Delhi District Court
Having Its Head Office At: vs Shiv Vansh Homz Private Limited on 21 August, 2018
IN THE COURT OF DR. HARDEEP KAUR ADJ
02(SHAHDARA)KKD COURTS/DELHI
(CS No. 2133/2016)
In the matter of:
Bank of Baroda
[A Body of Corporate Constituted
under the banking Companies
(Acquisition & Transfers of Undertakings)
Act, 1970] (Through its Authorized
Representative)
Having Its Head Office At:
Mandavi, Baroda 396006
With One of Its Branches At:
C14, Dilshad Colony, Dilshad Garden,
Delhi 110095 ...Plaintiff
Vs.
1.Shiv Vansh Homz Private Limited F100, Dilshad Colony, Delhi 110095 Also At:
Meerut Hapur Bypass Road, Rajnagar Extension, Ghaziabad, Opposite Ajnara, Uttar Pradesh
2. Rajnish Sharma Director Shiv Vansh Homz Private Limited F100, Dilshad Colony, Delhi 110095
3. Meenakashi Sharma Director Shiv Vansh Homz Private Limited F100, Dilshad Colony, Delhi 110095 ...Defendants CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 1 of 11 Date of Institution : 07.06.2016 Date of Judgment: 21.08.2018 Decision : Decreed.
[Suit for Recovery of Rs. 5,90,258/ (Rupees Five Lac Ninety Thousand Two Hundred Fifty Eight Only) along with pendentlite and future interest) J U D G M E N T
1. Plaintiff Bank is a Body Corporate constituted under the banking Companies (Acquisition & Transfers of Undertakings) Act, 1970. The plaintiff bank is having its Head Office at Mandavi, Baroda 396006, The plaintiff Bank at all material time carried on and is still carrying on the business of banking through its various branches all over India. The Plaintiff Bank is also carrying the business from one of its branch at C14, Dilshad Colony, Dilshad Garden, Delhi 110095 Shri Sunil Kumar Dogra, S/o Shri Satya Paul, Employee Code No. 55351 working as 'Chief Manager' with the Plaintiff Bank at one of its branch at Mandoli, Delhi 110093 is the Authorized Signatory and Constituted Attorney of at the Plaintiff Bank vide Power of Attorney dated 05.05.2016. He is fully conversant with the facts of CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 2 of 11 the case on the basis of the information and the Knowledge derived from the records maintained by the Plaintiff bank pertaining to the Defendants herein and as such is very much in the position and authority to file the present suit on behalf of the Plaintiff bank. He is also competent to sign and verify all types of applications, plaints, written statements, petitions, Vakalatnama, affidavits, executions and various other applications and to do all acts necessary for properly conducting the legal proceedings filed on behalf of the Plaintiff Bank.
The present suit is filed by the Plaintiff Bank for recovery of Rs. 5,90,258/ (Rupees Five Lac Ninety Thousand Two Hundred Fifty Eight Only) along with pendentlite and future interest against the Defendants. Defendant No.1 is a private limited company duly incorporated under the Companies Act, 1956 vide Corporate Identity No. (CIN) U70200DL2008PTC182225 dated 20.08.2018 and defendant No. 2 and 3 are the Directors of the Defendant No.1 company and are looking after day to day affairs of the Defendant No.1 company.
Defendant No.1 is having a current account no. 3168020000089 with the plaintiff Bank since September, 2008. That pursuant to a meeting dated 26.11.2014 of Board of Directors of the Defendant No.1, it was CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 3 of 11 unanimously resolved by the Board to request to the Plaintiff Bank for a Temporary Overdraft (TOD) facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) for a period of 14 days in its current account no. 31680200000089. In terms of said resolution Defendant No.2 being one of the Directors of the Defendant No.1 company was authorized to sign and submit all the necessary documents pertaining to the aforesaid TOD facility to the plaintiff Bank.
That subsequent to the Board Resolution, a letter was given by the Defendant No.2 to the plaintiff Bank requesting for grant of TOD facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) to the Defendant No.1 company. Considering the requests of the Defendants , the plaintiff Bank in the normal and usual; course of its business sanctioned a TOD facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) to Defendant No. 1 on 08.12.2014 and in consideration thereof Defendant No.1 through Defendant No. 2 executed and delivered a Demand Promissory Note of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) being LDOC 4 dated 08.12.2014 in favor of the plaintiff Bank. The said Demand Promissory Note was duly filled in, CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 4 of 11 read over and explained to the Defendant No.2 and he put his signatures on the same for and on behalf of Defendant No.1, after understanding its implication and delivered the same to the plaintiff Bank.
