Andhra Pradesh

Chittoor-II at triputi

CC/69/2016

N.R. Hamanulla, S/o. N.R. Karim Saheb - Complainant(s)

Versus

The Branch Manager, Indian Bank - Opp.Party(s)

N.Anandakumar, N.Sobha Rani

05 May 2018

ORDER

         

 

                                                                                                Filing Date: 18-07-2016                                                                                                               Order Date:  05-05-2018

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, CHITTOOR AT TIRUPATI.

Present: - Sri. M.Ramakrishnaiah, President

                                                       Smt.T.Anitha, Member

 

SATURDAY THE FIFTH DAY OF MAY, TWO THOUSAND AND EIGHTEEN

 

C.C.No.69/2016

Between

1. N.R.Hamanulla, S/o. N.R. Karim Saheb, (Died)
2. N.R. Sharifa, W/o. Late N.R.Hamanulla, Muslim, aged about 42 years, House Wife, (Adhaar Card No. 6552 3686 3292),
3. Kum. N.R. Shahataj Afsana, D/o. Late N.R.Hamanulla, Muslim, aged about 24 years, dependent (Adhaar Card No. 4638 1104 4409),
4. N.R. Amitaj, S/o. Late N.R.Hamanulla, Muslim, aged about 22 years, dependant (Adhaar Card No. 9364 3061 5475),
5. N.R. Shawnawaz, S/o. Late N.R.Hamanulla, Muslim aged about 21 years, dependant (Adhaar Card No. 2389 9258 8992),

 All are residing at Sandu Street, Mango Nagar, Damalcheruvu Village,

Pakala Mandal, Tirupati Revenue Division, Chittoor District.

(Amended and added 2 to 5 as per the orders in I.A.No.52/2017

 dt: 06/09/2017).                                                                          …. Complainants

 

And

1. The Branch Manager,

Indian Bank, Kallur Branch,

Chittoor District.

 

2. The Zonal Manager,

Agriculture Banking Section,

Zonal Office, Indian Bank,

Chittoor Town, Chittoor District.

 

3. The Chief General Manager,

Rural Banking Division,

Indian Bank, H.O.No.66,

Rajaji Salai, Chennai – 600 001.                                      .… Opposite parties

 

        This complaint coming on before us for final hearing on 13.04.2018 and upon perusing the complaint, written version, evidence,written arguments of the complainant and opposite parties and other relevant material papers on record and on hearing of             Sri. N. Anand Kumar and M.Jayachandra Reddy, counsels for the complainants and                Sri. G.Subramanyam, counsel for the opposite parties having stood over till this day for consideration, the Forum made the following.

ORDER

DELIVERED BY SRI. M. RAMAKRISHNAIAH, PRESIDENT

ON BEHALF OF THE BENCH

        This complaint is filed Under Section 12 of the Consumer Protection Act 1986, for the following reliefs: - i) to direct the opposite parties 1 to 3 not to insist the complainants to repay the subsidy amount of Rs. 8,00,000/- with interest which was lost due to own negligence of the opposite party No.1 in not submitting the papers within stipulated time to NABARD Authorities as per the guidelines of Government of India, ii) to direct the opposite parties 1 to 3 to pay Rs.10,00,000/- as damages for non submission of subsidy papers to NABARD within time and for causing loss of benefit of subsidy to the complainants which amounts to deficiency in service and causing mental agony to the complainants and for threatening the complainants that their account will be put in CIBIL as NPA (Non Performance Account) even though the complainants have made repayments promptly iii) to pay costs of the litigation and prays such other orders and reliefs as forum deems it fit and proper in the circumstances of the case.

         (During the pendency of the case the first complainant N.R.Hamanulla who filed complaint originally died, as such his legal Representatives, the complainants 2 to 5 were brought on record as per the orders in I.A.No. 52/2017 dt: 06.09.2017).

        2. The brief averments of the complaint are:   that N.R.Hamanulla the deceased first complainant being an agriculturist approached opposite party No.1 for agricultural credit term loan of Rs.32,00,000/- for construction of permanent Mango Mandy Shed with farmers rest room at Mango Nagar Damalcheruvu village, on Mangalampeta to Pakala Road, Chittoor District on 01.12.2008 under the “Scheme for Development/Strengthening of Agricultural Marketing Infrastructure Grading and Standardization(SDAMIGS)”, according to said scheme complainant was entitled to a sum of Rs.24,00,000/- which is repayable in 11 years (9 years with Moratorium of 2 years=11) and the remaining Rs.8,00,000/- will be paid by NABARD by way of subsidy.  

