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

DATED 18^TH DAY OF JANUARY 2024

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. To ordered to refund the advance amount of Rs.40,00,000/- to the complainant together with interest thereon @ 15% p.a., from the date of payment to till the date of realization.
2. To pay compensation of Rs.5,00,000/- towards mental agony, hardship and harassment etc., caused to this complainant.
3. To pay a sum of Rs.1,00,000/- towards the cost of the litigation and pass such other orders.

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

OP1 is the owner of the land and OP2 is the developer and they have entered into a registered JDA dated 30.04.2018 for the purpose of construction of multistoried residential apartment in the name and style of JYOTHSNA PEARL.  The OP2 being a developer informed that the residential apartment will be constructed by taking necessary sanctions from the authority and will be provided high end facilities in addition to the basic facilities and further assured to arrange bank loan for the purpose of purchase of flat at the time of registration to pay the remaining amount through monthly equated installments.

3. The complainant believing the promise and assurances of the OP2 agreed to purchase flat No.301 in the third floor measuring 2252 sq. feet of super built up area and 600 sq. feet undivided rights together with two covered car parking for a sum of Rs.1,40,00,000/-.  The complainant has paid Rs.30,00,000/- on 23.11.2018 and further agreed to pay remaining sale consideration amount at the time of registration of the sale deed. In view of the commencement of construction the OP assured to complete the construction within a period of 20 months with grace period of three months from the date of agreement.  The OP further agreed to pay a sum of Rs.0.5% p.m., in case of delay in construction of the apartment.  The OP2 by taking advantage of the acquaintances of the complainant collected further sum of Rs.10,00,000/- by way of cash.  However the OP except promise and assurances not bother to issue receipt for having received cash from the complainant.  The complainant has paid a total amount of Rs.40,00,000/- to the OP.
4. The OP with one or the other pretext failed to complete the construction in terms of the agreement or even till today. There is no sign of completion of the apartment in near future. Hence the complainant got issued legal notice on 21.07.2022 to OPs calling upon them to refund the advance amount of Rs.40,00,000/- with 15% interest. Inspite of service of legal notice the OPs have not bothered to comply the demand.  The OP2 got issued untenable reply on 10.08.2022.  The OP by adopting similar mode of operandi collected huge amount from the bonafide purchasers like complainant enriching themselves in the hard earned money of the complainant.  The OP has adopted unfair trade practice and allotted the same site to different persons and also by showing same area in different project collected the substantial sale consideration amount from the buyers including the complainant herein.
5. It is further case of the complainants that the OP without following the sanction plan and in utter violation of building byelaws had constructed half of the building and abandoned. The OP rendered deficiency in service and due to the said act the complainant and family members have put to great hardship, mental tension, financial loss which is beyond their imagination. Hence the OPs being the owner and developer both are jointly and severally liable to refund the amount.  Hence the complainant has filed this complaint.
6. In response to the notice, OPs appeared and files version.   The OP1 has executed a registered GPA in favour of OP2 and the OP2 being the GPA holder of OP1 has filed the version on his behalf and also on behalf of OP1.
7. The OP has taken the contention that the complaint is not maintainable either in law or on facts and liable to be dismissed. This tribunal has no jurisdiction to entertain this case since the nature involved in the case is purely a civil dispute and the civil court has jurisdiction to try this case.
8. It is the specific case of the OP2 that Smt.K.Jyothsna W/o. Chandraraju, entered into Agreement of sale dated 24.04.2018 with one Sri.V.A.Subramanian @ V.A.S. Mani pertaining to purchase the property bearing Site No.22 situated at Dasarahalli Village, K.R.Puram Hobli, South Taluk, measuring 2400 sq. feet, subsequent to the Sale agreement the complainant’s husband Kumaran T entered into absolute sale deed dated 23.08.2018 with OP2’s wife Smt.K.Jyothsna and Sri.A.Subramanian being the vendors pertaining to the purchase of the property bearing site No.22. After purchase of the above said property the complainant and her husband have entrusted the same to OP2 for Joint development of constructing three floors of residential building with a 50:50 ratio arrangements between OP2 and the complainant and her husband. The said understanding of JDA was an oral arrangement between the complainant and OP2.
9. It is further case of OP2 that as per the said understanding, OP2 has constructed three floor RCC molding along with walls and plastering works by spending Rs.65,00,000/-.  The complainant and her husband have not paid any amount towards the said construction.  In the meanwhile the complainant has entered into sale agreement pertaining to selling of flat No.301 the schedule site for a total consideration of Rs.1,40,00,000/- and complainant paid an advance sale consideration of Rs.30,00,000/- on 23.11.2018 but thereafter the complainant has not shown any interest to get the registered sale deed by paying this balance sale consideration as per the Sale agreement dated 12.11.2018. the complainant and her husband have also restricted the OP2 to do further construction work in the property belonging to the complainant as per the Joint Development understanding for the reasons best known to them.
10. It is further case of the OP that the complainant and her husband have given a proposal to pay the cost of construction expenses incurred by OP2 in construction of three floors RCC molding along with walls and plastering in the property belong to the complainant.  The complainant and her husband have agreed to cancel the sale agreement dated 12.11.2018 and set of the same against the expenses incurred in construction work and to pay the remaining balance of Rs.35,00,000/- to OP2 within a span of three months. But till today they have not paid the said amount of Rs.35,00,000/- to the OP2. Believing the words and in trust upon the complainant and her husband the OP2 has invested Rs.35,00,000/- all in constructing the three floors residential building.  The OP2 has laid three concrete slab roofing along with brick works and bore well and has completed the same within eight months from the date of purchase by suppressing the above facts, the complainant and her husband now with malafide intention making unlawful gains from OP2 is now claiming Rs.40,00,000/- from this OP2 under false context and the same is parse illegal and extortion.  The complainant and her husband with malafide intention is now to pull up a legal conflict and evade time and cause stress to OP2. The complainant is still liable to pay a sum of Rs.35,00,000/- towards the construction of three floors residential building. Suppressing the said facts the complainants have filed this complaint against the OPs and hence it is liable to be dismissed.
11. The OP2 has denied all the allegations made in the complaint except the fact that OP1 is the owner of land and this OP2 is the developer and they have entered into registered JDA dated 30.04.2018 for the construction of the multistoried residential apartment Jyothsna Pearl. He has further admitted that the complainant agreed to purchase flat No.301 for a sum of Rs.1,40,00,000/- and has paid Rs.30,00,000/- on 23.11.2018 and agreed to pay the remaining amount.  The OP has denied that the complainant has further paid an amount of Rs.10,00,000/- and totally Rs.40,00,000/- to the OPs. There is no cause of action for filing this complaint. The complainant is not entitled for any relief. Hence OPs prayed for dismissal of the complaint.
12. The complainant has filed his affidavit evidence and relies on 08 documents. The OP has delivered interrogatories to the complainant and the complainant has replied the same.  Affidavit evidence of OP2 has been filed and OP relies on 08 documents, OP2 further examined one witness as DW2.
13. Heard the arguments of advocate for the complainant, perused the written arguments filed by the OP2.
14. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

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

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

16. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence of both the parties, written arguments and documents.
17. It is undisputed fact that OP1 is the owner of the land and OP2 is the developer and they have entered into a JDA dated 30.04.2018 for construction of multistoried residential apartment over the property bearing No.2/27 measuring totally 2400 sq. feet, situated at Poojari Layout, Geddahalli Village, Bangalore North, in the name and style of Jyothsna Pearl.
18. It is the grievance of the complainant that she is impressed by the assurance given by the OPs as agreed to purchase flat No.301 measuring 2252 sq.feet of super built up area and 600 sq.feet undivided rights together with two covered car parking for a sum of Rs.1,40,00,000/- and entered into a agreement of sale on 12.11.2018.  As per the terms of the agreement i.e., Ex.P2 the complainant has paid an amount of Rs.30,00,000/- towards advance sale consideration amount and agreed to pay the remaining amount at the time of registration of the sale deed.
19. It is further grievance of the complainant that the OP2 by taking advantage of her acquaintances collected further sum of Rs.10,00,000/- and he has not bothered to issue any receipt for having received Rs.10,00,000/- and hence the complainant has totally paid an amount of Rs.40,00,000/- to the OP2.  The OP2 after collected the substantial amount has neither furnished the building sanction plan, nor bank approval, nor constructed the building even after 24 months and has failed to provide the facilities and amenities to the building and he has abandoned the construction of the apartment.  When there is no sign of complete construction and developing the residential apartment in the near future the complainant has got issued legal notice on 21.07.2022.  Inspite of service the OP1 has not issued any reply, but the OP2 has issued reply by taking untenable contentions.
20. In support of their contentions the complainant has relied on 08 documents. Ex.P1 is the JDA entered between the OP1 and 2 dated 30.04.2018, Ex.P2 is the sale agreement entered between the complainant and OP2, Ex.P3 is the copy of the bank pass book, Ex.P4 and P5 are the notice and reply notice, Ex.P6 and P7 are the postal receipts and acknowledgement, Ex.P8 is the copy of building photos.
21. On the other hand the contention taken by the OP2 is that he has entered into JDA as per Ex.P1 with OP1 in respect of the property bearing No.2/27. He has further admitted about the sale agreement entered between himself and complainant as per Ex.P2 in respect of the schedule apartment and he has further admitted about the advance sale consideration amount of Rs.30,00,000/- received by him and further denied that he has not collected Rs.10,00,000/- from the complainant towards sale consideration.
22. It is the main contention taken by the OP is that the husband of the complainant namely Mr.Kumaran T., who was residing in Jyothsna Enclave developed by this OP2 had requested this OP2 to help in purchasing a site and construction of the building.  This OP2 facilitate the complainant and her husband to purchase site No.22 and situated at Dasarahalli Village, measuring 60X40 feet and the husband of the complainant has got the sale deed executed by the wife of this OP2 and another VA Subramanian and the said transaction was completed in the presence of one witness by name one Ramareddy, who is the land owner of apartment by name Jyothsna Enclave.  The sale deed was executed on 23.08.2018.  This OP2 has offered to purchase the apartment No.301 to the complainant and she has agreed to purchase the same for Rs.1,40,00,000/- and paid an advance of Rs.30,00,000/- after entering into sale agreement. Later the complainant and her husband had several negotiations with this OP2 in respect of their site No.22 measuring 2400 sq.feet for Joint Development in the ratio 50:50.  Subsequently in terms of mutual negotiations and understanding this OP2 has obtained plan sanction from the competent authority and got the drawings as brochures and started construction in the said property.  He has completed all the roofs which are consisting of ground, first, second and third floor along with erection of bore well and certain areas construction of break wall on the said property. It was mutually agreed and settled in September 2019 at the intervention of Mr.Ramareddy that the construction cost pertaining to site No.22 to be adjusted in respect of sale consideration of Rs.30,00,000/- received from the complainant under Ex.P2.  Accordingly this OP2 handed over all sanction plan approvals, bills, brochures etc., to the complainant and her husband.  Both have assured that the Ex.P2 would not be enforced and the same will be handed over to him and later they have represented to this OP2 that they have lost the agreement Ex.P2.  