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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
S.A. SIDDIQUI, PRESIDING MEMBER, S.C. JAIN, MEMBER
SANJAY SINGH – Appellant
Versus
LIC Housing Finance Ltd. & Anr. – Respondents
C-430/13
Decided on : 29-10-2013
Insufficient evidence and ongoing police investigation can influence the court's decision to vacate an interim injunction order.
Headnote:
Interim Injunction - Housing Finance Fraud - [Section 420/409/467/468/472/120B IPC, NHB guidelines] - The court discussed the alleged fraud and breach of trust committed by the housing finance company and the builder, the legal duties and due diligence of the finance company, the criminal case against the builder, and the jurisdiction of Consumer Courts. The court vacated the interim injunction order.
Fact of the Case:
The complainant alleged that the housing finance company colluded with a builder to commit fraud and breach of trust, resulting in financial loss and mental agony for the complainant.
Finding of the Court:
The court found that there was insufficient evidence to prove collusion between the housing finance company and the builder, and that the matter was under investigation by the police. The court also noted that the jurisdiction of Consumer Courts was in question.
Issues: Alleged fraud and breach of trust by housing finance company and builder, jurisdiction of Consumer Courts.
Ratio Decidendi: Insufficient evidence of collusion, ongoing police investigation, and jurisdictional issues led to the court's decision to vacate the interim injunction order.
Final Decision: The court vacated the interim injunction order dated 5.8.2013.
ORDER :
Mr. S.A. Siddiqui, Presiding Member-An interim injunction was granted on 5.8.2013 in favour of the complainant whereby OP-1, LIC Housing Finance Ltd. was restrained to recover the monthly installments hitherto till the next date and notice was issued to the OPs for filing objection and to show-cause as to why order dated 5.8.2013 be not made absolute pending the disposal of the complaint.
2. OP-1, LIC Housing Finance Ltd., filed reply to the complaint as well as objection against ex-party ad-interim injunction supported by an affidavit.
3. Sh. Tribindh Kumar, Ld. Counsel for the complainant as well as Karnail Singh, Ld. Counsel for the OP-1 were heard and record was examined.
4. Despite best efforts, OP-2, Golf Course Sahkari Samiti Ltd., did not appear.
5. It has been alleged by the complainant Sanjay Singh that OP-2 with support of OP-1 planned to develop a Group Housing Scheme of Residential Units “Shivkala Charms Luxury Apartments” and made an advertisement in newspapers inviting application for allotment of the flats. Complainant moved an application for membership and allotment of flat for a price of Rs. 39 Lacs. The applicants were allotted Flat No. 1021, Plot No. 7, Sector PI2, Shivkala Charms Luxury Apartments, Greater Noida. Out of 39 Lacs, 27 Lacs were paid through housing loan granted by OP-1.
6. It has further been alleged by the complainant that OP-1 in collusion and connivance with OP-2 has granted loan to the applicant on the same flat which was already mortgaged with PNBHFL as revealed through notices issued by various Banks and Financial Institutions (annexed with the complaint).
7. Due to multiple allotments, fraud and breach of trust committed by the OP-1 in collusion with the builder, complainant had to suffer great financial loss, mental agony and pain and stood fully cheated by the OPs.
8. OP-1 extended “Advanced Processing Facility” to OP-2 so that any number of retail disbursements in the project could be facilitated without having to undergo individual legal and technical appraisal clearance in a shorter time as against their claim of providing loan as case to case basis. OP-1 approved the project through upfront approval process without following due diligence. It was because of the failure of certain legal duties and due-diligence the fraud occurred against the innocent purchasers including the complainant, who are paying installments with the hope that they will get a residential flat but the same actually could never come to them. It is also noteworthy that OP-1 have themselves financed multiple loan on single flat by their own branches (Total to 15 numbers) and are the aliasing/recovering EMI from each borrower. In addition, OP-1 has given loan to virtual/non-existing flats (total number of such flats being 49 or more). The aforesaid facts have been confirmed by National House Bank, report of which has been annexed with the main complaint. This shows that OP-1 has involved in fraud/scam in collusion with OP-2, which is ranked deficiency in service.
9. On the other hand, counsel for the OP-1 maintained that OP-1 is an independent Finance Company of repute and have no connection with OP-2, which is the main culprit in the ill-fated project. The present complaint is liable to be dismissed against OP-1 as complainant had no grievance against OP-1. It is pertinent to note that OP-1 manages public funds and grants loans to applicants with great care, caution and responsibility. It had no role in property selection. It was the complainant who himself approached the OP-1 for grant of loan. Thus, OP-1 only aided by giving financial assistance to the complainant. This financial assistance has been given from the company’s public fund. Complainant in order to avoid payment of outstanding loan/EMI, recovery proceedings filed the complaint by twisting the facts and making a false story. The OP-1 performed its duty and obligations in consonance with the guidelines issued by NHB and no deviations whatsoever was
