Banks are liable for deficiency in service if they release entire housing loan amounts in a single disbursement to developers, ignoring stage-wise payment schedules, thereby failing to protect the borrower's interests.

Order :

PER HON’BLE SMT. MEENA RAMANATHAN, MEMBER (NON-JUDICIAL)

1. This is a complaint filed by the complainant U/s.47 of the Consumer Protection Act, 2019 praying this Commission :-

(i) to direct the opposite parties No.1 & 2 to refund the amount of Rs.65,18,000/- to the complainant along with 18% p.a. interest from the respective dates of receipt of sale consideration till realization.

(ii) to direct the opposite party No.3 not to demand for EMI’s and not to damage the CIBIL score of the complainant till the disposal of the complaint and till the opposite party No.1 & 2 returns the amounts collected by them.

(iii) to direct the opposite party No.3 to take over the complaint schedule property and clear the loan account of the complainant and issue NOC for his home loan account.

(iv) to direct the opposite parties No.1 & 2 to pay compensation of Rs.25,00,000/- to the complainant for adopting unfair trade practices and for their deficient services in collecting the amounts and for non-completion of the project.

(v) to direct the opposite parties No.1 & 2 to pay costs and legal expenses of Rs.1,00,000/- to the complainant and pass any such other relief or relief’s as this Commission deems fit and proper in the circumstances of the case, in the interest of justice.

2. The brief facts of the case are that the Complainant believed the representations of the opposite parties who are involved in the field of construction and entered into an agreement of sale deed dated 18.06.2021. The opposite parties agreed to sell the Scheduled Property- B, i.e. Residential Apartment bearing No. B-301, 3rd Floor, measuring 1021 sq. ft. of built-up area along with 184 sq. ft. of common area, totally measuring 1205 sq. ft, of super built-up area consisting of 2 bed room, one covered car parking space, in the multi stories residential apartment building known as “Destiny Gables”, inclusive of proportionate share in common areas and other specifications as appended in the sale agreement.

3. The opposite parties agreed to sell the scheduled property for a total sale consideration of Rs.69,58,875/- payable as per the schedule mentioned in the sale agreement. The opposite parties agreed to complete the construction within 36 months with three month grace period from the date of plan approval i.e. 18.02.2019 as described in page 3 of the sale agreement.

4. The complainant believed the representations of the opposite parties and in good faith paid an amount of Rs.8,00,000/- (wrongly entered as Rs.80,000/-) through online on 29.09.2021 and Rs.5,00,000/- through Cheque bearing No.000141. The complainant obtained loan from opposite party No.3 for Rs.52,18,000/- repayable in EMIs of Rs.42,317/-. The opposite parties were supposed to complete the construction by 18.02.2022 (03 months inclusive of grace period), but the project is no way near completion. The complainant is unable to pay the EMIs and apprehends that his CIBIL score will also get impacted. He has received no response from the opposite parties and the project is still incomplete as on today. Due to the negligent actions of the opposite parties, the complainant has suffered loss of money and severe mental agony. Having no other option, he has approached this Commission for redressal.

5. Docket Proceedings dated 15.07.2024 shows that “the Notice published against Opposite Party No.1 in the “South India Time