VASANTHI PLASTIC INDUSTRIES Vs. MANAGER BANK OF BARODA

JUDGEMENT

(1.) Under a scheme evolved by the Government of Tamil Nadu for the social and economic upliftment of the Members of the Aadi Dravida Community the complainant Mrs. Vasanthi applied to TAHDCO for financial help for the plastic kodam manufacturing unit project. The TAHDCO approved the project and as directed by it the complainant approached the 1st opposite party Manager of the Bank with a loan application. The project would cost Rs.5,00,000/- of which Rs.4,00,000/- would be for purchase of machinery and Rs.1,00,000/- would be for working capital. The 1st opposite party Bank was to finance Rs.4,00,000/- and the 2nd opposite party TAHDCO was to finance Rs.1,00,000/-. For obtaining the said amount of Rs.4,00,000/- the complainant opened an account in the 1st opposite party Bank making a deposit of Rs.10,000/- and the 1st opposite party sanctioned a loan of Rs.4,00,000/- out of which Rs.3,20,000/- would be term loan and Rs.80,000/- would be working capital loan.

(2.) The loan was sanctioned subject to TAHDCO paying the 25% margin money of Rs.1,00,000/-. Out of the said margin money of Rs.1,00,000/-15% would be subsidy that would be paid by the Government. According to the complainant she took on lease a premises for starting the unit on 24.9.1990 for a period of 10 years at rent of Rs.450/- per month and she paid an advance of Rs.2,000/-. The installation of the machine was completed on 10.7.1991. On 27.7.1991 the 1st opposite party Bank released 50% of the working capital i. e. a sum of Rs.40,000/-. There was delay in TAHDCO releasing the margin money. The 1st opposite party Bank told the complainant that if the payment of the margin money by TAHDCO was delayed the complainant would have to submit a fresh loan application, and if the complainant deposited the margin money herself she could avoid such a situation. Upon this the complainant borrowed money from others and paid the margin money to the Bank. The complainant deposited totally Rs.95,000/-. The Bank assured the complainant that once the TAHDCO released the margin money of Rs.1,00,000/-, the Bank would return the money deposited by the complainant. On 4.3.1992 the TAHDCO released the margin money of Rs.1,00,000/- and it was paid by cheque to the Bank. The complainant requested the Bank to return the amount of Rs.95,000/- paid by her in lieu of the margin money and also requested the Bank to release the balance of the working capital of Rs.40,000/-. But the Bank refused to pay that amount, and adjusted the money towards the complainant's loan amount. The complainant, therefore, had to borrow money from others to run the industry.

(3.) Because of the said negligent service rendered by the Bank the complainant's industry was put under severe financial strain. While so without prior intimation, all of a sudden, taking law in its hands, on 6.5.1994 the Bank with the help of Goondas broke open the complainant's premises and removed the machineries, raw materials and finished products and all other valuables. On these grounds the complaint has been filed for directing the opposite parties to pay, (1) a compensation of Rs.3,00,000/- for the financial loss, mental agony and loss of reputation caused due to the withholding of Rs.95,000/- which had been deposited by the complainant towards TAHDCO's margin money; (2) a compensation of Rs.4,50,000/- for the financial loss, mental agony and loss of reputation caused due to the illegal act of breaking open of the complainant's premises and seizure of machinery, raw material and finished products.