Delhi District Court
And Having Its Branch Office At vs Bhushan Kumar on 6 April, 2017
IN THE COURT OF Dr. KAMINI LAU: ADDL. DISTRICT
JUDGEII (CENTRAL):TIS HAZARI COURTS, DELHI
CS No. 526/2015
New No.17178/16
ICICI Bank Limited,
Having Its Registered Office
At Landmark, Race Course Circle,
Vadodara390007.
And Having Its Branch Office At:
2nd Floor, Videocon Tower,
BlockE1, Jhandewalan Extn.,
New Delhi.
........... Plaintiff
VERSUS
Bhushan Kumar
S/o Sh. Mahender Kumar
R/o H.No. 1567, Gali Boriyan
Sitaram Bazar, NR. Lal Darwaza
Delhi110006.
................. Defendant
Date of Institution : 09.11.2015
Judgment Reserved on : 03.04.2017
Judgment Pronounced on : 06.04.2017
JUDGMENT:
(1) This suit has been filed by the plaintiff against the defendant for recovery of Rs. 5,41,791/ along with pendentelite and future interest.
ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.1 of 12 Plaintiff's Case :
(2) The case of the plaintiff is that the plaintiff is Banking Company within the meaning of Banking Regulation Act and is interalia engaged in the business of banking, financing and providing loan facilities to its customers for purchase of vehicles, machinery etc. It is pleaded that the plaintiff is having its Registered Office at Landmark, Race Course Circle, Vadodara390007. It is also pleaded that the plaintiff is having its Branch office at 2nd Floor, Videocon Tower, Jhandewalan Extn., Block E1, New Delhi, within the jurisdiction of this Hon'ble Court. It is further pleaded that Sh. Mohit Grover is the Authorized Representative of the plaintiff and is well conversant with the facts of the case and he has been authorized by a power of Attorney to sign, file, verify and affirm the pleadings and also to institute the present suit on behalf of the plaintiff bank. It is pleaded that the defendant is the borrower of plaintiff bank and has availed loan facility from the plaintiff under its Car Loan Scheme vide loan agreement bearing no. LADEL00030683468. It is also pleaded that the defendant had approached the plaintiff bank and represented that he requires loan facility for purchase of car namely, Maruti Suzuki Swift/VDI and the defendant also represented that he is financially sound and assured that he shall be making regular payments of loan in installments. It is further pleaded that the defendant provided all documents to show his bonafide to the plaintiff for the same. It is pleaded that on such representation and assurances made by the defendant, the plaintiff bank agreed to grant the finance facility where after the defendant executed loan agreement/credit facility application ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.2 of 12 form. It is also pleaded that the original loan agreement / credit facility application form, unattested deed of hypothecation and irrevocable power of attorney are attached hereto and the defendant agreed and undertook to comply with the terms of the agreement and assured that he would discharge his liability towards the plaintiff bank. It is further pleaded that in terms of the said agreement a total sum of Rs.5,45,684/ was disbursed for the purchase of a vehicle make i.e. Maruti Suzuki Swift/VDI bearing Registration No. DL9CAK3777 on 18.11.2014 and the said loan was to be repaid in 60 equated monthly installments of Rs.11865/ each. It is pleaded that the plaintiff submits that there were number of casting obligations on the defendant as per the loan agreement / credit facility application form, and contrary to the assurances and undertaking, the defendant failed to discharge his liability and defaulted in making the regular equated monthly installment. It is also pleaded that the defendant had been extremely irregular in making the payment of the equated monthly installments to the plaintiff bank. It is further pleaded that the plaintiff bank tried its level best to recover the amount due but the defendant evaded paying the same. It is pleaded that the plaintiff bank looking to the indifferent attitude of the defendant in not repaying the installments was compelled to issue a notice of demand dated 29.07.2015 to the defendant recalling / foreclosing the entire loan agreement. It is also pleaded that inspite of the receipt of the notice, the defendant failed to make payment of the termination amount as demanded by the plaintiff bank in notice. It is further pleaded that the defendant is liable to pay Rs.5,54,074.92 to the plaintiff bank as per statement of account dated ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.3 of 12 10.09.2015 for the closure of the aforesaid loan account which the defendant has willfully failed to pay inspite of repeated requests and demands made by the plaintiff bank. Hence, this suit.
