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Binoy (Senior auditor)     22 May 2012

Improper loan disbursal & flat construction delay

I am an NRE.  I have purchased a flat at Kochi for Rs.25 lacs on November 2007 and the builder has arranged a loan facility from a schedule bank of Rs. 20 Lacs.  The construction was started on the same year and they have released the first installment of 30% on that month.  Further the second installment of 10% has been released on June 2008 with my Email approval.  After that the builder has released the loan amount upto 95% without my approval and has no correspondence with me.   As per the terms and conditions  of loan, the bank cannot disburse the amount more than 90% because it says the last installment should be 10% at the time of handing over of the flat.

The agreement to complete the building with the Construction Company was 24 months from the date of contract.  That means it should finish by the end of December 2009.  As of now the building structure has completed and some electrical work was finished.  At present the Company is not doing any work.  

I paid the Loan EMI regularly and also I paid lump sum amount to bank approximately 20 Lacs  to reduce the borrowing cost.  Now outstanding amount may be approx. 6.50 lacs only. 

I want to know:

1.       Can I file a suit against bank to banking ombudsman for the disbursal of loan for the violation of the terms and conditions explained above and

2.       Can I file a suit against the builder for the default of terms and condition and the compensation for the opportunity cost.



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 3 Replies

S Jadhav 98336 98330 (Jadhav & Associates)     23 May 2012

You can file a complaint to the banking ombudsman and you are likely to win it since the banks are not permitted to release funds without the knowledge of the account holder.

You can also approach the Consumer Court at the same time as it will give you faster result.

Please do not buy under construction property if you can as in the absence of any regulator, the builder has almost absolute power over the project and you cannot do much except maybe get refund of your money  or some minor penalty levied on the builder (which are too small as compared to the flat purchase amounts.)

Even the banks will listen to builders as they are richer and more powerful which in India is more respected.

S Jadhav

1 Like

Binoy (Senior auditor)     23 May 2012

Sir,  

Can I file a suit against the builder for the non completion of building in the stipulated time?  The agreed time was 24 months and that was expired since Dec 2009.  The builder is not completing the project.  

Can I file a case to consumer protection for the non compliance by the builder and to claim the losses suffered during the 2.5 years delay now??? Can explain more about this??


 

S Jadhav 98336 98330 (Jadhav & Associates)     23 May 2012

Yes you can file a suit but it takes  mores time and money for the legal work.

As suggested please act on two platforms

1. Approach the banking ombudsman and

2. File a consumer complain in the Consumer Court

Do remember that you should mention what remedy you are seeking e.g. you may want the builder to complete the building and handover the possession to you as per the agreement and also the damages amount as you could not use the flat in time and hence may have had to pay rent, etc. You could also ask for refund of the monies instead of the flat. It is your wish but my advise would be to take the flatas its price would have gone up considerably.

S Jadhav


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