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Madhya Pradesh High Court · body

2017 DIGILAW 576 (MP)

VIJAY v. STATE BANK OF INDIA

2017-05-01

J.K.MAHESHWARI

body2017
ORDER : J.K. Maheshwari, J. This petition under Article 226 of the Constitution of India has been filed for quashing the order Annexure P/1 dated 22-7-2014 and to seek direction for sanctioning the subsidy @ 25% of the capital cost of the project under the "Gramin Bhandaran Yojna"; it is prayed the respondents No. 1 and 2 may be restrained from recovery of the amount of term loan to the extent of amount of subsidy admissible to the petitioner and also restrain them from charging interest to the extent of eligibility of subsidy. The direction has also been sought to adjust the amount of the interest already recovered by the Bank without adjustment of subsidy/advance subsidy against term loan amount. 2. The facts in brief are that the "Gramin Bhandaran Yojna" (hereinafter referred to as the 'Yojna') has been floated by the Central Government whereby the residents of India may get loan for construction of the godown (warehouse) in the rural area, on subsidy as specified therein, and it would be sanctioned as per the scheme of NABARD. Petitioner submitted a project for construction of a godown on the land situated in Tehsil Bagali, District Dewas to the Branch Manager, State Bank of Indore (now merged in the State Bank of India), Hatpipliya, District Indore. The total cost of the project was Rs. 56.54 lakhs out of which the petitioner deposited his own capital investment 16.72 lakhs and the term loan was worked out at Rs. 39.82 lakhs, which includes the eligible capital investment subsidy at Rs. 14.30 lakhs @ 25% of the total cost of project. The term loan was sanctioned on 28-3-2008. The first instalment was released on 31-3-2008, as reveal from the acknowledgement Annexure P/3 dated 1-4-2008. 3. It is the contention of the petitioner that he is regularly paying the bank instalments and as per the scheme the project has been completed within the time so specified. The subsidy @ 15% has wrongly been sanctioned by the NABARD although he has applied under the category of "Farmer" to which subsidy @ 25% ought to be granted in view of the recommendation made by the Bank while sanctioning the loan. It is a further grievance of the petitioner the sanction of the subsidy was made belated vide order dated 4-3-2013 of the NABARD. It is a further grievance of the petitioner the sanction of the subsidy was made belated vide order dated 4-3-2013 of the NABARD. However, during such period the bank has calculated the interest even on the amount of subsidy, which is liable to be repudiated and the interest on subsidy cannot be recovered from him, by the Bank. It is the further grievance, after issuance of the direction the rate of the subsidy accepted by the NABARD vide order Annexure P/1 dated 22-7-2014 is contrary to the guidelines applicable on the date of submission of the project accepting his loan, in the category "General" and not in the category of "Farmer". However, in view of the said submission referring various documents the relief as prayed for in the petition may be directed. 4. The respondents No. 1 and 2 Banks by filing their reply inter alia contended that the amount of loan was sanctioned on 28-3-2008 for a sum of Rs. 39,82,000/- under the scheme of CISS-NABARD. The first instalment was disbursed to petitioner on 31-3-2008. As the petitioner has not submitted the relevant document required to be forwarded to NABARD seeking advance subsidy or full subsidy till completion of the project, therefore, due to delay on the part of petitioner sanctioning of the subsidy was delayed. After sanction the interest on the sanctioned amount of subsidy has not been charged from the petitioner. In addition to the aforesaid referring various documents filed by the petitioner and an affidavit of the Bank it is contended that the loan has been sanctioned on the request made by the petitioner. However, for its repayment the borrower is liable in case the subsidy has not been sanctioned. An undertaking to this effect has been submitted by the petitioner, however, he cannot go back against his undertaking. It is also their case that the Bank submitted all the documents to the NABARD as is apparent from the contents of the affidavit of the Bank officer Annexure P/9 dated 18th January, 2013 filed in the earlier writ petition and the reminders were also sent to the NABARD, which would reveal from Paras-10 to 16 of the said affidavit. In such circumstances, since the petitioner has submitted the documents in the year 2009-2010 after sanctioning the loan on 28-3-2008, the