Tamil Nadu

StateCommission

CC/76/2015

Sooriya Hospital, Rep by its Managing Partner, Dr.C.P. Sree Kumar, - Complainant(s)

Versus

ICICI Bank Ltd, Rep by Managing Director & C.E.O. Ms. Chanda Kochar, and anr - Opp.Party(s)

M/s.Lavanya Shankar

05 Jul 2022

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

BEFORE      Hon’ble Thiru Justice R. SUBBIAH          PRESIDENT

                             Thiru R.VENKATESAPERUMAL                          MEMBER

 

CC.NO. 76/2015

 DATED THIS THE 5^th DAY OF JULY 2022

Sooriya  Hospital

Rep. by its Managing Partner

Dr. C.P.Sree Kumar

No.1, Arunachalam Road

Velayutaham Colony, Saligramam

Chennai – 600 093                                                               ....Complainant

 

                                                  Vs 

 

1.       ICICI Bank Ltd.,

Rep. Managing Director & CEO

Ms. Chanda Kochar

ICICI Bank Tower Ground Floor

Bandra Kurla Complex- Bandra East, Mumbai – 400 051

 

2.       ICICI Bank Ltd.,

Rep. by its Regional Manager

Plot No.24, Arihant  Building, South Phase

Block No.I 1^st Floor, Ambattur Industrial Estate

Chennai – 600 058                                                ....Opposite parties

 

Counsel for complainant                               :   M/s  Lavanya Shankar

Counsel for 1^st & 2^nd opposite parties             :   M/s. Saikrishnan Associates

 

         This complaint coming before us for hearing finally on 8.6.2022 and on hearing the arguments of counsel appearing for bothsides and upon perusing the material records this Commission made the following order:

ORDER

Justice R. SUBBIAH,  PRESIDENT    

1.       This complaint has been filed under Sec.17 of the Consumer Protection Act, 1986, as against the opposite parties for the following reliefs:

  i.        Praying for return of a sum of Rs.25,00,000/- together with interest @24% p.a.,   

  ii.     Pay Rs.1,00,000/- towards cost

2.       The case of the complainant in brief is as follows:

           The complainant being a healthcare institution/ hospital running in the name and style as Sooriya Hospital.  The complainant opened an account with the 2^nd opposite party in the year 2013.  Originally, the complainant was maintaining an account with the HDFC Bank, and after coming to know that the complainant was a high profile customer the opposite parties hoodwinked the complainant by stating that their services would be more user friendly.  On believing the statement, the complainant migrated from HDFC bank to opposite parties bank. 

          Pursuant to that the opposite parties vide communications dt.27.8.2013, 28.10.013 and 14.11.2013 had assured to sanction credit facilities by way of a term loan to the tune of Rs.5,00,00,000/-  and extended  overdraft facility of Rs.9,00,00,000/-.  Though the opposite parties succeeded by making the complainant to walk into their trap by assuring fast track disbursal of sum, the same remained only in paper, as the opposite parties had taken their own time to release the balance sum of Rs.2 crore, and out of the OD facility of 9 crore, due to which the complainant underwent extreme ordeal.   To the shock and surprise the opposite parties vide letter dt.24.2.2014 expressed their inability to proceed with the sanctioned term loan, inspite of the complainant parting with sufficient immovable properties as security.  Due to the unilateral action of the opposite parties in withdrawing the term loan, the complainant was compelled to approach another non-banking finance corporation i.e., Bajaj Finserv Ltd., as they were in need of said sum to keep the establishment afloat.  The opposite parties have collected Rs.561800/- in the upfront towards processing the term loan, though arbitrarily having withdrawn the sanction, they have not chosen to refund the Rs.5 lakhs, which was collected towards processing the term loan, which is nothing but unjust.  When the complainant was in dire straits the opposite parties further aggravated the complainant’s misery by directing him to pay a sum of Rs.20,22,480/- from the complainant’s account towards foreclosure charges by taking refuge under the unconscionable terms set out in the agreement.  The levy of Rs.20,22,480/- is contrary to the guidelines and stipulations and such levy of charges is against RBI norms.  It is the further contention of the complainant that non-refunding of Rs.5 lakhs under an erroneous pretext of processing fee and debiting huge amount of R.20,22,480/- by coercing the complainant could be labelled as unfair trade practice.  Hence the complainant issued legal notice to the opposite parties on 20.1.2015 calling upon them to repay the sum of Rs.2500000/- within 15 days from the date of receipt.  Instead of complying with the legitimate demand of the complainant, the opposite party issued reply dt.30.1.2015, setting out untenable, deplorable and concocted stories to suit their convenience in order to overcome their unfair trade practice.  Hence he filed this complaint praying for a direction to the opposite party to refund Rs.25 lakhs alongwith 24% interest p.a., alongwith cost of Rs.1,00,000/-. 

