State Consumer Disputes Redressal Commission
Vikas Sharma vs Mona Township Pvt. Ltd. on 8 February, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.920 of 2019
Date of Institution:20.12.2019
Reserved on :21.01.2022
Date of decision :08.02.2022
1. Sh. Vikas Sharma son of Sh. Inderjit Sharma
2. Mrs. Ritu Sharma wife of Sh. Vikas Sharma
Both R/o House No.541, Phase 3-A, SAS Nagar, Mohali (Punjab).
Email : [email protected]
Mobile : 9888263500
......Complainants
Versus
1. M/s Mona Township Pvt. Ltd., through its Managing Director,
Regd. Office at 399, Ground Floor, Bhera Enclave, Pashim Vihar,
New Delhi-110087.
Email : [email protected]; Mobile : 8088098809
2nd Address :-
2. M/s Mona Township Pvt. Ltd., through its Managing Director, Site
Office at Sector 115, Landran Road, Khunimajra, Kharar-
140301.
Email : [email protected];
Mobile : 8088098809, 8699999800
3. Sh. Tajinder Setia, Managing Director, M/s Mona Township Pvt.
Ltd., through its Managing Director, Regd. Office at 399, Ground
Floor, Bhera Enclave, Paschim Vihar, New Delhi-110087
Email : [email protected];
Mobile : 8088098809, 8699999800
4. India Bulls Housing Finance Ltd., Registered Office at Indiabulls
House, 448-451, Udyog Vihar, Phave V, Gurugram-122001
(Haryana).
Email : [email protected]
Mobile : 0172-5051340
C.C. No.920 of 2019 2
2nd Address :-
India Bulls Housing Finance Ltd., SCO No.347-348, Sector 35-B,
Chandigarh-160036.
Email : [email protected]
Mobile : 0172-5051340
....Opposite Parties
Consumer Complaint under Section 17 (1)(a)
(i) of the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mrs. Urvashi Agnihotri, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued by:-
For the complainants : Sh. Manish Bhatnagar, Advocate For opposite parties No.1-3 : Sh. Sukaam Gupta, Advocate For opposite party No.4 : Ms. Niharika Goel, Advocate JUSTICE DAYA CHAUDHARY, PRESIDENT:
The complainants-Vikas Sharma and Ritu Sharma (husband and wife) have filed the present complaint under Section 17 (1)(a)(i) of the Consumer Protection Act, 1986 (in short the "Act") against the opposite parties (in short "OPs") alleging certain allegations of 'deficiency in service' and use of 'unfair trade practice' on the part of OPs. They were searching some flat for residential purposes for their family and they came to know about the project i.e. Mona Cityhomes of the OPs No.1-3 through print media. They reached their office in Sector 115, Mohali and applied vide application dated 22.09.2017 for allotment of 3 BHK flat having carpet area of 1190 square feet. On the basis of said application, they were allotted flat No.C-307 in Mona Cityhomes. At C.C. No.920 of 2019 3 the time of booking of the flat, the complainants paid an amount of Rs.1,00,000/-, vide invoice No.MTPL/IN/152 dated 26.09.2017 to OPs No.1-3. Said unit was having super area of 1500 square feet, built up area of 1395 square feet and carpet area of 1190 square feet. The complainants also raised a loan of Rs.28,00,000/- from OP No.4 (India Bulls Housing Finance Limited) for payment of the amount to OPs No.1- 3, which was sanctioned vide letter dated 07.10.2017. The loan amount was to be paid in total 240 months and rate of interest was 8.35% per annum. Each EMI was of Rs.24,034/-. A loan agreement dated 25.10.2017 was also executed between the complainant and OP No.4.
