State Consumer Disputes Redressal Commission
Sanjeev Sharan S/O P.B.Saran vs I.D.I.B.I.Bank Ltd on 27 April, 2015
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BEFORE THE STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, RAJASTHAN,
BENCH NO.3 JAIPUR
ORIGINAL COMPLAINT CASE NO: 36/2011
Sanjeev Sharan S/o Mr.P.B.Sharan, R/o Vidhyut
Nagar, Jaipur.
..........Complainant
Vs.
1. Industrial Development Bank of India Ltd., C-
Scheme, Jaipur through Collection Manager.
2. Amay Home Services Ltd., Nirman Nagar, Jaipur
through its Director Mr.Rohit Suri, C/o
Central Jail, Jaipur.
..........Opposite Parties
Date of Order -27/04/2015
Before:
Hon'ble Mr.Anil Kumar Mishra - Presiding Member
Hon'ble Mr.Kailash Soyal - Member
Mr.Devendra Mohan Mathur . . . . . Counsel for the
Complainant.
Mr.Sanjay Rahar . . . . . Counsel for the Opposite
Party No.1 - IDBI.
None present on behalf of Opposite Party No.2 Amay
Home Services (Builder).
JUDGMENT
PER MR.ANIL KUMAR MISHRA (PRESIDING MEMBER)
1. The present complaint has been filed by Mr.Sanjeev Sharan, the complainant 2 (hereinafter referred to as "the complainant") against the opposite parties with an averment that Industrial Development Bank of India Ltd., Opposite Party No.1 (hereinafter referred to as "the Bank") has financed many projects of building construction of Amay Home Services, Opposite Party No.2 (hereinafter referred to as "the Builder"). The Bank agreed to the finance builder's project namely - My Liberty Homes at Jaisinghpura. The Bank had financed the Builder's project and the EMI was to start after the possession. The complainant agreed to purchase a flat No.A3-402, in the project My Liberty Homes, Jaisinghpura for a consideration of Rs.15,67,400/-. An agreement between the complainant and M/s Sheetal Buildcon Pvt. Ltd., the power of attorney holder of the builder was executed on 09.02.2008 (Annex.1). The complainant applied for a home loan from the Bank and a loan of Rs.14 Lacs was sanctioned (Annex.2). A Tripartite Agreement (TPA) was executed on 27.02.2008 3 (Annex.3) between the complainant and opposite parties. The complainant deposited Rs.1,67,400/- as initial booking amount with the builder (Annex.4/1 & 4/2). As per the terms of MOU, the builder was to pay the interest on the entire amount i.e. the period commencing from date of disbursement till the date of offer of the possession of the unit and the builder was to be treated as the principal debtor. The Bank also disbursed an amount of 80% directly to the builder under Advanced Disbursement Facility (ADF) and the said amount was debited in the loan account of the complainant. Under the special payment plan agreed between the Bank and the Builder, the buyer had to take loan only from the Bank and the buyer was obliged to pay the EMI only after possession was handed over to him.
2. The Bank is entitled to recover the entire loan amount, the interest and overdue interest and other payments due to it only from the builder and it has no right to recover any amount from the complainant. 4 The Bank had made a payment of 80% amount of loan to the builder in advance and not in stages of construction and thus, it acted as an agent of a fake and fraud builder. The builder has not constructed the flat nor gave it's possession to the complainant and therefore, the complainant is entitled to get back an amount of Rs.12,60,000/- received by the builder against the cost of the flat. The Bank also gave false information to the Credit Information Bureau (India) Ltd. (CIBIL) showing complainant as a defaulter in payment of his loan and therefore, the complainant is not able to take loan from any Bank or financial institution. The opposite parties have committed deficiency in service and therefore, the complaint be allowed and they be directed to pay back the aforesaid amount of Rs.12,60,000/- and Rs.10 Lacs as compensation for mental agony and Rs.51,000/- as cost of proceedings and the Bank be further directed not to show him as a defaulter in the information given to the CIBIL. 5
3. The Bank in it's reply to the complaint has submitted that it is the complainant, who approached the Bank on 07.12.2007 for sanction of a home loan of Rs.14 Lacs for the purchase of a flat No.A3-402, My Liberty Homes at Jaisinghpura, Jaipur (Annex.R1/1) and the loan was sanctioned on 27.02.2008 and the complainant entered into a Home Loan Agreement with the Bank (Annex.R1/2). A TPA was entered into between the parties on 27.02.2008 and as per clause 2 of this agreement, the complainant instructed the Bank to disburse the loan amount directly to the builder. As per clause 10 of the aforesaid agreement, the Bank can recall the entire loan amount from the borrower (the complainant). As per clause D of the MOU dated 27.02.2008 (Annex.R1/4), the complainant agreed to disburse 80% of the loan amount to the builder at first instance and the loan amount was released at the instance of the complainant. The complainant is wholly liable to repay the loan amount with interest. No assurance 6 was given by the Bank to the complainant that no interest was payable by the complainant till possession of the flat was given to him. The Bank is entitled to recover the amount from the complainant and hence, the complaint be dismissed.
