Delhi District Court
Punjab National Bank vs Raees Salmani (Borrower) on 23 December, 2025
IN THE COURT OF DJ (COMMERCIAL COURT)-03 (SHAHDARA)
KARKARDOOMA COURTS, DELHI
PRESIDED BY: SH. SANJAY SHARMA-II, DHJS
CS (Comm.) No. 617/2024
CNR No.: DLSH01-007449-2024
Punjab National Bank
Branch Office:
Mahila Colony Branch
Gandhi Nagar, Delhi-110032
..... Plaintiff
VERSUS
1. Raees Salmani (Borrower)
S/o Mr. Mohd. Shakeel Salmani
2. Mohd. Shakeel Salmani (Co-Borrower)
S/o Late Sharif Ahmed
3. Mrs. Askara Salmani (Co-Borrower)
W/o Mr. Mohd. Shakeel Salmani
All Residents of:
R/o IX-4024, Gali No. 16, Ajit Nagar
Gandhi Nagar, Delhi-110031
..... Defendants
Date of Institution : 05.12.2024
Date of Arguments : 20.12.2025
Date of Judgment : 23.12.2025
JUDGMENT
THE SUIT:
1. The plaintiff, through its Sr. Manager Mr. Ashok Kumar , instituted a suit for a decree for recovery of Rs. 5,49,585.69/-
alongwith pendente-lite and future interest @ 10.45% per annum and penal interest @ 2% per annum against the defendants.
Digitally signed by
SANJAY SANJAY SHARMA
SHARMA Date: 2025.12.24
14:45:13 +0530
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 1 of 27 THE PARTIES:
2. Oriental Bank of Commerce is the lender. However, Oriental Bank of Commerce amalgamated with Punjab National Bank (Hereinafter referred as 'the plaintiff') w.e.f. 01.04.2020, vide Gazette Notification dated 04.03.2020.
3. The defendant No. 1 is the principal borrower and the defendant No. 2 and 3 are co-borrowers. THE TRANSACTION:
4. On 12.06.2017, the defendants applied for 'Education Loan' in the sum of Rs. 4,00,000/-, vide 'Loan Application Form For All Retail Schemes (Individuals)'.
5. On 04.09.2017, the plaintiff sanctioned 'Education Loan' in the sum of Rs. 4,00,000/- to the defendants on interest @ 10.45% per annum for a period of 180 months excluding moratorium period of 48 months (Study Period + 12 Months Grace Period). The defendants executed loan documents in favour of the plaintiff. The plaintiff disbursed the loan amount, vide loan A/c. No. 00856416000456. The defendants availed the said 'Education Loan'.
6. Grievance of the plaintiff is that the defendants failed to adhere to terms of repayment. On 01.07.2023, the defendants made last payment in the sum of Rs. 5,314/-. The loan account was classified as 'Non Performing Assets' (NPA) on 30.08.2023.
The plaintiff sent demand notice dated 31.08.2023, through speed post, to the defendants. However, the defendants neither replied the demand notice nor cleared the outstanding amount. An amount of Rs. 5,49,585.69/- ( comprising Rs. 4,79,112.60/- as principal amount and Rs. 70,473.09/- as accrued interest ) was due against the defendants, as on 24.09.2024. Therefore, the Digitally signed by SANJAY plaintiff filed the suit for recovery. SANJAY SHARMA SHARMA Date:
2025.12.24 14:45:19 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 2 of 27 WRITTEN STATEMENT:
7. In written statement, the defendants contended that the plaintiff instituted the suit on the basis of an invalid General Power of Attorney dated 27.11.2017 as the plaintiff had no nexus with loan advanced by Oriental Bank of Commerce in 2017.
They contended that amalgamation of Oriental Bank of Commerce with the plaintiff on 01.04.2020 would not validate the said GPA retrospectively. They contended that the suit is barred by limitation on the ground that the plaintiff instituted the suit after 7 years from the date of disbursal of loan. They contended that part payment qua the said loan would not furnish a fresh period of limitation to the plaintiff in absence of any acknowledgement under Section 18 of 'The Indian Limitation Act, 1963'. They contended that acknowledgement relied by the plaintiff is defective as the said acknowledgement does not mention that the defendants acknowledged their liability in clear and unambiguous terms. They contended that in the said acknowledgement, there is no mention of the date on which the amount mentioned therein became due to the plaintiff. They contended that the plaintiff has not complied with amalgamation laws mandating the plaintiff to follow due process to pursue loan accounts pertaining to Oriental Bank of Commerce. They contended that the plaintiff has not approached the Court with clean hands and suppressed material facts including payments made by the defendants. They contended that the suit is bad for mis-joinder of the defendant No. 2 and 3 and they are wrongly impleaded and misrepresented as guarantors / co-borrowers. They contended that the defendant No. 2 and 3 have never participated in loan transaction and no liability can be fastened Digitally signed by SANJAY upon them. SANJAY SHARMA SHARMA Date:
2025.12.24 14:45:36 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 3 of 27
8. According to the defendants, the plaintiff misled the Court to shift liability of the said loan account to the defendant No. 2 and 3 as initially, Oriental Bank of Commerce opened and maintained loan account in the name of the defendant No. 1 and issued passbook to him. However, the plaintiff misrepresented the said loan account as a ' joint account' of the defendants. They contended that unilateral modification of the loan account without consent / authority of the defendant No. 2 and 3 is an act of misrepresentation and manipulation to fasten liability upon the defendant No. 2 and 3. They contended that the defendant No. 2 and 3 were not privy to original transaction and had no role in sanction / disbursement of the said loan.
