Jharkhand

Bokaro

CC/32/2020

SRi Balaji Chips Prop. Rinku Devi - Complainant(s)

Versus

The Zonal Manager, Andhra Bank - Opp.Party(s)

22 Jul 2023

ORDER

District Consumer Disputes Redressal Commission, Bokaro

Date of Filing-04-08-2020

Date of final hearing-22-07-2023

 Date of Order-22-07-2023

Case No. 32/2020

Sri Balaji Chips Prop. Rinku Devi W/o Sanjeev Kumar

R/o Sector-12/A, Qr.no. 1578, P.O & P.S- Sector-12,

 Bokaro, Jharkhand

                                      Vrs.

1. The Zonal Manager, Andhra Bank,

Aditya Arcade, Exhibition Rd, Lalbhai Society,

Salimpur Ahra Golambar, Patna, Bihar 800020

2. The Branch Manager, Andhra Bank,

City Centre Branch, Sector-4, Bokaro Steel City,

Bokaro 827004

Present:-

                             Shri Jai Prakash Narayan Pandey, President

Shri Bhawani Prasad Lal Das, Sr.Member

                  Smt. Baby Kumari, Member

PER- B.P.L. Das, Sr. Member

-:Order:-

1. This case has been filed by the complainant with prayer to pass order against the O.Ps. who be held responsible and deficient in its services by declaring the C.C. A/c No. 210813100000131 of the complainant as NPA and to pass order for recall of notice dt. 15.06.2020 issued by the O.P. No.2 addressing the complainant for repayment  of entire loan amount along with interest charged without disclosing amount are unfair, unwarranted vexatious and illegal   and direct the O.Ps. to pay compensation of Rs. 10,00,000/- to the complainant towards physical, mental harassment and business loss on account of the act of O.Ps. and also to make payment of Rs. 10,000/- as litigation cost to the complainant and to pass order for any other relief or reliefs for which the complainant is found to be entitled too.
2. Complainant’s case in short is that she has been running her business of “Manufacturing of Chips” at Dundibagh Market, P.O.& P.S.- Sector-XII, Bokaro Steel City, Bokaro for last many years who obtained financial help from O.P. No.2 the Branch Manager, Andhra Bank, City Centre Branch, Sector-IV, B.S. City, Bokaro, who after fulfilling all requirements and taking required documents extended Cash Credit Facility to the complainant up to Rs. 15,00,000/- for which Fixed Deposit of Rs. 9,00,000/- and fixture and machineries have been placed under the Bank accordingly F.D. of Rs. 9,00,000/- handed over to O.P. No.2 and in the month of August 2016 C.C. A/c No. 210813100000131 was opened and complainant was availing its facilities. Further case is that with passage of time complainant felt difficulty related to frequent load shedding and crisis of man power in the locality in which she had been running her unit, hence seeing no other option she applied before O.P. No.2 on 18.10.2017 for shifting of her unit to Chas Road, Sindri More, Distt.- Purulia, (W.B.) but officials of O.P. No.2 slept over the matter and whenever she approached them to know the fate of her application she was assured that her application was under consideration before higher authorities and she would be informed after receiving response. Further case is that since complainant did not receive any come back from the O.P. No.2  for a long time, she shifted her factory to Chas Road, Sindri More, Distt.- Purulia, (W.B.) in assumption that her prayer would be allowed. Further case is that being a bonafide consumer of  O.P. complainant was eager to deposit the loan and to fulfill the terms and conditions under which she was allowed Cash Credit facility ( here in after refer as C.C. facility) and she was furnishing her stock statement regularly to O.P. No.2 and it was being periodically inspected by their officials concerned before renewal of her C. C.  Account  facility. Further case  is that her factory was further inspected by the officials of O.P. to whom monthly stock statement are also submitted.
3. Further case of the complainant is that a case being Purulia (M) P.S. Case No. 72/2019 dt. 04.04.2019 was registered u/s 468,471 IPC, u/s 102/103/104 of the Trade Mark Act 1999 and u/s 62 of the Copy Right Act 1957 against Sanjeev Sao @ Sanjeev Kumar and investigating agency seized the factory of the complainant in which later on vide order dt. 03.10.2019 Ld. C.J.M. Purulia allowed to release the machine with a condition that not to use the said machine, not to part with the machine or not to change the nature and character of the machine without leave of the Court. Later on said order was challenged by the complainant before the Hon’ble High Court of Kolkata vide C R R No. 3487/ 2019 in which complainant was allowed to use the machine and thereafter, she re-started her business after maintenance and repair of the machine and tools since Feb. 2020 and all those facts were being brought into knowledge of O.P. No.2 who supported the complainant and assured her to maintain the cordial relationship and informed her that she would be allowed sufficient opportunities for recovery of loan. Further case is that since March 2020 due to Covid-19 Pandemic lock down was imposed and all the business activities became dead hence during said hard time the Central Govt. extended facility of moratorium to all persons who have taken loan from any bank or financial institution but while the complainant was looking some favourable days she came to learn that her loan account has been freezed and she received notice dt. 15.06.2020 from O.P. No.2, by which, she was directed to repay the entire amount, along with interest, without disclosing the amount in that very letter, thereafter legal notice dt. 02.07.2020 was given to O.Ps. which was replied by O.P. No.2 vide reply dt. 10.07.2020 contending that the complainant has shifted her factory to another place without consent of the bank. Further case is that the said act of the O.Ps. is detrimental to the business of the complainant and also negligent and deficient in services on the part the O.Ps. who are engaged in unfair trade practices and not discharging its duty fairly and in good faith, which comes within the purview of deficiency of service causing financial, physical and mental harassment to the complainant. Further case is that since O.Ps. are negligent and deficient in service, hence they are liable to recall their order directing the loan account of the complainant as NPA. Hence this case has been filed with above mentioned relief.
4. O.Ps. appeared and they have filed W.S. mentioning therein that complainant has not approached this Commission with clean hand and suppressed the material facts. O.Ps. have admitted the fact related to running of business of Manufacturing of Chips by the complainant, sanction of C.C. limit up to Rs. 15,00,000/-, deposit of F.D.R. of Rs. 9,00,000/- with the bank and hypothecation of all the fitting and fixtures, goods and book- Debt, outstanding money etc. with the bank have been admitted by these O.Ps. Further reply is that the complainant has shifted her business establishment to Chas Road, Sindri More, Distt. Purulia (W.B.) without prior permission of these O.Ps. which came into knowledge of these O.Ps. later on and since there was no transaction in the account of the complainant since April 2019 hence these O.Ps. came to know that business is not running. Further reply is that these O.Ps. have given as much as possible opportunity to the complainant for maintaining/regularize her account but she failed to do so and neglected to pay the outstanding amount, hence as per norms as well as guidelines of RBI C.C. A/c No. 210813100000131  became NPA in June 2020 and F.D.R. of Rs. 9,00,000/- was adjusted in outstanding amount and rest of Rs. 5,83,914/- is due. Further reply is that in this way O.Ps. have acted without prejudice in accordance with legal duty to maintain financial discipline, hence complainant is not entitled to get any relief and case is liable to be dismissed with cost.
5. Point for determination is:-

