Delhi District Court
Lic Housing Finance Limite vs Shashank Wahal And Ors on 5 February, 2024
DLST010046792016
In the Court of Sh. Munish Bansal,
Additional District Judge-03 (South District),
Saket Courts Complex, New Delhi.
CS No.: 9119/2016
In the matter of :-
LIC Housing Finance Limited,
Laxmi Insurance Building,
Asaf Ali Raod, New Delhi,
Through its Authorized Signatory. .......Plaintiff
Versus
1. Sh. Shashank Wahal,
S/o Sh. J.P. Wahal,
895-A/8, Main Bazar,
Mehrauli, Near State Bank of India,
New Delhi- 110030.
2. Golf Course Sahakari Awas Samiti Ltd.,
D-162, Sector-10,
Noida.
Also through
Secretary, Interim Committee,
Golf Course Sahakari Awas Samiti Ltd.,
Uttar Pradesh Awas Vikas Parishad,
Second Floor, Sector- 16 A,
Hall no. S-4, Vasundhara Complex,
Vasundhara, Ghaziabad. ......Defendants
CS/9119/2016 Page 1 of 15
Date of institution : 01.12.2014
Arguments heard on : 18.11.2023
Date of decision : 05.02.2024
JUDGMENT
1. The present suit has been filed by the Plaintiff seeking recovery of Rs.31,53,250.37 against the Defendants. Initially the present suit has been filed under Order XXXVII CPC, however, vide order dated 21.03.2017, in view of statement made by Ld. Counsel for the Plaintiff, present suit was converted into an ordinary recovery suit.
1.1. Facts as epitomized in the plaint are that the Plaintiff is engaged in the business of giving financial assistance in the form of their loan schemes for purchasing residential accommodation for individual etc. and one of their schemes is individual home loan scheme in which the borrower who approached the Plaintiff company for loan to purchase/ construct the property, enters into written agreement/ contract after scrutiny of the prescribed application form filled by prospective borrower. It is stated that Defendant no. 1 is the borrower under the aforesaid scheme and a Loan Agreement was executed between the Plaintiff and Defendant no. 1. It is stated that Defendant no. 2 is the builder/ society to whom the loan amount was disbursed. It is stated that Defendant no. 2 being a Co-operative Society was allotted a plot of land bearing no. 7, Sector Pi, II, Greater Noida, as per Registered Lease Deed dt. 29.03.2005 in the office of Sub-Registrar, Gautam Budh Nagar, Ghaziabad, Uttar Pradesh and was constructing a multi-storey Group Housing Society. It is stated that Defendant no. 2 society proposed that as per its scheme, they were in process of constructing various flats for CS/9119/2016 Page 2 of 15 its members. It is further stated that Defendant no. 1 in about April, 2010 had approached and applied to Plaintiff company for loan against the property/ Flat/ Unit no. 3071, on 7 th floor in Block/ Tower T-3, in Shiv Kala Charms, Plot no. 7, Sector Pi-II, Greater Noida, U.P., under the Plaintiff's individual home loan scheme. It is stated that Defendant no.1 informed the Plaintiff that he was member of Defendant no. 2 society and that he had been allotted the aforesaid property/ flat/ unit. It is further stated that Defendant no. 2 also assured that it will not issue any duplicate share certificate to Defendant no. 1 without obtaining consent of the Plaintiff and further assured that in the event of default by the Defendant no. 1, if the Plaintiff enforced the security by sale, the Defendant no. 2 would accept the purchaser of said property as its member. It was further agreed by Defendant no. 2 that in the event of cancellation of above allotment on any ground, the Defendant no. 2 shall refund to the Plaintiff company the entire amount advanced/ disbursed by the Plaintiff to the Defendants towards the cost/ value of the said property. It is stated that the Defendants have assured that they had complied with all the conditions set out by the local authorities, while sanctioning the layout plan etc. 1.2. It is further stated in the plaint that considering the request of the Defendants, the Plaintiff company had sanctioned a loan of Rs.23 Lacs vide Loan Offer Letter dated 20.04.2010 to Defendant no.1 for purchase of aforesaid flat. It is stated that out of the sanctioned loan amount, a sum of Rs.22 Lacs was disbursed to the Defendants on 30.04.2010 vide cheque no. 826098, drawn on HDFC Bank Ltd. It is stated that the Defendant no. 1 agreed to the terms and conditions of said Loan Offer Letter and in order to secure the loan, he also executed a Loan Agreement dated 27.04.2010 and other documents and agreed to pay back the loan amount alongwith interest at the fixed rate of 8.90% per annum for three years and thereafter, at