1. Appeal No. 1822 of 2019 is filed by the Complainants under Section-19 of the Consumer Protection Act, 1986 against the Order dated 13.08.2019 passed by the West Bengal State Consumer Disputes Redressal Commission, Kolkata (hereinafter referred to as the "State Commission") in Complaint No.SC/07/O/2007.
2. Cross Appeal No. 1868 of 2019 has been filed by the Opposite Parties No.1 and 2 under Section 19 of the Consumer Protection Act, 1986 against the Order dated 13.08.2019 passed by the West Bengal State Consumer Disputes Redressal Commission, Kolkata (hereinafter referred to as the "State Commission") in Complaint No. SC/07/O/2007.
3. The case of the Complainants is that on 01.05.2003 they entered into an Agreement with Opposite Party No.-1 for purchase of a 'Row House' being House No.B-15 in the Complex "The Tarrace" at Merlin Greens situated at Mouza ,Kriparampur, P. S. - Bishnupur, District - South 24 Parganas for a total consideration of Rs.14,25,000/-. Complainants paid Rs.50,000/-, vide cheque No.745541 dated 01.05.2003, towards earnest money. The Complainants also paid a sum of Rs.1,93,750/- towards the balance of earnest money totaling to Rs.2,43,750/-. Supplementary Agreement was executed on the same day i.e., 01.05.2003. Thereafter, the Complainants approached Opposite Party No.-3 for obtaining house loan of Rs.15,00,000/- which was duly sanctioned. Thereafter, Tripartite Agreement between the Complainants, Opposite Party No.1 and Opposite Party No.-3 was executed on 21.01.2004. Opposite Party No.-3 released a sum of Rs.13,81,250/- directly to Opposite Party No.-1 out of the sanctioned House loan of Rs.15,00,000/- and kept a sum of Rs.1,18,750/- for registration of the Deed of Conveyance. The Complainants paid in total Rs.16,25,000/- out of which Rs.14,25,000/- was the total consideration for the Row house and Rs.2,00,000/- towards contribution towards the Corpus Fund and for other charges like maintenance charges etc. The Complainants got possession of the house on 20.04.2004 and Opposite Party No.2 provided water supply, electricity, generator service and security services. On 30.06.2004, the Complainants requested Opposite Parties No.1 & 2 to get the Deed of Conveyance duly registered in their favour, but the same was not done. Opposite Party.2 informed the Complainants, vide letter dated 23.10.2006, that since they failed to fulfil their financial obligation, cheque of Rs.1,93,750/- being dishonored twice and default in payment of installments to Opposite Party No.3 i.e., Bank, the Supplementary Agreement dated 01.05.2003 stood cancelled. The Complainants would be treated as trespassers and had to vacate the Row House. All the basic facilities were withdrawn and the Complainants were compelled to shift from the Row House to a rented house on 23.10.2006. Opposite Party No.2 took repossession of the property and transferred the same to a third party in collusion with Opposite Party No.3 at Rs.20,51,000/- though it was officially valued at Rs.31,25,100/- as per the report of the Sub-Registrar Office. Though the Complainants were ready and willing to repay their home loan in full, they were not allowed.
4. Aggrieved by the action of the Builder, the Complainants filed a Consumer Complaint in the State Commission on 01.03.2007 which was disposed by the State Commission in favour of Complainants by order dated 24.02.2009. Challenging the said order, the Builder preferred an Appeal in the National Commission, being First Appeal No.128 of 2009, which was dismissed, vide order dated 23.05.2014.
5. Aggrieved by the order of this Commission, the Builder filed Special Leave Petition before the Hon'ble Supreme Court, being SLP No.21217 of 2014 which was later converted into Civil Appeal No.-6849/15. Hon'ble Supreme Court 2014, vide order dated 01.09.2015, set aside the order passed by the National Commission as well as State Commission and remanded the matter to the State Commission with a direction to proceed with the case afresh, after impleading Union Bank of India, as a party. In view of the order of the Apex Court, Union Bank of India was impleaded as Opposite Party No.3. The State Commission, vide order dated 10.04.2017, again allowed the Complaint with a direction to Opposite Parties No.1 and 2 to jointly and severally make payment of Rs.50,00,000/- in lieu of the property, along with compensation of Rs.10,00,000/- and litigation cost of Rs.1,00,000/.
