JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

1.      The complainant, who at the relevant time was working as a Head Constable with Bangalore City Police, became a member of the opposite party No.2-society named Bangalore City Police Housing Cooperative Society (hereinafter referred to as the society). The society entered into a Memorandum of Understanding with opposite party No.4-Vishwambara Builders & Land Developers (hereinafter referred to as the builder), on    05-09-2003. Under the said MOU, the builder got converted its agricultural land in village Chudenapura, Kengeri Hobli, Bangalore South to form a residential layout and offered residential sites formed in the aforesaid layout to the members of the society. As many as 145 residential sites were to be offered to the members of the society. The builder agreed to execute sale deeds in respect of the aforesaid residential sites to the members of the society individually after receiving the entire payment from them. Site No.247 was allotted to the complainant by the society.

The complainant also entered into a sale agreement dated             17-02-2003 with the builder, whereby the said builder as the owner in possession of site No.247 situated in survey No.9, Chudenapura village, Kengeri Hobli, Bangalore South, agreed to sell the aforesaid site to him for a consideration of Rs.2,88,000/-. One of the terms of the said agreement was that the purchaser would pay the balance amount to the seller within a period of 90 days from the date of the agreement and on receipt of the said amount the seller would execute the conveyance deed in favour of the purchaser. The vender had a right, under the said agreement to forfeit the advance money paid by the purchaser in case of default on the part of the purchaser to tender the balance amount and thereafter he could deal with the property in any manner whatsoever.

The complainant then took a loan of Rs.1,50,000/- from opposite party No.1-HDFC Ltd.. As per the agreement of the complainant with the opposite party No.1, the loan amount along with interest was to be paid in equated monthly installments of Rs.3,114/-. The said EMIs were to be deducted from the salary of the complainant and remitted to the opposite party No.1. However, the sale deed of the site allotted to the complainant was not registered in his name and, according to the complainant, the society allotted the said site to the builder. On receipt of the documents from the opposite party No.1, the complainant came to know that the builder had refunded the loan amount of Rs.1,50,000/- to the opposite party No.1 which had accepted the same without any notice to the complainant. Since the employer of the complainant kept on deducting the amount of EMIs from his salary and remitting the same to the opposite party No.1, a sum of Rs.1,16,888/- got accumulated in his account, which the opposite party No.1 later remitted to him by way of a cheque. The complainant, however, refused to accept the same. He also informed the opposite party No.1 that he had not issued the cheque of Rs.1,50,000/- to the opposite party No.1 towards pre-payment of the loan taken by him. Alleging deficiency in service, a complaint was filed against the opposite party No.1, society and the employer of the complainant. During pendency of the complaint the builder was also impleaded as a party to the complaint. The prayer made in the complaint was for registration of the site in question in the name of the complainant or in the alternative payment of compensation amounting to Rs.22,50,000/- by the opposite party No.1 as well as the society.

2.      The complaint was resisted by the opposite party No.1, society as well as the builder. In its reply, the opposite party No.1 inter alia claimed that one of the conditions of the loan was that the complainant would mortgage the property in question in its favour by way of deposit of the title deed but no such mortgage was created in its favour thereby committing breach of the terms of the loan. It was further stated in the reply that the opposite party No.1 was informed by the society that since the complainant had failed to pay the balance sale consideration his agreement for sale was cancelled. The builder accordingly refunded the money that had been paid to him by the opposite party No.1 at the instance of the complainant and the same was accepted by the opposite party No.1 in good faith. It was further stated in the reply that the opposite party No.1 had informed the employer of the complainant to stop deducting salary from his account but despite that the employer kept on deducting the salary which was eventually refunded to the complainant by way of cheque dated               15-05-2007. The complainant, however, failed to accept the said cheque and, therefore, the money is still in his account.

3.      The society in its reply submitted that the complainant had failed to make payment to the builder in terms of the sale agreement between him and the builder and, therefore, a sum of Rs.1,50,000/- was paid by the builder directly to the opposite party No.1. It was further stated in the reply that the society had not allotted the site in question to any other person as such there was no deficiency on its part in providing services to the complainant.

4.      The builder inter alia stated that pursuant to the MoU between him and the society, the complainant was one of the members nominated by the society for purchase of a site and accordingly he had entered into an agreement with the complainant for sale of the said site to him for a consideration of Rs.2,88,000/-, to be paid within  90 days from the date of the agreement (17-02-2003) failing which he was entitled to forfeit the advance amount. Since the complainant after making payment of Rs.1,50,000/- through opposite party No.1 failed to pay the balance amount, the agreement between him and the complainant was liable to be cancelled and at the request of the society made on behalf of the complainant the amount of Rs.1,50,000/- which he had received from the complainant through the opposite party No.1 was refunded to the opposite party No.1.

5.      Three questions arose for our consideration in this appeal.              (1) Whether there was any deficiency on the part of the society in providing services to the complainant, (2) whether there was any deficiency on the part of the opposite party No.1 in providing services to the complainant and (3) whether there was any deficiency on the part of the builder in providing services to the complainant.

