STATE CONSUMER DISPUTES REDRESSAL COMMISSION

OF TELANGANA : AT HYDERABAD

CC NO. 117 OF 2015

Between :

Naseer Ahamed Mohammed
S/o Mohammed Vasuddin, aged about 42 yrs

Occ: Software Engineer, R/o Flat No.302,

Harmony Residency, Beside Canara Bank Road

Masab Tank, Hyderabad

Rep. by his authorized Holder Mohammed Vasuddin

                                                                                                                                                                                                                   …Complainants

          A N D

1)       M/s Aliens Developers (P) Ltd.,

          Rep. by its Managing Director & Joint Managing Director

          O/o Flat No.911, Teja Block, My Home Navadeepa

          Apartments, Madhapur, near Hitech City,

          Hyderabad – 500 081.

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director M/s Aliens Developers

          (P) Ltd., O/o Flat No.911, Teja Block,

          My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director M/s Aliens

          Developers (P) Ltd., O/o Flat No.911,

          Teja Block, My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

( Present addresses of Ops No.1 to 3 are at

Aliens Space Station, Tellapur, Ramachandrapuram Mandal

Medak District, Hyderabad (Telangana-502032)

4)       AXIS Bank

          Rep. by its Branch Manager

          2^nd Floor, P.M. Modi Complex

          5-4-187/6 MG Road, Karbala Maidan

          Hyderabad-500 009

                                                                                      … Opposite Parties

CC NO. 174 OF 2015

Between :

1.       GDPVSN Sastry S/o late G.Subba Rao

Aged about 35 years, Occ: Self Employer

2.       Mrs R.Meera W/o GDPVSN Sastry

Aged about 30 yrs, Occ: Associate Engineer

Both are presently R/o 1440 NE, 37^th Place

J4, Bellevue, WA, USA ZIP#98007 USA

Rep. by their authorized holder G.Vishwanath

S/o GB Acharya, aged about 30 yrs, Occ: Service

R/o Plot No.34, Road No.3, Srikrishna Nagar

Safilguda, Hyderabad-500 056
 

                                                                                                                                                                                                                   …Complainants

          A N D

1)       M/s Aliens Developers (P) Ltd.,

          Rep. by its Managing Director & Joint Managing Director

          O/o Flat No.911, Teja Block, My Home Navadeepa

          Apartments, Madhapur, near Hitech City,

          Hyderabad – 500 081.

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director M/s Aliens Developers

          (P) Ltd., O/o Flat No.911, Teja Block,

          My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director M/s Aliens

          Developers (P) Ltd., O/o Flat No.911,

          Teja Block, My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

( Present addresses of Ops No.1 to 3 are at

Aliens Space Station, Tellapur, Ramachandrapuram Mandal

Medak District, Hyderabad (Telangana-502032)

4)       State Bank of India
          rep. by its Branch Manager

          Personal Banking Branch

          Abids Circle, Near GPO

          Hyderabad-500 001

                                                                                      … Opposite Parties

CC NO. 177 OF 2015

Between :

1.       Manoj Kumar Gupta S/o Chandra K Gupta

          Aged about 40 years, Occ: Service

2.       Mrs Renu Manoj Gupta W/o Manoj Kumar Gupta

          Aged about 37 years, Occ: House Maker

          Both are R/o Flat No.206, SMT Technopolis

          Kondapur Hyderabad-500 081, Present Address

          (101 Gillespie Dr.APT 8205 Franklin TN 37067 USA)

          Rep. by their GPA Holder Robbins Kumar Gupta

          S/o Chandra Kumar Gupta R/o Pbel City

          Hyderabad Flat No.108, Argentum Tower (D), 18

          APPA Junction, Vikarabad Road, Peerancheruvu Village

          Rajendra Nagar Mandal, Peeramcheru

          Hyderabad-500 091

                                                                                                                                                                                                                   …Complainants

          A N D

1)       M/s Aliens Developers (P) Ltd.,

          Rep. by its Managing Director & Joint Managing Director

          O/o Flat No.911, Teja Block, My Home Navadeepa

          Apartments, Madhapur, near Hitech City,

          Hyderabad – 500 081.

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director M/s Aliens Developers

          (P) Ltd., O/o Flat No.911, Teja Block,

          My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director M/s Aliens

          Developers (P) Ltd., O/o Flat No.911,

          Teja Block, My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

( Present addresses of Ops No.1 to 3 are at

Aliens Space Station, Tellapur, Ramachandrapuram Mandal

Medak District, Hyderabad (Telangana-502032)

4)       State Bank of India
          rep. by its Branch Manager

          PBB Abids

          Hyderabad-500 001

                                                                                      … Opposite Parties

CC NO. 178 OF 2015

Between :

1.       Prafulla Kumar Sharma S/o late D.N.Sharma

          Aged about 52 years, Occ: Service

2.       Mrs.Veena Sharma W/o Mr.Prafulla Kumar Sharma

          Aged about 50 yrs, Occ: Housewife

          Both are R/o E-8 (presently E-46) HWP(M) Colony
          Goutami Nagar, Aswapuram

          Khammam Dist-507116

                                                                                                                                                                                                                   …Complainants

          A N D

1)       M/s Aliens Developers (P) Ltd.,

          Rep. by its Managing Director & Joint Managing Director

          O/o Flat No.911, Teja Block, My Home Navadeepa

          Apartments, Madhapur, near Hitech City,

          Hyderabad – 500 081.

