Bangalore District Court
Canara Bank vs M/S. Bismillah Enterprises on 21 February, 2023
1 Com. O.S. 812/2022
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl.City Civil & Sessions Judge
Bengaluru City.
Dated this the 21st day of February 2023
Com.O.S.No.812/2022
Plaintiff: Canara Bank,
Erstwhile Syndicate Bank
K G Halli Branch,
Branch at, 152/81/4
St Philomina Hospital Road
Nagawara Bangalore-560045
Represented by it's Branch Manager
Mr. Raghavendra Gandodi
S/o G.Prasad Aged about 31 years.
(By C.K.K., Advocate)
-vs-
Defendants: 1. M/s. Bismillah Enterprises
No. 48, situated at 17th Cross,
Near, Rasheediya Masjid, SR APJ
Abudl Kalam Road, A C College Post,
Bangalore-560045
Represented by its proprietor
Mrs.Juveriya
2. Mr.M.A.Gaouse Basha
2 Com. O.S. 812/2022
S/o. Mr.MA Tovfiq
Aged about 47 years,
Residing at No. E-531/1,
17th Cross, Near Rashidiya Masjid,
Govind Pura, Arabic College,
Bangalore-560045.
(Exparte)
Nature of the suit Money suit
Date of institution of the 07.06.2022
suit
Date of commencement of 09.02.2023
recording of the evidence
Date on which the 21.02.2023
judgment was pronounced
Total duration Year/s Month/s Day/s
00 08 14
JUDGMENT
This is a suit filed by the plaintiff bank against the defendants for recovery of Rs.3,55,453/- with interest @ 18% p.a. and penal interest 2% thereon from 05.01.2022 till its realization.
2. Nutshell of the plaintiff case are as under:
The plaintiff bank in its plaint has alleged that the defendants were approached for financial assistance and filed the application on 03.10.2018 for term loan facility. So, considering the application and other relevant documents sanctioned loan facility a sum of Rs.3,50,000/- on 10.10.2018. The defendants have executed composite hypothecation agreement in its favour
3 Com. O.S. 812/2022 and utilized loan facility for which purpose it was sanctioned, but the defendants did not pay the loan amount with interest and they have committed default inspite of repeated request and demand and the defendants refused to pay the outstanding due amount thus legal notice has been issued on 25.09.2021 calling upon the defendants for payment of due amount of Rs.3,44,773/-. But the notice was returned with a shara not known/no such person and the defendants failed to repay the loan amount.
3. The plaintiff bank in its plaint has further alleged the defendants have committed default in repayment of the loan amount with interest, thereby initiated the pre-institution mediation before the DLSA Urban in PIM No.1581/2021 and notice was issued to the defendants but the notice was not served on the defendants thus the DLSA Urban issued a non-starter report. The cause of action for the suit which arose on all the dates when the loan transaction of the defendants continue and the loan was sanctioned on 10.10.2018 and the day when the defendants had made the last payments on 02.03.2020and legal notice issued on 25.09.2021 and when the proceedings initiated before the DLSA Urban and when the non-starter report issued within the jurisdiction of this Court and prays for decree the suit.
4 Com. O.S. 812/2022
4. In response of the suit summons the defendants did not appear nor filed their written statement as they were placed exparte.
5. The plaintiff bank in order to prove the plaint averments has examined its Branch Manager as PW.1 and got marked the documents as Ex.P.1 to Ex.P.8 and the plaintiff bank has not examined any witness in its favour.
6. Heard the arguments on the plaintiff side.
7. The points that arise for court consideration are as under:
1. Whether the plaintiff bank is entitled for the relief as prayed for?
2. What order or decree?
8. My answer to the above points are as under:
Point No.1: In the Affirmative;
Point No.2: As per final order, for the following;
REASONS
9. POINT NO.1: The plaintiff bank has approached the court on the ground that the defendants were has approached for financial assistance for business expenses, accordingly loan of Rs.3,50,000/- has been sanctioned, though the defendants have undertaken to repay the loan amount with interest by executing the documents but they did not keep up their promise as agreed 5 Com. O.S. 812/2022 inspite of legal notice and request, thereby the plaintiff bank has filed the instant suit against the defendants.
10. The plaintiff bank in order to prove the plaint averments has examined its Branch Manager as PW.1 who filed his affidavit as his chief-examination by reiterating the plaint averments stating that defendants were approached for financial assistance and filed the application on 03.10.2018 for term loan facility. So, considering the application and other relevant documents sanctioned loan facility a sum of Rs.3,50,000/- on 10.10.2018. The defendants have executed composite hypothecation agreement in favour of the bank and utilized loan facility for which purpose it was sanctioned, but the defendants did not pay the loan amount with interest and they have committed default inspite of repeated request and demand and the defendants refused to pay the outstanding due amount thus legal notice has been issued on 25.09.2021 calling upon the defendants for payment of due amount of Rs.3,44,773/-. But the notice was returned with a shara not known/no such person and the defendants failed to repay the loan amount. The defendants have committed default in repayment of the loan amount with interest, thereby initiated the pre-institution mediation before the DLSA Urban in PIM No.1581/2021 and notice was issued to the 6 Com. O.S. 812/2022 defendants but the notice was not served on the defendants thus the DLSA Urban issued a non-starter report. Thereby the plaintiff bank has filed the instant suit against the defendants.
11. It is an admitted fact the plaintiff bank has filed the instant suit against the defendant for recovery of loan amount with interest on the ground that the defendants have availed the loan of Rs.3,50,000/- for the purpose of business but did not keep up their promise as agreed. Now, the question arises whether this court having the jurisdiction to adjudicate the matter which is dispute and whether this court having the pecuniary jurisdiction, though there is no dispute on these aspects. But, before considering the other aspects it is necessary to consider these aspects. Thus, this court drawn its attention on Sec.2(i)(c) of Commercial Courts Act, 2015 which reads like this:
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
7 Com. O.S. 812/2022
(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements; (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment
agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
8 Com. O.S. 812/2022 (xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
The provision under Sec.2(c)(i) which referred above is very much clear the first category which referred above, includes disputes of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents including enforcement and interpretation of such documents. The definition naturally will cover the dispute of all kinds of ordinary transactions of merchants, bankers, financiers and traders. The banks are established under Banking Regulation Act for the purpose of business and commerce, naturally all transaction of bank about giving of loans, recovery thereof, deposits in banks etc., should fall within the category of commercial dispute. If the specified value there of is more than Rs.3,00,000/-. So the facts which pleaded in the plaint comes under the commercial dispute.
9 Com. O.S. 812/2022
12. Now the question is whether the dispute which stated supra comes under the jurisdiction of commercial court. Thus, this court drawn its attention on Sec.6 of Commercial Courts Act, 2015 which reads like this:
Jurisdiction of Commercial Court.
6. The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction.
Explanation.-For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
The above provision is very much clear that the commercial court shall have the jurisdiction to try all suits and applications relating to commercial dispute.
13. Now, the question is whether this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute.
10 Com. O.S. 812/2022 Thus, this court drawn its attention on Sec.3 of Commercial Courts Act, 2015 which reads like this:
Section 3: Constitution of Commercial Courts.
3. (1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
2[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.] 3[(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary
11 Com. O.S. 812/2022 value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.] The above provision is very much clear that by virtue of the notification specified the pecuniary value of this court which shall not be less than Rs.3,00,000/- Admittedly, the plaintiff in the plaint itself has stated that the defendants are due a sum of Rs.3,55,453/- with interest and the plaintiff has filed the instant suit against the defendants on 07.06.2022 i.e. after the amendment of Commercial Courts Act, 2018. Prior to the amendment, the pecuniary jurisdiction of the commercial court is of Rs.1 Crore and above, but by virtue of the amendment of Commercial Courts Act, the pecuniary jurisdiction of the commercial court shall not be less than Rs.3,00,000/-. So, this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute by virtue of the provisions which stated supra.
14. The plaintiff bank in support of the oral evidence has produced the documents which marked as Ex.P.1 to Ex.P.8. Ex.P.1 is the authorization letter, authorizing the PW.1 to prosecute the case against the defendants. Ex.P.2 is the loan application which filed by the defendants for financial assistance under term loan 12 Com. O.S. 812/2022 for business purpose. Ex.P.3 is the letter of sanction reflects the loan has been sanctioned and the same has been intimated to the defendants. Ex.P.4 is the composite hypothecation agreement reflects the defendants have executed composite hypothecation agreement by hypothecating items as mentioned therein. Ex.P.5 to P.7(a) are clear the plaintiff bank got issued a legal notice to the defendants through RPAD calling upon them to pay the loan amount with interest. Ex.P.8 is the statement of accounts reflects the defendants are due to the plaintiff as on the date of suit. So, the documents which are marked as Ex.P.1 to Ex.P.8 are coupled with the oral evidence of the PW.1.
15. If at all the defendants were not availed the loan from the plaintiff bank nor executed the documents in response of the suit summons the defendants would have appeared and resisted the claim of the plaintiff bank. But the reasons best known to the defendants did not appear nor resisted the claim of the plaintiff bank. So, the contents of the plaint and the documents which are marked as Ex.P.1 to Ex.P.8 are remained unchallenged. The plaintiff bank has proved its case through oral and documentary evidence. Hence, I am of the opinion that the point No.1 is answered in the Affirmative.
13 Com. O.S. 812/2022
16. POINT NO.2: In view of my answer to point No.1 as stated above, I proceed to pass the following;
ORDER The suit of the plaintiff bank is decreed with costs.
The defendants are hereby directed to pay a decretal amount of Rs.3,55,453/- is due as on 04.01.2022 with future interest @ 18% p.a., and penal interest 2% thereon with effect from 05.01.2022 till its realization.
Draw decree accordingly.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 21st day of February 2023) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City List of witnesses examined on behalf of plaintiff:
P.W.1 Sri. Raghavendra Gandodi List of witnesses examined on behalf of defendant:
Nil List of documents exhibited on behalf of plaintiff:
Ex.P.1 Authorization letter
Ex.P.2 Loan application
Ex.P.3 Sanction letter dt:10.10.2018
14 Com. O.S. 812/2022
Ex.P.4 Composite Hypothecation agreement
dt:10.10.2018
Ex.P.5 Copy of the notice dt:25.09.2021
Ex.P.6 Postal receipts
Ex.P.7 Unserved envelope Cover(opened in the
open Court)
Ex.P.7(a) Copy of the notice
Ex.P.8 Statement of accounts with certificate
List of documents exhibited on behalf of defendant:
Nil (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City.
15 Com. O.S. 812/2022