        The opposite party No.2 Zonal Manager, Agricultural Banking Section, Zonal Office, Chittoor, sanctioned loan on an application of N.R.Hamanulla (deceased first complainant) duly forwarded by opposite party No.1, with a direction of opposite party No.1 to apply for subsidy of 25% from NABARD within stipulated time. The bank (opposite party No.1) has to submit the claim application for release of subsidy within 18 months after disbursement of loan amount. The bank (Opposite party No.1) released first installment of Rs.3,00,000/- on 30.03.2009, released 2^nd installment of Rs.6,00,000/- on 14.10.2009, released 3^rd installment of Rs.6,00,000/- on 22.12.2009, released 4^th installment of Rs.5,00,000/- on 04.03.2010, released 5^th installment of Rs.2,00,000/- on 15.04.2010 and released 6^th installment of Rs.2,00,000/- on 27.11.2010 thus released a total sum of Rs.24,00,000/- .

        That the deceased first complainant has made the repayments as follows:-

1. Rs. 5,00,000/-  on 09.12.2011
2. Rs.1,85,000/-   on 15.12.2011
3. Rs.3,10,000/-   on 20.12.2012
4. Rs.5,00,000/-   on 10.06.2013
5. Rs. 5,00,000/-  on 08.08.2013
6. Rs.2,00,000/-   on 19.08.2013
7. Rs.2,00,000/-   on 13.08.2015 and
8. Rs.1,50,000/- on 31.12.2015. Thus repayments were made in a sum of Rs.25,45,000/-.The complainant further contending that though the loan amount has cleared in advance the opposite party No.1 is still demanding to pay Rs.8,00,000/- with interest as they did not get subsidy.

         3. That the opposite party No.1 has to make an application to NABARD for release of subsidy amount within 18 months from the date of sanction of loan on 21.02.2009 i.e. on or before 21.08.2010. But it did not send the application for subsidy amount within stipulated time i.e. within 18 months from the date of sanction of loan (21.02.2009). Thus the opposite parties have lost the subsidy amount of  Rs.8,00,000/- from NABARD and trying to recover the same from complainants with interest occurred thereon, and insisting the complainants for repayment. The opposite parties have failed to submit the application for subsidy within prescribed time they are not competent to recover subsidy amount from the complainants. That the deceased first complainant during his life time had paid a total sum of Rs.28,45,000/- out of the sanctioned loan amount of Rs.24,00,000/- in spite of such payment of more than the amount released as term loan, the opposite parties insisting for repayment of subsidy amount also with interest. Hence the complaint.     

        4.The opposite party No.1 filed its written version and additional written version denying the complaint allegation Para wise and further contended that the complainant should complete the project work within stipulated time (18months from the date of sanction of loan). That the total cost of project  is Rs.32,00,000/-. It has to be completed with the bank finance/loan amount of  Rs. 24,00,000/- and the complainants have to bear Rs.8,00,000/- from his own funds and the project work has to be completed within 18 months as prescribed by NABARD from the date of disbursement of first installment of loan by opposite party No.1. If the project work is completed within time stipulated the complainants will get subsidy of Rs.8,00,000/-from NABARD if the project work is not completed within time stipulated the complainants shall not entitled for subsidy.

       That the opposite party No.1 sanctioned loan amount of Rs.24,00,000/- to the complainants on 21.02.2009 under Sanction Ticket No. CO/BR/ABD/ST No. 27/2008-2009, dt: 21.02.2009. Accordingly, the deceased first complainant has executed the Demand Promissory Note on 17.03.2009 for Rs. 24,00,000/- and also executed Memorandum of Deposit of title deeds on 18.03.2009 in favour of the opposite party No.1 offering security for discharge of the loan amount together with interest accrued thereon. The said mortgage is subsisting.

        That the opposite party No.1 disbursed of first installment of Rs.3,00,000/- on 30.03.2009, 2^nd installment  of Rs.6,00,000/- on 14.10.2009, 3^rd installment of Rs. 6,00,000/- on 22.12.2009, 4^th installment of Rs. 5,00,000/- on 04.03.2010, 5^th installment of Rs. 2,00,000/- on 15.04.2010 and 6^th and last installment of Rs. 2,00,000/- on 27.11.2010.

        5. That the 18 months time would be over by 30.09.2010 but the complainants could not complete the project work. For completion of project work the complainant requested the opposite party No.1 to release the final and 6^th installment of Rs.2,00,000/- expressing his willingness even to forego the subsidy. Then the opposite party released the last and 6^th installment of Rs.2,00,000/- on 27.11.2010. Though the grace period of six (6) months was lapsed by 30.3.2011, the complainant could not complete the project work. At last the complainant could complete the project work by 16.02.2012 vide the Completion and Commissioning Certificate signed by the Complainant/Borrower, Bank Engineer and the then Branch Manager of opposite party No.1.