6.      The only grievance of the complainant against the society appears to be that the site allotted to him was later allotted by the society to opposite party No.4. However, this has been emphatically denied by the society in its reply and there is no evidence of the site in question having been allotted by the society to the builder or any other person. In fact, the builder was purporting to act in exercise of his rights under the agreement of sale dated 17-02-2003 while refunding the amount of Rs.1,50,000/- to the opposite party No.1. Therefore, no case of deficiency on the part of the society in providing services to the complainant is made out.

7.      As far as the opposite party No.1 is concerned, it is an admitted case that the pre-payment of loan amount of Rs.1,50,000/- was accepted by it from the builder without any request to this effect from the complainant. The builder being a stranger to the loan agreement between the opposite party No.1 and the complainant, the opposite party No.1 had absolutely no legal right to accept pre-payment of the loan given to the complainant from the builder. Though the loan was disbursed to the complainant by way of a cheque in the name of the complainant, the borrower continued to be the complainant and the builder did not become borrower of the opposite party No.1 merely on account of its having received the cheque of Rs.1,50,000/- from the opposite party  No.1 for and on behalf of the complainant. Therefore, acceptance of pre-payment of loan amount of Rs.1,50,000/- from the builder without any request to this effect from the complainant was clearly a case of deficiency in the services provided by the opposite party No.1 to the complainant.

8.      It is also an admitted case that even after receipt of the amount of Rs.1,50,000/- from the builder the opposite party No.1 kept on encashing the cheques which it had received from the employer of the complainant from time to time towards payment of the equated monthly installments. Though the opposite party No.1 claims to have written to the employer of the complainant to stop making deductions from his salary the fact remains that it did not return the cheques, which it received towards payment of EMIs despite receiving Rs.1,50,000/- from the builder and kept on encashing those cheques. Even while refunding the aforesaid amount to the complainant, the opposite party No.1 did not offer appropriate interest to the complainant on that amount. This was yet another deficiency committed by the opposite party No.1 in rendering services to the complainant.

9.      Learned counsel for the opposite party No.1 submits that since the complainant had failed to deposit the title deed of site in question with the opposite party No.1 it was open to them to accept the outstanding loan amount from the builder. We, however, cannot accept the contention for two reasons. Firstly, the learned counsel for the petitioner has not been able to show to us any obligation on the part of the complainant to deposit the title deeds, which were to be executed by the builder in his favour with the opposite party No.1. The memorandum of deposit of title deeds dated 21-03-2003 annexed to the reply filed by the opposite party No.1 refers to original sale agreement dated 17-02-2003 and site allotment intimation dated 17-02-2003 as the title deeds which the borrower had deposited with the opposite party No.1. This document shows no obligation on the part of the complainant to deposit the title deed to be executed by the builder in his favour with the opposite party No.1. Moreover, admittedly at no stage the opposite party No.1 required the complainant to deposit the title deed after getting the same executed from opposite party No.4 in his favour. No communication was sent by the opposite party No.1 to the complainant, stating therein that in case the title deeds were not deposited in its favour, it would accept he repayment of the loan from the builder in order to secure the loan which it had extended to the complainant.     

10.    As far as the builder is concerned, no case of deficiency in service on its part was made out in the complaint. Even in the amended complaint available on pages 94 to 111 of the paper-book, no relief was claimed against the builder who was impleaded as opposite party No.4 in the complaint. A perusal of the sale agreement executed between the complainant on one hand and the builder on the other hand would show that the total cost of the site in question was agreed at Rs.2,88,000/- and after deducting the advance which the complainant had already paid, the balance amount was to be paid within a period of 90 days from the date of the agreement. On receipt of the balance payment, the builder was to execute the conveyance deed in favour of the complainant. In the event of default on the part of the complainant in making payment of the balance sale consideration, the builder was entitled to forfeit the advance amount paid by the complainant and deal with the property in any manner he desired. Since, admittedly, the balance sale consideration was not paid by the complainant within 90 days from the date of the agreement the builder was justified in forfeiting the advance money and not executing the sale deed of the site in question in favour of the complainant. Therefore, no case of deficiency in providing services by the builder to the complainant is made out.

11.    However, since the builder utilized the amount of Rs.1,50,000/- received from the complainant through the opposite party No.1 he should pay appropriate interest to the complainant on the said amount after deducting the advance which he was entitled to forfeit in terms of the sale agreement executed between the parties on 17-02-2003.

12.    For the reasons stated hereinabove, the appeal is disposed of with the following directions:

(i)      the opposite party No.1-HDFC Ltd. is directed to refund the amount which it had received from the employer of the complainant along with interest on that amount at the rate of 12% per annum from the date the money was received till the date it is paid to the complainant. If after adjusting the amount of Rs.1,50,000/- received from the builder, any amount had remained payable from the complainant to the opposite party No.1, the aforesaid amount shall be deducted while making payment in terms of this order;

(ii)      The opposite party No.1, HDFC Ltd. shall also pay a sum of Rs.25,000/- to the complainant for deficiency in rendering the service to him, and

(iii)     the opposite party No.4-M/s. Vishwambara Builders & Land Developers shall pay to the complainant interest on the amount which he had received from the complainant, after deducting the amount of advance money he was entitled to forfeit under the terms of the agreement at the rate of 12% per annum from the date of receipt of the money till the date it was paid by him to the opposite party No.1, HDFC Ltd..