Delhi District Court
Canara Bank vs M/S Luxmi Plastic on 30 August, 2025
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
IN THE COURT OF VINOD YADAV:
DISTRICT JUDGE (COMMERCIAL COURT)-02:
NORTH-WEST DISTRICT: ROHINI COURTS: NEW DELHI
CNR No.DLNW010111242024
Civil Suit (Comm.) 715/2024
In the matter of:
Canara Bank,
Through its Sr. Manager,
Branch : Tri Nagar, 1542, Ganeshpura,
Tota Ram Market, Delhi-110035.
.....Plaintiff
(Through Sh. Varun Mittal, Advocate)
Versus
M/s. Luxmi Plastic,
Through its Prop. Sh. Neeraj Jain,
C-6/7, Lawrence Rd. Indl. Area
Also at: 3379/246, Hansa Puri,
Tri Nagar, Delhi-110035.
.....Defendant
(Through Ms. Ritu, Adovate)
(Defence lying struck off vide order dt. 25.07.2025)
Date of Institution of Suit : 19.11.2024
Date of hearing final arguments : 30.08.2025
Date of judgment : 30.08.2025
Suit for recovery of Rs.11,86,372.69(Rupees eleven lacs eighty six
thousand three hundred seventy two and Paise sixty nine only) along with
pendente lite and future interest
Suit (Ex-parte) "Decreed" Page 1 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
JUDGMENT IN TERMS OF ORDER 8 RULE 10 CPC
1. This is a suit for recovery filed on behalf of plaintiff against
the defendant, thereby seeking a decree in the sum of
Rs.11,86,372.69(Rupees eleven lacs eighty six thousand three hundred
seventy two and Paise sixty nine only) along with pendente lite and future
interest.
2. The facts of the case in brief, as borne out from the record are
that plaintiff is a body corporate constituted under the Banking Companies
(Acquisition & Transfer of Undertakings) Act, 1980, having its Head Office
at 112, JC Road, Bangalore and one of its branches at Tri Nagar, Delhi,
after merger of Syndicate Bank in Canara Bank pursuant to the Gazette
Notification dated 04.03.2020 of Government of India, Syndicate bank has
amalgamated with Canar Bank u/s 9 of the Banking companies
(Acquisition and Transfer of undertaking) 1970 and new bank constituted
under the provisions of the Banking Companies (Acquisition and Transfer
of Undertakings), 1980.
3. It is the case of plaintiff that defendant is a proprietorship
concern which is engaged in the business of manufacturing of slippers and
its parts. It has been averred by the plaintiff that defendant approached it
for grant of Overdraft Cash Credit Limit of Rs.9,00,000/- under MSME
Udhyog Scheme for business purpose. The plaintiff after considering the
request of defendant, sanctioned the said Overdraft Cash Credit Limit and
disbursed the same on 23.12.2019 on prevailing Repo Linked Lending Rate
Suit (Ex-parte) "Decreed" Page 2 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
+ 2.25% p.a. rate of interest vide loan account No.90611400002078. It is
further stated that thereafter, defendant again approached plaintiff vide link
letter dated 23.02.2021 for renewal of the aforesaid Overdraft Cash Credit
Limit and its enhancement to Rs.10,00,000/- which was renewed and
enhanced by the plaintiff. Thereafter also, the defendant got the said
Overdraft Cash Credit Limit renewed from time to time at the prevailing
rate of interest @ 11.50% p.a., by executing the relevant documents in this
regard on 29.07.2022 and 25.10.2023.
4. It is further stated that due to outbreak of Covid-19, vide loan
application dated 20.06.2020, the defendant also requested for Guaranteed
Emergency Credit Loan (GECL), i.e., working capital term loan of
Rs.1,78,500/-. This loan was also sanctioned by the plaintiff with interest
@ 7.50% p.a. vide loan account No.90619160000292. It is further stated
that defendant again approached plaintiff for grant of another Guaranteed
Emergency Credit Loan (GECL), i.e., working capital term loan of
Rs.1,25,000/-. This loan was also sanctioned by the plaintiff with interest
@ 7.50% p.a. vide loan account No.170001915490. It has further been
averred that after availing the aforesaid loans, the defendant failed to
adhere to the financial discipline and did not repay the said loans.