 

3.       Denying the allegations the opposite parties have filed their version stating as follows:

          The complainant is not a consumer as defined under Sec.2(d) of the Consumer Protection Act.  The complainant approached the opposite party bank seeking financial assistance which was intended purely for commercial purposes.  Therefore the present complaint is frivolously filed against the opposite parties, and is not maintainable.  The opposite party bank had levied processing fee and foreclosure charges as per the terms and conditions mutually agreed between the complainant and opposite party bank.  Such levy is very much within the knowledge of the complainant.  The complainant had approached the opposite party bank and L & T Finance to take over their existing loan facilities from HDFC Bank, which is stated as follows:

1.  Overdraft limits Rs.6,50,00,000/-  proposed to be taken over by the opposite party bank with an enhancement of Rs.25000000/-.

 

2. The term loan limit outstanding as on 31.5.2013 was Rs.16,00,00,000/- with HFC Bank Ltd.,  An amount of Rs.15,00,00,000/- outstanding as on 31.5.2013 was proposed to be taken over by L&T Finance and

 

3. Term loan limits upto Rs.1,00,00,000/- proposed to be taken over by opposite party bank. 

The facilities vide credit arrangement letter dt.27.8.2013 was

1. An overdraft facility of Rs.9,00,00,000/- which includes takeover of OD limit of Rs.65000000/- with HDFC BANK with an enhancement of Rs.25000000/-

 

2. Corporate loan of Rs.5,00,00,000/- which includes takeover of the residual term loan outstanding with HDFC Bank of Rs.1,00,00,000/- and an enhancement of Rs.4,00,00,000/-. 

The opposite party bank strongly denies the allegation of hoodwinking of the complainant.  The facilities sanctioned were as per the mutually agreed terms and conditions between the complainant and the opposite party bank. 

          With respect to over draft facility, an amount of Rs.63680000/- was disbursed towards takeover of limits from HDFC bank on 29.11.2013, post acceptance of Credit Agreement letter and submission of documents as per the sanctioned terms.  Post such disbursement, it was brought to the notice of the opposite party bank that the complainant had availed a loan against property facility from Bajaj Finserve to the tune of Rs.20,90,00,000/- which was an additional borrowing of Rs.59000000/- over and above the initial proposed term loan limits, which is against the terms and conditions of clause 10 of the Operational terms and conditions of the Credit Agreement letter dt.27.8.2013, which was mutually agreed between both parties.  Due to such breach the opposite parties bank was constrained to rework on the sanctioned amount and hence the balance over draft limits were disbursed on 26.2.2014 after the complainant had submitted the requirement document.  The complainant’s plans to avail funding kept on changing from time to time, leading to a delay in clarity of final debt structure and submission of documents.   With respect to corporate loan facility, it was a joint takeover of limits by L&T Finance and the opposite parties bank and one of the terms in Page 14 of the acceptance credit agreement letter dt.27.8.2013 was that the disbursement of corporate loans was subject to L&T Finance parking their disbursed amount of R.15,00,00,000/- with the opposite party bank.  However, the complainant failed to obtain disbursement from L&T Finance as per the agreed terms and conditions and thereafter the complainant informed the opposite parties bank that instead of L&T finance, HDFC Bank would retain the term loan facility which was proposed to be taken over by L&T finance.  Thus the opposite parties bank had to inform the sanctioning authority of opposite parties and seek its re-approval on the new structure.  After obtaining such approval the revised terms and conditions were communicated to the complainant vide Credit Agreement Letter dt.28.10.2013.  Subsequently, it was brought to the notice of the opposite parties that the complainant had availed Loan Against Property facility from Bajaj Finserve to the tune of Rs.20,90,00,000/- which was an additional borrowing of Rs.59000000/- over and above the initial proposed term loan limits, which is against the terms and conditions of sanction mutually agreed between both parties.  When the opposite party was appraised of the said breach, corporate loan facility was withdrawn in view of the fact that the purpose of availing corporate loan from the opposite parties bank had become redundant.  The same was communicated to the complainant vide Credit Agreement Letter dt.24.2.2014.  Thus it was the breach committed time and again by the complainant that led to the cancellation of corporate loan limits.  It was explicitly made clear that the processing fee payable is of non-refundable in nature and the complainant has accepted such a condition. The complainant had paid all charges levied as per mutually agreed terms and conditions and closed the overdraft facilities on 17.11.2014 and the opposite parties had released the security documents on 20.11.2014 and the same has been declared and acknowledged by the complainant vide letter dt.20.11.2014 within three working days after closure of limits.   Therefore it is incorrect to state that there has been delay in releasing the security documents. Further pursuant to the complainants request to lose the over draft account, the complainant had vide letter dt.14.11.2014 agreed and authorised the opposite parties bank to levy a charge of 2% of the sanctioned limit as foreclosure charges.  Thus, since the complainant had authorised and agreed for such charges and hence the complainant cannot go back on its authorisation.  The complainant had initiated this proceeding without adducing proper evidence and by citing one reason or other for deficiency in service and unfair trade practice without substance shows the clear intention of the complainant to mislead this commission for their wrongful gain.  Therefore, absolutely there is no deficiency in service on the part of the opposite party. 

