Delhi

StateCommission

A/07/346

CORPORATION BANK - Complainant(s)

Versus

SHRI MASOOD AHMED KHAN - Opp.Party(s)

20 Mar 2019

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 20.03.2019

Date of Decision : 03.04.2019

APPEAL NO.254/2007

 

In the matter of:

 

1.      M/s. Krant (Associates (I) Pvt. Ltd.,
2.  

4/185 Lalita Park, Laxmi Nagar,

Delhi

(though its Managing Director)

 

2.      M/s. Maitrey Tiwari * Co.,

Through its Prop. Mr. Maitrey Tiwari,

(Interior Decorator),

119 Bank Enclave, Delhi. ………Appellants

 

Versus

 

1.      Shri Masood Ahmad Khan

 

2.      Smt. Usma Khan,

W/o. Shri M.A. Khan,

Both R/o. H.No.252, Basti Khwaja,

Mir Dard Road, New Delhi.

 

3.      Corporation Bank,

Branch Laxmi nagar, Delhi.

Through its Branch Manager……..Respondents

 

APPEAL NO.346/2007

In the matter of:

 

Corporation bank,

A body Corporate Constituted under

The Banking Companies (Acquisition

And Transfer of Undertakings) Act, 1980

(Act No.3 of 1980) having its head office

At Mangalore (South its head office

At Mangalore (South Kanara, Karnataka

State), having a branch at Ansal Laxmideep

Plot No.9 District Centre, Laxmi Naga,

•  

 

Versus

 

1. Shri Masood Ahmed Khan,

S/o. Late Shri A.s. Khan,

H.No.252, Basti Khawaja,

Mir Dard, New Delhi-110001.

 

2. Smt. Uzma Khanam,

W/o. Shri Masood Ahmed Khan,

H.No.252, Basti Khawaja,

Mir Dard, New Delhi-110001.

 

3. M/s.  Kranti Builders & Engg. (P) Ltd,

Though its Managing Director,

Shri Mattrey Tiwari,

4/185,Lalita Park,

Laxmi Nagar,

•  

 

 

 

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                      Yes/No

2.      To be referred to the reporter or not?                                                                                                           Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

 

1. These appeals have out lived their life. They are being disposed of by common judgment as they arise out of order dated 16.03.2007 passed by District Forum (East) in CC-921/05. Appellant in Appeal no. 254/07 was OP-1 and OP-3 before the District Forum. The appellant in appeal no. 346/07 was OP-2 before the District Forum.
2. The events in chronological order giving rise to the complaint are:-

That on 10.03.2004 complainant/respondent No. 1 and 2 in appeal no. 254/07 entered into an agreement to purchase a flat no. UG-3, upper ground floor built on plot no. 23-B situated at Shalimar Extension, village Pasonda, Pargana, Loni, Ghaziabad for Rs. 10 Lakhs and open space in front thereof for Rs. 4,20,000/-. On 07.05.2004 they applied for house loan. Loan of Rs. 13,20,000/- was sanctioned on 11.05.2004. On 20.05.2004 sale deed in respect of flat alone was executed. EMIs started on 21.06.2004. The complainants paid only 1 or 2 EMIs. On 30.03.2005 they gave notice to OP-3. On 12.011.2005 appellant of appeal no. 346/07 gave notice u/s 13 (2) SARFEASI Act copy of which is at page 111 of file of appeal no. 346/07. On 10.10.2005 the complaint was filed before DCRF. The same was allowed on 16.03.2007 all the OPs were directed to pay jointly or severely Rs. 1,20,000/- to complainants of which amount the complainant were deprived due to illegal act of OPs. OP were directed to pay Rs. 50,000/- as compensation, Rs. 20,000/- as cost of litigation. OP-2 i.e. Corporation Bank was directed to declare nil balance as on date against both loan account CHOME/01/040172 in the name of complainants. It was clarified that all rights of complainants in respect of property stood relinquished in favour of Corporation Bank.

