A V S RAJA Vs. INDIAN BANK

JUDGEMENT

(1.) THIS appeal arises on the Order dated 19.6.2002 passed by the PO, DRT-II, Chennai, in OA-27/2001. The main point raised in this appeal is with regard to the rate of interest. Counsel for the appellant submits that the loan was availed by the appellant only for agricultural purpose and the appellant is liable to pay interest only on the agricultural loan at concessional rate but the respondent Bank has charged more interest at 19.89% and that is excessive and the respondent Bank is not entitled to charge such high rate of interest on the agricultural loan availed by the appellant.

(2.) Counsel for the appellant mainly relies upon the sanction letter and the Notices issued by the Bank. Of course, the loan was sanctioned only for agricultural purpose. Even in the Notice sent by the Bank dated 9.3.1998 and 15.11.1998, it has been specifically stated that the appellant approached the Bank for setting up agricultural lands project and the loan was sanctioned by the Bank for that effect. Even in the OA, it is stated that the defendant availed the said loan for agricultural purpose. It is the case of the respondent Bank that the loan availed by the appellant was not utilised for agricultural purpose and it was diverted for commercial purpose and because of that only the Bank charged enhanced rate of interest i.e. \ 9.89% and the appellant did not establish that the loan availed by him was utilised only for agricultural purpose. But it must be established that the appellant utilised this loan amount only for agricultural purpose and there was no diversion of this loan facility for other purpose other than for which the loan was sanctioned. Even in the OA the respondent Bank has clearly stated that the defendant availed the loan amount for agricultural purpose but the amount was not utilised for agricultural purpose as requested in the loan application but only for real estate business. So, even in the initial stage when the OA itself was filed, the Bank was very specific that the amount borrowed by the appellant was not utilised for agricultural purpose and it was utilised for real estate and other commercial purpose.

(3.) COUNSEL for the appellant submitted that this fax message was not filed before the DRT and it was filed before this Appellate Tribunal only for the first time and so no reliance can he placed upon this document. The explanation given by the COUNSEL for the respondent Bank was that this fax message was not available with the Bank when the trial in the DRT was being conducted and this fax message was available in the Head Office and it could not be got from the Head Office and this fax message was brought from the Head Office only during the pendency of this appeal and so during this appeal the respondent Bank is able to produce this fax message. This fax message is an authentic letter clearly signed by the appellant. The signature of the appellant found in this fax message also tallies with the other admitted signatures found in the file. The appellant has clearly set out in the fax message that though the purpose of the loan was agriculture he could not proceed with the project due to certain legal problems in the land in which the activity was to be carried on and hence he invested money in the capital market through the Portfolio Management relying on one share-broker by name Mr. H. Srinivasan, but due to the volatility in the market the entire money was lost just over period of 6 months. It is a clear admission made by the appellant to the Bank in the fax message. This admission of the appellant in his fax message cannot be brushed aside when this document is available before this Tribunal. The appellant has sent the fax message only to the Bank Chairman. It is also duly signed by the appellant. In the said circumstance, the clear admission made by the appellant in the fax message cannot be thrown over and it cannot be concluded that the appellant never signed the fax message. This fax message and the other contentions raised in the OA by the respondent Bank clearly prove that even though the appellant availed the loan for agricultural purpose, the loan was utilised for other commercial purpose. So, it is crystal clear that the appellant did not use the loan for the purpose for which he availed and he utilised it for some other purpose. So, there is clear diversion of this loan amount for some other purpose. Under such circumstances, it can be safely concluded that the loan availed by the appellant was not at all utilised for agricultural purpose.