IMPORTANT POINT
Non-release of margin money within time-frame constitutes deficiency in service.

Arun Kumar Goel (Retd.), President —Appellants have filed this appeal against the order passed by District Forum, Solon in Consumer Complaint No.110/2004, on 27.2.2009. By means of impugned order, complaint was dismissed.

2. Admitted facts giving rise to this appeal are, that appellant No.1 is a Society and appellant No.2 is its President. With a view to establish an Industrial Unit, project report was submitted by the appellants to respondent No.2. After examining their case, it was sponsored by respondent No.2 to respondent No.1 Bank, at its Solan branch. Copy of sponsoring letter is Annexure M at page 127 of the complaint file. It was not disputed at the time of hearing that respondent No.1, to be hereinafter referred to as the, “Bank”, after sponsor of case to it by respondent No.2, to be hereinafter referred to as the, “Board” sanctioned a sum of Rs.21,38,000. In terms of sponsorship letter Annexure M, 10% money was to be promoter’s share, and the balance amount was to be financed by the bank. Margin money upto maximum limit of Rs.10,00,000 was to be claimed by the financier-bank from respondent No.1.

3. It was again not disputed on behalf of the respondents that margin money had to be claimed within 90 disbursement of first loan installment. From the documents on record, i.e. copies of cheques Annexures K1, J, J1, J2 and K, it is made out that first installment was released in the sum of Rs.2,00,000 by the bank to the machinery supplier of the appellants on 31.8.2000. Thereafter on 10. 10.2000 Rs.3,30,000 vide Annexure J1, on the same date another sum of Rs.9,00,000 vide Annexure J2, was released to L & T case Equipment Limited. Again on 2.11.2000 another sum of Rs.7,69,000 was also released by the bank vide Annexure K1 to Ashok Leyland Limited. From the record it is clearly made out that the bank did not forward the case of the appellants for release of margin money which according to stand of respondent No.1 was Rs.3,99,500.

4. In the light of above facts, complaint was filed with a prayer to direct the respondents to adjust Rs.3,99,500 with interest besides damages, cost of litigation etc. Before instituting the complaint, legal notice Annexure Q was got issued by the appellants. This was duly replied to by the respondent-bank.

5. When put to notice respondent No.1 raised preliminary objections that the appellants have suppressed true and material facts, they were estopped by their act, conduct, deeds, acquiescence from filing the complaint. Appellants intentionally gave wrong information in the application. According to it, application was submitted within time to Nodal Branch for the release of the margin money. During inspection by respondent No.2 on various occasions, it was found that the appellants were violating the conditions and at the same time they had not complied with the requirements of respondent No.2. Besides this they had no cause of action. According to respondent No.1, claim was lodged well in time for the grant of subsidy. In addition to sanctioning the loan as aforesaid, working capital limit in the sum of Rs.1,00,000 was also sanctioned by this respondent per Mr. Sharma.

6. So far as respondent No.2 is concerned, it pleaded that the complaint was mala fide, material facts have been suppressed by the appellants, and they were estopped from maintaining the complaint as they had no cause of action.. Complaint was not maintainable, this respondent should have been sued through its Chief Executive Officer. It was also not maintainable because the appellants had not complied with the terms and conditions of this respondent Khadi and Village Industries Board. Case of the appellants having been sponsored to the bank is admitted. At the same time, it is pleaded that the margin money was to be claimed by respondent No.1 within 90 days from release of first installment. Whereas in the present case bank had not furnished any information about either the loan sanction letter or release of installments to this