INDUSTRIAL PRODUCTS KARNAL Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) The Complainant set up a unit for manufacture and sale of electrodes in 1981-82. For running the unit he obtained working capital facilities from the erstwhile Hindustan Commercial Bank Ltd. This Bank was amalgathated with the Punjab National Bank on the 19th December, 1986.

(2.) The grievance of the Complainant is that in the beginning he was able to obtain credit and advances from the Bank through opening a single account. Subsequently, the Bank bifurcated it into cash credit, over draft, term loan, bill of discount, letters of credit accounts with different drawing powers, margins etc. and that this splitting up of his single account with the Bank was responsible for unnecessary complications and led to the Bank failing to provide the need based financial assistance to the Unit for its various requirements such as purchase of essential raw-materials (wire rods for manufacture of electrodes) and non-observance of the orders and the guidelines of the Government of India and the Reserve Bank of India regarding credit facilities to small scale industries. The Complainant has also alleged that his banker violated the statutory banking norms and practices thereby caused serious financial crises for the unit. According to him an independent industrial consultant has assessed his avoid-able loss due to deficiency in services rendered by the Bank at Rs. 7,30,45,250/-. As per the details furnished by the Complainant this loss comprised of excess and erroneous charges for opening and closing of Letters of Credit, interest on bills retired late, non-provision of over draft facility to purchase electrode quality wire rods, unjustified insistence on margin money etc.

(3.) The Opposite Party, Punjab National Bank, has refuted the allegations made by the Complainant and has submitted that the partners of the partnership firm of M/s. Industrial Products, Karnal (Complainant) are Shri R.M. Jain and Shri J.M. Jain and that Mr. R.M. Jain is also the sole proprietor of the concern, M/s. Special Machines, that earlier Shri R.M. Jain was running other partnership firms viz. M/s. Weldwell and M/s. Weldflux at Karnal and had availed of loan facilities from the State Bank of India and the Hindustan Commercial Bank and had defaulted in repayment of the loans to the Banks, and that the partner (Shri R.M. Jain) of the Complainant firm (M/s. Industrial Products) is involved in litigation with the State Bank of India as a partner in the firm of M/s. Weld well and M/s. Weldflux and that the funds obtained for his partnership firm of Industrial Products (Complainant) were diverted to another of his partnership firm M/s. Modern Equipments in which his wife and two minor children were the partners. The Opposite Parties have further alleged that the Complainant had contravened financial discipline to be observed by him by diverting funds received from the Bank for personal use - leading a luxurious life - which resulted in loss to the firm including M/s. Industrial Products, the Complainant here.