Final Order 9

Order Details: COPY OF JUDGMENT
Pdf Text: IN THE COURT OF SENIOR CIVIL JUDGE CUM RENT
CONTROLLER : NORTH DISTRICT : ROHINI COURTS : DELHI
Presided by : Mr. Himanshu Raman Singh
Civil Suit No. 298/24
CNR No. DLNT 0300-0485-2024
UCO Bank
Having its Head Office at :
10, BTM Sarani, Kolkatta – 700001.
And having its Branch Office at :
A – 1/120, First Floor, Prashant Vihar,
Rohini, Sector – 14, Delhi – 110085.
Through its Branch Manager. …..Plaintiff
Versus
Ajay
S/o Sh. Krishan
R/o House No. A-389/1, Gola Kuan,
Tehkhand, Okhla Industrial Estate,
South Delhi, Delhi-110020 …..Defendant
SUIT FOR RECOVERY FOR AN AMOUNT OF Rs. 77,302/-
ALONGWITH PENDENTE LITE AND FUTURE INTEREST @
12% PER ANNUM.
Date of Institution : 21.03.2024
Date of Judgment : 29.07.2025
Decision : Decreed
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 1 of 8
-- 1 of 8 --
EXPARTE - JUDGMENT
1. The present suit has been instituted by the plaintiff seeking
recovery of Rs. 77,302/- along with pendentelite and future interest @
12% per annum.
FACTS STATED IN THE PLAINT
2. The brief facts as narrated by the plaintiff are that the plaintiff is
a Bank and a body corporate under the Banking Companies
(Acquisition & Transfer of Undertaking) Act, 1970 having one of its
branch offices at Prashant Vihar, Sector – 14, Rohini, Delhi. The
present suit has been filed by the Branch Manager and the Attorney of
the Bank namely Kumar Abhishek, authorized vide Board Resolution.
3. In the month of November, 2020, defendant approached the
Plaintiff Bank for availing Credit Facility–cum–Term Loan under the
Pradhan Mantri Mudra Yojna (PMMY) and submitted the application
for the same alongwith KYC documents on 25.11.2020 with the Bank.
After the completion of necessary formalities, the Bank sanctioned the
Credit Facility–cum–Term Loan for an amount of Rs. 1,00,000/- in
favor of the defendant on 25.11.2020. Defendant thereupon executed
Loan Agreement dated 25.11.2020, Composite Deed of
Hypothecation, Demand Promissory Note and Letter of Waiver and
other necessary Loan Documents in favor of the Bank as per
requirements and undertook to repay the Loan Amount in 60 Equal
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 2 of 8
-- 2 of 8 --
Monthly Installments of Rs. 2,001/- each along with interest @ 7.45%
per annum which was disbursed to the defendant in his Saving
Account No. 18720610010761 held with the Bank. As per the terms of
the agreement, in case of default in payment of any of the installment,
the Bank was entitled to charge penal interest @ 2% over the Reserve
Bank rate, subject to a minimum of 9.45% per annum.
4. It is stated that defendant did not observe financial discipline
and started committing default in repayment of the dues. He lastly
made payment of Rs. 2,001/- on 21.12.2022 as reflected in the
Statement of Account and thereafter failed to pay even a single penny.
The account of the defendant was declared a Non Performing Asset
(NPA) on 29.01.2023. As per the Statement of Account & Interest
Certificate, an amount of Rs. 77,302/- (Principal amount due on
29.01.2023 as Rs. 69,626/- + Interest calculated @ 9.45% w.e.f.
30.01.2023 – 31.03.2024 as Rs. 7,676/-) has become due towards the
defendant. Hence, the present suit.
5. Defendant was duly served in the matter but did not appear
before the court and also did not file any written statement whereby he
was ultimately proceeded
exparte vide order dated 16.07.2024. He
remained
exparte thereafter.
TRIAL
6. AR/Kumar Abhishek was examined as PW1
vide affidavit Ex.
PW1/A wherein he reiterated the contents of the plaint. He relied upon
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 3 of 8
-- 3 of 8 --
the following documents:-
1. Ex. PW1/1 (colly) (OSR) - Copy of Common Board Resolution
2. Ex. PW1/2 (OSR) - Copy of Loan Application, statement of
means and KYC documents.
3. Ex. PW1/3 (OSR) - Copy of Sanction advice cum Sanction
Letter.
4. Ex. PW1/4 (OSR) – Copy of Loan Agreement relating to term
loan, hypothecation of goods to secure to demand a cash credit
and other necessary loan documents.
5. Ex. PW1/5 (OSR) – Computerized statement of account for the
period 25.11.2020 to 16.03.2024
6. Ex. PW1/6 - Interest Certificate
7. Ex. PW1/7 - Certificate under Section 65-B of Indian Evidence
Act,1872
8. Ex. PW1/8 - Certificate of Computer System
9. Ex. PW1/A-1- Suit for Recovery/Plaint.
7. The witness was not cross-examined as the defendant remained
exparte during trial. No other witness was examined. PE stood closed
on 18.09.2024.
