DATE OF FILING :30.11.2010

BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI

Dated this the 28th day of February, 2011

Present:

SRI.LAIJU RAMAKRISHNAN PRESIDENT

SMT.SHEELA JACOB MEMBER

SMT.BINDU SOMAN MEMBER

C.C No.253/2010

Between

Complainant : KISSAN S.H.G

represented by its President,

Mathew Thomas,

Kathakunnel House,

Pandippara P.O,

Idukki District.

(By Adv: K.J.Thomas)

And

Opposite Parties : 1. The Director,

Khadi & Village Industries Commission, State Office, M.G Road,

Thiruvananthapuram.

(By Adv: P.A.Suhas)

2. The Project Officer,

District Khadi & Village Industries Office,

Thodupuzha,

Idukki District.

(By Adv: N.Chandran)

3. The District Lead Bank Manager,

Union Bank of India,

Thodupuzha,

Idukki District.

(By Adv: Joseph Kavumkal)

4. The Branch Manager,

Union Bank of India,

Thankamany Branch,

Thankamany P.O,

Idukki District.

(By Adv: Joseph Kavumkal)

O R D E R

SRI.LAIJU RAMAKRISHNAN(PRESIDENT)

The complainant is a S.H.G of 14 members at Pandippara, Karikkamtholam represented by its President. The Ist opposite party, Khadi and Village Industries Commission is an agency under Ministry of Agro & Rural Industries, Government of India, implementing the Rural Employment Generation Programme with 25% to 30% margin money assistance. During 2007-2008, the Ist opposite party selected the complainant S.H.G, having 14 entrepreneurs for setting up of 14 micro vermi compost and bio-gas plants at their property with margin money involvement of 30% of the total cost. The Ist opposite party conducted a spot study through the 2^nd opposite party and also  prepared a model project. As per the project, the total cost for setting up of one vermi compost and bio-gas plant unit was Rs.35,000/- and the opposite parties offered 30% of the same as margin money. The Ist opposite party forwarded the bio-data and model project report to the 3^rd opposite party, who is the District Lead Bank, recommending the same to the appropriate financing banks for implementing the said project. As per the recommendation, the 4^th opposite party provided financial assistance to the complainant for implementing the project. In November 2008, the 4^th opposite party provided financial assistance to the tune of Rs.4.90 lakhs ie, Rs.35,000/- each to 14 members of the complainant S.H.G and directed to return that amount in 36 monthly instalments of Rs.1,200/- each. The opposite parties made believe to each member that they would receive 30% of the said Rs.35,000/- ie, Rs.11,156/- as margin money assistance from the opposite parties and that subsidy amount sent to the account of each member and that would be adjusted towards the last instalments of the loan amount. Believing the words of the opposite parties, the complainant members took financial assistance from the 4^th opposite party and constructed the vermi compost and bio-gas plant units. The members of the complainant S.H.G regularly remitted the monthly instalments without any delay. As per the guidelines of the said scheme the members of the complainant are eligible for 30% subsidy amount and for that they approached the opposite party several times but they had not issued or adjusted the same to their loan account till this date. The 4^th opposite party is competent to forwarding the completion report and details in time to the Ist and 2^nd opposite parties and they are the respective persons to provide subsidy to the complainant members. The opposite parties wilfully avoiding the payment of the same and has no right to retain the amount. Hence this petition is filed for getting the subsidy amount of Rs.11,156/- to each member of the complainant S.H.G as financial assistance with interest from the opposite parties.

