Bangalore District Court
Syndicate Bank vs M/S. P.N. Industries on 15 July, 2017
C.R.P.67] Government of Karnataka
Form No.9
(Civil) Title Sheet for
Judgement in
Suits
TITLE SHEET FOR JUDGMENTS IN SUITS
IN THE COURT OF SMALL CAUSES, (SCCH-16)
AT BENGALURU
Present: Sri. Subramanya N., B.A.L, LL.B.,
X Addl. Judge, Court of Small Causes
Bengaluru.
Date: on this the 15th July 2017
S.C. No.803/2017
Plaintiff : Syndicate Bank,
No.693, 3rd Block,
Ramamandir Road,
Rajajinagar,
Bengaluru - 560 010,
Represented by its
Chief Manager.
(Sri M.R. Shashidhar, Advocate)
Vs.
Defendant : M/s. P.N. Industries,
Represented by its
Prop. Mr. R. Mohan,
S/o Sri Ramadass,
Major, No.119,
13th Cross, L.N. Pura,
Bengaluru - 560 021.
Also at:
N.37/1, 13th Cross,
L.N. Puram,
Bengaluru - 560 021.
(Exparte)
Date of Institution of suit: : 30-05-2017
2 (SCCH-16) S.C. 803/2017
Nature of the suit: : Recovery of money
Date of commencement of :
recording of the evidence 14-07-2017
The date of pronounce- : 15-07-2017
ment of Judgment
Total duration : Year/s Month/s Day/s
00 01 15
JUDGMENT
This suit is filed to recover a sum of Rs.1,78,333/- from the defendant.
2. Briefly stated facts of the case are that plaintiff is bank and it is represented by its Chief Manager. The defendant approached the plaintiff and made an application seeking financial assistance for the purpose of meeting the working capital for his business. After verifying the application so made and the assets and liabilities furnished by him, a sum of Rs.1,50,000/- was sanctioned under SYND MSE covered under CGTMSE scheme on the primary security of stocks. After availing the loan defendant executed letter of proprietorship stating that he is running the trade in the name and style of M/s. P.N. Industries, of which he is the sole proprietor. He executed necessary documents in favour of the plaintiff, agreeing to repay the loan amount with interest at 11.25% compounded at monthly rests. As a security he hypothecated the stocks. But, he failed to maintain 3 (SCCH-16) S.C. 803/2017 the account regularly by repaying the balance amount and thus committed default. Therefore, his account was classified as NPA on 05-08-2015. In the meantime he executed on demand promissory note and acknowledgment of debt promising to pay Rs.1,55,823/- together with interest. However, he failed to keep up his promise. At last, legal notice dated 13-01-2017 was issued. Despite having received the same, he did not come forward to comply with the demand made therein. From 28-05-2017 till filing of the suit, the outstanding balance is Rs.1,78,333/-. Hence, this suit.
3. In spite of service of summons, the defendant has not appeared before the court. Consequently, he has been placed exparte.
4. So as to prove its case, the plaintiff has examined its Chief Manager as PW1 and got marked 13 documents as exhibits.
5. I have heard the arguments advanced by the learned counsel for the plaintiff.
6. On hearing the arguments and on going through the materials on record, the following points arise for the determination of the court.
1) Whether the plaintiff proves that the defendant availed loan of 4 (SCCH-16) S.C. 803/2017 Rs.1,50,000/- and executed promissory note and hypothecation agreement in its favour?
2) Whether the plaintiff proves that a sum of Rs.1,78,333/- is due to be payable by the defendant?
3) Whether the plaintiff is entitled to the suit claim with interest as prayed for?
4) What order or decree?
7. My findings on the above points are as under:-
Point No.1 : In the affirmative Point No.2 : In the affirmative Point No.3 : Partly in the affirmative Point No.4 : As per final order REASONS
8. POINT NOs.1 & 2:
These points are taken up together for common discussion for the sake of convenience.
