PER S.K. NAIK, MEMBER

          This revision petition has been preferred by Akhilesh Kumar Pandey, the complainant before the District Consumer Disputes Redressal Forum, Kanpur (For short ‘District Forum) against the order dated 27.12.2004 passed by the State Consumer Disputes Redressal Commission Lucknow, U.P. (For short ‘State Commission’) vide which the relief obtained by him from the District Forum has been disallowed by the State Commission.

Relevant facts of the case are that ---- the petitioner/complainant had applied for a loan of Rs.2 lakhs from the respondent/opposite party to set up a masala manufacturing unit under a scheme of the State Government to encourage self employment which included a component with regard to subsidizing the rate of interest on the amount of loan obtained for the purpose from the financial institution.  His application was routed through and recommended by the Khadi & Village Industries Board.  The respondent/opposite party – Bank initially sanctioned a loan of Rs.1,40,000/- on 15.3.1997 which was subsequently increased to Rs.1,60,000/- on 9.4.1997.  As, required under the scheme, the petitioner/complainant deposited a sum of Rs.30,000/- as his contribution towards margin money with the respondent/opposite party – Bank.  As per the complainant, his premises were inspected for suitability by the representatives of the respondent/opposite party – Bank and on their advice to raise the ceiling level  of the house, he had to dismantle  the roof and invest a huge amount to reconstruct the roof to meet their requirement. Further, he had obtained electricity connection for starting the unit.  Besides, a sum of Rs.16,000/- was also received by the respondent/opposite party – Bank from the Khadi and Village Industry Board towards the subsidy amount for the interest on the loan.   Moreover, the complainant had furnished five guarantors as against the normal requirement of two.  However, to his utter disappointment, the sanctioned loan was not disbursed despite repeated visits.  The complaint, therefore, was filed before the District Forum seeking a direction for the disbursement of the loan as also a compensation of Rs.1,50,000/-  as damages for mental agony and also cost of litigation. 

The District Forum vide their order dated 11.6.2001, after notice to the respondent/opposite party and on perusal of the evidence produced before it, partly allowed the complaint and directed the respondent/opposite party to pay compensation of Rs.40,000/- and Rs.1000/- for cost of litigation.  Appeal against the order of the District Forum was filed before the State Commission by both the parties.  The State Commission vide the order, impugned, has accepted the appeal of the respondent/opposite party – Bank and dismissed the complaint holding that it was the prerogative of the Bank to decided as to the quantum of loan to be advanced to an applicant and they cannot be forced to sanction the amount asked for.  Aggrieved on the reversal of the order passed by the District Forum resulting in dismissal of his complaint by the State Commission that this revision petition has been filed by the complainant. 

          Learned counsel for the petitioner has reiterated the submissions that it was the Khadi and Village Industry Board through whom the scheme of self employment was being promoted and the concerned authority of the Board in his inspection report available at page 48 of the Index Vol. File had recommended a loan of Rs.2 lakhs after visiting his premises and finding that water, electricity and other conditions necessary for running the unit had been arranged by the complainant. It was thereafter that the Manager of the Bank visited the premises and on his advice, his house was restructured. The respondent/opposite party – Bank was, therefore, not justified in not sanctioning the  recommended  loan amount of Rs. 2 lakhs.  The Bank had originally sanctioned a loan of Rs.1,40,000/- which was increased only to Rs.1,60,000/-.  The complainant himself has deposited a margin money of Rs.30,000/- and the Khadi and Village Industry Board had remitted a sum of Rs.10,000/- as the subsidy amount to the Bank.  In this background, there is no reason as to why the Bank did not disburse even the sanctioned loan amount of Rs.1,60,000/- which amounted to gross deficiency in service.  The counsel also contends that the respondent/opposite party – Bank deposited the subsidy amount of Rs.16,000/- in their suspense account rather than crediting the same in the loan account of the complainant and did not credit any interest thereon. This only goes to show that the respondent/opposite party – Bank rather than helping the complainant – entrepreneur harassed him at every step.  The order passed by the District Forum to compensate  him by only Rs.40,000/- was not only inadequate but he was aggrieved that the State Commission disallowed even this meager compensation.  He, therefore, prays that the order passed by the State Commission being erroneous, be set aside.

