Karnataka High Court
Karnataka Vikas Grameena Bank vs Sri Yogish Kumar on 20 December, 2024
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COMAP No. 66 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF DECEMBER, 2024
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE S RACHAIAH
COMMERCIAL APPEAL NO. 66 OF 2022
BETWEEN:
KARNATAKA VIKAS GRAMEENA BANK
CONSTITUTED AND FUNCTIONING UNDER
REGIONAL RURAL BANKS ACT 1976 AND
ITS HEAD OFFICE SITUATED AT DHARWAD
IN DHARWAD DISTRICT OF KARNATAKA STATE
BRANCH INTER ALIA AT UJIRE
BELTHANGADY TALUK
DAKSHINA KANNADA DISTRICT
REPRESENTED BY ITS BRANCH MANAGER
AND POWER OF ATTORNEY HOLDER
SRI. B.N. UDAYA SHANKAR
S/O SRI B.V. NANJAPPA
AGED ABOUT 35 YEARS
...APPELLANT
(BY SRI. MOHAN RAO M, ADVOCATE)
AND:
SRI YOGISH KUMAR
S/O VASU POOJARY
AGED ABOUT 41 YEARS
RESIDING AT "NANDINI", ODALA
UJIRE VILLAGE AND POST - 574 240.
BELTHANGADY TALUK
DAKSHINA KANNADA DISTRICT
...RESPONDENT
(BY SRI. RAKSHITH KUMAR, ADVOCATE)
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COMAP No. 66 of 2022
THIS COMAP FILED UNDER SECTION 13(1A) OF THE
COMMERCIAL COURTS ACT 2015 PRAYING TO CALL FOR THE
RECORDS IN COM.O.S.NO. 393/2020 FROM THE I ADDITIONAL
DISTRICT AND SESSIONS JUDGE AND COMMERCIAL COURT AT
MANGALURU, DAKSHINA KANNADA DISTRICT AND SET ASIDE THE
JUDGMENT AND DECREE DATED 17/07/2021 AND DECREE THE SUIT
AS PRAYED FOR IN THE PLAINT IN FAVOUR OF THE PLAINTIFF BANK
BY AWARDING THE COST BY ALLOWING THIS APPEAL.
THIS APPEAL, HAVING BEEN RESERVED FOR JUDGMENT,
COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE V KAMESWAR RAO
and
HON'BLE MR JUSTICE S RACHAIAH
CAV JUDGMENT
(PER: HON'BLE MR JUSTICE S RACHAIAH)
1. This Commercial Appeal has been filed by the unsuccessful plaintiff / appellant, being aggrieved by the impugned judgment and decree dated 17.07.2021 passed in Com.O.S.No.393/2020 on the file of the I Addl. District Judge and Commercial Court, Mangaluru, D.K.
2. The rank of the parties in the Trial Court henceforth will be considered accordingly for convenience. Brief facts of the case:
3. The case of the plaintiff is that it is a financial institution registered under the Regional Rural Banks Act, 1976. The defendant approached the plaintiff for financial -3- COMAP No. 66 of 2022 assistance for meeting his financial necessities on 08.10.2011. The plaintiff sanctioned loan of Rs.3,00,000/-. The defendant executed Composite Hypothecation Agreement in favour of the plaintiff - Bank for the said amount. The repayment schedule was fixed to 60 EMIs commencing from 01.12.2011.
4. It is further averred in the plaint that, as on 12.12.2014, the defendant was due a sum of Rs.3,42,069/- along with future interest. After compliance of the statutory requirements, a suit was filed by the plaintiff and summons were issued to the defendant.
5. The defendant after entering his appearance, filed written statement contending that the suit filed by the plaintiff is false and baseless and the same is unsustainable under law.
6. Further he contended that he has not borrowed any loan from the plaintiff - Bank on 08.10.2011 and not executed any receipt and acknowledgement of debt as claimed by the plaintiff. However, he further stated that he had borrowed loan from the plaintiff - Bank in the year 2010 -4- COMAP No. 66 of 2022 and he has cleared the said loan on 08.10.2011 by paying Rs.1,70,692/-.
7. It is further contended that at the time of clearing the loan, the Bank stated to have received his signatures on some documents and those documents have been misused by the Bank by claiming the amount which is illegal etc., Further, he raised the dispute relating to limitation. According to the defendant, the suit filed by the Bank is barred by limitation. However, the Trial Court after appreciating the oral and documentary evidence on record, dismissed the suit of the plaintiff with cost of Rs.50,000/-. As against the said impugned order, the plaintiff has approached this Court.
8. Heard Sri Mohan Rao.M., learned counsel for appellant and Sri Rakshith Kumar, learned counsel for respondent.
9. It is the submission of the learned counsel for the appellant / plaintiff that the impugned judgment and decree passed by the Trial Court is erroneous and not proper and therefore, the same is liable to be set aside. -5- COMAP No. 66 of 2022
10. It is further submitted that Ex.D3 - statement of S.B. Account extract should have been considered by the Trial Court properly. In fact, the defendant has withdrawn the amount from his account after the said amount was credited to his account by the Bank. The defendant has not explained regarding the said amount. However, the Trial Court did not consider the merit of the case. Hence, the impugned judgment has been passed.
11. It is further submitted that the defendant had borrowed loan of Rs.3,00,000/- on 08.10.2011 and executed the loan hypothecation agreement and also executed acknowledgement of debt on 25.08.2014. Ex.P10 is the document would indicate that on 08.10.2011 and 13.10.2011, the Bank had transferred amount of Rs.2,00,000/- and Rs.1,00,000/- respectively to the account of the defendant.
12. The Trial Court has committed grave error only on the ground that Ex.P1 - Composite Hypothecation Deed of Agreement was purchased in the name of another person, that may not be relevant as the signature on the said document has not been controverted.
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13. It is further submitted that the Trial Court committed grave error in appreciating the evidence, both oral and documentary. Therefore, interference with the said findings is necessary. Making such submissions, learned counsel for appellant / plaintiff prays to allow the appeal.
14. Per contra, learned counsel for respondent / defendant justified the judgment and decree passed by the Trial Court and submitted that the defendant has not borrowed any amount from the Bank as stated. In fact, on 08.10.2011, he had deposited the amount of Rs.1,70,692/- to clear the earlier loan which was borrowed by him as per the document at Exs.D1 and D2. Exs.D3 and D4 are the documents relating to the statement of account and pigmy account statement etc.,
15. It is further submitted that the amount mentioned in the alleged loan account and Ex.P1 - hypothecation agreement are baseless and false. In fact, Ex.P1 is the stamp paper purchased in the name of other person and it is said that the defendant has executed the same which has been denied by the defendant. Such being the fact, -7- COMAP No. 66 of 2022 the plaintiff ought to have proved the said document in a proper manner. In the absence of proper proof, adverse inference has to be drawn on the said document. Accordingly, the Trial Court after appreciating the oral and documentary evidence on record, opined that the plaintiff - Bank has failed to prove the case and dismissed the suit. Therefore, interference with said findings may not be proper. Making such submissions, learned counsel for respondent prays to dismiss the appeal.
16. After having heard learned counsel for the respective parties and also perused the documents available on record, the points which arise for our consideration are:-
(i) Whether the appellant / plaintiff proves that the respondent / defendant had borrowed loan of Rs.3,00,000/- and the defendant is liable to pay the said amount?
(ii) Whether the plaintiff proves that the suit is filed within time?
(iii) Whether the findings of the Trial Court in dismissing the suit are justified? -8- COMAP No. 66 of 2022
(iv) Whether the appellant has made out grounds to interfere with the said dismissal?
Reg: Point Nos.(i), (iii) and (iv) :-
17. Since all the above three points are inter-connected with each other, they are taken up together for consideration. The Trial Court while dismissing the appeal held that the alleged loan transaction that took place on 08.10.2011 appeared to be doubtful on the ground that, Ex.P1 - hypothecation agreement dated 08.10.2011 said to have been executed by the defendant on the same day, however, the stamp paper was purchased on 13.09.2011 in the name of Sundara who is not the defendant.
