Delhi District Court
Punjab And Sindh Bank vs Ankit Sharma on 3 December, 2024
IN THE COURT OF SH. PITAMBER DUTT:
DISTRICT JUDGE (COMMERCIAL COURT-01)
EAST DISTRICT KARKARDOOMA COURTS : DELHI
CS (Comm) No. 177/2023
Punjab & Sind Bank
Having its Head Office at
'Bank House' 21, Rajendra Place, New Delhi,
Through its Branch at
D-31, Mayur Vihar, Phase - I,
Near Acharya Niketan,
Delhi - 110091. ................Plaintiff
Versus
1. Sh. Ankit Sharma
S/o Sh. Yogendra Nath Sharma
R/o A-88, 2nd Floor,
Pandav Nagar, Opp. Mother Dairy Plant,
Delhi - 110092.
2. Smt. Neha Sharma
W/o Sh. Amit Anurag,
R/o A-13, Navkunj Apartments
IP Extn. Delhi - 110092.
3. Sh. Yogendra Nath Sharma
S/o Sh. Gorakh Nath Sharma,
R/o A-88, 2nd Floor, Pandav Nagar,
Opp. Mother Dairy Plant,
Delhi - 110092. ................Defendants
Date of institution : 20.05.2023
Date of reserving judgment : 14.11.2024
Date of judgment : 03.12.2024
JUDGMENT:
1. Vide this judgment, I shall decide the present suit filed by the plaintiff bank for seeking recovery of Rs.12,54,272.46P CS (Comm) No. 177/2023 Digitally signed Punjab & Sind Bank Vs Ankit Sharma Pitamber by Pitamber Dutt Page No. 1 of 16 Dutt Date: 2024.12.03 17:10:00 +0530 along with pendente lite and future interest @ 10.60% from the date of filing of the suit till the realization of the amount. The brief facts necessitated in filing of the present suit are given as under:-
2. The plaintiff has averred that Late Smt. Shobha Sharma, proprietor of M/s Anjani Collections, approached them in August 2017 for seeking OD Loan of Rs.4,20,000/- for her business. The plaintiff considered her request and sanctioned the OD loan of Rs.4,20,000/-, on interest @ 9.55% Per Annum along with penal interest @ 2% per annum, vide sanction letter dated 17.08.2017, for which Late Smt. Shobha Sharma had executed requisite documents in favour of the plaintiff bank.
3. The plaintiff has further averred that the said OD facility of Late Smt. Shobha Sharma was further enhanced from Rs.4,20,000/- to Rs.8,40,000/- on her application dated 26.06.2018, vide sanction letter dated 20.08.2018.
4. The plaintiff had also sanctioned amount of Rs. 80,000/- twice towards GECL facility to Late Smt. Shobha Sharma during Corona pandemic on her applications dated 31.03.2020 and 17.06.2020, vide sanction letters dated 20.04.2020 and 17.06.2020 respectively, for which Late Smt. Shobha Sharma executed requisite documents in favour of the plaintiff bank.
5. The plaintiff has further averred that Late Smt. Shobha Sharma and Sh. Yogendra Nath Sharma (Defendant no. 3) thereafter approached them for seeking vehicle loan of Rs.6,00,000/- vide loan application dated 18.06.2021. The Digitally signed CS (Comm) No. 177/2023 by Pitamber Punjab & Sind Bank Vs Ankit Sharma Pitamber Dutt Page No. 2 of 16 Dutt Date:
2024.12.03 17:10:08 +0530 plaintiff considered their request and sanctioned vehicle loan of Rs.6,00,000/- vide sanction letter dated 30.06.2021, for which requisite documents were executed by Late Smt. Shobha Sharma and defendant no. 3 Sh. Yogendra Nath Sharma who stood as a guarantor for the said vehicle loan.
6. The plaintiff has further averred that defendants have failed to adhere to the terms and conditions of the loan facilities and failed to regularize their loan account despite several persuasions, consequently loan account of Late Smt. Shobha Sharma was declared as NPA on 20.12.2021. The plaintiff also sent a notice under Section 13 (2) of the SARFAESI Act on 31.12.2021 as well as a legal notice dated 31.12.2021 but defendants neither responded to the same nor regularized the said loan account.
7. The plaintiff has further averred that defendants are the legal heirs of Late Smt. Shobha Sharma, who was the main borrower of the plaintiff, who inherited her movable and immovable property after her death, therefore, defendants are jointly and severally liable for her liability.
8. The plaintiff also filed an application under Section 12A of the Commercial Courts Act before Mediation Centre, East District for initiating pre-institution mediation with the defendants but though they appeared in the said proceedings but have failed to pay any amount, hence, a non-starter report dated 25.03.2023 was issued. On the basis of these averments, the present suit has been filed for adjudication.
Digitally signed by Pitamber Dutt Pitamber Date:
CS (Comm) No. 177/2023 Dutt 2024.12.03 Punjab & Sind Bank Vs Ankit Sharma 17:10:16 Page No. 3 of 16 +0530
9. Pursuant to the summons, defendants no. 1 appeared for himself as well as on behalf of defendants no. 3. But defendants no. 1 and 3 have not filed their written statement despite opportunity. Thus, the Ld. Predecessor of this Court, vide order dated 11.09.2023, forfeited the right of defendants no. 1 & 3 to file written statement.
10. The defendant no. 2 filed written statement, thereby, controverted all the averments made in the plaint. She averred that the suit has not been filed by a duly authorized person. She further averred that she had neither taken any loan from the plaintiff nor stood as a guarantor nor inherited any movable or immovable property / estate from the deceased borrower, therefore, she is not liable to pay any amount.
11. The defendant no. 2 has further averred that plaintiff has not placed any document on record showing her liability. She has further averred that the bank has already exercised its rights under SARFAESI Act and has recovered its money by selling the vehicle but has suppressed this fact. All other averments have been denied. It is prayed that the suit may be dismissed with costs.
12. The plaintiff has filed replication to the written statement of defendant no. 2, thereby controverted the averments made in the written statement and reiterated the averments made in the plaint.
13. On the basis of the pleadings of the parties, the Ld. Predecessor of this Court, vide order dated 25.01.2024, has Digitally CS (Comm) No. 177/2023 signed by Pitamber Dutt Punjab & Sind Bank Vs Ankit Sharma Pitamber Date: Page No. 4 of 16 Dutt 2024.12.03 17:10:29 +0530 framed the following issues for adjudication:-
ISSUES
1. Whether the plaintiff is entitled for a decree against the defendants for a sum of Rs.12,54,272.46P along with interest, if any, and if yes at what rate and for which period? OPP
2. Relief.
14. In order to prove their case, plaintiff has examined Smt. Aanchal Singh as PW-1, who reiterated the averments made in the plaint, in her examination in chief. PW-1 has exhibited loan application as Ex. PW-1/2, sanction letter dated 17.08.2017 as Ex.PW-1/3 (colly), demand promissory Note dated 17.08.2017 as Ex. PW-1/4, Form No. 103/291/412 dated 17.08.2017 as Ex.
PW-1/5, Form No. 106 dated 17.08.2017 as Ex. PW-1/6, Form No. 126 dated 17.08.2017 as Ex. PW-1/7, Form No. 200 dated 17.08.2017 as Ex. PW-1/8, Bank Form No. 199 dated 17.08.2017 as Ex. PW-1/9, Letter of continuity Form no. 159 dated 17.08.2017 as Ex. PW-1/10, Hypothecation of Goods to secure a Demand cash credit form no. 192 dated 17.08.2017 as Ex. PW-1/11, Loan agreement along with form no. 255 (RR) dated 17.08.2017 as Ex. PW-1/12, loan application dated 26.06.2018 as Ex. PW-1/13, Sanction letter dated 20.08.2018 as Ex. PW-1/14 (colly), Demand Promissory Note Form No. 