Delhi District Court
Canara Bank vs M/S Maha Laxmi Store Through Its ... on 26 July, 2024
DLST010008042023
Presented on : 20-01-2023
Registered on : 09-02-2023
Decided on : 26-07-2024
Duration : 1 years, 6 months,
6 days
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT) (DIGITAL-04),
SOUTH, SAKET COURTS, NEW DELHI
Presiding Officer: Sh. SANJEEV KUMAR SINGH
CS (COMM.) NO.74/2023
IN THE MATTER OF:
Canara Bank
(From April 1, 2021, Syndicate Bank
has been merged with Canara Bank)
Having Head office At:-
112 JC road, Bangalore, Karnataka
And
its Branch office
Khasra No. 229/2, Main Road, 145,
Fatehpur Beri, Delhi-110074
(Through its Manager Sh. Dipanshu)
..........Plaintiff
Versus
M/s Maha Laxmi Store
(Through its proprietor Sandeep Kumar)
R/o B-30/C, FC, Block B,
Sanjay Colony, Bhatti Mines,
New Delhi-110074
..........Defendant
Digitally signed
SANJEEV by SANJEEV
KUMAR KUMAR SINGH
Date: 2024.07.26
SINGH 16:18:28 +0530
CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 1 of 20
Date of institution : 09.02.2023
Date on which final argument was concluded : 19.07.2024
Date of Judgment : 26.07.2024
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JUDGMENT
1. The plaintiff has filed the present suit against the defendant under The Commercial Courts Act, 2015 seeking recovery of Rs.11,77,999.6/- along with pendente lite and future interest @ 9.15% per annum compounded with monthly rests plus 2% penal interest and cost of the suit through its Senior Manager namely Sh. Dipanshu who has been duly authorized vide Authority Letter / Power of Attorney dated 01.03.2016.
BRIEF FACTS OF THE CASE ARE AS UNDER:-
2. The version of the plaintiff is that the defendant availed the credit facilities from Syndicate Bank having its head office at Manipal, Karnataka and one of its branch office at Khasra No. 229/2, Main Road, 145, Fatehpur Beri, Delhi-110074; that pursuant to the gazette Notification No. CG-DL-E04032021-216535 published on 04.03.2021 of the Government of India, Syndicate Bank has been amalgamated with Canara Bank under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; that the defendant approached the applicant bank for availing a SOD credit / loan facility under MSME (Micro & Small Enterprises) for a sum of Rs.10,00,000/- to purchase stock and machines on dated 02.05.2019; that upon various assurances and documents given by the defendant in favour of the plaintiff bank the SOD credit / loan facility for the Digitally signed by SANJEEV SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:18:38 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 2 of 20 abovesaid amount was sanctioned for one year subject to annual review in favour of the defendant on 15.05.2019 duly acknowledged by the defendant and the defendant agreed to repay the sanctioned amount alongwith @ 10.15% bearing Loan Account No. as 90161400001000.
3. It is further the version of the plaintiff that the defendant executed the following documents in favour of the plaintiff bank in order to gain the sanctioned amount : -
a) Composite Hypothecation Agreement loan (ASD-4) dated 15.05.2019.
b) Charge and Hypothecation of Debts Agreement dated 15.05.2019.
c) Undertaking of the Borrower.
d) Power of Attorney in favour of the plaintiff bank by the defendant for collections of Bills, book Debts and other receivables.
e) Authority Letter dated 15.05.2019.
4. It is further averred that upon the sanction of the aforesaid loan, the defendant agreed to pay rate of interest at 10.15% per annum (subject to change from time to time). The defendant also agreed to pay the interest and other charges to the plaintiff on the principal amount of the said loan from time to time as per the terms and conditions set out in the said loan agreement.
5. It is further averred that pursuant to availment of above credit / overdraft facility by the defendant, the defendant again approached the plaintiff bank for renewal of the credit / overdraft facilities on 26.06.2020 for a sum of Rs.10,00,000/- to enhance its working capital Digitally signed by SANJEEV SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:18:56 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 3 of 20 in furtherance of its business; that pursuant to above request, the defendant executed following documents in favour of the plaintiff bank :-
a) Agreement cum deed of Hypothecation dated 26.06.2020.
b) Agreement Re: Advances against Book Debt as Prime security dated 14.07.2020.
6. It is further the version of the plaintiff that after the outbreak of Covid-19, the defendant had approached the plaintiff bank on 23.04.2020 to avail further credit / overdraft facility under "CANARA CREDIT SUPPORT TO COVID-18 AFFECTED CUSTOMERS" on no emergency basis for operational liabilities, restarting business and to meet the temporary liquidity mismatch arising out of Covid-19 outbreak for a sum of Rs.1,00,000/-; that the defendant executed the following documents in favour of the plaintiff bank in the loan account no. 90169580000050:-
a) Simplified appraisal note for "Canara Support to Covid-19 affected Customers (CCS)" scheme dated 23.04.2020.
b)Undertaking letter from Non-Corporate Borrowers dated 23.04.2020.
c) Take Delivery Letter to DPN (NF 481) dated 23.04.2020.
d) Pronote dated 23.04.2020.
7. It is further averred that defendant also agreed to pay interest and other charges to the plaintiff on the principal amount of the said credit/overdraft facility from time to time as per the terms and Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:19:06 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 4 of 20 conditions set out in the said loan agreement and that defendant never paid any amount in the said loan account since 23.04.2020.
8. It is further the case of the plaintiff that at the request of the defendant, the bank sanctioned Guarantee Emergency Credit Facility for a sum of Rs.2,00,000/- to the defendant on 26.06.2020 vide Loan Account No.9016916000095 and defendant also executed an Agreement cum Deed of Hypothecation dated 26.06.2020.
9. It is further averred that on account of financial indiscipline, the account of the defendant slipped to NPA on 25.11.2020 and after vigorous follow up and persuasion, no regularization of account could be effected on the part of the defendant. Last payment for a sum of Rs.3,47,986.49 was made by the defendant in SOD Credit/Loan Account No. 90161400001000 on 20.10.2021.
10. It is further averred that since the present matter comes within the ambit of commercial Dispute under Section (1)(c) of The Commercial Courts Act, 2015, the plaintiff filed an application under Section 12-A of the Act before South District Legal Service Authority on 03.12.2021. However the defendant did not appear before the SDLSA despite notice being sent, the SDLSA issued a certificate for Non-Starter Report on 16.02.2022.
11. On the aspect of jurisdiction, it is submitted that the loan/finance facilities agreements were executed at the branch office of the plaintiff bank and all the transactions were carried out at the said Branch, hence this Court has territorial jurisdiction to try and entertain this suit. SANJEEV Digitally signed by SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:19:21 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 5 of 20
12. It is further stated that the commulative debit balance (in the Loan Account No.90161400001000, 90169580000050 and 90169160000095) comes to Rs.11,77,999.6/- along with pendente lite and future interest inclusive of interest debited upto 30.09.2022 along with interest @ 9.5% per annum compounded interest monthly rests plus 2% penal interest.
CASE OF THE DEFENDANT:-
13. Summons of the suit were served upon the defendant and the defendant contested the suit by filing its written statement, contending interalia that the suit of the plaintiff is baseless, misconceived and without any cause of action against the defendant; that the plaintiff bank with evil eyes wants to extort money from the defendant, therefore, the plaint is liable to be dismissed under Order VII Rule 11 CPC; that the plaintiff has not come to the court with clean hands and has suppressed the material facts from the Court in order to harass the defendant.
14. In reply/response to para nos. 1, 3, 4, 5 and 6 of the plaint, it is submitted that same are matter of record. In reply/response to para no.2 of the plaint, the defendant has denied the same.
15. In reply/response to para 7 of the plaint, it is submitted that it is a matter of record. It is further submitted that at the time of sanction of loan, the plaintiff has got mortgaged the property of the defendant bearing property no.vR-168, land measuring 250 Square Yards situated at Sanjay Colony, Bhati Mines, New Delhi, value of more than Rs.25 Lakhs and detained the original General Power of Attorney, Agreement SANJEEV Digitally signed by SANJEEV KUMAR SINGH KUMAR Date: 2024.07.26 SINGH 16:19:32 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 6 of 20 to Sale and other documents related to the said property; that after availing the loan facility from the plaintiff bank, the defendant had paid interest of the said loan to the bank upto February, 2020; that due to pandemic of Covid-19 throughout the world, the Government of India declared total lockdown in the country in the last week of March, 2020, therefore, business of defendant was totally closed and upto August 2020, no business was done by the defendant and on account of this, the defendant could not deposit the installment of loan. However, defendant had deposited interest of the loan upto August 2020. It is further submitted that on 20.09.2020, the defendant suffered heavy cardiac arrest and got hospitalized.
