Delhi District Court
State Bank Of India vs Hans Raj And Ors on 29 November, 2023
IN THE COURT OF SH. SANJEEV KUMAR SINGH, DISTRICT
JUDGE(COMMERCIAL COURT)-13, CENTRAL DISTRICT, TIS
HAZARI COURTS, DELHI
CS (COMM.) No. 492/19
IN THE MATTER OF:
State Bank of India,
RACPC Branch,
A-1/24, Near Metro Police Station,
Janakpuri, New Delhi-110058 .........Plaintiff
VERSUS
1. Mr. Hans Raj
S/o Shri Puran Chand,
R/o T 367, Gali No. 21B,
Baljit Nagar,
Prem Nagar Road,
New Delhi-110008
Also at
Safai Karamchari,
Emp No. 708555695,
Municipal Corporation of Delhi,
DEMS, Ward No. 10,
Civil Lines Zone,
Delhi-110054.
2. Mrs. Kanta
W/o Shri Hans Raj,
R/o T 367, Gali No. 21B,
Baljit Nagar,
Prem Nagar Road,
New Delhi-110008
CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 1 of 10
Also at
Safai Karamchari,
Municipal Corporation of Delhi,
CSE, Ward No. 10,
Civil Lines Zone,
Delhi-110054. ...........DEFENDANT
Date of Institution : 12.04.2019
Judgment Reserved on : 04.11.2023
Date of Decision : 29.11.2023
EX PARTE JUDGMENT
1. The Plaintiff bank has filed the present suit against the defendant
seeking recovery of Rs. 7,85,722/- along with interest @ 9.45% per
annum from the date of filing of suit till final realization.
2. The version of the Plaintiff is that plaintiff bank is a corporate
body constituted under the State Bank of India Act, 1955(Act No. XXIII
of 1955) having its Central Office at Madame Cama Road, Nariman
Point, Mumbai; that it is a body with perpetual succession and it can sue
and be sued in its own name; that it is engaged in the business of
banking and it has various local head offices including one at New Delhi
and has various branch offices including one at New Delhi and has
various branch offices throughout India and a Centralized Recovery
Centre called RACPC, situated at A-1/24, Janakpuri, New Delhi.
3. It is further the version of the plaintiff that present suit has been
filed by Dr. Mohd. Farook Khan, who was duly authorized
representative of the plaintiff bank and was fully conversant with the
facts of the case and was duly authorized, empowered and competent to
sign and verify the pleadings for and on behalf of the plaintiff bank. It is
further the version of the plaintiff that Dr. Mohd. Farook Khan was
CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 2 of 10
lateron substituted by Sh. Vikas on an application moved on behalf of
plaintiff bank, which was allowed vide order dated 04.11.2023.
4. It is further the version of the plaintiff that defendant
approached the plaintiff bank at East Patel Nagar Branch for availing a
vehicle loan for purchasing Mahindra & Mahindra Scorpio bearing
registration No. DL-10-CT1946 and applied for a loan of Rs.
10,00,000/- vide loan application dated 01.01.2015; that considering the
said representation, plaintiff bank agreed to grant the said vehicle loan
and loan account bearing No. 34593421000 and said loan was disbursed
on 12.01.2015; that the defendant signed, executed and delivered the
following documents in favour of the plaintiff bank:-
(i) Loan cum hypothecation Agreement dated
10.01.2015.
(ii) Arrangement letter dated 10.01.2015.
(iii) Disclosure of CIBIL(Annexure-I) dated
dated 10.01.2015.
(iv) Vehicle Delivery Letter dated 10.01.2015.
(v) Annexure Car VIII dated 10.01.2015.
5. It is further the version of the plaintiff that defendant agreed to
repay the loan amount in 84 EMI of Rs. 16,835/-; that he also agreed to
pay interest on the said loan @ 10.45% p.a with monthly rests; that the
defendant failed to adhere to the financial terms and conditions and
account of the defendant became irregular; that the officers of the
plaintiff bank had been contacting the defendant time and again to
regularize his loan account; that the defendant failed, neglected and
avoided to adhere to the financial discipline and thus his account was
declared as non-performing asset with effect from 08.03.2018; that the
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plaintiff bank also served legal notice dated 10.11.2018 upon the
defendant to recall the entire outstanding amount.
