F.A.No.1270/2008 against  C.C.No.25/2008 , District Forum, KARIMNAGAR

Between:

Union Bank of India,

Choppadandi Branch,

Choppadandi Mandal,

Karimnagar District.                                                               Appellant/

                                                                                                 Opp.party No.1

And

1. Sri Singi Reddy Ananda Reddy

    S/o.Sri Raji Reddy aged 38 years,

    Occ:Agriculture, R/o.Arnakonda Village,

    Choppadandi Mandal, Karimnagar District.                    Respondent/

                                                                                                Complainant

2. NABARD RTC ‘X” roads, Musheerabad,

    Hyderabad.                                                                        Respondent/

                                                                                                 Opp.party No.2

Counsel for the Appellant: M/s B.S.Prasad

Counsel for the Respondents: M/s.V.Gourisankara Rao-R1

                                                   M/s.K.Srinivasa Murthy-R2

F.A.No.1271/2008 against  C.C.No.25/2008 , District Forum, KARIMNAGAR

Between:

NABARD RTC ‘X” roads, Musheerabad,

Hyderabad. Rep. by its Chief Manager.                               Appellant/

                                                                                                Opp.party No.2

And

1. Sri Singi Reddy Ananda Reddy

    S/o.Sri Raji Reddy aged 38 years,

    Occ:Agriculture, R/o.Arnakonda Village,

    Choppadandi Mandal, Karimnagar District.                    Respondent/

                                                                                                Complainant

2. Union Bank of India,

    Choppadandi Branch,

    Choppadandi proper & Mandal of

    Karimnagar District, rep. by its

    Branch Manager.                                                               Respondent/

                                                                                                Opp.party No.1  

Counsel for the Appellant: M/s K.Srinivasa Murthy

Counsel for the Respondents: M/s.V.Gourisankara Rao-R1

                                                   R2-served

QUORUM:   THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT                                                            

AND

SMT.M.SHREESHA,  MEMBER

.                                                                 

THURSDAY, THE SECOND DAY OF DECEMBER,

TWO THOUSAND TEN

Oral order:(Per Hon’ble Justice Sri D.Appa Rao, President)
***

        These appeals viz F.A.No.1270/2008 is preferred one by the opposite party No.1,  while F.A.No.1271/2008 is preferred by opposite party No.2 i.e. NABARD,  against the order of the District Forum directing them to release 50% of the subsidy amount of Rs.1,50,000/- for the loan granted to the complainant together with interest and costs. 

Since both the appeals arise out of the same order, we describe the parties as arrayed in the complaint for clarity of expression.

        The case of the complainant in brief is that he is an agriculturist and when he intended to purchase a Standard combined Harvester, he approached Union Bank of India and submitted the requirements and project report on which it had sanctioned a sum of Rs.3,00,000/-.  He purchased the said harvester on 14-11-2006 by paying his contributory amount of Rs.2,10,000/-.  NABARD is a refinancing agency for banks for loans issued to agriculturists.  At the time of purchase, there was a “scheme for development/strengthening of agricultural marketing infrastructure, Grading and standardization” covering the period from 01-6-2005 to 13-11-2006, wherein the purchasers of agricultural infrastructure including harvester are eligible for 50% of the eligible loan amount.  As per the norms, he was eligible for subsidy of Rs.1,50,000/- as the loan amount was Rs.3,00,000/-.  For getting the subsidy, he  submitted the application on 14-2-2007 to the bank for forwarding to NABARD.  When such an application was filed, opposite party No.1 bank gave a copy of the covering letter along with claim form submitted by them and stated that the time for applying for subsidy was upto 31-9-2007.  However, when he sought for subsidy, neither of the parties had responded.  Therefore, he sought Rs.1,50,000/- towards subsidy amount, Rs.10,000/- towards expenditure incurred and Rs.10,000/- towards mental agony and costs.

        Opposite party No.1 bank resisted the case while admitting that an amount of Rs.3,00,000/- was sanctioned towards loan, it alleged that the complainant was holding Ac.5-20 guntas of agricultural land.  As per the guide lines, he was not entitled for agricultural medium term loan, therefore, he opted to avail mortgage loan under retail scheme and offered the agricultural land as well as house plot as security by way of deposit of title deeds.  On that it has sanctioned Rs.3,00,000/- on 08-11-2006.  He executed the loan documents.  He had to pay interest at 13.25% p.a. repayable in 60 monthly instalments.  He was not entitled to any subsidy. When the matter was sent to regional office, it did not consider his request and therefore his application was not forward to NABARD.  Therefore it submitted that there was no deficiency in service and prayed for dismissal of the complaint with costs.

        Opposite party No.2, NABARD, did not choose to contest and therefore it was set exparte.

        The complainant in proof of his case filed his affidavit evidence and  Exs.A1 to A6 were marked while the opposite party No.1 filed affidavit evidence of their Branch Manager and got marked Exs.B1 to B4.

