State Consumer Disputes Redressal Commission
The State Director, Khadi And Village ... vs Gajula Venkatarathnam on 3 October, 2024
1
BEFORE THE TELANGANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION : HYDERABAD.
F.A.No.711 OF 2022
AGAINST ORDERS IN C.C.59/2020
DISTRICT CONSUM ER COMM ISSION, MAHABUBNAGAR
Between:
The State Director, Khadi and Village Industries Commission,
Gandhi Bhavan, M.J. Road, Nampally,
Hyderabad -500 001, presently at "A" Block,
NIMSME CAMPUS, Yousufguda, Hyderabad -500 045,
State of Telangana.
...........Appellant/ Opposite Party No.1
And:
1.Mr.Gajula Venkatrathanm, S/o Gajula Ramulu, Age : 46 years, R/o No.6-49, Amangal Mandal, Ranga Reddy District 509 321.
........Respondent No.1/Complainant
2. The Branch Manager, Andhra Bank, H.No.13-120, Main Road, Amangal -509321, Mahabubnagar District.
........Respondent No.2/Opposite Party No.2 Counsel for the Appellant/Opposite Party No.1 : M/s A.Sai Chakravarthi Counsel for the Respondent No.1/Complainant : Party-in-person Counsel for the Respondent No.2/Opposite Party No.2 :
M/s R.V.Subba Rao QUORUM :
HON'BLE SMT. MEENA RAMANATHAN, I/c PRESIDENT & HON'BLE SRI. V.V.SESHUBABU, MEMBER - (JUDICIAL) THURSDAY, THE 3rd DAY OF OCTOBER TWO THOUSAND TWENTY FOUR ********** Order : (PER HON'BLE SRI. V.V.SESHUBABU, MEMBER - JUDICIAL)
1. The appeal is filed u/s 41 of Consumer Protection Act, 2019, by the Opposite Party No.1, aggrieved by the order of District Consumer Commission, Mahabubnagar, dated 19.08.2022 in CC 59/2020, where under the opposite party No.1 was directed to deposit the subsidy amount of Rs.3,46,500/- in the account of the opposite party No.2/Bank and the opposite party No.2 is directed to deposit the said amount as TDR in the name of the complainant 2 or adjust the same in the loan account of the complainant and further directed the opposite parties with joint and several liability to pay Rs.25,000/- towards compensation for mental agony and Rs.5,000/- towards costs of the proceedings to the complainant within one month from the date of this order.
2. The brief averments of the complaint are that the complainant has applied for the term loan of Rs.9,40,000/- under Prime Ministers Employment Generation Programme (PMEGP) and the opposite party No.1 called for an interview on 04.10.2015 and informed to submit required documents for setting up of the project; that the opposite party No.1 recommended the opposite party No.2 bank to sanction loan to the complainant under PMEGP scheme; that the opposite party No.2 sanctioned a term loan under PMEGP scheme for Rs.9,40,000/- to purchase Gongzhenng GZT 3024 with 2-Heads Spectra Polaris 512/35 pl Solvent Printer along with 200 its.Ink and UPS 5 kva with primary security of Hypothecation of equipments and machinery to purchase with the loan and margin 5% on equipments i.e. Rs.50,000/- and tenure is 84 monthly installments and interest is one year MCLR=Spread 1.80=9.45T% + 1.80=11.25% presently middle ended subsidy from kvic Rs.3,46,500/- to be kept in the name of the beneficiary as deposit with the lock-in-period of three years at the branch and EMI amount is Rs.16,500/- and sanction date is 30.11.2016 with collateral security 90.60 sq. yards in Sy.No.1440 (old) 1440/A (new) situated at Amangal Village G.P. & Mandal in 90.60 sq. yards; that the opposite party No.1 has not deposited the subsidy amount but, the opposite party No.2 kept on deducting the EMI amount of Rs.16,500/- till date. The same was informed to the opposite party No.1, but they were dodging the matter; that the complainant has contributed his hard earned amount with the opposite parties and waited for a reasonable period, but there was no response; hence, the complaint.
