AQUADEV INDIA LTD Vs. STATE BANK OF HYDERABAD

JUDGEMENT

(1.) THE grievance of the Complainant in this complaint is that the respondent banks which formed a consortium for grant of loan, have not released the sanctioned loan after having two appraisal reports and directing the Complainant to issue prospectus for issue of equity shares. It is contended that the banks, in blatant abuse of power and without giving any reasons, refused to disburse the loan. This has caused complete destruction of the whole project and placed the Directors and shareholders of the company in a precarious position. It is submitted that :

(2.) ON the basis of the aforesaid and other averments, it has been prayed that (a) the respondent banks be directed to release the sanctioned loan amount of Rs.23.85 crores to the complainant company, and (b) direct the respondents to pay damages to the complainant to the tune of Rs.79.20 crores with interest @ 24% per annum. The learned senior counsel Mr. Sudhir Chandra for the Complainant submitted that this case does not require any detailed enquiry and the complainant seeks to rely only upon facts which are mentioned in the documents filed by the complainant and the banks. He further submitted that the contention raised by the banks with regard to sanction and disbursement of the amount would not be covered by the C.P. Act, is absurd. Section 2(o) defines the word 'service', which includes bank, and in the present case admittedly before sanctioning the loan, banks have charged a fee of Rs.6 lacs. Therefore, complainant is entitled to approach the Consumer Forum for redressal of his grievances. Facts and contentions of the Complainant:

(3.) THE balance sheets of Ragunath Cotton and Oil Products Limited, a Company (hereinafter referred to as RCOPL) of which Shri G. Venakateswarlu was the Managing Director, were submitted to the Banks along with application for this loan and all the banks have obtained Confidential Credit Reports from the relevant Institutions and Banks as part of their appraisal before sanction of the loan. Thereafter on 14.12.1993, sanction letter was issued by the lead bank. Other consortium Banks, i.e. State Bank of India (R-2), State Bank of Travencore (R-3), Dena Bank (R-4), Bank of Maharashtra (R-5) and Catholic Syrian Bank (R-6) issued similar letters on 18.06.1994, 08.03.1994, 04.01.1995, 21.04.1994 and 23.03.1994 respectively. The conditions stipulated in the said sanction letters were as follows: