LAXMI FABRICATORS Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) - Though there are four Opposite Parties in this Original Petition, in fact there are only two: (a) Union Bank of India and its Branch Office (opposite parties Nos. 1 & 2) and (b) Maharashtra State Financial Corporation (M.S.F.G.) and its Regional Office (opposite parties Nos. 3 & 4).

(2.) The complainant acquired a plot of land from the Maharashtra Industrial Development Corporation (M.I.D.C.) for setting up a factory for manufacture of irrigation and agricultural equipment, sluice gates, oil expellers, folders, pullies, agricultural implements, man-hole covers, fixtures for irrigation water works and water sewerage board etc. For establishing this factory, the complainant-petitioner received a term loan for the fixed assets viz., for erection of factory building, sheds, plant & machinery, godown etc. It was to obtain its working capital from the commercial banks.

(3.) The MSFC sanctioned term loans of 11.25 lacs in September, 1986 and 4.65 lacs in December, 1988. Complainant approached the Union Bank of India for working capital loan and the said bank on 18th March, 1989 sanctioned the working capital of Rs. 9 lac (Cash Credit hypothecation Rs. 5 lacs, Bills purchase Rs. 4 lacs). It was stipulated that these limits would be available only after installation of machineries and "completion of bank's formalities and procedures". Subsequently, on 2nd March, 1991 it revoked the provisional sanction of 18th March, 1989 and declined to give any financial assistance for "adverse reasons". The letter of the 2nd March, 1991 which is crucial for deciding this case is reproduced below :