Patna High Court
State Bank Of India & Anr vs M/S Singhania Roller Flour Mil on 20 April, 2011
Author: Mungeshwar Sahoo
Bench: Mungeshwar Sahoo
FIRST APPEAL No. 42 OF 2002
Against the judgment and decree dated 20.10.2001 passed by Sri
Nakul Chand Gupta, 9th Subordinate Judge, Patna in Money Suit No. 18
of 1998.
STATE BANK OF INDIA & ORS. .......... Defendants-Appellants
Versus
M/S SINGHANIA ROLLER FLOUR MILS & ORS. ......... Plaintiffs-Respondents
********
For the Appellant : Mr. Sidheshwari Prasad Singh, Sr. Advocate
Mr. Kaushlendra Kumar Sinha, Advocate
Mr. Abhay Kumar, Advocate
Mr. Sunil Kumar Singh, Advocate
For the Respondent : None
Dated : 20th day of April, 2011
PRESENT
THE HON'BLE MR. JUSTICE MUNGESHWAR SAHOO
JUDGMENT
Mungeshwar The defendants have filed this First Appeal against the
Sahoo, J.
impugned judgment and decree dated 20th October, 2001 passed by Sri
Nakul Chand Gupta, the learned 9th Subordinate Judge, Patna in Money
Suit No.18 of 1998 decreeing the plaintiff-respondent no. 1's Money Suit
for a sum of Rs.2,06,63,600/-.
(2) The plaintiffs filed the aforesaid Money Suit alleging that
the appellant was in legal obligation to provide working capital to the
plaintiff and for non-providing the same, the appellant is liable to pay
damages suffered by plaintiff to the extent of Rs.2,06,63,600/-.
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(3) The plaintiff's case in short is that M/S Singhania Roller
Flour Mills Pvt. Ltd. is a company registered under Indian Companies Act.
For financial assistance, the plaintiff approached Bihar State Financial
Corporation after being registered as small scale industries. Bihar State
Financial Corporation (hereinafter referred to as B.S.F.C.) sanctioned
Rs.38 lacs on 21.05.1988 with condition that working capital finance
should be assured by banking institutions on need based basis.
Therefore, the plaintiff approached the appellant, State Bank of India for
financing of working capital. The State Bank of India issued an
assurance letter dated 16.05.1989 promising to grant working capital
finance on need based basis. Thereafter, B.S.F.C. started disbursing the
term loan amount of Rs.38 lacs after execution of necessary documents
and disbursed Rs.23,04,000/- upto 31.03.1991 in installment. The
plaintiff utilized the same in construction of the building and machinery
etc. The plaintiff was informing about the progress to the Bank and
when B.S.F.C. asked the defendant to procure sanction letter from the
Bank, the plaintiff approached Bank for sanction of working capital. On
28.03.1992, the Bank issued a letter stating that because of subsequent
event, the industries for which the plaintiff set off the flour Mills is not
viable and the working capital in favour of plaintiff became obsolete. The
Bank issued this letter because plaintiff has not fulfilled illegal demand of
gratification of Bank Authorities. Because of this act of Bank, B.S.F.C.
stopped disbursement of further installment. Thereafter, B.S.F.C. wrote
letter to the Bank and requested to fulfill the commitment. The plaintiff
also asked the Bank to reconsider the matter. Ultimately, the matter
was referred to Bihar Industrial Technical Consultancy Organization,
Patna and thereafter, the Bank sanctioned Rs.17 lacs as cash credit
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facility on 01.03.1993 against the security and hypothecation of the raw
materials and demanded collateral security etc. Because of this delayed
action of the Bank, the plaintiff was compelled to revise his project
raising the term loan amount of Rs.38 lacs to Rs.60 lacs and presented
before B.S.F.C. Sanction letter of term loan was issued on 24.03.1995
mentioning that Rs.23.4 lacs was outstanding of the previous loan
Account No.1, Rs.20.23 lacs was in Account No.2 and Rs.16.73 lacs was
adjusted towards interest accrued upto 28.02.1995. If the defendant,
first party, appellant had sanctioned working capital as agreed upon
project would have been completed within the period and there would
have no increase in project cost and unnecessary burden of heavy
interest upon the plaintiff. In 1995, the project was completed and came
in trial production. Thereafter, the defendant Bank was asked to provide
working capital as promised and agreed earlier but the defendant, first
party, appellant Bank asked the plaintiff to regularize other loan account
of Director, Managing Director of the company before providing working
capital to the company. The plaintiff has separate legal identity and is
not liable for the individual act of the Director and Managing Director.