Therefore, the loan accounts of defendant were declared by plaintiff as
NPA on 05.08.2024. Plaintiff has claimed the following outstanding
amount which have also been reflected in the books of accounts maintained
by plaintiff in respect of the aforesaid accounts of the defendant:-
Suit (Ex-parte) "Decreed" Page 3 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
Sl. Account details Amount
No. outstanding as
on 31.10.2024
1. Overdraft Cash Credit current A/c Rs.10,95,063.28
No.90611400002078
2. Ist Guaranteed Emergency Credit Rs.15,988.63
Loan (GECL), i.e., working capital
term loan of Rs.1,78,500/- being
A/c No.90619160000292.
3. 2nd Guaranteed Emergency Credit Rs.75,320.78
Loan (GECL), i.e., working capital
term loan of Rs.1,25,000/-. Being
A/c No.170001915490.
Total: Rs.11,86,372.69
It has further been averred that despite issuance of legal notice dated
16.09.2024, the defendant failed to discharge its aforesaid liability. It is
further stated that plaintiff also initiated pre-litigation Mediation but
defendant did not join the same and the District Legal Services Authority,
North-West, Rohini Courts, Delhi issued its certificate dated 26.10.2024 in
this regard.
5. The defendant was served in the matter on 07.02.2025 and complete
set of paper book was supplied to him on 24.02.2025. The time was given
to defendant to file WS in the matter, however, no WS in the matter was
filed by the defenant within 120 days from its service. Therefore, defence
of defendant stood struck off vide order dated 25.07.2025.
Suit (Ex-parte) "Decreed" Page 4 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
SCOPE OF ORDER VIII RULE 10 CPC
6. The scope of Order VIII Rule 10 CPC in commercial suits
particularly under the New Commercial Courts, Commercial Division and
Commercial Appellate Division of the High Court Act, 2015 has been
examined by Hon'ble High Court of Delhi in case reported as,
"235(2016)DLT 354", titled as, "Nirog Pharma Pvt. Ltd. vs. Umesh Gupta
& Anr.", whereby the Hon'ble High Court has been pleased to lay down as
under:
xxxxx
"11. Order VIII Rule 10 has been inserted by the
legislature to expedite the process of justice. The courts
can invoke its provisions to curb dilatory tactic, often
resorted to by defendants, by not filing the written
statement by pronouncing judgment against it. At the
same time, the courts must be cautious and judge the
contents of the plaint and documents on record as being
of an unimpeachable character, not requiring any
evidence to be led to prove its contents.
..........
28. The present suit is also a commercial suit within the definition of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and it was the clear intention of the legislature that such cases should be decided expeditiously and should not be allowed to linger on. Accordingly, if the defendant fails to pursue his case or does so in a lackadaisical manner by not filing his written statement, the courts should invoke the provisions of Order VIII Rule 10 to decree such cases."
xxxxxx Suit (Ex-parte) "Decreed" Page 5 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
(i) Further the power and authority of the Courts to straightway decree a suit on the basis of averments made in plaint in terms of Order VIII Rule 10 CPC, in the absence of a written statement filed by the defendant is well settled by the Hon'ble Supreme Court in case reported as, "(1999) 8 SCC 396", titled as, "Balraj Taneja V/s Sunil Madan".
(ii) Furthermore, the Hon'ble High Court of Delhi in case reported as, "CS (Comm.) No.618/2019", titled as, "Parsvnath Developers Limited V/s Vikram Khosla" (DOD: 03.03.2021), has been pleased to lay down as under:
xxxxx
9. Having heard the learned counsel for the plaintiff, it is noted that the defendant has not cared to appear before this Court and was proceeded ex-parte. The law with regard to Order VIII Rule 10 CPC is clear, which stipulates that where any party from whom a written statement is required under Rule 1 or Rule 9, fails to present the same within time permitted or fixed by the Court as the case may be, the Court shall pronounce judgment or make such orders in relation to the suit as it thinks fit and on the pronouncement of same, the decree sheet shall be drawn up. Accordingly, in view of the provisions of order VIII Rule 10 CPC, I proceed to decide the present suit. Further, I am in agreement with the judgments of the Coordinate Benches of this Court as relied upon by the plaintiff in paragraph 8 on the issue that in ex-parte matters no purpose would be served if evidence is directed to be led. There being no written statement filed, the averments in the Plaint being unrebutted, the same are deemed to be correct.
xxxxx Suit (Ex-parte) "Decreed" Page 6 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic
(iii) Recently, the Hon'ble High Court of Delhi in case reported as, "CS (Comm.) No.72/2022", titled as, "Kleenoil Filtration India Pvt. Ltd. V/s Udit Khatri & Ors." (DOO: 05.01.2023) has been pleased to clear the air regarding power and authority of Court to straightway decree the suit under Order VIII Rule 10 CPC.
ANALYSIS
7. Further, on the aspect of Order VIII Rule 10 CPC, I am also conscious of the observations made by Hon'ble Supreme Court of India in case reported as, "Civil Appeal No.9695/2013", titled as, "Asma Lateef & Anr. V/s Shabbir Ahmad & Ors." (DOD: 12.01.2024), whereby the Hon'ble Apex Court has been pleased to categorically observe that a Court is not supposed to pass a mechanical judgment invoking Rule 10 of Order VIII CPC, merely on the basis of plaint, upon the failure of defendant to file a written statement. I am further conscious of the fact that a judgment, if pronounced by a Court under Rule 10 of Order VIII CPC, must satisfy the requirements of Rule 4(2) or Order XX CPC and thereby conform to its definition provided in Section 2(9) thereof.
8. The Hon'ble Supreme Court of India in case reported as, "(2007) 6 SCC 555", titled as, "C.C Alavi Haji V/s Palapetty Muhammed & Anr. (DOD: 18.05.2007) has been pleased to enunciate the presumption under Section 114 of the Evidence Act and Section 27 of the General Clauses Act, Suit (Ex-parte) "Decreed" Page 7 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic the relevant paragraphs whereof reads as under:
xxxxx "13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the court that the common course of business renders it probable that a thing would happen, the court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the GC Act is a far stronger presumption. Further, while Section 114 of the Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of the GC Act is extracted below:
"27. Meaning of service by post.--Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression 'serve' or either of the expression 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been Suit (Ex-parte) "Decreed" Page 8 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic effected at the time at which the letter would be delivered in the ordinary course of post."
14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. (Vide Jagdish Singh v. Natthu Singh [(1992) 1 SCC 647 : AIR 1992 SC 1604] ; State of M.P. v. Hiralal [(1996) 7 SCC 523] and V. Raja Kumari v. P. Subbarama Naidu [(2004) 8 SCC 774: 2005 SCC (Cri) 393].) It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.
xxxxx"
9. The Hon'ble High Court of Delhi in case reported as, "1980 RLR (Note 44)", titled as, "Kalu Ram V/s Sita Ram" has been pleased to hold that adverse presumption will be drawn if the legal notice is not replied to. The relevant portion of the said judgment reads as under:Suit (Ex-parte) "Decreed" Page 9 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic xxxxx "It was held that the plaintiff before filing suit had served defendant with a notice making serious allegations that defendant was a trespasser and that his possession was illegal. Defendant did not refute these charges and remained silent by ignoring to reply the notice. Silence showed that he had nothing to deny and hence it was a fit case for raising adverse presumption. Besides the defendant also failed to prove the two contentions that he had raised. There is nothing on record to support the pleas that he had taken. His appeal is without force. The appeal of the plaintiff is supported by the provisions of O. 20 R.12, CPC and trial court should have ordered mesne profits till the delivery of possession. Plaintiff is held entitled to same."
xxxxx (Emphasis supplied)
(ii) Furthermore, the Hon'ble High Court of Delhi in case reported as, "98 (2002) DLT 573", titled as, "Metropolis Travels & Resorts (I) Pvt. Ltd. V/s Sumit Kalra & Ors.", (DOD: 07.05.2002) has been pleased to lay down as under:
xxxxx
13. There is another aspect of the matter which negates the argument of the respondent and that is that the appellant served a legal notice on the respondent vide Ex. PW-1/3. No reply the same was given by the respondent. But inspite of the same no adverse inference was drawn against the respondent. This Court in the case of Kalu Ram v. Sita Ram 1980 RLR (Note) 44 observed that service of notice having been admitted without reservation and that having not been replied in that eventuality adverse inference should be drawn Suit (Ex-parte) "Decreed" Page 10 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic because he kept quite over the notice and did not send any reply. Observations of Kalu Ram's case (Supra) apply on all force to the facts of this case. In the case in hand also despite receipt of notice respondent did not care to reply nor refuted the averments of demand of the amount on the basis of the invoices/bills in question. But the learned Trial Court failed to draw inference against the respondent.
Xxxxx
(iii) Even recently on the similar aspect in case reported as, "RFA (OS) No.93/2010", titled as, "Krishan Kumar Aggarwal V/s Life Insurance Corporation" (DOD: 29.08.2014), the Hon'ble High Court of Delhi has been pleased to lay down as under:
xxxxx
65) No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice sent by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23rd August, 2008 or the legal notice, the contents whereof would be deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd. (1988) 2 SCC 165 & Hiralal Kapur Vs. Prabhu Chaudhary (1988) 2 SCC 172 it was held by the Supreme Court that a categorical assertion by the landlord in a legal notice if not replied to and controverted, can be treated as an admission by a tenant.
66) In a Division Bench proceedings of this court reported in Metropolis Travels & Resorts Vs. Sumit Suit (Ex-parte) "Decreed" Page 11 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic Kalra 98 (2002) DLT 573 (DB), no adverse inference was drawn against the respondent for failure to reply the legal notice on consideration of the facts and circumstances of the case. Reference was made to proceedings reported in Kalu Ram Vs. Sita Ram 1980 RLR (note) 44 wherein it had been observed that service of notice being admitted without reservation and that having not been replied, in that eventuality adverse inference should be drawn.
Xxxxx"
10. Therefore, the adverse inference is liable to be drawn against the defendant.
(i) Now coming back to the facts of present case. From the perusal of Non-Starter Report dated 26.10.2024, issued under the signatures of learned Secretary, DLSA, North-West, Rohini Courts, it is clearly apparent that despite due service the defendant neither appeared before the District Legal Services Authority during pre-institution mediation nor gave its consent/willingness to participate in the mediation process.
(ii) Furthermore, the plaintiff repeatedly requested the defendant for payment of the due amount. The Hon'ble High Court of Delhi in case reported as, "98 (2002) DLT 573", titled as, "Metropolis Travels & Resorts (I) Pvt. Ltd. V/s Sumit Kalra & Ors.", (DOD: 07.05.2002) has been pleased to hold as under:Suit (Ex-parte) "Decreed" Page 12 of 16
CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic xxxxx
13. There is another aspect of the matter which negates the argument of the respondent and that is that the appellant served a legal notice on the respondent vide Ex. PW-1/3. No reply the same was given by the respondent. But inspite of the same no adverse inference was drawn against the respondent.
