Bangalore District Court
5 vs No. 4 And 5 Executed Deed Of Guarantee At ... on 23 January, 2023
15
COM.O.S.791/2022
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
AT BENGALURU (CCH.83)
THIS THE 23rd DAY OF JANUARY 2023
PRESENT:
SMT. SUMANGALA S BASAVANNOUR.,B.COM,L.L.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.791/2022
BETWEEN:
The Jammu and Kashmir
Bank Limited, A Banking
Company established
under hte J 7 K Companies
Act, 1977, Branch Office at
No. 70/1, Dr. Brownamma
Towers, Mission Road,
Bangalore - 560 027,
represented it Manager
and GPA Holder, Mr. Nissar
Ahmad Zargar
: PLAINTIFF
(Represented by M/s
Susheel Associates -
Advocates)
AND
1. M/s Mark Construction,
A partnership Concern,
Having its place at
business at No. 39, 2nd
floor, 4th main, S.K.
15
COM.O.S.791/2022
Garden, Benson Town
Post, Bangalore - 56,
through its partner.
2. Mr. Mukhtar Ahmad
Kanji, S/o G.H. Hassan.
3. Mrs. Rubiya, W/o
Mukhtar Ahmad Kanji.
Both residing at No. 39,
2nd floor, 4th Main, S.K.
Garden, Benson Town
Post, Bangalore - 56.
4. Mr. Haji Gulam
Hassan Nawsheri, s/o Lt.
Haji Gulam Ahmed
Nawsheri, aged about 63
years, R/o No.1, 1/12, 10th
cross, 11th main,
vasanthnagar, Bangalore -
560 053.
5. Mr. Masarat Bashir, S/
o Bashir Ahmad Kanji,
aged about 53 years, R/o
No. 104, Southern Crystal,
Chinana layout, K.B.
Sandra, R.T. Nagar Post,
Bangalore - 51.
: DEFENDANT
(Defendant No. 4 is placed
exparte as per order dated
15.10.2022, Defendant
15
COM.O.S.791/2022
No.5 is placed exparte as
per order dated
18.11.2022 and Defendant
No. 1 to 3 represented by
Sri. AKSK Advocate )
Date of Institution of the
04.06.2022
suit
Nature of the suit (suit on
pronote, suit for
Suit for recovery of money
declaration & Possession,
Suit for injunction etc.)
Date of commencement of 16.12.2023
recording of evidence
Date on which judgment 23.01.2023
was pronounced
Total Duration Year/s Month/s Day/s
00 07 19
(SUMANGALA S BASAVANNOUR),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This suit is filed by the Plaintiff Bank for recovery of Rs.8,77,361.03 along with future interest at 16.25% per annum from the date of the suit till the date of realization.
15COM.O.S.791/2022
2. The Brief facts of the Plaint are as follows:-
The Defendant No.1 approached the Plaintiff Bank during April 2010 and requested for financial assistance, by way of cash credit in order to carry on its business and further the said financial assistance was sought for working capital and accordingly the 1st Defendant through its partners submitted all relevant documents including KYC in order to facilitate the bank to sanction the said cash credit facility based on the documents furnished by the 1st Defendant. The Plaintiff Bank sanctioned the cash credit facility of Rs. 10,00,000/- to the 1 st Defendant on 26.04.2010 to the 1st Defendant as per the terms and conditions mentioned in the said sanction letter. The sanction letter categorically mentioned that the said credit facility is sanctioned for a period of one year subject to renewal and the primary security being hypothecation of stocks/books debts/ movables and collateral security of two persons. The Defendant No.1 through its partner executed a on demand promissory note, loan agreement, hypothecation agreement and other relevant documents on 04.05.2010 in order to secure the aforesaid loan and further the Defendant No. 4 and 5 executed Deed of Guarantee in favour of the Plaintiff Bank as security for the aforesaid cash credit facility of Rs. 10,00,000/-. The aforesaid cash credit facility was sanctioned to the 1 st 15 COM.O.S.791/2022 Defendant on the terms that the rate of interest would be PLR + 0.50% per annum with monthly rests and the said facility being renewed once in a year which were duly agreed by the Defendant herein. On 04.05.2010, the account was opened and the said cash credit facility was provided to the 1 st Defendant started operating the same and the amount was duly disbursed to the said account of the 1 st Defendant. The 1st Defendant paid the interest regularly ans maintained the account property and routed all the receipts from his customer through the aforesaid account. The 1st Defendant approached the Plaintiff Bank and requested for reducing the existing cash credit facility of Rs.
10,00,000/- to Rs. 7,50,000/- and accordingly the Plaintiff Bank reduced the Cash Credit Facility to Rs. 7,50,000/- and the Defendant No.1 duly executed a demand promissory note for Rs. 7,50,000/- on 04.05.2013 . On 03.05.2019 the Defendant NO.1 through its partner, Defendant No.2 and 3 herein have acknowledged the loan amount of Rs. 7,50,000/- by executing a DP Note. The Defendant No.1 became irregular with regard to the aforesaid cash credit facility and as a matter of fact the Defendant No.1 failed to repay the amount and the interest payable on the said cash credit facility and accordingly on 31.03.2021, the said account was declared as non-performing account and as on that date the 1st Defendant was due a sum of Rs. 8,29,795.03. Inspite of making repeated requests and 15 COM.O.S.791/2022 st demands, the 1 Defendant has failed and neglected to pay the outstanding amount and as a matter of fact a notice was duly issued by the Plaintiff on 06.04.2021 to the Defendants herein and inspite of receiving the same, the Defendant has made no payments towards the outstanding loan amount. The Defendant has mad the last payment on 03.05.2019, which amounts to acknowledging the loan raised from the Plaintiff Bank and accordingly the suit is in time. As there was no reply to the notice sent by the Bank nor any payment has been made to the loan account. The Defendants inspite of receiving the said notice, the Defendants neither paid the outstanding amount nor replied to the said notice.
3. Inspite of service of summons, the Defendants have not appeared before this court, hence the Defendant No. 4 is placed exparte as per order dated 15.10.2022, Defendant No.5 is placed exparte as per order dated 18.11.2022
4. The Defendant No.1 to 3 appeared his counsel but not chosen to file the written statement.
5. The Plaintiff has examined PW-1 and got marked Ex.P.1 to Ex.P.28. I have heard the arguments of the Advocate for the Plaintiff.
15COM.O.S.791/2022
6. Based on the above pleadings of the Plaintiff, the following points arise for my consideration :-
1. Whether the Plaintiff is entitled for the Suit Claim from the Defendant ?
2. What Order ?
7. My findings on the above Points are as under:
1. Point No.1 :- In the Partly Affirmative.
2. Point No.2 :- As per the final Order for the following reasons.
REASONS
8. Point No.1 :- The Plaintiff Bank substantiate of this case examined its Manager Nissar Ahmad Zargar as PW.1. PW.1 in his evidence reiterated averments of the Plaint, and got marked Ex.P.1 to Ex.P.28.
9. In the decision reported in A.I.R. - 2000 - Karnataka - 234 (Syed Ismail vs. Smt. Shamshia Begum), the Hon'ble High Court of Karnataka has held as follows :-
"3. The impugned order does not disclose the nature of pleading placed by the plaintiff and whether there is prima facie material to grant a decree in his favour. A 15 COM.O.S.791/2022 judgement in favour of the plaintiff is not automatic. The Court has to consider the case of the plaintiff and grant a decree in his favour. The learned trial Judge has not referred to the pleadings of the plaintiff and the documents produced by him to substantiate even a prima facie case for grant of a decree in his favour. Therefore, the judgement and decree in favour of the plaintiff is not automatic on failure of the opposite party to put his defence. The Court can grant a judgement in favour of the party only upon consideration of the case of the plaintiff including appreciation of pleadings and evidence."
10. The averments of the Plaint, evidence of PW.1 and Ex.P.2 to Ex.P27 discloses that the Defendant No.1 approached the Plaintiff Bank during April 2010 and requested for financial assistance, by way of cash credit in order to carry on its business and further the said financial assistance was sought for working capital and accordingly the 1 st Defendant through its partners submitted all relevant documents including KYC in order to facilitate the bank to sanction the said cash credit facility based on the documents furnished by the 1 st Defendant.
11. The Plaintiff Bank sanctioned the cash credit facility of Rs. 10,00,000/- to the 1st Defendant on 26.04.2010 at Ex.P.1 to the 1st Defendant as per the terms and conditions mentioned in the 15 COM.O.S.791/2022 said sanction letter. The sanction letter categorically mentioned that the said credit facility is sanctioned for a period of one year subject to renewal and the primary security being hypothecation of stocks/books debts/ movables and collateral security of two persons.
12. The Defendant No.1 through its partner executed a on demand promissory note, loan agreement, hypothecation agreement at Ex.P.6 and other relevant documents on 04.05.2010 in order to secure the aforesaid loan and further the Defendant No. 4 and 5 executed Deed of Guarantee at Ex.P.5 in favour of the Plaintiff Bank as security for the aforesaid cash credit facility of Rs. 10,00,000/-.
13. On 04.05.2010, the account was opened and the said cash credit facility was provided to the 1 st Defendant started operating the same and the amount was duly disbursed to the said account of the 1st Defendant. The 1st Defendant paid the interest regularly ans maintained the account property and routed all the receipts from his customer through the aforesaid account.
