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Delhi District Court

Canara Bank vs Ajay Kumar on 30 September, 2024

   IN THE COURT OF SH. SONU AGNIHOTRI DISTRICT JUDGE-07
           SOUTH EAST SAKET COURTS, NEW DELHI

Civil Suit No. 1894/2017
CNR No.: DLSE01-009419-2017


CANARA BANK
Through its Authorized Officer

Head office at : 112, JC Road,
Bangalore-560002

Branch office at:
Lajpat Nagar-II, New Delhi-110024
                                                           .......... Plaintiff
                                 Versus

AJAY KUMAR
C-375, Gali No. 18,
C-Block, Bhajanpura, Delhi
                                                        ......... Defendant

    SUIT FOR RECOVERY OF RS.4,38,736/- (RUPEES FOUR LAKH
 THIRTY EIGHT THOUSAND SEVEN HUNDRED THIRTY SIX ONLY)
                             WITH INTEREST


                                          Date of institution : 16.12.2017
                             Date when judgment reserved : 05.09.2024
                                          Date of Judgment : 30.09.2024



CS No. 1894/17                                                 Page No. 1 of 18
Canara Bank Vs. Ajay Kumar
                                      JUDGMENT

1. Vide this judgment, I shall dispose of present suit filed by plaintiff against defendant for recovery of sum of Rs.4,38,736/- along with pendente-lite and future interest.

2. The case of plaintiff in brief as averred in plaint is as under:

3. It is stated that plaintiff is a limited bank duly incorporated/constituted under Banking Act 1970 having its head office at 112, JC Road, Bangalore and inter-alia amongst others a Branch office at Lajpat Nagar-II, New Delhi. It is stated that present suit is being filed by Mr. Abhinav Sharma, GPA holder, who is fully conversant with facts of present case. He is competent to sign and verify plaints, pleadings, applications etc. and to do all necessary acts on behalf of plaintiff bank for proper conduct of legal proceedings on behalf of plaintiff.

4. It is stated that defendant approached plaintiff bank for a car loan to the tune of Rs.4,63,000/- vide loan application dated 28.03.2016 to purchase a Brand new Tata Indigo GLS Car. It is stated that after scrutinizing proposal of defendant and verification of financial requirement of defendant, a loan of Rs.4,63,000/- was sanctioned under Canara Pragati Scheme vide sanction letter dated 28.03.2016 by plaintiff bank. It is stated that all the terms and conditions of sanction letter were duly accepted by defendant. Loan amount was repayable with agreed rate of interest i.e. 10.20% in 48 equal installments of Rs.11,989/- per CS No. 1894/17 Page No. 2 of 18 Canara Bank Vs. Ajay Kumar month.

5. It is stated that defendant entered into a loan agreement of deed of hypothecation re-vehicles dated 28.03.2016 in favour of plaintiff thereby hypothecating vehicle in favour of plaintiff bank. Defendant agreed that he will pay loan amount with interest to plaintiff bank. It is stated that defendant also agreed to pay additional interest @ 2% per annum with agreed rests in case of default in payment of car loan account.

6. It is stated that on 28.03.2016 after execution of all the documents by defendant, plaintiff bank opened and disbursed Secured Loan Hypothecation amount of Vehicle to the tune of Rs.4,63,000/- in account of defendant bearing No. 6064101000341 which was already opened by defendant in Central Market, Lajpat Nagar Branch.

7. It is stated that defendant also submitted proforma invoice of Auto Vikas Sales and Service Pvt Ltd. dated 06.02.2016 to plaintiff bank. It is stated that on 28.03.2016, after disbursement of term loan of Rs. 4,63,000/-, defendant bought a new Tata Indigo GLX Diesel having registration No. DL-1RTA-5482. After sanction of loan, defendant executed Car Loan Agreement and other related documents and plaintiff bank transferred amount of Rs. 4,63,000/- in favour of Auto Vikas Sales and Service Pvt. Ltd by way of RTGS on 28.03.2016.

8. It is stated that defendant enjoyed and utilized aforesaid car loan but failed to adhere to terms and conditions of loan and to maintain CS No. 1894/17 Page No. 3 of 18 Canara Bank Vs. Ajay Kumar financial discipline and committed defaults in re-paying the loan amount on account of which, account became irregular.

9. It is stated that defendant paid some installments towards part payment of loan account and thereafter started to default in depositing installment of loan account. Plaintiff bank requested defendant so many times for payment of installments but to no avail and defendant did not take steps to get regularized loan account.

