Complaint Under Section 12 of the Consumer Protection Act.
QUORUM:
SH. SANJEEV BATRA, PRESIDENT
SH. JASWINDER SINGH, MEMBER
MS. MONIKA BHAGAT, MEMBER
COUNSEL FOR THE PARTIES:
For complainants : Sh. Rajeev Abhi, Advocate
For OP : Sh. Varun Verma, Advocate.
ORDER
PER SANJEEV BATRA, PRESIDENT
1. Briefly stated, the facts of the complaint are that complainant No.2 is the proprietorship concern and complainant No.1 is the proprietor of the same. Earlier said concern was a partnership firm and Sh. Jasmer Singh and Amandeep Kaur were its partner and the said partnership firm was running the business to earn their livelihood. The said firm was dissolved vide dissolution deed dated 15.03.2019. The complainant firm which is a MSME Unit (as per MSMED Act, 2006) is engaged in the business of manufacturing of fabrics to be used in hosiery garments and is covered under the YUF subsidy scheme of Govt. of India and is entitled to refund of capital subsidy on the purchase of machinery though partly or fully financed by availment of loan from financial institutions including banks etc. It is claimed that the complainant firm purchased machine i.e. Single Jersy New Circular Knitting Machine 34” 20GG, 102F TIA FAN Brand, Single Jersy 102F 4 Track Conversion Kit With Cylinder 28G vide invoice No.R-27 dated 02.05.2013 for Rs.7,03,430/- and vide invoice No.R-84 dated 08.08.2013 for Rs.1,51,065/- from M/s.Ramana Fashions, B-VI-186/1, Street No.6, Madhopuri, Ludhiana. For purchasing the said machinery, the complainants had availed loan of Rs.4,00,000/- from the opposite party bank vide application dated 16.04.2013 which was sanctioned on 11.06.2013 and was disbursed on 13.06.2013 and balance amount was paid by the complainants from their own resources. The complainants stated that the term loan of Rs.4,00,000/- was payable in 33 equal monthly installments which stands adjusted and now nothing is due and recoverable by the opposite party bank from them.
According to the complainants, they were entitled to capital subsidy under TUF scheme of Govt. of India for an amount of Rs.1,51,000/- and the loan was sanctioned under the said scheme with capital subsidy of Rs.1,51,000/- by the opposite party bank. Therefore, the complainants lodged claim for refund of capital subsidy of Rs.1,51,000/- under TUF scheme and submitted all the required documents etc. but till date the opposite party bank had not called upon to submit any document or information or request for completion of any formalities for lodging the claim for refund of capital subsidy of Rs.1,51,000/-. However, on 30.05.2014, the opposite party bank sent the documents i.e. refund of TF subsidy claim to Zonal Office, Mumbai vide letter dated 30.05.2014 and opposite party admitted this fact vide their letter dated 18.01.2019.
The complainants further stated that their firm further purchased another machine i.e. New Circular High Speed Knitting Machine Single Jersy 34” 28G 136F with 24G Cylinder and All Standard Accessories vide invoice No.R-73 dated 08.06.2015 for Rs.11,98,592/- from M/s.Ramana Fashions, B-VI-186/1, Street No.6, Madhopuri, Ludhiana by availing a loan of Rs.3,00,000/- from the opposite party bank vide application dated 20.07.2015 and loan was sanctioned on 28.07.2015 and was disbursed on 28.07.2015 with capital subsidy of Rs.1,79,700/-. The complainant firm claimed to have paid the balance amount of Rs.8,98,592/- for purchase of said machine from their own resources. The said loan of Rs.3 Lac was payable in 60 equal monthly installments, which stands adjusted and now nothing is due and recoverable by the opposite party bank from them. The complainants further stated that they were entitled to capital subsidy under TUF scheme of Govt. of India for an amount of Rs.1,79,700/- and the loan was sanctioned under the said scheme with capital subsidy of Rs.1,79,700/- by the opposite party bank. Therefore, the complainants lodged claim for refund of capital subsidy of Rs.1,79,700/- under TUF scheme and submitted all the required documents etc. but till date the opposite party bank had not called upon to submit any document or information or request for completion of any formalities for lodging the claim for refund of capital subsidy of Rs.1,79,700/-. However, on 30.10.2015, the opposite party bank sent the documents i.e. refund of TF subsidy claim to Zonal Office, Mumbai vide letter dated 30.10.2015 and opposite party admitted this fact vide their letter dated 18.01.2019.
The complainants further stated that they are legally entitled for refund of capital subsidy in respect of both machines purchased in the year 2013 and 2015 respectively amounting to Rs.1,51,000/- and Rs.1,79,700/- total Rs.3,30,700/- as per TUF scheme of Govt. of India. However, they were not informed by the opposite party about the fate of both claims. The complainants vide their letter dated 08.12.2017, 21.02.2018, 06.03.2018, 29.06.2018 and 02.08.2018 called upon the opposite party to settle and pay the capital subsidy of Rs.1,51,000/- for purchasing the machine in the year 2013 and Rs.1,71,700/- for purchasing machine in the year 2015 but the opposite party did not take any steps to accede to their genuine requests despite receipt of said letters. The opposite party vide its letter dated 18.01.2019 informed that the Zonal office Mumbai stated that the claim should be forwarded directly to the Ministry of Textile in Annexure E as per revised restricted TUFS booklet in respect of loan sanctioned in 2013 in respect of purchase of machinery for Rs.7.5 lakhs. Vide said letter dated 18.01.2019, it was intimated that neither the complainants submitted the subsidiary claim for refund of subsidy for loan sanctioned in 2013 in the format to the branch nor branch submitted the claim online to Textile Ministry. As such, the opposite party has not lodged the online claim which is gross deficiency in service, negligence and adoption of unfair trade practice due to which the complainant suffered mental tension, torture, agony, financial loss and loss of work. In the end, the complainants prayed for issuing direction to the opposite party to pay capital subsidy of Rs.3,30,700/- along with compensation of Rs.2,00,000/- and litigation costs of Rs.35,000/-.
2. Upon notice, the opposite party appeared and filed written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; lack of jurisdiction; lack of cause of action; the complaint being time barred; suppression of material facts; bad for non-joinder and mis-joinder of necessary parties etc. the opposite party stated that it was very particular and keen for bringing the TUF subsidy in the loan account of the complainant regarding which the complainant was requested many times to submit complete documentation for availing the said TUF subsidy as required by the notification but the complainant dally delayed the matter and was lethargic in supplying the documents for availing TUF subsidy, resulting which the procedure for availing subsidy under TUF scheme of Govt. of India could not be completed in time. According to the opposite party, the complainant was at fault and negligent. The opposite party claimed to have provided efficient and effective services to the complainant whenever he approached it. Even when complainant No.2 approached the opposite party for availing the loan, it was a partnership firm of Sh. Jasmer Singh and Smt. Amandeep Kaur. However, the loan was sanctioned to the partnership firm and subsidy was also to be given to the said partnership firm. Moreover, the present complaint is not maintainable as the same has been field through Jasmer Singh. However, the complaint should have been field through Sh. Jasmer Singh and Amandeep Kaur being Partners of M/s. Jay Jay Knit Fab.
On merits, the opposite party reiterated the crux of averments made in the preliminary objections. The opposite party has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.
