PREM KUMAR SHARMA Vs. PUNJAB NATIONAL BANK & ORS

JUDGEMENT

(1.) ONLY question that needs consideration in this appeal, is whether the bank on the facts existing on the complaint file was deficient in service by not granting cash credit hypothecation limit to the tune of Rs. 15 lacs. If this question is answered in the affirmative, the appeal has to be allowed, otherwise consequence is obvious.

(2.) IT appears that the appellant approached the Palampur Branch of the respondent -bank for sanction of cash credit limit in the sum of Rs. 25 lacs. He appeared for interview and copy of the interview form is Annexure D produced by the respondents. According to this document application was filed for grant of Rs. 15 lacs cash credit hypothecation credit limit to M/s. Annjal Computers which was to be established by the appellant. Margin money was to be 25% and permissible limit was Rs. 15 lacs. Primary security was to be hypothecation of stocks. As per this form, appellant was also to pledge the FDRs for Rs. 12 lacs, besides mortgaging land of the guarantors namely, Smt. Mansa Devi and Shri Rajinder Singh.

(3.) ANOTHER fact made out from the record is that in the course of correspondence exchanged between the parties, is that as per Annexure OP -12 it is clearly made out, that though the appellant had approached the Palampur Branch of the Bank for grant of cash credit limit in the sum of Rs. 25 lacs, but he was made aware that the branch could consider and sanction this limit only upto Rs. 15 lacs which was within the powers of the branch. Appellant was also informed in this behalf, that after watching his business activity for few months branch could recommend the case for enhancement of limit to Rs. 25 lacs to the competent authority. In this background he was required to make an application for the grant of the limit and, in fact, such an application was made in the bank on 15.1.2005, copy whereof is Annexure OP -7 filed by the bank. It appears that with a view to avail the facility of aforesaid limit in the sum of Rs. 15 lacs, appellant got the land of his guarantors Smt. Mansa Devi and Sh. Rajinder Singh mortgaged vide Annexure A -1. Mortgage deed was duly registered in the office of Sub -Registrar, Palampur. Copy of this mortgage deed is Annexure A -1. Now the disputes start.