        The Complainant/Borrower submitted the required documents to the NABARD for sanction of subsidy, to the opposite party bank on 08.05.2012 requesting the opposite party to submit the claim for release of subsidy amount from NABARD, stating that the NABARD might have extended the time and if the NABARD does not sanction the subsidy, the complainants would forego the subsidy amount and pay the entire loan amount together with interest accrued thereon, to opposite party No.1. Further, in the letter dt: 08.05.2012 of the complainants it is clearly admitted that the complainant will assume full responsibility and pay the entire liability with interest and charges as applicable if the claim for subsidy is not settled due to delay in submission of the required details in time. Immediately, the opposite party No.1 in its letter dt: 12.05.2012 sent proposals together with all documents submitted by the complainant dt: 08.05.2012 to the NABARD requesting the sanction and release the subsidy.

         6. In the letter No. NB.AP.RO/HYD/ICK/4434/TAM 391A and 391 B/2012-13     dt:16.07.2012 the Assistant General Manager, NABARD, Hyderabad informed the opposite party No.2 (Zonal Manager) that the above project is prima facie ineligible for the subsidy as the project work was completed beyond the prescribed time limit. Thus, the complainant could not get subsidy amount of Rs. 8,00,000/- from NABARD for the negligence of complainants they cannot blame the opposite parties.

        Thus, there is clear delay and negligence on part of the complainants in completing the project work and submitting the required documents to claim subsidy. There is neither delay nor deficiency in service nor negligence on part of the opposite parties. This Forum has no jurisdiction to entertain the complaint. That the opposite parties are not at all insisting the complainants to pay the subsidy amount of Rs.8,00,000/- but, it is demanding the complainants to pay the balance amount of the sanctioned loan amount with interest and prays the Forum to dismiss the complaint with exemplary costs.

         7. The deceased first complainant has filed its evidence affidavit (during his life time) and subsequently evidence affidavit of PW-2 (N.R.Sharifa) is also filed and got marked Ex:A1 to A7 for the complainants, for the opposite parties filed chief affidavit  as  RW-1 and also filed additional chief affidavit of  RW-1 (in view of the bringing Legal Representatives of deceased first complainant) and got marked Ex:B1 to B12. Both parties have filed their written arguments and also additional written arguments respectively.

        8. Now the points for consideration are:-

              (i)  Whether the complainants have completed the project work within prescribed period of 18 months or within the grace period of 6 (Six) months thereafter?                 

             (ii)   Whether the complainants are under obligation to submit application to opposite parties along with relevant documents claiming subsidy amount of Rs.8,00,000/- or is it the duty of the opposite parties to get the subsidy amount from NABARD?

            (iii) Whether there is  deficiency in service on part of the opposite parties?                  

            (iv) Whether the complainants are entitled for the reliefs sought for?        

            (v)  To what Relief?

         In this case, earlier, after advancing oral arguments from both sides and case is reserved for orders on 31.07.2017 the counsel for complainant filed memo stating that the first complainant died on 23.07.2017. Later steps were taken legal representatives of the first complainant was brought on record as complainants 2 to 5 as per orders I.A. 52/2017 dt: 06.09.2017.

                     9.Point No (i) and (ii):-   At the outset, we have to state that both parties, for the reasons best known to them, have not filed NABARD guidelines in respect of granting loan, in respect of releasing loan amount and in respect of subsidy from NABARD, in spite of specified instructions from the Forum. Admittedly the first complainant was an agriculturist used to do mango business in Damalcheruvu Village. He approached the opposite party No.1 for agricultural Term Loan of Rs.32,00,000/- for the construction of Mango Mandy Shed with farmer’s rest room on Mango Nagar, Mangalampet to Pakala Road, Damalcheruvu Village, Pakala Mandal, Chittoor District under the “SCHEME FOR DEVELOPMENT/STRENGTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE, GRADING AND STANDARDIZATION under the classification of priority sector/Agriculture. The opposite party No.1 on the application (Ex:A1) of the complainant sanctioned loan of Rs.24,00,000/- vide Sanction Ticket Ex:A2 under which, time for repayment of the sanctioned loan is given for a period of 9 (Nine) years in 9(Nine) annual installments with moratorium of 2 (Two) years. Totally 11 years time is allowed for repayment of the loan sanctioned. And specified, that the complainant (Deceased) is entitled to subsidy of 25% of the total project cost of Rs. 32,00,000/- which comes to Rs.8,00,000/- to be claimed from NABARD after disbursement of the first installment of loan amount sanctioned. The construction of Mango Mandy and farmer’s Rest room (Project Work) shall be completed within 18 months from the date of sanction or from the date of release of first installment of the loan amount admittedly. The grace period of six (6) months also given to the complainants. It is to say, at any cost the project work should be completed within two (2) years altogether but not beyond the grace period admittedly.

