Breach of trust has no place in bank: Court

Underscoring that a bank is synonymous with trust and breach has no place in the financial institution, a local court here has imposed Rs 50000 fine on Punjab National Bank.

Additional district judge (bank cases) Srinagar, Balbir L Jaswal imposed the fine on PNB after hearing advocate F A Mir on behalf of a Corporation dealing in manufacturing of carpets, rugs, chainstich and the PNB through its counsel.

   

The case was filed by the PNB against the Corporation for recovery of Rs 10,93,571.

“Considered the arguments from both sides…in my considered view the bank has acted negligent and has caused the loss to the defendant (corporation) and (it) cannot claim recovery of the loan amount from the defendants,” the court said.

“The bank has alleged false and vexation claim recovery. The bank means trust and where the trust ever prevails. The breach of trust has no place in the financial institution alike bank,” the Court observed.

The conduct of the bank, the court said, attracts the exemplary costs. “Since the bank has dragged the defendants (Corporation) in the false litigation or more than thirty four years and similar thirty four years of the court is consumed by the plaintiff bank for false litigation. Where the bank was aware of their mistakes of non-obtaining of insurance policy against loan of Packing Credit Facility, even premium was deducted for the amount of Rs 6364,” the court said dismissed the suit with fine of Rs 50000.

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