The Punjab National Bank (International) lost again in the high court on Tuesday when chancellor Geoffrey Vos refused its appeal against a January ruling that dismissed its claim against nine defendants it had loaned $45 million for oil refining and energy generating projects in the United States.
The bank made the claim on the ground of alleged deceit, misrepresentation and breach of contract against seven individuals and two companies based in India and the US. It also alleged that money had been siphoned off and payments due had not been made under the loan facilities and guarantees.
A UK-incorporated bank, PNB (International) is a wholly owned subsidiary of PNB India. It has seven branches in London and elsewhere in the UK.
The defendants in the case were Ravi Srinivasan, Trishe Resources Inc (US), Narasimhan Ramkumar, Vatsala Ranganathan, Pesco Beam Environmental Solutions Inc (US), Pesco Bean Environmental Solutions Pvt Ltd, Shankar Anantharaman, Like Staengl and Anantharam Subramaniam.
Kartik Mittal, partner in law firm Zaiwalla & Co, which represented the defendants, said: “PNB has now lost twice in this case…In both instances, the court found that PNB had failed in its duty to make full and frank disclosure”.
“The court has ordered PNB to pay a total sum of £215,000 towards the costs of the respondents in this appeal…PNB has indicated to the court that it intends to apply for permission to appeal to the Court of Appeal”.
“As this would be a second appeal, the test for granting permission to appeal is stringent. Permission to appeal will only be granted by the Court of Appeal if PNB can show that its appeal would have real prospects of success and it raises an important point of principle or practice”.
None of the defendants had links with England, but the loan contracts were negotiated and executed in London. The loan accounts were held and operated in London. The bank relied on these facts while making the claim in the high court.
Rohit Ralleigh, senior solicitor, added: “PNB’s claims remain set aside primarily due to its lack of candour with the court. Significantly, the chancellor of the high court found there to be no serious issue to be tried on the PNB’s fraud claims”.
Pointing out a series of lapses in PNB’s claim in the January ruling, Chief Master Marsh said: “The core components of a claim in deceit are absent”, adding that “the claims in deceit and misrepresentation do not demonstrate a serious issue to be tried.”
PNB had made similar legal claims in the US and Chennai, which it had allegedly failed to inform the court in breach of its duty to the court to provide full and frank disclosure.
Marsh added: “The failure to draw to the attention of the court the existence of the foreign claims was a serious breach of the claimant’s duty to the court. The proceedings were highly material to the exercise of the court’s jurisdiction to give permission to serve out of the jurisdiction.”
