Delhi District Court
State Bank Of India vs Sh. Rajesh Kumar on 29 April, 2023
IN THE COURT OF SH. RAKESH SYAL,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI.
CS (COMM) 73/2022
State Bank of India
A body corporate constituted under the State Bank of India Act, 1955,
having its Registered and Head Office at S.B.I. Bhavan, Madam Cama
Road, Nariman Point, Mumbai, Local Head Office at 11, Sansad Marg,
New Delhi, New Delhi-110001 and also SMECCC situated at 59,
Community Centre, Naraina Industrial Area Phase-I, New Delhi-110028
through its Manager (NPA), Sh. Mahendra Roopchandani.
.... Plaintiff
VERSUS
Sh. Rajesh Kumar
(Proprietor of New Royal Selection)
S/o Sh. Banni Ram,
having place of business at:
(i) Plot No. 12/13, Ground Floor, West Sagarpur,
New Delhi-110046.
Also at:
(ii) RZ-E-13, Gandhi Market, West Sagarpur,
New Delhi-110046.
Residing at:
(iii) RZ-28/341, Gali No. 9, Madanpuri, West
Sagarpur, New Delhi-110046
Mobile No.: 8587811616. .... Defendant
CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 1 of 16
Date of Institution : 05.03.2022
Date of final arguments : 24.04.2023
Date of decision : 29.04.2023
JUDGMENT
(Order XII Rule 6 CPC) 1.1 The plaintiff has filed the present suit against the defendant, for recovery of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), alongwith pendente-lite and future interest @ 9.70%, per annum, till realization, and costs of the suit.
2.1 The plaintiff's case is that on 08.02.2018, the defendant applied to the plaintiff's PBB Janak Puri, Pankha Road, New Delhi Branch, for financial assistance i.e. Working Capital for his proprietorship business of ready-made garments and accessories, in the name and style of 'M/s New Royal Selection'. As the application of the defendant fell in the category of small and medium enterprises, vide letter dated 16.03.2018, it was forwarded by Janakpuri Branch, to SMECCC, at 882, East Park Road, Karol Bagh, New Delhi. On 16.05.2018, SMECCC, Karol Bagh sanctioned a Cash Credit Limit of Rs. 5,00,000/- (Rupees five lac only), in favour of the defendant. The defendant executed Letter of Arrangement (SME 1), Agreement of Loan- cum-Hypothecation (SME-2) and Affidavit giving details of his assets. He hypothecated the stocks of his business. The defendant had agreed that the working capital would be repayable on demand and would be CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 2 of 16 available for six months, from the date of sanction, subject to review, and with interest at card rate of 10.90%, calculated on daily product, at monthly rests. A Cash Credit Account no. 37708163425 was opened at PBB Janakpuri Branch, where the sanctioned amount was disbursed, and it was availed by the defendant.
2.2 It is further stated that the defendant began committing consecutive defaults in compliance of the terms and conditions of the agreement, due to which his account became overdue and irregular. The plaintiff repeatedly requested him to regularize his account, by way of personal visits, telephonic calls and also by way of letter dated 05.04.2019. Since the defendant failed to regularize his account, it was rendered Non-Performing Asset on 30.04.2019. A Legal Notice dated 09.05.2019 was issued to him. On 05.03.2020, an official of SMECCC Karol Bagh, visited the shop of the defendant. However, as per the inspection Report, the shop was found to be closed. Another shop named "Royal Selection" was running in the next street. On enquiry, the owner of the said shop was found to be the brother of the defendant. However, the same was found to be suspicious as the owner's name and details were given in the said shop. Further, over telephonic conversation, the defendant had told the bank official that his business had closed as he got paralyzed, but he was ready for compromise.
2.3 It is further stated that the plaintiff followed up with the defendant for compromise but the defendant failed to either compromise CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 3 of 16 or regularize his account. After giving credits for all the payments made by the defendant, his account reflected a balance of Rs. 4,83,605.69 (Four lac eighty three thousand six hundred five rupees and sixty nine paise only), as on 22.07.2021. On the aforesaid balance, debit interest @ 9.70%, per annum, amounting to Rs. 1,59,671 (Rupees one lac fifty nine thousand six hundred and seventy one only), along with penalty interest had accrued till 22.07.2021. Thus, the defendant is liable to pay to the plaintiff a sum of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), alongwith pendente-lite and future interest @ 9.70%. The plaintiff has, thus, prayed for a decree against the defendant for a sum of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), alongwith pendente-lite and future interest @ 9.70%, per annum, with monthly rests, till realization, and costs of the suit.
