BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.

Date of filing : 14/09/2010

Date of Order : 31/01/2012

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 493/2010

Between

And

 

C.C. No. 494/2010

Between

And

C O M M O N O R D E R

A. Rajesh, President.

1. After the completion of the evidence of the complainants in the above cases, the opposite parties filed a memorandum dated 19-08-2011 submitting that the evidence adduced on their behalf in C.C. No. 493/2010 may be adopted in C.C. No. 494/2010. Since, the dispute involved in the above complaints are the same and the opposite parties are the same, we are disposing off the above cases by this common order.

2. The case of the complainant in C.C. No. 493/2010 is as follows :

The complainant is the owner in possession of 20 cents of land in Sy. No. 356/1 of Ezhupunna Village. Lured by the assurances and representatives of the 2^nd and 3^rd opposite parties, the complainant entered into an agreement with the opposite parties for land development on 25-09-2008. The opposite parties collected an amount of Rs. 10 lakhs including the cost of land from the complainant. But so far, nothing has been done to develop the land by the opposite parties. The complainant requested the opposite parties either to complete the development work or to return the money, but there was no response. The above conduct of the opposite parties amounts to unfair trade practice. There is gross deficiency in service and negligence on the part of the opposite parties. The complainant is entitled to get back Rs. 10 lakhs with interest @ 18% p.a. and a compensation of Rs. 3 lakhs for the agony suffered by the complainant along with costs of the proceedings. The complaint hence.

3. The complainant in C.C. No. 494/2010 as well raised similar contentions in the complaint.

4. The version of the opposite parties in C.C. No. 493/2010 :

The complaint is not maintainable by virtue of Section 2 (1) (o) of the Consumer Protection Act. The 1^st opposite party entered into an agreement dated 25-09-2008 with the complainant, it is made clear in the agreement that the said land development shall be completed only along with other adjacent properties of the 1^st opposite party. The complainant is at liberty to proceed with Clause 5 in the agreement. The opposite parties could not commence the development work, since the complainant failed to apply for and obtain necessary permits from the concerned authority. Subsequent to the filing of the complaint, the power of attorney of the complainant caused a lawyer notice to the opposite party under Section 138 of the Negotiable Instruments Act demanding to pay a sum of Rs. 10,80,000/-. In the circumstances, the complainant cannot claim any amount much more than the amount of Rs. 10,80,000/-. The complainant is not entitled to get any of the reliefs as claimed for.

5. The opposite parties in C.C. No. 494/2010 filed their version raising the very same contentions in C.C. No. 493/2010.

6. In C.C. No. 493/2010, the Power of Attorney of the complainant was examined as PW1 and Exts. A1 to A4 were marked on the side of the complainant. No oral evidence was adduced by the opposite parties. Exts. B1 and B2 were marked on their side. In C.C. No. 494/2010, the Power of Attorney of the complainant was examined as PW1 and Exts. A1 A6 were marked on the side of the complainant. Neither oral nor documentary evidence was adduced by the opposite parties. The opposite parties filed argument note. Heard the counsel for the parties.

7. The points that arose for consideration are :-

1. Whether the complaints are maintainable in this Forum?

2. Whether the complaints are barred by limitation?

3. Whether the complainants are entitled to get refund of Rs. 10 lakhs with 18% interest?

4. Whether the opposite parties are liable to pay compensation and costs of the proceedings to the complainants?

8. Point No. i. :- The opposite parties vehemently contended that neither the complainants are consumers nor is the opposite parties a service provider as contemplated in the Consumer Protection Act. It is also contended that the complaints itself are not maintainable by virtue of Section 2 (1)(o) of the Act.

9. Admittedly, the agreement entered into between the parties is for land development for the proposed Ezhupunna Project. Indisputably, 'housing construction' is a service as per Section 2 (1)(o) of the Consumer Protection Act. The Hon'ble Apex Court in Lucknow Development Authority Vs. M.K. Gupta III (1994) CPJ 7 (SC) = (1994) I SCC 243, held that “a person who applies for allotment of a building site or for a flat constructed by a development authority or enters in to an agreement with a builder or a constructor is a potential user and nature of transaction is covered on the expression 'service of any description'.” In the instant case, the complainants have availed the service of the opposite parties for land development for consideration which is well within the ambit of service as per Section 2 (1)(o) of the Act. To sum up, we have no hesitation to hold that the complainants are consumers and the complaints are maintainable in this Forum.

10. Point No. ii. :- During the proceedings in this Forum, the opposite parties raised question of limitation to entertain the complaint. Ext. A2 agreement dated 25-09-2008 entered into between the parties in both the cases would show that the opposite parties agreed to complete the land development in 2 years time from the date of agreement. So, legally the cause of action for the complaints began to run from after the completion of 2 years from the date of agreement on 25-09-2008. Admittedly, the complainants have filed these complaints on 14-09-2010 which is within the period of limitation as prescribed under Section 24 A of the Consumer Protection Act. So, the above contention of the opposite parties too goes.