3. In support of their claim, the complainants tendered affidavit Ex. CA as well as affidavit Ex. CB of Sh. Jasmer Singh, Proprietor of M/s. Jay Jay Knit Fab. in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of dissolution deed, Ex. C2, Ex. C3 are the copies of letters dated 17.11.2018, 18.01.2019 of opposite party, Ex. C4 to Ex. C11 are the copies letters written by the complainants, Ex. C12, Ex. C14 is the copy of retail invoice dated 08.06.2015, Ex. C13 is the copy of Annexure-I, Ex. C15 is the copy of due diligence certificate dated 30.10.2015, Ex. C16 is the copy of Annexure FR-2, Ex. C17 is the copy of copy of Reporting format RR-1, Ex. C18 is the copy of Annex-FR-2, Ex. C19 is the copy of retail invoice dated 08.08.2013, Ex. R20 is the copy of retail invoice dated 02.05.2013, Ex. C21, Ex. C29 to Ex. C31 are the copies of account statement of the complainant firm, Ex. C22 to Ex. C27 are the copies of ledger report of the complainant firm w.e.f. 01.04.2016 to 26.09.2017, Ex. C32 is the copy of Form 49A, Ex. C33 is the copy of partnership deed, Ex. C34 is the copy of Form GSTR-3B and closed the evidence.
4. On the other hand, opposite parties No.1 and 2 tendered affidavit Ex. RA of Sh. Gurmeet Singh, Chief Manager, Punjab and Sind Bank, IBD Branch, Miller Ganj, Ludhiana and submitted documents Ex. R1 is the copy of Govt. Notification dated 13.10.2014, Ex. R2 is the copy of Govt. notification dated 22.12.2014, Ex. R3 is the copy of letter dated 18.01.2019 of the complainant firm for TUF subsidy claim and closed the evidence.
5. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and affidavit produced on record by both the parties. We have also gone through the point of arguments submitted by the complainant.
6. Admittedly, complainant firm, a MSME unit, engaged in manufacturing of fabrics to be used in hosiery garments, purchased new machinery on 02.05.2013 and 08.08.2013 vide invoices Ex. C19 and Ex. C20 for a sum of Rs.7,03,430/- and Rs.1,51,065/- out of which Rs.4,00,000/- was financed by the opposite party bank which was payable in 33 equal monthly installments. Similarly, on 08.06.2015, the complainant firm purchased another machine worth Rs.11,98,592/- vide receipt Ex. C12, out of which the complainant firm availed loan of Rs.3,00,000/- from the opposite party bank which was payable in 60 equal installments. Now both these accounts stand adjusted. Accordingly, by purchasing these machines, the complainant has upgraded its machinery and thereby became entitled to refund of capital subsidy of Rs.1,51,000/- and Rs.1,79,700/- by virtue of Technology Up-gradation Fund Scheme (TUFS) for textile & jute industries launched by Government of India. Initially, this scheme was for 5 years i.e. from 28.04.2011 up to 31.03.2012 but Govt. of India extended the same w.e.f. 01.04.2013 to 31.03.2017 and the scheme was rechristened as Revised Restructured Technology Up-gradation Fund Scheme (RR-TUFS) (Annexure-R1). Annexure-R1 dated 13.10.2014 postulates the terms and conditions with regard to its scope, role of bank, general eligibility conditions, cut off dates and other operational guidelines etc. for the release of TUF subsidy to the eligible textile industrial units. The aforesaid guidelines were revisited by the Government of India and revised guidelines of Technology Up-gradation Fund Scheme were issued which has also been detailed in letter dated 22.12.2014 Annexure-R2 obviously these were to be applied prospectively.
7. It is evident that at the time of purchase of first machine, unrevised guidelines as stipulated in letter dated 13.10.2014 Annexure-R1 were applicable while revised guidelines as contained in letter Annexure-R2 dated 22.12.2014 became applicable with regard to processing and awarding of subsidy of the purchase of second machine. The cutoff date for consideration of grants of benefits under this scheme was up to one year from the date of sanction of term loan. Letter Annexure-R1 also clearly stated the rule/duty of the bank for implementation of the scheme which requires bank to examine the eligibility of industry as well. Further a detailed procedure had been provided for the operational guidelines for submission of application which are reproduced as under:-
“OPERATIONAL GUIDELINES FOR SUBMISSION OF APPLICATION FOR TUF SUBSIDY:
1. Applicant can submit the application for availing TUF subsidy to the concerned Branch.
2. After carrying out due-diligence, branches have to prepare applicable formats (i.e.RR-1,RR- 2,RR-6,RR-8,FR-2 etc.),quarter-wise subsidy requirement for entire period of 07 years/repayment period whichever is less. On completion of all formats along with necessary documents viz.