The further case is that the State Bank of India with intention to get
illegal gratification did not provide working capital on illegal grounds and
also wrote letters to other Nationalized Bank for not to provide any loan
to the plaintiff, company. Due to this act of the State Bank of India, the
plaintiff suffered heavy loss. If plaintiff, company was not assured for
providing working capital, the plaintiff would not have approached
B.S.F.C. for loan. The plaintiff detailed the amount of claim and damages
in the plaint total being Rs.2,06,63,600/-. The detail of the same is re-
produced herein-below:
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SCHEDULE OF CLAIM
1. Outstanding term loan amount towards
Bihar State Financial Corporation being
Rs.40,65,465.00 plus Rs. 38,70,771.00
interest component as on 31.3.96 Rs.79,36,236.00
2. Margin Money/Capital investment drawn
from own or creditors sources as on
31.3.96. Rs.16,00,000.00
3. Interest on above investment from
1.4.92(when State Bank of India first
backed out, to again turn around)
to 31.3.96 @ 18% p.a. Rs. 11,52,000.00
Total: Rs. 1,06,88,236.00
4. Interest on the above amount from
1.4.96 to 30.7.98 @ 18% p.a. Rs.48,35,364.000
5. Projected profit/gains @ 6,000/- per
Day from 1.8.96 till 30.7.98 left un-
Recovered/unavailed on account of Defendant
1st party(Total 730 days) Rs.43,80,000.00
6. Mental agony from 1.4.92 to 30.7.98
@ Rs.10,000.00 per month (Total 76 months) Rs.7,60,000.00
Total: Rs.2,06,63,600.00
(Rupees Two crores six lacs sixty three thousand six hundred only).
(4) The defendant, second party i.e. B.S.F.C. appeared and
filed written statement alleging that the plaintiff approached for term
loan for establishment of Roller Flour Mills and after verification, B.S.F.C.
sanctioned Rs.38 lacs as term loan. There was a pre requisite that the
plaintiff has to procure assurance letter from nationalized Bank for
working capital. If assurance letter for working capital was not obtained,
the term loan would not have been sanctioned or disbursed to the
plaintiff. The plaintiff obtained the assurance letter and then the loan
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was sanctioned to the plaintiff and disbursed. In the meantime, the
State Bank of India informed B.S.F.C. in the year 1992 that project of
Roller Flour Mills in Bihar are not feasible and viable. Therefore, working
capital will not be provided to the plaintiff. Due to this letter, B.S.F.C.
stopped the release of further installment of loan. Subsequently, the
project came to trial production but no working capital was provided by
the Bank.
(5) The defendant, first party, appellant, State Bank of India
filed a contesting written statement. The appellant's case in short is that
the plaintiff has got no cause of action and the suit has been filed with a
view to have illegal gain. The Bank being the financial institution always
ready and willing to advance money to the company if they come with
clean hands. The Banks are custodian of public money and therefore,
they have to maintain financial discipline and norms of the Bank specially
the guidelines of the Reserve Bank of India. In the year 1988-89, there
was good relation of creditor and debtor with the plaintiff and Bank but
due to callous attitude of the Directors of the company, the Bank was
compelled to drop the idea to advance loan. Moreover, the assurance
does not give any authority or legal right to claim release of fund. There
was no contract nor any paper has been executed by the plaintiff nor any
documentation was there entitling plaintiff to claim financial help. The
Directors of the plaintiff, company are enjoying the loan from this Bank
in relation to M/S Anupam Udyog, M/S Swastic Engineering and M/S
Shree Medicals. These firms are not running smoothly and for recovery
of the loan amount of Rs.65 lacs, the appellant, Bank has already filed
cases before Debt Recovery Tribunal, Patna. At paragraph 18 of the
written statement, the details about the case and amount involved has
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been mentioned. According to the circular of the Bank, if an account
becomes N.P.A.(Non Performing Account), the other account
automatically becomes bad and no further advancement can be made.