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director M/s Aliens Developers

          (P) Ltd., O/o Flat No.911, Teja Block,

          My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director M/s Aliens

          Developers (P) Ltd., O/o Flat No.911,

          Teja Block, My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

( Present addresses of Ops No.1 to 3 are at

Aliens Space Station, Tellapur, Ramachandrapuram Mandal

Medak District, Hyderabad (Telangana-502032)

4)       State Bank of India
          rep. by its Branch Manager

          PBB Abids

          Hyderabad-500 001

                                                                                      … Opposite Parties

CC NO. 218 OF 2015

Between :

G.Balasubramanyam S/o late G.Narayanapa

Aged 44 yrs, Occ: Pvt Employee

R/o H.No.296, BHEL MIG Colony

Ramachandrapura, Medak Dist.                                                                                                                                                                 …Complainants

          A N D

1)       M/s Aliens Developers (P) Ltd.,

          Rep. by its Managing Director & Joint Managing Director

          O/o Flat No.911, Teja Block, My Home Navadeepa

          Apartments, Madhapur, near Hitech City,

          Hyderabad – 500 081.

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director M/s Aliens Developers

          (P) Ltd., O/o Flat No.911, Teja Block,

          My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director M/s Aliens

          Developers (P) Ltd., O/o Flat No.911,

          Teja Block, My Home Navadeepa Apartments,

          Madhapur, Near Hitech City,

          Hyderabad – 500 081.

( Present addresses of Ops No.1 to 3 are at

Aliens Space Station, Tellapur, Ramachandrapuram Mandal

Medak District, Hyderabad (Telangana-502032)

4)       Allahabad Bank

          Rep. by its Branch Manager

          Secunderabad Branch

          Minerva Complex, S.D. Road

          Secunderabad-500 003

                                                                                      … Opposite Parties

Counsel for the Complainants:                   Sri D.Raji Reddy

Counsel for the Opp. Parties:            M/s P.Rajasripathi Rao   
No.1 to 3                                          

Counsel for the Opp.Party No.4:        M/s Laxminarayana Associates, Sri G.Prabhakar Sharma,  and Sri B.Damodar Reddy

QUORUM             :

HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT   

AND

SRI VITHAL RAO PATIL, MEMBER 

FRIDAY  THE SEVENTEENTH DAY OF FEBRUARY

TWO THOUSAND SEVENTEEN

Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)

***

                    The complaints arise out of identical facts and similar circumstances, as they are disposed of by common order.   The complaint,  C.C.No.117/2015 is taken as the lead case. 

2)                 The case of the Complainants in brief, is that the Opposite party No.1 company represented to them that they are engaged in the business of constructing multi-storied apartments and entered into development agreement with the owners of the land comprised in survey nos. 384, 385 and 426/A situated at Tellapur village, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and obtained permission bearing No.HUDA/621/P4/PLG/HUDA/2008 and they would provide all amenities therefor, would give possession by the end of November/December, with certain grace period and on such representation of the opposite parties, the complainants  entered into agreement of sale for purchase of flats, having super built-up area with one car parking along with undivided share of land, as detailed below.

3).      The complainants entered into agreements of sale in respect of flats at Aliens Space Station, situate at Tellapur village, Ramachandrapuram mandal, Medak district for the consideration thereof as detailed in the table below:

4).      The Opposite parties had not commenced construction of the flats even after the stipulated period is expired. There is no possibility of the construction of the flats as also the Opposite parties had not responded to the repeated requests of the Complainants.  The Complainants got issued the legal notice, to which there was no response.  The Complainants had sought for return of the amount with interest, compensation and costs of the complaint, in each case, as detailed below.

          The Complainants also sought to repay the home loan owed by them to the Opposite party bank with necessary interest and other charges as levied.

5)                 The Complainants are paying monthly instalments and interest on the amount obtained by way of home loan besides rent to the house where they are staying at present.  Due to the fraudulent actions on the part of the opposite parties, complainants suffered with mental agony, escalation of cost and physically by wandering in and around the office of the opposite parties for the past few years, for which, the opposite parties are liable to pay compensation as claimed in the table shown above.  Hence, the complaint with a prayer to direct the opposite parties  to comply with the above reliefs, as detailed in the table shown above. 

6)                 The Opposite parties promised to deliver the possession of the flat to the Complainants as prescribed in the agreement of sale with some grace   period.      Having agreed to purchase the above flats, Complainants entered into Agreement of sale with the Opposite party No.1 paying the earnest money and also by obtaining home loan from the OP No.4 bank and got disbursed the amount. 

7)                 The Complainants opted for pre-EMI scheme, as such, OP No.1 shall pay the pre-EMI on behalf of the complainants till the date of possession of the flat in pursuance of the Tripartite Agreements entered into between the parties.  The Complainants are compelled to pay the monthly loan instalments amount to opposite party No.4 bank.  The opposite parties 1 to 3 have failed to commence even the base/pillar footing works at the site in respect of the subject flats, as such, Complainants requested for cancellation of the booking and sought for refund of the amount.  Hence, prayed to allow the complaint as prayed for, supra in the table shown above.

