Bangalore District Court
Bank To The vs To It on 9 August, 2016
IN THE COURT OF THE SMALL CAUSES, AT BANGALORE
(SCCH-7)
Dated this, the 9th day of August, 2016.
Present : SMT. INDIRA MAILSWAMY CHETTIYAR
B.Com.,LL.B.(Spl.,),L.L.M.,
IX Addl. Small Causes Judge & XXXIV ACMM,
Court of Small Causes,
Member, MACT-7, Bangalore.
S.C.No.811/2016
Syndicate Bank, : ..... PLAINTIFF
Balepet Branch,
No.77, Kalyan Building,
I Floor,
Bangalore - 560 053.
Represented by its
Senior Branch Manager,
Padmanabhan. D.
(By Sri. B.S. Shekhar, Adv.,)
V/s
Sri. Kumar. N., :
..... DEFENDANT
S/o. Sri. Nagappa,
No.36, 5th Cross,
Bakshi Garden,
Bangalore - 560 053.
(Exparte)
2 S.C.No.811/2016
(SCCH-7)
1. Date of Institution : 30.05.2016
2. Nature of Suit : Recovery of Money
3. Date of Evidence : 05.08.2016
4. Date of Judgment : 09.08.2016
5. Total duration : YEAR/S MONTH/S DAYS
00 02 10
(INDIRA MAILSWAMY CHETTIYAR)
IX Addl. Small Causes Judge & XXXIV ACMM,
Court of Small causes,
Member, MACT-7, Bangalore.
JUDGMENT
The Plaintiff Bank has filed this suit as against the Defendant for recovery of Rupees 1,08,619-71 from the Defendant with interest at the rate of 12.95% from 01.05.2016 till settlement and direct seizure of the Auto Rickshaw and future interest at 12.95% on the decreed amount thereon till payment/settlement of dues along with Court fees and expenses for filing the suit, etc., in respect of the consideration received by the Defendant.
2. The brief averments of the Plaintiff Bank's case are as follows;
a) It is a Bank constituted and functioning under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 and having its Head Office at Manipal in Udupi District of Karnataka State with Branches at various places amongst others 3 S.C.No.811/2016 (SCCH-7) at Balepet, Bangalore and represented by the GPA Holder/Authorized representative, its present Senior Manager, Padmanabhan. D.
b) This suit is filed for recovery of Rupees 1,08,619-71 plus interest from 01.05.2016 towards advanced under Loan Account No.LSL (Other Secured Loan) vide No.04357910000267 on 06.03.2014 for Rupees 1,00,000/- for purchasing a New Auto Rickshaw.
c) The Defendant/Borrower approached it on 20.02.2014 requesting loan for purchase of an Auto Rickshaw. The Defendant sought loan on a written Application dated 20.02.2014.
d) The Plaintiff Bank considered the loan application and agreed to grant loan of Rupees one lakh as per the prevailing terms/rules and regulations of the Bank at the rate in force as per directives of the Reserve Bank of India.
e) The Defendant in consideration of the loan to be granted agreed to the terms and conditions of the Bank and executed a Composite Hypothecation Agreement [ASD 4] duly stamped on 06.03.2014. As per the agreement, it released a sum of Rupees 1,00,000/- for purchase of the vehicle, which was agreed to be repaid in 84 monthly installments starting from 30.04.2014 and the last installment being on 31.03.2021 at Rupees 1,750/- per month, with interest at 11.25% compounded monthly. The Defendant also executed the receipt for release of 4 S.C.No.811/2016 (SCCH-7) the loan amount to his savings Bank account maintained with it dated 06.03.2014.
f) The rate of interest to be charged by it was subject to modifications by the Reserve Bank of India and as agreed at clause 3(a) of the Composite Hypothecation Agreement dated 06.03.2014, the Defendant waived the notice of variation in interest as per directives of RBI.
g) The Defendant agreed to take delivery of the vehicle in good condition, ensure registration and keep informed the Bank about the Registration number, insurance taken on the vehicle and also agreed for periodical inspection.
h) The Defendant was bound by the covenants agreed upon in the Composite Agreement and he clearly understood the implications of default, such as, charging overdue interest, seizure of vehicle, etc., The Defendant also agreed for charging of 2% overdue interest in case of default in payment of monthly installments and/or interest charged thereupon.
i) The Defendant did not make payment of installments/interest as agreed, thereby, rendering the account as non-performing account. It requested the Defendant to pay the installments regularly and in this regard, wrote several letters and the last being on 08.03.2016.
