STATE CONSUMER DISPUTEs REDRESSAL COMMISSION

BIHAR, PATNA

Complaint Case No.09 of 2019

 Bablu Kumar, Son of Brahmdev Prasad Yadav, Resident of Panchwati Chowk, Gangjala, Ward No, 18, Police Station Saharsa, District- Saharsa.                                             

                                                              ….......... Complainant

Versus

1. CEO–cum-Managing Director, Bank of India, Head Office- BANK OF INDIA STAR HOUSE C-5, “G” BLOCK, Bandra Kurla Complex, Bandra (East), Mumbai 400 051.
2. Zonal Manager, Bank of India Zonal Office, Bhagalpur, Second Floor Devdoot C radha rani Sinha road, Bhagalpur, Bihar.
3. Senior Branch Manager, Bank of India, Branch- Saharsa Bangali Bazar, PO + Dist. Saharsa, Bihar
4. Branch Manager, Bank of India, Branch – Saharsa, Bangali Bazar, PO + Dist. Saharsa, Bihar.
5.                                                                                                                                        …........... Opposite parties

            Learned Counsel for the complainant:- Mr. Dinesh Maharaj

            Learned Counsel for the Opposite Party:-  Mr. Sanjay Bharti

Before,

Miss Gita Verma,  Judicial Member (F)

            Mr. Raj Kumar Pandey, Member

ORDER

Per:Raj Kumar Pandey (Member)

Dated-10.04.2023

1. The complainant Bablu Kumar filed this consumer complaint seeking the reliefs against the opposite parties and prayer has been made, as follows:-

1.  The opposite parties be directed to pay the Damages to the tune of Rs. 44,93,000/- (Forty Four Lakhs Ninety Three Thousand) only along with statutory interest at the rate of 18% to the  complainant.
2. The opposite parties be directed to compensate the complainant for loss of his business and other liabilities besides, mental and physical agony, quantified at Rs.15,00,000/- (Rupees Fifteen Laksh ) only which arose due to the insensitive and arbitrary attitude of the opposite parties.
3.  Rs.20,000/- (Rupees Twenty Thousand ) only towards the cost of legal expenses.
4. Any other relief/ reliefs for which the complainant found entitled to.