This Court in the case of Kalu Ram v. Sita Ram 1980 RLR (Note) 44 observed that service of notice having been admitted without reservation and that having not been replied in that eventuality adverse inference should be drawn because he kept quite over the notice and did not send any reply. Observations of Kalu Ram's case (Supra) apply on all force to the facts of this case. In the case in hand also despite receipt of notice respondent did not care to reply nor refuted the averments of demand of the amount on the basis of the invoices/bills in question. But the learned Trial Court failed to draw inference against the respondent.
xxxxx
(iii) Furthermore, in another case "RFA (OS) No.93/2010", titled as, "Krishan Kumar Aggarwal V/s Life Insurance Corporation" (DOD:
29.08.2014), the Hon'ble High Court of Delhi has been pleased to lay down as under:
xxxxx
65) No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice sent by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23 rd August, 2008 or the legal notice, the contents whereof would be deemed to Suit (Ex-parte) "Decreed" Page 13 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd. (1988) 2 SCC 165 & Hiralal Kapur Vs. Prabhu Chaudhary (1988) 2 SCC 172 it was held by the Supreme Court that a categorical assertion by the landlord in a legal notice if not replied to and controverted, can be treated as an admission by a tenant.
66) In a Division Bench proceedings of this court reported in Metropolis Travels & Resorts Vs. Sumit Kalra 98 (2002) DLT 573 (DB), no adverse inference was drawn against the respondent for failure to reply the legal notice on consideration of the facts and circumstances of the case. Reference was made to proceedings reported in Kalu Ram Vs. Sita Ram 1980 RLR (note) 44 wherein it had been observed that service of notice being admitted without reservation and that having not been replied, in that eventuality adverse inference should be drawn.
xxxxx
11. In view of the above judgments of Hon'ble High Court of Delhi, plaintiff has been successful in showing on record that non-reply of notice of the plaintiff by the defendant calls for drawing of presumption as to correctness of the facts contained therein. The plaintiff has succeeded in establishing on record that he has good case in his favour whereas the defendant has not been able to show any plausible defence in defending the present suit. The conduct of the defendant is also blameworthy.
12. As regards the quantum of interest, in view of the nature of Suit (Ex-parte) "Decreed" Page 14 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic transaction between the parties being commercial in nature, interest @ 10% p.a. would meet the ends of justice.
Relief
13. (i) In view of the above, a decree in the sum of Rs.11,86,372.69 (Rupees eleven lacs eighty six thousand three hundred seventy two and Paise sixty nine only), as per details given below, alongwith interest @ 10% per annum from 31.10.2024 till realization thereof is passed in favour of plaintiff and against the defendant:-
Sl. Account details Amount
No. outstanding as on
31.10.2024
4. Overdraft Cash Credit current A/c Rs.10,95,063.28 No.90611400002078
5. Ist Guaranteed Emergency Credit Rs.15,988.63 Loan (GECL), i.e., working capital term loan of Rs.1,78,500/-
being A/c No.90619160000292.
6. 2nd Guaranteed Emergency Credit Rs.75,320.78 Loan (GECL), i.e., working capital term loan of Rs.1,25,000/-.
Being A/c No.170001915490.
Total: Rs.11,86,372.69
(ii) Plaintiff is entitled to costs of the suit. Plaintiff is further entitled to counsel's fee which is quantified as Rs.22,000/-.
14. Decree Sheet be drawn accordingly, subject to payment of requisite Suit (Ex-parte) "Decreed" Page 15 of 16 CS (Comm) 715/2024 Canara Bank Vs. Luxmi Plastic court fees.
15. File be consigned to Record Room after completion of necessary Digitally formalities.
Dictated & Announced in the
VINOD signed by
VINOD
open Court on 30.08.2025. YADAV(Vinod Yadav) YADAV District Judge (Commercial Court)-02 North-West/Rohini Courts Suit (Ex-parte) "Decreed" Page 16 of 16