6. It is further the version of the plaintiff that now defendant is liable
to pay the outstanding amount as per the details mentioned as under:-
i) Outstanding due towards Principal as well as :Rs. 7,29,410.00
applied interest.
ii) Un-applied interest at applicable rates
w.e.f 01.04.2018 to till 31.03.2019 :Rs. 71,135.33
iii) Miscellaneous Debits : Rs.177.00
Total --------------------
Rs. 8,00,722.33
-------------------
Minus Credits after the date of NPA Rs. 15,000.00 Balance due Rs. 7,85,722.33
7. It is further the version of the plaintiff that last payment of Rs. 15,000/- was received on 13.04.2018; that this Court has territorial jurisdiction since loan was applied through East Patel Nagar Branch where necessary loan documents as mentioned were signed and executed between the parties, which falls within the territorial jurisdiction of this Court; that suit is a "commercial Dispute" as defined in Section 2(1)(c) of the Commercial Courts Act, 2015 and that plaintiff bank invoked the pre-litigation mediation in compliance of Commercial Courts Act, 2015 before Delhi State Legal Services Authority by filing application; that after receipt of notice defendant initially appeared before DSLSA, but thereafter he did not join the mediation proceedings on the subsequent CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 4 of 10 dates, due to which talks for settlement/negotiations could not take place and the Non-Starter report given by concerned DSLSA is filed on the record.
8. Summons of the suit were served upon both the defendants and they put their appearance on 25.01.2020 and on their willingness to settle the matter, matter was referred to Mediation Center, Tis Hazari Courts for amicable settlement vide order dated 25.01.2020, however as per the record none of the defendants participated in the Mediation Proceedings and even thereafter they stopped appearing before the Court and consequently were proceeded exparte vide order dated 04.05.2022.
9. The plaintiff bank has examined Sh. Vikas, AR/Assistant Manager, S.B.I Bank, At RACPC Branch, A-1/24, Janakpuri, New Delhi as its sole witness as PW-1.
10. PW-1 tendered his evidence by way of affidavit Ex. PW1/A in which he reiterated the contents of the plaint and relied upon following documents:-
(i) Gazette Notification dated 02.05.1987 is Ex.PW-1/1.
(ii) Sanction letter dated 08.01.2015 is Ex.PW-1/2.
(iii) Car loan application form dated 01.01.2015 is Ex.PW-1/3.
(iv) Loan-cum-Hypothecation Agreement dated 10.01.2015 is Ex.PW-
1/4.
(v) Agreement letter dated 10.01.2015 is Ex.PW-1/5.
(vi) Vehicle Delivery Letter dated 10.01.2015 is Ex.PW-1/6.
(vii) Proforma invoice dated 22.12.2014, invoice dated 21.01.2015 and receipt dated 15.01.2015 are Mark-A (colly)
(viii) KYC document of defendant is Mark B (colly).
CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 5 of 10
(ix) Copy of RC of hypothecated vehicle is Mark-C.
(x) Notice dated 28.07.2017 under SARFAESI Act is Ex.PW-1/7.
(xi) Legal notice dated 10.11.2018 as Ex.PW-1/8 and its postal receipt is Ex.PW1/9.
(xii) Statement of account alongwith certificate of accrued interest is Ex.PW-1/10 (colly).
(xiii) Certificate under section 2A of the Banker's Books of Evidence Act, 1891 r/w section 65-B of Indian Evidence Act, 1860 is Ex.
PW-1/11.
