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V.S Rajaiah, S/o. V. Subbarayulu, Retired employee filed a consumer case on 20 Apr 2016 against The Branch Manager, DHFL Vysya Housing Finance Limited in the Chittoor-II at triputi Consumer Court. The case no is CC/33/2014 and the judgment uploaded on 09 May 2016.
Filing Date: 24.07.2014
Order Date:20.04.2016
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,
CHITTOOR AT TIRUPATI
PRESENT: Sri.M.Ramakrishnaiah, President ,
Smt. T.Anitha, Member
WEDNESDAY THE TWENTIETH DAY OF APRIL, TWO THOUSAND AND SIXTEEN
C.C.No.33/2014
Between
1. V.S.Rajaiah,
S/o. V.Subbarayulu,
Hindu, aged about 59 years,
Retired Employee (died),
2. V.S.Baby,
W/o. V.S.Rajaiah,
Hindu, aged about 54 years,
House Wife,
3. V.R.Ramakrishna,
S/o. V.S.Rajaiah,
Hindu, aged about 32 years,
Business,
4. V.R.Hari Krishna,
S/o. late. V.S.Rajaiah,
Hindu, aged about 30 years,
All are residing at:
D.No.20-2-2507/11, Korlagunta,
Maruthi Nagar,
Near Prasanthi School,
Tirupati,
Chittoor District. … Complainants
And
1. The Branch Manager,
DHFL Vysya Housing Finance Limited,
Plot No.9, 1st Floor, Opposite to Palani Theatre,
R.C.Road,
Tirupati,
Chittoor District.
2. The Managing Director,
DHFL Vysya Housing Finance Limited,
# 3, 2nd Floor, J.V.T. Towers,
8th A-Main Road, S.R.Nagar,
Bangalore – 560 027 … Opposite parties.
This complaint coming on before us for final hearing on 15.03.16 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Sri.B.Rajendrudu, counsel for the complainants, and Sri.K.Chakravarthy, counsel for the opposite parties, and having stood over till this day for consideration, this Forum makes the following:-
ORDER
DELIVERYED BY SRI. M.RAMAKRISHNAIAH, PRESIDENT
ON BEHALF OF THE BENCH
This complaint is filed under Sections-12 and 14 of C.P.Act 1986, by the complainants 1 and 2 for the following reliefs 1) to direct the opposite parties jointly and severally to pay an amount of Rs.14,40,000/- with interest at 12% p.a. from the date of complaint, till realization, for not releasing the balance of loan amount and for the medical expenses for mental and physical agony caused by the opposite parties, 2) to pay the costs of the complaint and 3) to pass such order or orders as the Forum deems fit and proper in the circumstances of the case.
2. The averments of the complaint in brief are:- that on 08.09.2008, complainants availed house loan of Rs.11,85,000/- from LIC Housing Finance Limited, for construction of house at Korlagunta, Maruthi Nagar, Tirupati. As per the terms and conditions of the agreement, complainants have to pay Rs.16,661/- as E.M.I. Accordingly, complainants have paid Rs.1,92,019/- to LIC, balance amount of Rs.9,92,981 due to be paid, loan term is 10 years, sanction letter dt:08.09.2008 and payment receipts issued by LIC dt:17.02.2010 are filed herewith.
3. That both the complainants 1 and 2 made an application to opposite parties for sanction of house loan of Rs.30,00,000/- for further construction of the same house at Korlagunta, but the opposite parties have sanctioned only Rs.20,00,000/- and gave passing offer letter dt:25.07.2012 on condition that a) opposite parties themselves will discharge the outstanding house loan of complainants with LIC in a sum of Rs.9,92,981/-, b) that they will take the documents pertaining to vacant site of complainants hypothecated to LIC along with salary certificate of the complainant given as security at the time of taking loan with LIC, c) then only opposite parties will release the balance amount of Rs.10,07,919/- to the complainants.
4. On believing the words of opposite parties, complainants have agreed for availing the loan. Later on 30.08.2012 opposite parties have paid a sum of Rs.9,92,981/- to LIC Housing Finance Ltd., by sending a letter dt:30.08.2012 to LIC and took all the documents referred to above from LIC. Opposite parties directed the complainants to repay the loan amount within a period of 10 years with EMI of Rs.11,585/- for discharging the entire loan amount of Rs.20,00,000/- by submitting the post dated cheques for security. Opposite parties promised that they will release the balance amount of Rs.10,07,019/- within one week by their letter dt:25.07.2012. Believing the opposite parties version, complainants have given post dated cheques and salary certificates of their sons Hari Krishna and Ramakrishna.
5. That on 22.09.2012, opposite party No.1 sent a letter to complainants stating that the opposite parties have taken a group policy from M/s.Chola MS General Insurance, covering the complainants account for a value of Rs.20,00,000/- for a period of 01.08.2012 to 31.07.2013 under policy No.2130/00171855/000/00 dt:20.09.2012, with premium amount of Rs.500/-.
6. On 08.04.2013 opposite party No.1 sent another letter stating that complainants have availed housing loan of Rs.20,00,000/- and the rate of interest thereon was reduced by 0.20% from 13.8% p.a. with effect from 01.04.2013, that since 17.10.2012 complainants are paying EMI regularly, till the date of complaint and paid a total sum of Rs.2,53,914/- out of half of the loan amount of Rs.9,92,981/-, Though post dated cheques given to opposite parties for discharging loan amount of Rs.20,00,000/-, as per sanction letter dt:25.07.2012, loan No.1717, till the date of complaint i.e. 24.07.2014, opposite parties did not release the balance house loan amount of Rs.10,07,019/-, though offer letter is given on 25.07.2012 and the complainants also paid Rs.500/- towards premium amount of the policy with M/s.Chola MS General Insurance, opposite parties did not give the balance of loan amount of Rs.10,07,019/- to the complainants to complete the construction of the house. Due to the negligence and deficiency in service on the part of the opposite parties, complainants were forced to borrow Rs.5,00,000/- from P.Krishnaiah on 31.07.2012 and borrowed Rs.5,00,000/- from B.Guruswamy on 10.09.2012, under promissory notes with interest at 48% p.a. and paying interest of Rs.40,000/- p.m., like that, so far complainants have paid Rs.8,40,000/- to their creditors. Opposite parties harassing the complainants by not releasing the sanctioned amount though collected installments. 2nd complainant is suffering “Carcinoma Tongue” etc. and underwent surgery, chemotherapy and radio therapy at OMEGA hospitals, Hyderabad, and spent Rs.5,00,000/- for medical expenses. It is due to the negligence on the part of the opposite parties, she suffered lot of mental and physical agony, if the opposite parties could release the amount, 2nd complainant may not suffer from such health problems. Hence the complaint.
7. Opposite party No.1 filed written version on 19.11.2014 and the same is adopted by opposite party No.2. They denied the allegations in the complaint parawise and further contended that complainants 1 and 2 have approached the opposite parties for financial assistance and the opposite parties have sanctioned Rs.20,00,000/-, out of the said amount, opposite parties have discharged outstanding loan amount of complainants for a sum of Rs.9,92,281/- with LIC Housing Finance Ltd. Accordingly, opposite parties have released the part of loan amount of Rs.2,81,923/- vide cheque No.900959 dt:30.08.2012 and Rs.6,97,274/- vide cheque No.900960 dt:30.08.2012 into another account No.170480156 of complainants and also paid Rs.13,784/- to ICICI Prudential Life Insurance (policy in the name of R.Harikrishna, son of complainants.
