1.       Heard Mr. K. Maruthi Rao, Advocate, for the appellant, Mr. Arun Aggarwal, Advocate, for respondent-1 and Mr. Satyapal Singh, Advocate, for respondent-2. 

2.       K. Murugesan (the complainant) has filed above appeal from the order of Tamil Nadu State Consumer Disputes Redressal Commission, Chennai, dated 26.04.2023 passed in CC/180/2016, dismissing the complaint on the finding that the complainant is not a ‘consumer’ as he had availed the services of the opposite parties free of charge and the complaint is not maintainable.

3.       K. Murugesan (the appellant) filed in CC/18/2016, for directing the opposite parties to pay Rs.9828497/- as compensation (as on 31.08.2016), for his revenue loss for about six years. The appellant stated that the Central Government of India launched the scheme for motivation of self-employment generation as well as eradication of unemployment through the “Prime Minister Employment Generation Programme (for short the scheme) and invited the first generation entrepreneurial aspirants to execute the project. The scheme laid down guidelines to facilitate the concerned entrepreneurs to avail the financial assistance upto Rs.25/- lacs (10% of which was contributed by the beneficiary, 55% was advanced by sponsoring Bank as loan and 35% subsidy of the government). Khadi & Village Industries Commission (the KVIC) is Nodal Agency at national level. State Khadi & Village Industries Board, District Industry Centres and the bank implement the scheme at the state level. In the Nilgiris District, the project under the scheme was funded by M/s. Vijaya Bank, Coonoor branch in the year 2010. The complainant was an employee of Non-uniform Civil Administrative Cadre-Account of the defence. The complainant took voluntarily retirement from his service for the motivation of execution of an agro based MSME project under the scheme as a priority sector of the Government at backward rural area, The complainant executed an agro based Fruits & Vegetables Preservation Industry in the name of “Pasumai Hi-Tech Agro Industry” at SF No.628, Kanacombai, Thummanatti (PO), Udhagamandalam (TK), District The Nilgiris-643102, investing huge amount out of which Rs.25/- lacs availed under the scheme (10% of which was contributed by the complainant, 55% was advanced by Vijaya Bank as loan and 35% subsidy of the government) and started production since December, 2010. However, the KVIC did not provide an initial marketing support as per guidelines, despite his repeated requests and the directions of the competent authority. The products of the complainant expired as it could not be marketed before its expiry date and the complainant suffered huge loss. Apart from it, Vijaya Bank also mis-utilised the amount of subsidy.  The programme provides for rehabilitation of sick industries as per guidelines of RBI for rehabilitation of sick small scale industries. The complainant, therefore, applied to Vijaya Bank for sanction of more loan for rehabilitation of his industry. The Regional Manager, Vijaya Bank asked to give proposal for loan to the branch office. The complainant then gave his proposal vide letter dated 15.11.2012 to the branch office. The Branch Manager, vide letter dated 06.12.2012, asked to give details/statements, which were given and charged for fee for it. The title deeds and other documents were already pledged with the bank. However, Branch Manager rejected his application for sanction of rehabilitation loan, vide letter dated 10.02.2013 for a silly reason that they had projected 6 mobile outlets for sale of the products of the complainant but it could not be sold. The complainant raised his objection to the said letter to the higher authorities. The higher authorities instead of examining the objection on merit, kept it pending for a long time and ultimately advised to give a fresh proposal for grant of loan. The complainant then gave another letter dated 23.01.2014, for sanction of rehabilitation loan and submitted details/statements on 24.01.2014 to the branch office of Vijaya Bank. The application was kept on pending for a long period. After about two years, Credit Manager, Regional Office, Vijaya Bank, Coimbatore asked the complainant to give a fresh application then a fresh application along with details/statements was given on 31.01.2016. Credit Manager put a condition upon the complainant to achieve 20% projected sales and apprise about the performance. The complainant achieved the target and apprise the branch office vide letter dated 10.04.2016. The complainant also wrote a letter dated 10.04.2016 to Reserve Bank of India, RPCD, Chennai, apprising the efforts made by him for grant of rehabilitation loan from 2012. Reserve Bank of India, vide letter dated 23.05.2016, directed the bank to take appropriate action on the application of the complainant. Thereafter, Vijaya Bank conducted a viable study of the project of the complainant. Regional Manager, vide letter dated 19.07.2016, informed the Reserve Bank of India that the project was technically and commercially non-viable. Assistant General Manager, Vijaya Bank gave his report dated 21.07.2016 and by assigning some silly reasons, submitted that the project was technically and commercially non-viable. The complainant, vide letter dated 22.07.2016 explained each and every objection, as mentioned in the report. Vijaya Bank throughout violated the guidelines of Reserve Bank of India dated 16.01.2002, issued for rehabilitation of small scale industries. Reserve Bank of India, vide its letter dated 25.07.2016 directed Regional Office of the Bank to form a committee as per guidelines dated 17.03.2016 for an immediate injection for rehabilitation of sick industries established under the scheme. Thereafter, a joint meeting of the complainant with the Regional Manager, Assistant General Manager, the Chief Manager, the MSME Manager & the Credit Manager was held on 30.08.2016 at the Regional Office of the bank, in which, the complainant explained each and every aspect of viability of his project. But ignoring the explanation of the complainant the report dated 21.07.2016 was accepted and the application for sanction of the rehabilitation loan was rejected. The complainant, through RBI, wrote a letter dated 20.09.2016 to Vijaya Bank to form the committee as per guidelines but no action was taken.

After commencement of production, the KVIC did not provide initial marketing breathing support, despite repeated requests and directions of the competent authority, while as per the guidelines, a compulsory EDP training to the entrepreneurs, they educated it. The complainant, being new in the field, tried to sell his products in local market and at tourist points, where whole products could not be sold before expiry date. Due to which, the complainant suffered huge loss. The complainant gave an application before the Collector/ District Chairman of the scheme, who directed District Industry Centre (the DIC) to conduct an appraisal study to find out the obstacles and appropriate remedies to resolve the problems of the project. General Manager after appraisal study, submitted his appraisal report dated 02.08.2011, suggesting for resolution of the problems. The bank did not reciprocate nor took any action as per report. The Industries Commissioner, Chennai, vide his letter, dated 18.08.2011, directed the DIC and the KVIC to export the potential of the project but the KVIC did not provide export support. As per guidelines under the scheme, the KVIC has to conduct a periodic meeting with the competent authorities and the concerned entrepreneurs to discuss the problems and find a solution. District Chairman vide letter dated 04.01.2013, also directed the KVIC through the DIC to arrange a joint meeting to resolve the obstacle of the complainant but no meeting was held. The KIVC never called the complainant in any such meeting, despite his repeated requests. District Chairman vide letters dated 09.04.2012, 31.12.2012 and 08.05.2013, also directed the KVIC to conduct an appraisal study to find out the obstacles and appropriate remedies to resolve the problems of the project. The KVIC took one year time to comply with the direction of the District Chairman and submitted appraisal report dated 20.06.2013, in which, various false facts have been mentioned against the complainant. The District Chairman called for comments of the complainant. The complainant gave his reply, vide letter dated 13.12.2013, pointing out the falsity in the report dated 20.06.2013. The KVIC and the bank has not given their reply to the letter dated 13.12.2013, despite the letter of District Chairman dated 17.12.2013. The complainant also gave reminder to the District Chairman vide letter dated 26.02.2016. The complainant also registered in grievances through the MSME Internet Grievance Monitoring System, vide complaint Nos.TN00001549, TN00001590 and TN00001600. On these allegations, the complaint was filed on 30.11.2016.   

