Bangalore District Court
Canara Bank vs Transpace Furnitech Systems on 26 February, 2020
IN THE COURT OF THE XXX ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (CCH-31)
DATED THIS THE 26 th DAY OF FEBRUARY 2020
-: PRESENT:-
SRI. MAANU K.S., B.Sc., LLB.
XXX Addl.City Civil & Sessions Judge,
Bengaluru City
O.S.NO.2421/2018
PLAINTIFF : Canara Bank,
Vijayanagara Branch,
No.53, Magadi Chord Road,
Vijayanagara, Bengaluru-560 040.
Represented by its Senior
Manager Sri.Ravi Shankar Singh,
S/o Sri.Uma Shankar Singh,
Aged about 35 years.
(By Pleader Mr.M.S.Vinayaka,
Adv.)
/VS/
DEFENDANTS: 1. Transpace Furnitech Systems,
A partnership firm represented
by its partners.
2. Sri.Phaniraj Rama Rao,
S/o T.S.Rama Rao,
Aged about 42 years.
3. Smt.Parimala S.Muddi,
W/o Sri.Phaniraj Rama Rao,
Aged about 41 years,
All are at No.4, Mookambika
Temple Road, Machohalli Forest
Gate, Magadi Road, Dasanapura
Hobli, Bengaluru - 560 091.
*****
2 O.S.NO.2421/2018
DATE OF INSTITUTION 31-03-2018
NATURE OF THE SUIT (Suit on Suit for
Pronote, Suit for declaration and Recovery of money.
Possession, Suit for injunction, etc.)
DATE OF THE COMMENCEMENT
OF RECORDING OF THE EVIDENCE 07-01-2019
DATE ON WHICH THE JUDGEMENT
WAS PRONOUNCED 26-02-2020
TOTAL DURATION YEAR/S MONTH/S DAY/S
01 10 24
( MAANU K.S.),
XXX Addl.City Civil & Sessions Judge,
Bengaluru City.
3 O.S.NO.2421/2018
JUDGEMENT
1. This is a suit for recovery of a sum of Rs.6,80,700/- together with current and future interest at the rate of 16.45% p.a. compounded monthly plus 2% penal interest from the date of filing the suit till realization along with costs.
2. The brief facts of the plaintiff's case are as under:
(a). It is the case of the plaintiff that it is a banking institution and defendants 2 and 3 being the the partners of defendant No.1 firm had availed the overdraft facility of Rs. 5,00,000/- from it on 03-02-
2008 after executing request for overdraft facilities, pronote, cash credit agreement, guarantee covering letter and guarantee agreement on the said date itself and the said overdraft facility has been renewed from time to time on 31-03-2010, 09-11-2011 and 03-11- 2012 by executing partnership letters, letters of renewal, letters of revival and letters of extension of guarantee and the defendants have acknowledged the liability to the tune of Rs. 5,06,272-52 by executing letter of renewal. The plaintiff further contended that the defendants have agreed for the terms and conditions of the said loan facility and also agreed to operate the said loan account without committing any default and to pay the bank charges, incidental charges and interest at the rate of 15% p.a. compounded monthly and in case of default in 4 O.S.NO.2421/2018 operation of loan account and repayment of the loan liabilities, they have further agreed to pay penal interest at 2% p.a. The plaintiff further contended that after availing the said overdraft facility, the defendants have not repaid the said overdraft amount in spite of repeated demands and personal approaches made by it, hence, they got issued a legal notice dtd.30-07-2015 and on receipt of said legal notice, the defendants have executed letter of revival dtd.30- 09-2015 and later on 09-02-2016 they have also executed letter of undertaking of repayment of loan liabilities and inspite of the same, they have failed to clear the loan amount. The plaintiff has further contended that as per the statement of accounts, the defendants were in due a sum of Rs.6,80,700/- and the defendant No.1 being the partnership firm and the defendant No.2 and 3 being the partners of the 1 st defendant firm and guarantors in respect of the said overdraft facilities, they are jointly and severally liable to pay the said dues and since the defendants failed to repay the said outstanding dues, it has come up with the present suit for recovery of the said dues with interest at 16.45% p.a. plus 2% penal interest compounded monthly and prayed for decreeing the suit.
3. After service of summons, even though the defendants have appeared through their counsel, they have not contested the case by filing written statement and 5 O.S.NO.2421/2018 hence, the case was posted for plaintiff's evidence by taking the written statement of the defendants as not filed.
