State Bank Of India vs Pankaj Kumar And Anr.

This original application has been filed by the applicant bank, on 26.04.2018, through Mr. Rajesh Kumar Garg, Chief Manager, of the applicant bank, under Section 19 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the defendant no. 1 for recovery of a sum of Rs. 32,85,317/- (Rupees Thirty Two Lac Eighty Five Thousand Three Hundred and Seventeen Only) along with pendentelite and future interest @ 8.95% p.a. with monthly rests and @ 2% penal interest without capitalization from the date of this application till realization in full; to pass an order directing the defendant no. 2 to return the entire amount received, on behalf of the defendant no. 1, directly to the applicant bank along with other relief(s).

The brief facts of the case are that the defendant no. 1 approached the Shastri Nagar branch of the applicant bank, vide loan application and requested for grant of Housing Loan of Rs.29,57,500/- for purchasing the property being Flat bearing no. 706, 7th Floor, Tower-C, Red Apple Residency, Khasra No. 998, Raj Nagar Ext., Ghaziabad, Uttar Pradesh. the applicant bank sanctioned the Home Loan of Rs.29,57,500/- on 28.10.2015 and the same were disbursed as per the request of the defendant no. 1. In order to avail the said loan facilities, the defendant no. 1 executed various loan documents such as Loan Application, Loan Arrangement Letter dated 28.10.2015, Loan Agreement date 28.10.2015, Agreement to Mortgage dated 28.10.2015 and Tripartite Agreement dated 28.10.2015.

Further the defendant no. 1 created an equitable mortgage of the property being "Flat bearing no. A-706,7th Floor, Tower-C, Red Apple Residency, Khasra No. 998, Raj Nagar Ext. Ghaziabad, Uttar Pradesh" by way of deposit of the title documents with the applicant bank.

The aforesaid Housing Loan was to be repaid in Equated Monthly Instalments of Rs.25,130/- per month till the entire loan with interest is fully paid.

The defendant no. 2, has taken being up a Builder / Developer / Promoter construction of residential apartment known as "Red Apple Residency" at Plot bearing Khasra No. 998, Noor Nagar Raj Nagar Extension, Ghaziabad, Uttar Pradesh. Further, the defendant no. 2 entered into a tripartite agreement dated 28.10.2015 with the applicant bank and the defendant no.1.

It has further been submitted by the applicant bank that after availing the aforesaid loan facility, the defendant no. 1 has failed to comply with the terms and conditions of the loan & security documents and failed and neglected to deposit the interest and monthly instalments regularly and the account became irregular. Despite of several requests and reminders of the applicant bank, the defendant no. 1 has failed to liquidate their liability and finally the account of the defendant no. 1 was declared NPA on 26.10.2017. Thereafter, the applicant bank through its advocate's notice dated 03.03.2018 called upon the defendant no.1 to pay the total amount of Rs.32,47,193/- as on 20.02.2018 along with the future interest to the applicant bank but the defendant no.1 failed and neglected to pay to the applicant bank the said outstanding amount or any part thereof. Applicant bank through its advocate's notice dated 03.03.2018 called upon the defendant no.2 to cancel the booking of aforesaid Flat bearing no. 706 allotted to the defendant no. 1 and to return all the amounts received by defendant no. 2 on behalf of him to the applicant bank within 7-days but the defendant no.2 failed and neglected to return to the applicant bank all the amounts received on behalf of the defendant no.1. Hence, the applicant bank has approached this Tribunal for recovery of their dues.

Notices of this OA were issued to both the defendants and the defendant no. 1 put appearance through its counsel and filed his written statement. So far as, the defendant no. 2 is concerned, despite sufficient service, none appeared for defendant no. 2, hence, defendant no. 2 was proceeded ex parte vide order dated 30.09.2019 of this Tribunal.

In his written statement, the defendant no.1 has raised various objections that the present OA has not been signed, verified and instituted by a duly authorized and competent person; that the OA filed by the Bank is barred by limitation; that the statement of account contains wrong, incorrect and unauthorized entries, wrong calculation of interests etc; that the OA is bad and not maintainable as the same is based on documents which were got signed blank and filled in subsequently without any authority.