4.       Vijaya Bank filed its written version and stated that the complainant had applied for a loan of Rs.23.75 lacs, vide PMEGP Application No.5/B/2008 on 27.02.2009 for setting up Vegetable Preservation Industry. Total cost of the project was Rs,25/- lacs and Rs.1.25 lacs was margin money. Break-up of the estimate was Rs.5.50/- lacs for work shed, Rs.56705/- as pre-operative expenses, Rs.9/- lacs as working capital and Rs.993295/- for Machinery & Equipment. After approval from the competent authority, Rs.5.50 lacs was disbursed for ‘work shed’, in Loan Account No.300308391000001 on 22.12.2009. Repayment of the loan had to be done in 84 EMIs of Rs.9490/- from 22.12.2010, ie. after 12 months moratorium period. Rs.172500/- was disbursed for ‘pre-operative expenses’ on 11.02.2010, in Loan Account No.300308391000002. Repayment of the loan had to be done in 96 EMIs of Rs.2000/- from 11.02.2011, ie. after 12 months moratorium period. Rs.762500/- was disbursed on 15.02.2010 for ‘working capital’, in Current Account No.300306211000005. Cash Credit Limit was valid for 18 months i.e. upto 15.08.2011. Rs.890000/- was disbursed for machinery & equipment on 26.02.2010, in Loan Account No.300309041000044. Repayment of the loan had to be done in 96 EMIs of Rs.15240/- from 22.03.2012. The complainant wrote a letter dated 24.03.2011 to the Branch Manager that he had deployed all his extreme efforts and hard work but he was unable to operate his project due to delay in sanction/approvals by the concerned authorities; and due to slow moving of the KVIC, he was marketing his products in Super Markets and Mini shops, resulting in financial constraints; and he was not in position to invest further and had no hope for immediate impact on export as well as local sales of his product. The complainant requested the Branch Manager to take appropriate step. On 06.05.2011, subsidy of Rs.875000/- was credited in Current Account. As his EMIs were due as such Rs.59770/- was credited to Loan Account No.300309041000044 and Rs.16939/- was credited to Loan Account No.300308391000001 from this subsidy and balance remained in Current Account. The complainant did not deposit EMI in any of the loan account as such all the three loan accounts were stamped as ‘Non-Performing Asset’ (NPA) on 31.08.2011 by the system automatically as per RBI norms. Vijaya Bank issued notice under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) on 18.11.2011. The complainant wrote a letter dated 23.07.2012 to Reserve Bank of India for directing the Vijaya Bank to re-structure his loan. The complainant submitted his plan on 15.11.2012, relating viability of the project. Then inspection was done by the officers of the bank and it was found that the complainant had two mobile units (not six as alleged). On these two units, total sale of Rs.51000/- of the product was done up to 10.12.2012, which was not sufficient to pay existing EMI. Target of sale of Rs.90.65 lacs up to 31.03.2013 could not be achieved. The bank, vide letter dated 10.02.2013, communicated to the complainant that his proposal for restructure of the loan is not viable and asked to repay the loan otherwise, proceeding under the SARFAESI would be taken for recovery of the loan. The complainant, vide letter dated 10.02.2013, informed the bank that he wanted to go for a job and requested to take possession of mortgaged properties. Symbolic possession of the property bearing No,628 (Old No.57/1) in Kanacombai Thummanatty Village Udhagmandalam Taluk, Nilagiris District was taken on 23.02.2013 in pursuance of the notice dated 18.11.2011. The complainant handed over physical possession on 31.12.2015 and the proceeding for auction and sale of above property was initiated. The complainant gave an application to the General Manager, RPCD, Reserve Bank of India on 11.04.2016 for rehabilitation of his project. On this application, the Branch Manager, Coonoor submitted his report that the project in not technically feasible and financial viable. Entire papers were placed before the Committee. The committee found that success of the Unit depends upon marketing of its product. A review from the dealers to whom the complainant had supplied his product shows that the product could not compete with similar product of other companies available in the market, being more costly. The Unit of the complainant was located at a distance of 25 KMs from Coonoor. Supply to dealers at minimal cost was not possible. Considering all the aspects for viability of the project, the committee did not recommend for rehabilitation of the project. The bank has acted as per guidelines in the scheme and guidelines of RBI. There was no deficiency in service on the part of the bank. The EMIs of the loan of the complainant were started from 22.12.2010, 11.02.2011 and 22.03.2011 but he did not deposit a single EMI. The complaint is misconceived and is liable to be dismissed.

5.       Khadi & Village Industries Commission filed its written version stating that EDP training was given to the complainant during 13.04.2009 to 24.04.2009. Clause-14.2(ix) of the scheme provides for marketing support as “Marketing support for the products, produced by the unit under PMEGP may be provided through KVIC’s Marketing Sales outlets, as far as possible. KVIC will reserve the right to provide such a support based on quality, pricing and other parameters to be separately circulated by KVIC to KVIBs/DICs. Besides the above, Exhibitions, Workshops at District/State Zonal/National and International levels, Buyer-Seller Meets etc. will be arranged for the benefit of PMEGP beneficiaries by KVIC”. There are lakhs of the beneficiaries of the PMEGP scheme and it was not possible for KVIC to provide marketing support to all of them. The KVIC facilitated the complainant to sell his products to the Cochin Bhavan but there were complaints from the consumers regarding quality, packing and pricing etc and even few consumers threatened to approach consumer court if such low standard products are continued to be sold in the Bhavan. DIC, APEDA and KVIB also offered the complainant for marketing support of his product but the complainant did not approach them for sale of his products. OP-2, vide letter dated 15.02.2012, intimated the complainant to participate in International Level Exhibitions and State Level Exhibition for marketing his product. The complainant, in his application dated 27.02.2012 wrote the Collector acknowledged that even though he was informed to participate in International Level Exhibitions and State Level Exhibition for marketing his product but he could not utilise this opportunity due to paucity and mobilization of funds and requested the bank to sanction a short term cash credit loan. On the application of the complainant for rehabilitation of his unit, a Joint Verification Team, consisting members of KVIC, DIC and BDO, visited the unit of the complainant and after considering all the aspects submitted its report, finding that the complainant was a wilful defaulter and so a suitable action may be initiated against him. RBI in its letter dated 23.07.2012, informed the complainant in this respect. Then the bank initiated proceeding under the SARFAESI. The complainant marketed his product through Nilgiris District Sarvodaya Sangh, an aided institution of the KVIC for the last three years viz. 2015, 2016 and 2017 but his sale is very poor. In order to avoid, recovery proceeding, the complaint has been malafide filed compensation.