                    10.  Now the question is whether the complainants have completed the construction of Mango Mandy and farmer’s rest room within stipulated time including grace period? Term loan of Rs.24,00,000/- was granted under Ex:A2 sanction ticket on 21.02.2009. Stipulated time of 18 months will be over by 21.08.2010. If grace period is added, it will be over by 21.02.2011.  If the sanction dated is taken in to consideration for completing the stipulated period of 18 months or 2 (Two) years whatever the case may be.

                    The opposite party No.1 released the first installment of Rs.3,00,000/- on 30.03.2009 as such the stipulated time 18 months will be over by 30.09.2010. If grace period of 6 (six) months is added, it will be over by 30.03.2011. Whatever the case it may be therefore, the complainants have to complete the construction of project work at any cost by 30.03.2011. If the complainants have completed the project work on or before 30.03.2011 then only they are entitled for the benefit of subsidy from NABARD. 

                        It is pertinent to specify the procedure to be followed by both the promoter/borrower/complainant as well as the financial institution/the banks/opposite parties.

                     SO FAR AS SCHEME FOR DEVELOPMENT/STRENTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE GRADING AND STANDARDIZATION:- is concerned ministry of agriculture (Development of Agriculture and co-operation) Government of India, New Delhi released Operational Guidelines (Modified as on 26.06.2008) according to the said guidelines,

                   The procedure to be followed for sanctioning of project and release of subsidy:-                                  

                    i).  An interested promoter will submit the project proposal for term loan and subsidy to the bank on an application form as prescribed by the concerned bank along with project report and other documents for appraisal and sanction of loan. A copy of the proposal shall also be endorsed by the promoter to Sub Office/Regional Office of Directorate of Marketing and Infrastructure (DMI) as per list Annexure – 8.

                   ii).  Bank after appraisal and sanctioning of project and disbursal of first installment of loan, will furnish a brief project profile-cum-claim form for advance subsidy in prescribed form given in Annexure-I along with copy of bank’s sanction letter to RO, NABARD with a copy to the Sub office/Regional Office of DMI as per list at          Annexure –VII.

                   iii). NABARD on receipt of project profile-cum-claim form from the participating bank, will sanction and release 50% advance subsidy to the participating bank for keeping the same in the Subsidy Reserve Fund Account (Borrower-Wise). NABARD will forward a copy of the sanction and project profile as indicated in Annexure-I to the Head Office of DMI project-wise for replenishment or adjustment against advance subsidy provided by DMI to NABARD.

                   iv) When the project is nearing completion, the promoter will inform the bank who will initiate action for an inspection by a Joint Inspection Committee consisting of officials of bank, NABARD and DMI to ensure that the executed project conforms to technical and financial parameters. No Joint Inspection shall be required, where the TFO of the project sanctioned by the bank is less than Rs.10,00,000/-. For such projects, the inspection will be conducted by the officer of the financing bank. After joint inspection/inspection is conducted, the bank will submit the claim for final subsidy in the prescribed format given in Annexure-II to NABARD, in triplicate, with a copy to concerned Regional Office/Sub Office of DMI. The inspection report (Annexure-VI) of the Joint Inspection Committee/ Financing Bank and completion certificate should be enclosed with the claim form for final subsidy.  NABARD shall release the final subsidy to banks, which will be replenished by DMI or adjusted against the subsidy amount provided to NABARD in advance.

                    11. In the case on hand, the complainants eligibility for term loan and subsidy is not in dispute. The opposite party No.1 itself admitted that the complainants are entitled term loan and subsidy as well.

                      Now the question is whether the complainants discharged their responsibilities in making application for term loan and for subsidy? Admittedly  the deceased complainant/ Borrower applied to the opposite party No.1 for the sanction of loan of Rs.24,00,000/- under Ex:A1 (No Date) for Agricultural Credit Short term loan proposed project work by the complainant  under the Scheme for Development/Strengthening of Agricultural Marketing Infrastructure Grading and Standardization. Under this scheme, the deceased first complainant made an application before opposite party No.1 under Ex:A1. On receipt of the application from the complainant late N.R.Hamanulla, the opposite party No.1 sanctioned loan of Rs.24,00,000/- as term loan under Ex:A2 Sanction Ticket dt: 21.02.2009. As per the Ex:A2 and A3 total cost of project is Rs.32,00,000/-. The complainant is eligible for 25% of the total cost of the project as subsidy i.e.         (Rs.8 lakhs) to be claimed from NABARD after disbursement of first installment of loan amount. As per Ex:A3, (Format for claiming 50% advance subsidy) date of receipt of proposal application is 16.01.2009, date of sanction of term loan by bank is 21.02.2009, date of disbursement of first installment is 30.03.2009 whereas Ex:A3 dt: 02.11.2011. Ex:A3 disclosed rate of interest charged is 13.25% p.a., in the case of Commercial Banks PLR (Primary Lending Rate) 10.45% p.a. When the rate of interest is 10.45% p.a. for the Commercial purpose why the opposite parties are claimed/charged rate of interest at 13.25% p.a. on the agricultural term loan. Whether the opposite party No.1justified in claiming subsidy on 12.05.2012 beyond the prescribed period? As per the guidelines of advance subsidy should be claimed as envisaged. NABARD will release advance subsidy to Financing Institution (FI) for keeping the same in Subsidy Reserve Fund (SRF) account of the concerned borrowers, to be adjusted finally against loan amount. This amount of 50% eligible subsidy would be released by NABARD to the Financing Institution on submission of a project profile-cum-claim form (Annexure-9) complying to sub claim guidelines.

