PADMA CYRAMIX vs R.F.C.

THIS appeal has been filed by the appellant complainant against order dated 23.5.96 passed by the District Forum, Bikaner in Complaint Case No. 340/95 by which the complaint of the appellant was dismissed against the respondent.

NECESSARY facts given rise to this appeal are as follows : That the respondent had sanctioned a loan for Rs. 1,13,000 for establishment of a factory in favour of the appellant and that too was cancelled or repudiated by the respondent through their letter dated 15.3.1994 inter alia stating that the premises upon which industry was to be established were under dispute as suit for possession and partition was pending with the Court. The case of the complainant appellant was that repudiation of the sanctioned loan by the respondent had amounted to deficiency in service on the part of the respondent for which the complaint was filed by the appellant complainant against the respondent on 17.11.1995. A reply was filed by the respondent and their case was that that the sanctioned loan was rightly repudiated through letter dated 15.3.1994 because the land on which unit was to be established was found under dispute. Hence no case. Complaint be dismissed.

The District Forum after hearing both the parties through impugned order dated 23.5.1996 dismissed the complaint inter alia holding that if the sanctioned loan was not paid on the ground taken by the respondent as stated above that did not amount to deficiency in service on the part of the respondent.

AGGRIEVED from that order this appeal has been filed. In our considered opinion the District Forum has rightly dismissed the complaint.

IT may be stated here that through letter dated 5.10.1993 marked Anx.12 the appellant was informed by the respondent which is Rajasthan Financial Corporation that the land over which the unit was to be established was a disputed land and in such case loan could not be released by the respondent. The District Forum had rightly observed that it is for the Bank and Financial Institutions to decide whether to assist any industry with term and working capital loans. If in the judgment they find that a party is not credit worthy or the project proposed to be financed is unviable/it cannot be maintained that the refusal to finance the unit constitutes deficiency in the banking service to which the industry is entitled to from Banks and Financial Institutions. The Forum had also observed that it is legally open to the banking company concerned to take a decision in faith in the exercise of its bona fide discretion as to whether it is safe to make advances of public funds to any particular party and arrive at a decision after examining the relevant facts and circumstances. It cannot be said that when after due consideration of relevant factors the bank in its discretion decides not to grant further advances there has been any deficiency in service on the part of the bank.

APART from that the Corporation has a right, having due regard to the interest of industry, commerce, general public to act on business principles. For reasons when the corporation respondent had come to the conclusion that on the disputed land sanctioned loan was not secure and if in such circumstances the sanctioned loan was repudiated, by doing so no deficiency in service could be attributed on the part of the respondent.

FOR coming to the above conclusion the law laid down by the National Commission in the case of Padmalaya Auto Complex Ltd. v. A.P. State Financial Corporation, II (1992) CPJ 553 (NC), may be referred to where the National Commission has held that sanctioning of financial aid or continuing the aid already granted is discretionary power of the corporation. If refusal to sanction financial aid is pursuant to bona fide exercise of such discretion, same would not constitute deficiency. Thus the findings recorded by the District Forum are correct one and no interference is called for with the impugned order passed by the District Forum, Bikaner.

Accordingly, the appeal filed by the appellant is dismissed. Appeal dismissed.