The High Court has come to the rescue of some who had cancelled their bookings for flats at ‘Mantri Web City’ residential apartments project of M/s Mantri Developers Pvt Ltd, Bengaluru.
The court said that it is not their obligation to repay the outstanding loan amount with a nationalised bank as per the tripartite agreements for cancelling/withdrawing their bookings for flats following inordinate delay in construction.
No coercive action
Also, the court restrained PNB Housing Finance Ltd. (PNBHFL) from taking any coercive measures against the petitioners for recovering any amount comprised in agreements, including the tripartite housing loan arrangement between the petitioners, the developer and the PNBHFL.
A direction has also been issued to the Reserve Bank of India and other authorities to process petitioners’ claim for re-framing the CIBIL scores and for issuing no due certificates in accordance with law.
Justice Krishna S. Dixit passed the order while partly allowing separate petitions filed by Mudit Saxena and several others.
Meanwhile, the court directed Mantri Developers to comply with the directions issued by the Real Estate Regulatory Authority (RERA) to return the own contribution amount to the petitioners and to discharge the loan raised in their names with all its EMI and interest.
The court also made that this order will not come in the way of PNBHFL from taking up any proceedings for recovering the outstanding loans from Mantri Developers.
Background
The petitioners had booked flats in terms of “pre-sanctioned loans” through the tripartite agreements. However, dissatisfied with the pace of construction, they withdrew/cancelled their bookings with intimation to PNBHFL and the same was endorsed by the developer.
As developer did not repay the loan amount as per RERA’s directions, the PNBHFL initiated coercive steps against the petitioners to recover amounts.
The court, however, declined to accept PNBHFL’s contentions that the petitioners need to approach the civil court as agreements are contractual in nature, and that both the borrower and the developer are jointly liable to repay the loans as per the agreement.
The petitioners had alleged loan amounts were disbursed directly to the developer allegedly without ascertaining the stages of construction but the PNBHFL claimed that disbursements were done on instructions from them.
However, the court said borrowers’ consent does not dilute protection available to them in the agreements as it was the obligation of the lender to disburse amount only after ascertaining the stages of construction as per statutory norms.
