SREE RAJESH INDUSTRIES Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) The complainant, M/s. Sree Rajesh Industries, established a small scale industrial unit at Vijayawada in 1980. On the application of the complainant, the opposite party, Punjab National Bank, in April, 1983 agreed to provide financial assistance for the concern of the complainant. The total amount of financial assistance which the opposite party agreed to provide was Rs. 30.50 lakhs long term loan of Rs. 4.98 lakhs and short term loans consisting of cash credit (Rs. 8 lakhs), bill discounting (ABC Bills upto Rs. 7.50 lakhs), letter of credit (both revolving and non-revolving) Rs. 7 lakhs, Bank guarantee on behalf of this complainant to Railways upto Rs. 3 lakhs to obviate 15% deduction as security from "on account" bills. In addition it was also given a Clean Demand Draft facility upto Rs. 1 lakh. The financial assistance with the aforementioned limits was allowed by the Bank to the complainant in March 1984.

(2.) The complaint of the complainant is that, contrary to the Government's policy to provide finance to small scale industries and the credit policy for loans and advances of the Reserve Bank of India for the priority sectors, he was not given financial assistance as agreed by the opposite party, the Bank. The complainant has alleged that he had secured orders from the Railways for traction sub-stations and from the Andhra Pradesh State Electricity Board amounting to Rs. 1 crore but when the works were under execution the Bank (Opposite Party) denied him the finance as already agreed to. In particular the opposite party failed to provide finance against ABC Bills and against Letter of Credit. In consequence the complainant alleges that he could not execute the works in time. He attributes his inability to execute the contracts to the failure of the opposite party (Bank) to provide the finance upto the sanctioned limits resulting in his industrial unit running into heavy losses. According to the complainant, loss was incurred by him due to the failure of the Bank to render the service it was required to render under the order of the Government of India and the credit policy of the Reserve Bank.

(3.) The complainant has further alleged that the opposite party had written to the Central Railway in April, 1986 that the dealings of the complainant with the Bank were not proper, thereby, affecting the complainant's reputation unjustifiably. Again the opposite party (Bank) approached the Income Tax Department for transferring to it the amount of refund of tax granted to the complainant by the Income Tax Department in 1986. This action of the Bank, according to the complainant, was inimical and was not in the interest of the complainant