16. In reply/ response to para no.8 and 9 of the plaint, it is a matter of record.
17. In reply/response to para no.10 of the plaint, the defendant has denied the same. It is submitted that on 23.04.2020, there was a lock down in the country and public movement was strictly prohibited, then how it is for the defendant to approach the plaintiff bank for credit/over draft facility on 23.04.2020.
18. In reply/response to para no.11 of the plaint, it is submitted that same is matter of record. It is further submitted that at the time of sanction of loan, the plaintiff bank has got mortgaged the property of the defendant bearing property no. R-168, land measuring 250 square yards situated at Sanjay Colony, Bhati Mines, New Delhi value of more than Rs.25 Lakhs and detained the original GPA, Agreement to Sale and other documents related to the property.
Digitally signedSANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:19:44 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 7 of 20
19. In reply/response to para no.12 of the plaint, the defendant partly admitted the same but denied that the defendant never paid any amount since 23.04.2020, however the plaintiff bank encashed the FDR of the defendant for a sum of Rs.3,47,986.49 and adjusted the same in the loan amount.
20. In reply/respondent to para no.13 and 14 of the plaint, it is submitted that same are matter of record.
21. In reply/response to para no.15 of the plaint, the defendant has denied the same and it is contended that plaintiff bank encashed the FDR of the defendant on 20.10.2021 and adjusted the amount in the sum of Rs. 3,47,986.49/- in the loan account of the defendant, therefore, plaintiff bank had no right to declare the loan account of the defendant as NPA on 25.11.2020; that the defendant is still willing to pay the loan amount to the plaintiff bank.
22. In reply/response to para no. 18 of the plaint, the defendant has denied the same and contended that no cause of action arose to file the present suit against the defendant.
ISSUES:-
23. On the basis of pleadings of the parties, following issues were framed on 03.05.2024:-
(i) Whether the plaintiff is entitled to a decree of the suit amount as prayed for? OPP
(ii) Whether the plaintiff is entitled to any interest, if so, at what rate and for which period? OPP
(iii) Relief.
SANJEEV Digitally signed by SANJEEV KUMAR KUMAR Date: 2024.07.26 SINGH SINGH 16:19:56 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 8 of 20 EVIDENCE & LIST OF DOCUMENTS:-
24. In order to prove its case, plaintiff bank examined Sh. Dipanshu (Senior Manager) as PW-1.
25. In order to deal with the testimony of PW-1, the documents relied upon by the plaintiff are hereby put in a tabulated form as under:
S. No. Documents Exhibit
1. The POA/Authority letter Ex.PW-1/1
2. Notification dated 04.03.2020 Ex.PW-1/2
3. Sanction letter dated 15.05.2019 Ex.PW-1/3
(OSR)
4. Composite Hypothecation Agreement Ex.PW-1/4
Loan (OSR)
5. Charge and Hypothecation on Debts- Ex.PW-1/5
Agreement (OSR)
6. Undertaking of the borrower Ex.PW-1/6
(OSR)
7. Power of attorney in favour of the Ex.PW-1/7
plaintiff bank by the defendant for (OSR)
collections of bills, book debts and other receivables
8. Authority letter dated 15.05.2019 Ex.PW-1/8 (OSR)
9. Application of Renewal/enhancement of Ex.PW-1/9 Working Capital Limits dated (OSR) 26.06.2020
10. Agreement cum deed of Hypothecation Ex.PW-1/10 dated 26.06.2020 (OSR)
11. Agreement regarding Advances against Ex.PW-1/11 Book Debts as Prime Security (OSR)
12. Request letter dated 23.04.2020 Ex.PW-1/12 (OSR)
13. The Simplified Appraisal Note for Ex.PW-1/13 "Canara Support to Covid-19 affected (OSR) Customers (CCS)" scheme dated 23.04.2020
14. Undertaking letter from Non-Corporate Ex.PW-1/14 Borrowers dated 23.04.2020 (OSR) Digitally signed by SANJEEV SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:20:14 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 9 of 20
