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

DATED 12^TH DAY OF NOVEMBER 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. Direct the OPs to refund Rs.32,00,000/- with penal compound interest @ 21% p.a., from the date of receipt.
2. To pay compensation of Rs.10,00,000/- towards damages for deficiency of service etc.,
3. Pay Rs.50,000/- towards cost of the complaint to the complainant.
4. Pass such other direction that this Hon’ble Commission deems fit to grant in the interest of justice and equity.

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

Complainant is the allottee of the schedule B property and entered into registered Memorandum of Agreement dated 17.02.2020 and renewal agreement dated 12.01.2023.

3. The OP1 is a private limited company incorporated under the provisions of companies act 2013 formed with the main object of formation of layouts development and other activities relating to real estate business in and around Bangalore and allotment of residential sites to its customers. The OP2 to 5 are the directors of the OP1 company.
4. The OP1 through its directors have informed the complainant that they have formed a residential layout known as G M Cluster carved out of residentially converted land in Sy.No.41/5 and 41/7, of Kammanahalli village, Begur Hobli, Bengaluru South taluk.
5. The OP2 representing OP1 executed a registered Memorandum of agreement to sell without possession in respect of site on 17.02.2020 and the agreed total consideration was Rs.35 lakhs. The complainant has paid Rs.32 lakhs as advance sale consideration.  The OP2 as MD along with OP3 and 4 are directors of OP1 company have affixed their signatures as witnesses to the sale agreement and they have deliberately induced the complainant to enter into the aforesaid sale agreement over the schedule B property assuring that they have been provided with all basic amenities like underground drainage, water supply, electricity roads etc., and they have clear documents and marketable title over the same.
6. The complainant subsequent to the payment of advance amount has handed over the title documents provided by the OP1 to her advocate for verification of title deeds.  On scrutiny it is noticed that some of the vital and cogent documents more particularly the site released letter issued by the BDA, khata, RERA approval etc., relating to the above said property was not found.  The OPs have intimated her that the said documents would be arranged at the earliest but they were unable to provide the required documents even after repeated request by the complainant.  Due to non availability of those documents the complainant could not raise the loan to purchase the property.
7. The OPs in response to their deficiency have agreed to compensate the complainant by paying the delayed period interest and paid a sum of Rs.7,28,179/- and they paid directly to the different bank accounts of the complainant. The complainant has lost substantial amount to the tune of        Rs.10 lakhs approximately towards cost, future income expenses on this investment since the date of the aforesaid agreement to sell.  The OPs in the absence of vital and cogent documents are not in a legally better position to sell the schedule B property in favour of the complainant.  After approaching the OP2 to 4 they have informed the complainant that they require some more time to secure the statutory approval like site release letter, khata etc., from the BDA.
8. Accordingly another renewal sale agreement dated 12.01.2023 was duly executed by the OP1 rep. by OP2 in favour of the complainant wherein the OPs have specifically agreed that the period for completion of the sale transaction and registration of the sale deed was on or before two years which is nothing but the unfair practice of the OP.  The OP3 and 4 have also put their signatures in the renewal agreement.
9. After enquiry the complainant came to know that the OPs are yet to provide the basic amenities and therefore no such site release order followed by khata has been issued by the BDA in respect of the schedule B property this amounts to deficiency in service and unfair trade practice on the part of the OPs.  After that the complainant requested the OPs to cancel the said agreement and to refund of the advance amount of Rs.32 lakhs along with cost and expenses. The complainant has also sent a legal notice on 19.01.2023 through her advocate for refund of the advance amount with compound interest at 21% and compensation of Rs.10 lakhs.  The said notice was duly served on OP1 and 3 and notice sent to OP4 returned with an endorsement not claimed. Even after service of notice the OPs have neither complied nor cancelled the agreement to sell and repaid the advance amount along with agreed compensation. Hence this complaint is filed.
10. In response to the notice, OP1 to 3 appeared and files version.  OP4 and 5 remained absent and placed exparte.  The case of the OP1 to 3 is that the OP1 entered into JDA dated 31.01,.2020 with Sri.S.B.Venkateshappa and acquired share in the schedule B Property. The OP1 to 3 admitted that they have agreed to sell the property vide registered Memorandum of Agreement dated 17.02.2020 for a total consideration of Rs.35 lakhs and the complainant has paid Rs.32 lakhs as part of the sale consideration.  The time for completion of the sale of the schedule property was on or before six months from the date of agreement or such mutually extended period and the OP1 shall complete the layout electrification work, construction of tar road, drainage and planting avenue trees within nine months from the date of registration.
11. It is the specific contention taken by the OPs that due to covid 19 there was no progress of work in respect of the property. The complainant took a plea of uncertainty of life during the pandemic and sought for refund of part of the sale consideration and the OP1 has paid Rs.7,28,179/- to her account. As such the advance sale consideration amount paid by the complainant to OP1 is only Rs.24,71,821/- and this was followed by execution of renewal of sale agreement on 12.01.2023 wherein the time for completion of sale transaction is two years from the date of such renewal.
12. It is further grievance of the OP1 to 3 that they have applied and sought for release of site formed in the larger property of which the subject site is a part from the BDA and it has not yet issued release letter in respect of B schedule property. Further the approval of RERA not required.  The OP1 had provided all documents to the complainant and she has not sought for any additional documents. The complainant has been adopting deceptive, illegal method or other method so as to coerce the OP1 to part with refund of part of the sale consideration. There is a valid agreement to sell is in force and the OP1 is obliged to comply with it on or before 12.01.2025 and the same is in process.  Therefore the complaint itself is not maintainable. There is no cause of action or privity of contract between the OP2 to 5 and they are not proper and necessary parties to the complainant. The authorized person is not having personal knowledge about the facts of the case. Accordingly the OP1 to 3 prayed for dismissal of complaint with exemplary cost.
13.  The complainant in support of their contention has filed affidavit evidence and relies on 11 documents.  Affidavit evidence of OP2 has been filed but not filed any documents.
14. Heard the arguments of both parties. Counsel for both parties have filed written arguments. 
15. 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?

16. 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

17. 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, evidence, written arguments of both parties and documents filed by the complainant.

18. It is clear from the evidence and the documents that the OP1 is a developer and they have entered into JDA with one Sri.S.B.Venkateshappa on 31.03.2020 and it has acquired a share in the site bearing No.29 in the layout G M Cluster carved out of residentially converted land bearing Sy.NO.41/5 and 41/7 of Kammanahalli village, Bangalore South Taluk, totally measuring 111.46 sq.meters.  

19. The OPs have agreed to sell the schedule B site in favour of the complainant for a total consideration of Rs.35 lakhs and entered into registered memorandum of sale agreement on 17.02.2020 and received an advance sale consideration of Rs.32 lakhs.  As per the agreement the time for completion of the sale of the site was on or before six months from the date of agreement or such mutually extended period. The OPs have to complete the layout electrification work, construction of tar road, drainage and planting avenue trees within nine months from the date of registration of the sale deed.

20. It is the specific contention taken by the complainant that after entered into Memorandum of sale agreement with the OP, the OP has handed over the title documents relating to the site. The complainant has handed over the same to her advocate for verification, after scrutiny it was noticed that some of the vital and cogent documents more particularly the site release letter issued by BDA, Khata, RERA approval etc., was not found.  She has informed the same to the OP and even after repeated request the OPs have not furnished the said documents. In view of the non availability of said documents the complainant could not raise the loan to purchase the property. At that time the OPs have agreed to compensate by paying delayed period interest and paid a sum of Rs.7,28,179/- to the complainant. Again the OPs have executed a renewal sale agreement on 12.01.2023 and they have agreed to complete the sale transaction by executing the registered sale deed on or before two years from the date of sale agreement.  When the OPs have failed to execute the sale deed the complainant has also got issued a legal notice on 19.01.2023 requesting for return of the advance sale consideration with interest and compensation. Inspite of service of notice the OPs have neither issued any reply nor comply the request of the complainant.  

21. In support of their contention the GPA holder of the complainant has filed affidavit evidence, reiterated all the allegations made in the complaint and also produced 10 documents as Ex.P1 to P10. Ex.P1 is the copy of the GPA, Ex.P2 is the Memorandum of agreement, Ex.P3 is the renewal of sale agreement dated 12.01.2023, Ex.P4 to P7 are the statement of account, ex.P8 is the legal notice and ex.P9 is the postal receipts and Ex.P10 is the photographs.

