2. The Assistant Director of Sericulture,

Doordarshan building,

Collector office road,

Guntur.

3. The Branch Manager,

Andhra Bank,

Vykunthapuram branch,

Amaravathi Mandal,

Guntur district.

4. The Zonal Manager,

Andhra Bank,

Guntur.                                                             …opposite parties

        This Complaint coming up before us for hearing on                     07-06-11 in the presence of Sri K. Haranadha Raju, advocate for the complainant and opposite parties 1 and 2 representing in person and of Sri M.V. Subba Rao, advocate for 3^rd opposite party                        4^th opposite party having on record, upon perusing the material on record after hearing both sides and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao, President:-

        The complainant filed this complaint U/S 12 of Consumer Protection Act seeking compensation of Rs.3, 00,000/- towards deficiency of service and Rs.1, 00,000/- towards compensation for damages caused to him including mental agony, pain and suffering and Rs.10, 000/- towards costs.

2.     In brief the averments of the complaint are these:

The complainant is eking livelihood by running small provision stores.   On 9-07-07 one of the field officers of the 1^st opposite party namely Jagan met the complainant and provided information regarding silk industry.   The said Jagan also informed that the said industry was very profitable and the department will support entrepreneurs for marketing and thereon for production.   On 21-07-07 the said Jagan and in charge Divisional Officer of 1^st opposite party namely Chinnapa Reddy pressurized the complainant to establish unit of silk industry with a promise to provide technical service and recommendation to Andhra Bank for working capital of Rs.5, 00,000/-.  Basing on those promises, the complainant accepted to install the said unit under the name and style of M/s Nagalakshmi Silk Industry.   The complainant obtained DD for Rs.73, 800/- on the advice of the 1^st opposite party for supply of six basins reeling machinery, motorized twin charkha, hot air drier, boiler and pipeline.   The opposite parties 1 and 2 supplied some of the material instead of four items specified above.  For repeated demands the opposite parties 1 and 2 informed the complainant to purchase the remaining items from private market and start production.   On such advice the complainant purchased the rest of the material from private market and started production.   The opposite parties 1 and 2 promised to provide technical service for about an year.  For repeated demands the opposite parties 1 and 2 sent one male and female untrained persons who inurn gave instructions as per their knowledge.   Later the complainant appointed a person with his own expenditure and started production. The opposite parties 1 and 2 created lot of problems.   Even then the complainant run the unit though incurred loss.  The opposite parties 1 and 2 promised to recommend to M/s Andhra Bank for providing working capital of Rs.5, 00,000/- and to APSEB for providing three phase power supply.   The 3^rd opposite party gave Rs.2, 00,000/- only as agricultural term loan bearing No.ATL/01/20070901 instead of Rs.5, 00,000/- towards working capital.   The 3^rd opposite party without the knowledge of the complainant changed the account number as SS1/01/20070002 during the period 01-07-07 to 28-02-09.   The opposite parties failed to furnish the details of the nature of the account and interest calculation.   The 3^rd opposite party did not sanction Rs.5, 00,000/- as working capital though recommended by the District Collector and 2^nd opposite party.   The 2^nd opposite party orally informed the complainant that subsidy was at 50% on interest

 prior to 21-06-08 and from thereon at 3% pa.   The electricity board did not provide three phase power supply.  The 2^nd opposite party did not care to keep its promise inspite of repeated requests from the complainant.   The opposite parties 1 and 2 promised an incentive of Rs.100/- per kg for production of raw silk to encourage the entrepreneurs.  But the opposite parties failed to give production incentives till today inspite of repeated requests.  The opposite parties failed to keep up their promise inspite of repeated requests.   The opposite parties 1 and 2 gave reply with false averments to the notice issued by the complainant.   The opposite parties 3 and 4 did not give reply though received notice.  The complaint therefore be allowed.

