(Per Shri S.R.Khanzode, Hon’ble Presiding Judicial Member)

(1)               The consumer complaint pertains to alleged unfair trade practice/deficiency in service on the part of the opponent State Bank of India (hereinafter referred as ‘the bank’ for brevity) in connection with sanction and disbursement of credit facility/term loan of `13,00,00,000/- which to set up the information technology park in Kolkatta by the complainant, M/s.Bhimrajka Impex Ltd. (hereinafter referred as ‘the complainant’ for brevity) for its business of constructing IT park.

(2)               It is the contention of the complainant that it had procured a land on lease from government of West Bengal in Salt Lake City, Kolkatta.  It was the land for commercial/industrial use and the lease was for that specific purpose.  The complainant earlier had proposed to set up an import substitution research laboratory for testing of industrial rubber products.  However, the transfer of technology from the US became run in rought weather and, therefore, the said plant was dropped.  Thereafter, with the encouragement from Government of West Bengal, the land was demarcated for an IT Park i.e. Information & Technology Park.  The complainant started working on the project of said IT park in the year 2005 and approached the bank in the month of March/April of that year and made an application for getting Credit Facility/Term loan of `13,00,00,000/-.  Formal application was made on 09/05/2005.  By letter dated 06/01/2006, the bank informed about sanction of the term loan asked for.  The complainant thereafter requested to reduce upfront fees and also asked for further concessions.  The bank informed the complainant on the same on 06/10/2006 stipulating the proposed conditions of the term loan.  One of those conditions include that the complainant was required to submit no objection from the Govt. of West Bengal for change of user of the land for being used for IT park.  The complainant also paid upfront fees for processing to the tune of `10,74,450/-.  However, above referred conditions not being fully satisfied, the loan was not disbursed. Thereafter on 17/01/2007, the complainant was informed by the bank about lapse of previous sanctioned loan and requested it to get revalidate the sanction.  The complainant complained that the bank went on changing the terms and conditions and, thus, ultimately without any aid of the said term loan asked for, it had to complete the project.  Therefore, alleging unfair trade practice on the part of bank, the bank was informed that the complainant was no more interested in the terms loan and claimed the refund of upfront processing fees for `10,74,450/- paid along with interest w.e.f. April 2006.  The complainant filed consumer complaint for the same and asked for additional compensation of `5,00,000/-  on account of expenses incurred in making copies and submitting documents after documents to satisfy the never ending requirements of the bank and traveling & follow up with the bank.  In addition to it, an amount of `25,00,000/- being the additional cost incurred due to the delay in disbursement which led/forced the complainant to procure funds from their own other sources from open market/sister concerns/Director loans at the higher rate of interest.  `50,000/- further were asked towards costs.  The consumer complaint was filed accordingly on or about 16/10/2009.

(3)               The bank opposed the consumer complaint denying every adverse allegation made against it in toto.  As per their written version dated 10/02/2010, they categorically denied that it was engaged in an unfair trade practice and also justified charging upfront processing fees when  the initial sanction was given and also for additional demand when on revalidation further processing fees was required to be charged.  They also justify their non-disbursement of loan, since the complainant failed to comply the requisite conditions.

(4)               In evidence, the complainant filed affidavit of Vishwanath Bhimrajka while the opponent rely upon the affidavit of its official, Nagesh Shetty.  Documents produced on record remain undisputed.

(5)               Heard both the parties.  Referring to the statements made by the complainant as per his complaint as well as the situation as reflected from the documents, particularly, the project report prepared by Sanjay Lehri; it is revealed that the credit facility/term loan of `13,00,00,000/- is tried to be obtained to ensure or procuring the capital to run or carry out their real estate business to construct the IT Park and to sell it/or leaseit to IT business groups.  Thus, the loan being sought from the bank for the purpose of business activity by the complainant and thus, it being a commercial transaction, the complainant which is private limited company is not a consumer within the meaning of Sec.2(1)(d)(ii) of the Consumer Protection Act, 1986 (‘the Act’ for brevity)  A useful reference can be made to the decision of Apex Court in the matter of Economic Transport Organization Vs. Charan Spinning Mills (P) Ltd. & Anr., 2010 CTJ 361 (SC) (CP). 

(6)               Apart from this, referring to the terms on which the loan/credit facility was offered by the bank to the complainant, it could be seen that the loan could not be disbursed since the complainant failed to comply all the requirements, particularly, to procure and submit no objection from the Govt. of West Bengal for the change of user of the land.  Ultimately, by its letter dated 24/09/2008, the complainant informed to the bank that they, as their project was completed raising the funds on their own, they do not need the term loan of `13,00,00,000/- asked for and further requested to refund to them upfront fees of `10,74,450/- paid on 03/04/2006.  To this, the bank had replied on 04/10/2008 and brought it to the notice of the complainant that revalidation of the credit facility was required to be done on account of delay from the complainant’s side in obtaining necessary approvals from the Local Authorities and the loan could not be disbursed on account of failure of the complainant to complete the formalities for disbursement of the loan.  It is further brought to the notice of the complainant that the upfront fee for processing charged and collected of `10,74,450/- was for the original proposal for processing and sanction of a loan by it and, therefore, it cannot be refunded.  This is followed by notice through lawyer issued by the complainant to the bank on 03/12/2008 before filing to this consumer complaint. 

(7)               The bank also placed on record the administrative instructions which were issued as per its circular dated 12/07/2006 speaking for validating sanction/pricing concessions.  Looking at them, the request of the bank made and information given about the lapse of the first sanction and need for revalidation as per its letter dated 17/01/2007, can be said to be fully justified.   Since, the term loan availed could not be disbursed, in the circumstances stated earlier, no deficiency in service on the part of the bank could be alleged.  Further, it is not a case of any unfair trade practice by any stretch of imagination within the meaning of Sec.2(1)(r) of the Act.  To make available any term loan or credit facility is subject matter of privity of contract between the debtor (in this case, it is the complainant) and the creditor (in this case, it is the bank).  The bank as finance institution bound to protect its own interest. If the terms on which the bank agreed to extend the term loan are not agreeable to the debtor, then he can either refuse to go with the proposal or seek financial assistance from any other finance institution.  There is no concealment (of facts) or cheating or misrepresentation about the terms of which the term loan was offered.  It is not a case of unfair trade practice or deceptive practice, which could be termed as unfair trade practice within the meaning of the Act.

(8)               In the given circumstances, failure to disburse the term loan cannot be a consumer dispute.  A useful reference also can be made to the decision of Hon’ble National Commission, New Delhi in the matter of - Victoria Electrical Ltd. through its Managing Director Vs. IDBI Bank Ltd., New Delhi & Ors., - 2012 (I) CPR 51 (NC).

(9)               The prayer to claim back upfront processing fee paid of `10,74,450/- cannot be allowed, since it was already consumed by the bank and the fact of which was brought to the notice of the complainant by the Bank vide its letter dated 04/10/2008, supra.  No deficiency in service in non-refund of the said amount could be alleged on the part of the bank. 

(10)             For the reasons stated above, we find the consumer complaint is without any merit.  We find this consumer complaint is filed to camouflage the real intention to convert a money suit into a consumer dispute just to save costs of the civil suit or with same oblique motive.  As per the existing law, it can never be a consumer dispute.  Thus, bringing this action is nothing but an abuse of process of law and therefore, to impose some token cost as per the final order will meet the ends of justice.  We hold accordingly and pass the following order.

ORDER

(1)     Consumer complaint stands dismissed.

(2)     Complainant to bear his own cost and pay 25,000/- to the opponent.

Pronounced on 28th March, 2012.