18. The Trial Court further opined that the defendant had cleared his earlier loan which he borrowed in the year 2010 by depositing the amount of Rs.1,70,692/-. Such being the fact, the alleged loan transaction held to be unsustainable.
19. After having considered the findings of the Trial Court, it is necessary to re-assess the facts of the case in order to appreciate the case. Ex.P1 is the hypothecation agreement said to be executed by the defendant on -9- COMAP No. 66 of 2022 08.10.2011. However, the stamp paper relating to the said document was purchased on 13.09.2011 in the name of Sundara. The recitals of the said document would indicate that the defendant had borrowed a sum of Rs.3,00,000/- on 08.10.2011. Though it is controverted, it is a mere denial. Therefore, the said denial cannot be accepted without any other documentary support.
20. Ex.P2 is the document named as agreement of acknowledgement of debt dated 25.08.2014. It would indicate that balance outstanding as on 25.09.2014 was a sum of Rs.3,61,645/-. Ex.P10 is the document which is considered as account extract for the period of 11.10.2006 to 22.09.2017. The said account extract would indicate that the Bank has transferred amount of Rs.2,00,000/- and Rs.1,00,000/- on 08.10.2011 and 13.10.2011 respectively. The plaintiff has proved that the defendant has borrowed a sum of Rs.3,00,000/- loan on executing certain documents. However, the Trial Court considering the stamp paper found in Ex.P1 was purchased in the name of Sundara and opined that the loan transaction had not taken place, which appears to be erroneous and not proper.
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COMAP No. 66 of 2022
21. The Trial Court should have considered the documents which are marked as Exs.P2 and P10 and should have arrived at a conclusion. The defendant even though got marked four documents as Exs.D1 to D4, those documents may not be helpful to the defendant for the reason that Ex.D1 is the loan account extract which indicates that on 08.10.2011, he has cleared the loan. Ex.D2 - loan extract which also indicates that no balance need to be paid. Ex.D3 / Ex.P10 relating to the account of the defendant. There were two entries on 08.10.2011 and 13.10.2011. These two entries would indicate that the amount was transferred from the Bank to the account of the defendant. The said document should have been considered by the Trial Court properly while appreciating the evidence. It is needless to say that mere denial of the loan transaction on the technical ground is not proper and cannot be accepted. The judgment and decree passed by the Trial Court is liable to be set aside. Reg: Point No. (ii)
22. As regards point No.(ii) is concerned, the loan has been obtained by the defendant on 08.10.2011 and acknowledgment of debt was executed on 25.08.2014.
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COMAP No. 66 of 2022 The suit was filed on 27.08.2015. Therefore, the suit filed by the plaintiff is within time. Hence, the Point No.(ii) is answered in the 'Affirmative'. We are in consonance with the findings of the Trial Court relating to the said point.
23. In the light of the observations made above, we proceed to answer the points which arose for our consideration as under:-
Point No.1 - In the 'Affirmative' Point No.2 - In the 'Affirmative' Point No.3 - In the 'Negative' Point No.4 - In the 'Affirmative'
24. Accordingly, we proceed to pass the following:-
ORDER
(i) The Commercial Appeal is allowed.
(ii) The judgment and decree dated 17.07.2021 passed in Com.O.S.No.393/2020 by the I Additional District Judge and Commercial Court, Mangaluru, D.K., are set aside.
(iii) The suit is decreed. The defendant is liable to pay a sum of Rs.3,46,460/- (Rupees Three
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COMAP No. 66 of 2022
Lakhs Forty Six Thousand Four Hundred and Sixty) only.
(iv) The defendant is also liable to pay the interest at the rate of 13.5% p.a., as agreed upon on the principal amount, from the date of the decree till realization.
(v) The defendant shall also liable to pay the cost of both the suit and the appeal as per law.
(vi) The Registry is directed to draw up the decree accordingly.
(vii) In view of the disposal of the appeal, all pending I.As., do not survive for consideration and the same are also disposed of accordingly.
Sd/-
(V KAMESWAR RAO) JUDGE Sd/-
(S RACHAIAH) JUDGE Bss