14R dated 20.08.2018 as Ex. PW-1/15, Demand Promissory Note Form No. 15R dated 20.08.2018 as Ex. PW-1/16, Form No. 103/291/412 dated 20.08.2018 as Ex. PW-1/17, Form no. 106 dated 20.08.2018 as Ex. PW-1/18, Form no. 126 dated 20.08.2018 as Ex. PW-1/19, Form no. 200 as Ex. PW-1/20, Form no. 199 as Ex. PW-1/21, Letter of continuity Form no. 159 dated 20.08.2018 as Ex. PW-1/22, Form no. 122 dated 20.08.2018 as CS (Comm) No. 177/2023 Digitally signed Pitamber by Pitamber Dutt Punjab & Sind Bank Vs Ankit Sharma Page No. 5 of 16 Dutt Date: 2024.12.03 17:10:39 +0530 Ex. PW-1/23, Loan agreement dated 20.08.2018 as Ex. PW - 1/24, loan application as Ex. PW-1/25, sanction letter dated 20.04.2020 as Ex. PW-1/26, Demand Promissory Note Form No. 14R dated 29.04.2020 as Ex. PW-1/27, Deed of Hypothecation PSB A 11 as Ex. PW-1/28, Term Loan Agreement dated 29.04.2020 as Ex. PW - 1/29, loan application dated 17.06.2020 as Ex. PW-1/30, Sanction letter dated 17.06.2020 as Ex. PW-1/31, Deed of Hypothication PSB A11 dated 17.06.2020 as Ex. PW-1/32, Term Loan Agreement dated 17.06.2020 as Ex. PW-1/33, Application for vehicle loan dated 18.06.2021 as Ex. PW - 1/34, sanction letter dated 30.06.2021 as Ex. PW-1/35, Demand Promissory Note Form No. 14R dated 02.07.2021 as Ex. PW-1/36, Letter of Hypothecation cum agreement for vehicles AL618 dated 02.07.2021, Ex. PW-1/37, Letter of Guarantee 256 dated 02.07.2021 as Ex. PW-1/38, Death Certificate of Late Smt. Shobha Sharma as Ex. PW-1/39, Notice dated 31.12.2021 as Ex. PW-1/40, notice dated 31.12.2021 as Ex. Pw-1/41, Demand notice dated 23.02.2023 as Ex. PW-1/42, Certificate under Section 2A of Banker's Book of Evidence Act and Section 65 B of the Indian Evidence Act along with statement of account are Ex. PW-1/43 (colly).
15. PW-1 has not been cross-examined by the defendants despite opportunity.
16. In order to answer the claim of the plaintiff, defendants no. 2 Smt. Neha Sharma has examined herself as DW - 1 as well as as her husband Sh. Amit Anurag as DW - 2. Both DW - 1 and DW - 2 have reiterated the averments made in the written statement of defendant no. 2 in their examination in chief.
Digitally signedCS (Comm) No. 177/2023 by Pitamber Punjab & Sind Bank Vs Ankit Sharma Pitamber Dutt Date: Page No. 6 of 16 Dutt 2024.12.03 17:10:49 +0530
17. DW - 1 and DW - 2 have been thoroughly cross-examined by Ld. Counsel of the plaintiff.
18. I have heard Sh. B.K. Mishra, Ld. Counsel for the plaintiff, Sh. Anurag Pratap and Sh. Rishi Raj, Ld. Counsel for the defendant no. 2, perused the pleadings, evidence and other material placed on record. My issue wise finding is given as under:-
Issue No. 1 Whether the plaintiff is entitled for a decree against the defendants for a sum of Rs.12,54,272.46P along with interest, if any, and if yes at what rate and for which period? OPP.
The plaintiff has claimed that Late Smt. Shobha Sharma, Proprietor of M/s Anjani Collections, got sanctioned an over draft facility of Rs,4,20,000/- from plaintiff in August 2017, which was further enhanced to Rs. 8,40,000/-, on her application dated 26.06.2018, vide sanction letter dated 20.08.2018. The plaintiff also sanctioned amount of Rs. 80,000/- twice towards GECL facility to Late Smt. Shobha Sharma during Covid pandemic vide sanction letters dated 20.04.2020 and 17.06.2020.
19. The plaintiff has further claimed that Late Smt. Shobha Sharma also approached the plaintiff for vehicle loan of Rs. 6,00,000/-, which was sanctioned to her vide sanction letter dated 30.06.2021, for which defendant no. 3 Sh.Yogendra Nath Sharma stood as guarantor and executed necessary documents in favour of the plaintiff.
Digitally signed by Pitamber Pitamber Dutt Dutt Date: 2024.12.03 CS (Comm) No. 177/2023 17:10:58 +0530 Punjab & Sind Bank Vs Ankit Sharma Page No. 7 of 16
20. The plaintiff has further claimed that borrower Smt. Shobha Sharma died and defendants are her legal heirs, who are liable to discharge the liability of deceased borrower as they have inherited her property and estate.
21. The defendant no. 2 has claimed that she had never taken any loan from the plaintiff nor stood as a guarantor for her mother Late Smt. Shobha Sharma. She has further claimed that she has not acquired any property from Late Smt. Shobha Sharma, therefore, she is not liable to pay any amount on her behalf.
22. Defendants no. 1 and 3 have not filed their written statement, therefore their right to file written statement has been closed.
23. Both plaintiff and defendant no. 2 have led their respective evidence.
24. An examination of the pleadings and evidence led on record shows that the plaintiff has filed the present suit against the defendants with respect to two loans availed by Late Smt. Shobha Sharma, i.e. over draft facility of Rs.8,40,000/- and vehicle loan.
25. The plaintiff has claimed that defendant no. 3 and Late Smt. Shobha Sharma approached them for taking vehicle loan. However, documents annexed with the plaint shows that the said vehicle loan was advanced by the plaintiff to Late Smt. Shobha Sharma, for which defendant no. 3 Sh. Yogendra Nath Sharma CS (Comm) No. 177/2023 Digitally signed Punjab & Sind Bank Vs Ankit Sharma Pitamber by Pitamber Dutt Page No. 8 of 16 Dutt Date: 2024.12.03 17:11:09 +0530 stoods as a guarantor and executed the Deed of Gurantee Ex. PW-1/38.
26. The defendant no. 3 was not the guarantor of the OD facility granted to Late Smt. Shobha Sharma, who died before filing of present suit and he stood as guarantor only for car loan.
27. Admittedly, the car for which plaintiff advanced the loan to Late Smt. Shobha Sharma, was re-possessed by the plaintiff before filing of the present suit. The said car was sold by the plaintiff in e-auction on 31.08.2023 for a sum of Rs.5,80,000/-. After adjusting the said amount, only a sum of Rs.94,863.48P was due and outstanding against Late Smt. Shobha Sharma in the said transaction.
28. The said vehicle loan was advanced by the plaintiff to Late Smt. Shobha Sharma, for which defendant no. 3 stood as a guarantor, therefore, defendant no. 3 is jointly and severally liable to pay the amount of loan taken by the principal borrower. Defendant no. 3 is thus liable to pay Rs.94,863.48P to the plaintiff along with interest.
29. Besides the vehicle loan, the plaintiff had also sanctioned over draft facility of Rs. 8,40,000/- to Late Smt. Shobha Sharma, for which none of the defendants stood as a guarantor nor they had executed any document, binding themselves for repayment of the said facility advanced to Late Smt. Shobha Sharma.
30. Ld. Counsel for the plaintiff has contended that the defendants, being LRs of Late Smt. Shobha Sharma, have Digitally signed CS (Comm) No. 177/2023 by Pitamber Pitamber Dutt Punjab & Sind Bank Vs Ankit Sharma Page No. 9 of 16 Dutt Date:
2024.12.03 17:11:27 +0530 inherited the property and business left behind by Late Smt. Shobha Sharma, therefore, they are liable to pay the liability of Late Smt. Shobha Sharma her legal heir.
31. It is a well settled law that a legal heir can be held liable to discharge the liability of a deceased only to the extent he / she has inherited the estate of the deceased.
32. Section 50 of CPC talks about liability of legal representatives, which reads as under:-
50. Legal Representative (1) Where a judgment-debtor dies before the decree has been fully satisfied, the holder of the decree may apply to the Court which passed it to execute the same against the legal representative of the deceased.
(2) Where the decree is executed against such legal representative, he shall be liable only to the extent of the property of the deceased which has come to his hands and has not been duly disposed of; and, for the purpose of ascertaining such liability, the Court executing the decree may, of its own motion or on the application of the decree-
holder, compel such legal representative to produce such accounts as it thinks fit.
33. A perusal of Section 50 of CPC thus makes it absolutely clear that a decree passed against a deceased can be fastened against his / her legal heir, only to the extent they have inherited the property of the deceased and their liability is not absolute.
