State Consumer Disputes Redressal Commission
M/S River Valley Agency vs The General Manager Uco Bank on 29 July, 2011
State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission West Bengal BHABANI BHAVAN (GROUND FLOOR) 31, BELVEDERE ROAD, ALIPORE KOLKATA 700 027 S.C. CASE NO- CC/43/2009 DATE OF FILING : 16.06.2009 DATE OF FINAL ORDER: 29.07.2011 COMPLAINANTS : i. M/s. River Valley Agency. ii. M/s. Lovely Cement, Both the Firm are Represented by Prop. Noor Alam Siddique, G.T. Road, Belrui, P.O. Sitarampur, Dist- Burdwan(W.B). OPPOSITE PARTIES : 1. The General Manager, UCO Bank, Head Office, 10, B.T.M. Sarani, Brabourne Road,Kolkata- 700 001. 2. The Chief Officer, (Authorized Officer), UCO Bank, Zonal Office, Burdwan, P.O. & Dist- Burdwan. 3. The Senior Branch Manager, UCO Bank, Barakar Branch, P.O.- Barakar, Dist- Burdwan. 4. Indrajit Mukherjee, Branch Manager, UCO Bank, Barakar Branch, P.O.- Barakar, Dist- Burdwan. BEFORE HONBLE MEMBER : Smt. Silpi Majumder. HONBLE MEMBER : Sri Shankar Coari. FOR THE COMPLAINANTS : Mr. Indrajit Chatterjee, Mr. Ashim Ghatak, Advocate Mr. Arup Krishna Das, Mr. Asif Ikbal, Advocate. FOR THE OPPOSITE PARTIES : Mr. Shankar Singh & Mr. Sanjay Sukla, Advocate. Silpi Majumder, Member
This complaint has been filed by M/s River Valley Agency and M/s Lovely Cement represented by the proprietor Noor Alam Siddique against the OPs alleging deficiency in service in respect of non-providing of the loan amount as prayed for running his business.
Sri Noor Alam Siddique being the proprietor of the firm got clearance from the Department of Pollution Control and registered the said firm under SSI or manufacturing cement. The Complainant obtained a cash credit loan from the OPs- Bank after hypothecating of stock and book debts and had been performing the business diligently till 31.03.2007. The Complainant applied for renewal-cum-enhancement of the cash credit limit of 08.12.2005 from Rs.24,00,000/- to 38.40 lakhs, which enhanced/sanctioned by the bank authority. Thereafter the Bank authority intimated the proprietor by issuing a letter dated 17.07.2006 that they have sanctioned and accommodation of 38.40 lakhs on some terms and conditions. Accordingly the Complainant accepted the said accommodation after signing the duplicate copy of sanctioned letter. The Complainant obtained the enhanced cash credit facility after executing necessary documents of hypothecation of stocks and book debts and also working capital from the Respondent no-1 in the year 2006. The Complainant continued with the said business of petrol pump profitably without any complaint from the bank authority and made a profit of Rs.7,07,882.30/- for the year 2005-2006, Rs.8,14,063.40/- for the year 2006-2007 and Rs.6,68,035.74/- for the year 2007-2008. The said proprietor of M/s River Valley Agency also applied for loan to set up a cement industry for Rs.94.44 lakhs and the bank authority recommended the proposed loan viz a letter dated 15.05.2007. In the recommendation letter it has been intimated to the superior authority of the said bank that he is a good business man and well known to the society as well as the area he lives. Siddique started trading and distributorship business after his graduation with Kelvinator under the name of Novel Refrigerator and serve the people in good reputation. On the basis of his good will and reputation as well as his past experience as a distributor and developer he started a business of petrol pump (IOC) in the name of River Valley Agency and engaged the said business along with a service centre of medium and heavy vehicles for last 20 years. He is also attached with automobiles vehicles of TATA motors, authorized service centre as well as Escortor India Ltd, three wheelers. Presently he is enjoying credit facility to the tune of Rs.38.40 lakh sanctioned by WBRII Burdwan, dated 13.06.2006 and UCO Bank mortgaged loan for Rs.6,00,000/-, present balance 4.69 lakhs against the security. The bank has also stated that Mr. Siddique has already invested now a sum of Rs.27.50 lakhs for his proposed cement industry as follows-
i.
Construction of shade measuring 100 x 80 feet for Rs.18 lakhs.
ii.
Purchasing of transformer of 200 KVA for Rs.2.50 lakhs.
iii.
3 numbers of generator of 25 horse peach of Rs.3 lakhs.
iv.
Development of land of Rs.2 lakhs.
v.
Office / Laboratory construction of Rs.2 lakhs.
