AMAR PAL SINGH vs U.P.FINANCIAL CORPORATION

THE complainant in case No. C-64/SC/95 on the file of the State Commission, Uttar Pradesh at Lucknow is the appellant in this appeal. The State Commission by its order dated May 8, 1996 dismissed the complaint holding that it was devoid of any merit and also added that part of the cause of action put forward in the complaint related to the period 1989-1990 and the complaint which was filed only in the year 1995 was highly belated.

THE appellant will hereinafter be referred to as the "complainant" and the respondent herein namely, the U.P. Financial Corporation as the ''opposite party''. The complainant who is the proprietor of a small scale unit in Aligarh by name ''S. S. Locks Industries'' had been sanctioned a loan of Rs. 2 lakhs by the opposite party by its order dated December 10, 1985 for the purchase of new machines. Subsequently, the complainant again applied to the opposite party for the grant of an additional loan of Rs. 1 lakh and thereupon the opposite party sanctioned by way of additional loan a sum of Rs. 88,000/- on January 1, 1988 but only an amount of Rs. 62,700/- was released pursuant to the said sanction. Even that amount was adjusted by the opposite party against the liability of the complainant for payment of interest as well as the overdue instalments of principal in respect of the earlier loan. The complainant has alleged that because of this action on the part of the opposite party he could not purchase a generator for meeting the cost of which the additional loan had been requested for and as a consequence his unit was deprived of power supply. It was further alleged in the complaint that the complainant had applied on January 4, 1998 to the Joint Director of Industries, Uttar Pradesh State Government for the grant of a certificate for claiming rebate/remission in sales-tax on the basis of the establishment of new machines in his small scale unit but because of the failure of the opposite party to furnish the required information to the Joint Director of Industries, the complainant''s request for the grant of certificate was rejected on November 27, 1989 and an application for review filed by him was also rejected by the Joint Director of Industries on June 21, 1990. As a result of the foregoing, the Sales-tax authorities imposed on the complainant by an order dated March 8, 1990 a sales tax of Rs. 85,000/- and called upon him to deposit the said amount. By reason of the complainant being obliged to comply with the aforesaid demand of sales-tax there was sharp decrease in the production and sales. It was only after the complainant moved the High Court at Allahabad and succeeded in getting a direction issued against the Director of Industries as per judgment dated December 12, 1991 to reconsider his case for the grant of the certificate required under Section 4(A) of the Sales-tax Act that the Joint Director, Industries, Agra Region granted a certificate to him on June 17, 1992. It has been alleged by the complainant that the delay in his getting the said certificates was due to the non-cooperation of the opposite party and as a consequence of it the complainant had to incur a loss of production in his factory during the period 1986-1987 to 1994-1995 to the tune of Rs. 4,55,491/-. Besides, having to pay interest amounting to Rs. 4,50,000/- on the loans which he had taken from the U.P. Financial Corporation. The complainant has also put forward a plea that in addition to such interest, he had also to pay Rs. 30,000/- by way of interest on private loans during the aforesaid period and he had, in addition, suffered a loss of goodwill amounting to Rs. 2 lakhs. On all these counts as well as on the ground of having undergone severe mental agony, the complainant sought to recover a total amount of Rs. 16,00,691/- from the opposite party by way of compensation for the loss caused to him and damages for mental agony etc.

IN the detailed counter-affidavit filed by the Deputy Senior Manager (Law) of the opposite party, the allegations contained in the complaint were all denied except to the extent that the factum of the opposite party having sanctioned a loan of Rs. 2 lakhs to the complainant on December 10, 1985 and an additional loan of Rs. 1 lakh on January 28, 1988 was admitted. It was submitted in the counter that the loans in question had been advanced by the opposite party on the security of an equitable mortgage dated March 15, 1986. Since default was committed by the complainant in payment of the instalments due on the loan amounts, action was taken by the opposite party under Section 29 of the State Financial Corporation Act for recovery of the amounts which had become due from the complainant. Though a proposal submitted by the complainant for one time settlement of the outstanding dues was agreed to by the opposite party, the complainant did not honour its terms despite the fact that under the said arrangement of settlement, interest amounting to Rs. 1,54,884.12 paise had been agreed to be waived. It was after committing a breach of the terms and conditions of the said one time settlement that the complainant instituted the present complaint before the State Commission, Uttar Pradesh making incorrect allegations.