9. The defendants further contended that the plaintiff has concealed payment of an amount of Rs. 1,29,000/- and credit entry of Rs. 2,76,022.52/- in the said loan account. They contended that the plaintiff made averment pertaining to receipt of an Income Certificate dated 04.09.2019 whereas the plaintiff was not lender at that time. They contended that the plaintiff has not filed original income certificate containing stamp of Oriental Bank of Commerce.
10. The defendants contended that the plaintiff wrongly classified loan account as 'Non Performing Asset' (NPA) in breach of guidelines issued by RBI mandating that an account can be classified as 'Non Performing Asset' (NPA) in case of non-payment for 90 days. They contended that classification of loan account as 'Non Performing Asset' (NPA) was premature and it vitiates the claim of the plaintiff. The plaintiff instituted the suit on 05.12.2024 and an amount of Rs. 2,76,022.52/- was credited to loan account on 06.12.2024 and therefore, the suit is Digitally signed by SANJAY premature. SANJAY SHARMA Date:
SHARMA 2025.12.24
14:45:43
+0530
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 4 of 27
11. According to the defendants, initially, the plaintiff made a demand of Rs. 4,90,706.69/-, vide demand notice whereas the plaintiff filed the suit for recovery of an amount of Rs.
5,49,585.69/-. Therefore, there is material discrepancy in statement of account and the claim of the plaintiff. They contended that in Para No. 14 of the plaint, the plaintiff claimed an amount of Rs. 5,49,585.69/- comprising principal amount of Rs. 4,79,112.60/- and interest amount of Rs. 70,473.09/-. They contended that claim for interest amount of Rs. 70,473.09/- is arbitrary, excessive and illegal. They contended that there is no explanation for difference of an amount of Rs. 58,879/- between amount demanded, vide demand notice and this suit. They contended that the plaint does not disclose clear, coherent and legally enforceable claim and therefore, it is liable to be rejected under Order 17 Rule 11(a) and (d) CPC.
12. To add further, the defendants contended that loan documents were not properly explained to them and their signatures were obtained under coercion. They contended that loan documents were not read over or explained to them. They contended that penal interest @ 2% per annum is contrary to Section 23 of 'The Indian Contract Act, 1872'. They contended that the plaintiff did not issue any notice before classification of account as 'Non Performing Asset' (NPA) on 30.08.2023. They denied receipt of loan recall notice dated 31.08.2023. REPLICATION:
13. In the replication, the plaintiff denied averments made in the written statement and reiterated averments made in the plaint. The plaintiff contended that the defendant No. 2 and 3 executed Agreement of Term Loan, Affidavits and Balance and Security Digitally Confirmation Letter and the suit is within limitation. signed by SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:45:51 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 5 of 27 ISSUES:
14. On 09.06.2025, the Court framed issues, as under:
(1) Whether GPA dated 27.11.2017 is defective and for that reason, authorized representative of the plaintiff had no authority to file the suit?
(OPD) (2) Whether the suit is barred by limitation?
(OPD) (3) Whether there is non-compliance with amalgamation laws and scheme and the plaintiff has not followed due process to pursue accounts of Oriental Bank of Commerce?
(OPD) (4) Whether there is suppression of material facts?
(OPD) (5) Whether the suit is bad for misjoinder of the defendant No. 2 and 3?
(OPD) (6) Whether the plaintiff made unilateral modification in the identity of the account holder and wrongly reflected the account as jointly held by the defendant No. 1 to 3?
(OPD) (7) Whether the plaintiff suppressed part payments / installments of Rs. 1,29,000/- and credit of Rs. 2,76,022.52/- into the loan account?
(OPD) (8) Whether the plaintiff withheld copy of Income Certificate dated 04.09.2019, if so, its effect?
(OPD) (9) Whether the loan account was wrongly classified as 'Non Performing Asset' (NPA)?
(OPD) (10) Whether the plaintiff is entitled to a decree for recovery of Rs. 5,49,585/-, as prayed?
(OPP) (11) Whether the plaintiff is entitled to pendente-lite and future interest @ 10.45% per annum with monthly rest and penal interest @ 2% per annum?
(OPP) (12) Relief.Digitally signed by SANJAY
SANJAY SHARMA
SHARMA Date:
2025.12.24
14:45:57 +0530
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 6 of 27
THE PLAINTIFF'S EVIDENCE:
15. The plaintiff examined Mr. Ashok Kumar, Sr. Manager as PW-1. He deposed, on strength of evidence-affidavit Ex.PW1/1.
He relied on documents, as under:
Sl No. Description Exhibit 1. Gazette Notification dated 04.03.2020 Ex.PW1/A
2. GPA dated 27.11.2017 in favour of Mr. Ashok Kumar Ex.PW1/B
3. Loan Application Form dated 12.06.2017 Ex.PW1/C
4. Sanction Letter dated 04.09.2017 Ex.PW1/D
5. Affidavits of co-borrowers dated 07.09.2017 Ex.PW1/E
6. Agreement of Term Loan for Education dt 07.09.2017 Ex.PW1/F
7. Undertakings dated 28.09.2017 Ex.PW1/G
8. Letter for Auto Recovery dated 07.09.2017 Ex.PW1/H
9. Balance & Security Confirmation dated 01.05.2023 Ex.PW1/I
10. Income Certificate of the defendant No. 2 Ex.PW1/J
11. Fee Receipts dated 12.06.2017, 23.10.2017 and Ex.PW1/K 23.05.2018
12. Statement of Bank Account and NPACR Ex.PW1/L
13. Demand Notice dated 31.08.2023 and postal receipt Ex.PW1/M
14. 'Non-Starter Report' dated 10.09.2024 Ex.PW1/N
15. Affidavit under Order 11 Rule 6(3) of 'The Ex.PW1/O Commercial Courts Act, 2015'
16. Certificate under Section 2A(b) and 2A(c) of 'The Ex.PW1/P Information and Technology Act, 2000' THE DEFENDANTS' EVIDENCE:
16. The defendant No. 1 appeared as DW-1. He deposed, on strength of evidence-affidavit Ex.DW1/A. He relied on documents, as under:
Sl No. Description Exhibit 1. Copy of Bank Statement of the defendant No. 1 Ex.DW1/1 2. Copy of passbook of loan A/c. No. 00856416000456 Ex.DW1/2 3. Income Certificate of father of the defendant No. 1 Ex.DW1/3
17. DW-2 Mr. Ashok Kumar, Sr. Manager, PNB, Gandhi Nagar Branch, Delhi brought statement of loan account of the Digitally signed by defendants w.e.f. 01.06.2024 to 31.12.2024 Ex.DW2/A. SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:46:13 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 7 of 27 APPEARANCE:
18. The Court has heard arguments of Ms. Jyoti Gautam, Ld. Counsel for the plaintiff, Mr. Rajkumar, Ld. Counsel for the defendant No. 1 and Mr. Zuber Salmani, Ld. Counsel for the defendant No. 2 and 3 and perused written arguments filed by the defendants.
