National Consumer Disputes Redressal
Sree Rajesh Lndustries vs Punjab National Bank And Anr. on 7 November, 1990
JUDGMENT Y. Krishan, J.
(1) MEMBER-THE Complainant, M/s. Sree Rajesh Industries, established a small scale industrial unit it Vijayawada in 1980. On the application of the complainant, the opposite party, Punjab National Bank, in April, 1983 agreed to provide financial assistance for the concern of the complainant. The total amount of financial assistance which the opposite party agreed to provide was Rs. 30.50 lakhs : long term loan of Rs. 4-98 lakhs and short term loans consisting of cash credit (Rs. 8 lakhs), bill discounting (ABC Bills) upto Rs. 7.50 lakhs), letter of credit both revolving and non- revolving) Rs. 7 lakhs. Bank guarantee on behalf of this complainant to Railways upto Rs. 3 lakhs to obviate 15% deduction as security from "on 'account" bills. In addition it was also given a Clean Demand Draft facility upto Rs. 1 lakh. The financial assistance with the aforementioned limits was availed.
(2) The complaint of the complainant is that, contrary to the Government's policy to provide finance to small scale industries and the credit policy for loans and advances of the Reserve Bank of Indin for the priority sectors, be was not given financial assistance as agreed by the opposite party, the Bank. The complainant has alleged that be had secured orders from the Railways for traction sub-stations and from the Andhra Pradesh State Electricity Board amounting to Rs. I crore but when. the Works were under execution the Bank (Opposite Party) denied him the finance as agready agreed. 221 to In partieular the opposite party failed to provide finance against Abc Bills and against Letter of Credit. In consequence the complaint alleges that he could not execute the works in time. The attributes his inability to execute the contracts to the failure of the opposite party (Bank) to provide the finance upto the sanctioned limits resulting in his industrial unit running into heavy losses. According to the Complainant, loss was incurred by him due to the failure of the bank to render the service it was required to render under the order of' the Government of India and the credit policy of the Reserve Bank.
(3) The complanint has further alleged that the opposite party had written to the Central Railway in April, 1986 that the dealings of the Complainant with the Bank were not proper, thereby, affecting the complainant's reputation unjustifiably. Again the opposite party (Bank) approached the Income Tax Department for transferring to it the amount of refund of tax granted to the complainant by the Income Tax Department in 1986. This action of the Bank, according to the complainant, was inimical and was not in the interest of the complainant.
(4) In brief the complainant maintains that due to the failure of the Bank to render the service which it is bound to render to the complainant as per the policy of the Government of India, the credit policy of the Reserve Bank of India and the agreement with the Bank regarding financial assistance, there was deficiency in service rendered by the Back and this negligence caused failure of his business which entitled him to compensation amounting to Rs. 59,00,642.00 , besides costs.
(5) The Opposite party, the Punjab National Bank, has raised preliminary objections as well as objections on merits to the claim of the complainant. The Opposite Party has pointed out that the complaint is barred by time as the limits of financial assistance were sanctioned in 1984 and the Bank had not allegedly provided the complainant with the funds as asked for by him in 1984, 1985 and April and June, 1986. No amount has been paid by the Income Tax Department to the Bank on account of the refund of tax aid to be due to the complainant and therefore the complaint is premature.
(6) Furthermore, the opposite party has filed a civil suit against the complainant for recovery of Rs. 20,24,253.00 outstanding amounts of various loans availed of by the Complainant as a borrower from the Bank. According to the Opposite Party the Complainant in the civil suit has raised almost the same and similar defence and he has also claimed, damages as a counter claim before the said civil court.
(7) The Opposite Party has further argued that truly speaking, the complaint is a device to obtain what is really a simple money decree for damages which can be granted only by a civil court within the jurisdiction.
(8) The opposite party has further submitted that in the matter of granting financial assistance to various parties by way of loans, bank guarantees, cash credit. Bill discounting etc., the Banks have the right to exercise discretion and jadgment for the granting or withholding loans, advances etc., that such-financial assistance cannot' be claimed as amatter of right and thus. the failure to provide the same cannot be said to constitute a deficiency in Service under the Consumer Protection Act.
(9) The Opposite Party has also alleged that the complainant has violated the terms and conditions of the loan agreement by collecting the- 222 bills from the garnisheces directly and not depositing them with the Punjab National Bank and that the amounts were collected through other banks and diverted to the complainant's other purposes.
(10) The Commission finds that the transactions between the complainant and the opposite party pertain to the orders of 1984-86. There is considerable strength in the contention of the Opposite Party that tbe complaint is barred by time.
(11) Secondly, there is adequate evidence to show that the dispute between the parties is subjudice. It is observed from the written statement filed on behalf of the complainant in the suit filed before of the civil court at Vijayawada by the opposite party (Punjab National Bank) O.S. No. 104 of 1987 filed as Annexure Ii to the Reply of the Opposite Party to this complaint in these proceedings, the complainant here and the defendant in that civil suit has claimed that the plaintiff Bank has damaged the interests of the production unit of the plaintiff from 1984 continuously by non-cooperation and freezing the limits term loans, cash credit, bank guarantee etc.), though orders to the tune of Rs.l.55crore were said to have been secured by the defendant and in consequence the defendant's sustained huge loss of more than 20 lakhs due to non-cooperation of the plaintiff bank. In his written statement before the civil court the defendant (complainant here) has reserved his right to file a separate suit for Rs. 20 lakhs against the plaintiff for damages. In other words, it is quite clear that the claim for damages of the Complainant before this Commission turns on the same allegations and on the charges against the bank as are the subject matter of the civil suit instituted in 1987 by the Bank. Clearly the matter is sub judice. The statement of the complainant that the financial assistance sanctioned under Abc Bills and Letter of Credit are not the subject matter of the suit of 1987 is specious, as would be evident from para 16 of the defendant's written statement in the civil suit.
(12) In view of these facts that the matter is sub judice and also is barred by limitation, it is not necessary for this Commission to examine the merits of the case. The complaint is therefore dismissed. There will be no order as to costs.