NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
ORIGINAL PETITION NO. 95 OF 2005
RAMA MILK PRIVATE LTD.
R-346, ADINATH SOCIETY,
PUNE – 411009
...... Complainant
Vs.
1. MAHARASHTRA STATE
FINANCIAL CORPORATION
NEW EXCELSOR BUILDING
(5TH, 7TH, 8TH, 9TH FLOORS)
A.K. NAYAK MARG,
FORT,
BOMBAY-400001
2. THE REGIONAL MANAGER,
MAHARASHTRA STATE
FINANCIAL CORPORATION
OPP. FIRE STATION,
STATION ROAD
AURANGABAD
(MAHARASHTRA)
...........Opp. Parties
BEFORE:
HON’BLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER HON’BLE DR. P.D. SHENOY, MEMBERFor the Complainant : Mr. S. P. Dange, Advocate
For the Opp. Parties : Mr. Santosh Paul &
Mr. Arvind Gupta,
Advocates
Dated the 9th September, 2008
ORDER
DR. P.D. SHENOY, MEMBERIn this case the Complainant, M/s. Rama Milk Private Ltd. (for short “Rama Milk”) wanted to set up a milk processing plant with the financial help from Maharashtra State Finance Corporation (for short “Corporation”). As the Complainant became defaulter the Corporation initiated recovery proceedings against it u/s 29 of the State Financial Corporation Act, 1951 (for short the “Act”).
Aggrieved by the action of the Corporation, Rama Milk knocked the doors of the Hon’ble High Court of Bombay as well as the Hon’ble Supreme Court but without success. The Corporation had also given an offer for one time settlement to M/s. Rama Milk. After issuing a notice to the Corporation on 27.05.04 for payment of huge compensation the complainant filed complaint before us in October, 2005.
The main issue to be decided by us is as to whether there was any deficiency in service on the part of the Corporation and if so what relief the complainant is entitled to?
FACTS OF THE CASE
The Complainant is a proprietary concern and Shri Manik Chand is its sole proprietor who is an educated unemployed and wanted to set up a milk plant. On 20.04.81, Complainant submitted a loan application to the Corporation alongwith project report for the milk plant with a request of loan amount of Rs.20 lakhs. He was granted a loan of Rs.9,10,000/- on 10.5.84 on the security of land, factory building, plant and machinery. This amount was disbursed in installments from 25.09.85 to 28.08.88. His request for additional loan was not granted by the Corporation. It is the say of the Complainant that all of a sudden the Corporation issued notice on 14.12.92 under Section 29 of the Act for recovery of the loan amount with instructions to give possession of the unit. He approached the District Collector against the decision of the Corporation. The Corporation filed an FIR with the Police Station, Kalamb on 6.3.93 alleging that the Complainant had taken back the possession of the project site forcibly from them and henceforth Complainant would be responsible for the plant and machinery and all other articles lying at the site of the unit. Complainant also alleged that about 10 officials of the Corporation alongwith Police Force came to the project site on 22.8.93 and took forcibly the possession of the unit again without taking any inventory and without following the procedure. It is the say of the Complainant that the Opposite Parties had handed over back the possession of the unit to the Complainant and the Bhumi Pujan was organized on 1.10.96 which was attended by the officials of the Opposite Parties also. Complainant was shocked to receive letter from the Corporation on 14.11.03 stating that the Complainant had defaulted in making payment of the dues to the Corporation to the extent of Rs.14,27,765/-. In the letter dated 10.10.03 received on 14.11.03 the Corporation proposed to make one time settlement for an amount of Rs.7,75,463.45/-. According to the Complainant despite the fact that the unit never came into proper operation, an amount of Rs.18.50 lakhs was paid to the Corporation in the following manner:-
i) Rs.3.5 lacs
ii) Rs.5 lacs before the Hon’ble Supreme Court
iii) Rs. 5 lacs by way of Bank Draft
iv) Rs. 5 lacs as full and final settlement in the year 1996 after the function of “Bhumi Pujan” was done on 1.11.96.
According to the Complainant, the Corporation has committed deficiency in service such as sanctioning of inadequate finance, inordinate delay in disbursement of the loan installments, pressure to repay the loan amount despite unit having its gestination period and moratorium period by invoking provisions of Section 29 of the Act, filing four false criminal cases against them, callous and non-co-operative attitude of the Opposite Parties resulting to unit becoming sick and non-issuance of the NOC by the Corporation etc.
On account of the above said alleged deficiencies the Complainant had claimed the followings relief:-
i) direct the opposite parties to issue a “No Dues Certificate” to the complainant.
ii) award an amount of Rs.6,57,00,000 (Rupees six crore Fifty six lacs only) to the complainant against the opposite Parties as detailed in para no. 36 of the complaint with interest @ 12% from the date of loss suffered by the Complainant.
iii) award future interest @ 12% p.a. to the complainant on the claim amount of Rs.6,57,00,000/- till the date of payment of the said claim amount.
iv) award litigation expenses of Rs.50,000/- as cost to the complainants.
v) pass any other or further orders as this Commission may deem fit, just and proper in the facts and circumstances of the present case.