2. The facts as stated in the complaint case and emerged from the documents attached therewith are as follows:-

1.  Being the proprietor of M/S New B.K. Bricks and construction, Saharsa a reputed firms of the District, the complainant was engaged in the production of fly Ash Bricks. For improving/ enhancing the production of the Bricks, the complainant required a new Machine/ for which he proposed / applied before the State Investment Promotion Board, Govt. of Bihar, (hereinafter called as “SIPB”) vide application ID No. SIPB-2016219062 dated 19.12.2016.
2.  The application filed by the complainant was duly verified and after due consideration the Investment Promotion Council, headed by the Development Commissioner, Bihar by its meeting dated 13.01.2017 has been given stage-I clearance regarding the proposal of the complainant, on which the Branch Manager, Bank of India, Saharsa Branch (Opposite party no.4) was proposed to grant a lone of Rs. 1, 17,00000/- ( One crore Seventeen Lacs) only  from his Branch.  On that basis the complainant on the time  of clearance of  his proposal of Stage-II & III  he opted the said Bank.  Hence the letter was sent to the Bank concerned vide memo no.212 dated 25.07.2017 where under a direction was issued to accept the DPR (Detailed Project Report) and other required documents  and the Bank was directed to sanction the loan amount. It has been further stated that after verification of all documents the concerned Branch Manager of the Bank raised objection vide its letter dated 05.08.2017regarding the loan of Rs.23,00000/- has already been taken by the complainant from State Bank of India under PMEGP Scheme in the year 2015-2016 for setting FLY ASH BRICK  Unit which was in running condition in the same premises.
3.  On reply to the letter dated 05.08.2017 the General Manager, District Industries Centre, Saharsa informed the Bank that the Unit of the complainant is approved by SIBP and any one has liberty to established more than one Unit as such the complainant was entitled  for grant of loan  as well as the subsidy under same scheme namely SIBP 2016.
4.   After getting appropriate reply from the District Industries Centre Saharsa, the Bank further proceeded and directed the complainant to invest 25% of the margin money for infrastructure development. It is submitted that opposite party no.3 & 4  offered the complainant a term loan of Rs.10,00000/- for enhancing the infrastructure requirements and the said loan was granted.
5.  In pursuance of enhancement of infrastructure the complainant invest huge money regarding purchasing some land, making shed and also purchasing a Truck bearing Registration no. BR-90G4156 at the consideration amount of Rs.21,00000/- and thereby about Rs.44,93,000/-.
6.  It has been submitted that, opposite parties no.3 & 4 intentionally and deliberately continued to delay in sanctioning the aforesaid loan amount and also ignored the directions of the District Industries Centre, Saharsa. It has been stated that, the doubt regarding interest and subsidy on the term loan was also redressed by the District Industries Centre, Saharsa vide memo no.365 dated 28.12.2017.
7.  Reminder sent by District Industries Centre, Saharsa regarding  granting of loan vide memo no.118 dated 17.04.2018 also ignored by opposite party no.3 & 4. The opposite party no.2 & 3 also violated the mandatory provision of settling the loan proposal within 3 months and proposal had been pending for more than one year, thereafter bank again demanded updated documents approved under SIPB scheme which compel the complainant to submitted the same before the opposite party no. 2 &3.  A meeting dated 07.09.2018 under the chairmanship of Director of Industries (Industries Department Bihar, Patna) which was attained by opposite party no.4 also in which the complainant was also present and stated his grievance thereafter the Director, Industries Department showed displeasure regarding the act of opposite party no.3 & 4.
8.  It has been stated that on advice of opposite party no.3 the complainant also settled his vehicle loan of Rs.6,00,000/- before the Andhra Bank and after satisfaction of loan amount, “No Dues Certificate’ issued by the said bank on 25.10.2018  and said certificate was submitted before the opposite party no.3. But all of sudden the complainant came to know that his loan proposal has been rejected way back on 24.09.2018. However no any show cause regarding rejection of the loan proposal  was demanded by the opposite party no.3 & 4.
9.  It has been stated that the action taken by the opposite party no.3 & 4 was totally wrong, imaginary and baseless grounds and allegation regarding the pre-existing loan taken by the complainant would not be disqualification in light of the clarification dated 07.09.2017 issued by the Managing Director, District Industries Centre, Saharsa. It is submitted that  it was wrong assertion on part of the opposite party no.3 & 4 regarding non-functional unit in the factory premises which is itself contradictory from the letter of the bank dated 05.08.2017 itself. It has been further stated that the reasons stated by the opposite party no.3 & 4 like land locked plant and CIBIL and SASCL were misleading  and unsustainable in the light of the fact that  the complainant’s earlier plant was running and has been financed by the State Bank of India, Sasharsa. Moreover such objections would be raised on initial stage of the process of loan by the Ops but which was not raised. It has been submitted that the approach of the opposite party no.3 &4 is highly arbitrary, objectionable and illegal and is a good example of insensitive attitude for extraneous consideration, which comes within the purview of the deceptive trade practice, hence opposite party no.3 &4 are liable to compensate the complainant for his monitory loss, damages occurred due to their arbitrary and insensitive approach, as the complainant expended a huge amount in infrastructural development in anticipation of the grant of the said loan and it has been prayed that for ends of justice the complainant is liable to  be compensated for the loss and injury caused on the part of opposite parties  and prayer has been made as stated in the first paragraph.
10. The complainant has  attached under mention documents as annexure with complaint petition:-

1. Copy of stage I clearance attached as Anneuxre-1
2. Copy of memo No.212 dated 25.07.2017 Attached  as Annexure-2.
3. Copy of Sale Deed cum affidavit dated 23.08.2017 attached as Annexure-3
4. Copy of Memo No.271 dated 07.09.2017 attached as Annexure-4
5. Copy of Memo No.118 dated 17.04.2018 attached as Annexure-5.
6. Copy of letter from the SIPB Bihar is attached as Annexure-6
7. Copy of Notice dated 10.01.2019 is attached as Anneuxre-7.