Defendant is Exparte:
(3) Pursuant to the filing of the suit, summons were issued to the defendant who was validly served but did not appear before this court and hence, was proceeded exparte on 16.08.2016.
Exparte Evidence of the Plaintiff:
(4) In its exparte evidence, the plaintiff has examined its Authorized Representative Sh. Mohit Grover as PW1 who in his examination in chief by way of affidavit has corroborated what has been earlier stated in the main plaint. He has placed his reliance on the copy of Power of Attorney which is Ex.PW1/1; preliminary credit facility application form which is Ex.PW1/2; Original Credit Facility Application Form/Loan Agreement which is Ex.PW1/3; Original unattested Deed of Hypothecation which is Ex.PW1/4; Original Irrevocable Power of Attorney which is Ex.PW1/5; Disbursement Memo which is Ex.PW1/6;
statement of account for the period 10.12.2014 to 10.09.2015 is Ex.PW1/7; the certificate under Section 65B of Indian Evidence Act is Ex.PW1/8; certificate U/s 2A of the Banker's Book of Evidence at 1891 is Ex.PW1/9 and legal notice dated 29.07.2015 is Ex.PW1/10 and its postal receipt is MarkX. ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.4 of 12 OBSERVATIONS & FINDINGS:
(5) I have heard the arguments advanced before me and considered the written memorandum of arguments filed on behalf of the plaintiff. I have also perused the documents on record and considered the evidence before me.
(6) At the very Outset I may observe that the plaintiff has not proved the Recall notice in accordance with law. Only a printout / scanned copy of the recall notice (Ex.PW1/10) has been placed on record which is a computer generated record and has not been certified to be correct in accordance with Section 65B of the Evidence Act. The executant and signatory of the Recall notice has not been examined to prove the same. The service of this foreclosure / recall notice has also not been proved in accordance with law and only a photocopy of some internal register being maintained by the plaintiff bank has been placed on judicial record by falsely claiming this to be a receipt of service. The perusal of Mark X (which even otherwise is not admissible in evidence being photocopy and not being proved as per law) shows that it is only an entry in some internal register (i.e. LRNBluk Register for Dispatch Mode Reg. Post AD) of the plaintiff company showing that some communication was perhaps intended to be dispatched to the defendant by the plaintiff bank but whether it was actually dispatched or not has not been established. The fact that the said communication so reflected in Mark X was related to the recall notice and was actually dispatched by speed post has not been proved. The speed post receipt has not been placed on record and what is placed before the Court is only the ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.5 of 12 photocopy of the entry in the internal register of the plaintiff which has not been proved. It is claimed that the bar code reflected on the photocopy relates to the speed post receipt issued by the postal authorities, which does not convince me because had that been so, the original would have been placed before this court. It appears that an attempt is being made to mislead the court by claiming this photocopy of some receipt showing bar coding to be the dispatch receipt of speed post in respect of Recall notice. The plaintiff has also not called any witness from the postal authorities to prove the service of the recall notice which they could have done nor the Tracker of Department of Post, Government of India has been placed on record to prove the service. No certificate under Section 65B of Evidence Act has been placed on record in respect of the alleged Legal / recall Notice Ex.PW1/10 to prove its contents.