Bank cannot be deprived to recover the amount of interest on the loan amount including subsidy. In such circumstances, since the petitioner has submitted the documents in the year 2009-2010 after sanctioning the loan on 28-3-2008, the Bank cannot be deprived to recover the amount of interest on the loan amount including subsidy. Therefore, the claim as made seeking relief in this petition against the Bank for adjustment of the amount of interest on the amount of subsidy is devoid of any merit. It is also submitted that sanctioning of the subsidy is a function of NABARD under the scheme of the Government of India. However, on receiving the sanction the Bank has started to charge the interest on the remaining unpaid amount of the loan. Therefore, the petition filed by the petitioner is devoid of any substance and may be dismissed accordingly. 5. Learned counsel appearing on behalf of the respondents NABARD contends that looking to the documents submitted by the petitioner while sanctioning the loan for the purpose of construction of the godown (warehouse) under the scheme it was found that his main source of earning is not from the agriculture, but it was from the salary. However, the petitioner would not come within the purview of 'Farmer' in which category he has applied the loan, However, looking to the definition of the "Farmer", as given in the scheme, he does not fall within the said category. Therefore, he would be entitled to receive the subsidy only to the extent of 15% of the project cost calculated as per the guidelines issued under the scheme dated 1-10-2004 which is applicable on the date of release of the first instalment of the loan. It is also contended that all the relevant documents of the project of the petitioner have been received by the NABARD on 4-3-2013 which have been processed and the advance subsidy of Rs. 3,54,200/- has been sanctioned to M/s Annapurna Warehouse dated 5-3-2013 instructing to the Bank in this regard. By filing reply it is urged that final subsidy has also been sanctioned on 21-4-2014 to the tune of Rs. 6.790 lakhs out of the total project cost. In such circumstances, the NABARD has acted upon as per the guidelines issued under the scheme and sanctioned the subsidy as per the entitlement of the petitioner. Therefore, they are not at fault for any reason whatsoever. In view of the aforesaid, prayer is made to dismissed the petition. 6. 6.790 lakhs out of the total project cost. In such circumstances, the NABARD has acted upon as per the guidelines issued under the scheme and sanctioned the subsidy as per the entitlement of the petitioner. Therefore, they are not at fault for any reason whatsoever. In view of the aforesaid, prayer is made to dismissed the petition. 6. After hearing learned counsel for the parties and on perusal of the facts of this case, following questions arise for determination : 1. Whether petitioner would be entitled to claim subsidy to the extent @ 25% within the category "Farmer", however, the order passed by the NABARD is not in conformity to the guidelines issued under the "Gramin Bhandaran Yojna"? 2. Whether petitioner may be compelled to pay the interest even on the amount of the subsidy in terms of the scheme? 3. Whether petitioner would be entitled to get adjustment of the interest paid on subsidy and not supposed to pay interest on the said amount? 4. Whether the adjustment of the amount of interest recoverable from the petitioner on the sanctioned loan after deduction-of the subsidy would be from the date of its release by the NABARD or from the release of the first instalment of the loan? All the aforesaid questions are related to each other, however, those are adverted to simultaneously. 7. The perusal of the record indicates that the project to which loan was sanctioned to the petitioner comes within the purview of the "Gramin Bhandaran Yojna" as per the guidelines of CISS-NABARD. It further reveals from the acknowledgement to sanction the loan Annexure P/3. It is to be noted here that petitioner submitted a project for construction of the warehouse for a total project cost of 56.54 lakhs out of which an amount of Rs. 16.72 lakhs was the capital investment of the petitioner and the total term loan amount was worked out Rs. 39.82 lakhs including the amount of the investment subsidy, subject to sanction by the Central Government. It is also not in dispute, the Bank had made the recommendation for subsidy of the petitioner treating him "Farmer" and requested to sanction the subsidy to the tune of Rs. 14.13 lakhs @ 25% out of the total cost of the project Rs. 56.54 lakhs. It is also not in dispute, the Bank had made the recommendation for