CONTENTIONS OF THE PLAINTIFF:
19. Ld. Counsel for the plaintiff contended that Oriental Bank of Commerce advanced an education loan in the sum of Rs.
4,00,000/- to the defendant No. 1 in order to enable him to pursue 'Master of Dental Surgery' from 'Institute of Dental Studies and Technologies' pursuant to loan application filed by the defendants Ex.PW1/C, vide sanction letter dated 04.09.2017 Ex.PW1/D. She contended that the defendants executed loan documents in favour of the plaintiff, vide Affidavits of Co- Borrowers Ex.PW1/E, Agreement of Term Loan for Education Ex.PW1/F and Undertakings Ex.PW1/G. She contended that the loan amount was disbursed to 'Institute of Dental Studies and Technologies' on furnishing Fee Receipts Ex.PW1/K. She contended that the defendants failed to adhere to financial discipline and deposit regular installments leading to classification of account as 'Non Performing Asset' (NPA) on 30.08.2023. She contended that the plaintiff issued loan recall notice dated 31.08.2023 Ex.PW1/M to the defendants, through speed post. However, the defendants failed to clear the loan account. She contended that an amount of Rs. 5,49,585.69/- was due against the defendants, as on 24.09.2024, vide statement of account Ex.PW1/L. She contended that contentions raised by the defendants are evasive and therefore, the plaintiff is entitledDigitally to a signed by decree for recovery of the suit amount with interest.SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:46:20 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 8 of 27 CONTENTIONS OF THE DEFENDANTS:
20. Ld. Counsels for the defendants contended that the plaintiff instituted the suit on the basis of an invalid GPA executed in favour of PW-1 Mr. Ashok Kumar, Sr. Manager.
They contended that Oriental Bank of Commerce disbursed loan on 04.09.2017 and at that time, Punjab National Bank had no connection with Oriental Bank of Commerce. They contended that GPA filed by PW-1 Mr. Ashok Kumar was executed on 27.11.2017. They contended that amalgamation of Oriental Bank of Commerce with Punjab National Bank would not validate the said GPA retrospectively. In this regard, Ld. Counsels for the defendants referred cross-examination of PW-1 Mr. Ashok Kumar, Sr. Manager that he had no knowledge of the loan transaction and he had neither signed nor witnessed execution of loan documents. On that basis, Ld. Counsels for the defendants contended that the plaint is signed, verified and instituted by a person not authorized by the plaintiff and PW-1 Mr. Ashok Kumar, Sr. Manager is not a competent witness.
21. Ld. Counsels for the defendants contended that loan was advanced on 04.09.2017 and the plaintiff instituted the suit for recovery on 05.12.2024 i.e. after 7 years from the date of advancement of loan and therefore, the suit is barred by limitation. They contended that Balance and Security Confirmation Letter dated 01.05.2023 Ex.PW1/I and payment of Rs. 5,314/- made on 01.07.2023 were executed / deposited after expiry of period of limitation and therefore, the said confirmation letter and deposit would not extend period of limitation under Section 18 of 'The Indian Limitation Act, 1963'. They contended that in any other case, the said confirmation letter does not state the date on which the said amount became due and it isDigitally not valid.
signed SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.24 14:46:27 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 9 of 27
22. Ld. Counsels for the defendants contended that the plaintiff has not complied with scheme of amalgamation of Oriental Bank of Commerce with Punjab National Bank as the plaintiff is relying upon GPA dated 27.11.2017 executed before amalgamation on 01.04.2020.
23. Ld. Counsels for the defendants contended that the plaintiff has suppressed material facts from the Court. They contended that the plaintiff suppressed payment of Rs. 1,29,000/- made by the defendant No. 1 and credit of Rs. 2,76,022.52/- into loan account on 06.12.2024. They contended that the plaintiff suppressed and fabricated identity of account holder(s) and status of loan account. They contended that initially, Oriental Bank of Commerce opened loan account in the name of the defendant No. 1 and issued a passbook to him whereas post-amalgamation, the plaintiff reflected the said account as ' joint account' of the defendants. They contended that the plaintiff changed status of the loan account in the absence of any consent of / agreement with the defendant No. 2 and 3. They contended that unilateral modification of status of an 'individual account' to 'joint account' is fabrication of record with the intent to fasten liability upon the defendant No. 2 and 3.