 

4.       Proof affidavits alongwith documents filed by both parties.  The documents filed by the complainant are marked as Ex.A1 to A11 and documents filed by the opposite parties are marked as Ex.B1 to B6.  Written arguments are filed by both parties.

  

5.       When the case was taken for hearing, the counsel for complainant made a detailed submission by adverting to the averments in the complaint. But it is the contention of the opposite party before this commission is that the complaint will not come under the purview of the Consumer Protection 1986, since the transaction is purely commercial in nature, and would submit that on this ground alone the complaint is liable to be dismissed.   

          In support of the contentions of the opposite parties, the learned counsel had also drawn our attention to the following judgements

          The judgement of the Hon’ble National Commission in Primus Chemicals Ltd., Vs. IFCI Limited, reported in I (2017) CPJ 615 (NC), wherein it was held that “Loan was taken for establishing the industry and industry is a commercial venture with a motive of profit – Availing services of a financial institution for loan have all the four components, namely, sanction of loan, disbursement of loan, repayment of loan and then return of documents- As the main service availed was for getting which was commercial purpose, all other components of this service including return of documents shall be considered for commercial purpose- Complainant is not a consumer”.    

          The opposite parties have also cited other judgements viz:

          The judgement of the Hon’ble National Commission in Sutlej Industries Ltd., Vs. Punjab National Bank reported in 1(2018)CPJ 593 (NC);

          The judgement of the Hon’ble Apex Court in Shrikant G.Mantri Vs. Punjab National Bank, reported in 2022 SCC online SC 218, wherein their Lordhips has held that “this court has held that the question, as to whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case.  However, ordinarily “commercial purpose” is understood to include manufacturing/ industrial activity of business to business transactions between commercial entities; that the purchase of the good or service should have a close and direct nexus with a profit generating activity”

 

6.       We have carefully considered the submissions made by the learned counsels on eitherside, and perused the entire material records filed in support of the case.

 

7.       The mere reading of the complaint would show that the complainant, being an healthcare institution had approached the opposite parties bank for sanctioning of loan to the tune of Rs.5 crores with overdraft facility of Rs.9,00,00,000/-.  Though the complainant had drafted the complaint without mentioning the purpose of obtaining loan, as seen from Ex.A1 the Credit Arrangement letter dt.27.8.2013 it could be seen that the purpose of loan was mentioned under the caption as “corporate loan”.  Further as seen from the Terms and Conditions, in the column under “Corporate Loan facility purpose.” it was mentioned as “(1)  Towards purchase of equipment or upgrading the existing equipment, renovation or upgrading the Hospital facility and the hospital properties    (2)  For consolidation of the various loans   (3)  To takeover the portion of debt outstanding alongwith L&T Finance to the extent of Rs.10.0Mn.”   

          In view of the above, it is abundantly clear that the loan opted for the purpose of developing their business or to meet out the needs of their business.  Therefore, the loan opted for the generation of profit.  Therefore, as per the dictum laid down in the judgement cited above, held by the Hon’ble National Commission in Primus Chemicals Ltd., Vs. IFCI Limited, reported in I (2017) CPJ 615 (NC), is squarely applicable to the fact of this complaint.   Therefore, without any hesitation, it could be held that the complainant is not a consumer. 

