Delhi District Court
Bharat Bhushan vs Hdfc Bank Ltd on 24 March, 2026
IN THE COURT OF SH. SHIV KUMAR
DISTRICT JUDGE -02, WEST DISTRICT:
TIS HAZARI COURTS, DELHI.
Civ DJ no. 20/2020
CNR No. DLWT01-000146-2020
DLWT010001462020
Sh. Bharat Bhushan
S/o Sh. Ram Lal Mukhija
R/o 01/2, Singh Sabha Road,
Block-41, Shakti Nagar,
Delhi-110007.
....... Plaintiff
Versus
HDFC Bank Ltd.
J/12/21, Rajouri Garden Branch,
Rajouri Garden,
New Delhi.
Regional office at
9-10, 4th floor,
Express Building
Bahadurshah Zafar Marg,
New Delhi-110002. . . . Defendant
Date of institution of the case : 10.01.2020
Date on which case reserved for judgment : 07.03.2026
Date of pronouncement of Judgment : 24.03.2026
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 1/46
SUIT FOR DECLARATION, DAMAGES, PERMANENT
AND MANDATORY INJUNCTION.
JUDGMENT
(1) Vide this judgment, I shall decide, the present suit, filed by the plaintiff for declaration, damages, permanent and mandatory injunction.
(2) As per plaint, the suit of the plaintiff, in nutshell, is that the plaintiff had availed the loan facility of Rs,. 10,80,000/- from the defendant i.e. HDFC Bank (hereinafter referred to as the"Defendant Bank") at the floating rate of interest @ 11% per annum in April, 2006 and the abovesaid loan amount was repayable in 120 equal monthly installment of Rs. 14,874/-. It is further averred that the defendant bank had directed the plaintiff to submit the title deed of property No. 1/2, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007 and on their instruction, the above said documents were handed over by the Plaintiff to the defendant bank.
(3) It is further averred that as per the schedule, the plaintiff kept on paying the installments of the loan amount and till date, the Plaintiff has already paid 146 installments of Rs.14,878/- and paid total sum of Rs.21,72,188/-. It is further averred that in the year 2008, the Plaintiff suffered with paralytic attack, due to which, the Plaintiff could not paid some of the monthly installments as the Plaintiff was bed ridden during that period of two years and after recovering from above said paralytic attack, Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 2/46 the plaintiff started paying the monthly installment and for unpaid installments, the bank had levy penalties on the Plaintiff and Plaintiff has paid the penalty charges also.
(4) It is further averred that the Plaintiff has already paid 146 installment to the bank instead of 120 installments as settled in the loan agreement but still the bank kept on claiming 159 installments arbitrary and without any justification. It is further averred that the Plaintiff requested the bank officials that, as he has already paid excess installments than settled installments and requested them to clarify, as to how, they are claiming 159 installments of Rs.14,878/- as the loan amount had already been paid and also requested them to release the property documents taken by them at the time of advancing the loan. It is further averred that bank officials have failed to clarify, as to how, the 159 installments are required to be paid by the Plaintiff and the bank officials claimed that as the loan was advanced on floating rate of interest, the interest has been increased during the loan period, therefore, excess amount is required to be paid by the Plaintiff.
(5) It is further averred that the Plaintiff requested the officials of the defendant bank to clarify the interest rate claimed by them and to clarify the total outstanding amount but the officials of Defendant Bank have failed to do so and the bank officials have misused one cheque of the plaintiff bearing no.2400124 of Rs.14,874/-, date of which was lying blank, has been filled up by the bank officials, as per their convenience drawn on HDFC Bank Ltd. Delhi and filed false case U/s 138 Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 3/46 N.I. Act before Dwarka, Delhi to pressurize the plaintiff by filing the false criminal case against the Plaintiff, however, nothing is payable or due against the Plaintiff.
(6) It is further averred that the defendant Bank has done illegality by filing the false case U/s 138 N.I. Act, thereby harassed and humiliate the Plaintiff and caused loss of prestige and also caused mental agony to the Plaintiff.
(7) It is further averred that the defendant Bank has failed to clarify the Plaintiff and justify their demand and the Defendant bank has also failed to show any document with regard to change of floating rate of interest and had handed over statement of account self made which itself contrary to the demand and interest rate as levy by the defendant bank.
(8) It is further averred that Plaintiff has raised the above said issue with the higher officials of bank by sending emails regarding the exceed 'EMI's payment and requested the bank officials to clarify as to how the additional installments are pending as the defendant bank has been sending its officials and recovery agent frequently to collect the installments, however, no installment is due or payable by the Plaintiff to the Defendant bank and even the exceed installment have already been paid but the bank officials have failed to give any suitable and justified reply regarding their demand and falsely claiming a sum of Rs.2,10,226/- as outstanding amount, however nothing is due or payable by the Plaintiff to the Defendant.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 4/46 (9) It is further averred that the Defendant bank has sent legal notice dated 12.07.2018 and claimed Rs.2,10,226.46 paisa as outstanding amount and directed the Plaintiff to pay the same within 7 days from the date of notice but the bank officials instead of justifying their demands have been illegally and unlawfully putting undue pressure on the Plaintiff to bow down before their arbitrary and illegal demand despite the fact that the Plaintiff has already paid the 26 excess installments of Rs.14,878/- each.
(10) It is further averred that the Plaintiff has already repaid entire loan amount along with interest and even paid excess installments then agreed but the defendant bank still illegally, unlawfully and arbitrary claiming a sum of Rs.2,10,226.46 from the Plaintiff as outstanding amount, however, the demand is neither justified nor recoverable from the Plaintiff and even the Plaintiff has paid 26 additional installments of Rs.14,878/- each, the total comes to Rs.3,86,828/- i.e. excess amount paid by the Plaintiff to the Defendant bank and the defendant bank is liable to refund to said excess amount. It is further averred that the amount of Rs.3,86,828/- as the same was paid excess by the Plaintiff and the above said amount is entitled to be refunded to the Plaintiff by the Defendant bank (11) It is further averred that the Defendant bank is claiming a sum of Rs.2,10,226.46 illegally and unlawfully from the Plaintiff, the above said demand is unjustified illegal and arbitrary and same is liable to be declared as not payable and null and void. It is further averred that Plaintiff has already paid Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 5/46 the entire loan amount to the Defendant and the document of Property No. 1/2, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007, taken by the Defendant bank from the Plaintiff, the defendant bank is liable to be directed to return the original document of the aforesaid property to the Plaintiff. It is further averred that the Defendant bank has filed false and frivolous case U/s 138 N.I. Act, against the Plaintiff by manipulating and forging the undated cheque of Plaintiff taken by the bank officials in the year 2006 as security is also liable to be stayed and the defendant bank is liable to be restrained from misusing any cheque or any other document or for filing any other case against the Plaintiff. It is further averred that the Plaintiff has no other lawful efficacious remedy for redressal of his grievances except to file the present case against the Defendant bank.
(12) It is prayed by the plaintiff that a decree of declaration, a decree of mandatory injunction, a decree of permanent injunction and also a decree of recovery of a sum of Rs. 3,86,828/- may be passed in favour of the Plaintiff against the defendant bank CASE OF DEFENDANT AS PER WRITTEN STATEMENT.
(13) In the written statement filed on behalf of defendant, the defendant had taken preliminary objections that the Plaintiff has not come to this Hon'ble Court with clean hands and the Plaintiff has filed the suit with malafide intention which contains false averments and incorrect facts (as explained hereinafter) and as such the plaint is liable to be dismissed on Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 6/46 this ground alone with exemplary cost with regard thereto as per provisions of Section 35 A of CPC, 1908. The Plaintiff who is seeking equitable relief must prove his bonafide and should first come forward before this Hon'ble Court with clean hands.
(14) It is further contended that as per the admission of the Plaintiff and the documentary evidence (filed along with the written statement), it is apparent that, it is the Plaintiff and Ms. Dimple/Co-Borrower, who are guilty of not adhering to the terms and conditions of the Secured Loan (against Property). It is further contended that the Plaintiff along with Ms. Dimple was fully satisfied with the services provided by the Defendant Bank and they were made well aware of the terms and conditions of the Secured Loan (against Property) and as detailed in the loan agreement, which have been duly signed and acknowledged by the Plaintiff along with Ms. Dimple.