A. whether there is any deficiency in service or unfair trade practice by the O.Ps. in this case ?

B.Whether complainant is entitled to get relief as claimed and to the what extend?

6. On careful perusal of the pleadings of the parties it is very much clear that both the parties have either admitted or not controverted following facts.

I.That complainant was running her unit of Manufacturing of Chips.

II.That earlier her unit was running at Dundibagh Market, P.O.& P.S.- Sector-XII, B.S. City, Bokaro .

III.That O.P. No.2 has provided C.C. A/c No. 210813100000131 with facility to draw the amount up to Rs. 15,00,000/-.

IV.That said C.C. account was opened in the month of August 2016.

V.That on 18.10.2017 complainant filed an application before the O.P. No.2 with request to permit for shifting of her Manufacturing Unit to Chas Road, Sindri More, Distt. Purulia (W.B.) on the grounds related to difficulties being faced by her to run the Unit. VI.That for a long period there was no any reply by O.Ps. on the petition dt. 18.10.2017 filed by the complainant.

VIII.That later on complainant shifted her unit to Chas Road, Sindri More, Distt. Purulia (W.B.).

IX. That complainant establishment was not running since long and there was no any transaction in her C.C. account since April 2019 (para 6 of the W.S.).

X. That C.C. A/c No. 210813100000131 of the complainant has been declared NPA in the month of June 2020.

7. It is submitted on behalf of the complainant that O.Ps. cannot blame the complainant for shifting her unit to some other place because they have regularly realized the Unit Inspection Charges and Account Renewal Charges from the complainant after inspection and renewal respectively,  hence by conduct they have accorded permission and there shall be applicability of the principles of estoppel against them.  Further he has drawn attention of this Commission on the directions of Reserve Bank of India issued vide letter dt. 23.05.2020 and earlier letter dt. 27.03.2020 and 17.03.2020 by submitting that as per directions of the RBI there was period of moratorium from March 2020 to 31.08.2020 hence O.Ps. have illegally declared the C.C. account NPA. He has also pointed out other illegalities.
8. On the other hand Ld. Counsel for the O.Ps. has submitted that whichever act has been done by the O.Ps. is in accordance with the banking norms.
9. Now we would like to discuss the case and evidence on merit. Here in this case complainant has produced one witness namely Moon Kumar as witness No.1 who has attempted to prove her case during his evidence on affidavit. During cross- examination he states that factory is in the name of his mother. Further he states that he is not knowing about conditions of loan and right to shift the factory to other place. At para 20 he states that he was having no role in taking loan. At para 23 he states that entire  loan amount of the bank has not been paid. Except this witness no any other oral evidence has been produced by the complainant.
10. No any oral evidence has been produced by the O.Ps. However, they have produced photo copy of letter of sanctioned notice dt. 15.06.2020, consent letter undertaking of the complainant in respect to term loan, letter dt. 27.11.2017, letter dt. 12.12.2018, 30.06.2020 which are not in dispute.
11. As documentary evidence photo copy of legal notice dt. 02.07.2020 is Annexure A series, photo copy of reply of the O.Ps. related to said legal notice is Annexure-B which shows that due to shifting of unit to another place and poor transaction of the complainant said loan has been turned into NPA on 30.06.2020.  Annexure-C series are photo copy of the account statement related to account No. 210813100000131 from 01.09.2016 to 31.07.2020 which show that on 30.06.2020 account balance was minus Rs. 14,03,945.90/-. On careful perusal of Annexure- C series it shows that on 26.03.2017, 26.06.2017, 31.12.2017, 30.03.2018, 28.06.2018, 29.09.2018, 11.12.2018, 31.12.2018, 31.03.2019, 30.06.2019, 30.09.2019, 31.12.2019 and 31.03.2020 O.Ps. have realized/charged the unit inspection charges of the bank from the complainant. Apart from realization of unit inspection charges O.Ps. have charged the complainant on different dates for renewal also. In this way it is apparent that from opening of the account till 31.03.2020 the officials of the O.Ps. have regularly inspected the unit of the complainant for which O.Ps. have charged due fee regularly.
