BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 07^TH DAY OF AUGUST 2024

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Direct the OP to refund Rs.11,03,185/- payment made by the complainant to the OP1 through installments and premature closure agreement with interest at 18% p.a.,
2. To award compensation of Rs.5,00,000/- to the complaiant as mental agony and Rs.30,00,000/- towards liquidated damages which is equalent price of similar flat in the said area.
3. Direct the OP to make the payment of Rs.50,000/- towards litigation expenses. Pass such other reliefs as this Hon’ble Commission deems fit to grant.

2. The case set up by the complainant in brief is as under:-

The OP2 is a developer with an intent to develop the property bearing Sy.No.53/1, 53/2, 54/1 to 54/5 situated at Maragondanahalli Village, Bangalore Rural District, entered into sale agreement with the M/s Allam Infinite India Pvt. Ltd., with an intention to develop the property into multistoried building, have applied for development and building plan before the concerned authority and pursuant thereto had obtained the license and sanction plan for development of the consolidated township from KIADB.  In pursuance of the same OP2 developer started constructing six towers of multistoried residential apartments by name GM AMBITIOUS ENCLAVE, under the scheme Pradhan Mantri Avas Yojana.  The complainant has approached the OP2 to purchase a flat and agreed to purchase residential apartment bearing flat No.A1-01-27(1 BHK flat) on the first floor.

3. The OP2 promised that they would complete the construction of all the flats in tower 1 to 6 and they will deliver the same within a period of four years and with the grace period of six months from the date of sanction.

4. The OP2 has also introduced OP1 for financial assistance.  After discussion and negotiation with the OP1 they have agreed to provide home loan to purchase the flat to the complainant as per the terms of the agreement the OP1 has to release the amount as per the demand made and requirements of the developer on the basis of completion of the construction work.  Precisely the home loan disbursement goes to several levels.  After assurance given by the OP1 the complainant entered into two agreements i.e., Construction agreement and agreement of sale on 17.07.2018 with the developer with the total consideration of Rs.13,20,900/- towards the cost of construction and Rs.5,66,100/- towards schedule property. 

5. The OP1 on 09.08.2018 had issued sanction letter and have sanctioned home loan of Rs.16,57,500/- towards purchase of flat with loan tenure of 240 months with EMI of Rs.14,595/-.  The OP1 further informed that the said purchase is eligible under Pradan Mantri Awas Scheme and linked the subsidy scheme. After sanction of loan the OP1 disbursed the loan to the OP2 directly as per the demand.  The OP1 released the initial payment of Rs.5,66,100/- on demand note made by the OP2 out of the total loan sanctioned amount.  After release of the aforesaid loan amount the complainant started paying the installment without any default and the developer started construction work.  Subsequently in March 2019 the complainant received a mail from OP2 that the OP1 is not able to disburse the amount. After that the complainant had tried to contact the OP1 but he was not able to contact them.

6. It is further contention taken by the complainant that the developer could not complete the construction of the flat as agreed since the OP1 have not released the amount as demanded.  After the initial release the OP1 failed to release the amount as per the demand made by the complainant and OP2. When it was brought to the notice of OP1 they have given one or the other untenable reason towards none release of sanction loan.  The complainant has also requested the OP2 to resolve the issue but both the OP1 and 2 have failed to provide financial assistance and to proceed further and complete the flat as per the agreed terms. The OP1 stopped sanctioning the balance amount leaving the complainant unaware of the broken ties.

7. The complainant left with no other option wants to purchase the house since the aforesaid flat construction was not processing he decided to move towards purchase of another flat for which he needed to resolve the aforesaid loan issue.  Hence the complainant approached the OP2. The OP2 by taking the advantage of the situation have forced the complainant to enter into pre-closure of the loan. The OP1 and 2 have colluded together, have made the complainant to clear the loan by entering into pre-closure of the loan.  The complainant till then had paid 124 installments at Rs.4,293/- per installment totaling Rs.5,32,332/-.  In fact the complainant who did not get the flat had to pay total of Rs.11,03,185/-. Now the developer demanding Rs.30 lakhs which is the present market value of the flat to enable them to hand over the possession of the flat.

8. The complainant forced to pre-close the loan amount by making use of the situation.  The complainant learnt that the OPs have cheated him of the valuable amount and thereby they have committed unfair trade practice.  The complainant left with no other option got issued legal notice on 24.04.2023 to rectify the mistakes and refund the excess payment made by the complainant. Inspite of receipt of the legal notice the OPs neither replied nor made any payment. Hence this complaint.
9. In response to the notice, OP1 appears and files version. Though OP2 appeared before this commission, but not filed their version.

10. It is the case of the OP1 that it is a non banking financial institution. The complainant approached them for loan.  The OP1 after satisfying itself of complainant capacity to repay sanctioned and forwarded the loan after issuing loan sanction letter and executing loan agreement with the complainant. Both these documents define the terms of sanction disbursement and repayment of loan in detail.  The same are read understood and then executed by the complainant. The loan amount is disbursed as per the instruction of the complainant. 

11. The OP1 is not involved in construction of the apartment and it is not even privy to any of the exhibits between the complainant and OP2. Therefore any default in completion of the construction of the apartment cannot be attributed to this OP1.

12. This OP1 cannot be directed to refund any amount to the complainant as sought in the prayer. This complainant after obtaining the loan from this OP1 has fully repaid loan amount without any protest/challenge as he is liable to do so. The OP1 after receiving all of its dues has also issued no-due certificate.  The loan account statement shows the status of the loan account to be closed. Therefore the prayer (a) can only be against OP2 and not against this OP1.