(15) It is further contended that after availing and appropriating the loan, wherein the Defendant Bank provided the services as agreed, the Plaintiff has come up with the frivolous and vexatious plaint on the false and frivolous grounds with the malafide intentions and the parties to the contract of Secured Loan (against Property) have acted on the same and hence as per Principal of Estoppel, the Plaintiff is estopped from alleging to the contrary. It is further submitted that the averments and/or allegation in the Plaint to the contrary is nothing but after thought and being levelled in order to pressurize the Defendant Bank; so that the Defendant Bank succumb to the illegal demand of the Plaintiff. In view of the Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 7/46 same the present plaint amount to an abuse of the benevolence of this Hon'ble Court and is therefore, liable to be rejected rightly on the preliminary ground alone.
(16) It is further contended thar the prayer of decree of Declaration of the plaintiff has not been properly valued and further the plaintiff has not paid the requisite court fees, as per the Court Fees Act and as such the plaint is liable to be rejected as per the Order VII Rule 11 (b) & (c) of CPC as the Plaint is not properly valued and is insufficiently stamped.
(17) It is further contended that the present suit is bad on ground of non-joinder of parties and the Plaintiff along with Ms. Dimple/co-borrower had approached the defendant Bank and a Loan Agreement dated 28.02.2006 was entered between the Plaintiff, the Co-Borrower and the defendant Bank and the parties were made well aware with the terms and conditions of the Loan against property. Hence Ms. Dimple/ Co- Borrower is the necessary and proper party for adjudication of the present suit.
(18) It is further contended that the Plaintiff and Ms. Dimple/Co-Borrower had taken the present Loan from Defendant Bank and had agreed that the Floating Rate of Interest shall be applicable. It is further contended that in the Floating Rate of interest if the Rate of the Interest increases, the Defendant has option to either increase EMI's amount or extend the tenure of the EMI.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 8/46 (19) It is further contended that in the present case, the Defendant has extended the tenure of the EMI. It is further contended that that the Defendant Bank has acted as per the terms and conditions agreed between the parties and the relevant terms of the agreement executed between the Plaintiff and Ms. Dimple/ Co-Borrower and the Defendant Bank are reiterated hereunder for the ready reference of this Hon'ble Court:
Clause 1.1 (a): "Floating Rate of Interest" when applicable to the Loan, shall mean the FRR applied to a Loan with spread (if any) as specified in Schedule 2 and as applied by the Bank, on the Loan of the Borrower on the terms and conditions set forth in Schedule 2.
Clause 5.1: The Loan will carry interest at the Floating Interest Rate or the Fixed Rate of Interest rate per annum mentioned in Item No. 7 of the Schedule 1 hereunder written. Such option shall be specifically indicated by ticking the current option under item No. 7 of the Schedule 1 hereunder written. The Borrower shall also be liable to pay PMII if applicable.
Clause 5.4: Interest and other charges shall be computed on the basis of a year of three hundred and sixty five days. The Bank may in its sole discretion modify the basis of the year and the periodicity of the interest.
Clause 5.5 The Bank in its sole discretion would be entitled to modify and vary the said rate of interest (without any prior intimation to the Borrower) from time to time and upon such revision, the Borrower agrees to pay the revised rate of interest. It shall be the responsibility of the Borrower to check with the Bank from time to time about such revisions.
SCHEDULE 2 (B)
d) Save and except as provided hereinbelow (e), the EMI is intended to be kept constant irrespective of the variations in the Floating Interest Rate and therefore the EMI(s) is not likely to vary. In case of variation of the EMI's no intimation will be provided to the Borrower provided however that the borrower shall be intimates of the Floating Interest Rate applied on the Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 9/46 Loan the relevant dates during the preceding financial year on an annual basis within a reasonable time from the expiry of the financial year in such manner as the Bank deems fit.
(20) It is further contended that this Court may appreciate that the Defendant Bank has applied the yearly downward/upward revisions of the Rate of Interest as per Reserve Bank of India (hereinafter referred to as "RBI") to the Loan Account and benefits of the same were duly given to the Plaintiff and Ms. Dimple/Co-Borrower(as detailed in the Submissions hereinafter). The statement of account placed on record reflects the yearly downward/upward revisions in the Rate of Interest as per RBI which was duly applied to the Loan Account in question. It is further contended that this Hon'ble Court may also appreciate that the Defendant Bank is not legally bound to send the intimation letters w.r.t the increase and decrease of the Rate of Interest to the Plaintiff and Ms. Dimple i.e. Co- Borrower. However the Defendant Bank has sent various intimation letters intimating the Plaintiff w.r.t the yearly downward/upward revisions in the Rate of Interest as per RBI through Speed Post and Normal Post. Hence the present Suit deserves to be dismissed as being not maintainable on this ground alone.
(21) It is further contended that in view of the default in payment by the Plaintiff and Ms. Dimple/Co-Borrower, as per the Loan Agreement, the defendant bank has a Right to Lien and Set-Off. It is further contended that the Hon'ble Court may also appreciate that parties to the agreement have also duly signed "Letter of General Lien and Set Off" which further Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 10/46 substantiate the Defendant's Bank right and the right of Defendant Bank as stated in Clause 14.1 w.r.t the Set-off and Lien in the Loan Agreement is reiterated herein below for the kind perusal of this Hon'ble Court.
"14.01 The rights, powers and remedies given to the Bank by this Agreement shall be in addition to all the rights powers and remedies given to the Bank by virtue of any other security, statute, or rule of law. The Bank may exercise a Banker's Lien or right to set-off with respect to any obligation of the Borrower to the Bank and shall have a lien on all property or securities of the Borrower in the Bank's possession or custody whether for safe-keeping or otherwise."
(22) It is further contended that as per the terms and conditions enumerated in the Loan Agreement (duly executed and signed by the Plaintiff and the Co-Borrower), the Defendant Bank as per the Loan Agreement, has a Right to Lien and Set- Off in view of the default in payment by the Plaintiff and Ms. Dimple/Co-Borrower. Therefore the Plaintiff and Ms. Dimple/ Co-Borrower deserves no indulgence from this Hon'ble Court and thus the same is liable to be rejected at the threshold.
(23) It is further contended that without prejudice to the rights of the Defendant Bank under the Terms and Conditions of the Agreements entered between the parties, the Defendant Bank under Section 171 of the Indian Contract Act, 1872 has the said "Right of General Lien" wherein "Bankers, factors, wharfingers, attorneys of a High Court and policy brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them, but no other person have a right to retain, as a security for such Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 11/46 balance, goods bailed to them, unless there is an express contract to that effect".
(24) It is further contended that the Defendant Bank's statutory right to exercise lien is a valuable right and it cannot be taken away, particularly when it is the statutory right of the bank created under Section 171 of the Indian Contract Act 1872. Reliance in this regard is placed on the Supreme Court's judgment "Syndicate Bank vs Vijay Kumar And Others", [reported in AIR 1992 SC 1066]- in which it was held "that by mercantile system the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer's debit balance." In view of the above it is submitted that that the Defendant Bank's statutory right to exercise lien is a valuable right and it cannot be taken away. Therefore the Plaintiff and Ms. Dimple i.e. Co-Borrower deserves no indulgence from this Hon'ble Court and thus the same is liable to be rejected at the threshold.
(25) It is further contended that this Hon'ble Court may also appreciate that the Plaintiff and Ms. Dimple/ Co-Borrower have been chronic defaulters w.r.t the payment of the EMI's. It is Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 12/46 further contended that the Plaintiff and Ms. Dimple/Co- Borrower have been defaulting in the payment of EMI's from the very beginning and it is pertinent to note that in total 69 Cheques have dishonoured, the SOA placed on record substantiates the same. It is further contended that the Defendant Bank thereafter in view of the default of the Plaintiff has sent a Notice dated 12.07.2018 informing the Plaintiff to make the payment of the Loan Amount within seven days, however the same was blatantly ignored by the Plaintiff and Co- Borrower. It is further contended that this Hon'ble Court may appreciate that the Plaintiff in its Plaint (Para 5) has admitted that due to paralytic attack Plaintiff could not pay monthly installment for two years.