3. On Notice, issued by this State Commission, the Opposite parties were appeared through their counsel and filed written statement on 23.01.2020, which is supported by affidavit of Mushtaque Alam, Chief Manager, Bank of India, Saharsa branch. Under heading preliminary objection the opposite parties contended that the complainant filed this complaint with ulterior motive and evil intention and only with a view to harassing the opposite parties.  The complaint petition is complex in nature and it has been further submitted that the complainant filed this complaint by suppressing the material facts, as such the complaint case is not maintainable and fit to be dismissed. It has been also stated that the complainant and his wife having more loans from various banks including Bank of India, Saharsa and they unable to pay the loan amount regularly and  have became habitual defaulter. It has been submitted that there is no deficiency or latches in service on part of the opposite parties. Under heading ‘Reply On Merits’   the opposite parties  have denied the contents of para-1 to 32 of the complaint petition and specifically explained the matter of fact  as regards para no. 4 to 6, para no.7 to 9, para no. 10 & 11, Para no. 12 &13 and para no. 14 to 32. The gist and substance of the denial of opposite parties under certain paras of W.S. is that  a huge amount have been taken by the complainant along with his wife from the various banks including the OPs- bank also and maximum loan amount has became NPA, and as soon as this fact came into knowledge of the opposite parties on the basis of enquiry regarding the credit of the complainant, the opposite parties-bank decided no grant him loan and  it has submitted that complainant is not entitled for any relief as demanded in complaint petition and  prayer has been made that the complaint petition be dismissed with heavy cost.
4. Both the parties have filed evidence on affidavit in support of their respective case.

1. Witness No.1 the Complainant-Bablu Kumar, filed his evidence on affidavit supporting the contents of the complaint petition.

In his cross-examination, he admitted that the along with his wife they have taken loan from various banks. In para-4 of the cross-examination he admitted that he deposited total amount of Andhara bank and got no dues certificate. In para-5 of the cross examination he admitted that he applied before the op.s-bank to getre-loan for thenew B.K. Bricks plant for which he filed application before the industry department also. In para-8 ofthe cross examination, he admitted that he had taken loan worth Rs. 8,00000/- from S.B.I in which he declared defaulter and the loan amount got N.P.A. He further stated that as no information given by the S.B.I just before the declaration of the NPA, So, his loan was declared as such. In para-11 of the cross-examination, he admitted that in June-July 2021 the loan taken by his wife for Jai Mata Di beauty Parlor and he has further stated that due to Corona Pandemic he became unable to pay the loan amount to concern bank.In further paragraph of the cross-examination he admitted the approval of Industry department for taking loan from the Ops-bank. He has denied as he became defaulter so bank was not inclined to grant him loan because no public money can be given as loan to the defaulter person. He also deniedthe attention drawn regarding false statement given by him.

2. Complainant Witness No.2 Rahul Kumar was present before the bench and filed his evidence on affidavit.

In his evidence on affidavit Rahul Kumar admitted that Bablu Kumar (complainant) is the proprietor of M/S New B.K. Bricks and Construction, Saharsa having plant of making fly ash Bricks. He supported the fact regarding the separate establishment of Bricks plant by the complainant. In further paragraphs of affidavits, he asserted that the contents of the complaint petition filed by the complainanthas fully explained the same. In para-8 of the evidence on affidavit, he stated that on assurance given by the then Branch Manager of the O.P.- Bank, the complainant spend up about Rs.45,000,00/- as taking loan from the personal friends and relatives, but then branch manager not granted him loan due to non-payment of his commission money. He has further stated that due to non-payment ofanticipated loan amount, the complainant-Bablu Kumar suffered mental and economical loss for which opposite parties are responsible. In his cross-examination Rahul Kumar admitted that complainant is his neighbour and he called him brother. In Para- 4 of cross-examination Rahul Kumar admitted that the business of complainant and his wife was going on with the help of loan amount. In Para-5 of cross-examination, he admitted that whenever he went to bank he got information regarding defaulter of the complainant. In para-7 of the cross-examination Rahul Kumar admitted that the complainant (Bablu Kumar) had transaction of the money with other villagers also. On attention drawn by the opposite party- Rahul Kumar stated that he never gave wrong evidence.