6. Challenging the aforesaid order, Opposite Parties No.1 and 2 preferred First Appeal No.840 of 2017 before this Commission. This Commission, vide order dated 19.02.2019 set aside the order passed by the State Commission and the case was remanded to the State Commission with a direction to dispose the matter expeditiously, preferably within three months from the date of first appearance of the Parties before them i.e. 18.03.2019 and not later than six months. The Complainants again filed SC/07/0/2007 before the State Commission with the following prayer:-
"It is therefore prayed that the Hon'ble Commission may be pleased to admit this Complaint and pass the following orders in favour of the Claimants:-
Rs.56,25,000 to be paid as compensation in lieu of the petitioners petition.
Rs.16,25,000 be paid to reimburse actual house rent paid by petitioner after being unlawfully evicted from their property on 23.10.2006 Rs.10,00,000 be paid as damages for causing in human physical sufferings public humiliation and mental trauma to petitioners.
Rs.10,00,000 be paid as cost of litigation over the last 8 years since this Complaint was filed.
Pass further orders or orders as your Lordship may deem fit and proper."
7. The State Commission in the third round of litigation in Complaint No.SC/07/O/2007, vide impugned order dated 13.08.2019, observed that the Opposite Party No.3 i.e., Bank was guilty of providing deficient service, as the Bank did not release the pending amount for registration of the House. The State Commission further held that since no relief was sought against Opposite Party No.3 i.e., the Bank, no order was passed against them. The State Commission allowed the Complaint with the following directions:-
(i) The Opposite Party No. 1 is directed to make payment of Rs.50,00,000/- in lieu of the property subject to deduction of Rs.25,00,000/- which has already been deposited by OP No.1 Company, in default, the amount shall carry interest @ 9% p.a. from this date till its realization;
(ii) The Opposite Party No. 1 is directed to make payment of Rs.10,00,000/- as compensation for harassment and mental agony of the complainants;
(iii) The Opposite Party No. 1 is directed to pay Rs.1,00,000/- as costs of litigation to the complainants
(iv) The above payments must be paid within 60 days from date.
8. Not satisfied with the impugned order dated 13.08.2019 passed by the State Commission, in Complaint No. SC/07/O/2007, the Complainants filed First Appeal No.1822 of 2019 before this Commission for enhancement of compensation, with the following prayer:-
"I. Rs.56,25,000/- be paid as compensation in lieu of the Petitioner's property.
II. Rs.16,25,000/- be paid for reimbursement of house rent paid by the Petitioners after being unlawfully evicted from their property on 23.10.2006.
III. Rs.10,00,000/- to be paid as damages for causing inhuman physical sufferings public humiliation and mental trauma to the Petitioners.
IV. Rs.10,00,000/- be paid as cost of litigation over the last 8 years since this Complaint was filed.
V. Pass further order or orders as your Lordship may deem fit and proper."
9. Also, aggrieved by the order dated 13.08.2019 passed by the State Commission, in Complaint no. SC/07/O/2007, Opposite Party No.1 & 2 filed First Appeal No.1868 of 2019 before this Commission with the following prayer:-
Allow the appeal filed by the present appellant and set aside the impugned judgement and final order dated 13.08.2019 passed by the Learned State Consumer Disputes Redressal Commission, West Bengal in complaint case no. SC/07/O/2007;
Pass such further and other order as this Hon'ble National Consumer Dispute Redressal Commission, New Delhi may deem fit in the facts and circumstances of present case.
