ROBINSON INDIA vs RAJASTHAN FINANCIAL CORPORATION

THIS Complaint is from M/s. Robinson India Sri Ganganagar, through its proprietor. The Complainant applied to the Rajasthan Finance Corporation (R.F.C. for short)-Opposite Part No. 1 for a loan for the manufacture of med cines and was sanctioned a loan of Rs. 7 lakh The Complainant also obtained sanction for Cash Credit Limit of Rs. 3 lakhs from the Punjab National Bank, Sri Ganganagar (P.N.B. for short (Opposite Party No. 2). The grievance of Complainant is that the R.F.C. disbursed to him only Rs. 6.08 lakhs and that the balance amount was not disbursed inspite of several requests and that because of non-payment of the loan to the full extent, the Complainant could not start his factory in a proper way. He also contended that the O.P. No. l took over the possession

HIS factory in his absence on 18.11.92 when it was in running position whereas according to him, O.P. No. 1 was not entitled to do so until the full amount of the loan was paid. He further complained that O.P. No. 2, without jurisdiction or right took over the possession of the ram materials from O.P. No. 1 and that while Of No. 1 handed over the possession of the factory back to the Complainant on 14.5.93, the possession of raw materials was still with Oil No. 2. The Complainant has alleged that the Opposite Parties acted in collusion with each other with a view to cause him undue loss. The Complainant has claimed a relief of (i) Rs. 40.35 lakhs towards the financial and physical loss allegedly caused by the O.P. Nos. 1 and 2 due to carelessness, (ii) Rs. 10,000/-per day from the date of taking over possession of raw materials till the return of the same with a direction to return the materials to him, (iii) Rs. 5,500/- as lawyers fee and (iv) Rs. 500/- towards travel costs for his trips to Delhi from Sri Ganganagar on each day of hearing. Opp. Party Nos. 1 and 2 have filed their respective replies. Opp. Party No. 1 has inter alia pointed out that the loan was to be disbursed simultaneously with creation of the assets by the Complainant with certain conditions about the margin requirements. Accordingly an amount of Rs. 6.08 lakhs was disbursed to the Complainant at various stages linked to the assets created by the Complainant till November 1990. As per the terms and conditions, the loan was re-payable in instalments with interest. However, the Complainant defaulted in repayment and since on 29.9.92, a sum of Rs. 3,02,334/- was overdue towards repayment of instalment of principal and interest, Opp. Party No. 1, issued a legal notice to the Complainant under the State Financial Corporation Act, 1951 calling upon him to repay the entire loan and interest failing which the Opp. Party No. l shall take over the possession of the assets secured by them against the sanctioned loan. The Complainant, in reply, sent a cheque dated 30.10.92 for a sum of Rs. 1,14,000/- which was allegedly dishonoured by the bank. On 12.11.1992, Opp Party No. 1 informed the Complainant that it would be taking over the possession of the assets on 18.11.92 in the presence of Notary Public and witnesses. The Complainant filed a suit for injunction against Opp. Party No. 1 in the Court of Upper Munsif and Judicial Magistrate, Sriganganagar followed by an appeal in the Court of District and Sessions Judge, Sri Ganganagar. In the meanwhile, O.P. No. 1 had taken over possession of the factory alongwith the goods therein with intimation to the PNB (O.P. No. 2) with whom these goods stood hypothecated against the bank''s cash credit facility. However, on 1.2.93, the Complainant him-rote to O.P. No. 1 with proposals for repayment of the loan and also for withdrawal of the above mentioned Court cases. Pursuant to this, the Complainant withdrew the suits on 13.5.93 and got back from O.P. No. 1 the possession of the factory on 14.5.93.

THE PNB Opposite Party No. 2 have filed in their reply a copy of the Cash Credit Account of the Complainant to show that the operation of said account was unsatisfactory and that at the end of November, 1992, an amount of Rs, 3,11,327.30 was outstanding against the sanctioned limit of Rs. 3 lakhs although he had given an undertaking to deposit the proceeds of daily sale of his stock-in-trade on the next working day towards part payment of the interest and principal due. O.P. No. 2 also mentioned that the letters of RFC to the complainant on the take over were endorsed to PNB and since the hypothecation of raw materials and finished goods was with the PNB, the RFC informed the PNB to take possession of the hypothecated goods. The PNB did so on 17.12.92 in the presence of Notary Public and certain other witnesses. Although the Complainant has settled the matter with RFC and taken possession of his factory, he has not contacted the PNB to sort out the matter regarding goods inspite of repeated references from PNB advising him to deposite the outstanding in his Cash Credit Account and take back the raw materials in their custody.

WE have gone through the records and heard the Counsel on both sides. A preliminary objection on the maintainability of the Complaint was raised by O.P. No. since according to them, their relationship with the Complainant was one of lender-borrower. This point has, however, been settled and in so far as interest is paid as consideration for the loan, the transaction is in the nature of a service under the provisions of the Consumer Protecton Act. On the merits of the case, we find that both the RFC and PNB have acted as per the terms and conditions of the sanction of the loan and extension of Cash Credit Facility. The RFC had disbursed as much as Rs. 6.08 lakhs as against the sanctioned loan of Rs. 7 lakhs. It was the Complainant who had defaulted in the repayment with interest to the RFC and had also violated norms of financial discipline by operating his Cash Credit Account with the PNB in an unsatisfactory manner. In such circumstances of default, the RFC and PNB have both acted within their jurisdiction and in the interest of safeguarding public money. We do not find any deficiency in service on the part of RFC and the PNB. Regarding the question of return of raw materials, it is for the Complainant to settle the outstandings in his Cash Credit Account with the PNB and as such his claim for relief on this count is devoid of merits. This Original Petition is, therefore dismissed. There will be no order as to costs.