13. It is further case of the OP1 that the prayer (b) sought by the complainant is also not maintainable.  Any alleged mental agony is due to failure on the part of the OP2 to construct the apartment and deliver possession.  The prayer (c) is also not maintainable against this OP1. In fact the complainant must be held liable to pay cost of the litigation to this OP1 since it has been unnecessarily drag to frivolous litigation.  The complainant is not a consumer on the date of the complaint and hence the complaint is not maintainable against this OP1. Therefore OP1 prayed for dismissal against them.

14. The complainant has filed his affidavit evidence and relies on 12 documents.  Affidavit evidence of official of OP1 has been filed and OP1 relies on 07 documents.  OP2 has not filed their evidence.

15. Heard the arguments of advocate complainant and OP1.  Perused the written arguments filed by the complainant and OP1.

16. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OPs?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

17. Our answers to the above points are as under:

Point No.1:  Affirmative in part

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

18. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence, written arguments and documents.

19. It is undisputed fact that the complainant ahs approached the OP2 in order to purchase the flat No.A1-01-27(1 BHK flat) measuring 500 sq. feet on the first floor of the proposed project GM Ambitious Enclave for a total consideration of Rs.13,20,900/- and Rs.5,66,100/- towards schedule property and entered into construction agreement and sale agreement dated 17.07.2018 with the OP 2. As per the agreement the OP2 has to develop the property and deliver the apartment within a period of four years and with the grace period of six months from the date of sanction plan. The OP2 has introduced the OP1 for financial assistance to the complainant. 

20. On 09.08.2018 the OP1 has issued sanction letter and sanction a loan of Rs.16,57,500/- towards the purchase of the flat with a loan tenure of 240 months with EMI of Rs.14,595/- as per Ex.P3.  The OP1 further informed the complainant that the said purchase is eligible under Pradan Mantri Awas Yojana Scheme and linked the subsidy scheme.  As per the agreement the loan amount was directly released to the OP2. The OP1 has released initial amount of Rs.5,66,100/- and demand note made by the OP2 out of the total sanctioned loan amount as per the sanction.  After release of the aforesaid loan amount the complainant started paying EMI without any default and the developer started construction work.  The complainant has received mail from the OP2 informing that the OP1 is not able to disburse the amount.  After that the OP2 has stopped the construction. Inspite of repeated request made by the complainant to OP2, OP2 has failed to complete the construction and both the OP1 and 2 have failed to resolve the issue and both have failed to provide financial assistance and proceed further and complete the flat as per the agreed terms. In view of this the complainant was forced to preclose the loan as he was in a hurry to purchase another flat in view of the failure of the OP2 in completing the project and handing over the possession of the flat.  

21. The complainant who did not get the flat was forced to pay a total amount of Rs.11,03,185/- towards the OP1 and he has paid Rs.5,32,332/- in 124 installment.  The OP1 and 2 have played fraud and cheated the complainant.

22. Now the developer i.e., OP2 is demanding the complainant to pay Rs.30 lakhs which is present market value to enable them to hand over the possession of the flat to the complainant. In view of this complainant had undergone mental agony and financial loss.  The complainant was forced to pay extra amount to purchase the similar flat in the similar area.

23. The OP1 has filed their version and lead their evidence stating that they are not at all involved in any construction of the apartment and they are not party to the any agreement between the complainant and OP2. Any default in construction of the apartment cannot be attributed against OP1.

24. It is clear from the evidence and documents placed by both the parties before this commission that the complainant even though has paid part of the consideration amount has failed to get the flat from the OP2. The OP2 has stopped the construction when the OP1 was unable to release the amount for the reasons best known to them. In view of this the complainant was forced to pre-close the loan even though he was not got the flat to the OP1.  The entire amount was utilized by the OP2. Inspite of that the OP2 has not completed the construction and not handed over the possession of the flat in favour of the complainant. Now the OP2 is demanding Rs.30 lakhs which is the present market value of the flat to hand over the flat to the complainant.

25. The conduct of the OP2 clearly discloses that he has stopped construction of the flat and made the complainant to pre-close the loan amount. Due to the negligence and deficiency of service on the part of the OP2 the complainant was forced to pre-close the loan and made effort to purchase another flat for exorbitant rate in the same area.  The OP2 remained absent and the OP1 has not at all disclosed the reason for not release of the sanctioned loan amount in favour of the complainant in order to complete the construction by the OP2.  When the complainant has already cleared the loan amount sanctioned by the OP1, the question of again seeking the OP1 refund the amount in his favour does not arise.  

26. The complainant has to recover the amount from OP2 as he has utilized the loan sanctioned in favour of the complainant for construction of the apartment in GM Ambitious Enclave. Under these circumstances, the complainant has clearly established the deficiency of service and unfair trade practice on the part of the OP2 and failed to establish the deficiency of service and unfair trade practice on the part of the OP1. Hence the complaint is not maintainable against OP1 and it is liable to be dismissed against OP1. The OP2 is liable to refund the amount of the loan cleared by the complainant with compensation and litigation expenses.   Hence we answer point No.1 partly affirmative and point No.2 partly in affirmative.

27. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part against OP2 and complaint is dismissed against OP1.
2. OP2 is directed to refund Rs.11,03,185/- to the complainant with interest at 9% p.a., from the date of release of the loan till realization.
3. OP2 is further directed to pay compensation of Rs.2,00,000/- with litigation expenses of Rs.10,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.11,03,185/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 07^TH day of AUGUST 2024)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party 1 – R.W.1;