Bangalore District CourtState Bank Of India vs Mrs.Sunitha.N on 14 September, 20211          Com.O.S.No.395/2021\n IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &\nSESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):\n           BENGALURU CITY. (CCH-89)\n\n Present:     Sri. P.J. SOMASHEKARA, B.A.,LL.M,\n              LXXXVIII Addl.City Civil & Sessions Judge\n              Bengaluru City.\n\n      Dated this the 14th day of September 2021\n\n                     Com.O.S.No.395/2021\n\nPlaintiff:            State Bank of India,\n                      Small and Medium Enterprises Centre,\n                      (SMEC),\n                      No.20, Badagandu Sangha building,\n                      Girls High School Street,\n                      Kumara Park ,\n                      Bangalore - 560 020,\n                      Rep by its Chief Manager, Kiran.S.Matad\n                      PAN No.AAACS5877K\n\n                     (By Sri. NP., Advocate)\n                           -vs-\nDefendant:            Mrs.Sunitha.N,\n                      W/o.Nagarappa,\n                      No.363, 5th Cross, 5th Main\n                      Ranganathapura, Basaweshwranagara,\n                      Bangalore - 560 079\n                      and also at\n                      No.7, Near Ganesha Temple,\n                      Kamakshipalya, Basaweshwaranagara,\n                      Bangalore - 560 079.\n\n\n                             (Exparte)\n\nNature of the suit           Money suit\nDate of institution of the   30.06.2021\nsuit\nDate of commencement of 01.09.2021\nrecording of the evidence\n                                   2                 Com.O.S.No.395/2021\nDate on which the              14.09.2021\njudgment was pronounced\nTotal duration                  Year/s        Month/s         Day/s\n                                  00           02                1\n\n\n                           JUDGMENTThis is a suit filed by the plaintiff bank against the defendant\n\nfor recovery of Rs.11,75,089/- together with cost, current and\n\nfuture interest @ 10.85% p.a. with compounded monthly rests\n\nfrom the date of the suit till its realization.2. Brief facts of the plaint are as under :The plaintiff bank in its plaint has alleged that the defendant\n\nhas approached for financial assistance for the purpose of\n\nbusiness of Garment Shop, pursuant to the request of the\n\ndefendant a cash credit facility loan of Rs.50,000/- has been\n\nsanction and term loan of Rs.11,30,000/- has been sanctioned\n\nand    the   same    are   intimated     to   the    defendant       through\n\narrangement letter dt:23.12.2019. The defendant has accepted\n\nthe terms of conditions of such sanction has acknowledged the\n\nsaid arrangement letter dt:23.12.2019.            The defendant has not\n\navailed credit facility, but availed only term loan of Rs.11,30,000/-and agreed to repay the said loan amount in 80 monthly\n\ninstallments of Rs.20,675/- and last installment of Rs.5391/- with\n\ninterest @3.5% above MCLR and present MCLR being 8%, the\n\neffective rate of interest is 11.50% per annum compounded at\n\nmonthly rests subject to change in the rate of interest as per the3             Com.O.S.No.395/2021loan policy guidelines issued from time to time in this regard. The\n\ncurrent rate of interest is 10.85% per annum compounded at\n\nmonthly rests and the defendant has hypothecated the stocks in\n\ntrade and receivables in order to avail the credit facility by\n\nexecuting   the    agreement     of   loan   cum    hypothecation\n\ndt:23.12.2019. The defendant was very irregular in payment of\n\nthe loan installments, the defendant has failed and neglected to\n\nhonor the commitment and failed to pay the loan installments as\n\nagreed at the time of availing the loan facility.   