THE State Commission examined in detail the documentary evidence produced in the case evidencing the transactions that took place between the complainant and the opposite parties. We have independently gone through the said evidence and we are in complete agreement with the finding of the State Commission that the complainant had totally failed to establish the allegation levelled by him against the opposite party that there was failure and negligence on the part of the opposite party in the matter of issue of a communication to the Directorate of Industries confirming the fact of the purchase of new machines and hence the opposite party should be held responsibly for the delay in his being granted the certificate required under Section 4(A) of the Sales-tax Act. It was entirely for the officials of the District Industries Centre to take the decision on the question of eligibility of the complainant for the grant of the certificate. From the documents produced in the case it has clearly emerged that the query that had been put to the opposite party by the General Manager of the District Industries Centre as per Annexures 1A, 2A etc. requesting for clarification as to whether the machines purchased by the complainant for establishment of a small scale unit were new machines or old ones had been promptly replied to by the opposite party by stating that the opposite party does not advance finance for old plant and machinery. We hold that the delay in the grant of the certificate was not, to any extent, attributable to any default or negligence on the part of the opposite party in furnishing the requisite information to the authorities of the Industries Department. We are also of opinion that the State Commission was perfectly right in observing that the grievance relating to the issue of the certificate pertains to the period 1989-1990 and the complaint which was filed only in the year 1995 in respect of the said matter was highly belated and hence was not maintainable. We next come to the allegation of the complainant that he had suffered losses in production in his small scale unit on account of his not getting in time rebate/remission from the Sales-tax authorities due to the non-cooperation of the opposite party and also due to harassment caused by the opposite party. No evidence of any kind has been adduced by the complainant in support of his allegation that the opposite party had caused any obstruction in the matter of smooth running of his small scale unit. The complainant had originally requested for the grant of a loan of Rs. 2 lakhs in 1985 and thereafter for an additional loan of Rs. 1 lakh in 1988. Both the loans were sanctioned by the opposite party as admitted by the complainant himself and thereafter no other financial assistance had been requested for by the complainant from the opposite party. It clearly emerges from the records that the complainant had defaulted in repayment of the loans and hence the opposite party acted well within its rights in taking resort to proceedings under Section 29 of the State Financial Corporation Act for recovery of the loans which had become overdue. When a proposal was put forward by the complainant for a "one time settlement" of all the dues outstanding against him, the opposite party acceded to the said request of the complainant and entered into a one time settlement evidenced by the agreement dated March 31, 1995. However, the complainant did not honour the terms of the said agreement and after having committed a breach of his obligations thereunder he has rushed to the State Commission by filing the complaint putting forward, inter alia, the allegation that the amount of interest that was being demanded by the opposite party was grossly incorrect. As rightly observed by the State Commission, the complainant has not chosen to disclose either in the complaint petition or any of the affidavits filed by him before the State Commission, how and in what respect and to what extent there has been any mistake in the calculation of interest made by the opposite party. In these circumstances, the State Commission was perfectly right in holding that the complainant has totally failed to prove that there was any deficiency in service on the part of the opposite party. No fresh ground of deficiency has been either put forward or endeavored to be established before this Commission at the stage of appeal. In these circumstances we do not see any ground whatsoever justifying any interference with the well considered order passed by the State Commission.

IN the result, the order of the State Commission is hereby confirmed and this appeal is dismissed with costs of the respondent which we fix at Rs. 2,500/-.