BHOGALS Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) M/s. Bhogals-a partnership firm of Faridabad- has invoked the original jurisdiction of this Commission by filing the present complaint, alleging deficiency in service against UCO Bank regarding the grant of Interest Subsidy amounting to Rs.12,50,105/- and claiming loss in business and demand of higher rate of interest, etc. amounting to Rs.5 lacs.

(2.) According to the complainants they are engaged in the business of manufacturing foot wear and sports shoes and their factory is located at 26 DLF, Industrial Area-I, Faridabad. In November, 1984, their factory was burnt down, on account of which they suffered tremendous financial loss as their entire stocks including the building and machinery, etc. were set on fire. Later on, Government of India floated an Interest Subsidy Scheme which covered the borrowers whose aggregate limits from all the Banks did not exceed Rs.25,000/-. Soon thereafter a revised Central Interest Subsidy Scheme was also approved by the Government of India and in pursuance whereof Reserve Bank of India on 31st March, 1984 issued directions to the various Banks to extend Interest Subsidy to the borrowers by charging 1% simple interest and such like other facilities.

(3.) As the complainant was an account holder of UCO Bank in Sector 28, Faridabad Branch, he approached the Bank for providing the aforesaid benefits and submitted the requisite formal application along with the necessary documents. The Branch Manager of UCO Bank after due verification and satisfaction of the genuineness of the claim recommended the same to the Zonal Office of UCO Bank for the grant of Interest Subsidy amounting to Rs.12,50,105/-. In turn the Zonal Office of the UCO Bank forwarded the proposal to their Head Office at Calcutta. Despite repeated reminders of the complainant, the necessary Interest Subsidy was not received by the complainant and in turn reply received from the UCO Bank was only to apprise the complainant of the correspondence of the UCO Bank with the Reserve Bank of India. By this in action on the part of the UCO Bank in not releasing the Interest Subsidy, the complainant suffered huge financial loss as the complainant had to pay higher rate of interest amounting to Rs.5 lacs in the absence of the Interest Subsidy. In the mean time the complainant came to know that Interest Subsidy as claimed by the complainant and recommended by the UCO Bank had been sanctioned by the Reserve Bank of India, but the same was not released to the complainant and was returned to the Reserve Bank of India by the authorities of the UCO Bank without any valid ground. Aggrieved by this, the complainant has approached this Commission for the recovery of the aforesaid amount of Interest Subsidy and loss suffered, total amounting to Rs.17,50,105/-.