When this fact came to the notice, the Bank restrained itself to grant
fresh loan and the plaintiff cannot compel the Bank to grant loan. In
spite of repeated request, the Directors of the plaintiff, company who
were the proprietors of other units did not take any steps to regularize
the account and, therefore, the appellant was compelled to reconsider
the proposal for sanctioning loan to the plaintiff. The Punjab National
Bank requested the State Bank of India, Bhagalpur branch to inform
about the integrity of the Directors of the plaintiff, company and,
therefore, the branch of the State Bank replied by letter dated
24.05.1996 and also issued letter to the several branches and Bank
which clearly shows that the appellant was not at all willing to extend
any financial assistance to the plaintiff. The Bank is custodian of public
money which can be utilized only after due enquiry and consolidation in
order to protect the interest of Bank and the plaintiff cannot as a matter
of right claim financial assistance. The Central Bank of India has also
filed a case for recovery of Rs.8 lacs against Anand Singhania and
Vishwanath Singhania who are related with the Directors of the plaintiff.
(6) On the basis of the above pleadings of the parties, the
following issues were framed by the learned Court below:
I. Is the suit maintainable as framed?
II. Has the plaintiff got cause of action for the suit?
III. Is the suit time barred?
IV. Has Court jurisdiction to entertain the suit?
V. Whether defendant 2nd party sanctioned term loan to plaintiff on the
basis of assurance letter of defendant 1st party?
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VI. Whether there was valid contract between plaintiff and defendant 1st
party for providing working capital?
VII. Whether the plaintiff under took liabilities from B.S.F.C. on the
promise given by defendant 1st party?
VIII. Whether the defendant 1st party malafidly and illegally back out by
using false pretext from its commitment?
IX. Whether the plaintiff sustained loss, damages and injury occasioned
by breach of promised by defendant 1st party?
X. Is the plaintiff entitled for the relief as claimed?
(7) After trial, the learned Court below came to the conclusion
that the plaintiff, company would not have entered into an agreement for
any term loan if there was no promise by the defendant first party,
appellant. The burden is upon the appellant to prove that refusal of
working capital to the plaintiff was legal and justified. The learned Court
below also found that refusal of working capital by the defendant Bank to
plaintiff is illegal. The learned Court below also found that issuance of
assurance letter by the defendant first party to the plaintiff is a contract
and if commitment is not fulfilled without any valid reason, the plaintiff is
entitled for damages and loss suffered by it. While deciding issue no.9,
the learned Court below found that the plaintiff is not entitled for mental
agony because the plaintiff is a juristic person vide paragraph 35. At
paragraph 36, the learned Court below held that the damages as
projected profit of Rs.43,80,000 claimed by the plaintiff is imaginary and
unfounded. At paragraph 37, the learned Court below held that the
plaintiff is entitled for damages mentioned in item nos.1 to 4 of the
Schedule of the Plaint in part. At paragraph 38, the learned Court below
held that plaintiff is not entitled to realize the amount of marginal money
and its interest and the plaintiff is entitled to realize damages @ Rs.200
per day and accordingly, the suit was decreed in part with cost.