8)                The Opposite parties 1 to 3 resisted the claim on the premise that the complainants filed the complaint to gain out of their breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. 

9)                 The Opposite parties submitted that originally the land in Sy.No.384 was an agricultural land and they filed application for conversion of the same into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006.  Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the Opposite parties have filed application for change of use of the land as commercial use zone.

10)               It is averred by Opposite parties that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.384 as residential use zone.  The project could not be commenced in view of proposed road under Master plan, until realignment of the proposed road without affecting the land in Sy.No.384 is made.  Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008.  Opposite parties have obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters.  After following due procedure and process, the Opposite parties obtained NoC from Airports Authority on 10.07.2009.

11)               It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission upto 29 floors is awaited.  In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996.  That they have taken necessary steps to complete the project.  The project is a massive project and due to reasons beyond their control, the Opposite parties could not complete the project within the time frame and they informed the complainant that the project required sanction from statutory authorities and mentioned the same as ‘force majeure’ in the agreement of sale.  It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.

12)               It is stated that for the delay, the Opposite parties have agreed to pay Rs.3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and they agreed to adjust the amount towards dues payable by the complainant.  The delay was only due to Telangana agitation, Sakala Janula Samme, etc., The complainant filed the complaint with ulterior motive to defame the opposite parties.  The Complainant shall file relevant receipts and documents to prove the payments.

13)               They denied to have not given any response.  The Opposite parties are taking all necessary steps to deliver the flats at the earliest.  The Complainant is not entitled for any compensation and their claim is illegal.  The complainant is not entitled for refund of amount and interest thereon and any compensation and costs.  There is no deficiency of service on the part of the Opposite parties.  Hence prayed for dismissal of the complaint.

14)              The opposite party no.4 in C.C.No.117 of 2015 filed written version resisting the case and contended that    the  complaint is barred by limitation since no cause of action has arisen against this opposite party.  The complainant does not fall within the definition of consumer as prescribed u/s 2 (d) of CP Act as the complainant has availed finance for purchase of house which is purely a commercial contract.   As per clause 2 of Tripartite Agreement entered between the complainant, opposite party no.1 and opposite party no.4, the complainant had agreed that the bank shall not be responsible or liable to ensure or ascertain the progress of construction and mere demand for payment would be sufficient of the bank to effect disbursement. The opposite party no.4 disbursed loan amount of Rs.12,27,016/- on 19.09.2009 in favour of builder and no further amounts were disbursed.         The complainants  are estopped to contend that the opposite party no.4 should have co-related the loan disbursement with the progress of the construction in accordance with the progress of Sec.4 and 5 of the AP Apartment (Promotion of Construction and Ownership Act, 1987) and the opposite party no.4 violated the same and committed unfair practice.     Therefore it prayed for dismissal of the complaint with costs. 

 15)              During the course of enquiry, the Complainant got filed evidence affidavit on their behalf and also got marked the documents as exhibits.  On behalf of the opposite parties 1 to 3, the Managing Director of the Opposite party no.1 by name Hari Challa filed his affidavit and the documents, Ex.B1 to B18, in each case.  On behalf of the opposite party no.4 no affidavit or documents have been filed. 

16)               The counsel for the Complainants and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments on behalf of Complainants.  Heard both sides.

17)               The points for consideration are :

1. Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?

ii)       Whether the complaint is not a ‘consumer dispute’?

iii)      Whether there is any deficiency in service on the part of the Opposite parties?

iv)      To what relief ?

18)               POINT NO.1 :  The Complainants entered into “Agreement of Sale” with the Opposite party No.1 for purchase of flats and paid the consideration amount as detailed in the above shown above.  A tripartite agreement was also executed by the Complainants and Ops.  The agreement of sale provides reference to arbitration.  The learned counsel for the opposite parties 1 to 3 have contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission.  Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds.

19)               In terms of the agreement of sale, the dispute has to be decided by means of arbitration.  However, remedy provided under the provisions of Consumer Protection Act is an additional remedy and in the light of law laid in “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainants having exhausted the other remedy was considered as under:

“The remedy of arbitration is not the only remedy available to a grower.  Rather, it is an optional remedy.  He can either seek reference to an arbitrator or file a complaint under the Consumer Act.  If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act.  However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act.  Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”

For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite parties.

20)               In the arguments, counsel for Complainants reiterated the same facts as averred in the complaint besides stating that the Opposite parties 1 to 3 ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreements and hence pleading ‘force majeure’ does not arise. 

21)               On the other hand, the counsel for the Opposite parties 1 to 3 in the arguments submitted that as per agreement, if the Complainants wants to cancel the booking of the flat, they shall forego 10% of the total flat cost as charges which is agreed by them.  In the case on hand, there is no provision for refund of earnest money.  Admittedly, on failure to comply with terms and conditions of agreed terms by the Opposite parties 1 to 3, the Complainants sought for refund of the amount.  Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite parties 1 to 3.  Though averments are made against the Opposite party No.4 in the complaint, no relief is sought against it by the Complainants.

22)               POINTS No.2 & 3 : The Opposite parties 1 to 3 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they agreed to deliver the residential flat to the Complainants in accordance with the terms & conditions agreed upon and consented thereof and as per specifications given thereto. 

23)               In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as this complaint is concerned.  The opposite parties have attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project.  The opposite parties would contend that the cause for delay is beyond their control which is force majeure.  The Opposite parties 1 to 3 stated the reasons for the delay in completion of the construction of the residential complex as under:

“The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project.  The said fact was informed to the complainant and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”.  The above referred facts mentioned squarely fall under the said clause.  Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp. party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”

24)               The complainants have submitted that owing to failure of the opposite parties 1 to 3 in completing the construction of the flats, they opted for cancellation of the agreement of sale of flat and the opposite parties 1 to 3 have contended that in order to maintain cordial relations with the complainants, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers.  The complainants also got issued notice setting forth series of events of delay and negligence and false promises made by the Opposite parties 1 to 3 seeking for refund of the amount on the premise of inaction on the part of the opposite parties 1 to 3.

25)               The opposite parties 1 to 3 have promised to complete construction of the flat and hand over its possession to the complainants  as prescribed in the agreement of sale with certain grace period as agreed and on their failure to perform their part of contract, the opposite parties 1 to 3 have proposed to pay rents but failed to pay the same.  However, there is no communication from the side of the opposite parties in this regard and the opposite parties have not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the complainants. 

26)               Not keeping promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the opposite parties.  The complainants have two options left for recovery of the amount, either by filing suit in court of law or by way of filing complaint before State Consumer Disputes Redressal Commission in view of the amount claimed falling within the pecuniary jurisdiction of this commission.  The contention of the opposite parties that the complaint is not maintainable is not sustainable. 

27)               The complainant contends that contrary to the terms of agreement and also various guidelines for releasing loan amounts, the bank has released the entire amount in one go without considering the stages of construction to the detriment of his interest. The bank can directly pay the amount to the developer as agreed upon but not whole of the amount without even verifying the stages of construction and existence of property. It could not have released the amount without verifying the progress of construction jeopardising their claims. By referring to project programme guide lines where there was specific reference that the developer should be in business for not less than 5 years and the builder/developer has history of due completion of 3 projects and it should have completed at least 1,00,000 sft. of built up area, and that without satisfying the eligibility criterion, the bank could not have sanctioned Advance Disbursement Facility (ADF for short).

28)               The OP No.4 bank contends that by virtue of tripartite agreement, the developer has to indemnify the bank in cases of this nature, where under, it was specifically mentioned that :

“The Builder agrees to demand payment from the Bank towards the cost of the Flat strictly as per the stage of construction of the Flat agreed to be sold to the Borrower and it will be responsibility of the Borrower to verify the stage of construction.

Immediately upon receipt of the loan amount sanctioned to the Borrower, the Builder agrees to execute and register a valid conveyance in favour of the Borrower and deliver the original Sale Deed after its registration directly to the Bank.  In this context, the Borrower irrevocably authorises the Builder to deliver the original Sale Deed directly to the bank.”

The developer and complainant are jointly liable for any of the claims for the loan amount disbursed. In the light of above clause, they are estopped from making any claim. In order to get over the payment of the amount towards EMI they were impleaded as parties. It is only a financial institution facilitating funding of the project and purchase thereof. It has nothing to do with the completion of construction.

29)               In contravention of the guidelines issued by Reserve Bank of India from time to time and tripartite agreement, the bank disbursed the loan amount. It is not known why the bank had taken such a stance when the guidelines stipulate to release the amount stage wise. The fact remains that the bank released the amounts to the developer contrary to guidelines. 

30)               There would be no meaning in releasing the entire amount in one go, without watching the progress of construction work.  This would cause unjust enrichment to the developer, and loss to the complainant. The terms of the agreement in between three parties were made in order to see that no party suffers from non-implementation of terms of the agreement. The bank cannot act at its own whims and fancies, and release the amount.

31)               If the bank acts contrary to the guidelines, the complainant is not liable to refund the amount paid to the developer. The bank can as well recover from the developer by recoursing the above clauses. The courts will not come to the rescue of the party which violates the terms and conveys benefits to one party in preference to another. It intends to cause loss to a genuine borrower by unduly favouring a defaulting and unfair customer. All this amounts to unfair trade practice.

32)               However, the very property which the complainants sought to purchase was a non-existent property kept as primary security. It also extended the loan on deposit of equitable mortgage though there was a mention that if equitable mortgage is not possible it would be by registered mortgage deed. The bank alleges that loan was sanctioned taking the property as security which the complainant intends to purchase from the developer besides on the instruction of the complainant. When the bank knew full well that the property was non-existent and no doubt document was executed in favour of the complainant by the developer in order to create equitable mortgage, disbursing the loan amount to the developer cannot be said to be valid. Considering the nature of transaction between the parties, we are of the opinion that the bank could not have disbursed the amount without taking proper care and caution to find out the non-existence of the flat for which loan was sanctioned.

33)               The banks and financial institutions promising to lend monies or sanctioning loans and the borrower investing in the project will be clothed by the principles of Promissory Estoppel. The doctrine of promissory estoppel is an evolving doctrine, contours of which are not yet fully and finally demarcated. Being an equitable doctrine, it should be kept elastic enough in the hands of the court to do complete justice between the parties. If the equity demands that the promissor is allowed to resile and the promisee is compensated appropriately that ought to be done. If, however, equity demands that the promissor should be precluded in the light of things done by the promisee on the faith of representation from resiling and that he should be held fast to his representation, that should be done. It is a matter holding scales even between the parties to do justice between them. This is the equity implicit in the doctrine vide State of H.P. Vs. Ganesh Wood Products reported in 1995 (6) SCC 363.

34)               It is legally open to the bank to take a decision in good faith in the exercise of its bonafide discretion as to whether it was safe to make advances of public monies to any particular party and arrive at a decision after examining the relevant facts and circumstances. The bank did not act in good faith nor had it exercised bonafide discretion while releasing the funds.

35)               Recourse can be had to a decision in Nannapaneni Venkata Rao Co-operative Sugars Ltd. Vs. State Bank of India reported in AIR 2003 AP 515 (DB) it was held :

“Refusal on the part of the respondent bank to pay interest on the ground that opening of such account and crediting of the interest is not in accordance with the guidelines of RBI is not tenable as the respondent is solely responsible for suppressing the fact while entering into the contract.”

36)               This Commission can take judicial cognizance of the fact that the OP No.4 bank had financed the builder obviously in view of reputation the developer was having by then, and the bank contrary to the terms of the agreement as well as guidelines, disbursed the amounts keeping the interests of the complainant in jeopardy. The banks are picking and choosing certain clauses and contending that the very complainant have given authorization to them to release the amount and therefore they have released, forgetting the fact that the very financing of the project was contrary to the scheme issued in this regard. Evidently, the bank as well as the developer benefitted from these transactions. The developer has taken the amount without constructing the flat, and equally the bank has been collecting the amounts from the complainant towards EMI. It is a case of double jeopardy. Necessarily all this amounts to unfair trade practise as well as deficiency in service on the part of developer as well as the bank. Necessarily the complainant is to be compensated. Since terms of the agreement enable the bank to collect from the developer, it can as well recover the same. The bank by violating its own rules cannot take advantage and recover the same from the complainant.

37)               The bank has undoubtedly violated the guidelines and released the amount even without bothering to verify as to the stage and nature of construction. In other words, the bank financed a non-existent project or incomplete project, duping its own customer. If the bank releases the amounts contrary to the guidelines, it has to suffer for the consequential losses. Whatever loss caused thereby it could as well approach appropriate forum for recovery of the amount from the developer, to which it has released the amount in one go. The bank under the terms entitled to recover from the developer to which it had paid the amounts. It cannot turn round and claim against the complainant. It is not under original stipulation that the bank had to pay the entire amount to the developer. The developer also agreed to refund the amount if there are cancellations of the agreements or failure to fulfil its commitments. The agreement that was arrived at earlier was fair and no party would benefit from the lapses or mistakes of the other. Therefore, the complainant is not liable to pay the equated monthly instalments.

38)               The bank has to collect the loan amount plus whatever interest and other legally permissible charges from the developer and credit it to the complainant’s loan account. It shall not collect further EMI’s nor entitled to any more amount except the amount, if any, remained unpaid by the complainant towards loan granted to him. The bank has no authority to complain to CIBIL. In fact, if there is a provision, the CIBIL has to enter the name of the bank, as one of the violators of guidelines of the banks.  For the reasons stated supra, the Points No.2 and 3 are answered in favour of the Complainants and against the Opposite parties.

 39)              In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties 1 to 3 are jointly and severally liable to pay the amounts to the Complainants.

 40)              In the result, the complaints a re allowed holding the opposite parties  1 to 3 jointly and severally liable to refund the amount paid by the Complainants.  In case, sale deed was executed, the complainants shall re-convey the same to the developer on compliance of above direction. The registration charges and stamp duty, etc., shall be borne by the developer.  Time for compliance: four weeks.

C.C. NO.117/2015

(i)       In the result, the complaint is allowed directing the Opposite parties 1 to 3 to pay an amount of Rs.25,13,541/- (as per receipts bearing Ex.A2 to A9)  with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-.  Time for compliance four weeks.

ii)       Further, the developer OP No.1 is directed to refund the amount disbursed by the bank to it along with interest, penal charges etc., levied by the OP No.4 bank, if any, failing which the bank is liable to collect, and credit the same to the loan account of the complainant.

iii)      In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1.

C.C. NO.174/2015

(i)       In the result, the complaint is allowed directing the Opposite parties 1 to 3 to pay an amount of Rs.19,43,917/-( as per Exs.A2 to A4, A13 and admission of Op4 in his evidence affidavit)  with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance four weeks.

ii)       Further, the developer OP No.1 is directed to refund the amount disbursed by the bank to it along with interest, penal charges etc., levied by the OP No.4 bank, if any, failing which the bank is liable to collect, and credit the same to the loan account of the complainant.

iii)      In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1.

C.C. NO.177/2015

(i)       In the result, the complaint is allowed directing the Opposite parties 1 to 3 to pay an amount of Rs.25,46,769/-( as per Exs.A2 to A7 )  with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance four weeks.

ii)       Further, the developer OP No.1 is directed to refund the amount disbursed by the bank to it along with interest, penal charges etc., levied by the OP No.4 bank, if any, failing which the bank is liable to collect, and credit the same to the loan account of the complainant.

iii)      In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1.