11. I have heard the arguments advanced by the learned counsel for the plaintiff and perused the record.
12. At the very Outset, I may observe that the provisions of Section 2 (1) (c) (i) of Commercial Courts Act, 2015 are very clear which reads as under:
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x)management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 6 of 10
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
13. The provisions of Section 2(1) (c)(i) of the Commercial Courts Act, 2015 as above are very much clear. It is important to notice that the crucial expression that connects the classes of persons i.e. merchants, bankers, financiers and traders to the expression mercantile documents are the words "such as".
14. Hon'ble Calcutta High Court in Ladymoon Towers Private Ltd. Vs. Mahendra Investment Advisors Private Limited(I.A No. G.A 4 of 2021 in C.S 99 of 2020 order dated 13.08.2021). After setting out the dictionary meanings of the expressions "merchants" "bankers" "traders" and "financiers" the learned judge proceeded to observe as under:
"The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a non-commercial cause. The graduation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 7 of 10 Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The insolvency and Bankruptcy Cod, 2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt - Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It would not include an agreement where profit-making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom."
Therefore, the facts which are alleged in the plaint come under the commercial dispute.
15. Now, the next question is whether this Court has the pecuniary jurisdiction to adjudicate the matter which is in dispute. The provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3: Constitution of Commercial Courts:
3. (1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 8 of 10 exercisable by the District Courts, as it may consider necessary.] 3[(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
16. The Commercial Courts Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the amendment and by virtue of notification, the pecuniary jurisdiction of the commercial courts shall not be less than Rs. 3,00,000/-. In the present case, the claimed amount as mentioned in the plaint is of Rs. 7,85,722/- and as such this court is having jurisdiction to adjudicate the matter which is in dispute.
17. This Court has territorial jurisdiction to try the present suit since the loan was sanctioned by the plaintiff bank, East Patel Nagar Branch, Delhi, where necessary loan documents were executed between the parties, which falls within the territorial jurisdiction of this Court.
18. Perusal of record reveals that before filing of the present suit, the Pre-Institution Mediation was initiated by the plaintiff bank and the Non-Starter Report dated 27.03.2019 is on the record, which reflects that notices were issued for 13.03.2019 and 27.03.2019. On 27.03.2019, Sh. Mukesh Ranjan, ld counsel for plaintiff and Sh. Hans Raj(defendant No.1) were present, however Sh. Hans Raj refused to participate in the mediation process and stated that the matter in question has already been settled in Lok Adalat on 09.03.2019.
19. It is evident from the record i.e. Ex. PW1/10(colly) that on 13.04.2018 defendant made payment of Rs. 15,000/- and thereafter on 17.10.2018, cheque bearing No. 064929 for a sum of Rs. 66,900/- was CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 9 of 10 also issued by defendant and the suit was filed on 12.04.2019, therefore the suit of the plaintiff is well within limitation.
20. The entire testimony of PW-1 has gone unrebutted in view of which the claim of plaintiff has gone undisputed and uncontroverted. There is no reason to disbelieve the same.
21. Keeping in view the above discussion, the suit of the plaintiff is decreed in favour of plaintiff and against both the defendants and it is held that plaintiff is entitled to the recovery of principal amount of Rs.7,85,722/- So far as the interest component is concerned, the plaintiff has claimed interest @ 9.45% per annum which is in my considered opinion is excessive and, therefore, in the interest of justice, the plaintiff is entitled to the recovery of principal amount of Rs. 7,85,722/- along with interest @ 9% per annum from the date of filing of the suit till realization from the defendants. Both the defendants are jointly and severally liable to pay the aforementioned amount to the plaintiff bank.
22. Cost of the suit is also awarded in favour of the plaintiff bank.
23. Decree sheet be prepared accordingly.
24. File be consigned to Record Room after due compliance.
Digitally signed SANJEEV by SANJEEV KUMAR SINGH Announced in the open court KUMAR Date: 2023.11.30 SINGH Dated: 29.11.2023 03:52:08 +0530 (Sanjeev Kumar Singh) District Judge, Commercial Court-13 Central District, Tis Hazari Courts, Delhi/29.11.2023(mb) CS(Comm) No. 492/19 State Bank of India Vs. Hans Raj and ors. Page No. 10 of 10