8. Opposite parties further submitted that as per Clause-5 of the terms and conditions of the offer letter, the loan will be disbursed in lump sum or in suitable installments (not exceeding 3 installments), as per the decision of the opposite parties considering the need and progress of the construction, that on the disbursement of the 1st installment loan amount, the complainants did not approach the opposite parties for remaining loan amount. The opposite parties also made several calls to complainants for releasing the balance loan amount, but the complainants did not respond properly. Atlast, about 15 months after disbursement of the 1st installment, the complainants approached opposite party No.1, for releasing further loan amount. Then the opposite parties went to the property for inspection and found that complainants constructed the ground floor for commercial purpose, as against the residential building, as agreed. Since the complainants executed the letter dt:30.08.2012, that out of the loan amount, they will construct residential building only, therefore, the interest is calculated on the basis of residential building purpose. The complainants violated the terms and conditions. That the complainants themselves making cement bricks for construction of the building. At the time of sanctioning the loan, complainants represented that their son is doing job at Kuwait and considering his employment and salary, opposite parties sanctioned the loan. If any change in employment or loss of job, it should be informed to opposite parties. The opposite parties reserve the right to alter / revise any of the terms. In such an event, opposite parties came to know that the complainants son resigned to his employment at Kuwait and complainants also admitted the same. Taking into consideration the events and circumstances, opposite parties have restricted the loan to Rs.9,92,981/- from Rs.20,00,000/- and fixed EMI at Rs.23,107/- for a period of 5 years, payable from June 2014 and requested the complainants to send post dated cheques for repayment of the loan amount vide letter dt:22.05.2014. Thereafter, complainants got issued notice on 04.06.2014, for which opposite parties gave reply on 18.06.2014 and the same was served on the Advocate of complainants on 25.06.2014. Complainants got issued another notice dt:26.06.2014 with same allegations to that of allegations in the earlier notice, that the opposite parties also got issued reply on 09.07.2014. Opposite parties are not responsible for the debts incurred by the complainants or for the chronic ill-health of 2nd complainant. There is no consumer and service provider relationship between the complainant and opposite parties. There is no deficiency in service on the part of opposite parties. Complaint is devoid of merits and it is frivolous and vexatious and prays the Forum to dismiss the complaint with costs.
9. 1st complainant has filed chief affidavit as P.W.1 and got marked Exs.A1 to A24. The Branch Manager of 1st opposite party filed his chief affidavit as R.W.1 and got marked Exs.B1 to B9. Both parties have filed their respective written arguments.
10. During the pendency of the case, 1st complainant V.S.Rajaiah, died on 01.05.2015, as such the complainants 3 and 4, were brought on record as legal heirs, as per orders in I.A.No.29/2015 dt:22.06.2015.
11. Now the points for consideration are:-
(i). Whether the opposite parties are guilty of deficiency in service?
(ii). Whether the complainants are entitled to the reliefs sought for?
(iii) To what relief?
12. Point No.(i):- before answering this point, the admitted facts are as follows – that the complainants 1 and 2 availed house loan of Rs.11,85,000/- from LIC Housing Finance Ltd. on 08.09.2008, out of which the complainants paid a sum of Rs.1,92,019/- and outstanding loan is Rs.9,92,981/-, that the complainants approached the opposite parties for sanction of loan of Rs.30,00,000/-, but the opposite parties admittedly sanctioned only Rs.20,00,000/- vide sanction letter dt:25.07.2012, that the opposite parties have paid the outstanding balance amount of Rs.9,92,981/- of the complainants with LIC Housing Finance Ltd. on 30.08.2012 out of the sanctioned house loan of Rs.20,00,000/-. The opposite parties have paid the complainants only a sum of Rs.9,92,281/- by way of discharging the loan amount due to the LIC, thereafter, balance of loan amount of Rs.10,07,019/- was not released to the complainants so far. Reasons for non-releasing of balance of house loan amount of Rs.10,07,019/- to the complainants are that 15 months after releasing of Rs.9,92,981/- to LIC towards discharge of outstanding loan, the complainants approached opposite party No.1 for release of the balance amount, 2 months thereafter the opposite party officials have inspected the building of the complainants under construction and found that the ground floor of the house was constructed for commercial purpose; another ground is that the complainants themselves were manufacturing the cement bricks for construction of the house; another ground is that the son of complainants resigned for his job at Kuwait and returned to India. Since the opposite parties have sanctioned the loan for house construction with interest basing on residential construction purpose; As the complainants have constructed ground floor for commercial purpose, the interest is to be levied on the commercial basis, that is why the opposite parties have not released the balance amount of house loan and restricted the loan amount only for Rs.9,92,981/- and directed the complainants to clear-off the loan within 5 years and installment is raised to Rs.23,107/- p.m. payable from June 2014, till then installment at Rs.11,585/- was collected for the total loan amount of Rs.20,00,000/-.
13. At this juncture, it is pertinent to note that when the loan was sanctioned to the complainants on 25.07.2012 in a sum of Rs.20,00,000/- by the opposite parties, they have released only Rs.9,92,981/- by way of discharging outstanding loan amount of complainants with LIC on 30.08.2012. The opposite parties did not assign any reasons as to why the balance amount was not released for about 2 years. If the loan is not sanctioned as required by the complainants, it is different matter, the opposite parties lured the complainants by sanctioning house loan of Rs.20,00,000/- under the sanction letter dt:25.07.2012, but failed to release the amount, so as to complete the construction of the house of the complainants. The complainants were make believe that the opposite parties will release the amount sanctioned, so that they can complete the construction of the house, but due to negligence or unfair trade practice on the part of the opposite parties, the complainants were forced to borrow some amounts from 3rd party in order to complete the construction of their house, even after construction, though the complainants filed the municipal tax receipts in respect of their newly constructed house and requested the opposite parties to release the balance of sanctioned amount, the opposite parties failed to do so. This is nothing but misleading the complainants / consumers / customers of the opposite parties by sanctioning certain amounts on paper and avoiding to release the amounts, so as to fulfill the construction of the house. The opposite parties have given some reasons viz., that the son of complainants, who was working at Kuwait by the date of sanction of loan, was resigned to his employment at Kuwait and returned to India, but no evidence is placed before the Forum to substantiate their version, on the other hand, in the written version as well as chief affidavit filed by the opposite parties, they stated that the complainants submitted in para.10 of the complaint that their son resigned the job at Kuwait and returned to India, but nowhere in the complaint, such averment is found place. Ex.A3 is the letter given by the opposite parties dt:22.05.2014, that they have sanctioned loan of Rs.20,00,000/- for construction of house at Tirupati, that the opposite parties have released part of loan amount of Rs.9,92,981/- on 30.08.2012, that the construction of the house was not completed by the complainants In this regard, the opposite parties have restricted their loan amount to Rs.9,92,981/- and starts the EMI of Rs.23,107/- and tenure is for 5 years from June 2014, that they will be constrained to initiate suitable action in case of further delay and asked the complainants to send 25 post dated cheques for house loan repayment. If the installment @ Rs.23,107/- p.m. is calculated for 10 years (as contended by complainants), it will be sufficient to discharge the loan of Rs.20,00,000/- fully. The opposite parties simply stating that they have released Rs.9,92,981/- part of the loan amount to the complainants, but no single pie is paid to the complainants but the said amount was towards discharging of the outstanding loan of complainants with LIC. But the letter under Ex.A3 shows as if they have released Rs.9,92,981/- to the complainants for the construction of the house. Ex.A4 another letter dt:25.09.2012 shows that complainants have availed the loan of Rs.20,00,000/-, that the complainants are the privileged customers of the opposite parties, therefore, they have obtained group policy from M/s. Chola MS General Insurance, covering the account of complainants for the value of Rs.20,00,000/- and also demanded to pay the premium of Rs.500/- towards the policy, that was also collected from the complainants. But what happened to the said policy is not mentioned anywhere in the written version and evidence of the opposite parties. Under Ex.A5, the rate of interest was reduced by 0.20% as against 13.8% p.a. with effect from 01.04.2013. The contents of the letters under Ex.A3 and Ex.A5 are contrary to each other because the opposite parties have not inspected the building till 2014.
14. The opposite parties have filed the photos of the building under construction and it is found that the ground floor appears to be meant for commercial purpose. The opposite parties being the financier, can claim the interest on commercial basis but instead they neither released the balance of loan amount of Rs.10,07,019/- nor calculated commercial rate of interest, but they are collecting the installment amounts regularly. This is nothing but making the customers / consumers to suffer not only financially but also mentally, and also the opposite parties forced the complainants to approach the 3rd parties for loans for completing the construction of the building. Whether the complainants are manufacturing the cement bricks themselves for the construction of the building or purchasing the bricks from elsewhere is immaterial for the opposite parties. Considering all the aspects discussed supra, we are of the opinion that the opposite parties are guilty of deficiency in service and also adopted unfair trade practice. Accordingly, this point is answered.
15. Point No.(ii):- in order to answer this point, the complainants have to discharge their burden, that they have spent a sum of Rs.14,40,000/-. That apart the complainants themselves mentioned in the complaint that 2nd complainant was suffering from chronic disease. The word chronic disease itself shows that it was not due to non-releasing the loan amount The promissory note dt:31.07.2012 shows that one P.Krishnaiah, financed Rs.5,00,000/- to the 1st complainant, another promissory note dt:10.09.2012 under which B.Guruswamy, financed a sum of Rs.5,00,000/- to the 1st complainant, purpose in both the promissory notes are that the said amounts are borrowed for the construction of the house. Though the discretion of the financier either to release the loan amount or not is with them, such decision should be taken before sanctioning the loan. After sanctioning the loan of Rs.20,00,000/-, non-releasing of the balance of loan amount already sanctioned denotes, bad intention of the opposite parties, though they were collecting the installments of Rs.23,107/- towards the installments for entire loan amount of Rs.20,00,000/-, the opposite parties are bound to release the balance amount and continue to collect the installments as mentioned, till the said amount is cleared-off, but they need not to pay the medical expenses of 2nd complainant. So far as this point is concerned, the complainants are not entitled to recover the medical expenses of 2nd complainant in a sum of Rs.14,40,000/- from the opposite parties. Under the above circumstances, we are of the opinion that the complainants are not entitled for the reliefs sought for, so far as medical expenses are concerned. If the complainants violated the terms and conditions of the loan agreement by deviating the mode of construction from residential to commercial, at the best, the opposite parties can claim the rate of interest on commercial basis, but they cannot suo moto restrict the amount and avoid the payment of sanctioned loan, depriving the complainants from their right of constructing the house.
16. Point No.(iii):- in view of our discussion on points 1 and 2, we are of the opinion that the opposite parties are guilty of deficiency in service and also unfair trade practice as well. Therefore, the complainants are entitled to compensation for the deficiency in service. Further, the construction of the building is admittedly completed, they may not be in necessity to release the balance of loan amount of Rs.10,07,019/-. Accordingly, the complaint is to be allowed.
In the result, complaint is partly allowed holding that the opposite parties are guilty of deficiency in service and also unfair trade practice as well and the complainants are entitled to the compensation. Therefore, the opposite parties are directed to pay compensation of Rs.1,00,000/- (Rupees one lakh only) to the complainants with interest at 9% p.a. from 30.08.2012, till realization and also directed to pay Rs.2,000/- (Rupees two thousand only) towards costs of the litigation. The opposite parties are further directed to comply with the order within six (6) weeks from the date of receipt of copy of this order.
Dictated to the stenographer, transcribed and typed by him, corrected and pronounced by me in the Open Forum this the 20th day of April, 2016.
Sd/- Sd/-
Lady Member President
APPENDIX OF EVIDENCE
Witnesses Examined on behalf of Complainants.
PW-1: V.S. Rajaiah (Chief Affidavit filed).
Witnesses Examined on behalf of Opposite Parties.
RW-1: K. Naveen Kumar (Chief Affidavit filed).
