Karnataka Vikas Grameena Bank vs Mallapa Ningappa Parappanavar

THE petitioner, Karnataka Vikas Grameena Bank, being aggrieved of the concurrent findings of the Fora below against them has preferred this revision petition. Briefly put, the facts relevant for the disposal of this revision petition are that respondent No. 1 filed a consumer complaint under Section 12 of the Consumer Protection Act, 1986, against the petitioner claiming himself to be a small farmer. It is alleged that complainant took a short term crop loan of Rs. 20,000 from the petitioner bank on 14.7.2005. Unfortunately, due to heavy rains the corn crop of the respondent was damaged. The petitioner bank issued notice dated 10.2.2007 to the respondent No. 1 calling upon him to pay the loan amount and the interest. The complainant on 1510.2007 paid interest amount of Rs. 4,640 only and requested the petitioner to extend the time of payment of his loan. It is alleged that bank officials accepted the payment of interest and obtained signatures of the complainant on various blank forms which has been to mis -utilized to show discharge of debt of Rs. 20,000 on 15.10.2007 and sanction of new loan of Rs. 20,000 in favour of the respondent. According to the complainant, the petitioner bank has indulged in this exercise with a view to deprive the respondent of benefit of "Agricultural Debt Waiver and Relief Scheme" announced by the Government of Karnataka in the year 2008. It is alleged that since respondent No. 1 had taken a loan of Rs. 20,000 on 14.7.2005 which remained unpaid, the respondent No. 1 is entitled to waiver of his debt under the scheme announced by the Government. Claiming the aforesaid conduct of the petitioner to be deficiency in service, respondent No. 1 filed a complaint.

THE petitioner in the written submissions version took the plea that on 15.10.2007, respondent No. 1 cleared his loan along with interest and obtained fresh loan of Rs. 20,000 which was sanctioned on 15.10.2007. It is the case of the petitioner that since respondent No. 1 had taken a new loan on 15.10.2007, he is not covered the debt waiver policy/scheme of the Government. Learned District Forum on consideration of the pleadings and evidence on record allowed the complaint vide order dated 6.10.2008 and ordered the petitioner to recommend to the Central Government that the complainant is a defaulter. The reasoning given by the District Forum for the aforesaid finding is reproduced thus: The Opposite Party in his objections stated that the complainant is not a defaulter. The opposite party stated in para. No. 7 of their objections that the loan obtained for the period from 1.4.2007 to 31.12.2007 does not come under the Agricultural Debt Waiver and Relief Scheme. The complainant even though obtained a loan on 14.7.2005, he has cleared the loan on 15.10.2007 on the same date he has obtained a fresh loan of Rs. 20,000. Hence, he is not a defaulter. The Respondent has produced Xerox copies of challan for the repayment made by the complainant. The complainant has repaid the loan amount of Rs. 20,000 and interest of Rs. 4,640 to the respondent bank. On the same day the complainant has availed a fresh loan of Rs. 20,000. The respondent bank has produced the statement of account regarding the principal amount and interest paid by the complainant on 15.10.2007. Hence, the complainant is not a defaulter.

The complainant has stated that he has paid only interest amount and he has not paid the principal amount and further states that the respondent has created the concocted documents to show that the loan amount of Rs. 20,000 made by the complainant but the respondent bank states that they have not obtained signature of the complainant on the blank papers.

The opposite party has produced all the Xerox copies of the documents including three Xerox challans. If at all the complainant on that day paid the principal amount and interest he would have paid the amount of Rs. 24,460 in one challan but there is no necessity to pay the principal amount and interest in separate challans. The complainant is a customer of the respondent bank and there is a special relationship within the parties whereas the complainant is a borrower and the respondent bank has sufficient funds to lend a loan. Hence, the respondent bank can exercise its power over the borrower and the borrower has a circumstances to bow to the respondent bank''s power. Hence for the reasons stated above, we agreed with the complainant.

The Government of Karnataka has been waived the farmer''s debt in Cooperative Societies like wise pressurized the Central Government to waive the farmers debt in Nationalized Banks. As stated by the Complainant in October 2007, he has paid the loan amount and there was a circumstance that the Central Government waive the farmers debt in Nationalized Banks. In these circumstances, the farmer will not repay the loan amount and he wishes to remain as a defaulter. In many cases there is a circumstances that who is willing to repay the interest the remaining principal amount has waived. In this case the complainant has paid only interest portion. The Consumer Forum has to protect the Consumer. Hence, we answered finding in favour of the Complainant.

BEING aggrieved of the impugned order, the petitioner preferred an appeal before the State Commission and the State Commission after consideration of record, dismissed the appeal with following observations: Admittedly the money borrowed by the complainant is on 14.7.2005 that is earlier to 31.3.2007. The O.P. bank has advanced the loan of Rs. 20,000 on 15.10.2007 and collected the sum of Rs. 20,000 towards the principal payable by the complainant in addition to the interest. On the same day the O.P. Bank has granted loan of Rs. 20,000 to the complainant. There is no need to sanction loan of Rs. 20,000 on the very date the complainant discharged the loan. If really the Bank interested in recovery of the money, it could have renewed the loan by collecting interest instead of granting fresh loan. This appears to be in order to deny the benefit which he is entitled as per the Government notification. Therefore, in our view the DF is right in directing the O.P. bank to issue a certificate to the effect that he is a defaulter.

