Date of Filing:21/10/2017

Date of Order:30/06/2018

BEFORE THE BANGALORE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SHANTHINAGAR BANGALORE -  27.

Dated: 30^THDAY OF JUNE 2018

PRESENT

SRI.H.R. SRINIVAS, B.Sc., LL.B. Rtd. Prl. District & Sessions Judge And PRESIDENT

SRI D.SURESH, B.Com., LL.B., MEMBER

COMPLAINT NO.1424/2016

Vs

ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

1.     The Complaintisfiled by the ComplainantU/S Section 12 of Consumer Protection Act 1986, against the Opposite Parties (herein referred in short as O.Ps) alleging the deficiency in service in not handing over the site agreed to be sold in her favour and for direction to the Opposite  parties to execute and register Sale Deed in her favour by receiving the balance of sale consideration in terms of agreement of sale dated 05.2.2015 and in the alternative O.Ps torefund the earnest money with interest at 12% per annum form the date of payment till full and final payment is paid and further O.Ps to pay a sum of Rs.2,00,000/- for causing mental agony, inconvenience, stress sufferance to her and such other reliefs as this Hon’ble Forum deems fit. 

2.     The brief facts of the complaint are that; the O.P.No.1 is a private limited company engaged in the business of developing residential layout, O.P.No.2, 3 and 4 are its Managing Directors and Additional Directors. The O.Ps offered to sell  the site No.376 measuring 30X50 ft for Rs.12,75,000/- to be developed by them in Sy.No.80 at Cholappanahalli Village, KasabaHobli, HosakoteTaluk and project was named as ‘THE RESIDENCY’ and also entered into agreement of sale and received part consideration of Rs.7,00,000/- paid through two different cheques on 21.2.2011 and 30.4.2011.   She was waiting for further instructions and she was waiting for execution of sale deed by receiving the balance of sale consideration. The 2^ndO.P. One K.R. Raja additional director, Smt.Beena and Prabhakar informed her that they are waiting for the  permission from the Government for execution of the sale deed and gave false assurance. During December 2014 K.R. Raja informed that since they have formed a new procedure, requested her to return the allotment letter so that they would execute another instrument in her favour. On 6.2.2015 they executed an agreement of sale and also acknowledged receipt of Rs.7,00,000/-. It was also stipulated therein that they would not extend the time limit for more than 6 to 8 months from the date of said agreement to execute the sale deed. But one reason or the other, they went on postponing the execution of the sale deed. On 12.5.2016 it was learnt that the director K.R. Raja who entered into the agreement, committed suicide. She is willing to pay the balance of sale consideration whereas O.ps have not at all coming forward to execute the sale deed and register the same by receiving the balance of sale consideration. Legal notice was also issued on 29.8.2016. Inspite of it, they have neither replied nor executed the sale deed.The cause of action for the compliant arose on 6.2.2015 when O.P executed a new agreement of sale and hence this compliant.

3.     Upon the issue of notice, O.P.No.1, 3 and 4 appeared through their advocates and filed their version. O.P.No.2 inspite of service of notice, did appear before Forum and hence placed exparte. O.P.No.3 and 4 filed a memo on 21.08.2017   stating that they have no role to play in this transaction which was carried out only by the O.P.no.1 and O.PNo.2 and hence they prayed for dismissing the complaint against them. Since the complainant’s counsel submitted that he has no objection for dismissing the complaint against O.P.No.3 and 4, this Forum passed an order on 21.8.2017 accepting the memo and dismissing the complaint against O.P.No.3 and 4. In view of this, their version and evidence though filed do not require any consideration.

