BEFORE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD

F.A.No. 65 OF 2015 AGAINST C.C.NO.100 OF 2015 DISTRICT CONSUMER FORUM RANGA REDDY

Between

Andhra Bank,

Gajularamaram Branch,

Plot No.10 & 11, Block No.32,

HAL Colony, Hyderabad – 500 055.

R.R.Dist, Rep. by its Branch Manager

Appellant/opposite party

          A N D

Movva Bappaiah, S/o Ranga Rao,

Aged about 43 years, Occ: Service,

R/o Plot No.4, Sri Sai Nilayam,

Beside Narayana Hrudayalayam Hospital

Suraram X Road, Hyderabad-55

                                                                   Respondent/complainant

Counsel for the Appellant                  Sri S.Mujib Kumar

Counsel for the Respondent              Sri S.Veerendra

 QUORUM            :

 HON’BLE SRI JUSTICE B.N.RAO, PRESIDENT

&

SRI PATIL VITHAL RAO, MEMBER

FRIDAY THE TENTH DAY OF MARCH

TWO THOUSAND SEVENTEEN

Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)

***

1.                 This is an appeal preferred by  opposite party  against the order  of the Dist. Forum directing   it to pay Rs. 12,50,000/- along with interest @ 12% p.a. till realization together with compensation of Rs.10,000/- and costs of Rs.5,000/-

2.                 The case of the complainant in brief is that on seeing a publication of opposite party in newspaper with regard to auction of a flat in Jeedimetla Hyderabad the complainant participated in the auction on 18.11.2013 by paying an amount of Rs.1,20,000/- wherein he was declared as highest bidder for an amount of Rs.12,50,000/-.  On 27.11.2013 the complainant      paid the remaining consideration   and a ‘sale certificate’ was issued by Opposite Party on 30.11.2013.   It was promised in the ‘sale certificate’ that the property was free from all encumbrances known to the secured creditor.  Though the complainant paid registration charges, the opposite party postponing the same.   Thereafter the complainant came to know that    some persons obtained a decree in their favour from the Hon’ble R.R.District Courts regarding the said flat and the decree holder had filed a ‘protection petition’ before the District Registrar, Ranga Reddy at Kukatpally, with a request not to register or transfer the suit schedule property as it would amount to contempt of court.    The decree holder had already published a notification in the newspaper on 13.11.2013 but the same was suppressed by the Opposite Party and the auction was held on 19.11.2013. Though the complainant  requested the opposite party for refund of the amount, the opposite party failed to pay the same.    Therefore,  the complainant got issued a legal notice on 14.03.2014 which was received by Opposite Party but no reply was given.  Hence, the present complaint. 

3.                The opposite Party resisted the case by contending that the complaint does not fall within the jurisdiction of this Forum as it was outside the scope of C.P.Act for the reasons that complainant was seeking remedy against the Sub Registrar, Quthbullapur for not registering the sale deed. After the ‘sale certificate’ was issued by this Opposite Party, he approached the Sub Registrar for registering the property in the name of the complainant and it was then for the first time he came to know about the ‘protection petition’ filed by one N.Krishnaveni.   The learned Prl.Senior Civil Judge, R.R.District had granted injunction against U.Venkatesham, not to alienate the said flat and hence the Sub Registrar refused registration. Opposite Party was unaware of the litigation between the defaulter U.Venkatesham and Smt N.Krishnaveni as he was not a party to the said suit. The auction was justified under the SARFAESI ACT as the borrower/mortgager U.Venkatesham defaulted in repaying the housing loan to the Opposite Party Bank. As the registration cannot be done, without there being fault of Opposite Party, he cannot be called upon to repay the sale consideration to the complainant  after issuing the ‘sale certificate’.  The As the opposite Party bank has no such power and hence  there was no ‘deficiency’ on part of Opposite Party.  Therefore, the opposite party prayed for dismissal of the complaint.

4.                 The complainant in proof of his case, filed his affidavit evidence and got Exs. A1 to A7 marked, while the opposite party filed his evidence affidavit and filed Exs. B1 to B4.  

5.                The Dist.  Forum after considering the evidence placed on record opined that the complainant was put to much trouble in resolving the issue in refunding the amount paid by the complainant,  in case registration is not possible   and therefore  held  deficiency in service  and directed the bank to refund Rs.12,50,000/- with interest @ 12%, compensation of rs.10,000/- and costs of Rs.5,000/-.     

6.                Aggrieved by the said order, the  bank  preferred the appeal contending that the Dist. Forum did not appreciate either facts  or law in correct perspective.   The District Forum erred in  not accepting the contentin o of the opposite party that it is not a party to the suit filed by one Smt N.Krishnaveni against the defaulter and also there ws no possibility to know about the injunction granted in the suit.   The District Forum also erred in giving a finding that it is very unlikely that Smt N.Krishnaveni could obtain an injunction from the Civil Court without the knowledge of the opposite party bank.  The opposite party is not a defaulter in the suit so that it has no knowledge of the filing of the said suit and injunction order.    Hence prayed to allow the appeal by setting aside the order of t he District Forum. 

7.                 The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?

 8.               It is the case of the complainant that the complainant participated in the auction conducted by the opposite party in which he became the successful bidder and paid the sale consideration towards the flat but could not culminate in the registration of the said flat in his name, due to the injunction granted against any transfer of the said flat by the Hon’ble Prl. Senior Civil Judge, R.R.District.  When he sought refund of the amount paid by him, the opposite party postponing the same citing unsustainable reasons. He is relying on documents Exs.A1 to A7 while seeking refund of the amount along with compensation and costs.   The opposite party on the other hand denies any liability for refund or compensation for the reasons that the complainant was seeking remedy against the Sub Registrar, Quthbullpur for not registering the sale Deed.  As the registration cannot be done without there being fault of opposite party, he cannot be called upon to repay the sale consideration to the complainant as after issuing the sale certificate the opposite party bank has no such power. 

9.                It is to be seen that where there is a public auction without assuring any specific or particular amenities, and the prospective purchase  participates in the auction after having an opportunity of examining the flat/site, the bid in the auction is made keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or many not participate in the auction. Once with open eyes, a person participate in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price  or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided or registration of flat. With reference to a public auction of existing sites (as contrasted from sites to be formed), the purchaser   is not a consumer the owner is not a trader or service provider and the grievance does not relate to any matter in regard, which a complaint can be filed. Therefore, any grievance by the purchaser will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction purchaser against the owner holding the auction of sites.

10.              Further it is stated by the complainant himself in his complaint that auction notice was made by publication in which the opposite party put the flat in auction.   The auction property  is to be sold as is where is basis and further it is to be  notified in the same publication in order to   -7- ascertain the details of the property the undersigned to be contacted. The complainant alleged that the opposite party issued sale certificate that the property was free from all encumbrances known to the secured creditor  and when he  approached the opposite party regarding the registration of the auctioned flat , the opposite party postponing the same.   The opposite party contended that after the sale certificate was issued by this opposite party, he approached the Sub Registrar for registering the property in the name of the complainant and then only the opposite party came to know about the protection petition filed by one N.Krishnaveni.  The Pril. Senior Civil Judge, RR Distri t had granted injunction against UVenkatesham not to alienate the said flat and hence the Sub Registrar refused registration.  The opposite party was unaware of the litigation between the default U.Venkatesham and Smt N.Krishnaveni as he was not a party to the suit.  The opposite party justified the auction under SARFAESI Act and the borrower/mortgager U.Venkatesham defaulted in repaying the housing loan.    In those circumstances when the complainant failed to prove that the opposite party had sold the property by suppressing the fact that property was in litigation when the auction notice and publication clearly mentioned that the property to be sold as is where is and as is what in basis, the complainant cannot plead that the opposite party suppressed the details of the  litigation in the auction. It is the duty of the purchaser / bidder to verify the details of the properties including litigations, if any in the proposed bid and thereby the complainant failed to do so and in those circumstances the complainant cannot be considered as proved his case.

11.              The Hon’ble Supreme Court in U.T. Chandigarh Administration  Vs.

Amarjeet Singh reported in II (2009) CPJ-1 S.C. held:

“With reference to a public auction of existing sites (as contrasted  from sites to be `formed'), the purchaser/lessee is not a consumer, the owner  is not a `trader' or `service provider' and the grievance does not relate to any  matter in regard which a complaint can be filed. Therefore, any grievance by the purchaser/lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction purchaser/lessee against the owner holding the  auction of sites.”

12.              Hence in view of the foregoing reasons and the decision of the Supreme Court   we are of the view that there is no deficiency of service on the part of the opposite party and the District Forum erroneously allowed the complaint without taking into consideration of the opposite party side contentions in a proper way and thereby this appeal deserved to be accepted on merits and accordingly.

13.              In view of above settled position of law, this appeal is allowed by setting aside the order of the District Forum.  Consequently,  the complaint is dismissed.   No order as to costs. However, liberty is granted to the complainant to seek legal redress in civil court or as deemed fit, in which case they may seek condonation of delay under Section 14 of the Limitation Act in filing the complaint in accordance with the judgment of the Hon’ble Supreme Court in the case of Laxmi Engineering Works v. P.S.G.Industrial Institute reported in II (1995) CPJ1 (SC). 

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PRESIDENT                                       MEMBER

Dated: 10.03.2017