Delhi District Court
State Bank Of India vs Tushar Groversole Prop. M/S Uttam Purse ... on 31 August, 2024
IN THE COURT OF SHRI MUKESH KUMAR GUPTA
DISTRICT JUDGE (COMMERCIAL)-07, DISTRICT CENTRAL
TIS HAZARI COURTS, DELHI
CS (COMM.) 672-2023
CNR No. DLCT01-005207-2023
DLCT01-005207-2023
State Bank of India
Through Manager (SARC)
Retail Assets Central Processing Centre (RACPC)
South Extn. Part-I,
F-40, 2nd & 3rd Floor, Ring Road
New Delhi-110049.
........Plaintiff
Versus
Tushar Grover
Sole Prop. M/s. Uttam Purse & Belts
13/30, WEA Ajmal Khan Road, Karol Bagh, New Delhi-110006.
Email:[email protected]
MOB:91-9958041389 AND 9717881861
...... Defendant
SUIT FOR RECOVERY OF RS.11,91,445/-
Date of institution of suit : 15.04.2023
First date before the court : 27.03.2024
Date of hearing final argument : 16.08.2024
Date of Judgment : 31.08.2024
Appearance (s): Mr. Varun Chandok, Ld. Counsel for the plaintiff.
: None for defendant (exparte).
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2024.08.31
17:33:25
CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER +0530 1/ 11
JUDGMENT (Exparte)
1. By way of present judgment (exparte) I shall conscientiously adjudicate upon the suit of Plaintiff-Bank for recovery of Rs.11,91,445/- alongwith interest thereon @ 10.40% per annum pendentelite and future from the date of filing of the suit till its realization. The plaintiff has also prayed for costs of the suit.
2. Eschewing prolix reference to the pleadings crystallizing the same the plaintiff has averred in the plaint that plaintiff bank is a body corporate constituted under State Bank of India Act, 1955, having its head office at Madame Cama Road, Nariman Point, Mumbai. The plaintiff bank is engaged in the business of banking and has its various branches throughout India. It is further the case of the plaintiff that the present suit has been filed by Authorised Representative Mr. Parvesh Kumar, the Manager of SMECCC Branch Naraina Industrial Area, Phase-I, Delhi who is fully conversant with the present case and is authorized to file, sign, verify and competent to institute the present suit against the defendant in terms of regulation 55(1) of the Bank's General Regulations 1955 framed by Reserve Bank of India read with the Notifications published in this regard in Gazette of India dated 27.03.1987. The plaintiff has, however, later substituted its Authorized Representative, as prayed and allowed vide orders dated 27.03.2024 of the Court. Accordingly, Mr. Pritesh Kumar Bhagat was substituted as Authorized Representative of the plaintiff-Bank.
3. It is further averred in the plaint that the defendant had approached the plaintiff bank in the month of March, 2018 to secure a loan facility CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER Digitally signed by MUKESH 2/ 11 MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.08.31 17:33:30 +0530 under the nomenclature 'Cash Credit' under Pradhan Mantri Mudhra Yojana (PMMY) scheme for the purpose of his business under name and style of M/s. Uttam Purse and Belts. He is stated to have approached the plaintiff bank at its Naraina Branch, New Delhi for the aforesaid loan facility of Rs.7,50,000/-. Accordingly, the plaintiff bank after loan appraisal capacity of the defendant sanctioned a loan of Rs.7,50,000/- to the defendant vide its loan account no.37610164407 after execution of necessary documents i.e. Letter of Arrangement dated 23.03.2018, Agreement of Loan-cum-Hypothecation dated 23.03.2018. Pursuance thereof, the loan was payable in accordance with the terms and conditions stipulated in the Arrangement Letter, under which the loan was to be repayable on demand and was available for 36 months subject to review every 12 months along with interest to be chargeable @2.75% above MCLR(Marginal Cost of Funds Lending Rate).
4. It is further the case of the plaintiff that the defendant failed to adhere to the financial discipline and in accordance with the agreed terms and conditions. Resultantly, the account of the defendant became irregular resulting into account becoming irregular and was, thus declared as Non-Performing Asset (NPA) w.e.f. 28.12.2019.