subsidy of the petitioner treating him "Farmer" and requested to sanction the subsidy to the tune of Rs. 14.13 lakhs @ 25% out of the total cost of the project Rs. 56.54 lakhs. The NABARD accepted the claim of subsidy of the petitioner to the extent of 15% in General category and not classified in the category of "Farmer" as specified under the scheme of Government of India. As per the said scheme the "Farmer" means a person whose main source of income is from agriculture. In the present case, the bank while forwarding his case for sanction of subsidy to NABARD found him farmer, but NABARD looking to the income tax return not accepted him as "Farmer". Learned counsel for the petitioner has made an attempt to satisfy this Court that the main source of income of the petitioner was agriculture, however, relying upon the judgment of High Court of Allahabad rendered in the case of Seth Shiv Prasad v. Commissioner of Income Tax, (1972) 84 ITR 15 (ALL.) contended that it may be described as the spring or fount from which a clearly defined channel of income flows. However, if fix income has been shown from the salary in the income-tax return, which is more than the agriculture income, then in the facts of the case, taking the less income of the agriculture as the main source of income is not in conformity to law. On perusal of the facts of the said case and the controversy involved in the present case, it is to be seen whether petitioner comes within the purview of 'Farmer' as specified in the scheme or not. In this regard suffice it to observe that it is a case for grant of loan and taking subsidy under the scheme of the Government of India. However, terms of the scheme would prevail to determine him 'Farmer' based on invocation, and capacity to work in which the petitioner has applied for the subsidy. As per the income tax return the main source of income of the petitioner was shown from the salary and not from the agriculture. However, in this context the competent authority who has to grant subsidy did not find the petitioner in the definition of a 'Farmer' for the purpose of granting subsidy. As per the income tax return the main source of income of the petitioner was shown from the salary and not from the agriculture. However, in this context the competent authority who has to grant subsidy did not find the petitioner in the definition of a 'Farmer' for the purpose of granting subsidy. As per the definition, in my considered opinion, petitioner do not fall in the category of 'Farmer' and the decision of the respondents not sanctioning 25% subsidy does not suffer from any illegality. Therefore, the entitlement decided by the NABARD to claim subsidy by the petitioner to the extent of 15% is justifiable and do not warrant interference. Therefore, the order of the NABARD deciding the 15% subsidy to the petitioner is in accordance with law. 8. It is further seen that the lean under the scheme was sanctioned for construction of the warehouse on 28-3-2008. The first instalment of the said loan was disbursed on 31-3-2008. As per the Clause XXII of the revised operational guidelines the subsidy for the projects under the scheme shall be released through the NABARD. It has further been clarified that the subsidy admissible to the promoter under the scheme will be kept in the Subsidy Reserve Fund Account (Borrower-wise) in the books of the financing banks and no interest would charged on this amount by the Bank. For the purpose of charging interest on the loan, the subsidy amount should be excluded and the balance lying to the credit of the subsidy reserve fund account will not form part of demand and time liabilities for the purpose of SLR/CRR. Clause 5 of the said scheme specifies Pattern of Assistance for project for which the subsidy may routed through to the NABARD. In this regard it is apparent that after sanctioning of the loan the Bank shall submit the claim of subsidy on behalf of borrower to NABARD within the category as specified for advance subsidy and/or final subsidy, which shall be sanctioned by the NABARD. It is not a case wherein the petitioner has not completed the project within the time so specified in the scheme. It is also not a case wherein the petitioner remained at fault in re-payment of the loan. It is not a case wherein the petitioner has not completed the project within the time so specified in the scheme. It is also not a case wherein the petitioner remained at fault in re-payment of the loan. However, after the release of first instalment of the loan to the petitioner and on submitting the papers of loan on 1-9-2009, it was between the Bank and the NABARD to get through the file of the petitioner