Complainant by filing this complaint has submitted that complainant the M/s. Universal Bituminous Industries Pvt. Ltd. through his Director Narendra Kapani had applied for Cash Credit loan from the op on 15.09.2011 to the tune of Rs. 2 crores. On 16.11.2011 one representative came to the office at 12, BBD Bag East, Kolkata -700001 and gave an impression that the loan was sanctioned and asked a cheque of Rs. 1,05,000/- towards processing fees of such loan and complainant on good faith handed over a cheque No. 437988 of State Bank of India of Rs. 1,05,000/- on 16.11.2011 at that time when the loan was not sanctioned. But no documents were provided to the complainant for the loan and processing fees cheque and the said cheque was encashed by the op without approving the loan to the complainant.
But after prolong persuasion complainant was offered loan but the amount of loan was much lesser than their requirements. Complainant was urgent need of fund and thereafter approached to their existing banker and got the Cash Credit limit enhanced and complainant by various letter requested the op to refund the said processing fees wrongfully withholding by the op which was collected by op from complainant by means of fraudulent inducement but till date they are not returning the same and op created all sorts of necessary hurdles by changing the terms and conditions of the loan from time to time which had not been earlier discussed or communicated to the complainant. Thereafter complainant wrote a letter on 05.09.2012 requesting the op no.2 to refund the processing fee of Rs. 1,05,000/- because they were convinced that the op was not in a mood to sanction the loan.
Op vide their letter dated 11.10.2012 bearing letter No. RCC/NY/C284201209062771/12-13/1011 had refused in writing to refund the said processing fee and complainant finally sent a legal notice dated 25.09.2013 through their Advocate Utpal Roy Chowdhury requested the op to refund the said amount but the op vide their reply dated 06.11.2013 has refused to refund the same. So, it is crystal clear that the op had caused both delay and harassment by stating new terms and conditions not communicated to the op earlier and nowhere has it been or written that the loan processing fees which was paid by the complainant is not refundable more so when the loan was not even sanctioned. The complainant did his best to meet all the requirements stipulated in the terms and conditions and a lot of money was also spent on telephone/fax to get the loan proposal accepted and so complainant issued an application before the Office of Banking Ombudsman, Reserve Bank of India, 15 N.S. Road, Kolkata – 700001 but the said application was rejected vide letter dated 03.01.2013 bearing letter No. Kol/OBO/2148 for technical reasons and in the said letter it was categorically mentioned that the complainant has the liberty to approach any other authority under the law of the redressal of their grievances and in the above circumstances, complainant has filed this complaint for refund of the said processing fee including compensation for harassment, mental agony etc.
On the other hand op by filing written statement submitted that complainant is not a consumer within the meaning of Consumer Protection Act and their representing is not a mere dispute in view of the fact that the complainant is a private limited company admittedly and loan was availed of by that company for its business purpose that is commercial purpose and as such, the purported dispute does not come within the purview of the consumer dispute.
It is specifically mentioned that in or about 17.09.2011, complainant approached the op through its Director for availing of business lending facility and duly applied for the same and duly applied for the said and made by the Director of the complainant company, being the guarantor in the said facility, the op vide a sanction letter dated 14.12.2011 sanctioned Cash Credit Facility to the tune of Rs. 1.30 crores and Bank Guarantee to the tune of Rs. 50 lakhs and it is mentioned that the said sanction was subject to the terms and conditions as mentioned in the sanction letter dated 14.12.2011 and as per the terms and conditions of the sanction letter, the complainant was required to create hypothecation and mortgage of the goods and properties mentioned in the sanction letter.
On the basis written application of the complainant, the loan was processed and sanctioned for which the op bank accordingly charged processing fee of Rs. 1,05,000/- and the complainant did not avail of the facility for more than six months from the date of sanction and therefore, the loan facility sanctioned to the complainant was cancelled and it is submitted that the op bank duly processed the loan facility and sanctioned the same for which the processing fees was charged and the complainant who did not avail of the facility even after sanction so the op is not under any liability to return the processing fees.
