- (1.) HEARD Mr. Ashutosh Srivastava, Counsel for the petitioners and Mr. Anil Kumar, for the respondent No. 3.
(2.) THE petitioners, Messrs. Lal and Kumar, is otherwise a proprietorship firm whose proprietor happens to be Heera Lal, Son of Sri Jamuna Prasad. Heera Lal, the petitioner No. 2, proprietor of the firm, aforesaid, is otherwise a contractor. His business is cbnstruction and building works. He took a loan from the Nagar Sahkari Bank Limited, Nagar Maha Palika Branch, Gorakhpur. THE loan was against a cash credit limit given to him for running his business in 1989. This cash credit limit was extended to Rs. 15 Lacs. THE petitioner mentions these facts in para graph 5 of the writ petition. With a cash credit limit running to Rs. 15 lacs, the petitioner borrowed from the Bank on the basis of his credit worthiness. THE Bank permitted overdrafts. While the petitioner was taking overdrafts against the cash credit limit provided by the Bank, the petitioner was slow in clearing his debts. THE overdrafts remained and the Bank required the petitioner to make-up the deficit and wipe out the overdrafts. Instead of clearing the loans which he took against the overdrafts, the petitioner told the Bank that he is running another busi ness of building and constructions as a contractor and a supplier to several Government departments including the railways and certain other "different authorities" and his payments from these Government departments are outstand ing. What the petitioner was telling the Bank was that as soon as he receives the payment from the other Government departments against the contracts which had been assigned to him, he would dis charge the overdraft against his account. Finding that the petitioner was avoiding the discharging of overdrafts, the out-standings were swelling with interest being added to the borrowings. Overdraft is a loan. When ordinary means of per suasion failed requiring the petitioner to clear the loans, the Bank took out recovery proceedings. THE petitioner was faced with a recovery citation amounting to a sum of Rs. 11, 93, 654=00 the amount outstanding until 30 June, 1993. Instead of discharging the payment or satisfying the recovery, the petitioner filed the present writ petition. In so far as the outstanding are concerned, there is no issue and it is ad mitted in the writ petition. There are sub missions on record and reiterated by Counsel, in effect, that by law the petitioner was entitled to a notice of thirty days, before the recovery proceedings were set in motion. The attempt by the Bank to retrieve its moneys by recovery proceed ings, thus, is bad. In so far as the petitioner is con cerned, neither equity nor law is in his favour. Any short-fail of notice which the petitioner contends ought to have been given has been sufficiently had by the fact that for three years this writ petition has been pending and by this time the petitioner ought to have discharged the loan.
(3.) EQUITY is against the petitioner. First over-shooting a cash credit limit and running an overdraft and then rushing in a writ petition in the High Court's preroga tive writ jurisdiction is itself inequity which offends the contract between the petitioner and the Bank and violates the sanctity of credit worthiness of the petitioner with the Bank. Being permitted to take an overdraft is an act of faith on which runs today's business and industry. If persons like the petitioners make a habit of over- shooting their credit limit with a Bank, and thereafter come up with a plea that other payments are to be received, which when received the overdraft will be cleared will erode the very foundation on which modern business credit rests. What the petitioner is telling the Bank is this that notwithstanding the overdraft which he has taken, he will return the amount at his pleasure or when he receives his other payments against the contracts of his con struction business with other Government agencies. For the Bank, the petitioner is a risky customer. There is no contract of guarantee nor is indemnity between the Bank and the petitioner other business associates. This Court has often expressed in its decisions that persons like the petitioner contribute to deficit financing of the nation's economy. There is nothing left in the credit of the petitioner and he wants an overdraft to continue under the writ of the High Court. The question is who will return the moneys which the petitioner will not pay and who will make up the interest on the overdrafts enjoyed by the petitioner?;