It has further been mentioned in the complaint that Buyers Agreement dated 13.10.2017 was executed between complainants and OPs No.1-
3. The basic sale price of 3BHK flat was as Rs.31,63,500/- and after adding GST and other charges, the total amount was quoted as Rs.35,43,120/-. As per terms and conditions of the agreement, the possession of that flat was to be handed over by OPs No.1-3 by 30th of June, 2018. In case, OPs No.1-3 failed to provide the possession by said date, they shall be liable to pay interest @12% per annum on the total amount received. OPs No.1-3 also assured to pay PEMI of the loan amount of complainants to OP No.4 till handing over the physical possession, but they committed default in paying the said PEMIs, as the cheques issued by them for the months of September to November, 2019 were dishonored by their bankers. A sum of Rs.1,10,068/- towards said PEMIs including the PEMI of December, 2019 was still outstanding. The complainant deposited total amount of Rs.31,54,312/-. C.C. No.920 of 2019 4 OPs No.1-3 issued letter to the complainant on 03.09.2019 for offering the possession of the flat, but flats were not ready for possession as external development was not complete and basic amenities were also not provided. The complainants asked OPs No.1-3 to supply the occupation certificate but the same was not supplied. The tenure of loan was extended from 240 months to 394 months by OP No.4. It has further been mentioned that the complainants came to know that OPs No.1-3 had decreased the size of 3BHK by almost 25% of the earlier offered size and the same were also not mentioned in the latest brochure. Subsequently, the price was also increased to Rs.42.50 lakhs by OPs No.1-3 without offering any extra benefit. The complainants served a legal notice upon OPs No.1-3 for making demand of the refund of the amount paid by them alongwith interest. It has also been mentioned that action and inaction of OPs No.1-3 is not only a case of 'deficiency in service' but of 'unfair trade practice'.
2. The prayer in the present complaint is for allowing the complaint and for direction to OPs No.1-3 to refund the deposited amount of Rs.31,54,312/- alongwith interest @12% per annum till its realization in view of clause 29(d) of the Buyers Agreement and also to pay an amount of Rs.3 lakh as compensation on account of mental agony, harassment and financial loss suffered by them alongwith litigation expenses to the tune of Rs.1,00,000/-. A further direction has been sought to be issued to OP No.4 for restoration of loan terms and liabilities by reconciling the account to original and approved terms and number of EMIs at the agreed floating rate applicable from time to time C.C. No.920 of 2019 5 and also to pay an amount of Rs.1,00,000/- as compensation for 'unfair trade practice' and on account of mental agony, harassment and financial loss suffered by them alongwith litigation expenses of Rs.1,00,000/-.
3. Respondents No.1-3 and 4 have filed their separate written statements by opposing the allegations raised qua to them and have also the averments made in the complaint by raising preliminary objections.
4. Learned counsel for the complainants submits that action of OPs No.1-3 is contrary to the terms and conditions as neither the possession of the flat was handed over within the prescribed period nor any amenities were provided. The flat in dispute even is not ready for possession till date. There is no development work at the site and only a paper possession has been offered to the complainants, as mentioned in letter dated 03.09.2019 even after a delay of almost 15 months and the same is contrary to the terms and conditions of buyers agreement Ex.C-2. Learned counsel also submits that vide different letters wrong averments were made by projecting that possession of the flat was ready but it was simply an offer on papers whereas in the letter, it was mentioned that the unit is almost ready for being delivered. In one letter, it was also mentioned that with effect from 03.09.2019, the company will cease to be liable to pay EMI to the Bank on their behalf and it will become their liability. Learned counsel further submits that by writing different letters, OPs No.1-3 have misguided and misrepresented the complainants and not only the area has been C.C. No.920 of 2019 6 reduced, but price has also been increased. Learned counsel also submits that not only the different specifications were mentioned in the brochure but subsequently in the approved drawing things have been changed. Learned counsel further submits that as per subvention scheme (Tripartite Agreement), OPs No.1-3 was directly liable to pay PEMI to OP No.4 from 01.11.2017 to 30.06.2018, but cheques of PEMI of Rs.1,10,068/- were dishonored by their banker. OPs No.1-3 have made a total payment of Rs.74,345/- under the PEMI Payment Scheme. Learned counsel further submits that not only the interest rate has been increased by the OP No.4-Bank but tenure of EMI has also