Sri. Ashok Kumar J.Dhole,<br /> President,<br /> <br /> COMMON ORDER IN CC 365 TO 367/05<br /> <br /> 1. These complaints are disposed by this common order, as the question of law and fact involved is the same. O.P.1 is a Company named M/s Kavitha Sites & Resorts Pvt. Ltd having it’s registered office at Mysore. O.P.2 Sri.K.P.Dastagirireddy is the present Managing Director of the said Company. These complaints have been filed against the O.P. on the ground of deficiency in service, seeking refund of Rs.45,000/- each, apart from the accrued interest, future interest at the rate of 18% p.a. and damages of Rs.40,000/- on the ground of mental agony.<br /> <br /> 2. Notices were duly served on the O.P.s who appeared, filed common version and seriously contested the complaint. Both parties have filed their respective affidavits and produced documents. Heard the learned counsels for both sides.<br /> <br /> 3. Undisputed facts, can be briefly summarized as under:-<br /> <br /> In the year 1997, the O.P. has issued broacher and advertisement calling interested person to subscribe for a scheme called “Happy town layout”. There is no dispute that O.P. has formed a layout at Managanahalli village in Bilikere Hobli, Hunsur Taluk. As per the said scheme, O.P. has formed sites measuring 30 x 40 ft., 40 x 60 ft. and 60 x 80 ft. There is also no dispute that a person, who becomes subscriber to such scheme and opting for a site measuring 30 x 40 ft. was entitled to pay amount of Rs.1,000/- per month in 50 installments. In simple words, the total value of the site measuring 30 x 40 ft. was fixed at Rs.50,000/-. The broacher and the advertisement further indicates that an incentive scheme was also offered. As per the said scheme, every month a draw was going to be held and the 1st prize was a free site measuring 30 x 40 ft. to such winner. This is apart from other small prizes like Rice cooker, Mixi, and a special bumper prize of Maruthi car (800 CC) or Rs.2,12,000/-. There is no dispute that all the three complainants became members and subscribers to such scheme.<br /> <br /> (a) Complainant B.N.Geethabai (CC 365/05) was allotted membership no.134 and admittedly she has deposited an amount of Rs.45,000/- from 23-10-97 to 8-5-01.<br /> (b) Complainant Beeregowda (CC 366/05) was allotted membership no.169 and he has deposited an amount of Rs.45,000/- between 25-10-97 to 10-05-01.<br /> (c) Complainant Jaganath (CC 367/05) was allotted membership no.158 and he has also deposited Rs.45,000/- between 25-10-97 to 10-05-01.<br /> There is no dispute that O.P. has issued receipts acknowledging such payments apart from entries made in the pass book furnished to the respective complainants. The terms and conditions of the scheme has been noted down in the pass book which are as under:-<br /> <br /> “Terms and conditions:-<br /> 1. The site is located near Nisarga Nagar (Kirloskar) on Hunsur Road near Mysore City.<br /> 2. Duration of the scheme is 50 months. No. of members 1200 and above.<br /> 3. Monthly installment of Rs.1,000/- has to be paid before 5th of every month.<br /> 4. The area of each plot is 1200 sq.ft. 30 x 40 ft., if the plot area is either excess or less than 1200 sq.ft. the difference of cost will be borne by the member of company accordingly.<br /> 5. Only those who remit their installments before 5th of every month one eligible for every month lucky draw. (Every monthly draw winner will get one site free – 1st month Bumper draw MARUTHI – 800 Car).<br /> 6. Members can avail an attractive discount on outright purchase and also select the plot of their choice by paying an initial amount of Rs.20,000/- and have the plot registered preferably within six months after paying the balance amount.<br /> 7. Outright purchaser will also be eligible for lucky draw.<br /> 8. Registration charges including stamp duty and allied expenses have to be borne by the purchaser.<br /> 9. Draws shall be held on the 10th of every month.<br /> 10. The winner of free house plot need not pay further installments and they will not be included in further free plot draws.<br /> 11. After the completion of the scheme, plots shall be allotted on lucky dip basis.<br /> 12. The company reserves to accept or reject any application for membership.<br /> 13. The company reserves the right to increase or reduce the number of members in the scheme.<br /> 14. All legal matters come under Mysore jurisdiction only”.<br /> <br /> 4. It is case of complainant that O.P. has not conducted the draws as stipulated in the scheme. It is further contended that O.P. has not given a copy of the layout plan, which was approved by the competent authority to the complainant. It is also contended that the scheme floated by the O.P. was a period of 50 months. The last contention of the complainants is that the scheme was for a period of 50 months, which concluded in the month of December 2001, but the O.P. has neither developed the sites nor allotted sites to the complainant. O.P. has used the amount invested by the complainant, without rendering proper service. This act of the O.P. amounts to deficiency in service. It is also contended that the complainant approached the O.P. after 2001, but the allotment was avoided on one ground or the other. As there is deficiency in service, the complainants are entitled for reliefs sought.<br /> <br /> 5. A lengthy version is filed by the O.P., contending that complainants are not a “consumers” and this Forum has no jurisdiction to entertain the complaint. It is also contended that as there is no letter of allotment, the complainant can not maintain this complaint in view of the decision of Hon’ble National Commission reported in I (2004) CPJ 127 (NC).