4.   In the version filed by O.P.No.1, he has denied the allegation made against the company. He has contended that the complainant had suppressed material fact and this Forum has no jurisdiction to entertain the complaint and hence it is liable to be dismissed. He has also denied that O.P.No.1 is a registered company and O.P,2, 3 and 4 are its directors. He had denied all the allegations made against Ops.   He has taken up the contention that the transaction between the complainant and K.R. Raja is a private transaction which has taken place four year ago and complainant might have  paid the amount  to K.R. Raja who is in no way concerned to O.P.No.1 and 2. Complainant is not a consumer and this forum has no authority to entertain the complainant as he has to file suit before the civil court for specific performance of the agreement of the sale or before the adjudicating officer established under real estate Act 2016. The Sale Agreement is entered is undervalued and proper stamp duty is not paid. Agreement to sell by one of the partner in the absence of authority of other partners as per Section 19(2) (g) of Partnership Act, is not a legal agreement. As per the decisions passed by the Calcutta High Court in 2014(2) ICC 853, the Forum shall not pass a decree which cannot be executed at all and hence prayed to dismiss the complaint.

5.      In order to substantiate their case, the parties have filed their affidavit evidence and documents. Heard the arguments.

6.    On the basis of the pleadings of the parties, the following points have  arisenfor our consideration:-

                   (1)   Whether the complainant has prove

                        deficiency in service on the part of the O.Ps?

(2)  Whether the complainant is entitled to

      the relief prayed for in the complaint?

7.     Our answers to the above points are:-

POINT 1: In the Affirmative.

POINT 2: Partly in the affirmative

                As per the final order:

REASONS

POINT No.1:-

8.     On perusal of the pleadings of the parties and the evidence on record, it is an undisputed fact that, the complainantwith an intention to purchase residentialsite in the proposed layout named as ‘THE RESIDENCY’ formed by the O.Ps entered into agreement and paid amounts to the O.Ps as mentioned above.

9.   Further on perusal of the evidence,O.P.No.1 being the company and O.P.No.2 being its Managing Director, have not stated anything regarding the completion of the layout formation, and registering the sale deed in favour of the complainant. If at all they have completed the layout formation in all respect, and ready for registration, they would have demanded the complainant to pay the balance of sale consideration and to get the registration of the sale in her favour.  Inspite of receiving the notice issued by the complainant and also by this Forum,have kept quiet and they have not stated anything in this regard in the version filed by O.p.No.1. The documents produced clearly shows that O.P.No.1 is a registered company with Registrar of Companies having its registered office at Hampi Nagar, Bangalore. Hence it is not a partnership firm, wherein all the partner had to agree for the sale. Hence the reliance placed on the judgment by the O.Ps in its version  do not hold any water.

10.   ThoughO.P.No.1 has taken a contention that this Forum has no jurisdiction to decide this complaint and the complainant ought to have filed suit for Specific Performance of Agreement of Sale before the Civil Court or before the authorized person under Real Estate Act also do not hold water, since Section 3 of the Consumer Protection Act is in furtherance of other statute. Hence this contention is not accepted.

11.    As a director of the company, K.R Raja has entered into agreement of sale by receiving Rs.7,00,000/- and further agreed to Receive Rs.5,75,000/- being the balance sale consideration and further agreed to get the sale deed registered. He has also undertaken to provide the required facilities for the formation of the residential sites.  He has signed this agreement of sale for and on behalf of K.R.K properties Ltd., as a director. When such being the case it cannot be held that the transaction is a private one between K.R.Raja and the complainant.

12.   Inspite of the legal notice issued, O.Ps have failed to execute the sale deed and also get it registered in favour of the complainant which amounts to deficiency in service and further in not refunding the advance sale consideration received is  an unfair trade practice. Hence we answer Point No.1 in the Affirmative.

POINT NO.2:

13.   It is note worthy to mention that, all the agreements are contracts which are enforceable by law. Particularly in these cases, every man is always dreaming to have its own dream house and for which he will strenuously work to earn money and their hard earned money will save to have their home. Accordingly the complainant also paid their hard earned money to the O.Ps with an intention to purchase site properties but the O.Ps should bind to the agreementsand if any reasons they failed to carry-out the agreements, they have no right to retain the hard earned money of the complainant.  Every agreement should be a covenant also.  A contract is maintained through external force of law, whereas a covenant has an internal moral basis and maintain through loyalty and responsibility.  Whereas the O.Ps failed in their responsibility and the complainant proved not only deficiency in service on the part of the O.Ps and the O.Ps without refunding the amount to the complainant it attracts unfair trade practice also.

14.  Under the circumstances, we hold O.P.No.1and 2jointly and severally liable to pay the amounts paid by the complainanti.e., Rs.7,00,000/- as shown in the agreements along with interest at the rate 12% per annum from the date of agreement of sale dated 6.2.2015 till payment of the same. Further the complainant has claimed compensation of Rs.2,00,000/- towards physical and mental harassment. No concrete evidence has been placed in that respect. Inspite of it, having paid the advance sale consideration, hoping for the registration of the site in their favour since 2015, they have lost their mental piece, put to mental tension, physical strain and financial loss. Had they invested the same amount in any of the real estate properties, the value of the property would have increased by five to six times and the complainants have lost the capital appreciation of the property. Hence we are of the opinion that if a sum of Rs.25,000/- towards damages awarded to the complainant and Rs.10,000/- towards cost of proceedings and litigation expenses would meet the ends of justice.

15.   The counsel for the complainant has relied on the judgment passed by the Honourable SUPREME COURT OF INDIA in Civil Appeal Nos.4432-4450 of 2012 – M/s. Narne Constructions Pvt. Ltd. Vs Union of India wherein it is held by relying on the judgment of Lucknow Development Authority Vs M.K. Gupta (1994)I SCC 243 that in a transaction of sale of developed plot by the developer to the customers, there is relationship of  service provider and the consumers and hence Consumer Protection Act is applicable.

16.   It has also held in 2014 SCC NCDRC 266 Ravi Development Builders and others Vs JayanthiBai V Ranka and others that the purchase of the house/site falls under the Consumer Protection Act.

17.  It is also held in AIR 2004 SUPREME COURT 4080 – Haryana Urban Development Authority Vs Smt.SumanBansal.

“(A) Consumer Protection Act (68 of 1986) , S.2(1) (g), S.21-Interest on compensation amount- Grant of , at rate of 18% - Held, not proper in view of decision in Ghaziabad Development Authority V. Balbir Singh, 2004 AIR SCW 2362: AIR 2004 SC 2141:2004 ALL LJ 1500.

(B) Consumer Protection Act (68 of 1986), S.14, S.2(1)(g) – Award of interest on compensation – Allotment of plot by Development Authority – Failure to give possession – complaint- District Forum ensured that possession is given at old rate – Party thus got benefit of escalation in price of land, therefore, there cannot  and should not also be award of interest on money – However, considering fact that allotment was in 1987 and  possession given very late, i.e, only in 1998, and compensation towards mental agony/harassment is very low- Supreme Court, instead of increasing compensation for mental agony and harassment and awarding compensation for escalation  in costs of construction, in view of special features of case maintained award of interest at rate of 15%.”

18.    In view of the same, we answer point No.2 Partly in the Affirmative and pass the following:

ORDER

1. The complaintis hereby partly allowed with cost.

2. O.P.No.1 and 2 are jointly and severallyhereby directed to pay a sum of Rs.7,00,000/- to the complainant being the advance sale consideration received by themalong with interest at the rate 12% per annum from the date of Agreement of Sale i.e. 6.2.2015till payment.

3. Further O.P.No.1and 2are jointly and severally hereby directedto pay Rs.25,000/- towards damages to  the complainant and Rs.10,000/-  towards cost of proceedings and litigation expenses.

4.  The O.P No.1 and 2 arehereby directed to comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this forum within 15 days thereafter.

5. The complaint against O.P.No.3 and 4 are hereby dismissed.

6. Send a copy of this order to both parties free of cost.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 30^thDay of JUNE 2018)

MEMBER                        PRESIDENT

*RAK

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Doc.No.1: Copy of the Agreement of Sale dated 06.02.2015

Doc.No.2:Legal Notice dtd:29.8.2016.

Doc.No.3:Postal receipts (5 in Nos.)

Doc.No.4:Postal acknowledgments (3 in Nos.)

Doc.No.5:Postal cover legal notice, unnerved on 2^nd O.P with postal Shara.

Doc.No.6: Copy of the Brochure.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Sri K.R. Kannan for O.p.No.2.

Copies of Documents produced on behalf of Opposite Party/s

- Nil -

MEMBER                        PRESIDENT