DISPOSED ON: 31.12.2010

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

DATED THIS THE 31^ST DECEMBER 2010

  PRESENT:-  SRI. B.S. REDDY                             PRESIDENT

                     SMT. M. YASHODHAMMA               MEMBER

                     SRI. A. MUNIYAPPA                         MEMBER         

COMPLAINT Nos.1716, 1717, 1718, 1719

                            1720, 1795 & 1796/2010

O R D E R

SRI. B.S.REDDY, PRESIDENT

These are the complaints filed U/s. 12 of the Consumer Protection Act of 1986, by the respective complainants seeking direction against Opposite Parties-1 to 3 (herein after called as O.Ps) to refund the amounts paid towards the allotment of sites with interest at 12% p.a.. Further to direct OP-4 to pay compensation and for awarding costs of the litigations on the allegations of deficiency in service on the part of the OPs. 

Since the reliefs claimed in all these complaints are similar and OPs are common, the questions involved for determination is identical; in order to avoid the repetition of facts and multiplicity of reasonings, in the interest of justice all these complaints stand disposed of by this common order.

Briefly stated the facts leading to these complaints are that:

2.      On the basis of the advertisement appeared in all leading news papers regarding “European Township” project being launched at Hirandahalli, Bidarahalli Hobli, Bangalore East Taluk of Old Madras Road by OPs-1 to 3, the complainants booked sites and paid initial amounts. The transaction were facilitated by Mr. Anjum Pasha, Marketing representative Orange Properties; the initial payments were made through cheques. OPs assured that the project is coming up in 120 acres which is in possession of OP-1 and conversion sanctioned by D.C. application for BDA approval has already been sent. The agreement deeds were executed incorporating terms and conditions of the transactions. It was stipulated that OP-1 shall furnish the documents of the copies of the BDA approvals of the land within period of three months from the date of the agreement, OPs assured that all the developments according to the specifications of the BDA shall be completed within 9 months from the date of signing the agreement. Further it was stipulated that in the event of a failure to obtain necessary approvals within three months OP-1 shall refund the entire amount with interest at 12% p.a. The complainants came to know that without completing the project, OPs were planning to escape by closing their office, the complainants requested for refund of the amount deposited. Orange Properties promised to issue refund cheques and accordingly issued cheques in favour of the complainants in complaint Nos.1716, 1718 and 1720/10 towards refund of the amounts paid, but the cheques were dishonoured. The details of site number, payments made, the date of agreements and the amount claimed for refund are mentioned in the below chart:     

          OPs failed to keep up their promises and failed to refund the amounts paid by the complainants. Hence the complainants felt deficiency in service on the part of the OPs and were advised to file these complaints for the necessary reliefs stated above.

3.      OPs-1, 3 & 4 inspite service of notices failed to appear, hence placed ex-parte.       

4.      On appearance, OP-2 filed version. The contentions of the OP-2 in the version filed in all these complaints is identical, it is contended that no case has been made out against OP-2 and all the grievances are against OP-4. The complainants admit that its transactions are with OP-4 and they have received the cheques from him, this OP is not responsible for any acts of OP-4. The complainants have admitted that by rescinding the agreement they have received the post dated cheques from OP-4, thereby severing alleged contract if any with this OP, this OP shall be discharged on this ground alone. It is admitted that OP-4 has undertaken to market residential sites proposed to be formed, it is not within the knowledge of this OP about advertisement in all leading newspapers, hoardings displays through out Bangalore City. As per the complaint averments all the alleged transactions were held between OP-4 and complainants for which this OP is not liable for any alleged deficiency as claimed in the complaints. The complainants by receiving the cheques from OP-4 has rescinded the understanding to buy the plots, the appropriate and proper jurisdiction for the complainants is to claim before the Civil Court by filing the civil suit against the  OP-4. The alleged agreement for sale supposedly executed by this OP have been handed over to complainant by executive of M/s Orange Properties, this OP has not handed over the same to executive to hand over to the complainants. The complainants have not taken any action against the OP-4 for the offence of the U/s 138 of N.I. Act. Orange Properties have not just cheated the complainants, several other investors, but also cheated this OP for several crores of Rupees. Hence it is prayed to dismiss the complaints.         

5.      In order to substantiate the complaint averments, the complainants filed affidavit evidences and produced documents. OP-2 has not filed affidavit evidence.

6.      Arguments of the complainants side heard, OP-2 was not present, hence taken as heard. Points for consideration are:

       Point No.1:- Whether the complainants are proved           

                          the deficiency in service on the part

of the OPs?

Point No.2:- If so, whether the complainants are

                   entitled for the reliefs now claimed?

     Point No.3:- To what Order?

7.      We record our findings on the above points:

Point No.1:- Affirmative.

Point No.2:- Affirmative in part.

Point No.3:- As per final order.