The defendant\n\nintentionally and deliberately has committed the serious default\n\nin repayment of the loan amount and failed to discharge the\n\nobligations towards the terms and conditions under the loan\n\nagreement and failed to pay overdue interest occurred on the\n\nloan amount, in order to make her unlawful gain3. The plaintiff Bank in its plaint has further alleged that\n\ndespite there being no rhyme or reasons whatsoever withhold the\n\nrepayment of the loan amount which is legally payable by the\n\ndefendant as per the terms and conditions of the loan document\n\nand the defendant has failed to make repayment of the loan\n\namount, inspite of several requests and demands, but the\n\ndefendant has failed and neglected to repay the loan amount\n\nwith the malafide intention and oblique motive has committed\n\nserious default in repayment of the loan amount.         The loan4           Com.O.S.No.395/2021account has been transferred from Gandhinagara Branch for\n\nrecovery of the loan dues.        Inspite of several requests and\n\ndemands made to the defendant to pay the loan installments, the\n\ndefendant willfully failed and totally neglected to pay the loan\n\ninstallments. Thereby got issued a legal notice dt:10.04.2021 to\n\ncalling upon the defendant to clear the loan which due, but the\n\ndefendant has evaded service of the same, thus it was returned\n\nwith an endorsement insufficient address and left. The defendant\n\nis due a sum of Rs.10,38,952/- and the interest from 13.06.2020\n\nto till day. The defendant in total liable to pay Rs.11,75,089/- with\n\ninterest @10.85% per annum compounded monthly rests till its\n\nrealization.   The cause of action for the suit which arose on\n\n23.12.2019 when the loan has been sanctioned and when the\n\ndefendant      has   been   executed   agreement     of     loan   cum\n\nhypothecation and letter of arrangement and when the loan\n\namount was disbursed and on 10.04.2021 when the legal notice\n\nhas been issued calling upon her to pay due amount within the\n\njurisdiction of this Court and prays for decree the suit.4. In response of the suit summons the defendant did not\n\nappear nor filed her written statement as she was placed exparte.5. The plaintiff bank in order to prove its plaint averments\n\nhas examined its Manager as P.W.1 and got marked the5                  Com.O.S.No.395/2021documents as Ex.P.1 to P.6, P.4(a) & P.8.       The plaintiff bank has\n\nnot examined any witnesses in its favour.6. Heard the arguments on the plaintiff side.7. Now the points that arise for court consideration are:1. Whether the plaintiff bank is entitled\n           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;REASONS9. POINT NO.1: The plaintiff bank has approached the court\n\non   the   ground    that   the   defendant   has   availed   loan   of\n\nRs.11,30,000/- under a term loan for the purpose of Garment\n\nbusiness and executed the documents by agreeing to repay the\n\nloan amount with interest on monthly installments, but in spite of\n\nrepeated request and demand, the defendant did not come\n\nforward nor paid the loan amount, thereby the plaintiff bank has\n\nfiled the instant suit against the defendant.10. The plaintiff bank in order to prove the plaint averments\n\nhas examined its Manager as P.W.1 who filed his affidavit as his\n\nchief-examination by reiterating the contents of the plaint stating\n\nthat the defendant has approached the bank for financial6           Com.O.S.No.395/2021assistance for the purpose of Garment business of Rs.11,30,000/-\n\nunder the term loan and the loan has been sanctioned for\n\nRs.11,30,000/- to the defendant for his business purpose and the\n\ndefendant has executed the documents by agreeing to repay the\n\nloan amount with interest on 80 monthly installments of\n\nRs.20,675/- and last installment of Rs.5,391/- with interest\n\n@11.50% per annum compounded at monthly rests, subject to\n\nchange in the rate of interest.   The current rate of interest is\n\n10.85%   per     annum   compounded    at   monthly   rests.   The\n\ndefendant was very irregular in payment of the loan installments\n\nand the defendant has failed and neglected to honor the\n\ncommitment and failed to pay the loan installments.            