(7) Secondly, all the documents relied upon by the plaintiff i.e. Recall / Foreclosure Notice, Bar Code Receipts, Statement of Account etc. are all computer generated documents / electronic record which has not been proved as per the provisions of Section 65B of the Indian Evidence Act and as per the law laid down by the Hon'ble Supreme Court in Case of 'Anvar P.V. Vs. P.K. Basheer & Ors.' in Civil Appeal No. 4226/2012 decided on 18.09.2014. Once the service of the notice of recall by way of which they have communicated to the defendant that the plaintiff bank has recalled the loan credit facility and thereby asking the defendant to pay the entire outstanding balance together with interest and ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.6 of 12 all the sums payable under the agreement has not been proved, there is no question of there being any cause of action for filing the present suit seeking to recovery of the entire remaining amount. In this background, the entitlement of the plaintiff bank, under the given circumstances, would at the worse be limited to the defaulted amount of installments only but in the present case there is another issue. The only document on the basis of which the plaintiff seeks to charge the defendant of her liability to pay, is the Statement of Account Ex.PW1/8 maintained by the plaintiff bank which has not been proved in accordance with law laid down. The provisions of Section 34 of Evidence Act are very clear. It provides that entries in books of account, including those maintained in an electronic form, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statement shall not alone be sufficient evidence to charge any person with liability. In this regard reference is being made to "Ishwar Dass Vs. Sohan Lal"
reported in AIR 2000 SC 426 and "Dharam Chand Joshi Vs. Satya Narayan Bazaz" reported in AIR 1993 Gauhati 35. The Books of Accounts and the entries in the books of account (in the present case statement of account) are only corroborative evidence and they by themselves cannot create any liability and in case of liability the plaintiff is required to support this evidence i.e. Statement of Account by other evidence which in the present case has not been done and except for examining the Authorized Representative Mohit Grover as PW1, who is in no way is concerned with collection of installments and maintenance of account, the plaintiff has not examined any other witness.
ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.7 of 12 (8) Thirdly, it is apparent from the reading of the plaint and the document attached along with it that the defendant Bhushan Kumar is a resident of H. No. 1567, Gali Boriyan, Sitaram Bazar, NR. Lal Darwaza, Delhi110006 which does not fall within the Territorial Jurisdiction of Courts at Delhi (Central District). Further, the Annexure to Credit Facility application shows that an amount of Rs.5,37,550/ has been disbursed directly in the account of the Dealer i.e. Magic Auto Pvt. Ltd.
7/56, D.B. Gupta Road, New Delhi110005 which again does not fall within the Territorial Jurisdiction of this Court. I may observe that only the screening of the application form and documents of the defendant and processing of loan was done at the Videocon Towers, Jhandewalan Extension with which the defendant has nothing to do and which is not an Integral Part or a Substantial Part of the cause of action and is an incidental act having no relation to the Substantial Cause of Action which is actually dishonour of cheques and failure to pay the installment amount and remaining dues. In fact, the witness of the plaintiff i.e. Sh. Mohit Grover PW1 has been specifically cross examined by this court with regard to the execution of the documents who has pleaded his ignorance the relevant portion of his cross examination I quote as under: "...............I am working in the plaintiff bank since August 2006. I have no involvement in the processing of the loan amount. The credit application form Ex.PW1/3 and other documents as relied upon me was neither filled up by the ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.8 of 12 borrowers nor signed by the parties in my presence. I cannot tell in whose handwriting the above documents were filled up and also the place where they were filled up..............."