12. Now, we have to see during which period unit of the complainant was shifted from Dundibagh to Chas Road, Sindri More, Distt.- Purulia, (W.B.) because complaint petition is silent on this regard and O.Ps. have also not disclosed the specific date of shifting of the unit. As per complaint petition complainant has filed application before the O.Ps. on 18.10.2017 (photo copy of said application is Annexure-F) for permission by the O.Ps. regarding shifting of the unit but it was kept pending for long period. Photo copy of FIR of Purulia P.S. Case No. 72/2019 dt. 04.04.2019 (Annexure-D)  shows that in respect to unit of the complainant situated in the Purulia District said case was registered on 04.04.2019. In this way it is apparent that concerned unit would have been shifted after 18.10.2017 and before 04.04.2019. Annexure-C series are very much specific that after 18.10.2017 concerned unit was inspected by the officials of the O.Ps. on 31.12.2017, 30.03.2018, 28.06.2018, 29.09.2018, 11.12.2018, 31.12.2018, 31.03.2019, 30.06.2019 , 30.09.2019, 31.12.2019  and 31.03.2020 which show that after filing of the criminal case at Purulia also concerned unit has been four times inspected by the officials of the bank without any objection and bank has realized its charges from the complainant. Therefore, by own conduct O.Ps. have recognized the shifting of the unit to the some other place and contrary to it they cannot say something else rather principle of ‘Estoppel’ will apply on this aspect. Therefore, in light of above discussion we are of the view that by the conduct O.Ps. have recognized the shifting of the unit to some other place and mere on this basis they cannot take any adverse action against the complainant.
13. Now, we have to see whether the action of the O.Ps. regarding declaration of the account NPA in the month of June 2020 and issuance of letter dt. 15.06.2020 with direction to make immediate payment of dues within 15 days along with interest (vide photo copy of Annexure-G) is justifiable or not? On this aspect complainant has filed photo copy of notice dt. 15.06.2020 (Annexure-G) which shows that in respect to above mentioned loan account complainant has been directed to re-pay the entire loan amount along with interest immediately within 15 days from the date of that very letter otherwise O.P. shall proceed to recover the amounts dues. This letter is not disclosing the specific amount of loan as well as interest rather on this aspect it is silent. Hence vide Annexure-G there is no any specific direction regarding deposit of specific amount by the complainant before the O.Ps. Annexure-H is photo copy of letter dt. 13.07.2020 written by the complainant to the O.P. No.2 with request to extend the deadline to recall money showing her difficulties on the ground that her unit was defunct for long period and after 10 months it came into function, meanwhile Covid-19 started, due to it she is unable to collect the money from the market for its payment, hence she has prayed for extension of period.  Annexure-D series are the photo copy of the papers to show that there was litigation in respect to said unit and vide order dt. 23.12.2019 passed by the Hon’ble Kolkata High Court in CRR No. 3487/2019 complainant was allowed to run the unit. Annexure-E series is photo copy of the complaint and response between both the parties in respect to said account. Annexure-I is photo copy of Trade Mark Certificate and Annexure-J is photo copy of affidavit Sworn in by the complainant by giving authority to her husband to act on her behalf in respect to unit concerned. Annexure-K is photo copy of letter dt. 22.06.2020 written by O.P. No.2 to the complainant by which some informations have been shot from the complainant. Annexure-L is photo copy of the demand notice dt. 17.09.2020 issued by the Bank.  
14.  Complainant has also filed Annexure-M which is the directions of the Reserve Bank of India issued on 23.05.2020 viden letter RBI/2019-20/244, DOR. No. BP.BC.71/21.04.048/2019-20 addressed to all banks State Cooperative Banks, all India Financial Institutions etc. by giving certain directions and its relevant portions are being reproduced bellow:-