6.       State Commission, after hearing the parties, vide its judgment dated 26.04.2023, held that the complainant had availed the services of the opposite parties ‘free of charge’ for ‘commercial purpose’ as such the complainant is not a consumer and consumer complaint is not maintainable. Sanction of the loan is under discretion of the bank. After considering entire aspects, the bank rejected the application for sanction of the loan for rehabilitation. On these findings dismissed the complaint. Hence this appeal has been filed.       

7.       We have considered the arguments of the parties and examined the record. The word “consumer” has been defined under Section 2 (1) (d) and word “service” has been defined under Section 2 (1) (o) of the Consumer Protection Act, 1986, (hereinafter referred to as the Act) which are quoted below:-

“Section-2 (1) (d).- “consumer” mean any person who,-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such use is made with approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails such services for any commercial purpose;

Explanation.- For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning livelihood by means of self employment.

Section 2(1) (o):- “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

8.       Admittedly, Government of India launched the scheme for motivation of self-employment generation as well as eradication of unemployment through the “Prime Minister Employment Generation Programme. Khadi & Village Industries Commission (the KVIC) is Nodal Agency at national level. State Khadi & Village Industries Board, District Industry Centres and the bank implement the scheme at the state level. Central Government and Khadi & Village Industries Commission provide the service/scheme ‘free of charge’ and the appellant is not a ‘consumer’ of opposite party no.2. This Commission, in Himachal Weavers Private Limited Vs. H.P. Financial Corporation, 1993 SCC OnLine NCDRC 116, RP/4894/2012 Chaudhary Ashok Yadav Vs. Rewari Central Co-operative Bank (decided on 08.02.2013) and Canara Bank Vs. Piyush Tripathi, 2023 SCC OnLine NCDRC 601, held that beneficiary of government scheme is not a ‘consumer’ of the government.

9.       Allegations against Vijaya Bank is that it had mis-utilised the subsidy and had not sanctioned rehabilitation loan. Vijaya Bank has stated that EMIs of the loan of the complainant were started from 22.12.2010, 11.02.2011 and 22.03.2011, respectively but he did not deposit a single EMI. On 06.05.2011, subsidy of Rs.875000/- was credited in his Current Account. As his EMIs were due as such Rs.59770/- was credited to Loan Account No.300309041000044 and Rs.16939/- was credited to Loan Account No.300308391000001 from this subsidy and balance remained in Current Account. The complainant did not deposit EMI in any of the loan account as such all the three loan accounts were stamped as ‘Non-Performing Asset’ (NPA) on 31.08.2011 by the system automatically as per RBI norms. The complainant wrote a letter dated 23.07.2012 to Reserve Bank of India for directing the Vijaya Bank to re-structure his loan. The complainant submitted his plan on 15.11.2012, relating viability of the project. Then the officers of the bank made inspection and found that the complainant had two mobile units (not six as alleged). On these two units, total sale of Rs.51000/- of the product was done up to 10.12.2012, which was not sufficient to pay existing EMI. Target of sale of Rs.90.65 lacs up to 31.03.2013 could not be achieved. The bank, vide letter dated 10.02.2013, informed to the complainant that his proposal for restructure of the loan is not viable and asked to repay the loan otherwise, proceeding under the SARFAESI would be taken for recovery of the loan. On the application of the complainant, the Collector vide letter dated 05.03.2013, requested the State Director of the KVIC for appraisal of revival of the project of the complainant. Thereafter, a committee, consisting of the members of KVIC, DIC and BDO, held a meeting with the complainant on 20.06.2013 and examined all the papers and aspects. The committee also inspected the project of the complainant. The committee found that total sale of the complainant was of Rs.15000/- during 2010-2011, Rs.39000/- during 2011-2012 and Rs.51000/- during 2012-2013. Total sale as on 31.03.2013 was of Rs.1.05 lacs and total investment was of Rs.1.20 lacs. On spot verification, it was noticed that “No production, No labourer, No raw material, Expired products and factory was closed. After considering all the aspects the committee submitted its report dated 21.06.2013, finding that the complainant was a wilful defaulter and revival of the project not feasible. Vijaya Bank after examining all the aspect took a commercial decision for not sanctioning for rehabilitation loan. The committee constituted by the KVIC affirmed the decision of Vijaya Bank. The commercial decision taken by the bank for not sanctioning rehabilitation loan cannot be reviewed. Findings of the State Commission in this respect does not suffer from any illegality. The appeal has no merit and is liable to be dismissed.

10.     After reserving the judgment, the appellant has filed additional document on 09.09.2024 which is a letter dated 20.10.20213 written by General Manager, District Industry Centre, Coimbatore to the complainant by which it has been merely informed that the complainant may collect the necessary information from Bank of Baroda. This letter has nothing to do with the merits of this case.

ORDER

In view of aforesaid discussions, the appeal is dismissed.