REKHA GUPTA Revision petition has been filed against the judgment and order dated 02.07.2012 passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula (he State Commission in First Appeal no. 325 of 2011. The facts of the case as per the respondent/ complainant are as follows: The respondent had an experience of the Business of Masala Chakki and had also got training under Prime Ministers Employment Generation Programme. All the documents regarding his experience were submitted by the respondent/ complainant in the office of petitioner/ opposite party no. 2 and he had applied for a loan to start his business. After fulfilling all the conditions fixed under the scheme, he was sanctioned a loan of Rs.6,28,000/- on 13.03.2009, out of which a sum of Rs.1,83,000/- was given to the respondent by petitioner Bank. With this amount, the respondent started his business to set up Masala Chakki. He also spent money by way of taking loan from his relations and neighbours on interest, when the petitioner Bank department delayed in issuing the total amount of the loan sanctioned in his favour. Even after his making several visits in the office of petitioner no. 1 and even after sanction of the loan by opposite party no. 2 still, the petitioner did not release the amount of loan to the respondent without any basis. In this way, the respondent business was set up by him was on the edge of end, due to non-release of the sanctioned loan amount the petitioner caused a great loss/ damage to the respondent and amount of damage occurred due to non-releasing of sanctioned loan amount by the petitioner is near about Rs.4,45,008/-. On 08.03.2010, the respondent issued a legal notice upon the petitioner through their counsel Smt Mahee Malik, Advocate, District Court, Sonepat which was received by the petitioner, the respondent demanded the above said loan amount as per the above said scheme, but the petitioner did not file the reply of the same and did not pay heed upon the notice of the respondent. The respondent/ complainant has humbly prayed that in view of the above-mentioned facts and circumstances, the Court may kindly be pleased to summon and direct the petitioners: (i) To pay Rs.1,00,000/- on account of mental shock, agony, harassment, humiliation and other financial losses in business suffered by the respondent/ complainant. (ii) To pay the amount of Rs.4,45,008/- as loan sanctioned by petitioner no.2 which is to be released by petitioner Bank. (iii) To pay Rs.50,000/- for deficiency in services on the part of petitioner not to release the amount of loan mentioned above to the respondent being consumer of the petitioner. (iv) To pay Rs.11,000/- the costs of present complaint along with counsel fee, along with Rs.1,200/- for dispatching legal notice to the respondent in the interest of justice. The petitioner/ opposite party no. 1 in their written reply before the District Consumer Disputes Redressal Forum, Sonepat (he District Forum stated that there has been a breach of terms and conditions of the agreement made on behalf of the respondent and petitioner on 21.07.2009. The facts of the case as per the petitioner are as follows: The respondent was sanctioned a cash credit hypothecation limit of Rs.5,02,000/- for meeting out his requirements subject to the terms and conditions as stated in Annexure R 1. The entire term loan of Rs.1,26,000/- was availed of by the respondent but in this account also the respondent defaulted in the payment of instalments. Since the respondent made a breach of the terms and conditions of the agreement of loaning on the basis of which the credit facilities were granted, and as such the respondent bank is within the right to refuse further credit facilities and the respondent bank which is a nationalised bank is to see that the amount of loan sanctioned to the borrower is utilized as per terms and conditions of the agreement and the borrowers are required to abide by those terms and conditions. It has already been stated in the preliminary submissions of the written reply that the borrower has miserably failed to submit the stock statements and to route the sale through his account with the bank and as such he is himself responsible for violating the terms and conditions and has no right to take advantage of his own wrongs. Whatever amount that has been deposited by the respondent has been duly reflected in the statement of accounts which are Annexure 5 & 6. District Forum vide their order dated 03.02.2011 observed that: fter hearing both the learned counsel for the parties at length and after going through the entire relevant records placed on the case file very carefully, this Forum has come to the conclusion that the petitioner Bank has tried to make the things justified. But has failed to convince the Forum and at the same time, this Forum finds force in the arguments advanced by the learned counsel for the respondent as discussed above and has come to the conclusion that the petitioner has indulged himself in deficient service by withholding the amount of Rs.4,45,008/- as loan which was sanctioned by the respondent no. 2 and was to be paid by respondent no. 1 to the complainant ccordingly, finding deficiency in service on the part of the petitioner Bank it is directed the petitioner to release the amount of Rs.4,45,008/- as loan to the respondent on the terms and conditions on the basis of which a sum of Rs.2,83,000/- was given to the respondent/ complainant. The petitioner is also directed to compensate the respondent to the tune of Rs.2,000/- for rendering deficient services for causing mental agony and harassment and under the head of litigation expenses. However, petitioner can ask the respondent for complete formalities, if any to safe guard the repayment/ return of their amount of Rs.4,45,008/- with interest from the respondent. It is also directed to the respondent to complete the formalities, if any asked by the petitioner in respect of release of Rs.4,45,008/- in favour of the respondent ensuring its repayment with interest in favour of petitioner by the respondent. With these observations, findings and directions, the present complaint is allowed and the petitioner Bank is directed to make the compliance of this order within one month from the date of pronouncement of this order Aggrieved by the order of the District Forum, the petitioner filed an appeal before the State Commission. The State Commission vide their order dated 02.07.2012 dismissed the appeal holding that: he controversy between the parties is with respect to the release of balance loan