Per Shri B.A.Shaikh, Hon’ble Presiding Member.
1. This complaint is filed purportedly under section 17 of Consumer Protection Act, 1986.
2. The case of the complainant as set out by him in the said complaint in brief is as under.
a) The opposite party (for short O.P.) Nos.1 and 2 are the official entities of a common builder, promoter and developer namely “M/s.Ramnath Developers Pvt.Ltd.” The said builder is represented through its director Sudeshchandra Babulal Gupta. The O.P.No.1 is having its registered office at Jhansi and O.P.No.2 is its Regional Office, which is situated at Nagpur. The O.P.Nos.1 and 2 proposed residential apartment/scheme named and styled as “Ramnath City, Phase-1”, which was to be developed and built up by them on their land of village Bokhara, Koradi Road, Nagpur, described in detail in para No.1 of the complaint. The O.P.Nos.1 and 2 had pointed a very rosy picture and displayed various promotional materials namely brochures and leaflets to attract the prospective purchasers. They had made lot of tall promises under the concept of township.
b) The complainant approached to O.P.Nos.1 and 2 to purchase from them residential apartment in the said scheme. The complainant entered in to registered agreement with O.P.Nos.1 and 2 on 17/04/2012 to purchase from them residential unit No.31, which is described in detail in para No.2 of the complaint. The complainant paid entire consideration of Rs.60,08,000/- to the O.P.Nos.1 and 2. In addition to the same the complainant also paid taxes and maintenance charges. The complainant paid total amount of Rs.62,93,000/- to O.P.Nos.1 and 2 township total consideration of unit, taxes and maintenance charges, of which details are given in para No.3 of the complaint. The O.P.Nos.1 and 2 issued receipts of all the payments from time to time and thereby acknowledged the receipts of the said amounts. Therefore the complainant is a consumer of O.P.Nos.1 and 2.
c) As per clause No.17 of the agreement, possession of the said residential unit was expected to be given on or before 30/05/2012. However the complainant received possession of the same on 31/10/2012.
d) The complainant has performed his contractual obligation of performance, but O.P.Nos.1 and 2 miserably failed to perform their contractual obligations as they have not executed sale deed in favour of the complainant and thereby rendered deficient service to the complainant.
e) The O.P.Nos.1 and 2 committed many irregularities in providing amenities promised by them. The quality of construction is inconsistent and do not match with promise of ‘A’ class specification made by them. The details of the same are given in para No.5 of the complaint.
f) The complainant made consistent efforts and persuasion by way of various oral and telephonic communications with O.P.Nos.1 and 2 so as to seek redressal of defective construction and deficiency in service. The complainant suffered lot of mental agony and harassment due to inactions and omissions and lacklusture attitude of the O.P.Nos.1 and 2. Moreover the complainant also made communication by way of letters dated 25/01/2012 and 13/10/2014 to O.P.Nos.1 and 2 about the defective construction and deficiency in service.
g) The O.P.Nos.1 and 2 are duty bound to remit the entire consideration received from complainant through Escrow Account of O.P.Nos.3 and 4. As per clause No.43 of agreement to sale, it is clear that O.P.Nos1 and 2 are developing the residential complex with loan assistance from O.P.Nos.3 and 4 called as Housing and Urban Development Corporation Ltd. (for short HUDCO) and that the entire property has been mortgaged to O.P.Nos.3 and 4 as a security for loans and hence final transfer of the unit in favour of the purchaser/complainant can be made only after the entire payment of the apartment has been made by the purchaser to the HUDCO. It is therefore necessary for O.P.Nos.1 and 2 to insure all necessary compliance from HUDCO to obtain “No Due Certificate” and to invite the complainant for execution of the sale deed.
h) The complainant made entire payment of consideration through Escrow Account which is utilized by O.P.Nos.1 and 2. Therefore HUDCO must have received the payment through Escrow Account, and hence HUDCO can not withhold “No Due Certificate” in favour of the complainant. The HUDCO/OP.Nos.3 and 4 can not hold complainant responsible for non receipt of the amount deposited in Escrow Account. The inactions and omissions on the part of O.P.Nos.1 and 2 for not obtaining “No Due Certificate” from O.P.Nos.3 and 4 amounts to sheer negligence and deficiency in service and it is illegal and bad in law.