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(8) The learned senior counsel Mr. Siddheshwari Prasad Singh
appearing on behalf of the appellant submitted that the learned Court
below has not properly appreciated the facts of the case and has wrongly
held that there was a concluded contract between the parties. The
learned counsel further submitted that the learned Court below has mis-
understood the contents of the letter dated 16.05.1989 and held that it is
a promise to advance working capital to the plaintiff. The learned
counsel further submitted that although the letters dated 16.05.1989 and
the sanction letter dated 02.03.1993 are subjects to compliance of the
terms and conditions incorporated therein, the learned Court below mis-
construed the said letters and held that there was a valid contract. By
the said letter dated 16.05.1989(Ext. 3/G), the Bank has simply
intimated to the plaintiff that the Bank shall be able to grant the working
capital within the framework of working norms of Bank and not otherwise
and, therefore, the said letter was not absolute assurance letter in favour
of the plaintiff. The learned counsel further submitted that on the basis
of said letter, the plaintiff is not entitled to compel the Bank to sanction
loan unless the necessary requirement is fulfilled by the plaintiff. There
were sufficient materials produced before the Court below which were
subsequent to the letter dated 16.05.1989 which are sufficient evidence
to doubt the credibility, honesty, integrity of the proprietor and Managing
Director of the plaintiff, company which are sufficient to refuse
advancement of working capital. The learned counsel further submitted
that the learned Court below has misconstrued the letter dated
02.03.1993(Ext. 3/J) issued by the Bank to the plaintiff sanctioning
Rs.17 lacs to be the valid contract. The learned counsel further
submitted that the plaintiff was specifically required to execute the
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necessary security documents along with guarantors and also to sign the
duplicate copy of the agreement and returned the same to the Bank but
till 15.11.1996, the plaintiff neither returned the duplicate copy of the
agreement and letter to the Bank agreeing inter alia to comply the terms
and conditions of the sanction letter dated 02.03.1993 nor did he
approached the Bank and offered to execute necessary loan documents.
In the meantime, the validity of the sanction letter expired after expiry of
one year. The appellant was justified in refusing to advance working
capital when the Bank was satisfied that providing the financial
accommodation to the plaintiff's firm was not going to serve any useful
purpose. The learned Court below could not have compelled the Bank to
provide financial assistance. On these grounds, the learned counsel
submitted that the impugned judgment and decree are liable to be set
aside and the plaintiff's suit be dismissed with cost. At the time of
hearing of this First Appeal, nobody appears on behalf of the
respondents.
(9) In view of the above submission of the learned counsel for
the appellant and in view of the impugned judgment and decree and the
materials available on record, the points arise for consideration is as to
"whether the plaintiff is entitled for the reliefs claimed in the plaint" and
"whether the State Bank of India, appellant is liable to pay the damages
claimed by the plaintiff" and "whether the impugned judgment and
decree are sustainable in the eye of law?"
(10) In this case, although, the B.S.F.C. is party defendant, the
plaintiff has not claimed any relief against B.S.F.C. The claim of the
plaintiff against State Bank of India i.e. the appellant is that when the
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plaintiff approached B.S.F.C. for financial assistance for establishment of
industries as Roller Flour Mills for manufacturing Atta, Maida, Sujji, Bran,
the B.S.F.C. sanctioned Rs.38 lacs on condition that working capital
finance be assured by banking institution on need based basis.
Thereafter, the plaintiff approached the State Bank of India, the
appellant and the appellant issued letter dated 16.05.1989 promising to
grant capital finance on need based basis. Therefore, the main claim of
the plaintiff is that by this letter dated 16.05.1989, the State Bank of
India assured the plaintiff to advance working capital. From perusal of
the impugned judgment, it appears that the learned Court below also
relied upon the other letter i.e. letter dated 02.03.1993 by which Rs.17
lacs was sanctioned in favour of the plaintiff. On the basis of these two
letters i.e. dated 16.05.1989(Ext. 3/G) and dated 02.03.1993(Ext. 3/J),
the learned Court below came to the conclusion that there was a valid
contract between the plaintiff and the appellant.