5 S.C.No.811/2016(SCCH-7)
j) As on date due to irregular payment a sum of Rupees 25,000/- is overdue in the account and the liability as on 30.04.2016 is Rupees 1,08,619-71/- with interest at 12.95% due from 01.05.2016.
k) The details of claim are, Principal amount [The original principal amount clubbed with periodical interest as per norms of Bank, without capitalizing the interest] with interest up to 30.04.2016 amounting to Rupees 1,08,619-71/- with interest at 12.95% from 01.05.2016 till final settlement.
l) The statement of loan account maintained in the normal course of business, showing the rate of interest, credits received/debited, interest charged, etc., from the date of opening the account till filing.
m) In response to the enquiry, the Defendant has been assuring payment shortly and regularization of the account and also has assuring to bring the vehicle for inspection. However, the assured payment/inspection is still not happening, thereby, necessitating the suit.
n) It calling upon the Defendant issued a Vakil notice through his Counsels vide Notice dated 22.04.2016. The notice issued is duly delivered on 25.04.2016, for the simple fact that, the Defendant called the Bank's Counsel from his mobile number 9066997928 acknowledging receipt of letter and pleading that, the 6 S.C.No.811/2016 (SCCH-7) filing be deferred. He also assured to visit the Bank/Counsel and pay the overdue portion, which has not happened till date.
o) It is not filed any other case either past or present before Court of law and there are no proceedings pending within the knowledge in respect of the same subject-matter for the same relief. Hence, pleadings cause of action, the Plaintiff Bank has filed this suit.
3. Though the suit summons was duly served on the Defendant through RPAD, he was remained absent and hence, he is placed as exparte on 26.07.2016.
4. In order to prove its case, the Plaintiff Bank has examined its Senior Manager as P.W.1 by filing an affidavit as his examination-in-chief and has placed reliance upon Ex.P.1 to Ex.P.8.
5. Heard the arguments.
6. Now, the Points that arise for my consideration are as follows;
POINTS
1. Whether the Plaintiff Bank is entitled for a sum of Rupees 1,08,619-71 with current and future interest at the rate of 12.95% p.a. from 01.05.2016 till its 7 S.C.No.811/2016 (SCCH-7) realization with costs from the Defendant as prayed for?
2. What Order?
7. My answers to the above Points are as follows;
Point No.1 : Partly in the Affirmative, Point No.2 : As per the final Order, for the following;
REASONS
8. POINT NO.1 :- The Plaintiff Bank has filed this suit as against the Defendant for recovery of Rupees 1,08,619-71 from the Defendant with interest at the rate of 12.95% from 01.05.2016 till settlement and direct seizure of the Auto Rickshaw and future interest at 12.95% on the decreed amount thereon till payment/settlement of dues along with Court fees and expenses for filing the suit, etc., in respect of the consideration received by the Defendant.
9. The P.W.1, who is the Senior Manager of the Plaintiff Bank, in his examination-in-chief has stated that, he is well aware and conversant with the facts of the present suit. The Plaintiff Bank has produced Ex.P.8 Power of Attorney. On perusal of the contents of Ex.P.8 Power of Attorney, it prima-facie appears that, the P.W.1 is an Officer of the Plaintiff Bank and the Plaintiff Bank has authorized the P.W.1 to give evidence on its behalf in the present suit. Hence, the evidence of P.W.1 can very well be looked 8 S.C.No.811/2016 (SCCH-7) in to for consideration of the case made out by the Plaintiff Bank as against the Defendant in the present suit.