The\n\ndefendant intentionally and deliberately has committed the\n\nserious default in repayment of the loan amount and failed to\n\ndischarge the obligations towards the terms and conditions under\n\nthe loan agreement and failed to pay over due interest.11. The plaintiff bank, Manager in his affidavit has alleged\n\nthat inspite of repeated request and demand failed to make\n\nrepayment of the loan amount by the defendant, thus got issued\n\nlegal notice calling upon the defendant to pay the loan amount\n\nwith interest, but in spite of notice did not appeared nor paid the\n\nloan amount. Thus the plaintiff has filed the instant suit against\n\nthe defendant.7                   Com.O.S.No.395/202112. It is an admitted fact the plaintiff bank has filed the\n\ninstant suit against the defendant for recovery of Rs.11,75,089/-\n\nwith interest @ 10.85% p.a. compounded monthly on the ground\n\nthe defendant has availed loan of Rs.11,30,000/- for the purpose\n\nof her business. Now the question is whether the suit which filed\n\nis maintainable before this court and whether this court having\n\nthe pecuniary jurisdiction to consider the relief which sought by\n\nthe plaintiff bank. Though no dispute either on the jurisdiction\n\npoint nor maintainability of the suit before this court. However, it\n\nis necessary to consider these aspects before considering the\n\nmaterials on record as the plaintiff bank has filed the instant suit\n\nagainst   the   defendant   for       recovery    of    loan   amount       of\n\nRs.11,75,089/- with interest 10.85% p.a. compounded at monthly\n\nrests. Thus this court drawn its attention onSec.2(i)(c)of\n\nCommercial Courts Act, 2015 which reads like this:(c) "commercial dispute" means a dispute\n          arising out of-(i) ordinary transactions of merchants,\n                bankers, financiers and traders such as\n                those relating to mercantile documents,\n                including enforcement and interpretation\n                of such documents;(ii) export or import of merchandise or\n                services;(iii) issues relating            to    admiralty    and\n                maritime law;8            Com.O.S.No.395/2021(iv) transactions relating to aircraft,\naircraft engines, aircraft equipment and\nhelicopters, including sales, leasing and\nfinancing of the same;(v) carriage of goods;(vi)  construction    and   infrastructure\ncontracts, including tenders;(vii) agreements relating to immovable\nproperty used exclusively in trade or\ncommerce;(viii) franchising agreements;(ix)   distribution       and       licensing\nagreements;\n(x)  management          and     consultancy\nagreements;\n(xi) joint venture agreements;\n(xii) shareholders agreements;\n(xiii)  subscription    and  investmentagreements pertaining to the services\nindustry including outsourcing services\nand financial services;(xiv) mercantile agency and mercantile\nusage;(xv) partnership agreements;(xvi)    technology             development\nagreements;(xvii) intellectual property rights relating\nto      registered     and     unregistered\ntrademarks, copyright, patent, design,\ndomain names, geographical indications\nand semiconductor integrated circuits;\n(xviii) agreements for sale of goods or\nprovision of services;9            Com.O.S.No.395/2021(xix) exploitation of oil and gas reserves\n                 or other natural resources including\n                 electromagnetic spectrum;(xx) insurance and re-insurance;\n                 (xxi) contracts of agency relating to any\n                 of the above; and\n                 (xxii) such other commercial disputes as\n                 may     be   notified by   the   Central\n                 Government.The provision underSec.2(c)(i)which referred above is very\n\nmuch clear the first category which referred above, includes\n\ndisputes   of   ordinary   transactions   of   merchants,   bankers,\n\nfinanciers and traders such as those relating to mercantile\n\ndocuments including enforcement and interpretation of such\n\ndocuments. The definition naturally will cover the dispute of all\n\nkinds of ordinary transactions of merchants, bankers, financiers\n\nand traders. The banks are established underBanking Regulation\n\nActfor the purpose of business and commerce, naturally all\n\ntransaction of bank about giving of loans, recovery thereof,\n\ndeposits in banks