KAILASHMAL MEHTA vs STATE BANK OF BIKANER

-THIS appeal by the complainant-appellant is directed against the order dated 22.1.92 passed in Complaint Case No. 308/91 by which the complaint was dismissed by the District Forum, Jodhpur. Facts leading to this appeal may succintly be noticed.

THE complainant filed a complaint against the State Bank of Bikaner and Jaipur through (1) Managing Director, Head Office; and (2) Branch Manager Mandore Road, Jodhpur before the District Forum which was registered on 27.6.91. THE complaint is dated 24.6.91. THE complainant averred that he has obtained cash credit facility from the opposite parties (Bank) on 8.10.87. THE cash credit facility was increased on 4.5.89 to the tune of Rs. 50,000/-. It was stated by the complainant in the complaint that he has made certain complaints regarding the services of the bank and on account of this the Bank reduced limit of the cash credit facility to Rs. 25,000/- on 27.3.91. As the amount of the cash credit facility was reduced, he wrote a letter dated 12.4.91 to the Bank. A reply was received from the Bank stating the reasons for reducing the cash credit facility to a limit of Rs. 25,000/-. THE reason according to the complainant assigned was that the complainant''s unit is not a small scale industry. THE complainant has alleged that on 18.5.91 he issued two cheques cheque No. 367609 for Rs. 3,850/- and cheque No. 367610 for Rs. 1,262/- in favour of Pankaj Textiles and Western Carriers respectively. Both the cheques were returned to the complainant and a sum of Rs. 20/- was debited in the account of the complainant. Cheque No. 3673610 was again presented by Western Carriers to the Bank which was honoured. THEreafter he approached the Bank Manager for knowing the reason but the complainant has alleged that he stated that he is not bound to give any clarification in this regard. Enquiries were made by him but no reply was given. According to the complainant the services of the bank suffered from deficiency when the cheques issued by the complainant were not honoured and passed and reasons were also not assigned for the same. He has, therefore, averred that on account of these acts of commission and omission of the Bank he had mental agony and shock. His prestige was lowered down and the acts were intolerable. He has, therefore, claimed a sum of Rs. 50,000/- as compensation from the opposite party-Bank. After notice the Bank filed the version of the case traversing the allegations made in the complaint. It was pleaded that the certificate obtained by the complainant regarding his alleged unit was temporary, the period of which had expired. The industry of the complainant was not registered as small scale industry (SSI). It was pleaded that he has not established any industry in the industrial area but the complainant is merely doing job work of preparing "loongees". It was submitted in the version of the case that on 27.3.91 the complainant was informed that limit of cash-credit facility has been reduced. Inspite of this information the complainant issued two cheques referred to hereinabove and as the amount of the two cheques exceeded the limit of the cash-credit facility they were not honoured. It was stated that the Branch Manager himself made efforts to contact the complainant but as he was not available, information in this regard was conveyed at his residence but he did not pay any heed to it and, therefore, there was no alternative but to dishonour the cheques. Subsequent to that a request was made by the complainant for honouring at least one cheque. It was again received for collection and the payment was made. On the basis of these premises it was submitted that the services rendered by the Bank cannot be said to suffer from deficiency. Objections regarding the maintainability of the complaint were taken on the ground that the complainant is not a consumer and that the provisions of the Consumer Protection Act, 1986 ("the Act" herein) do not apply. That even if the Bank is expected to render services, the complainant has not hired the services of the opposite party for consideration.

The complainant did not file any affidavit in support of the complaint. He, however, submitted his affidavit in evidence which was sworn on 25.11.91. In rebuttal Shri Chain Sukh, Branch Manager submitted his affidavit. That affidavit is unattested and unsworn. Parties submitted photostat copies of the documents. Reference to the documents whenever necessary for the disposal of the appeal, shall be made in the order hereafter. The District Forum heard the arguments on 15.1.192 and pronounced the order under appeal on 22.1.92. Hence, this appeal as aforesaid.