15. Take Delivery Letter to DPN (NF 481) Ex.PW-1/15 dated 23.04.2020 (OSR)
16. Pronote dated 23.04.2020 Ex.PW-1/16 (OSR)
17. Agreement Cum Deed of Hypthecation Ex.PW-1/17 dated 26.06.2020 (OSR)
18. Non-Starter Report Ex.PW-1/18
19. The Statement of Loan Account Nos. Ex.PW-1/19 90161400001000, 90169580000050 and 90169160000095
26. PW-1 who tendered his affidavit in evidence as Ex.PW-1/A. He more or less reiterated the contents of the plaint.
27. In cross-examination, PW-1 admitted that the said loans were not disbursed to the defendant in his presence. He further admitted that he has no personal knowledge about the present case and what he was deposing is on the basis of record maintained by the bank; that authority letter Ex.PW-1/1 i.e. G.P.A. in his favour was given by Regional Office Delhi; that his name is reflected at first page. He stated that GPA was executed in his favour by the GM of the bank. He admitted that he has not filed any document about the authority of GM to further execute GPA in his favour. PW-1 admitted that in para no.1 of his affidavit, the amount to be recovered is Rs.52,449/- and voluntarily stated that it is a typographical mistake and actually the suit has been filed for the recovery of Rs. 11,77,999.6/-. He denied the suggestion that the amount recoverable from the defendant is Rs.52,449/-. He admitted that the date mentioned in Ex.PW-1/2 as 04.03.2020 is correct whereas it has been mentioned in the plaint is 04.03.2021 is incorrect. Copy of GPA of the defendant was shown to the witness to which he stated that original of this document is not in possession of the plaintiff bank. SANJEEV Digitally by SANJEEV signed KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:20:28 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 10 of 20
28. PW-1 denied the suggestion that Ex.PW-1/13 to 16 are forged and fabricated document which were procured by the plaintiff bank; that in 2020 the lock down was imposed by the Govt. of India from February 2020 to August 2020 and as per his knowledge, on this period bank was opened for public dealing. He denied the suggestion that from 21.03.2020 upto 30.05.2020 there was total lockdown and public movement was totally restricted. He denied the suggestion that defendant never came to sign such document to the bank on 23.04.2020; that last payment received from the defendant was on 28.10.2020. PW-1 admitted that bank has not issued any demand notice to the defendant after 28.10.2020 for total outstanding against the defendant. He admitted that the bank has a security FDR of Rs. 3 Lacks against the said loan. He admitted that bank has not issued any notice about the adjustment of said FDR amount in the above- mentioned loan. He admitted that before declaring any account as NPA bank issues notice to the customer. He admitted that bank did not issue any notice to the defendant before declaring his loan account as NPA; that as per record, the account of the defendant was declared as NPA on 25.10.2020. He denied the suggestion that without informing the defendant, bank has declared his account as NPA; that as per Ex.PW- 1/19, total outstanding was Rs.8,17,000/- as on 01.06.2022 in account no. 90161400001000. He denied the suggestion that defendant was ready to pay the loan amount in installment but intentionally to grab the money from the defendant, the plaintiff bank has declared the account of the defendant as NPA.
29. For proving its case, the defendant examined its Proprietor Sh. Sandeep Kumar as DW-1.
Digitally signedSANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:20:41 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 11 of 20
30. DW-1 who tendered his affidavit as Ex.DW-1/A. He more or less reiterated the contents of the written statement and relied upon copy of GPA as Mark-A.
31. In cross-examination, DW-1 admitted that he took loan from the plaintiff bank. He admitted that prior to Covid-19, the said loan account was irregular; that he is the sole user of the said loan account; that account no. 9016400001000 was account number for the loan. He further admitted that he has requested to renew the above loan account which was done by the bank; that he submitted all the originals of his property for the purpose fo mortgage against the loan. He denied the suggestion that the plaintiff bank had denied to mortgage the property of the defendant for the said loan. He further admitted during Covid, plaintiff bank sanctioned an additional loan.
ARGUMENTS, ANALYSIS & FINDINGS:-
32. I have heard the arguments advanced by the learned counsel for the parties and have also gone through the record. Having gone through the same, my issue wise findings are as follows:-
ISSUE No.1
(i) Whether the plaintiff is entitled to a decree of the suit amount as prayed for ? OPP
33. The onus of proving this issue was upon the plaintiff.
34. At the very outset, I may observe that the provisions of Section 2 (1) (c) (i) of Commercial Courts Act, 2015 are very clear which reads as under :-
SANJEEV Digitally by SANJEEV signed KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:21:08 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 12 of 20
(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;
(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.
35. The provisions of Section 2(1)(c)(i) of the Commercial Courts Act, 2015 as above are very much clear. It is important to notice that the crucial expression that connects the classes of persons i.e. merchants, bankers, financiers and traders to the expression mercantile documents are the words "such as".
