DURGA FLOUR MILLS vs State Bank of India

-THIS is a complaint under Section 17(1) of the Consumer Protection Act (hereinafter called the ''Act'') on the ground that as per terms and conditions of the contract for carrying on smooth running of Flour Mill in question, the opposite party, State Bank of India was under obligation to complete its own part of the contract and to furnish the loan sanctioned as and when so required and since the same was not done the complainant had to suffer total loss. Consequently the complaint was filed.

THE opposite party, State Bank of India besides preliminary objection, in its written statement submitted that the complainant is admittedly the proprietor of the Firm and he was initially sanctioned a Term Loan of Rs. 2,00,000/- and a cash credit limit of Rs. 5,00,000/- but on verification, it was found that the business was not being carried out as per assurance and even the machines and materials were not procured and the loan so sanctioned in part was misappropriated. The only question which emerges for active consideration is as to whether the Bank in question can be compelled to comply with the terms and conditions of loan so as to compel the Bank to finance further. In our considered view for two reasons hereinafter narrated, the Bank is justified in doing so. In the instant case, it has been found on verification by the Bank/opposite party that the very purpose of the term loan and the facility of cash credit limit to the tune of Rs. 5,00,000/- will not serve as the business was not being carried out. Even the basis for carrying on the business i.e., machines and materials were not procured inspite of getting the finance from the Bank. It is a case in which constrained with these situations, registered notice for realisation of Rs. 2,53,821/- was served but the complainant did not pay the same and the ultimately the opposite party/Bank was compelled to file a suit for recovery of the aforesaid sum against the complainant/defendant in the Court of Civil Judge, Lucknow (Senior Division) at Lucknow vide Recovery Suit No. 2/1998. This complaint thus obviously has been filed with a view to counter blast the suit proceedings.

In the instant case, it is clear as per the allegations of the Bank that though Rs. 2,53,821/- was provided for running of business but even the machines and materials were not purchased. Thus, the Bank was under justification not to further grant and sanction the loan and not to provide the cash credit Limit facility. More so it is an internal policy matter of the bank and the Consumer Forum have got no jurisdiction to deal with the situation. Consequently, we are of the considered view that this complaint has no legs to stand, with the result the complaint is dismissed. ORDER The complaint is dismissed. However, in the circumstances the parties are directed to bear their own costs. Let copy of this order be made available to the parties as per rules. Complaint dismissed.