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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J.M. Malik, Presiding Member and Dr. S.M. Kantikar, Member
ALLIANCE INORGANICS LTD. - Appellant
Versus
PRADESHIYA INDUSTRIAL AND INVESTMENT CORPORATION OF U.P. LTD. AND ANOTHER - Respondents
Original Petition No. 168 of 2001
Decided on : 06-02-2014
Ms. Madhurima Tatia, Advocate, for the Appellant; Mr. P.C. Sen, Advocate and Mr. Vinay K. Sharma with Mr. Mukul Kumar, Advocates, for the Respondent
The discretion of the State Financial Corporation in approving rehabilitation packages and the definition of a consumer under the Consumer Protection Act.
Headnote:
Default - Rehabilitation Package - State Financial Corporation Act, Section 29 - The court discussed the complainant's default in loan repayment, the discretion of the State Financial Corporation in approving rehabilitation packages, and the definition of a consumer under the Consumer Protection Act. The court found the complainant to be a defaulter, lacking clean hands, and not falling under the definition of a consumer. The complaint was dismissed with a direction for the complainant to pay costs to the opposite parties.
Fact of the Case:
The complainant company sought compensation for loss and injury due to negligence and deficiency in service by the opposite parties. The opposite parties challenged the jurisdiction of the Commission and defended their actions, claiming the complainant was a defaulter and did not deserve leniency.
Finding of the Court:
The court found the complainant to be a defaulter, lacking clean hands, and not falling under the definition of a consumer. The complainant's attempt to seek rehabilitation was deemed frivolous and vexatious, resulting in the dismissal of the complaint with a direction for the complainant to pay costs to the opposite parties.
Issues: Default in loan repayment, approval of rehabilitation package, jurisdiction of the Commission, and the definition of a consumer under the Consumer Protection Act.
Ratio Decidendi: The complainant's default in loan repayment, lack of clean hands, and failure to meet the definition of a consumer led to the dismissal of the complaint.
Final Decision: The complaint was dismissed with a direction for the complainant to pay costs to the opposite parties.
ORDER
Mr. Justice J.M. Malik, Presiding Member -How much help could be extended to a company, which has waddled out of its commitments and declared as a defaulter What is the effect of keeping the material facts, under a hat and suppress those from a Court of law Is it incumbent upon the opposite parties to approve the rehabilitation package Is the complainant, a consumer . These are the few knotty problems which are to be adjudicated by this Commission.
2. M/s. Alliance Inorganics Ltd., the complainant, submitted a Scheme to manufacture Sodium Dichromate and allied products to Pradeshiya Industrial and Investment Corporation, OP1, and U.P. State Financial Corporation, OP2 to have their financial assistance. An Agreement was executed between all the three parties. OP1 was to be the leading financial institution and it agreed to advance Rs. 90.00 lakh and OP2 agreed to advance Rs. 32.10 lakh as term loan. The complainant Company was to arrange Rs. 35.90 lakh as Equity Share Capital and Rs. 7.00 lakh as Unsecured loan, totalling to Rs. 42.90 lakh. Both OP1 & 2 sanctioned the above said loan vide letters dated 7.3.1989 and 20.4.1989, respectively, which was proved on record as Annexure P-1 and P-2, respectively. The complainant also raised an amount of Rs. 40.00 lakh and invested more than 75% of the same towards implementation of the project, in accordance with the package approved by the OPs, before 31.7.1989. OP1 agreed to sanction a bridge loan of Rs. 45.00 lakh vide sanction letter dated 20.8.1989.
3. OP1 disbursed a loan of Rs. 35 lakh towards bridge loan on 9.11.1989. They also disbursed Rs. 10.00 lakh towards bridge loan, on 21.5.1990. A common Deed of Hypothecation with OPs 1 and 2, jointly, was executed on 26.6.1990, by deposit of title deeds. The bridge loan was converted into regular term loan, w.e.f. 5.7.1990. Third installment of Rs. 21.50 lakh, i.e., 15 lakh, on behalf of OP2 and Rs. 6.50 lakh, on behalf of OP1, on 24.7.1990, was released.
4. Due to non-availability of central investment subsidy, OP1 refused means of finance and under the new Scheme, OP1 agreed to sanction additional term loan of Rs. 12.00 lakh and the burden of balance of gap of central investment worth Rs. 13.00 lakh was placed on the complainant company. OP1 disbursed 4th loan term for Rs. 28.50 lakh on 28.11.1990, meaning thereby that till November, 1990, a sum of Rs. 80.00 lakh was disbursed by OP1 against its term loan of Rs. 102 lakh. Under the revised Scheme, a sum of Rs. 15.00 lakh was disbursed by OP1 against its term loan of Rs. 32.10 lakh.
5. Thereafter, the complainant asked OP1 to disburse the remaining amount of Rs. 39.10 lakh and requested OP1 vide letter dated 20.10.1991 for the rehabilitation of the project vide Annexure A-3. The said package was approved vide joint meeting dated 24.5.1993, Annexure P-4. After a delay of 1 months, the OP1 issued sanction letter dated 6.7.1993 approving the package with revised cut-off date of the validity of the rehabilitation package. The said letter was placed on record as Annexure P-5.
6. OP 2 did not really sanction the package immediately, but only after repeated requests and reminders, it issued sanction letter dated 15.12.1993 with another cut off date i.e., 21.3.1994, without any coordination/consultation with OP1. It is alleged that by the time OP2 approved the rehabilitation package, the revised cut off date, i.e., 1.10.1993 had already expired. Thereafter, requests were made to OP1 to extend the cut-off date upto 31.3.1993, but it did not pay any heed. Copy of the letter dated 15.12.1993, has been placed on record as Annexure P-6.
7. Complainant, vide its letter dated 3.3.1994, informed OP1 that it had raised Rs. 57.65 lakh in share capital and invested the same on the project. It also requested OP1 to fix the date for inspection of the unit, before 16.3.1993, so that disbursement by OP2 may be released. However, only OP1 sent a team of experts for inspection only on 4.4.1994, after the expiry
