HITTCO DRILLS LTD Vs. STATE BANK OF MYSORE

JUDGEMENT

(1.) WRIT petitioner is a borrower from the respondent-bank who had agreed to provide certain cash credit facilities in favour of the petitioner to the extent agreed to between the parties. It is the case of the petitioner that such terms and conditions are evidenced by an agreement, a copy of which is produced as Annexure -B to this writ petition. The bank had also, by a subsequent communication dated 5. 1. 1999 indicated that the cash credit facilities sanctioned in favour of the petitioner is as detailed in its communication, copy of which is produced and marked as Annexure-C to the write petition.

(2.) SRI D. S. Joshi, learned Counsel for the petitioner submits that pursuant to such agreements, the transactions between the petitioner and the bank was quite normal, that the petitioner did avail of the facilities and had provided security by way of hypothecation of the stocks, raw material as well as goods that were being processed at the factory situated at No. 78, III Phase Peenya Industrial Area, Bangalore and similar goods stored elsewhere in the factory. It is the submission of Mr. Joshi that all of a sudden, the respondent-bank issued communication dated 2. 5. 2001 (copy marked at Annexure`d') indicating that as per the advice of the Head Office, the facilities were being withdrawn and alternative arrangements may be made by the petitioner to have such facilities from any other source and they can also make arrangements for repayment of the outstanding amount at the earliest. This was followed by another communication dated 23. 5. 2001 (copy at Annexure -E) informing that the advance facility was recalled and the amount outstanding should be paid within sixty days from the date of receipt of such communication.

(3.) IT is aggrieved by these two communications from the bank and stopping the cash credit facilities to the detriment of the petitioner, the petitioner has approached this Court seeking for quashing of these two communications and for a further direction by way of mandamus to the respondent-bank to continue the facilities to enable the petitioner to operate the cash credit accounts and for other incidental reliefs.