IN THE COURT OF IV ADDITIONAL DISTRICT JUDGE &

COMMERCIAL COURT, D.K., MANGALURU

Present
Smt. Sandhya S., M.A., LL.B.(spl.)
IV Addl. District & Sessions Judge,
D.K., Mangaluru.

Dated this, the 25th day of March, 2023

COMMERCIAL ORIGINAL SUIT No.185/2021

Plaintiff :
M/s. Praveen Capital Pvt. Ltd.,
Established under the provisions
of Companies Act, 1956
Having its Head office at
Sri Ganesh Complex, Darbe,
Puttur Taluk, D.K. District.
Having Branch office at 1st Floor,
Embassy Plaza, Pump well,
Mangaluru, D.K.
Represented by its Directors i.e.

Mr. Sathyashankar K.,

S/o Sri Krishna Bhat,
Aged about 51 years,

Smt. Ranjitha Shankar,

W/o Mr. Sathyashankar K.,
Aged about 45 years,

Through its/their GPA holder namely,

 2 Com. OS No.185/2021

Mr. Umesh,
Aged about 35 years,
S/o. Late Jattappa Gowda,
R/at. Panithota House,
Kodimbadi Village and Post,
Puttur Taluk, D.K District.

(By Sri. Naveen Banninthaya P.R.,

Advocate.)
/ Versus /
Defendants:
1) Mr. Kushala,
Aged about 41 years,
S/o. Sri. Koraga Baira,
R/at. #3­155, Thodambila House,
Kallige, Kallige Village, D.K,
Bantwal Taluk – 574 219.

2) Mr. K. Mohammed Ali,

Aged about 54 years,
S/o. Sri. Abdul Rahiman,
R/at. #3­12, Puncchakere House,
Manchi, Bantwal, D.K – 574 323.

3) Mr. S.B. Tasleem Arief,

Aged about 39 years,
S/o. Sri. S.B. Yusuf,
R/at. Door No. 20­309/A,
Bagodi House, Panimangaluru,
Bantwal.

(D1 : Exparte,
 3 Com. OS No.185/2021

D2 & D3 : By Sri. G. Mahammad

Kabeer, Advocate)

1. Date of Institution of the Suit : 23.04.2021

2. Nature of the Suit : Money Suit

3. Date of Judgment : 25.03.2023

4. Total Duration : Days Months Year

02 11 02

*******

JUDGMENT

This suit is filed by the plaintiff against the defendants for

recovery of money amounting to Rs.4,72,497/­ (Rupees Four Lakh

Seventy Two Thousand Four Hundred and Ninety Seven) with

interest at the rate of 24% per annum from the date of suit till

realization.

2. It is the case of the plaintiff that, the defendant No.1 as a

principal borrower and the defendant No.2 and 3 as co­

 4 Com. OS No.185/2021

applicants/guarantor have borrowed the loan of Rs.3,40,000/­

(Rupees Three Lakh Forty Thousand) on 04.10.2019 for the

purpose of purchase of Maruthi Swift VDI, bearing Registration

No. KA­19­MF­3281. That, the defendants have undertaken to

repay the loan amount, as per the terms and conditions of the

loan agreement. That the defendants are jointly and severally

liable to repay the loan amount, as per the terms and conditions

of loan. Further the defendants have failed to pay the amount

due, inspite of the repeated requests and demands. The Plaintiff

got issued a Registered Legal Notice to the defendants on

22.02.2021 calling upon them to settle the outstanding dues. The

said notice was served on defendant No.1. Inspite of the same,

the defendant No.1 has neither replied nor complied the demand

made in the said notice. That, the notices issued to the defendant

No.2 and 3 were returned with an endorsement as “unclaimed”.

Hence, the same is duly served on the defendant No.2 and 3.

 5 Com. OS No.185/2021

Even then the defendants have not complied the demand nor

repaid the outstanding amount or issued any reply to the said

notices. Further that, the defendant No.2 is one of the Guarantor

of the loan obtained by the defendant No.1 for the purpose of

purchase of Maruthi Swift VDI bearing Registration No. KA­19­

MF­3481, who is the owner of the immovable property. That the

defendant No.2 with an intention to obstruct or delay the

execution of the decree that will be passed against him is making

attempts to alienate the schedule property, hence separate

application is filed claiming an order of attachment before

judgment in the present suit. Hence, the plaintiff having no

other efficacious remedy than to file this suit, has filed this suit,

is the case of the plaintiff.

3. Upon sufficient services of suit summons, the defendant

No.1 had not come forward to resist the claim of the plaintiff.

Hence, the defendant No.1 has been placed exparte. Further, the
 6 Com. OS No.185/2021

defendant No.2 and 3 have appeared through their counsel, but

defendants No.2 and 3 have not filed their written statement.

4. The learned counsel appearing for the plaintiff has

vehemently argued on the case.

5. On the basis of the above facts, the points that arise for

the consideration of this Court are as under:­

1. Whether the plaintiff proves that the

defendants had availed Loan of Rs.3,40,000/­
on 04.10.2019?

2. Whether the plaintiff further proves the

alleged default on the part of the defendants
in repayment of loan?

3. Whether the plaintiff is entitled to recover the

suit claim of Rs.4,72,497/­ from the defendants
with interest at the rate of 24% per annum?

4. What decree or order?

6. This Court has answered to the above points for

consideration as hereunder:

Point No.1: Affirmative,

 7 Com. OS No.185/2021

Point No.2: Affirmative,

Point No.3: Affirmative,

Point No.4: As per the final order

for the following;

REASONS

7. Point Nos.1 to 3: All these points are taken up together

for consideration and convenience and also for avoiding

repetition of discussion on the facts of the case and also

regarding points of law. As per the cannon of civil adjudication,

plaintiff has to bring home cogent and satisfactory evidence with

production of valid and supportive documents.

8. The counsel for plaintiff Sri Naveen Banninthaya P.R.,

vehemently argued the case stating that the defendants had

availed loan of Rs.3,40,000/­ (Rupees Three Lakh Forty

Thousand) for the purpose of purchase of car and later they

become defaulter in paying the loan installments. Further, upon

issuance of notices and sufficient service of notices, the defendant

 8 Com. OS No.185/2021

No.1 has remained absent and defendant No.1 has been placed

exparte. Further the defendant No.2 and 3 have appeared

through their counsel but not filed their written statement.

Further argued that the original documents are in support of

their case and hence, the same may be considered and the case

may be decreed. Further the learned counsel for the plaintiff has

also relied on the following decisions in support of his arguments;

1. 1987 0 AIR(SC) 1950 in the case of Everest Industrial

Corporation and others Vs. Gurajat State Financial
Corporation, where in it is held that;

…........“ The High Court was right in holding that interest would
be payable on the principal amount due in accordance with
the terms of the agreement between the parties till the entire
amount due was paid s per the order passed under section 32
of the Act.

We accordingly affirm the judgment of the High Court holding

that section 34 of the Code of Civil Procedure 1908 is not
applicable to their case but remand the matter to the Joint
Judge to redetermine the actual amount due and payable to
the corporation in these proceedings calculating the same as
per contract between the parties before directing the safe of
the properties”.

2. In the case of Baldev Singh Vs. Fullerton India Credit

Company Limited, passed by State Consumer Disputes
Redressal Commission dated 31.10.2013 in First Appeal
No. 502 of 2010, where in it is held that;
 9 Com. OS No.185/2021

….........”As per the law laid down by the Hon’ble Supreme

Court, the contractual rate of interest between the parties will
prevail and even otherwise, as per section 21 of the Banking
Regulations Act, the Courts have no power to change the
contractual rate of interest between the parties.

The Agreement, promissory note and the schedule of the

payment are signed by the appellant and there is no evidence
on record that the respondents have charged more interest or
have changed the miscellaneous expenses”.

3. 1982 0 AIR (kar) 179 in the case of Karnataka State

Financial Corporation Vs. Nityananda Bhavan, wherein it
is held that;

….......”It was urged for the corporation that the loan given to
the respondent was a commercial transaction and 11 percent
interest was a contractual rate of interest agreed upon
between the parties and the corporation is entitled to collect it.
It was also urged that the learned Judge has not given any
reason why that contractual rate of interest should be reduced
to 6 percent when particularly, it was not disputed that the
respondent has admittedly defaulted to pay the installments
as and wen they became dues”.

9. Further sufficient opportunity has been given to the

defendant No.2 and 3 for arguments. But, they have remained

absent and not adduced any arguments. Hence, argument of the

defendant No.2 and 3 were taken as Nil.

10. On perusal of the entire papers on record, in order to

prove the case of the plaintiff, they got examined their General
 10 Com. OS No.185/2021

Power of Attorney holder as P.W.1 and filed affidavit in lieu of

chief examination. The contents of the affidavit are nothing but

the reiteration of the entire averments made in the plaint. To

strengthen the case of the plaintiff, Ex.P.1 to Ex.P.19 have been

produced and marked for plaintiff’s side.

11. On careful perusal of all the documents on record, it is

evident to note that, Ex.P.1 is the Loan Application. Ex.P.2 is the

Receipt dated 04.10.2019. Ex.P.3 is the Demand Promissory Note

dated 04.10.2019. Ex.P.4 is the certified copy GPA. Ex.P.5 is the

Certified copy of Certificate of Incorporation. Ex.P.6 is the

Certified copy of Memorandum of Association. Ex.P.7 is the

Certified copy of Articles of Association. Ex.P.8 is the office copy

of legal notice. Ex.P.9, Ex.P.9(a) and Ex.P.9(b) are the Postal

Receipts. Ex.P.10 is the Postal Acknowledgement. Ex.P.11 and

Ex.P.12 are the Returned Postal Envelops with

acknowledgements. Ex.P.13 is the Statement of Account.

 11 Com. OS No.185/2021

Ex.P.13(a) is the Certificate. Ex.P.14 is the B­Register Extract.

Ex.P.15 is the Encumbrance Certificate. Ex.P.16 is the Mutation

Register Extract. Ex.P.17 is the RTC. Ex.P.18 is the Certified

copy of Sale Deed and Ex.P.19 is the Mutation Dated 20.01.2004.

12. On careful perusal of all the documents, it can be seen

that, Ex.P.4 shows that the General Power of Attorney was

issued in favour of P.W.1 authorizing him to perform acts and

deeds on behalf of the plaintiff. Further Ex.P.1 is the loan

application submitted by the defendants for the purpose of

purchase of car. Further, Ex.P.2 is the receipt for having

borrowed the loan of Rs.3,40,000/­ (Rupees Three Lakh Forty

Thousand) on 04.10.2019 and had undertaking to repay the same

with 36 monthly installment at the rate of 24% per annum.

Further, Ex.P.3 is the Demand Promissory Note for a sum of

Rs.3,40,000/­ (Rupees Three Lakh Forty Thousand) executed by

the defendants undertaking to repay the same with interest of

 12 Com. OS No.185/2021

24% per annum. Further, Ex.P.5 is the Certificate of Registration

of plaintiff firm. Further, Ex.P.6 and Ex.P.7 are the

Memorandum of Association and Articles of Association in

respect of plaintiff firm. Further, Ex.P.14 is the B­Register

Extract of Maruthi Swift VDI submitted by the defendants in

favour of the plaintiff bank. Further, Ex.P.15 is the Endorsement

Certificate. Ex.P.16 and Ex.P.19 are the Certified copy of

mutation extracts submitted by the defendant No.2 shows that

the property which was registered in the name of defendant

No.2. Further, Ex.P.17 is the Khatha extract of the immovable

property of the defendants executed by them in favour of the

plaintiff bank. Further, Ex.P.18 is the Sale Deed dated

20.01.2004 for having purchased the immovable properties

mentioned in ‘A’ schedule, which was mortgaged in favour of the

plaintiff bank. By these documents, the plaintiff clearly

established that the defendants had obtained Loan of

 13 Com. OS No.185/2021

Rs.3,40,000/­ (Rupees Three Lakh Forty Thousand) on

04.10.2019 for the purpose of purchase of Maruthi Swift VDI.

Further, Ex.P.8 is the copy of legal notice issued to the

defendants calling upon them to clear the dues. Ex.P.9, Ex.P.9(a)

and Ex.P.9(b) are the postal receipts for having sent the legal

notices to the defendants. Ex.P.10 is the Postal

Acknowledgement for having received the notice by the

defendant No. 1, sent by the plaintiff firm. Further, Ex.P.11 and

Ex.P.12 are the returned envelops with postal acknowledgements

for not having served the notices on defendant No.2 and 3, sent

by the plaintiff firm. By producing all these documents, the

plaintiff has established that in spite of demand made by the

plaintiff bank, there was default committed by the defendants in

repaying loan that was due. Ex.P.13 is the Statement of Accounts

maintained in the regular course of business by the plaintiff

bank which depicts that the defendants were due for total sum of
 14 Com. OS No.185/2021

Rs.4,72,497/­ (Rupees Four Lakh Seventy Two Thousand Four

Hundred and Ninety Seven). Further Ex.P.13 has a presumptive

value and there is presumption regarding the entries made in it

with regard to the genuineness and authenticity as per the

Bankers’ Book of Evidence Act. The presumption under section 4

of Bankers Book of Evidence Act stands un­rebutted. Ex.P.13 is

the Certificate given by the plaintiff certifying that the

defendants had availed loan for the purpose of purchase of car

and the loan account was maintained by the person in charge of

regular course of business maintained by the Company. The

pleadings placed before this Court is in­consonance with the

documents placed before this Court. Hence, there is no hesitation

for this Court to hold that there was default on the part of the

defendants in repayment of the loan outstanding. By these

documents, the plaintiff bank has clearly established their case

that the defendant No.1 as borrower, defendant No.2 and

 15 Com. OS No.185/2021

defendant No.3 as co­applicant/guarantor had obtained loan of

Rs.3,40,000/­ (Rupees Three Lakh Forty Thousand) on 04.10.2019

for the purpose of purchase of Maruthi Swift car.

13. Having regard to the above discussion, this Court is of

the opinion that the claim of the plaintiff cannot be disbelieved in

any manner. The contractual obligation of the defendants have

not been performed by them and as such, there is no reason to

interfere with the agreed rate of 24% of interest as could be seen

from Ex.P.3­Demand Promissory Note and Ex.P.2­the receipt for

having borrowed the loan of Rs.3,40,000/­ (Rupees Three Lakh

Forty Thousand) dated 04.10.2019 agreeing to pay the same with

24% per annum. The pleadings placed before this Court are in­

consonance and Ex.P.1 to Ex.P.19 are in support of the same.

Further, the papers reveal that loan was sanctioned for the

purpose of purchase of swift car, which was due on the part of the

defendants and the original documents placed before this Court

 16 Com. OS No.185/2021

by the plaintiff are not disproved in any way by the defendants,

as defendant No.2 and 3 have appeared through their counsel but

not filed their written statement. This, on the other hand, shows

that the defendants have admitted the claim of the plaintiff.

Further, all these documents are in support of the claim of the

plaintiff. Hence, this Court holds that the plaintiff bank is

entitled to recover the suit claim of Rs.4,72,497/­ (Rupees Four

Lakh Seventy Two Thousand Four Hundred and Ninety Seven)

from the defendants with the rate of interest at 24% per annum,

from the date of suit till realization. Hence, point Nos.1 to 3 are

answered in the Affirmative.

14. Point No.3: In view of the discussions made by this

Court and answers on the above points, this Court proceeds to

pass the following:

ORDER

The Suit is hereby decreed with costs.

 17 Com. OS No.185/2021

The defendants jointly and severally are

liable to pay to the plaintiff a sum
Rs.4,72,497/­ (Rupees Four Lakh Seventy

Two Thousand Four Hundred and Ninety

Seven) with interest at the rate of 24% per
annum, from the date of suit till realization.

Draw decree accordingly.

(Dictated to the Stenographer directly on the computer, the transcript

corrected, signed by me and then pronounced in the open Court, this the 25th day
of March, 2023.)

(Sandhya S.)
IV Addl. District & Sessions Judge
D.K., Mangaluru.

ANNEXURE

List of witnesses examined for the Plaintiff Bank:

PW.1 Umesh
List of witnesses examined for the Defendants:

­ Nil ­
List of documents marked for the Plaintiff Bank:
Ex.P1 Original Loan Application
Ex.P2 Receipt dated 04.10.2019
 18 Com. OS No.185/2021

Ex.P3 Demand Promissory Note dated 04.10.2019

Ex.P4 Certified copy of General Power of Attorney with
resolution
Ex.P5 Certified copy of incorporation
Ex.P6 Certified copy of Memorandum of Association
Ex.P7 Certified copy of Article of Association
Ex.P8 Office copy of legal notice
Ex.P9 Postal Receipt
Ex.P9(a) Postal Receipt
Ex.P9(b) Postal Receipt
Ex.P10 Postal Acknowledgement
Ex.P11 Returned envelop with postal acknowledgement
Ex.P12 Returned envelop with postal acknowledgement
Ex.P13 Statement of Accounts
Ex.P13(a) Certificate
Ex.P14 B­Register Extract
Ex.P15 Encumbrance Certificate
Ex.P16 Mutation Register Extract
Ex.P17 RTC (Katha Extract)
Ex.P18 Certified copy of Sale Deed
Ex.P19 Mutation dated 20.01.2004
List of documents marked for the Defendants:

Nil

(Sandhya S.)
IV Addl. District & Sessions Judge
D.K., Mangaluru.