(9) I may also observe that the plaintiff has deliberately withheld the fact that the last payment had been made by the defendant on 17.07.2015 prior to which his account had already been declared as NPA in May, 2015. This aspect has neither been pleaded nor placed on record apparently because the payment of dues had already been received by the plaintiff after the account of defendant had been declared NPA. This being the background filing of the suit before the court of competent jurisdiction is not a mere formality but obligatory as per provisions of CPC because it involves rights of the defendants. There are cases where the defendants kept a watch over the litigation by filing caveats which right is likely to be defeated by the plaintiff when it files a suit before the court in a different territory in order to secure an exparte favourable order behind the back of the defendant. The cause of action is not in enterting into an agreement but comprises of dishonour of cheques which has taken place at the bank of the defendant/borrower and not at the branch of the plaintiff bank. How then can the courts at Central District, Delhi have the territorial jurisdiction to try the present suit, is something on which the plaintiff has again not been able to satisfy this court. (10) Lastly I may observe that the issue regarding increase in the number of Non Performing Assets (NPAs) of the Banks is a matter of ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.9 of 12 serious concern, having a direct bearing on the National Economy and has recently been a subject matter of a hot debate in the Indian Parliament and concerns have also been expressed by the RBI on the mounting number of Non Performing Assets by the day, due to sanctioning of loans by the banks without verification and counter guarantee. In fact the RBI has also carried out Forensic Investigations in many Private Sector Banks (PSB's) to detect the debt to equity norms in order to verify the Integrity and Accuracy in classification of Non Performing Assets with a specific focus on review of loans having an outstanding of Rupees Ten Lacs and below and priority sector loans. The defendant in the present case being exparte, there is an increasing onus upon this Court to exercise caution in order to prevent any legal abuse since the possibility of filing the recovery suits by the banks to evade such investigations by bringing the cases within the category of suit filed cases of willfull defaults in order to write off the Non Performing Assets, cannot be ruled out. The Suit filed cases of willfull default like the present case before this Court are treated as a separate category as per the RBI guidelines. As per the data available in Public Domain (Website) relating to the plaintiff bank (ICICI Bank Ltd.) the gross nonperfroming advances (net of write off) for the year ended on March 31, 2014 was Rs.10,505.84 Crores and for the year ended on March 31, 2015 is Rs.15,094.69 Crores. Further, the percentage of grossnon performing advances (net of writeoff) to gross advances was 3.03% for the year ended on March 31, 2014; 3.78% for the year ended on March 31, 2015 and the percentage of gross non ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.10 of 12 performing customer assets to gross customer assets was 3.29% and net nonperforming customer assets to net custoner assets was 1.40%, which of course, is a cause of concern. It is in this background that it is necessary for the Court to ascertain whether the suit filed by the plaintiff bank by resorting to the legal process is genuine or just a mere formality and an eye wash only to resolve a hard loan by putting a willfull defaulter tag on the same by bringing it in the category of court filed cases and later by writing off the Non Performing Assets, which directly affects the National Economy.
(11) Merely because the defendant has not appeared in the Court and was proceeded exparte, does not mean that every word stated by the witnesses of the plaintiff and every document on which it places its reliance is to be taken as a gospel truth. Rather under the given cricumstances the court is obligated to be more vigilant so as to ensure that there is no abuse of process of law and the Public Interest is safe guarded. In the present case, admittedly the account of the defendant has not been declared as Non Performing Asset and the plaintiff had issued a notice of foreclosure (which notice and whose service they have not been able to prove) and hence must have been declared a Non Performing Asset in accordance with the Banking Guidelines. Further, RBI's Master circular updated on 1.7.1994 on Loans and Advances, Statutory and other restrictions which provides a framework of the Rules/ Regulations / Instructions issued to Schedule Commercial Banks on statutory and other restrictions on loans and advances requires taking of security/ guarantee and banks are obligated to implement these ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.11 of 12 instructions to adopt adequate safeguards in order to ensure that banking activities undertaken by them run on sound, prudent and profitable lines. Hence, in order to establish that the loan advanced by them was a bonafide transaction, it was necessary for the plaintiff bank to first establish that these Instructions and Guidelines were followed and meticulously adhered to, which the plaintiff bank in the present case has miserably failed to establish. In this background, there is every possibility that the present suit has been filed only to get a stamp of legality on their act of declaring this account of the defendant as Non Performing Asset in order to avoid any audit or other legal objections by the Reserve Bank of India/ Government Agencies by bringing it within the category of court filed cases in order to write off the NPAs at a later stage, or else there is no reason why the entire proceedings conducted by the Plaintiff Bank would be so causal and non serious.
(12) This being the background, I hereby hold that the plaintiff has failed to prove its entitlement to recover a sum of Rs. 5,41,791/ from the defendant. The suit of the plaintiff is hereby Dismissed. No orders as to costs. Decree sheet be prepared accordingly.
(13) File be consigned to Record Room. Announced in the open court (Dr. KAMINI LAU) Dated: 06.04.2017 ADJII(CENTRAL)/ DELHI ICICI Bank Ltd. Vs. Bhushan Kumar (CS No.526/15) Page No.12 of 12