Digitally signedSANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:21:19 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 13 of 20
36. In Good year India Ltd. Vs. Collector of Customs (AIR 1999 SC 1558), the words "Such as" were construed by the Hon'ble Apex Court to mean that the words following it were to be read as illustrative of the matter and not as limitations. Consequently, it would be difficult to say that the words "mercantile documents" which follow the words "Such as" in Section 2(1)(c) are the only classes falling within the net of this definition. In other words, it would appear that the expression "such as those relating to mercantile documents" cannot be construed as words of limitation while construing this definition.
37. Hon'ble Calcutta High Court in Ladymoon Towers Private Ltd. Vs. Mahendra Investment Advisors Private Limited (I.A No. G.A 4 of 2021 in C.S 99 of 2020 order dated 13.08.2021) after setting out the dictionary meanings of the expressions "merchants" "bankers"
"traders" and "financiers" the learned judge proceeded to observe as under :-
"The definition section of the 2015 Act only contemplates a "commercial dispute" and not any other form of dispute where the basis of disagreement between the parties has a non- commercial cause. The graduation of disputes in Section 2(1)(c) taking into account all possible forms of agreements from which a "commercial dispute" may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute. The insolvency and Bankruptcy Cod, 2016, for example, defines a dispute from a broader perspective as any suit or arbitration proceedings relating to an existing debt - Section 5(6)(a). The commercial purpose would generally mean a transaction by which a person's commercial or economic interests may be advanced and would result in an economic benefit to that person. It Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:21:29 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 14 of 20 would not include an agreement where profit- making is an incidental outcome of the transaction or may happen by accident. Although, a "hand loan", for example, is given by a person or entity to another with the expected outcome of the principal sum being returned with interest, the essential commercial flavour in such a loan may be lost by reason of the informal terms under which the money is lent and advanced and the consequent uncertainty which may result therefrom."
38. Therefore, the facts which are alleged in the plaint come under the commercial dispute.
39. Now, the next question is whether this Court has the pecuniary jurisdiction to adjudicate the matter which is in dispute. The provisions of Section 3 of Commercial Courts Act, 2015 provides that :-
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 and powers conferred on those Courts under this Act:
[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.] Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:21:38 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 15 of 20
40. The Commercial Courts Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the amendment and by virtue of notification, the pecuniary jurisdiction of the commercial courts shall not be less than Rs. 3,00,000/-. In the present case, the claimed amount as mentioned in the plaint is of Rs. 11,77,999.6/- and as such this court is having jurisdiction to adjudicate the matter which is in dispute.
41. This Court has territorial jurisdiction to try and adjudicate the present suit since the loan/financial agreements were executed at the branch office of the plaintiff bank at Khasra No.229/2, Main Road, 145, Fatehpur Beri, Delhi-110074 and all transactions were carried out at the said branch which falls within the territorial jurisdiction of this Court.
42. The present suit is within limitation as the last payment in the loan account no.90161400001000 was made by the defendant on 20.10.2021. The suit was filed on 09.02.2023 and hence, the suit is within the Limitation period of 03 years.
43. Learned counsel for plaintiff argued that in cross-examination DW-1 has admitted that he took loan from the plaintiff bank and prior to Covid-19, the said loan account was irregular; that he is the sole user of the said loan account. He further contended that DW-1 has also admitted that he had requested to renew the loan account which was done by the bank.
44. He further argued that defendant was having only General Power of Attorney, Agreement to Sale and other documents of the property bearing no. R-168, situated at Sanjay Colony,SANJEEV Bhati Mines, Digitally signed by SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:21:49 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 16 of 20 New Delhi and as per Bank Rules without Registered Sale Deed, any property cannot be mortgaged. Only FDR in the sum of Rs.3 Lakh was given by the defendant as security to the loan.
45. During the course of arguments, learned counsel for the defendant took me to the cross-examination of PW-1 and argued that PW-1 has admitted that said loan were not disbursed to the defendant in his presence; that he has no personal knowledge about the present case and what he was deposing is on the basis of record maintained by the bank.
46. Relying on the above-said cross-examination of PW-1, learned counsel for the plaintiff contended that the plaintiff bank is not entitled to the relief claimed.
47. Per contra, learned counsel for the plaintiff contended that the defendant availed the credit facilities from the plaintiff bank by executing following documents i.e. composite Hypothecation Agreement Loan (Ex.PW-1/4), Charge and Hypothecation on Debts Agreement (Ex.PW-1/5), Undertaking of Borrower (Ex.PW-1/6), Power of attorney in favour of the plaintiff bank by the defendant for collections of bills, book, debts and other receivables (Ex.PW-1/7), Authority letter dated 15.05.2019 Ex.PW-1/8, Application of Renewal/enhancement of Working Capital Limits dated 26.06.2020 (Ex.PW-1/9), Agreement cum deed of Hypothecation dated 26.06.2020 (Ex.PW-1/10), Agreement regarding Advances against Book Debts as Prime Security Ex.PW-1/11, Request letter dated 23.04.2020 (Ex.PW-1/12), the Simplified Appraisal Note for "Canara Support to Covid-19 affected Customers (CCS)" scheme dated 23.04.2020 (Ex.PW-1/13), Undertaking letter from Non-Corporate Borrowers dated 23.04.2020 (Ex.PW-1/14), Take Delivery Letter to DPN (NF 481) dated Digitally signed by SANJEEV SANJEEV KUMAR KUMAR SINGH Date: 2024.07.26 SINGH 16:22:01 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 17 of 20 23.04.2020 (Ex.PW-1/15), Pronote dated 23.04.2020 (Ex.PW-1/16), Agreement Cum Deed of Hypthecation dated 26.06.2020 (Ex.PW-1/17) Non-Starter Report (Ex.PW-1/18), the Statement of Loan Account Nos. 90161400001000, 90169580000050 and 90169160000095 (Ex.PW-1/19).
48. Learned counsel for the plaintiff further drew my attention to the statement of Loan Accounts (Ex.PW1/19) and submitted that as on 31.05.2022 Rs.8,17,238.89/- was payable by the defendant.
49. It is noteworthy that during cross-examination, defendant (DW-1) clearly admitted that he took loan from the plaintiff bank and prior to Covid-19, the said loan account was irregular. He further admitted that he had requested to renew the loan account which was done by the bank.
50. In view of the aforesaid documentary evidence. I find that the oral testimony of PW-1 to the effect that he does not have personal knowledge about the present case, is immaterial.
51. Learned counsel for the defendant further argued that plaintiff bank had not issued any legal notice to the defendant before filing of the suit. This arguments does not hold much water as plaintiff had already initiated pre-institution Mediation proceedings and filed an application under Section 12-A of The Commercial Courts Act, 2015 before the South District Legal Authority on 03.12.2021. However, defendant did not appear before SDLSA despite notice being sent and SDLSA issued a certificate for Non-Starter Report dated 16.02.2022 (Ex.PW-1/18).
SANJEEV Digitally
by SANJEEV
signed
KUMAR KUMAR SINGH
Date: 2024.07.26
SINGH 16:22:11 +0530
CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 18 of 20
52. The plaintiff by way of deposition of its witness PW-1 and documentary evidence has been able to establish its claim against the defendant.
53. The sum and substance of the above discussion is that the plaintiff succeeds in proving the liability of the defendant and defendant fails to prove that it is not liable to pay the outstanding of Rs.11,77,999.6/- to the plaintiff bank. Thus, this issue is decided in favour of the plaintiff and against the defendant.
54. Consequently, the plaintiff is entitled for recovery of Rs.11,77,999.6/- from the defendant.
ISSUE No.2
(ii) Whether the plaintiff is entitled to any interest, if so, at what rate and for which period? OPP
55. The onus of proving this issue was upon the plaintiff.
56. So far as the interest component is concerned besides the amount of Rs.11,77,999.6/-, the plaintiff has also claimed pendente lite and future interest along with interest @ 9.15% per annum compounded with monthly rests plus 2% penal interest.
57. Having regard to the facts and circumstances of the case, interest of justice would be met if the plaintiff is awarded pendente lite and future interest @ 9% per annum. This issue is decided accordingly. Digitally signed SANJEEV by SANJEEV KUMAR SINGH KUMAR Date:
SINGH 2024.07.26 16:22:22 +0530 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 19 of 20 Relief:-
58. In view of the foregoing discussion, present suit is decreed for a sum of Rs.11,77,999.6/- in favour of the plaintiff and against the defendant. The plaintiff is also entitled to pendente lite and future interest @ 9% per annum along with costs of the suit.
59. Decree sheet be prepared accordingly.
60. File be consigned to record room after due compliance.
SANJEEV Digitally
by SANJEEV
signed
KUMAR KUMAR SINGH
Date: 2024.07.26
Announced in the open court SINGH 16:22:29 +0530
on 26.07.2024 (Sanjeev Kumar Singh)
District Judge (Commercial Court)(Digital)-04, South/Saket/New Delhi/26.07.2024 CS (Comm) No.74/2023 Canara Bank vs. M/s Maha Laxmi Store Page 20 of 20