Kerala

StateCommission

A/15/889

DEWAN HOUSING FINANCE CORPORATION - Complainant(s)

Versus

TINARAJU AND APPLE A DAY PROPERTIES - Opp.Party(s)

22 Feb 2019

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

 

APPEAL NUMBER 889/2015

JUDGMENT DATED : 22.02.2019

 

(Appeal filed against the order in CC.No.213/2012

on the file of CDRF, Ernakulam)

PRESENT

SRI.T.S.P.MOOSATH                                : JUDICIAL MEMBER

SMT.BEENA KUMARI.A                   : MEMBER

 

APPELLANT

        Dewan Housing Finance Corporation Limited, Palarivattom,

Pin – 682025 formerly known as First Blue Home Finance Limited, Formerly known as Deutsche Post Bank Home Finance Limited, Door.No.38/696-E, 3rd Floor, Tharum Towers, S.A.Road, Kochi – 682016 Rep.by its Regional Legal Manager, Vipindas.K, S/o.Purushothaman, Regional Legal Manager,-Kerala DHFL, 1st Floor, K.M.M.Building, Near Hotel Renaissance, Palarivattom Junction, Kochi- 682025

 

        (By Adv.Sri.Jacob Chacko & Adv.Sri.Manoj.P.G)

 

 

VS

RESPONDENTS

 

  1. Tina Raju, W/o. Sanjeev Mohan, 725, 2nd Floor, 21st Main, J.P.Nagar, 2nd phase, Bangalore – 560078

 

  1. Apple A Day Properties Pvt Ltd, Apple Tower, Palarivattom, N.H.Bye Pass, Edappally, Kochi-24

 

JUDGMENT

SRI.T.S.P.MOOSATH                :JUDICIAL MEMBER

The first opposite party in CC.No.213/2012 of the Consumer Disputes Redressal Forum, Ernakulam, in short, the district forum has filed the appeal against the order passed by the district forum by which the it was found that the first and second opposite parties are not entitled to receive any amount further from the complainant as per the so called agreement executed by them, since the said agreement is vitiated by fraud and collusion made on the part of the first and second opposite parties. It was also directed that the first opposite party bank is at liberty to realize the entire amount paid to the second opposite party through the complainant, from the second opposite party itself ignoring the execution of the so called agreement which was found to be a cooked up document, to play fraud on the complainant. The opposite parties 1 & 2 were directed to pay Rs 10,000/- as cost of the proceedings to the complainant.

