Punjab National Bank vs Satya Prakash

-HEARD. With a view to help educated youth to earn their livelihood by self-employment the Govt. of India had floated a scheme known as "Pradhan Mantri Rojgar Yojana". According to that scheme the unemployed youth were to be sanctioned loans upto a certain limit and disbursement thereof after giving training to them for a month or so. The respondent was one of the such youths, who was though educated yet unemployed. In order to take benefit of the said scheme, as was in force in the year 1993-94 , the respondent applied to the District Industries Centre at Ganganagar on 28.10.1993 to sanction a loan to him. A loan of Rs. 75,000/- was sanctioned to him by the said Centre on 16.1.1994 and he was advised to approach the Punjab National Bank, Sriganganagar for disbursement of the loan according to rules. On 18.1.994 he received the sanction of the appellant Bank and he was required by the appellant to undergo a training for one month in the trade/business, he was willing to enter into. The respondent obtained such training and submitted the certificate of training to the Manager of the appellant Bank. Thereafter Shri M.M. Jain, Branch Manager of the appellant Bank at Sriganganagar required the respondent to file the quotations from the firms wherefrom he intended to purchase the machinery. The respondent submitted such quotations from certain firms at Ganganagar and Ludhiana (Punjab). Thereafter Shri Jain, Manager required the appellant to hire a shop wherein he could establish his business. The respondent hired a shop at a rent of Rs. 600/- per month and paid Rs. 1,800/- as advance rent for 3 months. The said Yojana under which the loan had been sanctioned to the respondent provided that such unemployed youth was not required to furnish any guarantee to secure the debt. But Shri Jain, Manager (appellant No. 1) required the respondent to furnish the details of his properties which could be pledged/mortgaged with the Bank to secure the debt. Such letter is stated to have been forwarded to him on 21.4.1994 through the Tehsildar. On the basis of such letter the respondent went to Patiala wherefrom he collected the documents of his immovable property and submitted such documents to secure the debt which was yet to be disbursed to him. Shri Jain Manager then required him to deposit a margin money of Rs. 5,000/- which was also deposited by him. By his letter dated 29.6.1994 Shri Jain, Manager of the appellant at Ganganagar Branch told the respondent that two other persons were already carrying on business/trade wherein the respondent wanted to enter. Placing these facts before the D.F., which get support from the documents filed by him, the respondent complained that Shri Jain did not disburse the sanctioned loan to him despite his doing all the acts as directed to be done by Shri Jain. He, therefore, claimed a compensation of Rs. 1 lac and cost at Rs. 1,300/-.

THE case put forth by the appellants in their defence was that it was the duty of the Bank to see whether the prospective loanee was in a position to repay the amount of loan. It was in that direction that Shri Jain, Manager had behaved in the way, as narrated by the respondent. The D.F. after hearing the parties held that once a loan had been sanctioned and the respondent had done all the acts which he was required to do and which acts included furnishing security for the repayment of the debt, not disbursing the sanctioned loan to him by the appellant amounted to deficiency in service on their part. The D.F. accordingly directed the appellant to sanction the loan to the respondent within a period of one month from the order of the Forum and also to pay a cost of Rs. 200/- to him. The aggrieved appellants are now before is Commission.

Relying heavily upon the decision of the National Commission in the case of Parmanand Tripathi v. Canara Bank & Ors., I (1993) CPJ 14 (NC)=1993 (2) CPR 645 and A.H. Sharma & Ors. v. Divisional Manager, Syndicate Bank and Anr., 1992 (1) CPR 443, it was vehemently urged by the learned Counsel for the appellant that it was for the Bank to decide whether a particular person was eligible for credit within the framework of the credit policy and looking to his past performance, viability of project and that it is not open to the Forum to substitute its judgment for decision to be taken by the Bank. It was further submitted that to implement credit policy the decision vests with the Bank or institution which has to enforce the credit eventually.

THE principles laid down by the National Commission in the cited cases are not in dispute. Before sanctioning loan by the Bank to a creditor under its credit policy it is certainly not only the duty but also a right of the Bank to see the past performance and viability of the project being carried on by its creditor. But such are not the facts in the present case. Herein it is undisputed that the loan had been sanctioned to the respondent by the Industrial Department at Sriganganagar and not by the appellant Bank. In the grant of the loan the very purpose of the scheme under which the educated unemployed youth were intended to be encouraged by the Government had been kept in mind by the Sanctioning Authority, which the Industries Department was in the present case. Before sanctioning the loan a Committee comprising certain members wherein the Banks were represented through their nominees had taken place and it was such Committee by that loan had been sanctioned to the respondent. It is clear from the narration of the above facts that the respondent, acting upon the sanction granted by the Industries Deptt., had required the respondent to undergo a training for one month and the respondent had obtained such training. THEn again, the version of the respondent was that he was required to take a shop on rent and he did take a shop on rent is supported by the rent note on record. THEn, by the letter of the Tehsildar dated 21.4.1994 the respondent was required to submit the details of his property which could be obtained from him through pledge/mortgage to secure in order to disburse the loan. THE respondent had also done that. THE document of title of his property in Punjabi is on record. THEn by his letter dated 15.6.1994 the Bank Manager had informed the respondent to obtain the amount of sanctioned loan by the end of the month. But before the expiry of the month on 30.6.1994, the same Manager by his letter dated 29.6.1994 had informed the respondent that in the line of business wherein the respondent wanted to enter into, two other agencies were working and, therefore, his entering into such business would not be profitable for him. All these acts done by the appellants clearly show that the Bank Manager had intentionally and for some ulterior motive been harassing the respondent like anything. After recommending him to take training in the particular trade/business for which a loan had been sanctioned to him and respondent''s taking such training from the District Industrial Centre at Ganganagar it was none of the business of the Bank Manager to have simply said that the business/trade wherein he wanted to enter was not profitable and that the respondent intended to change the project. Such argument has to be written only to be outrightly rejected. In view of the above we find no merits in this case. We find that the Bank Manager had not only frustrated the very policy of the Government but had dissuaded an unemployed youth from earning his livelihood. A loan sanctioned to him in the year 1994 has not yet been disbursed to him even after about 10 years. Taking into account such conduct of the Manager of the appellant Bank we dismiss this appeal with cost at Rs. 5,000/-. The expenditure incurred in this litigation, including the cost imposed by this Commission, shall be recoverable from Shri M.M. Jain, Manager, appellant Bank. Appeal dismissed.