Ex. PW1/6, Supplementary Hypothecation cum Working Capital Agreement dated 20.01.2014, Ex. PW1/7, Supplemental Guarantee Agreement for Enhancement of Working Capital Limit dated 20.01.2014, Ex. PW1/8, Sanction Letter dated 29.01.2016, Ex. PW1/9, Sanction Letter dated 23.02.2017, Ex. PW1/10, Bio Data form dated 18.07.2017, Ex, PW1/11, Stock Statements & Balance Sheet, Ex. PW1/12, Legal Notice dated 01.10.2020, Ex. PW1/13, Statement of Account, Ex. PW1/14 (Colly) and Certificate in terms of Section 2A of Bankers Book Evidence r/w Section 65B of Indian Evidence Act, Ex. PW1/15. CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page9 of 13 PW-1 was not cross-examined by the defendants as none had appeared on behalf of the defendants. His testimony has, thus, gone unrebutted and uncontroverted. There is, thus, no reason to disbelieve him. 8.2 From the evidence led by the plaintiff, it is clear that on the request of defendant no. 1, the plaintiff bank has granted a loan/financial assistance of Rs. 4,00,000/- (Rupees four lacs only) in form of Cash Credit Limit Facility @ 15.5% per annum, in Account no. 67197530922, vide Santion Letter dated 04.10.2012, Ex. PW1/3 and Hypothecation cum Working Capital Agreement dated 04.10.2012, Ex. PW1/4. Defendant no. 2 executed Guarantee Agreement dated 04.10.2012, Ex. PW1/5, for Working Capital Limit. Further, at the request of defendant no. 1, the plaintiff enhanced the Cash Credit Limit upto Rs. 8,00,000/- vide Sanction Letter dated 20.01.2014, Ex. PW1/6. Defendant no.1 executed Supplemental Hypothecation cum Working Capital Agreement dated 20.01.2014, Ex. PW1/8. As per Sanction letter dated 20.01.2014, Ex. PW1/6, the effective rate of interest was 15.25% per annum. The defendant applied for renewal of Cash Credit Limit of Rs. 8,00,000/- which was accordingly renewed by the plaintiff bank vide Sanction Letter dated CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page10 of 13 29.01.2016, Ex. PW1/9. The effective rate of interest was 12.70 % per annum.
8.3 As per Statement of Account, Ex. PW1/14 (Colly), defendant no. 1, broke the contract and defaulted in repayment of due amount along with interest. Consequently, the plaintiff declared the loan account as NPA on 28.08.2018. The loan was recalled vide Legal Notice dated 01.10.2020, Ex. PW1/13. As per the Statement of Account, Ex. PW1/14 (Colly), the outstanding balance as on 23.09.2020 is Rs. 7,79,999.50/- and overdraft interest is Rs. 2,70,105.92/-. Thus, the total outstanding amount comes to 10,05,105.42/- (Ten lacs five thousand one hundred five rupees and forty two paise). From 23.09.2020 to 17.12.2020, the interest is Rs. 29,691.00/-. Thus, as on 17.12.2020, the total outstanding amount is Rs. 10,79,796.00/- It is observed that as per the Statement of Account, Ex. PW1/14 (Colly), the rate of interest has changed on 04.10.2020 to 10.95% per annum.
9.1 In view of the aforesaid, it is considered that the plaintiff has been able to prove its case, for recovery of Rs. 10,79,796/- CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page11 of 13 (Rupees ten lacs seventy nine thousand seven hundred and ninety six only), against the defendants. It is also considered that pendente-lite and future interest @ 10.00% per annum would be just and reasonable. Thus, it is held that the plaintiff is entitled to recover from the defendants Rs.10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only), along with pendente-lite and future interest @ 10.00% per annum, till realisation of the entire amount.
9.2 Accordingly, the suit is decreed in favour of the plaintiff and against the defendants for a sum of Rs. 10,79,796/- (Rupees ten lacs seventy nine thousand seven hundred and ninety six only), alongwith pendente-lite and future interest @ 10.00% per annum, till realization of the entire amount.
10.1 The plaintiff is also awarded costs of the suit. 11.1 Decree be drawn accordingly.
CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page12 of 13 12.1 A copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise, in terms of Order XX Rule 1 of the Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015).
13.1 File be consigned to Record Room.
Announced in open Court on 28.09.2022.
(Rakesh Syal) District Judge (Commercial Court)-03, South-West, Dwarka Courts, New Delhi 28.09.2022 CS (Comm) no. 84/2021 State Bank of India vs M/s Satguru Boutique & Anr. Page13 of 13