C.C. NO.178/2015

(i)       In the result, the complaint is allowed directing the Opposite parties 1 to 3 to pay an amount of Rs.20,22,300/-( as per Exs.A2, A3, admission of Op4 in his evidence affidavit and A11 )  with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance four weeks.

ii)       Further, the developer OP No.1 is directed to refund the amount disbursed by the bank to it along with interest, penal charges etc., levied by the OP No.4 bank, if any, failing which the bank is liable to collect, and credit the same to the loan account of the complainant.

iii)      In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1.

C.C. NO.218/2015

(i)       In the result, the complaint is allowed directing the Opposite parties 1 to 3 to pay an amount of Rs.23,54,361/-( as per receipts Exs.A2 to A4, admission of the Op4 in his affidavit and Ex.A5, Bank Statement   )  with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance four weeks.

ii)       Further, the developer OP No.1 is directed to refund the amount disbursed by the bank to it along with interest, penal charges etc., levied by the OP No.4 bank, if any, failing which the bank is liable to collect, and credit the same to the loan account of the complainant.

iii)      In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1.

PRESIDENT                              MEMBER

 Dated: 17.02.2017

APPENDIX OF EVIDENCE

CC NO. 117 OF 2015

WITNESSES EXAMINED

For Complainant :                                                       For Opposite parties :

Affidavit evidence of  Mohammed Vasuddin   ,           Sri Hari Challa,  as RW1 (on behalf of OP
GPA Holder Complainant                                            No.1).

                                                                                    Sri N.S.Shanker Rao as RW2 ( on behalf of
                                                                                    Op. no.4

                                                            EXHIBITS MARKED

For Complainants :

Ex.A1               Copy of agreement of sale dated 01.08.2009 executed by the Op No.1 in favour of the complainant

Ex.A2               Copy of receipt bearing No.02320 dated 18.06.2008 for Rs.25,000/-

Ex.A3               Copy of receipt bearing No.02467 dated 04.07.2008 for Rs.2,50,000/-

Ex.A4               Copy of receipt bearing No.04531 dated 30.07.2009 for Rs.5,31,500/-

Ex.A5               Copy of receipt bearing No.60324 dated 23.01.2009 for Rs.25,000/-

Ex.A6               Copy of receipt bearing No.60408 dated 28.03.2009 for Rs.30,000/-

Ex.A7               Copy of receipt bearing No.02300 dated 20.06.2008 for Rs.2,25,000/-

Ex.A8               Copy of receipt bearing No.03689 dated 22.09.2009 for Rs.12,27,016/-

Ex.A9               Copy of receipt bearing No.03991 dated 09.10.2009 for Rs.2,00,025/-

Ex.A10             Copy of tripartite agreement dated nil. between the complainant, opposite parties no.1 to 3 and the opposite party no.4

Ex.A11             Copy of letter addressed by the Op4 dated 14.01.2010 to the complainant informing about the home loan details

Ex.A12             Copy of FIR of PC Ramachandrapuram dated 15.03.2015

Ex.A13             Office copy of legal notice dated   27.04.2015 got issued by the complainants to the Opposite parties no.1 to 3

Ex.A14             Original postal receipts and return covers

Ex.A15             GPA given to one Md.Vasuddin

 APPENDIX OF EVIDENCE

CC NO. 174 OF 2015

WITNESSES EXAMINED

For Complainant :                                                       For Opposite parties :

Affidavit evidence of  G.Viswanath                             Sri Hari Challa,  as RW1 (on behalf of OP
GPA Holder Complainants                                          No.1).

                                                                                    Sri Khaja Zaheer Ahmed as RW2 ( on behalf
                                                                                    of +Op. no.4

EXHIBITS MARKED

For Complainants :

Ex.A1               Copy of agreement of sale dated 26.09.2009 executed by the Op No.1 in favour of the complainant

Ex.A2               Copy of receipt bearing No.03593 dated 14.07.2009 for Rs.1,50,000/-

Ex.A3               Copy of receipt bearing No.04677 dated 27.02.2010 for Rs.2,00,000/-

Ex.A4               Copy of receipt bearing No.05070 dated 20.04.2010 for Rs.2,00,000/-

Ex.A5               Copy of bank account statement with regard to the complainants loan account from 01.12.2009 to 27.03.2015

Ex.A6               Copy of agreement of sale 25.04.2013 executed by Op1 in favour of one G.Balasubramanyam

Ex.A7               Copy of tripartite agreement dated 29.04.2013 between the complainant, opposite parties no.1 to 3 and the opposite party no.4

Ex.A8               Copy of complaint dated 15.03.2015 given to the PS Ramachandrapuram

Ex.A9               Office copy of legal notice dated  12.08.2015 got issued by the complainants to the Opposite parties no.1 to 3

Ex.A10             Original postal receipts, acknowledgements and return covers

Ex.A11             Authorization given by the complainants to his friend G.Viswanath

Ex.A12             Copy of GPA given to his friend G.Viswanath

Ex.A13             Copy of calculation sheet of the complainants issued by Ops no.1 to 3

For opposite party no.4

Ex.B19             Copy of Housing Loan Application Form of the complainants dated 10.10.2009

Ex.B20             Copy of arrangement letter dated 27.11.2011 of the Op no.4

Ex.B21             Copy of Tripartite Agreement dated 25.01.2010 between the complainants, Ops

Ex.B22             Copy of letter dated 26.12.2009 addressed by the complainant to Op no.4 requesting to make arrangement of payment of Rs.12,93,917/-

Ex.B23             Copy of extract of statement of housing loan dated 01.12.2009 of the complainants

APPENDIX OF EVIDENCE

CC NO. 177 OF 2015

WITNESSES EXAMINED

For Complainant :                                                       For Opposite parties :

Affidavit evidence of  Robbins Kumar Gupta              Sri Hari Challa,  as RW1 (on behalf of OP
GPA Holder Complainants                                          No.1).

