Griffan Masih vs PUNJAB NATIONAL BANK

THE facts giving rise to this appeal may briefly be noticed. The complainant had filed the complaint before the District Forum that he had moved an applicatins with the respondent Bank for the grant of loan of Rs. 4.35 lacs under KIC Scheme for term loan to set up small scale unit in village Rania. Report for the cost of the project amounting to Rs. 4.35 lacs was also submitted by the complainant to the Bank. According to the complainant, the complainant on the direction of the bank had spent an amount of Rs. 1.64 lacs after getting monetary assistance from his relatives and friends and Rs. 35,000 on documentation for machinery. He had also mortgaged the property in favour of bank as security for the loan. The concerned authorities of the Bank had sent the case to the higher authoriteis on 29.12.2001.

THE opposite side refuted the facts and it was denied that the complainant had applied for loan of Rs. 4.35 lacs. It was alleged by the Bank that the cost of the project of complainant was Rs. 3.64 lacs and not Rs. 4.35 lacs as alleged and as per the Margin Money Scheme, Rs. 2 lacs were advanced by the bank to the complainant as composite term loan and the balance amount of the project i.e., Rs. 1.64 lacs was to be contributed by the complainant himself. It was admitted that complainant had spent Rs. 1.64 lacs on the construction of the building from his own sources. After appreciating the evidence led by both the parties, the complaint was dismissed. Hence the present appeal.

IT has been observed by the District Forum as under: ''Ex. C -5 is the document produced by the complainant himself. It is the project report of the project. Total cost of the project had been worked out at Rs. 3.64 lacs and mode of finance has been said to be the Term Loan to the extent of Rs. 2 lacs and the promoters contribution to be Rs. 1.64 lacs. Ex. R -5 is the application of the complainant Griffan Masih for loan to the extent of Rs. 2 lacs. Ex. R -6 is the deed of hypothecation of the assets. There also the extent to the laon amount is said as Rs. 2 lacs. Ex. R -7 is the working capital term loan agreement executed between the parties. There also the extent of the loan is Rs. two lacs. Learned Counsel for the complainant has placed reliance upon the document Ex. C -12, which is photocopy of the letter addressed by Sr. Manager of the Bank to Sr. Manager (SSIO), SRMO, Kapurthala whereby the fresh project report of the borrower with the request for incurring loan of Rs. 4.35 lacs was forwarded. Simply because some request for enhancement of the loan was given and that was forwarded to the higher authorities, it will not mean that the applicant was entitled to get loan to that extent.''

THE aforesaid observations are self contained and self speaking. The loan applied for (sic.) that application was enhancing the loan. We find under the circumstances, that there was no deficiency in the services to be rendered by the Bank. Even otherwise the National Commission in Ashok Prabhakar v. State Bank of India & Ors., I (1993) CPJ 11 (NC), held that it is for the Bank and financial institutions to decide whether assist any industry with term and working capital loans, and if so, to what extent. The loan has to be commensurate with the credit worthiness and the financial status of the borrower. Even in case, M/s. Bunnys Gift & Novelty Centre v. Punjab & Sind Bank, III (1993) CPJ 322 (NC), it was held by the National Commission that the banks have the discretion regarding the sanctioning of the loan or cash credit facility which has to be done under the rules/guidelines laid down by the Reserve Bank of India. We find no infirmity in the order of the District Forum. The appeal is dismissed in limine. The order of the District Forum is affirmed. Appeal dismissed. -