VASANTHI PLASTIC INDUSTRIES vs MANAGER, BANK OF BARODA

UNDER a scheme evolved by the Government of Tamil Nadu for the social and economic upliftment of the Members of the Aadi Dravida Community the complainant Mrs. Vasanthi applied to TAHDCO for financial help for the plastic kodam manufacturing unit project. The TAHDCO approved the project and as directed by it the complainant approached the 1st opposite party Manager of the Bank with a loan application. The project would cost Rs. 5,00,000/- of which Rs. 4,00,000/- would be for purchase of machinery and Rs. 1,00,000/- would be for working capital. The 1st opposite party Bank was to finance Rs. 4,00,000/- and the 2nd opposite party TAHDCO was to finance Rs. 1,00,000/-. For obtaining the said amount of Rs. 4,00,000/- the complainant opened an account in the 1st opposite party Bank making a deposit of Rs. 10,000/- and the 1st opposite party sanctioned a loan of Rs. 4,00,000/- out of which Rs. 3,20,000/- would be term loan and Rs. 80,000/- would be working capital loan.

THE loan was sanctioned subject to TAHDCO paying the 25% margin money of Rs. 1,00,000/-. Out of the said margin money of Rs. 1,00,000/-15% would be subsidy that would be paid by the Government. According to the complainant she took on lease a premises for starting the unit on 24.9.1990 for a period of 10 years at rent of Rs. 450/- per month and she paid an advance of Rs. 2,000/-. THE installation of the machine was completed on 10.7.1991. On 27.7.1991 the 1st opposite party Bank released 50% of the working capital i.e. a sum of Rs. 40,000/-. THEre was delay in TAHDCO releasing the margin money. THE 1st opposite party Bank told the complainant that if the payment of the margin money by TAHDCO was delayed the complainant would have to submit a fresh loan application, and if the complainant deposited the margin money herself she could avoid such a situation. Upon this the complainant borrowed money from others and paid the margin money to the Bank. THE complainant deposited totally Rs. 95,000/-. THE Bank assured the complainant that once the TAHDCO released the margin money of Rs. 1,00,000/-, the Bank would return the money deposited by the complainant. On 4.3.1992 the TAHDCO released the margin money of Rs. 1,00,000/- and it was paid by cheque to the Bank. THE complainant requested the Bank to return the amount of Rs. 95,000/- paid by her in lieu of the margin money and also requested the Bank to release the balance of the working capital of Rs. 40,000/-. But the Bank refused to pay that amount, and adjusted the money towards the complainant''s loan amount. THE complainant, therefore, had to borrow money from others to run the industry. Because of the said negligent service rendered by the Bank the complainant''s industry was put under severe financial strain. While so without prior intimation, all of a sudden, taking law in its hands, on 6.5.1994 the Bank with the help of Goondas broke open the complainant''s premises and removed the machineries, raw materials and finished products and all other valuables. On these grounds the complaint has been filed for directing the opposite parties to pay, (1) a compensation of Rs. 3,00,000/- for the financial loss, mental agony and loss of reputation caused due to the withholding of Rs. 95,000/- which had been deposited by the complainant towards TAHDCO''s margin money; (2) a compensation of Rs. 4,50,000/- for the financial loss, mental agony and loss of reputation caused due to the illegal act of breaking open of the complainant''s premises and seizure of machinery, raw material and finished products.

Of the two opposite parties, only the 1st opposite party has filed a written version. In the written version it is contended that the complainant voluntarily deposited the margin money of Rs. 95,000/- and the Bank never promised her that when the TAHDCO released the margin money the Bank would return the money of Rs. 95,000/- deposited by her. It was further contended that the complainant never asked to return Rs. 95,000/- and to pay the balance of the working capital of Rs. 40,000/-. The Bank under a letter dated 21.5.1992 called upon the complainant to clear the old dues together with interest in cash credit account and term loan account, and to that the complainant in a reply letter dated 18.6.1992 informed the Bank that the margin money would be paid by TAHDCO in a week''s time and the Bank could adjust that amount towards the old dues. Further the complainant wrote that she would avail the further working capital of Rs. 40,000/- after adjustment of the old dues. In these circumstances, there is no question of the Bank refusing to pay any money. On 18.2.1991 the complainant availed the term loan and on 24.7.1991 she availed the cash credit loan. The complainant failed to make repayment of even the 1st instalment in term loan account in August, 1991. In spite of demand to pay the instalment amounts and interest accrued due, the complainant failed to do so. Further the Bank came to know that the complainant was arranging to sell the entire unit to some third parties without repaying the amount due to the Bank. Therefore to safeguard their interests the Bank had to resort to seize the machineries and the goods in the premises through M/s. Reliance Seizures and Warehousing Pvt. Ltd. For seizure a notice dated 5.5.1994 was sought to be served on the complainant but she refused to receive it. The Bank had right to make sizure as per Clause 17 of the Hypothecation Agreement dated 14.2.1991. The Bank, thereafter, sold the machineries and credited the sale proceeds to the complainant''s account in the Bank. If they had not seized the machineries and good s the possibility of realising their amount would have been very remote. Therefore, there was no deficiency in service on the part of the Bank and hence the complaint is liable to be dismissed.

THE point that arises for consideration is whether mere was any deficiency in service on the part of the opposite parties and if so what relief can be granted to the complainant. A reading of the complaint shows that there is no grievance of the complainant against the 2nd opposite party TAHDCO and the entire case is only against the 1st opposite party Bank. It appears the 2nd opposite party TAHDCO has been made a party unnecessarily and the reliefs also appear to have been really sought against the 1st opposite party only though the prayer is against both the opposite parties. Now, it is common case that the Bank had paid the loan amounts to the complainant and regarding that there is no dispute. According to the complainant since the TAHDCO delayed payment of the margin money of Rs. 1,00,000/- to the Bank, she would have to make a fresh application but if she herself had paid the margin money then as and when; the margin money was paid by TAHDCO that amount would be paid to the complainant, but when the margin money was paid by the TADHCO, the Bank refused to return the margin money paid by her. Regarding this the Ist opposite party Bank would contend that it never told so to the complainant and it never promised to return the margin money paid by her after the TAHDCO paid the amount. It is the further case of the opposite party that when the TAHDCO paid the margin money, the margin money amount paid by the complainant was adjusted towards arrears of the amounts payable towards instalments amounts that were to be paid by her and also towards interest accrued. It is not in dispute that there was arrears of instalment amounts and interest payable by the complainant. The only grievance of the complainant appears to be that the Bank failed to keep up its promise to return the margin money of Rs. 95,000/- paid by her. But as seen supra, the opposite parties would deny that there was any such promise. In this connection a letter Ex. B7 dated 18.6.1992 written by the complainant to the Bank may be noted. Therein the complainant has clearly stated that TAHDCO had promised to pay the margin money of Rs. 85,000/- within a week, and alongwith it she would clear the entire amount due to the Bank. In this connection, the complainant would seem to reply on a letter Ex. A22 dated 17.8.1994alleged to have been written by her to the Bank wherein according to the complainant the Bank had been requested for an extension of time by one year for repayment of the loan amount, but the 1st opposite party Bank would deny that any such letter was received by them, and there is no proof of service of such letter on the Bank. This being the position, there cannot be any deficiency in service on the part of the opposite party Bank as alleged by the complainant. Thus there is absolutely no merit in the said plea made by the complainant.

THE next plea of the complainant is that the opposite party Bank illegally broke open her premises and seized the machineries and other goods and on account of this she sustained heavy loss and mental pain. Here again, it is not in dispute that there was arrears of instalments and interest payable by the complainant to the Bank. THE case of the Bank is that since those arrears were not paid by the complainant in spite of demand, to safeguard the Bank''s interest it had to resort to seizure of the machineries and the goods in the complainant''s premises. We have seen above that it was a fact that there was amount due from the complainant to the Bank and the complainant has stated that she would pay the entire dues within one week from 18.6.1992 as seen from Ex. B7 letter, but that had not happened. According to the opposite parties there was not only heavy arrears due from the complainant but also they heard that the complainant was arranging to sell away the unit to some third parties. Now, as stated in Clause 17 of the Hypothecation Agreement, standard copy of which has been produced, if the borrower fails to carry out and perform any of his obligations and the Bank apprehends of any damage to or loss of the hypothecated materials, then the Bank can without any notice, enter into the premises and seize the materials. THErefore, as regards the second plea raised by the complainant also, there is no deficiency in service on the part of the opposite parties. In these circumstances, no question of payment of any damages to the complainant arises. Thus we find no merit in the complaint. Accordingly, the complaint is dismissed. There will be no order as to costs. Complaint dismissed.