 

8.       The main claim of the complainant is that there is deficiency in service on the part of the opposite parties in non-refunding the processing fee.  In this connection, a perusal of the Annexure I, Terms and Conditions, under the head of Operational terms and conditions at column No.5, the terms and conditions envisaged for processing fee as follows:

          “The firm will pay 1.0% plus applicable taxes (if any) of the sanctioned overdraft limits (non refundable).

          The processing fee is a one time non-refundable fee, and is collected by ICICI Bank for the purpose of appraising the application of the application of the applicant for the facility and the same is independent of the subsequent sanction of the facility by ICICI Bank and/or the availment of the facility by the borrower.”

          In view of the above terms, it is clear that the processing fee is non-refundable, and was made out clearly to the complainant at the time of opting for loan itself.  There was no clause in the terms and conditions to the effect that if the loan is not sanctioned, the processing fee would be refunded.  Therefore, knowing fully well that the processing fee would not be refunded, the complainant had opted for sanction of loan.  Since the loan had not been sanctioned, the act of the complainant in preferring complaint alleging deficiency in service on their part for non refund of the processing fee @Rs.561800/- is not correct.

 

9.       The next allegation of the complainant is with regard to the foreclosure of the Overdraft account maintained by the complainant with the opposite parties bank.  In this regard, the learned counsel for the opposite parties would submit that the complainant themselves vide their letter dt.14.11.2014 under Ex.B5, had agreed for the levying a charge of 2% of the sanctioned limit as foreclosure charges.  In the said letter the complainant hospital had stated as follows:

          “This is further to the personal meeting we had with you and Mr.Pavithrakumar on 11.11.2014 in connection with the closure of our OD account with you and charging of 2% as charges for closure of our account.  We are agreeable for the levy of 2% of the sanctioned limit of Rs.9.00 crores as OD facility for the Hospital.  We request you to debit our account for this 2% and make arrangements for the early release of our title deeds of properties held by you.”

          Subsequently, as per Ex.B6, ‘Declaration’, the complainant themselves have declared that they have received all the property papers on 20.11.2014, and that they do not have any other claim pending from the opposite party bank.  In the said letter, the complainant also declared as “That I or any person claiming through me or otherwise shall not initiate any action for recovery of any other amounts or any other property papers/ documents from ICICI Bank”. 

          In this connection the learned counsel for the complainant had stated that they have paid the foreclosure charges because unless and until they paid the amount, they cannot get back their documents.  But it is the contention of the opposite party that the foreclosure charges was paid by complainant only in terms of the banking regulations. 

          In view of these submissions, it is clear that there are disputed questions of facts involved in this case.  The appropriate Forum to decide the issue is only a civil court, which cannot be decided in a summary manner before this commission.  Therefore, looked at from any angle, the complaint is liable to be dismissed.

 

10.     In the result, the complaint is dismissed.  There is no order as to cost.

 

 

            R. VENKATESAPERUMAL                                                         R SUBBIAH     

                    MEMBER                                                                                 PRESIDENT

Exhibits filed on the side of complainant

A1      18.02.1991   Firm Registration certificate

A2      27.08.2013    Credit arrangement letter by 2^nd OP

A3      28.10.2013    Amendatory credit arrangement letter to complainant by 2^nd OP

A4      14.11.2013              -do-

A5      24.02.2014    Amendatory credit arrangement letter to complainant by 2^nd OP

A6      19.09.2014    Notice by complainant to 2^nd OP

A7      30.09.2014    Reply by 2^nd OP

A8      Nov 14                   Statement of account by OP

A9      20.01.2015    Legal notice by complainant to Ops

A10                        Ack. Card authenticating receipt of legal notice by 1^st OP

A11     20.01.2015    Reply by 2^nd OP

 

Exhibits filed on the side of 1^st Opposite party

B1      27.08.2013    Credit arrangement letter

B2      28.10.2013              -do-

B3                         Loan application from Bajaj Finserve

B4      24.02.2014    Credit arrangement letter

B5      14.11.2014    Complainant’s letter

B6      20.11.2014    Declaration by the complainant

 

 

 

  R. VENKATESAPERUMAL                                                                 R SUBBIAH     

           MEMBER                                                                                        PRESIDENT