24. Ld. Counsels for the defendants contended that the suit is bad for misjoinder of the defendant No. 2 and 3. They contended that the plaintiff is misrepresenting the defendant No. 2 and 3 as guarantors / co-borrowers. They contended that the defendant No. 2 and 3 were not privy to loan transaction and they never participated in loan transaction. They contended that the plaintiff made the defendant No. 2 and 3 as guarantors / co-borrowers without their consent or explaining them legal implication of the documents and got executed documents under influence.Digitally signed SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.24 14:46:33 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 10 of 27
25. Ld. Counsels for the defendants further contended that the plaintiff suppressed income certificate dated 04.09.2019 bearing official stamp of Oriental Bank of Commerce. They contended that the plaintiff filed an income certificate dated 04.09.2019 bearing stamp of Punjab National Bank whereas Oriental Bank of Commerce amalgamated with Punjab National Bank on 01.04.2020, vide Gazette Notification dated 04.03.2020 Ex.PW1/A.
26. Ld. Counsels for the defendants contended that averments made in the plaint regarding liability of the defendants are contradictory. They contended that the plaintiff demanded an amount of Rs. 4,90,706.69/-, vide demand notice Ex.PW1/M whereas the plaintiff stated the principal amount as Rs. 4,79,112.60/-. They contended that the plaintiff is claiming interest amount of Rs. 70,473.09/-. They contended that pre-suit interest claimed by the plaintiff is arbitrary, excessive and illegal. They contended that the plaintiff has not explained difference of Rs. 58,879/- between the demand notice and the suit amount.
27. Ld. Counsels for the defendants contended that the plaintiff wrongly classified loan account of the defendants as 'Non Performing Asset' (NPA) in breach of RBI guidelines mandating that an account can only be classified as ' Non Performing Asset' (NPA) in case of non-payment for 90 days. They contended that the plaintiff did not serve loan recall notice. They contended that the plaintiff filed a notice Ex.PW1/M alongwith photocopy of postal receipts. However, there is no tracking report regarding service of the said notices upon the defendants. They contended that the plaintiff cannot file a suit for recovery in the absence of intimation of classification of the account as 'Non Performing Asset' (NPA) and demand notices.
Digitally signed bySANJAY SANJAY SHARMA SHARMA Date: 2025.12.24 14:46:40 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 11 of 27
28. Ld. Counsels for the defendants contended that this Court does not have pecuniary jurisdiction to try this suit as the claim of the plaintiff on the date of institution of the suit was below Rs. 3,00,000/-. In that regard, they referred statement of account Ex.DW2/A wherein an amount of Rs. 2,91,649.17/- is shown due, as on 31.12.2024. They contended that the plaintiff did not deduct the said amount of Rs. 2,91,649.17/- in its statement of account Ex.PW1/L. They contended that if the plaintiff deducted the said amount from the suit amount, the claim of the plaintiff would have been below the pecuniary jurisdiction of this Court.
29. Ld. Counsels for the defendants contended that the plaintiff instituted the suit after 17 months from the date of classification of loan account as 'Non Performing Asset' (NPA). They contended that the plaintiff has not furnished any justification for such inordinate delay in filing of the suit.
30. Ld. Counsels for the defendants relied upon judgments, as under:
Judgment Citation
S.P. Chengalvaraya Naidu vs. Jagannath 1993 SUPP 3 SCR 422
Dalip Singh vs. State of U.P. & Ors. 2010 (2) SCC 114
K.D. Sharma vs. Steel Authority of India Civil Appeal No. 4270/2008 Ltd. & Ors. decided on 09.07.2008 (SC) DUTY OF THE BORROWERS:
31. Before appraisal of evidence, this Court would like to place its concern on record that Oriental Bank of Commerce advanced an education loan to the defendant No. 1 in order to enable him to pursue 'Master of Dental Surgery'. The defendant No. 1 admitted, in his cross-examination, that he had applied and utilized education loan. The defendant No. 2 and 3 were the co-borrowers and they are parents of the defendant No. 1. Pursuant to the said loan, the defendant No. 1 completed 'Master of Dental Surgery'.
Digitally signedSANJAY by SANJAY SHARMA SHARMA Date: 2025.12.24 14:46:52 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 12 of 27
32. It would have been fair on the part of the defendants that they would have cleared the loan account. However, the defendants raised generic, standard and evasive defences to escape from their liability. It is highly unexpected from such a highly educated person to deny his liability on vexatious, frivolous and baseless grounds. It is not only that the defendants raised general and usual defences, but they also accused the plaintiff of suppression and misrepresentation of the facts as well as fabrication of documents.
33. Nationalized Banks are custodians of public money. They disburse loans to traders, students, property buyers etc. to meet their financial constraints. There is a corresponding duty on borrowers to repay loan as per agreement so that the said money can be disbursed to other needy persons.
34. In M/s. ICICI Bank Limited vs. Umesh Rai , 2018 SCC OnLine Del 9540, Hon'ble High Court of Delhi held, as under:
"10. Banks and financial institutions, which disburse loans to citizens, operate on the trust and faith that the citizens who avail of loans would pay back the same honesty and with diligence. Banks hold the money of the public in trust with them, and the financial cycle of investments, deposits and loans are essential for the functioning of the economy. If people, who avail loans, default in payment of the same and also avoid the Court processes, there would be enormous distress in the system.
11. Courts also have a duty to safeguard public money and by applying completely incorrect principles of procedure and evidence, suits filed by these financial institutions cannot be dismissed in this manner. A perusal of the documents filed in this case shows that the Bank has filed the entire set of original documents on record. The statement of accounts clearly shows that the Defendant paid several of the instalments but defaulted in some of the instalments. SANJAY The Plaintiff bank, having placed all the original SHARMA documents on record except the loan recall notice, has established its case." Digitally signed (emphasis supplied) by SANJAY SHARMA Date: 2025.12.24 14:46:59 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 13 of 27 ISSUE NO. 1:
(1) Whether GPA dated 27.11.2017 is defective and for that reason, authorized representative of the plaintiff had no authority to file the suit?
