The main legal point established in the judgment is the admissibility of electronic evidence and the necessity of certificates under Section 65B of the Evidence Act for electronic records in commercial transactions.

Prathiba M. Singh, J.

1. The present appeal arises out of the impugned judgment/order dated 6th February, 2015 by which the suit for recovery filed by the Appellant/Plaintiff bank (hereinafter, ‘Plaintiff bank’) was dismissed. The primary ground on which the suit had been dismissed was that the Plaintiff bank had failed to file the original loan recall notice dated 11th February, 2014 in the Trial court.

Brief Background

2. The Respondents/Defendants (hereinafter, ‘Defendants’) approached the Plaintiff bank for financing of the purchase of a vehicle under loan cum hypothecation scheme for a sum of Rs.11,50,000/-. The Defendants agreed to repay the loan amount in 47 equal monthly instalments (hereinafter, ‘EMI’) of Rs.31,070. The loan was duly sanctioned and was disbursed on 23rd July, 2012 to the dealer from whom the vehicle was to be purchased by the Defendants, after deducting usual processing fee and stamp duty charges. All the loan documents were executed by the Defendants.

3. Upon payment by the bank to the dealer, the Defendants secured a loan for the Vehicle Toyota Innova VX 7 seater bearing registration No. UP- 16-AK-6208. Various cheques were issued by the Defendants for payment of the instalments, which were dishonoured/returned unpaid with the remarks “Refer to drawer/insufficient funds”, when presented by the Plaintiff bank. Accordingly, the Plaintiff bank filed a suit for recovery for the sum of Rs.9,11,985.21.

4. In the suit, repeated attempts were made to serve the Defendants. Directions were passed on 7th May, 2014 appointing a representative of the Plaintiff bank as receiver with the direction to take possession of the vehicle from the Defendants along with an undertaking that the Plaintiff bank would not sell the vehicle without permission of the Court. Despite repeated attempts, the Defendants could not be served. Finally, the Defendants were served through publication but failed to appear. On 18th December 2014, the Defendants were proceeded ex-parte. The Plaintiff bank led evidence by way of affidavit of Mr. Mohit Grover, the authorized representative as PW-1. The said PW-1 exhibited, along with his affidavit, the following documents:

(i) Ex.PW-1/1 - Power of Attorney authorizing him to depose;

(ii) Ex.PW-1/2 - the original credit facility application form along with the terms and conditions of the loan;

(iii) Ex.PW-1/3 - Unattested deed of hypothecation;

(iv) Ex.PW-1/4 - irrevocable Power of Attorney;

(v) Ex.PW-1/5 - loan recall notice;

(vi) Ex.PW-1/6 - postal receipt;

(vii) Ex.PW-1/7 - statement of account duly certified under The Bankers’ Books Evidence Act, 1891 (hereinafter, ‘BBE Act’).

5. This statement of account is duly accompanied with a certificate under Section 65B (PW-1/8) of the Indian Evidence Act, 1872 (hereinafter, ‘Evidence Act’). On the basis of these documents, the Plaintiff bank prayed for a decree in the suit.

6. A perusal of the documents placed on record clearly establishes that the Plaintiff bank has taken all steps necessary to establish its case. The loan documents, which are filed in original, bear the signatures of the Defendants. The factum of release of the loan amount and the possession of the vehicle having been taken by the Defendants is not in dispute. Despite all the original documents being on record, the Trial Court proceeded on an erroneous assumption that the original loan recall notice dated 11th February, 2014, has not been placed on record and only a photocopy of the same has been placed on record. It is actually unfathomable as to how the loan recall notice, issued to the Defendants, could be produced in original by the Plaintiff bank. The original of the said notice would obviously be with the Defendants. This can hardly be a ground to dismiss the suit of the Plaintiff bank by adopting a technical approach.

7. Banks and financial institutions, which disburse loans to citizens, operate on the trust and faith that the citizens who avail of loans would pay back the same