been increased. Government of India released an amount of Rs.2,35,068/- on 28.11.2018, but still amount has not been reduced by OP No.4, as the total outstanding of an amount of Rs.87,11,080/- on 12.02.2020 was there. At the end, learned counsel submits that the action/inaction on the part of OPs amounts to 'deficiency in service' and it is a case of 'unfair trade practice', as the possession of the flat has not been handed over till date and all amenities are not completed which has caused mental agony and harassment and they have been compelled to file the complaint for which litigation expenses have also been incurred. The complainants also served a legal notice dated 05.11.2019 upon OPs No.1-3. Learned counsel has relied upon judgments in cases "Manoj Kawatra & another Versus Pioneer Urban Land & others, CC No.1443/2018, decided on 01.11.2021, "Ankur Goyal Vs. M/s Rise Project Pvt. Ltd." CC No.2094/2019, decided on 14.10.2020, "Suman Kumar Jha & another Vs. Mantri Technology C.C. No.920 of 2019 7 Constellations Pvt. Ltd." CC No.54/2018, decided on 29.10.2021, "Ansal API Megapolis Buyer's Association Vs. Ansal Hi-Tech Townships Ltd." CC No.1467/2015, decided on 08.11.2021 by the Hon'ble National Disputes Redressal Commission, New Delhi and "Kapil Narula Vs. M/s Logix City Developers Pvt. Ltd. & another"
Complaint No.1492/2016, decided on 16.08.2021 by the Delhi State Consumer Disputes Redressal Commission, in support of his submissions.
5. Learned counsel for OPs No.1-3 has opposed the submissions made by learned counsel for the complainants by raising preliminary objections regarding maintainability of the complaint as the complainants do not fall under the definition of "Consumers" as defined under Section 2(1)(d)(ii) of the Act and the flat was required for commercial purposes and not for residential purposes. Learned counsel also submits that there is an Arbitration Clause No.48 in the Apartment Buyer(s) Agreement (Ex.R1-3/A) executed between the complainants and OPs No.1-3 on 13.10.2017. In such situation, the complaint before this Commission is not maintainable. Learned counsel also submits that only an amount of Rs.29,98,098/- has been received by OPs No.1-3 out of total amount of Rs.31,54,312/-, as an amount of Rs.1,56,214/- was deducted by OP No.4 towards the subvention scheme. Out of above said amount, an amount of Rs.3,54,312/- has been paid by the complainants and balance amount of Rs.28,00,000/- has been disbursed by OP No.4. Details thereof have been mentioned in the written statement. Learned counsel also submits that OPs No.1-3 have C.C. No.920 of 2019 8 already disbursed an amount of Rs.3,50,542/- to the complainants against subvention scheme vide Annexure R-3/C (colly), but the complainants have concealed this fact from this Commission. At the end, learned counsel has submitted that there is no 'deficiency in service' and 'unfair trade practice' on the part of OPs No.1-3 and prayed for dismissal of the complaint.
6. Learned counsel for OP No.4 has also opposed the submissions made by learned counsel for the complainants. He has also raised the preliminary objections about the maintainability of the present complaint and as such the complaint is liable to be dismissed qua OP No.4. Learned counsel also submits that OP No.4 is only a financer and it has played its role only by disbursing loan amount to the builder, as per Loan Agreement and Tripartite Agreement. The complainants have filed the present complaint when they required to pay EMI to OP No.4. Learned counsel further submits that the complainants themselves approached for purchase of flat being satisfied themselves regarding the project, but they have failed to demonstrate that how the liability of any nature can be fastened upon OP No.4. As far as role of OP No.4 is concerned, no allegation of 'deficiency in service' or 'unfair trade practice' can be alleged against OP No.4. The allegations made by the complainants are not only wrong but false stating that OP No.4 has suo motto to enhance the tenure of loan and decrease the amount of EMI due to which the complainants have not suffered any mental tension and agony. The complainants accepted the terms and conditions of loan sanction letter C.C. No.920 of 2019 9 dated 07.10.2017 as is clear from the sanction letter that interest type is Adjustable Interest Rate (AIR) and the AIR is defined in sanction letter as Floating Reference Rate (LFRR) notified from time to time, -10.4% margin. Current LFRR is 18.75%. Accordingly, rate of interest for the loan sanctioned to the complainants was floating means the rate of interest keep fluctuating with the change in LFRR, as prescribed by Reserve Bank of India. The rate of interest increases or decreases on the increasing and decreasing of PLR by RBI and Financial Institutions cannot unilaterally increase the tenure of EMI. Accordingly, it affects the tenure of loan, as mentioned in Clause 2.2(C) of the Loan Agreement signed by the complainant and OP No.4.
