State Consumer Disputes Redressal Commission
Sajith Rajan S/O K.S.Rajan vs I.D.B.I.India Ltd on 30 April, 2015
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BEFORE THE STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, RAJASTHAN,
BENCH NO.3 JAIPUR
ORIGINAL COMPLAINT CASE NO: 34/2011
Sajith Rajan S/o Mr.L.S.Rajan, R/o Street No.11,
Gurgaon.
..........Complainant
Vs.
1. Industrial Development Bank of India Ltd., C-
Scheme, Jaipur through Collection Manager.
2. Krishna Villa Prime Apartments, Sodala, Jaipur
through it's Director.
3. Amay Home Services Ltd., Nirman Nagar, Jaipur
through its Director.
..........Opposite Parties
Date of Order -30/04/2015
Before:
Hon'ble Mr.Anil Kumar Mishra - Presiding Member
Hon'ble Mr.Kailash Soyal - Member
Mrs.Parinitoo Jain . . . . . Counsel for the
Complainant.
Mr.Sanjay Rahar . . . . . Counsel for the Opposite
Party No.1 - IDBI.
None present on behalf of Opposite Party No.2 & 3
i.e. Krishna Villa Prime Apartment and Amay Home
Services (Builders).
JUDGMENT
PER MR.ANIL KUMAR MISHRA (PRESIDING MEMBER)
1. The present complaint has been filed by Mr.Sajith Rajan, the complainant (hereinafter referred to as "the 2 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.3 (hereinafter referred to as "the Builder"). The Bank agreed to the finance builder's project namely - Skyline at plot No.GH-C in Village Siroli at Jagatpura and the EMI was to start after the possession. The representative of the Bank contacted the complainant and agreed to provide finance to him with an assurance that he will not have to pay any interest on loan amount till the construction was completed and possession given to him by the builder. The Krishna Villa Prime Apartments Pvt. Ltd., the OP No.2 (hereinafter referred to as "the Krishna Villa"), the original purchaser of the land entered into an agreement on 19.09.2006 with M/s Gold Dream Builders & Developers to construct a multi storied complex known as the 3 Skylines and the project was to completed within 24 months. Later on, M/s Gold Dream Builders merged with the Krishna Villa and subsequently, the Amay Home Services, the OP No.3 (hereinafter referred to as "the Builder") took over the management of the Krishna Villa. The Builders entered into a special arrangement and Advance Disbursement Facility (ADF) with the Bank, wherein the Bank agreed to disburse the entire loan amount to the builder.
2. The Bank persuaded the complainant to make an initial payment of 15% of the cost of the flat to the Builder and the balance amount was to be financed by the Bank as loan amount. A Memorandum Of Understanding (MOU) between the complainant and the Builder and a Tripartite Agreement (TPA) between the complainant, the Bank and the Builder was entered into on 07.07.2008 (Annex.1 & 2 respectively) and the complainant agreed to purchase a flat No.B-114 in the project Skyline, Jagatpura for a consideration of Rs.17,30,235/- + Rs.1,50,000/- towards parking and club 4 charges i.e. total amount of Rs.18,80,235/-. The complainant paid Rs.2,00,000/- against the cost of the flat as initial booking amount and Rs.1,50,000/- against parking and club charges i.e. Rs.3,50,000/- in all. The Bank agreed to disburse Rs.14,71,000/- (i.e. 85% amount of the cost of the flat) to the Builder and the said amount was debited in the loan account of the complainant. The buyer /complainant was obliged to pay the EMI only after the possession was handed over to him.
3. The Builder had also obtained a construction loan of Rs.9 Crores from Rajasthan Financial Corporation (RFC) by mortgaging project's property to it. The builder paid the interest to the Bank for a few months and then stopped the payment as well as the construction of the flats. The complainant came to know that the Directors of the project committed fraud and cheating with many customers and closed down their office and absconded. Various FIRs (Annex.6) have been 5 registered with the police against the builders and the possession of the project was taken over by the RFC. The Bank also entered into a special arrangement with the builder to give wrongful gain to him. 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. The Bank had made a payment of 85% of the price of the flat 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 the booking amount of Rs.3,50,000/- with 18% interest from the opposite parties. The Bank vide an illegal notice dated 08.08.2010 (Ex.13) has called upon the complainant to make a payment of Rs.16,18,988/- against the loan amount, whereas the complainant is not liable to 6 pay any interest or loan amount till possession of the flat is given to him. 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 Rs.30,20,000/- as compensation as prayed in para 31(ii-vi) of the complaint, and the demand notice of the Bank (Ex.13) be quashed and set aside and the Bank be further directed not to show him as a defaulter in the information given to the CIBIL and the OP No.1 be directed to pay an amount of Rs.3,50,000/- with 18% interest to the complainant.