floating CS/9119/2016 Page 3 of 15 rate of interest with monthly rests as per the terms and conditions of Offer Letter or such other rate which the Plaintiff may specify from time to time. It is stated that Defendant no.1 had agreed to repay the loan amount with interest in 216 equated monthly installments (EMIs) regularly. It is further stated that the Defendant no. 1 had also agreed to pay additional interest as per the rules of the Plaintiff company and all other charges as applicable from time to time. It is stated that the Defendant no.1 had created a security/ lien against the property/ Flat/ Unit no. 3071, on 7 th floor in Block/ Tower T- 3, in Shiv Kala Charms, Plot no. 7, Sector Pi-II, Greater Noida, U.P. as security for repayment of the loan amount and deposited Original Agreement cum Allotment Letter and Original Share Certificate with Plaintiff company. It is further stated that the Plaintiff, Defendant no. 1 and Defendant no. 2 had also entered into a Tripartite Agreement and agreed that on handing over the possession of aforesaid flat, the Defendant no.1 shall mortgage the Flat in favour of the Plaintiff. It was also agreed that till the flat was mortgaged in favour of the Plaintiff, the flat in question shall be treated as security against loan advanced to Defendants. It is further stated that after availing of loan, the Defendants failed to maintain financial discipline and started committing default in paying EMIs regularly and the default resulted in huge arrears. It is stated that the Defendant no.1 has not made any payment since June, 2012 and last payment of Rs.1,50,000/- was made by the Defendants on 15.05.2012.
1.3. It is further stated in the plaint that Defendant no. 2 has not completed the construction work and has made multiple allotments due to which the Plaintiff was compelled to lodge a criminal complaint in Economic Offence Wing against Defendant no. 2. It is stated that officials of Plaintiff company had made several calls, visits and oral requests and also sent legal notice dated 18.11.2013 to Defendants demanding closure dues, however, CS/9119/2016 Page 4 of 15 despite the legal notice, the Defendants failed to pay the balance outstanding amount. It is stated that as per the books of account maintained by the Plaintiff in due course of its business, the Defendants are jointly and severally liable to pay the outstanding amount of Rs.31,53,250.37 alongwith pendente lite and future interest @18% p.a. Hence, this suit.
2. Since the suit was treated as an ordinary suit for recovery, summons for settlement were issued to the Defendants. Upon issuance of summons, the Defendant no.1 appeared and contested this suit by filing Written Statement. Summons sent to Defendant no. 2 were served through its office clerk namely Raj Kumar and service was also effected through substituted mode i.e. by way of publication in newspaper dt. 25.07.2019. Despite service, Defendant no.2 did not appear before this Court to contest the suit and was proceeded ex-parte vide order dated 21.09.2019.
3. Written Statement was filed on behalf of Defendant no. 1 wherein it is averred that this Court does not have any jurisdiction to try the present suit as property in question is situated at Noida and even as per the alleged loan agreement, jurisdiction has been defined to be of Mumbai. It is stated that no consent was taken by the Defendant with respect to change of jurisdiction. It is further stated that the alleged agreement was got entered into under undue influence, cheating and fraud as there was connivance between the Plaintiff and Defendant no. 2. It is further stated that even if the documents relied upon by the Plaintiff are taken into consideration, it is the Defendant no. 2 which is liable to make payment to Plaintiff as entire amount has been directly disbursed to Defendant no. 2 and it was the liability of Defendant no. 2 to pay back to the Plaintiff in case of any default or surrender of flat in question as per the admitted tripartite agreement between Plaintiff and Defendants. It is further stated that the Plaintiff has suppressed CS/9119/2016 Page 5 of 15 the fact that property/ Flat/ Unit no. 3071, on 7 th floor in Block/ Tower T-3, in Shiv Kala Charms, Plot no. 7, Sector Pi-II, Greater Noida, U.P. was also financed by HDFC Bank in favour of some other person and thus, the said flat has not only been mortgaged twice but has been funded twice which could not have been possible without connivance of Plaintiff and Defendant no. 2 and other financial institution.