(i) invoice,
(ii) Sanction letter
(iii) Chartered Accountant certificate regarding commencement of Commercial Operation
(iv) Chartered Engineer's certificate regarding installation of machineries
(v) Post sanction unit visit report by Branch Manager
(Vi) Due Diligence certificate
(Vii) Present Position of Account.
The application is to be submitted to Zonal Office. Please note that the Capital subsidy will be worked out on the basic value of the machinery excluding the tax components for the purpose of valuation. In other words, for indigenous machinery the basic price and for imported machinery CIF price be considered for working out subsidy.
3. Zonal Office after verifying application for completeness has to recommend the application to TUFS CELL created at HO Priority Sector (Advances) Department for ascertaining eligibility and submission of application online for obtaining Unique Identification. Number(UID) from Ministry of Textiles. The correctness of the information submitted for obtaining UID will be responsibility of the Branches/Zonal Offices.
4. There would be an online pre-authorization system for each eligible application by the Office of Textile Commissioner, Ministry of Textiles, Government of India, MUMBAI. Application will be processed on first come first served basis, subject to eligibility and availability of funds.
5. Request for UID shall be entertained only up to one year from the date of sanction of term loan.
6. For obtaining Unique Id number, TUFS CELL at Head Office, after determining of eligibility and admissible amount under TUFS for each case, decide the eligibility and allot ECN (Eligibility Certificate Number) for each case and thereafter submit information online in the prescribed format to the Textile Commissioner Office, MUMBAI.
7. If the applications are found in order/complete in all respect, the same will be processed for allotment of UID and the Office of Textile Commissioner MUMBAI will issue a Unique ID number to pre-authorize the loan application for submission of subsidy claim by the lending agency in the online system.
8. If there is an apparent discrepancy, the UID application will be referred back to the concerned Lending Agency as "Deficient Application "for rectification and re-submission. The resubmitted application will be considered again on first-come-first-served basis.
9. On issuance of UID number by the Office of Textile Commissioner, the same will be conveyed to respective Zonal Office.
10. Mere creation/submission of UID application in the online system will not entitle for UID Number and for subsidy under TUFS.
11. Any application sanctioned by the Bank without Unique ID number by the Textiles Commissioner, MUMBAI would not be eligible for release of subsidies under the TUFS scheme.
12. The Textile Commissioner will stop preauthorization as soon as the available subsidy cap is reached in the segment.
13. In order to ensure data integrity and prevent any possible misuse of the scheme, the data furnished by lending agencies through FR-2 over web portal of Textile Commissioner shall be treated as frozen and subsidy payments shall be considered strictly as per frozen data OR actual whichever is lower.
14. The nodal banks will determine the eligibility and release the TUFS benefit in respect of all cases financed by them under TUFS including Non-MSME,MSME and 10% capital subsidy for specified processing machinery/textile machinery/technical textile machinery & 15% for brand new shuttle less looms.
15. In case of consortium financing, the consortium leader shall assess eligibility of the project under TUFS for itself and also for other members of the consortium, provided the consortium leader is a nodal bank. In case consortium leader is not a nodal bank, the nodal bank with major share of term loan shall assess the eligibility of the project including amount of loan eligible under TUFS and also determine eligibility of 10% capital subsidy for specified processing machinery /garmenting / technical textile machinery and 15% capital subsidy for brand new shuttle less looms.
16. In case of financing by multiple banks, the bank with major share of term loan shall assess eligibility of the project under TUFS for itself and also for other banks, provided the said bank is a nodal bank. In case bank with a major share of term loan is not a nodal bank, the nodal bank with major share of term loan shall assess the eligibility of the project including amount of loan eligible under TUFS and also determine eligibility of 10% capital subsidy for specified processing machinery/garmenting/technical textile machinery and 15% capital subsidy for brand new shuttle less looms.