(26) It is further contended that the Plaintiff and Ms. Dimple have regularly defaulted in the payment of EMI's and the Plaintiff and Ms. Dimple have defaulted in payment of EMI's before and even after, the said two year period (after 2008) as stated in the Plaint. It is further contended that the Statement of Account placed on record clearly shows the default made by Plaintiff and Ms. Dimple. It is further contended that Plaintiff and the Co-Borrower deserves no indulgence from this Hon'ble Court and thus the present suit is liable to be rejected at the threshold.
(27) It is further contended that a cheque bearing no. 408307 dated 29.09.2018 for an amount of rs. 14,878/- drawn on HDFC Bank Ltd, Roop Nagar, New Delhi-110007 was dishonoured and the plaintiff was also informed that the said cheque was Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 13/46 returned by the bank on 29.09.2018 for reasons "account is blocked",thereafter, through the Demand Notice dated 17.10.2018 under Section 138 of the NI Act informed the Plaintiff and called upon the Plaintiff to make the due payment. It is further contended that the said Demand Notice dated 17.10.2018 also stated that if the Plaintiff fails to make the due payment to the Defendant Bank within 15 days then the Defendant Bank shall take legal action.
(28) It is further contended that the Defendant Bank has filed a criminal case under Section 138 of the NI Act and the said case is pending adjudication before Hon'ble District Court Dwarka. It is further contended that the present suit is filed by the Plaintiff praying for the release of the original title documents of property bearing no. 1½, Singh Sabha Road, Block -41, Shakti Nagar, Delhi-110007. It is further contended that the Plaintiff and Ms. Dimple had executed the Loan Agreement dated 28.02.2006 for a secured loan (against Property). It is further contended that at the time of availing the Secured Loan (against Property), the original title documents of property was handed over by the Plaintiff and the Ms. Dimple to the Defendant Bank and the Plaintiff along with Ms. Dimple have agreed that the said original title documents of Property shall be released by the Defendant Bank once the Loan Amount is paid back.
(29) It is further contended that the Plaintiff and the Co- Borrower stands in default and as on date (14.02.2020) an outstanding amount of Rs. 2,87,071.60/- (Rupees Two Lakh Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 14/46 Eighty Seven Thousand and Seventy One Rupees and Sixty Paisa Only) is yet to be paid back by the Plaintiff and Ms. Dimple to the Defendant Bank. It is further contended that the original title documents of property shall be released by the Defendant Bank once the Plaintiff and Ms. Dimple pays back the Loan Amount. It is further contended that Plaintiff and the Co-Borrower deserves no indulgence from this Hon'ble Court and thus the present suit is liable to be rejected at the threshold.
(30) It is further contended that the Plaint in the present form is not maintainable and the Defendant Bank has acted strictly in accordance with rules & guidelines and regulations and as per the normal course of banking transactions. It is further contended that from the content of the Suit, it is apparent that the alleged grievances of the Plaintiff are flimsy and without any merit and as such does require any indulgence by this Hon'ble Forum. As such the plaintiff and the co-borrower should be stopped from alleging false, baseless, flimsy allegation against the defendant bank.
(31) It is further contended that the Defendant is a Banking Institution having its registered office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai 400013,its Branch Office at 1st Floor, Tower A, Plot No. 31, Najafgarh Industrial Area, Shivaji Marg, Moti Nagar, New Delhi - 110015 and is engaged in the legitimate business of providing banking service. It is further contended that the Defendant has impeccable reputation in its fraternity and for all times has been diligent enough to cater the needs of the customers and believes Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 15/46 in providing the best service in the field of banking. It is further contended that the Defendant have clean antecedents and has never been involved earlier in any malpractices of any nature whatsoever much less as alleged in the Plaint filed before this Hon'ble Court.
(32) It is further contended that the present Written Statement has been filed through Mr. Shashank Singh who is working as Legal Manager for the Defendant Bank, who has been duly authorized vide a Power of Attorney dated 20.03.2019 duly executed in his favour by the Defendant Bank and Mr. Shashank Singh is the authorized officer of the Defendant Bank and is authorized by the Bank to represent it before any Court of Law and to file the present Written Statement. The details of loan account as under:
Type Loan amount Rate of interest EMI Installment of Sanctioned in applicable in duration facility INR 2006 Secure Rs. 10,80,000/- Floating rate Rs. 14,878/- 07.04.2006-
d loan 11.00% 07.06.2019.
(agains
t
propert
y)
(33) It is further contended that the relevant terms of
Sanctioned letter dated 24.02.2006 executed between the plaintiff along with Ms. Dimple and the defendant bank are reiterated hereunder for the ready reference:
Facility Amount Rs. 10,80,000/- (Rs. Ten lakh eighty thousand only) Type of interest Floating rate of interest Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 16/46 HDFC Bank FRR (Floating 11% at the time of sanction of loan reference of interest Applicable interest rate FRR-11% Tenor 120 months at the time of sanction of loan.
(34) It is further contended that Plaintiff along with Ms. Dimple (Co- Borrower) for availing of the Secured Loan against property bearing no. 1½, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007 has executed following documents:-
a. Sanction Letter dated 24.02.2006 duly signed b. Loan Application Form c. Loan Agreement d. Schedule-I e. Schedule-II f. Letter of continuity dated 28.02.2006 g. Letter of General Lien and Set Off dated 28.02.2006 h. Demand Promissory Note (35) It is further contended that after disbursal of the loan amount on 17.03.2006, the plaintiff and the co-borrower started paying the EMIs; as per the agreed repayment schedule and during that period the plaintiff was charged with rate of interest and the details of charged rate of interest has been given in para no. 8 of the written statement.
(36) It is further contended that the Plaintiff had e-mailed the Defendant Bank (between June 2018 to March 2019-Annexed with the present Plaint) and had raised grievances regarding the Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 17/46 increase in number of EMI's payable to the Defendant Bank and the Defendant Bank has duly explained the Plaintiff the calculation w.r.t the EMI's and also in this regard the Defendant Bank had sent Letter dated 10.08.2018 and 05.11.2018 to the Plaintiff giving further clarification on the same. It is further contended that the mails attached by the Plaintiff along with the plaint itself shows that the Defendant Bank has duly explained (vide mail dated 03.07.2018) the increase and decrease of the Rate Of Interest thereby resulting in the Increase in total number of EMI's.
(37) It is further contended that the Hon'ble Court may further note all the clarification (in view of the increase in the number of EMI's) sought by the Plaintiff, were duly replied by the Defendant Bank (as stated in the pleadings above). It is further contended that despite the replies of the Defendant Bank, the Plaintiff was not satisfied and the Plaintiff did not make payments w.r.t the Loan Account in question. That the Defendant Bank thereafter in view of the default of the Plaintiff had sent a Notice dated 12.07.2018 (Annexed in the present plaint by the Plaintiff) intimating the Plaintiff to make the payment of the Loan Amount within seven days.
(38) It is further contended that the Defendant Bank has acted strictly in accordance with rules & guidelines and regulations and as per the normal course of banking transactions and From the content of the Suit, it is apparent that the alleged grievances of the Plaintiff are flimsy and without any merit and as such does not require any indulgence by this Hon'ble Forum. As such Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 18/46 the Plaintiff and the Co-Borrower should be stopped from alleging false, baseless, flimsy allegation against the Defendant Bank. Hence the present Suit deserves to be dismissed as being not maintainable on this ground alone.
(39) It is further contended that Plaintiff instead of adhering to the terms and conditions of the Secured Loan (against property) and of the of the Notices issued by the Defendant Bank has now approached the Hon'ble Court by way of present false, baseless and vexatious Suit. It is further contended that the Plaintiff is indebted to HDFC Bank Ltd and the suit is false and frivolous and deserves to be dismissed with punitive and exemplary cost. It is further contended that the Plaintiff cannot be permitted to urge the suit without coming with clean hands.