4. In order to substantiate the case of the plaintiff bank, the Senior Manager of the plaintiff bank got examined himself as P.W.1 and got marked the documents Ex.P.1 to P.41. In spite of granting sufficient opportunity the defendants have not cross-examined P.W.1 and have not examined any witnesses. Therefore, by recording the cross-examination of P.W.1 by defendants as nil and defendants' evidence as nil, the matter was posted for arguments.
5. Heard the arguments of the plaintiff's counsel. The counsel for the defendants has not come forward to address his arguments and remained absent, hence, the argument of the defendants' counsel was taken as nil and posted the matter for judgment. Perused the materials placed on record.
6. On the basis of the materials placed on record, the following points arise for my consideration:
1. Whether the plaintiff has established that the defendants have availed the overdraft facility to the tune of Rs.5,00,000/- on 03-12-2008 from it by agreeing to repay the same with interest at 15% plus penal interest of 2% p.a. in case of default and the same was 6 O.S.NO.2421/2018 renewed from time to time by the defendants till 03-11-2012?
2. Whether the plaintiff has established that defendants were in due a sum of Rs.6,80,700/- as on the date of suit?
3. Whether the plaintiff is entitled to recover a sum of Rs.6,80,700/- along with interest from the defendants?
4. What order or decree?
7. On the basis of the materials placed on record and the evidence adduced both oral and documentary, my answers to the above points are as under:
Point No.1: In the affirmative. Point No.2: In the affirmative. Point No.3: In the affirmative. Point No.4: As per the final order for the following:
REASONS
8. POINTS NO.1 TO 3: Since these points are interlinked with each other, to avoid repetition of the averments and appreciation of evidence, all the points no.1 to 3 are taken together for joint discussion.
9.The Senior Manager of the plaintiff bank who has examined himself as P.W.1 while reiterating the plaint averments has specifically stated that the defendants have opened the bank account as per Ex.P.1 account opening form and on the application made by the defendants seeking for overdraft facilities as per 7 O.S.NO.2421/2018 Ex.P.2 the plaintiff bank has sanctioned OD facility of Rs.5,00,000/- to the defendants and after availing the said facility, the defendants have executed specimen signature card as per Ex.P. 3, cash credit agreement as per Ex.P. 4, pronote as per Ex.P. 5, guarantee covering letter and guarantee agreement executed by 2nd defendant as per Ex.P.6 and P.7, guarantee covering letter and guarantee agreement executed by 3rd defendant as per Ex.P. 8 and P.9, partnership letter as per Ex.P. 10. He further deposed that the defendants have also renewed from time to time the said overdraft facility by further executing the letters of renewal as per Ex.P. 11, P.12, P.23 and P.30, request letter for change of authorized signatories as per Ex.P. 13, specimen signature cards as per Ex.P. 14, P.15 and 19, letters dtd.31-03-2010, 9-11- 2011and 3-11-2012 as per as per Ex.P. 16, P.17, P.21,P.22,P.28 and P.29 seeking for renewal of financial accommodation and willingness to continue the guarantee executed by defendants No.2 and 3, partnership letters as per Ex.P. 18 and P.27, credit limit sanction letter as per Ex.P. 20, letters of revival as per Ex.P. 24, P.31 and P.38, Deed of hypothecation as per Ex.P.25, letter of undertaking as per Ex.P. 26, request letter by defendants as per Ex.P. 39 and the demand notice issued by the plaintiff bank to the defendants as per Ex.P. 40. P.W.1 has also produced office copy of legal notice as per Ex.P. 32, unserved postal covers as per Ex.P. 33 to P.37 and the notices 8 O.S.NO.2421/2018 as per Ex.P. 33(a) to P.37(a) and deposed that in spite of service of the said legal notice, the defendants have not repaid the said loan borrowed by them and as per the statement of account as per Ex.P. 41 the defendants were in due a sum of Rs. 6,80,700/- and claimed for a decree for recovery of Rs. 6,80,700/- with current and future interest.