7. Heard the arguments of learned counsel for the parties and we have also carefully perused the written submissions of the parties as well as other documents available on the file.
8. Facts regarding purchasing of residential flat in the said project by the complainants, payment of amounts, allotment of 3BHK flat No.C-307, execution of Buyer's Agreement between complainants and OPs No.1-3, sanction of loan amount of Rs.28,00,000/- by OP No.4-Bank and execution of Tripartite Agreement between complainants, OPs No.1-3 and OP No.4 are not disputed. As per Buyer's Agreement (Ex.C-2), the possession of the flat was to be delivered by 30.06.2018. In case there was delay in delivering the possession, the company was to compensate the allottee by paying interest calculated @12% per annum on the total amount received of said flat, as per Clause 29(d) of the Buyer's Agreement. Undisputedly, C.C. No.920 of 2019 10 the possession of the flat was not handed over within a period of 12 months and even the basic amenities were not completed, as is clear from the photographs Ex.C-13 to C-23. The correspondence and sending/receiving of emails between the parties are also not disputed. From perusal of those communications (Ex.C-23 to Ex.C-31) between the parties, it has been proved on record that there was delay in handing over the possession. OPs No.1-3 have not produced on record any completion/occupation certificate. OPs No.1-3 have violated the terms and conditions of the Buyer's Agreement, as they have not delivered the possession to the complainants within the stipulated period and also have not paid the agreed interest on account of delay, which amounts to 'deficiency in service'.
9. It is a settled law that the complainant/allottee cannot be expected to wait for an indefinite period to get the possession of the property after spending his/her hard earned money in order to purchase the property/flat in dispute, as has been observed in judgment by the Hon'ble Supreme Court of case "Fortune Infrastructure Vs. Trevor D Lima" 2018, Volume-V, SSC-442. The Hon'ble National Commission in judgment of case Manoj Kawatra (Supra) has held as under:-
"10. Even after receiving substantial amount, Opposite Party failed to hand over possession of the Unit within the promised time period. It is clear that the Opposite Party failed to fulfil its contractual obligation of delivering possession of the Unit to the Complainant within the time stipulated in the Agreement, or even within a reasonable time thereafter. Possession of the flat has not yet been delivered to the Complainant. The Opposite Party has not provided any evidence in support of the reasons adduced by C.C. No.920 of 2019 11 the Opposite Party. A person cannot be made to wait indefinitely for the possession of the flats allotted to him/her. The complainants are, therefore, entitled to seek the refund of the amount paid along with compensation."
10. The same issue was there before the Hon'ble National Commission of case Ankur Goyal (Supra), wherein it has been held that- Complainant visited the site of construction several times but there was no progress. Due to non-delivery of possession, the complainant was held entitled to refund of amount alongwith interest. In judgment of case Suman Kumar Jha (Supra), the Hon'ble National Commission has held that offering the possession of incomplete construction and without obtaining completion certificate amounts to 'unfair trade practice'. The Hon'ble National Commission has allowed the complaint with cost of Rs.1,00,000/- and directed the builder to refund entire deposited amount alongwith interest. In judgment of case Ansal API Megapolis (Supra), the Hon'ble National Commission while allowing the complaint has held that the complainant is entitled to refund of deposited amount alongwith interest due to non-delivery of possession within stipulated time.
11. From the pleadings available on the record and arguments raised by learned counsel for the parties, it has also been proved on record that the area of the flat was reduced from the area, which was mentioned in brochure at the time of applying for the flat without informing the complainants which also amounts to 'deficiency in service'.
12. The complainants opted subvention plan for the period from C.C. No.920 of 2019 12 01.11.2017 to 30.06.2018 and under this plan, OPs No.1-3 were duty bound to pay PEMI to OP No.4-Bank for the said period, as per Tripartite Agreement. The complainants have alleged that OPs No.1-3 have not paid the PEMIs, as per subvention scheme. On other hand, OPs No.1-3 have produced on record documents i.e. AnnexureR1-3/B (colly) and Annexure R1-3/C (colly) in support of their submissions that they have already refunded the total amount of Rs.5,06,756/- under the subvention scheme. The complainants have failed to rebut the said documents i.e. Annexure R1-3/B (colly) and Annexure R1-3/C (colly) on the record. As such, the complainants are held entitled to refund of the deposited amount alongwith interest minus the amount of Rs.5,06,756/- already received under subvention scheme. In the present case, OPs No.1-3 have failed to deliver the possession by 30.06.2018, as such the complainants are held entitled to compensation in the shape of interest @12% per annum on the deposited amount, as per Clause 29(d), from the date of deposit till actual payment.
13. So far as the objection of OPs No.1-3 with regard to arbitration clause in the Buyer's Agreement is concerned, it is relevant to mention here that the Larger Bench of the Hon'ble National Commission in judgment of case "Aftab Singh Versus EMAAR MGF Land Limited & Anr." Consumer Complaint No.701 of 2015, decided on 13.07.2017, has held that an Arbitration Clause in the afore-stated kind of Agreements between the complainants and the builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. The Civil Appeal C.C. No.920 of 2019 13 No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed by the builder against said order was dismissed by the Apex Court, vide order dated 13.02.2018. The Review Petitions (C) Nos.2629-2630/2018 filed by the builder were also dismissed by the Hon'ble Apex Court on 10.12.2018. Consequently, the existence of an Arbitration Clause is not a bar to resolution of dispute by this Commission.
14. We also find no force in the submissions of OPs No.1-3 that the complainants are not consumers, as they have failed to produce on record any cogent evidence that the flat in question was purchased by the complainants for speculative purposes or for resale purpose to earn profit. As such, the complainants are held to be 'consumers' under the Act.
15. The submission of learned counsel for the complainants is that OP No.4-Bank has enhanced the tenure of loan from 248 months to 394 months and also enhanced the rate of interest without informing the complainants. It is also the argument of learned counsel for the complainants that the Government of India released an amount of Rs.2,35,068/- on 28.11.2018, which was not reduced by OP No.4 in the loan amount. The stand taken by learned counsel for OP No.4-Bank is that the rate of interest for the loan sanctioned to the complainants was floating and the Bank has charged the interest and enhanced the tenure of loan, as per guidelines of RBI.
16. The Reserve Bank of India has issued circulars from time to time as to how the floating rate of interest on loans is to be charged. C.C. No.920 of 2019 14 The relevant part of one of its circular No.DBOD.Dir.BC.6/13.03.00/ 2007-08 dated 02.07.2007, is referred as under:-
"2.5.1. Banks have the freedom to offer all categories of loans on fixed or floating rates, subject to conformity to their Asset Liability Management (ALM) guidelines. In order to ensure transparency, banks should use only external or market based rupee benchmark interest rates for pricing of their floating rate loan products. The methodology of computing the floating rates should be objective, transparent and mutually acceptable to counterparties. Banks should not offer floating rate loans linked to their own internal benchmarks or any other derived rate based on the underlying. This methodology should be adopted for all new loans. In the case of existing loans of longer/fixed tenure, banks should reset the floating rates according to the above method at the time of review or renewal of loans accounts after obtaining the consent of the concerned borrower/s."
In the present case, OP No.4-Bank did not inform complainant No.1 about the change of rate of interest as well as change of tenure of loan, as the Bank has not led any evidence in this regard. On perusal of account statement dated 12.02.2020 Annexure R-4/4, it is clear that OP No.4-Bank has not provided any information with regard to change of interest and tenure of loan to complainant No.1. Whereas the consent of the complainant/borrower was required to be taken at the time of review of rate of interest and renewal of loan account, but the same has not been done by OP No.4 in the present case, which amounts to 'deficiency in service'. The amount received by the Bank from Government of India on account of subsidy has not been adjusted by the Bank against the principal amount, as there is no mention in the statement of account, for adjusting the same against principal or C.C. No.920 of 2019 15 interest. This act of OP No.4-Bank amounts to 'unfair trade practice'.
