LAXMI PUTHANI INDUSTRIES vs Karnataka State Financial Corpn.

REVISION petitioner was the complainant before the District Forum. Complainant''s firm had obtained a loan from the Karnataka State Financial Corporation (hereinafter to be referred as KSFC). It is the say of the complainant that on 9.2. 1995 the complainant offered to repay the loan with interest in lump sum but the KSFC refused this offer and directed the complainant to repay in instalments as per the mortgage deed executed by the complainant in favour of them. Hence, complainant filed a complaint before the District Forum seeking directions to KSFC to receive from the complainant or its representative the loan and interest due as on 9.2.1995 and to transfer all the documents to the person repaying the loan to the respondent. Complainant had further claimed compensation and damages.

IT was contended by the learned Counsel for the complainant that it was the duty of the KSFC to receive the entire loan with interest in lump sum offered by the complainant through Bank of India who had agreed to lend money to the complainant at a lesser interest, since the respondent failed to do so, it amounted to deficiency in service by the respondent. The District Forum vide its order dated 28th February, 2005 held that : (a) Complaint is partly allowed. Complainant is entitled to get an amount of Rs. 1,33,000 with interest at the rate of Rs. 9% per annum from the date of filing the complaint i.e., 1.2.1996 till the date of making the entire amount awarded in this case.

(b) Respondents are hereby directed to receive the amounts due to it as on 9.2.1995 from the complainant or any person named by the complainant and to transfer/assign all the interest the respondents hold CTS 2838/17-A/2 of ward No. 5 measuring 722.55 square metres, the Shed No. D13 situated at KSSIDC estate Bijapur, measuring 257.48 square metres and Plant and Machinery of the complainant to the person paying the dues of the respondents on behalf of the complainant.

Aggrieved by the order of the District Forum, the KSFC filed an appeal for dismissing the complaint as it is not maintainable and the complainant filed an appeal for enhancing the compensation before the State Commission. The State Commission held that "there is no statutory obligation for the KSFC to transfer the loan to any other Bank. In the absence of such right even assuming that the KSFC refused to transfer the loan to Bank of India, it cannot be said that there is any deficiency in service on the part of KSFC". Accordingly, the State Commission allowed the appeal and set aside the order of the District Forum and dismissed the complaint. Hence this revision.

IN this connection, it is pertinent to note the outcome of the certain legal proceedings both in the High Court and in the Civil Court between the parties. The complainant had filed W.P. No. 1276 of 2002 for quashing of the order dated 7.11.2001 passed by the KSFC, initiating the recovery proceedings against the complainant on the ground that it committed default in the payment of loan borrowed. The said writ petition was dismissed by the High Court by its order dated 4.12.2002. This order was also upheld by the Division Bench of the High Court by its order dated 28.1.2003 in W.P. No. 1524 of 2003. Further the First Additional Civil Judge had passed a judgment and decree on 11.12.2006 redeeming the mortgage of the complainant. The above judgments further weakens the case of the revision petitioner.

THE learned Counsel for the petitioner submitted that one of the conditions for grant of loan by KSFC stipulated that the complainant should go to the commercial Bank for securing a short-term loan. When it approached the Bank of India for the same, it desired that long-term loan given by KSFC should be transferred to it as a pre-condition. Hence, there is deficiency in service by KSFC as it did not agree for the same, he argued. In our view, the Bank of India is not the only Bank, which sanction short-term loans as the project has been appraised by KSFC, a term lending agency and found to be technically feasible and financially viable. Hence, we do not see any legal infirmity or jurisdictional error warranting our interference under Section 21(b) of the Consumer Protection Act, 1986. Therefore, this revision petition is dismissed. There shall be no order as to costs. Revision Petition dismissed.