seeking subsidy after determining the entitlement on a project under the scheme either for advance or for final subsidy. It is to be noted here that the advance subsidy has been sanctioned on 5-3-2013 and the final subsidy has been sanctioned on 21-4-2013. Thus for the delay after 1-9-2009, petitioner would not be held responsible. The divergent claims were made by the petitioner and the respondents. Petitioner submits that he has fulfilled all the requisites for subsidy on 1-9-2009, which is apparent from the affidavit of the Bank filed in previous case, meaning thereby from 28-3-2008 to 1-9-2009 i.e. the period on which the requisite compliance was to be made by the petitioner, delay was on his part to which applying the principle of equity, justice and fair play, he cannot object to pay interest on the amount of subsidy. After I-9-2009 on receiving the documents, affidavits and counter affidavits have been filed by the petitioner as well as NABARD in previous petition. The Bank in its affidavit, Annexure P/9 in paragraphs 10 to 16 explained that correspondences made to the NABARD during the period 9-9-2009 till 24-4-2010 and during such period the documents were referred to the NABARD, but decision was no; taken communicating to the Bank or to the petitioner. On the other hand, by filing an affidavit Annexure P/10 in the previous petition in, para-3 it is submitted by the NABARD that on receipt of all the relevant documents on 4-3-2013 advance subsidy was sanctioned on 5-3-2013. The said disputed fact between the Bank and the NABARD cannot be adjudicated in extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. However, it is for the Bank or NABARD to determine that who is responsible for belated sanction of the amount of subsidy. The said disputed fact between the Bank and the NABARD cannot be adjudicated in extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. However, it is for the Bank or NABARD to determine that who is responsible for belated sanction of the amount of subsidy. This Court is of the opinion that the loan of petitioner was sanctioned under the scheme wherein subsidy may be sanctioned after the recommendation by the NABARD. Thus petitioner is entitled to get subsidy though it may not be in the category of "Farmer", but in the "General" category @ 15%. However, as per the terms of the "Gramin Bhandaran Yojna", the petitioner is not entitled to pay the amount of interest on the amount of subsidy sanctioned by NABARD. The said issue may be adjudicated by the Bank or NABARD by their mutual understanding. This Court is only concerned to the entitlement of the petitioner in the matter of claiming benefit of the interest on the amount of subsidy in terms of the scheme. The "Gramin Bhandaran Yojna" specifies that on the amount of subsidy, the interest shall not be charged, therefore, on the total cost of the project, 15% subsidy sanctioned by NABARD interest thereon cannot be recovered by Bank from the petitioner. The Bank cannot compel him to pay interest on the amount of subsidy to be sanctioned by the NABARD except to the period of delay on his part. 9. Now reverting to the issue that the benefit of the interest would be available to the petitioner from the date of sanction of the subsidy or from the date of release of the first instalment of the loan. Looking to the terms of the scheme it is apparent that after disbursement of the first instalment of the loan the matter is to be proceeded with by the Bank to NABARD claiming advance subsidy and thereafter final subsidy. In the present case, the date of sanction of loan was 28-3-2008 and the date of release of first instalment was 31-3-2008. The petitioner has not submitted his affidavit up to 1-9-2009, however, as concluded above, he would not be entitled to get the benefit of interest on the amount of subsidy till that date because such delay was on his part. The petitioner has not submitted his affidavit up to 1-9-2009, however, as concluded above, he would not be entitled to get the benefit of interest on the amount of subsidy till that date because such delay was on his part. Thereafter, for more than about 31/2 years the matter remained pending in between the Bank and the NABARD for no fault on the part of the petitioner The counsel representing Bank contends that all the relevant documents were forwarded to the NABARD while the NABARD contends that on receipt of those documents the order has immediately been passed for advance subsidy and thereafter final subsidy was sanctioned. It is a case in which even after completion of the formalities by some delay by the petitioner on 1-9-2009, the advance subsidy has been sanctioned by the NABARD