<br /> <br /> 6. In alternative, it is contended by the O.P. that complainants have filed this false complaint with a view to make money. The complainants are defaulter and they have not paid the balance amount of Rs.5,000/- as per the said scheme. It is further contended that initially one Sharath Babu was Director of O.P.1 who has misappropriated the funds of the company. Thereafter, one Revannaswamy became the Managing Director. The company has initiated proceedings against Sharath Babu for necessary action. It is also contended that the company has formed the layout and allotted sites to it’s members, who have paid the entire sital value. It is also contended that more than 75 sale deeds have been executed in favour of such members and the same have been registered. Such sale deeds have been executed from the year 2003. The O.P. is ready and willing to allot a site measuring 30 x 40ft. in favour of the complainant and also execute registered sale deed in their favour, at the cost of complainants, provided, the complainants pay the balance amount of Rs.5,000/- each. They have no right to seek the relief, unless the balance amount is paid. There is no deficiency in service hence, complainants are not entitled to claim damages of Rs.40,000/- for mental agony. O.P. can not be held responsible for the defaults of the complainants. Lastly, it is contended that this complaint is barred by time and the O.P. is not liable to refund the amount with interest. For the above reasons, O.P. has prayed for dismissing the complaint with cost.<br /> <br /> 7. The learned counsel for the complainant vehemently argued and submitted that the sites were not developed properly. He has brought to the notice of Forum certain positive photographs produced in C.D.No.365/05 and submitted that there are no roads, no electricity, no underground drainage, or other similar facilities. The sites which are marked by the O.P. are only in the nature of agricultural land. O.P. has collected huge amount without formation of the sites. Hence, the complainants are entitled for refund of the amount with interest and damages.<br /> 8. The learned counsel for the O.P. vehemently argued and submitted that there is no deficiency in service on the part of the O.P. The sites have been marked and the layout has been formed. O.P. is ready and willing to allot site and execute registered sale deed in favour of the complainant. O.P. is also ready to delivered possession of the same. He has also relied on positive photographs showing the formation of the sites, fixing boards for identification of sites and also construction of drainage and overhead tank. He further submitted that complainants were aware of the fact about location of the site, which is mentioned in the broacher. They have opted to purchase such site. Now the complainants are seeking refund of amount with damages and interest. O.P. has invested the entire amount for purchase of the land and development of the sites. When O.P. is ready and willing to allot the site and execute registered sale deed, there is no deficiency in service and prayed for dismissing the complaint.<br /> <br /> 9. points arise for our consideration as under:-<br /> <br /> a. Whether complainants are “consumers” as defined under section 2(1)(d) of the C.P.Act, 1986 and complaints are maintainable in law?<br /> b. Whether the complaints are barred by time?<br /> c. Whether this complaint is maintainable in view of the decision of Hon’ble National Commission reported in I (2004) CPJ 127 (NC)?<br /> d. Whether complainants have proved deficiency in service on the part of O.P., if so, to what relief, they are entitled?<br /> <br /> <br /> REASONS<br /> <br /> 10. Point no.9(c):- The learned counsel for the O.P. vehemently argued and submitted that this Forum has no jurisdiction to entertain these complaints. Such argument is based relaying on the decision in the case of B.K.Prabha Vs. Secretary, Kendria Upadyara Sangha reported in I (2004) CPJ 127 (NC). The learned counsel for the O.P. has misconstrued the decision, which is laid down by the Hon’ble National Commission in the above case. The complainant in that case became a share holder of the O.P. society and deposited certain amount. There was no letter of allotment or any express or implied assurance of allotment of a site. When the complainant approached the Forum seeking allotment of a site, it was observed that mere deposit of some amount will not make a person “consumer” in the context of allotment of a site.<br /> <br /> 11. But the admitted facts in this case are quite different. When amount was received from the complainants in installments of Rs.1,000/- per month, there was express agreement that complainants would be allotted a site measuring 30 x 40 ft. in the layout called “Happy town”. The location of the site was definite and identified. The area of the site to be allotted to the complainant was agreed between the parties. The O.P. has executed a written agreement in favour of the complainant after receiving an amount of Rs.15,000/- stating that the complainant has got right to get allotment of such site. Only the number of the site was not identified in the agreement. This is due to reasons, which are mentioned in the scheme. As per the scheme, which is referred above, the subscriber had an option to select and purchase a site immediately on payment of the full amount. In such case, the site no. could have been identified. A subscriber paying the amount in installments was to be allotted a site by a draw, to be held at the end of scheme period of 50 months.<br /> <br /> 12. The word “Service” is defined under section 2(1)(o), which was amended in the year 1993 and all services including the “housing service” is brought within the purview of the provisions of C.P.Act, 1986. Hence, we have no hesitation to come to conclusion that complainants are “Consumers” as defined under section 2(1)(d) and these complaints are maintainable. So, point no.9(c) is answered accordingly.