                                                                                    Sri Khaja Zaheer Ahmed as RW2 ( on behalf
                                                                                    of Op. no.4

EXHIBITS MARKED

For Complainants :

Ex.A1               Copy of agreement of sale dated 23.07.2010 executed by the Op No.1 in favour of the complainant

Ex.A2               Copy of receipt bearing No.05266 dated 04.07.2010 for Rs.2,50,000/-

Ex.A3               Copy of receipt bearing No.05263 dated 08.07.2010 for Rs.1,00,000/-

Ex.A4               Copy of receipt bearing No.05722 dated 22.07.2010 for Rs.2,00,000/-

Ex.A5               Copy of receipt bearing No.05686 dated 04.08.2010 for Rs.1,32,437/-

Ex.A6               Copy of receipt bearing No.06725 dated 07.08.2010 for Rs.15,92,367/-

Ex.A7               Copy of receipt bearing No.08036 dated 30.08.2011 for Rs.2,71,965/-

Ex.A8               Copy of arrangement letter dated 04.08.2010 of the Op no.4

Ex.A9               Copy of sale deed dated 21.11.2011 executed by Op1 in favour of the complainants

Ex.A10             Copy of construction agreement dated 25.11.2011

Ex.A11             GPA executed by the complainants in favour of Manoj Kumar Gupta

Ex.A12             Copy of complaint given by the GPA to PS Ramachanddrapuram dt.nil

Ex.A13             Copy of receipt dated 21.11.2011 issued by OP4 

Ex.A14             Office copy of legal notice dated  23.09.2015 got issued by the complainants to the Opposite parties no.1 to 3

Ex.A15             Original postal receipts, acknowledgement and returned covers

Ex.A16             Copy of certificate issued by the Op1 to GPA Holder dated 26.07.2010

Ex.A17             Copy of letter dated 05.08.2010 addressed by the complainants to Op4

For opposite party no.4

Ex.B19             Copy of Housing Loan Application Form of the complainants dated 23.07.2010

Ex.B20             Copy of arrangement letter dated 04.08.2010 of the Op no.4

Ex.B21             Copy of Tripartite Agreement dated 06.08.2010 between the complainants, Ops

Ex.B22             Copy of letter dated 06.08.2010 addressed by the complainant to Op no.4 requesting to make arrangement of payment of Rs.15,92,354/-

Ex.B23             Copy of extract of statement of housing loan dated 05.08.2010 of the complainants

APPENDIX OF EVIDENCE

CC NO. 178 OF 2015

WITNESSES EXAMINED

For Complainant :                                                       For Opposite parties :

Affidavit evidence of  Robbins Kumar Gupta              Sri Hari Challa,  as RW1 (on behalf of OP
GPA Holder Complainants                                          No.1).

                                                                                    Sri Khaja Zaheer Ahmed as RW2 ( on behalf
                                                                                    of +Op. no.4

EXHIBITS MARKED

For Complainants :

Ex.A1               Copy of agreement of sale dated 20.08.2009 executed by the Op No.1 in favour of the complainant

Ex.A2               Copy of receipt bearing No.756 dated 07.08.2009 for Rs.7,00,000/-

Ex.A3               Copy of receipt bearing No.10787 dated 12.08.2012 for Rs.2,00,000/-

Ex.A4               Copy of customer information sheet of the opposite party

Ex.A5               Copy of letter dated 02.09.2009 addressed by the Op1 to the complainant regarding delivery of possession

Ex.A6               Copy of letter dated 05.11.2009 addressed by Op4 to the complainant mentioning the details of home loan

Ex.A7               Copy of certificate of Insurance of the New India Assurance Co., Ltd.,

Ex.A8               Copy of provisional statement issued by the Op4 dated 09.01.2010

Ex.A9               Copy of interest Certificate dated 31.03.2012 issued by Op4

Ex.,A10            Copy of letter dated 17.08.2012 addressed by Op1 to complainant

Ex.A11             Copy of calculation sheet of the opposite party no.4 regarding payments made by the complainant

Ex.A12             Office copy of legal notice dated  09.09.2015 got issued by the complainants to the Opposite parties no.1 to 3

Ex.A13             Original postal receipts, acknowledgement and returned covers

For opposite party no.4

Ex.B19             Copy of Housing Loan Application Form of the complainants dated 18.09.2009

Ex.B20             Copy of arrangement letter dated 05.11.2009 of the Op no.4

Ex.B21             Copy of Tripartite Agreement dated 07.11.2009 between the complainants, Ops

Ex.B22             Copy of letter dated 07.11.2009 addressed by the complainant to Op no.4 requesting to make arrangement of payment of Rs.11,22,300/-

Ex.B23             Copy of extract of statement of housing loan dated 06.11.2009 of the complainants

APPENDIX OF EVIDENCE

CC NO. 218  OF 2015

WITNESSES EXAMINED

For Complainant :                                                       For Opposite parties :

Affidavit evidence G.Balasubramanyam                    Sri Hari Challa,  as RW1 (on behalf of OP
Complainant                                                               No.1).

