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

DATED 29TH DAY OF DECEMBER 2022

ORDER

SRI.M.SHOBHA, PRESIDENT

1. The  complainant  has filed this complaint against the Opposite parties  for reliefs

1. To direct the OP to refund the entire sale consideration amount of Rs.29,10,274/- with interest at the rate of 18% p.a. from the respective date of payment till repayment.
2. To direct the OP to sum of Rs.5,00,000/- towards damages, compensation, mental pain and agony.
3. To direct the OP to pay cost of Rs.50,000/- and such other reliefs.

2.  The case of the complainant is that:

The OP-1 are engaged in real estate business and they are represented by its directors. OP-2 is the managing Director of OP-1. The OP have launched the project in the name and style of Mantri Webcity to be developed over various converted survey lands situated at Nagareswara Nagenahalli village measuring 18 acres 08 guntas and Kothanur village measuring 26 acres 05 gunts and in all measuring 44 acres and 24.5 guntas which are referred as project land.

The complainant based on innumerable representation and assurance and huge list of amenities and facilities offered by the OPs booked an apartment bearing no.U-1703 having super built up area 1740Sq.ft. on 17^th floor. In furtherance of the same she entered into an agreement of sale for a total consideration of amount Rs.57,24,600/- which included all costs. The complainant has also entered into construction agreement for a total construction of Rs.41,28,000/-.  As per the offer made by the OP the complainant has to pay only 25% to 30% of the aforesaid sale consideration amount and balance sale consideration has to be paid at the time handing over the possession. The complainant as per the offer has paid sum of     Rs.29,10,274/-. 

As per the terms and condition of the agreement the OPs were liable to complete the project and hand over the possession of the project with all amenities by 30.09.2018, but the OP failed to complete the project even today the project is not finished and it is likely to take few more years.

It is further case of the complainant that she had booked the apartment for her own use. She had paid a sum of Rs.9,85,260/- out of savings. She has raised a loan from SBI and as per the scheme and demand raised by the OP got released a sum of Rs.19,25,014/-.  The complainant patiently waited for a long period, but the OP failed to complete the project. When the complainant has approached the leading banks like SBI, ICICI and Axis banks for the purpose of raising loan and they  have block listed the project and refused  finance. The loan which was raised earlier by the complainant is now lapsed and she is continuously paying interest on the said loan.

It is further grievance of the complainant that the OP failed to share the basic documents like approved plan, occupancy certificate and other documents. The OPs rather than furnishing the documents they are only seeking details of bank personnel to enable them to interact with them. At last the OP issued email threatening to cancel the agreement and impose penalty for no fault.

It is further case of the complainant that the OPs were suppose to complete the entire project along with all amenities by 30.09.2018. In spite of lapse of more than 03 years the OPs have not completed the project and not providing occupancy certificate. Under these circumstances the complainant does not intent to continue in the project and demanded for refund of entire sale consideration amount along with interest at the rate of 18% p.a. from the date of respective payments. In pursuance of the same the complainant got issued legal notice on 24.12.2021 and requested for refund of the money but the OP fails to refund the money. Hence, the complainant has filed this complaint.

3. After service of notice, OP-1 has appeared before this commission through their counsel and  filed their version. OP-2 remained absent and placed exparte.

The OP-1 has filed their version and have admitted about booking made by the complainant in their project and the amount of Rs.29,10,274/- paid by the complainant. they have further admitted about the sale agreement and construction agreement entered between them on 15.09.2016.

It is specific contention taken by the OP that as per clause-6.1 of the construction agreement this OP has to hand over the possession of the completed apartment on 30.09.2018. This hand over of possession was subject to limitation in clause-6.1 and 6.4. As per which based on certain force majeure consideration which were beyond the control of OP-1 could be excused in the case of delay arising from happening of events contemplated in clause-6.4 of the construction agreement.