4. No one appeared on behalf of the Builder despite service of notice on it's Director. Thus, there is no rebuttal by the builder about the allegations and averments made in the complaint.
5. The complainant Sanjeev Sharan submitted his affidavit and documents Annex.1-4 in support of the averments made in the complaint, whereas the Bank submitted the affidavit of Mr.Aditya Malpani and documents Annex.R1/1 to 1/10.
6. We have heard the arguments of the learned counsel for the complainant and the OP No.1 and we have carefully perused the record, documentary evidence and affidavits on behalf of the parties.
7. One of the contentions of the learned counsel for the Bank is that the complainant is not a consumer under the 7 Consumer Protection Act (hereinafter referred to as "the Act"). In this regard, it is an admitted fact that the complainant applied for home loan from the Bank on 07.12.2007 (Annex.R1/1) and a loan of Rs.14 Lacs was sanctioned by the Bank on 27.02.2008 (Annex.R1/2). A TPA between the builder, the complainant and the Bank was executed on 27.02.2008 (Annex.3) and a MOU dated 27.02.2008 (Annex.R1/4) was also executed between the builder and the Bank with regard to the loan to the complainant. In case, there has been any non-compliance of terms & conditions of the TPA/MOU either on part of the Bank or the Builder and if there is any deficiency in service on their part, then the complainant comes within the definition of consumer and can sue the Bank and the Builder for damages. Such a dispute very well comes within definition of consumer and Consumer Fora are competent to adjudicate such disputes. The Hon'ble Supreme Court in II (1993) CPJ 7 (Lucknow Develpement Authority Vs. M.K.Gupta) and 8 2002 DNJ (SC) 594 (J.J.Merchant Vs. Srinath Chaturvedi) has held that such disputes can be heard and adjudicated upon by Consumer Fora. Therefore, the contention of the learned counsel for the Bank does not hold good.
8. It is an admitted fact that the complainant booked a Flat No.A3-402 in the project My Liberty Homes, Jaisinghpura of the Builder after paying an initial booking amount of Rs.1,67,400/- on 26.02.2008 & 23.10.2007 vide 2 different receipts (Annex.4/1 & 4/2) and the Bank sanctioned a home loan of Rs.14 Lacs on 27.02.2008 and a Home Loan Agreement (Annex.R1/2) was also executed between the complainant and the Bank. The total cost of the flat was Rs.15,67,400/-. It is also an admitted fact that a TPA dated 27.02.2008 (Annex.3) between the complainant, Bank and the Builder was executed and an MOU (Annex.R1/4) was executed on 27.02.2008 between the Builder and the Bank.
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9. It is also evident that as per condition No.F & H of the MOU between the Builder and the Bank, the purchaser's EMI and payment of interest was to commence only after the final disbursement in terms of the sanctioned terms and builder had to service interest on the entire amount for the entire period, namely the period commencing from the date of disbursement till the date of offer of the possession of the unit. It has been further agreed in para 1(a) of the MOU that the Builder was to bear the interest on the loan amount at the agreed rate as per Bank sanction. It was further agreed in para 1(c) of the MOU that the parties agreed that the Builder was to be treated as "the principal debtor" and not the purchaser. In para 2 of the MOU, the purchaser was held liable to service and repay the loan once the offer of possession or 18 months, whichever was earlier, was given to the purchaser. Thus, it is amply clear that the complainant was not liable to pay any interest or the loan amount before the 10 offer for possession was given to him and only the Builder was liable to pay the interest and the loan amount till possession was actually given to the purchaser/complainant.
10. It appears from the condition No.6 of the TPA dated 27.02.2008 (Annex.3) that the borrower was obliged to make the payment of all dues before taking possession and /or getting the conveyance deed register. Thus, it is clear from the TPA that the complainant was to make the payment only just before the possession or at the time of registration of the conveyance deed, which means that the construction of the Flat was to be completed and it was to be ready for handing over possession to him before he was obliged to pay the interest /overdue interest and the amount of loan. On the other hand, para 10 & 12 of the TPA puts liability of repayment on the complainant/ borrower and these two conditions are self-contradictory with condition No.6 and condition No.F, G, H & condition No.1(a)(c) & 2 of the MOU. 11
We are of the firm view, there where there are contradictory and conflicting terms and conditions in the TPA on one hand and the MOU on the other hand, then the conditions and terms, which are favourable and beneficial to the complainant/ purchaser have to be given effect to. This view of ours get support from the judgment of Hon'ble Supreme Court in 2004 (4) SCC 230 (H.N.Shankara Shastry Vs. Assistant Director Agriculture, Karnataka).
