DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA (PUNJAB)<br /> <br /> CC No. 282 of 26-09-2007<br /> Decided on :17-01-2008<br /> <br /> M/s. Sra Construction Company, S.C.F. No. 96, Rose Garden Shopping Complex, G.T. Road, Bathinda, through its partner Daljeet Singh S/o Sh. Raghunath Singh, R/o Bathinda. <br /> ... Complainant<br /> Versus<br /> <br /> 1. ICICI Bank Limited, Registered Office “Landmark” Racecourse Circle, Vadodara 390 007 through its Chairman.<br /> 2. The Regional Manager, ICICI Bank Limited, ICICI Bank Towers, NBCC Palace, Bhishma Pitamah Marg, Paragati Vihar, New Delhi 110 003.<br /> 3. The Manager, ICICI Bank Limited, Guru Kanshi Marg, Bathinda.<br /> <br /> ...Opposite parties<br /> <br /> Complaint under Section 12 of the Consumer Protection<br /> Act, 1986.<br /> <br /> QUORUM :<br /> Sh. Lakhbir Singh, President<br /> Sh. Hira Lal Kumar, Member <br /> Dr. Phulinder Preet, Member<br /> <br /> For the Complainant : Sh. Anil Gupta, Advocate.<br /> For the Opposite parties : Exparte.<br /> <br /> O R D E R <br /> <br /> LAKHBIR SINGH, PRESIDENT <br /> 1. Complainant Company is engaged in the work of construction and is carrying out various contracts of the Government at various places including that of Bathinda. It was in need of working capital limit. On 11.5.05 Mr. Bharat Bhushan Arora, Solution Manager of the opposite parties approached the complainant through its partner for providing working capital limit. Matter was discussed with him and he agreed to give a proposal in writing. Accordingly, opposite parties wrote letter of proposal dated 13.5.05. After negotiations, they agreed to provide working capital limit to the tune of Rs. 1.00 Crore. They asked it (complainant) to pay 1% of the total amount of this limit i.e. Rs. 1.00 Lac as processing and other service charges. Accordingly a sum of Rs.1,10,200/- was paid vide cheque No. 250055 dated 5.8.05 as processing and service charges, Rs. 2500/- as legal opinion charges to Mr. Rajesh Goyal, Advocate, lawyer of the opposite parties, Rs. 1100/- as Bank Evaluator charges and Rs. 1438/- as Insurance Charges. As desired by the opposite parties, letter was issued by it (complainant) to the Estate Officer, Chandigarh intimating that House No. 219, Sector 40-A, Chandigarh is being equitably mortgaged with the opposite parties. Mr. Rajesh Goyal, Advocate, Legal Advisor of the opposite parties has verified the title of the property and gave report dated 8.8.05. All other requisite formalities regarding guarantee etc., were completed for release of working capital i.e. cash credit facilities. Opposite parties wrote letter dated 11.8.05 intimating that limit of Rs. 10 millions (Rs. 1.00 Crore) has been sanctioned but he should arrange parri passu letter among participating banks. Before this, opposite parties did not ask for arranging of such letter. It is further added by it that opposite parties have themselves written letter dated 17.8.05 to Punjab National Bank, Bathinda to issue letter conceding parri passu charges. It is alleged that this condition imposed by the opposite parties is an after thought and is due to some ulterior motive to cause wrongful loss to it and wrongful gains to themselves. He alleges that he has undergone loss to the tune of Rs. 2.00 Lacs which the opposite parties are liable to reimburse alongwith interest @ 18% P.A. from the date of deposits of the amount till payment. He has also undergone mental tension, agony and loss to his physical health. He alleges deficiency in service and unfair trade practice on their part. In these circumstances, complaint under Section 12 of the Consumer Protection Act, 1986 (Here-in-after referred to as `Act') has been preferred seeking direction from this Forum to the opposite parties to pay it Rs. 2.00 Lacs got deposited from it, paid by it to various persons, spent by it to complete the formalities and also Rs. 5.00 Lacs as compensation on account of mental tension, agony and loss of physical health besides cost of the complaint.<br /> 2. Notices of the complaint were issued to opposite parties No. 1 & 2 through registered A.D. Post on 8.10.07. Neither registered covers nor A.Ds were received back within 30 days. Accordingly, they have been deemed to have been duly served. No-one came on their behalf to contest the complaint. Accordingly, they have been proceeded against exparte.<br /> 3. Notice to opposite party No. 3 was sent through the peon of this Forum. Raman Rathore Manager after reading it refused to receive it. This opposite party did not care to contest the complaint. Accordingly, he has been proceeded against exparte.<br /> 4. Complainant led in exparte evidence his affidavit (Ex. C-1), photocopy of Legal Notice (Ex. C-2), photocopy of A.Ds (Ex. C-3 to Ex. C-5), photocopy of letter dated 9.10.06 (Ex. C-9) and photocopy of letter dated 13.5.05 (Ex. C-10).<br /> 5. We have heard the learned counsel for the complainant. Besides this, we have gone through the record.<br /> 6. Mr. Gupta, learned counsel for the complainant argued that opposite parties vide their letter dated 11.8.05 had intimated that limit of Rs. 10 millions (Rs. 1.00 Crore) has been sanctioned subject to his arranging parri passu letter among participating banks. He further submitted that there was no such condition of arranging letter ceding parri-passu charge on current assets from Punjab National Bank its (complainant's) existing banker. For this, he drew our attention to Ex. C-10 according to which complainant was asked to provide them four Nos. of securities. Complainant got issued legal notice dated 1.12.06, copy of which is Ex. C-2 and in response to it, opposite parties sent letter dated 9.10.06 to the counsel for the complainant intimating that limit can not be disbursed as complainant was not in a position to get parri-passu letter on current assets from Punjab National Bank. It was further intimated by the opposite parties that they are unable to refund the processing fee and the extra claim that has been demanded in the notice. Next submission of Mr. Gupta is that in the letter dated 13.5.05, copy of which is Ex. C-10, opposite parties has made it clear that they would bank the cheque only after sanction of limit. When limit has not been ultimately sanctioned, opposite parties are liable to refund the amount received from the complainant. Deficiency in service on their part is established. They are liable to pay Rs. 2.00 Lacs and Rs. 5,00,000/- details of which have been given in the prayer clause in the complaint. To support the arguments, reliance is placed on the affidavit Ex. C-1 of Sh. Daljit Singh Sra, partner of the complainant.<br /> 7. We have considered the respective arguments and we do not feel ourselves inclined to agree with the learned counsel for the complainant. Ex. C-10 is the copy of the letter regarding proposal for working capital limit to the complainant to the tune of Rs. 18.5 million. It has been made clear in this document that processing fee as applicable would be charged at 1.0% of the sanctioned limit (Service tax extra). Complainant was further asked to hand over cheque of Rs. 2,03,870/- (inclusive of service charges). It was further directed to provide first charge on current assets, first charge on fixed assets, Equitable mortgage of property having a value of 75% of the proposed limit i.e. Rs. 13,875 million (property to be valued by ICICI Bank valuer) and Cash margin to be kept at 20% at the time of insurance of Bank Guarantee. Underneath the letter one paragraph has been added which is reproduced as above :<br /> “The above mentioned summary of Terms and Conditions provides indicative terms and conditions for the credit facilities to M/s. SRA Construction Co. This term sheet is not meant to be, not should it be construed as a commitment by ICICI Bank to extend credit formalities. The term sheet is intended to outline basic points of business understanding around which the credit facilities would be constructed. It does not attempt to describe all the terms and conditions that would relate to the credit facilities nor do the terms suggest specific documentation phrasing. The closing of any financial transaction relating to the credit facilities would be subject to various conditions precedent, including without limitation, the conditions set forth in this letter. The final terms and conditions applicable to the credit facilities would be subject to inter alia, examining plan, satisfactory review of hinterland connectivity, satisfactory environmental impact assessment, validation of revenue assumptions, legal counsel review, satisfactory project economics and internal credit approvals.”<br /> In the letter dated 9.10.06, copy of which Ex. C-9, special conditions have been recorded according to which all charges of documentation and mortgage creation would be borne by the complainant. A perusal of paragraph underneath the letter, copy of which is Ex. C-10, which has been reproduced above indicates that opposite parties were not restricted to get 4 documents mentioned in the body of this letter. This letter does not describe the terms and conditions relating to the credit facilities. It has further been made clear that terms sheet is not meant to be, not should it be construed as a commitment by Bank to extend credit formalities. It means that opposite bank could impose further condition as well in addition to the 4 securities recorded in the body of the letter dated 13.5.05, copy of which is Ex. C-10. Accordingly, they were well within their rights to demand pari passu letter. Bank as a financial institution is well within its right to exercise all precautions and cautions while sanctioning and granting loan to any party like the complainant. Mere fact that bank did not finally sanction the loan for want of parri passu letter, does not amount to deficiency in service on their part. For this, we are fortified by the observations of the Hon'ble National Commission in the case of Shree Kanaka Durga Hatcheries (P) Ltd. Vs. State Bank of India I(2003) CPJ 62 (NC). Similar view has been held in the case of Rudarakash Aqua Foams Private Limited and Another Vs. Bank of India I(2003) CPJ 18.<br /> 8. Stance of the complainant is that he has paid Rs. 1,10,200/- as processing and service charges vide cheque No. 250055 dated 5.8.05, 2500/- as legal opinion charges; Rs. 1100/- as Bank Evaluator charges and Rs. 1438/- as insurance charges. Now question arises as to whether opposite parties are liable to refund the amount received from the complainant as demanded by it in the prayer clause of the complaint. The reply to our minds is in the negative. Case of the complainant was processed by the opposite parties upto the final stage. Limit was sanctioned subject to arranging letter ceding parri passu charges on current assets. Even in Ex. C-10 it was made clear to the complainant to provide first charge on current assets. Processing fee has been collected as fee for processing its case. Complainant was apprised through letter dated 13.5.05 that it would have to pay the processing fee @1% of the sanctioned limit (Service charges extra.). Complainant itself is relying upon Ex. C-9. In this document as well it has been made clear that all charges of documentation and mortgage creation would be borne by it. The final terms and conditions applicable to the credit facilities were subject to inter alia, examining plan, satisfactory review of hinterland connectivity, satisfactory environmental impact assessment, validation of revenue assumptions, legal counsel review, satisfactory project economics and internal credit approval. In these circumstances, complainant was liable to pay processing fee (service charges extra) and charges of documentation and mortgage creation particularly when its case was taken to the maximum height. Hence refund of the amount is not permissible. Complainant is bound by the terms and conditions brought to its notice. Accordingly, no deficiency in service on the part of the opposite parties is proved. Accordingly, he is not entitled to the amount of Rs. 2.00 Lacs and Rs. 5.00 Lacs claimed by him in the prayer clause of the complaint.<br /> 9. In the result, complaint being devoid of merits, is dismissed. <br /> Copy of this order be sent to the parties concerned free of cost and file be consigned.<br /> Pronounced :<br /> 17-01-2008 (Lakhbir Singh )<br /> President<br /> <br /> <br /> (Hira Lal Kumar)<br /> Member<br /> <br /> <br /> (Dr. Phulinder Preet)<br /> Member <br />