3. In the mean time the Corporation Bank disposed of the property under SARFEASI Act and realised part of the loan amount. For the balance amount it filed a suit for recovery in Civil Court which has been dismissed in default.  
4. OP-1 and 3 filed appeal in State Commission which was registered as no. 254/07. The Corporation Bank challenged jurisdiction of District Forum. The State Commission found that bank advanced loan of Rs. 13,20,000/- against cash down payment of Rs. 5,000/- only and that too without mortgage of the property. The loan was given on the recommendation of OP-1. The schedule of payment described in sale deed was Rs. 5,000/- by cash as advance, Rs. 9,95,000/- by pay order dated 17.11.2003. The plea of the appellant and Bank was that the builder and Bank were in collusion and hatched conspiracy and cheated complainants and many other bonafide purchasers in as much as bank sanctioned loan of Rs. 13,20,000/- against property of value of Rs. 10,00,000/- and that too against cash down payment of Rs. 5,000/- only. The bank paid the loan without creating mortgage over the property. Amount was paid by the bank on 13.05.2004 and mortgage by deposit of title deeds was created on 20.05.2004. Builder could not explain as to what work was done by appellant no. 2 in exchange of Rs. 3,25,000/- disbursed by the bank in favour of appellant No.2 mentioned in the sale deed in favour of purchaser, may more facilities were provided to them. Thus loss suffered by complainants were assessed by District Forum to the tune of Rs. 5,000/- paid at the time of agreement to sell, Rs. 1,00,000/- paid towards stamp duty on sale deed and two instalments of Rs. 11,500/- each on 26.05.2004 and 22.06.2007.
5. In State Commission the plea of the appellant bank was that entire finishing renovation was completed by appellant no. 2 and respondent no. 1/complainant no. 1 had no objection to realise of payment Rs. 3,25,000/- on account of said finishing. The complainants gave undertaking/declaration to the fact that property in question was their possession since 20.05.2004 and they have not created charge on said property nor would they transfer the property by way of sale or mortgage.
6. The State commission found that the above documents did not inspire confidence as to their genuineness as they were in stereo  typed shaped in English language and only the banks had been filled up and signatures on said document was of one Azma and not Mehmood Ahmed Khan / respondent no. 1 in whose sale deed was executed. The said circumstance showed that none of the documents were explained to the person whose signatures were obtained, the respondent no. 1 was not the actual purchaser, may be his wife was purchaser. District Forum came to the conclusion that both the appellants and respondent no. 3 were in league and in conspiracy with each other. So the appeal was dismissed vide order dated 06.07.2007.
7. The builder’s revision petition against the aforesaid order of the State Commission, before National Commission was registered as number RP/2889/07. The same was dismissed by sought non speaking order by National Commission on 31.08.2007 which reads as:-

“In view of the concurrent findings of the District Forum & State Commission, we do not find any force in this revision petition. The revision petition is dismissed.”