3.1. It is further stated in the Written Statement that the present suit is not maintainable as Plaintiff itself had issued letter dated 29.10.2010 confirming and certifying that there was no outstanding amount against the Defendant no. 1 with respect to loan account in question. It is stated further that present suit is not maintainable by virtue of clauses 4, 5 & 7 of the Tripartite Agreement dt. 24.04.2010. It is stated that Defendant no.1 had stopped making payments towards the installments upon knowledge of cheating committed by Plaintiff and Defendant no. 2 and the liability is of Defendant no. 2 to repay the financed amount. It is stated that permission to mortgage the flat in question was given by Defendant no. 2 even when the said flat was not in existence and since by way of Tripartite Agreement, the said flat was to be registered in the name of the Plaintiff or that the Plaintiff had the right to sell the said property to recover its amount in case of default, therefore, Defendant no. 1 has been unnecessarily made party who is not liable to pay any amount.
3.2. It is further stated in the Written Statement that M/s Golf Course Sahakari Awas Samiti Ltd. is a Society working as part of an umbrella of "Shiv Kala SRS Group of Companies", having seven companies under it. It is stated that the aforesaid society and officials of Plaintiff had cheated the Defendant as loan was approved by the Plaintiff despite having known that society was a defaulter with Noida Authorities and allotment was to be CS/9119/2016 Page 6 of 15 cancelled. It is submitted that M/s Golf Course Sahakari Awas Samiti Ltd. through its President/ Secretary, Umesh Garg and S.U. Zafar had introduced a pre-launch project namely "Shiv Kala Charms" proposed to be developed at Plot no. 7, Sector Pi- II, Greater Noida, Gautam Budh Nagar, U.P. for residential flats and collected money from general public including Defendant. It is stated that it has come to the knowledge of the Defendant that S.U. Zafar had also lodged a complaint against the Builder as well as Defendant no. 2 alleging and claiming that he had no role in the said society. It is further stated that the aforesaid society offered to sell them flats and getting the same financed through Plaintiff and other financial institutions with which the society had already made finance arrangements. It is stated that the Defendant had booked and was allotted Flat no. 3071, measuring approx. 1450 sq. ft. of super area, 7th floor, in block/ Tower -3 vide agreement cum allotment letter and accordingly, a Tripartite Agreement was executed between the Defendant, the Plaintiff and M/s Golf Course Sahakari Awas Samiti Ltd. i.e. Defendant no. 2. It is stated that base price for the said flat was informed to be Rs.33 Lacs. It is further stated that by virtue of Tripartite Agreement, the Plaintiff disbursed the loan directly to Defendant no. 2. It is stated that Defendant no. 2 was brought into picture by Plaintiff and not by Defendant no. 1. It is stated that Defendant no. 2 had assured that project had been pre-approved by the Plaintiff after confirming that Defendant no. 2 had right and title over the land where project was to be built. It is stated that the Plaintiff had disbursed the loan on 30.04.2010 i.e. within three days of signing of Loan Agreement dated 27.04.2010 on the basis of NOC issued by the builder i.e. Defendant no. 2 for making a lien on the flat booked by Defendant no. 1. It is stated that it was later discovered that Defendant no. 2 was in arrears with Noida Authorities and was a defaulter and that flats had been overbooked and many flats have been sold to more than one buyer. It is further stated that the Defendant no. 1 had made various complaints and CS/9119/2016 Page 7 of 15 correspondences to the Plaintiff but no response was given by the Plaintiff. It is stated that Defendant no.1 intimated the Plaintiff that he would stop payment of installments and recovery, if any, was liable to be made from the builder i.e. Defendant no. 2. It is stated that since many similar purchasers were duped by the Defendant no. 2 in connivance with financial institutions including the Plaintiff herein, several complaints have been lodged with various authorities. It is further stated that as per the Tripartite Agreement, in case of default, it was the liability of Defendant no. 2 to return the loan amount or otherwise since the flat/ property stood mortgaged in favour of the Plaintiff, the recovery could be effected by selling the said property/ flat. It is further stated that Defendant no. 1 has regularly paid the EMIs till 15.05.2012 but was constrained to stop the same upon knowing the connivance between the Plaintiff and Defendant no. 2. It is stated that several FIRs have been filed against the Builder i.e. Defendant no. 2 and the builder Mr. Mahim Mittal is behind the bars and investigation is going on into the aspect of connivance between Plaintiff and Defendant no. 2. All other averments made in the plaint were denied by the Defendant no. 1.
