ER. C.S. RANDHAWA vs Punjab National Bank

-APPELLANT was the complainant before the State Commission where he had filed a complaint alleging deficiency in service on the part of respondent/opposite party.

THE undisputed facts of the case are that M/s. Punjab Gas Cylinders Ltd. situated at Village Malikpur, Ludhiana-Malerkotla Road, Ahmedgarh, District Sangrur in Punjab obtained an interest free loan from the Government of Punjab (Department of Industries) but one of the terms of the loan was to obtain a 100% security. THE complainant who was then Managing Director of M/s. Punjab Gas Cylinders Ltd. along with two other persons, namely, Amarjit Singh Grewal another also named Amarjit Singh took an FDR of Rs. 3,04,000 from the Punjab National Bank/respondents 1 and 2 and this FDR was given as a guarantee in favour of Director of Industries, Punjab/3rd respondent. It appears that on account of delayed/non-payment of the loan amount, the 4th respondent invoked the guarantee, consequent to which the first and second respondents made payment of Rs. 13,20,600 to the 3rd and 4th respondents. It was the case of the complainant that he was no more Managing Director at the time the guarantee was invoked. THE FDR obtained on account of deposit of personal funds could not have been paid by the Bank to the respondents 3 and 4 and secondly since the guarantee was only to the extent of Rs. 3,04,000 by way of FDR, the total account could not have been given by the first and second respondents to the State Industries Department i.e. respondents 3 and 4. It is in this circumstance a complaint was filed before the State Commission alleging deficiency in service and the State Commission after hearing the parties and perusal of material on record, dismissed the complaint. Aggrieved by this order, this appeal has been filed before us. We have heard the learned Counsel for the appellant at length. There is no dispute that the loan given to the Company was ''interest free'' and the complainant along with two others were guarantors to the loan. It was also not in dispute that as per terms of the ''loan-sanctioning-agreement'' in case there was delay in making the payment of the interest free loan; it was to carry interest @ 16% p.a. It is in these circumstances that the respondents 3 and 4 raised a total demand of Rs. 13,20,600 invoking the guarantee with the Bank and in these circumstances if the Bank has given that money to respondents 3 and 4 as per terms of the guarantee, we do not see any deficiency in service on the part of respondents 1 and 2.

There is no dispute that the appellant-complainant was the Managing Director and he had given the guarantee. What is being disputed is that the respondents 3 and 4 could have invoked the guarantee to the loan of Rs. 3,04,000 only. We are afraid that it is not so as according to us in terms of the loan sanctioning agreement the respondents 3 and 4 were entitled to interest on delayed payment. The State Commission relied upon the letter dated 30th December, 1999 marked as O.P. 10 through which Punjab Gas Cylinders Ltd. agreed and asked the Bank to make payment of the whole maturity amount of Rs. 12,28,688 to the Director of Industries, Punjab and they would have no objection if the said payment was made. It will be too late in the day to rescind from this commitment. What was done, was done with the knowledge and consent of the guarantors, in view of which no deficiency can be fastened on the respondents.

IN the aforementioned circumstances, we see no merit in this appeal and find no ground to interfere with the well reasoned order passed by the State Commission. This appeal has no merit and is dismissed. Appeal dismissed.