The copy of the brochures and architect drawings and few bills are within the custody of the complainant and her husband.  This OP2 has incurred an expenditure of Rs.65,00,000/- for construction of the building in site No.22. later there was a dispute arose between the complainant and her husband and this OP2 and the complainant husband has also lodged a police complaint against this OP to pay the advance amount of Rs.40,00,000/- paid by them which amount was already adjusted towards the cost of construction in site bearing No.22.  This OP2 has also obtained an anticipatory bail in the said criminal proceedings. The entire transaction pertaining to Ex.P2 had been set off with the construction cost in respect of site No.22 as such he is not liable to pay any amount to the complainant.
23. In support of his contention the OP2 has also got examined one witness Mr.N.Ramareddy as DW2 and relied 8 documents. Ex.R1 is the sale deed entered between the complainant husband and the wife of this OP2 and another V.A.Subramanian dated 23.08.2018, Ex.R2 is the bills, Ex.R3 and 4 are the copy of invoice, Ex.R5 is the copy of the architect drawings, Ex.R6 is the copy of the balance sheet, Ex.R7 is the copy of the order sheet in criminal Mis.No.9078/22 on the file of LXV ACC & SJ, (CCH-66), Bengaluru.
24. In addition to this the OP2 has also delivered interrogatories to the complainant by way of cross examination. The complainant has also answered the interrogatories and she has clearly denied that as per her knowledge her husband has not executed the sale deed Ex.R1 and he has not entered into any Joint Development Agreement with OP2. When the complainant and her husband have not at all entered into any Joint Development Agreement with the OP2 for any construction the question of incurring the construction expenses by the OP2 for Rs.65,00,000/- does not arise. There was no Joint Development Understanding was entered between the complainant and OP2 for giving set off to the advance sale consideration paid under Ex.P2.  When there is no contractual obligation to enter into alleged JDA with the OP2 the question of breaching of trust does not arise.
25. The main contention taken by the complainant that the OPs in order to escape from the liability to refund the advance amount of Rs.40,00,000/- have made false and baseless allegations.  
26. The complainant has clearly established about the Ex.P2 entered between herself and OP2 and also the advance sale consideration paid to the OP2.  On the other hand, the OP2 failed to establish that there was an oral Joint Development Agreement entered between this complainant and her husband and OP2 in respect of site No.22 for construction of the three floors of residential building, with a 50:50 ratio arrangement between this complainant and her husband and OP2.  It is admittedly an oral arrangement between the complainant and her husband and OP2 as per the say of the OP2.
27. If really the OP2 has entered into any JDA with the complainant and her husband with a 50:50 ratio arrangement between them nothing prevented him from obtaining the proper JDA from the complainant and her husband. The OP2 is not a innocent person and he is acquainted with the worldly knowledge and he is a business men. Under these circumstances, the say of the OP2 that he has invested Rs.65,00,000/- as per the oral Joint development understanding between himself, complainant and her husband cannot be believed. When the OP2 has not at all produced any documents evidencing the alleged oral Joint Development Arrangement the contention taken by the OP2 to set off the advance amount paid by the complainant against the alleged investment made by him towards the construction of the building by spending Rs.65,00,000/- cannot be allowed.  
28. Under these circumstances, it is clear that the complainant has booked the apartment as per Ex.P2 with the OPs and paid an advance amount of Rs.40,00,000/-.  Inspite of received substantial amount from the complainant, the OPs failed to complete the construction and handed over the apartment to the complainant and thereby they have committed deficiency of service, financial loss to the complainant. Hence the complainant is entitled for the relief claimed in the complaint.  Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.
29. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OPs are hereby directed to refund the advance amount of Rs.40,00,000/- to the complainant with interest @ 12% p.a., from the date of payment till realization.
3. OPs are further directed to pay compensation of Rs.2,00,000/- with litigation cost of Rs.10,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 14% p.a. after expiry of 60 days on Rs.40,00,000/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 18^TH day of JANUARY 2024)

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

Documents produced by the representative of opposite party 2– R.W.1;