10. It is stated that account of defendant was classified as NPA on 13.05.2017 as defendant failed to maintain discipline of re-payment schedule and completely ignored requests of plaintiff bank to adhere with terms and conditions of loan agreement.

11. It is stated that loan account of defendant was showing debit balance of Rs. 4,17,709/- when account of defendant was classified as NPA on 30.05.2017. It is stated that total outstanding alongwith interest from 31.05.2017 till 13.12.2017 comes out to be Rs. 4,38,736/- (Rs. 21,027/- towards interest ).

12. It is stated that transaction entered into between plaintiff bank and defendant is a commercial transaction and as such, plaintiff bank is entitled to pendente lite and future interest which at present is 10.20 % per annum with monthly rests as on date of his application.

13. Plaintiff has prayed for passing decree to the tune of Rs. 4,38,736/- in favour of plaintiff and against defendant alongwith pendente lite and future interest from date of filing present suit till CS No. 1894/17 Page No. 4 of 18 Canara Bank Vs. Ajay Kumar realization. Plaintiff has also prayed for grant of costs of the suit in its favour.

14. Summons of the suit was ordered to be issued against defendant vide order dated 28.11.2018. Defendant appeared in person after service of summons and filed written statement.

15. Defendant took some preliminary objections in written statement filed by him.

16. It is stated that suit filed by plaintiff is liable to be dismissed being frivolous, not maintainable and vexatious. It is stated that suit filed by plaintiff is abuse of process of law and is based on false allegations. It is stated that no cause of action arose in favour of plaintiff and against defendant and plaint filed by plaintiff is liable to be rejected U/o 7 Rule 11 CPC. It is stated that suit filed by plaintiff is liable to be dismissed as plaintiff has not approached this court with clean hands and has suppressed true and correct facts from this court. It is stated that suit filed by plaintiff is liable to be dismissed as defendant regularly paid installments to plaintiff bank but due to accident, defendant was unable to pay remaining installments regarding which defendant visited office of plaintiff bank and requested to take over the said vehicle and official of plaintiff bank took possession of vehicle bearing No. DL-1RTA-5482 alongwith its two keys which fact was duly acknowledged by Manager of plaintiff bank on 03.03.2017. It is stated that this fact has been concealed by plaintiff from this court on account of which, suit filed by CS No. 1894/17 Page No. 5 of 18 Canara Bank Vs. Ajay Kumar plaintiff is liable to be dismissed. It is stated that after taking over possession of aforesaid vehicle, officials of plaintiff bank told defendant that they will not file any case against defendant in respect of the said vehicle and that the matter has been settled forever. It is stated that officials of plaintiff bank further assured defendant that from 03.07.2017, there is no need to pay any installments to plaintiff as they will recover balance installments by auctioning / selling the said vehicle.

17. It is stated that statement of accounts relied upon by plaintiff bank is not properly maintained in accordance with law. It is stated that it is a known fact that bank generally obtains blank signed documents from borrowers which are filled in subsequently without consent and knowledge of borrowers / guarantors and same is position in present case also. Documents in the present case have also been filled up later on after making material alteration in the documents which fact itself makes documents defective which cannot be relied upon. It is stated that plaintiff bank has standard format of loan documents and printed forms of contract and when such documents are filled up in the blank spaces, such documents or contract cannot be said to be legal contract. It is stated that standardized contracts that plaintiff bank entered into are nothing but pretended contracts that have semblance of contract as they predominately show unilateral will.

18. It is stated that plaintiff bank has charged illegal and excessive rate of interest in violation of RBI Guidelines. It is stated that CS No. 1894/17 Page No. 6 of 18 Canara Bank Vs. Ajay Kumar plaintiff bank has never informed defendant with regard to rate of interest as defendant had signed on blank documents which will not have any bearing on the case and hence, plaintiff bank is not liable to be granted interest claimed from defendant.

19. On reply on merits, it is admitted that plaintiff bank sanctioned loan of Rs. 4,63,000/- to defendant on 28.03.2016 whereafter defendant signed various documents as per directions of bank official but that bank officials did not disclose or explain regarding contents of documents signed by defendant. It is stated that defendant is an illiterate person who does not know English language and signed all documents at the time of sanctioning of loan amount. It is stated that defendant is a poor person having family comprising of wife and two school going children. In April-2017, defendant met with an accident due to which he was confined to bed for more than three months. In July-2017, defendant handed over vehicle alongwith two keys to bank officials on 03.07.2017.

