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Anokh Singh v. Diwan Housing & Ors
Structured Summary of the Opinion (Kuljit Singh, President; Jyotsna, Member)
Factual and Procedural Background
The complainants approached the opposite parties (OPs) for a housing loan to construct a house on land they purchased by registered sale deed dated 12.01.2017 (6 Marlas at Village Khera, Tehsil Phagwara, District Kapurthala). The OPs received the original sale deed and identity proofs and agreed to sanction a housing loan. The estimated cost of construction was about Rs.13,00,000/-, and the OPs agreed to sanction Rs.7,86,620/-.
The OPs executed sanction on 08.06.2018. Following sanction, an amount was credited: Rs.1,75,000/- was credited to the complainants' bank account on 28.06.2018 (the record also refers to credit on 28.08.2018 in various exhibits). The complainants started construction, but the OPs subsequently stopped further disbursements without assigning reasons, at times attributing delay to internal technical problems. Later, the OPs informed complainants that they would not disburse the remaining amount and asked the complainants to "return Rs.2,61,620/-" on the pretext that total disbursement was Rs.2,61,620/-. The complainants alleged further unexplained charges of Rs.41,676/- and Rs.86,620/- (the latter said to be for an insurance policy the complainants deny taking).
The complainants issued a legal notice dated 25.04.2019, which did not resolve the matter, and then filed the present complaint alleging deficiency in service and seeking: (i) non-charging/return of unexplained amounts Rs.86,620/- and Rs.41,676/-, (ii) disbursement of the remaining sanctioned loan amount, (iii) Rs.3,00,000/- as compensation for deficiency in service and illegal acts, and (iv) Rs.7,500/- as litigation costs.
The OPs appeared, raised preliminary objections that the complaint was not maintainable, and filed a written reply. On merits, OPs stated that documents were requested for legal/technical verification and appraisal, that Rs.7,86,620/- was sanctioned, disbursement occurs in stages based on construction progress, and that the complainants agreed to the terms in the sanction letter and loan agreement. OPs stated they disbursed Rs.1,50,000/- (also referred as Rs.1,75,000/- in exhibits) and paid Rs.86,620/- towards an insurance premium on 28.08.2018. They relied on a technical inspection that 65% construction had been achieved and thus the complainants could not receive a further disbursement of Rs.2,80,000/-. OPs denied other averments and sought dismissal.
Evidence on record included the complainant's affidavit (Ex.C-A) with documents Ex.C-1 to Ex.C-52 (identity proofs, agreement for land, account statement Ex.C-6 indicating disbursed amount Rs.2,61,620/-, photographs Ex.C-14 to Ex.C-21 showing construction in progress, and various purchase receipts Ex.C-22 to Ex.C-52), and the OPs' affidavit (Ex.OP-A) with documents Ex.OP-1 to Ex.OP-7 (including disbursement memo Ex.OP-6 and application form Ex.OP-5).
Legal Issues Presented
- Whether the OPs committed deficiency in service by not disbursing the remaining amount of the sanctioned housing loan of Rs.7,86,620/- and by charging unexplained amounts (Rs.86,620/- and Rs.41,676/-) and/or charging for an insurance policy not obtained by the complainants.
- Whether the complainants are entitled to direction for disbursement of the remaining sanctioned loan amount and to compensation and litigation costs for the alleged deficiency in service.
Arguments of the Parties
Complainants' Arguments
- The OPs agreed to sanction a loan of Rs.7,86,620/- for construction but disbursed only partial amounts (Ex.C-6 and Ex.C-8 reflecting disbursements), leaving the complainants unable to complete construction.
- The OPs credited Rs.1,75,000/- (or Rs.1,50,000/- per some records) and later asked complainants to return Rs.2,61,620/- claiming total disbursement was Rs.2,61,620/-, causing confusion and financial loss.
- The OPs charged Rs.41,676/- without explanation and debited Rs.86,620/- purportedly towards an insurance policy which the complainants deny taking; complainants therefore called these charges unexplained and unlawful.
- The complainants sought (a) refund or non-charging of the unexplained amounts, (b) disbursement of the remaining sanctioned loan amount, (c) Rs.3,00,000/- as compensation for deficiency in service, and (d) litigation costs of Rs.7,500/-. They served a legal notice dated 25.04.2019 prior to filing the complaint.
OPs' (Respondents') Arguments
- Preliminary objection: the complaint is not maintainable.
- On merits, OPs asserted that they sought documents required for legal and technical verification and appraisal; sanction of Rs.7,86,620/- was made on 08.06.2018 and disbursement is to be made in accordance with stages of construction, as agreed by complainants and set out in the sanction letter and loan agreement.
