National Consumer Disputes Redressal
Shri Harsh R Sheth & Anr., vs M/S Suraksha D. B. Realty & Anr., on 8 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 252 OF 2014 1. Shri HARSH R SHETH & ANR., 1602, Bldg. No. 5, Garden Grove Complex, Opp. MAHDA, Chikuwadi, Off Link Road, Borivali (W), MUMBAI - 400092. ...........Complainant(s) Versus 1. M/s SURAKSHA D. B. REALTY & ANR., Conwood House, Yashodham,, Gen A. K. Vaidya Marg, Goregaon (E), MUMBAI - 400063. 2. The Chief Manager, Dena Bank, Retail Assets Branch, Sharada Bhavan, Opp NMIMS University, V. M. Road, J.V.P.D. Scheme, Vile Parle (W), MUMBAI - 400056. ...........Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Ms. A. Subhashini, Advocate For the Opp.Party : Ms. Swati Sinha, Advocate Ms. Manisha, Advocate Mr. Jos Chiramel, Advocate OP-2 with Ms. Anamika Saraff, Advocate Dated : 08 Oct 2015 ORDER The complainants Harsh R Sheth and Nidhi Rajesh Sheth are brother and sister, represented by their father Rajesh Nathalal Shah in the present consumer complaint. They have alleged that they booked a flat No. 705, E wing in the project Orchid Suberbia-III with opposite party (OP-1), the builder-cum-developer, M/s. Suraksha D.B. Realty, but the said builder had indulged in deficiency in service and unfair trade practice, by his failure to meet the assurances and promises given through his advertisements and for the non-delivery of possession in time. The total consideration for the said flat is stated to be ₹77,93,600/- including ₹6 lakh for a two-car parking space. The possession of the said flat was to be delivered in March 2011. As per the complainants, 20% of the value of the flat was to be paid from their own sources and the balance 80% of the consideration was to be paid by raising loan from some bank. The case of the complainants is that they were given part loan by M/s. Indian Bank and the said money was also paid to the OP-1 Builder. However, the Indian Bank refused to advance them further loan and hence, they approached the OP-2 Dena Bank for the advancement of further loan. Although, M/s. Dena Bank gave them approval/sanction for the home loan, but the said loan could not be disbursed, because the OP-1 builder did not provide the required details about the project and clear 'No Objection Certificate' to that bank in time. Although, senior officers of the bank visited the head-office of OP-1 builder, but they did not give the necessary cooperation to them. On the other hand, the OP-1 builder cancelled the allotment in question for non-payment of the balance amount of consideration within time.
2. The complainants are stated to have deposited a sum of ₹_1_lakh on 28.12.2008 as booking amount for the said flat. They made further payment of ₹6,19,360/- on 27.01.2009, making it a total of ₹7,19,360/- which was 10% of the earnest money towards the cost of the flat only, instead of consolidated cost of the flat, including the car parking space. According to them, 10% of the value of car parking space, i.e., ₹60,000/- was not collected by OP-1 from the complainant at that time, but the said amount was also paid later, on 11.08.2009. The complainant stated that the OP builder was required to execute an agreement of sale with them in accordance with the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA) on receipt of 10% of the value of the flat which would have facilitated the raising of loan from the banks, but the OP-1 did not execute the said agreement, rather issued a letter of allotment on 09.02.2009.
3. The complainants have alleged that at the time of booking of the flat, the OP Builder told them that the project had been approved by the Housing Development and Finance Corporation (HDFC) and hence 80% of the amount could be availed as loan from the HDFC. However, they learnt later that the HDFC did not approve their project for want of certain vital documents. There was delay in arranging home loan from the other financial institutions for want of agreement of sale and hence, the OP-1 had misled the complainants regarding loan from HDFC and thus, indulged in unfair and restrictive trade practice. On the other hand, the OP-1 kept on sending demand notices to the complainants, asking them to deposit the necessary money in accordance with the payment plan. The agreement for sale was subsequently executed on 23.02.2010, but the complainants asked them to rectify the errors in the said agreement vide their letter dated 26.04.2010. The complainants have further stated that they were required to make payments to the builder in accordance with the pace of construction, but the OP-1 kept on demanding money from them, without keeping the pace of the work in view. The demands raised by them were never supported with progress report/certificate etc. from a structural engineer. The OP-1 also demanded interest on the instalments of payment from time to time, although there was substantial delay in the implementation of the project. Ultimately, a termination notice was issued on 19.02.2011, in which it was stated that the agreement/allotment of the flat had been terminated and earnest money paid had been forfeited. It was also stated that the said flat shall be sold to some other person and upon receipt of the consideration, the money deposited by the complainant shall be returned as per the provisions of allotment letter/agreement for sale. Later on, the OP sent them letters from time to time for the deposit of service tax amounting to ₹22,386/- each time. The said amounts were duly deposited by the complainant. Thereafter, many more termination letters were received by the complainants from time to time and the latest one was dated 12.12.2011, meaning thereby that the actual termination had not taken place on 19.02.2011. On the other hand, OP-2 Dena Bank sanctioned home loan to them of ₹56 lakh in principal, vide their letter dated 10.05.2012. The complainants addressed letter to OP-1 requesting them to issue the NOC for the disbursement of loan and creation of charge. On their failure to do so, a consumer complaint was filed before the District Forum, in which the District Forum directed the OP-1 for issuance of the NOC. The OP-1 preferred appeal before the State Commission, which was dismissed. A revision petition was then filed by OP-1 before this Commission, which was dismissed vide order dated 06.02.2014 by this Commission and a direction was given to OP-1 to issue NOC to OP-2 within ten days. Thereafter, the OP-1 issued the NOC on 12.02.2014, but the same was made subject to the outcome of the decision of the District Forum. OP-2, Dena Bank, however, wrote to the complainants on 09.04.2014 that they should seek direction from the court that the OP-1 should withdraw the termination notice issued to them. The OP-2 Bank also sent a letter dated 05.05.2014 to OP-1 asking them to confirm that the termination letter dated 16.07.2011 stood unequivocally withdrawn/cancelled. However, OP-1 sent reply dated 09.05.2014 saying that the said termination letter dated 16.07.2011 was legal, valid and subsisting. The loan, therefore, could not be disbursed by the OP-2 Dena Bank. In the meantime, the District Forum passed an order saying that they could not hear the complaint for want of pecuniary jurisdiction. Accordingly, the complainants are before us by way of the present consumer complaint.