3.1 Summons of the suit was served upon the defendant, who appeared and filed written statement. On 15.12.2022, the defendant has moved application dated 12.12.2022, u/o VI Rule 17, r/w Section 151 CPC, for amendment in the written statement. Vide order dated 17.02.2023, the said application was allowed and the amended written statement was taken on record.
3.2 In the amended written statement dated 12.12.2022, it is stated that before January, 2019, the defendant used to pay the amount regularly but in January, 2019, he suffered paralysis attack and after that CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 4 of 16 he was not in position to sell the clothes in the shop. The material is lying in his house and the plaintiff can attach the said clothes to clear his loan. It is further stated that it has been alleged by the bank that as per the Statement of Account, Rs. 6,24,295/- (Rupees six lac twenty four thousand two hundred and ninety five only), is the outstanding amount. He has never denied to pay the said amount in installments. He is ready to pay the said amount in installment as his business was disturbed due to his suffering paralysis attack and the payment could not be deposited in time. He has also requested the bank for paying the said amount in installments as he is not in position to pay the said amount in lump sum. He has prayed for waiving of the interest/penalty.
4.1 The plaintiff has moved an application dated 17.12.2022, u/s XII Rule 6, r/w Section 151 CPC, for passing of judgment on the basis of admissions of the defendant. In the application, it is stated that the defendant, in para 9 of the pre-liminary objections, in the written statement, has stated as under:-
"That as per Statement of Account it is alleged by the bank that an amount of Rs. 6,24,295/- is alleged balance towards the defendant. The defendant never denied to pay the said amount in installments. The defendant is ready to pay the said amount in installment as the business become disturbed due to paralysis attack on the defendant so the payment could not be deposited in time....."
CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 5 of 16 4.2 It is further stated that in para 17 of the reply on merits, in the written statement, he has stated as under:-
" ..... The defendant never refused to pay the amount but due to paralysis attack, his shop was closed. It is requested by the defendant to waive interest and penalty on the said amount."
The plaintiff has requested that a judgment be passed u/o XII Rule 6, r/w Section 151 CPC, for an amount of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), and costs on the basis of the admissions of the defendant.
5.1 In reply dated 09.02.2023, to the said application, the defendant has stated that the application of the plaintiff is a misuse of law as the same has been filed just to decide the matter without taking evidence. The application of the plaintiff is not maintainable as the defendant has only admitted the claim of the plaintiff, with request to waive interest and cost and to pay loan amount in installments as he is disabled and not able to carry on his business.
5.2 Further, while admitting para no. 4 of the application (which pertains to para no. 9 of the preliminary objections in the written statement), he stated that the same is not admission of the whole claim, with interest and costs, as claimed by the plaintiff. He has denied that the application of the plaintiff is bonafide and in the interest of justice and the balance of convenience also lies in favour of the plaintiff. Other averments made in the application have been generally denied.
CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 6 of 16 6.1 It is pertinent to refer to Order XII Rule 6 CPC, which stipulates, "6. Judgment on admissions.--(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question - between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under sub-rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced."
6.2 It is pertinent to refer to Smt. Seema Thakur vs Union of India & Ors., 2015 SCC OnLine Del 11386, wherein the Hon'ble High Court has held, "7. A reading of the aforesaid provision shows that the court has discretion depending upon the facts of a case whether or not to decree the suit under Order XII Rule 6 CPC. If the admissions are such that further trial is not necessary, a court is entitled to pass a decree without requiring further trial. The principles with respect to Order XII Rule 6 CPC have been stated by the Supreme Court in its judgment in the case of Uttam Singh Duggal & Co. Ltd. Vs. Union Bank of India & Ors., CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 7 of 16 (2000) 7 SCC 120. The relevant paragraphs of this judgment are paras 12, 15 and 17 and which read as under:-
"12. As to the object of the Order XII Rule 6, we need not say anything more than what the Legislature itself has said when the said provision came to be amended. In the objects and reasons set out while amending the said rule, it is stated that "where a claim is admitted, the court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled." We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which, it is impossible for the party making such admission to succeed."
7.1 It is also pertinent to refer to Order VIII Rule 3(A) (3) CPC, as amended by the Commercial Courts Act, 2015 (hereinafter referred to as the Act) which stipulates, "3A. Denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court.
(1)......
(2).....
(3) Where the defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 8 of 16 different version of events from that given by the plaintiff, he must state his own version.
(4)......
(5)....."
7.2 Further, the proviso to Order VIII Rule 5(1) as amended by the Act, stipulates, " Provided further that every allegation of fact in the plaint, if not denied in the manner provided under rule 3A of this Order, shall be taken to be admitted except as against a person under disability."