Thereafter the General Manager of OP No-1 vide his letter dated 13.02.2007 furnished the reply in respect of proposal for policy clearance in favour of lovely cement industry. Mr. Noor Alam Siddique being a well experienced person in this line and having experienced in the field of sale and service of Refrigerating items of Kelvenator group was running his business very successfully. It has been mentioned in the petition of complaint that he kept fixed deposit, LICI policy, landed properties towards security amounting Rs.178.05 lakhs before the bank. The allegation of the Complainant that even after recommendation by the bank authority and investment by the Complainant the bank all on a sudden informed Mr. Siddique that the lovely cement industry has not been sanctioned being not a viable project. Due to such illegal and wrongful refusal in the matter of sanction of loan even after taking several securities such as FD, LICI policy, landed property and also invested of huge amount towards construction and infrastructure of the proposed cement factory by the Proprietor. The Bank authority suddenly disallowed the Complainant to operate cash credit account of M/s River Valley Agency and thereafter the bank authority most illegally and wrongfully issued a notice u/s 13 (2) of Sarfaesi Act, 2002 stating that if a sum of Rs.39,79,204.31 is not paid within 60 days the bank will sell out the petrol pump and that property which has been kept as security against the petrol pump and in the said letter the bank has given two schedule mentioning the outstanding dues as well as detailed of the security. According to the Complainant the Bank most illegally and wrongfully disallowed the Complainant to operate cash credit account on and from 01.04.2008 and for such illegal act of the Bank management the petrol pump has stopped operating and the pump has stopped functioning in spite of keeping sufficient security such as FD, LICI policy and other security. Such Act of the OPs-Bank is not only defective but also deficient as well as glaring example of unfair trade practice. Thereafter the Complainant send a reply to the OPs-Bank against the said notice and requested it to withdraw the notice as well as the letter dated 17.11.2008 and to allow the Complainant to operate the cash credit account of M/s River Valley Agencies and to pay the damages against the business loss and damages suffered by the Complainant towards the damages for making infrastructure and keeping to security for the proposed cement factory as detailed in the schedule within 15 days from the date of receipt of the said letter/notice. But unfortunately till filing of this complaint the Bank management has not taken any positive step to allow the Compliant to operate the cash credit account of M/s River Valley Agency and to pay the damages for the act in connection with the cement factory. Due to negligence, defect and deficiency in service on the part of the OPs-Bank the Complainant has suffered huge loss and injury on account of illegal stoppage of operation of the cash credit account and for deprivation, harassment, mental agony and loss of prestige, good will as also cost involved for which the OPs are jointly and severally liable to pay the damages. Filing the complaint before this Commission the Complainant has prayed for direction upon the OPs to pay damages for Rs.1,75,000/- per month along with interest @18 % p.a. on account of loss and damages for illegal stoppage of the cash credit account of the petrol pump/River Valley Agency, to pay a sum of Rs.27,0500/- towards loss and damage on account of investment along with interest @18% p.a., to pay Rs.10,000/- per month equivalent to the fixed deposit interest towards loss on account of withholding the security idle with the bank for the credit facility of M/s River Valley Agency, to pay a sum of Rs.10,000/- towards loss of prestige and reputation, to pay a sum of Rs.5,00,000/- towards mental agony and paid and Rs.10,000/- on account of loss of good will. It has been stated in the petition of complaint that the cause of action of this complaint arose on 01.04.2008 since the Bank Authority stopped operation of cash credit account and also on 14.07.2007 when the Bank Authority in spite of recommending the project of cement factory, did not sanction the loan on the ground of non viability of the proposal.
The petition of complaint has been contested by the OPs by filing the written version wherein it is stated that after availing of the credit facilities the Complainant did not adhere with the terms and conditions of the sanctioned and committed various irregularities in operation and repayment of loan availed of by him under aforesaid business and committed default in making payment of the dues in spite of repeated requests and reminder of the OPs-Bank. It has been stated in the written version by the OPs that the Complainant has availed of cash credit facilities of Rs.38.40 lakhs from the OPs on and from 18.07.2006 against primary security of hypothecation of stock and book debts and collateral securities such as FDR value of Rs.2,00,000/-, LICI policies of Rs.5,00,000/-, equitable mortgage of single storied commercial building, measuring 1.32 acre etc. consequently the said cash credit amount has been classified as NPA on 30.09.2007 by the OP Bank in terms of RBI directives and banking norms of the OPs. Since the account of the borrower has been classified as NPA the OPs have no alternative but to exercise its right to enforce the security interest under 13(2) of the Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 created by the Complainant in favour of the OPs as such the OPs in exercise of their legal right as provided under the issued demand notice on 17.11.2008 and demanded its NPA dues of Rs.39,79,204.31/- together with interest thereon from the Complainant. The Complainant has received the aforesaid demand notice but did not comply the same within the statutory period of 60 days but illegally and wrongfully filed the instant complaint which he cannot do because the Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 itself provides remedy to the Complainant if the measures taken by the Bank is wrong, the Complainant may file an application before Debts Recovery Tribunal, Kolkata having jurisdiction in the case. In view of such remedy available as per the said Act this Commission has no jurisdiction to entertain the complaint filed by the Complainant and as such the OPs have prayed for dismissal of the complaint with cost. The OPs have further stated that the law of the land has also provided statutory right for filling an application under the Sarfaesi Act, 2002 only after the measures taken by the OPs under the said Act, but in this case no measure has been taken till filing of this case by the OPs-Bank under the said section.So, the Complainant has no right to file any complaint unless the required measures under the said section may be taken by the OPs over the secured assets being the secured property equitably mortgaged with the OPs for payment of dues lying in the account of the Complainant. According to the OPs as the complaint has no merit is liable to be dismissed with cost.