2. As per the written version filed by the Ist opposite party, it is stated that the Khadi and Village Industries Commission(KVIC) is an agency under Ministry of Agro & Rural Industries, Government of India, implementing the Rural Employment Generation Programme(REGP) from 1995-96 onwards with 25% to 30% of margin money assistance. More than ten thousand such small industrial units were established in the State and around 3.5 lakhs of rural artisans are working in these units for their livelihood. During 2007-2008 also the Ist opposite party planned to set up 1920 REGP units with margin money involvement of Rs.2,200/- lakhs for the generation of 36637 employments in Kerala through Khadi and Village Industries Commission and Kerala Khadi and Village Industries Board(KVIB). But the REGP scheme was ceased to exist with effect from 1.04.2008 and no proposals were to be accepted or sanctioned under REGP with effect from 1.04.2008 by the KVIC. They issued a circular mentioning about the introduction of Prime Minister Employment Generation Programme(PMEGP) in place of REGP. According to the circular if any applications received after 31.03.2008 can be considered under the PMEGP after its formal approval and launching around May - June 2008. The state offices of KVIC/KVIBs and other implementing agencies of REGP including banks may be advised not to accept or entertain any new project/loan under REGP with effect from 1.04.2008 and pending claims may be settled before 31.05.2008 through special efforts and close monitoring. No further funds would be released from the Ministry under REGP with effect from 1.04.2008. It is admitted by the complainant himself that in November 2008 they approached the Ist opposite party for the implementation of the said project, that means only after the ceasing up of 'REGP' scheme. So it is very clear that the Ist opposite party is not liable to pay the amount which is claimed by the complainant and the liability is vested with the 3^rd opposite party. So the petition may be dismissed.
 

3. As per the written version filed by the 2^nd opposite party, it is admitted that the Khadi and Village Industries Commission is an agency under the Ministry of Agro Rural Industries, Government of India, implementing the Rural Employment Generation Programme. The 2^nd opposite party is an agency under the Government of Kerala which also implement the Rural Employment Generation Programme. Both are independent agencies and not working as a subsidiary of another. The Ist opposite party selected the complainant S.H.G having 14 entrepreneurs for setting up of 14 micro vermi compost and bio-gas plants at their property with margin money involvement of 30% of the total cost. It is a project of the Ist opposite party, Khadi and Village Industries Commission. It has nothing to do with the 2^nd opposite party. The Ist opposite party conducted spot study through the 2^nd opposite party and prepared a model project, which is not at all correct. The 2^nd opposite party had not conducted any spot study as alleged. This opposite party is having no such or any other involvement in the complainant's project. There is no responsibility with respect to the so called project of the complainant. The complainant never approached the office of the 2^nd opposite party in connection with the said project. So this opposite party is not liable for any relief sought in the complaint since the 2^nd opposite party is unnecessarily implicated.

4. As per the written version filed by the 3^rd and 4^th opposite parties, it is admitted that the 4^th opposite party had granted a total loan of Rs.4.90 lakhs to the complainant Kissan S.H.G on 1.11.2008 at the rate of Rs.35,000/- each to the 14 members. Demand Promissory note, agreement etc. for the loan were executed in favour of the bank on 1.11.2008. The loan had to be repaid in 36 monthly instalments along with interest @ 14% per annum with monthly rests. The 3^rd and 4^th opposite parties never made the complainant to believe that 30 % of the said Rs.35,000/- would be provided as margin money etc. The opposite parties are not liable to pay the subsidy amount to the borrowers. If subsidy amount is received from the Ist and 2nd opposite parties, it would be credited to the loan account of the borrowers. The subsidy amount to be obtained from the opposite parties 1 and 2 is not yet received. Opposite parties 1 and 2 have not informed the permit of subsidy eventhough the 4^th opposite party made demand for the same. The opposite parties 3 and 4 are not liable for the same. The complainant did not approach these opposite parties for subsidy and they very well know that the subsidy amount have to be obtained from the Ist and 2^nd opposite parties. The 4^th opposite party has sent a letter referring No.SOK/REGP/Idukki/07-08/4217 to the Ist opposite party stating that the loan amount have been disbursed to the complainant and also requested to transmit the subsidy amount to the 4^th opposite party. The letter was sent on 27.11.2008 through Professional Couriers. Evenafter the receipt of the letter the  Ist opposite party never tried to disburse the subsidy amount to the 4^th opposite party. If any amount of subsidy is obtained it would be duly credited to the loan account of the complainant S.H.G. The 4^th opposite party is disbursing loan and effecting recovery only. So the petition may be dismissed.
 