10. The P.W.1 has stated that, the Defendant/Borrower approached their Bank on 20.02.2014 requesting loan for purchase of an Auto Rickshaw and the Defendant sought loan on a written Application dated 20.02.2014. He has further stated that, their Bank considered the loan application and agreed to grant loan of Rupees one lakh as per the prevailing terms/rules and regulations of the Bank at the rate in force as per directives of the Reserve Bank of India. He has further stated that, the Defendant in consideration of the loan to be granted agreed to the terms and conditions of the Bank and executed a Composite Hypothecation Agreement [ASD 4] duly stamped on 06.03.2014 and as per the agreement, their Bank released a sum of Rupees 1,00,000/- for purchase of the vehicle, which was agreed to be repaid in 84 monthly installments starting from 30.04.2014 and the last installment being on 31.03.2021 at Rupees 1,750/- per month, with interest at 11.25% compounded monthly. He has further stated that, the Defendant also executed the receipt for release of the loan amount to his savings Bank account maintained with their Bank dated 06.03.2014. He has further stated that, the rate of interest to be charged by their Bank was subject to modifications by the Reserve Bank of India and as agreed at clause 3(a) of the Composite Hypothecation Agreement dated 06.03.2014, the Defendant waived the notice of variation in interest as per directives of RBI. He has further stated that, the Defendant agreed to take delivery of the vehicle in good condition, 9 S.C.No.811/2016 (SCCH-7) ensure registration and keep informed the Bank about the Registration number, insurance taken on the vehicle and also agreed for periodical inspection and the Defendant was bound by the covenants agreed upon in the Composite Agreement and he clearly understood the implications of default, such as, charging overdue interest, seizure of vehicle, etc., and also agreed for charging of 2% overdue interest in case of default in payment of monthly installments and/or interest charged thereupon.
11. To corroborate its case as well as the oral version of P.W.1, the Plaintiff Bank has produced Ex.P.1 Loan Application dated 20.02.2014, Ex.P.2 Composite Hypothecation Agreement dated 20.02.2014 and Ex.P.3 Receipt.
12. On perusal of the contents of Ex.P.1 to Ex.P.3, it clearly goes to show that, the Defendant has borrowed a loan of Rupees 1,00,000/- from the Plaintiff Bank on 06.03.2014 for the purpose of purchase of Auto Rickshaw and agreed to repay the said loan to the Plaintiff Bank in 84 monthly installments starting from 30.04.2014 and the last installment being on 31.03.2021 at Rupees 1,750/- per month with interest at the rate of 11.25% per annum compounded monthly and subject to variation of interest from time to time and has hypothecated the Auto Rickshaw in favour of the Plaintiff Bank as a security for the said loan amount and has executed necessary and required documents in favour of the Plaintiff Bank by admitting its terms and conditions.
10 S.C.No.811/2016(SCCH-7)
13. The P.W.1 has stated that, the Defendant did not make payment of installments/interest as agreed, thereby, rendering the account as non-performing account. He has further stated that, their Bank requested the Defendant to pay the installments regularly and in this regard, wrote several letters and the last being on 08.03.2016. He has further stated that, as on date due to irregular payment a sum of Rupees 25,000/- is overdue in the account and the liability as on 30.04.2016 is Rupees 1,08,619-71 with interest at 12.95% due from 01.05.2016. He has further stated that, the details of claim are, Principal amount, i.e., the original principal amount clubbed with periodical interest as per norms of Bank, without capitalizing the interest with interest up to 30.04.2016 amounting to Rupees 1,08,619-71/- with interest at 12.95% from 01.05.2016 till final settlement. He has further stated that, the statement of loan account maintained in the normal course of business, showing the rate of interest, credits received/debited, interest charged, etc., from the date of opening the account till filing. He has further stated that, in response to the enquiry, the Defendant has been assuring payment shortly and regularization of the account and also has assuring to bring the vehicle for inspection, however, the assured payment/inspection is still not happening, thereby, necessitating the suit. He has further stated that, their Bank calling upon the Defendant issued a Vakil notice through his Counsel vide Notice dated 22.04.2016 and the notice issued is duly delivered on 25.04.2016, for the simple fact that, the Defendant called the Bank's Counsel from his mobile number 9066997928 acknowledging receipt of letter and pleading that, the filing be 11 S.C.No.811/2016 (SCCH-7) deferred and he also assured to visit the Bank/Counsel and pay the overdue portion, which has not happened till date.