Both parties filed their respective evidences, questionnaires, replies and brief notes of arguments in favour of their respective contentions and we have perused all the documents as annexed by the parties in the instant complaint and heard the submission so put forward by the Ld. Counsel for the parties during final hearing.
It is seen by us that admittedly the Complainant has availed of cash credit facilities of Rs.38.40 lakhs from the OPs on 18.07.2006 against the primary hypothecation of stocks and book debts and other colateral securities. He took the said facilities for business of petrol pump. Thereafter the Complainant applied for a loan to the OPs to set up a cement industry to the tune of Rs.94.44 lakhs. After receipt his application the bank has recommended the said prayer and application to the higher authority for sanction. The main allegation of the Complainant is that in spite of such recommendation ultimately the bank has not paid the said amount to the tune of 94.44 lakhs for establishment of a cement industry. In the petition of complaint the Complainant has stated that the OPs have assured him that loan will be sanctioned as per prayer and being assured the Complainant has already invested a sum of Rs.27.50 lakhs in the proposed cement industry. The Complainant has stated further that all on a sudden issuing a letter dated 14.07.2007 the OPs-Bank informed the Complainant that the Lovely Cement industry has not been sanctioned as it is not a viable project. The next allegation of the Complainant is that in spite of investment to the proposed cement project to the tune of Rs.27.50 lakhs as per verbal assurance of the bank, as the bank ultimately did not sanction the loan the Complainant has suffered loss and damages severely and being aggrieved the Complainant has approached before this Commission for redressal of his grievance. The case of the OPs are that though the Complainant has availed of cash credit facilities for his petrol pump business, but he did not adhere with the terms and conditions of the agreement signed by and between the parties and failed to repay the loan to the Bank in spite of repeated requests and reminders. It is submitted by the OPs that consequently thereof the said cash credit account has been classified as NPA on 30.09.2007 by the OP bank in terms of directives of RBI and Banking norms of the OPs. In view of such directives there was no alternative before the OPs but to exercise its right to enforce the security interest u/s 13(2) of the Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002. It has been further submitted that under the abovementioned Act the OPs demanded a sum of Rs.39,79,204.31/- together with interest thereon from the Complainant towards the outstanding repayment of the loan. The submission of the OPs are that in spite of receipt of the aforesaid demand notice the Complainant did not comply with the same within the statutory period of 60 days and illegally and wrongfully filed the instant complaint bye-passing the self contained Act in the same filed. According to the OPs the said Act provides remedy to the Complainant if the measures as taken by the OPs-Bank for collection of the outstanding EMI from the Complainant is wrong , the Complainant is at liberty to file an application before the DRT Kolkata having jurisdiction in this case.
We have carefully perused several documents filed by the Complainant wherefrom we have noticed that nowhere the Bank has committed to provide loan to the Complainant as per his prayer for establishment of Lovely Cement Industry. On the contrary after receipt of the loan application from the Complainant showing good gesture the OPs have recommended the application along with their formal letter to the higher authority for sanction and their perusal but the higher authority of the OPs after due consideration has rejected the application for loan stating that the Cement Industry is not a viable project one. In this respect we are of the opinion that sanctioning of any loan amount is the sole discretion of the Bank and we cannot direct the Bank to sanction loan for any amount to the Applicant. If the highest authority of the Bank or any Financial Institutions may think that the loan application cannot be allowed due to some reasons we cannot create any pressure and make any direction upon the Bank or Financial Institutions to disburse the loan amount in favour of the applicant.
In respect of recovery of loan as stated by the OPs in respect of the River Valley Agencies we cannot direct the Complainant to repay the loan amount forthwith. But we may advise the Complainant to repay the loan amount within due period in respect of outstanding amount relating to the River Valley Agencies as per terms and conditions of the agreement which was signed by and between the parties. Admittedly for recovery of the loan amount the OPs issued demand notice directing him to pay the outstanding amount along with interest within 60 days, but it is also an admitted fact that the Complainant without making the payment and moreover to avoid make payment has filed the instant complaint before this Commission. We are of the considered view that if the Complainant has aggrieved and dissatisfied with the demand notice as issued by the OPs for repayment of the loan amount, the Complainant is at liberty to approach before the appropriate Forum/Court/Tribunal for his redressal. We can not say that the said demand notice is illegal and the Complainant is not liable to pay the outstanding amount towards loan to the OPs. Whether there is any outstanding or not in respect of the cash credit facilities as availed of by the Complainant, such question cannot be adjudicated through this Commission.
Going by the foregoing discussion hence it is ordered that the Complaint be dismissed on contest without any cost. The Complainant is at liberty to approach before the appropriate Court/Tribunal for redressal of his grievance.
Silpi Majumder Shankar Coari (Member) (Member)