Delhi District Court
State Bank Of India vs Sahil Sethi on 22 August, 2023
IN THE COURT OF MS. NEELAM SINGH
DISTRICT JUDGE (COMMERCIAL)-02, SOUTH EAST
SAKET COURTS, NEW DELHI
CS (COMM) - 959/2022
In the matter of
STATE BANK OF INDIA
Having its central office at
State Bank Bhavan,
Madam Cama Road,
Mumbai-40024
Having its local head office at
11, Sansad Marg, New Delhi-110001
Having its Branch at
Nehru Place, New
and also RACPC situated
F-40, 2nd and 3rd Floor, Ring Road,
South Extension Part-I,
New Delhi
Through its Branch Manager
Sh. Sharvan Kumar
......Plaintiff
Versus
Sh. Sahil Sethi
S/o Sh. Jogesh Sethi
R/o 2/60, 2nd Floor
Back Side, Behind HDFC Bank
Ramesh Nagar, Delhi-110015
Also at:
F-1/189, Savitri Nagar
Near Kali Masjid,
Malviya Nagar, New Delhi-110017
Also at:
BF-61, First Floor, B-1
Janakpuri West, Delhi-110058
Also at:
CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 1 of 8
BF-61, First Floor, B-1
Janakpuri West, Delhi-110058
Also at:
Flat No. 1, 1st Floor, Block B-1,
Savitri Enclave, VIP Road,
Zirakpur, Mohali,
Punjab
Also at:
C/o M/S Himgiri Automobiles Pvt. Ltd.
B-22, Global Foyer, Golf Course Road,
Sector-43, Gurgaon, Haryana-122001
Also at:
C/o M/S AAA Vehicledes Pvt. Ltd.
Plot No. F-1/189, Savitri Nagar,
Malviya Nagar Road,
Near Kali Masjid, New Delhi-110017 ...... Defendant
Date of Institution of suit : 23.09.2022
Date of Reserving of judgment : 22.08.2023
Date of Judgment : 22.08.2023
Final Decision : Decreed
JUDGMENT
1. The present suit has been filed by the plaintiff Bank for recovery of money of Rs. 3,69,443/- (Rupees Eighteen Lakhs Forty Thousand and Fifty Eight only) along with pendentelite and future interest @ 8.25 % per annum till the date of actual payment.
2.1 Brief facts of the case are that the plaintiff bank is a corporate entity established under the State Bank of India Act, CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 2 of 8 1955. Its central office is in Mumbai, with various local offices, including one at Parliament Street, New Delhi, and a branch at Nehru Place, New Delhi. Mr. Sharvan Kumar initiated the suit on behalf of the plaintiff bank, being a Manager at the RACPC in New Delhi. The plaintiff bank established the RACPC in New Delhi to manage nonperforming assets (NPAs) within the city. NPAs from branches, including Nehru Place, were migrated to RACPC. The RACPC is filing the suit, but the plaintiff remains the State Bank of India.
2.2 It is further averred that the defendant approached the plaintiff bank at Nehru Place, New Delhi branch for a vehicle loan, submitting necessary documents for approval. The plaintiff bank sanctioned a car loan of Rs. 5,30,000/ to the defendant on August 20, 2016. The loan was secured against a Chevrolet Beat vehicle with registration DL 12CK 3823. The defendant signed various loan documents including the loan application, arrangement letter, loan cum hypothecation agreement, vehicle delivery letter, and other related documents. The defendant agreed to pay interest at 9.7% p.a. on the outstanding loan amount. Monthly installments of Rs. 8,717/ were agreed upon for loan repayment. All loan documents were explained to the defendant, who signed them voluntarily, understanding their implications. The defendant opened a car loan account but failed to comply with the agreed terms. Regular defaults led to the account becoming irregular and classified as an NPA by December 20, 2020. The defendant owes a total of Rs. 3,69,443/, including principal and accrued interest, as of the date of filing the suit. Due to persistent CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 3 of 8 defaults, the plaintiff bank recalled the loan through a legal notice dated April 13, 2022. The defendant intermittently deposited loan installments, with the last deposit on March 20, 2020, acknowledging the liability. The plaintiff bank classified the defendant's account as an NPA on December 20, 2020, according to asset classification guidelines. Interest is still applicable until payment/ realization.
3. Perusal of the record reveals that summons of the suit was ordered to be issued upon the defendants on 30.09.2022 but defendant remained unserved. Thereafter, Ld. Counsel for the plaintiff has moved an application u/o V Rule 20 CPC for substituted service upon defendants and that application was allowed by Ld. Predecessor of this Court. Defendants have been duly served by way of publication in the newspaper "The Statesman" dated 21.03.2023. On 29.04.2023, since none has appeared on behalf of defendant and even no Written Statement has been filed on behalf of the defendant, the right to file Written Statement on behalf of the defendant was closed and defendant was proceeded against ex-parte. Plaintiff in order to substantiate its claim has filed evidence by way of affidavit and examined Sh. Sharvan Kumar as PW-1 who tendered his evidence by way of affidavit Ex.PW1/A and relied upon the following documents:-