                   FINAL SUBSIDY:-  

                         Remaining 50% of the eligible subsidy amount will be released to the Financing Institution by NABARD after an inspection and recommendation by a Joint Inspection Committee (JIC) comprising of officers from NABARD or its representatives, Financial Institution and Directorate of Marketing and Infrastructure.

                   ADJUSTMENT OF SUBSIDY IN BORROWERS ACCOUNT:-

                        As the adjustment of subsidy is back ended, the full project cost including the subsidy amount, but excluding the margin money contribution from the promoter will be disbursed as loan by the Financing Institution. The repayment schedule will be drawn on the loan amount in such a way that the total subsidy amount is adjusted after the full loan component with interest is liquidated but not before five (5) years from the date of disbursement of first installment of loan. Therefore the opposite party No.1 bank ought to have released entire cost of the project work i.e. 32,00,000/- that is  including the subsidy amount, but excluding the margin money contribution from the promoter and allow the promoter to complete the construction work/ project work within the stipulated time. But in the case on hand for the reasons best known, the bank (opposite party No.1) had not released the total cost of the project work, but released only 24,00,000/- i.e. ¾  of the total cost of the project and first installment was released on 30.03.2009. Then within 90 days from the date of release of first installment the bank would have submitted the format claiming 50% of the subsidy from the NABARD. But in this case till 12.05.2012 the 50% subsidy was not claimed though prepared along with list of documents shows in Ex:B10 dt: 12.05.2012 terms and conditions under Ex:B2 are as follows:-

1. Branch should follow of all the Scheme guidelines  Development/Strengthening of agricultural marketing infrastructure, grading and standardization as per HO/RBD Circulars ADV 53/2005-06 dt: 27.07.2005 and ADV 88/2006-07 dt: 21.11.2006.
2. Processing charges of Rs. 17,920/- to be recovered @ 0.56% of the project cost i.e. Rs.32.00 lakhs.
3. EM creation charges of Rs.4800/- to be recovered.
4. Branch to submit subsidy claim as per guidelines mentioned in the above circulars without fail within the stipulated time.
5. The sanctioned limits are to be released only after pre release audit and permission from sanctioning authority.
6. Other terms and conditions as per annexure.

        Similarly, the terms and conditions under Ex:B3 also provided how to submit subsidy claim as per guidelines mentioned in the above circulations without fail within stipulated time.In Ex:B4 DP Note obtained from late N.R.Hamanulla, except the amount of Rs.24,00,000/- date and place as well as the address of the promoter no other purposes were furnish regarding  the rate of interest and repayment terms etc., all the columns were left blank. It was mentioned that the repayments shall be made within 9 (Nine) years + 2 Years moratorium i.e. within 11 years with annual installment. When it is the duty of the bank to apply for subsidy what is the necessity to obtain letter under Ex:B9                    dt: 08.05.2012 from the deceased first complainant it appears prima facie that the opposite party No.1 bank have failed to apply for 50% of the subsidy amount immediately after releasing the first installment of loan amount. But cent percent subsidy amount was claimed under Ex:B10 dt: 12.05.2012 i.e. the opposite party No.1 has claimed cent percent subsidy, about one year 8 months after stipulated time is over. Bank did not mention any reasons as to why it has not opened the Subsidy Reserve Fund Account in the name of the deceased first complainant with the bank. Similarly why the bank has not released the total cost of the project. It is also mentioned in the guidelines that the Financing Institution (FI) within 90 days of disbursement of first installment of loan, submit to RO, NABARD through its controlling / Nodal Office, a brief project profile-cum-claim form for advance subsidy in the prescribed form given in Annexure-IX along with the documents as per check-list under Annexure-X. A copy of the claim form along with all documents should also be submitted to the Regional Office/Sub Office of DMI. The Financial Institution (Opposite parties) will also have to inform the promoter about submission of the proposal to RO, NABARD and DMI. NABARD will, every quarter, compile list of all proposals that have not been submitted in time (Viz within 90 days) and forward the same to DMI and RO/SO, NABARD will also place the matter before the State Level Bankers Committee (SLBC), SLBC will review all such matters and ensure that such delays do not recur and the proposals are received by NABARD within time.