4. The Bank in it's reply to the complaint has submitted that it is the complainant, who approached the Bank on 12.02.2008 (Annex.R1/1) for sanction of a home loan of Rs.16,35,000/- for the purchase of a 7 flat No.B-114 at project Skyline, Jagatpura, Jaipur and the home loan was sanctioned on 22.02.2008 (Annex.R1/2). The complainant entered into a Home Loan Agreement with the Bank on 05.03.2008 (Annex.R1/3). A TPA was entered into between the parties on 07.07.2008 (Annex.R1/4) 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 07.07.2008 (Annex.R1/5), 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 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. It has been made to 8 appear as if the Bank is the builder and it has sold flat to the complainant. The principles of 'caveat emptor' applies in the matter and the buyer was supposed to check the credentials of the builder before buying the flat. Neither any officer of the Bank ever persuaded the complainant to purchase the flat nor any officer was hand in gloves with the builder. The Bank is entitled to recover the amount as shown in the notice dated 18.08.2010 and hence, the complaint be dismissed.
5. No one appeared on behalf of the OP No.2 & 3, the Builders, despite service of notice on them. Thus, there is no rebuttal of the OP No.2 & 3 the Builders, about the allegations and averments made in the complaint.
6. The complainant Sajith Rajan submitted his affidavit and documents Ex.1-13 in support of the averments made in the complaint, whereas the Bank submitted the affidavit of Ms.Akshika Narula and documents Annex.R1/1 to 1/6.
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7. 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.
8. One of the contentions of the learned counsel for the Bank is that the complainant is not a consumer under the 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 12.02.2008 (Annex.R1/1) and a loan of Rs.16,35,000/- was sanctioned by the Bank on 22.02.2008 (Annex.R1/2). A TPA between the builder, the complainant and the Bank had been executed on 07.07.2008 (Annex.1 & R1/4) and an MOU (Annex.2 & R1/5) 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, 10 then the complainant comes within the definition of consumer and can sue the Bank and the Builders 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 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.
9. It is an admitted fact that the complainant booked a flat No.B-114 in the project Skyline, Jagatpura of the builders after paying an initial booking amount of Rs.3,50,000/- and the Bank sanctioned a home loan of Rs.16,35,000/- on 22.02.2008 (Annex.R1/2) and a Home Loan Agreement (Annex.R1/3) was also executed on 05.03.2008 between the complainant and the Bank. The total cost of the flat was Rs.17,30,235/- + Rs.1,50,000/- (parking 11 and club charges). It is also an admitted fact that a TPA dated 07.07.2008 (Annex.R1/4) between the complainant, the Bank and the Builder was executed and an MOU (Annex.R1/5) was executed on 07.07.2008 between the Builder and the Bank. It is pertinent to mention here that though the date of execution of the MOU is shown as 07.07.2008, but the stamp on which it has been executed is itself purchased on 17.11.2008, which reflects that the document was executed in back date
10. 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 12 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 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.
11. It appears from the condition No.6 of the TPA dated 07.07.2008 (Annex.1) 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 13 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.
We are of the firm view that 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).
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12. 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 was given 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 liable to be paid by the complainant to the Bank (condition No.F, H, 1(a)(c) & 2 of the MOU - Annex.2 & R1/5) 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 him and the demand notice dated 18.08.2010 of the Bank (Ex.13) for Rs.16,18,988/- is illegal and therefore, it is liable to be quashed.
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13. 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 an amount of Rs.16,18,988/- from the complainant against the interest and the loan amount from the complainant 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.
14. 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 16 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 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 17 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.
15. 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 illegally raised the demand vide it's letter dated 18.08.2010 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.
ORDER
16. The complaint of Mr.Sajith Rajan, the complainant is allowed jointly and severally against the opposite parties and they are directed as follows:- 18
(i) The Amay Home Services (OP No.3) shall hand over the possession of flat No.B-114 in the project Skyline, Jagatpura to the complainant within a period of three months or refund the booking amount of Rs.3,50,000/- (Rupees Three Lacs Fifty Thousand Only) with 12% interest per annum from the date of payment by him.
(ii) The demand notice dated 18.08.2010 (Ex.13) given by the IDBI (OP No.1) to the complainant is quashed and set aside and 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 25.04.2011 against the opposite parties is affirmed and the opposite parties are directed not to make 19 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 Krishna Villa Prime Apartment Pvt.
Ltd. (the OP No.2) and the Amay Home Services (OP No.3) shall pay jointly and severally Rs.2,00,000/- (Rupees Two Lacs Only) and the IDBI (OP No.1) shall also pay to the complainant Rs.2,00,000/- (Rupees Two Lacs) with 12% interest per annum from the date of judgment as compensation against the mental agony. All the Opposite Parties shall also pay Rs.25,000/- (Rupees Twenty Five Thousand Only) each as cost of proceedings.
(vi) Except para 16(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