ORDER

JUSTICE A. P. SAHI, PRESIDENT

1. The appeal has been filed by the Canara Bank assailing the order dated 17.08.2012 in CC No. 27 of 2007 passed by the State Consumer Disputes Redressal Commission, Tamilnadu at Chennai. The respondent complainant company admittedly is engaged in carrying on the business of manufacturing Digital electricity meters for supply to the State Electricity Boards and for this business the appellant Bank had extended various Cash Credit Limits and other banking facilities to the complainant including the furnishing of Bank Guarantees to be accompanied with the tenders applied for by the complainant for award of contracts for supply of such meters. The guarantees were in the shape of Money guarantees and Performance guarantees for a period of five years as per the tender conditions and were ofcourse subject to commission charges payable to the Bank as agreed upon.

2. A total of 28 Bank Guarantees are stated to have been facilitated to accompany tenders of different Electricity Boards which is not in dispute.

3. The complainant subsequently availed of other facilities from the Dena Bank and in the year 2006, the complainant, in all probability due to the expansion of its business and requirement of further financial resources and facilities, approached the IDBI Bank which agreed to provide such facilities to the tune of Rs. 30 crores. Accordingly the complainant availed of the offered facilities by the IDBI Bank and consequently, the entire accounts relating to the complainant were shifted to the IDBI Bank.

4. It may be pointed out that the Bank Guarantees extended by the appellant Canara Bank were for over a period between 2003 to 2006 for a period of 5 years.

5. With the shifting of the banking transactions of the complainant to the IDBI Bank, the conditions on which this transfer was permitted from the Canara Bank are detailed in the letter dated 06.04.2006 that is extracted hereinunder:

6. In relation to the Bank Guarantees that had already been extended and were subsisting issued by the Canara Bank, the condition imposed relating to Bank Guarantees is at item no. 2 and item no. 5 of the said letter permitting the taking-over of the Bank Guarantee liability to an extent of Rs. 10 Crores by accepting counter guarantees from IDBI Bank Ltd. and for release of the proportionate margin / term deposits for the Bank Guarantee limit to the complainant Company for meeting the working capital requirement. It is also specified in condition no. 4 that the Company should confine its dealings, except opening of BGs with existing Bankers only, and all other terms and conditions as sanctioned earlier were not modified and would remain unchanged.

7. Under the said arrangement, the status of the Bank Guarantees issued by the Canara Bank remained unaltered, subject to counter guarantees from the IDBI Bank Ltd.

8. According to the complainant, once this arrangement had been made and the IDBI Bank had agreed to issue counter Bank Guarantees and take over the liability of the Bank Guarantees, the Canara Bank had to release the respective margin money and also refund the commission on the Bank Guarantees for the remaining period or what is termed as the unutilised period of the Bank Guarantee issued by the Canara Bank.

9. A letter to that effect was sent on 08.04.2006 which admits of the existing Bank Guarantees issued by the Canara Bank. The said letter is extracted hereinunder:

10. In furtherance of its request, the complainant requested the Canara Bank to refund the commission charges of Rs. 32,69,162/- through its letters dated 15.04.2006 and then 20.04.2006.

11. The Bank on 24.04.2006 intimated the complainant declining to refund the commission on the Bank Guarantee on the ground that the purpose of the Bank Guarantee being fulfilled, the same has been utilised and therefore according to the policy of the Bank, no refund will be made in respect of the unexpired period. It was further stated categorically that the original Ban