1 s-402-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi SUIT NO. 402 Of 2009. Dena Bank A Body Corporate Constituted under the provisions of Banking Companies (Acquisition & Transfer of Undertakings), having their Office at Corporate Centre, C-10, “G”Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051 ..Plaintiffs. vs. 1. Govind Vasudev Haryan, residing at 65, Jariwala Chawl, Sane Guruji Road, Tardeo, Mumbai 400034. 2. Sheelavati Govind Haryan, residing at 65, Jariwala Chawl, Sane Guruji Road, Tardeo, Mumbai 400034. 3. Pravin Gajanan Dalvi, residing at Bai Sakarabai Dinshaw, Petit Hospital for Animals, Dr. S.S. Rao Road, Parel, Mumbai 400012. ..Defendants. .... Ms. Naveena Kumai, i/b M.V. Kini & Co., Advs for Plaintiffs. None for Defendants. .... CORAM : S.J. KATHAWALLA, J. DATE : 23RD FEBRUARY 2011. JUDGMENT : The Plaintiffs are Dena Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The Plaintiffs are seeking an ex-parte 2 s-402-09 decree against the Defendants for non payment of outstanding amount due with respect to a housing loan sanctioned by the Plaintiffs to the Defendants. Govind Vasudev Haryan and Sheelavati Govind Haryan, Defendant Nos. 1 and 2 respectively, are the principal borrowers of the housing loan granted by the Plaintiffs. Pravin Gajanan Dalvi, Defendant No. 3, is the guarantor who has guaranteed the due repayment of the said loan taken by Defendant Nos. 1 and 2. 2. The Plaintiffs have tendered affidavit of evidence of Ramdas G. Ravate dated January 20, 2011, who is working as an officer of the Plaintiffs at Tulsi Vihar, Dr. Annie Besant Road, Worli Naka, Worli, Mumbai 400 018. The said evidence is taken on record and marked ‘X’ for identification. The Power of Attorney dated 3rd October 1985 issued by the Plaintiffs in favour of Ramdas G. Ravate is marked as Exhibit P-1. 3. The Plaintiffs have stated in the plaint as well as in the affidavit of evidence that:- (i) On March 15, 2006, Defendant Nos. 1 and 2 approached the Plaintiffs for a loan of Rs. 6,66,000/- under Housing Loan. The Plaintiffs in April 2006 sanctioned a loan of Rs. 5,50,000/- to the Defendant Nos. 1 and 2 for the purpose of purchase of flat under Dena Niwas Scheme. The loan was sanctioned at a floating interest at 8.25% at monthly rests to be repaid in 240 equated monthly instalments of Rs. 6,400/- 3 s-402-09 commencing from May 2006. The original sanction letter of the Plaintiffs is marked as Exhibit P-2. (ii)On April 21, 2006, Defendant Nos. 1 and 2 executed a term loan agreement wherein the Defendant Nos. 1 and 2 expressly agreed that the said loan of Rs. 5,50,000/- had been obtained for purchase of house property being flat 203, B-Wing, 2nd floor, Vikrant Apartments, Sector 9, Plot no. D/53-54, Dive Village, Airoli, Navi Mumbai (hereinafter referred to as the said Flat) and the amount of the loan was to be repaid in equated monthly instalments of Rs. 6,400/- together with accrued interest which shall be compounded with quarterly rests. The original term loan agreement is marked as Exhibit P-3. (iii)Defendant Nos. 1 and 2 executed a demand promissory note dated April 21, 2006 for Rs. 5,50,000/- in favour of the Plaintiffs wherein the Defendant Nos. 1 and 2 agreed to repay the said loan on demand together with accrued interest at 8.25% per annum over and above the published RBI rate with a minimum of 8.25% compounded with monthly rests. The original promissory note dated April 21, 2006 is marked as Exhibit P-4. (iv)Defendant No. 1 executed with the Plaintiffs a Memorandum of Entry dated April 24, 2006 wherein it was recorded that the Defendant Nos. 1 and 2 deposited and delivered the title documents, i.e., registered original agreement for sale dated April 21, 2006 in respect of the said Flat creating an equitable mortgage in favour of the 4 s-402-09 Plaintiffs. The original memorandum of entry is marked as Exhibit P-5. (v)On April 21, 2006, the Defendants executed a declaration dated April 21, 2006 wherein Defendant Nos. 1 and 2 while admitting the availing of loan of Rs. 5,50,000/- agreed to comply with all requirements required to secure the dues of the Plaintiffs’. The original declaration dated April 21, 2006 is marked as Exhibit P-6. (vi)Defendant Nos. 1 and 2 executed with the Plaintiffs a General Undertaking dated April 21, 2006 whereby the Defendants agreed that they would not mortgage or create third party rights or dispose of the said Flat mortgaged to the Plaintiffs without the consent of the Plaintiffs. The Plaintiffs submit that the Defendants also agreed to pay penal interest at 2% on the entire outstanding. The original General Undertaking is marked as Exhibit P-7. (vii)Defendant No. 3 also executed a Letter of Guarantee dated April 20, 2006 with the Plaintiffs whereby the Defendant No. 3 guaranteed the repayment of the loan amount due and recoverable from the Defendant No. 1. The Plaintiffs submit that the guarantee is additional, independent and distinct to any security that might be taken by the Plaintiffs from the principal borrower and the liability of the guarantor is joint and several and co-extensive with that of the principal borrower. The Letter of Guarantee is marked as Exhibit P-8. (viii)Defendant Nos. 1 and 2 vide their letter of General Lien and Set Off for Borrowing Arrangements from the 5 s-402-09 Borrower/s dated April 21, 2006 authorised the Plaintiffs to claim set-off and/or to transfer any sum or sums standing in the credit of Defendant Nos. 1 and 2 towards the adjustment of the loan amount. The original letter of General Lien and Set Off for Borrowing Arrangements from the Borrower/s dated April 21, 2006 is marked as Exhibit P-9. (ix)Defendant No. 3 vide letter of General Lien and Set Off from Guarantor/s dated April 20, 2006 authorised the Plaintiffs to claim set-off and/or to transfer any sum or sums standing in the credit of Defendant Nos. 1 and 2 towards the adjustment of the loan amount. The original letter of General Lien and Set Off from Guarantor/s dated April 20, 2006 is marked as Exhibit P-10. (x)Despite repeated demands, the Defendants have failed and neglected to repay the amount due and payable by the Defendants to the Plaintiffs in respect of the housing loan granted to the Defendants. The Plaintiffs by their advocate’s letter dated November 17, 2007 called upon the Defendants to repay the entire balance amount due but the Defendants failed to pay the said dues to the Plaintiffs. A copy of the said letter dated November 17, 2007 is marked as Exhibit P-11. (xi) The sum due and payable by the Defendants is Rs. 5,84,475/- together with interest thereon at 11% per annum which shall be compounded with monthly rests from the date of the suit till full and final payment or realisation. The Statement of Accounts is marked as Exhibit P-12. 6 s-402-09 4. I have gone through the averments made in the plaint and also the contents of the affidavit of evidence along with the compilation of documents filed by the Plaintiffs. From Exhibits P-2 it is established that the Defendant Nos. 1 and 2 applied for a loan facility to the Plaintiffs and the same was sanctioned by the Plaintiffs for a sum of Rs. 5,50,000/- on terms and conditions mentioned therein. From Exhibit P-3 it is established that the Defendant Nos. 1 and 2 entered into a term loan agreement with the Plaintiffs wherein it was stated that the loan was for purchase of house property, viz. the said Flat. From Exhibit P-4 it is established that the Defendant Nos. 1 and 2 promised to pay the said loan amount of Rs. 5,50,000/- as per the terms mentioned therein. From Exhibits P-5 to P-7 it is established that the Defendant Nos. 1 and 2 by depositing the title deeds of the said Flat have created an equitable mortgage with respect to the said Flat in favour of the Plaintiffs. They have agreed to comply with all the requirements for securing the dues of the Plaintiffs’ and have agreed that Defendant Nos. 1 and 2 shall not create and third party rights or dispose of the said Flat mortgaged without the consent of the Plaintiffs. From Exhibit P-8 it is established that the Defendant No. 3 guaranteed the due repayment of loan amount taken by Defendant Nos. 1 and 2. From Exhibit P-9 it is established that the Defendant Nos. 1 and 2 authorised the Plaintiffs to claim set-off and/or to transfer any sum or sums standing in the credit of Defendant Nos. 1 and 2 towards the adjustment of the loan amount. From Exhibit P-10 it is established that Defendant No. 3 authorised the Plaintiffs to claim set-off and/or to transfer any sum or sums standing in the credit of Defendant Nos. 1 and 2 towards the adjustment of the loan amount. From Exhibit P-11, it is established that the Defendants were called upon to make 7 s-402-09 payment of the outstanding dues but failed and neglected to do so. From Exhibit P-12, it is established that the balance outstanding payable by the defendants to the plaintiffs is Rs. 5,84,475/-. 5. The Plaintiffs attempted to serve the writ of summons on the Defendants. As stated in the affidavit dated November 30, 2009, the packet containing the writ of summons transmitted to Defendant Nos. 1 and 2 were returned with the remark “Unclaimed” and with respect to Defendant No. 3, the service was accepted and acknowledgement was duly received. The writ of summons was therefore served by substituted service by publishing the same in English Language in the Free Press Journal and in Navasakhti in Marathi Language dated March 30, 2010. The Defendants have not come forward to defend the suit and have not filed their written statement. In view thereof, what is stated by the Plaintiffs has gone unchallenged. There is no reason why what the Plaintiffs have stated in the plaint as well as in the affidavit of claim should not be accepted. 6. In the above circumstances, in my view, the reliefs sought by the Plaintiffs are required to be granted. In view thereof, I pass the following order:- (i) The Defendants are jointly and severally ordered and decreed to pay to the Plaintiffs a total sum of Rs. 5,84,475/- along with simple interest at 12% from the date of filing of the suit till the payment and / or realisation. (ii)It is declared that the said Flat, more particularly described in Exhibit P-3 is validly mortgaged in favour of the Plaintiffs 8 s-402-09 as security for due repayment of the amount payable by the Defendants to the Plaintiffs as set out in clause (i) above. (iii)The Court Receiver, High Court, Bombay is appointed as Receiver of the said Flat. The Receiver, after obtaining valuation of the said Flat, is directed to sell the same by public auction and after deducting his costs, charges and expenses hand over the net sale proceeds to the Plaintiffs for appropriating the same towards the amount for which the order and decree is passed in clause (i). (iv)Defendants to pay costs to the Plaintiffs for this suit. (v)The suit is accordingly disposed of in favour of the plaintiffs and against the defendants. [S.J. KATHAWALLA, J.]