5. The point for consideration is whether there was any deficiency in service on the part of the opposite parties, and if so, for what relief the complainant S.H.G is entitled to ?

6. The evidence consists of the oral testimony of PW1 and Exts.P1 to P4 marked on the side of the complainant and the oral testimony of DWs 1 to 3 and Exts.R1 to R8 marked on the side of the opposite parties.
 

7. The POINT :- The complaint is filed for getting the subsidy amount of the project, which is for starting vermi compost and bio-gas plant units with the aid of the 4^th opposite party by the direction of the opposite parties. The tenth member deposed as PW1. PW1 is the President of the Kissan S.H.G. There are 14 members in the said S.H.G. The Ist opposite party selected the complainant S.H.G having 14 entrepreneurs for setting up of 14 vermi compost and bio-gas plants  with the margin money involvement of 30% of the total cost. The Ist opposite party conducted a spot study through the 2^nd opposite party and also prepared a model project. The copy of the project report given by the Ist opposite party is marked as Ext.P1. The Ist opposite party issued a letter to the 3^rd opposite party, the District Lead Bank Manager, Union Bank of India about the setting up of vermi compost units under REGP regarding dated 15.06.2007, wherein it is stated that the projects will be eligible for margin money from KVIC/KVIB according to the guidelines of REGP, copy of which is marked as Ext.P2. The 4^th opposite party disbursed an amount of Rs.4.90 lakhs and Rs.4.20 lakhs as credit for setting up of vermi compost and bio-gas plant units for the Kissan & Haritha S.H.G groups respectively and a letter was sent to the Ist opposite party requesting the eligible subsidy amount, copy of the same is marked as Ext.P3. A copy of the list of beneficiaries applied under REGP for establishing new vermi compost unit is marked as Ext.P4. So each member of the complainant S.H.G is eligible for a subsidy of Rs.11,156/- as margin money and that would be adjusted towards the last instalment of the loan amount. The Project Officer of Khadi and Village Industries Office, Idukki deposed as DW1. Ext.R3 is the circular dated 3.01.2006 issued from the Kerala Khadi and Village Industries Board stating that the Khadi and Village Industries Board will dealt with 5 public sector banks(State Bank of Travancore, Punjab National Bank, Indian Overseas Bank, Bank of Baroda and Syndicate Bank/NMGB's) and all commercial/private sector banks in the state and District Co-operative Banks. 2^nd opposite party is an agency of Ministry of Agro Industry. The REGP scheme was terminated on 31.03.2007 and PMEGP was came into force in 2007-2008. There is a direction to stop the payment in REGP after 31.03.2007. After that if any loan was disbursed the liability will be vested to the banks. The Khadi Board Commissioner has informed the matter to the concerned banks. DW1 is not aware whether Ext.R3 circular was given to the banks by the Ist opposite party. As per DW1, there is no connection with the 2^nd opposite party and the complainant S.H.G. All the transactions were done with the Ist opposite party. The 2^nd opposite party is under the control of Kerala Khadi and Village Industries Board and the Ist opposite party is organised under the Ministry of Agro Rural Industries, Government of India. The 2^nd opposite party is not working under the control of the Ist opposite party. Both are different and independent offices. The REGP projects are implementing by the Commission and the Board separately. There are different guidelines for both of them. The Ist opposite party is giving financial assistance to the entrepreneurs through Union Bank. The 2^nd opposite party never conducted any spot study in the project applied by the complainant. The 4^th opposite party, who is the Manager of the Union Bank of India, Thankamany Branch examined as DW2. DW2 deposed that they have already claimed subsidy to the Ist opposite party and copy of the letter stating the same is marked as Ext.R4. Copy of the courier despatch register of the letter is marked as Ext.R5, which was duly acknowledged by the Ist opposite party and courier receipt is marked as Ext.R6. No reply was issued from the Ist opposite party for the same. They never informed about the termination of the scheme to the bank. The complainant S.H.G was selected by the Ist opposite party for setting up of 14 vermi compost and bio-gas plant units and forwarded the bio-data and model project report to the 3^rd opposite party for recommending the same to appropriate financing banks, copy of the letter given to the bank dated 15.06.2007 is marked as Ext.P2. The margin money for each member is Rs.11,156/-, which is also written in Ext.P1. There is no information given by the opposite parties about the termination of the REGP scheme. It was told to the complainant that there is 30% subsidy for the loan. It was recommended by the Khadi and Village Industries Commission that no collateral security needed from the complainant. The complainant S.H.G paid 22 instalments promptly and the balance instalments can be adjusted with the subsidy amount. It was duly claimed before the bank. The loan was disbursed as per the application given in 2007. There is no date limit written in Ext.P2 letter. The Ist opposite party deposed as DW3. Ext.R7 is the circular issued from the Ist opposite party,  Khadi and Village Industries Commission, Mumbai on 10.04.2008 stating the introduction of Prime Minister Employment Generation Programme(PMEGP) in place of Rural Employment Generation Programme and PMRY. A letter dated 20.10.2008 was given to all the concerned banks stating the same by the Commission, copy of the letter is marked as Ext.R8. The Ist opposite party is implementing their projects through financial assistance of Union Bank of India. The 2^nd opposite party is not implementing their projects through Union Bank of India. The 2^nd opposite party is not having any liability in the implementation of the project of the Ist opposite party. Applications from the Kissan S.H.G was received on 15.06.2007 and Ext.P2 letter was also given to the 3^rd opposite party on 15.06.2007. The project application was given within 31.03.2008. The inspection was conducted and project reports were given within that date and it is written in Ext.P2. No other letter given to the bank other than Ext.P2. It is written in the letter dated 21.10.2008 that the REGP scheme was terminated. Ext.R4 letter was received from the Union Bank and the subsidy is requested in that letter. It is also written in Ext.P1 that a member is eligible for a subsidy of Rs.11,156/-. It was not intimated to the Kissan S.H.G about the termination of the scheme. Ext.R1 is the application submitted by the S.H.G to the bank for applying for loan assistance. Ext.R2 is the letter given to the Branch Manager, Union Bank of India, Thankamany Branch by the Kissan S.H.G Secretary Mr.Stanly Joseph, for getting the amount after completion of the work.