(OPD)
35. The said issue was framed on the contention of the defendants that PW-1 Mr. Ashok Kumar, Sr. Manager of the plaintiff instituted the suit on the basis of GPA dated 27.11.2017 Ex.PW1/B whereas Oriental Bank of Commerce amalgamated with the plaintiff on 01.04.2020, vide Gazette Notification dated 04.03.2020 Ex.PW1/A. On that premise, the defendants contended that the said GPA is relating to pre-amalgamation period and the plaintiff has not issued a fresh GPA in favour of PW-1 Mr. Ashok Kumar, Sr. Manager. Ld. Counsels for the defendants contended that amalgamation of Oriental Bank of Commerce with the plaintiff on 01.04.2020 would not validate GPA dated 27.11.2017 Ex.PW1/B retrospectively. Therefore, the defendants contended that the plaintiff instituted a suit on the basis of an invalid / defective GPA.
36. This Court does not find any merit in the said contention. Oriental Bank of Commerce amalgamated with the plaintiff on 01.04.2020, vide Gazette Notification dated 04.03.2020 Ex.PW1/A. Therefore, the officers of the plaintiff can institute the suit for recovery of the amount due to Oriental Bank of Commerce on the basis of General Power of Attorney already executed in their favour. In this regard, it would be appropriate to refer Para No. 2, 4, 9 of 'Scheme of Amalgamation of Oriental Bank of Commerce into Punjab National Bank' is, as under:
"(2) Upon the commencement of this Scheme, the undertakings of the Transferor Banks shall vest or be deemed to vest or be taken over by the Transferee Bank without requiring any act, deed, consent or Digitally signed instrument for transfer of the same.
SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.24 14:47:06 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 14 of 27 (4) Without prejudice to the generality of sub- paragraph (1) and in respect of movable assets other than those dealt with in sub-paragraph (3), including but not limited to debts, actionable claims, earnest monies, receivables, bills, credits, loans, advances and deposits, if any, forming part of the undertaking, whether recoverable in cash or in kind or for value to be received, bank balances, etc., the same shall stand transferred to and vested in the Transferee Bank without any notice or other intimation to any person to the end and intent that the rights of the Transferor Banks to recover or realize the same stands transferred to the Transferee Bank, and to the extent such assets is a debt, loan, receivable, advance or deposit, appropriate entries should be passed in their respective books to record the aforesaid change, without any notice or other intimation to such debtors, depositors or persons as the case may be. (9) If, immediately before the commencement of this Scheme, any cause of actions, suit, decrees, recovery certificates, appeals or other proceedings of whatever nature in relation to any business of the undertakings which have been transferred under paragraph 3, is pending by or against the Transferor Banks before any court or tribunal or any other authority (including for the avoidance of doubt, an arbitral tribunal), the same shall not abate, be discontinued or be, in any way prejudicially affected by reason of the transfer of the undertakings of the Transferor Banks or of anything contained in this Scheme but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the Transferee Bank."
(emphasis supplied)
37. It is evident that post-amalgamation, the right to recover the amount advanced by Oriental Bank of Commerce vested into the plaintiff and the plaintiff can initiate proceedings for recovery of loans advanced by Oriental Bank of Commerce.
38. It does not stand to reason as to why GPA executed on 27.11.2017 in favour of PW-1 Mr. Ashok Kumar would cease to have effect in view of amalgamation on 01.04.2020. There was no necessity for execution of a fresh GPA in his favour
39. PW-1 Mr. Ashok Kumar, Sr. Manager was duly authorized to institute this suit for recovery of the amount advanced to the Digitally signed defendants. SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.24 14:47:13 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 15 of 27
40. In any case, PW-1 Mr. Ashok Kumar, Sr. Manager is a principal officer of the plaintiff and he can file a suit for recovery against the defendants.
41. In United Bank of India vs. Naresh Kumar and Others , (1996) 6 SCC 660, Hon'ble Supreme Court of India held, as under:
"10. ... Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. ...
13. The court had to be satisfied that Shri L.K. Rohatgi could sign the plaint on behalf of the appellant. The suit had been filed in the name of the appellant company; full amount of court fee had been paid by the appellant-Bank; documentary as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub-Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Shri L.K. Rohatgi must have been authorised to sign the plaint and, in any case, it must be held that the appellant had ratified the action of Shri L.K. Rohatgi in signing the plaint and thereafter, it continued with the suit."
(emphasis supplied)
42. Ld. Counsels for the defendants contended that PW-1 Mr. Ashok Kumar, Sr. Manager has no knowledge of facts of case as he neither signed nor witnessed execution of loan documents, 'he could not state the date of execution of loan documents ', 'date of amalgamation of Oriental Bank of Commerce with the plaintiff', 'he was appointed as a 'Probationary Officer' in 2014 ', 'he could not state the date of classification of the account as 'Non Performing Asset' (NPA)', 'date of issuance of loan recall notice to the defendants and date of balance confirmation letter '.
Digitally signed bySANJAY SANJAY SHARMA SHARMA Date: 2025.12.24 14:47:19 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 16 of 27
43. Precisely, this contention was answered in M/s. ICICI Bank Ltd. vs. Ashok Sharma, RFA 572/2015 decided on 01.06.2018 by Hon'ble High Court of Delhi, while dealing with a similar contention, as under:
"8. The question put by the Court to the witness also proved that the witness was deposing truthfully. The fact that he may not have witnessed the Defendant's signing the documents, does not render the documents fraudulent or unbelievable. In large organizations like the Plaintiff Bank, when the Principal Officer is deposing as a witness, it cannot be expected that the said Principal Officer would be witnessing the signatures of all the customers on the original documents that have been produced. So long as the originals are produced on record and the same are not denied and there is no allegation that the same are forged and fabricated, there can be no reason for the Court to disbelieve the same. The original documents having been placed on record and duly exhibited, the averments in the suit stand proved. The finding of the Trial Court that as the witness had not personally witnessed the Defendant signing the agreement, the same cannot be believed, is a completely incorrect approach. The Defendant has not disputed his signatures on the original agreement, which is placed on record. Thus there is no reason to disbelieve the same."
(emphasis supplied)
44. In this case, the defendant No. 1 admitted that he applied and availed education loan. The defendant No. 2 and 3 have not appeared into the witness box to dispute existence, authenticity and credibility of loan application and loan documents filed by the plaintiff.
45. Therefore, the plaint was signed, verified and instituted by a duly authorized person and there is no infirmity in GPA dated 27.11.2017 Ex.PW1/B and Mr. Ashok Kumar, Sr. Manager is a competent witness and he duly proved loan documents pertaining to loan of Rs. 4,00,000/- advanced to the defendants.
46. Accordingly, issue No. 1 is decided in favour of the Digitally signed plaintiff and against the defendants. SANJAY by SANJAY SHARMA SHARMA Date:
2025.12.24 14:47:25 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 17 of 27 ISSUE NO. 2:
(2) Whether the suit is barred by limitation?
(OPD)
47. The said issue was framed on the contention of the defendants that the loan was advanced on 04.09.2017 and the suit was instituted on 05.12.2024, after 7 years from the date of advancement of loan, and further that Balance and Security Confirmation Letter 01.05.2023 Ex.PW1/I was executed after three years from the expiry of period of limitation and therefore, it would not furnish a fresh period of limitation, and that the said letter dated 01.05.2023 is incomplete, vague and unenforceable for want of independent witness and absence of date on which the said amount became due to the plaintiff.
48. The plaintiff sanctioned an amount of Rs. 4,00,000/- to the defendants, vide sanction letter dated 04.09.2017 Ex.PW1/D. According to the statement of account Ex.PW1/L, the said amount was directly transferred to 'Institute of Dental Studies and Technologies'. The said amount was repayable after moratorium of 48 months comprising study period of 3 years and 12 months grace period. Therefore, cause of action arisen in favour of the plaintiff since 03.08.2021. In the meanwhile, the defendants made payments in the said loan account till 01.07.2023, vide statement of account Ex.PW1/L. Moreover, the defendants executed Balance and Security Confirmation Letter dated 01.05.2023 Ex.PW1/I whereby the defendants acknowledged liability of Rs. 4,84,098.69/-, as on 01.05.2023. Therefore, computing period of limitation either from tenure of repayment or acknowledgement dated 01.05.2023 or last payment of Rs. 5,314/- on 01.07.2023, the suit filed by the plaintiff on 05.12.2024 is within limitation. Accordingly, issue No. 2 is Digitally signed by decided in favour of the plaintiff and against the defendants.
SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:47:31 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 18 of 27 ISSUE NO. 3:
(3) Whether there is non-compliance with amalgamation laws and scheme and the plaintiff has not followed due process to pursue accounts of Oriental Bank of Commerce?
(OPD)
49. The said issue was framed on contention of the defendants that the plaintiff has not complied with amalgamation laws and scheme and not followed due process to pursue accounts of Oriental Bank of Commerce. It appears that the said contention was premised on the basis of challenge to GPA dated 27.11.2017 Ex.PW1/B pertaining to post-amalgamation period. However, the said challenge has already been rejected. Moreover, the defendants have neither stated nor demonstrated any non-
compliance of scheme of amalgamation by the plaintiff or breach of any law pertaining to amalgamation, if any.
50. Accordingly, issue No. 3 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 4:
(4) Whether there is suppression of material facts?
(OPD)
51. The said issue was framed on contention of the defendants that the plaintiff has concealed payment of Rs. 1,29,000/- and credit entry of Rs. 2,76,022.52/- in loan account of the defendants. It may be noted that PW-1 Mr. Ashok Kumar, Sr. Manager admitted, in his cross-examination, that an amount of Rs. 1,29,000/- has been paid by the defendants and that an amount of Rs. 2,91,649.17/- was due, as on 31.12.2024. In that regard, the defendants relied upon statement of loan account for the period from 06.12.2024 to 31.12.2024 Ex.DW2/A wherein an amount of Rs. 2,76,022.52/- was credited into loan account.
Digitally signed by SANJAY SANJAY SHARMA
SHARMA Date:
2025.12.24
14:47:38 +0530
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 19 of 27
52. In this regard, Ld. Counsels for the defendants contended that PW-1 Mr. Ashok Kumar, Sr. Manager categorically stated, in his cross-examination, that the plaintiff has not obtained any subsidy from the Government for want of relevant documents at appropriate stage and no subsidy was credited to loan account of the defendants. Therefore, they contended that the plaintiff concealed the said payments and deposit and the plaintiff has not given due credit of the said payments and deposit.
53. As regards payment of Rs. 1,29,000/-, it can be stated in statement of loan account of the defendants Ex.PW1/L payments made by the defendants are duly credited. The defendants have neither shown any deposit receipt or proof of transfer of any amount which was not credited in the said loan account.
54. As regards contention relating to entry dated 06.12.2024 in the sum of Rs. 2,76,022.52/-, it can be stated that the said entry is relating to the period of post-institution of the suit. It is neither the case of the defendants nor it can be that the defendants deposited the said amount of Rs. 2,76,022.52/- into loan account. The said amount was transferred to the loan account of the defendants from HNPACR / CGFSEL on 06.12.2024. The said amount was transferred to the said account by the Government to mitigate the loss of the plaintiff-bank on account of non-payment of loan amount by the defendants. The defendants cannot derive any advantage from transfer of the said amount to the loan account. It is not the case of the defendants that the Government subsidized their education loan. This Court is of the considered opinion that there is no suppression of the facts by the plaintiff.
55. Accordingly, issue No. 4 is decided in favour of the Digitally signed plaintiff and against the defendants. by SANJAY SHARMA SANJAY Date:
SHARMA 2025.12.24
14:47:44
+0530
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 20 of 27 ISSUE NO. 5:
(5) Whether the suit is bad for misjoinder of the defendant No. 2 and 3?
(OPD)
56. As regards contention of Ld. Counsels of the defendants that the defendant No. 2 and 3 were not privy to loan transaction and they never participated in loan transaction and they are misrepresented as co-borrowers / guarantors is concerned, it can be stated that the defendant No. 2 and 3 have not appeared into the witness box to substantiate their contentions.
57. From perusal of evidence on record, it is evident that the defendant No. 2 and 3 applied alongwith the defendant No. 1 for education loan of Rs. 4,00,000/-, vide loan application Ex.PW1/C and they furnished affidavits as co-borrowers, vide Ex.PW1/E (colly.) and signed Agreement of Term Loan for Education Ex.PW1/F. They also furnished Undertakings Ex.PW1/G to the plaintiff and signed Balance and Security Confirmation Letter Ex.PW1/I.
58. As regards contention that the defendant No. 2 and 3 are elderly persons and the plaintiff obtained their signatures under influence without explaining the documents and their legal implication, it can be stated that the defendant No. 1 was a Graduate in dental surgery on the date of application for loan. The defendant No. 1 applied education loan for 'Master of Dental Surgery'. He is a well educated person. It cannot be believed that the bank obtained signatures of the defendant No. 2 and 3 on so many documents spanning over a long period under influence. Moreover, there is no complaint filed by the defendant No. 2 and 3 that bank officials obtained their signatures under influence without explaining legal implication of the documents. The contention raised by the defendants is without merit.Digitally signed by SANJAY SANJAY SHARMA SHARMA Date: 2025.12.24 14:47:50 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 21 of 27
59. The defendant No. 2 and 3 are co-borrowers and their liability is joint and several with the defendant No. 1.
60. The suit is not bad for mis-joinder of the parties.
61. Accordingly, issue No. 5 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 6:
(6) Whether the plaintiff made unilateral modification in the identity of the account holder and wrongly reflected the account as jointly held by the defendant No. 1 to 3?
(OPD)
62. As regards contention regarding post-amalgamation unilateral modification in the status of loan account by the plaintiff from 'individual account' to 'joint account', it can be stated that it would not have any affect on liability of the defendants. It does not stand to reason as to how the liability of the defendants can be affected by referring loan account as ' joint account' instead of an 'individual account'. Loan account number of loan advanced to the defendants would remain same.
63. Accordingly, issue No. 6 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 7:
(7) Whether the plaintiff suppressed part payments / installments of Rs. 1,29,000/- and credit of Rs. 2,76,022.52/- into the loan account?
(OPD)
64. This issue has already been decided in favour of the plaintiff and against the defendants while discussing issue No. 4. ISSUE NO. 8:
(8) Whether the plaintiff withheld copy of Income Certificate dated 04.09.2019, if so, its effect?
(OPD)
65. There is no merit in the contention that the plaintiff Digitally signed by withheld original Income Certificate dated 04.09.2019. SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:48:00 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 22 of 27
66. A perusal of income certificate dated 04.09.2019 Ex.PW1/J would show that the said certificate is bearing seal of Oriental Bank of Commerce. Merely the plaintiff affixed its seal at the time of filing of the suit would not by itself give rise to an inference that the plaintiff has misrepresented that the defendant No. 2 submitted income certificate to it and not to Oriental Bank of Commerce.
67. Accordingly, issue No. 8 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 9:
(9) Whether the loan account was wrongly classified as 'Non Performing Asset' (NPA)?
(OPD)
68. As regards contention that the plaintiff wrongly classified loan account as 'Non Performing Asset' (NPA) and the plaintiff neither intimated classification of loan account as ' Non Performing Asset' (NPA) nor proved service of loan recall notice, it can be stated that a perusal of statement of loan account Ex.PW1/L would show that loan account of the defendants more or less remained above Rs. 5,00,000/- since 30.11.2021 and the defendants were irregular in making payment of interest or repayment of loan. The account was more and less dormant and therefore, the plaintiff rightly classified the loan account as ' Non Performing Asset' (NPA) on 30.08.2023.
69. Moreover, loan recall notice is served upon the borrower so as to put him / her on notice about status of loan account and regularize the loan account.
70. There is no proposition of law that service of loan recall notice is mandatory and in absence of proof thereof, the suit is considered as without cause of action and premature. Digitally signed by SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:48:06 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 23 of 27
71. In M/s. ICICI Bank Ltd. vs. Kamini Sharma and Another , 2018 SCC OnLine Del 6933, Hon'ble High Court of Delhi while dealing with an appeal arising out of dismissal of suit on account of failure of the plaintiff to file original loan recall notice held, as under:
"13.....The Plaintiff bank could have maintained the suit for recovery even in the absence of the loan recall notice so long as the disbursement of loan and availing of the same is admitted. In this case, all the loan documents in original are placed on record. The loan recall notice is merely a document which takes away the luxury of payments in instalments granted to the Defendants and nothing more. The fact that the Defendants have defaulted in making the payments, does not in any manner depend upon the existence of the loan recall notice. The Defendants, after service of the said notice, cannot avail of the facility of paying through instalments and have to make the entire payment at one go. The Plaintiff bank could have very well filed the suit for recovery when the Defendants defaulted on making the payments. The loan recall notice merely gives closure to the entire transaction and nothing more."