etc., should fall within the category of\n\ncommercial dispute. If the specified value there of is more than\n\nRs.3,00,000/-. So the facts which pleaded in the plaint comes\n\nunder the commercial dispute.13. Now the question is whether the dispute which stated\n\nsupra comes under the jurisdiction of commercial court. Thus, this10           Com.O.S.No.395/2021court drawn its attention onSec.6of Commercial Courts Act,\n\n2015 which reads like this:Section 6: Jurisdiction of Commercial Court.6. The Commercial Court shall have\n        jurisdiction  to   try   all  suits   and\n        applications relating to a commercial\n        dispute of a Specified Value arising out\n        of the entire territory of the State over\n        which it has been vested territorial\n        jurisdiction.Explanation.-For the purposes of this\n        section, a commercial dispute shall be\n        considered to arise out of the entire\n        territory of the State over which a\n        Commercial Court has been vested\n        jurisdiction, if the suit or application\n        relating to such commercial dispute has\n        been instituted as per the provisions ofsections 16to20of the Code of Civil\n        Procedure, 1908 (5 of 1908).The above provision is very much clear that the commercial court\n\nshall have the jurisdiction to try all suits and applications relating\n\nto commercial dispute.14. Now the question is whether this court having the\n\npecuniary jurisdiction to adjudicate the matter which is in dispute.\n\nThus, this court drawn its attention onSec.3of Commercial\n\nCourts Act, 2015 which reads like this:Section 3: Constitution of Commercial Courts.3. (1) The State Government, may after\n        consultation with the concerned High11           Com.O.S.No.395/2021Court, by notification, constitute such\nnumber of Commercial Courts at District\nlevel, as it may deem necessary for the\npurpose of exercising the jurisdiction\nand powers conferred on those Courts\nunder this Act:2[Provided   that with respect to\n      the High Courts having ordinary\n      original civil jurisdiction, the\n      State Government may, after\n      consultation with the concerned\n      High    Court,    by   notification,\n      constitute Commercial Courts at\n      the District Judge level:Provided further that with respect\n      to a territory over which the High\n      Courts have ordinary original civil\n      jurisdiction,       the       State\n      Government may, by notification,\n      specify such pecuniary value\n      which shall not be less than three\n      lakh rupees and not more than\n      the      pecuniary      jurisdiction\n      exercisable by the District Courts,\n      as it may consider necessary.]\n      3[(1A)  Notwithstanding anything\n      contained in this Act, the State\n      Government        may,        after\n      consultation with the concerned\n      High    Court,   by   notification,\n      specify such pecuniary value\n      which shall not be less than three\n      lakh rupees or such higher value,\n      for whole or part of the State, as\n      it may consider necessary.]12           Com.O.S.No.395/2021The above provision is very much clear that by virtue of the\n\nnotification specified the pecuniary value of this court which shall\n\nnot be less than Rs.3,00,000/- Admittedly, the plaintiff in the\n\nplaint itself has stated that the defendant is due a sum of\n\nRs.11,75,089/- with interest and the plaintiff bank has filed the\n\ninstant suit against the defendant on 30.06.2021       i.e. after the\n\namendment ofCommercial Courts Act, 2018.            The pecuniary\n\njurisdiction of the commercial court is not less than Rs.3 Lakhs\n\nand above, but by virtue of the amendment ofCommercial Courts\n\nAct, the pecuniary jurisdiction of the commercial court shall not\n\nbe less than Rs.3,00,000/-.    So this court having the pecuniary\n\njurisdiction to adjudicate the matter which is in dispute by virtue\n\nof the provision which stated supra.15. The plaintiff bank in support of the oral evidence has\n\nproduced the documents which marked as Ex.P.1 to Ex.P.6. Ex.P.1\n\nis the letter of arrangement dt:23.12.2019 is reflects the\n\ndefendant has approached the plaintiff bank for cash credit loan\n\nof Rs.50,000/- and term loan of Rs.11,30,000/- for the purpose of\n\nGarment business.       