1. True copy of gazette notification of SBI is Ex. PW1/1.
2. Photocopy of proforma is Mark-A.
3. Copy of RC of hypothecated vehicle is Mark-
B. CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 4 of 8
4. Copy of insurance of hypothecated vehicle is Mark-C.
5. Copy of PAN card of defendant is Mark-D.
6. Copy of Adhar Card of defendant is Mark-E.
7. Loan Application Form is Ex. PW1/2.
8. Arrangement letter dated 20.08.2016 is Ex. PW1/3.
9. Loan-cum-hypothecation agreement dated 20.08.2016 is Ex. PW1/4.
10. Vehicle delivery letter dated 20.08.2016 is Ex. PW1/5.
11. Annexure-1 (Undertaking) dated 20.08.2016 is Ex. PW1/6.
12. Annexure-car-VII dated 20.08.2016 is Ex. PW1/7.
13. Standing instructions dated 20.08.2016 is Ex. PW1/8.
14. Office copy of legal notice is Ex. PW1/9.
15. Postal receipts are Ex. PW1/10 (Colly.).
16. Statement of account duly certified under the Banker's Books of Evidence Act is Ex. PW1/11.
17. Certificate of accrued interest is Ex. PW1/12.
18. Certificate u/s 65-B of IEA is Ex. PW1/13.
19. NSR is Ex. PW1/14.
CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 5 of 84. In order to adjudicate upon the suit, I have heard Ld. Counsel for plaintiff. During the hearing, Ld. Counsel for plaintiff had submitted that the case of the plaintiff stands duly proved by virtue of the unchallenged testimony of Plaintiff Sh. Sharvan Kumar and therefore, plaintiff should be granted the decree, as prayed for.
5. The cause of action for the present suit in favor of the Plaintiff and against the Defendants initially when plaintiff received an application for a car loan from the defendant. On 20.08.2016, the plaintiff approved and disbursed a car loan of Rs.5,30,000/- to the defendant, with the condition of hypothecating the financed car in favor of the plaintiff. The defendant signed the relevant loan documents on the same day. Subsequent causes of action arose due to the defendant's repeated defaults on the loan agreement, failure to respond to payment demands from the plaintiff, and eventual classification of the loan as a Non-Performing Asset (NPA) on 20.12.2020. The defendant intermittently deposited loan installments between 2016 and 2020, including a deposit of Rs.8,717/- on 20.03.2020. Despite a legal notice dated 13.04.2022, the defendant did not comply.
6. After perusing the record of the Court file and considering the submissions of Ld. Counsel for Plaintiff, I find that the suit of the Plaintiff has been filed on 23.09.2022 and is within the prescribed period of limitation. Further, I find that this CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 6 of 8 Court has the territorial jurisdiction to try and adjudicate the present suit as the loan in question was provided by the Plaintiff through its Nehru Place, New Delhi branch, and all necessary documents were executed and disbursed to the Defendants at that location. Accordingly, the cause of action has arisen within the territorial jurisdiction of this court and therefore, this court has territorial jurisdiction to try and entertain the present suit as per law.
7. PW-1 has categorically deposed that the plaintiff bank, established under the State Bank of India Act, holds its central office in Mumbai, with various branches including one at Nehru Place, New Delhi. It is further submitted that he being a manager at the RACPC in New Delhi, filed the suit on behalf of the bank. It is further submitted that the RACPC manages non-performing assets (NPAs) from branches, including Nehru Place. It is further submitted that the defendant requested and received a car loan of Rs. 5,30,000/- in August 2016, secured against a Chevrolet Beat. It is further submitted that despite regular defaults, the defendant failed to repay the loan, resulting in the account being declared an NPA in December 2020. It is further submitted that the outstanding amount of Rs. 3,69,443/-, along with accrued interest, is being claimed by the bank.
8. As regards the rate of interest claimed by the Plaintiff is concerned, I am of the considered opinion that as per the CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 7 of 8 Judgment of Hon'ble Supreme Court in Central Bank of India Vs. Ravindra AIR 2001, Supreme Court 3095, the grant of pendente- lite and future interest is a subject matter of the discretion of the Court and not to be governed by the agreement between the parties. Accordingly in exercise of the discretionary power of this Court, I have granted pendente-lite and future interest at the rate of 6% p.a. to the Plaintiff because Section 34 of CPC, 1908 as well as the provisions of the Interest Act, 1978, contemplate grant of interest at the rate of 6% per annum and because in the past decade, the nationalized banks have also granted interest at the rate of 5-6% per annum, on terms deposits.
9. Thus, as a net result of the aforesaid, the suit of the Plaintiff is decreed for an amount of 3,69,443/- (Rupees Eighteen Lakhs Forty Thousand and Fifty Eight only) along with the interest pendente-lite and future interest @ 6% p.a. till its realization.
10. The Suit of the Plaintiff is decreed accordingly. Decree sheet be drawn and file be consigned to Record Room.
Announced & dictated in the open Court on this 22nd day of August, 2023 (NEELAM SINGH) District Judge (Commercial Court-02) South-East, Saket Courts, ND CS (COMM) 959/2022 State Bank of India Vs. Sahil Sethi Page 8 of 8