amount of Rs.4,45,008/-. The plea raised by the appellant/ opposite party that the complainant had not submitted the stock statement due to which the balance loan amount was not released to him, is not sustainable in the eyes of law because the complainant had yet to receive the amount for stock and for raw material and therefore, the question of submitting stock statement does not arise at all. The appellant/ opposite party has indulged itself in deficient services by withholding the amount of Rs.4,45,008/-. No prejudice is going to be caused to the opposite parties from the order of the District Forum Hence, the present revision petition. The main grounds for the revision petition are as follows: (a) The courts below have failed to take notice of the fact that there are various types of loan/ facilities that are offered by the bank and depending on the requirement of the borrower suitable loan/ facility is chosen by them and consequently the same is granted by the bank on fulfilment of formalities. Term loan is taken for purchase of term asset etc., where time is required for repayment of loan amount. However, in cash credit facility an amount of loan is given to the borrower for his working capital needs. The entire amount of working capital required is not funded by the bank, some small amount is always funded by the borrower and the balance amount is funded by a bank as loan. This is as per RBI rules. The amount so worked out is given as loan and is called as imitthis is because under this kind of loan the borrower may not take up the entire amount of loan as working capital requirement every day is not the same. The bank released loan only after ensuring using of the amount for the purpose it was allowed. The inventory built up by bank loan is security of bank. (b) The courts below have failed to take note that the petitioner bank sanctioned term loan of Rs.1,26,000/- and cash credit limit of Rs.5,02,000/- to the respondent under the said scheme and that the respondent was required to set up his business from the term loan sanctioned and released and use the amount sanctioned in cash credit facility to facilitate day to day capital requirement. (c) The court below have failed to take note that full amount of limit as sanctioned under cash credit facility is not released by the bank at one go and that the amount is released in terms of the agreement entered into by the parties. The borrower has to account for the use of loan released by submitting agreed reports/ statements. The inventory built up by loan of bank is security of bank for repayment of loan, which was not done by the respondent in the present case. (d) For that courts below have failed to take note that almost full amount of loan was released by the petitioner bank under the terms loan facility and there was no deficiency by the petitioner. (e) The court below failed to take note that the complainant has not complied with the terms of sanctioned letter. In fact, not even a single stock statement was submitted by the respondent. (f) The courts below failed to take note that the respondent failed to comply with the terms and agreement and particularly that laid down in clause 8 of the agreement. That the respondent never submitted reports as laid down in the said clause. (g) The courts below failed to take note that clause 8 of the agreement entered into petitioner and respondent empowered the petitioner to terminate the agreement in case respondent fails to submit monthly inventories showing use of funds released by bank. The amount was not released by the petitioner bank as none of the conditions as envisaged in the said clause were complied by the respondent. (h) The court below failed to take note that the petitioner is an independent autonomous statutory body having its own constitution and rules to abide by and functions and obligations to discharge. That in discharge of its function, it is free to act according to its own rules. That the views it forms and the decision it takes are based on information, documents, advices, calculation, situation etc. The decision of the stopping further release of loan was based on prudent decision taken by a banker after considering all relevant facts. (i) The courts below failed to appreciate that bank is the custodian of the public money and it cannot give indulgence to people like borrower who defy the rules and regulations of public institutions. In light of above submissions and in the facts and circumstances of the case, the petitioner prayed to: Set aside /quash the impugned order dated 02.07.2012 passed by the State Commission in Appeal no. 325 of 2011 and the order dated 03.02.2011 passed by the District Forum, Sonepat and consequently dismiss the complaint against the petitioner. We have heard the learned counsel for the parties and have also gone through the records of the case carefully. It is quite apparent from the sanction letter of the petitioner dated 13.03.2009 that the respondent had been sanctioned term loan of Rs.1,26,000/- of which margin was 10% and the working capital was Rs.5,02,000/- and for which margin was 25% . The terms and conditions as per the sanctioned letter were follows: Term loan of Rs.1,26,000/- will be disbursed and the amount of margin of Rs.14,000/- will be paid to you. CC working limit will be disbursed against the margin @25%. The time limit will be repayable in 20 quarterly instalments of Rs.6,300/- after a moratorium period of 4 months, i.e., with effect from June 2009. The rate of interest will be charged as per RBI instructions and changes from time to time. For CC working limit, you have to submit stock report every month before 10th of every month. The CC working limit will be renewed every year and you have to submit necessary documents for renewal. You have to deposit sale proceeds in your CC working capital account. In addition, Annexure I was an undertaking from the borrower where clauses 23, 25 & 26 reads as follows: 23. I/We further undertake to route/ credit all our transactions/ sales through account only with your Bank. 25. We shall submit the monthly/ quarterly/ half yearly stock statements regularly in time, as per stock register maintained, eligible for D P (Drawing Power) against the fully paid stocks duly insured for all risks. 