i) The O.P.Nos.3 and 4/ HUDCO are also responsible for not exercising their control on the amount deposited in Escrow Account which is agreed between the parties. Therefore withholding “No Objection Certificate” for the purpose of execution of sale deed in favour of the complainant amounts to exploitation and unfair trade practice on their part and it also amounts to deficiency in service on their part. The O.P.Nos.1 and 2 have not formed Housing Society for maintenance purpose under Maharashtra Co-operative Society Act, 1960. It also amounts to deviation from statutory obligations and reflects sheer negligence and deficiency in service on their part. The complainant obtained housing loan from State Bank of India, branch Nagpur and repayment of that loan by monthly installments is started from November 2011 and the interest @ 10.5% P.A. is being paid by the complainant.
j) The O.P.Nos.3 and 4/ HUDCO are also exploiting the innocent consumers taking undue advantage of pending proceeding under Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act). Hence this complaint is filed seeking the following reliefs.
i) To direct the O.P.Nos.1 and 2 to execute sale deed of the apartment described in the complaint, in favour of the complainant within 30 days from the date of order passed in the complaint.
ii) To direct the O.P.Nos.1 and 2 to obtain “No Due Certificate” and declaration free from any charges and encumbrance in respect of the apartment No.31 described in detail in the complaint, from O.P.Nos.3 and 4 within 30 days from the date of order passed in the complaint.
iii) Restrain the O.P.Nos.3 and 4 from any action and direct them not to disturb peaceful possession of the complainant over the said unit described in the complaint, during the pendency of the present complaint by way of ad-interim relief.
iv) Direct the O.P.Nos.1 and 2 to pay the complainant compensation of Rs.1,00,000/- for mental agony and stress.
v) Direct the O.P.Nos.1 and 2 to pay exemplary cost of Rs.50,000/- to the complainant.
3. The O.P.Nos.1 and 2 filed their common reply/written version and thereby resisted the complaint. They admitted that they proposed residential unit/scheme called as “Ramnath City” upon their land described in the complaint and they entered into registered agreement to sell with the complainant in respect of one of the residential unit No.31 described in details in the complaint and that the complainant paid to them entire consideration of the said unit amounting to Rs.60,08,000/- and that the complainant also paid to them taxes and maintenance charges. Thus they admitted that they received total amount of Rs.62,93,000/- from the complainant as averred by the complainant in the complaint. They further admitted that they obtained loan assistance from O.P.Nos.3 and 4 for aforesaid development purpose. They further admitted that the Escrow Account has been opened in the bank through which they received the amount from the complainant. They also admitted that they delivered possession of the residential unit to the complainant on 31/10/2012. They also admitted that as per clause No.43 of the agreement, final transfer of the residential unit can be made in favour of the purchaser only after entire payment of the said unit is made by the purchaser and the payable amount of that unit is paid to HUDCO (O.P.Nos.3 and 4).
4. However the O.P.Nos.1 and 2 denied that they have committed many irregularities in providing amenities promised by them and they failed to perform their contractual obligations. They also denied that the quality of construction work is of substandard nature. They denied that they have committed inactions and omissions and they have deviated from contractual obligation.
5. The defence of the O.P.Nos.1 and 2 in short is that they obtained loan from O.P.Nos.3 and 4 and that they are unable to pay installments in time for repayment as the O.P.Nos.3 and 4 increased huge rate of interest. Moreover the O.P.Nos.3 and 4 also filed a case before Debt Recovery Tribunal (for short DRT) vide case No.79/2015 and DRT Nagpur directed O.P.Nos.1 and 2 to maintain status-quo for sale of the project. Moreover another legal proceedings No.O.A.139/2014 is also filed by O.P.Nos.3 and 4 against O.P.Nos.1 and 2 for the recovery of loan and it is also pending before DRT, Mumbai. The O.P.Nos.1 and 2 are therefore unable to execute the sale deed of the residential unit in favour of the complainant. The complaint is also barred by limitation. Therefore it is prayed by O.P.Nos.1 and 2 that complaint may be dismissed as against them.