5. Repeated requests, reminders and notices were sent by and on behalf of the plaintiff-Bank from time to time, requesting and advising the defendant to clear outstanding loan amount, but the defendant completely failed and neglected to pay the same. The plaintiff-Bank then recalled the Loan Facility available to the defendant by way of sending Legal Demand Notice dated 07.06.2022 demanding from him to pay the whole outstanding amount. Defendant failed to make the payment against dues, despite repeated calls and demand notice and hence, the plaintiff-
CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 3/ 11
Digitally signed
by MUKESH
MUKESH KUMAR GUPTA
KUMAR Date:
2024.08.31
GUPTA 17:33:33
+0530
Bank has come up with the present suit for Recovery of total outstanding amount of Rs.11,91,445/- due as on 03.04.2023 plus future and pendentelite interest @ 10.45% per annum, from the date of filing of the present suit till realization along with costs of the suit.
6. Summons for Settlement of Issues were issued against the defendant and the defendant was served with the summons through post on 22.09.2023. However, since the defendant failed to file the Written Statement within the statutory period, his right to file the Written Statement was forfeited vide order dated 18.01.2024 of the Ld. Predecessor of the court. Further, since none appeared on behalf of defendant during the course of proceedings, the defendant was proceeded against exparte vide order dated 27.03.2024.
7. Plaintiff Bank in support of its case got examined one Mr. Pritesh Kumar Bhagat, Assistant Manager(NPA) who is its Authorized Representative, as PW1. The witness has reiterated the contents of the plaint 'On Oath' and has deposed that he is authorised to depose before the Court as per General Regulations 76 and 77 of the State Bank of India in exercise of powers conferred upon it under Section 50(3) of State Bank of India Act, 1955 with prior approval of the Government of India read with notification published in the Gazette of India including one dated 27.03.1987, which is published on 02.05.1987, by which he was duly authorized, empowered and competent to sign and verify the pleadings for and on behalf of the plaintiff company, to institute the suit & prosecute the suit and to do all acts on behalf of the plaintiff bank, who tendered his evidence by way of affidavit Ex.PW1/A. He has tendered in his evidence the said gazette of India notification as Ex.PW1/1.
CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 4/ 11 Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.08.31 17:33:37 +0530
8. PW1 has further testified that defendant approached the plaintiff bank in March, 2018 to secure a loan facility under the nomenclature 'Cash Credit' under Pradhan Mantri Mudhra Yojana (PMMY) scheme for the purpose of his business under name and style of M/s. Uttam Purse and Belts vide Original Loan Application Form Ex.PW1/2. The plaintiff bank has sanctioned the loan of Rs.7,50,000/- vide Sanction Letter dated 23.03.2018 and after execution of various documents which are Arrangement letter dated 23.03.2018 and Loan Agreement dated 23.03.2018 which are duly proved on record as Ex.PW1/3 and Ex.PW1/4. Defendant failed to comply with the terms and conditions of the aforesaid Loan and failed to pay the outstanding amount upon which the plaintiff-bank issued a legal demand notice dated 07.06.2022 tendered along with postal receipt as Ex.PW1/5(colly) upon the defendant calling upon him to repay the outstanding amount. Despite notice, defendant neither replied the notice nor paid the outstanding dues. The witness has further deposed that as per the accounts maintained by the plaintiff-bank and the Discharge Quote, the defendant is liable to pay a sum of Rs.11,91,445/- towards current balance, accrued debit interest and penal interest as on 03.04.2023, which includes current balance as Rs.7,77,014.51 ps, Rs.3,28,719/- as accrued debit interest and Rs.85,711/- as accrued penalty interest. The witness has relied upon Statement of Account along with Discharge Quote dated 23.03.2018 as Ex.PW1/6(colly). As the defendant failed to make the payment despite repeated calls and legal notice, therefore, the present Suit for Recovery of total outstanding amount of Rs.11,91,445/-, plus accrued interest, has been filed on behalf of plaintiff. The requisite Certificates U/s.65B of the Evidence Act is tendered as Ex.PW1/7. The claim of the suit is prayed to be decreed in favour of the plaintiff.
Digitally
CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER signed by 5/ 11
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2024.08.31
17:33:41
+0530
9. The Plaintiff bank did not examine any other witness and vide statement dated 18.04.2022, the plaintiff's evidence was closed.
10. Submissions of the Ld. Counsel for the plaintiff have been heard and the entire record including the pleadings, documents and evidence on record has been appreciated. The defendant did not appear upon service, either in person or through pleader. No written statement has been filed. Defendant was proceeded with exparte vide order dated 27.03.2024.
11. The onus to prove the averments and claim of the plaintiff rests entirely upon the plaintiff who has to discharge the burden of proof to establish its case, as per law. In civil litigation, it is sufficient for the plaintiff to discharge the burden laid upon it successfully, if the plaintiff is able to prove its case by preponderance of probabilities. It is the law of land as re-affirmed by the Hon'ble Apex Court in Adiveppa V. Bhimappa (2017) 9 SCC 586. Hon'ble Supreme Court of India in Adiveppa (supra) was pleased to uphold that:
"It is a settled principle of law that the initial burden is always on the plaintiff to prove his case by proper pleadings and adequate evidence (oral and documentary) in support thereof."
Thus, the onus to prove its case and that the burden to prove the case as per law entirely lies upon the plaintiff, by way of documentary and oral evidence.
12. The present suit has been filed on behalf of plaintiff bank, on the basis of Cash Credit Facility granted by the plaintiff in favour of the defendant, in regular course of banking business. In such cases, CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER Digitally 6/ 11 signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.08.31
17:33:45
+0530
documentary evidence is of paramount importance as there is continuity of maintenance of account maintained in the ordinary course of its business. Hence, it is a matter of settled practice for public financial institutions to maintain regular and proper accounts against each and every customer account. Accordingly, the court has meticulously scrutinized the evidence, document and statement of account tendered through the sole testimony of PW1.
13. At the outset, the court shall take up the issue of limitation which is a legal issue, which the court is required to determine for the purpose of deciding the entitlement of plaintiff to the relief claimed. As per Section 3 of the Limitation Act, 1963, any suit, application or appeal has to be filed within the period of limitation as prescribed under the schedule annexed to the Limitation Act and subject to provisions contained in Section 4 to 24. This has to be done irrespective of the fact whether limitation has been set up as a defence or not. It is a settled proposition of law that law of limitation is a law of repose, peace and justice which bars the remedy after the lapse of particular period by way of public policy and expediency. Reliance is placed on AIR 1991 Kerala 83 Craft Centre vs. Koncherry Coir Factories. It may be seen that the present suit is for recovery of amount outstanding against the defendant in respect of cash credit facility sanctioned by the plaintiff bank to the defendant pursuant to Letter of Arrangement dated 23.03.2018 which forms the part of Ex.PW1/3. The defendant initially paid some payment and thereafter started defaulting. Defendant has made payment of Rs.5,000/- on 03.07.2018 lastly by way of IMPS. A cash credit account is a facility which a person obtains from the bank in order to draw money upto the limit agreed to and makes deposit at his convenience in the account of which balance is made. Such an account has been held by the CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 7/ 11 Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.08.31
17:33:49
+0530
Hon'ble Gauhati High Court in the case State Bank of India vs. Durga and Scientific Distributors, (1990) 1, Banking,173 Cases to be mutual, open and current account and Article 1 of the Limitation Act applies for realization of the dues under such an account. The similar view was taken by the Hon'ble Punjab and Haryana High Court in case State Bank of India vs. Kashmir Arts, Printing Press, Sirsa, AIR(1981) Punjab and Haryana 188. While considering the similar problem, the Hon'ble Punjab and Haryana High Court hold that where a person who was allowed the benefit of cash credit account had been withdrawing and repaying amounts upto the limit of Rs.5,000/- from time to time and on the debit balance, interest was accruing, the limitation would be that provided under Article 1 of Limitation Act, 1963. The Hon'ble Supreme Court of India in case Kesharichand Jaisukhlal vs. Shillong Banking Corporation Ltd., Shillong (in liquidation), AIR 1965 Supreme Court 1711 has considered the question of a combined overdraft and deposit account and held that when there are mutual dealings between the parties and the account was mutual, the period of 3 years for the purpose of limitation shall commence from the close of the year of the last entry, as provided under Article 1 of the Limitation Act, 1963.
14. Adverting to the facts of the present case, a cash credit facility was advanced to the defendant by the plaintiff bank upto the limit of Rs.7,50,000/- and the defendant was utilizing the said facility by withdrawing the payments and makes deposits. In the instant case, the last payment of Rs.5,000/- was made by the defendant on 30.07.2018 through IMPS. Now as per the facts of the present case, the limitation will be governed by Article 1 of the annexure to Limitation Act, 1963. Relying upon the aforesaid laws and Article 1 of the Limitation Act, the period of limitation of the present case starts from 31.12.2018 i.e the date CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 8/ 11 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
2024.08.31 GUPTA close of the year of the last entry and the present suit was filed on
15.04.2023, which should have been filed within 3 years on 31.12.2021 but due to unfortunate Covid-19 pandemic situation, the same could not be filed within 3 years. It is relevant to mention here that the Hon'ble Supreme Court of India in suo moto Writ petition (C) 3 of 2020 in Re:Cognizance for extension of limitation has directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial quasi judicial proceedings and as such, the balance period of limitation remaining as on 03.10.2021, if any shall become available w.e.f 01.03.2022. It has further been held that where the limitation would have expired during the period between 15.03.2020 till 28.02.2022 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event, the actual balance period of limitation remaining w.e.f 01.03.2022 is greater than 90 days, that longer period shall apply. The last payment was made by the defendant on 30.07.2018 and the present suit was filed on 15.04.2023. After excluding the period w.ef. 15.03.2020 till 28.02.2022, the actual balance available period for filing the present suit was 21.5 months but the present suit having been filed on 15.04.2023 is within 13.5 months from 01.03.2022 as per the law of Hon'ble Supreme Court. Therefore, applying the ratio of the aforesaid judgments and as per article 1 of the Limitation Act, 1963, the present Suit having been filed on 15.04.2023 is well within the period of limitation as per law.
