IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC THURSDAY, THE 23RD SEPTEMBER 2010 / 1ST ASWINA 1932 WP(C).No. 24889 of 2010(T) -------------------------------------- PETITIONER: ------------------- SURESH VELAYUDHAN, PROPRIETOR, M/S.PARAMOUNT PHOTOGRAPHERS, AYURVEDA COLLEGE JUNCTION, M.G.ROAD, THIRUVANANTHAPURAM. BY ADVS. SRI.K.B.GANGESH, SMT.SMITHA CHATHANARAMBATH. RESPONDENTS: ------------------------ 1. KERALA TRANSPORT DEVELOPMENT FINANCE CORPORATION LTD.,REP.BY ITS MANAGING DIRECTOR, LEVEL-8(6TH FLOOR), TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM- 695 014. 2. FINANCE ASSISTANT & CHIEF ACCOUNTING OFFICER, KTDFC LTD., LEVEL-8 (6TH FLOOR), TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM-695 014. R1 BY SRI.K.R.B.KAIMAL, SENIOR ADVOCATE, ADVS. SRI.B.UNNIKRISHNA KAIMAL, SRI.T.ISSAC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23/09/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. ANTONY DOMINIC, J. ------------------------- W.P.(C.) No.24889 of 2010 (I) --------------------------------- Dated, this the 23rd day of September, 2010 J U D G M E N T Petitioner had availed of a loan from State Bank of Travancore, Puthenchanthai Branch. Subsequently based on Ext.P9 loan agreement with the respondent Corporation, the loan was taken over specifying interest @ 7.75% and with 2% default interest. The petitioner also availed of an additional loan, which was also disbursed on terms similar to those contained in Ext.P9 agreement. 2. Subsequently, the petitioner was issued Ext.P5 letter dated 19/06/2008 intimating that the lending rates were revised in accordance with volatility in interest rates, and that the rate of interest of the loan availed of by the petitioner was revised to 13%. The petitioner submitted objections and that resulted in Ext.P7 letter dated 21/11/2008, where the petitioner was informed that the interest has been fixed at 12.5% floating rate. Again the petitioner filed objections and there was also a negotiation with the Chief Accounts Officer of the respondent on 18/09/2009. WP(C) No.24889/2010 -2- 3. According to the respondent, thereafter the matter was considered by the Board of Directors and the petitioner was issued Ext.P14 dated 15/03/2010 intimating that the interest rate will be fixed at 12.5% with effect from 19/06/2008, the date on which Ext.P5 letter was issued. Objections were again filed. The objections were not considered and finally the petitioner was issued Ext.P18 dated 21/06/2010 calling upon the petitioner either to make payment or to close the loan account. It was at that stage, the writ petition has been filed. 4. Main grievance of the petitioner is that in the representations filed by him, he sought reference of his grievances to the Grievance Redressal Mechanism as contemplated in Exts.P10 to P12 guidelines issued by the Reserve Bank of India governing the Non Banking Financial Companies like the respondent. This contention of the petitioner has been answered by the respondent contending that the petitioner’s case was considered and finalized by the Board of Directors and that therefore the Grievance Redressal Mechanism as contemplated in Exts.P10 to P12 guidelines will be unable to decide the matter, since the same is a forum consisting of WP(C) No.24889/2010 -3- subordinate officers of the organization. It is stated that it was therefore that the petitioner’s case was not referred to the said Mechanism. 5. The case of the petitioner was considered by the Board of Directors on more than one occasion. The respondent is a Company incorporated under the provisions of the Companies Act. The management of the Company is vested in the Board of Directors, and if the Board of Directors has taken a decision, it is impractical to think that an informal committee consisting of subordinate officers will over rule that decision. In that view of the matter, nothing would have been achieved by the petitioner, even if such a reference was made. Therefore, that grievance of the petitioner does not appear to be of any substance warranting interference of this Court. 6. Then referring to Ext.P11, the petitioner contended that the rate of interest could only be revised prospectively. According to him, Ext.P14 was issued only on 15/03/2010, when he was finally informed that the interest rate will be retained at 12.5% and the revision of interest is made effective from 19/06/2008. It is WP(C) No.24889/2010 -4- contended that such a revision of interest rate was impermissible. However, answer of the respondent is that the interest rate was initially fixed at 13%, which was informed to the petitioner by Ext.P5 letter dated 19/06/2008 and it was therefore that the revision was made effective from that date. It is stated that such fixation is only prospective, and not retrospective as contended by the petitioner. In the nature of the order that I propose to pass, I do not think it necessary to pronounce finally on this issue. 7. Evidently, the grievance of the petitioner is regarding the revision of interest rate from 7.75% to 12.5% and the effective date from which it is levied. He has been requesting for a meaningful negotiation with the respondent in order to make an attempt to get the interest rate reduced and the effective date postponed. He had only a decision with the Chief Accounts Officer of the respondent in the meeting held on 18/09/2009, and he did not have an opportunity to negotiate directly with the Board of Directors of the Company. In that view of the matter, I feel it is only appropriate that the petitioner should be given an opportunity to place his grievance before the Board of Directors, and the Board should hear WP(C) No.24889/2010 -5- him and take a decision in the matter. Therefore, I direct that it will be open to the petitioner to make an appropriate representation before the respondent Corporation within three weeks from today, which will be placed before the Board of Directors and the Board will consider the representation, hear the petitioner and take a decision in the matter. The representation shall be considered in the meeting of the Board that is held subsequent to the filing of the representation as above. In order to enable the Board to take an impartial decision in the matter, I leave open all the claims and contentions of the petitioner and direct that the Board should decide the matter untrammelled by the observations in this judgment. This writ petition is disposed of as above. (ANTONY DOMINIC, JUDGE) jg