DISTRICT CONSUMER DISPUTES REDRESSAL FORUM
PASCHIM MEDINIPUR.
Complaint case No. 13/2009 Date of disposal:25/06/2009
Complainant/Petitioner/Plaintiff : SRI SHIBU PODDAR.
Defendant/O.P.S. : THE MANAGER UNITED BANK OF INDIA &
OTHERS.
BEFORE : THE HON’BLE PRESIDENT : Mr. P. K. Sarkar.
MEMBER : Mr. S. Pal.
MEMBER : Smt. J. Sarkar. For the Complainant/Petitioner/Plaintiff: Mr. D. Mandal.
For the Defendant/O.P.S. : Mr. S. N. Das.
Judgement/Order.
This case of complaint was filed by Complainant Sri Shibu Poddar S/o- Sri Lalmohan Poddar residing at Prembazar, P.O.-Hijli Co-operative Society, Dist- Paschim Medinipur against Op. no.1. the Manager, United Bank India, at I.I.T area branch, Kharagpur, Dist Paschim Medinipur & Op. no.2. the Regional Manager, United Bank India, at Sahid Kshudiram Bose Road, Burdge Town, P.O. & P.S.-Midnapore, Dist-Paschim Medinipur alleging that the Ops did not disburse sanctioned loan to him as a result of which, he could not complete the project Shilpa Motel-cum-Restaurant.
The facts of the case, in brief, are that the Op-Bank sanctioned a loan of Rs.34.40 lakhs to the complainant for a project of Motel cum-Restaurant styled as Shilpa Motel-cum-Restaurant, whereas the total cost of the project was Rs.71.81 lakhs. The Op-Bank disbursed loan to the tune of Rs.18.50 lakhs up to 22.06.2007.by phases. But the Op-Bank stopped disbursement of the rest amount on the plea that the complainant did not utilize the disbursed amount for the purpose for which it was lent. The complainant requested the bank for releasing the balance amount so that he could complete the construction. As the Op-Bank did not respond to his appeal, he filed this case praying for issuance of directions upon the Ops (i) to pay the balance amount of loan of.Rs.15.90 lakhs (ii) to pay Rs.4 lakhs towards damage caused and (iii) to exempt interest on loan amount already disbursed till disposal of the suit.
The case has been contested by the Ops by filing their written objection contending interalia, that the complainant did not make proper utilization of bank credit, nor made the
Contd………….P/2
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matching contribution of his share in the construction work; and that, as the complainant did not submit any reliable documents of expenditure to the Bank, so they stopped disbursement of the rest amount of the loan. According to the Op-Bank, they were not deficient in service as alleged by the complainant and as such the complaint should be dismissed with cost.
Upon the pleadings of both sides the following issues are framed for our consideration :
i) whether the case is maintainable in this Forum ?
ii) whether the Ops were deficient in service as alleged by the complainant ?
iii) To what relief/relief(s) is the complainant entitled ?
Decisions with reasons:
We have very carefully perused all the papers/documents filed in this case by both parties. We have also heard and considered the submissions of the Ld. Lawyers on behalf of both sides.
Issue No.(i)
There is no dispute that the Op-bank sanctioned the credit to the extent of Rs.34.40 lakhs (overall limit) comprising the term loan of-Rs.34.00 lakhs and the working capital of Rs.0.40 lakhs to the complainant for his project M/S Shilpa Motel-cum-Restaurant against the project cost of Rs.71.81 with the stipulation of 48.40% margin against term loan and 25% margin against working capital. The complainant contended that he utilized the disbursed amount properly. On the other hand, the Ops contended that the complainant diversified the fund lent out and furnished no documents/papers showing the details of expenses incurred out of the fund lent out for the purpose of the project.
On scrutiny of ‘the details of recommended terms of sanction in respect of the account of the project in question we find that in col.7, the mode disbursement of the loan has been laid down. We may reproduce the same for our discussion:
“Disbursement will be made in phases depending on the progress of the works. The borrower’s portion of margin shall have to be invested first and after inspection by the Branch Manager and being satisfied with the progress of the work disbursement of the bank loan portion will be made. Payment will be made directly to the supplier of goods, as far is practicable.”
Now out of the total project cost being 71.81 lakhs the complainant/borrower’s contribution (i.e. margin) was 48.40% against terms loan and 25% against working capital.
We find from the ‘Estimated project cost & the proposed means of finance’ marked Exts.12/5 the following::
i) Cost of procurement of land- Rs.12.34 lakhs.
ii) Cost of construction of the building-Rs.40.01 Lakhs.
Contd………….P/3
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iii) Cost of electrical installation- Rs.1.39 lakhs.
iv) Cost of Furniture & Fixture- Rs.9.26 lakhs.
So Rs.52.35 lakhs was required to complete the work up to the 2nd phase (i. e. for procurement of land, developing the land and construction of building).
Now as per proposed terms of finance the promoter required the capital of Rs.36.40. According to the terms of sanction of the loan, the borrower’s portion shall have to be invested first. The Op-Bank disbursed Rs.18.50 lakhs up to 22/06/07. If we add this amount with the promoter’s own capital (i.e. Rs.36.40 lakhs) the total amount stood at Rs.54.90 lakhs. Therefore it is evident that the building should have been completed with the amount already disbursed by the Op-Bank. But on spot enquiry by the Head Office of the bank it was detected that the fund was not properly utilized for the purpose for which it had been lent out and the borrower did not invest his fund in the construction work. The report of the enquiry also reveled that ‘only the boundary wall had been erected. No major construction work of the hotel was done and the RCC work was done up to lintel level’. It also appeared from the complainant/ borrower’s letter no. nil, dated 08/02/2008 marked Ext. 4 that the construction work was not completed and he undertook to complete the same within the month of June’2008 but failed to keep his word. The inspector also observed in his report dt.16-1-05 marked Ext.7 that the borrower was not complying with the terms and conditions of the sanction letter. So there is reason to believe that the complainant diverted the fund already disbursed by the Op-Bank and for non-completion of the project, the complainant/borrower was to blame himself. Therefore the Op-Bank can not be held to be deficient in service for stopping further finance. So the complainant is not entitled to get any relief in this case. Thus the issues are decided against the complainant.
Lastly before parting with the record, we like note that the Op-Bank was not vigilant in the matter of disbursement of the loan and most likely that is the only reason for diversification of the fund by the complainant-borrower.
Hence,
Ordered,
that the case be and the same is dismissed on contest.
However we do not pass any order as to cost.
Let the copies of this order be supplied to the parties free of cost.
Dic. & Corrected by me
I agree I agree
Member Member Member President
District Forum
Paschim Medinipur.
Tags: United Bank of India