Delhi District Court
State Bank Of India vs Ms. Jaya Prada W/O Shri P.N on 21 September, 2011
IN THE COURT OF SHRI RAJ KUMAR TRIPATHI:
ADDITIONAL SENIOR CIVIL JUDGE,
SAKET COURTS, NEW DELHI.
CS NO. 21/2008
ID No. 02403C0994882008
State Bank of India, a Corporation
constituted under State Bank of India
Act, 1955, having its Central
Office/Corporate Centre at State Bank
Bhavan, Madame Cama Road,
Mumbai 40024, one of its Local Head
Office at 11, Parliament Street, New
Delhi and its Stressed Assets
Resolution Centre at 23, First Floor,
Najafgarh Road, New Delhi.
Plaintiff
versus
1. Ms. Jaya Prada W/o Shri P.N.
Ramalingam R/o 6A, J.N.U., Ber
Sarai, New Delhi 110 016.
Also at:
Ms. Jaya Prada, General Manager
II, Laundry Department, O/o
Ashok Hotel, 50B, Chanakyapuri,
New Delhi 110 021.
2. Mr. R.C. Verma S/o Shri B.D.
Verma, R/o D55, B.K. Dutta
Colony, Lodhi Road, New Delhi.
CS No. 21/2008 Page No. 1 of 13
3. General Manager, Ashok Hotel,
50B, Chanakyapuri, New Delhi
110 021.
Defendants
DATE OF INSTITUTION: 6.11.2008
DATE OF RESERVING JUDGMENT/ORDER: Not reserved.
DATE OF PRONOUNCEMENT: 21.09.2011.
SUIT FOR RECOVERY OF RS. 97,338/ (RUPEES NINETY
SEVEN THOUSAND THREE HUNDRED THIRTY EIGHT
ONLY) WITH COSTS AND INTEREST
JUDGMENT
1. The present suit was filed by the plaintiff against the defendants on 6.11.2008 for recovery of Rs. 97,338/ with pendentelite & future interest @ 16.10% per annum with monthly rest till payment and/or realization and cost of the suit. The plaintiff has also prayed for directing defendant no. 3 to pay the agreed equated monthly installments to the plaintiff in terms of the undertaking executed till full payment of the loan with interest, costs, charges and expenses.
2. Brief facts of the case of the plaintiff is that the plaintiff is a body corporate, constituted under The State Bank of India Act, 1955 and Shri M.L. Puniyani is competent and authorize to sign and verify the pleadings. The defendant no. 1 approached the branch office of CS No. 21/2008 Page No. 2 of 13 the plaintiff bank situated at CGO complex, New Delhi for grant of loan facility under Personal Loan Scheme to the salaried person. The plaintiff bank accepted the request of defendant no. 1 for her financial assistance. A Personal Loan of Rs. 2,00,000/ was sanctioned, lent and released by plaintiff bank and availed by defendant no. 1 on 5.9.2003 as per her requirement under the terms & conditions contained in the Agreement Letter and documents executed by defendants. The defendant no. 1 executed Personal Loan Agreement of Rs. 2,00,000/ dated 5.9.2003 and Arrangement Letter dated 5.9.2003. Defendant no. 2 executed Guarantee Agreement for Rs. 2,00,000/ on the said date. The defendant no. 3 delivered an undertaking in favour of plaintiff bank to deduct the amount of the EMI from the monthly salary of defendant no. 1 and to pay the same to the plaintiff bank. As per arrangement/sanction letter, defendant no. 1 was to pay to the plaintiff bank, the amount of the loan in 48 equated monthly installments of Rs. 5,400/ each. The first equated monthly installment was payable on 5.10.2003 and the subsequent installments on or before the same date of each succeeding month thereafter till the entire loan is fully repaid with interest and other penalty costs, charges and expenses. The current rate of interest is stated to be @ 16.10% per annum. An account was opened in the books of accounts of the plaintiff bank at CS No. 21/2008 Page No. 3 of 13 CGO Complex Branch, New Delhi in the name of defendant no.1. The defendant no. 3 made payment of certain Equated Monthly Installments as agreed and the same have been credited to the loan account as and when received by the plaintiff. On 30.3.2006 defendant no. 1 had deposited Rs. 25,000/ in cash towards the outstanding dues of plaintiff which was credited in her loan account. The defendant no. 3 later on in breach of the undertaking/agreed arrangement failed and neglected to repay the installments and the account became irregular. The defendant no. 1 failed to observe the terms & conditions on which the plaintiff granted the personal loan. On persistent defaults, the plaintiff bank sent a legal notice dated 20.10.2008 to the defendants but they paid no heed. The plaintiff is entitled to recover a sum of Rs. 97,338/ from defendant no. 1. The plaintiff bank in accordance with the directions or guidelines relating to assets classification has declared the account of the defendant no. 1 as nonperforming assets on 28.2.2007.
