Delhi High Court
M/S Il & Fs Financial Services Ltd vs Prakash Laljibhai Patel on 10 July, 2014
Author: G. S. Sistani
$~32.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 1651/2012
% Judgment dated 10.07.2014
M/S IL & FS FINANCIAL SERVICES LTD ..... Plaintiff
Through : Mr.Nitesh Jain, Adv.
versus
PRAKASH LALJIBHAI PATEL ..... Defendant
Through
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
1.
Plaintiff has filed the present suit under the provisions of Order XXXVII
of the Code of Civil Procedure for recovery of Rs.1,75,82,666/- along
with pendente lite and future interest, and costs.
2. Summons in the suit were issued to the defendant in the prescribed form
on 5.6.2012. The defendant could not be served by ordinary process as he
had left the given address. Thereafter fresh addresses were provided,
however, the defendant continued to remain unserved. Finally the
defendant was served through publication, however, appearance has not
been entered into by the defendant in terms of Order XXXVII Sub-Rule 3
of CPC.
3. Learned counsel for the plaintiff submits that since despite due service the
defendant has failed to enter appearance, the plaintiff is entitled to a
decree forthwith in terms of Order 37 Sub-Rule 3 of CPC.
4. As per the plaint, the plaintiff is a company incorporated under the
Companies Act, 1956, and, inter alia, carries on the business of lending
and/or financing. The defendant is an investor and trader, who was
dealing in buying and selling of shares in the demat form through
empanelled brokers of the plaintiff company. The defendant was
registered with DB (International) Stock Brokers Limited as a client for
buying and selling of shares. The defendant's demat account number with
ISSL is 11507714. The plaintiff seeks to recover an amount of
Rs.1,75,82,666/-.
5. As per the plaint, which is duly supported by an affidavit, the defendant
had approached the plaintiff company for a loan against purchase of
shares (hereinafter referred to as LAPS) facility in the sum of Rs.5.00
crores. The defendant submitted a loan application form on 20.10.2010.
Along with the said application, relevant documents were also submitted
by the defendant. Based on the request of the defendant and after due
verification of the documents submitted with the loan application, the
plaintiff vide Sanction Letter dated 25.10.2010 sanctioned a loan upto to a
limit of Rs.5.00 crores to the defendant for a duration of 12 months with
interest at the rate of 12.5%, per annum, with quarterly rests and subject to
signing of a Loan Agreement. The sanctioned letter dated 25.10.2010 was
duly accepted by the defendant and consequent thereto on 2.11.2010 a
loan agreement was executed between the parties at New Delhi whereby
the plaintiff advanced a loan facility of an amount not exceeding Rs.5.00
crores with interest thereon at the rate of 12.5%, per annum, payable
quarterly on the last day of each quarter to the defendant to enable him to
purchase the securities on various terms and conditions as detailed in the
said loan agreement. On the same day i.e. 2.11.2010, with an intention to
secure due repayment of the said loan, the defendant executed a
Promissory Note in favour of the plaintiff in the sum of Rs.5.00 crores
with interest thereon at the rate of 12.5%, per annum, or at such rate as
IFIN may fix from time to time. A letter of continuity was also signed on
the same date i.e. 2.11.2010 by the defendant.
6. Learned counsel for the plaintiff submits that the present suit is based on a
loan facility granted to the defendant in the sum of Rs.5.00 crores, based
on a written contract, loan agreement, Promissory Note, letter of
continuity and the statement of accounts of the defendant, received from
Axis Bank, which shows the entries of loan extended to the defendant by
the plaintiff, the payments received and the amount due and payable by
the defendant to the plaintiff. The plaintiff has also placed on record
communications from the DB (International) Stock Brokers Limited to
show that the defendant had purchased shares in the sum of
Rs.2,75,24,857.90 vide Settlement No.2010212 (Normal) shares worth
Rs.96.75 lakhs vide Settlement No.2010216 (Normal) and also sold
shares Rs.19,33,807/- vide Settlement No.2010227 (Normal). Attention of
the Court is also drawn to the original Statement of accounts received by
the plaintiff from the banker of the defendant from where the relevant
entries are shown of payments received by the defendant from the
plaintiff. Based on these entries, the plaintiff claims a sum of
Rs.1,43,74,904/-.
7. I have heard learned counsel for the plaintiff and also perused the plaint
and the documents filed on record. The present suit is based on loan
facility granted to the defendant upto a sum of Rs.5.00 crores, based on a
written contract, loan agreement, Promissory Note, letter of continuity and
the statement of accounts of the defendant, received in Axis Bank. The
present suit is maintainable under the provisions of Order XXXVII of
CPC.
8. Order 37 Rule 2(3) and Rule 3 CPC reads as under:-
"[2. Institution of summary suits.- (1)..........
(3) The defendant shall not defend the suit referred to in sub-rule
(1) unless he enters an appearance and in default of his entering an
appearance the allegations in the plaint shall be deemed to be
admitted and the plaintiff shall be entitled to a decree for any sum,
not exceeding the sum mentioned in the summons, together with
interest at the rate specified, if any, up to the date of the decree and
such sum for costs as may be determined by the High Court from
time to time by rules made in that behalf and such decree may be
executed forthwith."
9. Taking into consideration the averments made in the plaint, documents
filed on record and taking into consideration that despite service
defendant has not entered appearance within the time allowed in terms of
Order 37 Rule 2(3) CPC, the present suit is decreed in favour of the
plaintiff and against the defendant in sum of Rs.1,75,86,266/- together
with pendente lite and future interest @8% per annum. Let a decree sheet
be drawn up accordingly.
G.S.SISTANI, J
JULY 10, 2014
msr