In view of the same, the Suit deserves to be dismissed with costs awarded in favor of HDFC Bank Ltd. As instead of paying the above amount, the Plaintiff has falsely initiated the Suit with a malafide intention of avoiding payment of Defendant Bank's dues. It is further contended that the Plaintiff has filed the Suit for wrongful gains despite the fact that Defendant Bank is explaining and giving all its co-operation to the Plaintiff.
(40) The plaintiff has not filed replication in the present case, despite giving him opportunity and his right to file replication was closed by the court, vide order dated 07.12.2021.
(41) From the pleadings of the parties, following issues were framed on 18.02.2022 for adjudication:
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 19/46
1. Whether the plaintiff is entitled to declaration that defendant's demand for payment of Rs. 2,10,226/- against loan account no. 2400124, is null and void? OPP.
2. Whether the plaintiff is entitled to decree of Rs. 3,86,828/- against the defendant on account of refund of excess amount of 26 installments of Rs. 14,878/-each? OPP.
3. Whether the plaintiff is entitled to decree of mandatory injunction against the defendant to the effect that the defendant should release/return documents of property no. 1/2, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007? OPP.
EVIDENCE OF PLAINTIFF.
(42) On 16.01.2024, the plaintiff/Sh. Bharat Bhusan examined himself as PW-1 and tendered his evidence by way of affidavit Ex PW-1/A, wherein he reiterated the contents of his plaint and relied upon the following documents:
1. Mark A(colly): Copy of loan agreement and other documents of defendant bank.
2. Mark B (colly): Copy of e-mail conversation between PW-1 and the bank.
3. Mark C: Copy of legal notice.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 20/46 (43) In his cross examination, PW-1 has deposed that the loan in question was availed in the year, 2006 from the defendant's bank. PW-1 further deposed that co-borrower is his wife, Smt Dimple. PW-1 further deposed that it is correct that before granting the loan in question, an agreement for loan was signed by him Mark A and PW1 also admitted that before sanctioned the loan, a letter dated 24.02.2006 was received and signed by him. PW-1 has further admitted that the responsibility to pay the EMI on time by the co-borrower is the essence of loan agreement. PW-1, voluntarily, deposed that it was not specifically mentioned in the loan agreement that the loan in question was sanctioned on floating rate of interest.
(44) PW-1 further admitted that the cheques were dishonoured which was submitted with the bank towards the EMI. PW-1, voluntarily, deposed that however, the payment of the said dishonoured cheques was made by way of cheque, cash with penalty. PW-1 further deposed that the bank also clarified vide order dated 10.08.2018 and 05.11.2019 with respect to the increase in the number of EMIs and He has paid 146 EMIs as well as penalties. PW-1 further deposed that the complain under Section 138 NIA was filed in 2020 on the basis security/advance EMI Cheque which was given in 2006 at the time of availing the loan in question.
EVIDENCE OF DEFENDANT (45) On 17.11.2025, Ms. Progoti Bose, was examined on behalf of the defendant as DW-1 and she tendered her evidence Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 21/46 by way of affidavit Ex. DW1/A and she reiterated the objections taken by the bank in the written statement. She relied upon the following documents:
(i) Ex DW-1/A (OSR): Copy of Board Resolution dated 15.04.2023.
(ii) Ex DW-1/B (OSR) (Colly): Copy of loan application form.
(iii) Ex DW-1/C (OSR): Copy of Sanction letter dated 24.02.2006.
(iv) Ex DW-1/D (colly) (OSR): Loan agreement dated 28.02.2006 along with schedule-I (page no. 36 to 38 of the said document is marked as Mark A to C).
(v) Ex DW-1/E: Statement of account of Loan account no.
24000124.
(46) In her cross examination, DW-1 has deposed that she has been working as Legal Manager in the HDFC Bank, Moti Nagar Since 28.07.2022 and she knew about the all facts mentioned in the evidence affidavit. DW1 further deposed that as per loan schedule, there were 64 installments and she again said that there were 120 installments, as per sanction letter.
(47) DW-1 further deposed that amount financed was Rs. 10,80,000/- and it was for 11% floating rate of interest. DW-1 deposed that she has not filed the RBI norms/guidelines with the written statement.
(48) DW-1 further deposed that the bank did not issue any notice to the borrower, whenever, the rate of interest has been Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 22/46 fluctuated and she, voluntarily, deposed that the fluctuation in rate of interest have been notified on the official website as well as in the statement of account of the borrower. DW-1 further deposed that clause 1.1 (f) states FRR means the percentage rate per annum decided by the bank from time to time and announced/notified by the bank in such form and manner as deem appropriate by the bank. DW-1 admitted that the documents of the property bearing no. 1/2 Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007 has been kept by the bank at the time of sanctioning the loan. As per statement of account on record, only 73 EMIs have been cleared on presentation and 69 have bounced.
(49) DW-1 further deposed that first EMI whereby the customers started defaulting was installment no. 4 dated 07.07.2006. DW1 further deposed that she did not know whether the borrower had informed the bank about his illness/disease and there is no provision wherein on account of illness, the EMIs are waived by the bank, however, it is purely a business decision taken by bank on case to case basis.
(50) DW-1 further deposed that she cannot verify that the borrower informed the bank about his disease of paralysis at that moment.
(51) DW-1 admitted that the cheques had been kept by the bank at the time of sanctioning the loan, as per PDC delcaration given by the borrower. The cheques of the borrower are kept by the bank on the basis of decision by credit department. DW-1 Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 23/46 had pointed out on document Ex DW-1/E (Colly) wherein the total over due is reflected as Rs. 2,85,336.60/- as on 14.02.2020.
FINAL ARGUMENTS (52) I have heard final arguments from both Ld. counsels for the parties. I have also perused complete case file including pleadings and evidence of the parties. Today, Ld counsel for the plaintiff has filed written submissions and the same has also been duly considered.
ISSUE-WISE FINDINGS.
Findings on Issue no. 1 & 2.
Issue no. 1. whether the plaintiff is entitled to declaration that defendant's demand for payment of Rs. 2,10,226/- against loan account no. 2400124, is null and void? OPP.
& Issue no.2 : Whether the plaintiff is entitled to decree of Rs. 3,86,828/- against the defendant on account of refund of excess amount of 26 installments of Rs. 14,878/-
each? OPP.
(53) Issue no. 1 and 2 are interconnected, so, they have been taken together for decision.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 24/46 (54) The onus to prove issue no. 1 and 2 are upon the plaintiff. In order to prove the said issues, the plaintiff has examined only one witness ie. plaintiff himself.
(55) The case of the plaintiff is that he has taken loan of Rs. 10,80,000/- from the defendant at the floating rate of interest i.e. 18% per annum in April, 2006 and the said loan had to be paid in 120 equal months installment of Rs. 14,874/-.
(56) The plaintiff has deposed that he has paid an amount of Rs. 217,21,88/- by way of 146 monthly installments instead of 120 monthly installments and he has re-paid excess amount of Rs. 3,86,828/- by way of 26 monthly installments.
(57) Before adjudication the issues, I would like to refer the relevant case law, applicable to the present case and which is mentioned in succeeding paras.
(58) In a case titled "State Bank Of India vs Yasangi Venkateswara Rao decided on 21 January, 1999, the Hon'ble Supreme Court of India has observed as under:
"We also find it difficult to agree with the observation of the High Court that normally when a security is offered in the case of mortgage of property, charging of compound interest would be regarded as excessive. Entering into a mortgage is a matter of contract between the parties. If the parties agree that in respect of the amount advanced against a mortgage compound interest will be paid, we fail to understand as to how the court can possibly interfere and reduce the amount of interest agreed to be paid on the loan so taken. The mortgaging of a property is with a view to secure the loan and has no relation whatsoever with the quantum of interest to be charged."