On these grounds it is prayed that suit of the Plaintiff is not maintainable against Defendant no. 1 and is liable to be dismissed.
4. From pleadings of parties, following issues were framed on 29.09.2020:-
1. Whether the plaintiff is entitled to recovery of a sum of Rs.31,53,250.37 paise as prayed for? OPP
2. If issue no. 1 is adjudged in affirmative whether the plaintiff is entitled to any interest thereon, if so at what rate and for what period? OPP
3. Whether the present suit has been filed and instituted by a duly authorized person on behalf of the plaintiff company? OPP CS/9119/2016 Page 8 of 15
4. Whether the suit is barred for the reasons as spelled out in para 3 of the preliminary submissions of the written statement? OPD
5. Whether the present suit is not maintainable inasmuch as the loan agreement between the defendant no.1 and the plaintiff has been entered into on account of undue influence, cheating and fraud between defendant no. 2 and the plaintiff? OPD
6. Whether the suit is liable to be dismissed inasmuch as the flat in question has already been financed by another financial institution HDFC in favour of third person, if so, its effect? OPD
7. Whether the suit is liable to be dismissed on account of the letter dated 29.10.2010 issued by the plaintiff confirming hat no dues exists qua defendant no. 1 ? OPD
8. Whether on account of the tripartite agreement in case of default the liability of the loan is of defendant no.2 to return the amount given by the plaintiff? OPP
9. Relief.
Thereafter, matter was fixed for Plaintiff's evidence.
5. To prove its case, the Plaintiff got examined only one witness namely Sh. Naveen Kumar Sinha, Manager/ AR of Plaintiff, who tendered his evidence by way of affidavit Ex. PW1/A. He made similar contentions as made by the Plaintiff in its plaint. He has placed reliance on several documents viz. Authority letter dt. 20.11.2018 Ex. PW1/1 (OSR), Authorization letter of Sh. Rajni Kant Uniya and GPA Ex. PW1/2 (OSR) and Ex. PW1/3 (OSR), Loan offer letter dt. 20.04.2010 Ex. PW1/4, Loan Agreement dt. 27.04.2010 Ex. PW1/5, Tripartite Agreement Ex. PW1/6, Share Certificate Ex. PW1/7, Agreement cum Allotment letter Ex. PW1/8, Legal notice and postal receipts with AD cards Ex. PW1/9 to Ex. PW1/14 and Statement of accounts Ex. PW1/15.
CS/9119/2016 Page 9 of 15During the course of proceedings, Counsel for Defendant no. 1 withdrew his vakalatnama and despite opportunities the Defendant no. 1 neither appeared nor cross-examined PW1. Accordingly, cross-examination of PW1 was closed being Nil vide order dated 31.05.2023.
6. The Defendant no. 1 did not lead any defence evidence as despite several opportunities, the Defendant no. 1 neither appeared nor took any steps to lead evidence and accordingly, vide order dated 04.08.2023, DE was closed.