prior to sanction of final subsidy. However, on submitting the papers to the Bank, if receiving of the advance subsidy is delayed, the Bank cannot claim the interest from the borrower but simultaneously by scheme of sanction of advance subsidy, the Bank should also not be left to suffer, as the Government introduced such equitable scheme, simultaneously in case of delay either on the part of the Bank or on the part of NABARD, the liability of the interest cannot be fastened on the borrower. However, in the said sequel of the facts and looking to the terms of the scheme petitioner would be entitled for relaxation of payment of interest from 1-9-2009 on the amount of subsidy i.e. the date on which he has completed all the formalities and thereafter it was the function of the Bank and the NABARD in belated sanction of subsidy. In that view of the matter, in my considered opinion, it is to be held that as per entitlement of the petitioner for the subsidy to the extent of 15% the interest on the said amount would not be leviable on him w.e.f. 1-9-2009 to the extent of the amount of subsidy sanctioned by the NABARD to such ratio and also entitled to adjust the amount of the interest, if paid, during the said period. 10. 10. At this stage, it has been brought to the notice of this Court by the learned counsel appearing on behalf of the Bank that under the order of stay passed by this Court in W.P. No. 6772/2011 petitioner is not making payment of instalment including interest, but on raising the demand every time the amount is being credited in his account. However, in view of the aforesaid, the Bank may be permitted to adjust the amount of interest which has been credited in the account of the petitioner. In this regard suffice it to observe that in view of the discussion made here-in-above, the Bank shall certify the entitlement of the petitioner regarding interest, on the amount of subsidy by issuing a statement recalculating the interest and also its adjustment, which shall be verified by the petitioner and if any objection is there, it shall be decided by the Bank in view of the foregoing discussion. 11. As per the discussion made here-in-above, it is apparent that the petitioner does not fall within the category of "Farmer", however, not entitled to claim the subsidy to the extent of 25% of the total cost of the project. As he comes within the category "General", therefore, 15% subsidy can be claimed by him, which has rightly been sanctioned by NABARD. In such circumstances, the grant of subsidy to the extent of 15% as sanctioned by NABARD do not warrant any interference and all the questions posed are answered accordingly. 12. In view of the above discussion, this petition succeeds and is hereby allowed in part by issuing the following directions :- (i) The entitlement of the petitioner for grant of subsidy to the extent of 15% is just and proper, however, the order impugned (Annexure P-1) do not warrant interference. (ii) As the loan was sanctioned on 28-3-2008 and its instalment was disbursed on 31-3-2008, but, the documents of subsidy were submitted by the petitioner on 1-9-2009, therefore, till 1-9-2009 petitioner shall not be entitled to get relaxation of interest on the amount of subsidy. Thereafter the delay is either on the part of the Bank or on the part of NABARD, however, from the said date on the amount of subsidy sanctioned by NABARD, interest shall not be chargeable against the petitioner to the extent of the subsidy amount. Thereafter the delay is either on the part of the Bank or on the part of NABARD, however, from the said date on the amount of subsidy sanctioned by NABARD, interest shall not be chargeable against the petitioner to the extent of the subsidy amount. (iii) Due to delay in adjudication of the issue of subsidy for a period from 1-9-2009 till 21-4-2014, the Bank shall not be entitled to claim interest on the amount of subsidy from the petitioner and interest paid during such period be adjusted. (iv) In view of the foregoing discussion, it is directed that the Bank shall issue a statement of loan account adjusting the interest taken on the amount of subsidy from petitioner w.e.f. 1-9-2009 within one month from the date of production of certified copy of this order. (v) On receiving the said statement of account, reply be filed by petitioner within one month and the Bank authorities shall calculate the ascertained amount of recovery of loan taking into consideration the observations made here-in-above, and the said amount be paid by the petitioner in instalments in terms of the agreement. (vi) In the facts and circumstances of the case, the parties are directed to bear their own costs.