Ex.P.2 is the agreement of loan cum\n\nhypothecation is reflects after availment of the loan the\n\ndefendant has hypothecated the stocks in trade and receivables\n\nin order to avail credit facility.   Ex.P.3 is the legal notice copy\n\nreflects the plaintiff bank got issued a legal notice to calling upon13           Com.O.S.No.395/2021the defendant for payment of loan amount with interest. Ex.P.4 &\n\nP.5 are clear the legal notice has been issued to the defendant\n\nthrough RPAD.     Ex.P.6   is the statement of accounts is clearly\n\nreflects the defendant was due a sum of Rs.11,74,089/- with\n\nRs.1000/- legal notice charges are taken into consideration the\n\ndefendant was due a sum of Rs.11,75,089/- as on the date of suit.\n\nSo the documents which marked as Ex.P.1 to P.6 are coupled with\n\nthe oral evidence of P.W.1.16. If at all the defendant was not availed the loan of\n\nRs.11,30,000/- for the purpose of Garment business nor executed\n\nthe documents in favour of the plaintiff bank, in response to the\n\nsuit summons, the defendant would have appeared and resisted\n\nthe claim of the plaintiff bank, but the reasons best known to the\n\ndefendant, in spite of service of summons, did not appear nor\n\nresisted the claim of the plaintiff bank. On the other hand, the\n\nplaintiff bank has proved its case through oral and documentary\n\nevidence that the defendant has availed loan of Rs.11,30,000/-\n\nfor   the   purpose   of   Garment   business   and   executed   the\n\ndocuments by agreeing to repay the loan amount with interest on\n\nmonthly basis, but the defendant failed to keep up her promise as\n\nagreed. Hence, I am of the opinion that the point No.1 is\n\nanswered in the Affirmative.14          Com.O.S.No.395/202117. POINT NO.2: In view of my answer to point No.1 as\nstated above, I proceed to pass the following;ORDER\n        The suit of the plaintiff bank is decreed with cost.\n        The defendant is hereby directed to pay the\n   decretal amount of Rs.11,75,089/- together with\n   cost, current and future interest @ 10.85% with\n   compounded monthly rests from the date of suit till\n   its realization.Draw decree accordingly.(Dictated to the Typist, thereof corrected by me and then pronounced in\nthe open court on this the 14th day of September, 2021)\n\n\n\n\n                                   (P.J. Somashekara)\n                         LXXXVIII Addl. City Civil & Sessions Judge,\n                             (Exclusive Commercial Court),\n                                      Bengaluru City15              Com.O.S.No.395/2021.List of witnesses examined on behalf of plaintiff:P.W.1          Deepak Kumar\n\n\nList of witnesses examined on behalf of defendant:Nil\n\n\nList of documents exhibited on behalf of plaintiff:Ex.P.1    Letter of arrangement dt:23.12.2019\nEx.P.2    Agreement of loan cum hypothecation\nEx.P.3    Legal notice dt:10.04.2021\nEx.P.4    RPAD cover (opened in the open court)\nEx.P.4(a) Notice copy\nEx.P.5    RPAD cover (opened in the open court)\nEx.P.5(a) Notice copy\nEx.P.6    Statement of accounts\nList of documents exhibited on behalf of defendant:Nil\n\n\n\n\n                            (P.J. Somashekara)\n                  LXXXVIII Addl. City Civil & Sessions Judge,\n                       (Exclusive Commercial Court),\n                                Bengaluru City16                    Com.O.S.No.395/2021Judgment pronounced in the open court, vide separate;ORDER\n      The suit of the plaintiff bank is\ndecreed with cost.The defendant is hereby directed\nto    pay      the     decretal        amount           of\nRs.11,75,089/-          together        with     cost,\ncurrent and future interest @ 10.85%\nwith compounded monthly rests from\nthe date of suit till its realization.Draw decree accordingly.(P.J. Somashekara)\n           LXXXVIII Addl. City Civil & Sessions Judge,\n              (Exclusive Commercial Court),\n                       Bengaluru City