Y. Krishan ( 1 ) THE complainant Padmalaya Auto Complex Ltd. has claimed damages amounting to Rs. 30. 00 lakhs on account of failure on the part of the Opposite Party- A. P. Financial Corporation to release the instalments of loans against the sanctioned term loan of Rs. 41. 8 lakhs in time. In addition, it has prayed for ceriain directions to be given to the Opposite Party for release of the balance of the funds sanctioned, not to charge interest on the amount so far advanced upto the date of release of the balance of funds, to forbear from demanding the repayment of principal, to reschedule the repayment of the loans after the release of the balance of the sanctioned loan, not to charge commitment charges in respect of the balance of amount sanctiotned but remaining undrawn or undisbursed. ( 2 ) ACCORDING to the complainant in October, 1986 the Opposite Party State Pinalice Corporation sanctioned aterm loan of Rs. 41. 9 lakhs against the request for a term loan of Rs. 30 lakhs only. The first instalment Of loan of Rs. 10. 45 lakhs was granted in October, 1988. The complainant sought for the further release of the loan in February, 1989 but there was dispute about the value of the civil works executed and against which a further laon instalment was to be released. Eventually a senior Engineer of the opposite Party Corporation valued the civil work at Rs. 7. 5 Iakhs in May, 1989 agaisnt which the Opposite party released a sum of Rs. 4. 15 lakhs only though the amount required was Rs. 10. 45 lakhs as ad hoc second loan instalment. ( 3 ) LIKEWISE there was dispute about the valuation of the further work done for the release of the further amounts of loan instalments but the release of loan instalments was delayed allegedly because of lapse of refinancing facility which the Opposite Party had obtained from I. D. B. I. Eventually the I. D. B. I. extended the validity of the refinancing of the loan by the Opposite Party in August, 1989 but the Opposite Party refused to release the funds. ( 4 ) FURTHER the Opposite Party also did not release Rs. 7. 74 lakhs as a part of the Central subsidy of Rs. 9. 11 lakhs admissible to the complainant. ( 4 ) FURTHER the Opposite Party also did not release Rs. 7. 74 lakhs as a part of the Central subsidy of Rs. 9. 11 lakhs admissible to the complainant. ( 5 ) IN short, the complaint is that the Opposite Party Corporation has starved the complainant of the funds both agaisnt the sanctioned term loan and on account of the subsidy admissible from the Central Government. In fact, the Opposite Party unjustifiably asked for reappraisall of the project on account of the passage of long lime and over-runs on the building costs. After reappraisal the complainant was informed by the Opposile Party to bring in further sum of Rs. 10. 00 lakhs. Therefore. in October, 1990 he made another application for a loan of Rs. 20. 00 lakhs. Though it was cleared for sanction by the Board of Directiors of the Opposite Party in November, 1990, yet no disbursement was made. The complainant has alleged that the Opposite Party could not advance the committed loans because of the diversion of the funds to the State unauthorisedly resulting in delay in funds to the Complainant. ( 6 ) THE Opposite Party State Financial Corporation in its rejoinder has stated that for the release of the first ad hoc amount of loan instalment of Rs. 10. 45 lakhs the complainant had been allowed three months time for shifting its registered office from Tamil Nadu to Andhra Pradesh and the execution of guarantee agreement by the two Directors within a period of two months. According to the Opposite Party the Complainant company fulfilled neither of the terms and conditions stipulated in the agreement within the time allowed. It has further pointed out that as per the original appraisal of the project, the unit should have gone into commercial production by august, 1987 whereas the complainant company failed to complete the legal formalities by that time. These were completed on 29th October, 1988. By then the time within which the refinance sanctioned by the I. D. B. I. could be availed of was practically over: according to the condition prescribed by the I. D. B. I. the refinance limit had to be utilised before 18th December, 1988. Consequently, it was not possible for the Corporation to advance loan to borrower in the absence of re-finance facility. Consequently, it was not possible for the Corporation to advance loan to borrower in the absence of re-finance facility. ( 7 ) THE Opposite Party Corporation further pointed out that the Central subsidy due was adjusted against the arrears of interest recoverable from the borrower and this was done with the consent of the Chief Promoter of the Company. ( 8 ) THE Opposite Party had also to ask for re-appraisal of the project because of the delayed implementation of the project by three years. There was a long time gap between the date of sanction of loan and the implementation of the project and there was over-runs, on the original estimates necessitating reappraisal. In the light of the reappraisal in February, 1991 the Opposite Party Corporation came to the conclusion that it was not possible for he management of the complainant to implement the scheme and therefore, decided to recall the loan. ( 9 ) IN the light of the facts cited above it is evident that no deficiency inservice on the part of the Opposite Party-State Financial Corporatron-has been established. ( 10 ) IN any case the financial institution which undertakes to provide loans necessarily will have considerable discretion in deciding as to whether a particular instalment of loan should be released or not, to determine the value of the works executed against which further instalment of loans have to be released, whether a project continues to be viable keeping in view the delays in its execution and the cost over-runs etc. ( 11 ) IN short there is no deficiency in-service on the part of the State Financial Corporation has been established. The complaint is, therefore, dismissed. The complainant should pay a sum of Rs. 2,000. 00 as costs to the Opposite Party.