Digitally signed by Pitamber Dutt CS (Comm) No. 177/2023 Pitamber Date:
Punjab & Sind Bank Vs Ankit Sharma Dutt 2024.12.03 Page No. 10 of 16 17:11:35 +0530
34. A Division Bench of the Hon'ble Delhi High Court in "Kamal Gupta Vs Bank of India" 2007 SCC OnLine Del 1473 has held that:-
"Salmond on Jurisprudence (10th Ed.) has examined the question of right and liabilities of a dead man and has observed as under:-
"The rights which a dead man thus leaves behind him vest in his representative. They pass to some person whom the dead man, or the law on his behalf, has appointed to represent him in the world of the living. This representative bears the person of the deceased, and therefore has vested in him all the inheritable rights, and has imposed upon him all the inheritable liabilities of the deceased. Inheritance is in some sort a legal and fictitious continuation of the personality of the dead man......for the representative is in some sort identified by the law with him whom he represents. The rights which the dead man can no longer own or exercise in propria persona, and the obligation which he can no longer in propria persona fulfil, he owns, exercises and fulfils in the person of a living substitute. To this extent, and in this fashion, it may be said that the legal personality of a man survives his natural personality, until, his obligation being duly performed, and his property duly disposed of, his representation among the living is no longer called for.... The representative of a dead man, thought the property of the deceased is vested in him, is not necessarily the beneficial owner of it. He holds it on behalf of Digitally signed by CS (Comm) No. 177/2023 Pitamber Pitamber Dutt Punjab & Sind Bank Vs Ankit Sharma Dutt Date: Page No. 11 of 16 2024.12.03 17:11:45 +0530 two classes of persons, among whom he himself may or may not be numbered. These are the creditors and the beneficiaries of the estate. Just as many of a man's right survive him, so also do many of his liabilities; and these inheritable obligations pass to his representative, and must be satisfied by him. Being, however, merely the representative of another, he is not liable in propria persona, and his responsibility is limited by the amount of the property which he has acquired from the deceased......A conjoint reading of the aforesaid provisions of the Contract Act, 1872, Transfer of Property Act, 1882 and the Act makes it clear that the word 'borrower' as defined in Section 2 (f) would mean the original borrower and after his death his legal representatives. The legal representatives to the extent they have inherited the estate from the deceased become a 'borrower' for the purpose of Section 2 (f) of the Act."
35. The Hon'ble Supreme Court of India in "Chiranjilal Shrilal Goenka (Deceased) through LRs Vs Jasjit Singh" (1993) 2 SCC 507 has held that:-
In the Official Liquidateor Vs Parthasarathi Sinha (1983) 2 SCR 211, this Court considered whether the legal representative would be bound by the liability for misfeasance proceeding against the deceased, while considering the question under Section 50 CPC this Court held that the legal representative, of course, would not be liable for any sum beyond the value of the estate of the deceased in his hands.Digitally signed
CS (Comm) No. 177/2023 by Pitamber
Punjab & Sind Bank Vs Ankit Sharma Pitamber Dutt Page No. 12 of 16
Dutt Date:
2024.12.03
17:11:54 +0530
Thus, as per the above decision,
the LRs liability would not be
absolute and would be governed
by Section 50 CPC.
36. The said legal proposition has been again reiterated by the Hon'ble Delhi High Court in "Rakesh Kumar Nanda through LR Vs Jitender Singh" 2019 SCC OnLine Del 11999.
37. The above legal propositions laid down by the Hon'ble Supreme Court of India, Hon'ble Delhi High Court as well as under Section 50 of CPC, makes it absolutely clear that LRs of a deceased can be held liable for the liability of a deceased only to the extent he or she has inherited the property / estate of the deceased and their liability is not absolute.
38. The plaintiff had already repossessed and sold the vehicle, qua which, the loan was advanced to Late Smt. Shobha Sharma and has realized amount of Rs.5,80,000/- as sale proceeds of the said vehicle.
39. The defendant no. 2 has pleaded and proved that she has not inherited any movable or immovable property after the demise of her mother Late Smt. Shobha Sharma.
