Per :- Mr. Deshpande, President                             Place : BANDRA

JUDGMENT

          The Opposite Party is ‘ICICI Home Finance Company Ltd.’.  Mr. Suhas Shridhar Bhide – the Complainant herein; had purchased a flat from Mr. Suhas S. Samant, for a consideration of Rs.21,00,000/- and an agreement to that effect was executed.  Mr. Suhas S. Samant had mortgaged his flat with the CKP Bank, Dadar (West) Branch, Mumbai; and had raised a loan in sum of Rs.18,00,000/-.  The building in which the flat is situate was constructed by M/s. Kanakia Builders.  The Complainant had raised a loan from the Opposite Party – Finance Company; in sum of Rs.18,77,000/-, to pay the consideration amount to the flat-owner – Mr. Suhas S. Samant.  The Builder had to recover certain amounts from the flat-owner – Mr. Suhas S. Samant; and there was a stipulation in the agreement that Mr. Suhas S. Samant; shall produce ‘No Dues Certificate’ from the Builder and then only the Opposite Party – Finance Company; shall make the payment to the CKP Bank, who was the banker to the flat-owner – Mr. Suhas S. Samant.  The Complainant, vide his letter dtd.7/4/2005, had informed the Opposite Party – Finance Company; that the flat-owner – Mr. Suhas S. Samant; had not obtained the requisite ‘No Dues Certificate’ from the Builder and as such the Complainant should not be forced to accept the cheque of loan amount, which was sanctioned by the Opposite Party – Finance Company.

[2]     It is the case of the Complainant that despite this, the Opposite Party – Finance Company; disbursed the amount in sum of Rs.18,00,000/- out of the sanctioned loan amount in sum of Rs.18,77,000/- and made payment directly to the CKP Bank with whom the flat-owner – Mr. Suhas S. Samant; had mortgaged his flat.  It is alleged by the Complainant that while making payment of the amount in sum of Rs.18,00,000/- to the CKP Bank, the Opposite Party – Finance Company; did not inform the Complainant about the step the Opposite Party – Finance Company; was taking and this was in total disregard to the Complainant’s letter dtd.7/4/2005.

[3]     It is alleged by the Complainant that because of this action on the part of the Opposite Party – Finance Company; the flat-owner – Mr. Suhas S. Samant; was relieved from his liability to make payment to the Builder and at the same time, he got benefited by the fact that the payment was made to his banker – CKP Bank; and the mortgage was redeemed.

[4]     It is further case of the Complainant that the Opposite Party – Finance Company; withheld disbursement of balance sanctioned loan amount in sum of Rs.77,000/-, but at the same time, debited entire loan amount of Rs.18,77,000/- and recovered interest from the Complainant on the entire loan amount.

[5]     Thus, the Complainant alleges that the Opposite Party – Finance Company; was guilty of deficiency in service inasmuch as the Opposite Party – Finance Company; recovered extra interest in sum of Rs.1,62,000/- on Rs.18,00,000/- from the month of April-2005 to September-2005 because the Complainant received the possession of the flat in the month of October-2005 from the flat-owner – Mr. Suhas S. Samant.  The Complainant has sought recovery of an amount in sum of Rs.1,62,000/- from the Opposite Party – Finance Company; and compensation in sum of Rs.5,00,000/- besides an amount in sum of Rs.8,085/- towards interest for delayed payment of balance sanctioned loan amount in sum of Rs.77,000/-.