LEARNED Mr. P.S. Raghunathan, Advocate for the petitioner has contended that the orders of the for as below are not sustainable for the reason that orders have been passed against law and facts. He has drawn our attention to the Agricultural Debt Waiver and Debt Relief Scheme, 2008, wherein it is recorded that debt accounts eligible for waiver are those short term production loans (Crop loans) which are disbursed upto 31.3.2007 and over due as on 31.12.2007 and unpaid until 29.2.2008. He has contended that in the instant case, admittedly earlier loan taken by the respondent No. 1 was discharged on payment of principal amount as well as interest on 15.10.2007 and thereafter, respondent No. 1 obtained fresh loan of Rs. 20,000 on the same day. Thus, the existing loan being beyond the period mentioned for the eligible accounts, respondent No. 1 is not covered under the debt waiver scheme of the Karnataka Government. It is contended that both the Fora below have exceeded their jurisdiction in assuming that earlier loan was not settled and actually the bank has indulged in paper work just to deprive the respondent No. 1 of benefit of debt waiver scheme. Respondent No. 1 who appeared in person on the contrary has argued in support of the impugned orders. He has contended that on 15.10.2007, he had paid the interest amount of Rs. 4,640 and asked for extension of payment of his loan. At that time, the bank officials obtained his signatures on blank forms and converted those blank forms into the transaction of payment of the earlier loan and creation of new loan with a view to deprive him from the benefit of debt waiver scheme.

WE have considered the rival contentions and perused the record. On careful consideration of record, we find force in contention of learned Counsel for the petitioner. On perusal of the record, we find that respondent No. 1 is seeking waiver of his debt on the strength of "Agricultural Debt Waiver and Debt Relief Scheme, 2008". On perusal of the said scheme, it is clear that this scheme was introduced vide Circular No. 31/08/2008/ADV dated 6.6.2008. The relevant portions of the circular are reproduced thus: Attention of Branches/Offices is invited to our Circular No. 31/08/2008/ADV dated 8.3.2008. Now GOI/NABARD has issued detailed guidelines of the above scheme, the contents of which are detailed here below.

Nothing contained in this Scheme shall apply to any loan disbursed prior to March 31, 1997

Scope:

The Scheme will cover direct agricultural loans extended to ''marginal and small farmers'' and ''other farmers'' as indicated in the Guidelines.

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Eligible Accounts:

(i) Short -term production loans (Crop loans/VKCC) disbursed upto 31.3.2007 and overdue as on 31.12.2007 and remaining unpaid until 29.2.2008;

(ii) Restructured and rescheduled (ARTL) by Banks in 2004 and in 2006 through the special packages announced by the Central Government, whether overdue or not; and

(iii) Restructured and rescheduled in the normal course upto 31.3.2007 as per applicable RBI guidelines on account of natural calamities, whether overdue or not.

(iv) Investment credit for Agri. Allied activities where the principal loan amount does not exceed Rs. 50,000 should be classified under ''small and marginal farmer'' irrespective of the size of the land holding, if any.

(v) In case of restructured and rescheduled loans the date of restructuring or rescheduling will be the date of disbursement.

ON reading of the above, it is clear that benefit of debt waiver scheme is available to only those short term production loans which were disbursed upto 31.3.2007 and were over due as on 31.12.2007 and had remained unpaid till 29.2.2008. In the instant case, admittedly as per the record of the bank, earlier loan of the respondent dated 14.7.2005 was settled on 15.10.2007 and respondent No. 1 had taken a fresh loan of Rs. 20,000 on the same day. Plea of the respondent No. 1 is that actually earlier loan was not settled and only interest was paid. But the bank officials after obtaining his signatures on blank papers have created documents regarding discharge of the earlier loan and creation of new loan on 15.10.2007. It is the contention of the respondent No. 1 that this has been done by the petitioner bank to deprive him of benefit of waiver of loan under the policy announced by the Government. Both the Fora below being impressed by the above contention of respondent No. 1 have allowed the complaint. The Fora below have failed to appreciate that the above noted debt waiver scheme was notified vide Circular dated 6.6.2008. There is a mention of earlier circular issued to the banks vide which guidelines of the notified schemes were circulated. Even that circular is dated 8.3.2008. When the scheme came into being in the year 2008, by no stretch of imagination it can be said that on 15.10.2007, the petitioner bank in order to avoid extending debit relief benefit to the respondent No. 1 indulged in fabrication of record to give an impression that loan taken by the respondent No. 1 on 14.7.2005 was discharged on 15.10.2007 and thereafter a fresh loan of Rs. 20,000 was sanctioned in favour of the respondent. Otherwise also, we find no explanation why a bank manager would indulge in such exercise with a view to deprive the respondent No. 1 of the benefit particularly when, there is no evidence of any enmity against respondent No. 1 or motive on the part of the bank manager to indulge in such exercise. Further, the petitioner bank has placed on record photocopies of the deposit slips dated 15.10.2007 from which it transpires that on 15.10.2007, by way of two deposit slips, the respondent deposited sum of Rs. 4,640 and Rs. 20,000 in cash for discharge of his loan account dated 14.7.2005. Petitioner has also placed on record photocopy of ledger account pertaining to the loan of respondent No. 1 wherein there exist entries regarding payment by cash to discharge the loan payment on 14.7.2005. Therefore, we are of the considered view that loan dated 14.7.2005 which the respondent is seeking to be waived was not due as on 31.12.2007. Therefore, respondent No. 1 in our considered view is not covered under eligible criteria for waiver of loan. In view of the discussion above, we are of the opinion that Fora below have passed the impugned orders ignoring the basic facts on assumptions and presumptions. Aforesaid orders, therefore, cannot be sustained. Accordingly, revision petition is allowed, impugned orders are set aside and complaint is dismissed. No order as to costs.