R E A S O N S

8.      From the complaints averments and affidavit evidences of the complainants it becomes clear that OP-1 is a company incorporated under the Companies Act 1956. OPs-2 and 3 are the Managing Director and Director respectively of OP-1. OP-4 is the sole proprietor of M/s Orange Properties, the proprietary concern purportedly engaged in business of development, promotion and marketing of real estate projects, including the promotion and development of residential township and sale of sites therein to consumers. OP-4 through his proprietary concern M/s Orange Properties widely advertised in several leading newspapers and hoardings displayed in prominent parts of Bangalore City, proclaiming that they were promoting and developing a ‘European Township’ a residential township, wherein sites would be sold to members of public. The brochures brought out in respect of the said project produced by the complainants contain the details of the project. Based on these advertisements and brochures, the complainants intended to purchase sites in the proposed layout and paid the initial amounts through cheques issued in favour of OP-1 as shown in the chart. OP-1 being represented by its Managing Director OP-2 executed the agreement deeds in favour of the complainants incorporating the terms and conditions stating that OP-1 is in possession and enjoyment of the schedule property shown in the agreement deeds. The said property is free from encumbrance; approvals in relation to the development of layout had been sought and were awaited. Further it was stipulated that on the failure of obtaining necessary approvals from BDA within three months from the date of signing the agreements and completing all developments there to within 9 months, OP-1 would refund the entire amount paid with interest at 12% p.a. We have perused the terms and conditions of the agreement deeds; the other terms agreed are that the registration shall be completed within the period of 9 months from the date of agreement. It is also stated that OP-1 (first party) assures that the schedule property exclusively belongs to them and the sale of schedule properties is subject to clear, valid and marketable title of the first party and the first party agreed to set right all the defective title to the property and litigation if any and convey a good title to the schedule properties in favour of the second party. Further OP-1 assured the second party i.e., the complainants that they furnish the documents and approvals of land conversion and layout plan of the schedule property within period of three months from the date of agreement. The complainants repeatedly called upon OPs to furnish the title documents of the property, but the OPs failed to do so. The complainants came to know that OPs were not at all in a position to form any layout or sell any sites, the representation made by OPs were all false. The proposed layout was not sanctioned by the appropriate authorities; the lands in question were agricultural lands belonging to various farmers. OPs have not at all acquired any title over the said property. Under these circumstances the proposed layout could not be developed. Thus the complainants cancelled the applications filed for the sites and sought for refund of amounts paid. Some of the complainants filed complaints before the jurisdictional police against the OPs. OPs failed to refund the amounts, as such the complainants were made to approach the Forum seeking necessary reliefs.

9.      The version filed by OP-2 disowning its liability for refunding amounts with interest has no basis. The complainants have paid the amounts through cheques issued in favour of OP-1 and OP-2 as a Managing Director of OP-1 has executed the agreement deeds acknowledging the receipt of initial payments. In view of the same it cannot be accepted that the signed agreements were handed over to the executive of M/s Orange Properties, OP has not handed over the same to the executive to hand over the same to the complainants. Merely because OP-4 has issued cheques in favour of some of the complainants towards refund of the amounts and the cheques are being bounced it cannot be said that OP-2 is not liable for refunding the amount. Further there is no merit in the contention that the complainants ought to have approached the Civil Court seeking necessary reliefs. OP-2 as a Managing Director of OP-1 has directly entered into an agreement for sale of the sites with the complainants; in view of the same when it was not possible to form the proposed layout it would have been fair enough on the part of OPs to refund the amount to the complainants with interest at 12% p.a. as agreed under the terms of the agreement deeds. OP-2 cannot avoid its liability on the ground that OP-4 has cheated the complainants by issuing post dated cheques. As the OPs-1 to 3 failed to fulfill the obligations to furnish the required documents regarding title of the schedule property and obtain approval from statutory authorities for formation of layout they are bound to refund the amounts with interest at 12% p.a. The failure of OPs-1 to 3 in fulfilling the obligations as per the terms of the agreement and failure to refund the amounts to the complainants amounts to deficiency in service on their part.               

10.    The relief claimed against OP-4 is to award compensation for causing mental agony and harassment as OP-4 has mislead the complainants by widely publishing in all leading newspapers, misrepresenting the facts with sole aim to lure and inducing the complainants to book the sites thereby indulging in unfair trade practice. OP-4 made these complainants to part with huge amounts towards booking of the sites in the proposed project of OPs-1 to 3 knowing fully well that OPs-1 to 3 have acquired no title over the property and the properties were not in their possession. The complainants were made to suffer mental agony and harassment on account of the act of OP-4 as such OP-4 is liable to pay compensation. Taking into consideration of all the facts and circumstances it would meet ends of justice by awarding compensation of Rs.25,000/- to each of these complainants directing OP-4 to pay the same. Accordingly we proceed to pass the following:     

O R D E R

The complaints filed by the complainants are allowed in part.

1. In complaint No.1716/2010 OPs-1 to 3 are directed to refund an amount of Rs.6,62,600/- with interest at 12% p.a. from the respective date of payments till the date of realization and  OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

2. In complaint No.1717/2010 OPs-1 to 3 are directed to refund an amount of Rs.12,30,000/- with interest at 12% p.a. from the respective date of payments till the date of realization and OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

3. In complaint No.1718/2010 OPs-1 to 3 are directed to refund an amount of Rs.11,97,000/- with interest at 12% p.a. from the respective date of payments till the date of realization and OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

4. In complaint No.1719/2010 OPs-1 to 3 are directed to refund an amount of Rs.3,37,500/- with interest at 12% p.a. from the respective date of payments till the date of realization and  OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

5. In complaint No.1720/2010 OPs-1 to 3 are directed to refund an amount of Rs.11,97,000/- with interest at 12% p.a. from the respective date of payments till the date of realization and  OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

6. In complaint No.1795/2010 OPs-1 to 3 are directed to refund an amount of Rs.5,00,000/- with interest at 12% p.a. from the respective date of payments till the date of realization and  OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

7. In complaint No.1796/2010 OPs-1 to 3 are directed to refund an amount of Rs.2,00,000/- with interest at 12% p.a. from the respective date of payments till the date of realization and  OP-4 is directed to pay compensation of Rs.25,000/- to the complainant.

OPs are directed to pay litigation cost of Rs.2,000/- to each of the complainants.

This order is to be complied within four weeks from the date of this order.

This original order shall be kept in the file of the complaint No.1716/2010 and a copy of it shall be placed in other respective files.

Send the copy of this order to both the parties free of cost.

(Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 31^st day of December - 2010.)

PRESIDENT

MEMBER                                                      MEMBER 

 Snm: