ORDER

(Passed On 10.09.2025)

Per Say Justice Sunita Yadav, President:

Aforesaid appeals arise out of the same order dated 09.09.2015 passed by the District Consumer Disputes Redressal

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Commission, Ujjain (for short ‘District Commission’) in C.C.No.388/2012 therefore they are taken up together and are being disposed of by this common order.

The opposite party-bank has filed First Appeal No.1198/2015 for setting aside the impugned order whereas the complainant has filed First Appeal No. 119/2016 for enhancement of compensation awarded by the District Commission. For convenience facts are taken up from First Appeal No.1198/2015 unless otherwise stated.

The facts of the case as narrated by the complainant (hereinafter referred to as ‘complainant’) are that in order to purchase one crusher machine he had applied for loan for a sum of Rs.22,50,000/- to the opposite party no.1-bank through Khadi Tatha Gramudyog Vibhag under Prime Minister Employment Generation Program (PMEG) and by way of margin money he had deposited Rs.2,50,000/-. It is submitted that a subsidy of Rs.6,25,000/- was allowed by Khadi Tatha Gramudyog Vibhag and deposited the said sum with the bank. It is alleged by

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the complainant that despite of sanction of loan by the opposite party-bank and even depositing the earnest money as well receiving the subsidy of Rs.6,25,000/- from Khadi Tatha Gramudyog Vibhag, the opposite party-bank did not disburse the loan amount to the complainant due to which he could not purchase the crusher machine. The complainant therefore alleging deficiency in service on part of opposite parties-bank approached the District Commission seeking relief.

The opposite parties-bank in their reply submitted that the bank had sanctioned loan amount in accordance with the terms and conditions laid down in loan sanction letter dated 29.08.2011 and accordingly, the complainant for the purpose of operation of loan account and for making repayments was required to execute the guarantee agreement from the guarantors. The complainant did not deposit Rs.2,50,000/- against the earnest money instead had deposited this sum by way of Fixed Deposit. The complainant also failed to deposit the loan processing charges, documentation charges and inspection charges despite repeated request by the bank to the complainant. Later on the request and consent of the complainant, the bank not only the said loan account and refunded sum of Rs.6,25,000/- to Khadi Tatha Gramudyog Vibhag. There has been no deficiency in service on part of the bank. It was thus prayed that the complaint be dismissed.

The District Commission partly allowed the complaint and directed the opposite parties-bank to pay Rs.2,58,659/- the amount of earnest money to the complainant within a period of one month. Interest @ 12% p.a. from 15.02.2012 is also directed to be paid. Compensation of Rs.25,000/- is also directed to be paid within one month failing which to

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pay interest 7% p.a. from the date of filing of complaint i.e. 28.12.2012. It is further directed that the amount of subsidy Rs.6,25,000/- with interest be deposited with the Khadi Tatha Gramudyog Vibhag, if not deposited. Cost of Rs.500/- is also awarded.

Learned counsel for the opposite parties-bank (Appellant in First Appeal No.1198/2015) argued that the impugned order passed by the District Commission is perverse and against the settled principles of law. He argued that the District Commission failed to appreciate that the complainant did not deposit the security deposit of Rs.2,50,000/- instead deposited the same in fixed deposit in his own name. Also the complainant failed to deposit Rs.10,000/- against processing charges and in such situation it cannot be expected from the bank to advance loan to such a borrower for facing recovery problems of public money. It is further argued that the District Commission has erroneously imposed the penalty of Rs.25,000/- without appreciating the complete facts and documentary evidence on recor