NOTICE of the appeal was issued to the appellant as well as the respondent. On behalf of the respondent, Mr. Balwant Kumar, Advocate filed the reply to the appeal on 29.9.92. He stated that he has sent the copy of the reply to the appellant by registered post. Service was presumed to be sufficient on the appellant on 17.11.92. Despite that an order was made that the office shall send a notice to the appellant about the next date of hearing. The Branch Manager of the Bank who was present on 17.11.92 was directed to inform in writing to the appellant about the next date of hearing i.e. today''s date. Learned Counsel for the respondent has submitted carbon copy of the letter which was sent to the appellant. That letter is No. 143 dated 12.12.92 stating the date of hearing as 21.1.93. He has also produced the acknowledgement receipt of the appellant showing that he has received the intimation about today''s date of hearing. It appears from the record that the appellant sent a rejoinder to the reply by post with a forwarding letter on 16.1.93 supported by affidavit of the appellant. It may be mentioned that in support of the reply to the appeal, a duly sworn affidavit of Shri Chain Sukh, Branch Manager was submitted which was sworn on 29.9.92. The appellant has not appeared today despite having notice of today''s date of hearing. In these circumstances, we are left with no alternative but to hear the learned Counsel appearing for the respondent.

WE have carefully gone through the record of the complaint, order under appeal, memo of appeal, reply thereto and the rejoinder submitted by the appellant. Mr. Balwant Kumar submitted that the order of the District Forum dismissing the complaint is legal and correct and calls for no interference in appeal. He argued that the District Forum on the basis of the settled position of law come to the conclusion that on the facts stated by the complainant in the complaint there was no deficiency in service on the part of the Bank. The complainant has prayed for the following reliefs in para 14 of the complaint which is as under: - "YEHA KI MANANIYA ADHYAKSH MOHADIYA SE YEHA ANURODH HAI KI THATYO KO DEHAKTA HUAI SHAKA PRABANDHAK S.B.B. AND J. KA MARA PRATIPURVAGHRA SA PRARIT HOKAR DWESHPURN KARA VAHI KARNA VA BANK NIYAMO KA ULANGHAN KARKA CHEQUE WAPIS KARNA SA JO MUJHA AAGHAT LAGA VA MANSIK CHATI HUAI VA MARI SAAKH PAR DHABBA LAGA VA ASHANIYA HAI. KARAN KI 40 SAAL SA BH1 MARA EK BHI CHEAQUE BANK SA WAPIS NAHI AYAA HAI. ATAH: ISKI CHATI PURTI KA MERA BANK SA RS. 50,000/- KA MUWAVJA DELWAYA JAVA VA ANY UPAYUKT ADESH JO SHRIMAAN ADHAYAKSH MOHADIYA UCHIT SAMJHA VO PRARTHI KA PAKSH MAI PRADAN KIYA JAVA."

A letter No. 1376 dated 22.3.91 was sent to M/s. Suman Textiles, Paot of the complainant in regard to cash credit limit of Rs. 50,000/-. This letter is as follows:- " We have processed the balance sheet submitted by you for the year ending 31.3.90. We have also visited your house, from where the business is conducted. In this regard, it is advised that your limit was enhanced from Rs. 25,000/- to Rs. 50,000/- with the projection that you will achieve the sale of 6 lacs which has not been achieved by your Unit. Though you had temporary SSI Nos. but as your unit is not directly manufacturing the "loongees" but getting them on job work, it cannot be treated as SSI. Hence, we are treating it as C & I unit and, accordingly, the rate of interest and other stipulations applicable to C & I advance will be applicable to your firm also. As you have no shop but carrying the business from your house only, and your capital in business is Rs. 7,818.75 P. only, the finance of Rs. 50,000/- is not justified. Accordingly, we have reduced your cash credit limit from Rs. 50,000/- to Rs. 20,000/- with immediate effect. Please arrange to deposit the balance amount immediately. Please also arrange to send us the monthly stock statement regularly. We expect your full cooperation in the matter."

After that letter No. 267 dated 10.5.91 was sent by the bank to the complainant. This letter was sent after examining the statement submitted by the complainant and in the penultimate para it was written:- "We have examined the datas submitted by you and also looking to your satisfactorily conduct of account, we can only consider the limit of Rs. 25,000/- to your unit. We hope, you will cooperate with us. Please, bring down present outstanding to Rs. 25,000/- only." The complainant has replied to these letters. It is clear from the above correspondence that the complainant was informed by the Bank that bank is not going to accept the unit under SSI as it has been doing the job work. It was further stated that its turn over was not Rs. 6 lacs p.a. For these reasons the cash credit limit was reduced form Rs. 50,000/- to Rs. 25,000/- and according to the respondent-Bank, this was within the discretion of the Bank. ''Deficiency'' has been defined in Section 2(1)(g) of the Act as under:- 2(1)(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to performed by a person in pursuance of a contract or otherwise in relation to any service;"

The opposite party Bank unilaterally reduced cash-credit facility. The complainant has filed the complaint claiming compensation. The question is whether a person can seek relief under the Act for the discontinuance of the cash-credit facility. In other words, whether it is obligatory on the part of the Bank to allow credit facilities to a party. In original petition No. 32 of 1989 decided on 22.12.89 the National Commission has considered whether a person who has borrowed amounts from a Bank under cash credit facility etc. can seek relief against the Bank under the Act on the ground that the Bank had failed to advance further amounts to him or had discontinued the overdraft or cash credit facility. It was held that the complainant was not entitled to the grant of any relief. This view was reiterated in II (1992) CPJ 439 (NC).

IN I (1992) CPJ 111 (NC), the question arose before the National Commission whether it is obligatory on the part of the Bank to allow credit facilities to the party- "it is in the discretion of the Bank to determine whether credit has to be allowed to a party to the extent of sanctioned limits, keeping in view how the party is discharging his obligation towards the bank such as repayment of the credit and interest thereon, provision of adequate and acceptable security and the management of the scheme project or the activity for which credit has been agreed to be provided by the Bank. Again the Bank has to satisfy itself that the assets which are offered as security are good and free from encumbrance, the title of the party in the goods or property is clear and that the valuation of the assets is just and fair. It is for the Bank to determine whether the party''s credit worthiness and if so the extent to which it should be allowed credit and against what security. The refusal of the Bank to enhance the existing sanctioned limits of credit or even to continue to grant credit to the extent of the limits already sanctioned cannot and does not constitute a breach of the bank''s obligations towards its debtors. It is primary duty of the Bank to ensure that the money of the depositors which it invests in the form of credit is safe."

It was observed in Ram Kripal Bhargave v. Union of INdia and Other [II (1992) CPJ 429 (NC)] as under:- 7. "It is for the Bank to decide whether a particular party is eligible for credit within the framework of the credit policy laid down by the Govt, of INdia and the Reserve Bank of INdia viz., whether the project is financed is viable, the would-be-borrower is credit worthy. The history of his past performance as a borrower in honouring his obligations for repayment of his loan liabilities, the obligation of the Bank to provide credit where improvement works are undertaken by a farmer from his own resources even though such items or works may be eligible for bank credit, entitlement of a farmer to credit where there is admitted delay on the part of the farmer to undertake the sowing operations in time. More importantly, for providing further credit, it is for the Bank to satisfy itself whether there has been a bona fide crop loss due to vagaries of weather and whether a borrower is a defaulter or not. It will not be open to the Commission to substitute its judgment for the decision to be taken by the banks for giving bank credit."

Thus it is settled that if the Bank after taking into consideration the relevant facts and circumstances of a particular case decide to refuse to increase the cash credit facility limit or reduce the limit of the cash credit facility, this is entirely within the discretion of the Bank and for failure to provide the facility of cash credit, the question of deficiency in service as envisaged by Section 2(1)(g) of the Act does not arise. IN this case having perused the letters issued by the opposite party bank for reducing the cash credit facility, we are of the opinion that the Bank was justified in reducing the limit of cash credit facility to the extent of Rs. 25,000/- and it cannot be characterrised as deficiency in service.

HAVING gone through the reasons given by the District Forum regarding reducing the cash credit facility and holding that there was no deficiency in service on the part of the Bank, we are unable to take a view different from the one-taken by the District Forum. Therefore, we concur with the conclusion arrived by the District Forum that there was no deficiency in service on the part of the Bank respondent. Apart from that it needs to be mentioned that the complainant has claimed a sum of Rs. 50,000/- as compensation for the reasons mentioned in para 14 of the complaint. Under Section 14(1)(d)of the Act compensation can only be awarded to the consumer who has suffered loss or injury on account of the negligence of the opposite party. It has come on record that the cheque which was issued to the Western carriers on subsequent presentation was honoured and the payment was made as requested by the complainant though the bank was not bound to make the payment as it exceeded the cash credit limit. Compensation can only be awarded if the claim is substantiated by cogent and convincing evidence. There is nothing on the record in regard to the claim for compensation much less for its quantification. In these circumstances no compensation as claimed by the complainant can be awarded.

For the aforesaid reasons, the appeal is devoid of force and it is consequently dismissed. As the appellant has not appeared, we make no order as to costs. Appeal dismissed.