4. The complaint has been resisted by OP-1 by filing a written statement, in which they stated that the complainant had always defaulted in the payment of various instalments of money, as demanded from time to time through their letters, duly sent to the complainants. The latest payment was made by the complainants on 17.09.2010, in response to the demand letter dated 22.05.2010, although it was required to be made by 29.05.2010. Thereafter, the complainants did not make any payment on the pretext that they could not arrange loan from the banks. The OP-1 further stated that the complainants were required to pay a sum of ₹7,79,360/- as earnest money @10% p.a. for the total sale consideration of ₹77,93,600/- by 27.01.2009. However, they made payment of ₹7,19,360/- by the said date, and the balance amount of ₹60,000/- was paid on 11.08.2009, i.e., after a delay of 196 days. The OP-1 was well within its rights to charge interest for the amount of delay. The agreement for sale dated 2.02.2010 was executed and registered well before the complainant had paid 20% of the total amount. The said agreement was stamped on 02.02.2010 and got registered on 23.02.2010. In this way, the OP had got the agreement executed even when there was default in the payment of instalments on the part of the complainant. Further, the OP-1 had issued mortgage NOC to the complainant on two occasions on 09.03.2010 and 19.04.2010, which were collected by a representative of the complainants. The OP-1 has maintained that on account of the failure of the complainant to pay the balance amount despite the issue of many demand notices, the allotment made to the complainant was terminated on 19.02.2011. On 30.10.2012, the OP-1 offered to refund the deposited mount to the complainant, after deducting earnest money and a cheque number 270908 for ₹37,96,800/- was also issued, but the complainants refused to accept the same. The OP-1 also stated that they had handed over physical possession of flats to more than 554 flat-purchasers and there was no complaint from any one of them. The OP-1 further stated that the complainant had booked the flat in question for commercial purpose and hence, the complaint was not maintainable, in accordance with the provisions of the Consumer Protection Act.
5. The OP-2 Dena Bank also filed a written statement, saying that there was no cause of action to the complainant against OP-2. The complainant had made an application to them for advancement of loan and also to take over the previous loan granted by the Indian Bank in their favour. The bank conveyed approval of loan of ₹61 lakh in principal to the complainants and asked them to complete the documentation etc. and also to obtain NOC from OP-1. They also wanted confirmation from the complainant that the termination of booking stood revoked by OP-1. The OP-2 were well within its rights to ask for the necessary documents/information from the complainant before taking a decision to advance the loan in question. There was, therefore, no deficiency in service on the part of the OP-2 and the complaint against them deserved to be dismissed.
6. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.
7. The first issue that arises for our consideration is whether the complaint is within the pecuniary jurisdiction of this Commission and hence, maintainable in its present form. As indicated already, the total value of the flat is ₹77,93,600/- including ₹6 lakh for car parking space. The complainant has worked out the value of goods/services as ₹1,22,27,509/-, taking into account the fact that the carpet area to be allotted to the complainant was 937.5 sq. ft., whereas the OP-1 allotted only 794.73 sq. ft. It has also been stated that the value of compensation shall be ₹44,94,760/- making a total claim of ₹1,67,22,269/-. Considering the fact that the value of goods/service for the area demanded by the complainant exceeds ₹1 crore, it is held that the complaint is within the pecuniary jurisdiction of this Commission and hence, maintainable.