14. The 1st Defendant approached the Plaintiff Bank and requested for reducing the existing cash credit facility of Rs.
15COM.O.S.791/2022 10,00,000/- to Rs. 7,50,000/- and accordingly the Plaintiff Bank reduced the Cash Credit Facility to Rs. 7,50,000/- and the Defendant No.1 duly executed a demand promissory note for Rs. 7,50,000/- on 04.05.2013 .
15. On 03.05.2019 the Defendant No.1 through its partner, Defendant No.2 and 3 herein have acknowledged the loan amount of Rs. 7,50,000/- by executing a DP Note. The Defendant No.1 became irregular with regard to the aforesaid cash credit facility and as a matter of fact the Defendant No.1 failed to repay the amount and the interest payable on the said cash credit facility and accordingly on 31.03.2021, the said account was declared as non-performing account and as on that date the 1st Defendant was due a sum of Rs. 8,29,795.03. Inspite of making repeated requests and demands.
16. The 1st Defendant has failed and neglected to pay the outstanding amount and as a matter of fact a notice was duly issued by the Plaintiff on 06.04.2021 to the Defendants herein and inspite of receiving the same, the Defendant has made no payments towards the outstanding loan amount. The Defendant has mad the last payment on 03.05.2019.
17. From Ex.P.28 the Statement of account of loan account 15 COM.O.S.791/2022 facility speaks to the effect that total amount payable includes the interest accrued and therefore, Plaintiff has successfully proved that the Defendants have availed loan and have not repaid the same and are liable to pay the suit claim amount as on the date of suit. The plaintiff claimed the interest at the rate 16.25% per annum from the date of suit till realization. However by considering the interest prevailing, it is proper to award interest @ 10% per annum from the date of suit till realization.
18. The above mentioned transactions commenced from April 2010 and the last payment made by the Defendant on 03.05.2019 and the suit filed on 04.06.2022 is within the limitation period.
19. In this case in spite of suit summons, the Defendants No. 1 to 3 appeared in this case but not filed written statement. Hence, it shows the Defendants admitted the case of the Plaintiff. The evidence of PW.1 and Ex.P.1 to Ex.P.28 are remained unchallenged. Therefore, the Plaintiff is entitle for recovery of the suit claim amount of Rs. 8,77,361.03/- with future interest @ 10% per annum from the date of suit till realization of the entire amount. Hence, I answer this Point in "
Partly Affirmative".15
COM.O.S.791/2022
20. Point No.2 : -Therefore, I proceed to pass the following Order.
ORDER The Suit of the Plaintiff is decreed in part with cost.
The Defendants are hereby directed to pay Rs. 8,77,361.03/- to the Plaintiff, together with interest at the rate of 10% per annum from the date of suit till realization.
Draw Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendant to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
( Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 23rd day of January, 2023).
(SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.
15COM.O.S.791/2022 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF PW-1 Nissar Ahmad Zargar LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Office copy of the Sanction letter dt 26.04.2010 Ex.P.2 Demand promissory note dated 04.05.2010.
Ex.P.3 Demand promissory note dated
04.05.2010
Ex.P.4 Working capital and securities agreement
dt 04.05.2010
Ex.P.5 Deed of guarantee dt 04.05.2010
Ex.P.6 Hypothecation of stocks to secure
overdraft and term loan facility dt
04.05.2010
Ex.P.7 Letter of continuity dt 04.05.2010
Ex.P.8 Letter of continuity dt 04.05.2010
Ex.P.9 Consent letter dt 04.05.2010
Ex.P.10 Irrecoverable GPA of borrowers dt
04.05.2010
Ex.P.11 Demand promissory note dt 02.08.2010
Ex.P.12 Deed of guarantee dt 02.08.2010
Ex.P.13 Letter of undertaking dt 02.08.2010
Ex.P.14 Irrecoverable GPA of borrowers dt
02.08.2010
15
COM.O.S.791/2022
Ex.P.15 Counter guarantee dt 02.08.2010
Ex.P.16 Consent letter dt 02.08.2010
Ex.P.17 Proposal for SOD LIMIT dtd.26.04.2020
Ex.P.18 Loan application form
Ex.P.19 Personal statement of borrower
Ex.P.20 Personal statement of borrower
Ex.P.21 Personal statement of Guarantor
Ex.P.22 Personal statement of Guarantor
Ex.P.23 Letter from defendant dtd.23.04.2010
Ex.P.24 Note for submission to branch head
dtd.31.07.2010
Ex.P.25 Sanction letter dtd.26.04.2010
Ex.P.26 Recall notice dtd.06.04.2021
Ex.P.27 Proposal for filing suit against the
defendant dtd.14.09.2021
Ex.P.28 Statement of account with certificate
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT NIL LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT NIL (SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.