SHAH NURSING HOME AND POLY CLINIC PRIVATE LIMITED vs INVESTMENT CORPORATION OF U.P. LIMITED

A complaint lias been filed on behalf of the petitioner, Shah Nursing Home and Poly Clinic Private Limited stating inter alia that the complainant was sanctioned a loan of Rs. 72,20,000/- by the respondent for setting up a thirty three bedded Nursing Home and Poly Clinic at Meerut. The project was to be financed on the basis of debt equity ratio of 2 : 1 and the loan of Rs. 72,20,000/- was dispersed in three instalments of Rs. 47,15,000/-, Rs. 8,95,000/- and Rs. 16,10,000/- respectively. The execution of the project was delayed and it started in October, 1990''instead of the scheduled date of 1989. The Nursing Home and Poly Clinic did not fare well due to communal riots in Meerut and also on account of the competition offered by Swati Hospital which is situated at a distance of half a kilometre, with the result, that it became sick. The complainant thereafter, approached the respondent on 28th March, 1994 for reschedulement of loan, waiver of interest and for additional loan for its revival. The grievance of the petitioner is that the relief sought was not given by the respondent despite repeated requests. The petitioner''s application of 30th December, 1997 for one time settlement was also rejected by the respondent and an advertisement was issued in the Dainik Jagran of 14th January, 1998 regarding the sale of the Nursing Home. Another grievance of the petitioner is that whereas the facility of reschedulement of loan and a rehabilitation package was offered to Swati Hospital, the same was denied to it. It has been complained that the respondent is taking recourse to U.P. Public Money Recovery of Dues Act, 1972 against the Directors/Guarantors including the deceased Smt. Sarwar Sultan and Smt. Saadat Sultan. In short, the respondent is adopting unfair trade practices and acting in an arbitrary, illegal and mala fide manner and in violation of the guidelines of IDBI.

ARGUMENTS on maintainability of the complaint addressed by Mr. J.M. Sharma, Advocate for the petitioner were heard. The question for determination is whether the complaint is maintainable and whether the respondent has been indulging in unfair trade practices within the meaning of Section 36A of the MRTP Act, 1969. The respondent is a Corporation of the U.P. State Government and its declared aims and objects are to promote industrial development by providing loan and other facilities to entrepreneurs for setting up units in the State of Uttar Pradesh. In pursuance of these objects, the petitioner was also sanctioned a loan for setting up thirty three bedded Nursing Home and Poly Clinic. It is not denied that default in payment of principal and interest amount was committed by the petitioner. There is a stipulation in the loan agreement which is required to be signed by the loanee that in case of default, the entire amount including interest will be paid on demand. Notice of demand was accordingly sent to the petitioner by the respondent and action for recovery was also initiated under the U.P. Public Money Recovery of Dues Act, 1972. While it is true that in certain cases reschedulement of loan and even rehabilitation package for a sick unit is considered, these concessions and facilities are granted on merits of each case, and not across the board to all sick units. Chances of revival capacity to repay the loan and interest and above all the inherent strength of a unit in terms of its management are other relevant considerations for reschedulement of loan and other concessions. In the instant case, the net worth of the petitioner Nursing Home has been totally eroded and it appears that after due consideration of all the relevant factors it has been decided to recall the loan and the process of recovering the principal sum and interest amount under the U.P. Public Money Recovery Act, 1972 has also been started. The action taken by the respondent is in accordance with the provisions of the U.P. Public Money Recovery Act, 1972 and it cannot be said to be a trade practice much less an unfair trade practice within the meaning of Section 36A of the MRTP Act, 1969 (the Act for brief) on the part of the respondent. Moreover, a civil suit has been filed by the petitioner and even otherwise, when remedy by way of a civil suit is being availed of by the petitioner, the present complaint cannot be entertained in view of Section 4(1) of the Act which is to the effect that the provisions of this Act are in addition to and not in derogation of any other law in force and it is a settled principle of law that this act is intended to supplement and not to supplant the ordinary law. In view of the above discussion, the complaint is rejected as not maintainable. Complaint dismissed.