7. I have heard arguments advanced by Ld. Counsel for the Plaintiff. Record perused. Considered. My issue-wise findings are as under:-
Issue no. 1 Whether the plaintiff is entitled to recovery of a sum of Rs.31,53,250.37 paise as prayed for? OPP 7.1. Onus to prove the issue was upon the Plaintiff. To prove the factum that the Defendant no.1 has applied for the loan, Plaintiff has placed on record loan offer letter dt. 20.04.2010 Ex. PW1/4. The said letter bears the signatures of Defendant no.1. Neither the document nor the signatures on the said documents has been denied by the Defendant no. 1 in his written statement nor by way of filing of affidavit of admission-denial of documents.
Further, loan was sanctioned by Plaintiff to Defendant no.1 and the same is proved by loan agreement dt. 27.04.2010 Ex. PW1/5. In the schedule, which is part of the loan agreement, loan amount of Rs.23 Lakhs is mentioned and the said schedule also bears the signatures of the Defendant no.1. Furthermore, Tripartite Agreement dated 24.04.2010 Ex. PW1/6 also proves the various terms and conditions operating between the Plaintiff and both the CS/9119/2016 Page 10 of 15 Defendants inter se. Ex. PW1/7 and Ex. PW1/8, are the share certificate dated 24.04.2010 and Agreement cum Allotment Letter dated 24.04.2010 respectively, which proves the factum that the said documents in original were handed over by the Defendant no.1 to the Plaintiff as security. Pertinently, none of the above-mentioned documents placed on record by the Plaintiff have been denied by the Defendant no.1 in his written statement. Moreover, no evidence has been tendered on behalf of Defendant no.1 and even the Defendant no. 1 has failed to cross-examine the Plaintiff's witness despite opportunity and thus, the Plaintiff's evidence has gone un-rebutted.
7.2. Plaintiff has also tendered in evidence, statement of accounts dated 08.11.2014, Ex. PW1/15 whereby as on 15.05.2012, outstanding due against the Defendant no. 1 is shown to be Rs.21,70,799.23. The Plaintiff has also sent a legal notice dated 18.11.2013 Ex. PW1/9, demanding Rs.27,10,219.25 from Defendant no. 1 as balance outstanding due as on 18.11.2013. The service of the said legal notice to the Defendant no. 1 as well as Defendant no. 2 has been proved by the postal receipts and acknowledgments Ex. PW1/10 to Ex. PW1/14. Even the said documents have not been denied by the Defendant no.1 in his written statement.
7.3. It is pertinent to mention that the Defendant no. 2 was proceeded ex-parte on 21.09.2019. Since the said Defendant has failed to appear before the Court despite service of summons, as per settled position of law, it must be assumed that whatever Plaintiff's witness deposed in the evidence Ex.PW1/A alongwith the documents tendered in the evidence, have been admitted in deposition because the same has completely gone un-rebutted.
7.4. In M/s Ecolab Inc. vs. Eco Labs Ltd. ,2011 (185) DLT 664, Hon'ble Delhi High Court has observed that where Plaintiff's evidence has CS/9119/2016 Page 11 of 15 gone unrebutted as the Defendant has failed to cross-examine the witness of the Plaintiff, then in such a situation, the evidence filed by the Plaintiff is taken to be correct. There is no other option available to the Court in the facts and circumstances which have been averred in the plaint and proved by the witnesses of the Plaintiff other than to presume that those have been admitted.
7.5. In view of the above discussion, this Court finds no reason to disbelieve the testimony of the Plaintiff witness and the documents exhibited on record as Ex. PW1/1 to Ex. PW1/16. It is also observed that the suit is well within the period of limitation.
7.6. It is seen from the record that vide legal notice Ex. PW1/9, a demand of Rs.27,12,719.25 was made from the Defendants. However, perusal of Ex. PW1/15 reveals that a letter dated 08.11.2014 has been appended with the statement of account addressed to the Defendant no.1 wherein total amount due is shown to be Rs.31,53,250.37, however, there is nothing on record to show that the said letter has been served upon the Defendant no.1 or the other Defendant. Thus, it can be fairly concluded that Plaintiff is entitled to Rs.27,12,719.25 due against the Defendants as on 18.11.2013.
Issue no. 2 If issue no. 1 is adjudged in affirmative whether the plaintiff is entitled to any interest thereon, if so at what rate and for what period? OPP
8. Since the Plaintiff has been deprived of the constructive/ fruitful use of the money not paid in time by the Defendants, certainly the Plaintiff is entitled to interest for the period for which such deprivation has been caused.
CS/9119/2016 Page 12 of 15In the prayer clause, plaintiff has sought pendent-lite and future interest @18% p.a. till the realization of the decreetal amount. However, it is pleaded in the plaint as well as mentioned in the loan documents that the loan amount was given on interest at the fixed rate of 8.90% p.a. No justification has been provided by the Plaintiff for seeking the grant of interest @18%. In view of same, the Plaintiff is entitled to interest @8.90% p.a. (Calculated on simple interest basis) from 18.11.2013 till its realization.
Issue no. 3 Whether the present suit has been filed and instituted by a duly authorized person on behalf of the plaintiff company? OPP
9. This issue stands proved in favour of the Plaintiff in view of the documents placed on record i.e. Authority Letter dt. 20.11.2018 Ex. PW1/1 (OSR), Authorization letter Ex. PW1/2 (OSR) and GPA Ex. PW1/3 (OSR).
Issue no. 4 Whether the suit is barred for the reasons as spelled out in para 3 of the preliminary submissions of the written statement? OPD
10. Burden of proving this issue was upon the Defendant. No evidence has been led on behalf of the Defendants. It is also seen from the Court record that the loan agreement Ex.PW1/5 is of 27.04.2010 and qua the said loan, the last payment towards the loan repayment was made by the Defendant no. 1 on 15.05.2012 and present suit has been filed in year 2014. Clearly, the present suit is within limitation. This issue is decided in favour of Plaintiff and against the Defendants.
CS/9119/2016 Page 13 of 15Issue no. 5 to 7 Whether the present suit is not maintainable inasmuch as the loan agreement between the defendant no.1 and the plaintiff has been entered into on account of undue influence, cheating and fraud between defendant no. 2 and the plaintiff? OPD Whether the suit is liable to be dismissed inasmuch as the flat in question has already been financed by another financial institution HDFC in favour of third person, if so, its effect? OPD Whether the suit is liable to be dismissed on account of the letter dated 29.10.2010 issued by the plaintiff confirming hat no dues exists qua defendant no. 1 ? OPD
11. Burden of proving these issues was on the Defendant. No evidence has been led by the Defendants in proof of the said issues. Accordingly, these issues are decided against the Defendants.
Issue no. 8 Whether on account of the tripartite agreement in case of default the liability of the loan is of defendant no.2 to return the amount given by the plaintiff? OPP
12. During the course of arguments, it has been pointed by Counsel for the Plaintiff that the burden of proving the present issue has been wrongly put on the Plaintiff since the objection qua which the present issue has been framed, was specifically taken by the Defendant no. 1 in his written statement. Perusal of the written statement reveals that the said objection was so taken by the Defendant no. 1. In view of the same, burden of proving the present suit correctly lies upon Defendant no.1. However, no evidence has CS/9119/2016 Page 14 of 15 been tendered by the Defendant no.1 in proof of the said issue. Consequently, this issue is decided against the Defendant no.1.
RELIEF
13. From the discussions as adumbrated hereinabove, I hereby pass the following:
FINAL ORDER (A). A decree of Rs.27,12,719/- (Rupees Twenty Seven Lacs Twelve Thousand Seven Hundred Nineteen) is passed in favour of the Plaintiff and against both the Defendants, who are jointly and severally liable to pay the same, along with simple interest @ 8.90% per annum from 18.11.2013 till its realization.
(B) The cost of the suit is also awarded in favour of the Plaintiff and against the Defendants.
Decreesheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Announced in the Open Court on 05.02.2024 (Munish Bansal) Additional District Judge South District: Saket Courts New Delhi CS/9119/2016 Page 15 of 15