72. In M/s. ICICI Bank Ltd. vs. Dilkash Star Vision & Communication Pvt. Ltd. And Others , 2018 SCC OnLine Del 9542, Hon'ble High Court of Delhi held, as under:
"10. The Trial Court has also erred by holding that the service of the recall notice has not been proved. The same has been sent by Speed Post AD which is sufficient service. The bank cold have made the effort to check the Tracking report and file the same with its evidence, which it has not done. However, that by itself does not mean that the overdraft facility has not been availed of and the outstanding is not payable."
73. In this case, the plaintiff sent loan recall notice Ex.PW1/M to the defendants, through speed post, to their correct addresses, as mentioned in loan application Ex.PW1/C. It is not the case of the defendants that they had informed their latest addresses to the plaintiff.
74. Accordingly, issue No. 9 is decided in favour of the Digitally signed by SANJAY plaintiff and against the defendants. SANJAY SHARMA SHARMA Date:
2025.12.24 14:48:28 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 24 of 27 ISSUE NO. 10:
(10) Whether the plaintiff is entitled to a decree for recovery of Rs. 5,49,585/-, as prayed?
(OPP)
75. Therefore, the plaintiff proved that Oriental Bank of Commerce had advanced a loan amount of Rs. 4,00,000/- to the defendants, vide sanction letter Ex.PW1/D. The defendants duly availed the said loan. However, they neither regularized loan account nor cleared the amount due against them.
76. As regards contention that there is unexplained delay of 17 months in institution of the suit from the date of classification of loan account as 'Non Performing Asset' (NPA), it can be stated that the defendants allowed interest component of loan amount accrued to loan account. The defendants could have cleared the loan account in time. At one stage, the defendants did not clear the loan account. At another stage, the defendants are complaining that the plaintiff instituted the suit after 17 months from classification of loan account as 'Non Performing Asset'.
77. Precisely, this issue was answered by Hon'ble Supreme Court of India in a Five-Judge Bench judgment in Central Bank of India vs. Ravindra & Ors., (2002) 1 SCC 367, as under:
"46. ... Firstly, the bank can afford to wait or delay the filing of the suit only during the period of limitation which delay would not be illegitimate. Secondly, noting prevents the debtor, even during the period of this delay, to pay or tender the amount of interest as and when it falls due and thereby prevent its capitalisation. ..."
78. According to statement of loan account Ex.PW1/L, the suit amount of Rs. 5,49,585.69/- is comprising two components. First, principal amount of Rs. 4,79,112.60/- due against the defendants, as on 24.09.2024. Second, accrued interest in the sum of Rs. 70,473.09/- w.e.f. 01.09.2023 to 24.09.2024. The Digitally signed by plaintiff is entitled to a decree for recovery of Rs. 5,49,585/-.
SANJAY SANJAY SHARMA SHARMA Date:
2025.12.24 14:48:36 +0530 CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 25 of 27
79. Accordingly, issue No. 10 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 11:
(11) Whether the plaintiff is entitled to pendente-lite and future interest @ 10.45% per annum with monthly rest and penal interest @ 2% per annum?
(OPP)
80. Grant of pendente-lite and future interest is within discretion of the Court. The plaintiff is claiming pendente-lite and future interest @ 10.45% per annum with monthly rests and penal interest @ 2% per annum against the said loan account. The rate of interest claimed by the plaintiff is on higher side. In view of the nature of loan and current bank rate of interest, the plaintiff is awarded interest @ 9% per annum. Accordingly, issue No. 11 is decided in favour of the plaintiff and against the defendants.
RELIEF
81. Therefore, the suit of the plaintiff is decreed with costs and a decree in the sum of Rs. 5,49,585/- alongwith pendente-lite and future interest @ 9% per annum is passed in favour of the plaintiff and against the defendants. Decree sheet be drawn. File Digitally signed be consigned to record room.
SANJAY by SANJAY
SHARMA
SHARMA Date: 2025.12.24
14:48:44 +0530
Announced in the open Court SANJAY SHARMA-II
on this 23 December, 2025 DJ (Commercial Court)-03 (Shahdara) rd Karkardooma Courts, Delhi CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 26 of 27 Punjab National Bank vs. Raees Salmani & Ors. CNR No.: DLSH01-007449-2024 CS (Comm.) No. 617/2024 23.12.2025 Present : Ms. Jyoti Gautam, Ld. Counsel with Mr. Alok Maina, Ld. Counsel for the plaintiff (through Video Conferencing).
Mr. Rajkumar, Ld. Counsel with Mr. Akash Kashyap and Ms. Nidhi Narula, Ld. Counsel for the defendant No. 1.
Mr. Zuber Salmani, Ld. Counsel with Ms. Gulshan and Ms. Aanchal, Ld. Counsel for the defendant No. 2 and 3.
Vide separate judgment, the suit of the plaintiff is decreed with costs and a decree in the sum of Rs. 5,49,585/- alongwith pendente-lite and future interest @ 9% per annum is passed in favour of the plaintiff and against the defendants. Decree sheet be drawn. File be consigned to record room.
Digitally signed SANJAY by SANJAY
SHARMA
SHARMA Date: 2025.12.24
14:48:55 +0530
Sanjay Sharma-II
DJ (Commercial Court)-03
Shahdara, KKD, Delhi
23.12.2025
CS (Comm.) No. 617/2024 Punjab National Bank vs. Raees Salmani & Ors. Page No. 27 of 27