11. For the aforesaid reasons, when we construe the terms and conditions of the MOU on the one hand and the TPA on the other hand in harmony, then it comes out that the purchaser's/ complainant's EMI and payment of interest had to commence only after the offer of possession of the flat to him and the Builder is the principal debtor. The Builder has to bear the interest on the entire amount for the entire period commencing from the date of disbursement to the date of offer of possession and no EMI or interest was 12 liable to be paid by the complainant to the Bank (condition No.F, H, 1(a)(c) & 2 of the MOU - Annex.R1/4) and therefore, the Bank has no right or authority to demand from the complainant any interest or loan amount till the possession of the flat is handed over to the complainant.
12. When the Bank itself has undertaken not to recover any interest or loan amount from the complainant till possession of the flat is given to the complainant and any such amount is liable to be paid only by the Builder, then the act and conduct of demanding any amount against the interest and the loan amount from him amounts to deficiency in service on it's part. For the aforesaid reasons, if the Bank has also showed the complainant as defaulter and informed the CIBIL as such, then such an act of the Bank is totally arbitrary, illegal and without any jurisdiction and the Bank is at liberty to demand the aforesaid amount from the Builder, who is the principal debtor as per the terms and conditions of the MOU.
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13. It is admitted fact that the Builder has not completed the construction of the flat till date nor any possession has been given to the complainant within the agreed period of 18 months, then such an act and conduct on the part of the Builder not only amounts to deficiency in service on it's part but it also amounts to unfair trade practice, as it has forced the complainant to pay his hard earned money in the hope of getting a shelter for himself. The course of progress of the Builder's project in the present matter indicates that it beguiled and entrapped the complainant through false, solicitations and promises by both the Builder as well as the Bank. The Hon'ble National Commission in I (2012) CPR 56 (Shri Shbhakara Estates Pvt. Ltd. Vs. D.Rambabu) has laid down that the Developers cannot be allowed to cheat innocent public by launching fake projects. In the present matter, the Builder did not complete the flat within the stipulated period of 18 months and 14 abandoned the project midway. It is also evident from the record that the land on which the Builder had started construction has been taken over by the RFC and the title of the land was also not clear. Thus, the Bank also was not diligent in financing the project of the Builder and it appears that the Builder as well as the Bank, in collusion with each other, defrauded and cheated the complainant by fleecing booking amount and then by providing loan to the complainant.
14. For the aforesaid reasons, we are of the view that no amount is recoverable from the complainant as he has not been given possession of the flat and the Bank has illegally raised the demand and illegally informed the CIBIL that the complainant stood defaulter in payment of the loan. Therefore, the present complaint of the complainant deserves to be allowed and he deserves adequate compensation in the light of judgment of Hon'ble Supreme Court in 2000 (7) SCC 668 and 1994 (3) SCC 504. 15
ORDER
15. The complaint of Mr.Sanjeev Sharan, the complainant is allowed jointly and severally against the opposite parties and they are directed as follows:-
(i) The Amay Home Services (OP No.2) shall hand over the possession of flat No.A3-402 in My Liberty Homes, Jaisinghpura to the complainant within a period of three months or refund the booking amount of Rs.1,67,400/- (Rupees Two Lac Only) with 12% interest per annum from the date of payment by him.
(ii) It is directed that the Bank shall not raise any demand from the complainant till possession of the flat is handed over to him. The Bank shall be at liberty to recover the aforesaid amount of the notice from the Builder.
(iii) The IDBI (OP No.1) is directed to take immediate steps before the CIBIL for getting the name of the complainant removed from the list of defaulters.
(iv) The interim injunction granted by this Commission on 06.07.2011 against the 16 opposite parties is affirmed and both the opposite parties are directed not to make any recovery against the complainant till the possession of the flat is given to him. The IDBI (OP No.1) is further directed that it would withdraw any legal proceedings taken against the complainant before any forum with respect to the recovery of loan amount.
(v) The Amay Home Services (OP No.2) and the IDBI (OP No.1) shall pay to the complainant Rs.2,00,000/- (Rupees Two Lacs) each with 12 % interest per annum from the date of the judgment as compensation against the mental agony.
Both the OPs shall also pay Rs.25,000/- (Rupees Twenty Five Thousand Only) each as cost of proceedings.
(vi) Except para 15(i) of the order, the compliance of the rest of the order shall be made within one month from today.
(KAILASH SOYAL) (ANIL KUMAR MISHRA) MEMBER PRESIDING MEMBER PINKKY JAIN, UDC