7.3 It is also pertinent to refer to Order XI Rule 4 CPC, which stipulates, "4. Admission and denial of documents. -- (1) Each party shall submit a statement of admissions or denials of all documents disclosed and of which inspection has been completed, within fifteen days of the completion of inspection or any later date as fixed by the Court. (2) The statement of admissions and denials shall set out explicitly, whether such party was admitting or denying:--
(a) correctness of contents of a document;
(b) existence of a document;
(c) execution of a document;
(d) issuance or receipt of a document;
(e) custody of a document.
CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 9 of 16 Explanation.--A statement of admission or denial of the existence of a document made in accordance with sub-rule (2) (b) shall include the admission or denial of the contents of a document.
(3) Each party shall set out reasons for denying a document under any of the above grounds and bare and unsupported denials shall not be deemed to be denials of a document and proof of such documents may then be dispensed with at the discretion of the Court. (4) to (7)........ " (emphasis supplied).
7.4 It can be seen that in para no. 6 of the plaint, the plaintiff has stated that since the application of the defendant fell in the category of small and medium, it was forwarded by Janakpuri Branch, under letter dated 16.03.2018, to the plaintiff bank's SMECCC, situated at 882, East Park Road, Karol Bagh, New Delhi. In the written statement, the defendant has stated that the contents of para 6 are matter of record. In para 7 of the plaint, it is stated that on 16.05.2018, the SMECCC Karol Bagh sanctioned a financial assistance/Cash Credit Limit of Rs. 5,00,000/- (Rupees five lac only), in favour of the defendant's firm. In the written statement, the defendant has stated that the same are a matter of record. In para no. 8 of the plaint, it is stated that in respect of the said financial facility, the defendant consciously and with free will signed and executed Letter of Arrangement (SME 1), Agreement of Loan-cum- Hypothecation (SME-2) and Affidavit giving details of his assets. In the written statement, the defendant has stated that the contents of para no. 8 of the plaint are a matter of record. He has signed some document but the same were not explained to him. It can also be seen that as per Letter of CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 10 of 16 Arrangement dated 18.05.2018, the rate of interest was 10.9%, per annum, calculated on daily products at monthly rests. It was also stated that additional interest @1.00%, per annum, over the regular working capital facilities will be applicable on fund based credit facility. It is further stated that enhanced rate of interest @ 1.00% cumulatively subject to a maximum of 2.00% will be charged for the period of delay in respect of delayed/non-submission of financial data required for review/renewal of limits, annual financial statements and stock statement.
7.5 In para no. 9 of the plaint, it is stated that the defendant has hypothecated the stocks of his business (lehngas, sarees, suits etc). The defendant upon executing the said document had agreed that the working capital would be repayable on demand and would be available for six months from the date of sanction, subject to review and an interest @ 2.75% margin above MCLR which was 8.15%, per annum, and Card rate of 10.9% calculated on daily product, at monthly rests. The defendant had also agreed to pay an additional interest @1.00%, over the regular working capital facilities and an enhanced interest rate of 1.00%, cumulatively subject to maximum of 2.00%, for the period of delay. In the written statement, the defendant has stated that the contents of para no. 9 of the plaint are wrong and denied. He denied that the conditions of agreement/documents were informed/explained to him. He also denied that the interest as alleged in this para of the plaint was told to him or the documents were explained to him. He further denied that he had agreed to pay the additional interest @ 1.00% & total comes to 2.00%. He stated CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 11 of 16 that his signatures were taken on blank papers. It is further stated that he was ready to handover the stock etc. to the plaintiff. However, he has not stated his reasons or put forward his own version in this regard, as to why he has signed the documents if he has not understood the same or the circumstances in which he has signed the said documents. Thus, the contents of para 9 of the plaint can be deemed to have been admitted.
7.6 In para 17 of the plaint, it is stated that after giving credits for all the sums of money paid by the defendant, including the part payments, if any, the defendant's Cash Credit Account reflected a balance of Rs. 4,83,605.69 (Four lac eighty three thousand six hundred five rupees and sixty nine paise only), as on 22.07.2021. In the written statement, the defendant has stated that the contents of para no. 17 of the plaint are a matter of record. In para no. 18 of the plaint, it is stated that on the aforesaid balance debit interest @ 9.70% per annum, amounting to Rs. 1,59,671/- (Rupees one lac fifty nine thousand six hundred seventy one only), along with penalty interest, had accrued till 22.07.2021. In the written statement, the defendant has denied the contents of para no. 18 of the plaint. However, he also stated that he has never refused to pay the amount but due to paralytic attack, his shop was closed. He requested to waive interest and penalty on the said amount. In para no. 19 of the plaint, it is stated that the defendant is liable to pay to the plaintiff a sum of Rs. 6,43,277/- (Rupee six lac forty three thousand two hundred and seventy seven only), alongwith pendente lite and future interest @ 9.70%, per annum. In the written statement, the defendant has denied the contents of para no. 19 of the plaint. He further denied that the interest @ CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 12 of 16 9.70%, per annum, of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred and seventy seven only), and penalty are chargeable as per loan documents/agreement. However, as earlier stated, the defendant has admitted the execution of documents, wherein he has agreed to the interest applicable on the loan amount.