40. The plaintiff has not given particulars of any other vehicle owned by Late Smt. Shobha Sharma or any movable or immovable property owned by her, either in the plaint or in their evidence, which has been inherited by defendants being her legal heirs.Digitally signed by Pitamber
Pitamber Dutt CS (Comm) No. 177/2023 Punjab & Sind Bank Vs Ankit Sharma Dutt Date: 2024.12.03 Page No. 13 of 16 17:12:02 +0530
41. The plaintiff has thus failed to place on record any cogent proof to show that defendants have inherited any movable or immovable property or any other amount from Late Smt. Shobha Sharma, after her death, therefore, defendants cannot be held liable for the payment of loan advanced by plaintiff to the borrower Late Smt. Shobha Sharma.
42. The plaintiff was required to aver in the plaint and prove on record by leading cogent proof, what property / estate, Late Smt. Shobha Sharma had left behind after her death, which has been inherited by defendants being her legal heirs and defendants could be held liable to pay her debt only to the extent they inherited the property of the deceased.
43. The plaintiff has only made vague assertions in the plaint that defendants have inherited the property and business left by Late Smt. Shobha Sharma in the form of movable and immovable property. However, no particulars whatsoever has been given by the plaintiff in the plaint as well as in their evidence to show which business, which property and which vehicle has been inherited by defendants from Late Smt. Shobha Sharma.
44. The plaintiff had already repossessed and sold the vehicle, qua which loan was advanced to Late Smt. Shobha Sharma and realized Rs.5,80,000/- as sale proceeds of the said vehicle. The plaintiff has not given any other particulars of any other vehicle or any property owned by Late Smt. Shobha Sharma, either in the plaint or in their evidence.Digitally signed
Pitamber by Pitamber Dutt CS (Comm) No. 177/2023 Punjab & Sind Bank Vs Ankit Sharma Dutt Date: 2024.12.03 17:12:12 +0530 Page No. 14 of 16
45. The plaintiff has thus failed to place on record any cogent proof to show that defendants have inherited any movable or immovable property or any other amount from Late Smt. Shobha Sharma, therefore, defendants cannot be held liable for the payment of loan advanced to the borrower Late Smt. Shobha Sharma.
46. The plaintiff is thus entitled to recover only a sum of Rs.94,863.48P due and recoverable against Late Smt. Shobha Sharma qua vehicle loan from defendant no. 3 Sh. Yogendra Nath Sharma, who stood as a guarantor for the said vehicle loan along with interest @ 9 % per annum from the date of filing of the suit till its actual realization.
47. The plaintiff is however not entitled to recover any other amount from defendants as plaintiff has failed to prove that defendants have inherited any property from the deceased.
48. In view of the above facts and circumstances, I am of the considered view that plaintiff is not entitled to recover a sum of Rs. 12,54,272.46P along with interest from the defendants.
49. The plaintiff is however entitled to recover a sum of Rs. 94,863.48P along with interest @ 9% per annum from defendant no. 3 Sh. Yogendra Nath Sharma only, who stood as a guarantor for the said vehicle loan advanced to Late Smt. Shobha Sharma. Issue no. 1 is accordingly decided in favour of plaintiff.
50. Issue No. 2. Relief.
In view of my findings on Issue no. 1, the suit filed by the Digitally signed CS (Comm) No. 177/2023 Pitamber by Pitamber Dutt Punjab & Sind Bank Vs Ankit Sharma Dutt Date: 2024.12.03 17:12:31 +0530 Page No. 15 of 16 plaintiff against defendants is partly decreed with cost against defendant no. 3 only. A Decree of Recovery of Rs.94,863.48P is passed in favor of the plaintiff and against defendant no. 3 along with interest @ 9% Per Annum from the date of filing of the suit till its realization. The suit filed against defendants qua other claims is however dismissed. A Decree Sheet be prepared accordingly.
File be consigned to Record Room after due compliance. Announced in the Open Court Digitally signed Pitamber by Pitamber Dutt on 03rd of December, 2024. Dutt Date: 2024.12.03 17:12:40 +0530 (PITAMBER DUTT) District Judge (Commercial Court-01) East District Karkardooma Courts, Delhi CS (Comm) No. 177/2023 Punjab & Sind Bank Vs Ankit Sharma Page No. 16 of 16