The organisation moved to the state forum after the Rajkot Consumer Forum ordered to pay Rs 45,097 by way of interest due on the FD
The State Consumer Forum has set aside a district forum order in connection with a case that involved payment of lower interest rate on Fixed Deposit (FD) by the Gujarat State Finance Corporation (GSFC). The organisation moved to the state forum after the Rajkot Consumer Forum ordered to pay Rs 45,097 by way of interest due on the FD.
The case pertains to one Narendra Sheth, a partner in Arihant Industries that manufactures tiles and other things. The company had taken a loan from GSFC and it was to be repaid in installments. As a security for the said loans, the company had given a fixed deposit of Rs 1.25 lakh. On June 7, 2000 GSFC annexed the FD but after a request by the complainant agreed to return it. The complainant then moved the district forum alleging that when the company annexed the loan he was getting an interest of 14 per cent on the deposit, while when it was returned, the company returned it with just 9 per cent interest.
The company argued that since the loan was borrowed by the complainant to expand his business in partnership firm, it was for commercial use and the hence he did not fit the definition of a consumer. It further argued that deposit rates were fixed as per the mandate of the RBI and the company had only paid what was the due rate at that point of time. It should be noted that neither the complaint came to present his side of the version nor did he appoint a counsel. The state forum ruled that the district forum had made an error in judgement.
It stated that since the loan was taken to expand a business the complainant cannot be termed as a consumer and it also quoted several such rulings of the courts in support of the same. The forum further said that the time when the fixed deposit was annexed, the prevailing interest rate was 14 per cent but when the company agreed to return the money the prevailing interest.
CASE FILE
Narendra Sheth, a partner in Arihant Industries had taken a loan from GSFC and it was to be repaid in installments. As a security, company had given a fixed deposit of Rs 1.25 lakh. On June 7, 2000 GSFC annexed the FD but after a request by the complainant agreed to return it.
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