It is the specific contention taken by the OP that he could not complete the project intime as he to over come several legal hurdles such as issues while excavation, legal issues, license issues, rain fall and flooding issues, protest by sand suppliers. In addition to this there were several force majeure events which occur further hampered the progress and delayed the project which are the demonetization that was declared in Nov.2017 by the Central Government hindered the progress of the project. When the OP-1 was slowly recovering from the blow of demonetization this OP as well as entire industry was dealt with another blow i.e. implementation of GST in July 2017. The OP is statutorily required to obtain several approvals and permissions from various authorities under various statues. The obtaining of such sanctions and approvals invariably a time consuming process and it also constitutes force majeure and it is beyond the control and power of the OP. Despite such huge obstacles this        OP-1 has managed to overcome the same and has ensured that the project is under full swing of construction. In the meantime the real estate RERA 2016 came into force on 01.05.2016. Due to this OP-1 applied for registration of the project as required under provisions of RERA Act and Rules. The authority after scrutinizing the documents submitted by OP-1 was pleased to registered the project.

It is further case of the OP that the complainant had made only payment of Rs.29,10,274/- and as the apartment unit is already completed as on 03.04.2020 and this OP has already applied for issue of Occupancy certificate before the BBMP. This OP has given a 1% discount on the entire sale consideration in form of credit note worth Rs.95,526/- to be adjusted at the time of payment of balance sale consideration amount. This OP has called upon the complainant to come and take possession by paying balance sale consideration amount, but the complainant did not pay the balance amount. In view of this OP was forced to terminate the agreement and cancel the booking. Under these circumstances  there is no deficiency on the part of the OP and he is not liable to pay any compensation and damages to the complainant.

It is further case of the OP that the complaint is not at all maintainable before this Commission and the complainant has to approach competent civil court for adjudication of this matter. In case of cancellation or termination of the agreement the complainant was required to follow the specified procedure. This OP shall be entitled to forfeit a sum ebullient to 10% of total value of the agreement and the complainant has to make a written request for cancellation along with NOC for resale of the apartment in the market by the OP-1. The complainant has forgone the provisions of the agreement and refrained from following the aforesaid prerequisites as laid down under the agreement. As per clause-21 of agreement of construction any dispute relating to the agreement shall be solved by arbitration by a sole arbitrator of the confederation of real estate developers association of India, Bengaluru. And the courts at Bengaluru alone have exclusive jurisdiction to try all the suits with regards to this agreement. The dispute is only in respect of breach of contract and the complainant has to approach the competent court and this commission is not the appropriate court to adjudicate the matter. Hence the complainant is not maintainable and liable to be dismissed. Hence, the OP has prayed to reject the complaint with exemplary costs. 

4. The complainant in order to prove her complaint filed her affidavit evidence and relied on Ex.P1 to P11. On the other hand  Authorized signatory of OP- has filed his affidavit evidence and relied on  Ex.R1 to R7.

5. We heard the arguments of the complainant and OP.

6. The following points do arise for our consideration are as under:-

1. Whether there is deficiency in service on the part of the OP?
2. Whether the complainant is entitled for the reliefs as sought for?
3. What order?

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

       Point No.1:-Affirmative

      Point no.2:- Affirmative in part.

      Point No.3:-As per the final order.

REASONS

8. Point Nos.1 and 2:. These two points are interrelated and hence they have  taken up for common discussion.

9. The complainant in order to prove her contention has filed her affidavit evidence by reiterating all the allegations made in the complaint  and relied on exhibits P1 to P11.

10. Ex.P1 agreement of sale and Ex.P2 is construction agreement dt.15.09.2016,  Ex.P3 is the payment receipt, Ex.P4 is the demand letter of OP and Ex.P5 is the arrangement letter for home loan, Ex.P7 is the bunch of emails, Ex.P8 is copy of legal notice, Ex.P10 is postal acknowledge and Ex.P10 is the reply notice.

11. On the other hand the Authorized representative of OP company filed affidavit evidence reiterating all the allegation made in the version. The OP has relied on Ex.R1 to R7. Ex.R3 is the copy of the e-mail about credit note, Ex.R4 is the letter to Town planning north circle, R5 is partial fire clearance certificate, Ex.R6  is 04 emails sent to the complainant to take possession and Ex.R7 is the termination letter.

12. It is clear from the evidence and documents and pleadings of both the parties that the complainant  booked the apartment formed by the OP-1 and entered into to sale agreement and construction agreement and paid an amount of Rs.29,10,274/- by raising loan from the SBI. As per the agreement the OP has to complete the construction and hand over the apartment with all the amenities by 30.09.2018. In spite of lapse of 03 years after the completion period the OP failed to complete the project  and hand over the possession. Under these circumstances demanded for the refund of the amount.

13. On the other hand the OP has taken the contention that they could not complete  the  project in time as they have to overcome several legal hurdles such as issues while excavation, legal issues, license issues, rain fall and flooding issues, protest by sand suppliers. In addition to this there were several force majeure events which occur further hampered the progress and delayed the project which are the demonetization that was declared in Nov.2017 by the Central Government hindered the progress of the project. When the OP-1 was slowly recovering from the blow of demonetization this OP as well as entire industry was dealt with another blow i.e. implementation of GST in July 2017. The OP is statutorily required to obtain several approvals and permissions from various authorities under various statues. The obtaining of such sanctions and approvals in invariably a time consuming process and it also constitutes force majeure and it is beyond the control and power of the OP. Despite such huge obstacles this OP-1 has manage to overcome the same and has ensured that the project is under full swing of construction. In the meantime the real estate RERA 2016 came into force on 01.05.2016. Due to this OP-1 applied for registration of the project as required under provisions of RERA Act and Rules. The authority after scrutinizing the documents submitted by OP-1 was pleased to registered the project.

14. It is undisputed project the complainant booked the apartment on 23.08.2016 after making substantial payment as per demand made by the OP. The OP has to complete the project within September 2018 and hand over the possession with all the amenities. The problems raised by the OP for delay in completion of the project were not at all there at the time of booking of the apartment by the complainant and also till the completion period of the project 2018. When the OP has failed to complete the project has taken all these problems as a hurdles in order to take shelter under these alleged problems in order to avoid the refund of the amount to the complainant.

15. The complainant cannot wait for an indefinite period for taking possession of the apartment after making substantial payment. In addition to this the OP has fail to share with important documents with the complainant and has illegally demanded the complainant to pay the entire sale consideration amount without completing the project. Under these circumstance the complainant has decided to cancel the booking and terminate the agreement entered with the OP.

16. On this background we have gone through the decisions of the Apex court. The complainant has also relied on the decision of National Consumer Disputes Redressal held in Mili Jain & two others V/s Wave City Centre Pvt. Ltd., on 29^th October 2021.

17. It is also clearly held in the above decision that the complainant is entitled for the refund of the amount with interest and if he failed to pay the amount then the complainant is also entitled for additional interest. If the OP failed to deliver possession and pay the compensation the complainants shall be entitled to seek execution of the order under the C.P. Act.   

18. The OP has also relied on the decisions of the Apex Court and they are not applicable to the facts and circumstances of this case.

19. The complainant has clearly established that the OP has committed deficiency of service as he failed to complete the project and hand over the possession within September 2018 and the termination of agreement and the cancellation of booking by the OP without refund of the amount is illegal and amounts to unfair trade practice. When the OP has terminated the agreement and cancelled the booking he is bound to refund the amount with interest. The OP instead of refunding the amount has made the complainant to run from pillar to post and to approach this commission for recovery of the amount. In view of this the complainant has suffered mental agony and financial loss and she has to pay exorbitant interest on loan raised by her from SBI. Hence, the complainant has clearly establish the deficiency of service and financial loss and mental agony suffered by her. Therefore, the complainant is entitled for relief claimed in the complaint and the complaint is allowed in part.

20. Hence, we answer point no.1 in affirmative  and point no.2 affirmative in part.  

21. Point no.3:-.  In view of the above discussions, the complaint is liable to be allowed in part and complainant is entitled for Rs.29,10,274/- along with interest at the rate of 10% p.a. from the date of complaint. The complainant is also entitled for compensation of Rs.5,00,000/- for the financial loss and also mental agony suffered by her. The complainant is also entitled for litigation expenses of Rs.10,000/-. Accordingly, we proceed to pass the following 

O R D E R

1. The complaint is allowed in part.
2. The OP is directed to refund the amount of Rs.29,10,724/- with interest at 10% p.a. on the date of complaint till realization
3. The OP is further directed to pay compensation of Rs.5,00,000/-  towards  financial loss and also mental agony suffered by the complainant along with Rs.10,000/- towards litigation expenses.
4. The OP is further directed to pay entire amount within 60 days from the date of this order, if the OP failed to refund the amount, the amount of  Rs.29,10,724/- will carry interest at 12% p.a. after expiry of 60 days  till realization of the amount.
5. Furnish the copy of this order to both the parties, and return the spare pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 29^th  day of December, 2022)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1 :  

*SKA