P C B HOUSE Vs. UNITED COMMERCIAL BANK

JUDGEMENT

(1.) IN this writ application, the petitioners prayer is to quash annexure 6 and to issue suitable directions to the respondent -bank to comply with annexure 3 and to implement the recommendations of the committee, contained in annexure 17, to which it was a party.

(2.) THE petitioner -company is a registered small scale industrial unit (in short, SSI unit). It claims to be a singular unit in Eastern India, manufacturing printed circuit boards and printed card assemblies. The unit was approved by the respondents in the year 1976 and started its operation in July, 1977. The Small Industries Research Training and Development Organisation (hereinafter referred to as "SIRTDO") rendered services to the petitioner and then the petitioner -company started production with the financial assistance of the respondents. The said SIRTDO is the monitoring agency of the petitioner -company under whose supervision the petitioner is working. In November, 1980, April, 1982, June, 1982, June, 1983, and September, 1983, the said SIRTDO wrote letters to the Divisional Manager, Zonal Manager as also to the head office of the United Commercial Bank, Calcutta (respondent No. 1), highly recommending the performances of the petitioner and requested the respondents for rendering financial assistance to the petitioner -company. Thereafter, the petitioner obtained various work orders from different institutions and successfully completed the contract work and supplied the products to the parties with full satisfaction. In the year 1979, the respondents sanctioned a loan of Rs. 1.40 lakhs to the petitioner and the petitioner deposited a sum of Rs. 13,000 to their credit account to repay the loan amount. The petitioner further deposited a sum of Rs. 23,000 in the year 1981 and Rs. 15,000 in the year 1983 to their credit account to repay its loan. In the year 1981, the branch manager of the United Commercial Bank, Ranchi, adjusted a sum of Rs. 65,000 in the cash credit account of the petitioner to realise the loan. The branch manager of the United Commercial Bank, Mesra, Ranchi (respondent No. 2), adjusted a sum of Rs. 4,000 in the year 1983 and Rs. 11,000 in May, 1984, in the cash credit account of the petitioner to realise the loan.

(3.) ALL on a sudden, as is alleged by the petitioner, respondent No. 2, stopped financing the petitioner from June, 1983. Due to the negligent and arbitrary action of respondent No. 2, the petitioner could not get raw materials in time, the result being that a work order of Rs. 5. lakhs had to be cancelled. The work order was cancelled in October, 1983, whereas the raw materials reached the petitioner in February, 1984, and, therefore, the petitioner refused to accept it because due to the cancellation of the work order, it had become useless but then respondent No. 2 compelled the petitioner to accept the same. Due to the non -co -operation of the respondent -bank, the performance of the unit suffered. In May, 1984, the director of SIRTDO wrote a letter to respondent No. 2 contending that due to the cancellation of the work order, the unit became sick and, therefore, requested respondent No. 2 to take action to revive the petitioners unit. The Small Industries Service Institution inspected the petitioners unit and sent its report to the respondents declaring the petitioners unit as a sick unit. In July, 1984, the Deputy Director, Small Industries Services Institution, wrote a letter to the Divisional Manager, United Commercial Bank, Kanke Road, Ranchi (respondent No. 3), requesting it to send its approval to declare the petitioners company as a sick unit. The Assistant Director, SISI, wrote a letter to the General Manager, United Commercial Bank, Calcutta, requesting him to send his comments and suggestions on the draft report to the divisional manager. The petitioner made several representations to the respondents to declare it as a sick unit and also requested them to take action for its revival. The said unit having failed in its efforts, the petitioner then sent a legal notice to the respondents to redress the grievances but the respondents did not consider its case. The petitioner had received orders worth Rs. 6 lakhs from various industries, such as the Indian Telephone Industry Ltd., to supply printed card assemblies and from the TELCO Ltd. to supply some electronic materials. Again, in August, 1984, the petitioner wrote a letter to the general manager for recommendation to the joint report to declare the petitioner -company a sick unit.