State Bank of India vs BINDESHWARI PRASAD MEHTA

O.P. State Bank of India, Purnea Branch is the appellant which has preferred the appeal against the order dated 1.6.1999 passed in Complaint Case No. 70/1993 by the District Forum, Purnea.

THE brief facts of the case is that appellant sanctioned a loan to the respondent first party (complainant) for purcahse of tractor, trailer and culti in March, 1991. THE loan account was opened in the name of the complainant and tractor was supplied to them for which the loan was sanctioned. Respondent No. 1 has filed quotation for trailer and culti of the tractor to the appellant and instructed the appellant to pay the price for the same out of loan account. As per instruction the appellant paid the money to M/s. Mithila Agro Industries. THEre was considerable delay on the part of respondent-second party in supply of the above articles in spite of receipt of the amount. THEreafter, the complainant informed the Bank and filed complaint. THE respondent-2nd party thereafter supplied the culti after six months but did not supply the trailer. THE contention of the complainant was that due to delayed supply of the trailer, etc. the complainant sustained loss in his income and profit and accordingly he claimed Rs. 25,000 and Rs. 4,000 on account of compensation sustained in income and profit. Before the District Forum in spite of notice only O.P. No. 1 (appellant) appeared and filed rejoinder. Respondent Nos. 2 and 3 did not appear nor the rejoinder was filed on their behalf. After perusal of the impugned order it appears that there is no dipsute with regard to the facts of the case. There is delay in supply of the trailer and culti on behalf of respondent Nos. 2 and 3. The complainant had purchased the tractor after taking loan from the appellant-Bank. The main contention of the Bank before the District Forum was that it has performed its duty and supplied the loan and has also informed other respondents to supply the necessary equipment with the tractor. It was the fault on the part of other respondents and not on respondent No. 1 appellant. Therefore, any claim against respondent No. 1 is not maintainable in law.

In reply the complainant-respondent submitted that from the admitted fact of the case appellant has sanctionerd loan to the tune of Rs. 1,08,000 only to the respondent first party for purchase of tractor, trailer, etc. in March, 1991. For supply of tractor orders were placed to the appellant-Bank with Maha Laxmi Distributor which supplied the tractor but for trailer and culti quotations were invited from respondent second party who did not supply. The bank has credited amount for these two equipments in the account of respondent second party but they were not supplied to the complainant. As per rule amount relating to each invoice is paid to the supplier directly by debiting to the borrower''s credit account and the supplier has instructed to supply the material direct to the Bank. Such letter of the draft should be signed by the concerned borrower with the Bank Manager. In the prsent case the Bank did not follow these rules which are the rules under the Banking Circular. If the rules were not followed and no information were sent to the supplier regarding the perosn to whom requisite goods to be supplied in that case it is the Bank who is responsible and not the supplier. Therefore, the District Forum has rightly held the appellant-Bank responsible and deficient in service in this regard. It was further submitted that under similar fact and circumstances, the State Commission in its order dated 20.7.2004 in Appeal No. 144/1996, State Bank of India v. B.B. Alima Khatun, has upheld the order of the lower Court and directed the appellant-Bank to pay the remaining amount with interest @ 12% from the date of deposit till the date of payment. A photo copy of the said order of the State Commission is enclosed herewith.

WE have gone through the order passed by the State Commission in the above appeal No. 144/96. WE find that facts of both the cases are similar. In this case also the Bank claimed that amount was direclty paid to the supplier without informing the borrower and the articles were not supplied to the borrower. Under these circumstances, the tractor supplied to the complainant remained idle for long period. The tractor was not used for long period though purchased on loan caused financial loss to the complainant. From the admitted fact total price of the trailer and culti was Rs. 29,000. The Bank has deposited this amount in the account of the respondent No. 3, therefore; the District Forum has rightly held that appellant-Bank shall not recover the price of the trailer Rs. 22,950 with interest from the complainant. WE are in agreement with this finding of the District Forum that this amounts deficiency on the part of the appellant for which a compensation of Rs. 5,000 has been awarded against the Bank. In our view this amount is reasonable and it does not require our interference. With regard to respondent No. 3 from the fact it is clear that in spite of deposit of money by the appellant-Bank in its account the trailer was not supplied till date to the complainant. This amounts to deficiency in service on the part of respondent No. 3. The District Forum has awarded Rs. 15,000 as compensation for this deficiency. In our view this amount is on higher side which is reduced to Rs. 5,000 only. Since the compensation has been allowed in favour of the complainant from respondent No. 3 the award of interest to Rs. 6,250 would amount to double punishment. Therefore, this part of the order, i.e., award of interest is set-aside. It is open for the appellant-Bank to get the amount of Rs. 22,950 which was deposited in the account of respondent No. 3 recoverd the same in accordance with the law. The above order must be complied within two months from the date of this order. In the result, the appeal is dismissed with the modification indicated above. However, there shall be no order as to cost. Appeal dismissed.