COVID-19- Regulatory Package

Please refer to the Circular DOR.NO.BP.BC.47/21.04.048/2019-20 dated march 27, 2020 and Circular DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 announcing certain regulatory measures in the wake of the disruptions on account of COVID-19 pandemic and the consequent asset classification and provisioning norms. As announced in the Governor’s Statement of May 22, 2020, the intensification of COVID-19 disruptions has imparted priority to relaxing of may 22,2020, the intensification of COVID-19 disruptions has imparted priority to relaxing repayment pressures and improving access to working capital by mitigating the burden  of debt servicing, prevent the transmission of financial stress to the real economy, and ensure the continuity of viable businesses and households. Consequently, the detailed instructions in this regard are as follows:

1. Rescheduling of payments- Terms Loans and Working Capital Facilities………………………………

                          (ii)       Easing of Working Capital Financing

4. In respect of working capital facilities sanctioned in the form of CC/OD to borrowers facing stress on account of the economic fallout of the pandemic, lending institutions may, as a one-time measure,

(i) recalculate the ‘drawing power’ by reducing the margins till August 31, 2020. However, in all such cases where such a temporary enhancement in drawing power is considered, the margins shall be restored to the original levels by March 31, 2021;  and/or,

(ii) review the working capital sanctioned limits up to March 31, 2021, based on a reassessment of the working capital cycle.

5. The above measures shall be contingent on the lending institutions satisfying themselves that the same in necessitated on account of the economic fallout from COVID-19. Further, accounts provided relief under these instructions shall be subject to subsequent supervisory review with regard to their justifiability on account of the economic fallout from COVID-19.

6. Lending institutions may, accordingly, put in place a Board approved policy to implement the above measures.

Asset Classification

7. The conversion of accumulated interest into FITL, as permitted in terms of paragraph 3 above, and the changes in the credit terms permitted to the borrowers to specifically tide over economic fallout from COVID-19 in terms of paragraph 4 above, will not be treated as concessions granted due to financial difficulty of the borrower, under Paragraph 2 of the Annex to the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated June 7, 2019 (‘Prudential Framework’), and consequently, will not result in asset classification downgrade.

8. In respect of accounts classified as standard as on February 29, 2020, even if overdue, the moratorium period, wherever granted in respect of term loans, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset classification under the IRAC norms. The asset classification of such accounts shall be determined on the basis of revised due dates and the revised repayment schedules.

9. Similarly, in respect of working capital facilities sanctioned in the form of cash credit/overdraft (“CC/OD”), where the account is classified as standard, including SMA, as on February 29, 2020, the deferment period, wherever granted in terms of paragraph 3 above shall be excluded for the determination of out of order status.

10. all other provisions of circulars dated March 27, 2020 and April 17, 2020 shall remain applicable mutatis mutandis.

15. In light of above discussion specially the above noted directions of the RBI it appears that  the actions of the O.Ps. regarding issuance of letter dt. 15.06.2020 and declaration of the account of the complainant as NPA on 30.06.2020 is completely in violation of the directions of the RBI, which are not sustainable and on this aspect there is deficiency in service by the O.Ps. and they have acted against the norms and directions of their regulator i.e. the RBI. Accordingly above points are being decided in favour of the complainant.

16. In the result, prayer of the complainant is being allowed in the following manner:-

          O.Ps. are being held deficient in service by declaring the C.C. A/c No. 210813100000131 of the complainant as NPA and by issuance of vague recall notice dt. 15.06.2020 to the complainant which have been done in utter violation of the directions of the Reserve Bank of India issued vide above mentioned letter dt. 23.03.2020 by which moratorium was declared till 31 August 2020. Accordingly there shall be no action on the basis of above mentioned notice dt. 15.06.2020 and account of the complainant shall be treated that it was not under the category of NPA till 31.08.2020 as it has been directed by the RBI.

         

Sd/-  

(J.P.N. Pandey)

                                                                                      President

 

Sd/-

(B.P.L Das)

   Sr. Member

                                                                            

                   Sd/-

                                                                               (Baby Kumari)

                                                                                       Member