IMPORTANT POINT
Bank extending financial facility for commercial venture & business to business transaction with profit generation as dominant purpose – Consumer Forum is not available to Complainant.

ORDER

A.P. Sahi, President.—This complaint has been framed alleging deficiency on the part of the Respondent Bank that has reduced the Credit Limit extended to the Complainant from Rs.2,30,00,000/- to Rs.1,50,00,000/- way back in the year 2014. The contention is that the Complainant could not carry out effective marketing of his Merchandise resulting in huge losses. On account of the acts and omissions of the Bank even thereafter as explained below, the trading of the Complainant was effected on account of Unfair Trade Practices adopted by the Bank. It is stated that there was no default on the part of the Complainant in complying with its obligations of timely payment of interest and other charges of the Bank of the loan account till 2020. Towards the end of February, 2020, the Complainant received an urgent Order for supply of 20,000 table mats and in order to cope up with immediate financial requirements the Complainant requested for a temporary overdraft of Rs. 30,00,000/- against which the Bank sanctioned only a sum of Rs. 17,00,000/- as a temporary overdraft facility to be repaid within 30 days on an interest @ 10%. The Complainant after procurement of the material was in the process of getting the product arranged when suddenly came the nation-wide lockdown from 24.03.2020 due to COVID-19 as such business operations came to a standstill. The Complainant alleges that the Finance Minister declared economic package for Micro, Small and Medium Enterprises (MSME) and also announced an Emergency Credit Line Guarantee Scheme (ECLGS) directing the Banks to provide additional working capital to the extent of 20% of their outstanding credit. This credit facility extended by the Banks was guaranteed by the Government of India.

2. The Complainant alleges that an amount of Rs. 34,00,000/- was sanctioned a Working Capital Term Loan (WCTL) under the Emergency Credit Line Guarantee Scheme (ECLGS) of the Government which was disbursed by the Bank to the account of the Complainant on 14.7.2020. But the Bank unjustifiably deducted a sum of Rs. 17,61,053/- from the account of the Complainant towards past arrears. The contention is that under the ECLGS there is a prohibition for adjustment of previous debts or doubtful recovery without obtaining prior consent from the Trust. This was yet another instance of the deficiencies alleged against the Bank.

3. The Complainant alleges that a devastating fire in the business and factory premises of the Complainant occurred which was intimated to the Opposite Party Bank on 7.12.2020 about destruction of the entire stock causing damage to the building, machine, fitting and fixtures etc.

4. The Complainant did not agree to any reduction of Credit Limit by Rs. 10,00,000/- per month as suggested by the Opposite Party. A request was made to convert the loan account i.e. CC limit of the Complainant into Loan Against Property (LAP) instead of loan against stocks as the property papers of the residential flat of the Complainant was already with the Opposite Party as security. Instead of the aforesaid proposed conversion, the Opposite Party reduced the drawing limit of the Complainant against the original sanctioned loan of Rs. 2,30,00,000/- to Rs. 143.45 lacs which was in effect to make the loan account of the Complainant in-operational and further went on to deduct interest and other charges.

5. The Bank started putting pressure on the Complainant for depositing money into the account from other sources and also calling upon the Complainant to do the needful or else the account of the Complainant would be declared as NPA. The consequences of recovery by way of attachment of residential premises of the Complainant was to follow. In-spite of a request on 11.3.2021 to reverse the various charges of penal interest etc. accrued during the Pandemic as per the Government Guidelines, no heed was paid and the Complainant had to arrange funds to meet the exigencies in-spite of the personal difficulties of the Complainant.

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