14. The Plaintiff Bank has produced Ex.P.4 Office copy of Letter dated 08.03.2016, Ex.P.5 Statement of Account, Ex.P.6 Postal Acknowledgment and Ex.P.7 Office Copy of Legal Notice dated 22.04.2016.
15. On perusal of the entries made in Ex.P.5 Statement of Account, it clearly goes to show that, the Defendant is very irregular in making repayment of the loan installments as agreed and as such, as on 18.03.2016, a sum of Rupees 1,08,619-71 is due from him to the Plaintiff Bank in respect of the said loan of Rupees 1,00,000/-.
16. The contents of Ex.P.6 Postal Acknowledgement and Ex.P.7 Office Copy of Legal Notice dated 22.04.2016 clearly disclosed that, before filing the present suit, the Plaintiff Bank by issuing a Legal Notice has called upon the Defendant to pay the outstanding loan amount of Rupees 1,05,292-18 with interest at 12.95% from 01.04.2016 till full satisfaction within seven days from the date of the notice and the said notice was issued by the Plaintiff Bank to the Defendant through RPAD, which was duly served on the Defendant. In Ex.P.7 Legal Notice, the Plaintiff Bank has clearly narrated about the nature of the loan transaction, which was taken place between it and the Defendant and the irregular in making repayment of the loan installments by the Defendant to it.
12 S.C.No.811/2016(SCCH-7)
17. As this Court has already observed based on the entries made in Ex.P.5 Statement of Account that, the Defendant is very irregular in making repayment of the loan installments and as such, as on as on 18.03.2016, a sum of Rupees 1,08,619-71 is due from the Defendant to the Plaintiff Bank. Since inspite of issuance of Ex.P.7 Legal Notice, the Defendant did not care to repay the outstanding loan amount with interest to it, the Plaintiff Bank has no other alternative way, has filed the present suit as against the Defendant for recovery of the said outstanding loan amount. Hence, the Plaintiff Bank has cause of action for filing the present suit and as such, it is maintainable.
18. From the said material evidence, both oral and documentary, it is clearly proved that, as on the date of filing of this suit, a sum of Rupees 1,08,619-71 is due from the Defendant to the Plaintiff Bank. To deny or to discard the same, nothing is available on record on behalf of the Defendant, as, though the suit summons was duly served on the Defendant, he was remained absent and hence, he is placed as exparte. The non-appearance of the Defendant in the present suit clearly implies that, the Defendant has indirectly admitted the entire case made out by the Plaintiff Bank as against him in the present suit. Hence, it can be safely held that, the Defendant is due a sum of Rupees 1,08,619- 71 to the Plaintiff Bank, which is the suit claim.
19. The Plaintiff Bank has claimed current and future interest at the rate of 12.95% per annum on the suit claim of Rupees 1,08,619-71 from 01.05.2016 till its realization with Court 13 S.C.No.811/2016 (SCCH-7) Costs. The P.W.1 has also stated the same in his examination-in- chief.
