SAUHARD FOOD PRODUCTS (P) LTD. vs Punjab National Bank

THE present compensation application has been filed under Section 12-B of the M.R.T.P. Act, 1969 alleging unfair trade practices by and on behalf of Punjab National Bank. THE only grievance of the applicant is that the respondent Bank has not sanctioned loan amount of Rs. 30.00 lakhs. THE request of the applicant/complainant was declined by the respondent vide communication dated 5th February, 1992. This communication may be reproduced as below : "PNB Jhinjhak (Kanpur Dehat) 5.2.1992 To M/s. Sauhard Food Products (P) Ltd. V. & P.O. Mangalpur, Distt. Kanpur Dehat (U.P.) Reg. Your Working Capital proposal Dear Sir, This has reference to your working capital proposal. - In this connection, we have to inform you that our higher authorities have declined your loan proposal in view of the following reasons. - Non-completion of the project which will adversely affect the already low DSCR of the project. - Inability of the promotees to meet minimum margin requirements towards working capital. - Heavy erosion of net worth due to losses. - Inadequate collateral security offered to cover proposed limits. We regret the inconvenience caused. Thanking you and assuring our best attention at all times. Yours faithfully, Sd/- Manager"

THE parties went into trial and elaborate evidence was led. We, however, feel that prima facie the respondent Bank did not hold out any promise to the applicant nor misled in withholding the loan. On the contrary, the loan application was not approved as the applicant failed to fulfil the requisite conditions. In any case, no amount was withheld as no sanction was granted by the respondent Bank and the applicant does not possess a vested right to be granted loan and the financial institutions on assessment of the material placed before them are entitled to decline the proposal. We, therefore, find no merit in the compensation application. THE same is accordingly dismissed. THEre will be no order as to costs. C.A. dismissed.