17. The Delhi State Consumer Disputes Redressal Commission in its judgment of case "Mr. Vishnu Bansal Vs. ICICI Bank Ltd." (III)2021 CPJ-99 has held in paras No.16 and 17 as under:-
"16. Returning to the facts of the present case, the Opposite Party had the power to change the rate of interest charged or change the number of the EMIs, however, the Complainant was never apprised about the fact that the rate of Interest had been increased or the number of the EMIs has been changed. The Opposite Party was duty bound to disclose the aforesaid information to the Complainant in order to provide the complainant the option to either close the account or shift the account.
17. Consequently, we are of the view that the increase or decrease in the interest rates by the Opposite Party without taking the consent from the borrower/complainant amounts to Unfair Trade Practice."
Otherwise also it is apparent not only from perusal of ratio of said judgment as mentioned above but also on perusal of guidelines of RBI, that the methodology of computing the floating rates should be objective, transparent and mutually accepted.
18. The same issue was before the Hon'ble Apex Court as is evident from the judgment of the case "ICICI Bank Ltd. Vs. Maharaj Krishan Datta & others" Civil Appeal No.5928 of 2015, decided on 03.08.2015. In said judgment, it was held that the intimation of resettling of the interest is required to be given to the complainant. In other judgment titled as "M/s IDBI Bank Ltd. & another Vs. Subhash Chand Jain & another", Revision Petition No.806 of 2008, decided on 15.10.2012, it was observed by the Hon'ble National Commission C.C. No.920 of 2019 16 that "the concept of floating rate of interest flows from the regulation of rate of interest by the RBI guidelines and not arbitrarily by the service provider without informing or telling the reasons for increasing the rate of interest." In view of guidelines issued by the Reserve Bank of India and the ratio of above judgments, OP No.4-Bank is directed to overhaul the loan account of the complainant, to charge interest rate as per guidelines and PLR issued by RBI from time to time, to adjust the amount of subsidy in the principal outstanding amount and then to supply the account statement. The complainants are also held entitled to compensation for mental harassment and agony suffered by them due to act of OP No.4-Bank.
19. In view of above discussion, we are of the considered view that the complainants are entitled to refund of deposited amount i.e. Rs.31,54,312/- (minus the amount received under subvention scheme by the complainants) alongwith interest @ 12% per annum and OPs are also liable to pay compensation and litigation expenses to the complainants. Accordingly, the complaint filed by the complainants is hereby allowed against OPs and OPs No.1-3 are directed:-
(i) to refund the entire deposited amount i.e. Rs.31,54,312/-
(minus the amount received under subvention scheme by the complainants) alongwith interest @12% per annum from the date of respective deposit till payment; and
(ii) to pay litigation expenses of Rs.30,000/- to the complainants.
OP No.4-Bank is directed:-
(i) To adjust the amount of subsidy i.e. 2,35,068/- in the C.C. No.920 of 2019 17 principal amount;
(ii) to charge the interest as per guidelines and as per prime lending rate issued by the RBI from time to time and to issue the statement of account after overhauling the loan account of the complainant-
Vikas Sharma;
(iii) to pay an amount of Rs.30,000/- as compensation on account of 'deficiency in service' and 'unfair trade practice' on the part of OP No.4-Bank as well as for litigation expenses to the complainants; and
(iv) not to charge any pre-payment penalty/foreclosure charges, as per guidelines of RBI.
The compliance of the order be made by the OPs within a period of 45 days from the date receipt of certified copy of the order, failing which, the complainant shall be entitled to receive interest @ 15% per annum on the deposited amount instead of @ 12% per annum from OPs No.1-3.
20. The complaint could not be decided within the stipulated period due to heavy pendency of Court cases and non-sitting of this Commission due to pandemic of Covid-19.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (URVASHI AGNIHOTRI) MEMBER February 08, 2022.
MM