Bangalore District Court
The Bank Of Baroda vs Sri. M.D.Ganesh on 4 December, 2020
1 SC No.1790/2019
SCCH-23
IN THE COURT OF SMALL CAUSES (SCCH23)
AT BENGALURU
DATED THIS THE 4th DAY OF DECEMBER 2020
PRESENT: SMT.ASHWINI M. HATTIHOLI
(B.Com., LL.B),
XXI ADDL. SCJ & ACMM
MEMBER MACT,
BENGALURU.
S.C No.1790/2019
PLAINTIFF/S : The Bank of Baroda
(Earlier Vijaya Bank), A body
Corporate constituted by and
under the Banking Companies
(Acquisition & Transfer of
Undertakings) Act, 1970, having
Head office situated at Baroda
Bhavan, R C Dutt Road, Alkapuri,
Vadodara, Gujarat State and
interalia Branch Office at Peenya
Branch, Bengaluru.
Represented by its Sr.Branch
Manager & P.A holder
Sri. Sanjay Wali,
S/o Shivaputra Wali,
Aged about 37 years.
(By Sri.Nagaraj Damodar, Advocate )
V/S
DEFENDANT/S : 1. Sri. M.D.Ganesh,
S/o Late Devaiah,
2 SC No.1790/2019
SCCH-23
Aged about 53 years,
R/at No.12, 1st cross,
Ulsoor, A Street, S.Puram,
Bengaluru 560008.
Also at
M/s.S.M.Kannappa Automobiles
(P)Ltd, Unit No.II, 7th Mile Stone,
Tumkur road, Peenya,
Bengaluru560058.
2. Sri. B.R.Chandra Prasad,
S/o Late Rajesh,
Aged about 42 years,
M/s.S.M.Kannappa Automobiles
(P)Ltd, Unit No.II, 7th Mile Stone,
Tumkur road, Peenya,
Bengaluru560058.
(Abated as dead)
3. Smt.T.A.Radha,
W/o Ganesh M.D,
Aged about 43 years,
R/at No.12, 1st cross,
Ulsoor, A Street, S.Puram,
Bengaluru 560008.
(D1 & 3 placed Exparte)
Date of the Institution of the suit : 21.12.2019
Nature of the suit (suit on pronote : Recovery suit
suit for declaration andpossession
suit for junction, etc.,)
Date of commencement of : 26.11.2020
recording of the evidence
3 SC No.1790/2019
SCCH-23
Date on which the Judgment : 4.12.2020
was pronounced
Total duration Years Month/s Days
11 17
XXI ADDL. SCJ & ACMM
MemberMACT, Bengaluru
JUDGMENT
This suit is filed for recovery of Rs.93,959.10/ from the defendants jointly, severally and personally together with future interest @ 16% per annum and with penal interest @ 2% p.a., compounded monthly, from 1.12.2019 till the date of realization along with costs.
2. Plaintiff Bank is the Creditor and the Defendant No.1 is the borrower. Whereas defendants No.2 & 3 are Guarantors in the present suit transaction. That on 27.6.2007 the defendant No.1 had availed loan facility of Rs.1,00,000/ by executing necessary documents under loan account No.117307131000007, for which defendants No.2 and 3 had stood as guarantors. The borrower agreed to repay 4 SC No.1790/2019 SCCH-23 the loan amount within 48 months. The monthly installment was fixed at Rs.2,835/ from 27.7.2007 along with interest @ 16% p.a. with monthly rests. After utilising the said loan facility, the defendant No.1 failed to adhere to the repayment schedule and thus became a chronic defaulter. The Plaintiff Bank made repeated demands and requests to the defendant No.1 to discharge the outstanding liability. They also issued him personal letters. Inspite of it he failed to repay the balance outstanding in the loan account. Likewise the defendants No.2 and 3 also failed to discharge their liabilities as guarantors. The liability of the defendants No.2 and 3 is coextensive with that of the defendant No.1. Hence both of them are jointly and severally liable to repay the balance outstanding amount to the Plaintiff Bank.
3. Despite service of suit summons, defendants No.1 & 3 failed to appear before the Court. Hence they were placed exparte on 30.9.2020. Defendant No.2 was reported to be dead. Hence the suit stood abated against him. 5 SC No.1790/2019
SCCH-23
4. The Assistant Manager and Authorised Signatory of the Plaintiff Bank viz., Miss. Harsha Agarwal D/o Pramod Agarwal got examined herself as PW1. Exs. P1 to P10 were marked.
5. Learned counsel for Plaintiff Bank addressed his arguments.
6. Now, the points that arise for my consideration are:
1. Whether plaintiff Bank proves that the defendants are jointly, severally and personally liable to pay Rs.93,959.10/ along with interest as claimed?
2. What order?
7. My findings on the above points are as under:
Point No.1: Partly In the Affirmative Point No.2: As per final order for the following:
REASONS
8. Point No.1 : PW.1Miss.Harsha Agarwal D/o Pramod Agarwal, the Assistant Manager and Authorized Signatory of the Plaintiff Bank filed affidavit in lieu 6 SC No.1790/2019 SCCH-23 of her examinationinchief and reiterated the plaint averments. To substantiate her contention, she produced Exs.P1 to 10. Exs.P1 to 4 are the Loan application, Loan sanction letter, Letter of repayment and On demand promissory note respectively, executed by the Defendant No.1 in favour of the Plaintiff Bank with respect to the loan facility availed by him. Letter of Guarantee executed by the Defendants No.2 and 3 in favour of plaintiff Bank, undertaking jointly/severally to guarantee the payment of loan borrowed by defendant No.1 is marked as Ex.P5. The acknowledgments of liability dated 26.5.2010, 20.5.2013, 4.5.2016 & 25.2.2019 are respectively marked at Exs.P6 to 9. Ex.P10 is the duly certified computerised statement of accounts pertaining to the account of Defendant No.1, which discloses that he is due to pay a sum of 7 SC No.1790/2019 SCCH-23 Rs.92,959/ (with respect to A/c No.117307131000007) , as on 30.11.2019.
9. On the other hand, inspite of due service of suit summons upon them, the defendants No.1 & 3 did not appear before the Court. Hence, they were placed exparte. Thus, the evidence led by the plaintiff bank has remained unrebutted and unchallenged in respect of the loan transaction and dues payable by the defendants to the plaintiffbank. Therefore, this Court has no other option, but to rely upon the evidence led by the plaintiff, which is more probable and reliable.
10. As far as the interest from date of borrowing loan upto the date of filing the suit, the plaintiff bank has claimed the same at the rate agreed in Ex.P1 to
4. The said exhibits reveal that the defendant No.1 at the time of borrowing the loan had agreed to repay the principal sum of Rs.1,00,000/ together with 8 SC No.1790/2019 SCCH-23 interest at the rate of 16% p.a. Further, the defendant No.1 himself had agreed to pay the additional interest at 2% per annum, in case if there is default in the repayment schedule. As the defendant No.1 has been irregular in repaying the loan amount, the plaintiffbank has rightly calculated the interest and is justified in claiming the suit claim amount of Rs.93,959.10/. Admittedly, the liability of defendant No.3 who had stood as guarantor is co extensive with that of the debtor i.e., defendant No.1. Hence she is jointly and severally liable to pay the aforesaid amount with interest.
11. Though, in view of discussion made above, it is clear that Defendants No.1 & 3 fell in due of suit claim and plaintiffbank is entitled for Judgment and Decree in its favour for that amount. But, the future rates of interest at the rate of 16% p.a. as well as the penal interest @ 2% p.a, claimed by the plaintiffbank 9 SC No.1790/2019 SCCH-23 is exorbitant. Sec.34(1) of C.P.C. mandates that the court shall not grant interest at such rate not exceeding 6% p.a. At the same time, court has also the power to award such rate of interest deemed reasonable for the period from the date of suit till the date of payment. Sec.34(1) of C.P.C. has to be read with proviso to Sec.34(1) C.P.C. There is no evidence to come to the conclusion that the transaction was a commercial one. In this view, I am of the opinion that awarding future interest at the rate of 6% p.a. is proper and reasonable. Hence, the Plaintiffbank is entitled to recover the future interest at the rate of 6% p.a. Accordingly, the above point is answered 'Partly in the Affirmative'.
12. Point No.2 : For the reasons discussed above, this court pass the following;
O R D E R The suit of plaintiffbank is hereby partly decreed with costs.
10 SC No.1790/2019
SCCH-23 The defendants No.1 & 3 are jointly and severally liable to pay the suit claim amount of Rs.93,959.10/ with future interest at the rate of 6% p.a. from the date of suit till the date of realisation.
The defendants shall pay the decreetal amount within two months from the date of this order.
Draw decree accordingly.
(Dictated directly on the computer to the Stenographer, script revised, corrected, signed and then pronounced by me in the Open Court on this t h e 4 t h d ay o f D e c e m b e r , 2 0 2 0 ) (ASHWINI M. HATTIHOLI) XXI ADDL. SMALL CAUSES JUDGE BENGALURU ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF/S:
PW1: Miss.Harsha Agarwal LIST OF DOCUMENTS MARKED ON BEHALF OF THE PLAINTIFF/S:
Ex.P.1 Loan Application dated 1.6.2007 11 SC No.1790/2019 SCCH-23 Ex.P.2 Sanction letter dated 27.6.2007 Ex.P.3 Letter of repayment dated 27.6.2007 Ex.P.4 On demand promissory note dated 27.6.2007 Ex.P.5 Letter of guarantee dated 27.6.2007 Ex.P.6 Acknowledgement of liability dated 26.5.2010 Ex.P.7 Acknowledgement of liability dated 20.5.2013 Ex.P.8 Acknowledgement of liability dated 4.5.2016 Ex.P.9 Acknowledgement of liability dated 25.3.2019 Ex.P.10 Certified statement account extract of defendant No.1 LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT/S:
None LIST OF DOCUMENTS MARKED ON BEHALF OF THE DEFENDANT/S:
Nil (SMT.ASHWINI M. HATTIHOLI) XXI ADDL. SMALL CAUSES JUDGE BENGALURU