FINDINGS
8. I have heard the argument advanced and gone through the entire
material on record carefully. PW1 has duly proved the contents of the
plaint as well as the documents relied upon by him. The plaintiff bank
had extended a loan of Rs. 1,00,000/- to the defendant on 25.11.2020
but he paid only an amount of Rs. 2001/- on 21.12.2022 and thereafter
started committing default in repaying the outstanding amount of
Rs.77,302/-. Further, despite receipt of the legal demand notice, no
payment was made by Defendant. The testimony of PW-1 has gone
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 4 of 8
-- 4 of 8 --
unrebutted and uncontested in absence of any cross-examination by
the defendants to this effect. The uncontroverted testimony of the
witness is duly corroborated by the plethora of documents including
copy of Loan Application, statement of means and KYC
documents i.e. Ex. PW1/2, copy of Sanction advice cum Sanction
Letter i.e. Ex. PW1/3, copy of Loan Agreement relating to term loan,
hypothecation of goods to secure to demand a cash credit and other
necessary loan documents i.e. Ex. PW1/4, Computerized statement of
account for the period 25.11.2020 to 16.03.2024 i.e. Ex. PW1/5
and Interest Certificate i.e. Ex. PW1/6, placed on record. There is
nothing on record to disbelieve the same. The unrebutted testimony of
PW-1 therefore stands proved.
9. Further, with respect to the interest claimed by the Plaintiff @
12% per annum, the Hon’ble Division Bench of Hon’ble High Court
of Delhi in case of Pt. Munshi Ram &Associates (P) Ltd. Vs. DDA,
2010 SCC Online Del 2444 has held that higher rates of interest,
which are against public policy, can be struck down by the Court by
finding such rates of interest to be against the public policy. Any
Contract, which is against the public policy, is void under Section 23
of the Indian Contract Act, 1872. The said Judgment was also relied
upon by the Hon’ble Single Bench of the Hon’ble High Court in case
bearing R.F.A. No. 823 of 2004, titled as Shri Sanjay Mittal Versus
Sunil Jain decided on 07/12/2018. The Hon’ble Single Bench has
granted 9% p.a. interest instead of 24% per annum i.e. 2% per month.
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 5 of 8
-- 5 of 8 --
9.1 In
M/S. Tommorrowland Limited vs Housing And Urban
Development, Arising out of SLP (C) No. 34338 OF 2016 vide latest
judgment dated 13.02.2025, the Hon’ble Supreme held as under:
“9. It is trite law that under Section 34 of
the CPC, the award of interest is a discretionary
exercise steeped in equitable considerations. The
law in this regard has been succinctly discussed in
the Constitution Bench judgment of this Court
in Central Bank of India v. Ravindra & Ors.;
(2002) 1 SCC 367, which states:
“Award of interest pendente lite or 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 interest at a lower
rate or may even decline to award such interest.
The discretion shall be exercised fairly,
judiciously, and for not arbitrary or fanciful
reasons.”
50. There is no gainsaying that the power to
award interest ought to be exercised judiciously,
aligning with equitable considerations and also
ensuring neither undue enrichment nor unfair
deprivation. Courts are duty-bound to assess the
facts and circumstances of each case, applying the
principles of fairness and justice. This discretion
must reflect a balanced approach, grounded in
reason, and guided by the overarching objective
of equity.”
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 6 of 8
-- 6 of 8 --
9.2. It would be appropriate to refer to Section 34 of the CPC at this
stage. Section 34 of the CPC reads as under:
“
34. Interest .-
(1)Where and in so far as a decree is for the
payment of money, the Court may, in the decree,
order interest at such rate as the Court deems
reasonable to be paid on the principal sum
adjudged, from the date of the suit to the date of
the decree, in addition to any interest adjudged on
such principal sum for any period prior to the
institution of the suit, with further interest at such
rate not exceeding six per cent. per annum, as the
Court deems reasonable on such principal sum,
from the date of the decree to the date of payment,
or to such earlier date as the Court thinks fit:
Provided that where the liability in relation to the
sum so adjudged had arisen out of a commercial
transaction, the rate of such further interest may
exceed six per cent. per annum, but shall not
exceed the contractual rate of interest or where
there is no contractual rate, the rate at which
moneys are lent or advanced by nationalised banks
in relation to commercial transactions.
Explanation.-In this sub-section, "nationalised
bank" means a corresponding new bank as defined
in the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 (5 of 1970).
Explanation II.-For the purposes of this section, a
transaction is a commercial transaction, if it is
connected with the industry, trade or business of
the party incurring the liability.
9.3 The plaintiff is held entitled to recover a sum of
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 7 of 8
-- 7 of 8 --
Rs.77,302/- alongwith interest at the rate of 6% per annum from the
date of filing of suit till its realisation.
RELIEF
10. For the reasons assigned herein-above, plaintiff has
successfully proved his case.
A decree of recovery of Rs.77,302/- along with interest @
6% per annum from filing of suit till its realization is passed in favor
of the plaintiff and against the defendant.
Costs of the suit are also awarded in favor of the plaintiff.
Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Announced in the open Court on 29.07.2025.
( Himanshu Raman Singh)
SCJ / RC / North
Rohini Court / Delhi
Civil Suit No. 298/24
UCO Bank Vs. Ajay
Page 8 of 8
-- 8 of 8 --