3.     The 4^th opposite party though received summons did not appear before the Forum.

4.    The contention of the opposite parties 1 and 2 in nutshell is hereunder:

The claim of the compensation is totally baseless and is unjustified.  The complainant studied the silk industry in detail about the operation cum profitability by visiting Government silk unit at Guntur and private units at Hanuman Junction of Krishna District, Janagam of Warangal district and Dharmavaram of Ananthapur district and on his own accord took decision to set up reeling unit.   Number of similar units assisted by the Department of Sericulture, Government of Andhra Pradesh are running profitably.   The complainant requested for supply of six basins of silk reeling unit, motorized twin charka, hot air drier and mini boiler with steam pipeline manufactured at Vijayawada and sent DD for Rs.73, 787/-.   The opposite parties 1 and 2 supplied two items only i.e., six basins improved cottage silk reeling machinery manufactured by M/s Silk Tex, Bangalore where as the twin chakra was procured by the complainant at Hanuman Junction.   The silk reeling machinery supplied to the complainant was of latest model wherein stifling of cocoons can be done without the use of hot air drier.   The cost of the said machinery was Rs.1, 51,515/- inclusive of packing, transportation to site and installation.  Contribution of the complainant was Rs.34,054/- only.  In view of the latest equipment the hot air drier and mini boiler was not required.  Cost of twin chakra was Rs.6,220/- and does not involve any technology.   The opposite parties 1 and 2 gave a subsidy of Rs.1550/- towards twin chakra.   The opposite parties  1 and 2 in order to minimize the complainant’s liability and investment the latest machinery was supplied with minimum investment .The net returns were Rs.16,554/- per month and Rs.1.99 lakhs p.a., subject to operation of the unit continuously.   The space provided by the complainant was not suitable to accommodate hot air drier and mini boiler and further the machinery supplied to the complainant was latest which has taken care of the work of hot air drier and mini boiler.   The remaining amount from out of Rs.73, 787/- was returned to the complainant by the opposite parties 1 and 2.  At each and every stage the opposite parties 1 and 2 provided all technical know-how to run the unit on profitable lines.  The opposite parties 1 and 2 provided a male and female trainer of Government silk reeling unit at Guntur whose work was supervised by the person in charge of technical service centre, non-farm Sector, Guntur.   When there is a Government silk reeling unit at Guntur the question of providing master trainer from Central silk board, Bangalore did not arise.   The complainant was granted a loan of Rs.3.18 lakhs in 3 spells i.e., Rs.2, 00,000/- on       04-12-07, Rs.50, 000/- on 24-07-08 and Rs.68, 000/- on 27-02-09.   The complainant has availed the said loan facility from the 3^rd opposite party on the recommendation of the opposite parties 1 and 2.   The complainant cheated the department and the bank in not running the unit continuously and instead is running after Government for subsidy/benefits.   The silk reeling unit is a very profitable industry.  The raw material is cocoons, which will be converted into raw silk, and in the process the bye products are silk waste and flimsy cocoons and all the items are sold to realize profit.   The question of incurring loss in this industry did not arise.   For three-phase current supply by APSEB opposite parties 1 and 2 have nothing to do in the matter.    With regard to sanction of subsidy on silk yarn produced therein, the proposal was kept in the silk incentive meeting held on 20-03-09 at Eluru and the proposal was not accepted for lack of silk testing report.   The claim for subsidy is for 71.800 kgs.  The subsidy eligible is @Rs.30/- per kg and it comes to Rs.2, 154/-.   The opposite parties             1 and 2 are no way responsible if the complainant incurred any loss.  The complaint therefore be dismissed.

5.   The contention of the 3^rd opposite party in brief is hereunder:

The complaint against financial institution is not maintainable.   For availing loan the complainant has to submit his application before the bank authorities and then only loan will be sanctioned.  Subsequent to sanctioning the loan the complainant deviated the terms and as such is self-accountable to explain the utilization of the funds.   In fact the 3^rd opposite party is first one to take steps for recovery in case of a defaulted account.  In order to divert the issue the complainant motivated the complaint with false allegations.  The complaint therefore be dismissed.

6.    Exs.A-1 to A-17 on behalf of complainant and Exs.B-1 to B-9 on behalf of opposite parties 1 and 2 were marked.

7.  Now the points that arose for consideration in this complaint are:

1. Whether the opposite parties committed any deficiency of service and if so by whom?
2. Whether the complainant is entitled to compensation as claimed and if so from whom?
3. To what relief?

8.    Admitted facts in this complaint are:

1. The complainant started silk reeling industry in his village.

        2. The opposite parties 1 and 2 supplied six basins improved                        cottage silk reeling unit and motorized charka under subsidy.

3. The 3^rd opposite party sanctioned loan of Rs.2, 00,000/-       (Ex.A-16).

4.  There was exchange of notices between the opposite parties        1 and 2 and the complainant (Exs.A-13 to A15).

9.   POINT No.1:-    Deficiency of service as complained by the complainant can be discussed under four different categories (heads)

a. Not supplying of the entire machinery.

b. Not supplying technical know-how.

c. Not providing sufficient bank loan.

d. Not providing 3-phase power supply.

e. Not providing subsidy for the produce.

          a) Not supplying the entire machinery:-    Ex.A-12 is copy of information sought under the RTI Act by the complainant.   It is an admitted fact that the opposite parties 1 and 2 did not supply steam boiler of 100 liters capacity and electrical hot air drier of 50 kgs capacity.  The contention of the opposite party is that the silk reeling machinery supplied to him was of the latest model wherein stifling of cocoons can be done without the use of hot air drier.   The complainant did not produce any technical evidence to show that steam boiler of 100 liters capacity and electrical hot air drier was necessary for the said industry.   In this context the relevant portion in Ex.A-9 letter dated 16-09-09 is extracted below for better appreciation:

        “

                Nowhere in Ex.A-9  it was mentioned that the complainant is facing difficulty in producing silk yarn for want of hot air drier and boiler.   Ex.B-6 is the copy of receipt dated 10-09-08 executed by the complainant in favour of opposite parties 1 and 2 and it revealed that the complainant received Rs.15, 983/- by way of cheque drawn on Bank of India, Auto Nagar, which was meant for purchasing hot air drier.   Having received that amount the complainant cannot now question that the opposite parties 1 and 2 did not provide hot air drier and steam boiler.   In view of the afore mentioned discussion, we find that the opposite party did not commit any deficiency of service.

          b) Not supplying technical know-how:-   It is the contention of the complainant that master trainer from the central silk board, Government of India, Bangalore did not provide technical know-how;  but male and female untrained workers from Guntur came to give training.   The contention of the opposite party is that the department has provided training to the workers and to the complainant through male and female trainers of Government silk reeling unit, Guntur and also the in charge of the non-farm technical Service Centre supervised and provided necessary assistance and When there is a Government Silk Reeling Unit at Guntur the question of providing master trainer from Bangalore did not arise.  As seen from the above rival contentions that the opposite parties 1 and 2 gave training to the complainant and workers through male and female trainers of Government Silk Reeling Unit, Guntur.   Under those circumstances, it cannot be said that the opposite parties committed deficiency of service in this aspect.   Hence, this point is also answered against the complainant.

          C&d) Not providing sufficient bank loan and Not providing                     3- phase power supply:-

      The relevant portion in Ex.A-9 dated 16-09-09 is extracted below         for better appreciation:

                Ex.A-10 revealed that the 3^rd opposite party released Rs.3, 25 lakhs to the unit towards working capital.  Ex.A-9 revealed that the opposite parties 1 and 2 did their best in providing loan assistance through the 3^rd opposite party. The alleged deficiency against the 3^rd opposite party is that it had not provided that much quantity of loan recommended by the opposite parties 1  and 2.   It is not the case of the complainant that 3^rd opposite party promised to lend loan.   In Niwas Spinning Mills Limited vs. Bank of India 2003 (3) CPJ 190 it was held that the bank has to safeguard its interests being holder of public money and can impose conditions for grant of loan.  The contention of the 3^rd opposite party about sanctioning of loan depends upon so many factors is having considerable force. Sanction of loan is not in the hands of the opposite parties 1&2 as rightly contended. It can therefore be said that the opposite parties did not commit any deficiency of service of service.

                Providing 3-phase power supply is not within the purview of the opposite parties 1 and 2.  It is for the complainant to secure 3-phase power supply.  Therefore for not obtaining 3-phase power supply by the complainant to its unit the opposite parties 1 and 2 cannot be found fault.   Even on this count also the opposite parties 1 & 2 cannot be found fault.

       e) Not providing subsidy for the produce:-   In Ex.A-9 letter dated 16-08-09 the complainant stated that he was producing silk yarn.   The complaint as well as affidavit was silent how much quantity he supplied to the opposite parties 1 and 2 to have subsidy.   The opposite parties 1 and 2 mentioned that subsidy for produce is Rs.30/- per kg and it was so mentioned in Ex-A12.   In the absence of particulars of quantity supplied to the opposite parties 1 and 2 the subsidy amount to which the complainant  entitled to cannot be ascertained.   But the opposite parties 1 and 2 in their version mentioned that the quantity supplied by the complainant was 71.800 kgs only.   The complaint is lacking material particulars.   The complaint in ExA-9 also did not mention how much he supplied silk yarn to the opposite parties 1 and 2.   In the absence of any material particulars it cannot be said that the opposite parties 1 and 2 committed deficiency of service in not providing subsidy.   In view of afore mentioned discussion we opine that none of the opposite parties committed deficiency of service.

10.  POINT No.2:-   In view of above findings, we opine that the complainant is not entitled to any compensation.   Hence, this point is answered against the complainant.

11.  POINT No.3:-   In view of above findings, in the result, the complaint is dismissed without costs.   

        Dictated to Junior Steno, transcribed by her, corrected by us and pronounced in the open Forum dated this the 23rd day of              June 2011.

Sd/-XXX                                   Sd/-XXX                                 Sd/-XXX

MEMBER                                             MEMBER                                        PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party :  

                                                                                                                        Sd/-XXX

                                                                                PRESIDENT