Delhi District Court
Punjab National Bank vs Sandeep Kumar on 27 October, 2018
IN THE COURT OF DR. HARDEEP KAUR ADJ
02(SHAHDARA)KKD COURTS/DELHI
CS No. 2631/2016
Punjab National Bank,
Having Its Head Office at:
7 Bhikaji Cama Place,
New Delhi110607
And Branch Office At:
Radhey Puri,
New Delhi 110021
(Through its AR Ms Shweta Srviastava
Dy Manager) ...Plaintiff
Vs.
1.Sandeep Kumar S/o Sh. Rajesh Kumar, R/o 4992, Gali no. 113, Sant Nagar, Burari Delhi84.
Office At:
M/s. Balaji Electricals 1853, Surya Bazar, Bhagirath Place, Chandni chowk, Delhi.
2. Rajesh Kumar R/o 4992, Gali no. 113, Sant Nagar, Burari Delhi84. ....Defendants Date of Institution :17.09. 2016 Date of Judgment :27.10.2018 Decision :Decreed.
CS-2631/16 page no. 1 of 10 [Suit for Recovery of Rs. 8,37,325/ (Rupees Eight Lac Thirty Seven Thousand three hundred twenty five only alongwith Pendente lite and future interest] J U D G M E N T
1. This is the suit for recovery of Rs 8,37,325/ filed by plaintiff against the defendants.
Brief facts:
2. Plaintiff bank is a Corporate Body constituted under the banking Companies (Acquisition & Transfers of Undertakings) Act, 1970. The plaintiff bank is having its Head Office at 7, Bhikajiu Cama Place, New Delhi and a Branch Office at Radhey Puri, Delhi110021, and has been carrying the banking business. The present suit is being filed by Ms Shweta Srivastava Dy. Manager of plaintiff bank who have been duly authorized / appointed as a true and lawful attorney of plaintiff bank through a GPA dated 11.08.2015 to institute, sign and file the present suit on behalf of the plaintiff bank who is competent to institute this suit.
Defendant no. 1 is a borrower and defendant no. 2 is the Guarantor.
Defendant no. 1/Sandeep Kumar having a business of electrical shop at 1853, Surya Bazar, Bhagirath Palace, Chandni Chowk, Delhi06 and is r/o 4992 Gali No. CS-2631/16 page no. 2 of 10 113 Sant Nagar, Burari, Delhi84, approached the plaintiff bank for Term Loan to the plaintiff bank for the purchase of a four wheeler vehicle make Hyundai T20 Sports, bearing regd. No. DL7P0113 of Rs. 6.5 lac vide sanction letter dated 07.07.2012 whereby the defendant no. 1 had given his unconditional acceptance to the terms and conditions of the said term loan.
The term loan was to be repaid within a period of seven years in equal monthly installment of Rs. 11500/ plus interest.
Defendant no. 2 Mr Rajesh Kumar is father of defendant no. 1, who is the guarantor of the defendant no. 1 in the said term loan has duly acknowledged and signed general form of the guarantor (in form of continuing guarantee) dated 07.07.2012. The defendant no. 2 has agreed to jointly and severally guarantee to the due payment and discharge on demand of all amounts together with interest, banking and other charges, including all relative cost and expenses incurred by the defendant no. 1.
For the purpose of availing loan, following security documents in favour of the plaintiff bank was executed by defendant no. 1 and Guarantor i.e. Defendant no. 2.
a) Loan agreement for Rs. 6.5 lacs dated 07.07.012, executed by the defendant no. 1.
CS-2631/16 page no. 3 of 10
b) Agreement of Guarantee for sum of Rs. 6.5 lacs executed by defendant no. 2 on 07.07.2012.
c) Instrument of Hypothecation of vehicle dated 07.07.2012 The loan agreement dated 07.07.2012 was executed by the defendant no. 1 wherein the defendant no. 1 had promised to pay the entire loan amounting to Rs. 6,50,000/ with interest of the bank ie. 12% per annum.
Defendant no. 2 duly acknowledged and signed general form of guarantor (in form of continuing guarantee) dated 07.07.2012. Defendant no. 2 has agreed to jointly and severally guarantee to the due payment and discharge on demand of all amount together with interest, banking and other charges, including all relative cost and expenses incurred by the defendant no. 1. Form of guarantee also includes that defendant no. 2 understand and agree that this guaranteee executed is irrevocable.
An instrument for hypothecation of the vehicle was also executed by the defendant no. 1 for Rs. 650000/ dated 07.07.2012 and vide the said instrument the defendant no. 1 hypothecated the vehicle make Hyundai I20 Sports bearing registration no. DL7P0113 in favour of the plaintiff including all fittings, tool, accessories, spares and parts whatsoever pertaining to the said vehicle with all CS-2631/16 page no. 4 of 10 replacement and additions made therein or thereto from time to time.
Defendants have not maintained any financial discipline towards repayment of loan and that plaintiff through its officers called upon the defendants may times and also sent written reminders over a period of time to the defendants for the same.
Defendants vide letter dated 27.09.2013 acknowledging the liability towards bank, requested for fresh agreement and settlement of the loan stating that the defendant no. 2/father of D1 was hospitalized and due to this reason, he could not repay his dues to the Bank. Accordingly, the bank granted further time for repayment of loan amount and executed a fresh supplementary agreement dated 29.09.2013 duly signed by the defendant no. 1. In spite of signing supplementary agreement and acknowledging his liability for getting some more time, the defendant no. 1 again failed to maintain the loan account and did not again paid a single penny towards the repayment of the loan amount alongwith the interest.