8. The next issue that arises for our consideration is whether there has been any deficiency in service or unfair trade practice by the OP-1 builder or OP-2 Dena Bank in the whole episode. The complainants have stated that at the time of booking of the flat, the OP-1 had told them that they were required to pay 20% of the price as margin money and the balance 80% would be raised by way of home loan from the HDFC. It was found later that the HDFC had not approved the said project for financing. The OP-1 has denied this version of the complainant in their written statement before us. In the absence of anything to the contrary in the agreement of sale executed between the parties, we do hold that the OP-1 was under no obligation to arrange the necessary funds as loan to the complainant for making payment as per the payment plan specified in the agreement for sale. There is no deficiency in service on the part of the OP-1 towards the complainant if the HDFC did not approve the funding of the said project.
9. The complainants approached the Indian Bank for the sanction of home loan. The said bank sanctioned loan of ₹25 lakh to them and disbursed the same to OP-1. The Indian Bank also created mortgage on them as per the NOC issued by OP-1. It has been stated further that following the arrest of some important functionary of OP-1 in some other matter, the Indian Bank refused to grant further loan to the complainants for making payment of instalments for the said flat. The complainants then approached OP-2 Dena Bank for the advancement of loan to them and also to take over the previous loan, advanced by the Indian Bank. After correspondence with the Dena Bank and submission of documents, OP-2 Dena Bank confirmed the sanction of ₹61 lakh as loan and also to take over the loan of the Indian Bank of ₹23 lakh as per their letter dated 29.03.2013 addressed to OP-1. However, this was subject to the grant of NOC by OP-1 in their favour so as to enable them to disburse the loan. The OP-1 issued NOC subject to the final outcome of the pending consumer complaint before the District Forum which did not serve any purpose. Later on, following direction dated 06.02.2014 from the National Commission as well, OP-1 issued NOC vide letter dated 12.02.2014 but that was also made subject to the final outcome of the case pending before District Forum. In response to letter dated 09.04.2014 written by the Dena Bank to the complainants and letter dated 05.05.2014 written to OP-1 seeking withdrawal of the termination letter, the OP replied that the termination letter was legal, valid and subsisting. The OP-2 Bank has taken the stand that they have no concern with the dispute between the complainant and OP-1.
10. The OP-1 has taken the stand that for the failure of the complainant to pay the instalments of the amount in question in time, they had issued cancellation letter on 19.2.2011. However, it is seen from available record that there are a number of termination letters and demand notices of various dates on record. The letter dated 19.02.2011 has the title "Termination Notice" saying in unambiguous terms that the agreement/allotment of flat had been terminated and the said flat shall be sold to any other person or persons as deemed fit and on receipt of the sale consideration for the same, the instalments paid by the complainant shall be returned. On 16.07.2011, there is another letter with the heading "Termination Letter" by which the total amount due has been stated to be ₹42,12,703.46ps. This letter also states that the allotment was being terminated and earnest money forfeited. There is a demand letter dated 16.07.2011 stating the total amount due as ₹31,17,440/-. Another demand letter dated 16.07.2011 states the total amount due to be ₹37,03,575.52ps. There is another termination letter dated 17.09.2011 quoting the total payable amount as ₹38,11,863.88ps. Another termination letter dated 9.11.2011 says that the total amount due was ₹39,08,718.04. One more termination letter dated 12.12.11 mentions the total amount due as ₹39,67,906.69ps.
11. Further, it is made out from record that OP-1 sent letters to the complainant, demanding the payment of service tax from time to time. One such letter is dated 25.05.2011, saying that a sum of ₹22,386/- as amount payable towards service tax till 31.03.2011 should be paid on or before 15.06.2011. The said amount was duly paid by the complainants. A similar letter was written on 20.06.2011, as well and the payment was made by the complainant. The issuing of many termination letters from time to time and the payments made by the complainant for the service tax as demanded by the petitioner, leads to the presumption that the termination of allotment as communicated by OP-1 to the complainant was not absolute. Moreover, when it is clear that OP sent a series of such "termination letters" it cannot be concluded that the termination of allotment was actually made, or intended.
12. Keeping in view the entire set of facts and circumstances of the case, it is made out that the complainant was not able to make payment of the entire sum demanded by OP-1 because loan of sufficient amount could not be arranged from the banks in time. The papers submitted on behalf of OP-2 Dena Bank clearly show that they sanctioned loan to the complainant and also took over the liability of the loan advanced by the Indian Bank. There was, however, problem in the disbursement of loan because the required documents could not be made available by OP-1. We feel, therefore, in the interest of justice that the flat in question should be handed over by OP-1 to the complainant by accepting the balance amount of money as intimated in the payment schedule already drawn up, alongwith interest @12% p.a from the due date of payment till date. Since almost half of the amount already stood paid by raising loan from the Indian Bank, it is clear that OP-1 have enjoyed the benefit of the money received by it for a considerable time without giving any interest etc. on the same. The ends of justice will, therefore, be met if the property is handed over to the complainant after receiving the balance amount with interest as stated above. This consumer complaint is, therefore, allowed and the OP-1 is directed to hand over the possession of the property in question to the complainant within four weeks of this order after accepting the balance payment with interest as stated above. There shall be no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER