Sri Shyamal Gupta, Member

This Appeal is directed against the Order dated 14-08-2015 passed by the Ld. District Forum, Paschim Medinipur in C.C. No. 113/2014, whereof the complaint has been dismissed.

In a nutshell, case of the Complainant is that, he received a term loan of Rs. 72,500/- from the OP Bank out of which he received Rs. 52,348/- in cash and Rs. 20,000/- was kept as fixed deposit.  He was asked to repay the said loan in 60 EMIs @ Rs. 1,319/- per month with interest @ 11.5% per annum.  The Complainant repaid the loan amount in full.  Thereafter, he asked the OP to return the FD amount with interest to the Complainant.  However, the OP sent a unsigned letter stating that he owed a sum of Rs. 24,371/- to the bank. Hence, the complaint.

OP contested the case by filing WV, wherein it stated that the Complainant paid 58 instalments @ Rs. 1,320/- p.m. and casually paid two instalments of Rs. 500/- each and thus, he paid a total sum of Rs. 77,560/-.  It is further stated that it could not release the FD amount since the Complainant did not repay the loan in full and there was no agreement to make payment of FDR with interest. It is also stated that the subsidy amount of Rs. 12,500/- has not been released in favour of the Complainant by the State Government.  Therefore, Complainant is required to repay the said amount with interest for five years.  After adjustment of outstanding amount, the Complainant can get back Rs. 4,773/-, which the OP is ready to pay.

Decision with reasons

Ld. Advocates for the parties are heard in the matter.  Material on record is also perused.

It appears from the loan sanction letter dated 07-05-2008 that the Respondent sanctioned a loan of Rs. 80,000/- in favour of the Appellant.  Out of the said amount, a sum of Rs. 7,500/- was kept as margin money.  In terms of the sanction letter, interest was chargeable on the amount of net of subsidy. 

It is stated by the Appellant that all through the bank/Respondent actually released Rs. 52,500/- to him and the residual amount of Rs. 20,000/- was kept in a fixed deposit.

It is contended by the Appellant that he repaid the loan in full.  From the photocopies of money receipts on record, it appears that the Appellant initially paid two instalments @ Rs. 500/-.  Besides this, he paid 3 instalments of Rs. 1,319/- each and 56 instalments @ Rs. 1,320/-.  Put together, he paid a sum of [(Rs. 500 x 2) + (Rs. 1,319 x  3) + (Rs. 1,320 x 56)] = Rs. 78,877/- to the Respondent. 

While the Appellant was supposed to repay 60 EMIs @ Rs. 1,319/- or Rs. 79,140/-, from the above, it appears that, the Appellant has repaid Rs. 78,877/-, thereby leaving a shortfall of (Rs. 79,140/- - Rs. 78,877/-) Rs. 263/- only.  It is indeed surprising, against non-payment of a meagre sum of Rs. 263/-, how come the outstanding figure stood at Rs. 24,371/- as on 12-05-2013. The Respondent has not made any attempt to satisfy ourselves about the bona fide of its calculation of outstanding due. Be it mentioned here that according to RBI Circular dated 02-07-2007, on the portion of the loan-representing subsidy, no interest was chargeable by banks.

The most intriguing fact is that the Respondent, in its WV under affidavit stated that the State Government did not allow subsidy of Rs. 12,500/- in favour of the Appellant.  However, on a reference to the relevant RBI Circular being no. RBI/2007-2008/36 RPCD. PLNFS.BC. No. 07 /09.04.01/2007-2008 dated 02-07-2007, we find that the Govt. of India has made available the subsidy amount in advance and such subsidy amount is remitted to the Head Office of the Bank concerned in advance.  Relevant portion of the RBI Circular is appended below for better understanding.

“9. Subsidy Management

(i) Subsidy disbursal

The subsidy will be made available by Government of India in advance and passed on to the banks through Reserve Bank of India. The subsidy portion will be kept as fixed deposit with the banks in the name of the borrower for the duration of the term loan component but will not earn any interest. The subsidy deposit will be available to the borrower for adjustment against the last instalment(s) due under the term loan component. In any case, the fixed deposit should run for a minimum period of 3 years and would be available for adjustment only thereafter.

(ii) Effective date of FDR

a) As the subsidy amount is remitted in advance to the Head Office of the bank, the date of the fixed deposit created out of subsidy amount will be the date on which the last instalment of the loan is disbursed by the branch. From that date, no interest will be charged on the subsidy portion of the loan.

b) Even if the subsidy amount is received by the Head Office after the loan is disbursed, to avoid inconvenience to the borrowers, the FD shall run from the date on which the last of instalment of the loan was disbursed and no interest on the subsidy portion of the loan shall be charged from that date.

(iii) Non-payment of interest on FDR representing subsidy

On the subsidy amount retained by the banks as fixed deposit in the name of the beneficiary, no interest will be paid by the banks and on the portion of the loan-representing subsidy, no interest would be charged by banks. The rate of interest to be charged will be decided on the basis of the loan amount net of subsidy.

(iv) Eligibility of subsidy

a) If the PMRY loan is closed prematurely, the borrower will not be eligible for subsidy. Similarly subsidy will not be available in the case of misutilisation of loan, abandonment of the project by the borrower, ineligibility of the borrower due to his not complying with the criteria laid down under the scheme etc. As in all such cases, loans would not have sub-served the central objective of the scheme; the borrower will not be eligible for subsidy.

b) However, in cases where the loans have become bad/doubtful of recovery and in respect of which banks file claim with DICGC, the amount of subsidy deposit may be adjusted towards the loan outstanding even before the expiry of 3 years, provided the mis-utilisation occurs beyond the control of the bank.

c) It will be necessary for banks to ensure that the appraisal, procedure for sanction and disbursement of loans and post-disbursement supervision, etc. are carried out in accordance with the instructions issued by the Bank's Head/Controlling Offices in order to be eligible for the above benefit and produce necessary records, if so required.

d) The provision regarding penalty for premature closure of term deposit will not apply in such cases. However, in cases where the beneficiaries are ineligible for assistance under the scheme, the subsidy will not be allowed to be adjusted towards the loan under any circumstances and will have to be refunded”.

We, thus, find that the Respondent intentionally misled the Ld. District Forum in respect of the subsidy matter.  It clearly shows, how, despite being a PSU Bank, taking undue advantage of the lack of knowledge of hapless consumers about banking practices/Rules and Regulations, the Respondent is deceiving them with impunity. This is totally unacceptable.  

Considering all aspects, we are inclined to allow this Appeal.

Hence,

O R D E R E D

The Appeal stands allowed on contest against the Respondent with cost Rs. 25,000/-, being payable by the Respondent to the Appellant.  The Respondent is directed to refund the subsidy amount+margin money after adjusting its outstanding due to the Appellant and furnish a correct Statement and Account thereof to the Appellant.  The Respondent is further directed to pay compensation for a sum of Rs. 1,00,000/- to the Appellant for indulging in unfair trade practices in the matter.  In case of non-compliance of this order in toto within 40 days hence, the entire awarded sum shall carry simple interest @ 9% p.a. for the period of default. The impugned order is hereby set aside.