- OPs admitted disbursing a sum to the complainants (referred to variously as Rs.1.5 lac or Rs.1,75,000/-) and stated Rs.86,620/- was given for insurance premium on 28.08.2018 per complainants' request. They relied upon a technical expert who observed 65% construction completion, and on that basis contended the complainants were not entitled to the claimed second installment of Rs.2,80,000/-.
- OPs denied other averments and sought dismissal of the complaint.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| M/s Construction and Design Services vs. Delhi Development Authority, 2015(1) SCC 263 | Principle that time can be the essence of a contract; delay in performance may attract compensation; courts can grant compensation where work is not completed within the specified period. | The judgment was relied upon by the complainants' counsel. The court noted the reliance on this authority in support of complainants' stance on contractual obligations and consequences of non-performance/delay. |
| Kamal Nagpal v. State Bank of India and another, 1995(2) CPJ 342 (Jammu & Kashmir State Consumer Commission) | Authority for the proposition that sanctioning a loan but failing to pay the total sanctioned amount constitutes deficiency in service on the part of the bank. | The complainants relied on this decision to contend that partial disbursement contrary to sanction amounts to deficiency in service; the court recorded that counsel placed this authority before it. |
| ICICI Bank & Others vs. Dattatray Sadashiv Gurav, 2009(2) CPC 677 (Maharashtra State Consumer Commission) | Example of bank's deficiency in service where loan terms/EMI were altered without notice, causing harassment and leading to an award of compensation by the forum. | The complainants relied on this authority to demonstrate precedent where consumer fora have found deficiency in bank services and awarded compensation; the court noted reliance on this decision while considering the complaint. |
Court's Reasoning and Analysis
The court examined the record, affidavits and documents placed on record by both sides. It took the following steps in its analysis:
- Assessment of evidence submitted by complainants: the court considered Ex.C-A (affidavit), identity documents (Ex.C-1, Ex.C-2), the sale agreement for the land (Ex.C-5), account statement Ex.C-6 showing sanctioned amount Rs.7,86,620/- and disbursed amount Rs.2,61,620/-, photographs Ex.C-14 to Ex.C-21 showing construction in progress, and multiple purchase receipts Ex.C-22 to Ex.C-52 evidencing expenditure on construction materials.
- Review of OPs' evidence: the court considered the OPs' affidavit Ex.OP-A and documents including disbursement memo (Ex.OP-6), application form (Ex.OP-5) and other documentary material (Ex.OP-1 to Ex.OP-7).
- Comparison of sanction and disbursement: from Ex.C-6 and Ex.C-7 the court noted the sanctioned amount was Rs.7,86,620/- while the account records and credit entries (Ex.C-8 and related documents) showed that only part of the sanctioned amount was credited (Rs.1,75,000/- credited on 28.08.2018; overall disbursed shown as Rs.2,61,620/- in account statement).
- Evaluation of contested charges: the court observed that OPs had charged amounts of Rs.41,676/- and Rs.86,620/- which the complainants described as unexplained and, in the case of Rs.86,620/-, as an insurance premium for a policy the complainants deny taking. The court noted the complainants' position that they never purchased an insurance policy from OPs.
- On contractual duty: the court applied the principle that if the OPs agreed to sanction a loan amount, they are duty-bound to disburse the sanctioned amount according to the rules and terms to which the parties agreed. The court found that OPs had disbursed only a portion and therefore were liable to disburse the remaining sanctioned amount.
- Consideration of precedents and submissions: the court recorded that counsel for the complainants relied on prior consumer forum decisions and an apex court decision to support the proposition that failure to perform per sanction/contract and unexplained/unauthorized charges constitute deficiency in service warranting relief and compensation.
- Conclusion from evidence and law: weighing the documentary evidence and the parties' contentions, the court concluded the OPs' conduct amounted to a deficiency (as reflected in its directive outcomes) and thus ordered relief appropriate to redress the complainants' grievance.
Holding and Implications
Holding: The court accepted the complaint in favour of the complainants.
Direct orders and consequences:
- The OPs were directed not to charge the unexplained amounts of Rs.86,620/- and Rs.41,676/-.
- The OPs were directed to disburse the remaining sanctioned loan amount to the complainants within 45 days from receipt of a copy of the order.
- The complainants were awarded Rs.10,000/- as compensation and Rs.5,000/- as costs of litigation.
- Compliance with the order was mandated within 45 days from receipt of a copy of the order; the court recorded that delay in deciding the complaint beyond the usual timeframe was due to heavy pendency of court cases and the spread of COVID-19.
Implications beyond the parties: The opinion does not purport to set a new legal precedent; it provides relief based on the factual matrix and documentary record in this complaint. The effect is remedial and specific to the parties (disbursement, non-charging of specified amounts, and modest compensation and costs).
Administrative and Miscellaneous
The order records that copies of the order are to be sent to the parties as permissible under the rules, and the file is to be indexed and consigned to the record room after due compliance. The order was announced in open commission on 1st June 2021 and is signed by Kuljit Singh (President) and Jyotsna (Member).
