On September 30, 2024, at the headquarters of the People's Court of Ha Giang City, the first instance public trial of the case accepted No. 03/2024/TLST-KDTM dated May 22, 2024 regarding Credit contract dispute and request for handling of mortgaged assets, according to the Decision to bring the case to trial No. 09/2024/QDXXST-KDTM dated September 6, 2024 between the parties:
Plaintiff: Joint Stock Commercial Bank L (formerly Joint Stock Commercial Bank B); head office address: Building L, No. X, Street T, Ward T, District H, Hanoi City.
Authorized representative: Mr. Tran Trung T; position: Debt settlement specialist; address: Joint Stock Commercial Bank B, Branch H, House No. x, Street N, Group x, Ward N, City H, Ha Giang Province; present.
(Decision No. 607/2024/QD-HG.XLN dated May 14, 2024 on authorization to participate in litigation and participate in civil judgment enforcement)
– Defendant: Ms. Nguyen Thi H; address: Group x, town Y, district Y, Ha Giang province; absent.
CASE CONTENT
In the petition dated April 23, 2024 and the statements during the settlement of the case, as well as at the first instance trial, the legal representative of the plaintiff Joint Stock Commercial Bank B, now renamed Joint Stock Commercial Bank L (hereinafter referred to as Bank L) stated:
On December 20, 2022, Bank L and Ms. Nguyen Thi H signed Credit Contract No.: HDTD62C2022178, the credit limit granted is 3,000,000,000 VND (Three billion VND) for the purpose of supplementing working capital for grocery business. The loan has the secured asset being the land use right for plot No. 4, BD map sheet, auctioned at Group 03 (market kiosk), area 69.3m2, at address: Group x, Y town, Y district, Ha Giang province, according to the Land Use Right Certificate (hereinafter referred to as GCNQSDD) No. BC291087, the number recorded in the GCN issuance book: CH00329, issued by the People's Committee of Y district, Ha Giang province on November 25, 2010 to Mr. Le Van H and Ms. Nguyen Thi H, registered for change on August 23, 2019 to inherit the land use right for Ms. Nguyen Thi H, according to the Mortgage Contract of land use right (hereinafter referred to as QSDD) and assets attached to land No.: 62C2020232/HĐTC.BĐS dated November 10, 2020 and the Document amending and supplementing the mortgage contract Land use rights and assets attached to land No. PL01-HDTC62C2020232 dated August 16, 2021 signed between Bank L, Branch H, Transaction Office Y and Ms. Nguyen Thi H. Immediately after signing the credit contract, Bank L disbursed the correct and full loan amount to Ms. Nguyen Thi H of VND 3,000,000,000 (Three billion VND). During the implementation of the contract, Ms. H did not fulfill her commitment, the loan was overdue. Bank L has repeatedly urged Ms. H to fulfill her debt repayment obligation, but to date, Ms. H has not fully paid off the debt to Bank L. Ms. H has only paid the principal of VND 1,100,001,694 and the interest of VND 20,657,297.
Therefore, Bank L filed a lawsuit requesting the People's Court of Ha Giang city to resolve:
1. Force Ms. Nguyen Thi H to fulfill her debt repayment obligation to Bank L according to Credit Contract No.: HDTD62C2022178 signed on December 20, 2022 between Bank L and Ms. Nguyen Thi H, the total debt amount as of September 30, 2024 is:
2,331,059,628 VND (Two billion three hundred thirty-one million fifty-nine thousand six hundred twenty-eight VND), of which: Principal is 1,899,998,306 VND, interest on unpaid principal is 41,200,237 VND, interest on overdue principal is 385,084,695 VND, late interest on unpaid principal is 4,776,390 VND. During the period of unpaid debt, Ms. Nguyen Thi H must continue to pay interest on the unpaid debt at the interest rate agreed upon by the parties in the credit contract and the signed debt acknowledgment contracts until the loan is fully paid.
2. In case Ms. Nguyen Thi H cannot repay the debt, Bank L has the right to request the competent civil enforcement agency to handle the mortgaged property according to the Mortgage Contract of Land Use Rights and Property Attached to Land No.:
62C2020232/HĐTC.BDS dated November 10, 2020 and Document amending and supplementing the mortgage contract of land use rights and assets attached to land No.: PL01-HĐTC62C2020232 dated August 16, 2021 signed between Bank L and Ms. Nguyen Thi H.
