Canara Bank vs Shambhu Chabra

J.M. Malik, J

In this appeal the Canara Bank, the appellant, has assailed the impugned order rendered by Shri D.C. Thakur, Ld. Trial Court dated 18.01.2011. The grouse of the bank is that the entire recoverable amount was not granted in favour of the bank. This is also indisputable fact that Shri Shambhu Chabra, the respondent was granted home loan. The respondent had mortgaged only one property bearing No. IX/1746, measuring area 33 sq. yds., with roof rights, out of Khasra No. 314/33/4, situated at abadi of Gali No. 6, Kailash Nagar, Near Gandhi Nagar in the area village Seelampur, illaqua Shahdara, Delhi. The respondent was required to pay 120 equated monthly installments (EMIs). The respondent waddled out of the commitments and could not maintain the financial discipline. The appellant bank issued notice under Section 13(2) of the SARFAESI Act dated 23.09.2009 wherein a demand in the sum of Rs. 7,69,834/- as on 01.09.2009 was raised against the respondent. Vide the impugned order dated 18.01.2011, the Ld. Trial Court reduced the amount to Rs. 3,04,000/- without any rhyme or reason and directed the appellant bank to deliver the title deeds within 48 hours. Fortunately, the appeal was preferred before this Court at about 3 p.m. on 21.01.2011. The Court immediately granted the stay order in favour of the appellant bank.

The respondent has contested the present appeal. The Ld. Counsel for the respondent made the following submissions. It was argued that the account of the respondent had become NPA in October 2004. Thereafter, the respondent paid a sum of Rs. 5 lacs. She opined that that amount was not deducted/adjusted. It was also argued that, although, the appellant bank had sanctioned a sum of Rs. 7.5 lacs, only, yet, actually a sum of Rs. 6.5 lacs was paid to the respondent. She explained that the interest rate was not reduced in accordance with the guidelines issued by the Reserve Bank of India. However, it is pertinent to note that the counsel for the respondent could not produce or draw the attention of the Court towards any of the RBI guidelines. The Ld. Counsel for the respondent further explained that the appellant had charged penal interest upon the respondent. When her attention was drawn towards the agreement, she explained that the respondent was made to sign the same without understanding the said term. The Ld. Counsel for the respondent lastly pleaded that daughter of the respondent has recently died and the respondent is the only bread winner of the family.

I am unable to locate substance in these submissions. The appellant has placed on record the statement of accounts before this Court as well as before the Ld. Trial Court. The counsel for the respondent could not point out any flaw or error in the statement of accounts.

Both the counsel have invited my attention towards the letter sent by Canara Bank to the respondent dated 31.12.2004. Its relevant portion reads as follows:

We wish to inform you that the present liability is Rs. 766458.00 + int. due from 01.07.2004. The present overdue is RS. 61000 + int. from 01.07.04. We hereby clarify that on remitting the entire amount in one lumsum we will consider of reducing the monthly installment in accordance with the amount disbursed to you.

There is no inkling on the record that the respondent had tendered the abovesaid amount. It is thus clear that the respondent has been dodging the bank prior to the year 2004.

Counsel for the appellant had invited my attention towards the agreement entered into between the parties. One of the terms and conditions detailed therein mentions:

In the even of my/our default in payment of any installment or in regularising or in clearing the account as per terms agreed upon, I/we know that an interest at a penal rate of 2 percent per annum above the rate of interest that is charged in the account from time to time is leviable on the advance from the date of such default till regularising/clearing the account, as, the case may be.

The Apex Court in the case of Bihar State Electricity Board v. Green Rubber Industries, 1990 (1) S.C.C. 731 was pleased to hold:

It is true that the agreement is in a standard form of contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy. Lord Diplok has observed: "If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable". A Schroeder (A) Music Publishing Co. Ltd. Vs. Macaulay, (1974) 3 All ER 616, 624. In such contracts a standard form enables the supplier to say. "If you want these goods or services at all, these are the only terms on which they are available. Take it or leave it." It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone. The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion. It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect.

Similar view was taken in authorities reported in Mrs. Margaret Lalita Samuel Vs. Indo Commercial Bank Ltd. AIR 1979 SC 102 Para 15, Central Bank of India, Bombay Vs. Sion Bakers and Confectioners Pvt. Ltd., Bombay & Ors., 2008 (2) D.R.T.C. 572 (Bom), by Delhi High Court in Allied Equipment & Services & Ors. Etc. v. DRT & another, AIR 2002 Del. 201 and Punjab & Sind Bank Vs. M/s. Ram Prakash Jagdish Chander & Ors., I (1990) BC 386 and B.M. Ahmed & Ors. Vs. K. Gangadharan, II (1990) BC 276.

In Punjab & Sind Bank Vs. M/s. Ram Prakash Jagdish Chander & Ors. (Supra), the Delhi High Court was pleased to hold:

If the defendant fails to point out discrepancies in the entries contained in the certified copies of the statement of accounts filed by the bank in the court, the bank shall be deemed to have proved its claim in the suit.

Under these circumstances, I hereby modify the order given by Ld. DRT and direct the respondent to deposit Rs. 7,69,834/- as on 01.09.2009 and pay pendente lite and future interest w.e.f. 01.09.2009 till full realisation @ 10% p.a. simple on reducing balance basis. The said amount be paid within two months failing which nothing will preclude the bank to proceed against the appellant as per law. The bank is further directed to adjust the amount which has been paid. In case the respondent pays the entire amount, the appellant would issue no due certificate and return the title deeds in favour of the respondent within four days. The appellant is entitled to the costs which would not in any way increase from an amount of Rs. 30,000/- and will include the counsel fee as well.

The appeal stands disposed of. Copies of this order be furnished to the parties as per law and one copy be sent to the Ld. DRT forthwith.