          Learned counsel for the respondent/opposite party – Bank has contended that the claim of the complainant that he had reconstructed the premises and obtained electric connection is not based on facts.  That, it is a false claim can be proved from his own averment in the complaint at page 43 and 44 wherein he himself stated that the construction could not be raised due to non-disbursement of the loan. For the same reason, even the electricity connection was not obtained. 

          Learned counsel, therefore, contends that the claim of having fulfilled the pre-requisite before the sanctioning of the loan is not based on facts.  With regard to the deposit of Rs.16,000/- by the Khadi and Village Industry Board, the counsel submits that it was only a share of interest by Board and it was not for payment to the complainant.  The amount was credited into the suspense account since no loan had been released prior to the receipt of the amount.  According to the learned counsel, breach was actually on the part of the complainant who did not fulfill the conditions for the sanctioning of the loan and the respondent/opposite party – Bank cannot be blamed for the lack of diligence on part of the complainant.  According to him, the State Commission has rightly held that the complainant was not entitled to any compensation.

          We have heard the learned counsel for the parties carefully and gone through the evidence available on record.

          Suffice it to say that the petitioner/complainant was trying to take advantage of a social sector scheme for the encouragement of self employment which had a component of subsidizing the interest on loan upto 10%.  The scheme was being implemented through the Khadi and Village Industry Board who provide the technical know-how to encourage young entrepreneurs.  The petitioner/ complainant wanted to set-up a masala manufacturing unit to earn his livelihood.  He had applied for a loan of Rs.2 lakhs to the respondent/opposite party – Bank which after due inspection by the concerned official of the Khadi and Village Industry Board was recommended to the Bank.  It is not disputed by the Bank that they initially sanctioned a loan of Rs.1,40,000/- which was subsequently enhanced to Rs.1,60,000/-.  It is also not in dispute that as against the normal requirement of 10% to be deposited as margin money, they got a sum of Rs.30,000/- deposited from the complainant.  Besides, they also received a sum of Rs.16,000/- as the subsidy amount on interest from the Khadi and Village Industry Board.  All this has happened before disbursing even a single penny to the petitioner/complainant to start his unit.  It is surprising that for a loan of Rs.1,60,000/-, the respondent/opposite party – Bank asked the complainant to furnish five guarantors. On top of it, the Manager of the Bank visited the premises of the petitioner/complainant and directed him to effect some alteration to the buildings. In this background, it cannot but be observed that the conduct of the respondent/opposite party – Bank amounts to nothing short of harassment which was bound to discourage an intending entrepreneur.  The compensation of Rs.40,000/- awarded by the District Forum, in our view is totally inadequate and the affidavit produced from respective villagers clearly prove that the complainant spent some amount on the restructuring of his premises to suit the requirement of a manufacturing unit and his dreams have been shattered for the non disbursement of the loan by the Bank.  The District Forum has also not passed any order with regard to Rs.30,000/- as margin money deposited by the complainant. As also whether or not  Rs.16,000/- received from the Khadi and Village Ind. Board has been refunded to the Board.  In this background, the State Commission has grossly erred in dismissing the complaint.  We, therefore, set aside the order of the State Commission and order that (a) the respondent/opposite party – Bank to compensate the petitioner at a sum of Rs.60,000/- for the harassment, mental agony and loss on account of expenditure incurred for restructuring of the premises, (b) refund the margin money of Rs.30,000/- if not already withdrawn by the petitioner/complainant with interest @ 10% and (c) refund a sum of Rs.16,000/- received from the  Khadi and Village Industry Board to the Board, if already not refunded along with interest accrued thereon.

          These orders be implemented within a period of one month failing which the respondent/opposite party – Bank will be liable to pay interest @ 15% p.a. till its payment.  The revision petition is thus allowed on these terms.

                                                        …………………..………J

     (R.K. BATTA)

      (PRESIDING MEMBER)

                                                                   ……………….……………

                                                        (S.K. NAIK)

                                                                            MEMBER

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