22. On the other hand, the OPs have taken the contention that due to covid 19 pandemic there was no progress of work in respect of the schedule B property. In the mean time the complainant has requested for refund of part of sale consideration amount on the plea of uncertainty of her life during the pandemic and OP1 had paid Rs.7,28,179/- to her account. Hence the sale consideration paid by the complainant is only Rs.24,71,821/- and it was followed by execution of renewal of the sale agreement on 12.11.2023 as per Ex.P3.

23. It is further contention taken by the OP1 that they have applied and sought for release of site formed in the larger property of which the subject site is a part of that property from the BDA and the BDA has not yet issued the release order in respect of the schedule B property.  Further the RERA approval is not required.  This OP1 has provided all the documents to the complainant and she has not sought for any additional document.  The complainant has filed his complaint so as to coerce this OP1 to refund of the part of the sale consideration. There is a valid sale agreement in force and this OP is obliged to comply with it on or before January 12, 2025 and the same is in process.

24. It is further contention taken by the OP1 that there is no privity of contract between complainant and OPs and they are not proper and necessary parties and the complaint is not maintainable.

25. The OPs even though have filed their affidavit evidence through their authorized person has not produced any documents.

26. Admittedly the OPs have not at all obtained the release order in respect of schedule B property and khata etc., from the BDA till today.  When the complainant has demanded the OPs for refund of the amount, they have partly refunded Rs.7,28,179/- to the complainant and they have executed a renewal agreement as per Ex.P3, extending the time for completion of the project till January 12^th 2025 and it is under process.  

27. The main contention taken by the OPs are that they are not liable to refund the amount since there is a valid agreement in force and the complainant has to wait till the release the schedule B property in her favour after obtaining all approvals and release orders from the BDA and other authorities.

28. The complainant is not at all satisfied with the title of the property. The OPs are failed to obtain the release order in respect of the schedule property from the competent authority BDA and other government authorities from the date of execution of Ex.P2 dated 17.02.2020 till the filing of this complaint. The conduct of the OPs in simply extending the time for completion of the agreement by paying some amount to the complainant clearly discloses that they are not in a position to get the approval from the competent authorities and they are unable to complete the project even though the complainant has paid 90% of the sale consideration amount by way of advance. The complainant cannot wait for an indefinite period after paying substantial amount to the OPs on the hope that they will get the proper approval from the competent authorities and register the sale deed in respect of the B schedule property.

29. The OPs have simply collected the amount from the complainant by executing memorandum of agreement of sale without obtaining proper approval from the competent authorities which clearly establishes the unfair trade practice and deficiency of service on the part of the OPs. When the OPs are unable to get the required permission and approval from the competent authorities they are bound to return the amount to the complainant with interest and compensation.   Instead of refunding the amount the OPs are just dragging the complainant by giving false assurance that they will get the approval and execute the sale deed by renewing the sale agreements. Under these circumstances the complainant has clearly established the deficiency in service and unfair trade practice on the part of the OPs. Hence the complainant is entitled for the relief claimed in the complaint.

30. The learned counsel for the complainant also relied on the decision of the Hon’ble apex court in civil appeal NO.6044/2019 & Civil appeal No.7149/2019 between M/s Experion Developers Pvt. Ltd., -vs- Susma Ashok Shirror and also on sec 17 of the Karnataka Town and country planning Act 1961. It is clear from the decision of the Hon’ble Supreme Court that as per the principles laid down in Pioneer’s case where the agreement entered between the developer and the apartment buyer were bound to be oppressive constituting unfair trade practice and the court has not given effect such terms of the agreement.  When the agreement is unilateral this commission need not go into the terms and conditions of the agreement and it is not binding on the complainant. The OP cannot retain the amount paid by the complainant without either allotting the site or refunding the amount for an unlimited period.  Hence answer point No.1 in affirmative and point No.2 partly in affirmative.

31. Point No.3:- In view the discussion referred above the complainant is entitled for refund of the amount with interest and compensation.  to the complainant and we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. Ops are directed to refund Rs.32,00,000/- with interest at 9% p.a., from the date of respective payment till realization
3. Ops are also directed to pay compensation of Rs.1,00,000/- with litigation cost of Rs.20,000/- to the complainant.
4. The OPs shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.32,00,000/- 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 12^TH day of NOVEMBER, 2024)

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

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

NIL