10. Heard the Learned Counsel for the Parties and perused the relevant record. Learned Counsel for Complainants advanced the argument that the State Commission, vide impugned order dated 13.08.2019, although allowed the Complaint and granted relief against Opposite Party No.1, failed to fix liability on Opposite Party No.3, despite holding it guilty of deficiency in service on the ground that there was no prayer qua Respondent No.3, whereas it was specific case of the Appellants/Complainants that the prayer in the amended Complaint covers relief qua Respondent No.1, Respondent No.2 and Respondent No.3. It was further submitted that they should be awarded upto date interest on the amount of compensation. In this regard he relied on the judgement of the Hon'ble Supreme Court in Balram Prasad vs Kunal Saha & others (2014) 1 SCC 384 and Malay kumar Ganguly vs Sukumar Mukherjee & ors. (2009) 9 SCC 221. Further State Commission erred in fixing the value of the property at 50 lakhs as on 13.08.2019, although it was valued at the same price, vide order passed by this Commission in FA/128/2009 dated 23.05.2014. A similar house now in Merlin Green Complex is being sold in the range of Rs.1.17 crore to 1.58 crore.
11. Learned Counsel for the Respondents/Opposite Parties No.1 and 2 submitted that the impugned order of the State Commission was without any basis. Notwithstanding the fact that the findings of the State Commission are contrary to the evidence on record, they cannot be foisted with the entire liability, given that there are categorical findings of deficiency of service against Respondent No.3. The State Commission failed to adjudicate the liability of the Bank and fixed the entire liability on Respondent No. 1 and 2, despite the observation of this Commission, vide order dated 19.02.2019 in FA/840/2017, to the effect that "the State Commission has not appreciated the evidence on record and has not examined the role of deficiency in service of the Bank." It was also submitted that in any event, the quantum of compensation awarded to the Appellants/Complainants had resulted in a windfall gain to the Complainants who were chronic defaulter as per CIBIL report referred by Respondent No.3. Appellants/Complainants paid Rs.2,43,750/- to Respondent No.1 and 2 against a total consideration of Rs.16,25,000/- for the purchase of Row House and admittedly Appellants paid EMI's of only as Rs.2,32,645/- to the Bank for a loan of Rs.15 lakhs. Complainants, thus, defaulted in repaying the loan to Respondent No.3 for which Respondent No.3 repeatedly informed Respondent No.1 of the same. The current market value of the house in question is Rs.25,63,896/- as is evident from the valuation report of the Sub-Registrar. The Compensation granted is, therefore, unjustified and irrational. The finding of the State Commission attributing liability to Respondents No.1 & 2 for non-registration of the sale deed was contrary to the facts on record. State Commission erred in holding that the OP No.1 Company also did not ask the Complainants to purchase the stamp duty or to bear registration cost or to fix any date, wherein they will execute the Sale Deed due to which sale deed could not be executed. As per allotment agreement, Complainants were responsible for payment of stamp duty and registration charges. Clause 8.1 of the allotment agreement sets out that: -
"It shall be the responsibility of the purchaser to get the agreement registered and development will appear before the authorities for the registration of the agreement. The purchaser shall have to make payment of the stamp duty and registration charges".
12. As the amount due towards stamp duty and registration charges continued to remain unpaid, the deed could not be registered. Learned Counsel further stated that the State Commission erred in holding that- "So far as withdrawal of essential services is concerned, the letter given by the OP No.1 Company dated 23.10.2006 appears to be a pointer. By the said letter, the OP No.1 Company treated the complainants as a trespasser and instructed the security and management staff to desist from rendering any of the services and any common facilities including disconnection of generator services etc. which compelled the complainants to vacate the house".
13. Water and electricity supply were in the name of the Appellants and were already provided by the relevant authorities. Letter dated 23.10.2006 only directs the stoppage of security and generator service. Thus, there was no direction to stop the "essential service." Possession of the property was taken pursuant to SARFAESI ACT proceedings initiated on account of non-repayment of loan amount. The Row House was voluntarily handed over by the Complainant to Respondent No.3 on 24 August 2007, in the presence of Respondents No.1 and 2. The dispossession of the Property, thus, was on account of the Appellants' own faults in their repayment obligation.
14. Learned Counsel for Respondent Nos.1 and 2 denied the allegation that they were not the sole owner of the property. The recital to the Allotment Agreement expressly recognizes that Merlin Projects Limited, the party hereto of the first part was the developer of row house complex in the premise as Sanction letter dated 22.01.2002 was issued to Respondent No.1 by the South 24 Pargana's Planning Authority. Moreover, the residential complex consisted of Row Houses and 100 bungalows and title of the same had been transferred in all the cases including the present Row House which was sold pursuant to SARFAESI Proceedings. No dispute had been raised by any of the owners regarding title of any of the Row House.
15. Learned Counsel for the Respondent No.3 filed common written statement in FA/1822/2019 and FA/1868/2019 and submitted that claim of the Complainants against Respondent No.3 was barred by limitation as the Complainants sought no relief against Respondent No.3 in the Original Complaint. Learned Counsel also submitted that on disbursement of the major loan amount, the Complainants were liable to repay the loan amount with interest, which they failed to do. It was submitted that Respondent No.3 issued Notice dated 24.04.2007 under Section 13(2) of SARFAESI Act. Ultimately Respondent No.3 issued possession notice under section-13(4) of SARFAESI Act and took possession of the house which was handed over by the Appellants without protest by signing possession letter and inventory.
16. It is an admitted fact that on 01.05.2003 the Complainants had entered into an Allotment Agreement and a Supplementary Agreement with the Developer for purchase of a Row House being No.B-15 in the Complex 'The Terrace' at Merlin Greens situated at Mouza- Kriparampur, P.S.- Bishnupur, District South 24 Parganas for a total consideration of Rs.14,25,000/-. An amount of Rs.2,00,000/- was to be paid as Corpus Fund for provision of common and related services of the property. The Complainants paid a sum of Rs.50,000/- by way of cheque dated 01.05.2003 as earnest money. Thereafter, Complainants also paid Rs.1,93,750/- towards the balance earnest money and thereby they paid an amount of Rs.2,43,750/- towards earnest money. The Tripartite Agreement clearly postulates that the Appellants have paid 15% of the total consideration amount i.e. Rs.2,43,750/- by way of earnest money in favour of the Builder. The Appellants also paid EMI of Rs.2,32,645/- to the Bank for the housing loan of Rs.15 lakhs taken for the home. Thus, the Complainant in effect directly paid only Rs.4,76,395/- apart from loan paid by the Bank to the Builder. On 15.07.2003, the Builder allotted the Row House in favour of the Complainants for a consideration of Rs.16,25,000/- and upon payment of 15% of consideration, the Builder was to execute the Sale Agreement in favour of the Appellants.
17. This Commission, vide order dated 23.05.2014 held as follows: -
"In absence of any other material in regard to the market value of the subject flat on the date (24.02.2009) when the impugned order, directing registration of Conveyance Deed and delivery of possession of the flat, was made, we feel that instead of remitting the matter back to the State Commission at this stage, for determination of compensation in lieu of the flat, the ends of justice would be sub-served if keeping in view the comparative Housing Price Index issued by the National Housing Board for the year 2007 and 2009 (100 : 162) the value of the flat, as in February, 2009 is taken at Rs.50,00,000/-"
Learned Counsel for the Complainants has filed a certificate dated 20.11.2008 issued by the Sub-Registrar showing the market value of the property at Rs.31,25,100/- as on 19.11.2008. Learned Counsel for Opposite Parties Nos.1 & 2, however, has also filed the valuation of the Sub-Registrar dated 25.01.2021 showing the market value of the property at Rs.25,63,896/-. Going by the latest valuation of the Sub-Registrar, Directorate of Registration & Stamp Revenue, State of West Bengal dated 25.01.2021, Market Value of the property is taken at Rs.25,63,896/-.
17. Opposite Party No.1 in spite of receiving the entire consideration of the raw house from the Complainants, failed to execute the Sale Deed in favour of the Complainants and vide notice dated 23.10.2006 compelled the Complainants to vacate the house treating them as trespassers. Opposite Party No.1 also withdrew the common services including the generator service. There was, thus, clear deficiency in service on the part of Opposite Party No.1. As per the terms of the Tripartite Agreement, Opposite Party No.1 stood guarantor for the Complainants. On the other hand, Opposite Party No.1 itself failed to execute the Sale Deed in favour of the Complainants. The findings of the State Commission holding Opposite Party No.1 guilty for deficiency in service are, therefore, affirmed. Regarding the deficiency in service of the Bank, it is relevant to note the terms of Tripartite Agreement which reads as follows: -
"Whereas the bank on the written application aria request of the Borrowers has already sanctioned a loan of Rs.15,00,000/- to the Borrower vide sanction dated 22.01.2004 ) and has agreed to disburse/release the loan soon after the Borrowers creates an equitable mortgage by deposit of title deeds relating the Row House to be purchased by them from the Builder."
18. As per the language of the Tripartite Agreement dated 21.01.2004, Opposite Party No.3 i.e., Union Bank of India was supposed to release the loan amount after equitable Mortgage was created but it is observed that the Bank released the loan amount before and without creating any equitable mortgage. Further, the Bank also failed to release the amount of Rs.1,18,750/- withheld for stamp duty, due to which the sale deed could not be executed. State Commission observed that "when at the instance of OP No.3 Bank, the OP No.1 Company delivered possession to the Complainant and OP No.3 Bank has requested the OP No.1 Company to execute the sale deed, there was hardly any reason on the part of OP No.3 Bank not to release the balance of the Home Loan account for meeting the stamp duty expenses.: From the above submissions and settled principles of law, this Commission endorses the observation made by State Commission that Respondent No.3/Bank was deficient in service in releasing the loan amount without creating an equitable mortgage. The State Commission, however, did not fasten liability on Respondent No.3 as
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it opined that no relief was prayed by the Complainants against Respondent No.3. In this regard, it is relevant to read the prayer clause of the Complaint which is as follows - "It is therefore prayed that the Hon'ble Commission may be pleased to admit this Complaint and pass the following orders in favour of the Claimants:- Rs.56,25,000 to be paid as compensation in lieu of the petitioners petition. Rs.16,25,000 be paid to reimburse actual house rent paid by petitioner after being unlawfully evicted from their property on 23.10.2006 10,00,000 be paid as damages for causing in human physical sufferings public humiliation and mental trauma to petitioners. Rs.10,00,000 be paid as cost of litigation over the last 8 years since this Complaint was filed. Pass further orders or orders as your Lordship may deem fit and proper." 19. From the above, it is clear that the Complainant did not seek relief specific to any of the Opposite Parties. The State Commission found deficiency in service on the part of Opposite Parties No.1, 2 & 3 but granted relief only against Opposite Parties No.1 & 2 and did not grant any relief against Opposite Party No.3/Bank. The State Commission erred by not fixing the liability on Respondent No.3, when deficiency in service on the part of Respondent No.3 is established. 21. In view of the above, both First Appeals are disposed of in the following terms:- (i) Opposite Party No.1 is directed to make payment of Rs.25,63,896/- in lieu of the property subject to deduction of Rs.25,00,000/- which has already been deposited by OP No.1 Company with the State Commission and withdrawn by the Complainants. (ii) Opposite Parties Nos.1 & 3 are further directed to make payment of Rs.5 lakhs each as compensation for harassment and mental agony caused to the Complainants due to deficiency in service; (iii) They shall also pay Rs.50,000/- each as costs of litigation to the Complainants; (iv) Above payments shall be made within 6 weeks from the date of this order, failing which the amount shall carry interest @ 9% p.a. from the date of the order till its realization.