• Penalty charged by builder delayed payment disbursement by bank

Builder asked to pay penalty when I got the final disbursement from the bank.
The bank delayed the final disbursement as they asked for project completion letter for final disbursement and builder could not provide that.The flat was 80 % complete when I booked it.
Even for the first installment for the bank took 4 months for which I have been charged 2 % of complete loan amount when  the process was ongoing and I updated the facts to the builder during that process.
Now they are not ready to register the flat before I pay the penalty of Rs 4 lakhs approx.I went to the bank as they delayed the payment but they say that they were following the bank's loan sanction process and without the payment completion letter that can  not disburse the final amount.

Should I go the the consumer forum against the builder or the bank?If I am not responsible for the delay should I pay the penalty?
Asked 1 year ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1) pay penalty under protest 

2) enter into regd agreement with builder 

3) take possession of flat 

4) then move consumer forum against builder 

5) seek refund of penalty amount paid with interest .rely upon bank letter
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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1. Terms & conditions of the offer letter issued by the builder has to be looked into.
2. To know if  there is a clause of penalty to be charged by the  builder and if so, how much penalty.
3. Completion certificate has to be issued by the builder to the flat owner.
4. As per your narration, even for the first instalment, the bank took 4 months for which you have paid 2% of loan amount as penalty and the builder has delayed issuing the completion certificate to you and inturn the bank delayed the final disbursement due to this reason.  Hence there is deficiency in service from both the bank and the builder and you have to approach the consumer forum against both.
Shashidhar S. Sastry
Advocate, Bangalore
1244 Answers
59 Consultations
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You cannot go against the law.  You wanted to avail loan for purchase of property, so you should comply with the norms/rules for grant of loan.  You cannot blame bank for delay in disbursement since you have not complied with the further requirement in this aspect.  Now the builder, if he is demanding the penalty charges for delay in payment, you may issue a notice to him quoting the delay in he competing the construction which led to the delay in disbursement of bank loan for the purpose hence you are not liable to pay illegal demand of penalty.  If the builder is not responding you may approach consumer forum for deficiency of service on the same grounds.  But please be aware that if you initiate legal process to solve the present issues, you may end up min losing more money and well as of loss of time and energy running behind the litigation as well as securing the property. Discuss with a local lawyer along with all relevant papers in your possession and look for an amicable solution, which may be by borrowing amount from some other source for the present and then repay the same once you get the sanctioned loan disbursed by the bank. 
T Kalaiselvan
Advocate, Vellore
14177 Answers
128 Consultations
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1. Here the fault is attributable only to the builder who did not provide the completion letter within time. As a corollary thereto, the bank was within its right to delay the disbursement.

2. Your legal recourse is against the builder and not the bank. 

3. You may issue a lawyer's notice to the builder seeking the registration of flat without the penalty as delay was due to the builder. If builder does not comply with the demand raised by your lawyer in his notice then you may go to the consumer forum against him.
Ashish Davessar
Advocate, Jaipur
18275 Answers
451 Consultations
5.0 on 5.0

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