• Penalty for late payment of loan to builder

Few Years back I have taken a Home Loan of around 36Lakhs.I did the pre Booking and paid ~3 Lak as initial fees and then I have to arrange for a money of 80% of the House value ~36 Lakhs within a month.But a renowned XXXX Bank denied me loan as I was working with a small company and they ddidnt find it reasonable enough to provide me Loan.Later another renowned Bank YYYY gave me loan but it took 2.5 months for me to arrange for it.
Finally when I contacted the builder they have charged my a penalty of 1.35 lakhs  .In my all the communications from them they haven't clearly intimated that what this amount is and said that this amount will be settled at the time of possession.
Anyway the builder is already late and we are filing a case for the late possession under CPA(Consumer Protection Act) in a consumer court.
I wanted to know is the charge they have levied on me of 1.35 lakhs for the late payment of the loan (which in any case is due to the failure in getting the loan from one bank and then delay by another bank), am I eligible to challenge this on a legal ground.Or is it I am at fault stuck between the Bank and the Builder and I have to pay this amount.
Kindly Provide your view on this.
Thanks and Rgds,
Asked 3 years ago in Property Law from New Delhi, Delhi
Religion: Hindu
1) in the event you have failed to make payment in time builder would be justified in charging you penalty for late payment as per clauses in your agreement 

2) builder is not concerned that one bank did not sanction you loan and hence there was delay in your part in making payment 

3) if builder has defaulted in delivery  of possession in time  builder would be liable to pay you interest for delay in handing over possession of flat 
Ajay Sethi
Advocate, Mumbai
44224 Answers
2565 Consultations

5.0 on 5.0

Yes in the instant cast under cpa you can raise the Hastings of imposing such huge penalty. The builder can not do so since ddelaying making payments was beyond your control. Ask for reversing the said amount in the present cast. Your prayers will be allowed.
Devajyoti Barman
Advocate, Kolkata
12505 Answers
160 Consultations

5.0 on 5.0

1. You must have executed an agreement with the builder prior to the remittance of the earnest money.

2. If the agreement provides for a penalty on delay in disbursement of the remaining amount then alone the builder is entitled to charge the same.

3. The delay in disbursement of loan by the bank is no ground to lay a challenge to the right of the builder to impose the penalty on you if this right has been expressly or impliedly articulated in the agreement or brochure, as the case may be.
Ashish Davessar
Advocate, Jaipur
22966 Answers
631 Consultations

5.0 on 5.0

Hi, as per agreement if you are not able to pay the amount in within time then you are liable to pay the penalty amount to the Builder.

2. You can not take a shelter  that due to delay in Bank you are not liable to pay the amount.

3. The builder has not deliver the property in time then you have no option go for filing a Complaint under Consumer Protection Act.
Pradeep Bharathipura
Advocate, Bangalore
4528 Answers
202 Consultations

4.3 on 5.0

Obtaining loan from a bank or a financial institute is your personal problem, this cannot be quoted as reason or an excuse for delayed payment especially when there is a clause for imposing penalty due to late or delayed payment of the sale consideration amount. The builder is no where concerned with your loan arrangement.
For delay in construction and other aspects related  to construction will constitute deficiency of service by  the builder, for this right forum is consumer court to seek compensation and  other reliefs, which you have already done. 
T Kalaiselvan
Advocate, Vellore
34387 Answers
368 Consultations

5.0 on 5.0

A. Loan is your optional tool to complete your tast i.e, purchase of flat, mere the delay of loan disbursement is not sufficient reason to non payment of the consideration amount and you cannot raise a voice against the builder for the imposing penalty.

B. You can move a Consumer Forum in the event of delay in delivery of possession under the deficiency in the service and you can claim the damages if any specific penalty clause mentioned in the agreement towards the delay. You have the all the right to recover the penalty from the builder for the delay even though absence of penalty clause in the agreement. 

C. Whatever the amount paid for a hostel, lodging, rented house and apartment can be a strong proof over money paid to a relative as 'rent'," you can recover this amount from the builder by dint of delay of delivery possession. 

B.T. Ravi
Advocate, Bangalore
831 Answers
55 Consultations

5.0 on 5.0

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