3. The brief averments of the written version of Opposite Party No.1 are that the complainant has suppressed the facts and 3 lodged a complaint and the same is not maintainable and is liable to be dismissed in limini; that there is no consumer and service provider relationship between the complainant and the opposite party No.1; that PMEGP approved by the Govt. of India is a credit linked subsidy program for generation of employment opportunity through establishment of micro enterprises in rural as well as urban areas. The scheme is administered by the Ministry of MSME, Govt. of India; that the Government subsidy will not directly be paid to the beneficiaries by opposite party No.1 and it will be rooted through Nodal Banks for distribution to the beneficiaries in their loan accounts by the respective financing banks; that it is for the financing bank to claim the subsidy from the Nodal Bank; that on the release of 1st installment of the loan, the financing Bank Manager has to claim margin money in the prescribed format signed by the beneficiary and the Manager of the Bank by enclosing supporting documents with the Nodal Branch under intimation to the opposite party No.1; that the Corporation Bank is the Nodal Bank for this scheme; that the amount given by the Central Government will be deposited by the opposite party No.1 in the Nodal banks recognized by them; that under the PMEGP scheme introduced from 01.07.2016 the applications shall be made online and processing will be done online; that the financing banks were informed to clear the pending claims of margin money and for offline cases Centralized Nodal Bank i.e. Corporation Bank, Mumbai, was appointed and all the offline claims shall be made by fixing the cutoff date as 27.08.2019 and the same was informed to all the SLBC, Controllers of Banks from time to time, but in the case on hand neither the complainant nor the opposite party No.2 made any claim for the subsidy. There is no deficiency of service on the part of opposite party No.1, since being a Government organization, it has neither received any amount from the complainant towards any service charges, as such the complaint is liable for dismissal as there is consumer dispute at all.
4. The brief averments of the counter of opposite party No.2 are that as it received the application from the opposite party No.1, 4 processed the application and sanctioned the loan of Rs.9.9 lakhs with a margin amount payable by the complainant at 5% i.e. Rs.49,500/- and Rs.3,46,000/- as the subsidy out of the loan amount of Rs.9,40,500/-; that the opposite party No.2 had taken collateral security on 30.11.2016 and fixed the EMI at Rs.16,500/- payable in 84 months; that the complainant is irregular in the payment of EMIs and not followed the terms and conditions of the sanctioned letter, as such the loan account became "NPA"; that any loan account of beneficiary under PMEGP, if becomes NPA, the customer is not entitled for subsidy; that the payment of subsidy is the sole responsibility of opposite party No.1 for which opposite party No.2 cannot be made responsible; that there is no negligence or deficiency of service on the part of opposite party No.2; that the complaint is vexatious in nature. With this requested to dismiss the complaint with costs.
5. Before the Commission below, complainant filed evidence affidavit as PW1 and marked Ex: A1 to A6. Evidence affidavit of Mr.Chanda Saidulu, Asst. Director of opposite party No.1 was filed and got marked Ex.B1. Mr.M.Venkateshwarlu, Manager of opposite party No.2 filed evidence affidavit. Written arguments filed for opposite party No.2.
6. The Commission below, settled the following points for discussion viz..:
Whether the complainant is a "Consumer" or not? Whether there is any deficiency in service and unfair trade practice on the part of Opposite Parties as alleged? Whether complainant is entitled for the reliefs as prayed by him?
To what relief?
7. Having heard both sides, the Commission below basing on the material available on record passed the order as stated supra. Aggrieved by the same, the present appeal is filed by the opposite party No.1 with the following grounds:
The order of the Commission below is contrary to law, weight of evidence and probabilities of the case.5
The Commission below failed to observe that the evidence affidavit filed by opposite party No.1 and not considered the same.
The Commission below failed to observe that the complaint is barred by time and no petition to condone the delay is filed.
The Commission below failed to discuss the document filed by the opposite party No.1 and also failed to observe that opposite party No.1 cannot be considered as a "service provider" in the absence of receipt of any consideration.
With these grounds and others that will be urged at the time of arguments requested to set aside the order of the Commission below and to dismiss the complaint.
8. Now the points for determination in the appeal are :
(1) W hether the complaint is barred by time? (2) W hether there is any deficiency of service on the part of opposite party No.1? In case, it comes within the purview of "service provider"?
(3) W hether the impugned order is sustainable under law? (4) Relief?