KULJIT SINGH, PRESIDENT The present complaint has been filed by complainants against the OPs on the averments that they approached OPs for one housing loan to construct house over the land purchased by them through registered sale deed dated 12.01.2017 measuring 6 Marlas situated at Village Khera Tehsil Phagwara District Kapurthala. OPs received original sale deed from the complainants along with their I.D Proofs and agreed to sanction a housing loan to them. As per estimated value of the construction, complainants need about Rs.13,00,000/- to complete the construction and OPs agreed to grant the loan of Rs.7,86,620/- to them. On the assurance, complainant engaged one the kedar to start construction over the property and on 08.06.2018 OPs sanctioned the loan to them amounting to Rs.7,86,620/- with loan from OP no.2. At the time of sanctioning the loan, OPs took number of signatures on various papers out of which some are blank. After sanctioning the loan of Rs.7,86,620/-, Rs.1,75,000/- has credited into the bank of complainants on 28.06.2018. The complainants started raising construction over their property but OPs without assigning any reason stop payment of further sanctioned loan. The OPs always told the complainants that due to some internal technically problem it will take some time for disbursement of further sanctioned loan amount. Due to shortage of funds, the complainants are unable to complete their construction. In the month of April 2019 OPs told to them that now they are not to disburse the remaining loan amount to them and asked to them to return Rs.2,61,620/- on the pretext that the total disbursement amount is Rs.2,61,620/-. The complainants requested OPs that amount of Rs.1,75,000/- which was disbursed to them that an amount of Rs.41,676/- was also charged from them. Due to act and conduct of OPs, the complainants suffered huge financial loss. Due to illegal act and conduct of OPs, the complainants suffered loss. The OPs are legally bound to disburse sanctioned loan amount to complainants as only Rs.1,75,000/- has been disbursed and legally bound to pay damages and compensation to them. The complainants also issued legal notice dated 25.04.2019 to OPs, but of no use. The complainants shocked to see that a sum of Rs.1,50,000/- has been disbursed and Rs.86,620/- has been paid towards the insurance policy whereas no insurance policy has been taken by them. Therefore, they had filed the present complaint and prayed that the OPs be directed not to charge the unexplained amount of Rs.86,620/- and Rs.41,676/- and disburse the remaining sanctioned loan amount and to pay the amount of Rs.3,00,000/- as compensation on account of deficiency in service and illegal act of OPs and Rs.7500/- as cost of litigation. Upon notice, OPs appeared and filed written reply and contested the complaint of the complainants by raising preliminary objections that complaint is not maintainable. On merits, it was averred that the documents were sought from them which were required to conduct a legal and technical verification and appraisal. On the basis of instructions, an amount of Rs.7,86,260/- was sanctioned on 08.6.2018. The loan amount shall be disbursed in accordance with stages of construction. The complainants agreed for the same and also agreed for all the terms and conditions mentioned in sanctioned letter as well as loan agreement. On the basis of request of complainants, a sum of Rs.1.5 lac was disbursed in their favour and Rs.86,620/- was given to insurance policy on 28.08.2018 against their premium. The complainants requested OPs for disbursement of the second installment of the loan. On the same, a technical expert observed that 65% of the property stood constructed. On achieving such stage, the complainants cannot receive the disbursement of Rs.2,80,000/-. Rest of the averments made by the complainants were denied by OPs and prayed for dismissal of the complaint. The complainants tendered in evidence affidavit of complainant no.1 as Ex.C-A along with copies of documents Ex.C-1 to Ex.C-52 on the record. On the other hand, OPs relied upon affidavit of Sanjay Kaundal Attorney of OPs as Ex.OP-A along with copies of documents Ex.OP-1 to Ex.OP-7. We have heard learned counsel for the parties and have also gone through the record of the case very minutely.
5. The glance of evidence is required for settlement of the present case. The complainant no.1 has tendered his affidavit Ex.C-A in support of his case. Ex.C-1 is copy of aadhar card of the complainant no.1 and Ex.C-2 is copy of aadhar card of complainant no.2. Ex.C-5 is copy of agreement executed between the seller and purchaser regarding land. Ex.C-6 is copy of account statement. In which it has been mentioned that amount of Rs.2,61,620.00 has been disbursed to complainants. Ex.C-10 is copy of legal notice served upon OPs. ExC-11 and Ex.C-12 are copies of postal receipts thereof. Ex.C-14 to Ex.C-21 are photographs on the record. Ex.C-22 to Ex.C-52 are copies of receipts of regarding purchase of materials of different dates and different amounts mentioned therein.