8. As per PW1, they have applied for a loan for the setting up of a vermi compost project ,to the Ist opposite party through the 4^th opposite party and it was started before 31.03.2008. As per the scheme introduced by the Ist opposite party, the 4th opposite party duly disbursed the loan amount as Rs.4.90 lakhs to the 14 members of the S.H.G and they have repaid the amount in 22 monthly instalments. But the subsidy amount Rs,11,156/- was not disbursed by the Ist opposite party. So the bank has been started recovery proceedings against the complainant. As per the 4^th opposite party, they have disbursed the loan amount to the complainant due to the letter given by the Ist opposite party which is Ext.P2. They also offered eligible margin money from KVIC/KVIB. The complainant S.H.G had repaid 22 instalments promptly. The subsidy amount is sufficient for the balance instalments and so they claimed for the subsidy amount to the Ist opposite party through Ext.R2 letter and it was received by the Ist opposite party, but no subsidy was sanctioned by them. So they are not able to provide the same to the complainant. As per the Ist opposite party, the project has been terminated by the Government and a new project has been commenced instead of the same. The application given by the complainant was after the termination of the scheme. So they are not entitled to sanction the subsidy amount. The bank is only entitled for the disbursement of the loan amount because the last date for the project was already over. Ext.R7 circular issued from the Khadi and Village Industries Commission introducing a new scheme PMEGP after terminating the project RMGP. It is also written in the circular that REGP in its present form will cease to exist with effect from 1.04.2008. A letter was given to all banks and District Industries Centres and connected officers stating the commencement of the PMEGP scheme with effect from 15.08.2008, copy of the same is marked as Ext.R8. But on cross examination of the learned counsel for the 3^rd and 4^th opposite parties, DW3, the Assistant Development Officer of the Ist opposite party stated that the project application for the S.H.G was received before 15.06.2007, the project was entertained by the Ist opposite party and letter was given to the 3^rd opposite party about the same, which is Ext.P3. Ext.P3 letter was written on 15.06.2007. So the project application was also received within 31.03.2008 and an inspection was conducted by the Ist opposite party as per Ext.P2. DW3 also deposed that it is not written in the Ext.R8 letter that the implementation of the new scheme was informed to the 3^rd and 4^th opposite parties. DW3 admitted that the 2^nd opposite party is not implementing this project through Union Bank of India and they are independent authorities.

9. So we think that the application for the project was received by the Ist opposite party within the prescribed time and they themselves recommended the bank for disbursing the loan and also assured about the subsidy. But they never informed the termination of the scheme to the opposite party bank eventhough the bank applied for the subsidy for the complainant's loan. The Ist opposite party never replied for the same and subsidy was not given to them. So it is a gross deficiency from the part of the Ist opposite party. The Ist opposite party is liable to disburse the subsidy amount to the complainant. The complainant S.H.G was promptly paying the loan instalments and the subsidy is enough for the payment of the balance instalments, in which the bank is initiated revenue recovery proceedings.
 

In the result, the petition allowed. The Ist opposite party is directed to disburse the subsidy amount Rs.11,156/- each to the members of the complainant S.H.G as per Ext.P1 within 30 days. The Ist opposite party is also directed to pay Rs.2,000/- as cost of this petition within one month of receipt of a copy of this order, failing which the amount shall carry 12% interest per annum from the date of default.

Pronounced in the Open Forum on this the 28th day of February, 2011

Sd/-

SRI. LAIJU RAMAKRISHNAN(PRESIDENT)
 

Sd/-

SMT. SHEELA JACOB(MEMBER)

Sd/-

SMT. BINDU SOMAN(MEMBER)

APPENDIX

Depositions :

On the side of Complainant :

PW1 - Mathew Thomas

On the side of Opposite Parties :

DW1 - C.R.Jayalakshmi

DW2 - M.G.Sreedharan

DW3 - T.Narayana Perumal

Exhibits:

On the side of Complainant:

Ext.P1 - Copy of the Project Report given by the Ist opposite party

Ext.P2 - Copy of the Ist opposite arty's letter dated 15.06.2007 addressed to the 3^rd opposite party about the setting up of vermi compost units under REGP

Ext.P3 - Copy of 4^th opposite party's letter addressed to the Ist opposite party, requesting the eligible subsidy amount

Ext.P4 - Copy of list of beneficiaries applied under REGP for establishing new vermi compost unit

On the side of Opposite Parties :

Ext.R1 - Copy of application to be submitted by S.H.G to bank branch while applying for loan assistance

Ext.R2 - PW1's letter dated 25.03.2009 addressed to the 4^th opposite party

Ext.R3 - Copy of circular dated 3.01.2006 issued from the Secretary, Kerala Khadi & Village Industries Board, Thiruvananthapuram

Ext.R4 - Copy of 4^th opposite party's letter addressed to the Ist opposite party

Ext.R5 - Copy of the courier despatch register of the Ext.R4 letter

Ext.R6 - Copy of courier receipt of Ext.R4 letter

Ext.R7 - Circular dated 10.04.2008 issued by the Director, Khadi & Village Industries Commission, Mumbai

Ext.R8 - Copy of letter dated 20.10.2008 given to all concerned banks stating the introduction of PMEGP in place of REGP and PMRY