10. On careful perusal of the entire evidence both oral and documentary, it is clear that after availing the overdraft facility of Rs.5,00,000/- from the plaintiff bank, the defendants have revived the said overdraft facility from time to time by extending their guarantee and by executing various letters of revivals and other documents, based on which, the plaintiff has renewed the said overdraft facility from time to time and in spite of granting sufficient time, they have not repaid the said loan and were in due a sum of Rs. 6,80,700/- as on the date of filing the suit. Even though the defendants have appeared through their counsel, they have not filed any written statement and have not cross-examined P.W. 1. As such the oral evidence of P.W.1 and the documentary evidence at Ex.P.1 to P.41 remained unchallenged and there is no reason for this Court to disbelieve the unchallenged evidence of P.W.1 and the documentary evidence relied by the plaintiff. Hence, I hold that the plaintiff has established availing of the overdraft facility by the defendants and that the said overdraft facility has been renewed from time to 9 O.S.NO.2421/2018 time and in spite of granting sufficient time and demand made by the plaintiff to repay the said loan, the defendants were still in due a sum of Rs. 6,80,700/-. The various letter of revivals including the last letter dtd.09-02-2016 marked as Ex.P.39 and the renewal of the said overdraft facilities by the plaintiff bank clearly demonstrates that the suit filed by the plaintiff is well within limitation. Therefore, there is no reason to refuse a decree in favour of the plaintiff in respect of the above said amount.
11. In the instant case, the plaintiff has claimed current and future interest at the rate of 16.45% compounded monthly plus 2% penal interest from the date of filing of the suit till the date of recovery of the same. In the humble opinion of this Court, if the simple current interest at the rate of 12% p.a. from the date of filing of the suit till the date of this judgment and future interest at the rate of 6% p.a. from the date of this judgment till realization is awarded on the principal outstanding due, it would meet the ends of justice. Hence, this Court is of the opinion that plaintiff is entitled to recover a sum of Rs. 6,80,700/- with current simple interest at the rate of 12% p.a. from the date of suit till the date of this judgment and future interest at the rate of 6% p.a. from the date of this judgment till realization on the principal outstanding due. Accordingly, I answer points no.1 to 3 in the affirmative.
10 O.S.NO.2421/201812. POINT NO.4: In view of the above discussions and my answers to the above points, I proceed to pass the following:
ORDER The suit of the plaintiff is hereby decreed in part with costs.
Plaintiff is entitled to recover a sum of Rs. 6,80,700/- (Rupees Six Lakhs Eighty Thousand Seven Hundred only) together with current simple interest at the rate of 12% p.a. from the date of suit till the date of this judgment and future interest at the rate of 6% p.a. from the date of this judgment till realization on the principal outstanding due, from the defendants jointly and severally.
The defendants are hereby directed to pay the decreetal amount within three months from the date of this judgment & decree.
Draw decree accordingly.
(Dictated to the Judgment Writer on computer, transcribed thereof, corrected, signed and then pronounced by me in the open Court on this THE 26 th DAY OF FEBRUARY 2020).
( MAANU K.S.), XXX Addl.City Civil & Sessions Judge, Bengaluru City.11 O.S.NO.2421/2018
ANNEXURE WITNESSES EXAMINED FOR THE PLAINTIFF/S:
P.W. 1 Sri.Ravi Shankar Singh.
WITNESSES EXAMINED FOR THE DEFENDANTS/S:
NIL.
DOCUMENTS MARKED FOR THE PLAINTIFF/S:
Ex.P.1 Account opening form.
Ex.P.2 Application for OD facilities.
Ex.P.3 Specimen signature card.
Ex.P.4 Cash credit agreement.
Ex.P.5 Pronote.
Ex.P.6 Guarantee covering letter.
Ex.P.7 Guarantee agreement.
Ex.P.8 Guarantee covering letter.
Ex.P.9 Guarantee agreement .
Ex.P.10 Partnership letter.
Ex.P.11, P.12,
P.23 & P.30 letters of renewal.
Ex.P.13 Request letter for change of
Authorized signatories.
Ex.P.14, P.15
& P.19 Specimen signature card.
Ex.P.16& P.17 Letters dtd.31-03-2010.
Ex.P.18 & P.27 Partnership letters.
Ex.P.20 Loan sanction letter.
Ex.P.21 & 22 Letters dtd.9-11-2011.
Ex.P.24, P.31
& 38 Letters of revival.
Ex.P.25 Deed of hypothecation.
Ex.P.26 Letter of undertaking.
Ex.P.28 & 29 Letters dtd.03-11-2008.
Ex.P.32 Office copy of legal notice.
Ex.P. 33 to P.37 Unserved postal covers.
Ex.P. 33(a) to
P.37(a) Notices.
Ex.P.39 Request letter by defendants.
12 O.S.NO.2421/2018
Ex.P.40 Demand notice issued by the plaintiff
bank to the defendants.
Ex.P.41 Statement of account with certificate.
DOCUMENTS MARKED FOR THE DEFENDANTS/S:
NIL.
( MAANU K.S.), XXX Addl.City Civil & Sessions Judge, Bengaluru City.