                                                                                    Sri C.Sankara Rao as RW2 ( on behalf
                                                                                    of Op. no.4

EXHIBITS MARKED

For Complainants :

Ex.A1               Copy of agreement of sale dated 25.04.2013 executed by the Op No.1 in favour of the complainant

Ex.A2               Copy of receipt bearing No.11853 dated 24.02.2013 for Rs.1,00,000/-

Ex.A3               Copy of receipt bearing No.10993 dated 08.03.2013 for Rs.1,50,000/-

Ex.A4               Copy of receipt bearing No.12292 dated 16.04.2013 for Rs.1,50,000/-

Ex.A5               Copy of Bank Statement from 01.01.2013 to 05.11.2015 showing the payment made by the complainant

Ex.A6               Copy of Tripartite Agreement dated 29.04.2013 between the complainants, Ops

Ex.A7               Copy of Bank Statement from 30.04.2013 to 15.05.2013

Ex.A8               Copy of Bank Statement from 30.04.2013 to 30.07.2015

Ex.A9               Copy of complaint given to the PS Ramachandrapuram dated 15.03.2015

Ex.A10             Copy of FIR dated 16.03.2015

Ex.A11             Copy of agreement of sale dated 26.09.2009

Ex.A12             Office copy of legal notice dated  14.11.2015 got issued by the complainants to the Opposite parties no.1 to 3

Ex.A13             Original postal receipts  and returned covers

For opposite party no.4

Ex.B19             Copy of Housing Loan Application Form of the complainants dated 20.04.2013

Ex.B20             Copy of loan sanction letter dated 29.04.2013  of the Op no.4

Ex.B21             Copy of letter dated 30.04.2013 addressed by the complainant to Op no.4 requesting to make arrangement of payment of Rs.16,53,884/-

Ex.B22             Copy of promissory note dated 30.04.2013

Ex.B23             Copy of extract of statement of housing loan dated 06.11.2009 of the complainants

For Opposite parties (common in all cases) :

Ex.B1          Copy of Lr.No.252931/4/2007 addressed by Principal Secretary to Government to Vice, Chairman, HUDA, Hyderabad for change of land use.

Ex.B2          Copy of G.O.Ms.No.288, Municipal Administration & Urban Development (I1) Department, dated 03.04.2008 (HMDA revised master plan).

Ex.B3          Copy of (report) Lr.No.D1/3601/2007, dated 05.05.2007 addressed by District Collector, Medak to Vice-Chairman & Managing Director, HUDA along with map.

Ex.B4          Copy of minutes of meeting of multi-storeyed building committee for HUDA area held on 29.02.2008 at 3-00 pm in the chambers of Vice-Chairman, HUDA (4 basements + Ground + 13 Upper Floors).

Ex.B5          Copy of Lr.No.1927/Misc/Plg/H/2008, dated 31.03.2008 addressed by HUDA to the Principal Secretary to Government for 30 meters road alignment in Sy.No.384 & 385.

Ex.B6          Copy of Lr.No.621/P4/Plg/HUDA/2008, dated 11.04.2008 addressed by HUDA to OP No.1 approving 4 basements + Ground + 13 upper floors).

Ex.B7          Copy of Lr.No.621/Pr/Plg/HUDA/ 2008, dated 11.04.2008 addressed by HUDA to Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments.

Ex.B8          Copy of minutes of meeting of multi-storeyed building committee for MSB in HUDA area held on 05.06.2008 at the chambers of Vice-Chairman, HUDA (4 basements + ground + 29 upper floors).

Ex.B9          Copy of Lr.No.621/P4/Plg/HMDA/2008, dated 14.10.2009 addressed by HMDA to the Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments (4 basements + ground + 20 upper floors).

Ex.B10         Copy of Lr.No.SEIAA/AP/MDK-14/08, dated 12.08.2008 addressed by State Level Environment Impact Assessment Authority, Hyderabad to according environmental clearances to Opposite parties.

Ex.B11         Copy of Lr.No.19038/I1/2009, dated 24.11.2009 addressed by Principal Secretary to Government to Ops (clearance of GOMs.No.111).

Ex.B12         Copy of letter addressed by Opposite parties, dated 08.10.2010 to the HMDA, Hyd (revised application and plans for building permission consisting of 3 basement + ground + 29 upper floors).

Ex.B13         Copy of Lr.No.10186/MP1/Plg/HMDA dated 28.03.2011 addressed by HMDA to the Ops to pay publication charges for change of land use from residential to commercial.

Ex.B14         Copy of cash acknowledgement receipt bearing No.825631 for Rs.1,000/- in File No.2011-2-431 for new water connection.

Ex.B15         Copy of Certificate of best compliments issued by Indian Green Building Council in favour of the Opposite parties company.

Ex.B16         Copy of certificate of best compliments awarded by Cityscape in favour of the Opposite parties company.

Ex.B17         Copy of letter addressed by the Opposite parties to the purchaser by name S.Pragathi intimating to take possession of the flat, dated 02.11.2015.

Ex.B18         Copies of photographs of flat occupants occupying the completed flats.

PRESIDENT                              MEMBER

Dated: 17.02.2017