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 25/46 (59) In a case titled "Central Bank Of India vs Ravindra And Ors, AIR 2001 SUPREME COURT 3095, decided on 18 October, 2001, the Hon'ble Supreme Court of India has observed as under:
"During the course of hearing it was brought to our notice that in view of several Usury Laws and Debt Relief Laws in force in several States private money lending has almost come to an end and needy borrowers by and large depend on banking institutions for financial facilities. Several unhealthy prac-tices having slowly penetrated into prevalence were pointed out. Banking is an organised institution and most of the banks press into service long running documents wherein the borrowers fill in the blanks, at times without caring to read what has been provided therein, and bind themselves by the stipulations articulated by best of legal brains. Borrowers other than those belonging to corporate sector, find themselves having unwittingly fallen into a trap and rendered themselves liable and obliged to pay interest the quantum whereof may at the end prove to be ruinous. At times the interest charged and capitalised is manifold than the amount actually advanced. Rule of damdupat does not apply. Penal interest, service charges and other over-heads are debited in the account of the borrower and capitalised of which debits the borrower may not even be aware. If the practice of charging interest on quarterly rests is upheld and given a judicial recognition, unscrupulous banks may resort to charging interest even on monthly rests and capitalising the same. Statements of Ac- counts supplied by banks to borrowers many a times do not contain particulars or details of debit entries and when written in hand are worse than medical prescriptions putting to test the eyes and wits of the borrowers. Instances of unscrupulous, unfair and unhealthy dealings can be multiplied though they cannot be generalised. Suffice it to observe that such issues shall have to be left open to be adjudicated upon in appropriate cases as and when actually arising for decision and we cannot venture into laying down law on such issues as do not arise for determination before us. However, we propose to place on record a few incidental observations, without which, we feel, Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 26/46 our answer will not be complete and that we do as under :
(1) Though interest can be capitalised on the analogy that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for non-payment, cannot be capitalised. Further interest, i.e. interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalised. It will be opposed to public policy.
(2) Novation, that is, debtor entering into a fresh agreement with creditor undertaking payment of previously borrowed principal amount coupled with interest by treating the sum total as principal, any contract express or implied and an express acknowledgement of accounts, are best evidence of capitalisa-tion. Acquiescence in the method of accounting adopted by the creditor and brought to the knowledge of the debtor may also enable interest being con-verted into principal. A mere failure to protest is not acquiescence.
(3) The prevalence of banking practice legitimatises stipulations as to interest on periodical rests and their capitalisation being incorporated in contracts. Such stipulations incorporated in contracts voluntarily entered into and binding on the parties shall govern the substantive rights and obligations of the parties as to recovery and payment of interest.
(4) Capitalisation method is founded on the principle that the borrower failed to make payment though he could have made and thereby rendered himself a defaulter. To hold an amount debited to the account of the borrower capitalised it should appear that the borrower had an opportunity of making the payment on the date of entry or within a reasonable time or period of grace from the date of debit entry or the amount falling due and thereby avoiding capitalisa-
tion. Any debit entry in the account of the borrower and claimed to have been capitalised so as to form an amalgam of the principal sum may be excluded on being shown to the satisfaction of the Court that such debit entry was not brought to the notice of the borrower and/or he did not have the opportunity of making payment before capitalisation and thereby excluding its capitalisa-tion.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 27/46 (5) The power conferred by Sections 21 and 35A of the Banking Regulations Act, 1935 is coupled with duty to Act. Reserve Bank of India is prime banking institution of the country entrusted with a supervisory role over banking and conferred with the authority of issuing binding directions, having statutory force, in the interest of public in general and preventing banking affairs from deterioration and prejudice as also to secure the proper management of any banking company generally. Reserve Bank of India is one of the watchdogs of finance and economy of the nation. It is, and it ought to be, aware of all relevant factors, including credit conditions as prevailing, which would invite its policy decisions. RBI has been issuing directions/circulars from time to time which, inter alia, deal with rate of interest which can be charged and the periods at the end of which rests can be struck down, interest calculated thereon and charged and capitalised. It should continue to issue such directives. Its circulars shall bind those who fall within the net of such directives. For such transaction which are not squarely governed by such circulars, the RBI direc- tives may be treated as standards for the purpose of deciding whether the interest charged is excessive, usurious or opposed to public policy.
(6) Agricultural borrowings are to be treated on a pedestal different from others. Charging and capitalisation of interest on agricultural loans cannot be permitted in India except on annual or six monthly rests depending on the rotation of crops in the area to which the agriculturist borrowers belong.
(7) Any interest charged and/or capitalised in voilation of RBI directives, as to rate of interest, or as to periods at which rests can be arrived at, shall be dis-allowed and/or excluded from capital sum and be treated only as interest and dealt with accordingly.
(8) Award of interest pendente lite and post-decree is discretionary with the Court as it is essentially governed by Section 34 of the CPC de hors the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post- decree inter-est at a lower rate or may even decline awarding such interest. The discretion shall be Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 28/46 exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner. In view of the law having been settled with this judgment, it is expected henceforth from the banks, bound by the directives of the Reserve Bank of India, to make an averment in the plaint that interest/compound interest has been charged at such rates, and capitalised at such periodical rests, as are permitted by, and do not run counter to, the directives of the Reserve Bank of India. A statement of account shall be filed in Court showing details and giving particulars of debit entries, and if debit entry relates to interest then setting out also the rate of, and the period for which, the interest has been charged. On the Court being prima facie satisfied, if a dispute is raised in that regard, of the permissibility of debits, the onus would be on the borrower to show why the amount of debit balance appearing at the foot of the account and claimed as principal sum cannot be so accepted and adjudged. This practice would narrow down the scope of controversy in suits filed by banking institutions and enable an expeditious disposal of the suits, the issues wherein are by and large capable of being determined by documentary evidence. RBI directives have not only statutory flavour, any contravention thereof or any default in compliance therewith is punishable under sub-section (4) of Section 46 of Banking Regu- lations Act, 1949. The Court can act on assumption that transactions or dealings have taken place and accounts maintained by banks in conformity with RBI directives.
(60) In a cas titled "Syndicate Bank vs R. Veeranna And Ors, decided on 19 December, 2002, AIR 2003 Supreme Court 2122, the Hon'ble Supreme Court of India has observed as under:
The learned counsel for the appellant contended that having regard to the agreement entered into between the plaintiff and the defendants as regards the rate of interest, the trial court as well as the High Court committed an error in not accepting the claim of the appellant to award the interest; the High Court was also not justified in holding that the appellant was not entitled to charge higher rate of interest without giving notice and charging such interest was in violation of principles of natural justice inasmuch as rate of interest was enhanced without giving an opportunity to the Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 29/46 defendants. According to the learned counsel, the High Court committed an error in refusing the claim of the plaintiff on the ground that it failed to follow the circulars issued by the head office; the circulars issued were only for the guidance of the officers of the Bank, which could not vary terms of the contract. Learned counsel added that the claim of the Bank was substantiated by the accounts maintained by the Bank and the extracts were produced before the trial court. Further in 1978, the defendants acknowledged their liability of the amount and the amount calculated was on the basis of the enhanced rate of interest on the basis of the agreed terms between the parties. According to him, it was not open to the defendants, having acknowledged the liability, to contend that the rate of interest charged was on higher side. It was also the submission of the learned counsel for the appellant that once the plaintiff placed the evidence before the Court to establish that it was entitled to charge higher rate of interest it was for the defendants to rebut the same. The defendants in this regard failed to do so. The courts were not justified in refusing to award the interest as claimed by the appellant.
Learned counsel for defendant No.1 submitted that in the plaint itself the plaintiff has claimed the contract rate of interest at 11%; hence it was not open to the plaintiff to claim higher rate of interest; in the plaint averments were not made as to what was the rate of interest charged from time to time. The learned counsel submitted that the trial court on appreciation of evidence recorded findings as to the appropriate rate of interest and High Court has confirmed the same. Hence, this Court may not interfere with the findings. We have carefully considered the submissions made by the learned counsel for the parties. The trial court rejected the claim of the plaintiff as regards the interest on the ground that here was absolutely no record to show that at any time the defendants agreed to pay any higher rate of interest than the agreed rate on the said three loans taken by them. We must point out at once that this observation of the trial court runs contrary to the very agreements Ex. P-I, P-5 and P-l 1. Further, the acknowledgements made by the defendants in 1978 also indicate that the defendants acknowledged their liability of the amount due and the amount had been calculated on the basis of the enhanced rate of interest. Observations of the trial court that the Bank arbitrarily increased the rate of interest and charged the higher rate also do not stand to the reason in the light of the evidence placed on Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 30/46 record including the afore- mentioned documents. In our view, the trial court was wrong in saying that the interest could not be enhanced without the consent of the defendants on the face of the agreements to Ex. P-l, P-5 and P-l I. The rate of interest was enhanced as per the agreement between the parties and there was no question of taking separate consent from the defendants again.
The High Court while holding that the party is bound to pay the interest at the agreed rate took the view that the Bank could not automatically charge the increased rate of interest merely on the basis of rise of interest on account of RBI circulars. It is not a case of automatically charging the increased rate of interest; charge of higher rate is based on agreement between the parties. The High Court was clearly in error in holding that the principles of natural justice were violated on the ground that the defendants were not put on notice before enhancing the rate of interest when the parties are bound by the terms of the contract. The application of principle of natural justice cannot be read into the express terms of contract. The other reason given by the High Court to affirm the decree of the trial court was that the plaintiff Bank violated the circulars/instructions given by the head office and as such the plaintiff could not claim higher rate of interest. We are not in a position to approve this view of the High Court. The instructions given by the head office to the branches were only for their guidance and to safeguard the interest of the Bank in case of dispute. At any rate, these instructions cannot vary the terms of agreement between the parties. In other words, they could not alter the terms of Ex. P-1, P-5 and P-II.
(61) During cross examination, the plaintiff/PW-1 has admitted the signing of agreement for loan (Mark A). PW-1 further admitted that before sanctioning the loan, he received and signed letter dated 24.02.2006. PW-1 further admitted that the responsibility to pay the EMI on time by the co-borrower is the essence of loan agreement.
(62) During cross examination, Plaintiff denied the suggestion that the loan in question was sanctioned on floating rate of Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 31/46 interest. He, voluntarily, deposed that it was not specifically mentioned in the loan agreement.
(63) Plaintiff/PW1 has admitted that the cheques were dishonoured, which were submitted with the bank towards the EMI. He, voluntarily, deposed that the payment of said dishonoured cheques was made by way of cheque and penalty by cash.
(64) DW-1 deposed that the amount financed was Rs.
10,80,000/- and it was for 11% floating rate of interest. DW-1 further deposed that floating rate of interest is defined in clause 1.1 (a) of loan agreement, substituted by schedule-1, where clause 7 defines floating rate of interest applicable as per Schedule-2.
(65) DW-1 further deposed that the floating rate of interest was 11% in the year, 2006 and floating rate of interest charges according to the RBI norms. DW-1 further deposed that the bank did not issue a notice to the borrower whenever the rate of interest has been fluctuated. DW-1, voluntarily, deposed that the fluctuation in rate of interest has been duly notified on the official website as well as in the statement of account of the borrower.
(66) DW-1 has further deposed that as per statement of account on record, only 73 EMI's have been cleared on presentation and 69 have been bounced.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 32/46 (67) During cross examination of DW-1, following questions have been asked and following reply of said questions has been given by DW-1.
Q Can you show from document, the total due and pending EMI's of the borrower?
Ans. Witness has pointed out document Ex PW1/E (colly) wherein the total over due is reflected as Rs. 2,85,336.60/- as on 14.02.2020.
(68) No suggestion in denial of abovesaid reply has been given by Ld counsel for the plaintiff to DW-1. On behalf of plaintiff, it has not been disputed that on 14.02.2024, an amount of Rs. 2,85,336.60/- of the bank was due against the plaintiff.
(69) The plaintiff has also not disputed the bouncing of his cheques of 69 EMIs. His defence is that due to disease of paralysis, he could not pay the said EMIs on time.
(70) The plaintiff has relied upon copy of loan agreement along with Schedule-I and schedule-2 in his evidence and marked these document as Mark A. During cross examination, the plaintiff has admitted the signing of loan agreement Mark A. (71) DW-1 has also produced original loan agreement along with schedule-I and schedule-2 and exhibited the loan agreement, schedule-I, schedule-2, Declaration of submission of PDC, sale proprietor declaration (running from page no. 25 to
35) as Ex DW-1/D. Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 33/46 (72) The execution of loan agreement along with schedule-I and schedule-2 has not been disputed by the plaintiff and has also been proved by the defendant as Ex DW-1/D. (73) Clause 5.1, Clause 5.2.1 and 5.5 of loan agreement are reproduced as under:
Clause 5.1: The Loan will carry interest at the Floating Interest Rate or the Fixed Rate of Interest rate per annum mentioned in Item No. 7 of the Schedule 1 hereunder written. Such option shall be specifically indicated by ticking the current option under item No. 7 of the Schedule 1 hereunder written. The Borrower shall also be liable to pay PMII if applicable.
Clause 5.2.1: In the event the borrower opts for a fixed rate of interest offered by the Bank, the rate of interest and the terms applicable thereto are specified in schedule 3 and in the event the borrower opts for a floating interest rate offered by the bank the rate of interest and the terms applicable thereto are specified in schedule2. The Borrower hereby confirms and acknowledges that it has fully understood the mode and manner of computation of the FRR.
Clause 5.5 The Bank in its sole discretion would be entitled to modify and vary the said rate of interest (without any prior intimation to the Borrower) from time to time and upon such revision, the Borrower agrees to pay the revised rate of interest. It shall be the responsibility of the Borrower to check with the Bank from time to time about such revisions.
(74) As per loan agreement, the nature of interest and rate of interest will be, as per schedule-I attached with loan agreement and the bank would be entitled to modify and vary the said rate of interest, without any prior intimation to the borrower. As per point 7 of schedule-I, the rate of interest is floating as per schedule 2.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 34/46 (75) The terms mentioned in schedule 2 are reproduced as under:
Definition
a) Floating Interest Rate = FRR (+)/() 2 (%) p.a. = 11%p.a.
b) "FRR Reset Date(s)" shall mean once every Quarter, on the 1st of April, 1st of July, 1st of October and 1st of January.
B) Computation of interest:
a) Until varied be the Bank in accordance with the terms of this Schedule, the Floating Interest Rate applicable to Loan shall be as specified hereinabove.
b) The Floating Interest Rate shall be reset on the FRR Reset Dates by the Bank, based on the the prevailing FRR.
c) Thereafter, the Floating Interest Rate applicable to the amount of the Loan will be applied by the Bank on and after the date so included by the Bank on which such reset would apply.
d) Save and except as provided hereinbelow in clause (e), the EMI is intended to be kept constant irrespective of the variations in the Floating Interest Rate and therefore the EMI(s) is not likely to vary. In case of variation of the EMI(s), no intimation will be provided to the Borrower provided however that the borrower shall be intimates of the Floating Interest Rate applied on the Loan the relevant dates during the preceding financial year on an annual basis within a reasonable time from the expiry of the financial year in such manner as the Bank deems fit.
e) Notwithstanding anything to the contrary, the Bank shall based on the Floating Interest Rate applied on the Loan, be applied on the Loan, be permitted, to increase the EMi(s), on being intimated of such increased EMI(s) in the following circumstances:
i) If the EMI(s) would lead to a negative amortization i.e. where the EMI(s) is not adequate to cover the interest in full, and/or
ii) If the principal component of the EMI(s) is inadequate to amortise the Loan within such period as may be determined by the Bank.
(76) As per schedule-2, the defendant bank has the right to revise the rate of interest on 1 st April, 1st July, 1st October and Ist January on each year. The bank is also not required to give prior Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 35/46 intimation/notice to the plaintiff before revising the rate of interest.
(77) In para no. 2 of the plaint, the plaintiff has averred that he availed the loan facility of Rs. 10,80,000/- from defendant at the floating rate of interest of 11% per annum, in April, 2026.
(78) Plaintiff has also reiterated the abovesaid para of his plaint in his examination in chief by way of affidavit Ex PW-
1/A. (79) From the pleadings of the plaintiff as well as evidence by way of affidavit Ex PW-1/A, loan agreement along with Schedule 1 and Schedule 2 (Ex DW-1/D), it is proved that the loan was advanced to the plaintiff by the defendant on floating rate of interest and which is subject to increase or decrease.
