BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 16^th DAY OF APRIL 2022

ORDER

SRI.K.S.BILAGI, PRESIDENT

1. The complaint has been filed under Section 12 of C.P.Act, 1986 (herein under referred as an Act) for the following reliefs against the OPs:-

(a) Direct the OP to refund the entire amount of Rs.10,00,000/- along with 18% interest p.a. from the date of making payments till realization.

(b) Direct the OP to pay Rs.50,000/- towards compensation for deficiency in service.

(c) Direct the OP to pay compensation of Rs.50,000/- towards shock, mental and physical suffering and loss of time due to the deficiency of service on the part of OP.

(d) Grant such other reliefs deemed fit and proper under the circumstances of the case in the interest of justice and equity.

2. The case set up by the complainant in brief is as under:-

The complainant having agreed to purchase 2 BHK flat measuring 1100 sq.ft. in Dreamz Swadhya of OPs for sale consideration of Rs.10,00,000/- and he paid Rs.10,00,000/- on different dates.

3. It is further case of the complainant that the OPs have played fraud on the complainant by creating the documents.  Therefore, the complainant called upon the OPs to refund the amount with interest by issuing legal notice dated 23.10.2019. But, OPs failed to heed the request of the complainant. The OPs have committed deficiency of service towards complainant.  Hence, this complaint.

4. The notice of complaint has been duly published in Hosadigantha daily newspaper.  But, OPs failed to appear before this Forum/Commission. They have been placed exparte.

5. The complainant has filed his affidavit evidence and relies on 5 documents. Heard the arguments of advocate for complainant.  Perused the records.

6. The following points arise for our consideration:-

1. Whether the then District Forum had pecuniary jurisdiction to entertain this complaint on the date of filing the complaint?
2. Whether the complainant proves the deficiency of service on the part of OPs?
3. Whether the complainant is entitled to reliefs mentioned in the complaint?
4. What order?

7. Our answers to the above points are as under:

       Point No.1:-  In the negative.

      Point Nos.2 and 3:- Do not survive for our   

      consideration

      Point No.4:-per final orders

REASONS

8. Point No.1:Even though, the OPs have been placed exparte. It is settled preposition of law that the Commission/Authority or Court has power to entertain complaint/suit subject to pecuniary and territorial jurisdiction.
9. The complainant in support of his case, relies on affidavit evidence and Ex.P.1 to P.5.   The evidence placed before us clearly indicates that the complainant and OPs entered into memorandum of understanding dated 26.06.2016 in respect of 2 BHK flat for sale consideration of Rs.10,00,000/- and paid Rs.10,00,000/-.  Whereas memorandum of understanding dated 26.06.2016 under Ex.P.2 indicates that payment of Rs.10,00,000/-.    This complaint proceeded by legal notice dated 26.10.2019.  Wherein complainant called upon the OPs to refund Rs.10,00,000/- with interest and compensation.  Even this payment of Rs.10,00,000/- is taken into consideration along with other sale consideration of Rs.10,00,000/- with 18% p.a. interest from the date of making payments, Rs.50,000/- compensation and Rs.50,000/- towards shock, mental and physical suffering.  The total amount for the purpose of pecuniary jurisdiction would be more than Rs.20,00,000/-.  The question arises whether on the date of filing the complaint on 09.06.2020 this District Consumer Forum/Commission under C.P.Act, 1986 had jurisdiction or not? Therefore, it is necessary to refer Section 11(1) of C.P.Act, 1986, the value for the purpose of pecuniary jurisdiction shall be less than Rs.20,00,000/-, whenever complaints filed showing  the value of goods or services and value of the reliefs claimed. Therefore, it is necessary to refer Section 11(1) of C.P.Act, 1986 which read thus:-

11(1): Jurisdiction of the District Forum: (1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed (does not exceed rupees five lakhs).  

10. According to the above provision for the purpose of pecuniary jurisdiction of this District Consumer Forum, the value for the purpose of pecuniary jurisdiction shall be determined on the basis of value of goods or services and amount claimed. In the present case the value of service Rs.10,00,000/- (under memorandum of understanding or as per complaint pleadings) and claim of relief is Rs.10,00,000/- interest at 18% p.a. from the date of payment till the date of filing the complaint, Rs.50,000/- towards compensation and Rs.50,000/- towards damages.  If these items are taken into consideration, the total value for the purpose of pecuniary jurisdiction would be more than Rs.20,00,000/-.  It means, on the date of filing the complaint, this Forum had no pecuniary jurisdiction to entertain the complaint.  This Forum had pecuniary jurisdiction to entertain the complaint when the component of value of service and claim does not exceed Rs.20,00,000/-. The complaint suffers from want of pecuniary jurisdiction on the date of filing the complaint.
11. This reasoning of us is supported by the decisions of Hon’ble National Consumer Commission reported in the following decisions:-

1. 2018 (2) CPR 111 in the matter between Gurmukh Singh Vs. Greater Mohali Area Development Authority and another. The Honb’le National Commission referring the earlier judgement of Larger Bench in Ambrish Kumar Shukla and others Vs. Ferrous Infrastructure Pvt. Ltd.,, wherein it was held in para 6 which read thus:-

Para 6:- A three-member bench of this Commission in their order on 07.10.2016, stated as under on the issue referred above:-

It is the value of the goods or services as the case may be, and not the value or cost of removing the deficiency in the service which is to be considered for the purpose of determining the pecuniary jurisdiction.

2. III (2018) CPJ 370 (NC) in the matter between Renu Singh Vs. Experion Development Pvt. Ltd., where in it is held that “Consumer Protection Act, 1986 Sections 29(1)(g), 21(a)(ii) – Pecuniary jurisdiction – booking of residential unit – builder-buyer agreement – Terms and conditions not agreed upon, Refund of deposited amount sought, alleged deficiency in service – State Commission dismissed complaint – Hence, appeal value of unit itself is Rs.1,28,84,474/- - Pecuniary jurisdiction in complaint is not before the State Commission but it is before the National Commission – No perversity in well reasoned order passed by State Commission.
3. 2022 (1) CPR 572 (NC) in the matter between Amit Arora and another Vs. Vatika Limited.

Para 9:-   In view of the above, it is clear that for the purpose of pecuniary jurisdiction, the value of services hired or availed plus compensation shall be the value for the purpose of pecuniary jurisdiction.  Admittedly, the subject apartment was allotted to the complainant in consideration of ₹1,50,50,925/- to be paid as per the payment schedule. Thus, it is clear that value of the services promised by the opposite party was more than ₹1.00 crore.  Therefore, in our considered view, this Commission has jurisdiction to entertain the complaint.

Recently, in the case of Renu Singh vs. Experion Developers Private Limited" and other connected matters" - Consumer Complaint No. 1703 of 2018 - decided on 26.10.2021, a Bench of five Members of this Commission while examining the correctness of the law laid down in .Ambrish Kumar Shukla's case (Suupra) has held as under:-

"  A Bench of this Commission referred the following issues relating to pecuniary jurisdiction under the Consumer Protection Act 1986 (in short the Act) for consideration by a larger Bench, in First Appeal No. 166 of 2016 and other connected appeals, vide order dated 11.08.2016:-

(i) In a situation, where the possession of the housing unit has already been delivered to the complainant and may be sale deed etc. also executed, but some deficiencies are pointed out in the construction/ development of the property, whether the pecuniary jurisdiction is to be determined, taking the value of such property as a whole, or the extent of deficiency alleged, is to be considered for the purposes of determining pecuniary jurisdiction.

(ii) Whether the interest claimed on such value by way of compensation or otherwise, is to be taken into account for determining the pecuniary jurisdiction of a particular consumer forum.

(iii) Whether "the value of the goods or services and compensation, if any, claimed" is to be taken as per original value of such goods, or service at the time of purchase of such goods, or hiring or availing of such service, or such value is to be taken at the time of filing the claim, in question.

(iv) In complaints, proposed to be filed under Section 12 (1) (c) of the Act with permission of Consumer Forum, whether the pecuniary jurisdiction is to be determined, taking the value of goods or service for individual consumer, or the aggregate value of the properties of all consumers getting together to file the consumer complaint is to be taken into consideration.

In view of the aforesaid discussions, our answers are as follows:-

(i) The Full Bench of this Commission in Ambrish Kumar Shukla & 21 Ors. Vs. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC) lays down the law correctly on the issue relating to pecuniary jurisdiction.

(ii) What should be the value of goods or services where the refund of paid money has been sought?

Answer:- Sale consideration, which was agreed between the parties for buying the goods or hiring or availing the services is relevant for determination of pecuniary jurisdiction in cases of refund also.

(iii) What should be the period for which the interest should be taken as compensation for adding to the value of goods or services for the purpose of availing the pecuniary jurisdiction of the consumer forum?

Answer:- For the purposes of determination of pecuniary jurisdiction, the rate of interest or period of interest as claim in the complaint alone has to be examined. However, the claim has to be proved in accordance with law and the relief is always subject to law of limitation and rule of estoppel and acquiescence. In view of power of condonation of delay as provided under Section 24-A (2) of the Act, the limit of two years for calculation of interest cannot be fixed either for the purposes of pecuniary jurisdiction or for granting the relief.