6. The O.P.Nos.3 and 4 also filed their common reply/written version and thereby they resisted the complaint. Their case in brief is as under.
i) The complainant does not fall within the definition of consumer as given under Section 2(1)(d) of Consumer Protection Act, 1986 and therefore the complaint is not maintainable. The dispute pertains to actions taken by the O.P.Nos.3 and 4 under the provisions of Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act for short), due to commission and default in payment of loan by O.P.Nos.1 and 2. The O.P.Nos.3 and 4 filed O.A. No.139/2014 against O.P.Nos.1 and 2 for recovery of the dues. The DRT Mumbai has issued interim recovery certificate for Rs.24,44,87,000/- and the recovery officer has also attached the entire property of “Ramnath City” including the house of the complainant. The dispute is subjudice and therefore if any order is passed in the present complaint, it would frustrate the aforesaid action taken by O.P.Nos.3 and 4. The present complaint is also barred in view of the provisions of Section 34 of SARFAESI Act.
ii) The O.P.Nos.1 and 2 have taken project loan from O.P.Nos.3 and 4 for construction of residential complex called as “Ramnath City” at Nagpur and they executed loan agreements on 30/06/2009 and 31/08/2010. The Union Bank of India, Katol Road branch Nagpur is acting as Escrow Agent in pursuance of Escrow agreements dated 30/06/2009 and 31/08/2010 executed amongst O.P.Nos.3 and 4, O.P.Nos.1 and 2, and Union Bank of India. The said Escrow Account is opened for the purpose of deposit of entire sale proceeds from project being implemented by O.P.Nos.1 and 2 and also for the purpose of repayment purpose of O.P.Nos.3 and 4. Moreover to secure the project loan granted by O.P.Nos.3 and 4, the mortgage is created by way of constructive delivery of title deed. The O.P.Nos.1 and 2 also executed deed of hypothecated of their movable property.
iii) The O.P.Nos.1 and 2 failed to repay the said loan and thus they are classified as “Non Performing Assets” (NPA) on 31/05/2013. Therefore a notice of demand under Section 13(2) read with Section 13(3) of SARFAESI Act, 2002 for enforcement of security interest has been issued to O.P.Nos.1 and 2 and their guarantors calling upon them to pay out standing amount of Rs.16,97,01,698/- together with interest there on in respect of Phase-I of the project and also to pay Rs.14,48,58,545/- together with interest there on in respect of Phase-II of the project. The O.P.Nos.1 and 2 and their guarantors received the said demand notice dated 13/06/2014. But they failed to comply with the said notice.
iv) Thereafter the O.P.Nos.3 and 4 issued letter dated 03/09/2014 giving the O.P.Nos.1 and 2 intimation for taking possession of secured assets and requested them to handover the peaceful possession of the secured assets on 11/09/2014. However on 11/09/2014, they refused to hand over peaceful possession of the secured assets and therefore O.P.Nos.3 and 4 took symbolic possession of the same by affixing notice on the conspicuous part of the secured assets. Moreover possession notice has been published in two news papers namely “Times of India” and “Maharashtra Times” on 14/09/2014.
v) The O.P.Nos.1 and 2 have collected huge sale proceeds by sale of various units without permission of O.P.Nos.3 and 4 by way of “No Objection Certificate” for sale of units to prospective purchasers. The O.P.Nos.1 and 2 have misused the amounts deposited from sale proceeds and they have not deposited the said amounts towards repayment of the loan to O.P.Nos.3 and 4.
vi) The O.P.Nos.1 and 2 have already given possession of the residential unit to the complainant on 31/10/2012 without executing any formal document. Although the circumstances demonstrate that complainant has performed his part, the necessary compliance to obtain “No Due Certificate” ought to have been performed by O.P.Nos.1 and 2 by making its payment and dues. The amount which was deposited with Escrow Account was utilized by O.P.Nos.1 and 2 and not paid to O.P.Nos.3 and 4 towards repayment of loan. The O.P.Nos.3 and 4 have not held the complainant responsible for non receipt of the amount deposited in Escrow Account if any. The O.P.Nos.3 and 4 hold O.P.Nos.1 and 2 entirely responsible for non receipt of any amount deposited in Escrow Account.
vii) The complainant has no locus standi to make claim arising out of the agreement in between O.P.Nos.1 and 2 on one side and O.P.Nos.3 and 4 on the another side.
viii) The O.P.Nos.1 and 2 with an intention to deceive the prospective purchasers of “Ramnath City” and O.P.Nos.3 and 4, are engaged in unfair business practices. Moreover the O.P.Nos.1 and 2 intentionally grabbed the extra money, accepted advances from prospective purchasers and proceeded to make construction by making additional apartments which is not as per the scheme sanctioned by O.P.Nos.3 and 4. The O.P.Nos.1 and 2 played gamble wherein they have put the complainant as well as O.P.Nos.3 and 4 at stake.
