STATE BANK OF INDIA Vs. SOLEX CUSTINGS

JUDGEMENT

(1.) The State Bank of India has preferred this appeal against the judgment dated 1-3-1997 passed in Money Suit No. 10 of 1994 by the Civil Judge, Sr. Division, North Tripura, Dharmanagar, decreeing the suit of the appellant only for an amount of Rs. 3,82,923.63 against the claim of Rs. 21,28,341.99 which includes principal loan amount and interest thereon calculated upto 30-11-1994.

(2.) The short facts giving rise to the present controversy are that the first respondent M/s. Solex Castings, a Firm owned by the second respondent Dipak Chandra Roy was registered as a Small Scale Industry (SSI). The second respondent applied for loan to the appellant-bank which was duly considered and on 28-12-1982 an amount of Rs. 5,08,000/- was sanctioned. On 14-5-1986, the Bank and the second respondent executed an agreement after the credit facility was enhanced to Rs. 9.67 lakhs. As per the terms of the agreement, the second respondent placed at the disposal of the appellant-Bank 4 postal assurance policies valued at Rs. 5000 each and executed other relevant documents. It may be noted here that credit facility was enhanced on the prayer for the second respondent on 16-7-1985, 9-9-85 and 24-11-85. When the credit facility was enhanced on 13-5-1986, all the balance amount in the old account was transferred to the new account and documents were executed to cover the enhanced facility. The break up of this enhanced facility as stated in the plaint was Rs. 3.50 lakhs on cash credit, Rs. 2.66 lakhs on clean cash credit, Rs. 3.01 lakhs on term loan and Rs. 0.50 lakhs on EFS limit. The third and fourth respondents being the brothers of the second respondent were the guarantors for the amount of loan sanctioned by the Bank. That apart, vehicle No. TRA-1743 was mortgaged as security by the fourth respondent. The loan was sanctioned to enable the Firm to manufacture Tube well pump, C.I. Soil pipe, Manhole cover, C.I.Cooking pan and for other products of Castings and General engineering. The allegation against the second respondent is that in violation of the terms of agreement he did not pay the loan by instalments and on the contrary open a new account without the knowledge of the appellant in Agartala Branch of the appellant-Bank where the sale proceeds were deposited and from that account he had withdrawn Rs. 6,53,648/- on different dates from 19-7-1989 to 14-8-1991. The failure of the second respondent to repay the loan and interest in terms of the agreement compelled the appellant-Bank to file the money suit for recovery of an accumulated amount of Rs. 21,28,341.99 calculated as on 30-11-1994.

(3.) The first and second respondents contested the suit by filing a written statement admitting the principal loan amount received by him and the interest thereon upto 30-11-1994 as claimed in the plaint. But they contended that they were not responsible for the failure to repay the said loan which was partly attributable to the Bank itself and mostly attributable to the respondent Nos. 5 and 6, the Director of Industries and the State of Tripura respectively. The grounds of non-payment of the loan amount as advanced in the pleadings, inter alia, are :- (i) The State respondents wilfully and mischievously deprived the defendant-Firm of its due share as SSI Unit of supplying the materials required by various departments of the State Government; (ii) As the State respondents deprived the Firm of its due share, the plaintiff-Bank should have recovered its dues from the State Government; (iii) The plaintiff-Bank sanctioned Rs. 5.08 lakhs in December, '82, but disbursed the same in April, '84 after a gap of one and a half year. Due to sueh delay the price of equipments, plants and machineries and raw materials went up taking the cost of whole project beyond financial estimate causing thereby incipient sickness of the Firm for which the Bank was responsible. Because of this delay, the limit of financial assistance had to be increased from 5.08 lakhs to 9.67 lakhs. (iv) The Resource Division of IFC and PHE Departments of the State Government placed orders worth Rs. 12 lakhs to the suppliers outside the State depriving the legitimate claim and expectation of the defendant- Firm. This had ruined the prospects of the Unit and snatched away the bread of the workers employed in the Firm; (v) The Power Department of the State respondents changed specification of the base plates for steel tubular posts. Such change was made in a violation of the engineering norms with the motive to deprive the Firm. (vi) The State respondent constituted a committee to enquire into the condition of the Firm and in December, '90, the committee recommended a revaluation package by diversification of the Unit. But the plaintiff-Bank did not come forward with any realistic proposal to revitalize the Firm.