        The District Forum after considering the evidence place on record opined that the opposite party No.1 bank gave the copy of application form in order to seek subsidy and not forwarded the same to opposite party No.2.  Ex.B2 would undoubtedly show that the complainant had applied for agricultural loan and therefore he was entitled to the subsidy and accordingly directed both the opposite parties to extend the subsidy and directed them to pay the said amount together with  interest at 9% from the date of filing the complaint i.e. 7-3-2008 and costs of Rs.1,000/-.

Aggrieved  by  the  said order, opposite  party  No.1 bank  preferred the

appeal, F.A.No.1270/2008,  contending that the agricultural loan was not sanctioned in order claim the subsidy.  He was not entitled to claim subsidy from NABARD as it was purely a commercial loan granted on the basis of mortgage created by him and therefore prayed that the appeal be allowed by setting aside the order of the District Forum.

        NABARD, opposite party No.2, equally preferred appeal, F.A.No.1271/2008, contending that it did not receive any application form from opposite party No1 and therefore it could not be said that there was any deficiency in service on its part.  It has nothing to do when the loan application of the complainant which was not forwarded to it, and therefore prayed that the appeal be allowed.

        The points that arise for consideration are:

1)    Whether the complainant borrowed the amount claiming subsidy  under the scheme for development/strengthening of agricultural marketing infrastructure, Grading and standardization?

2)    Whether NABARD is also liable along with Union Bank of India, if so, to what extent?

It is an undisputed fact that the Union Bank of India had sanctioned a sum

of Rs.3,00,000/- to the complainant for purchase of harvester.  The complainant had purchased it on 14-11-2006 by paying Rs.2,10,000/- towards his contribution and sought the remaining amount from the opposite party No1. bank.  The claim of the complainant is that in fact he borrowed the loan under scheme for development/strengthening of agricultural marketing infrastructure, Grading and standardization wherein he was entitled to subsidy and accordingly submitted application. 

The contention of the Union bank is that he was not eligible for such a subsidy, and therefore loan was granted under a union mortgage by taking a security  of an open plot situated in his village besides agricultural lands.  Since the said loan was under union mortgage, he was not entitled to subsidy.  The very bank has filed, Ex.B2 dated 14-12-2007, letter addressed by the Branch Manager to its Chief Manager. Since the contents of the said letter is decisive, we excerpt the entire letter for better appreciation.

‘We herewith enclosing the application received from the applicant

Mr.Singireddy Anand Reddy, S/o.Raji Reddy, Arnakonda for claiming

subsidy  on Advances under the Scheme for Development/Strengthening

of Agricultural Marketing infrastructure, Grading and  Standardization.

          Above said application submitting in triplicate for doing the needful.

          Kindly acknowledge receipt of the same’.

A perusal of the said letter would undoubtedly show that the complainant has made application claiming subsidy.  He categorically stated that the application was received for the said purpose.  In fact the Manager of opposite party No.1 has requested to submit the application of the complainant in triplicate.  However, the said application was not filed before this Commission.  In fact, the complainant was even given a copy of the said letter which was marked as Ex.A5.  Obviously he would be under the impression that his loan would be treated as an agricultural loan, and he would be entitled to subsidy.

  The Union bank obviously to get over the just claim of the complainant introduced Ex.B1, a note-cum-sanction advice by the Branch Manager of opposite party No.1 to the head office.  It is not the application that was submitted by the complainant.  At the cost of repetition, we may state that it is only a note by the Manager wherein he stated that he has taken the signature of the complainant.  A perusal of it would undoubtedly show that to get over the subsidy, Ex.B1 has been created in order to show that the money sanction was under Union Mortgage.  If really they intend to advance the money under union mortgage, they would not have written Ex.B2, which was towards agricultural loan.  It is unfortunate that the Union bank, a reputed bank and Government of India Undertaking resorted to this procedure to deny the just claim of an agriculturist.  This is a classic case where the deficiency is writ large and in the light of Ex.B2, we are persuaded to state that the loan was towards agriculture loan.  May be the Union bank had taken documents but the case of the complainant is otherwise.  The union bank failed to prove that the loan applied was union mortgage.  Therefore, we are of the opinion that the complainant is entitled to subsidy and the bank had to extend the same.  There is no mis-appreciation of facts in this regard.

        However, with regard to the case of NABARD, the appellant in F.A.No.1271/2008, there is no proof that opposite party No.1 has sent the application to NABARD in order to consider the extension of the subsidy by it.  The complainant could not prove as to why NABARD was impleaded.  It does not directly pay any loan to the agriculturists.  At any rate, when there is no proof whatsoever that NABARD is liable to pay any amount to the complainant, we do not see any ground whatsoever as to why NABARD should be made responsible to pay the said amount.  The appeal against NABARD is allowed.

        In the result,  F.A.No. 1271/2008 is allowed setting aside the order of the District Forum.  The appeal, F.A.No.1270/2008 preferred by Union Bank is dismissed with costs of Rs.2,000/-.  Time for compliance four weeks.

Sd/-PRESIDENT.

Sd/-MEMBER.

JM                                                                                                     Dt.02-12-2010