SURESH NARAYAN LALL vs BIHAR STATE FINANCIAL CORPORATION

FOR the purpose of setting up an industry to manufacture HDPE woven sacks by M/s. Bihar Polysacks Pvt. Ltd. of which the complainant Shri Suresh Narayan Lall is the Managing Director, the principal opposite party Bihar State Financial Corporation (BSFC) approved on 30th March 1984 a Project Report with estimated cost of Rs. 40.15 lakhs. In January, 1985 this was revised to Rs. 40.80 lakhs and the finance for the unit was to be raised from funds to be provided by the different State agencies as under:

THE unit subsequently became sick and in a complaint on 17th February, 1993, the complainant has attributed it as due to certain deficiencies in the services on the part of the opposite party-BSFC. 3. The complainant has alleged as under : (1) A sum of Rs. 3.35 lakhs sanctioned by the IDBI as Seed Capital was adjusted by the opposite party - BSFC against the Term Loan on 18th August, 1985. (2) The Central subsidy promised to be released was Rs. 3.92 lakhs; against this, a sum of Rs. 2.56 lakhs was sanctioned by the State of Bihar in November, 1986. But the same was appropriated by the BSFC towards interest on the Term Loan given by the BSFC. (3) The Patna Industrial Area Development Authority (PIADA) did not issue the Small Scale Industrial Unit Registration Certificate to the complainant even though the unit was fit to undertake commercial production in April, 1987. In consequence, the complainant was not eligible to be empanelled as a supplier with the Government Corporations on account of which the complainant suffered huge losses and could not repay the loans to the Financial Institutions.

The complainant has, therefore, contended that the huge losses that he has incurred are due to the deficiency in service on the part of the Bihar State Financial Corporation and the PIADA, that the BSFC did not recommend to the Bank of India for a reduction of its loan liabilities incurring losses and avoidable interest on the loans arranged from the Bank and the Financial Corporation, all due to deficiency on the part of the BSFC. He had, therefore claimed a sum of Rs. 1.40 crores by way of interest on Seed Capital from 19th August, 1986 to 31st August, 1986, interest on Central subsidy, interest paid to BSFC on Term Loan etc. He has also claimed a sum of Rs. 25 lakhs as damages payable by PIADA and Rs. 5 lakhs on account of mental agony and Rs. 30 lakhs on account of loss of profit per year.

THE opposite party BSFC has submitted that it is not selling any goods or rendering any services for consideration. It is only providing promotional services for the development of industry in Bihar and as such it is not suplying any goods or services for consideration. The complaint, therefore, is not maintainable under the Consumer Protection Act.

AS regards the facts, it is pointed out by the BSFC in its reply that the Term Loan of Rs. 24.85 lakhs was sanctioned in full on the 4th of May, 1985. Against this amount, the complainant has drawn only Rs. 21.9 lakhs; balance of Rs. 2.19 lakhs lapsed. As on 28th February, 1993, a sum of Rs. 55.79 lakhs is due on the Term Loan (this includes Rs. 25.90 lakhs by way of principal, and Rs. 28.10 lakhs by way of interest). The Central subsidy was sanctioned during 1986-87 and a sum of Rs. 2.74 lakhs was released in instalments in 1987, 1989 and 1990. It was explained that this amount of subsidy was adjusted against the overdues on account of repayment of the principal and interest on the Term Loan given by the BSFC in 1984-85.

AS regards the Seed Capital released by IDBI in August, 1985, this was also adjusted by the BSFC against the Term Loan in the absence of security for the amount of Term Loan released. On the face of it, this was justified by the BSFC inasmuch as it was obligatory on the part of the complainant to furnish security against the Term Loan and so long as this was not done, it was open to the BSFC to adjust any amounts which became payable such as the Seed Capital from IDBI against the Term Loan.

ACCORDING to opposite party BSFC, a sum of Rs. 59.24 lakhs has become due for repayment by the complainant. The above facts amply establish that there has been no deficiency in service on the part of the BSFC. Also the instances of deficiency in service alleged by the complainant arose in 1986 and 1987 and the cause of action of the complainant in respect of them had become time barred long before he filed this complaint.

THERE seems to be substance in the contention of opposite party BSFC that the complainant is a chronic defaulter and had failed/avoided to discharge its liabilities on one pretext or the other, that he is a wilful and intentional defaulter driving the opposite party BSFC to take action under the Bihar State Financial Corporation Act, that the complainant has to discharge its entire liabilities to the Corporation failing which the assets of the complainant will have to be sold. Apart from the fact that the drafting of the complaint is such as to make it a formidable task to properly understand the exact nature of the deficiency in service alleged against the opposite party, the complainant has made a fantastically high claim for damages obviously with a view to by-pass the jurisdiction of lower Forums. Also, as would appear from above, the complaint is frivolous and vexatious. We therefore, dismiss the same. The complainant shall pay a sum of Rs. 10,000 as costs to the opposite party BSFC.