BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 09^th DAY OF NOVEMBER 2016

O R D E R

SRI. P.V SINGRI, PRESIDENT

The complainants have filed this complaint U/s.12 of the Consumer Protection Act, 1986 against the Opposite Party (herein after referred as OP) with a prayer to direct the OP to pay them a sum of Rs.25,000/- forfeited out of initial amount of Rs.2,50,000/- together with interest @ 18% p.a and Rs.73,000/- towards conveyance expenses, legal notice charges, damages and cost of litigation in all amounting to Rs.98,000/-.

2. The brief averments made in the complaint are as under:

The husband of complainant-1 and father of complainant-2 namely R.K Prahalada Rao, a senior citizen was a retired Professor who passed away on 09.10.2014.  That during his life time, the said R.K Prahalada Rao, applied for 2.5 BHK Flat and submitted his application for registration of Flats at Bangalore, Kengeri “KHB Platinum” along with a D.D for a sum of Rs.2,51,500/- i.e., Rs.2,50,000/- towards initial refundable deposit and Rs.1,500/- towards registration fee (non-refundable).  That OP assured to handover the possession of the Flat by June 2013 and issued a brochure to that effect.  That in the brochure it has been mentioned that the possession of the Flat would be handed over by June 2013.  Neither in the brochure nor in the application form there is any clause regarding forfeiture of portion of initial deposit paid.  That OP in response to the application of deceased R.K Prahalada Rao, very belatedly allotted a Flat bearing No.DO101, vide allotment dated 11.11.2013, quoting registration No.P3F00004953 and stating that the Flat has been allotted in a lottery dated 09.10.2013.  That the deceased R.K Prahalada Rao was never informed about the said lottery being conducted nor invited to be present at the time of drawing such lottery on 09.10.2013.  That in the said allotment letter, OP called upon the allottee to pay the cost of the Flat in four monthly installments.  That for the first time it is stated in the clause-3 that, ‘If the allottee fails to remit the total cost of the Flat, even after the due date, the allotment will be cancelled without any notice or assigning any reason and 10% of the initial deposit will be forfeited”.  Such forfeiture clause does not appear either in the application form or in the brochure.  On every enquiry by the deceased R.K Prahalada Rao by visiting the spot it came to his knowledge that the completion of Flat and handing over the possession of the Flat will take considerable time, may be more than one year.

That after receipt of the allotment the deceased made all the sincere efforts to raise loan from the Banks but he was refused loan on the ground that, he is retired and a pensioner.  That since the deceased had already parted with his savings elsewhere he was forced to surrender the allotment of said Flat to OP and sought for refund of the initial advance amount of Rs.2,50,000/- paid by him through his letter dated 18.12.2013 and the same was duly acknowledged by OP on 20.12.2013.  That in view of the surrender of allotment of Flat, OP unauthorizedly deducted a sum of Rs.25,000/- from the initial deposit amount and refunded only Rs.2,25,000/- vide cheque No.575325 dated 28.01.2013, drawn on Corporation Bank along with order dated 08.01.2014, though the deceased was entitled to receive the entire deposit amount.  That the said deduction made by the OP was illegal and opposed to principles of natural justice.  That the alleged forfeiture clause was not at all made known to deceased or informed to him at any point of time prior to the letter of allotment.  Had the same was made known to the deceased, he would not have applied for allotment of the Flat at all.  That OP is not at all justified in deducting the said sum of Rs.25,000/- from the initial deposit.  The said conduct of OP deducting Rs.25,000/- amounts to serious deficiency in service and OP liable to refund the said amount together with interest, damages and compensation.

During his life time deceased R.K Prahalada Rao made repeated visits to the office of OP requesting for refund of the said amount of Rs.25,000/- illegally deducted by the OP but in vain.  Therefore, deceased during the life time caused legal notice on 20.02.2014 to the OP demanding refund of the said sum of Rs.25,000/-.  Despite receipt of the said notice, OP failed to comply the demand made therein.  Because of the said conduct of OP, the said R.K Prahalada Rao underwent great hardship, mental agony, tension as a result he suffered an heart attack and died on 09.10.2014.  That the complainants being the only legal heirs of the deceased R.K Prahalada Rao have filed this complaint with a prayer to direct the OP to refund the said amount of Rs.25,000/- as prayed for in the complaint.

3. In response to the notice issued, OP appeared through his advocate and filed his version.  The sum and substance of the version are as under:

That it is true that the deceased allottee had paid Rs.2,51,000/- to buy a Flat and according to the terms and conditions stipulated for allotment of Flat on 04.12.2013.  That the allotment of the site/house is governed by the Karnataka Housing Board (Allotment) Regulations of 1983.  Regulation 12(4) empowers the OP to forfeit the initial deposit upon the cancellation of the allotment.  That clause-3 provides “As already ……… If the allottee fails to remit the total cost of the property even after the due date the allotment will be cancelled without any notice or assigning any reason and 10% of the initial deposit will be forfeited”.  That the deceased/allottee opted for cancellation of the allotment of Flat on his own volition through his letter dated 18.12.2013 by expressing his inability to raise loan on the flat and pay the balance sum.  That the deceased accepted the refund of the initial deposit subject to deduction of Rs.25,000/- out of the initial deposit without demur or protest.  Therefore, the complainants now cannot raise such a dispute and their claim is baseless and untenable.  That the brochure cannot stand on higher footing than the regulations/terms and conditions of allotment of Flat.  That upon receipt of letter from allottee/deceased the allotment made in his favour was cancelled and the initial deposit was refunded after deducting 10% of the initial deposit.  That OP is vested with power to deduct 10% of the initial deposit.  That there was no any delay in allotment of the Flat.  That though OP provided all the necessary facilities for raising loan from the Bank, deceased/allottee failed to take benefit of the same and submitted on the application for cancellation of allotment of Flat in his favour.

That the complainants have approached this Forum on frivolous and imaginary grounds.  That there is no any deficiency of service on the part of OP.  That the complainant has no legal right to file the present complaint and this Forum has no jurisdiction to decide the present lis.  On the above amongst other grounds, OP prays for rejection of the complaint. 

4. In view of the rival contention of both the parties, the points that arise for our determination in this case are as under:

        5. In support of the allegations made in the complaint, complainant-1 filed her affidavit evidence and relied upon various documents.  OP also tendered his evidence by way of affidavit and produced documents in support of the averments made in the version.  Written arguments have been filed by both the parties.  We have also heard the oral arguments.

6. Our answer to the above issues are as under:

REASONS

7.  It is not in dispute that one Sri.R.K Prahalada Rao, the husband of complainant No.1 and the father of complainant No.2 during his life time applied for allotment of 2.5 BHK Flat constructed by OP in Kengeri, Bangalore “KHB Platinum” and along with his application he enclosed demand draft for a sum of Rs.2,51,500/-, out of which Rs.2,50,000/- was towards initial refundable deposit and Rs.1,500/- was towards registration fees (non refundable).  In pursuance of such application filed by the said allottee R.K Prahalada Rao, he was allotted a 2.5 BHK Flat bearing No.D0101, vide allotment letter dated 11.11.2013 stating that the said Flat has been allotted to him in a lottery dated 09.10.2013.  According to the complainants though OP promised to allot the Flat in the month of June 2013 but the same was allotted belatedly in the month of November 2013 and on verification by the deceased allottee, he came to know that the completion of the Flat and taking of possession of Flat would take another year.  It is further claimed by the complainant that, after receipt of the letter of allotment of Flat, the said allottee made sincere efforts to raise loan to pay the consideration amount in 4 installments as demanded by the OP, but he could not avail loan as he was a retired pensioner.  Therefore, he surrendered the allotment of the said Flat to OP by his letter dated 18.12.2013 and requested for refund of the initial advance amount of Rs.2,50,000/-.