9. Heard counsel for the appellant and arguments of the respondents are treated as heard. The appellant filed written arguments along with case law and filed postal receipts as a proof of service on the Respondent No.1. For the sake of the convenience the parties will be addressed as they arrayed in the impugned order.
10. Point No.1 : The complaint before the Commission below was filed on 29.09.2020. As per Ex.A3, the loan was sanctioned on 30.11.2016. However, no date is mentioned to know the date of disbursement. PW1 filed statement of account, under Ex.A4 which shows the transactions went on in the account of PW1 from 13.06.2019 to 27.08.2020. So, it is not helpful to know the disbursement date of the loan. In the written version Opposite party No.2 mentioned that the sanctioned term loan was 6 disbursed. In paragraph 4 of the complaint, it is mentioned that the opposite party No.2 was deducting EMIs @ Rs.16,500/- till date. When the loan is sanctioned on 30.11.2016 in all likelihood, the loan amount might have disbursed either on the same day or within few days from thereon. So, the complaint should have been filed atleast prior to 29.11.2018 to save the limitation. The appellant counsel relied upon the citation reported in 2015 SCC online NCDRC 2237 -M /s Ram Bhatta Co., through its proprietor, Rajbir, S/o Jai Lal, R/o Village Rampura.....Petitioner vs. Asst. Director Khadi and Village Industries Commission and another village industries Commission, Ambala, Haryana and another.......Respondents.
11. The above cited case was also filed for non-
disbursement of subsidy amount by the Khadi and Village Industries into the account of the complainant therein. At the time of arguments, the complainant counsel therein, contended that as the time period of two years was fixed to encash the subsidy by the complainant which was in the form of a TDR, the limitation starts from the date of expiry of TDR. However, the Hon'ble NCDRC not accepted the said arguments and observed that when the complaint was filed for non-payment of subsidy, the limitation starts from the date the 1st installment was disbursed by the financing bank as per the terms and conditions of the sanction. It is further observed by the Hon'ble NCDRC that the complainant had not even filed any application u/s 24(2) of the C.P.Act, to condone the delay, thereby, found the complaint as barred by time. In view of the above observations of the Hon'ble NCDRC, we are of the view that the present complaint is also barred by time, since it is not filed within two years from the date of disbursal of the 1 st installment of the loan. The Hon'ble NCDRC not discussed anything to the effect whether grant of subsidy can be said to be a service to be rendered to the complainant?
12. POINTS 2 to 4: PMEGP scheme was introduced by Central Government to help the youth in generating employment and to stand on their own legs. As per the said scheme, Khadi and 7 Village Industries Commission, was authorized to look after the scheme for its better implementation. The youth shall submit their applications to the opposite party No.1 and after processing the same as per the guidelines and after selection of the candidate who comes within the four corners of eligible criteria, his name will be recommended to a Bank for sanction of the loan for the project/unit aspired by the applicant. The loan consists of 03 components. Out of the eligible amount, the applicant who is in the reserved category is supposed to pay 5% of the loan amount as margin money from his pocket. The Bank will give major part of the loan and the government will contribute subsidy for the loan amount and it shall be kept in TDR for three years and thereafter, depending upon the status of the business, either it will be paid to the applicant or will be adjusted towards the loan installments by the financing bank.
13. After going through the modalities of the above scheme, one can understand that crucial role was assigned to the opposite party No.1 in processing the applications and selection of the candidate and then to recommend his name to a particular bank for sanction of loan as per the guidelines. The deposit of subsidy amount is also will take place at the instance of opposite party No.1 through a Nodal Bank to the respective financing banks of the applicants. It means without the interference of the opposite party No.1 or selection of a candidate by it, no applicant is entitled for the loan under the PMEGP scheme. In nutshell, without the assurance of payment of subsidy by opposite party No.1 through the Nodal Bank, applicant is not entitled for the loan under the scheme. It is the contention of opposite party No.1 that it is no way connected to the disbursement of loan and as the subsidy amounts will be disbursed by the Nodal Banks as selected by it either directly to the financing banks or on the request of financing banks, it cannot be considered as a service provider in the absence of receipt of any consideration.