5. On the other hand one- Deo Sharan has filed his evidence on affidavit  along with some documents, mentioning as Exibit-1 & 2 by himself on behalf of the opposite party no. 3 & 4 (B.M., Bank of India, Saharsa). In his evidence on affidavit, he stated that as regards documents filed as Exbit-1 & 2 it was the information which was given to the proper authority regarding the rejection letter not to granting the loan to the complainant, hence there was no any latches on the part of the opposite parties.

We have perused the document, marked as Exhibit no.1by witness no.1 of the opposite parties, however the said document is not clearly and easily visible but we tried to read over the document and found that Exhibit no.1 is a letter sent by Bank of India, Bhagalpur Zonal Office to the G.M. District Industries Centre, Saharsa regarding the loan application of complainant Bablu Kumar and by that letter the Ops-Bank seek the opinion from the addressee regarding double subsidy under any Govt. sponsored scheme. Second document as Exibhit-2 is a rejection of the loan proposal of New B.K. Bricks.

6.  The complainant has also filed a copy of certificate issued by the panel advocate of the Bank. After perusal of the documents attached in the certificate we find that it is mainly related to title deed of the complainant as well as valuation letter issued by the Circle Officer, Kahara Dist. Saharsa.
7.   Both the parties have filed written notes of argument in support of their respective case.
8.  We have heard learned counsels appeared on behalf of both the parties and also gone through the materials available on record.
9. The main point of our consideration is that:-

“Whether refusal to grant second loan to a person, having previous loan is due, comes within the purview of deficiency in service?”

10.  Deficiency is defined u/s 2 (11) of the Consumer Protection Act 2019 which reads as under; “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes-“

1. Any act of negligence or omission or commission by such person which causes loss or injury to the consumer, and
2. Deliberate withholding of relevant information by such person to the consumer;

11. Section-35-A of the Banking Regulation Act 1949 empowers RBI to issue directions to banking companies, such direction are statutory in nature. Section -35A. Extracted below:-

         Power of the Reserve Bank to the directions- (1) where the Reserve Bank is satisfied that:-

1. In the public interest; or

(aa) in the interest of banking policy; or

2. to prevent the affairs of any banking company being conducted  in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of  the banking company; or
3. to secure the proper management of any banking company generally,

It is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions.

(2) The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under sub-section (1), and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancelation shall have effect.

12.  The Hon’ble Supreme Court of India  in U.P Financial Corporation & others V/s Naini Oxygen and Acetylene Ltd., held that a Corporation being an independent autonomous statutory body is free to act according to its own right.  The court’s reasoning is in line with the lassie faire Philosophy.
13.  In the facts and circumstances of this case, as well as evidences brought on the record, it is crystal clear that the banking organizations are custodian of public money and a duty is cast upon the banking organization to do banking business keeping in mind that the public money should be disbursed as a loan in its right perspective, so that the public money would not frustrated.  If banking organization deem it fit to granting a loan to a  person may be caused difficulty regarding its recovery, in such situation the bank has liberty to refuse the granting loan  and if bank was decided not  to grant the loan, it is not come within the definition of deficiency in service under the scope of Consumer Protection Act.
14.   As such the complaint case stands dismissed as not maintainable.
15.   A copy of this order be supplied to both the parties free of cost as mandated by the C.P. Act 2019. Order be uploaded forthwith on the website of the State Commission.
16. Let the file be consigned in the record room along with copy of this order.   

            (Raj Kumar Pandey)                                                                                     (Gita Verma)

                  Member                                                                                                       Judicial Member

Mukund