It is mainly contended in the WS that on the assurance made by the defendant no. 2 that they would deliver the flats within time, the petitioners and other similarly situated flat buyers running into more than 2000 buyers made payments totaling to several hundred crores of rupees to the extent of 50% - 100% abiding by the payment schedule. However, the defendant no. 2 was found in serious breach of their obligation to deliver the flats till August 2016 and the default of defendant no. 2 continued unabated despite several revised dates of possession unilaterally extended by the defendant no. 2. It is further stated that since the handover of possession of the home buyers by defendant no. 2, the beleaguered home buyers knocked the door of the National Consumer Disputes Redressal Commission, New Delhi by filing Consumer Complaint no. CC 1873/2018 and Consumer Complaint No. CC IA/17183/2018 under Section 12(1) (c) of the Consumer Protection Act, 1986 inter-alia seeking an immediate 100% refund of the total principal amount paid by all the consumers / buyers along with a penal interest from the date of receipt of payments made to the builders and the matter is pending before NCDRC. It is also stated that the answering defendant has been cheated and defrauded by defendant no. 2 as well as by the officials of the applicant bank in connivance with each other. As per the payment schedule, the bank had to pay the builder 5% of (BSP) on casting of 11th Floor roof slab, 10% of (BSP) on completion of bricks work, 5% of (BSP) on completion of internal plaster and 10% of (BSP) on offer of possession, however, due to builder having collusion with the bank, the bank had released the loan amount to the builder in blatant violation of the stage-wise payment schedule and other agreements. In this regard, defendant no. 1 has relied upon a Circular issued by RBI on 03.09.2013 stating that the applicant bank has failed to follow the said Circular. It is stated in the WS that the answering defendant herein was lured by joint representation of defendant no. 1 and the applicant bank officials and the answering defendant entered into a Tripartite Agreement, however, the applicant bank failed to comply with the terms and conditions of the said Agreement in connivance with the defendant no. 2. The answering defendant was regularly making repayments of the said loan but despite repeated reminders, the defendant no. 2 failed to deliver the physical possession of the property-in-question and the answering defendant also issued a Legal Notice to the defendant no. 2 i.e. Builder through his counsel for cancelling the agreements and to refund the amount to the answering defendant and the bank along with interest and further made request to the concerned officials of the applicant bank to provide assistance for getting possession of the Flat but they did not pay any heed to his request. Hence, having left with no option, the answering defendant stopped making repayment of the EMIs and submitted that once the issue is resolved, he shall pay the EMIs regularly as per the terms and conditions of the loan. But the applicant bank instead of initiating any action against the defendant no. 2 and assisting the answering defendant for getting physical possession of the mortgaged property, which is the collateral security qua the loan, filed the present OA against the defendant. It is stated in the WS that the applicant bank should have proceed under the provisions of SARFAESI Act and to take the physical possession / put to sale in order to recover the alleged dues but the bank has failed to enforce the security by the sale and file present OA. The homebuyers of the Red Apple Residence Project had formed an association and filed the complaint under Section 156(3) and 200 of Cr. PC before the Hon'ble CMM Karkardooma Court, Delhi to lodge an FIR against the builder company, its director and bank officials which was allowed by the Court and FIR was registered as FIR no. 0225 on 30.10.2018. Further, as per letter dated 17.05.2019 issued by GDA confirmed that M/s Red Apple Residency Project developed by Idea builder is sealed and construction is stopped from last two-years. Hence, defendant no. 2 failed to handover the physical possession of the flat nor executed Sale Deed in favour of the answering defendant in respect of the Flat though, the defendant no. 2 and its officials have been assuring to handover the physical possession and execute the sale deed in favour of the answering defendant but the neither the physical possession of the said Flat was handed over to the answering defendant nor Sale Deed was being executed and subsequently, the applicant bank filed the present OA under reply. Accordingly, the defendant no. 1 has prayed for the dismissal of the present application against him.

The applicant bank has also filed its replication to the WS filed on behalf of defendant no. 1 denying the allegations levelled against it and reiterating the averments made in the OA.

