Unemployed individuals borrowing money for livelihood can be considered consumers under the Consumer Protection Act, but breaches of contract and lack of evidence can lead to the dismissal of a complaint.

1. M/s Supreme Surgicals is a registered firm and deals in the business of manufacturing of surgical cotton in Village Dharap, Block Purmandal, District Jammu and being a industrial unit was also registered on 22.10.2003 with the District Industries Centre Jammu. The said firm is also registered with the Registrar of firms under registration no. 6999/98 dated 6.4.98. The firm is being run by two partners namely, Sh. Narinder Jamwal and Sh. Anil Balgotra. It is alleged that they are unemployed educated youths and had installed this industrial unit. For its smooth working they approached the OP for the grant of loan which was sanctioned up to the limit of Rs. 21.95 lakhs. Against this loan the complainants have mortgaged their land measuring 13 kanals and 11 marlas as well as hypothecated the machinery. From the sanctioned loan of Rs. 21.95 lakhs an amount of Rs. 9,24,000/- was released in favour of the firm for the purchase of the machinery and the payment of the said amount was made in advance to M/s Bar Associates Delhi who had to supply the machinery. When the machinery was installed the remaining payment of the sanctioned loan was stopped. The case of the complainant is that the firm was entitled to the release of the remaining amount of Rs. 1,23,6000/- because the unit established by them could not be made fully functional and the firm has been undergoing losses. It is pleaded that this is deficiency in service because on the sanctioned loan the OP was entitled to charge the interest on the loan amount and this was a service to be rendered.

2. The OP has contested the claim and in the preliminary objections it was stated that the complaint is not maintainable as the industrial firm in question has been set up for commercial purposes and the functioning of the complainant firm was for manufacturing of surgical cotton to be sold in the open market commercially. It is stated that Rs. 9,24,000/- was paid in advance by the OP vide draft no. 980982 dated 26.5.2000 and the complainant firm had informed that the machinery shall be installed within three months from the date of the advance. After inordinate delay the complainants lifted the machinery partly in the month of November 2000 and partly in the month of March 2001 and they have failed to purchase one item listed at serial no. 7 valuing Rs. 1,30,000/-

The price of this item was also covered under the advance payment made by the OP but that was not done. The complainants were asked to furnish the goods received and they informed that some of the machinery parts were reconditioned and second hand. The OP as per the prevalent practice does not finance for the purchase of second hand machinery and at the time of getting the loan sanctioned concealment of this fact was made. On 26.5.2001, explanation was sought from the complainant for this lapse but no satisfactory explanation was given. For this reason the balance amount of the sanctioned loan was not released and the petitioner firm also became a defaulter as it had not paid any installment for the liquidation of the released amount and their liability which had swelled upto Rs. 18,63,199.60. The firm has not honoured its commitment but has defrauded the OP and unnecessarily they have blocked the public money. On facts it is stated that the complainants are not a consumers and they have intentionally defrauded the OP by not honouring the commitment made at the time of getting the loan sanctioned. When it came to the knowledge of the OP that second hand and old machinery had been purchased the balance amount of loan was not disbursed and explanation was sought for dishonouring the agreement. It is a settled law that breach of a contract is not a consumer dispute and that sanctioning of financial or other aid or continuing of the same was a discretionary power on the part of a financer or the Industrial Development Corporation and refusal to sanction the financial aid in the bonafide exercise of discretion would n