Bangalore District Court
Canara Bank vs Sri. R. Kanaka Raj on 1 March, 2021
IN THE COURT OF THE XX ADDITIONAL SMALL
CAUSES JUDGE AND ADDL.CHIEF METROPOLITAN
MAGISTRATE, BENGALURU (SCCH-22)
PRESENT : SMT. SHAKUNTHALA.S
B.A., LL.B.,
XX Additional Small Causes Judge,
& Additional Chief Metropolitan
Magistrate, Bengaluru.
DATED : This the 1st day of March, 2021.
S.C.No.409/2020
PLAINTIFF - Canara Bank,
PAN NO.AAACC6106G,
Vasanthanagara Branch,
Kodavasamaja Building,
1st Main Road, Vasanthanagara,
Bangalore-560052.
Represented by its Senior Manager
Sri. K.N.Nataraja
Son of Sri. Narasimhaiah
Aged about 58 Years.
(Rep. By Sri. M.S.Vinayaka, Adv.,)
- Versus -
DEFENDANT - Sri. R. Kanaka Raj,
Son of S.Ramu,
Aged about 37 Years,
No.105, 4th Cross, Shivaji Road,
Shivajinagar,
Bengaluru-560 051.
(Ex-parte)
SCCH-22 2 S.C.409/2020
1. Date of Institution : 20.03.2020
2. Nature of Suit : Recovery of Money.
3. Date of commencement of
Recording Evidence : 12.02.2021
4. Date of Judgment : 01.03.2021
5. Total Duration : Year/s Month/s Day/s
00 11 10
:: JUDGMENT ::
This is the suit filed by plaintiff Bank against the defendant for recovery of a sum of Rs. 1,71,938/- with interest at the rate of 9.65% p.a compounded monthly and 2% penal interest from the date of suit till the date of realization of the suit claim and for cost with a direction to sell the Hypothecated schedule property.
2. The brief case of the plaintiff bank is as under:
Defendant has availed term loan of Rs. 4,00,000/- for the purpose of the concrete mixture machine on 13.01.2015. and he executed necessary documents that is Hypothication agreement, hypothicated the machinery, letter of under taking, Pronote and letter of confirmation, loan application, specimen signature card, loan sanction letter.SCCH-22 3 S.C.409/2020
3. He had agreed for the terms and conditions of the said loan and agreed to pay monthly installments of Rs.8,647/- in 60 monthly installments to the loan account regularly. He also agreed to pay the interest at the rate of 10.75% p.a compounded monthly and agreed to pay the penal interest at 2% p.a in case of default in payment of the loan.
4. That as agreed he failed to pay the installment in spite of repeated demands, personal approaches. However he has executed revival letter on 21.03.2017 by confirming the availment of the said loan and execution of earlier loan documents. In spite of execution of letter of revival he has failed to clear the liability hence got issued a demand notice on 13.06.2019 calling upon him to pay the amount and the said notice though served but failed to clear the liability nor replied to the notice. Hence got filed this suit for the aforesaid reliefs.
5. In response to the summons, though served on the defendant not chosen to appear before the court and placed Ex- parte.
6. Plaintiff in order to prove its case, the Senior Manager of SCCH-22 4 S.C.409/2020 the plaintiff bank got examined himself as P.W.1 and in support of oral evidence got marked 12 documents, at Ex.P1 to Ex.P12.
7. The oral as well as documentary evidence produced by the plaintiff remained unchallenged and un controverted.
8. Heard the arguments.
9. On perusal of oral as well as documentary evidence , the points that arise for my determination are;
1. Whether the plaintiff proves that the defendant borrowed a sum of Rs.4,00,000/- for the purpose of his concrete mixture machine on 13.01.2015 and executed all necessary documents in favour of the plaintiff bank?
2. Whether the plaintiff entitle for the interest and penal interest? If so, at what rate?
3. Whether the plaintiff entitle for the relief as sought for?
4. What order or decree?
10. My findings on the above points are as under;
Point No.1 - In the Affirmative Point No.2 - Partly in the Affirmative.
Point No.3 - In the Affirmative Point No.4 - As per final order for the following reasons.
SCCH-22 5 S.C.409/2020:: REASONS ::
POINT No.1 and 3:-
11. For the sake of convenience and to avoid repetition of facts and evidence, I would like to discuss the above points together. It is the burden on the plaintiff who approached this court for the relief has to prove the availment of loan by the defendant, as well as execution of documents. In this case, the Senior Manager of the plaintiff bank examined himself as PW.1 and he has reiterated in his affidavit filed in lieu of his examination-in-chief, which is nothing but replica of plaint and in order to prove the availment of loan as well as the execution of documents by the defendant got marked the loan application at Ex.P1.
12. On perusal of Ex.P1 it clearly establishes that the defendant who approached the plaintiff bank by filing Ex.P1 on 13.01.2015 by putting his signature and prayed for sanction of loan and Ex.P1 in which the address and the signature of the defendant finds a place and Ex.P1 clearly establishes the approach made by defendant to the plaintiff bank for the purpose of loan as mentioned in Ex.P1.
SCCH-22 6 S.C.409/2020
13.Ex.P2 is the specimen signature of the defendant wherein defendant put his specimen signature in support of Ex.P1 on 13.01.2015 itself.
