BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 762/2008 against C.C. 636/2006, Dist. Forum-I, Hyderabad
Between:
P. Madhusudana Rao, s/o. P. Subbarayudu
Plot No. 211, Avanthi Nagar
Erragadda, Hyderabad. *** Appellant/
Complainant.
. And
1) The Branch Manager, ICICI Bank Ltd.,
Begumpet Branch, Hyderabad.
2) ICICI Bank Ltd., ICICI Bank Towers,
IV floor, South Tower, Bandra Kurla Complex
Mumbai.
3) Golden Palm Constructions
No. 5-4-187/3 & 4, 3rd Floor
Sohan Mansion, M.G. Road
Secunderabad.
Rep. by its Managing Partner *** Respondents/O.Ps
Counsel for the Appellant: M/s. T. Laxmikanth Sharma
Counsel for the Resp: M/s. C. Balagopal- R3.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
THURSDAY, THIS THE FOURTH DAY OF NOVEMBER TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) This is an appeal preferred by the complainant dis-satisfied with the award passed by Dist. Forum.
2) The case of the complainant in brief is that R1 & R2 bank sanctioned housing loan on 24.5.2006 for purchase of a duplex house from R3 under agreement dt. 14.7.2005. However they did not release the loan amount. R3 builder had threatened to cancel the agreement. Neither they had paid the amount nor returned his original agreement. It constitutes deficiency in service. It was an unfair trade practise. In the absence of original documents, he cannot apply for loan from other banks. Therefore he filed the complaint to disburse the loan amount and a direction against R3 not to sell the said house to any other third party, besides compensation and damages of Rs. 15 lakhs and costs of Rs. 5,000/-.
3) R1 & R2 bank resisted the case. It alleged that though loan was sanctioned the complainant has failed to file relevant documents and necessary permission from the competent authority and as such it could not process the loan. They had no concern with cancellation of agreement by R3 for non-payment of amount. It had returned the original agreement of sale dt. 5.7.2005 to him. They have also asked him to take return of other documents that were filed, but he had failed to come. For the notice issued by the complainant, it had given suitable reply. There cannot be any mental agony or inconvenience when he himself had committed default and therefore prayed for dismissal of the complaint with costs.
4) R3 equally resisted the case. While admitting that it is a firm dealing in real estate, and that it allotted plot No. 22 for a total consideration of Rs. 15,39,500/- it alleged that the complainant had paid only Rs. 1, 35,000/- as on 2.9.2005. The terms of agreement of sale dt. 5.10.2005 provides that he had to pay the amounts in instalments, and on failure to pay instalments it would entail cancellation of the agreement. The payment of instalments had nothing to do with the housing loan that he had obtained from R1 & R2 bank. Since the complainant had committed default in payment of sale consideration he had issued a letter dt. 16.5.2006 cancelling the agreement. The complainant had sent a copy of letter dt. 15.6.2006 addressed by him to one Ms. Putta Padmaja who had nothing to do with the contract. It is clear from the letter that no amount was received by the complainant. The letter further states that the bank would issue a letter for fresh agreement of sale. On that he had immediately replied on 26.6.2006 that Ms. Putta Padmaja had nothing to do with the agreement and the agreement was duly cancelled and that the original agreement was returned after due cancellation. The complainant has been fighting for non-existing right. The sale agreement was never returned but it was destroyed after due cancellation. He had already sold the property to a third party. He himself has chosen to cancel the agreement voluntarily. There was no deficiency in service on his part and therefore prayed for dismissal of the complaint with costs.
5) The complainant in proof of his case filed his affidavit evidence and got Ex. A1 to A12 marked while the respondents filed Exs. B1 to B6.
6) The Dist. Forum after considering the evidence placed on record opined that the complainant had failed to pay the amounts as agreed upon under agreement of sale Ex. A2 and that R3 had rightly cancelled the agreement and it had nothing to do with sanction of loan by R1 & R2 bank. However, in view of the fact that R3 had agreed to refund Rs. 1,35,000/- he was directed to pay the same with interest @ 12% p.a., together with costs of Rs. 2,000/-.
7) Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have awarded compensation as he applied for loan and got the sanction orders only after obtaining approval of lay out, and unilateral cancellation of agreement by R3 was unjust and amounts to deficiency in service. Therefore he prayed that the appeal be allowed directing R3 to allot the plot in the same venture and consequently direct the respondents to pay compensation of Rs. 50,000/- and costs of Rs. 5,000/-.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9) It is an undisputed fact that the complainant had entered into an agreement of sale with R3 on 5.10.2005 for purchase of a plot. As against sale consideration of Rs. 15,39,500/- he had paid Rs. 1,35,000/- on different dates by initially depositing Rs. 25,000/- vide Exs. A2 to A5. The complainant did not allege as to why he could not pay the remaining instalments by due dates. Since the agreement Ex. A2 stipulates that the vendee shall under no circumstances delay payment of instalments for more than three months from due dates and on failure to adhere to payments the agreement shall stands cancelled and the vendor would be entitled to forfeit the amount. Since the complainant did not adhere to the payment schedule R3 cancelled the agreement by letter Ex. A4 dt. 16.5.2006. The complainant alleges that since R3 did not obtain sanctioned lay out however entered into agreement and therefore the bank did not release the loan and this caused delay in payment of amounts as per the schedule. It may be stated herein that there is no tripartite agreement between the parties for release of loan by R1 & R2 bank for payment of future instalments. It may be stated that the bank had no doubt processed sanction of loan of Rs. 15 lakhs by its letter 24.5.2006 subject to approval. However no reason was given by the bank for non-sanctioning. Evidently the bank had returned the agreement of sale to the complainant.
10) The Hon’ble Supreme Court in Managing Director, Maharashtra State Financial Corporation Vs. Sanjay Shankarsa Mamarde reported in (2010) 7 SCC 489 considering a case where the financial institution with-held the loan sanctioned and due to which the complainant had sustained loss. However, considering the definition of deficiency in service as provided u/s 2(1) (g) 7(o) of the Consumer Protection Act opined that:
“It is manifest from the language employed in the clause that its scope is also very wide but no single test as decisive in the determination of the extent of fault, imperfection, nature and manner of performance etc. required to be maintained can be laid down. It must depend on the facts of the particular case, having regard to the nature of the ‘service’ to be provided. Therefore, in so far as the present case is concerned, in order to examine whether there was a deficiency in service by the Corporation, it has to be seen if there was any inadequacy in the quality, nature and manner of performance which was required to be maintained by the Corporation in terms of their letter dated 2nd July, 1992, conveying the sanction of loan to the complainant.
After considering the facts the Supreme Court opined that “
In the background of the factual scenario as emerging from the material on record, we are convinced that there was no shortcoming or inadequacy in the service on the part of the Corporation in performing its duty or discharging its obligations under the loan agreement. The Corporation was constrained not to release the balance instalments and recall the loan on account of stated defaults on the part of the complainant himself. Non release of loan amount was not because of any deficiency on the part of the Corporation but due to complainant’s conduct and therefore, the failure of the Corporation to render ‘service’ could not be held to give rise to claim for recovery of any amount under the Act.
Relying a decision n U.P. Financial Corporation & Ors. Vs. Naini Oxygen & Acetylene Gas Ltd. & Anr. (supra) this Court had observed that a Corporation being an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge, in the discharge of its functions, it is free to act according to its own right. The views it forms and the decisions it takes would be on the basis of the information in its possession and the advice it receives and according to its own perspective and calculation. In such a situation, more so in commercial matters, the court should not risk their judgments for the judgments of the bodies to which that task is assigned. It was held that: (SCC p. 761, para 21)
“Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however more prudent, commercial or businesslike it may be, for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable”.
As was observed by this Court in Jagdamba Oil Mills (supra), while not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. Fairness cannot be a one-way street. Where the borrower has no genuine intention to repay and adopts pretexts and ploys to avoid payment like in the present case, he cannot make the grievance that the Corporation was not acting fairly, even if requisite procedures have been followed.
(Emphasis supplied)
11) Evidently when R3 had cancelled the agreement which he was entitled to cancel under the terms of the agreement for non-payment of amounts when the complainant could not prove that he adhered to the terms of the agreement and when there was pre-condition it depends upon loan that would be released by the bank, it cannot be said that there was any deficiency in service on the part of respondents. When the complainant himself admits that lay out plan was approved on which he claimed loan, may be initially permission was not there. It was not a ground on which sanction was released. Question of complainant suffering mental agony cannot be gleaned from this. The non-sanctioning of loan unless it was malafide, is not justifiable. Already the complainant had got the order of refund of his amount together with interest @ 12% p.a., which adequately represents whatever loss that was caused to him. In fact we did not see any loss, more so, when he did not adhere to the terms of the agreement. For his inability to meet the terms of the agreement, he cannot turn round and find fault with the vendor. We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard. We do not see any merits in the appeal.
12) In the result the appeal is dismissed. No costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 04. 11. 2010.
*pnr
“UP LOAD – O.K.”
