R.K. Industries vs State Bank of India

SMT. Sumar Setia is the Proprietor of M/s. R.K. Industries, Abohar and M/s. Guru Nanak Ice and Oil Mills, Abohar. She has filed two Original Complaint Nos. 9 and 10 of 1993 through her General Attorney Shri Ravi Kant Setia and both are directed against the same Opposite Parties State Bank of India, Abohar. The salient background herein is closely inter-twined and the merits raise common issue of law and fact. The substantial part of the evidence is common on the record. The parties are represented by the same set of Counsel. It is not only apt but indeed necessary that both the complaints be dealt with together. The learned Counsel are agreed that these may be disposed of by a common order.

IN Original Complaint No. 9/1993, the Complainant Sh. Ravi Kant Setia has alleged that Smt. Suman Setia has been carrying on the business of ginning and pressing of cotton since 1988 and she approached the Opposite Parites Bank for sanctioning the term loan and working capital to the tune of Rs. 14.75 lacs and Rs. 14 lacs respectively. Her case is that the Opposite Parties Bank had released the sanctioned amount of machinery term loan to the tune of Rs. 14.75 lacs but did not release the working capital for Rs. 14 lacs and on that ground her business could not be flourished. According to the Complainant, despite repeated requests by her, the Opposite Parties Bank released only Rs. 6 lacs as working capital which was not at all sufficient to meet out the requirements of the industries. The complainant''s prayer in the complaint is that the Opposite Parties Bank be directed to release the remaining amount of the working capital to the tune of Rs. 8 lacs and to waive the interest imposed by the Bank on the term loan and the working capital and in future the repayments be accepted without interest. IN addition, he has claimed compensation of Rs. 10 lacs for the loss of business and hardship caused to Sm. Suman Setia by the negligence and wilful act of the Opposite Parties Bank. IN the written statement filed by the Opposite Parties, they stoutly controverted the allegations of the complainant and pleaded that the Bank had sanctioned only Rs. 6 lacs as working capital to the complainant. It was averred that the complainant was a defaulter and the Opposite Parties Bank was to recover the amount of Rs. 27,81,121/- with interest upto 31.1.1993 and thereafter till its full realisation from it. It was also alleged that the complainant had violated the Bank''s financial discipline in regard to the submission of stock statement etc. as mutually agreed. The firm plea of the Opposite Parties was that the Complainant-firm had hypothecated stocks and pledged/mortgaged her properties, machinery and the building with the Bank and that the latter had to file a suit on 28.9.92 in the Court of Sh. K.K. Garg, Additional Senior Sub Judge, Abohar for permanent injunction restraining it from alienating and disposing of its properties in any manner and that suit is still pending in that Court. It was pleaded that the Complainant was not entitled to the enhancement of working capital and that there was no negligence on the part of the Opposite Parties. In the Original Complaint No. 10/1993 it has been alleged that on the request made by Smt. Suman Setia on 23.10.1993 the Opposite Parties Bank had sanctioned the machinery term loan to the tune of Rs. 2.75 lacs and on 25.2.1989 Rs. 6 lacs as cash credit limit and that she had also raised term loan of Rs. 14 lacs from the Opposite Parties for her establishment known as M/s. R.K. Industries, but the Opposite Parties released the amount of Rs. 6 lacs only on that account and due to that reason her industries suffered huge losses. According to the Complainant, Smt. Suman Setia offered a compromise proposal to the Bank that she would repay the loan amount by depositing Rs. 4 lacs immediately after acceptance of her compromise proposal and Rs. 5 lacs in two quarterly instalments and that on the assurance given by the Opposite Parties Bank that her compromise proposal may be accepted, she sold off her family properties at a nominal rate to comply with the same. In the complaint, a compensation of Rs. 10 lacs as damages for the loss caused by the negligence of the Opposite Parties Bank was demanded and further prayed that a direction be issued to the latter to accept her compromise proposal and to waive the interest imposed on her by the Bank. In the written statement filed by the Opposite Parties, it was pleaded that the compromise proposal offered by the complainant was never accepted by the Bank and as such, the same did not become a contract and that unilateral proposal could neither be accepted nor could any damages be claimed for its non-enforcement. The firm plea of the Opposite Parties was that the complainant was a defaulter and the Bank was to recover the amount of Rs. 11,49,106/- with interest upto 23.9.1992 and thereafter interest was to be charged and recovered till its full realisation from it. It was alleged that the complainant had also violated the Bank''s financial discipline in regard to the submission of stock statement etc. as mutually agreed, it was averred that the complainant had hypothecated the stocks and pledged/mortgaged its properties, machinery and the building and that the Bank had to file a suit on 28.2.92 in the Court of Sh. K.K. Garg, Additional Senior Sub Judge, Abohar for permanent injunction, restraining it from alienating or disposing of its properties in any manner and that suit is still pending. The Opposite Parties had denied having given any assurance to the complainant that the alleged compromise proposal would be accepted by the Bank authorities and also denied the allegation of negligence on their part.

We have gone through the complaints and the replies of the Opposite Parties and also heard the learned Counsel for the parties and find that the complainant had failed to maintain the financial discipline expected from a borrower and hence the Bank after due consideration of all aspects relevant to its duty to safeguard public funds, did not find it a fit case for taking up the rehabilitation programme as requested for by the complainant and it was compelled to institute two suits against the complainant for the recovery of the amounts due to it and the said suits are pending in the Courts at Abohar.

HAVING gone through the evidence on record, we are of the opinion that these cases are fully covered by the principles laid down in the order dated 22nd December, 1989 passed by the National Commission in Original Petition No. 32/1989, wherein it has been held as a matter of sound policy, the Commission will not entertain any complaint, subject matter of which is already subjudice before a Civil Court. It has been further held in that judgment that questions relating to the justification for the refusal or failure on the part of a Bank to advance further amounts by way of loans to the borrower of the discontinuance of the facility allowed to the borrower to operate the over draft account etc, are not matters which legitimately call for adjudication by the Commission under the provisions of the Consumer Protection Act. Yet another aspect stressed by the National Commission in that order is that where a case involves complicated questions of facts requiring detailed examination and cross-examination of several witnesses and necessitates also the scrutiny of books of account and settlement of accounts between the parties, the more appropriate remedy to be resorted to by the parties, is to approach a Civil Court for adjudication of such issues. In the light of the aforesaid ruling, we dismiss both the Original Complaint Nos. 9 and 10 of 1993, reserving liberty to the complainant to seek redress in the appropriate Forums. Complaints dismissed.