The aforesaid TOD facility was granted for a limited period of 14 days i.e. from 08.12.2014 to 22.12.2014 and the Defendants were required to regularize the same before its expiry I.e by 22.12.2014. The interest was agreed to be paid @ 7.25% over base rate of the Plaintiff Bank per annum with monthly rests (base rate at the time of sanction was 10.25% per annum). In case of default the Defendant No 1 has agreed to pay an additional interest of 3% per annum on overdue installments.
However, after availing the aforesaid TOD facility, the Defendant No.1 became very negligent in the matter of payment of overdue amount and thus failed to adhere to financial discipline. That the Plaintiff Bank also sent letters dated 02.01.2015, 12.01.2015, 20.01.2015 and 23.01.2015 to the Defendant No.1 company, thereby requesting to deposit the overdue amount but the Defendants failed to accede to the said requests of the Plaintiff Bank.
That in response to the aforesaid letters of the Plaintiff Bank, Defendant No.1 through Defendant No.2 sent letters dated 12.05.2018, 13.07.2015, 11.09.2015, CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 5 of 11 10.12.2015, vide which Defendant No.1 gave false and frivolous excuses for the delay committed on their part in payment of overdue amount and further requesting for grant of time for the repayment of TOD facility. The TOD facility was granted for a limited period of 14 days, the defendants deliberately failed to repay the same despite expiry of more than one and a half years and the defendants have as on date made payment of Rs. 10,000/ (Rupees Ten Thousand Only) only against the TOD facility availed by them.
On account of Defendant No.1's failure to liquidate its liability, its loan account was declared as Non Performing Asset (NPA) by the plaintiff's Bank on 30.06.2015. That under those circumstances, the Plaintiff Bank sent legal notice dated 13.05.2016 to the Defendants thereby demanding payment of entire outstanding amount standing in its account within a period of seven days from the date of notice, however, all the Defendants neither replied nor accede to said notice of the Plaintiff Bank.
Plaintiff Bank further stated that as per statement of account of Temporary Overdraft Loan Account no. 31680600000089 maintained in the normal and usual course of business a total outstanding amount of Rs. 5,90,258/ ( Rupees Five Lac Ninety Thousand Two Hundred CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 6 of 11 Fifty Eight Only) [Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) being the principal amount plus Rs. 1,46,523/ (Rupees One Lac Forty Six Thousand Five Hundred Twenty Three Only) being the interest accrued plus Rs. 18,735/ (Rupees Eighteen Thousand Seven Hundred Thirty Five Only) being the TOD interest and penal interest], is due from Defendants as on 01.06.2016, which they are liable to pay to the plaintiff Bank, jointly and severally.
That the Plaintiff Bank is also entitled to recover pendentlite and future interest at the agreed rate of interest i.e @ 7.25% over base rate of the Plaintiff Bank per annum with monthly rests (base rate at present is 9.654% per annum) along with penal interest @ 3% per annum with monthly rests from the date of filing of the suit till realization compounded monthly.
2. Despite service of defendants through publication in Newspaper Veer Arjun on 01.03.2017, none has appeared on behalf of defendants. Considering this fact, defendants were proceeded exparte vide order dated 05.04.2017.
3. Plaintiff was allowed to lead exparte evidence. On 16.05.2018 PW1 Sh. Rakesh Kumar Dixit, AR of the plaintiff Bank tendered his evidence by way of affidavit (Ex PW CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 7 of 11 1/A) and reiterated the facts mentioned in the plaint.