(11) From perusal of Ext. 3/G, the letter dated 16.05.1989, it
appears that the letter was issued by the State Bank of India in favour of
the plaintiff in the following term:
"Dear Sir,
With reference to your letter dated
11.05.1989, we have to advise that as per your application for working capital loan, the Bank shall be able to grant the same to meet your need based requirement within the framework of banking norms and not otherwise subject to the disbursement of term loan from the B.S.F.C."
(12) From the above letter, it appears that application was filed by the plaintiff before the Bank and the Bank has written this letter giving assurance that the Bank will be able to advance loan within the framework of banking norms and not otherwise. Therefore, unless the 11 banking norms are fulfilled which was condition precedent for advancement of loan, the Bank could not have advance the loan to the plaintiff. Therefore, it is the duty of the plaintiff to have fulfilled the norms of the Bank prior to obtaining the loan. On the basis of this letter (Ext. 3/G), it cannot be said that there had been a concluded contract between the Bank and the plaintiff. Some conditions have been mentioned in this letter i.e. the norms of the Bank. Everybody knows that Banks are financial institution and they always remained ready and willing to advance loan to the company but for that purpose, the loanee must fulfill the terms and conditions of the Bank and entered into an agreement. The Bankers are custodian of public money and, therefore, prior to disbursing loan, the Bank must satisfy that the loanee is capable of returning the public money to the Bank. Therefore, in matters regarding the advancement of loan, the Bank is the best institution to safeguard its interest and the Court should not interfere and substitute its own judgment. The Court should restrain themselves from compelling the financial institutions to advance loan to anyone particularly when after considering the facts and materials, the Bank has already refused to advance loan. In the present case, in no stretch of imagination it can be said that on the basis of this letter (Ext. 3/G), the plaintiff got a right to compel the Bank to sanction loan. It is not at all a concluded contract between the plaintiff and the Bank.
(13) P.W.6, the Director of the plaintiff, company has stated that the Bank has illegally refused to provide working capital to the plaintiff, company. The officers of the Bank were demanding illegal gratification and when they refused to their illegal demand, the Bank officers obstructed the company in its business and denied working 12 capital on baseless ground. The plaintiff, company is not connected with the other units Shree Medical, Anupam Udyog and Swastic Engineering. From perusal of the impugned judgment, it appears that at paragraph 27, the learned Court below proceeded to decide the question as to whether the plaintiff was refused working capital on valid grounds. So far this question is concerned, it may be reiterated here that there are certain norms and rules which are to be observed prior to sanctioning loan by the Bank. For sanctioning loan, different factors are to be considered by the Bank and this satisfaction is the subjective satisfaction of the Bank. The Court cannot substitute its satisfaction. It further appears that the learned Court below assumed that the Bank assured the plaintiff to provide working capital by Exhibit-3/G and Exhibit-3/H. We have seen Exhibit-3/G and have found that it is not at all a contract between the parties and, therefore, it cannot be enforced against the Bank. It is only an information letter issued by the Bank intimating the plaintiff that loan can be advanced within the framework of banking norms and not otherwise. Therefore, the advancement of loan was conditional and not absolute.
(14) Now let us see Exhibit-3H, the letter dated 22.09.1990. This letter reads as follows:
"Dear Sir, Proposal for advance for working capital loan.
With reference to your letter dated 17th September, 1990, your proposal for loan for working capital for your proposed unit is under active consideration and you will be advised at the appropriate time."13
(15) Therefore, by this letter also, it appears that the appellant informed the plaintiff that the application for loan of working capital is under active consideration. It is therefore, clear that till that date, there had been no contract between the parties. The application for loan was under active consideration with the Bank. Now, therefore, on the basis of Exhibit-3/H also, it cannot be said that the Bank was duty bound to advance working capital to the plaintiff. As has been informed to the plaintiff by Exhibit-3/G, the loan was to be advanced within the norms of the Bank. From perusal of Exhibit-3/I, it appears that the Bank informed the plaintiff after examining the application for loan that the performances of Roller Flour Mills in Bihar are not promising and, therefore, the financing of such activity is not viable. The commitment letter issued upto 2 ½ years back is now obsolete in view of the changed situation. This letter is dated 20.03.1992. It may be mentioned here that the Exhibit-3/G was issued on 16.05.1989. During this period, only there are communications by letters between the parties. However, it appears that subsequently the Controlling Office sanctioned a stock cash credit limit of Rs.17 lacs by terms of letter dated 02.03.1993(Exhibit- 3/J). From perusal of the said letter, it appears that the said Rs.17 lacs was sanctioned subject to completion of the terms and conditions mentioned in the said letter such as hypothecation of raw materials and finish goods, second charge over plant and machinery to be purchased out of B.S.F.C. finance mortgage of land measuring 9.74 katha with boundary valued at Rs.15.50 lacs by the branch which stands in the name of Sri Sitaram Singhania one of the Directors of the company and other conditions. At paragraph 14 of the said letter, the plaintiff was requested to sign on the duplicate copy of the letter having agreed upon 14 the aforesaid terms and conditions and returned to the Bank. Therefore, this letter was also not a letter for disbursement of loan. This letter only indicate that the Bank had sanctioned loan and the plaintiff was required to fulfill conditions and if he fulfills the said conditions and returned the duplicate letter signing thereon and also after entering into agreement as mentioned in detail in the said letter, the loan would have been disbursed in favour of the plaintiff. There is nothing on record to show that the plaintiff ever fulfilled the conditions or entered into an agreement hypothecating the stocks with the Bank or mortgaging the land as required by the said letter. The conditions mentioned therein are condition precedent for disbursement of the loan. The plaintiff has failed to produce any evidence on record to show that he ever complied the said terms and conditions. Therefore, on the basis of this letter also, it cannot be said that there was concluded contract between the parties. From perusal of Exhibit-3/A, 5/A, 5/B and 5/C, it appears that the different authorities of Industries Department of State Government of Bihar and also, B.S.F.C. wrote letter to the Bank for providing working capital. It appears that the learned Court below relied upon these documents and gave much emphasis that various authorities were also asking Bank to give working capital. In my opinion, on the basis of the letters of the authorities, the Bank could not have sanctioned loan.
(16) From perusal of the said letter, Exhibit-3/A, it appears that this letter dated 09.09.1992 was sent by B.S.F.C. to State Bank of India requesting the Bank to reconsider the case of advancement of working capital to the plaintiff. Likewise, Exhibit-5/A, 5/B and 5/C are the letters dated 28.08.1992, 31.08.1992 and 12.01.1993 written by Industries Department to the State Bank of India. It appears that the 15 plaintiff was making representation before the said authorities and, therefore, the authorities wrote letter to the State Bank of India enclosing the letter sent by the plaintiff to them. Likewise, the other documents i.e. Exhibit 5/D to 5/K are the letters written by the plaintiff to either R.B.I or the State Bank of India. Exhibit-5/D is the letter dated 08.09.1992 written by the plaintiff to the Reserve Bank of India requesting to take suitable action in the matter. The subject in the letter is denial of working capital finance by State Bank of India, Main Branch, Bhagalpur. Exhibit-5/E is also letter dated 22.09.1992 written by plaintiff to Sri S.S. Gangopadhyay, Deputy Chief Officer, Reserve Bank of India with regard to denial of working capital finance. All these letters are only correspondence between the parties. From perusal of the said letters, nowhere it is mentioned that there is concluded contract between the parties or that the State Bank of India agreed to release the sanction working capital without complying the terms and conditions or without enter into an agreement with the Bank as required under the banking norms. Exhibit-3/J clearly mentioned the terms and conditions which the plaintiff was required to fulfill prior to release of the sanctioned amount of Rs.17 lacs. As stated above, there is nothing on record produced by the plaintiff to the effect that the plaintiff ever complied the said terms and conditions. This letter is dated 02.03.1993. The force of the sanction letter expired after expiry of one year. The plaintiff never took any step for renewal of the said sanction letter. Therefore, the Bank cannot be forced to release the said sanctioned amount without complying the terms and conditions that too after lapse of the sanction order.
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(17) Exhibit-3/K shows that on 21.11.1996, the State Bank of India wrote letter to Swastic Engineering Works, Anupam Udyog for regularizing the loan account advanced to the said units. It appears that the Directors of the plaintiff, company are the proprietors of the said units. It is admitted fact that for non-regularisation of the said units, the plaintiff, Bank has filed cases before the Debt Recovery Tribunal, Patna for realization of about Rs.65 lacs in the year 1998. Therefore, when the plaintiff, company was asking for the loan, the accounts of these units were not regular and the Bank asked to regularize the said accounts. The admitted fact is that the Directors of the plaintiff, company never regularized the accounts of those units. Being the Directors of the plaintiff, they approached for release of the sanctioned working capital without complying the terms and conditions. The question is whether in such circumstances, the Bank was justified in refusing to release the working capital unless the accounts of the other units are regularized. In my opinion, as stated above, the Bank have to be satisfied regarding the viability, the repayment capacity of the plaintiff prior to advancing the loan which is public money. In my opinion, in view of the above facts and circumstances, the refusal to release the working capital in favour of the plaintiff was within the competence of the Bank, appellant. The plaintiff cannot force the Bank on the ground that because the present plaintiff has no concern with those units, the Bank should not have refused to release working capital. This is only a technical objection. The satisfaction must be of the Bank and not according to the wish of the plaintiff or to the Court. The Bank being the custodian of public money has to act in order to protect the interest of the Bank and public and for that purpose, the 17 Bank may also see the integrity of the borrower and other circumstances. Only because the plaintiff is a small scale industry, it is not entitled to receive the amount unless the terms and conditions according to the norms of the Bank are fulfilled.
(18) It is well settled principles of law that unless there is a breach of terms of contract, the plaintiff is not entitled to claim for damages. Here, the learned Court below has misconstrued the letter dated 16.05.1989, Exhibit-3/G and the letter dated 02.03.1993, Exhibit- 3/J issued by the State Bank of India. We have seen above that those are only letters issued by the Bank informing the plaintiff regarding the facts contained in it. We have already quoted the letters and, therefore, it is not reiterated here. There is no concluded contract between the parties. The plaintiff has filed the contract paper to show that there has been a concluded contract between the plaintiff and B.S.F.C. i.e. Exhibit- 4 dated 17.05.1989.
(19) Considering the above facts and circumstances of the case, I find that the plaintiff has failed to prove that there had been concluded contract between the parties. The learned Court below misconstrued the letters of State Bank of India as stated above and wrongly held that there is a contract between the parties. The reasoning of the learned Court below is not acceptable. Since there was no concluded contract between the parties, in my opinion, the plaintiff was not entitled for any compensation on account of alleged breach of terms of any contract. Therefore, the findings of the learned Court below on these points are hereby reversed.
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(20) It appears that this suit has been filed only to pressurize the Bank, a public institution making frivolous allegations regarding demand of gratification etc. There is no reliable evidence as to which officer demanded what amount from whom. Only bald statements have been given in the evidence which is not acceptable. From the above facts and circumstances of the case, the plaintiff tried his best to give pressure on the Bank for obtaining benefit.
(21) In view of the above facts and circumstances of the case, and in view of the above findings, this First Appeal is allowed and the impugned judgment and decree are set aside and the plaintiff's suit is dismissed with cost. Advocate's fee is assessed at Rs.10,000/-. The plaintiff shall pay the cost of the suit and appeal also to the Bank. The Bank, appellant is entitled to recover the entire cost from the plaintiff.
(Mungeshwar Sahoo, J.) Patna High Court, Patna The 20th April, 2011 Saurabh/A.F.R.