8. Simultaneously Corporation Bank also filed appeal against the order of District Forum which was registered as number 346/07. The same was dismissed by this Commission vide order dated 26.07.07 on the ground that since appeal of the builder has been dismissed vide order 06.07.07 in which certain observations against conduct of the bank was made, the appeal was dismissed for the reasons mentioned in order dated 06.07.07 in appeal of builder.
9. Builder as well as bank both filed SLPs before Hon’ble Supreme Court which were registered as Civil Appeal no. 7472 and 7474 of 2010. Both the appeals were allowed vide order dated 08.09.10 and appeal of the builder was remanded back to National Commission. Appeal of Corporation Bank was remanded to the State Commission with directions to independently consider the appeal.
10. The National commission reheard appeal of the builder and vide order dated 13.07.11 the order of this Commission was set aside and matter was remanded to the State Commission to be decided afresh with appeal of bank.
11. Bank filed separate revision in the National Commission which was registered as RP/3165/07. The same was dismissed vide order dated 04.04.08. The Bank  carried the matter to Hon’ble Supreme Court by way of SLP. The same was registered with Civil Appeal no. 7474/10. Hon’ble Supreme court accepted the appeal vide order dated 08.09.10 and remanded the matter to this Commission with directions to decide the same with in period of six weeks.
12. This is how both the appeals are being heard now.
13. I have gone through the material on record and heard the arguments. Counsel for the builder filed written arguments dated 26.03.19. perusal of the same reveals that stamp paper for agreement to sell was purchased by bank which proves collusion between bank and builder, so the observations of District Forum in that regard dated 16.03.07 are correct. I am unable to endorse the findings of this Forum in above regard. Stamp paper can be purchased by anyone, bank can purchase the same on the basis of request of builder. That does not  have any bearings on the merit of the case.
14. Another plea of the purchaser is that bank sanctioned loan of Rs. 13,20,000/- against property of Rs. 10,00,000/-. The same has been repudiated by counsel for the bank by submitting that purchaser and builder were referring to agreement to sell commercial space in front of flat also for consideration of Rs. 4,20,000/-. If the figure of Rs. 10Lakhs for the flat and Rs. 4,20,000/- for the commercial space are added, the same comes to Rs. 14,20,000/-. Loan to the extent of Rs. 13,20,000/- against purchase of both the places is not unusual. The argument of bank appears to be correct.
15. One of the contention raised by the purchaser is that notice Section 13 (2) SARFEASI Act was served on the address of the property in dispute despite the fact that communication address of debtor was clearly mentioned in the loan application. The same is in violation rule 3 of SARFEASI Rules. In support of his contention he has referred to decision of Hon’ble Supreme Court in J. Rajiv Subramanium vs. Pandiyas (2014) 5 SCC 651 and decision of High Court of Andhra Pradesh in WP no. 36677/17 titled as Venshiv Farma Chem Pvt. Ltd decided on 06.04.18.
16. It is sufficient to mention here that this Commission is not sitting in appeal over the action of bank in selling the property. The pleas mentioned above could be taken by the purchaser in appeal before DRT.
17. I may observe that so far as complaint against the builder is concerned, the same was not maintainable. The reason being that builder has already executed sale deed and handed over possession to the purchaser. That brought an end to the relationship of Consumer and Service Provider.
18. In this regard reliance can be placed on decision of National Commission in Smita Roy vs. Excel Construction II (2012)CPJ 204, Harpal Arya vs. Housing Board Haryana II (2016) CPJ 36 and Piyush Goyal vs. Virender Arya II (2018) CPJ 38. The complaint was not maintainable.
19. As regards complaint against bank it may be mentioned that same was barred by Section 34 of SARFEASI Act. It can be argued on behalf of purchaser complainant that the complaint was filed on 10.10.05 before issue of notice dated 12.11.05 by bank under SARFEASI Act. So the complaint was prior in time and was not barred.
20. The argument can not be accepted in view of decision of Hon’ble Supreme Court in CA No. 1359/13 titled as Yashwant Ji. Ghaisas vs. Bank of Maharastra decided on 01.03.13. In that case the appellant approached National Commission by way of complaint under section 21 under Consumer Protection Act. In para 19 of the order of National Commission it is mentioned that National Commission is not empowered to arrogate to itself the powers which was vested within the jurisdiction of DRT. The matter is purely covered within the jurisdiction of DRT or DRAT. If there is any grievance against notice u/s 13 (2) SARFEASI Act, that should be brought to the notice of the concerned authority. In case the bankers are working within ambit of SARFEASI Act, it cannot be said to the deficiency on the part of the bank. The Hon’ble Supreme Court affirmed the said order of National Commission and added that the complaint was thoroughly and was nothing but an attempt to frustrate the action, which could be taken by the bank u/s 13 (4) of SARFEASI Act.
21. The words underlined above answer the argument of complainant that complaint filed prior to notice under SARFEASI Act can be continued. The said complaint was an attempt to frustrate the action which could be taken by the bank.
22. The  counsel for purchaser argue that Bank advanced loan before mortgage of property. The same has been suitably replied by counsel for Bank that before registration of sale deed, title did not vest in purchaser and he could not mortgage the same. So the practice adopted by Bank is that payment is made in favour of vendor, registrations slip is retained by employee of Bank who collects the sale deed, thereafter equitable mortgage by deposit of title deed is obtained from purchaser.
23. The counsel for purchaser complainant submitted that act of bank under SARFEASI Act can be defended only when the same is bonafide. In support of his submission he relied on decision of National Commission in this very case in RP/3165/07 decided on 04.04.08. When the said order has been set aside by Hon’ble Supreme Court, complainants cannot be allowed to harp upon certain observation made in the said order of NC.
24. As a result of the above discussion both the appeals are accepted, impugned order of the District Forum is set aside and the complaint is dismissed.

 

25. Copy of the order be sent to both the parties free of cost.
26. One copy of the order be sent to District Forum for information.
27. File be consigned to record room.

 

 

 

(O.P. GUPTA)                                                     

MEMBER (JUDICIAL)