Housing Development Finance Corporation Ltd v. Umesh Kumar Rai and Another

1. This is an application filed by the defendant no.1 seeking unconditional leave to defend.

2. Plaintiff has filed the present suit under the provisions of Order XXXVII of the Code of Civil Procedure. The present suit is based on a written agreement as also statement of account. The case of the plaintiff in a nutshell is that the defendants no.1 and 2 jointly approached the plaintiff in the capacity of borrower and builder, respectively, for availing of housing loan by the defendant no.1 for purchase of a flat No.3072, 7th floor, T-3, Shivkala Charms, Plot No.7, Sector- PI-II, Greater Noida, U.P., in the apartments by the name of “Shivkala Charms”. The apartments were being constructed by defendant no.2. 2014:DHC:4355

3. It is the case of the plaintiff that the defendant no.1 had satisfied himself about the integrity and capability of defendant no.2 to complete the project on time. Parties entered into a tripartite agreement on 24.3.2011. Plaintiff and defendant no.1 also executed a loan agreement on 30.3.2011. The defendant no.2 vide their letter dated 24.3.2011 has also marked a lien of the plaintiff on the flat in question. Loan in the sum of Rs.26.0 lacs was sanctioned in favour of defendant no.1 for a period of 240 months with variable rate of interest.

4. The plaintiff made a total disbursement of Rs.24.35 lacs on behalf of defendant no.1 to defendant no.2 and a cheque bearing No.75939 dated 29.3.2011 drawn on HDFC Bank, Suryakiran Building, New Delhi was issued in favour of the defendant no.2. Copy of the statement of account maintained by the plaintiff records that the said payment was made by the plaintiff. Defendant no.1 has also executed a promissory note in the sum of Rs.26.0 lacs, the sanctioned amount, and also an indemnity bond dated 24.03.2011, in favour of the plaintiff.

5. As per clause 2.[6] of the loan agreement, defendant no.1 had agreed to pay equated monthly installments (EMI)/ pre equated monthly installments (PEMI), every month. Further, as per clause 2.7(b), defendant no.1 also agreed to pay additional interest as per the rules of plaintiff and other charges as applicable from time to time.

6. In terms of the agreement it was agreed that in case of default in repayment of loan amount to the plaintiff by defendant no.1, any amount payable by defendant no.2 to defendant no.1, on account of cancellation of allotment of flat, shall be paid directly to the plaintiff by defendant no.2. Further, under the agreement, defendant no.1 agreed to secure with the plaintiff, the flat by way of mortgage and defendant no.2 also confirmed the same.

7. As per the plaint, the last payment made by defendant no.1 was on 31.8.2011 and thereafter no amount was paid by defendant no.1 towards repayment of said loan. Therefore, plaintiff sent a loan recall notice dated 6.3.2012 to defendant no.1, however, defendant no.1 failed to reply or repay the outstanding. Plaintiff also sent a demand notice dated 26.4.2012 to defendant no.2, but the defendant no.2 also failed to refund the amount.

8. It is the case of the plaintiff that the following amounts are due, as the defendant no.1 has cleared only six EMIs: PRINCIPAL OUTSTANDING Rs.24,08,944/- EMI OUTSTANDING Rs.2,07,873/- ADDITIONAL INTEREST Rs.15,595/- INCIDENTAL CHARGES Rs.1,430/- TOTAL AMOUNT DUE Rs.26,33,842/-

9. Further as per paragraph 21 of the plaint, defendant no.1 has failed to make the payment towards the loan amount and defaulted in fulfilling the obligations, as per the loan agreement, promissory note and indemnity bond.

10. The defendant no.2, despite service has chosen not to enter appearance. Consequentially the present suit is decreed in favour of the plaintiff and against the defendant no.2 with pendente lite and future interest @ 12%.

11. As far as the leave to defend with regard to defendant no.1 is concerned, the defendant no.1 seeks leave to defend: firstly on the ground that the present suit is not maintainable as there is no liquidated sum, which has been stated in the plaint. It is submitted that while in paragraph 20 of the plaint, the break-up has been given, the defendant no.1 has paid 12 installments. This is refuted by counsel for the plaintiff, who relies on the statement of account, to show that six installments have been paid by defendant no.1.

12. Counsel for the defendant no.1 submits that defendant no.1 has paid 12 EMIs of Rs.22,235/- each to the bank, but in the month of August, 2011 itself the defendant came to know that the said flat booked by him for which loan had been disbursed, had already been sold to other persons, besides the defendant no.1, consequently the defendant no.1 has stopped paying the requisite EMIs to the plaintiff.

13. It is submitted that there is collusion between the plaintiff bank and the builder and further the flat in question was mortgaged by the builder in favour of the bank and the bank has chosen to give up a valuable security in their favour. It is further submitted that since the defendant no.1 has not derived benefit of the flat in question he is not liable to pay the further EMIs.

14. I have heard counsel for the parties and also perused the plaint and supporting documents, which have been placed on record. There is no explanation rendered by the plaintiff with regard to the break-up of the amounts due from the defendant as shown in paragraph 20 of the plaint, however, reliance is placed on the statement of account which is duly certified under the Bankers’ book of Evidence, which reflects that six installments stands paid by the defendant no.1 to the plaintiff. The tripartite agreement between the parties has also been perused by this court. It would be useful to reproduce certain clauses of the agreement: “WHEREAS the Borrower has represented that the Builder is of his choice and that he has satisfied himself with regard to integrity, capability for quality construction of the Builder and the Builder’s ability for timely completion and on time delivery of the project; AND WHEREAS the Builder and the Borrower have entered into an agreement dated 24.3.2011 for the purpose of unit no.3072 in the said project of the Builder; AND WHEREAS the Borrower and the Builder have jointly approached HDFC for a Loan of Rs.26,00,000/- (Twenty six lacs only) towards payment of the sale / purchase consideration of the residential apartment in the Project; AND WHEREAS HDFC has considered the said request with a clear understanding and an irrevocable undertaking by the Borrower that subsequent to the disbursement, if any, as requested by the Borrower, there would be no repayment default for any reason whatsoever including but not limited to any concern/ issues by and between the Borrower and the Builder / Developer; AND WHEREAS the Borrower has represented, and such representation being a continuing representation, that Borrower’s obligation to repay the Loan shall be a distinct and independent obligation more particularly independent of any issues/ concern / dispute of whatsoever nature between the Borrower and Builder;”

15. A careful reading of the above clauses would show that it is the borrower, who has chosen the builder and also satisfied himself with regard to his ability for timely completion and delivery of project. Thus the argument of the defendant of collusion between the plaintiff and defendant no.2 is baseless and without any force. The agreement would also show that defendant no.1 was the principal borrower and further after the amount had been disbursed the borrower would be responsible for the repayment, even if there were concerns or issues between the borrower and the builder/developer.