Bangalore District Court
The Federal Bank Ltd vs Mrs. Beena Varghese on 23 January, 2023
1 Com.O.S.No.1328/2022
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl.City Civil & Sessions Judge
Bengaluru City.
Dated this the 23rd day of January 2023
Com.O.S.No.1328/2022
Plaintiff: The Federal Bank Ltd.,
Registered Office at Aluva,
Kerala-683 101
Represented by its Senior Manager
The Federal Bank Ltd.,
Jalahalli Branch, No17/1,
"SAVITHI", S.M.Road, Jalahalli West,
Bengaluru-560 015
(By V.V.K., Advocate)
-vs-
Defendants: Mrs. Beena Varghese,
Proprietor "M/s. Ivine Fashions",
#No. 1167, HMT Layout,
4th Cross, Nagasandra,
Bengaluru-560 073.
Also at:
Ivine Fashions,
No 4 & 18, 11th Cross,
2 Com.O.S.No.1328/2022
1st Floor, Near Axis ATM,
Rukmini Nagar,
Nagasandra Post,
Bengaluru 560 073.
(Exparte)
Nature of the suit Money suit
Date of institution of the 14.09.2022
suit
Date of commencement of 13.12.2022
recording of the evidence
Date on which the 23.01.2023
judgment was pronounced
Total duration Year/s Month/s Day/s
00 04 09
JUDGMENT
This is a suit filed by the plaintiff bank against the defendant for recovery of Rs.7,43,835/- together with future interest @ 17% p.a. with monthly rest from 12.09.2022 till its realization.
2. Nutshell of the plaintiff's case are as under :
The plaintiff bank in its plaint has alleged that the defendant has approached and requested to grant a cash credit (PMMY) loan facility of Rs.5,00,000/- as working capital requirements of her business in the name and style of M/s. IVINE FASHIONS which is into manufacturing of Footwear made primarily of Vulcanized or Moulded Rubber and Plastic, Manufacture of Rubber Footwear, 3 Com.O.S.No.1328/2022 plastic and PVC; canvas among others, considering the request of the defendant sanctioned Cash Credit Limit of Rs.5,00,000/- as stated below:
A/c. No. Date of Amount Disbursed
Sanction
PMMY by debuting in 08.05.2019 Rs.5,00,000/-
A/c
No.15825500000537
TOTAL Rs.5,00,000/-
(Rupees Five Lakhs
Only)
3. In consideration of the availment of the Cash Credit facility the defendant has executed the agreement for Cash Credit for Rs.5,00,000/-, on demand promissory note and security delivery letter for sum of Rs.5,00,000/- and the defendant agreed the terms and conditions of the loan and agreed to repay the loan along with interest at 13.9% p.a. with monthly rest and executed agreement for working capital of Rs.5,00,000/- in its favour and the defendant has not only hypothecated movable properties but also hypothecated the suit schedule property and agreed to repay the entire outstanding amount of the loan in lump-sum on the expiry of limit or earlier demand with interest at 13.95% p.a. with monthly rest or at such other rates as may be prescribed by the bank from time to time. The interest was due and payable of 24 4 Com.O.S.No.1328/2022 months and on subsequent dates. The defendant agreed to pay additional interest at 2% or such other rates from time to time over and above the rate of interest in case of default and violation of the terms of the loan agreement. The Cash Credit Limit was granted for the period of 24 months.
4. The plaintiff bank in its plaint has further alleged the defendant availed the Cash Credit Facility for her business/ Commercial purpose failed to repay the loan amount with interest as agreed and she became default in payment of outstanding amount and she is irregular in the matter of repayment as per the agreed terms and conditions, thereby, issued reminder letters dated 07.01.2021 and 08.03.2021 calling upon the defendant to repay the liabilities. But the defendant failed to discharge her liability as agreed and the defendant is due a sum of Rs.7,43,835/- with interest at 17% p.a. with monthly rest including over due interest at 4%. The cause of action for the suit which arose on 08.05.2019 when the defendant availed the temporary overdraft facility of Rs.5,00,000/- by agreeing to repay the same and when the defendant failed to discharge the liability with the jurisdiction of this court and prays for decree the suit. 5 Com.O.S.No.1328/2022
5. In response of the suit summons the defendant did not appear nor filed her written statement as she was placed exparte.