[6]     The Opposite Party – Finance Company; contested the complaint by filing its written version and admitted the fact that loan amount in sum of Rs.18,77,000/- was sanctioned in favour of the Complainant for purchase of a flat from Mr. Suhas S. Samant.  According to the Opposite Party – Finance Company; the flat was agreed to be purchased by the Complainant jointly with one Mrs. Sharmila Patwardhan; and a joint loan agreement was entered into by the Complainant and Mrs. Sharmila Patwardhan.  The Complainant and Mrs. Sharmila Patwardhan had agreed to repay the loan dues in 120 Equated Monthly Installments of Rs.22,037/- each, commencing from 7/5/2005.  According to the Opposite Party – Finance Company; since the loan sanctioned was a lumpsum loan and not a loan to be disbursed in installments, the day the loan was partly disbursed, the entire amount of loan was debited to the loan account of the Complainant though the balance amount in sum of Rs.77,000/- was withheld.  A contention is raised to the effect that the balance loan amount in sum of Rs.77,000/- was to be released after the borrower (the Complainant herein) had completed all the formalities, including furnishing of ‘NOC’.  Thus, the Opposite Party – Finance Company; justified debiting the entire amount to the loan account of the Complainant as well as withholding of balance sanctioned loan amount in sum of Rs.77,000/-.

[7]     As regards the alleged haste in making payment of sum of Rs.18,00,000/- directly to the CKP Bank, with whom the flat-owner – Mr. Suhas S. Samant; had mortgaged his flat and had raised a loan; the Opposite Party – Finance Company; has taken stand that the Complainant had refused to accept the cheque in sum of Rs.18,00,000/-, and therefore, upon withholding sum of Rs.77,000/-, payment in sum of Rs.18,00,000/- was made to the CKP Bank, Dadar (West) Branch, Mumbai; by a cheque.  The Opposite Party – Finance Company; denied the allegations of deficiency in service on its part as well as allegations of collusion between the flat-owner – Mr. Suhas S. Samant; and the Opposite Party – Finance Company.

[8]     The Opposite Party – Finance Company; has filed his affidavit of evidence and copies of correspondence.  The Opposite Party – Finance Company; also filed an affidavit of its officer.  The Complainant filed his rejoinder to the written version filed by the Opposite Party – Finance Company.  Both the sides filed their respective written notes of arguments and alongwith the written notes of arguments, the Opposite Party – Finance Company; has produced copy of a loan agreement.

[9]     We have gone through the pleadings, affidavits and documents as well as written notes of arguments filed by the parties.

[10]    We take the points that arise for our consideration and record our findings there-against as below:-

REASONS FOR FINDINGS

[11]    There is no dispute between the parties to the complaint proceeding as regards the fact that loan amount in sum of Rs.18,77,000/- was sanctioned to the Complainant by the Opposite Party – Finance Company; but according to the Opposite Party – Finance Company; it was sanctioned jointly in favour of the Complainant and Mrs. Sharmila Patwardhan.  There is also no dispute between the parties as regards the fact that the Complainant had agreed to purchase a flat from Mr. Suhas S. Samant, who had mortgaged the said flat in favour of the CKP Bank, Dadar (West) Branch, Mumbai; against loan of Rs.18,00,000/-.  There is also no dispute about the fact that the Opposite Party – Finance Company; disbursed the loan amount in sum of Rs.18,00,000/- directly to the CKP Bank in the month of April-2005.  Now, crucial question is as to whether the Opposite Party – Finance Company; was required to wait till the flat-owner – Mr. Suhas S. Samant; obtained ‘No Dues Certificate’ from the Builder and whether any prior intimation was required to be given to the Complainant before disbursement of the loan amount in sum of Rs.18,00,000/- directly to the CKP Bank.

[12]    In this regard, the Complainant has produced on the record a copy of the letter dtd.7/4/2005, which is at page (26) of the compilation of the complaint, by which the Complainant had brought to the notice of the Opposite Party – Finance Company; that the flat-owner – Mr. Suhas S. Samant; was not able to get ‘NOC’ from the Builder.  The letter ended with a request that the Complainant may not be forced to accept the cheque of the loan amount at that stage.  This letter was written by the Complainant in the background of the fact that there was a telephone call from the Opposite Party – Finance Company; to the Complainant to collect the cheque of the loan amount within two days and a threat was given that on failure on the part of the Complainant to collect the cheque, a penalty in sum of Rs.40,000/- would be imposed.  This fact was mentioned by the Complainant in his letter dtd.7/4/2005.  Thus, the background of importance of obtaining ‘NOC’ from the Builder was brought to the notice of the Opposite Party – Finance Company; vide a letter dtd.7/4/2005.  The Opposite Party – Finance Company; in its written version, has not denied the receipt of letter dtd.7/4/2005 from the Complainant.  During the course of oral arguments, the Learned Advocate for the Opposite Party – Finance Company; however, submitted that the condition that the Opposite Party – Finance Company; shall not release loan amount until ‘NOC’ is produced by the flat-owner – Mr. Suhas S. Samant; from the Builder, was not prominently mentioned in the letter.  However, this is besides the written version filed by the Opposite Party – Finance Company.  In absence of pleadings, it must be inferred that the Opposite Party – Finance Company; had received a letter dtd.7/4/2005, sent by the Complainant, and was in know of the fact that ‘NOC’ from the Builder was not obtained by the flat-owner – Mr. Suhas S. Samant.  Still then, the Opposite Party – Finance Company; proceeded with the step of disbursement of loan.  Perhaps, the Opposite Party – Finance Company; had to debit the loan amount to the loan account of the Complainant.  But in that process, the Opposite Party – Finance Company; failed to protect the interest of the Complainant inasmuch as the flat-owner – Mr. Suhas S. Samant; was relieved from his liability to clear the dues payable to the Builder and obtain NOC from the Builder.  The Opposite Party – Finance Company; should have withhold the entire amount till Mr. Suhas S. Samant; obtained ‘NOC’ from the Builder.  This was a condition precedent and this is well articulated by an admission, which appears in paragraph No.(15) of the written version filed by the Opposite Party – Finance Company.  There, the Opposite Party – Finance Company; has made following statement:-

“This Opposite Party states that as the C.A. did not accept the cheque in sum of Rs.18,00,000/- the same was drawn in favour of CKP Bank.  This Opposite Party states that it is true that it was a condition precedent to obtain NOC from the Builders in order to release the cheque of the loan amount and therefore the sum of Rs.77,000/- was withheld by this Opposite Party out of the sum of Rs.18,77,000/- which sum was to be released only after obtaining the NOC from the builder.”

[13]    The above-quoted statement, which appears in the written version filed by the Opposite Party – Finance Company; does not leave any manner of doubt about the contention in the complaint that obtaining of ‘NOC’ by the flat-owner – Mr. Suhas S. Samant; from the Builder, was a condition precedent for disbursement of loan.  No doubt, the Opposite Party – Finance Company; tried to justify its action by taking stand that sum of Rs.77,000/- was withheld and the entire loan amount was not disbursed.  However, what-ever amount was disbursed by the Opposite Party – Finance Company; was sufficient to repay the entire loan amount borrowed by the flat-owner – Mr. Suhas S. Samant; from the CKP Bank, Dadar (West) Branch, Mumbai; against the mortgage of his flat.  This is clear from the copy of the letter dtd.1/3/2005, sent by the CKP Bank to the Opposite Party – Finance Company; by which the CKP Bank had expressed that it had no objection to release their charge subject to repayment of loan with interest of Rs.18,00,000/-.  This was the same amount, which was disbursed by the Opposite Party – Bank; and sent to the CKP Bank.  Thus, there is a nexus between the letter sent by the CKP Bank and the disbursement of loan amount by the Opposite Party – Finance Company; in sum of Rs.18,00,000/-.  This also shows that the Opposite Party – Finance Company; was aware of the fact that the flat-owner – Mr. Suhas S. Samant; had mortgaged his flat with the CKP Bank against loan amount in sum of Rs.18,00,000/-.

