[Cites 5, Cited by 0]

Gujarat High Court

Sisodiya Lakshmansinh Ratansinh vs Bank Of Baroda on 27 January, 2026

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                            C/SCA/16232/2025                                    ORDER DATED: 27/01/2026

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                    R/SPECIAL CIVIL APPLICATION NO. 16232 of 2025

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                                       SISODIYA LAKSHMANSINH RATANSINH & ANR.
                                                        Versus
                                                BANK OF BARODA & ANR.
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                      Appearance:
                      MR.ADITYA J PANDYA(6991) for the Petitioner(s) No. 1,2
                      MS NALINI S LODHA(2128) for the Respondent(s) No. 1,2
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                         CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI

                                                       Date : 27/01/2026

                                                        ORAL ORDER

1. By way of the present petition filed under

Articles 226 and 227 of the Constitution of India,

petitioners have prayed for following reliefs:-

"9(A) YOUR LORDSHIP be pleased to issue writ of certiorari or any other writ, order or direction in the nature of certiorari or be pleased to exercise powers of superintendence and be pleased to quash and set aside the order dated 07.10.2025 passed below exhibit - 12 by the Id. 4th Addl. Senior Civil Judge, Bharuch in Regular Summary Suit No.9 of 2023 (ANNEXURE A Colly);

(B) YOUR LORDSHIP be further pleased to unconditionally allow the application filed under Order XXXVII Rule 3(5) of the Code of Civil Procedure, 1908 at Exhibit 12 in Regular Summary Suit No.9 of 2023 pending before Id. 4th Addl. Senior Civil Judge, Bharuch (ANNEXURE A Colly);

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(C) During the pendency and till final disposal of this petition, YOUR LORDSHIP be pleased to stay the further operation and implementation of the order 07.10.2025 passed below Exhibit 12 in Regular Summary Suit No. 9 of 2023 by the Id. 4th Addl. Senior Civil Judge, Bharuch and be further pleased to stay further proceedings of Regular Civil Suit No.9 of 2023 pending before the Id. 4th Addl. Senior Civil Judge, Bharuch (Annexure A Colly);

(D) Such other(s) and further relief(s) which this Hon'ble Court may deem fit to be granted in the interest of justice;

2. Heard learned advocate Mr.Aditya Pandya for

petitioners-original defendants and learned advocate

Ms.Nalini Lodha for respondents-original plaintiffs appeared

through hybrid mode.

3. Learned advocate for petitioners, at the outset,

contended that the respondents-Bank filed Regular

Summary Suit No.9 of 2023 before the learned Civil Court,

Bharuch, seeking recovery of Rs.18,38,872/- with interest

@ 16% p.a. from the date of suit till realization. The

petitioners, by way of leave to defend, raised the dispute

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applicability of rate of interest and entries made in the

statement of Account. It is further contended that, in the

sanction letter, the rate of interest is mentioned as 11.35%

p.a. on a floating basis. In the certificate of loan papers,

the rate of interest is mentioned as 12.05% p.a. However,

in the summons for judgment, plaintiffs-Bank is claiming

interest at the rate of 16% p.a.

3.1. It is further contended that the statement of

Account produced by plaintiffs indicates a closing balance

of Rs.13,68,717=00, as on 09.10.2023 and at the foot of

statement of Account, an amount of Rs.2,02,200/- is

shown as debit balance. In the summons for judgment,

plaintiffs have stated that, on 13.01.2023, the date on

which the Account was declared Non-Performing Asset

(NPA), an amount of Rs.18,38,872/- was outstanding in

the account of defendant.

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3.2 It is further contended that, in the leave to

defend affidavit, defendants have raised triable issue with

regard to the rate of interest and the entries posted in the

statement of Account. It is contended that the learned trial

Court has not dealt with any of the defences raised by

defendants, has granted conditional leave to defend on

depositing 30% of the outstanding amount within a period

of 30 days from the date of order.

3.3 Learned advocate for the petitioners has relied

upon the following decisions:-

(i) Chlochem Ltd. Vs. Lifeline Industries Ltd.

reported in 2014 SCC Online Guj 8465.

(ii) Merchem Limited & 3 Ors. Vs. New India ACID Baroda Private Limited passed by the Hon'ble Division Bench of this Court in Special Civil Application No.6350 of 2017 on 17.04.2017

Except above, no other submissions are made by

learned advocate for petitioners.

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4. Per contra, learned advocate for respondents has

supported the impugned order and contended that the

defendants have admitted the sanction letter as well as the

terms and conditions and has not raised any dispute with

regard to availing financial assistance as well as there is

no dispute raised with regard to the execution of the

sanction letter. It is further contended that, in the sanction

letter, the rate of interest includes MCLR plus 2.85%. It is

contended that whenever there is a change in MCLR, the

rate of interest would accordingly change, and therefore,

on the date of suit, prevailing rate of interest was 16%

p.a.

4.1 It is further contended that, in the statement of

Account, plaintiffs have not charged any penal interest,

though there is a specific stipulation in the contract for

the levy of penal interest on unpaid installments. The

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penal interest charged by Bank was subsequently refunded

to petitioners-defendants. The entries made in the

statement of Account have not been denied by defendants.

It is further contended that the learned Trial Court has

imposed a condition only on the principal outstanding

amount. It is contended that no triable issues are found in

the defence of defendants and therefore, the conditions

imposed by the learned Trial Court, is just and reasonable.

Except above, no other submissions are made by learned

advocate for respondents.

5. I have considered the submissions canvassed by

learned advocates for the respective parties and perused

the paper book. It appears from the record that the

petitioners-defendants have availed loan facility on

19.12.2017. As per the say of plaintiffs, defendants failed

to repay the loan amount with interest and therefore, on

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13.01.2023, the Account was declared as Non-Performing

Asset (NPA), and on the same day, an amount of

Rs.18,38,872/- was due and payable with interest from

defendants. Defendants in the leave to defend affidavit

have raised mainly two defences. The dispute is raised

with regard to charging of the rate of interest and the

entries posted in the statement of Account. Upon perusal

of the sanction letter produced at page No.4 of the paper

book, it is evident that the rate of interest is charged at

11.35% p.a. on a floating basis. However, the certificate of

loan papers produced at page No.15 of the paper book

indicates that the rate of interest is charged at 12.05% p.a.

Further, in the plaint as well as in the summons for

judgment, plaintiffs have claimed 16% interest on the

outstanding amount. The statement of Account which is

placed on record at page No.21 of the paper book

indicates that the closing balance as on 09.10.2023 was

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Rs.13,68,717/-. However, at the foot of statement of

Account, total outstanding amount as on 29.09.2023 is

shown as Rs.2,02,200/-. Prima facie, there is substance in

the defence raised by defendants in the leave to defend

affidavit.

6. In the catena of decisions, law is well settled

that a dispute with regard to the rate of interest and a

bonafide dispute with regard to the entries posted in the

statement of Account are triable issues. When the plaintiffs

have based their claim on the entries posted in the

statement of Account, plaintiffs have to establish the

entries made thereunder during trial. Learned advocate for

respondents has also stated that the penal interest which

was charged for the period between 22.08.2022 to

30.09.2020 and 01.10.2022 to 31.03.2021 has been

refunded to defendants.

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7. At this stage, it would be apposite to refer the

decision in the case of Chlochem Ltd. Vs.Lifeline Industries

Ltd, in para 20 and 21, this Court has observed as under:-

"20. If the prayer made in the plaint of the suit filed by the petitioner is perused, it is clear that the petitioner is claiming interest alongwith the amount due and further interest at the rate of 6% per annum over the total amount of Rs.75,73,512/, which includes the principal claim, plus the interest."

21. In Zonal Manager v. Akhilbhai B.Mehta (supra),this Court has held as below:

"7.Having heard both the learned advocates and having gone through the facts of the case and record it will have to decided whether the present dispute as has been raised by the plaintiff is falling within the ambit of Order37 Rule1 the Civil Procedure Code. It was urged that the suit is filed for liquidated amount of 24 days Earned Leave and therefore it falls within the ambit of Order37. Perusing Order37 Rule1 Sub sec.(2) it is clear that the dispute falls in none of the subclause of Subrule (2) of Rule1 of Order37. It is not the suit for recovery of liquidated amount but the amount of interest at the rate of 24% has also been sought to be recovered by the plaintiff respondent. The case is clearly covered by the unreported decision of this Court as reported in the matter of National Textile Corporation Ahmedabad v.

Shri Rajendra Sankalchandand and Parikh, as reported in 1982 GLH (UJ) 7 wherein the Court in unequivocal terms ruled that in order to succeed in getting the amount of interest the opponentplaintiff will have to prove his case by evidence and this cannot be permitted in a Summary Suit and, consequently not triable as Summary Suit. Claiming of the amount in the present

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case at the rate of 24% takes out the dispute of the schope of Summary Suit and therefore the learned Judge committed a of jurisdictional error to grant conditional leave. Not only that, neither the dispute can be termed as liquidated demand as envisated by the Order 37 Rule 1(2) but the claim of interest is also a triable issue and takes the suit out of the ambit of the Summary Suit. On this ground alone this Revision Application is required to be allowed, respective of the fact that even if it is Summary suit there were triable issues.

8. In this view of the matter, since the suit filed by the plaintiff is not falling within ambit of Summary Suit the order passed by the learned trial Judge to defend the suit on condition is without jurisdiction and erroneous and is required to be set aside. In this view of the matter, this Revision Application is allowed. The order impugned passed by the City Civil Court for issuing summons for judgment which is dated 17.12.1991 is set aside and consequently the order impugned which is dated 12.1.2000 granting conditional leave to defend is also set aside. Rule is made absolute. No order as to costs.

The Hon'ble Division Bench of this Court in the

case of Merchem Limited & Ors. Vs. New India ACID

Baroda Pvt. Ltd., has also taken into consideration the

decision of Chlochem Ltd (supra). In paragraph No.5.04,

the Hon'ble Division Bench has referred paragraph Nos.20

to 23 of the decision of Chlochem (supra).

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8. Upon perusal of the impugned order, it appears

that while deciding the leave to defend affidavit, the

learned Trial Court has not dealt with any of the defence