20. Based on the contents of Ex.P.2 to Ex.P.3, this Court has already observed and come to the conclusion that, the Defendant has agreed to repay the said loan amount of Rupees 1,00,000/- to the Plaintiff Bank with interest at the rate of 11.25% per annum compounded monthly and subject to variation from time to time. Further, based on the entries made in Ex.P.5 Statement of Account, this Court has further observed and come to the conclusion that, the Defendant is very irregular in making repayment of the loan installments and as such, as on 18.03.2016, a sum of Rupees 1,08,619-71 is due from the Defendant to the Plaintiff Bank. Further, the current and future interest at the rate of 12.95% per annum compounded monthly as claimed by the Plaintiff Bank in the present suit is not an exorbitant and unreasonable as the Defendant is very irregular in making repayment of the loan amount to the Plaintiff Bank. Hence, there are merits in the claim of current and future interest at the rate of 12.95% per annum compounded monthly on the suit claim of Rupees 1,08,619-71 from 01.05.2016 till its realization. Hence, the Defendant is liable to pay current and future interest at the rate of 12.95% per annum compounded monthly on the suit claim of Rupees 1,08,619-71 from 01.05.2016 till its realization to the Plaintiff Bank. Since, the Defendant has dragged the Plaintiff Bank to file the present suit for recovery of loan due amount, the Defendant is liable to pay the costs of the present suit to the Plaintiff Bank.
14 S.C.No.811/2016(SCCH-7)
21. It is pertinent to note here that, though the Plaintiff Bank has claimed a relief of direction of seizure of the Auto Rickshaw, it has not produced the vehicular documents relating to the said Auto Rickshaw, which is purchased by the Defendant by paying the said loan amount and not adduced acceptable material evidence to consider the same. Hence, the Plaintiff Bank is not entitled for the said relief.
22. Under the above said facts and circumstances as well as the reasons given, this Court has come to the conclusion that, the Plaintiff Bank is entitled for a sum of Rupees 1,08,619-71 from the Defendant with current and future interest at the rate of 12.95% per annum compounded monthly on the suit claim of Rupees 1,08,619-71 from 01.05.2016 till its realization, with costs, from the Defendant. The Defendant is liable to pay the same to the Plaintiff Bank. Hence, the suit filed by the Plaintiff Bank as against the Defendant is liable to be partly decreed with costs. Accordingly, I answered Point No.1 Partly in the Affirmative.
23. POINT NO.2 :- For the aforesaid reasons, I proceed to pass the following;
ORDER The suit filed by the Plaintiff Bank is hereby partly decreed with costs.
The Defendant is hereby directed to pay a sum of Rupees 1,08,619-71 with 15 S.C.No.811/2016 (SCCH-7) current and future interest at the rate of 12.95% p.a. compounded monthly from 01.05.2016 till its realization to the Plaintiff Bank, within two months from the date of this Order.
If the Defendant fails to pay, by then, the Plaintiff Bank is at liberty to recover the same in accordance with law.
Draw Decree accordingly.
(Dictated to the Stenographer directly on computer and typed by him, corrected and then, pronounced by me in the open Court on this, the 9th day of August, 2016.) (INDIRA MAILSWAMY CHETTIYAR) IX Addl. Small Causes Judge & XXXIVACMM, Court of Small Causes, Member, MACT-7, Bangalore.
ANNEXURE
1. WITNESSES EXAMINED BY THE PLAINTIFF :-
P.W.1 : Padmanabhan. D.
2. DOCUMENTS MARKED BY THE PLAINTIFF :-
Ex.P.1 : Loan Application dated 20.02.2014
Ex.P.2 : Composite Hypothecation Agreement
16 S.C.No.811/2016
(SCCH-7)
dated 20.02.2014
Ex.P.3 : Receipt
Ex.P.4 : Office Copy of Letter dated 08.03.2016 Ex.P.5 : Statement of Account Ex.P.6 : Postal Acknowledgment Ex.P.7 : Office Copy of Legal Notice dated 22.04.2016 Ex.P.8 : True copy of Power of Attorney
3. WITNESSES EXAMINED BY THE DEFENDANT :-
-NIL-
4. DOCUMENTS MARKED BY THE DEFENDANT :-
-NIL-
(INDIRA MAILSWAMY CHETTIYAR) IX Addl. Small Causes Judge & XXXIV ACMM, Court of Small Causes, Member, MACT-7, Bangalore.