To prove its case, the applicant bank leads its evidence by filling the affidavit of Shri Rajesh Kumar Garg, Chief Manager / authorized officer, of the applicant bank, who has exhibited the documents which includes copy of Gazette Notification dated 27.03.1987 as Ex. PW-1/1; original loan application of defendant no. 1 as Ex. PW-1/2; Arrangement Letter & Agreement for Home Loan dated 28.10.2015 executed by defendant no. 1 as Ex. PW-1/3 & PW-1/4 respectively; Agreement to Mortgage dated 28.10.2015 & copy of allotment cum flat buyer agreement dated 15.10.2015 as Ex. PW-1/5 & PW- 1/6 (OSR) respectively; tripartite agreement dated 28.10.2015 as Ex. PW-1/7; office copy of legal demand notice dated 03.03.2018 sent to defendant no. 1 and its postal receipts as Ex. PW-1/8 & PW- 1/9; office copy of legal demand notice dated 03.03.2018 sent to defendant no. 2 & its postal receipts as Ex. PW-1/10 & PW-1/11; copy of statement of accounts as Ex. PW-1/12; payment schedule and payment demand notices dated 27.10.2015 & 15.03.2016 & payment demand notices as Ex. PW-1/13 to PW-1/15 (OSR) respectively.

So far as, defendant no. 1 is concerned, he has also filed the evidence by way of his affidavit and proved certain documents i.e. copy of Payment Schedule (marked as 'A'); copy of Payment Demand Notice (marked as 'B'); copy of RBI circular dated 03.09.2013 as Ex. DW-1/3; copy of legal notice given by defendant no. 1 to defendant no. 2 as Ex. DW-1/4 (OSR); latest original photo of site as Ex. DW-1/5; copy of FIR dated 30.10.2018 registered by the homebuyers of the Red Apple Residency Project (marked as 'C'); letter dated 27.05.2019 issued by GDA confirming that the project by idea builder is sealed and construction is stopped from last two years ( marked as ' D')

Heard and record has been thoroughly perused. Now the objections raised by defendant no. 1 are being dealt in subsequent paras :-

(i) The defendant no. 1 has raised an objection that the present OA has not been signed, verified and instituted by a duly authorized and competent person. On perusal of the records, it is observed that the present OA has been filed by Sh. Rajesh Kumar Garg, Chief Manager of the bank, and applicant bank has duly placed on record the copy of Gazette Notification dated 27.03.1987 which authorizes him to sign and verify the present plaint/ OA. Therefore, the plea of the defendants is not maintainable and the same is hereby rejected.

(ii) The next objection raised by the defendant no. 1 is that the OA filed by the Bank is barred by limitation. I am not convinced by this plea of defendant no. 1 as the applicant bank sent legal notice dated 03.03.2018 to the defendant no. 1 which have been duly proved as Ex. PW-1/8 & PW- 1/9 whereas present OA was filed on 26.04.2018. Hence this plea of defendant no. 1 stands discarded.

(iii) Defendant no. 1 has also raised an objection that the statement of account contains wrong, incorrect and unauthorized entries, wrong calculation of interests etc. Record reveals that the witness of applicant bank has duly proved the Statement of Accounts as Ex. PW-1/12 and the defendant has not challenged even a single entry of statement of account specifically. Further more, defendant no. 1 was always at liberty to file his own statement of account which is not done by him. Hence, this plea of defendant no. 1 also does not hold any water and same is hereby rejected.

(iv) Another objection of defendant no. 1 is that the OA is bad and not maintainable as the same is based on documents which were got signed blank and filled in subsequently without any authority. This Tribunal is of the view that plea of blank documents is no plea in the eyes of law as has been held by the Hon'ble Delhi High Court in the matter of "Indian Bank Vs. Cheese Wafers (India) Pvt. Ltd. It was held if the defendants have not filed any complaint before higher authorities of the bank or filed any complaint before police authorities...... ". Thus, the plea of blank documents, alleged to be misused by the applicant bank, is not maintainable after filing of the OA and the same is rejected.

It is mainly contended in the WS that the defendant no. 2 failed to handover the physical possession of the flat nor executed Sale Deed in favour of the answering defendant in respect of the Flat though, the defendant no. 2 and its officials have been assuring to handover the physical possession and execute the sale deed in favour of the answering defendant but neither the physical possession of the said Flat was handed over to the answering defendant nor Sale Deed was being executed. It is also a matter of fact that the defendant no. 1 and other home buyers have filed the complaints before NCDRC as well as FIR against defendant no. 2.