PW1 proved the following documents:
1. Copy of Power of Attorney dated 11.07.2017 as Ex. PW 1/1 (OSR)
2. Copy of Power of Attorney dated 05.05.2016 as Mark A
3. Original Memorandum and Articles of Association of defendant no. 1 company as Ex PW 1/2
4. Certified copy of minutes of meeting of Board of Directors of D1 company dated 26.11.2014 as Ex PW 1/3
5. Original letter undated of D1 company as Ex PW 1/4
6. Original Demand Promissory Note as Ex PW 1/5
7. Office copy of letters dated 02.01.2015, 12.01.2015, 20.01.2015, 23.01.2015 as Ex PW 1/6 (colly)
8. Original letters dated 12.05.2015, 13.07.2015, 11.09.2015, 10.12.2015 as Ex PW 1/7 (colly)
9. Copy of legal notice dated 13.05.2016 with postal receipt as Mark B, mentioned as Ex. PW 1/8 in evidence affidavit and the same is deexhibited being photocopy.
CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 8 of 11
10. Statement of loan account no.
31680200000089 with certificate under Bankers Book Evidence Act as Ex PW 1/9 (colly) Thereafter, plaintiff closed its evidence and the matter was fixed for arguments.
4. This Court has heard the arguments of ld. Counsel for plaintiff and perused the material available on record.
5. Record shows that Defendant No.1 is having a current account no. 3168020000089 with the plaintiff Bank since September, 2008 and in pursuant to a meeting dated 26.11.2014 (Ex. PW 1/3) of Board of Directors of the Defendant No.1, it was unanimously resolved by the Board to request to the Plaintiff Bank for a Temporary Overdraft (TOD) facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) for a period of 14 days in its current account no. 31680200000089. Defendant No.2 being one of the Directors of the Defendant No.1 company was authorized to sign and submit all the necessary documents pertaining to the aforesaid TOD facility to the plaintiff Bank.
Record further shows that subsequent to the Board Resolution, a letter was given by the Defendant No.2 to the plaintiff Bank requesting for grant of TOD facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) to the Defendant No.1 company. Considering the requests of CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 9 of 11 the Defendants , the plaintiff Bank in the normal and usual course of its business sanctioned a TOD facility of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) to Defendant No. 1 on 08.12.2014 and defendant No.1 through Defendant No. 2 executed and delivered a Demand Promissory Note of Rs. 4,25,000/ (Rupees Four Lac Twenty Five Thousand Only) being LDOC 4 dated 08.12.2014 in favor of the plaintiff Bank (Ex. PW 1/5) and TOD facility was granted for a limited period of 14 days i.e. from 08.12.2014 to 22.12.2014 and the defendants were required to regularize the same before its expiry i.e by 22.12.2014 through various letters . Record shows that as per statement of account of Loan Account no. 3168020000089 (Ex PW 1/9 colly) maintained in the normal and usual course of business a sum of Rs. 488246.87/ is due from defendants.
There is nothing on record which could make this court to disbelieve this outstanding amount against the defendants, nor defendants have come forward to deny this claim. Hence this court has no other option but to believe the case of the plaintiff that a sum of Rs 4,88,246.87/ is outstanding against the defendants.
6. Plaintiff has claimed interest on the aforesaid amount @ 2.5 % over base rate of the plaintiff bank per CS-2133/16 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 10 of 11 annum with monthly rests (as per applicable based rate presently @ 9.65% p.a) that seems to be excessive. Since, the amount in the present case is for business transactions. In view of the Explanation II of sub section 1 of Section 34 of the Code of Civil Procedure, 1908 plaintiff is entitled for interest at reasonable rate.
If judicial notice of prevalent rate is taken, banks are normally charging rate form 9% to 12% on their advances depending upon the nature of loan. In the opinion of this court end of justice will be served if plaintiff is awarded simple interest at the rate of 10 % p.a.
7. Thus, a decree is passed in favour of the plaintiff and against the defendants for a sum of Rs. 4,88,246.87/ with simple interest at the rate of 10% per annum, from the date of institution of this suit till actual realization of decreetal amount. Plaintiff shall also be entitled to costs.
8. Decree sheet be drawn accordingly. File be consigned to record room after necessary compliance.
(Typed to the dictation directly, corrected and pronounced in the open court on 21.08.2018) (Dr. Hardeep Kaur) ADJ02(SHD)/KKD/Delhi Digitally signed by HARDEEP HARDEEP KAUR CS-2133/16 KAUR Date: 2018.08.28 13:06:41 +0530 Bank of Baroda vs Shiv Vansh Homz Private Ltd & Ors Page no. 11 of 11