        12. It also specified that the project work will not be eligible for subsidy if the project is not completed and documents submitted within 24 months from the date of disbursement of first installment of loan and advance subsidy will be refunded forthwith. So at every stage there are latches on part of the opposite parties, in order to recover up their latches and deficiencies and derelictions they have prepared the claim form under Ex:B10 with list of documents it appears. Therefore it is prima facie evident on record, that the bank has not taken proper steps at the appropriate stages of the project in obtaining the advance subsidy from NABARD and keeping the same in the Subsidy Reserve Fund account of the promoter which should be opened with the bank no such account is also opened at least. The bank has waited still 12.05.2012 without sending any request or format to the NABARD claiming the 50% of the subsidy or the cent percent of the subsidy. Though the guidelines specifically prescribed that the project work should be completed within 18 months or 24 months (with the six months grace period) it has to be completed by 30^th September, 2010 or 30.03.2011. The bank has released the 6^th and last installment of Rs.2,00,000/- dt: 27.11.2011 by which time the stipulated time was already expired about one year two months back from 30.03.2009 date of release of first installment of loan.

        13. The responsibilities of the Promoter/Borrower/Complainant is also vested specifically in the guidelines that the promoter has to inform the financing institution when the project is nearing to complete, and request the financing institution to come and inspect the project and see that the completion certificate be issued but, in this case no such request is there from the complainants. The complainants have not mentioned in their complaint or in evidence affidavit or in additional evidence affidavit or in the written arguments submitted on behalf of the complainants that the complainants, when project work is nearing o complete, make such request, similarly in the pleadings as well as evidence affidavits filed by RW-1 or also in the written arguments nowhere mentioned that the officials received any such information from the complainants requesting them to arrange for final inspection as the project work is going to be completed shortly within the stipulated time.  

         14.  There is no evidence or any scrap of paper to show, that the project work is completed within 18 months or 24 months as case may be as stipulated by the NABARD. Simply because they have mentioned in Ex:B9 that  we have submitted the required papers for claiming subsidy from NABARD (RECENTLY) does not mean that they have completed project work and submitted the documents referred to in Ex:B9 within the stipulated time so, there are glaring mistakes/latches on part of the both the parties. The complainants have not completed the project work within stipulated time, the opposite parties have not taken steps to release entire cost of the project work and claim subsidy within the stipulated time as per the guidelines given by the Government of India. When the project work is not completed within the stipulated time the complainants are not entitled for subsidy. That apart, the opposite parties also specifically mentioned in their written versions, evidence affidavits as well as written arguments that they are not claiming the subsidy amount of Rs.8,00,000/- from the complainants but they are demanding to pay the loan amounts with interest. Therefore, the relief of complainants so far as “direction to the opposite parties not to claim subsidy amount” need not be given as the opposite parties themselves stating that they are not claiming subsidy amount.

        Under the above circumstances we are of opinion that, the complainants are not under obligation to submit the application for subsidy  and on the other hand it is the duty of the opposite party No.1 (financing bank) to claim advance subsidy immediately after releasing the first installment of loan amount and claim the remaining 50% of the subsidy amount immediately after completion of the project work within the stipulated time. And the opposite parties also failed to open the Subsidy Reserve Fund Account in the name of Promoter/Borrower that the bank shall keep the subsidy amounts to be granted by the NABARD in the Subsidy Reserve Fund Account so opened.  So we are holding that both the parties have not approached the Forum with clean hands. Accordingly this point is answered.

                     15.Point No(iii):-   To answer this point we have to state that, the complainants are specifically alleging that the opposite parties 1 to 3 have acted negligently and did not send the proposal for claiming subsidy till 2012 though the project work was completed in time. That the opposite parties have not send the claim form, claiming subsidy within 90 days after releasing the first installment of loan amount. That the opposite parties also did not release the total cost of the project work though mentioned that the total project work cost is Rs.32,00,000/- and the Complainants/Borrowers/Promoters are entitled to subsidy of Rs.25% of the total cost of the project work which amounts to Rs.8,00,000/-. That the opposite parties have not made efforts or to take any initiation to open the Subsidy Reserve Fund Account in the name of promoter with opposite party No.1 and to get 50% of advance subsidy within 90 days after releasing the first installment of loan amount on 30.03.2009. Another aspect is, the opposite parties ought to have disburse the full project cost including the subsidy amount, as loan amount. As the adjustment of subsidy amount is “back ended” in case promoter failed to complete the project within the stipulated time the financing institution is at liberty to recover the total cost of the project work with interest from the promoter. But in this case the opposite parties did not disburse/release the total project cost and also failed to follow the guidelines to get the subsidy amount as per norms. In the DP Note Ex:B4 the rate of interest is not mentioned. Except the loan amount of Rs.24,00,000/-, name of the borrower date of execution of DP Note and the address of the executant/borrower and signature of the borrower all other columns were left blank. It is also silent in all the documents filed on behalf of the opposite parties that whether the loan is accepted by the promoter with floating rate of interest or fixed rate of interest.