814. We are of the view that the above argument of opposite party No.1 cannot be accepted for the reason that it is the ring master for the entire scheme. In the written version, opposite party No.1 pleaded that the Manager of the financing bank and the applicant shall claim the subsidy amount from the Nodal Bank under intimation to the opposite party No.1. It shows the crucial role played by the opposite party No.1 and it kept silent what steps it will take after receiving intimation form the applicant or the financing bank or by both. We are of the firm view that without the nod of the opposite party No.1 even Nodal Bank will not release the subsidy amount to the financing bank for distribution of the same to its respective customers/applicants. Promising to pay subsidy in case of sanction of loan to the financing bank, amounts to consideration within its definition under C.P.Act. It is nothing but a service, for which it need not receive any cash consideration from the applicant, since the scheme is introduced by the Central Government to the benefit of youth/public at large. The income generated by the public would lead to increase of GDP of the country. All the officers and employees working in the opposite party No.1 receiving the salaries from the government for their services can be considered as "service providers".
15. Ex.A1 is the letter issued by opposite party No.1 in favour of the complainant with an instruction to appear for interview before District Industries Centre, Mettuguda with required documents. Ex.A2 letter dated 20.06.2006 shows the opposite party No.2 gave consent to sanction the loan and addressed the same to the opposite party No.1 Branch at Mahabubnagar, that the loan is sanctioned subject to release of subsidy. Therefore, whether opposite party No.1 paid the amount directly or through the Nodal Bank, pales into insignificance, in view of the undertaken given by it to pay the subsidy and so, one can treat it as a "service provider". The opposite party No.1 is estopped under the principle of "estoppel by deed to plead contra".
916. Ex.A3 is the letter of sanction issued by opposite party No.2, to the complainant. Ex.B1 are the details of the PMEGP scheme. Perusal of the same goes to show that at several places, it deprecated the practice of financing banks obtaining collateral securities from the applicants/ customers. Even the Reserve Bank of India (RBI) instructed the banks not to insist for collateral securities. Despite all these instructions, the opposite party No.2 bank ventured and even obtained collateral security from PW1 which is against the scheme. Therefore, we are of the view that obtaining the collateral security from PW1 is an unfair trade practice and it shall be deprecated.
17. It is the argument of opposite party No.2 that as PW1 was irregular in the payment of EMIs, his loan account is treated as NPA as per the guidelines of RBI and any customer whose account became NPA is not eligible for subsidy under the PMEGP scheme. For the reasons better known to opposite party No.2, it had not filed any scrap of paper to show that the account of PW1 became "NPA". So, we are not inclined to accept the version of opposite party No.2 in this regard.
18. The argument of opposite party No.1 that the government itself deposit amounts into the Nodal Banks and they in turn send the amounts to the respective financing banks, as such it is not liable for disbursal of amounts, cannot be appreciated. The amounts will be deposited by the government basing on the list of applicants selected and approved by the opposite party No.1. Therefore, there is no question of government disbursing excess amount or lesser amount into the nodal banks when compared with the amounts sanctioned towards subsidy to the respective applicants. Though, these points are answered by us against the appellant, still the appeal is to be allowed for the reason that the complaint is barred by time. The plea of limitation can be taken at any stage of the proceedings. Despite not making such plea in the written version by the opposite party No.1, the plea was taken in the grounds of appeal. Therefore, we have considered the same. The RespondentNo.1/Complainant not 10 preferred any appeal for not making the opposite party No.2 liable to pay the amounts as claimed in the complaint. For the said reason, we are not passing any order against the Respondent No.2/ opposite party No.2 fixing any liability on the same; however, law of limitation equally applies to opposite party No.2.
19. In the result, the appeal is allowed without costs, by setting aside the impugned order dated 19.08.2022 in CC 59/2020 of the District Consumer Commission, Mahabubnagar, on the ground of the complaint being barred by time.
The appellant/Opposite party No.1 is at liberty to withdraw the deposited amount of Rs.1,88,250/- made by it while preferring the appeal, after the lapse of revision time.
Typed to my dictation by Stenographer on the System; corrected by me and pronounced by us in the Open Court on this the 03rd day of October' 2024.
Sd/- Sd/-
I/c PRESIDENT MEMBER-JUDICIAL
Dated : 03.10.2024
*AD