BANK OF INDIA versus M/S. BRINDAVAN AGRO INDUSTRIES PVT. LTD.

Citation: [2020] 3 S.C.R. 1071 · Decided: 28-02-2020 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
1071
BANK OF INDIA
v.
M/S. BRINDAVAN AGRO INDUSTRIES PVT. LTD.
(Civil Appeal No. 1720 of 2020)
FEBRUARY 28, 2020
[DR. DHANANJAYA Y CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Consumer Protection Act, 1986: Grievance of consumer
regarding processing fees charged by Bank – In the instant case,
the consumer-respondent by its letter dated 15.10.2011 requested
for credit facility to the appellant-Bank with concession of 50% on
LC charges, processing charges, inspection charges etc. and full
waiver of DD charges and commitment charges – However,
consumer, subsequently, revised its credit requirement three times –
On 30.12.2011, the Bank debited the account of consumer by
Rs.27.41 lacs being 50% of the applicable processing fees including
the TEV study and service tax charges – Consumer sought refund
of said amount on the ground of suffering losses, owing to the
alleged delay of the Bank in sanctioning the credit facilities – On
17.03.2012, the credit facilities were sanctioned – When Bank
approached the consumer with the sanction letter for credit facilities,
consumer showed sanction letters issued by other Banks – Consumer
filed an application under s.17 of the Consumer Protection Act,
1986 – This application was allowed by the SCDRC directing the
Bank to pay Rs.27.41 lacs – Appeal before the NCDRC against
said order remained unsuccessful – Appeal by Bank – Plea of Bank
that the procedure for sanction of loan  detailed in the Bank’s
Circular dated 20.04.2005 is available on the website of the Bank
which provides that it is mandatory to obtain a TEV study report in
all new industrial projects, diversification projects and accounts
where restructuring (other than CDR) is proposed and where the
total fund based limits/exposure (including liabilities likely to get
devolved in the case of existing accounts) is equal to and above the
threshold limit of Rs. 500 lacs; the term “Total Fund Based Limits”
includes both term loan and Working Capital Limit – It further pointed
out that appraisal fees for TEV study is different from the “Processing
[2020] 3 S.C.R. 1071
1071
A
B
C
D
E
F
G
H
1072
SUPREME COURT REPORTS
[2020] 3 S.C.R.
Fees” and is required to be charged in applicable cases over and
above the processing fees – Held: As per the tariff mentioned in the
sanction letter, TEV charges were Rs.18.25 lacs whereas processing
charges were to the tune of Rs.49.63 lacs – The consumer had to
pay charges for availing credit facilities of which the consumer
was in knowledge of and, therefore, sought a waiver of 50% of the
charges in letter dated 15.10.2011 – It is the consumer who revised
the requirement of credit facilities three times and the Bank
sanctioned credit facilities on 17.03.2012 i.e. within almost three
months from the final modified request – The ignorance of the
procedure and the circular of the Bank dated 20.04.2005 cannot
be accepted – The consumer was aware of the processing charges
and had sought a waiver thereof and, therefore, the processing
charges had been debited by the Bank on 30.12.2011 in terms of
authority given by the consumer on 19.01.2011 – Though, the Bank
agreed to refund Rs.9.16 lakhs from the processing charges through
email but the consumer had not accepted such proposal – Therefore,
the consumer is entitled to refund of Rs. 9.16 lakhs only in terms of
the decision of the Bank communicated to the consumer rather than
waiver of TEV charges in its entirety – The request was to give
concession of 50% of all charges, therefore, it is the cumulative
amount of charges which is to be taken into consideration and not
the charges under a particular head – Orders of SCDRC and
NCDRC suffer from patent illegality and are set aside.
Allowing the appeal, the Court
HELD: 1. The reasoning given by the NCDRC is de hors
the proposal as well as circular of the Bank and is, in fact, based
on ipse dixit of the NCDRC. The consumer had sought a waiver
of 50% of all charges in the request letter dated 15th October,
2011. The total charges payable were Rs. 68,83,000/- plus service
tax. Even if, the 50% concession is conceded to the
consumer, still the amount to be charged is much more than
Rs. 27,47,165/-. As per the tariff mentioned in the sanction letter,
TEV charges are Rs. 18,25,000/- whereas processing charges
are to the tune of Rs. 49,63,000/-. Obviously, the consumer had
to pay charges for availing credit facilities of which the consumer
was in knowledge of and, therefore, sought a waiver of 50% of
the charges. I

Excerpt shown. Read the full judgment & AI analysis in Lexace.