(80) Plaintiff has deposed in para no. 6, 7 & 9 of his evidence by way of affidavit, which are as under:
"6. That the deponent had paid 146 installments to the bank instead of 120 installments as settled in the loan agreement but the bank started claiming 159 installments from the deponent".
"7. That the deponent asked from the defendant to clarify that in what way, the defendant is entitled to get 159 installments but the defendant failed to clarify defendant misused the it and one cheque No. 2400124 filled up by the defendant and the defendant filed a false and frivolous case u/s.138 N.I.Act against the deponent".
"9. That the defendant sent a legal notice dt.12.07.2018 and claimed Rs.2,10,226.46 from the deponent despite that the deponent had already paid 26 extra installments to the defendant which comes Rs.3,86,828/-which the defendant bank is liable to return to the deponent".
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 36/46 (81) During cross examination, PW-1 has admitted that the responsibility to pay the EMI on time by the co-borrower is the essence of loan agreement. Plaintiff further admitted during his cross examination that his cheques for payment of EMI were dishonured.The plaintiff further deposed that the bank also clarified vide order dated 11.08.2018 and 05.11.2018 with respect to increase in number of EMIs.
(82) DW-1 has deposed in para no. 9 to 14 of evidence by way of affidavit, which are as follows:
"9. I say that the loan of the plaintiff and co-borrower was sanctioned under the Floating rate of interest. In the floating rate of interest if the rate of interest increases, the defendant has option to either increase EMI's amount or extend the tenure of the EMI. In the present case, the defendant has extended the tenure of the EMI. The relevant terms of the agreement executed between the plaintiff along with the Co-borrower and the defendant bank are reiterated hereunder for the ready reference of this Hon'ble Court.
Clause 1.1 (a): "Floating Rate of Interest" when applicable to the Loan, shall mean the FRR applied to a Loan with spread (if any) as specified in Schedule 2 and as applied by the Bank, on the Loan of the Borrower on the terms and conditions set forth in Schedule 2.
Clause 5.1: The Loan will carry interest at the Floating Interest Rate or the Fixed Rate of Interest rate per annum mentioned in Item No. 7 of the Schedule 1 hereunder written. Such option shall be specifically indicated by ticking the current option under item No. 7 of the Schedule 1 hereunder written. The Borrower shall also be liable to pay PMII if applicable.
Clause 5.4: Interest and other charges shall be computed on the basis of a year of three hundred and sixty five days. The Bank may in its sole discretion modify the basis of the year and the periodicity of the interest. Clause 5.5 The Bank in its sole discretion would be entitled to modify and vary the said rate of interest (without any prior intimation to the Borrower) from time to time and upon such revision, the Borrower agrees to pay the revised rate of interest. It shall be the Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 37/46 responsibility of the Borrower to check with the Bank from time to time about such revisions.
Loan agreement 28.02.2006 along with the Schedule duly singed by the plaintiff and co-borrower as Ex DW-1/D (Colly).
10. I say that after the disbursal of the Loan Amount on 03.03.2006, the Plaintiff and the Co-Borrower started paying the EMIs; as per the agreed repayment schedule.
During that period the Plaintiff was charged as per the below mentioned rate of interest:-
EMI Installment Due Date Effective ROI
no. amount R.O.I Changes
03 Rs. 14,878.00/- 07.06.2006 11.25 0.25
05 Rs. 14,878.00/- 07.08.2006 11.05 0.25
13 Rs. 14,878.00/- 07.04.2007 12 0.5
14 Rs. 14,878.00/- 07.05.2007 13 1
29 Rs. 14,878.00/- 07.08.2008 14 1
33 Rs. 14,878.00/- 07.12.2008 14.5 0.5
35 Rs. 14,878.00/ 07.02.2009 14 -0.5
42 Rs. 14,878.00/- 07.09.2009 13.75 -0.25
55 Rs. 14,878.00/- 07.10.2010 14.25 0.25
59 Rs. 14,878.00/- 07.02.2011 14.05 0.25
62 Rs. 14,878.00/- 07.05.2011 15.25 0.75
64 Rs. 14,878.00/- 07.07.2011 15.75 0.05
66 Rs. 14,878.00/- 07.09.2011 16 0.25
67 Rs. 14,878.00/- 07.10.2011 16.05 0.05
77 Rs. 14,878.00/- 07.08.2012 16.03 -0.02
83 Rs. 14,878.00/- 07.02.2013 16.02 -0.01
86 Rs. 14,878.00/- 07.05.2013 16.01 -0.01
90 Rs. 14,878.00/- 07.09.2013 16.03 0.02.
93 Rs. 14,878.00/ 07.12.2013 16.05 0.02
110 Rs. 14,878.00/ 07.05.2015 16.35 -0.15
112 Rs. 14,878.00/ 07.07.2015 16.02 -0.15
114 Rs. 14,878.00/ 07.09.2015 15.85 -0.35
118 Rs. 14,878.00/ 07.01.2016 15.08 -0.05
128 Rs. 14,878.00/ 07.11.2016 15.75 --0.50
133 Rs. 14,878.00/ 07.04.2017 15.05 --0.25
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 38/46
136 Rs. 14,878.00/ 07.07.2017 15.04 -0.01
141 Rs. 14,878.00/ 07.12.2017 15.35 -0.05
148 Rs. 14,878.00/ 07.07.2018 15.45 0.1
151 Rs. 14,878.00/ 07.10.2018 15.65 0.2
154 Rs. 14,878.00/ 07.01.2019 15.08 0.15
The Statement of Account of the Loan Account No. 2400124 is exhibited as EXDW1/E. "11. I say that the Defendant Bank has applied the yearly downward/upward revisions of the Rate of Interest as per Reserve Bank of India (hereinafter referred to as "RBI") to the Loan Account and benefits of the same were duly given to the Plaintiff and the Co-Borrower (as detailed in the Submissions above). The Statement of Account placed on record reflects the yearly downward/upward revisions in the Rate of Interest as per RBI which was duly applied to the Loan Account in question. That this Hon'ble Court may also appreciate that the Defendant Bank is not legally bound to send the letters to the Plaintiff and the Co-Borrower. However the Defendant Bank has sent various intimation letters intimating the Plaintiff w.r.t the yearly downward/upward revisions in the Rate of Interest as per RBI through Speed Post and Normal Post".
"12. I say that the Plaintiff and Co- Borrower have been chronic defaulters war.tudge-sty-balhi the payment of the EMI's (as agreed between the parties to Loan Agreement). That the Plaintiff and the Co- Borrower have been defaulting in the payment of EMI's from the very beginning and it is pertinent to note that in total 69 times the presentation of EMIs have been dishonored, the SOA placed on record substantiates the same. That this Hon'ble Court may appreciate, that as per the terms and conditions of the Loan Agreement executed between the parties, the Plaintiff had agreed for the timely payment of the EMI's as per the repayment schedule and loan agreement. In view of the above this Hon'ble Court may appreciate that the Plaintiff is not only a defaulter but has also failed to adhere to the terms and conditions of the Loan Agreement.
"13. I say that the Plaintiff and the Co-Borrower stands in default w.r.t payment of EMI's and as on date (26.04.2024) the loan facility is still active and total amount payable for closure of the same is Rs.2,00,179.92/-(Rupees Two Lakh One Hundred Seventy Nine and Ninety Two Paisa Only) which is payable by the Plaintiff and the Co-Borrower to the Defendant Bank. That it is pertinent to mention that the Defendant Bank on Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 39/46 22/03/2023 waived off Overdue EMI Interest charged in the loan Five and Fifty Seven Paisa Only). That the Defendant Bank 16/03/2024 waived off Cheque Bouncing Charges and Delayed Instalment Payment Charges amounting to Rs. 23,283.11/- and Rs. 18,943/- respectively. The calculation of the total amount payable is duly reflected in the Statement of Account and Foreclosure Letter dated 26.04.2024. The chart below lays down the details of the above stated Outstanding of the Loan Account."