        2.     The averments contained in the complaint are in brief as follows. The complainant, a software engineer, working at Motorola Bangalore came to know about the second opposite party M/s.Apple A Day Properties Pvt Ltd and their activities through the news papers advertisements and other visual media. Lured by the advertisement the complainant approached the second opposite party to buy a flat in their project at Palarivattom. The second opposite party had given an assurance to the complainant that the project at Palarivattom would be completed by December 2009 and that they will be able to hand over the flat to the complainant in the event the complainant pay an amount of        Rs 22,00,000/- as the cost of the flat. The second opposite party assured the complainant that she should start repayment of the loan only after the completion of the project. At the instance of the second opposite party, the first opposite party financial institution joined hands and executed an agreement with the complainant while sanctioning a loan of Rs 17.50 lakhs, which as per the tripartite agreement ought to have been repaid within a period of 240 months with EMI at Rs 16,028/-. The second opposite party had offered a Maruthi Alto Car as a free gift. The complainant honestly believed the assurance of the second opposite party and an amount of Rs 2,54,726/- was remitted to Indus Motors, Ernakulam towards the payment of the vehicle and the car was registered in the name of Renjith.M.N, who is a relative of the complainant. On 11.09.2006 the complainant paid an amount of Rs 3,28.652/- towards the part payment of the cost of the flat. The tripartite agreement regarding the payment of consideration and handing over of the flat and the nature of financing was executed on 22.08.2006 by the complainant and the opposite parties. As per the agreement the second opposite party had communicated to the first opposite party that they had sold the flat No.C in the BIG Apple Block, situated in Pipelines road, Palarivattom. On 31.08.2006 the complainant received a cheque from the first opposite party for an amount of Rs 17.50 lakhs and a letter stating that the complainant’s loan amount was disbursed fully. The complainant handed over the cheque immediately to the second opposite party. Thereafter the monthly instalments towards the loan amount was being deducted from the salary of the complainant as per the agreement. Though the second opposite party had assured that the construction of the flat will be over by December 2008, not even the basic structure of the flat is constructed till now. The second opposite party has no answer with regard to the violation of the terms of the agreement. The first opposite party banking financial institution had released the entire sanctioned amount of Rs 17,50,000/- to the complainant to be handed over to the second opposite party with evil motive. The first and second opposite parties were hand in hand in violating the contract as against the interest of the complainant. The complainant now realize that there was collusion between the opposite parties, to play fraud against the complainant. Their act together constitutes unfair trade practice and deficiency of service. As per the guidelines of the Reserve Bank of India the sanctioned amount of loan can be disbursed only by instalments in accordance with the progress of construction of the building. But in this case the first opposite party has disbursed the entire amount to the second opposite party in lumpsum which was totally against the conditions of the loan agreement and tripartite agreement. The complainant reasonably suspects that the signed blank papers or signed stamp papers obtained from the complainant would be misused by the first opposite party to create fraudulent documents to legalize the illegal activities of the first and second opposite parties. The complainant has sustained huge monetary loss due to the acts and omissions on the part of the first and second opposite parties. The act of the opposite parties would amount to deficiency of service and unfair trade practice as defined under Section 2(1) (g) and 2(1)  (r) of the Consumer Protection Act. The complainant therefore prayed for a declaration that the acts committed by the opposite parties as a deficient service and to direct the second opposite party to hand over the flat without any further delay. The complainant also prayed for the explanatory detailed statement regarding the  payments made her and to direct the opposite parties to pay compensation along with costs of proceedings.

        3.     The first opposite party filed version raising the following contentions. The complaint is not maintainable and misconceived. The complaint will not fall within the definition of consumer as per Section 2(1) (d) of the Consumer Protection Act, since alleged complaint is in violation of the contract in its terms and conditions. The present demand for money is on the basis of violation of the terms and conditions of the contract. Therefore only a civil suit will lie and not a complaint under consumer protection act. The complainant had applied for a loan of Rs 18,57,000/- on 08.08.2006 by an application before the first opposite party and the opposite party sanctioned a loan of Rs 17,50,000/- on 18.08.2006 subject to conditions. Thereafter a tripartite agreement between the complainant and the opposite parties was executed on 22.08.2006, whereby complainant agreed to the first opposite party to pay the loan directly to the second opposite party and accepted the loan offer of this opposite party. The loan agreement between the complainant and the opposite party for an amount of Rs 17,50,000/-was executed on 31.08.2006 whereby the complainant had agreed to repay the loan amount in 240 monthly instalments and agreed to the other terms and conditions of the  loan, for availing the loan. The complainant has requested to disburse the amount of Rs 17,50,000/- to the second opposite party as per request dated 31.08.2006 and accordingly the first opposite party had disbursed the amount to the second opposite party on 31.08.2006 itself as per cheque no.190340 of UTI bank favouring the second opposite party. The allegation that the loan ought to have been disbursed in instalments in accordance with the progress of the construction is wrong and denied. The cheque was handed over to the second opposite party on the written request of the complainant. The complainant had handed over the cheque to the second opposite party and got a sale deed executed having no.2960/2006 conveying 0.42% undivided right over the property having an extent of 67.37 Areas in Vazhakkala Village together with the right to construct an apartment in the second floor marked as flat no.C having an area of 119.10 sq.mt. in block-C in the multi-stories building named “Big Apple”. The first opposite party has acknowledged the EMI as per the terms of this agreement with the complainant. There is no collusion between the opposite parties. The first opposite party being a national player in housing loan has no need to play fraud for disbursing the loan or for realizing the loan. The first opposite party has no control over the second opposite party and therefore there is no deficiency in service committed by the first opposite party. The complainant has no cause of action against the first opposite party. No blank paper nor stamped blank papers were obtained from the complainant as alleged. The first opposite part is a body corporate functioning as per the strict control of Reserve Bank of India and the norms of the National Housing development banks and not violated any conditions of agreement. The complainant had approached this forum with unclean hands and the complaint is therefore to be dismissed.       

        4.     The second opposite party appeared but they did not file any version. Subsequently the second opposite party filed version which was ordered to be accepted subject to the payment of cost of Rs 1000/-, as per the order in IA.No.325/2013 filed by the second opposite party for accepting the version but they have not paid the cost as ordered and hence the version filed by the second opposite party was kept off the records.

        5.     The complainant was examined as PW1 and Exts.A1 to A5 were marked on her side. DW1 was examined and Exts.B1 to B2 were marked on the side of the first opposite party. Considering the evidence adduced by the parties and hearing both sides the district forum has passed the impugned order. Aggrieved by the order passed by the district forum the opposite party has preferred the present appeal.

        6.     Heard both sides. Perused the records.

        7.     According to the complainant on the basis advertisement made by the second opposite party he approached the second opposite party to buy a flat in the project of the second opposite party at Palarivattom. The second opposite party assured that the project will be completed by December 2008 and they will hand over the flat to her if she pay an amount of Rs 22,00,000/-as cost of the flat. The second opposite party also assured the complainant that she would start repayment of the loan only after the completion of the project. The second opposite party informed her that they would arrange housing loan for the complainant and accordingly as per the demand of the second opposite party, the complainant had deposited an amount of Rs 10,000/- on 07.08.2006. Ext.A1 is the copy of the receipt regarding the deposit of Rs 10,000/- on 07.08.2006 by the complainant before the second opposite party. After a few days the second opposite party informed the complainant that the first opposite party was ready to sanction the loan and for that purpose she has to make an application for the loan. Consequently the complainant made an application for loan to the first opposite as directed by the second opposite party. A tripartite agreement was made as loan agreement between the complainant and the opposite parties. On 30.08.2006 the complainant received a letter from the first opposite party stating that they have sanctioned a housing loan of Rs 17,50,000/-, which the complainant has to repay in equal monthly instalments for a period of 250 months with EMI as Rs 16,028/-. On 22.08.2006 a tripartite agreement was executed between the complainant and the opposite party in which a clause was added as, the amount sanctioned as loan shall be disbursed by instalments in accordance with the progress of the project. On 31.08.2006 the complainant received a cheque / draft from the first opposite party for an amount of Rs 17,50,000/- and the letter stating that the loan amount of the complainant was disbursed and thus a loan agreement was executed between the complainant and the first opposite party on the very same day. The complainant handed over the cheque immediately to the second opposite party.From September 2006 onwards the complainant has been paying the EMA to the first opposite party. Though the second opposite party had assured that the construction of the flat will be over in December 2008 even the basic structure of the flat was not completed. Recently the complainant came to know that the responsible persons of the second opposite party had absconded and the future of the project is in absolutely dark. Altogether an amount of Rs 11,00,000/- has been paid by the complainant to the first opposite party. But the first opposite party informed the complainant that only Rs 76,000/- has been credited towards the principal loan amount of Rs 17,50,000/- and rest had gone to interest. The complainant realized that on collusion between the opposite parties they had played fraud on her. Their act together constitutes unfair practice and deficiency of service. As per the guidelines of RBI the amount sanctioned for home loan can be disbursed only by way of instalments, in accordance with the progress of the construction work. But the first opposite party has disbursed the entire loan amount to the second opposite party which was totally against the conditions of the loan agreement and tripartite agreement. According to the complainant at the time of executing the loan agreement she was asked to sign various blank papers and some blank stamp papers. She reasonably suspect that  those signed blank papers and signed blank stamp papers were used by the first opposite party to create some fake documents. In the version filed by the first opposite party they contended that there was no collusion between them and the second opposite party and there was no deficiency in service or unfair trade practice on their part. It is stated by the first opposite party that the complainant had applied for loan of Rs 18,57,000/- on 08.08.2006 by submitting duly filed application. After considering the application of the complainant the first opposite party sanctioned loan of Rs 17,50,000/- to the complainant on 18.08.2006 subject to conditions. A tripartite agreement was executed between the complainant and the opposite parties on 22.08.2006 by which the complainant agreed to the first opposite party to pay cheque for the loan amount directly to the second opposite party and accepted the loan offer of the first opposite party. The loan agreement between the complainant and the opposite party was executed on 31.08.2006 whereby the complainant agreed to repay the loan amount with interest in 240 monthly instalments. The complainant had requested to disbursed the said amount of Rs 17,50,000/- to the second opposite party as per the request dated 31.08.2006 and the first opposite party has disbursed the loan amount of Rs 17,50,000/- to the complainant on 31.08.2006. The allegation of the complainant that the loan amount has to be disbursed by instalments in accordance with the progress of the project is false. There is no collusion between the first opposite party and second opposite party. The allegation of fraud against the first opposite party is absolutely false. The first opposite party disbursed the amount to the second opposite party as per the request of the complainant. The first opposite party has no control over the second opposite party and all the terms are governed by the agreement between them. The allegation of the complainant that the first opposite party had obtained blank papers and blank stamp papers from the complainant is false. The second opposite party has not filed written version in time and the petition filed by them later was allowed on terms of cost which was not paid by the second opposite party. So the version of the second opposite party was not accepted.

        8.     The district forum found that the second opposite party has agreed to complete the construction of the flat by December 2008 and there is clear violation of such convenient and even at the time of filing of the complaint, the construction of the flat was not completed. So there is clear deficiency of service on the part of the second opposite party in having not delivered the apartment to the complainant, after completion, in time. The second opposite party was directed to pay Rs 10,00,000/- to the complainant as compensation. The second opposite party was also directed to return the entire amount of Rs 17,50,000/- paid by the complainant with interest till realization. The district forum considering various facts and circumstances brought out in evidence, found that the practice shown by the parties 1 &2 for getting a tripartite agreement from the complainant is reflective of the fact that there is clear unfair trade practice, practiced by the opposite parties 1 & 2 collusively. It was found that the opposite parties 1 & 2 are not entitled to receive any further amount from the complainant as per so called agreement executed by them since the said agreement is vitiated by fraud and collusion on the part of the opposite parties 1 & 2. The said findings are challenged by the first opposite party in the present appeal.

        9.     The district forum came to the conclusion that there was collusion between the opposite parties 1& 2, considering various facts and circumstances brought out in evidence. The complainant has submitted the loan application to the first opposite party on 08.08.2016 and on 18.08.2006 the loan of Rs 17,50,000/- was sanctioned to the complainant within a record speed of 10 days. The district forum found that the nature of the disbursement of the loan by the first opposite party in the name of the second opposite party in record speed, without even having started the construction of the flat would speak volumes with regard to the aalleged collusion between the first and second opposite parties. There is no dispute to the fact that the first opposite party released the entire loan amount of Rs 17,50,000/-to the second opposite party through the complainant without even having started the construction work of the flat. In Clause 1 of Ext.P4 agreement dated 22.08.2006 it is stated that “on receipt of intimation from the builder that the flat has been allotted to the borrower. BHFL has sanctioned the housing loan for the purchase of flat of Rs 17,50,000/- to the borrower according to its rules. But BHFL will make the actual payments in instalments directly to the builder as per the valuation of BHFL. Ext. P5 is the agreement between the complainant and the first opposite party alleged to have executed on 31.08.2006. In Clause 2.1(b) of Ext.A5 it is stated that the loan may be disbursed in one or more than one instalment over a period to be decided by BHFL (Birla Home Finance Limited) with reference to the need or progress of the construction (which decision shall be final and binding on the borrowers). The borrower hereby acknowledges the receipt of the loan / instalment disbursed as indicated in the receipt annexed herein and agrees to acknowledge the receipt of the loan against the future disbursement if any. It is the case of the first opposite party that they had released the entire loan amount of   Rs 17,50,000/- to the second opposite party on the basis of the request of the complainant. The first opposite party is relying on Exts.B1 & B2 documents to substantiate their case that it was at the request of the complainant that the entire sanctioned loan amount of Rs 17,50,000/- was handed over to the second opposite party. Ext.B1 is the indemnity Bond alleged to have executed by the complainant in favour of the first opposite party on 24.08.2006 in which it is stated that the complainant had requested the first opposite party to disburse the entire loan amount of Rs 17,50,000/- irrespective of the stage construction, to the builder. It is also stated that the executants here undertakes to repay the loan regularly to BHFL as per the terms and conditions of the loan agreement dated 24.08.2006 irrespective of the date of possessing being handed over by the builder or the date as mentioned in the said allotment letter or in the event of the builder fails to hand over the possession of property to the executant. In.Ext.B1 there is a mention of the loan agreement dated 24.08.2006. It is therefore clear that there was a loan agreement dated 24.08.2006 which would have been a tripartite agreement because the interest of the second opposite party has also been mentioned therein. Ext.A5 produced by the complainant is loan agreement dated 31.08.2006. Therefore reference to such a loan agreement dated 31.08.2006 could not have been made in Ext.B1 dated 24.08.2006. Ext.B2 is the copy of the disbursement request form alleged to have submitted by the complainant to the first opposite party. It is a printed form with blank portions which were filled by writing. It does not contain any date on its upper portion. The bottom portion of the Ext.B2 is the receipt alleged to have signed by the complainant regarding the receipt of Rs 17,50,000/- from the first opposite party. There, the date is mentioned as 31.08.2006. It is to be noted that Ext.B1 is dated 24.08.2006. It is the case of the complainant that she was asked to sign on various papers, blank papers and blank stamp papers and she reasonably suspected that those signed blank papers and signed blank stamp papers would have been misused by the first opposite party to create some fake documents to legalize their illegalities. It is to be noted that when the complainant was examined as PW1, Exts.B1 and B2 were not put to her by the counsel for the first opposite party. In these circumstances on the basis of Exts.B1 & B2 it cannot be found that the complainant had submitted request before the first opposite party to disburse the entire loan amount to the second opposite party irrespective of stage such of construction and on the basis of that request they had disbursed the entire loan amount to the second opposite party. It is admitted by the first opposite party that they are governed by guidelines of the RBI while disbursing housing loan. It is a well settled principle of each and every bank in India and all well established financial institution in India governed by the RBI that the disbursement of the loan could be made only in accordance with the progress of construction. So even if it is taken for granted that the complainant had made request to the first opposite party to release the entire loan amount to the second opposite party, there is no explanation on the part of the first opposite party why they released the entire loan amount to the second opposite party without even having started the construction of flat. So the claim of the first opposite party that they had released the entire loan amount of Rs 17,50,000/- to the second opposite party on the basis of the request of the complainant is baseless. The district forum found that the haste in which the first opposite party issued the cheque to the second opposite party would speak volumes of malafides of the opposite parties in getting the complainant jacked between the plots planned by the opposite parties with evil motives which reflects conscipicuously. The district forum found that the practice shown by the first opposite party and the second opposite party in getting a tripartite agreement from the complainant is reflective of the fact that there was clear unfair trade practice, by the opposite parties 1 & 2, who acted collusively. Considering the evidence, facts and circumstances of the case brought out in evidence we consider that there is no ground / reason to interfere with the finding of the district forum.  The district forum observed that the opposite parties 1 & 2 are not entitled to receive any amount from the complainant as per the so called agreement executed by them since the agreement is vitiated by fraud and collusion on the part of the first and second opposite parties and the first opposite party bank is at a liberty to realise the amount paid to the second opposite party through the complainant from the second opposite party itself ignoring the execution of the so called agreement which was found to be a cooked up document, to play fraud on the complainant. The district forum directed the opposite parties to pay Rs 10,000/- as compensation to the complainant. Considering the facts and circumstances of the case we consider that there is no reason / ground to interfere with the observations and directions made by the district forum. So the appeal is to be dismissed.

        In the result, the appeal is dismissed.

        Parties are directed to suffer their respective costs.         

  

 

T.S.P.MOOSATH              : JUDICIAL MEMBER

 

 

BEENA KUMARI.A                   : MEMBER

 

 

 

 

 

 

 

 

 

 

 

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KERALA STATE

CONSUMER DISPUTES

 REDRESSAL COMMISSION

 SISUVIHARLANE

VAZHUTHACADU

 THIRUVANANTHAPURAM

 

APPEAL NUMBER 889/2015

JUDGMENT DATED : 22.02.2019

 

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