In an order that will send a warning signal to fraudulent developers and errant bankers, the AP state consumer disputes redressal commission told M/s Maytas Properties Pvt Ltd to refund the entire amount it had collected from three aggrieved customers, who paid hefty amounts ranging from Rs 50 lakh to Rs 80 lakh towards flats in the company's proposed Hill County venture at Bachupalli in Rangareddy district.
Though the flats were not constructed, the banks granted loans to customers and handed over the total money to Maytas and started deducting the same from the customers. Blasting the banks for releasing amounts despite construction having not taken place at Maytas Hill County, the commission said, "You (banks) have to release the loan amount in a phased manner based on the progress of the construction. In the current case, you gave the amount to developer without the latter making any progress in construction of flats,'' the commission said, and directed the banks to stop forthwith collecting EMIs from the customers. The commission also warned the banks, who threatened to take customers to CIBIL, over non-payment of EMIs. "Instead of customers, the banks should be referred to CIBIL for their erroneous functioning in this case," the commission said.
Warning the bankers that they cannot threaten the customers that their names will be referred to CIBIL, the consumer commission made it clear that it is the names of the banks that have to be referred to CIBIL for their erroneous functioning in the current matter.
Earlier, three customers, Ravikanth Veda, Kalidindi Jhansi Lakshmi, Neravati Rajasekhar, approached the commission and sought justice in the case. They narrated how they were let down by Maytas and their bankers, Axis Bank, ING Vysya Bank and Deutsche Post Bank Home Finance Ltd. which they said acted in an inhuman and irrational manner despite knowing the fact that the customers being victims in the entire episode.
The state consumer disputes redressal commission, comprising its presiding member M Shreesha and another member S Bhujanga Rao, ordered the Maytas and the banks to refund the entire amount to customers with 12% interest per annum along with a compensation of Rs one lakh and Rs 10,000 towards legal costs.
The commission rejected the claims of the current management of Maytas which has been repeatedly citing the pending case before company law board. The customers are not a party to that and hence it is not binding on them, the commission said. The banks have suppressed certain rules and are unnecessarily highlighting an irrelevant authorization given by the customers to recover EMIs from the customers. Banks have released the amounts contrary to the tripartite agreements reached between the developer, customer and the bank, the commission said. Hence the banks should suffer the consequential losses for not applying due diligence before relying on a developer merely basing on the brand value of the developer in the beginning, the commission's presiding member Shreesha, who wrote the judgment, said in her order.
Article referred: http://timesofindia.indiatimes.com/city/hyderabad/Maytas-told-to-refund-money-to-customers/articleshow/20836741.cms
Though the flats were not constructed, the banks granted loans to customers and handed over the total money to Maytas and started deducting the same from the customers. Blasting the banks for releasing amounts despite construction having not taken place at Maytas Hill County, the commission said, "You (banks) have to release the loan amount in a phased manner based on the progress of the construction. In the current case, you gave the amount to developer without the latter making any progress in construction of flats,'' the commission said, and directed the banks to stop forthwith collecting EMIs from the customers. The commission also warned the banks, who threatened to take customers to CIBIL, over non-payment of EMIs. "Instead of customers, the banks should be referred to CIBIL for their erroneous functioning in this case," the commission said.
Warning the bankers that they cannot threaten the customers that their names will be referred to CIBIL, the consumer commission made it clear that it is the names of the banks that have to be referred to CIBIL for their erroneous functioning in the current matter.
Earlier, three customers, Ravikanth Veda, Kalidindi Jhansi Lakshmi, Neravati Rajasekhar, approached the commission and sought justice in the case. They narrated how they were let down by Maytas and their bankers, Axis Bank, ING Vysya Bank and Deutsche Post Bank Home Finance Ltd. which they said acted in an inhuman and irrational manner despite knowing the fact that the customers being victims in the entire episode.
The state consumer disputes redressal commission, comprising its presiding member M Shreesha and another member S Bhujanga Rao, ordered the Maytas and the banks to refund the entire amount to customers with 12% interest per annum along with a compensation of Rs one lakh and Rs 10,000 towards legal costs.
The commission rejected the claims of the current management of Maytas which has been repeatedly citing the pending case before company law board. The customers are not a party to that and hence it is not binding on them, the commission said. The banks have suppressed certain rules and are unnecessarily highlighting an irrelevant authorization given by the customers to recover EMIs from the customers. Banks have released the amounts contrary to the tripartite agreements reached between the developer, customer and the bank, the commission said. Hence the banks should suffer the consequential losses for not applying due diligence before relying on a developer merely basing on the brand value of the developer in the beginning, the commission's presiding member Shreesha, who wrote the judgment, said in her order.
Article referred: http://timesofindia.indiatimes.com/city/hyderabad/Maytas-told-to-refund-money-to-customers/articleshow/20836741.cms
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