BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.
C.C.No.103/2013
Between:
Sri Ajanthy Foods Private Limited,
Plot No.265 J/1 Road No.10
Jubilee Hills, Hyderabad-500 033
Rep. by its Director G.Munirathnam Naidu. Complainant
And
- The State Bank of India,
Rep. by its Branch Manager,
Nagari Branch
Nagari-517 590
Chittoor District.
- The Regional Manager III,
Regional Business office,
State Bank of India,
Tirupathi 517 501.
- Consultancy service Cell,
S.B.I.Local Head office,
Bank street, Koti
Hyderabad-500 095.
- The Deputy General Manager,
Regional Business office
State Bank of India
Tirupathi 517 501.
- The General Manager Network-3
State Bank of India
Local Head Office
Bank street, Koti
Hyderabad-500 095.
- Central Public Information Officer,
State Bank of India,
Local Head Office,
Bank street, Koti
Hyderabad-500 095.
- General Manager Net work 1,
Appellate authority under RTI Act
State Bank of India,
Local Head office,
Bank street, Koti
Hyderabad-500 095. Opp.parties.
(not pressed against Ops 7 and 8)
Counsel for the complainant: M/s P.Nagendra Reddy
Counsel for the Opp.parties : M/s. Vamaraju Srikrishnudu
QUORUM: HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT.
AND
SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER.
THURSDAY, THE TENTH DAY OF JULY,
TWO THOUSAND FOURTEEN
Oral Order (As per Hon’ble Sri Justice GopalaKrishna Tamada, President)
***
This complaint is filed U/s.17 of Consumer Protection Act, to declare that there is deficiency in service on the part of the opposite parties and direct the opposite parties to pay compensation of Rs.50 lakhs which includes costs.
The complainant intended to establish Jaggery industry and Paraboiled Rice Mill in Mittakandriga Village, Nindra Mandal, Chittoor District and purchased the land in an extent of Ac.11-00 cents in Sy.Nos.254-1 and 266/2/A 13 situated in the said village and submitted progress report to opposite party No.1 and requested to grant term loan of Rs.3.38 crores and 1.93 crores, working capital of Rs.1.98 crores and Rs.0.80 crores for Parboiled rice mill and jaggery factory respectively. The opposite party No.1 forwarded the project report to opposite party No.2 and opposite party No.2 by letter dated 11-1-2012 required the complainant to submit certain documents which were already submitted with the project report and the complainant submitted copies on 23-1-2012. The complainant submitted that opposite party No.2 did not maintain the check list and started raising queries one after the another and there was exchange of correspondence between them and opposite party No.2 required the complainant to remit the processing fee of Rs.2,25,925/- for both the industries and also to submit legal opinion an valuation report and accordingly the fee was paid vide D.D.No.544147 dated 14-10-2011 and also legal opinion and valuation reports were submitted to opposite party No.2.
The complainant submitted that the opposite parties 1 and 2 inspected the land where the proposed industries were to be established and the complainant also offered plot to an extent of 505 sq. yds. situated in Road No.10, Jubilee Hills Hyderabad and also land to an extent of Ac.11.00 of Mittakandriga where the proposed industries are to be established apart from hypothecation of the industry. The market value of the collateral security is more than Rs.5 crores and the building and hypothecation will be more than 8 crores and for granting of loan of Rs. 8 crores the complainant offered 13 crores. The complainant submitted that opposite party No.2 compelled the complainant orally to drop the para boiled rice mill and inclined to grant loan for jaggery industry. The complainant submitted that opposite party No.2 sent proposal for jaggery industry to opposite party No.3 for study of viability of jaggery business and submit report of techno economic viability and opposite party No.3 without discussing with the complainant submitted the study report to opposite party No.2 on 11-1-2012 stating that the business is viable both technically and economically and complainant asked opposite party No.2 to submit validation from experts as it is said as new technology but opposite party No.2 reduced the term loan to Rs.1.10 crores from 1.93 crores. Thereafter the complainant to find out reasons for reduction of the loan requested to supply copy of study report and opposite parties 2 and 3 refused to supply copy and therefore he made application under R.T.I. Act to opposite party 7 vide letter dated 04-4-2012 and opposite party No.7 also refused to supply and therefore the complainant approached the Chief Information Commissioner and there was no reply which amounts to deficiency in service. The complainant applied for conversion of the land from agriculture to industrial and RDO, Chittoor visited the land and asked the complainant to pay fee of rs.60,000/- and the same was paid and the copy of challan was submitted to opposite party no.2 and complainant also paid fee of Rs.20,000/- as per the demand of Pollution Control Department and thereafter opposite party No.2 asked the complainant to submit agreements from the farmers for 8 years and it is the case of the complainant by seeing a newsitem that the rate of jaggery has gone down, opposite party No.2 refused to grant the loan. Therefore the complainant approached the Ombudsman and the Ombudsman gave direction on 23-10-2012 to opposite party No.2 to again obtain loan application from the complainant and process and the complainant submitted a request for loan on 03-11-2012 to opposite party No.5 but there was no response.
The complainant alleged that it took 9 months for opposite party no.2 for process and finally refuse the loan and one season had gone and advance of Rs.16.5 lakhs was paid to machinery, suppliers and lot of amount and time spent on land conversion, pollution certificate, approval of gram panchayat, approval from District Industries centre, etc., and the season is for 140 days and the complainant suffered a loss of Rs.500 lakhs. Hence the complaint.
Opposite party No.1 filed written version on behalf of all opposite parties resisting the complaint. It contended that the complainant failed to furnish the required document and information and margin money and hence the bank returned the proposal and the complainant has no vested right to grant loan and the proposal was under processing stage and there was no assurance from the bank that the loan amount will be sanctioned. The sanction of loans is purely a commercial decision to be taken by the bank and the Bank cannot be compelled to sanction loan facilities and further the Bank has every right to reject the loan application without assigning any reason. The opposite parties submitted that the sanction or rejection of loan is purely discretionary power of the Bank and the same is not a service as defined under the provisions of Consumer Protection Act. The decision taken by the Bank is a credit decision and the same is taken by assessing various factors and under the provisions of RTI Act, there are certain remedies available to the complainant and the consumer Fora constituted under the Consumer Protection Act, 1986 has no jurisdiction to entertain the complaints on the ground of non furnishing of information under the RTI Act and submitted that the complaint is frivolous and vexatious and liable to be dismissed.
The complainant filed the affidavit of its Director and got marked Exs.A1 to A38 and the opposite parties filed the affidavit of opposite party No.1 Branch Manager and relied on Exs.B1 to B16.
Heard both counsel.
The complainants intention is to carry on business in Jaggery and Para boiled Rice Mill and in that context he approached the bank for obtaining loan. When the amount is so huge and the purpose is to establish an industry even by no stretch of imagination, it can be held that the complainant is a consumer within the meaning of Section 2(i) (d) of the Consumer Protection Act, 1986. It may be apt to extract the said provision of law i.e. Section 2(d) and its explanation.
(d) "consumer" means any person who-
(i) buys any goods for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes
any user of such goods other than the person who buys such goods for
consideration paid or promised or partly paid or partly promised, or under any
system of deferred payment when such use is made with the approval of such
person, but does not include a person who obtains such goods for resale or for any
commercial purpose; or
(ii) 4[hires or avails of] any services for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred
payment and includes any beneficiary of such services other than the person who
4[hires or avails of] the services for consideration paid or promised, or partly paid
and partly promised, or under any system of deferred payment,
when such services are availed of with the approval of the first mentioned person; (but
does not include a person who avails of such services of any commercial purpose;)
[Explanation.-For the purposes of sub-clause (i), "commercial purpose" does not include
use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;]
In fact keeping this is mind, the said explanation was appended subsequent to the promulgation of the Act on 15-3-2003. In those circumstances, in our considered view, the complainant is not a ‘consumer’ and accordingly this complaint is dismissed giving liberty to the complainant to approach a competent civil court/tribunal for redressal of his grievance.
Accordingly this complaint is dismissed. There shall be no order as to costs. It is needless to observe that the time spent in prosecuting this complaint is exempted and the complainant is at liberty to approach the competent civil court and the period spent between the filing of the complaint before this Commission and the disposal of the matter today by us will be excluded under Section 14 of the Limitation Act, 1963 in the light of the decision of the Hon’ble Supreme Court in “Trai Foods Ltd vs National Insurance Company Ltd and others” reported in (2004) 13 SCC 656.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.10-7-2014.
//APPENDIX OF EVIDENCE//
WITNESSES EXAMINED
For complainant: For Opp.parties:
Affidavit of Mr. G.Munirathnam Naidu, Branch Manager of OP.1
Director filed. filed his affidavit.
Exhibits marked on behalf of the complainants:
Ex.A1-Approval from GM, Dist.Industrial Center, Chittoor dated 18-11-2011.
Ex.A2-Approval from Gram Panchayat dated 25-10-2010.
Ex.A3-Payment of fee of Rs.22,812/- to Gram Panchayat dt.25-10-2010.
Ex.A4-Application for land conversion dated 16-11-2011.
Ex.A5-Payment of challan for Rs.60,000/- for land conversion dt.23-4-2012.
Ex.A6-Land conversion approval from RDO, Chittoor dt.25-6-2012.
Ex.A7-Fees paid total Rs.21,000/- on different occasions for approvals from
Pollution Control Board, copies of D.Ds. dt.29-12-2010.
Ex.A8-Approval from Pollution Control Board, Kurnool dated 13-8-2012.
Ex.A9-Payment of processing fee of Rs.2,25,925/-, copy of DD dt.14-10-2011.
Ex.A10-Validation certificate from Principal Scientist, Sugarcane Research Station,
NG Ranga University, Anakapalli, dt.06-5-2012 and 23-2-2012.
Ex.A11-Proof of previous experience in business entrepreneurship-letter issued by
Chief Engineer, Electricity Board dated 12-12-1989.
Ex.A12-Letter of complainant furnishing replies to all queries of OP 2 on Pollution,
Agreement from farmers, land conversion etc. dated 23-1-2012.
Ex.A13-Consent letters of farmers to supply the sugarcane duly totalled by OP 2
Dated 25-12-2012
Ex.A14-Letter of the complainant to OP 4 requesting not to reduce the loan duly
Furnishing the reasons dated 02-12-2011.
Ex.A15-Letter of complainant to OP 6 explaining that heating of sugarcane juice is
Not a new process dated 30-1-2012.
Ex.A16-Letter of complainant to OP 2 explaining about pollution, source of margin
Land conversion, validation etc., dated 24-2-2012.
Ex.A17-Letter of complainant to OP 2 and 5 protesting for declining of loan for rice
Mill and asking for format of agreement, pollution, land conversion, source
Of margin dt.16-3-2012.
Ex.A18-Letter of complainant to OP 2 and 5 conveying disgust on Bank’s behaviour
Dated 06-4-2012.
Ex.A19-Letter of OP 2 conveying refusal of loan basing on newspaper report
Dated 07-5-2012.
Ex.A20-Newspaper report dated 07-5-2012 on jaggery reduction of Rs.0.50 per kg.
Dated 07-5-2012.
ExA21-Appeal of complainant to OP 5 for reconsideration dated 09-7-2012.
Ex.A22-Proof of present rate of jaggery Rs.63/- dated 26-9-2012.
Ex.A23-Letter of complainant under RTI Act for study report to OP 7 dt.04-4-12.
Ex.A24-Reply of OP 7 refusing the information under RTI Act dt.25-4-2012.
Ex.A25-Appeal of the complainant to OP 8 under RTI Act, dt.02-5-2012.
Ex.A26-Refusal of appeal by OP 8 under RTI Act dt.23-5-2012.
Ex.A27-Extract of Board resolution
Ex.A28-Copy of certificate of incorporation.
Ex.A29-copy of DD & Memo.
Ex.A30-Legal opinion of panel advocate .
Ex.A31-copy of SBI corporate office Master circular dated 04-4-2009.
Ex.A32-Letter of OP dt.27-9-2011 asking for required information for making a
Study on the project.
Ex.A33-Letter of complainant dt.07-10-2011 furnishing the required information.
Ex.A34Letter of OP dt.11-1-2012 informing the economically viability report.
Ex.A35-OP letter dated 27-1-2012 prejudicing the complainant.
Ex.A36-Representation dt.26-4-2013 to OP 2 & 5 on refusal of loan.
Ex.A37-Chief Information Commission, New Delhi decision dt.30-7-2013.
Ex.A38-Order of the Ombudsman, RBI dt.23-10-2012.
Exhibits marked on behalf of the opposite parties:
Ex.B1-Letter dated 20-9-2011 from OP 1 to OP 2 forwarding the project report
for study of technical viability and economic feasibility.
Ex.B2-Office copy of letter dated 09-1-2012 from OP 2 to OP 3 requesting to
reconsider the loan amount.
Ex.B3-Office copy of letter dated 11-1-2012 from OP 2 to complainant requesting
to furnish documents.
Ex.B4- Office copy of letter dated 27-1-2012 from OP 2 to complainant requesting
to furnish documents.
Ex.B5- Office copy of letter dated 31-1-2012 from OP 2 to complainant requesting
to furnish documents.
Ex.B6- Office copy of letter dated 01-3-2012 from OP 2 to complainant requesting
to furnish documents.
Ex.B7- Office copy of letter dated 24-3-2012 from OP 2 to complainant requesting
to furnish documents.
Ex.B8-Letter dated 26-4-2012 from OP 3 to OP 2 informing that the documents
required to be furnished by the complainant are mandatory.
Ex.B9- Office copy of letter dated 27-1-2012 from OP 2 to complainant returning
the proposal and processing fee amount along with DD
Ex.B10- Letter dated 02-12-2011 from complainant to OP 2 requesting to
reconsider the loan amount.
Ex.B11- Letter dated 23-1-2012 from complainant to OP 2 with regard to furnishing
of documents.
Ex.B12- Letter dated 04-2-2012 from complainant to OP 2 with regard to furnishing
of documents.
Ex.B13- Letter dated 24-2-2012 from complainant to OP 2 with regard to furnishing
of documents.
Ex.B14- Letter dated 16-3-2012 from complainant to OP 2 with regard to furnishing
of documents.
Ex.B15- Letter dated 04-4-2012 from complainant to OP 2 requesting to furnish the
Copies of reports of TEV cell.
Ex.B16- Letter dated 06-4-2012 from complainant to OP 2 with regard to furnishing
of documents.
sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.10-7-2014.
