This Appeal questions the correctness of the order dated 20.01.2016 passed in Consumer Complaint No.71 of 2013 by the State Consumer Disputes Redressal Commission, Rajasthan.

2. Heard learned Counsel for the Appellant and learned Counsel for the Respondent/Complainant.
3. The complaint was filed by the Respondents alleging deficiency in service against the Bank as well as the developer in respect of Flat No.237 booked by the Complainant in a project developed by the Respondent No.2 builder M/s Amay Home Services Ltd. A sum of Rs.1 lakhs was advanced on 16.07.2008 and the flat was booked where after the Respondent No.1 Complainant applied for a loan from the Appellant that was sanctioned on 11.08.2008. The amount of loan sanctioned was Rs.7 lakhs for which a home loan was applied.
4. An agreement was entered into between the builder Respondent No.2 and the Complainant on 28.08.2008 and a copy of the said flat-buyer agreement has been filed on record which contains all the terms and conditions including the payment schedule of instalments. The said schedule which is Annexure 2 to the agreement is extracted hereinunder:-

Payment Schedule of Instalments

5. It is therefore obvious that it was a construction linked plan and the payments were to be made accordingly. The property was under hypothecation and was part of a tripartite memorandum of understanding dated 13.09.2008. The said memorandum of understanding is also part of the record and has been duly signed by the Complainant, the builder as well as the Bank. Thus, all the three parties to this litigation are signatories to the said memorandum.
6. Learned Counsel for the Appellant has invited the attention of the Bench to advance his submissions towards clause 1 to 8 that are extracted hereinunder:-

“1. Inconsideration of the Bank, solely at the request of the Builder and the Purchaser, agreeing to release 80% of the sanctioned 85% of the loan amount being the financial assistance agreed to be provided by the Bank in terms of each of the agreements entered into by the purchaser and the Builder, the Builder undertakes as under:

a) That the Builder shall bear the interest on the said loan amount at the agreed rated as per the Bank's sanction on the due dates without demur.

b) The Builder is aware that the non-payment of such interest on the due dates shall be treated, as an event of default and the Bank shall have the right to call the said amount so disbursed together with interest forthwith, irrespective of the fact that the loan was sanctioned to the Purchaser.

C) The Builder agrees that in such an event the Builder, and not the Purchaser, shall be treated as the principal debtor.

d) The Builder agrees and undertakes to complete the Project on the due dates and shall without fail hand over the units to the intending Purchaser on the due dates.

2. The Purchaser agrees that the Purchaser shall be liable to service and repay the loan once the offer of possession or 18 months which ever is earlier given to the Purchaser.

3.Notwithstanding what is stated herein the Bank shall not be responsible for any delay in offer of possession of the premises on the due dates and the Bank reserves the right to demand the payment of interest from the Purchaser and/or the Builder in case of delay.

4.The Purchaser confirms that he/she has no objection to the above arrangement and further undertakes and confirms that he/she is aware that none of these provisions under this MOU shall release him or her from the liability to repay the loan together with interest in terms of the sanction letter no.____dated_________and/or the loan agreement no._____dated_____.

5. The Builder undertakes and confirms to the Bank that the interim period between the disbursement of the loan and the handing over of possession of the Project unit to the Purchaser shall not be more than 18 months being the maximum period. In the event of any delay with regard to the offer of possession to the Purchaser the interest at the rate of____ % p.a. shall be payable by the Builder to the Bank till the date of offer of possession to the Purchaser.

6. The Builder undertakes and confirms to the Bank that it shall submit true and certified copies of all documents related to the Project to the Bank and shall keep the Bank informed of the Progress of the project unit at all times.

7. Prior to handing over of possession of the project unit to the purchaser the Builder shall obtain an NOC from the bank and shall note the lien of the Bank on the project unit handed over to the Purchaser.

8. This MOU shall be read in conjunction with the Housing Loan Agreement dated_____ and sanction letter no._____and dated______. In the event of any conflict between this MOU and the said Housing Loan Agreement or the said Sanction Letter the interpretation, which is beneficial to the Bank, shall prevail.”

7. The Project was not completed and the builder defaulted in the payments of the EMIs. After a lapse of 18 months, the Bank alleged that the Complainant borrower had defaulted to repay the loan as such the loan was recalled and the Bank has filed a suit for recovery being Original Suit No.44 of 2011 before the Competent Civil Court. It is stated at the bar that the said suit is still pending.
8. The Complainant Respondent No.1 aggrieved field Original Complaint No.71 of 2013 alleging that the Bank had also defaulted and was in deficiency of service inasmuch as it had released the entire amount of loan to the builder contrary to the construction linked payment plan and the builder walked away with the money leaving the entire project in lurch. The contention of the Complainant was that similar complaints which had been filed in respect of the projects launched by the Opposite Party No.2 had been allowed by the State Commission and all such similarly situated Complainants had been extended the benefit of the reliefs as claimed by them where it was categorically found that the Bank, who is the Appellant herein, had acted contrary to norms as a result whereof the developer had absconded without completing the project and had walked away with the money loaned to the Complainants. It was held that the Bank was deficient in services and it also amounted to an unfair trade practice by having disbursed the amount of the loan to the builder in advance that was sanctioned to the flat buyers without any security and contrary to the terms and conditions agreed between the parties.
9. The Bank aggrieved by the orders passed by the State Commission filed several appeals and the entire bunch was dismissed with a cost of Rs.25,000/- each on the Bank. The statutory amounts deposited at the time of the filing of the appeal was also directed to be transferred to the Complainants in all the cases. The order passed in the appeals alongwith the order passed by the Apex Court therein was placed before this Bench on 15.05.2024 when the following order was passed:-