20. It is stated that whatever documents were signed by defendant, the same were signed at instructions and as per directions of bank officials as defendant was unemployed who wanted to carry on his own business on account of which, he applied for loan. It is stated that defendant had paid some installments to plaintiff bank but after sometime, when he met with an accident, he was unable to pay remaining installments with respect to the said vehicle and handed over the vehicle alongwith its keys to concerned Bank Manager but this fact CS No. 1894/17 Page No. 7 of 18 Canara Bank Vs. Ajay Kumar has been concealed by plaintiff from this court.

21. Defendant has prayed for dismissal of suit filed by plaintiff with exemplary costs in favour of defendant and against plaintiff.

22. Replication to written statement of defendant was filed on behalf of plaintiff.

23. In the replication, plaintiff took some preliminary objections. It is stated that defendant is taking false and baseless pleas before this court with ulterior motive and malafide intention to escape from his legally enforceable liability. It is stated that defendant was sanctioned car loan to the tune of Rs. 4,63,000/- by plaintiff bank vide sanction letter dated 28.03.2016 to purchase a brand new Tata Indigo GLS Car and all terms and conditions of sanction letter were duly accepted by defendant. The said amount was re-payable to plaintiff bank in 48 equal installments of Rs. 11,989/- with agreed rate of interest @ 10.20 %. Defendant entered into Deed of Hypothecation Re vehicles, car loan agreement and other related documents on 28.03.2016 in favour of plaintiff bank to secure loan amount. Defendant further agreed to pay additional interest @ 2 % per annum with agreed rests in case of default in payment.

24. It is stated that defendant enjoyed and utilized car loan but failed to adhere to terms and conditions of loan and to maintain financial discipline and committed defaults on account of which, account of defendant became irregular. Plaintiff bank requested defendant to make payment of installments but defendant did not bother for the same.

Canara Bank Vs. Ajay Kumar Plaintiff bank followed up with defendant to repay outstanding amount but despite various oral and written requests, defendant did not regularize the account and ultimately, account of defendant was classified as NPA on 13.05.2017.

25. In reply to preliminary objections taken by defendant, plaintiff denied that suit filed by plaintiff is liable to be dismissed being frivolous, vexatious and without any merits. It is stated that suit filed by plaintiff is liable to be decreed in favour of plaintiff and against defendant. It is denied that suit filed by plaintiff is abuse of process of law and is based on misleading and false allegations as alleged. It is denied that suit filed by plaintiff is liable to be dismissed U/o 7 Rule 11 CPC as the same does not disclose any valid and cogent cause of action as alleged. It is stated that cause of action against defendant is continuous and recurring till defendant does not liquidate outstanding amount. It is denied that suit filed by plaintiff is liable to be dismissed as plaintiff has not approached court with clean hands and has suppressed true and correct facts from the court as alleged.

26 It is stated that defendant has accepted that he has defaulted in payment of installments. It is denied that defendant visited office of plaintiff bank and requested to take over vehicle and official of plaintiff bank took over possession of vehicle bearing No. DL-1RTA- 5482 Tata Indigo GLX CNG alongwith two keys which were duly received and acknowledged by Manager of plaintiff bank on 03.07.2017 and CS No. 1894/17 Page No. 9 of 18 Canara Bank Vs. Ajay Kumar acknowledgment / receipt dated 03.07.2017 was issued in this regard. It is stated that both the averments of defendant are contradictory to each other. It is stated that defendant relied upon acknowledgment /receipt dated 03.07.2017 but failed to file the same alongwith his written statement. It is denied that officials of plaintiff specifically told defendant that they will not charge or take / file any case against defendant in respect of the said vehicle and that the matter has been settled forever. It is denied that officials of plaintiff bank assured defendant that from 03.07.2017, there is no need to pay any installments to plaintiff as they have recovered balance installments qua the said vehicle by auctioning /selling the same. It is stated that physical possession of the said vehicle was never taken by plaintiff bank nor any assurance was given by plaintiff bank to defendant regarding settlement of outstanding dues. It is stated that plaintiff bank requested defendant to route proceeds through account and to get regularized the loan account but defendant failed to do so and in state of anger, defendant irresponsibly on his own left the car outside plaintiff bank without consulting or informing plaintiff bank. As defendant left car on road, on complaint from residents, MCD towed car from the road. Thus, plaintiff bank has no possession of the said vehicle.

27. It is stated that plaintiff has paid requisite court fees of Rs. 6,639/- on claimed amount of Rs. 4,38,736/-. It is stated that loan and security documents executed by defendant in favour of plaintiff bank CS No. 1894/17 Page No. 10 of 18 Canara Bank Vs. Ajay Kumar govern contractual obligation interse between parties which are biding upon defendant and enforceable under law.

28. It is denied that statement of accounts relied upon by plaintiff bank are not properly maintained in accordance with law. It is stated that account opened in name of defendant at branch of plaintiff bank was regularly maintained and all entries of debit and credit were correctly made by plaintiff bank in its regular course of banking. It is denied that plaintiff bank generally obtains blank documents from borrower which are filled subsequently without consent and knowledge of borrower / guarantors as alleged. It is stated that on the contrary, defendant after accepting terms and conditions of sanction/ agreement executed loan and security documents in favour of plaintiff bank which are binding upon defendant and enforceable under law. It is stated that defendant cannot evasively deny that plaintiff bank took signatures of defendant.

29. It is denied that plaintiff bank has standard format of loan documents and printed forms of contract and when such documents are filled up in blank spaces, such documents or contract cannot be said to be legal contract as alleged. It is stated that loan agreement is a legal contract between a lender and borrower regulating mutual promises made by each party. It is a formal document evidencing a loan.

30. It is denied that plaintiff bank has charged illegal and excessive rate of interest from defendant in violation of RBI Guidelines as alleged. It is further denied that plaintiff bank never informed CS No. 1894/17 Page No. 11 of 18 Canara Bank Vs. Ajay Kumar defendant with regard to rate of interest as defendant had signed on blank documents and hence, plaintiff bank is not liable to claim interest from defendant as alleged. It is stated that defendant signed documents with full knowledge regarding its terms and conditions. It is denied that defendant was never informed with regard to rate of interest as alleged.

31. On reply on merits, plaintiff has reiterated corresponding paras of plaint filed by plaintiff.

32. It is denied that defendant is an illiterate person not knowing English and signed all documents at the time of sanctioning the loan amount as alleged. It is stated that all terms and conditions of sanction letter were described by plaintiff bank which were duly accepted by defendant at the time of availing loan facility. Loan documents were duly signed and executed by defendant in both Hindi and English language and same were filled by defendant on his own in English language and were also signed by him in English language. It is denied that defendant is a poor person with family consisting of his wife and two school going children. It is denied that in April-2017, defendant met with an accident on account of which, he was confined to bed for more than three months and thereafter, in July-2017, defendant handed over vehicle alongwith two keys to bank officials on 03.07.2017 as alleged. It is stated that plaintiff bank is having no knowledge regarding the accident of defendant as no proof of accident in terms of Doctor's certificate and medication was shown by him. It is stated that defendant is taking false CS No. 1894/17 Page No. 12 of 18 Canara Bank Vs. Ajay Kumar and baseless pleas before this court with ulterior motive to escape from his legally enforceable liability.

33. It is prayed to allow suit filed by plaintiff bank in terms of prayer made therein.

34. On the basis of the aforesaid pleadings of the parties, issues were framed by my Ld. Predecessor on 19.04.2023 which are as follows:-

1. Whether the plaintiff is entitled to recover from the defendant, the principal sum of Rs.4,38,736/-?

OPP

2. Whether the plaintiff is entitled to recover from the defendant, pendente-lite and future interest? If so, at what rate? OPP

3. Whether the defendant had handed over the vehicle No. DL1RTA5482 to the plaintiff? If so, to what effect? OPD

4. Relief

35. In order to prove its case, plaintiff examined Ms. Vandana, AR/Legal Manager with plaintiff bank as PW1 who exhibited her evidence affidavit vide Ex.PW1/A. In her deposition, PW1 relied upon and exhibited following documents:-

Canara Bank Vs. Ajay Kumar S.No. Description of Document Exhibit/Mark 1 Copy of General Power of Attorney in Mark PW1/1 favour of Mr.Abhinav Sharma 2 Loan application form of defendant Ex.PW1/2(OSR) 3 Copy of sanction letter dated Mark PW1/3 28.03.2016 4 Certified copy of deed of Ex.PW1/4 Hypothecation re-vehicles dated 28.03.2016 5 Performa invoice of Autovikas Sales Ex.PW-1/5(OSR) & Service Pvt. Ltd. dated 06.02.2016 in favour of defendant 6 Copy of Motor insurance policy and Mark RC of vehicle bearing No. DL1-RTA- PW1/6(colly) 5482 7 Transaction slip dated 28.03.2016 Ex.PW1/7 issued by plaintiff bank in favour of defendant 8 Memorandum of account/record of Mark PW1/8 outstanding dues against defendant 9 Certified copy of statement of Ex.PW1/9 account of defendant