14. Ex.P3 is the sanction letter memorandum which establishes that Rs.4,00,000/- as per Ex.P1 sanctioned with interest at the rate of 10.75% p.a., that to hypothicating the concrete mixture centering sheet and column box as mentioned in Ex.P3 and Ex.P3 also discloses the repayment as agreed by defendant. Ex.P4 is the hypothication agreement wherein the defendant hypothicated the concrete mixing machine as a security for the said loan and the signature of accused finds a place in Ex.P4 under which he agreed to repay the loan.
15. Ex.P5 is the letter of under taking he under taken to repay the amount as agreed as per Ex.P1 and Ex.P5 was executed on 13.01.2015 itself. Ex.P6 is the pronote executed by the defendant by putting his signature along with witnesses and promised on demand jointly and severally pay the loan amount with interest at 10.75% p.a compounded monthly and Ex.P7 is the agreement cum deed of hypothication, hypoticating the concrete SCCH-22 7 S.C.409/2020 mixture machine, centering sheets and column box and as per Ex.P7, the defendant agreed to pay interest at 10.75% p.a compounded monthly and also 2% p.a as penal interest. Ex.P8 is the confirmation letter executed by the defendant on 14.01.2015 confirming the documents executed in favour of the plaintiff bank as per Ex.P1 to 7 which he got executed. Ex.P9 is the letter of revival dated 21.03.2017 reviving the loan raised by him.
16. Ex.P10 is the demand made to him by the bank on 13.06.2019. Ex.P11 is the returned postal cover and Ex.P11(a) is the notice the demand made by the plaintiff to the defendant. Ex.P12 is the statement of accounts.
17. On perusal of oral as well as documentary evidence it clearly establishes the approach made by the defendant to the plaintiff bank and borrowed a loan of Rs.4,00,000/- and agreeing to repay the same with interest as per the terms and conditions by executing all the documents at Ex.P1 to Ex.P9. Accordingly I have no reason to disbelieve the case of plaintiff and the evidence of PW.1 which remained unchallenged, unrebutted and plaintiff established his case by producing cogent, clear, satisfactory and SCCH-22 8 S.C.409/2020 convincing evidence, as such he is entitled for the relief as sought for. Hence, I answer Point No.1 and 3 in the affirmative.
18. Point No.2:
It is the contention of plaintiff that defendant is liable to pay Rs.1,71,938/- together with costs, current and future interest at the rate of 9.65% p.a., and in default at the rate of 2% penal interest per annum compounded monthly interest from the date of suit. In order to prove that the defendant agreed to pay interest and also penal interest at the rate of 2% and to prove the same got produced Ex.P1 loan application and Ex.P3 sanctioned letter wherein the interest rate has been mentioned at 10.75% so also in Ex.P4 hypothication agreement in which it has been mentioned that the defendant agreed to pay the entire loan in 60 monthly installments of Rs.8,646/- with interest at 10.75% and also penalty at the rate of 2% p.a as mentioned in page no.2 serial no.3 and page no.7 serial no.34. So also in Ex.P6 the pronote under which he also agreed to pay interest at the rate of 10.75% so also in Ex.P7 agreed to pay interest at 10.75% and shall pay over due interest at 2% p.a accordingly, in the existence of the agreed rate of interest by him at SCCH-22 9 S.C.409/2020 the rate of 10.75% as according to plaintiff prayer the defendant is liable to pay interest at 9.65% p.a as stated in para 4 of the plaint, but Under Sec. 34 CPC given discretion to the court and at this stage, it is relevant to mention Sec.34, which reads, thus;
(1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit :
Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions."
19. Accordingly in the existence of agreed rate of interest if SCCH-22 10 S.C.409/2020 the defendant is directed to pay interest at the rate of 8.65% p.a and 2% penal interest p.a no in justice or hardship, would be caused accordingly considering the nature of loan, I answer this point partly in the affirmative.
20. Point No.4: For the above reasons, I proceed to pass the following:
ORDER Suit of the plaintiff is hereby decreed with costs.
Defendant is directed to pay a sum of Rs.1,71,938/ together with interest at 8.65% p.a., and 2% penal interest from the date of suit till the date of realization of the same.
Further the plaintiff is at liberty to proceed against the movable property hypoticated to the plaintiff and after selling the same entitled to recover the suit claim out of the sale proceeds of the movable hypoticated property.
Draw decree accordingly.
(Dictated to the stenographer, typed by her, corrected, signed and pronounced by me in the open court on this the 1st day of March, 2021.) (SHAKUNTHALA.S) XX Additional Small Causes Judge, & Additional Chief Metropolitan Magistrate, Bengaluru.SCCH-22 11 S.C.409/2020
:: ANNEXURE ::
Witnesses examined on behalf of the plaintiff:
P.W.1 - Sri. K.N.Nataraja Documents marked on behalf of the plaintiff:
Ex.P.1 - Loan Application. Ex.P.2 - Specimen signature Ex.P.3 - Sanction letter Ex.P.4 - Hypothecation Agreement Ex.P.5 - Undertaking Letters Ex.P.6 - Pronote Ex.P.7 - Agreement cum Hypothication Ex.P.8 - Confirming letter Ex.P.9 - Letter of revival Ex.P.10 - Legal notice Ex.P.11 - Postal cover Ex.P.11a - Copy of legal notice Ex.P.12 - Statement of account
Witnesses examined on behalf of the defendant:
- Nil -
Documents marked on behalf of the defendant:
- Nil -
(SHAKUNTHALA.S) XX Additional Small Causes Judge, & Additional Chief Metropolitan Magistrate, Bengaluru.