BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD
F.A.No.1119 OF 2005 AGAINST C.D.No.355 OF 2003 DISTRICT CONSUMER FORUM-II HYDERABAD
Between
M/s Amruth Agro Farms Pvt. Ltd.,
Rep. by its Managing Director, D.P.Subba Reddy
R.No.3, D.C.S.R.Complex, Mydukur Road,
Proddutur-516 361, Cuddapah District Appellant/complainant
A N D
1. The A.P.State Financial Corporation,
Rep. by its General Manager (Operations Dept.)
Zone-III, P.B.No.165, 5-9-194, Chirag Ali Lane
Abids, Hyderabad-500 001.
2. The A.P.State Financial Corporation
rep. by its Branch Manager, Cuddapah.
Respondents/opposite parties
Counsel for the Appellant Sri G.Ramgopal
Counsel for the Respondents Sri T.Sharath
QUORUM: SMT M.SHREESHA, LADY MEMBER
&
SRI G.BHOOPATHI REDDY, MEMBER
THURSDAY THE TWELVEFTH DAY OF JUNE
TWO THOUSAND EIGHT
Oral Order ( As per the Smt M.Shreesha, Member)
***
Aggrieved by the order in C.D.No.355 of 2003 on the file of District Forum-II, Hyderabad the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant is a registered as a Small Scale Industry under the Companies ACt. The complainant proposed to establish an industrial unit for processing milk in Cuddapah district with an estimated project cost of Rs.109.13 lakhs including the working capital margin of 5.86 lakhs. The complainant company approached the opposite party for a term loan of Rs.65.40 lakhs for the purpose of establishing an industrial unit for processing milk. The opposite party corporation after satisfying about the viability of the project and securities offered by the company sanctioned a loan of Rs.65.40 lakhs vide sanction letter dated 4.11.1995. In the sanction letter it was mentioned that the rate of interest was 17% + 0.60% interest tax i.e., total interest was 17.60% p.a., Agreement of Guarantee, Hypothecation Agreement were entered between the parties on 19.2.1996. In all these documents rate of interest was mentioned as 17% + interest tax of 0.60% p.a. It is further submitted that since the rate of interest being charged by the opposite parties was very high the complainant repaid the entire amount by April 2000. The opposite parties instead of charging 17.6% interest which includes interest and interest tax, charged 19.6% interest p.a. Charging of interest over and above the agreed interest is arbitrary and amounts to deficiency in service. The complainant corresponded with the opposite parties to refund the excess amount collected. But there was no positive response from the opposite parties. Hence, the complaint seeking directions to the opposite parties to refund the excess rate of interest of Rs.4,01,130/- collected from the complainant company, to pay interest @ 15% on Rs.4,01,130/- from 1.5.2000 to 31.1.2003 i.e., Rs.1,70,480/- and costs of Rs.20,000/-.
The opposite parties filed their counter denying the allegations made in the complainant and submitted that as per the terms of the agreement the loan was to be repaid in six years by 19 instalments with quarterly rests. The first 10 instalments were of Rs.3.80 lakhs each and the next 8 instalments were to be paid @ Rs.2.60 lakhs per instalment and the repayment of the loan was to commence after one and half years from the first disbursement of the said loan. The loan shall carry interest @ 17% p.a. plus interest tax @ 0.6%, which shall be paid every quarter year ending on 31st January, 30th April, 31st July and 31st October. The opposite parties corporation gets funds from SIOBI and other institutions and they have to repay the same with full interest charted. As per clause 8 of the terms and conditions of the loan sanction the opposite party reserves its right to vary/enhance the rate of interest at its own discretion and the complainant agreed fro the same and the same is binding on the complainant. Since the complainant wanted to close the account, the opposite parties agreed for the same and that the complainant repaid the loan amount without any protest and the entire amount was paid on 5.6.2000. The above complaint ought to have been filed within 2 years from 5.6.2000 as per Sec.24A of C.P.Act and hence the complaint is barred by limitation as the said complaint was filed on 30.1.2003. Therefore the opposite parties prays for dismissal of the complaint with exemplary costs.
The District Forum based on evidence adduced i.e., Exs.A1 to A14 and Exs.B1 and B2 dismissed the complaint on the ground that the complainant failed to prove deficiency in service on behalf of the opposite parties no.1 and 2.
Aggrieved by the said order the complainant preferred this appeal.