6. To counter this evidence of the complainants, OPs relied upon affidavit of Sanjay Kaundal attorney of Dewan Housing Finance Ltd as Ex.OP-A on the record. Ex.OP-1 is copy of courier receipt. Ex.OP-3 to Ex.OP-4 are photographs. Ex.OP-5 is copy of application form. Ex.OP-6 is copy of disbursement memo. Ex.OP-7 is copy of legal notice.
7. From perusal of record, it has transpired that as per the estimated value of the construction, complainants need about Rs.13,00,000/- to complete the construction and OPs agreed to grant loan of Rs.7,86,620/-. After sanctioned the loan of Rs.7,86,620/- OPs disburse the amount of Rs.1,75,000/- to them which has been credited into bank of complainants on 28.08.2018. OPs giving without any notice to complainants, told them they are not to disburse the remaining loan amount to them and asked the complainants to return Rs.2,61,620/- on the pretext that the total disbursement amount is Rs.2,61,620/- The OPs also charged Rs.41,676/- from complainants without any reason. OPs also disbursed amount of Rs.1,50,000/- and Rs.86,620/- towards insurance policy whereas the complainants not received any insurance policy. Ex.C-6 is copy of statement of account , in which the amount sanctioned is mentioned as Rs.7,86,620/- and disbursed amount is mentioned as Rs.2,61,620/- .From perusal of document Ex.C-8 it is clear that amount of Rs.1,75,000/- credited to account of complainants, this amount credited by Dewan Housing Finance OPs on 28.08.2018 to complainants. From perusal of photographs Ex.C-14 to Ex.C-21 it is clear that the construction work of the house of the complainants under process but not completed. If OPs agreed for sanctioned amount to complainants, then it is bounden duty of the OPs to disburse the sanctioned amount as per rules. From perusal of Ex.C-22 to Ex.C-52 receipts of different dates, clear that the complainants purchased the material for construction of his house on different dates and they paid for the same. OPs wrongly charged Rs.86,620/- from complainants on the account of insurance policy, but the complainants not purchased the same at any time from OPs and Ops also wrongly charged Rs.41,676/- from OPs.
8. The learned counsel for complainants relied upon various judgments in support of their case i.e. case titled as M/s Construction and Design Services vs. Delhi Development Authority reported in 2015(1) SCC 263 that time is essence of contract. Work not completed within the specified period. Even if technically the time was not of essence, it could not be presumed that delay was of no consequent. Compensation granted to complainant on account of delay. Further case titled as Kamal Nagpal versus State Bank of India and another reported in 1995(2) CPJ
342 by Jammu & Kashmir State Consumer Commission Jammu that complainant was sanctioned a loan of Rs.85,000/- by the authorities. Bank paid Rs.50,000/- only of the total loan. It is clearly a deficient in service on the part of the bank for not payment the total sanctioned amount to the complainant. Further case titled as ICICI Bank and others vs. Dattatray Sadashiv Gurav reported in 2009(2) CPC 677 by Maharashtra State Consumer Commission Mumbai that bank loan deficiency in service, a sum of Rs.33,400/- obtained by complainant from OP bank. Loan was agreed to repaid with EMI of Rs.1632/- but bank suo-moto changed EMI to Rs.2002 without any notice to the complainant. Complainant being unduly harassed by bank employees directed to repay total loan in lump sum. But bank did not accept the offer. District Forum found guilty of deficiency in service and directing it pay compensation of Rs.50,000/- with cost.
9. Coming to the merits of the case, pleadings and averments made therein about alleged harassment from the OPs. From the record, it has transpired that OPs sanctioned the loan amount of Rs.7,86,620/- and disbursed amount of Rs.2,61,620/- vide statement of account Ex.C-6 on the record. In document Ex.C-7 the sanctioned loan amount of Rs.7,86,620/- is mentioned. In document Ex.C-8 the amount of Rs.1,75,000/- credited in the account of the complainants on 28.08.2018. If OPs agreed to sanction the loan amount to complainants as it is duty of OPs to repay the same. The OPs only sanctioned Rs.1,75,000/- to OPs and they are liable to pay the remaining amount to complainants.
10. In the light of our above detailed discussion, we accept the complaint of the complainant and OPs are directed not to charge the unexplained amount of Rs.86,620/- and Rs.41,676/- and further the OPs are directed to disburse the remaining sanctioned loan amount to the complainants within
45 days from the receipt of copy of this order. The complainants further directed to pay Rs.10,000/- as compensation and Rs.5000/- as cost of litigation.
11. The compliance of the order be made within 45 days from receipt of copy of this order. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of the court cases and spread of Covid-19.
12. Let copies of the order be sent to the parties, as permissible, under the rules. File be indexed and consigned to the record room after its due compliance. ANNOUNCED IN THE OPEN COMMISSION :
1 st Day of June 2021 (Kuljit Singh) President (Jyotsna) Member [ Kuljit Singh] PRESIDENT [ Jyotsna] MEMBER
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