                    That the opposite parties violated the procedure prescribed for a sanction of loan for claiming of 50% of subsidy at the initial stage immediately after releasing the first installment of the loan amount and periodically inspection of the project and submitting the progress report in respect of construction work of the project. In every aspect, deficiency in service on part of the opposite parties is apparent under the above circumstance we are of the opinion that, there is deficiency in service on part of the opposite parties. According this point is answered.

         16.Point (iv):-    To answer this point it is pertinent to state that, so far as the first relief sought for by the complainants, i.e to direct the opposite parties not to insist the complainants to pay subsidy amount of Rs.8,00,000/-,  is concerned it can be negetude as the opposite parties themselves fairly conceded in their written version, evidence affidavit, and also in written arguments that they are not at all claiming subsidy amount from the complainants. So far as another relief i.e. to direct the opposite parties 1 to 3 to pay Rs.10,00,000/- as damages for non submission of subsidy papers to NABARD within time, is concerned, we have to state that, the complainants have not completed the project work within the stipulated time of 18 months or 24 months. It is evident  on record that, the last and sixth installment of Rs 2,00,000/- was released by the opposite parties on 27.11.2010  which shows that till 27.11.2010 the project work was not completed. It is expected that the complainants ought to have completed the project work by September, 2010 itself or even by 30.03.2011(if grace period is taken in to consideration). Therefore when the complainants were failed to complete the project work within the stipulated time of 18 months or 24 months as the case may be, they are not entitled for the subsidy and damages and that they have to repay the loan amount released with interest. Admittedly, the complainants have paid total a sum of Rs.28,45,000/- by 16.07.2016. Since the loan is obtained on agricultural purpose under the Scheme for Development /Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization the rate of interest shall not be 13.65 are so, as claimed by the opposite parties and it was not clear that the complainants were agreed to pay the loan amount on floating rate of interest. The repayment schedule also nowhere mentioned specifically except as annual installment.

        Therefore we are of the opinion that, the complainants are liable to repay the loan amount of Rs.24,00,000/- with interest at 11.25% p.a. shown in column No.2 of Sanction Ticket Ex:A2 only right from the date of availment of first installment of loan amount. The opposite parties are not supposed to claim interest more than 11.25% p.a. on agricultural loans, one in the nature mentioned in this complaint. Therefore they are entitled to claim interest at 11.25% p.a. over the loan amount of Rs.24,00,000/- right from the date of releasing the first installment of loan amount. If any balance amount to be paid by the complainants it can be recovered and the calculation to that effect should be worked out if the amount already paid i.e. 28,45,000/- is sufficient to meet the principle amount of Rs.24,00,000/- with interest at 11.25% p.a. from the release of first installment of loan amount till the date of complaint, they need not insist the complainants to pay any amounts more than that. Accordingly this point is answered holding that that complainants are not entitled for damages but entitled for the compensation for deficiency in service on part of the opposite parties and for mental agony caused to the complainants. According this point is answered.

         17.Point (v):-    In view of our discussion and holding on points 1 to 4 we are of the opinion that, the complainants have established that there is deficiency in service on part of the opposite parties 1 to 3; that the complainants are entitled for compensation for deficiency in service on part of the opposite parties and for causing mental agony to the complainants and costs of the complaint. According complaint is to be allowed.

         In the result, complaint is allowed in part, directing the opposite parties 1 to 3 jointly and severally to pay Rs.1,00,000/- (Rupees one lakh only) towards compensation for deficiency in service on part of the opposite parties and for causing mental agony to the complainants,  and also further directed to pay Rs.2,000/- (Rupees two thousand only) towards costs of the litigation failing which, the compensation amount of Rs.1,00,000/- (Rupees one lakh only) shall carry interest at 9 percent per annum from the date of the complaint till realization.

        Dictated to the stenographer, transcribed and typed by her, corrected and pronounced by me in the Open Forum this the 05^th day of May, 2018.

        Sd/-                                                                                                                       Sd/-

 Lady Member                                                                                                                      President

 

APPENDIX OF EVIDENCE

 

witnesses examined on behalf of complainant/s.

