- (1.) THE complainant in this case is M/s Special Machines, Karnal which is a proprietory concern (owned by one Shri R. M. Jain), which has established a small-scale industrial unit at Karnal for the manufacture of welding electrodes. For the purpose of the said business the complainant had obtained loan facilities from the Hindustan Commercial Bank Limited, Karnal by way of Cas Credit (Hypothecation) Cash Credit (Pledge), Overdraft (Documentary Bills), Letter, of Credit and Performance Guarantee etc. According to the comniainant because of the failure on the part of the Hindustan Commercial Bank Limited to take steps to provide timely financial services, the complainant's business ran into serious difficulties and the complainant suffered heavy losses as a result thereof THE complainant has alleged inter alia that though his concern had been Pro-mised services by the Hindustan Commercial Bank Limited such as 'single head account operation non-insistence of margin money etc. , these promised services were unilaterally withdrawn without any justification or reason and without following statutory norms and policy guidelines framed and proclaimed by the Reserve Bank of India from time to time in respect of small- scale industrial units in the country. It is further alleged that during 1982-83 the Hindustan Commercial Bank Limited unilaterally and arbitrarily insisted , the "bifurcation" of the complainant's accounts from one head to several heads: insisted on margins and on daily drawing powers and 'chocked out' the initand letter of credits THE complaint-petition goes on to state that the petitioner who had already working capital shortage was compelled by the first respondent Bank to devert money form working capital to fixed deposits in violation of all the Banking Laws and norms. THE complainant has the further grievance that the first respondent has charged a very high rate of interest as well as unduly high banking service charges and the accounts of complainant were not maintained and operated by the Hindustan Commercial Bank Limited as per the Banking Laws, Rules, Regulations and norms and as per Reserve Bank of India Circulars, Guldelines, etc. According to the complainant the first respondent had committed many errors, irregularities and illegalities resulting in the complainant being deprived of availing the banking and financial services which the first respondent was under a legal obligation to provide to its customers. THE complainant states that because of the aforesaid and other acts and omissions of the part of the Hindustan Commercial Bank Limited his small-scale industrial unit could not work normally, its sales came down steadily and the interest burden increased disproportionately. THE first respondent Bank is said to have illegally stopped operation of accounts by the complainant from 21. 05. 1986 by sending a letter directing the complainant not to issue cheques without proper arrangement, which again is alleged to have been done in violation of all Banking Laws and practices. Another ground of grievance put forward in the complaint-petition is that the recommended working capita limit had not been sanctioned to the complainant by the first respondent Bank and due to this the complainant had to face great hardships in the working of his small-scale unit and in maintaining normal production and sale. THE complainant has also alleged that he was put to very serious loss on account of the failure of the first respondent Bank to extend to him financing facility for procuring the basic raw-material namely, M. S. Rimming Quality Steel from Steel Authority of India Tata / Iron and Steel Company Ltd. at control price. It is alleged that it was because of the failure of the first respondent Bank to meet the complainant's requirements of finances for the smooth running of his unit that the complainant's unit suffered heavy losses.
(2.) ON 18-12-1986, the Hindustan Commercial Bank Limited was amalgamated with the Punjab National Bank. The complainant has impleaded the Karnal Branch of the Punjab National Bank as Respondent No. 2 and the Head Office of the said Bank through its Chairman as Respondent No. 3 in the petition. The prayer in the complaint-petition is for the recovery of a sum of Rs. 3,489. 39 lakhs as representing the losses suffered by the complainant as on 30-6-1989 under the 12 heads set out at page 69 of the complaint-petition. They cover losses caused on account of sudden insistence on margins, loss "due to letter of credits", loss dud to wrongly charged interest on bills, loss due to unavailed amount of F. D. Rs, loss due to delay in release of F. D. Rs, loss due to non-procurement of Wire Rod from SAIL/tisco, loss on account of non-crediting of realised amounts, loss due to charges paid to Godown Keeper, loss due to inapt handling of documents, loss due to "documents till outstanding'", loss said to have been caused by wrongful set off of accounts and loss Caused to the complainant due to levy of excess interest on F. D. Rs. The aforesaid amount of compensation is claimed by the complainant from the Punjab National Bank as the succes or-in-interest of the Hindustan Commercial Bank Limited. Items shown as Serial Nos. 1 to 10 and 12 mentioned at page 69 of the complaint petition relate to transactions that took place prior to 1986 and the compensation is sought to be recovered from the Punjab National Bank in its capacity as a successor-in-interest of the Hindustan Commercial Bank Limited. Item No. 11, which deals with alleged wrongful set off of accounts is a claim which arose after the takeover of the Hindustan Commercial Bank Limited by the Punjab National Bank. I The complainant has relied strongly on a report prepared by M/s Haryana Industrial Consultants Limited estimating the loss suffered by the complainant-petitioner at Rs. 15. 44 crores as on 31-12 1987. According to the complainant on an updating of the losses following the same norms as adopted by M/s HARICON by the Chartered Accountants of the complainant upto the period 30 6-1989, the losses have been found to aggregate to Rs. 34. 89 acres. Respondent Nos. 2 and 3 have filed a statement setting out various grounds of preliminary objections against the maintainability of the complaint before this Commission. it is submitted therein by the aforesaid respondents that the complaint has suppressed from this Commission the fact that as early as in December, 1988, about seven months before the filing of the present complaint the respondent have filed a suit in the Court of the learned Addl. Senior Sub Judge, Karnal against the complainant and Ors. for recovery of a sum of Rs. 1,36,13,906. 23 with pendentilite and future interest as representing the amounts due from the complaint under the different heads of loan accounts, cash credit account etc, that he had with the erstwhile Hindustan Commercial Bank Limited. The respondents contended that the claims, question and issues arising' in the present complainant are inextricably interwined with the claims, question and issues arising in the said pending civil suit since the very same Bank account facilities and transactions are in issue in both the proceedings. It is further submitted in the objection statement that to a great extent, common documentary and oral evidence will have to be adduced and scrutinised in the two proceedings and as the matter is thus sub-judice before the learned Senior Sub Judge, Karnal, this Commission should reject the complaint on the said preliminary ground. Another ground of preliminary objection raised by the respondents is that the petitioner's claim which constitutes the subject matter of the complaint is clearly barred by limitation inasmuch as the complainant relates to the alleged negligence, breach of duty and defaults on the part of the Hindustan Commercial Bank Limited in connection with the operation of the petitioner's account with the said Bank. It is pointed out by the respondent that the last transaction in the said Bank account was on 23-5-1986 and since the complaint-petition has been filed only on 18-7-1989, it is manifestly barred by limitation, . Yet another ground of objection raised by those respondents is that the complaint-petition involves numerous intricate and highly disputed questions of fact as well as law, the disposal of which will necessarily requires a lengthy, full-scale trial and the recording of voluminous evidence of numerous witnesses and the scrutiny of a very large volume of documentary evidence. It is submitted by the respondents that the issues involved are so complex that they cannot properly be decided on the basis of affidavits and hence the appropriate and convenient forum in which all these issues can satisfactorily be agitated is a Civil Court before which the respondent Bank's civil suit is already pending. The respondents point out that it is fully open to the complainant, who is yet to file his written statement in the said suit to seek the reliefs claimed in the present petition by way of a counter-claim in the suit and to have all the issues raised by him determined by the Civil Court after a proper trial.
(3.) LASTLY, it is contended by the respondents that since the essence and substance of the complaint is that the Hindustan Commercial Bank Limited and Respondent Nos. 2 and 3 had not extended and made available to the petitioner all the facilities and financial assistance which the petitioner required for his small-scale industrial unit, the said grievance will no fall within the scope of Section 2 (c) (iii) of the Consumer Protection Act, 1986 (hereinafter called the Act) and this Commission should decline jurisdiction to adjudicate upon the complaint for this reason also. Without prejudice to the right to urge the aforesaid preliminary objections the respondents have filed their detailed reply traversing on merits the allegations contained in the complaint petition and refuting in toto the claim of the complainant for recovery of any amount of compensation from them. In view of the preliminary objections raised by the Respondent Nos. 2 and 3 against the maintainability of the petition, we considered it fit to hear arguments on the said question in the first instance before proceeding to hear the case on merits, if the same is found necessary after deciding on the sustainability of the preliminary objections. ;