26. We further, undertake that we shall submit the yearly financial statements, i.e., Balance Sheet, Trading Account, Profit & Loss account, sales/ purchases every year to facilitate the renewal of our limit in time under your Bank rules. To avail of cash credit, the respondent has also signed hypothecation document which as per clause 8, read as under: he borrowers shall submit daily stock report to the Bank verified by them as correct. The Bank acts on the daily stock reports in determining the amount to be advanced or left outstanding against the borrowers should the daily stock reports as aforesaid contain any mis-statement (of which the Bank shall be the sole judge) or there be any shortage of the security the Borrowers shall render themselves liable to legal action and the Bank shall be entitled to terminate this agreement and take possession of the security and sell the same without any notice to the Borrowers and realise its dues and recover the balance of its claim from them It is the case of the petitioner that after taking loan, the respondent failed to submit even a single statement for availing of the cash credit for the working capital. The District Forum had hence erred in coming to the conclusions that the petitioner had indulged in deficiency of service by with-holding the amount of Rs.4,45,008/- as loan which had been sanctioned by OP2 and had to be paid by the petitioner/ OP 1. The State Commission also erred by holding that the respondent had not submitted he stock statement due to which the balance loan amount was not released to him, is not sustainable in the eyes of law because the respondent had yet to receive the amount for stock and for raw material and therefore, the question of submitting stock statement does not arise at all As per the sanction letter and as per the claim the respondent had to invest margin money amounting to Rs.1,52,000/- towards the actual cost of the project of Rs.7,80,000/- and thereafter he was eligible for availing the term loan and working capital cash credit to the extent Rs.6,28,000/-. The District Forum and the State Commission appear to have failed to understand the basic difference between a term loan and cash credit facility. Whereas the term loan is for a specific amount with specific repayment schedule with pre-determined interest rate and is most often used by a small business to purchase fixed assets such as equipments used in production process. On the other hand, cash credit makes provisions for the lender (which is mainly, Banks, Financial Institutions) for loan (also called as advance finance credit etc.) by depositing the sanctioned amount which in this case Rs.5,02,000/- into a new account from which the borrower in this case, the respondent can withdraw as per requirement within the permissible amount fixed by the lender for a specific time period. Cash credit facilities fulfil the requirement of working capital which is needed to run daily operation in a business concern and it is similar to a loan for the borrower. Cash credit makes a provision by transferring the sanctioned amount into cash credit account from the borrower can withdraw as per the requirements. In cash the credit system interest is charged on the amounts actually withdrawn on daily basis. Further, the borrower cannot withdraw the total sanctioned loan at a time. Banks or cash credit provides for holding Stocks or book debt (as security) against advance sanctioned. The security or a guarantee remains accessible by the Bank until cash credit is repaid in full. Depending on the security held, the cash credit facility is of two types, i.e., Pledge and Hypothecation. In this case cash credit hypothecation system was used. Further, while extending the cash credit facility, the bank does not fund total requirement of working capital. Some portion of the working capital has to be invested by the business entity itself as per the agreed upon percentage of margin money only the balance is supplied by the Bank as Cash Credit. Counsel for the petitioner has relied upon the judgment of Managing Director, Maharashtra State Finance Corporation and Ors. vs Sanjay Shankarasa Mamarde (2010) 7 SCC 489, wherein it was held as under: 2. As already stated, even the cheque in the sum of Rs.30,000/- issued by the complainant to the corporation on 02.09.1992 towards upfront fee was returned unpaid by his bankers. In the corporation letter dated 24.02.1994 it was alleged that the complainant had not only failed to pay interest, it was also found on inspection on a couple of occasions by the Regional Manager that during the last four months there was no further progress in implementation of the project. It is significant that these allegations and details of interest due from the complainant had not been seriously disputed by the complainant either before the Commission or in the counter-affidavit filed by him in this appeal. 23. In the background of the factual scenario as emerging from the material on record, we are convinced that there was no shortcoming or inadequacy in the service on the part of the Corporation in performing its duty or discharging its obligations under the loan agreement. The corporation was constrained not to release the balance instalments and recall the loan on account of stated defaults on the part of the complainant himself. Non-release of loan amount was not because of any deficiency on the part of the corporation but due to the complainant conduct and therefore, the failure of the corporation to render ervicecould not be held to give rise to claim for recovery of any amount under the Act. 26. Having considered the matter in the light of the correspondence exchanged between the corporation and the complainant, we have no hesitation in holding that there has not been any deficiency in the service the Corporation was required to provide to the complainant. In our opinion, the Commission was not correct in coming to the aforestated conclusion. We are of the view that the complainant being himself a defaulter right from the inception of his dealing with the Corporation, when his cheque in the sum of Rs.30,000/- got dishonoured, coupled with persistent defaults in discharging his liability to the corporation towards interest, despite repeated demands, he cannot be permitted to plead at a later stage that he suffered on account of deficiency in service by the corporation because of non-disbursement of balance instalments of loan by them The facts of the case are applicable to the case on hand. The repondent has failed to show that e has given the Bank even a single stock statement to support his claim for cash credit towards working capital. In view of the above, the revision petition is allowed and the orders of the State Commission as well as the District Forum are set aside and the complaint is dismissed. No order as to cost.