CH. A.N. RAJU vs MANAGING DIRECTOR, APSFC

- THE complainant submitted a complaint about the deficiency in service on the part of the opposite party on the 5th October, 1991. THE case was heard on 31.1.1992. At the hearing he submitted written arguments which has also been taken on record.

THE facts of the complaint are that the complainant claim to have invented a machine called "Transplanters-cum-Injectors for Rice and other crops" which can revolutionize Indian agriculture and India''s rural life. According to the complainant it enables line planting with controlled density instead of broad-casting and reduces the application of fertilizers and pesticides. It also facilitates inter-cultivating weeding, moving and harvesting by improved tools. It is claimed by the complainant that this could lead to considerable increase in food production and labour efficiency and thus increase the earnings of agricultural labour. For the purpose of commercial production of this machine, the complainant had obtained a term loan of Rs. 87,500/- from the A.P. State Financial Corporation (for short A.P.S.F.C.) under the SSI Scheme. The grant of term loan was, however, linked with the complainant obtaining a working capital loan of Rs. 2 lacs from the Andhra Bank as per the SSI Scheme.

According to the agreement with the State Financial Corporation no part of the loan would be released unless the party had obtained the requisite working capital from the Scheduled Bank, which, was Andhra Bank in this case. Consequently the complainant obtained sanction of the working capital loan from the Bank in 1981 but within 6 months, after a sum of Rs. 22,643/- only had been released as working capital by the Bank, further working capital loan was denied on the ground of credit squeeze. This resulted in his unit suffering from "infantile sickness" from the very beginning. According to the Complainant, the Opposite Party, A.P.S.F.C rendered no help in sorting out the problem of working capital with the Andhra Bank. Meanwhile the repayment of the term loan taken from the opposite party fell due on the 7th February, 1983 and because of non-repayment, penal interest was attracted. On 22nd September, 1986 he repaid a sum of Rs. 83,521/- which was appropriated by the A.P.S.F.C. towards accumulated interest on the loan. According to the complainant the opposite party should have adjusted this amount against principal. After his persistent representations, on 23rd March, 1989 the opposite party, A.P.S.F.C. proposed to the complainant that they would charge simple interest at the rate of 9% from the commencement of the loan, and adjust the sum of Rs. 83,521/- paid in September, 1986 towards principal provided he closed the loan account by paying the balance amount of Rs. 74,070/- due from him with interest from 1.1.1989. This offer was subject to the approval of the Board of Directors of the A.P.S.F.C. However, the complainant did not accept this offer and has filed this complaint.

HE has prayed that the opposite party be restrained from seizing his assets and selling them in satisfaction of the loan received by him in 1981, that the opposite party should be directed to convert the term loan of Rs. 87,500/- for commercial production of the machine into a developmental loan and that he be awarded compensation amounting to Rs. 10.5 crores by way of punitive and exemplary and prospective damages. The opposite party in its counter has maintained that the complaint is not maintainable inasmuch as there was no deficiency in service whatsoever. It has submitted that the non-acceptance of the complainant''s request for converting the whole loan as a "developmental loan" and to absolve him of the loan liabilities could not be said to be a deficiency in service.

THE opposite party has also pointed out that because of failure of the complainant to adhere to the repayment schedule his loan liability including interest etc. amounted to Rs. 2,38,507/- at the end of October, 1991 and they were entitled, under the loan agreement, to take steps to recover the same. THEy contended that it was not their responsibility to arrange for working capital loan facilities from the Andhra Bank and that the complainant ought to have himself taken steps to obtain the same. THE opposite party, however, was agreeable it 1989 to arrive at a settlement by (i) charging interest at simple rate from the commencement of the loan, (ii) adjusting the payment already made in September, 1986 towards the principal instead of appropriating it towards interest as per the banking practice and procedure. According to the opposite party, these two concessions amounted to a debit relief of Rs. 99,112/- but the complainant had wrongly interpreted the communication of 23rd March, 1989 and erroneously assumed that he was entitled to write off Rs. 99,112/- over and above the two aforementioned concessions. THE point of the opposite party is that the complainant himself is responsible for not availing of the reliefs in debt obligation the A.P.S.F.C. had agreed to give subject to certain conditions. More importantly the opposite party has pointed out that the manufacturing unit has not come to production at all, that the development of the new product for which he had obtained loan never became a reality even after the expiry of 10 years. In fact the complainant in his letter of June, 1991 to the Managing Director of the A.P.S.F.C. (Opposite Party) had admitted that "the prototype development of a new product could not be effected into commercial model with such limited sanction (of the loan amount), and that the whole loan need be reasonably converted as developmental grant by the Board as a special case.." and that on the conversion of the loan into a developmental grant and on his being absolved of his liabilities totally he hoped to bring to successful fruition his revolutionary product In the light of the facts stated above, it is evident that there has been no deficiency in service by the Opposite Party towards the Complainant. The Opposite Party was under no obligation to ensure that the working loan facility was provided by the Andhra Bank, on the other hand, as per the loan agreement, the working capital loan was to precede the grant of a term loan by the Opposite Party, A.P.S.F.C. The Opposite Party could not also be expected to alter the character of the term loan into a developmental loan or grant. The Opposite Party A.P.S.F.C. had, in 1989, offered to give relief to the complainant by charging simple interest on the loan and by appropriating the amount paid in 1986 towards the principal in the first instance, instead of as against the interest which had fallen due. The complainant has also misconstrued that the Opposite Party''s letter of 23rd March, 1989 as offering him with three debt reliefs as against two; in particular agreeing to write off a sum of Rs. 99,112/- over and above charging of simple interest and adjustment of repayment made in 1986 towards the principal. It is also not within the competence of this Forum to grant reliefs sought for by the complainant under the Consumer Protection Act viz. to restrain the opposite party State Financial Corporation from seizing and selling the assets in satisfaction of its dues and to convert the loan into a developmental grant

THERE is no merit in the complaint. In the result the complaint is dismissed. THERE is no order as to costs.

BEFORE we part with this Order we must observe with regret that the Complainant in his written arguments submitted at the end of the hearing has wrongly stated that the Commission terminated the hearing and denied him the right to be heard. We had allowed him ample time to present his case-keeping in view that he was not represented by a lawyer. Complaint dismissed.