36. Plaintiff's evidence was closed on statement of AR of plaintiff bank recorded on 11.03.2024.

37. No evidence was led by defendant and DE was closed on statement of defendant recorded on 05.09.2024.

38. I have heard final arguments addressed by respective counsels and perused the record.

39. My issue-wise findings are as below:-

Canara Bank Vs. Ajay Kumar ISSUES No. 1, 2 and 3

1. Whether the plaintiff is entitled to recover from the defendant, the principal sum of Rs.4,38,736/-?

OPP and

2. Whether the plaintiff is entered to recover from the defendant, pendente-lite and future interest? If so, at what rate? OPP and

3. Whether the defendant had handed over the vehicle No. DL1RTA5482 to the plaintiff? If so, to what effect? OPD

40. Onus to prove issues No. 1 and 2 was upon plaintiff and onus to prove issue No. 3 was upon defendant. All these issues are being taken up together being inter connected and have bearing on each other.

41. Plaintiff has sought recovery of amount of Rs. 4,38,736/- from defendant. Out of this amount, amount of Rs. 4,17,709/- is stated to be due as principal amount whereas amount of Rs. 21,027/- is stated to be due towards interest.

42. Defendant as such has not disputed that he availed loan of Rs. 4,63,000/- from plaintiff bank for purchase of vehicle bearing No. DL- 1RTA-5482 on 28.03.2016.

Canara Bank Vs. Ajay Kumar

43. In statement of account of defendant filed by plaintiff bank Ex. PW-1/9, balance amount as on 28.11.2017 has been shown to be Rs. 3,80,707/- which does not match with suit amount. PW-1 in her cross examination admitted that she has not mentioned total paid amount in the plaint. She stated that last installment of the said loan was paid on 28.04.2017. She further admitted that she has not mentioned remaining amount in plaint and affidavit after last installment. She further admitted that plaintiff recovered the loan amount from the asset / car as the loan was hypothecated loan. She further admitted that defendant surrendered the car to plaintiff to secure loan amount. She admitted that as per para No. 4, plaintiff recovered the loan amount from hypothecated vehicle. She stated that value of hypothecated car at the time of surrender was Rs. 3,74,448/-. She stated that defendant surrendered the vehicle to plaintiff on 03.07.2017. PW-1 in her cross examination stated that at the time of surrender, the car was not in a good condition and not in position to sell out the same towards valuation of loan amount and clear the outstanding.

44. PW-1 on one hand has stated value of hypothecated car at the time of surrender to be Rs. 3,74,448/- and on the other hand stated that at the time of surrender, car was not in a good condition and not in a position to sell out the same towards valuation of loan amount and clear the outstanding.

Canara Bank Vs. Ajay Kumar

45. As mentioned earlier, outstanding of defendant as per statement of account of defendant Ex. PW-1/9 was Rs. 3,80,707/- meaning thereby that as per valuation of hypothecated car, it almost matched due amount from defendant. Plaintiff has not brought on record the fact of sale of hypothecated car and how much amount, it actually fetched after sale. Plaintiff has failed to figure out exact liability of defendant after sale of hypothecated car and thus, it can be said that plaintiff failed to discharge its burden qua issue No. 1. Issue No. 1 is accordingly decided in favour of defendant and against plaintiff. As issue No. 2 was dependent upon issue No. 1, the same also stands decided in favour of defendant and against plaintiff.

46. Defendant has been able to discharge his burden qua issue No. 3 as PW-1 in her cross examination admitted that defendant surrendered vehicle to plaintiff on 03.07.2017. In case, hypothecated car was surrendered by defendant to plaintiff, plaintiff should have brought on record as to how much amount, it was able to recover from sale of hypothecated vehicle but as discussed above, plaintiff has failed to do so which in facts and circumstances of present case has cast shadow of doubt over claim made by plaintiff in plaint filed by it. Issue No. 3 is accordingly decided in favour of defendant and against plaintiff. RELIEF

47. In view of my findings qua Issues No. 1 to 3, I am of the view that suit filed by plaintiff is without merits and is accordingly dismissed.

Canara Bank Vs. Ajay Kumar No order as to costs.

Decree-Sheet be prepared accordingly.

File be consigned to Record Room.

                                        SONU             SONU AGNIHOTRI
                                        AGNIHOTRI        Date: 2024.10.22
                                                         15:00:46 +0530
Announced in open Court                   (Sonu Agnihotri)
today on 30.09.2024                  DJ-07, South East District,
                                        Saket Courts/Delhi




CS No. 1894/17                                              Page No. 18 of 18
Canara Bank Vs. Ajay Kumar