17. In case of consortium financing / financing by multiple banks, the individual banks shall administer interest reimbursement/ capital subsidy to their assisted units, provided the banks are nodal banks.
18. As the applications are sanctioned on first-cum-first-serve, the branches/Zonal Offices are requested to submit the applications at the earliest to avoid last date/late submissions.”
8. Perusal of documents Ex. C17 to Ex. C20 shows that the claim of Rs.1,51,000/- was lodged on 25.05.2014 along with application and the requisite documents were submitted within one year from the sanction of loan for machine i.e. 11.06.2013 as per terms and conditions of Ex. R1.
9. Now adverting to the issue of subsidy with regarding to second machine, perusal of revised guidelines as contained in letter Ex. R2 dated 22.12.2014 provides that action to be taken by the entrepreneur followed by action of lending branch/bank and its concerned Zonal office. It also provides that action which is required to be taken by the office of Textile Commissioner and Ministry of Textile with regard to consolidation and scrutinization of the subsidy claim. In nutshell, an entrepreneur was required to submit detailed application along with documents and undertaking to the lending branch/bank. Further it was required to ensure such documents are submitted to bank within six months of the sanction of term loan. The lending branch was required to initiate and process verification and Unique Identification Number (UID) and submit the claim to its Zonal office for its onward submission to Textile Commissioner besides completing other formalities. All the claims for subsidy were required to be signed by branch manager and counter signed by the Zonal Office. Perusal of documents on record shows that claim was lodged on 30.10.2015 i.e. within six months and even due diligence certificate dated 30.10.2015 was issued on the letter head of the opposite party.
10. It can be borne from the record that the complainant had been issuing reminders from 07.12.2017 to 29.06.2018 Ex. C4 to Ex. C10 and the opposite party only responded the letter dated 02.08.2018 Ex. C2 whereby the opposite party informed the complainant that Zonal office has forwarded its TUFS claim to head office at New Delhi for further process. Further letter dated 18.03.2019 addressed by opposite party to the complainant firm also details about the process adopted by the bank itself in forwarding the claim to its Zonal office. So it is evident that till 18.01.2019, the subsidy claim with regard to both machines was pending for consideration by the competent authorities. It is not the case of the opposite party that the complainant firm was not entitled to the subsidy or did not fulfill the eligibility conditions as enlisted in Annexure-R1/R2. So this Commission is of the view that there is deficiency in service on the part of the opposite party in submitting and processing the subsidy claim of the complainants.
11. The objection of the opposite party that the complaint is barred for non-joinder or mis-joinder of necessary parties is devoid of any merits. At the time of raising loan of both counts, the complainant firm being a partnership firm was registered as MSME Unit and complainant No.1 Jasmer Singh was also one of its partners along with Amandeep Kaur vide Ex. C1. The said firm was dissolved on 15.03.2019 and complainant No.1 took over all assets and liabilities of the firm being Proprietor of said firm. So he is competent to maintain the present complaint. Even otherwise, the firm has also been impleaded as co-complainant. In the given set of facts and circumstances, it will be just and appropriate if the opposite party is directed to pay Rs.1,51,000/- and Rs.1,79,700/- i.e. total Rs.3,30,700/- as TUF subsidy to the complainants with interest @8% per annum from date of filing of the complaint till its actual payment along with composite cost of Rs.15,000/-.
12. As a result of above discussion, the complaint is partly allowed with direction to the opposite party to pay Rs.1,51,000/- and Rs.1,79,700/- i.e. total Rs.3,30,700/- as TUF subsidy to the complainants with interest @8% per annum from date of filing of the complaint till its actual payment within 30 days from the date of receipt of copy of order. The opposite party shall also pay composite compensation of Rs.15,000/- (Rupees Fifteen Thousand only) to the complainant within 30 days from the date of receipt of copy of order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.
13. Due to huge pendency of cases, the complaint could not be decided within statutory period.
(Monika Bhagat) (Jaswinder Singh) (Sanjeev Batra) Member Member President
Announced in Open Commission.
Dated:16.10.2023.
Gobind Ram.