APPLICATION FOR CONDONATION OF DELAY
Complainant has filed an application under Section 24A of the Consumer Protection Act, 1986 for condonation of delay stating that the complaint is within limitation as cause of action arose in favour of the Complainant and against the Opposite Parties on 10.10.03 when the Corporation issued a letter alleging that Complainant had defaulted in making payment of dues to them to the extent of Rs.14,27,765/- and subsequently on 27.05.04 and 17.06.04 when the Complainant had given legal notices to the Opposite Parties. He has submitted that though the Complaint is within time but by way of abundant precaution to meet the situation if this Commission comes to the conclusion that there is a delay in filing complaint, the application has been filed and the delay, if any, is neither intentional nor deliberate for the following reasons :-
a) On 20.4.1981 the complainant made an application to the opposite parties for sanctioning of loan of Rs.20 lakhs, and thereafter kept on pursuing the matter with the opposite parties.
b) The Opposite Parties sanctioned the loan on 10.5.1984 and thereafter took four long years to disburse the loan, the last installment of Rs.59,000/- was disbursed on 23.08.1988.
c) Before the complete disbursement of the loan the opposite parties gave notices dated 25.09.1987, 28.09.1987 and 02.09,1988 to the complainant for recovery of its dues though the unit had not even gone into production.
That from the details given herein above it is evident that the opposite parties have always kept the complainant on his toes every time giving false hopes to the complainant for restarting his unit and at the same time never co-operated with him. The complainant on his part has been diligently making efforts to make his unit functional as his entire savings of life and the sale proceeds of his agricultural land had been pumped into the unit and his livelihood was solely dependent on the said unit. Further, four false criminal cases filed by the opposite parties against the complainant kept the complainant occupied. Besides this the complainant was not having any finances to initiate any litigation against the opposite parties.
REPLY OF THE OPPOSITE PARTIES TO THE COMPLAINT
.......................................................................
15. The view in Mahesh Chandra case appears to have been too widely expressed without taking note of the ground realities and the intended object of the statute. If the guidelines as indicated are to be strictly followed, it would be giving premium to a dishonest borrower. It would not further the interest of any Corporation and consequently of the industrial undertakings intending to avail financial assistance. It would only provide an unwarranted opportunity to the defaulter (in most cases chronic and deliberate) to stall recovery proceedings.
In Karnataka State Industrial Investment & Development Corporation Ltd. Vs. Cavelet India Ltd. and Ors. – (2005) 4 SCC 456, the Apex court has held as under :-
21. The examination of the facts, in the light of the aforenoted legal principles reveals that KSIIDC acted in a bona fide manner. The procedure followed by KSIIDC to dispose of the assets of the borrower to realise the dues cannot be held to be unreasonable or unfair. The sale was conducted by issuing advertisements in the newspapers. Steps were taken to secure the best price. The question before the High Court was only about the validity of sale to Vinpack and the plea of the borrower was that the unit was sold at a ridiculously low price. The learned Single Judge gave reasonable opportunity to the borrower to pay the same amount as payable by Vinpack failing which the unit was directed to be sold to Vinpack after a specified date. The borrower failed to comply with the order of the learned Single Judge or seek extension of time and also did not challenge it in writ appeal within the time specified in the order of learned Single Judge. Under these circumstances, the unit was sold to Vinpack and the possession handed over to it. The Division Bench, after holding that the procedure adopted was not in conformity with the guidelines enumerated in Mahesh Chandra case did not examine the effect of offer given to the borrower and not availed by him resulting in the sale in favour of Vinpack. In this view, the approach of the Division Bench cannot be sustained. Further, the subsequent line of cases distinguishing Mahesh Chandra and the decision in the case of Jagdamba Oil Mills which overruled Mahesh Chandra have already been noticed hereinbefore.
The recent judgments of the Apex Court amply support the case of the Corporation.
The main issue is whether there is any deficiency in service by the Corporation. Despite of the short-comings and negative action by the complainant, the Corporation in all fairness has given an One Time Settlement offer to the Complainant on 10.10.03 asking the complainant to pay Rs.7,75,468/- making the offer valid upto 31.10.03. Instead of accepting this offer the Complainant had issued a legal notice alleging unfair trade practice on the part of the Corporation on 27.10.04. We do not find an iota of deficiency on the part of the Corporation in view of the above detailed analysis of the facts and also the recent judgements of the Supreme Court which have distinguished the judgement delivered in Mahash Chanda’s case (supra) quoted by the Ld. Counsel for the Complainant. Accordingly, this complaint deserves to be dismissed. Hence, dismissed as such. There shall be no orders as to cost.
.............……......................J.
(R.C.JAIN)
PRESIDING MEMBER
.............……......................
(P.D. SHENOY)
MEMBER
YD
For Complete Case Please see http://ncdrc.nic.in/judgements.html