ix) There is no privity of contract in between complainant and O.P.Nos.3 and 4 and hence complaint as against O.P.Nos.3 and 4 is not maintainable. The O.P.Nos.3 and 4 excluded the apartment/unit for which the consideration amount was received by them from O.P.Nos.1 and 2. Apart from such excluded apartment/unit, the O.P.Nos.3 and 4 have right to proceed as per due process established by law to recover its dues.
x) Proceedings before DRT Nagpur, DRT Mumbai and Hon’ble High Court, Bench at Nagpur are either pending or disposed of. It is held by Hon’ble High Court that it would be improper for the Court to direct the O.P.Nos.3 and 4 to grant “No Objection Certificate” for execution of sale deed and that no remedy lies under the exercise of writ jurisdiction. The Hon’ble High Court held that the prayer made in the writ petition could have been made in civil proceeding or any other appropriate proceeding. The execution of the sale deed with O.P.Nos.1 and 2 does not give a ground for initiating any proceeding against O.P.Nos.3 and 4. The complaint is also barred by limitation. Hence it is prayed by O.P.Nos.3 and 4 that the complaint as against them may be dismissed with cost.
7. The complainant filed rejoinder and evidence affidavit. Complainant also filed copies of the following documents in support of the complaint.
Brochure and leaf-let, registered agreement for sale dated 17/04/2012, statement issued by O.P.No.2, payment receipt of taxes and maintenance charges and letters of acknowledgement, communication issued by complainant and O.P.Nos.1 and 2.
8. On the other hand O.P.Nos.1 and 2 filed affidavit of their Director Mr.Sudeshchandra Babulal Gupta. They also filed copies of following documents.
Letters of permission for availing loan against the security of the mortgaged property, statement of Escrow Account relating to transaction of complainant, extract of Audit Report showing expenditure on the project, certificate issued by Chartered Accountant (CA) showing expenditure incurred on the project, order dated 19/12/2014 passed in writ petition No.5954/2014, common order dated 13/06/2016 passed in writ petition No.6066/2014 and 6917/2014, order dated 22/04/2016 passed in writ petition No.2362/2016, notice of Hon’ble Supreme Court in petition No.5993 of 2017, order dated 11/11/2014 passed by DRT Mumbai on interim application No.391/2014, Release order issued to the Bank by HUDCO, letter given by O.P.Nos.1 and 2 to HUDCO for agreement for sale, order of DRT in O.A.No.139/2014, order of Hon’ble Bombay High Court in Criminal application No.700/2016, Certificate of C.A., computer generated copy of letter of Ministry of Corporate Office Government of India, notice issued by Additional Police Commissioner (Economic Wing), letter of O.P.Nos.1 and 2 addressed to police inspector, statement recorded by investigating officer, auction notice for sale of immovable property given under SARFAESI Act.
9. The O.P.Nos.3 and 4 filed affidavit of Mr.Ajay Menon N.Ramachandran, their Joint General Manager (Law). They also filed copies of the following documents.
Letters of offers for the scheme, loan agreements, Escrow agreement, charge register, letters issued by O.P.Nos.1 and 2 to O.P.Nos.3 and 4 seeking deferment in loan payment, audit reports issued by Jain Khetan Agrawal and Associates, statutory notice/ demand notice under SARFAESI Act, letter issued by O.P.Nos.3 and 4 to O.P.Nos.1 and 2 calling them for giving possession of secured assets, possession notice dated 11/09/2014 as published in a news paper namely Mararashtra Times, letter issued by O.P.Nos.1 and 2 to O.P.Nos.3 and 4 regarding review of financial position and cash flow, letter issued by O.P.Nos.3 and 4 to O.P.Nos.1 and 2 refusing proposal, order passed by DRT Mumbai, recovery certificate issued by DRT Mumbai, order rejecting review petition of O.P.Nos.1 and 2 by DRT Mumbai, order of valuation issued by DRT Mumbai, Orders passed by Hon’ble High Court in Writ Petition No.2362/2016, 5954/2014, 600/2016, 6066/2014, 6917/2014, Sale Unit Summary O.P.Nos.3 and 4 as per Escrow Account. The O.P.Nos.3 and 4 also filed copies of letters issued by “Ramnath Developers Pvt.Ltd.” for release of the units against payment deposit of other units, account statements, letters issued by O.P.Nos.3 and 4 to “Ramnath Developers Pvt.Ltd.” and letters and cheques issued by O.P.Nos.3 and 4.
10. The O.P.Nos.3 and 4 also filed a pursis dated 04/08/2017 stating therein that HUDCO cannot issue “No objection Certificate” until the payable amount of the concern unit is paid to HUDCO. It is further stated in that pursis that total amount of Rs.16,62,635.19 together with interest and other charges of Rs.12,47,060.50, being the proportionate liability of the concern unit, is payable to HUDCO. Thus according to O.P.Nos.3 and 4, total amount at Rs.29,09,696/- shall be payable by O.P.Nos.1 and 2 to HUDCO on or before 31/08/2017 in respect of residential unit of the present case.
11. The learned advocate of both parties also filed their respective written notes of arguments. We have also heard learned advocates of both parties at length and perused the record and proceedings of the complaint.
12. The learned advocate of the complainant reiterated the aforesaid case of the complainant as set out in the complaint and submitted that when admittedly entire consideration of the residential unit and all taxes have been duly paid in time by the complainant to O.P.Nos.1 and 2, it is necessary for them to execute sale deed of the unit by obtaining “No Objection Certificate” from O.P.Nos.3 and 4 as required under clause No.43 of the agreement to sell. He also submitted that the complaint is not barred by limitation since the cause of action for filing of complaint is continuous. The learned advocate of the complainant therefore requested that the relief sought for in the complaint may be granted. He relied on the decision in the case of Vighnaharta Builders and Projects Pvt.Ltd and another……..V/s…….Ramprasad Thakur Pardeshi and another, reported in I (2017) CPJ 403 (NC). In that case it is held that having received the sale consideration, allotted the flat and handed over possession of flat to complainant, appellant can not refuse to execute the requisite agreement in favour of the complainant.
13. On the other hand the learned advocate of O.P.Nos.1 and 2 submitted in brief that as the DRT, Mumbai has passed interim order restraining O.P.Nos.1 and 2 from alienation or disposing of entire property of Ramnath City, no direction can be given to O.P.Nos.1 and 2 to execute the sale deed. Moreover the O.P.Nos.1 and 2 already paid entire consideration of the unit described in the complaint to O.P.Nos.3 and 4 and that the O.P.Nos.3 and 4 also issued letter of release to concerned bank from which the complainant obtained the housing loan and therefore there is no question of now again obtaining any such “No Objection Certificate” from O.P.Nos.3 and 4 for execution of sale deed. Thus according to him the O.P.Nos.1 and 2 are ready to execute the sale deed of the unit in favour of complainant and hence he requested that the complaint may be dismissed.
14. On the other hand the learned advocate of O.P.Nos.3 and 4 submitted that the complaint is not maintainable as against O.P.Nos.3 and 4 as there is no privity of contract in between complainant and O.P.Nos.3 and 4 and there is also no relationship of consumer and service provider in between them. He further submitted that as per pursis referred to above, filed by O.P.Nos.3 and 4 if the payment is made by the O.P.Nos.1 and 2 to O.P.Nos.3 and 4, then only the O.P.Nos.3 and 4 can give “No Objection Certificate” for execution of sale deed and they will also file an appropriate application before the learned DRT Mumbai to facilitate the execution of sale deed of the residential unit described in the complaint. He therefore requested that the complaint as against the O.P.Nos.3 and 4 may be dismissed. He relied on the decisions in the following cases.
- Shri Rajeshwar @ Rajash Tyagi……..V/s……M/s.Audi India and Others, reported in 2016(3) CPR 762 (NC). In that case it is held that when there is no binding contract in between the parties, the complainant cannot be termed as a consumer.
- Member Secretary, Gujarat Rural Workers Welfare Board and another…….V/s……Bariya Dineshbhai Veljibhai and others, reported in 2016(1) CPR 829 (NC). It is held in the said case by Hon’ble National Commission that element of consideration is a necessary ingredient for maintainability of consumer complaint.
- Municipal Corporation Chandigarh……..V/s…..Dr.D.P.Mehta and another, reported in 2015(3) CPR 46 (NC). It is held in the said case by Hon’ble National Commission that complainant in a consumer dispute can seek compensation, only from service provider in case some deficiency on the part of service provider is established in rendering services to him.
- Rajasthan Housing Board and others……V/s…..Pratap Singh, reported in 2015(2) CPR 606 (NC). It is held in the said case by Hon’ble National Commission that a person is a consumer who buys any goods or hires or avails of any services from someone for consideration.
- Indian Oil Corporation…….V/s…..Consumer Protection Council, Kerala and another, reported in 1994(4) SCALE 144. It is held in the said case that when there as no privity of contract between the appellant and the consumer, no deficiency as defined under section 2(1)(g) of Consumer Protection Act, 1986 arises.
15. Initially we proceed to decide an issue as to whether the complaint is barred by limitation. It is not disputed that registered agreement to sell of the residential unit was entered in to between complainant and O.P.Nos.1 and 2 on 17/04/2012 and possession of the said residential unit described in that agreement has been also delivered by O.P.Nos.1 and 2 to the complainant on 31/10/2012. The present complaint is filed on 28/03/2016. It is also not disputed that entire consideration of the said residential unit has been already paid by the complainant to O.P.Nos.1 and 2, as per above agreement.
16. In the case of Hanshmukh Patel and others……..Vs/……Dr.Sunil Kumar Majhi and others, reported in 2012(4) CPR 362 (NC), the Hon’ble National Commission specifically held that non providing of facilities constitutes continuous cause of action. It is now well settled law that cause of action for filing the complaint is continuous when entire consideration of the flat is paid and possession is also delivered to the complainant, but sale deed is not executed. Hence we find that in the instant case as full consideration of the residential unit is paid and its possession is also delivered to the complainant, the cause of action is continuous for obtaining sale deed of the same by the complainant from O.P.Nos.1 and 2. In the absence of execution of registered sale-deed, the possession of residential unit is totally meaningless and without significance. So long as the O.P.Nos.1 and 2, do not discharge their basic obligation of execution of sale-deed, the cause of action continuous. Hence complaint is not barred by limitation.
17. Now considering other issues involved in the complaint, we find that O.P.Nos.1 and 2 who are the developers and builders of the residential unit described in the complaint have shown readiness to execute the sale deed of the said unit in favour of the complainant. But they have raised a plea that they are unable to execute the sale deed as interim injunction is granted by the learned DRT Mumbai, restraining alienation of mortgaged property which includes property described in the complaint. The learned DRT Mumbai passed an order on 11/11/2014 in interim application No.391/2014 filed by HUDCO against the O.P.Nos.1 and 2 and Union Bank of India, branch at Nagpur, to the effect that issue ad-interim injunction restraining the defendants (O.P.Nos.1, 2 and others) from alienating, encumbering, disposing of, parting with possession, transferring, selling, creating third party rights, title and interest of any nature whatsoever on the immovable properties described in exhibit A to C to the said original complaint. The said proceeding is still pending before the learned DRT Mumbai.
18. It is also pertainent to note that the same HUDCO which is joined to this complaint as O.P.Nos.3 and 4 is ready to file an appropriate application before the said DRT seeking appropriate relief to enable the O.P.Nos.1 and 2 to execute the sale deed of the unit described in the complaint in favour of the complainant, subject to payment of total amount of Rs.29,09,696/- including interest as on 31/08/2017 towards proportionate liability of the said unit.
19. However learned advocate of the O.P.Nos.1 and 2 relied on a letter dated 28/03/2012 written by Deputy General Manager (Law) of HUDCO to State Bank of India, branch Nagpur to show that the HUDCO has already given no objection to the purchaser availing the loan assistance. Thus according to him when HUDCO has already given said letter of no objection to the said bank, there is no question of now again obtaining “No Objection Certificate” or “No Due Certificate” from HUDCO for the purpose of execution of sale deed. However we find that the said no objection is given by HUDCO to the State Bank of India, branch Nagpur only for the purpose of availing of loan assistance by the complainant for payment of the same to O.P.Nos.1 and 2.
20. Moreover, the said no objection is given under that letter subject to four conditions mentioned therein. The second and fourth conditions are relevant and material for the purpose of deciding the dispute in the present complaint. The second condition is that the permission for final transaction of the unit and mortgage thereof in favour of the said bank will be granted by HUDCO only after full cost of the said unit has been duly received in to the aforesaid Escrow Account and after HUDCO has conveyed its decision to the said bank to discharge the mortgage pertaining to said unit, in writing. The 4th condition is that the said “No Objection Certificate” is issued without prejudice to the right and interest of HUDCO.
21. Thus the said “No Objection Certificate” issued by the HUDCO to the Bank, is of no assistance to the O.P.Nos.1 and 2 to claim that HUDCO has already given “No Objection” for all purposes including no objection for execution of the sale deed. The land of Ramnath City and residential unit described in the complaint and other units as constructed there on by O.P.Nos.1 and 2, have been already mortgaged by O.P.Nos.1 and 2 with the O.P.Nos.3 and 4 as stated in detail by the O.P.Nos.3 and 4 in their written version, by way of constructive delivery of the title deed of the said property by the O.P.Nos.1 and 2 to O.P.Nos.3 and 4. The clause No.23 of the pre-disbursal conditions of the loan agreement shows that the agreement for sale of flat to be entered in to with prospective buyers would stipulate that the project land alongwith construction thereon is mortgaged to HUDCO for raising construction loan for the project and all payment due and payable are to be deposited in Escrow Account of M/s Ramnath Pvt.Ltd., in the Bank.
22. The clause No.43 of the agreement for sale executed by O.P.Nos.1 and 2 infavour of the complainant provides as under.
“The Promoter is developing the residential complex with the loan assistance of Housing and Urban Development Corporation Limited (HUDCO) to whom it has mortgaged the entire aforesaid property towards security for loans and hence the right created herein is subject to the prior mortgage/charge of HUDCO. The final transfer of the units in favour of the Purchaser/occupant/allotee shall be made only after the entire payment of the apartment has been made by the Purchaser and the payable amount for the concerned unit is paid to HUDCO”.
23. Therefore we find that it is necessary for O.P.Nos.1 and 2 as per the said condition to pay entire payable amount of residential unit described in the complaint to HUDCO and then to obtain “No Objection Certificate” from HUDCO for final transfer of said residential unit infavour of the complainant by way of registered sale deed.
24. The O.P.Nos.1 and 2 have come with a case that they paid entire consideration of the said unit to the O.P.Nos.3 and 4. However there is no evidence to prove the same. No inference can be drawn from the evidence brought on record that the O.P.Nos.1 and 2 have paid proportionate liability or entire price of the aforesaid residential unit to the O.P.Nos.3 and 4.
25. Moreover, it is also not disputed by O.P.Nos.1 and 2 that huge amount of loan is outstanding against them towards loan obtained by them from O.P.Nos.3 and 4. It is not disputed that learned DRT Mumbai has also passed an interim order on 30/09/2015 in O.A. Nos.16/2015, 25/2015 and 134/2015 filed by the HUDCO against O.P.Nos.1 and 2 and others and thereby directed the O.P.Nos.1 and 2 and others to deposit Rs.24,44,87,690/- with the HUDCO/appellant bank within one month from the date of said order as provided under Rule 12 Clause(5) of RDDB rules, failing which the interim recovery certificate will be issued in favour of the appellant/bank. It is also not disputed that the O.P.Nos.1 and 2 have not deposited the said amount with the appellant/bank and therefore interim recovery certificate has been also issued against them.
26. We thus find that if the amount as claimed in the pursis dated 04/08/2017 filed by HUDCO in the present complaint and specified above amounting to Rs.29,09,696/- payable as on 31/08/2017 is paid by the O.P.Nos.1 and 2 to O.P.Nos.3 and 4 towards proportionate liability of the residential unit described in the complaint, then that would be adjusted in the huge amount of which the recovery certificate has been issued against the O.P.Nos.1 and 2. The O.P.Nos. 1 and 2 will not be prejudiced or will not be put to any loss if the aforesaid amount of Rs.29,09,696/- as on 31/08/2017 demanded by the O.P.Nos.3 and 4 is paid by O.P.Nos.1 and 2 to them for the purpose of obtaining “No Objection Certificate” from O.P.Nos.3 and 4 for the purpose of sale deed and for moving to learned DRT Mumbai seeking appropriate permission for the same. No cogent and plausible reason is given by the O.P.Nos.1 and 2 as to why they are not ready to pay the aforesaid amount claimed by O.P.Nos.3 and 4 towards the proportionate liability of the aforesaid residential unit. Hence we hold that the dispute can be resolved by payment of aforesaid amount claimed by O.P.Nos.3 and 4.
27. We also find that the Hon’ble National Commission in the case of G.L.Narasimham…..V/s…….B.S.Venkateshwarula and anothers, in appeal No.841/2005 decided as per order dated 28/05/2008 has very specifically observed that when the consumer has paid substantial amount and is willing to pay the balance amount at the time of execution of sale deed, and when the building has already been constructed and possession has also handed over, the consumer cannot be made to suffer because of the dispute between the builder and the owner of the property.
28. In our view the ratio of the said decision is applicable to the facts and circumstances of the present case. The dispute before the various Tribunals and Courts are in between the O.P.Nos.3 and 4 on the one side and O.P.Nos.1 and 2 on another side. The complainant is not made party to any of the said proceeding. The complainant has already performed his part of contract by paying full consideration of the residential unit alongwith all statutory taxes to the O.P.Nos.1 and 2 and he also received possession of the said unit from O.P.Nos.1 and 2 and therefore he can not be made to suffer because of dispute in between O.P.Nos.1 and 2 on one side and O.P.Nos.3 and 4 on another side.
29. Moreover, the learned counsel of the complainant has rightly relied on the decision in the case of Vighnaharta Builders and Projects Pvt.Ltd and anothers…….V/s……..Ramprasad Thakur and anothers, reported in I(2017)CPJ 403 (NC). The ratio of the said decision is applicable to the present case. Thus we hold that the O.P.Nos.1 and 2 having received entire sale consideration and having handed over the possession of the flat to the complainant then they cannot refuse execution of the sale deed of that unit in favour of the complainant. The O.P.Nos.1 and 2 cannot take advantage of their own intentional default of not repaying loan as per loan agreements to HUDCO, for raising a plea that they are unable to execute sale-deed due to action taken by O.P.Nos.3 and 4 against them under SARFAECI Act. They are bound to pay the amount claimed by the O.P.Nos.3 and 4 as stated above in their pursis towards the proportionate liability of aforesaid residential unit and then to obtain from them “No Objection Certificate” as required under the clause No.43 of the agreement to sell and then to take appropriate steps alongwith O.P.Nos.3 and 4 in getting suitable permission from the learned DRT Mumbai for execution of the sale deed. The O.P.Nos.1 and 2 cannot avoid the execution of sale deed without taking the aforesaid steps as required for execution of the sale deed.
30. We therefore hold that O.P.Nos.1 and 2 have rendered deficient service to the complainant and also adopted unfair trade practice by not taking aforesaid steps and by not executing the sale deed in favour of the complainant. Therefore we hold that the complainant is entitled to reliefs as regard execution of sale deed, compensation and cost, from O.P.Nos.1 and 2.
31. So far as the liability of O.P.Nos.3 and 4 is concerned, we find that there is no privity of contract in between complainant on one side and O.P.Nos.3 and 4 on another side. The complainant has not hired services of O.P.Nos.3 and 4 by paying any sort of consideration to them. Therefore applying the ratio of the aforesaid decisions relied on by learned advocate of O.P.Nos.3 and 4, we hold that no relationship as of consumer and service provider exists in between the complainant on one side and O.P.Nos.3 and 4 on another side, the complainant can not seek any relief against the O.P.Nos.3 and 4, I this complaint.
32. The complainant in prayer clause No.3 of the complaint sought direction to restrain the O.P.Nos.3 and 4 by way of ad-interim relief to restrain them from taking any action or from disturbing his peaceful possession over residential unit during pendancy of the complaint. However, as the complaint is being finally disposed of, there is no question of granting any interim relief as sought for. We therefore hold that the complaint as against O.P.Nos.3 and 4 is not maintainable and hence it deserves to be dismissed against them.
33. We thus hold that the complaint deserves to be partly allowed as under.
// ORDER //
- The complaint is partly allowed.
ii) O.P.Nos.1 and 2 are directed to pay to O.P.Nos.3 and 4 an amount claimed by them towards the proportionate liability of residential unit described in the complaint and then to obtain “No Objection Certificateand Declaration” free from any charge and encumbrance in respect of the residential unit described in detail in the complaint, from O.P.Nos.3 and 4 within three months from today for the purpose of execution of registered sale deed of the said flat/residential unit described in the complaint infavour of the complainant. The O.P.Nos.1 and 2 shall take appropriate steps with the assistance of O.P.Nos.3 and 4 after making aforesaid payment, within three months from today for getting necessary permission from learned D.R.T. Mumbai for the purpose of execution of registered sale deed of the residential unit described in the complaint.
iii) The O.P.Nos.1 and 2 after seeking “No Due Certificate and Declaration” as above and after seeking necessary permission from D.R.T. Mumbai as above shall execute registered sale deed of the unit described in the complaint in favour of the complainant as per registered agreement to sell dated 17/04/2012, within three months from today. The complainant shall bear expenses of execution and registration of the sale deed.
iv) The O.P.Nos.1 and 2 jointly and severally shall also pay compensation of Rs.1,00,000/- for physical and mental harassment to the complainant.
v) The O.P.Nos.1 and 2 jointly and severally shall also pay litigation cost of Rs.25,000/- to the complainant.
vi) The complaint as against O.P.Nos.3 and 4 is dismissed.
vii) Copy of the order be furnished to both parties free of cost.