In the Minutes of the meeting dated August 27, 2024 and the process of resolving the case at the Court, the defendant Ms. Nguyen Thi H stated: She borrowed capital from Bank L as Bank L's petition was correct. However, due to difficult travel, Ms. H could not go to the Court to work. Ms. H agreed to repay the debt to Bank L, but currently she is unable to repay the debt, she agreed to let the Bank handle her mortgaged property to recover the debt. Ms. H confirmed that after her husband, Mr. Le Van H, died in 2018, she did not live together, registered to marry another person and all assets on the land were her private property.
During the process of resolving the case, the Court held a meeting to examine the submission, access, disclosure of evidence and mediation between the parties, but the defendant was duly summoned by the Court for the second time but still intentionally absent, falling into the case of a civil case that cannot be mediated according to the provisions of Article 207 of the Civil Procedure Code.
Prosecutor's statement at the trial:
– Regarding the proceedings: During the process of resolving the case from the time of acceptance until the time the Trial Panel deliberated, the Judge, the Trial Panel, and the Court Secretary had complied with the provisions of the Civil Procedure Code; the Plaintiff had complied with the provisions of the Civil Procedure Code; the Defendant had been properly served with the procedural documents by the Court, and was properly summoned for the second time, but was still absent from the trial.
– Regarding the settlement of the case: Request the Trial Panel to accept the entire lawsuit request of the plaintiff Bank L, forcing the defendant Ms. Nguyen Thi H to pay the plaintiff Bank L the principal and interest up to the time of trial (September 30, 2024) of: VND 2,331,059,628 (Two billion three hundred thirty-one million fifty-nine thousand six hundred twenty-eight dong), of which: Principal debt is VND 1,899,998,306, interest on unpaid principal is VND 41,200,237, interest on unpaid overdue principal is VND 385,084,695, late interest on unpaid interest on unpaid principal is VND 4,776,390 and interest arising after the time of trial until the debt is fully paid. In case Ms. H cannot repay the debt, the Bank has the right to request the handling of the mortgaged property according to the provisions of law. Regarding court fees and litigation costs: The Defendant must pay court fees and litigation costs according to the provisions of law.
JUDGMENT OF THE COURT
[1] Determining the legal relationship of the dispute and the jurisdiction of the Court: Plaintiff Bank L sued defendant Ms. Nguyen Thi H regarding a credit contract dispute and a request to handle mortgaged assets. Because Plaintiff Bank L and defendant Ms. Nguyen Thi H both have business registrations and the purpose of signing the contract is for profit, the dispute is determined to be a dispute arising in business and commercial activities, specifically a credit contract dispute and a request to handle mortgaged assets. The dispute arises from the activities of Bank L, branch H, located in city H, Ha Giang province; Plaintiff Bank L has the right to choose the Court where the branch is located to resolve the dispute. Pursuant to Clause 1, Article 30, Point b, Clause 1, Article 35, Point b, Clause 1, Article 40 of the Civil Procedure Code, the dispute is under the jurisdiction of the People's Court of Ha Giang city, Ha Giang province.
[2] Trial in absentia of the defendant: The People's Court of Ha Giang City has duly summoned the defendant Ms. Nguyen Thi H for the second time, but the defendant was still absent from the trial without reason. Pursuant to Point b, Clause 2, Article 227, Article 228 of the Civil Procedure Code, the Court conducted the trial in absentia of the defendant.
[3] Regarding the statute of limitations for filing a lawsuit: According to Article 319 of the Commercial Law: “The statute of limitations for filing a lawsuit applicable to commercial disputes is two years from the time when legitimate rights and interests are infringed, except for the case specified in Point e, Clause 1, Article 237 of this Law.” The date on which Bank L knew or should have known that its legitimate rights and interests were violated was July 29, 2023 (the first day after the due date for interest payment that Ms. Nguyen Thi H did not fulfill her debt payment obligation). Thus, the statute of limitations for filing a lawsuit over a credit contract dispute in this case is still valid.
[4] Regarding the request to repay principal and interest under the signed Credit Contract, the Trial Panel found that: Credit limit contract No.: HDTD62C2022178 dated December 20, 2022 signed between Bank L and Ms. Nguyen Thi H stated: Bank L granted Ms. Nguyen Thi H a credit limit of VND 3,000,000,000 (Three billion VND); loan purpose: Supplementing working capital for grocery business. The validity period of the credit limit is 12 months from December 20, 2022 to December 19, 2023; the time the Bank disburses is within the term of the credit limit; The loan term of the debt amount in each loan is calculated from the next day of the date the Bank disburses the loan to the borrower until the end of the day the borrower must repay the debt and is recorded on the Disbursement Request Form and Debt Acknowledgement Agreement but not more than 05 months; the loan term of each time may exceed the term of the credit limit. The specific loan interest rate is recorded on the Disbursement Request Form and Debt Acknowledgement Agreement, calculated according to the provisions of the contract and calculated on the basis of a year of 365 days. Method of applying and adjusting interest rates: The loan interest rate is adjusted periodically every 03 months according to the regulations of the Bank. If the borrower is late in paying the principal and interest, the overdue principal interest rate must be paid at 150% the loan interest rate within the term at the time of transferring the overdue debt, the late interest rate agreed by the two parties is 10%/year. Regarding the repayment of principal and interest: The principal is paid at the end of the term; interest is paid on the 28th of each month. In addition, there are agreements on fees and costs, disbursement, debt repayment, loan security measures, debt repayment restructuring and overdue debt transfer, loan termination and early loan recovery, rights and obligations of the borrower, rights and obligations of the Bank, penalties for violations, etc. [5] Credit limit contract No.: HDTD62C2022178 dated December 20, 2022 signed between Bank L and Ms. Nguyen Thi H in accordance with the provisions of the Law on Credit Institutions 2010, amended and supplemented in 2017; Circular No. 39/2016/TT-NHNN dated December 30, 2016 regulating lending activities of credit institutions and foreign bank branches to customers; Meeting the conditions for the validity of civil transactions as prescribed in Article 117 of the Civil Code are legal documents that come into force at the time of signing the credit contract. Pursuant to Clause 13.2, Article 13 of the Credit Contract, Article 401 of the Civil Code, the credit contract comes into force from the date of signing. From the time the contract comes into force, the parties must exercise their rights and obligations towards each other as committed.
[6] Pursuant to the signed credit contract, on June 5, 2023, LPBank disbursed to Ms. Nguyen Thi H the entire amount of VND 3,000,000,000 (Three billion VND). Disbursement request and debt acknowledgment contract No. 62C2022178/02 dated June 5, 2023 shows: Debt acknowledgment amount: VND 3,000,000,000 (Three billion VND); disbursement date: June 5, 2023; loan term: 05 months, from June 6, 2023 to November 5, 2023; Loan interest rate: 10.6%/year in the first 3 months, from the 4th month, the floating interest rate will be applied according to Notice No. 5375/2023/TB-L issued on April 1, 2023; overdue principal interest rate: 150% in-term loan interest rate at the time of overdue debt transfer; late interest rate: Agreed by both parties at 10%/year; principal repayment period: Principal paid at the end of the period; interest payment period: On the 28th of each month, according to the actual principal balance; the first repayment period starts on June 28, 2023; the last repayment date: November 5, 2023.
[7] Ms. Nguyen Thi H has paid the total debt to Bank L of:
1,120,658,991 VND (One billion one hundred twenty million six hundred fifty-eight thousand nine hundred ninety-one VND), of which the principal is: 1,100,001,694 VND, the interest is: 20,657,297 VND. During the performance of the contract, Ms. Nguyen Thi H violated her debt repayment obligation to the Bank, Bank L transferred all of Ms. H's debt to overdue debt from August 7, 2023, issued Decision No. 1337/2023/TB-HG.HTHĐ dated August 15, 2023 to recover all of Ms. Nguyen Thi H's loans in advance. Up to now, although the agreed loan term in the credit contract has expired, Ms. Nguyen Thi H has not yet paid the remaining principal of: 1,899,998,306 VND. Therefore, the request of Bank L to sue Ms. Nguyen Thi H to pay the unpaid principal amount is well-founded, in accordance with the provisions of Articles 18 and 21 of Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the State Bank of Vietnam regulating lending activities of credit institutions and foreign bank branches to customers; Articles 352 and 466 of the Civil Code, so it should be accepted.
[8] Regarding Bank L's request to force Ms. Nguyen Thi H to pay the unpaid principal interest of VND 41,200,237, the unpaid overdue principal interest of VND 385,084,695, the late interest on the unpaid principal interest of VND 4,776,390, the total interest amount of VND 431,061,322 (Four hundred thirty-one million sixty-one thousand three hundred twenty-two dong), the Trial Panel finds that Bank L's request is in accordance with the provisions of Articles 91 and 95 of the Law on Credit Institutions 2010, amended and supplemented in 2017; Clause 4, Article 13, Articles 20 and 21 of Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the State Bank of Vietnam regulating lending activities of credit institutions and foreign bank branches to customers; Articles 7 and 8 of Resolution No. 01/2019/NQ-HDTP dated January 11, 2019 of the Council of Judges of the Supreme People's Court guiding the application of a number of legal provisions on interest, interest rates, and penalties for violations, should be accepted.
[9] Thus, the defendant Ms. Nguyen Thi H must pay the plaintiff Bank L the principal and interest as of September 30, 2024: VND 2,331,059,628 (Two billion three hundred thirty-one million fifty-nine thousand six hundred twenty-eight dong), of which: Principal is VND 1,899,998,306, interest on unpaid principal is VND 41,200,237, interest on unpaid overdue principal is VND 385,084,695, late interest on unpaid interest on unpaid principal is VND 4,776,390.
[10] Regarding Bank L's request to force Ms. Nguyen Thi H to continue to pay interest on the unpaid debt at the interest rate agreed upon by the parties in the credit contract and the signed debt acknowledgment contracts until the loan is fully paid: Considering that this request of Bank L is consistent with the provisions of Point a, Clause 1, Article 13 of Resolution No. 01/2019/NQ-HDTP dated January 11, 2019 of the Council of Judges of the Supreme People's Court guiding the application of a number of provisions of the law on interest, interest rates, and penalties for violations, it should be accepted.
[11] Regarding the request to handle mortgaged assets in case the defendant cannot repay the debt, the Trial Panel found that: To ensure the performance of obligations, Bank L and Ms. Nguyen Thi H signed the Mortgage Contract of Land Use Rights and Assets Attached to Land No.: HDTC62C2020232 dated November 10, 2020 and the Document amending and supplementing the Mortgage Contract of Land Use Rights and Assets Attached to Land No.: PL01 - HDTC62C2020232 dated August 16, 2021, which was certified at the People's Committee of Y town, Y district, Ha Giang province. Accordingly, Ms. Nguyen Thi H agreed to mortgage the property which is the land use right and property attached to the land according to the land use right certificate No. BC 291087, the certificate issuance book number: CH00329 issued by the People's Committee of Y district, Ha Giang province on November 25, 2010 to Mr. Le Van H and Ms. Nguyen Thi H, registered the change on August 23, 2019 to inherit the land use right for Ms. Nguyen Thi H, specifically: Land plot No. 4; map sheet No. BD. Auction group 3 (market kiosk); land plot address: Group x, Y town, Y district, Ha Giang province; area: 69.3m2; form of use: Private; purpose of use: Urban residential land; term of use: Long-term.
[12] Mortgage contract on land use rights and assets attached to land No. HDTC62C2020232 dated November 10, 2020 and Document amending and supplementing the Mortgage contract on land use rights and assets attached to land No. PL01-HDTC62C2020232 dated August 16, 2021 signed between Bank L and Ms. Nguyen Thi H in accordance with the provisions of the Civil Code, the 2013 Land Law (the law in effect at the time of signing the contract) and Decree No. 21/2021/ND-CP dated March 19, 2021 of the Government stipulating the implementation of the Civil Code on ensuring the performance of obligations, meeting the conditions for the validity of civil transactions as prescribed in Article 117 of the Civil Code. Pursuant to Article 319 of the Civil Code, Article 22 of Decree No. 21/2021/ND-CP dated March 19, 2021 of the Government stipulating the implementation of the Civil Code on securing the performance of obligations, the mortgage contract takes effect from the time of notarization. From the time the contract takes effect, the parties must exercise their rights and obligations to each other as committed. The request of Bank L to handle the secured assets in case Ms. Nguyen Thi H cannot repay the debt is in accordance with the agreement of the parties in the signed mortgage contract, in accordance with the provisions of Articles 15 and 21 of Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the State Bank of Vietnam stipulating lending activities of credit institutions and foreign bank branches to customers; Articles 299, 320 and 323 of the Civil Code; Articles 49 and 52 of Decree No. 21/2021/ND-CP dated March 19, 2021 of the Government stipulating the implementation of the Civil Code on security for performance of obligations should be accepted.
[13] During the process of resolving the case, the defendant did not object to the plaintiff's request, admitted to borrowing capital from Bank L; did not provide or submit documents or evidence to the Court.
[14] Regarding court fees: During the process of resolving the case at the Court, the defendant Ms. Nguyen Thi H did not submit a request for exemption or reduction of court fees. Pursuant to Articles 144 and 147 of the Civil Procedure Code, Article 26 of Resolution No. 326/2016/UBTVQH14 dated December 30, 2016 of the Standing Committee of the National Assembly stipulating the levels of collection, exemption, reduction, collection, payment, management and use of court fees and charges, since all of the plaintiff's requests were accepted by the Court, the defendant Ms. Nguyen Thi H must pay the first-instance civil court fees for business and trade disputes with a threshold value, specifically: VND 72,000,000 + 2% x VND 331,059,628 = VND 78,621,193 (Seventy-eight million six hundred twenty-one thousand one hundred ninety-three dong). Refund to the Plaintiff Bank L the entire amount of the advance payment of the first instance civil court fees paid, which is VND 38,109,275 (Thirty-eight million one hundred and nine thousand two hundred and seventy-five dong) according to the Receipt of advance payment of court fees and charges No. 0000394 dated May 22, 2024 of the Civil Judgment Enforcement Office of Ha Giang city, Ha Giang province.
[15] Regarding litigation costs: Pursuant to Articles 157 and 158 of the Civil Procedure Code, the defendant Ms. Nguyen Thi H must bear the costs of on-site examination and appraisal. Because the plaintiff Bank L has paid in advance the costs of on-site examination and appraisal, Ms. Nguyen Thi H is responsible for reimbursing Bank L for the costs of on-site examination and appraisal in the amount of: VND 5,000,000 (Five million VND).
[16] Regarding the right to appeal: The parties have the right to appeal according to the provisions of Articles 271 and 273 of the Civil Procedure Code.
For the above reasons,
DECISION
Pursuant to Clause 1, Article 30, Point b, Clause 1, Article 35, Point b, Clause 1, Article 40, Articles 144, 147, 157, 158, 227, 228, 235, 266, 271 and 273 of the Civil Procedure Code;
Pursuant to Article 319 of the Law on Commerce;
Pursuant to Clause 2, Article 91, Article 95 of the Law on Credit Institutions 2010, amended and supplemented in 2017;
Pursuant to Articles 4, 5, 13, 15, 18, 20, 21 and 23 of Circular 39/2016/TT-NHNN dated December 30, 2016 of the State Bank of Vietnam regulating lending activities of credit institutions and foreign bank branches to customers;
Pursuant to Article 179 of the 2013 Land Law;
Pursuant to Articles 116, 117, 280, 299, 307, 317, 318, 319, 320, 323, 352, 357, 401, 466, 500, 501 and 502 Civil Code;
Pursuant to Articles 7, 8 and 13 of Resolution 01/2019/NQ-HDTP dated January 11, 2019 of the Council of Judges of the Supreme People's Court guiding the application of a number of legal provisions on interest, interest rates, and penalties for violations;
Pursuant to Articles 10, 22, 49 and 52 of Decree 21/2021/ND-CP dated March 19, 2021 of the Government stipulating the implementation of the Civil Code on ensuring performance of obligations;
Pursuant to Article 26 of Resolution 326/2016/UBTVQH14 dated December 30, 2016 of the Standing Committee of the National Assembly stipulating the levels of collection, exemption, reduction, collection, payment, management and use of court fees and charges.
1. Accept all claims of the plaintiff L. Joint Stock Commercial Bank.
1.1. The defendant Ms. Nguyen Thi H is required to pay the plaintiff Joint Stock Commercial Bank L the total principal and interest as of September 30, 2024 as follows: 2.331,059,628 VND (Two billion three hundred thirty-one million fifty-nine thousand six hundred twenty-eight dong), in which: Principal is 1,899,998,306 dong, interest on unpaid principal within the term is 41,200,237 dong, interest on unpaid overdue principal is 385,084,695 dong, late interest on unpaid interest on unpaid principal within the term is 4,776,390 dong.
From the next day of the first instance trial until the execution of the judgment, the party subject to the execution of the judgment shall also pay interest on the amount remaining to be executed at the interest rate agreed upon by the parties but in accordance with the provisions of law. In case the parties have agreed in the credit contract on the adjustment of the lending interest rate from time to time by the lending bank, the interest rate that the borrower must continue to pay to the lending bank according to the Court's decision shall also be adjusted in accordance with the adjustment of the lending bank's interest rate.
1.2. In case Ms. Nguyen Thi H fails to properly fulfill her debt repayment obligation, L Joint Stock Commercial Bank has the right to request the competent civil enforcement agency to handle the mortgaged property in accordance with the provisions of law. The mortgaged property is the land use right and property attached to the land for plot number: 4; map sheet number: BĐ. Auction group 3 (market kiosk); land plot address: Group x, town Y, district Y, Ha Giang province; area: 69.3m2; form of use: Private; purpose of use: Urban residential land; term of use: Long-term; According to the Certificate of land use rights, house ownership rights and assets attached to land No. BC 291087, registration number of the Certificate: CH00329 issued by the People's Committee of Y district, Ha Giang province on November 25, 2010, registered for change on August 23, 2019 to inherit land use rights for Ms. Nguyen Thi H.
In case the amount obtained from the disposal of the mortgaged property after paying the costs of preservation, seizure and disposal of the mortgaged property is greater than the value of the secured obligation, the difference shall be returned to Ms. Nguyen Thi H. In case the amount obtained from the disposal of the mortgaged property after paying the costs of preservation, seizure and disposal of the mortgaged property is less than the value of the secured obligation, Ms. Nguyen Thi H shall be responsible for continuing to repay the debt to L Joint Stock Commercial Bank until the debt is fully paid.
2. Regarding court fees: Defendant Ms. Nguyen Thi H must pay the first instance civil court fees for business and commercial disputes with a threshold amount of 78,621,193 VND (Seventy-eight million six hundred twenty-one thousand one hundred and ninety-three dong). Refund to the plaintiff Bank L the entire amount of advance payment of first-instance civil court fees paid, which is 38,109,275 dong (Thirty-eight million one hundred and nine thousand two hundred and seventy-five dong) according to the Receipt of advance payment of court fees and charges No. 0000394 dated May 22, 2024 of the Civil Judgment Enforcement Office of Ha Giang city, Ha Giang province.
3. Regarding litigation costs: Defendant Ms. Nguyen Thi H must bear all costs of on-site review and appraisal. Because the Plaintiff Joint Stock Commercial Bank L has paid in advance the costs of on-site review and appraisal, Ms. Nguyen Thi H is responsible for reimbursing Joint Stock Commercial Bank L for the costs of on-site review and appraisal in the amount of: 5,000,000 VND (Five million dong).
From the date of the judgment enforcement request of the judgment debtor until the completion of the judgment enforcement, the party subject to the judgment enforcement must also pay interest on the remaining amount subject to enforcement at the interest rate prescribed in Article 357 and Article 468 of the 2015 Civil Code, unless otherwise provided by law.
4. Regarding the right to appeal: The legal representative of the plaintiff present at the trial has the right to appeal the judgment of first instance within 15 days from the date of judgment. The defendant absent from the trial has the right to appeal the judgment of first instance within 15 days from the date of receiving the judgment or the judgment being posted.
In case the judgment or decision is enforced according to the provisions of Article 2 of the Law on Civil Judgment Enforcement, the person entitled to civil judgment enforcement and the person subject to civil judgment enforcement have the right to agree on judgment enforcement, the right to request judgment enforcement, voluntarily enforce the judgment or be forced to enforce the judgment according to the provisions of Articles 6, 7, 7a and 9. Law on Civil Judgment Enforcement; the statute of limitations for judgment enforcement is implemented according to the provisions of Article 30 of the Law on Civil Judgment Enforcement.