7.7 Further, in para no. 5 of the Statement of Truth, filed along with the written statement, the defendant has stated, "I say that I am ready to pay the principal amount in installments and request for waiving the penal interest and other charges."
In affidavit of admission/denial of documents filed by the defendant, at Serial no. 19, he has admitted the Statement of Account filed by the plaintiff.
7.8 The defendant has also admitted that the Statement of Account reflected a balance of Rs. 4,83,605.69 (Four lac eighty three thousand six hundred five rupees and sixty nine paise only), as on 22.07.2021. Though, he has denied the debit interest @ 9.70%, per annum, amounting to Rs. 1,59,671/- (Rupees one lac fifty nine thousand six hundred and seventy one only), in the written statement, he has stated that he has never refused to pay the amount but due to paralysis attack, his shop was closed. He has not given his own version, about the rate of interest agreed upon between the parties as required vide Order VIII Rule 3A(3) CPC, as amended by the Act. Thus, the same can be deemed to have been admitted by the defendant. Further, in the written statement, in CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 13 of 16 reply to para 17 of the plaint and in para 5 of the Statement of Truth also, he has stated that he was ready to pay the principal amount in installment and had requested for waiving the penal interest and other charges. From his request for waiver of interest and penalty, it can be safely inferred that the interest has been validly charged by the plaintiff, as per the agreement. In his affidavit of admission/denial of documents, he has admitted the Statement of Account, which shows a clear balance of Rs. 4,83,180.98 (Four lac eighty three thousand one hundred eighty rupees and ninety eight paise only), and the rate of interest as 9.70%, per annum. In his affidavit dated 13.12.2022 of the admission/denial of the documents, the defendant has denied Certificate of Accrued Interest, filed by the plaintiff. However, it is a bald denial and he has neither stated any reasons for denying the said document nor given his own version of the interest which has accrued on the outstanding loan amount. When the written statements, statement of truth, affidavit of admission/denial of documents, filed by the defendant, are seen in totality, it is considered that the defendant has clearly and unambiguously admitted the sanction of loan, execution of various loan documents, containing the terms and conditions of the loan, including the applicable rate of interest, statement of account showing the outstanding balance of Rs. 4,83,180.98 (Four lac eighty three thousand one hundred eighty rupees and ninety eight paise only), and the applicable rate of interest. Denial of accrued interest is not as per the provisions of the Act and, thus, the version of the plaintiff, in this regard, can be deemed to have been admitted by him. In the written statement, the defendant has also denied the total liability of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 14 of 16 seven only), as mentioned in para no. 19 of the plaint. However, the said denial is also a bald denial, without stating his reasons or giving his version as to how much was his total liability. The same is also not as per Order VIII Rule 3 A (3) CPC, as amended by the Act. Thus, the same can also be deemed to have been admitted in terms of proviso to Order VIII Rule 5(1), as amended by the Act.
8.1 In view of the aforesaid discussion, it is considered that the defendant has made admissions of facts alleged by the plaintiff and a judgment can be passed. Therefore, the application u/o XII Rule 6, r/w Section 151 CPC, moved by the plaintiff is allowed. It is considered that the plaintiff is entitled to recover from the defendant Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only) 9.1 The plaintiff has also prayed for future and pendente-lite interest on the outstanding amount of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), @ 9.70%, per annum. In the facts and circumstances of the case, it is considered that pendente- lite and future interest @ 9.00%, per annum, would be just and reasonable. Thus, it is held that the plaintiff is entitled to recover from the defendant, a sum of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), alongwith pendente-lite and future interest @ 9.00%, per annum, till realization of the entire amount.
CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 15 of 16 10.1 Accordingly, the suit is decreed in favour of the plaintiff and against the defendant for a sum of Rs. 6,43,277/- (Rupees six lac forty three thousand two hundred seventy seven only), alongwith pendente-lite and future interest @ 9.00%, per annum, till realization of the entire amount.
11.1 The plaintiff is also awarded costs of the suit.
12.1 Decree be drawn accordingly.
13.1 A copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise, in terms of Order XX Rule 1 of the Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015).
14.1 File be consigned to Record Room.
Announced in open Court on 29.04.2023.
(Rakesh Syal) District Judge (Commercial Court)-03, South-West, Dwarka Courts, New Delhi 29.04.2023 CS(COMM) 73/2022 State Bank of India vs Sh. Rajesh Kumar, Page no. 16 of 16