“DATED:15.05.2024

ORDER

Heard learned Counsel for the Appellant and Respondent No.-1. Respondent No.-2 has chosen not to put in appearance and has been proceeded ex-parte vide order dated 31.07.2018.

Learned Counsel for Respondent No.-1 has cited an Order passed by this Commission in First Appeal No. 117 of 2015 dated 30.05.2018.

During the course of the hearing it transpires that the said Order was assailed in Special Leave Petition No. 23946 of 2018.

As per the information on the internet the said Special Leave Petition has been disposed of on 16.01.2024 by the following Order:

“ 1.    Learned Counsel for the petitioner states that during the pendency of the present petitions, the petitioner has arrived at a settlement with all the private respondents and seeks leave to withdraw the present petitions.

2.       In view of the statement made hereinabove, leave as, prayed for is granted.

3.       The Petitions for Special Leave to Appeal are disposed of as not pressed.”

It is thus prima facie apparent that the Bank has settled all the disputes before the Apex Court. The bank may explore the possibility of settlement in this case as the matter seems to have been finally disposed of with the withdrawal of the Special Leave Petition in terms of the settlement. In the event the bank proposes to do so it may accordingly be communicated to the learned Counsel for Respondent No.-1.

In case Respondent No.-1 receives any offer of settlement in between it is open to for them to respond to the same. In the event any such settlement arrived at the same may be intimated to the Bench.

List for directions on 01.07.2024.”

10. It was noticed therein that since the Bank had settled the matter with all the other complainants therein and the Special Leave to Appeal before the Apex Court was disposed of as not pressed, this case may also be settled accordingly.
11.  Having regard to the aforesaid developments with regard to the same matter, the case had been adjourned calling upon the learned Counsel for the Appellant Bank to indicate if the Bank proposed any settlement or otherwise in this case as well, as it stood on the same footing.
12. Today, the matter was heard and the learned Counsel for the Bank proceeded to argue the matter on merits as there were no instructions regarding any offer of settlement.
13. On the other hand learned Counsel for the Respondent Complainant urged that they had been to the Bank requesting them to settle the matter but instead it was the Bank which was asking for some more amount. The sum and substance of these exchanges clearly indicate that there was no settlement offered by the Bank nor was it reached by the Respondents and hence the matter had to be finally heard today.
14. Learned Counsel for the Appellant has urged that the terms of the contract are binding and inviting the attention of the Bench to the home loan agreement, urged that the borrower is obliged to repay the loan as per the terms of the memorandum of understanding quoted hereinabove upon the expiry of 18 months, and it is this phrase which has been completely overlooked by the State Commission. He therefore submits that the impugned order is vitiated as the obligation for repayment is not only dependent upon the offer of possession but also on the expiry of 18 months whichever is earlier and hence the conclusion of the State Commission is erroneous.
15.  Learned Counsel submits that so far as the Bank is concerned there is no deficiency nor is it liable in any way, and consequently the impugned order travels beyond the jurisdiction under the Consumer Protection Act 1986 as the Complainant in the strict sense is neither a consumer nor the grant of loan, the recovery whereof has been undertaken falls within the definition of services. The submission in essence is that if there is a breach of agreement by the borrower in respect of repayment of loan, this nowhere falls within the scope of any unfair trade practice or deficiency of service so as to clothe the Consumer Forum to entertain such a complaint. He has vehemently urged that even otherwise if the builder has failed to offer possession then no liability can be transferred on the Banker that has simply extended a loan to the Complainant which is recoverable under the terms of the contract. The complaint was filed as a counter measure to the recovery suit already filed by the Bank, and long thereafter, and hence such a litigation should not have been encouraged by the State Commission under the Consumer Protection Act 1986.
16. Learned Counsel for the Respondent once again invited the attention of the bench to the orders passed by this Commission in similar matters as referred to hereinabove.
17. Even though the instant case is no different from the similar cases that have already been decided, yet it is evident on the facts of this case that the loan amount in its entirety was disbursed almost in advance by the Bank. Learned Counsel for the Appellant Bank invited attention of the Bench to the statement of accounts filed as Annexure A13 to point out the disbursements made at intervals. Learned Counsel however could not match the disbursements with the payment schedule of instalments as quoted hereinabove or explain the manner of disturbment. The entire amount seems to have been disbursed in the same fashion as has been noted by this Commission in its decision dated 30.05.2018 in the batch of appeals referred to above. The batch which           was decided consisted of several appeals, the leading being First Appeal No.117 of 2015 IDBI Bank Ltd. Vs. Prakash Chandra Sharma & Anr. as well as the other connected matters. In those cases also, a similar loan recall notice was witnessed by all the Complainants and it was the same nature of the tripartite agreement as involved herein that was discussed in detail, and a Bench of this Commission held that the Bank had clearly defaulted and was deficient in its services by disbursing off the loan in advance and had also hastily approved the ADF without even taking any security for the disbursed amounts from the builder. The Commission discussed the RBI guidelines on housing loans, the brochure published by the builder jointly issued under the adage of the IDBI Bank and then held in paragraph 20 to 25 as follows:

“20. A bare glance at the Brochure makes it apparent that it conveys to the public at large that the project had been approved and financed by IDBI Bank. It was widely advertised that payment of EMIs would begin only after the purchaser takes possession of the subject flat. In view of the Brochure and the promises made to the purchaser, the act of the Bank in demanding from the Complainant the entire amount without possession being offered, amounts to unfair trade practice. From the material on record, it is evident that the Bank first induced the Complainants to get their units financed from it, with an assurance that the Complainants need not pay any EMI or interest on the loan disbursed in advance by the Bank to the Developer, till the possession of the units is offered to them. It can also be seen from the record that in the Tripartite Agreement the Developer is stated to be a ‘reputed coloniser’ and the MOU describes the Developer as a reputed one with a strong market position.

21. The Bank itself supplied the following information on 04.07.2013, under RTI, that ADF is given to a builder of good standing which is assessed on the following parameters:

1. Number of years in business.

2. Track record of the Builder in terms of number of projects completed, its timely completion and also number of on-going projects.

3.Credibility and financial standing of the builder (company/firm/partner/promoters).

4. Promoters contribution in individual project.

5. Quality, marketability of project, total built up area sold built up area of the ongoing project.

6. Market feedback.

It is only in special cases where the builder is of sound repute and enjoys good market credit that the Home Loan amount is disbursed in advance. We find force in the contention of the learned counsel representing the Complainants that the genesis of the entire dispute lies in the advance disbursement of the loan amount by the Bank to the Developer against the regulations stipulated by RBI. It is further interesting to note that the Complainants through RTI obtained the information that the land over which project in question was supposed to be executed was hypothecated with Rajasthan Finance Corporation and the Bank did not even bother to do the basic home work/background check or this aspect. Therefore, it can be safely concluded that it was fraudulently misrepresented in Clause 8 of the Tripartite Agreement that the Builder has assured that it had a clean/clear title to the lands/flats in question and the same can be freely transferred/registered and is not subject to any lien or encumbrance. Needless to add, had the Bank got the land of the project hypothecated/mortgaged with it a collateral security, the recovery of the loan amount from the Developer would not have presented any problem to all concerned, including the Complainants.

22. The act of the Bank in approving the ADF without even taking any security for the amounts to be disbursed, clearly establishes that the Bank had failed miserably in complying with the RBI Regulations, while sanctioning ADF to the Developer, who has abandoned the Project.

23. At the cost of repetition, it needs little emphasis that when the Complainants got issued legal notice, referring to the terms of the Special Payment Plan and the fact that the Developer had absconded without completing the project, the conduct of the Bank, in including the Complainants name in the list of defaulters of CIBIL thereby, despite having disbursed the entire amount in advance to the Developer without following the RBI regulations, undoubtedly caused mental agony, inconvenience and hardship to the Complainants. It amounts to not only an act of complete deficiency of service on its part to the Complainants, it amounts to unfair trade practice as defined in Section 2(r) as well.

24. In view of the aforegoing discussion, we are of the considered opinion that there is no illegality or infirmity in the impugned orders passed by the State Commission. Consequently, all the Appeals are dismissed with costs of Rs. 25,000/- in each of the Appeals.

25. The statutory amounts deposited at the time of filing of the Appeals shall stand transferred to the Complainant/Respondent No. 1 in each case.”

18. The Bank went up in appeal before the Apex Court and then withdrew its appeals stating that it had already settled the disputes with all the Complainants. The order of the Apex Court has already been quoted hereinabove and hence the judgment of this Commission quoted hereinabove attained finality.
19. Since the present case falls squarely within the ratio of the decision previously rendered on the same issues, there is no reason or any other argument advanced on behalf of the Appellant to take a different view. The State Commission in the impugned order has clearly come to this finding that the Bank had clearly defaulted and that all such flat buyers had been duped in a similar fashion as their loan was sanctioned that was disbursed in advance facilitating the builder to abscond. In the absence of any distinction on similarity of facts or law, the Bank had been called upon to take a call but as is evident from the stand taken by the learned Counsel for the Appellant, the Bank has declined to go ahead with any proposal as indicated in the orders dated 15.05.2024, 01.07.2024.
20. There is therefore no option left but to dismiss this appeal for all the reasons aforesaid with costs of Rs.25,000/-as was imposed in the other cases decided in similar appeals on 30.05.2018 and referred to hereinabove.
21. Accordingly, the present Appeal lacks merit and is accordingly dismissed with Rs.25,000/- as costs payable by the Bank to the Respondents.