3. The defendants no. 1 and 2 did not appear in the court despite service of process upon them. Accordingly, defendant no. 1 was proceeded against exparte vide order dated 7.2.2009. Defendant no. 2 was proceeded against exparte vide order dated 24.11.2009. CS No. 21/2008 Page No. 4 of 13
4. Defendants no. 3 has defended the suit by way of filing written statement wherein he has taken the preliminary objections that no cause of action has been made out against him. It is stated that the defendant had never issued any irrevocable undertaking dated 5.9.2003 in favour of plaintiff and undertook to credit a sum of Rs. 5,400/ per month from the salary of defendant no. 1 or signed the same by the General Manager Ashoka Hotel. The defendant has no concern or connection with the private dealing of any employee. The unit of ITDC where the defendant no. 1 is now posted will be duty bound to deduct the amount of decree from the salary of defendant no.
1. It is further stated that the defendant has no knowledge about any personal facility extended to the defendant no. 1 and a complaint against the defendants has also been lodged by defendant no. 3 at police station in regard to the forgery committed while preparing the irrevocable undertaking forging the signatures and seal of General Manager.
5. Plaintiff filed replication to the written statement of defendant no. 3 wherein it has reaffirmed and reiterated the same version as stated in the plaint.
6. From pleadings of parties, following issues were framed by this Court on 5.3.2011 for adjudication of the matter: CS No. 21/2008 Page No. 5 of 13
1. Whether plaintiff is entitled to recover a sum of Rs.
97,338/ from defendants no. 1 and 2 as prayed for? OPP.
2. Whether the plaintiff is entitled for interest, if so, at what rate and for which period? OPP.
3. Whether the plaintiff is also entitled for grant of injunction against defendant no. 3 as prayed for in the suit? OPP.
4. Relief.
7. Thereafter, the matter was posted for evidence of plaintiff. In order to prove its case, the plaintiff examined PW1 Shri P.C. Gupta and PW2 Shri Bhagwati Prasad. The evidence of plaintiff was closed on 06.08.2011. Defendants have not led any evidence in support of their contentions despite sufficient opportunities granted.
8. I have heard and considered the submissions advanced by learned counsel for both the parties and gone through the entire material available on record. I have also bestowed my anxious consideration over the entire matter as well as the material placed on record and after perusal of the same my issuewise findings are given as follows:
ISSUE No. 1
Whether plaintiff is entitled to recover a sum of Rs. 97,338/ from defendants no. 1 and 2 as prayed for? OPP. CS No. 21/2008 Page No. 6 of 13
& ISSUE NO. 2 Whether the plaintiff is entitled for interest, if so, at what rate and for which period? OPP.
9. Onus of proving issue no. 1 and 2 was on the plaintiff. The plaintiff has examined Shri P.C. Gupta as PW1 and Mr. Bhagwati Parsad as PW2 to prove its case. PW1 has proved Application Form Ex.PW1/1, Personal Loan Agreement Ex.PW1/2, Agreement Letter dated 5.9.2003 Ex.PW1/3, Guarantee Agreement dated 5.9.2003 Ex.PW1/4, Irrevocable Undertaking Ex.PW1/7 and voucher dated 30.3.2006 Ex.PW1/8. PW2 Shri Bhagwati Prasad proved legal notice Ex.PW2/1, UPC receipts Ex.PW2/2, Regd. AD receipts Ex.PW2/3 to Ex.PW2/6 and statement of account Ex.PW2/7.
10. Both the witnesses of plaintiff have filed their evidence by way of affidavit wherein they have reiterated and reaffirmed the same facts as has been stated in the plaint. The plaintiff's witnesses have not been cross examined by defendants no. 1 and 2. Their testimony has gone uncontroverted and unrebutted. The defendants did not appear to contest and dispute the claim made by the plaintiff bank. The documents i.e Ex.PW1/1 original Personal Loan Application Form, Personal LoanAgreement dated 5.9.2003 CS No. 21/2008 Page No. 7 of 13 Ex.PW1/2, Deed of Guarantee Ex.PW1/4 have been duly proved on record. A bare look at the aforesaid documents show that the plaintiff bank had disbursed a loan of Rs. 2,00,000/ to defendant no.1 on 5.9.2003. The defendant no. 2 stood as guarantor and undertook to pay the amount in case of default of payment by the defendant no. 1. The statement of account Ex.PW2/7 shows that an amount of Rs. 97,338/ was due and payable by the defendant no. 1 to the plaintiff bank upto 31.10.2008. The defendants no. 1 and 2 have failed to make payment of the loan amount despite service of legal notice upon them. Since the defendants failed to contest the suit of the plaintiff, therefore the averments of the plaintiff being uncontroversial, are deemed to be proved. There is no reason to doubt the veracity of the plaintiff's witnesses. The defendant no. 2 Shri R.C. Verma being the guarantor of defendant no. 1 Ms. Jaya Prada, is jointly and severely liable to pay the outstanding dues.
11. The plaintiff has claimed pendente lite and future interest @ 16.10% with monthly rest till payment and/or realization. The arrangement letter dated 5.9.2003 Ex.PW1/3 has been proved on record. A bare reading of the letter shows that the defendant no. 1 availed the personal loan at the floating rate of interest, which was to be charged at 2.35% per annum over PLR/SBAR/SBMPLR. The rate CS No. 21/2008 Page No. 8 of 13 of interest was to be revised from time to time as per RBI Guidelines. The plaintiff's witnesses have admitted during their deposition that defendant no. 1 made payment of some EMIs but thereafter defaulted in making payment. She could not adhere to the financial discipline in making payment as per the terms & conditions under which the loan was granted to her. Keeping in view the entirety of the facts & circumstances of the case, the plaintiff is awarded interest at the rate of 14% per annum from the date of filing of the suit, till its realization.
12. In view of the discussion made above, this court is of the view that the plaintiff bank has succeeded in discharging the onus to prove the issue no. 1 and 2. Accordingly, the issues are decided in favour of plaintiff.
ISSUE NO. 3 Whether the plaintiff is also entitled for grant of injunction against defendant no. 3 as prayed for in the suit? OPP.
13. Onus to prove this issue was upon the plaintiff. PW1 Mr. P.C. Gupta and PW2 Mr. Bhagwati Prasad have been examined by the plaintiff bank to discharge the onus to prove this issue. PW1 during his deposition proved the irrevocable undertaking dated 5.9.2003 Ex.PW1/7 given by the authorized officer of defendant no. 3 in favour of plaintiff bank. In the undertaking it is stated that the defendant has CS No. 21/2008 Page No. 9 of 13 received the irrevocable letter of authority from the employee i.e Jaya Prada for deducting a sum of Rs. 5,400/ from her salary per month beginning from the salary for the month of 5.10.2003. It is further stated that the defendant was also having the authority from the employee i.e defendant no. 1 for crediting her salary every month to her account with State Bank of India, CGO Complex Branch till he received further instructions from the bank. In view of the undertaking given by defendant no. 3, he/she was under an obligation to deduct a sum of Rs. 5,400/ per month from the salary of defendant no. 1 and to credit the same to her account with the State Bank of India. The defendant no. 3 miserably failed to discharge the obligations as per the undertaking given to the branch manager of the plaintiff bank.
14. The defendant no. 3 in his written statement denied to have ever issued any such irrevocable undertaking dated 5.9.2003 in favour of plaintiff and undertook to credit a sum of Rs. 5,400/ per month from the salary of defendant no. 1. It has been contended that the General Manager, Ashoka Hotel never signed any undertaking and even otherwise there was no such occasion to give any undertaking in regard to an employee who is seeking personal loan from the bank. It is stated that the defendant lodged a complaint to the police station in regard to the forgery committed while preparing irrevocable CS No. 21/2008 Page No. 10 of 13 undertaking, forging the signature and seal of the General Manager, Ashoka Hotel. The plaintiff filed replication to the written statement of defendant and reasserted that defendant no. 3 had signed an irrevocable undertaking in favour of plaintiff bank. It is stated that since the defendant no. 3 has failed to act in terms of undertaking, therefore, he is jointly, severely and coextensively liable to repay the entire outstanding dues of plaintiff bank.
15. Before filing of the suit against the defendants, the plaintiff had sent the legal notice to them to clear the outstanding dues. The defendants despite service of legal notice failed to make payment. PW1 during his cross examination has stated that he personally went many times to defendant no. 3 for recovery of balance loan EMI before serving the legal notice. The witness denied the suggestion that defendant no. 3 has not given any undertaking dated 5.9.2003 in favour of the plaintiff bank. The original irrevocable undertaking Ex.PW1/7 signed by the authorized signatory of defendant no. 3 in favour of plaintiff bank has been placed on record. The defence taken by the defendant is only an eyewash and vague. The defendant has not given the name of the police station where the complaint was lodged against defendant no. 1. The complaint alleged to be made against defendant no. 1 has neither been brought nor proved on record. CS No. 21/2008 Page No. 11 of 13 The official from the police station where the complaint is alleged to have been made was not summoned in the court to show as to whether any complaint was in fact made against defendant no. 1 or not and if the same was made, what was its fate. The plaintiff has led its best evidence. The defendant has miserably failed to bring any material on record in support of the contentions made in the written statement. In these circumstances, there is no reason to doubt about the authenticity of the document Ex.PW1/7. The veracity of the plaintiff's witnesses also cannot be doubted.
16. The plaintiff bank is a nationalized bank. It granted loan to defendant no. 1 on the assurance and undertaking given by defendant no. 3 to deduct the amount of EMI from her salary and to credit the same in the account of defendant no. 1 with plaintiff bank. Despite the irrevocable undertaking given by defendant no. 3, it failed to deduct the salary and credit the same in the loan account of defendant no. 1. Nothing has come in the cross examination of plaintiff's witnesses to doubt their testimony. The plaintiff's witnesses are the public servants. They have deposed whatever was in their personal knowledge on the basis of material available on record. They do not have any grudge or illwill with the defendants. In these circumstances, I see no reason to doubt their testimony. The plaintiff has succeeded to discharge the CS No. 21/2008 Page No. 12 of 13 onus to prove this issue. The issue is decided in favour of plaintiff.
ISSUE NO. 4 (RELIEF)
17. In view of my findings on issue no. 1 to 3, the suit of the plaintiff is decreed with costs. The defendant no. 1 and 2 are jointly and severely directed to pay Rs. 97,338/ to plaintiff bank with interest @14% per annum from the date of filing of the suit till its realization. The defendant no. 3 is directed to pay the entire balance loan amount to the plaintiff in terms of the undertaking executed in favour of the plaintiff bank with interest, costs, charges and expenses after recovering the same from salary and other dues of defendant no. 1. Decree sheet be prepared. File be consigned to record room.
(Announced in Open Court (RAJ KUMAR TRIPATHI)
on 21.09.2011) Additional Senior Civil Judge (South)
Saket Courts, New Delhi.
CS No. 21/2008 Page No. 13 of 13