Now, before embarking upon the further discussions, it would be appropriate to go through the terms and conditions of the Tripartite Agreement executed between the parties, which is as under:

"'Clause 2. That the Builder agrees that it has no objection to the Borrower(s) mortgaging the said flat with proportionate share in land to the SB/ as security for the said loan agreed to be advanced by the SB/ for the purpose of purchase/construction of the said flat. In the event of default in the repayment of loan and/or the Borrower(s) committing any other default which makes the Borrower(s) liable for the repayment of the entire amount outstanding in the said loan as per the terms of the Loan Agreement executed between the Borrower(s) and the SB!, the builder shall at the call of the SB!, be under obligation to cancel the booking and pay all the amounts received by the Builder from the Borrower(s) or on behalf of the Borrower(s) to the SBI.

Clause 3. That if for any reason there is any increase/escalation in the cost of the said flat, the increase shall be paid and borne by the Borrower(s) without any reference to the SBI and until such payment is made, the SBI shall have the right to suspend further disbursement of the said loan.

Clause 4. That in the event of the Builder cancelling the said booking for any default committed by the Borrower(s) or the project is shelved by the Builder or for any other reason whatsoever, the Builder, shall pay the entire amount received on behalf of the Borrower(s) to the SBI, after retaining the earnest money as per agreement quantified amount Rs.....

Clause 16. That the Builder assures the SBI that the construction shall be completed as per schedule and as per the sanctioned plans and on completion of construction the title of the flat with proportionate undivided share in the land shall be conveyed in the name of the Borrower(s).

In view of the abovesaid clause entered into between all the defendants and the applicant bank herein, if the builder/land owner fails to hand over the possession of the property-in-question to the borrowers, then certainly, the builder is liable to pay to the bank the amount received by it except retaining the permissible reduction if any, within the stipulated time. It is admitted fact that the builder has not delivered the possession of the flat to the defendant no.1. Therefore, in view of the said Clause 2 to 4 of the Tripartite Agreement, apparently, the entire amount has been received by the builder and in case the said builder fails to provide possession of the flat to the defendant no.1 then, certainly, the defendant no. 2 firstly is entitled to repay the entire amount to the bank after deducting necessary charges, but to that extent, no evidence is led by the builder, whereas the witness of the applicant bank has fully corroborated the averments made in this O.A. The evidence lead by the applicant bank which consists of mainly written/ typed documents has gone unchallenged and there is no question of disbelieving the same based upon the documents.

In the present matter, it is proved on record that the loan facility was availed by the defendant no.1 for purchasing the said flat-in-question from the defendant no.2 and they have entered into a separate agreement apart from the tripartite agreement. Therefore, all the defendants are jointly and severally liable to repay the loan amount to the applicant bank. But in view of the Clause 2 to 4 of the Tripartite agreement, then certainly, first the liability is of the defendant no. 2 and after making the said payment as received by the defendant no.2 to the applicant bank, if any is left due, then the same shall be recoverable from the defendant no.1.

ORDER

(i) Consequently, I allow this OA against all the defendants, but at the first instance held defendant no.2, to pay to the applicant bank, within a period of 30 days, a sum of Rs. 32,85,317/- (Rupees Thirty Two Lac Eighty Five Thousand Three Hundred and Seventeen only) together with costs and pendentelite & future interest @ 8.95% per annum with monthly rests from the date of filing of this OA till the date of its realization; failing which the aforesaid amount shall be recovered from the sale of the mortgaged property namely, "Flat bearing No. 706, 7th Floor, Tower C, Red Apple Residency, Khasra No. 998, Raj Nagar Extension, Ghaziabad, Uttar Pradesh", if in existence, and in case of non-existence or shortfall, the same shall be recovered from the sale of movable and immovable properties firstly of the defendant no.2 and thereafter, if any is left due, then the same shall be recoverable from the defendant no.1.

(ii) The recovery certificate be issued forthwith and be sent to the Recovery Officer-II, Debts Recovery Tribunal-III, Delhi.

(iii) Parties are directed to appear before the Recovery Officer-I, ORT-III, Delhi on 27.07.2020.

(iv) Copies of final order be sent to all concerned free of cost.

File be consigned to records.