No doubt the complainant appeared before the Office of Banking Ombudsmen raising frivolous allegations and op vide their reply dated 15.11.2012 duly explained the facts and that was ultimately rejected by the Banking Ombudsmen. So, the entire complaint is baseless and purpose to get back processing fees, this false case is filed and at the same time the entire complaint is vexatious for which the complaint should be dismissed.
Decision with reasons
On critical appreciation of the complaint including the written version and also considering the argument advanced by the Ld. Lawyers of both the parties and also considering the disputes of the complainant, it is admitted fact that complainant is a Private Limited Company and it is also a fact that complainant has filed an application form to the op/Bank for business lending loan through Cash Credit basis which is evident from the documents filed by the op and it is fact that application was filed on 15.09.2011. Thereafter complainant submitted all documents and op as per terms and conditions after processing all the materials documents etc. and other matters agreed to give loan facilities subject to the some terms and that was reported to the complainant vide a letter dated 24.11.2012. As per condition of the said loan facility, customer shall submit supported securities and there is also such condition exclusive charge in favour of the bank by way of hypothecation of the company’s entire stocks of raw material, semi finished and finished goods, consumable stores and spares and such other movable including book debts, bills whether documentary or clean, outstanding monies, receivables, both present and future, in a form and manner satisfactory to the Bank and exclusive charge in a from and manner satisfactory to the Bank by way of Equitable Mortgage on Industrial property located at Jaja – Dhulagori under P.S. – Sankrail and unconditional and irrevocable Personal guarantee of Prashant Kapani and Narendra Kapani residing at 73A, Shakespeare Sarani, Kolkata – 700017.
There is another condition that is Pre-disbursement Conditions and in that condition, it is specifically mentioned that Title and Legal clearance report of the property offered as security to be obtained from empanelled lawyers of the Royal Bank of Scotland and take over process to be completed as per the policies of the Bank, and CC Account held with SBI to be closed at the time of take over. Satisfactory A/C Conduct report from SBI, Subordination agreement amounting to INR 0.51 Million to be executed; by Prashant Kapani & Narendra Kapani for INR 0.255 Million each undertaking to be obtained from borrower for non repayment of unsecured loans during the tenure of RBS facility and the interest payment on unsecured loans shall be subservient to interest payment to RBS and undertaking to be obtained from borrower for closure of ICICI Bank Account within 90 days of disbursement and continuation of SBI CA Account only for the purpose of tax payments and insurance policies along with stock statement to be submitted and insurance policy value should be sufficient to cover the stock and property value.
There is another clause that Security Valuation that is the property offered as security shall be valued by the Bank’s empanelled valuers at the time of renewal of facilities every year. There is other conditions as noted in the Annexure-B that is condition of business. Fact remains that considering all the materials, it is found that no doubt the complainant a Private Limited Company got sanctioned of loan through Cash Credit facility and that was reported to the complainant vide letter dated 14.12.2011 and prior to that all processing fee was made by the complainant and thereafter complainant sent that letter on 14.12.2011 and cash credit limit short term loan of 13 Millions was granted and other terms and conditions were also noted. Complainant was asked to submit guarantee by Narendra Kapani and Prashant Kapani of the complainant but they did not submit that material and also did not submit materials as included in the pre-disbursement conditions.
Thereafter on 05.09.2012 that is long after confirmation of providing Cash Credit loan to the complainant on 14.12.2011, complainant prayed for refund of the processing fee of Rs. 1,05,000/- and against that letter of complainant dated 05.09.2012, op reported that Universal Bituminous Industrial Pvt. Ltd. did not avail of the loan facility for more than six months from the date of sanction. So facility was cancelled. Since the facility was sanctioned Universal Bituminous Industrial Pvt. Ltd. and for that purpose Bank processed the same and for which they spent money for which the process of Universal Bituminous Industrial Pvt. Ltd. cannot be refunded and that was reported by the op on 15.11.2012.
Now the question is whether complainant is entitled to get back the said processing fee. In this regard it is to be mentioned that vide letter dated 14.12.2011, op/Bank already sanctioned the loan after processing everything and for the purpose of processing a sum of Rs. 1,05,000/- was received and invariably that was spent for the purpose of processing that loan and Cash Credit loan was sanctioned in favour of the complainant after processing the entire matter and after satisfying about the complainant’s ability to get such loan and that letter was sent on 14.12.2011.
Thereafter complainant did not execute all such documents in favour of the Bank for operating the said sanctioned amount for more than nine months and thereafter ultimately complainant sent a letter asking him to return for the said amount. Practically after applying the General Principle of law regarding the process fees, it is settled principle of law that if the loan is not sanctioned for any reason in that case processing fees shall be refunded but without any interest. If it is found that loan has been sanctioned after processing the entire matter in that case and if it is found that lonee member has not ultimately submitted all the documents in support of security and pre-condition in respect of terms and conditions in that case as per banking laws, Bank shall have to wait for six months for getting such document from the customer (lonee member) and thereafter lonee member shall be entitled to get that Cash Credit loan. But in this case complainant as lonee member did not submit all the documents as per sanction and order but loan was sanctioned. At the same time the property of the company shall be hypothecated as per terms, guaranteed form was not submitted by the present complainant’s Director and another person.
So, it is clear that there was no deficiency on the part of the op. Op discharged their duties for which before sanctioning the loan amount, op processed the entire matter and was satisfied about release of substantiate amount. But complainant did not avail of. Then laches is on the part of the complainant which is proved beyond any manner of doubt. So, in the eye of law, complainant has miserably failed to prove any sort of negligence and deficiency or any deficient manner of trade on the part of the op.
On the other hand vital factor is that whether complainant is a consumer. But in this regard we have gone through the complaint wherefrom we find that complainant admitted that complainant is a private limited company and they prayed for loan and loan was sanctioned for the purpose of their business transaction and for which we are convinced to hold that when transaction was commercial transaction or business transaction and that transaction is made by private limited company, in that case, complainant cannot claim his right or status under the op as consumer. In this context, it is to be mentioned that there is no such whisper or version that loan was obtained by the complainant for the purpose of earning his livelihood or self-employment. So, the entire transaction is commercial transaction/loan simplicitor and when that is the fact, complainant is not a consumer in the eye of law as per prescribed definition of consumer.
At the same time it is proved that this complainant appeared before this Forum to get a relief knowing fully well that his transaction was for business purpose, knowing fully well for his laches he did not get the such right to operate that sanctioned loan and in view of the above fact and circumstances, we find that the complainant only to get refund of the processing fee even after their laches for not receiving that amount as sanctioned by the op, this complaint is filed. So we are convinced that this complainant with an intention to get such amount of processing fee which has been spent by the op for processing the entire amount of loan as sanctioned is an attempt to practice unfair practice to get relief. We are convinced to hold that knowing fully well about their status and also their activities and to harass the op, this frivolous complaint was filed by the complainant with a hope to get refund of the processing fee. Though he was aware that he is not a consumer and the transaction is commercial transaction.
In the above circumstances, we are convinced to hold that there is no merit in this case when complainant is not a consumer and the whole transaction is commercial transaction and loan was not obtained by the complainant for the purpose of his livelihood by means of self-employment. At the same time, complainant’s laches for not receiving the loan is also proved. Accordingly it is proved that it is nothing but vexatious and frivolous complaint for which this complaint should be dismissed. But it has become necessary to discourage such company to file such frivolous complaint against the Bank and at the same time for curtailing precious time of this Forum, we are imposing penal cost of Rs. 10,000/- which shall be deposited to this Forum.
Hence, it is
ORDERED
That the complaint be and the same is dismissed on contest.
Complainant is directed to deposit the penal cost of Rs. 10,000/- to this Forum within 15 days from the date of this order failing which penal action shall be taken against him when it is proved that it is frivolous complaint.