11. Point No. iii. :- The parties are in consensus on the following issues :-

1. Ext. A1 in both the cases are the sale deeds of the property, the same were executed by one Mr. Tyju Francis Thachil.

2. Ext. A2 in both the cases are the agreement for land development.

3. The opposite parties received a sum of Rs. 10,00,000/- each from the complainants on the date of agreement on 25-09-2008.

4. In Ext. A2 agreement, it is stated that the development cost of Rs. 10,00,000/- includes the cost of the land.

5. In both the cases, the 2^nd opposite party has issued cheques to the tune of Rs. 10,80,000/- each in favour of the complainants.

6. In both the cases, the complaints are pending before the Additional Chief Judicial Magistrate Court, Ernakulam. Since the cheques issued by the 2^nd opposite party had been dishonoured for the reason “insufficient fund in his account”.

12. The learned counsel for the opposite parties vehemently contended the following :-

1. As per the agreements, the land development shall be completed only along with other adjacent properties of the 1^st opposite party.

2. These complaints and Ext. B2 complaints are preferred by the complainants on the basis of Ext. A2 agreement the present attempt of the complaints are only an abuse of process of law.

3. Both the parties are bound by the terms of the agreement, the opposite parties are ready to comply with Clause No. 5 in Ext. A2.

13. The contention of the opposite parties that the land development shall be completed only along with other adjacent properties of the 1^st opposite party is unsustainable for the simple reason that as per the agreement, the opposite parties agreed to complete the land development within 2 years from the date of Ext. A2 agreement in which they failed. The above conduct of the opposite parties amounts to deficiency in their service.

14. Admittedly, Ext. B1 is the statutory notice issued by the complainants as per the provisions of the Negotiable Instruments Act. Ext. B2 complaints have been filed by the complainants to prosecute the accused for the offence punishable under Section 138 of the Negotiable Instruments Act. The instant complaints are filed by the complainants to get the money refunded from the opposite parties due to their deficiency in service and unfair trade practice.

15. Clause 5 in E xt. A2 reads as follows :-

“The original agreement duly executed will be kept by the Second Party and the duplicate copy will be kept by the first party.

The First Party hereby agrees to complete the land development in two years time from the date of this agreement of proposed project for which an amount of Rs. 10,00,000/- (Rupees Ten lakhs only) is received, including cost of land from the Second Party. If the Second Party is not satisfied with project of the First Party, on account of changes made from pre-launch plan or delay in completion as specified herein, then the First Party agrees to buy back the mentioned plot at a premium interest @ 8% plus 25% of the amount paid.”

The above clause is not applicable in these cases, especially since nothing is on record to show that the opposite parties have performed any of the conditions in the agreement and evidently failed in the clauses of the contract. This forecloses, the complainants' claim for redress.

16. In the above circumstances, we are of the firm view that the complainants in the above cases are entitled to get refund of Rs. 10 lakhs each from the opposite parties together with interest @ 12% p.a. from the date of Ext. A2 agreement till realisation.

17. As per Ext. A2 agreement, the development cost of Rs. 10 lakhs includes the price of the property. The price of the property as per Ext. A1 sale deed is Rs. 50,000/-. So, we are of the view that the complainants can either retain the property on their own or deduct the price of the property from he total amount.

18. Point No. iv. :- Since, the primary grievance of the complainants having been met squarely and adequately no order for compensation or costs are called for.

19. In the result, we partly allow the complaints and direct as follows :-

i. In C.C. No. 493/2010 :

1. The opposite parties shall jointly and severally refund Rs. 10 lakhs (Rupees Ten lakhs only) to the complainant with 12% interest p.a. from the date of Ext. A2 agreement till realisation. In that event, the complainant shall forfeit his claim over the property or

2. The opposite parties shall jointly and severally refund Rs. 9.5 lakhs (after deducting Rs. 50,000/- being the price of the property) to the complainant with 12% interest p.a. from the date of Ext. A2 agreement till realisation. In that event, the complainant can retain the property.

3. The complainant is at liberty to select either of the above clauses.

ii. In C.C. No. 494/2010 :

1. The opposite parties shall jointly and severally refund Rs. 10 lakhs (Rupees Ten lakhs only) to the complainant with 12% interest p.a. from the date of Ext. A2 agreement till realisation. In that event, the complainant shall forfeit his claim over the property or

2. The opposite parties shall jointly and severally refund Rs. 9.5 lakhs (Rupees Nine lakhs and fifty thousand only) (after deducting Rs. 50,000/- being the price of the property) to the complainant with 12% interest p.a. from the date of Ext. A2 agreement till realisation. In that event, the complainant can retain the property.

3. The complainant is at liberty to select either of the above clauses.

The above orders shall be complied with, within a period of one month from the date of receipt of a copy of this order.

Pronounced in open Forum on this the 31^st day of January 2012

Sd/- A. Rajesh, President.

Sd/- Paul Gomez, Member.

Sd/- C.K. Lekhamma, Member.

Forwarded/By order,

Senior Superintendent.

A P P E N D I X

In C.C. No. 493/2010 :-

Complainant's Exhibits :-

Opposite party's Exhibits :-

In C.C. No. 494/2010 :-

Complainant's Exhibits :-

Opposite party's Exhibits :: Nil

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