15. It may be seen that the present suit has been filed on behalf of plaintiff based on outstanding amount shown in the Statement of Account Ex.PW1/6 alongwith Discharge Quote showing a principal balance CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 9/ 11 Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.08.31
17:33:59
+0530
amount of Rs.11,91,445/-, duly supported with Certificate U/S.65 B of the Indian Evidence Act. As per the case of the plaintiff, the defendant has failed to pay the principal amount of Rs.11,91,445/- which as per the Statement of account ExPW-1/6 is due and pending against the defendant. The legal demand notice along with postal receipt dated 07.06.2022 has been proved as Ex.PW1/5(colly). Despite the aforesaid, defendant has failed to pay the outstanding amount leading to filing of the present suit.
16. The testimony of PW-1 has remained entirely unrebutted and unchallenged. There is no reason for the Court to disbelieve either the testimony of PW-1 or documents filed by the plaintiff more particularly Ex PW-1/2 to Ex.PW1/6 which are Loan Documents and Statement of Account qua the defendant, duly filed by the plaintiff in accordance with law showing an outstanding amount of Rs.11,91,445/-. The entries have been made in the ordinary course of business and the certificate U/S.65 (B) of Indian Evidence Act,1885 read with Order XI Rule 6 of CPC(as applicable to the Commercial Courts Act, 2015) has been duly proved vide Ex.PW1/7.
17. Having discussed the aforesaid and in the light of unrebutted and unchallenged testimony of PW1 and the documents exhibited on record, the court is of the considered opinion that the plaintiff bank has been able to successfully establish its case to the extent of preponderance of probabilities. However, the court has to see as to how much amount the plaintiff bank shall be entitled to. It may be seen that as per Statement of Account Ex.PW1/6(colly), the closing balance in respect of the defendant's account was Rs.7,77,014.51ps as on 02.03.2023 which amount has been reached by the plaintiff bank after necessary reversal of CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 10/ 11 Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.08.31
17:34:04
+0530
the interest components on 08.12.2022. Since the account of the defendant was declared as NPA on 28.12.2019 and necessary reversal entries are being made by the plaintiff bank, the plaintiff bank cannot charge any further interest on the accounts once declared NPA as per RBI guidelines. As such the plaintiff bank has filed the suit on the basis of aforesaid Statement of Account Ex.PW1/6(colly) and the same shall be the principal outstanding amount. Accordingly, in view of the aforesaid discussion, the plaintiff bank shall only be entitled to recovery of amount of Rs.7,77,014.51ps(rounded of to Rs.7,77,014/-) as on the date of filing of the suit.
18. The plaintiff, therefore, succeeds to the aforesaid extent. Suit of the plaintiff is, accordingly decreed and the plaintiff is entitled to recovery of Rs.7,77,014/- against the defendant with an interest @ 7.5% per annum pendentelite and future, which is just & fair and in synchrony with the prevailing rate of interests and in the facts and circumstances of the case, same is granted from the date of filing the suit, till the date of its realization. Reliance placed on Pt. Munshi Ram @ Associates (P) Ltd. V. DDA, 2010 SCC Online Delhi 2444 and Rajendra Construction Co. Vs. Maharashtra Housing & Area Development Authority and others, 2005 (6) SCC 678, McDermott International Inc. Vs. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181.
19. The plaintiff bank shall also be entitled to the costs of the suit.
20. Decree sheet be drawn accordingly.
21. File be consigned to record room, after due completion.
Pronounced in Open Court Digitally signed
today on this 31st August, 2024 MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2024.08.31
17:34:11 +0530
(Mukesh Kumar Gupta)
District Judge (Commercial Court) -07
Central District, THC, Delhi/31.08.2024 'rk' CS (COMM)-672/2023 STATE BANK OF INDIA VS. TUSHAR GROVER 11/ 11