6. The plaintiff bank in order to prove the plaint averments has examined its Senior Manager as PW.1 and got marked the documents as Ex.P.1 to Ex.P.9 and the plaintiff bank has not examined any witness in its favour.
7. Heard the arguments on the plaintiff side.
8. The points that arise for court consideration are as under:
1. Whether the plaintiff bank is entitled for the relief as prayed for?
2. What order or decree?
9. My answer to the above points are as under:
Point No.1: In the Affirmative;
Point No.2: As per final order, for the following;
REASONS
10. POINT NO.1: The plaintiff bank has approached the court on the ground that the defendant had availed the loan of Rs.5,00,000/- being the proprietor of M/s. IVINE FASHIONS for business purpose by agreeing to repay the loan amount with interest but she did not keep up her promise as agreed. There by, the plaintiff bank has filed the instant suit against the defendant. 6 Com.O.S.No.1328/2022
11. The plaintiff bank in order to prove plaint averments has examined its Senior Manager as PW.1 who filed her affidavit as her chief-examination by reiterating the plaint averments stating that the defendant being the proprietor of M/s. IVINE FASHIONS approached the bank and sought for financial assistance of Rs.5,00,000/- for her business purpose. Accordingly, loan of Rs.5,00,000/- has been sanctioned under Cash Credit PMMY loan facilities and defendant has executed the documents in favour of the bank by agreeing to repay the loan amount with interest in 24 monthly installments but the defendant did not keep up her promise as agreed in spite of repeated request and demand.
Thereby, got issued a reminders calling upon her for payment of outstanding due amount but she did not turned up nor clear the outstanding due amount. Thereby the plaintiff bank has filed the instant suit against the defendant.
12. It is an admitted fact the plaintiff bank has filed the instant suit against the defendant for recovery of loan amount with interest on the ground that the defendant has availed loan for business purpose. Now, the question arises whether this court having the jurisdiction to adjudicate the matter which is dispute and whether this court having the pecuniary jurisdiction, though 7 Com.O.S.No.1328/2022 there is no dispute on these aspects. But, before considering the other aspects it is necessary to consider these aspects. Thus, this court drawn its attention on Sec.2(i)(c) of Commercial Courts Act, 2015 which reads like this:
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing
agreements;
8 Com.O.S.No.1328/2022
(x) management and consultancy
agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment
agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.9 Com.O.S.No.1328/2022
13. The provision under Sec.2(c)(i) which referred above is very much clear the first category which referred above, includes disputes of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents including enforcement and interpretation of such documents. The definition naturally will cover the dispute of all kinds of ordinary transactions of merchants, bankers, financiers and traders. The banks are established under Banking Regulation Act for the purpose of business and commerce, naturally all transaction of bank about giving of loans, recovery thereof, deposits in banks etc., should fall within the category of commercial dispute. If the specified value there of is more than Rs.3,00,000/-. So the facts which pleaded in the plaint comes under the commercial dispute.
14. Now the question is whether the dispute which stated supra comes under the jurisdiction of commercial court. Thus, this court drawn its attention on Sec.6 of Commercial Courts Act, 2015 which reads like this:
Section 6: Jurisdiction of Commercial Court.
6. The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial 10 Com.O.S.No.1328/2022 dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction.
Explanation.-For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
The above provision is very much clear that the commercial court shall have the jurisdiction to try all suits and applications relating to commercial dispute.
15. Now, the question is whether this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute. Thus, this court drawn its attention on Sec.3 of Commercial Courts Act, 2015 which reads like this:
Section 3: Constitution of Commercial Courts.
3. (1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction 11 Com.O.S.No.1328/2022 and powers conferred on those Courts under this Act:
2[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.] 3[(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
16. The above provision is very much clear that by virtue of the notification specified the pecuniary value of this court which shall not be less than Rs.3,00,000/- Admittedly, the plaintiff in the 12 Com.O.S.No.1328/2022 plaint itself has stated that the defendants are due a sum of Rs.7,43,835/- with interest and the plaintiff bank has filed the instant suit against the defendants on 14.09.2022 i.e. after the amendment of Commercial Courts Act, 2018. Prior to the amendment, the pecuniary jurisdiction of the commercial court is of Rs.1 Crore and above, but by virtue of the amendment of Commercial Courts Act, the pecuniary jurisdiction of the commercial court shall not be less than Rs.3,00,000/-. So this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute by virtue of the provisions which stated supra.
17. The plaintiff bank in support of the oral evidence has produced the documents which marked as Ex.P.1 to Ex.P.9. Ex.P.1 is the loan application which clearly reflects the defendant has approached the bank and sought for loan of Rs.5,00,000/- for her business purpose. Ex.P.2 is the sanction order reflects the plaintiff bank sanctioned the loan of Rs.5,00,000/- to the defendant under Pradhana Manthri Mudra Yojana scheme for her business purpose. Ex.P.3 is the sole proprietorship declaration reflects the defendant along the proprietor of the defendant M/s. IVINE FASHIONS. Ex.P.4 is the agreement for working capital which executed by the defendant in favour of the plaintiff bank. Ex.P.5 is the on Demand 13 Com.O.S.No.1328/2022 Promissory Note which executed by the defendant after availment of the loan of Rs.5,00,000/- in favour of the plaintiff bank. Ex.P.6 is the security delivery letter executed by the defendant in favour of the plaintiff bank. Ex.P.7 to Ex.P.9 are the recall notice and statement of accounts which reflects the plaintiff bank got issued a reminders to the defendant calling upon her to clear the outstanding due amount and defendant was due a sum of Rs.7,43,835/- as on the date of suit. So, the documents which are marked as Ex.P.1 to Ex.P.9 are coupled with the oral evidence of the PW.1.
18. If at all the defendant was not approached the plaintiff bank nor availed the loan of Rs.5,00,000/- under Pradhana Manthri Mudra Yojana scheme nor executed the documents in favour of the plaintiff bank. She would have appeared and resisted the claim of the plaintiff bank but the reasons best known to her in spite of service of summons did not appear nor resisted the claim of the plaintiff bank. So, the contents of the plaint and documents which are marked as Ex.P.1 to Ex.P.9 are remained unchallenged and plaintiff bank has proved its case through oral and documentary evidence. Hence, I am of the opinion that the point No.1 is answered in the Affirmative. 14 Com.O.S.No.1328/2022
19. POINT NO.2: In view of my answer to point No.1 as stated above, I proceed to pass the following;
ORDER The suit of the plaintiff bank is decreed with costs.
The defendant is hereby directed to pay the decreetal amount of Rs.7,43,835/- with future interest at 17% p.a. with monthly rest from 12.09.2022 till its realization.
Draw decree accordingly.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 23rd day of January, 2023) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City List of witnesses examined on behalf of plaintiff:
P.W.1 Rajani D List of witnesses examined on behalf of defendant: 15 Com.O.S.No.1328/2022
Nil List of documents exhibited on behalf of plaintiff:
Ex.P.1 Loan application form dated
06.02.2019
Ex.P.2 Sanction order dated 08.05.2019
Ex.P.3 Sole Proprietorship declaration
Ex.P.4 Agreement for working capital dated
20.05.2019
Ex.P.5 On demand promissory note dated
20.05.2019
Ex.P.6 Security delivery letter
Ex.P.7 Recall notice dated 07.01.2020
Ex.P.8 Recall notice dated 08.03.2021
Ex.P.9 Statement of accounts with certificate
List of documents exhibited on behalf of defendant:
Nil (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City.16 Com.O.S.No.1328/2022
Judgment pronounced in the open court vide separate:
ORDER The suit of the plaintiff is decreed with costs.
The defendant is hereby
directed to pay the decreetal
amount of Rs.7,43,835/- with
future interest at 17% p.a. with
monthly rest from 12.09.2022 till
its realization.
Draw decree accordingly.
(P.J. Somashekara)
LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City