Plaintiff requested the defendants to pay the loan amount after they failed to pay the regular installments. Upon this the defendant no. 1 requested the plaintiff for some more time through a letter dated 01.08.2014 and CS-2631/16 page no. 5 of 10 duly acknowledged his liability towards the loan account by signing the balance and confirmation letter as on 31.07.2014.
Even though, defendants have failed to adhere to the financial discipline of the repayment of the loan amount including the principal amount, interest and other charges and as per the statement of account of the defendant no. 1, the account became NPA on 16.05.2014. The present loan account outstanding against defendants is Rs. 8,37,325/ alongwith interest and other charges.
Plaintiff issued several reminders to the defendants for regularization of their loan account but defendants have not paid any heed the same has not paid a single penny towards repayment of the loan amount alongwith interest.
Plaintiff finally issued a legal notice dated 03.12.2015 (Ex PW 1/10) through its counsel against the defendants through speed post on 04.12.2015 whereby demanding its entire outstanding amounts from the defendants however the defendants failed to pay single penny towards repayment of the loan amount alongwith the interest till date. Hence, the present suit.
3. Defendant no. 1 and 2 duly served on 01.10.2016. However, despite due service defendants failed to file their written statement within the statutory period hence, vide CS-2631/16 page no. 6 of 10 order dated 17.05.2017 right of defendants to file written statement is closed and the matter was listed for PE.
4. PW1/ Ms Shweta Srivastava / AR of plaintiff bank appeared on behalf of plaintiff bank and tendered her evidence by way of affidavit and reiterated the facts mentioned in the plaint. PW1 proved the following documents:
1. Copy of GPA Ex. PW1/1.
2. Copy of application forms Ex. PW1/2 (colly).
3. Copy of agreement of guarantee Ex. PW1/3 (colly).
4. Copy of hypothecation agreement and RC Ex. PW1/4 (colly).
5. Copy of letter dated 27.09.2013 Ex.PW1/5.
6. Copy of supplementary agreement and letter Ex. PW1/6.
7. Copy of letter dated 01.08.2014 Balance conformation letter dated 31.07.2014 Ex. PW1/7(colly).
8. Statement of loan account Ex. PW1/8 (colly).
9. Copy of reminders Ex. PW1/9 (colly).
10. Copy of legal notice with receipts of speed post Ex. PW1/10.
CS-2631/16 page no. 7 of 10
5. No one has appeared on behalf of defendants to cross examine PW1 and plaintiff closed its evidence. And the matter was fixed for arguments.
6. This Court has heard the arguments of learned Counsel for plaintiff and perused the material available on record. None has appeared on behalf of defendants to argue the matter. Hence, no defence has been put by the defendants in the present suit.
7. Perusal of the record shows that defendant no. 1 applied for loan vide document EX PW 1/2 (colly) for a sum of Rs 6,50,000/ and defendant no. 2 stood as guarantor ( EX PW 1/3) and letter of hypothecation was signed by defendants (Ex PW 1/4) The said facility was sanctioned and released after due execution of certain documents dated 07.07.2012 in favour of bank.
As per agreement the defendants were supposed to repay the loan amount within a period of seven years in equal monthly installment of Rs. 11500/ plus interest.
Defendant no. 1 started defaulting in making the payment and the account as such became irregular. Despite legal notice dated 03.12.2015 (Ex PW 1/10), defendant no. 1 did not pay the outstanding amounts.
As per statement of accounts (Ex PW 1/8, colly) maintained by the plaintiff bank a sum of Rs 8,37,325/ CS-2631/16 page no. 8 of 10 alongwith interest is still outstanding and payable by the defendants to the Plaintiff Bank.
There is nothing on record which could make this court to disbelieve this outstanding amount against the defendants, nor defendants have put any defence on their behalf. Hence this court has no other option but to believe the case of the plaintiff that a sum of Rs 8,37,325/ is 8,37,325/ i outstanding against the defendants.
8. As regards the relief claimed towards interest @ 11.75% p.a. since, the amount in the present case is for business transactions, it can be said that the transaction between the plaintiff and the defendants are commercial transactions in view of the Explanation II of sub section 1 of Section 34 of the Code of Civil Procedure, 1908.
This being a commercial transaction plaintiff is certainly entitled for being compensated in the form of interest at reasonable rate. If judicial notice of prevalent rate is taken, banks are normally charging rate form 9% to 12% on their advances depending upon the nature of loan. In the opinion of this court end of justice will be served if plaintiff is awarded simple interest at the rate of 11.75%.
9. Thus, a decree is passed in favour of the plaintiff and against the defendants for a sum of Rs 8,37,325/ with 8,37,325/ simple interest at the rate of 9% per annum, from the date CS-2631/16 page no. 9 of 10 of institution of this suit till actual realization of decreetal amount. Plaintiff shall also be entitled to costs. Decree sheet be drawn accordingly.
10. File be consigned to record room after necessary compliance.
(Typed to the dictation directly, corrected and pronounced in the open court on 27.10.2018) (Dr. Hardeep Kaur) ADJ02(SHD)/KKD/Delhi Digitally signed by HARDEEP HARDEEP KAUR KAUR Date:
2018.10.29 17:07:32 +0530 CS-2631/16 page no. 10 of 10