9. The Chief Manager of the plaintiff bank has deposed reiterating the entire averments of the plaint. The documentary evidence, especially Ex.P1 and Ex.P2 go to show that the defendant made an application to borrow the loan from the plaintiff bank and after 5 (SCCH-16) S.C. 803/2017 verifying the assets and liabilities furnished by him, a sum of Rs.1,50,000/- has been sanctioned by the latter. Ex.P3 and Ex.P4 manifestly make it clear that the defendant hypothecated the stock as a security. These documents also establish that the interest at 11.25% per annum was agreed to be paid.
10. Since, he failed to make payment as agreed, notice Ex.P9 was issued to him to pay the balance which was due as on that date. The statement of accounts Ex.P12 discloses that as on 28-05-2017, the closing balance was Rs.1,78,333/-.
11. According to Section 4 of Banker's Book Evidence Act, 1891, as far as the statement of accounts is concerned, it has to be presumed that the contents thereof are correct. But, there is nothing on record to rebut this presumption. The defendants have neither disputed nor challenged both oral and documentary evidence adduced by the plaintiff. Under such circumstances, the above said presumption comes to the aid of the plaintiff. The documentary evidence substantially proves the case of the plaintiff and strengthens the testimony of PW1. Hence, I have no reasons to discard his evidence. Consequently, I hold that the case of the plaintiff is established and accordingly point No.1 and 2 are answered in the affirmative.
6 (SCCH-16) S.C. 803/2017
12. Point No.3:
The loan was sanctioned on 30-10-2013. This suit is filed for recovery of money. The limitation for this suit is 3 years from the above said date. But, Ex.P6 and Ex.P7 make it clear that the defendant has executed promissory note for Rs.1,55,823/- and acknowledged the debt on 17-09-2016, which is before the expiration of the limitation period. According to Sec.18 of Limitation Act, acknowledgement of debt extends the limitation period. Hence, I am of the opinion that the suit is well within time.
13. In the instant case, plaintiff has claimed interest at 15.25% per annum. But, the documentary evidence shows that the agreed rate of interest is 11.25% per annum only. Therefore, interest at 15.25% per annum cannot be awarded. However, the contractual rate of interest is to be awarded from the date of suit till realization since it is a commercial transaction. With this observation I hold that plaintiff is entitled to interest at 11.25% per annum and accordingly the point No.3 is answered partly in the affirmative.
14. POINT No.4:
For the forgoing discussions, I proceed to pass the following:
7 (SCCH-16) S.C. 803/2017 ORDER The suit of the plaintiff is hereby partly decreed with cost.
It is ordered and decreed that the defendant shall pay to the plaintiff a sum of Rs.1,78,333/- together with interest at 11.25% per annum on principal amount from the date of suit till realisation.
Draw decree accordingly.
(Dictated to the stenographer, transcribed by him, corrected by me and then pronounced in the open court on this 15th day of July 2017) (Subramanya N.), X Addl. Judge, Court of Small Causes, Bengaluru.
ANNEXURE List of witnesses examined on behalf of plaintiff:
PW1 Sri Dushyant Singh List of documents exhibited on behalf of plaintiff:
Ex.P1 Assets and Liability
Ex.P2 Process Note
Ex.P3 Letter of Proprietorship
Ex.P4 Composite Hypothecation Agreement
8 (SCCH-16) S.C. 803/2017
Ex.P5 Letter of Authority
Ex.P6 AOD
Ex.P7 Promissory Note
Ex.P8 Guarantee Fee Paid Statement
Ex.P9 Legal Notice
Ex.P10 Postal Receipt
Ex.P11 Postal Acknowledgment
Ex.P12 Statement of Accounts
Ex.P13 Certificate
List of witnesses examined on behalf of defendant:
None List of documents exhibited on behalf of defendant:
Nil (Subramanya N.), X Addl. Judge, Court of Small Causes, Bengaluru.