SAWHENY EXPORT HOUSE PVT. LIMITED , SAWHNEY BROTHERS vs NOIDA

THE complainant had acquired 3900 square meters of plot in NOIDA in 1979 for establishing a Unit for production of garments for export. According to the complainant, it was entitled to a subsidy of 15 per cent on the total capital investment of the extent of Rs. 36 lakhs including the cost of land, building and machinery made by 1984. THE amount of subsidy works out to Rs. 5.41 lakhs. According to the complainant similar subsidy has been paid to other industrial units but not to the complainant.

THE complainant also received a loan of Rs. 16.84 lakhs from State Finance Corporation in March, 1984. THE complainant is being charged interest at 16.5. per cent whereas according to the complainant, it should be 10.5. per cent only as it was instantly re-financed by the IDBI. THE complainant had further said that his factory was burnt in the riots in November, 1984 and his production suffered. As a consequence, he defaulted in the repayment of loans on which O.P. No. 2, State Finance Corporation has charged penal interest. This, according to the complainant, was contrary to the Governments policy as interest was not to be charged from those affected by 1984 riots. THE complainant has cited an order of the Supreme Court of India dated 7th November, 1989 staying recovery of all loans advanced by banks to the victims of the November, 1984 riots. It is submitted that notwithstanding this order, the Opp. Party No. 2, State Finance Corporation is continuing to recover the principal amount as well as interest on the amount advanced. Further the complainant has purchased a generator set in 1989 on which he was entitled to a subsidy of Rs. 44,720/- by O.P. No. 2, State Finance Corporation, but this has not been paid to him so far. He has claimed Rs. 1.25 crores. This includes refund of excess interest of Rs. 22.09 lakhs and interest on the amounts due to him. Rs. 72.65 lakhs and compensation of Rs. 23.46 lakhs. O.P. No. 59 of 1992 Similar claims for over Rs. 1 crore has been filed in O.P. No. 59/92 on behalf of M/s. Sawhney Brothers against the same Opp. Parties. Briefly, 7645.49 square meters of plot was received by the complainant in 1979 from NOIDA. On the total investment in the plot, building, plant and machinery, etc. for production of garments for export amounted to Rs. 25.40 lakhs. On this, he claims 15% subsidy of Rs. 3.81 lakhs which has not been paid to the complainant so far. He also received in 1984 a loan of Rs. 11.78 lakhs from Opp. Party No. 2, the State Finance Corporation. He is being charged interest at the rate of 13.5.% including rebate of 3.5.%, whereas according to the complainant it should be only 10.5. per cent as the loan was re-financed by IDBI. Further, he has not been given the benefit of rescheduling of loans, and of the relief in interest on rehabilitation finance following destruction of his factory in riots in November, 1984. On the other hand, he is being charged penal interest on the over-due amounts of the loans due for repayment contrary to instructions of Government and the orders of the Supreme Court staying recovery of loans from the riot affected victims. His total claim is for over Rs. 1 crore which includes interest Rs. 54 lakhs, refund of excess interest charged from him Rs. 20.87 lakhs and compensation Rs. 20.94 lakhs.

Opp. Party No. 1, NOIDA in its reply has disclaimed responsibility for payment of capital subsidy as it is the responsibility of the Director of Industries, Government of U.P. According to the Opp. Party No. 1, the complainant is not a consumer qua NOIDA per the Consumer Protection Act.

OPP. Party No. 2, State Finance Corporation has also stated that the complaint is not maintainable under the Consumer Protection Act and the petitioner is not a consumer as defined therein. The OPP. Party No. 2, U.P. State Finance Corporation has not rendered any service to the complainant as defined in the Act. It was also pointed out that the complainant had realised a sum of Rs. 28 lakhs from the Insurance Company on account to damage of its factories in the riots of November, 1984, and therefore, is not entitled to any relief in the re-payment of loan and the payment of interest thereon. It was also pointed out that the order of 1989 of the Hon''ble Supreme Court of India is applicable only to banks. As regards re-scheduling of the loan and providing of rehabilitation finance, the same was provided by Opp. Party No. 2 on certain terms and conditions with which the complainant/petitioner did not comply.

IT was also denied that there is any scheme under which interest on the loans advanced is 10.5 per cent instead of 16.5 per cent. Subsidy offered to be paid is not service as defined in the Consumer Protection Act. Rescheduling of loans and relief in interest thereon is also not a service which a party or a financial institution renders to the loanee. It is in the nature of an accommodation and concession to a party. Any interest chargeable on loans is a matter of contract between the lender and the borrower. We, therefore, fail to see how either of the complaints can be maintained under the Consumer Protection Act. The orders of the Hon''ble Supreme Court of 7th November, 1989 only lay down that the banks should not take recourse to the recovery proceedings until the banks decide the case of each individual concerned in accordance with the advice of the Reserve Bank of India. There was no absolute stay and recovery proceedings were to be initiated or stayed on merits of each case by the banks themselves. It is more than evident from the facts stated above that the complainants cannot maintain the complaint under the Consumer Protection Act and that they have abused the provisions of the Act in filing these complaints, which results in harassment of Opp. Parties. The complaints are dismissed and they are required to pay a sum of Rs. 5,000/- each in the above cases to the Opp. Parties to be shared by the latter equally. There is also misjoinder of complaints-cause of action - claim for capital subsidy, for subsidy on generator set, for interest liability on loans. But we do not wish to debate on these defects in the complaints, as they are not found maintainable at all. Complaint dismissed.