DURGA CAST (I PRIVATELTD Vs. BIHAR STATE FINANCIAL

JUDGEMENT

(1.) IN the present writ application under Articles 226 and 227 of the Constitution, the petitioner has prayed fore writ of mandamus to be issued to the respondents commanding them to show cause as to how they are entitled to charge interest on the loan amount granted to the petitioner and as to whether they are not liable to pay damages to the petitioner for non disbursement of the loan amount in time.

(2.) THE petitioner is a private limited liability company. For the purpose of selling up a factory at Tupudana for manufacturing Alloys Steal item in the said factory he applied for a term loan from the respondent Bihar State Finance Corporation. A term loan of Rs. 37 lacs was sanctioned to the petitioner on 16 3 88. Pursuant thereof he entered into an agreement with the respondents and in accordance with the agreement respondents were bound to disburse the term loan of Rs. 37 lacs, as and when required by the petitioner. After obtaining the term loan, the unit of the petitioner was being inspected by the officials of the Corporation and periodic release of the term loan was being made by the respondents. However, after l1/2 years of the sanction of the term loan, the petitioner was granted only a sum of Rs. 24.93 lacs and the balance amount of Rs. 12.07 lacs was not released on the ground that they did not have sufficient funds. On account of this, the project of the petitioner came to a standstill and no progress could be made in absence of the aforesaid fund not being released in time. In the absence of the full amount not released to the petitioner, the paid amount released so far was of no use. According to the agreement the term loan was to lapse in March 1989. in spite of best efforts put by the petitioner, the said loan lapsed on 27 3 89 due to negligence and inaction on the part of the respondent Corporation. It was revalidated on 21 4 89 only for four days i.e. untill 25 4 89 and it was communicated to the petitioner on 2 5 89 after the loan automatically lapsed. It was highly improbable that within four days balance amount of Rs. 12.7 lacs could have immediately been utilised by the petitioner.

(3.) IT may be stated that for the purpose of additional loan, although the Small Industries Development Bank of India (in short SIOBI) had sanctioned an amount of Rs. 11, 38, 500 for the very unit of the petitioner, but for the reasons best known to them the respondents did not inform the petitioner and no intimation was sent whatsoever. When the petitioner wrote a letter to the Small Industries Development Bank of India (SIDBI), only then he learnt that they had already sanctioned the said amount. For nearly two years, the petitioner had to run from pillar to post for the purposes of additional loan only due to negligence and larches on the part of the respondent Corporation. It has thus been demonstrated that the only reason in delaying the disbursement of the loan to the petitioner was the ulterior motive. In fact, out of the total sanctioned loan of Rs. 37 lacs, the petitioner has been paid only about 31 lacs and the rest 6 lacs and odd have never been paid to the petitioner and the said amount lapsed due to negligence and latches on the part of the respondent. Whenever the petitioner approached any bank for the working a capital, the Banks did not agree for giving any working capital to the petitioner's unit in view of the fact that the respondents have themselves not disbursed the entire amount to the petitioner.