[14]    Tainted conduct on the part of the Opposite Party – Finance Company; could be further gathered from the fact that while making payment of sum of Rs.18,00,000/- to the CKP Bank against sanctioned loan amount in sum of Rs.18,77,000/-, the Opposite Party – Finance Company; did not send an intimation to the Complainant.  Written version of the Opposite Party – Finance Company; is devoid of such statement.  This shows that a phone call was made by the Opposite Party – Finance Company; to the Complainant’s residence to receive the cheque, but no phone call was made at the same number when huge amount in sum of Rs.18,00,000/- was disbursed by the Opposite Party – Finance Company; directly to the CKP Bank.  This very well articulates suspicious and highly objectionable conduct on the part of the Opposite Party – Finance Company.  Not only this was immoral and unethical but contrary to the terms of the package because according to the Opposite Party – Finance Company; itself, as referred to above, from the statements in paragraph No.(15) of the written version, it was a condition precedent to obtain ‘NOC’ from the Builder in order to release the cheque of loan amount.  Admittedly, without waiting for ‘NOC’ to be produced by the flat-owner – Mr. Suhas S. Samant; to be obtained from the Builder, loan amount was disbursed to the CKP Bank.  Thus, interest of the CKP Bank and Mr. Suhas S. Samant were protected, who were third parties for the Opposite Party – Finance Company; but its borrower & customer – the Complainant herein; was left high & dry inasmuch as no intimation, at-least by way of a phone call, was given to the Complainant.  These facts are sufficient to establish deficiency in service on the part of the Opposite Party – Finance Company.

[15]    The Complainant, in the process, sustained financial loss because the flat-owner – Mr. Suhas S. Samant; received the payment and he had no reason to show urgency in securing ‘NOC’ from the Builder.  Mr. Suhas S. Samant delayed delivery of possession of the flat to the Complainant.  The Complainant, in his written notes of arguments, has stated that Mr. Suhas S. Samant ultimately delayed delivery of possession of flat by six months.  In the meantime, the Complainant had to pay sum of Rs.77,000/- to Mr. Suhas S. Samant so that he could pay the said amount to the Builder to obtain ‘NOC’.  Had the Opposite Party – Finance Company; waited a little longer, that would have exerted required pressure on Mr. Suhas S. Samant, which would have compelled him to take required steps for obtaining the ‘NOC’ from the Builder and the transaction, without causing prejudice to either of the parties, would have been completed.  However, because of high-handedness shown by the Opposite Party – Finance Company; the interest of the borrower – the Complainant herein; was jeopardized inasmuch as he was required to suffer financial loss as well as mental agony & stress.

[16]    Not only that but the Opposite Party – Finance Company; debited the entire loan amount in sum of Rs.18,77,000/- on the very day of disbursement of amount in sum of Rs.18,00,000/- to the CKP Bank and despite the fact that the balance loan amount in sum of Rs.77,000/- was yet to be disbursed to the Complainant.  It was subsequently disbursed and the Opposite Party – Finance Company; tried to justify the same by taking stand that it was withheld as security for obtaining ‘NOC’ from the Builder.  This is again a lame excuse put forth by the Opposite Party – Finance Company; because without waiting for ‘NOC’, substantial amount in sum of Rs.18,00,000/- was disbursed to the CKP Bank without giving any intimation to the Complainant.

[17]    In view of this, we hold the Opposite Party – Finance Company; guilty of deficiency in service.  The Complainant has sought various directions from this Forum, as against the Opposite Party – Finance Company; for recovery of extra interest on principal sum of Rs.18,77,000/- for a period of six months as well as recovery of interest on un-disbursed amount in sum of Rs.77,000/-, besides compensation.  However, having regard to facts of the case, we find that direction to the Opposite Party – Finance Company; to pay to the Complainant compensation in sum of Rs.50,000/-, would meet the ends of justice and mitigate financial loss as well as mental agony caused to the Complainant.

          With this, we proceed to pass the order as below:-

ORDER

The complaint is partly allowed.

The Opposite Party is hereby directed to pay to the Complainant compensation in sum of Rs.50,000/- and costs in sum of Rs.3,000/-.

The Opposite Party shall comply with the foregoing order within a period of six weeks from the date of receipt of this order failing which, the Opposite Party shall also be liable to pay to the Complainant; interest @ 9% p.a., on the amount of Rs.50,000/- as from the date of expiry of stipulated period of six weeks till realization of the entire amount by the Complainant.

Rest of the claims of the Complainant stands rejected.

Parties shall be informed accordingly, by sending certified copies of this order.