The learned counsel for the appellant/complainant filed written arguments and also submitted that the rate of interest being charged by the respondent/opposite party is very high than the interest being charged by the other Nationalized Banks. He submitted that the company should inform the Registrar of Companies under Form No.8 and Form No.13 about the quantity of loan, the rate of interest and charge created by the company over the assets of the company and these forms are also required to be countersigned by the respondent corporation and in these forms also the rate of interest is mentioned as 17% p.a. It is the complainant’s case that they were constrained to repay the loan amount by obtaining another term loan from M/s Andhra Bank even before the agreement period. The entire outstanding loan amount obtained from the Corporation pursuant to the agreement dated 19.2.1996 was repaid by the complainant by April 2000. The learned counsel for the appellant/complainant submitted that the corporation charged 19.6% interest when there was contractual sanctity for charging the additional 2% interest and they were constrained to pay this amount as demanded by them.
The learned counsel for the appellant/complainant further contended that since at no point of time the corporation denied or refused to refund the excess amount paid by the complainant, the claim of the complainant was refused. The cause of action arose on 9.7.2001 when the complainant received a letter from the corporation and the complaint was filed on 20.1.2003 which is well within the period of limitation. The learned counsel for the appellant submitted that the District Forum has erred in dismissing the complaint relying on clause 8 of the agreement which states that the corporation can revise or increase the rate of interest. He submits that the corporation ought to inform if there was any such revision of interest to the borrower and the borrower has right to repay the outstanding amount within 3 months from the date of such intimation.
The learned counsel for the respondent also filed written arguments submitting that as per Ex.A9 the GM Corporation addressed a letter dated 7.9.2001 and examined the request of the company for waiver and had waived the premature premium amount of Rs.72,900/- and this decision was communicated to the company on 20.4.2000. He submitted that the company had already availed benefit and closed the account way back in April 2000. Therefore the date 7.9.2001 cannot be taken as the date of their cause of action and the complaint is barred by limitation. He further contended that if there was any alleged deficiency, the complainant ought to have approached the civil court since the District Forum did not have jurisdiction with respect to charging of interest rates.
We have gone through the material on record.
It is the complainant’s case that their company availed financial assistance from the respondent for an amount of Rs.65.40 lakhs in November 1995 and as per sanction letter the rate of interest is 17% per annum + 0.60% interest tax. It is the case of the complainant that even in the forms submitted to the Registrar of Companies i.e., Form 8 the rate of interest mentioned as 17.5%. It is also the contractual rate of interest. The learned counsel for the complainant submitted that as per the loan sanction letter dated 4.11.1995 and the loan agreement dated 19.2.1996 the rate of interest is only 17.6% whereas the corporation has charged 19.6% which is 2% in excess of the rate of interest. It is also the case of the complainant that they addressed several letters dated 28.2.2000, 25.5.2000, 12.9.2000, 29.12.2000 and 28.6.2001, but the corporation vide their letter dated 9.7.2001 denied the request of the complainant to refund the excess interest of 2% allegedly charged by them. We observed from the record that the complainant had closed the account without any protest in the month of April 2000. We have gone through Ex.A9 addressed by A.P.S.F.C., the opposite party herein to the complainant/appellant which read as follows:
Vide your letter dated 31.03.2001 submitted to the Branch, you have requested the Corporation for waiver of premature premium amounting to Rs.72,900/- for closure of loan account, as the interest burden is very high and making your project non-competeable with that of other existing units. Your request has been forwarded by our Branch recommending for consideration of the same.
As a very special case, the Corporation has examined your request and keeping into your track record, the Corporation has agreed to waive the premature premium amount of Rs.72,900/- to enable you to fore-close the loan account. The decision of the Corporation has been communicated to our Branch vide our letter No.002006 dated 20.04.2000.
Having extended the benefits and loan account been closed, your any of the request for further reliefs and concessions pertaining to account cannot be entertained.
It is clear from the aforementioned letter that there was a request for refund of excess collection of interest on term loan and the Corporation has agreed to waive the premature premium amount of Rs.72,900/- to enable the complainant to fore-close the loan account and this was informed to the complainant vide their letter dated 20.4.2000. While we hold that the complaint is well within limitation since a letter was addressed on 31.3.2001 and was replied by the Corporation on 9.7.2001 repudiating the request for refund of an excess collection. However we are of the considered view that this Commission cannot go into the aspect of interest rates to be charged by the Corporation. Any breach of contract with respect to contractual rates of interest do not fall within the ambit of the Consumer Protection Act. For any such recovery of amount, the complainant is at liberty to approach Civil Court and this period can be covered under limitation. We do not see any reason to interfere with the well considered order of the District Forum.
In the result this appeal fails and is dismissed accordingly.
LADY MEMBER MALE MEMBER
12.06.2008
KMK*