12. In the said decision, it has been categorically held that “Purpose of pecuniary jurisdiction, the value of service hired or availed plus compensation shall be the value for the purpose of pecuniary jurisdiction.”  But amount of refund and interest till filing of the complaint were not considered.
13. In the above decision, the Hon’ble Larger Bench has also referred judgement of Bench of five members of Hon’ble National Commission in Renu Singh Vs. Experion Developers Private Limited and other connected matters i.e. complaint No.1703/2018 decided on 26.10.2021.
14. It is relevant refer para 24 of the order which reads thus:-

1. The Full Bench of this Commission in Ambrish Kumar Shukla & 21 Ors. Vs. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC) lays down the law correctly on the issue relating to pecuniary jurisdiction.
2. What should be the value of goods or services where the refund of paid money has been sought?

Answer:- Sale consideration, which was agreed between the parties for buying the goods or hiring or availing the services is relevant for determination of pecuniary jurisdiction in cases of refund also.

(iii) What should be the period for which the interest should be taken as compensation for adding to the value of goods or services for the purpose of availing the pecuniary jurisdiction of the consumer forum?

Answer:- For the purposes of determination of pecuniary jurisdiction, the rate of interest or period of interest as claim in the complaint alone has to be examined. However, the claim has to be proved in accordance with law and the relief is always subject to law of limitation and rule of estoppel and acquiescence. In view of power of condonation of delay as provided under Section 24-A (2) of the Act, the limit of two years for calculation of interest cannot be fixed either for the purposes of pecuniary jurisdiction or for granting the relief. 

15. In view of the above decision and facts admitted before us, on the date of filing the complaint, the District Forum had no pecuniary jurisdiction to entertain the complaint.  The question arise whether such complaint can be continued before this Commission in view of enactment of C.P.Act, 2019 which has come to force w.e.f. 20.07.2020.  The pecuniary jurisdiction of District Commission was enhanced upto Rs.1 crore, on the basis of consideration paid for goods or service availed under new C.P.Act, 2019.  We are of the opinion that 2019 C.P.Act has no retrospective effect and pending proceedings initiated under the provision of C.P.Act 1986 cannot be continued under C.P.Act, 2019.      
16. This reasoning of us is supported by the following decisions of the Hon’ble Supreme Court of India in case of 2021 (2) CPR 398 in the matter between Neena Aneja Vs. Jain Prakash Associates Ltd., dated 16^th March, 2021, their lordship have specifically observed in para 71 of the judgement which read thus:-

71. For the above reasons, we have come to the conclusion that proceedings instituted before the commencement of the Act of 2019 on 20 July 2020 would continue before the fora corresponding to those under the Act of 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019.  While allowing the appeals, we issue the following directions:

(i) The impugned judgement and order of the NCDRC dated 30 July 2020 and the review order dated 5 October 2020, directing a previously instituted consumer case under the Act of 1986 to be filled before the appropriate forum in terms of the pecuniary limits set under the Act of 2019, shall stand set aside;

(ii) As a consequence of (i) above, the national Commission shall continue hearing the consumer case instituted by the appellants;

(iii) All proceedings instituted before 20 July 2020 under the Act of 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 as explained above and not be transferred in terms of the new pecuniary limits established under the Act of 2019 and

iv) The respondent shall bear the costs of the appellant quantified at Rupees two lakhs which shall be payable within four weeks.

17. On the date of filing the complaint this District Forum on 09.06.2020 had no pecuniary jurisdiction to entertain the complaint and same complaint cannot be continued under the C.P.Act, 2019.  Therefore, complaint requires to be returned to the complainant for presentation before the Hon’ble State Commission, Bengaluru.
18. Point Nos.2 and 3:- It is settled proposition of law that when the authority has no pecuniary jurisdiction, it has no power to decide the case on merits.  In view of our finding on point No.1, these two points deal with merits of the case, do not survive for consideration.    
19. Point No.4:- In view of the discussion referred above on point Nos.1 to 3 and reasons stated above, this District Forum had no pecuniary jurisdiction to entertain the complaint and same complaint cannot be continued under C.P.Act, 2019.  The complaint requires to be returned to the complainant for presentation before the Hon’ble State Commission, Bengaluru.   Hence, we proceed to pass the following 

  O R D E R

1. The District Forum had no pecuniary jurisdiction to entertain the complaint on 09.06.2020 and this complaint cannot be continued under provision of new C.P.Act, 2019.
2. Return the complaint to the complainant for presentation before the Hon’ble State Commission, Bengaluru.
3. No costs.
4. Furnish the copy of this order to both parties as per law.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 16^th day of March, 2022)

Documents produced by the Complainant are as follows: