DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016
Case No.138/2010
Sh. Neeraj Bhalla
S/o Sh. Amrit Bhalla
R/o 139-A, Block-A,
Sector-27, Noida-201301 ….Complainant
Versus
1. M/S DLF New Gurgaon Home
Developers Pvt. Ltd.
(through its Managing Director)
DLF Centre, Sandad Marg,
New Delhi-110001
2. M/S ICICI Home Finance Co. Ltd.
(through its Managing Director)
ICICI Bank Towers, Bandra Kurla Complex,
Mumbai-400051 ….Opposite Parties
Date of Institution : 09.03.2010 Date of Order : 10.09.2018
Coram:
Sh. R.S. Bagri, President
Ms. Naina Bakshi, Member
Ms. Kiran Kaushal, Member
ORDER
Member - Kiran Kaushal
Brief facts of the case are:
1. That Sh. Neeraj Bhalla (hereinafter called as complainant) purchased a flat from M/s DLF New Gurgaon Homes Developers Pvt. Ltd. hereinafter as OP No.1. The complainant paid Rs.5 lacs as application money against Down Payment Plan on 05.05.2008.
1.2 The complainant arranged a housing loan of Rs.38,44,000/- at floating rate of interest @ 10.25% per annum from M/s ICICI Home Finance Company Ltd. referred to as OP No.2. There was an agreement between the complainant and OP No.2 that the loan amount would be directly paid to OP No.1 by OP No.2. Therefore, down payment of Rs.38,44,000/- was paid by OP No.2 to OP No.1 directly on account of complainant. On persistent enquiry from the allottees the complainant was informed by OP No.1 who had not yet started construction of the said flat amended the period of handing over from the date of signing the agreement to the date of booking. OP-1 assured the complainant that the construction would commence from January 2009 vide a letter dated 17.09.08.
1.3 The complainant alleged that although the construction of the said flat had not yet started, the complainant was forced to sign Buyers Agreement. He was threatened that earnest money of Rs.5 lacs as per clause 8 of application will be forfeited in case the said agreement was not signed within 30 days of the receipt of the same.
1.4 That the complainant alongwith other applicants on February, 2009 was shocked to note that there was no activity of construction as promised by OP No.1. On contacting the authorities of OP No.1 he was surprised to know that OP No.1 had not yet received Environment Clearance from State Authorities for the project wherein the said flat was to be constructed. The complainant further alleges that this fact of non-availability of environment clearance was concealed from the complainant and other applicants as the application format was silent on this mandatory requirement. Therefore, this situation led to organized agitation by all the applicants which including staging of Dharna, slogan shouting, written protest etc.
1.5 The complainant further alleges that OP No.1 on realizing its mistake of booking flats without getting environment clearance announced few concessions unilaterally so as to avoid large scale exit by frustrated applicants. OP No.1 in the letter dated 26.03.2009 also assured the applicants that they would allow Exit to those applicants who did not accept the concessions offered by them.
1.6 The concessions offered by OP No.1 did not satisfy the complainant as OP No.1 had equated applicants of the Down Payment Plan with Construction linked payment plan. Therefore, vide his letter dated 07.04.2009 the complainant sought permission to exit in case OP No.1 was unable to revise the concession or gave him more concession as he had paid the entire amount of Rs.43,44,000/- in one go but the request of the complainant was not accepted by OP No.1. The complainant finally submitted his request to ‘Exit’ vide his letter dated 05.05.2009 which was accepted by OP No.1 vide their letter dated 14.05.2009.
1.7 That after accepting the Exit option of the complainant the OP No.1 arbitrarily took six months to refund application amount of Rs.4,31,909.58p to the complainant and also refunded Rs.39,12,990.42p directly to OP No.2 on 06.11.2009, without refunding the interest amount of Rs.6,08,493/- paid by the complainant on his loan to his banker OP No.2 for period from 10.06.08 to 10.11.09 as per statement of OP No.2 dated 27.11.09. The complainant accepted the above payment under protest vide his protest letter dated 10.12.09 to OP No.1.
1.8 The complainant alleged deficiency in service on the part of OP No.1 stating that OP No.2 did not verify documents of OP No.1 for the said project which they were duty bound to do so as the bank charges process fee in such cases for verification of the documents of the builder.
1.9 The complainant also alleges that OP No.2 in connivance with OP No.1 released the loan amount without ensuring that Buyer Agreement had yet to be signed by the parties and they had no valid contract as on 31.05.2008 i.e. the date bank released the loan amount.
1.10 The Buyer’s agreement was got signed from complainant without his free consent after concealment of material fact and misinformation about absence of environment clearance from the State by OP No.1 which made the agreement void ab initio/voidable and collecting payment under an invalid contract amounts to unfair trade practices resulting in deficiency of service. The agreement also becomes contingent because of OP No.1 declared that construction would start only after receipt of mandatory environment clearance from the state authorities and hence the contract was unsustainable in the eyes of law and complainant was within his rights to opt for Exit. OP No.1 was therefore legally bound to refund not only Rs.43.44 lakhs but even the interest of Rs.6,59,517/- for delaying the refund for six months. Hence, pleading deficiency in service and unfair trade practice on the part of OPs the complainant has filed the present complaint. He has prayed for the following relief and directions:-
a. Direct the OPs to refund the interest amount of Rs.6,00,493/- paid to OP No.2 as interest on loan amount.
b. Direct the OPs to pay Rs.59024/- as interest @ 10.25% on application money of Rs. five lakhs.
c. Direct the OPs to pay Rs.80,000/- to the complainant as compensation for mental agony for 16 months @ Rs.5,000/- per month.
d. Direct the OPs to pay to the complainant Rs.10,000/- as cost of litigation.
e. Direct the OPs to pay interest @ 9% on the above amounts A to D from the date of filing of the complaint till the date of realization.
2.1 The OP No.1 resisted the complaint on the ground that the present case is purely contractual in nature and clause 62 of Buyer Agreement states that the dispute which would arise out of the agreement or contract between the complainant and the respondent will be first settled by the between parties within 45 days else should be resolved by arbitration, thus this forum does have the appropriate jurisdiction over a contractual matter.
2.2 OP No.1 also states that the complainant was given 30 days which is sufficient time to go through the agreement and sign it at will. He also submits that it was clearly mentioned in the application form that the building plan etc. were yet to be sanctioned by the appropriate authorities. It claims that the complainant was well aware of the developments at the end of OP No.1 as the application form and the agreement was duly signed by him.
2.3 OP No.1 also submits that when the complainant opted for the Exit policy he was informed that the premises allotted in his name would be re-traded or within six months the amount would be refunded, whichever is earlier. It states that it was the complainant who decided to take the loan from the bank and availed the services of the OP No.2 therefore OP No.1 cannot be made liable for decision of taking loan from a financial institution and thereby pay interest on the part of the complainant.
3.1 OP No.2 in the written statement averred that he had a very limited role to play. That OP No.2 had paid the loan amount to OP No.1 on behalf of the complainant, pursuant to the agreement between the complainant and OP No.2. The complainant was liable to pay interest and other incidental charges on account of home loan availed by the complainant from OP No.2. It is submitted that services of OP No.2 were only limited to processing, sanctioning and disbursing the home loan either to the applicant or to the builder directly as the case may be.
3.2 OP No.2 further stated that complainant never raised any objection on the sanctioned/disbursal of the loan amount to OP No.1. The complainant has admittedly been paying the EMIs towards the repayment of the loan availed from OP No.2. Therefore the contentions raised against OP-2 in the complaint were an afterthought.
4.1 Complainant has filed rejoinder to the written statement of OP No.1 reiterating the averments made in the complaint. Complainant has not filed rejoinder to the written statement of OP No.2.
5. Parties have filed their respective affidavits by way of evidence and written arguments.
6. We have heard the arguments on behalf of the parties and have also gone through the material available on record.
7. Before we go into merits of the case, let us first address preliminary objection raised by the parties. It is contended by OP-1 that since the agreement between the parties contain arbitration clause, arbitration and not a complaint before this Forum is the appropriate remedy. Section 3 of the C.P.A, 1986 provides that the provisions of this Act are in addition to the other remedies available to a consumer. Therefore, availability of arbitration as a remedy does not debar the complainant from approaching a Consumer Forum in a case of deficiency in the services rendered to him.
8. As regard remedy on the contract and nature of contract complainant is at liberty to approach the competent Forum.
9. Now on the merits of the case, it is an admitted fact that the complainant was allotted residential flat in ‘New Term Heights Sector-86 Gurgaon’ as per allotment letter dated 05.05.2008 by OP-1 against the payment of earnest money of Rs.5,00,000/-. Complainant, thereafter, was sanctioned a loan of Rs.38,44,000/- by OP-2 which was directly paid to OP-1 on behalf of the complainant. In February, 2009 the complainant along with other allottees found that there was no construction activity at the site which resulted in massive agitation by allottees in front of the head office of OP-1. OP-1 in its letter dated 26.03.2009 admitted that delay in construction was due to non-availability of environment clearance from the government. Hence, fearing wholesale exit by allottees and in order to defuse the situation, OP-1 announced some unilateral concessions arbitrarily in their aforesaid letter dated 26.03.2009. The above said concessions were not acceptable to the complainant, therefore he opted for an Exit option wherein OP-1 promised to refund the whole amount given to him by the complainant. The amount of Rs.43,44,000/- was returned to the complainant after six months of receiving and accepting the exit option by OP-1 . Main contention regarding the dispute is that OP-1 did not pay any interest thereon during the period when the amount of Rs.43,44,000/- remained deposited with OP-1.
10. In my opinion, first deficiency of service on part of OP-1 arose when it booked aforesaid flat of the complainant without obtaining mandatory clearance from State authorities for environmental clearance. Going for the Exit option was consequent to the knowledge that environmental clearance was not obtained by OP-1 for the construction in the aforesaid project. Had the complainant seen some development in the project or had he received the above said flat within the stipulated time, he would not have opted to exit and would not have any grievance qua OP-1. Since the choice was between the concessions offered by OP-1, which were not acceptable to the complainant and the Exit Option. He was forced to choose the latter. He was left with no option but to seek refund from OP-1.
11. It is also contended by the complainant that OP-1 after having received and accepted the exit option on 14.05.2009 refunded the amount after six months. The justification given by OP-1 that the flat would be re-traded is not plausible as no evidence has been placed on record to show that the flat was re-traded and then the money was refunded after six months.
12. It is further contended by the complainant that OP-2 in connivance with OP-1 released the loan amount without ensuring the Buyers Agreement had yet not been signed between the parties which has been clarified by OP-2 stating that the said amount was disbursed, pursuant to the agreement made between OP-2 and the complainant. The complainant had even being paying the EMIs on the amount disbursed. Hence, we do not find any merit in the contention that there has been any deficiency of service on the part of OP-2 and the complainant is not entitled to any relief whatsoever against OP-2.
13. For the reasons stated hereinabove, we direct OP-1 to refund the interest on loan amount of Rs.38,44,000/- from the period of 09.04.2009 when the Exit option was applied by complainant till 23.11.2009 when the money was directly refunded to OP-2 by OP-1. The aforesaid amount shall be refunded @ 6% p.a. till the date of realization. We award Rs.10,000/- towards compensation for mental agony, legal expenses etc.
14. OP-1 is directed to pay the complainant within a period of 30 days from the date of receipt of the copy of this order failing which the OP-1 shall become liable to pay interest @ 9% p.a. on the aforesaid amount from the date of filing of the complaint till realization.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
Announced on 10.09.18.