 

PW-1: N.R. Hamanulla (Chief Affidavit filed).

 

witnesses examined on behalf of opposite party/s.

 

RW-1: N.V.S. Siva Kumar (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/s

 

Exhibits (Ex.A)	Description of Documents
	Photo copy of Application form for Agricultural Credit-Short-Term/Term Loan of Complainants as per GUPTA Committee Recommendations, Kalluru Branch.
	Photo copy of Letter regarding Loan Sanction Ticket filed by the Complainant.  Our Ref: CO/BR/ABD/ST No: 27/2008-09. Dt: 21.02.2009.
	Photo copy of Letter addressed by Opposite Party (Format for claiming 50% Advance Subsidy-Annexure-I) to NABARD. Dt: 01.11.2011, 12.05.2012.
	Photo copy of Reply letter from NABARD to Complainant                                         (Ref.No. NB.AP.RO/HYD/ICD/      / TAM 391A & 391B/2012-13). Dt: 31.08.2012.
	Photo copy of Statement of Account for the A/c. No. 829509017.
	Office copy of Legal Notice along with 3 Postal Receipts and 3 Acknowledgements filed by the complainant. Dt: 31.03.2016.
	Reply Notice of the Opposite Party. Dt: 21.04.2016.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/s

 

Exhibits (Ex.B)	Description of Documents
	Loan application of the Complainant submitted to the Opposite Party No.1 to sanction loan of Rs.24 lakhs in Original.
	Sanction Ticket Ref.No.CO/BR/ABD/ST No.27/2008-09, Dt: 21.02.2009 of the Deputy General Manager/Circle Head, Indian Bank, then at Chittoor sanctioning loan to the complainant in Original.
	Sanction Ticket Dt: 17.03.2009 of the Opposite Party No.1 sanctioning loan to the Complainant in Original.
	Demand Promissory Note Dt: 17.03.2009 for the loan amount of Rs.24 lakhs executed by the complainant in favour of the Indian bank, Kallur Branch in Original.
	Letter Ref.No.CO/ABS/468/2008-09 Dt: 26.03.2009 of the Deputy General Manager, Indian Bank, Circle Office, Chittoor addressed to the Opposite Party No.1 permitting the Opposite Party No.1 to release the loan amount as per the sanction limits to the complainant filed by the Opposite Party No.1.
	Memorandum of Deposit of title deeds executed by the complainant in favour of the Indian Bank, Kallur in original. Dt:18.03.2009.
	True copy of Statement of Account relating to the loan of the complainant filed by Opposite Party No.1. Dt: 28.11.2016.
	Completion and Commission Certificate signed by the complainant (Promoter), Bank Engineer and the Opposite Party No.1 certifying that the project work was completed in all aspects on 16.02.2012 and commissioned on 01.05.2012 filed by the opposite party no.1 in original.
	Letter dt: 08.05.2012 of the complainant addressed to the opposite party no.1 stating that he has submitted the required papers for claiming the subsidy from NABARD recently to the Indian Bank, Kallur and he undertook that he would assume full responsibility and pay the entire liability with interest and charges as applicable, if claim for subsidy is not settled due to delay in submission of the required details, filed by the opposite party No.1.
	Letter Dt: 12.05.2012 of the opposite party No.1 addressed to the Zonal Manager, Indian Bank, Chittoor enclosing 3 sets of documents requesting to claim the subsidy amount from NABARD, filed by opposite party No.1 in original.
	Letter dt: 19.07.2012 of the Zonal Manager, Indian Bank, Chittoor addressed to the opposite party No.1 enclosing the letter Dt: 16.07.2012 of the Asst. General Manager, NABARD, Hyderabad expressing their inability to provide subsidy to the complainant and the other party by name Sri Yahasanulla, due to delay in submission of subsidy claims in the prescribed time limit set by the GOI. But in the said letter the names of the promoters (Complainants) were inadvertently, spelt as ‘M/s. NR Yashanulla’ instead of the actual names (1) NR Yahasanulla and (2) NR Hamanulla, filed by opposite party No.1 in Original.
	Letter dt: 31.08.2012 of the Asst. General Manager, NABARD, Hyderabad addressed to the Zonal Manager, Indian Bank, Chittoor under a copy to the opposite party No.1 expressing their inability to provide subsidy to the complainant and the other party by name Sri Yahasanulla, due to delay in submission of subsidy claims in the prescribed time limit set by the GOI, filed by the opposite party No.1 in Original.

 

 

             Sd/-

                                                                                                             President

// TRUE COPY //

// BY ORDER //

 

Head Clerk/Sheristadar,

            Dist. Consumer Forum-II, Tirupati.

 

Copies to:  1) The Complainants  2 to 5. 

                  2) The Opposite parties 1 to 3.