EXHIBITS MARKED ON BEHALF OF THE COMPLAINANTs
Exhibits (Ex.A) | Description of Documents |
Original copy of Loan order copies send by the LIC Housing Finance Company, Hyderabad to the complainants. Dt: 08.09.2008. | |
Original copy of Loan payment receipt issued by the LIC, Tirupati to the complainants. Dt: 17.02.2010. | |
Served photo copy of notice send by the opposite party No.1 to the complainants. Dt: 22.05.2014. | |
Photo Copy of letter sent by 1st opposite party to the Complainants. Dt: 22.09.2012. | |
Photo Copy of letter sent by the 1st opposite party to the complainants. Dt: 08.04.2013. | |
Photo Copy of ledger account of complainants issued by the Andhra Bank, Tirupati and ICICI Bank, Tirupati. Dt: 26.05.2014 & 31.12.2013. | |
Original Medical Certificate issued by the Omega Hospital, Hyderabad to the 2nd complainant. Dt: 21.01.2013. | |
Photo copy of Discharge summary of the 2nd complainant issued by the Omega Hospital, Hyderabad. Dt: 21.01.2013. | |
Original copy for Demand Notice for payment of House Tax D.No.20-2-507/J1 Dt: 08.03.2013. | |
Photo Copy of Property tax receipt of complainant’s house D.No.20-2-507/J1 issued by the Tirupati Municipal Authorities. Dt: 23.04.2013. | |
Photo Copy of Property tax receipt of complainant’s house bearing D.No.20-2-507/J1. Dt: 28.12.2013. | |
One original Photo of complainant’s house bearing Door No.20-2-507/J1. | |
Photo copy of Promissory note executed by the 1st complainant in favour of P.Krishnaiah. Dt: 31.07.2012. | |
Photo copy of promissory note executed by the 1st complainant in favour of B.Guruswamy. Dt: 10.09.2012. | |
Photo copy of passport of complainant’s son V.Rama Krishna. Dt: 08.04.2007. | |
Office copy of the legal notice issued by the complainants to the opposite parties. Dt: 28.06.2014. | |
Two Postal acknowledgement cards. Dt: 30.06.2014. | |
Served copy of the reply notice send by the opposite parties to the complainants. Dt: 09.07.2014. | |
Copy of Intimation to the letter send by the DHFL Viysya Housing finance limited to the LIC, Tirupati. Dt: 30.08.2012. | |
Original Photo of three storied R.C.C Building of complainants filed on behalf of complainants. | |
Original Medical certificate issued by the “ Manas Hospital” Tirupati to the 1st complainant depression filed on behalf of the complainant. Dt: 21.10.2014.
| |
Original Housing Tax Receipt issued by the Tirupati Municipal corporation for loan House of complainant. Dt: 23.04.2013. | |
Original House property Tax Receipt of Complainants house issued by the Tirupati, Municipal Corporation filed on behalf of the complainant Dt: 28.12.2013. | |
Original Notice sent by the opposite Party No.1 to the Complainants filed on behalf of the complainant. Dt: 22.05.2014. |
EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTYs
Exhibits (Ex.B) | Description of Documents |
1. | True copy of Loan Sanction Offer Letter. Dt: 25.07.2012. |
2. | Photo copy of Loan Agreement executed by the complainants in favour of Opposite Party. Dt: 30.08.2012. |
3. | Photo copy of Memorandum of Deposit of Title Deeds executed by the 2nd Complainant in favour of Opposite Party. Dt: 31.12. 2012. |
4. | Undertaking Letter executed by the Complainant No.1 in favour of Opposite party No.1. Dt: 30.08.2012. |
5. | Photo copy of Approved plan and Proceedings issued by the Commissioner, Tirupati Municipal Corporation for Construction of Residential Building. Dt: 15.06.2010. |
6. | Served copy of Legal Notice issued by the Complainants to the Opposite parties. Dt: 04.06.2014. |
7. | Office copy of Reply Notice issued by the Opposite parties. Dt: 18.06.2014. |
8. | Postal Acknowledgement from the Advocate for complainants. Dt: 26.06.2014. |
9. | Photos and C.D. |
Sd/-
President
// TRUE COPY //
// BY ORDER //
Head Clerk/Sheristadar,
Dist. Consumer Forum-II, Tirupati.
Copies to:- 1. The complainants.
2. The opposite parties.
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