8. OP admits the receipt of the surrender letter of the said allottee dated 18.12.2013.  According to OP immediately after receipt of the said letter dated 18.12.2013 from the allottee was refunded and a sum of Rs.2,25,000/- by deducting 10% of the initial deposit i.e., Rs.25,000/- in pursuance of Regulation 12(4) of Karnataka Housing Board (Allotment) Regulations of 1983.  The complainants admits receipt of Rs.2,25,000/- from OP but contends that the OP has no right to deduct the said amount of Rs.25,000/- equivalent to 10% of the initial deposit, since no such clause was mentioned either in the application form or in the brochure issued by the OP.  Admittedly there is no mention of the forfeiture clause either in the application form or in the brochure issued by OP.  The learned advocate for OP argued that the said forfeiture of 10% of the initial deposit has been made in pursuance of the power vested with OP.  As per the Regulation 12(4) of the Karnataka Housing Board (Allotment) Regulations of 1983, Clause-3 terms and conditions of allotment of Flat appended to the allotment letter provides for deduction of 10% of the initial deposit made by the allottee in the event of cancellation of the allotment.  The terms and conditions governing the allotment of Flat have been appended to the allotment letter and the copy of the same is produced by the complainant.  Clause-3 of the terms and conditions reads as under:

“As already indicated the balance final cost is to be payable in four equal instalments.  All the instalments amount has to be paid within the prescribed due date and if there is delay in payment any instalment a penalty of Rs.2000/- will be charged.  If the allottee fails to remit the total cost of the property even after the due date the allotment will be cancelled without any notice or assigning any reason and 10% of the initial deposit will be forfeited”.

9. For the first time it was brought to the notice of the said allotte about the forfeiture clause, at the time of communicating the allotment of Flat and prior to this, the allottee was not made aware of any such forfeiture clause by the OP.  Therefore, it is argued that OP has no right or power to deduct 10% of the initial deposit amount out of Rs.2,50,000/- paid by the said allottee.

10. The Learned Advocate for the OP argued that clause-3, in the terms and conditions of the allotment of Flat, has been incorporated in pursuance of 12(4) of the Karnataka Housing Board (Allotment) Regulations of 1983.  Therefore, he argued that the forfeiture clause has not been introduced either for the first time or newly at the time of allotment of Flat.  The complainants did not deny that Regulations 12(4) of the Karnataka Housing Board (Allotment) Regulations of 1983 provides for forfeiture of certain portion of initial deposit in the event of cancellation of allotment.  In view of the forfeiture clause in the Karnataka Housing Board (Allotment) Regulations, we don’t find anything wrong on the part of OP in mentioning/reproducing the said forfeiture clause in the terms and conditions of allotment of Flat at the time communication of allotment of site.  The allegations of the complainant that, the OP is introducing the forfeiture clause for the first time only at the time of communicating the allotment of Flat is not correct since the OP has simply reproduced the forfeiture clause already provided in the Karnataka Housing Board (Allotment) Regulations of 1983 in terms and conditions of allotment of Flat.  The ignorance on the part of the said R.K Prahalada Rao about the forfeiture clause available/provided in Karnataka Housing Board (Allotment) Regulations of 1983 cannot be a ground for the complainants to claim 10% of the amount from the initial deposit.  Further it is to be noted here that, OP has given ample opportunity and time to the said allottee to pay the balance consideration amount in installments and also provided assistance in raising loan from the Bank.  However the deceased allottee was unable to raise any loan as he was a pensioner and a retired professor.  Upon the receipt of the surrender letter from the deceased allottee, OP in pursuance of clause-3 of the terms and conditions of the allotment of the Flat have deducted 10% of the amount in the initial deposit paid by the deceased and have refunded him a sum of Rs.2,25,000/-.  The said deduction of Rs.25,000/- from the initial deposit of Rs.2,50,000/- certainly does not amount to deficiency of service since the same has been done in pursuance of Regulation 12(4) of Karnataka Housing Board (Allotment) Regulations of 1983.  Therefore, we are of the opinion that there is no any deficiency on the part of OP as alleged in the complaint.  Accordingly point No.1 is answered.

11. The order could not be passed within the stipulated time due to heavy pendency. 

12. In view of the discussions made above, we proceed to pass the following:

  O R D E R

The complaint filed by the complainant U/s.12 of the Consumer Protection Act, 1986 is dismissed.  In the circumstances of the case, the parties to bear their own costs.

Furnish free copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 09^th day of November 2016)

MEMBER                            MEMBER                    PRESIDENT

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Witnesses examined on behalf of the complainant dated 24.06.2015.

1. Smt.Bharathi Rao.

Documents produced by the complainant:

Witnesses examined on behalf of the Opposite party dated 05.09.2015.

1. Sri.A.K Ashoka.  

Document produced by the Opposite party:

MEMBER                            MEMBER                    PRESIDENT

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