#S Calculated outstanding Amount
Cheque bouncing charges Rs 0/- as already waived
off
Overdue EMI interest Rs. 0/- as already waived
off
Pending installments Rs. 2,00,179.92/-
Total Rs. 2,00,179.92/-
"In view of the above, the Plaintiff and Co-applicant are jointly and severally liable to pay the outstanding amount of Rs.2,00,179.92/- ( Rupees Two Lakh One Hundred Seventy Nine and Ninety Two Paisa Only). The foreclosure letter along with statement of account dated 26.04.2024 is exhibited as EXDW1/F (Colly)".
"14. I say that the grievances raised by the Plaintiff were duly replied, by the Defendant Bank. That the Plaintiff had e-mailed the Defendant Bank (between June 2018 to March 2019 - Annexed with the present Plaint) and had raised grievances regarding the increase in number of EMI's payable to the Defendant Bank. It is pertinent to note that the Defendant Bank has duly explained the Plaintiff the calculation w.r.t the EMI's and also in this regard the Defendant Bank had sent Letter dated 10.08.2018 and 05.11.2018 to the Plaintiff giving further clarification on the same. That this Hon'ble Court may also appreciate that the mails attached by the Plaintiff."
(83) The initial burden is upon the plaintiff to prove that the rate of interest increased by the defendant is arbitrary and is not as per RBI norms but no evidence, in this regard, has been led Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 40/46 by the plaintiff. There is no evidence on record that the rate of interest increased by the defendant is arbitrary or it is not as per the RBI norms. The defendant has given the details of the revised rate of interest in Para no 8 of its written statement but the plaintiff has not filed replication to controvert the contents of the written statement of defendant. Vide order dated 07.12.2021, Ld. Predecessor of this court has closed the right of the plaintiff for filing replication by observing that the case is running at the stage of filing of replication for about one year.
(84) During cross examination of DW-1, the plaintiff has not disputed the increased rate of interest by the defendant, as per details given in para no. 10 of the evidence by way of affidavit Ex DW-1/A. No question regarding disputing the increased rate of interest, as per RBI norms has been asked to DW-1. No suggestion in denial that the rate of interest increased by the defendant bank is arbitrary or not as per RBI norms, has been given to DW-1. The testimony of DW-1 on the abovesaid aspect has remained unrebutted and unchallenged.
(85) As per statement of loan account of defendant, as on 31.01.2020, an amount of Rs. 2,85,336.60/- of defendant Bank is pending against the plaintiff.
(86) As per letter dated 14.02.2020 annexure D (Ex DW-1/E) amount of pending installments is Rs. 2,00,179.92/-, amount of overdue EMI interest is Rs. 63,608.57/- and amount of cheque bouncing charges is Rs. 23,283.11/-.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 41/46 (87) As per para no. 13 of evidence by way of affidavit of DW-1, cheque bouncing charges, overdue EMI interest have been waived by the defendant bank.
(88) DW-1 has deposed that the plaintiff and co-applicant are jointly and severally liable to pay the outstanding amount of Rs. 2,00,179.92/- as on 26.04.2024 as per statement of account and foreclosure letter dated 26.04.2024. The plaintiff has not denied the said fact in the cross examination of DW-1.
(89) During cross examination of DW-1, following questions has been asked:
Q Can you show from document,the total over due and pending EMI's of the borrower?
Ans witness has pointed out on document exhibited as Ex DW-1/E (Colly) wherein the total over due is reflected as Rs. 285336.60/- as on 14.02.2020.
(90) The plaintiff has not disputed the fact of waiving of overdue EMI interest of Rs. 63,608.57/- and waiving of cheque bouncing charges of Rs. 23,283.11/- The plaintiff has also not denied his liability of payment of balance loan amount of Rs.
2,00,179.92/-, which is mentioned in para no. 13 of the affidavit of DW-1.
(91) From the abovesaid documents and testimony of DW-1, it is proved that loan amount of defendant bank is still pending against the plaintiff.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 42/46 (92) The rate of interest is floating. So, in floating rate of interest, either amount of EMI will remain constant and tenure of EMI's will increase or decrease, as per increase or decrease in bank rate of interest or amount of EMI installments will increase or decrease and tenure of EMI installments will remain constant as per increase or decrease in rate of interest.
(93) In the present case, the amount of monthly EMI installments have remained constant, so, with the increase in the rate of interest, the number of EMI installments are bound to be increased.
(94) There is no force in the contention of the plaintiff that the tenure of EMI will remain constant to 120 monthly installments as in this case, the amount of EMI installments have not been increased due to increase in rate of interest.
(95) Ld counsel for the plaintiff submits that the bank has not informed the plaintiff regarding increasing the rate of interest, so, defendant is not entitled for increasing rate of interest.
(96) Ld counsel for the defendant has argued that there was no delay upon the bank to inform the plaintiff regarding increasing the rate of interest and rate of interest was increased as per RBI guidelines and it was also communicated to the plaintiff.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 43/46 (97) During cross examination of DW-1, DW-1 deposed that the bank did not issue any notice to the borrower whenever the rate of interest has been fluctuated. Vol. The fluctuation in rate of interest have been duly notified on the official website as well as statement of account of the borrower. These facts have not been disputed on behalf of the plaintiff. In the cross examination of DW-1, DW-1 deposed that moreover as per clause 5.5 of loan agreement (Ex PW-1/D1), the bank is not required to issue any prior notice to the borrower/plaintiff for making charge in the rate of interest and bank is entitled to modify and vary the rate of interest.
(98) As per schedule 2 also, bank is not obliged to give notice to the borrower before making any change in the rate of interest. However, bank is required to give information of change in floating rate of interest, in case, variation is made in the amount of EMI, before expiry of financial year.
(99) In view of the aforesaid facts and discussion, it is held that the defendant bank is entitled to revise the bank rate, as per terms of loan agreement and schedule-1 and schedule -2 (Ex DW-1/D) and the plaintiff has no right to challenge the said increase in bank rate merely on the ground that information has not been given to him by the bank for increasing the bank rate or due to said increase in bank rate, the tenure of his monthly EMI has been increased from 120 to 159. Moreover, the plaintiff has failed to prove that the rate of interest increased by the defendant bank is arbitrary and not as per RBI norms.
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 44/46 (100) From the testimony of DW1, it is proved that after waiving the amount of the cheque bouncing charges and overdue EMI interest, an amount of Rs. 2,00,179.92/- is pending against the plaintiff on 26.04.2024 and bank is entitled for interest and the delayed principal amount. So, the plaintiff is not entitled for declaration that the defendant's demand for payment of Rs. 2,10,226/- is null and void.
(101) It is also proved that the plaintiff has not paid excess amount of Rs.3,86,828/- by way of 26 installments to the defendant. Accordingly, issue no. 1 & 2 are decided against the plaintiff in favour of defendant.
Findings on issue no. 3 Issue no. 3: Whether the plaintiff is entitled to decree of mandatory injunction against the defendant to the effect that the defendant should release/return documents of property no. 1/2, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007? OPP.
(102) The documents of property no. 1 & 2, Singh Sabha Road, Block-41, Shakti Nagar, Delhi-110007 were kept with defendant as security of the loan amount and loan amount of defendant is still pending against the plaintiff, as per findings given on issue no. 1 & 2. The defendant has lien on the property documents of the plaintiff till the payment of entire loan amount. Therefore, the plaintiff is not entitled for release Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 45/46 of said documents of his property. Accordingly, issue no. 3 is decided against the plaintiff in favour of defendant.
RELIEF:
(103) In view of the foregoing findings on the above-said issue no. 1 to 3, the suit of the plaintiff stands dismissed with cost.
(104) Decree-sheet be prepared accordingly.
(105) File be consigned to record room after due compliance.
Announced in open Court (SHIV KUMAR)
Digitally signed
by SHIV
SHIV KUMAR
today on 24.03.2026. DJ-02, West Distt.Tis Hazari Date:
KUMAR 2026.03.24
courts Delhi
16:37:41 +0530
Civ DJ no. 20/2020 Bharat Bhushan Vs HDFC Bank Ltd. page no. 46/46