Back
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
V.B. Gupta, Presiding Member and Vinay Kumar, Member
DELHI FINANCIAL CORPORATION - Appellant
Versus
SAROJ GUPTA AND ORS. - Respondents
First Appeal No. 356 of 2006 against Order dated 21.4.2006 in Complaint Case No. 609 of 1993 of State Commission, Delhi
Decided on : 31-01-2012
Mr. B. Uday Dip Singh and Ms. Faujia Shakil, Advocates, for the Appellant; Mr. Manoranjan, Advocate, for the Respondent
The main legal point established is the liability for deficiency of service under the Consumer Protection Act, 1986, and the court's emphasis on the violation of loan sanction conditions and unjustified cancellation of the loan component.
Headnote:
Deficiency of Service - Loan Sanction and Disbursement - [Consumer Protection Act, 1986, Section 2(1)(g), Section 2(1)(o), Section 14(1)] - The court discussed the deficiency of service by the appellant in not paying the loan directly to the complainant after sanctioning it, intentionally withholding the project report, and cancelling the balance of the loan without justification. The court highlighted the violation of loan sanction conditions, delay in releasing payments, and premature cancellation of the loan component.
Fact of the Case:
The complainant applied for a loan for self-employment, but the DFC delayed the machinery supply, withheld the project report, and cancelled the balance of the loan without justification.
Finding of the Court:
The court found the appellant liable for deficiency of service and confirmed the compensation awarded to the complainant.
Issues: Delay in machinery supply, withholding of project report, cancellation of loan component, violation of loan sanction conditions.
Ratio Decidendi: The court held that the appellant was deficient in service on several counts, including violation of loan sanction conditions and unjustified cancellation of the loan component.
Final Decision: The court dismissed the appeal and confirmed the compensation awarded to the complainant, in addition to awarding a cost to be paid by the appellant to the respondent.
ORDER
Vinay Kumar, Member - The Delhi Financial Corporation (hereinafter referred to as DFC) has filed this appeal against the order of the State Consumer Disputes Redressal Commission of Delhi in CC No. 609/1993. In this order the State Commission has held the appellant liable for deficiency of service to the complainant. The Commission has therefore awarded a compensation of Rs. 2.50 lakh in favour of the complainant.
2. The case of the complainant before the State Commission was that she had applied for a loan of Rs. 8.76 lakh for self-employment. The DFC sanctioned the loan of Rs. 7.5 lakh, including Rs. 2.75 lakh towards margin for working capital. It was alleged that while the complainant wanted to purchase the machine from M/s. Aparna Mechanical Industries, Calcutta the DFC placed orders on M/s. Illumina Lamps Private limited, Calcutta. Due to delay in sanction from the DFC, the machinery supply was delayed by more than seven months. This delayed the trial production by three months resulting in the loss as rent for the factory-building, water electricity and security charges were to be paid during the entire period. Further, the complainant had sought working capital loan from a bank in August 1990. This loan could not be sanctioned till 1992 as the project report required to be sent to the bank was not sent by the DFC. Finally, when the DFC sent the project report, it had already cancelled the balance of the loan required as margin money for working capital. This cancellation and consequent rescheduling of the loan was done without giving an opportunity to the complainant to represent against such action.
3. The main defence of the opposite party/DFC before the State Commission was that the margin for working capital was not released because the complainant had failed to obtain working capital from a bank. It is stated in the written response before the State Commission that "sanction of loan does not mean that the loan has to be released, even if the same is not required by the borrower".
4. Considering the rival contentions, the State Commission came to the following conclusion
"After giving careful consideration to the rival contentions of the parties, we find that OP was deficient in service firstly for not paying the loan directly to the complainant after sanctioning it which could have facilitated the complainant to purchase the machinery from the manufacturer of her choice and on her own terms and conditions, secondly the OP intentionally withheld the project report as a result of which the working capital could not be procured and as a consequence the complainant could not start the production and suffered heavy loss, as she had to maintain a tenanted premises and bear expense of machinery, Labour, electricity charges, etc. So much so the complainant had to dispose of the factory because of delay on the part of the OP in making payment."
5. We have heard the Counsel for the appellant/DFC and the respondent/complainant and also perused the records of the case. The main ground of appeal is that the State Commission has ignored the evidence on record which showed that the respondent herself had chosen to purchase the machines from M/s. Illumina Lamps Pvt. Ltd. Learned Counsel for the appellant also drew our attention to the correspondence which showed that the list of suppliers was not available with the complainant. However, he could not explain why payment was not released through the complainant, as required under the terms of sanction of the loan. According to the learned Counsel, the DFC made direct payment to the machinery supplier, only after the complainant had already paid the advance towards the same. This is no explanation for making payment in violation of the terms of sanction. More so, as DFC had made this payment in October 1991, which was six months after intimation of the payment of advance by the complainant.
6. On the allegation of the complainant that her application was for sanction of loan under t