<br /> <br /> 13. Point no.9(a):- The word “Consumers” has defined under section 2(1)(d) of the said Act. Sub clause (1) deals with the goods purchased for a consideration. Sub clause (2) deals with availing of any service for a consideration. As already observed in the above mentioned para, delivery of a site measuring 30 x 40 ft. at “Happy town” for a consideration of Rs.50,000/- was agreed between the parties. Hence, the complainants are “Consumers” as defined under section 2(1)(d) and this complaints are maintainable. So, point no.9(a) is answered accordingly.<br /> <br /> 14. Point no.9(b):- The learned counsel for the O.P. submitted that last payment was made by the complainants in the year 2001. Thereafter, they have not paid the balance amount of Rs.5,000/-. He further submitted that this complaint should have been filed within a period of 2 years from the date of agreement or from the date of last payment. We do not find any substance in this contention. The right to file complaint subsists till the identified sites are allotted in favour of the complainants. It is important to note that after filing these complaints, the O.P. has come out with an offer that they are ready and willing to allot a site and execute sale deed provided balance amount of Rs.5,000/- is paid by each complainant. In view of this admission, there is no question of dismissing the complaints on the ground of limitation. So, we come to conclusion that complaints are not barred by time. So, point no.9(b) is answered accordingly.<br /> <br /> 15. Point no.9(d):- We are considering these complaints, in which O.P.s have taken stand that they are ready and willing to allot sites in favour of the complainants and also execute sale deeds. It is contended by the learned counsel for O.P. that in view of such submission, there is no deficiency in service. He also submitted that complainants are defaulter, as they have failed to pay the balance amount of Rs.5,000/-, within stipulated period. Hence, prayed for dismissing the complaint.<br /> <br /> 16. Though, the above argument, apparently, appears to be just and proper; we have to look to the facts and circumstances, objectively, which are made out in these complaints. Complainants have filed affidavits, stating that the sites have not been developed with civic amenities and O.P. has taken up a stand that such sites have been transferred and registered in favour of other 60 or 70 subscribers. On such ground only, the O.P. can not force the complainants to purchase the sites. The complainant has produced the printed broacher in C.C.367/05. The sites which were offered to the complainants were shown to have the following facilities:-<br /> <br /> “Consider the facilities:<br /> • Well lit asphalted main roads.<br /> • Drainage facilities.<br /> • Ample open space for recreation.<br /> • Areas earmarked for hospitals, schools and other amenities.<br /> • Tree lined avenues.<br /> • Free membership of the Happy Club offered to those who make an outright purchase and much more.<br /> <br /> Given these ideal setting Happy Town is sure to leave you in a state of awe and will make your family proud for your wise decision in investing at Happy Town. Come to Happy Town and live amidst pages of History with all modern amenities”.<br /> <br /> 17. The complainants have also produced number of positive photographs in C.C.365/05. O.P.s have not disputed these photographs seriously. O.P.s have not produced any evidence to show that sites have been developed as assured in the broacher and ready for delivery of possession. On perusal of these photographs, we can make out that the sites are not developed by the O.P. as assured in the broacher. What is existing on the spot, is the name board, one overhead tank and demarcation of the sites.<br /> <br /> 18. The word “unfair trade practice” is defined under section 2(1) sub clause (r) of the C.P.Act, 1986, which means a “trade practice” which for the purpose of promoting the sale, adopting any unfair or deceptive practice which includes falsely representing that the services are of a particular standard, quality or grade. Without any hesitation, we come to conclusion that the defence of the O.P. that they are ready and willing to allot the site is meaningless, because the sites are not developed as per the assurance given by them to the complainants at the time of subscribing to the scheme.<br /> <br /> 19. It is also important to note that we can not direct the complainant to pay balance amount of Rs.5,000/- and obtain a sale deed in respect of such undeveloped sites. The above fact not only amounts to deficiency in service, but also amounts to unfair trade practice as defined under sub clause (ii) of section 2(r) (1) of C.P.Act, 1986. The complainants are entitled for the refund of Rs.45,000/- along with suitable damages, interest and cost.<br /> <br /> 20. The complainants have paid amount of Rs.45,000/- in 45 monthly installments of Rs.1,000/- each. The last installment was paid in the month of May 2001. During the said period, if complainants would have invested Rs.1,000/- in the scheme sponsored by a Government of India (Small Saving Scheme called “recurring deposit for 5 years”) for an investment of Rs.1,000/- per month, the complainants would have received an amount of Rs.78,960/- for total investment of Rs.60,000/-. Applying the same principle for the investment for a period of 45 months, the complainants would have received atleast an amount of Rs.59,250/- (with cumulative interest at the rate of 9% p.a.). But, we are not inclined to award this amount of Rs.19,250/- towards damages. The complainants had an opportunity to participate in the monthly draw and win a prize. Here, we may like to mention that though complainants have contended that the draws were not held properly by the O.P.s, no documents are produced by the O.P. in this respect. Keeping in view the above facts and circumstances, we come to conclusion that complainants are entitled for damages of Rs.10,000/- as on May 2001.<br /> <br /> 21. O.P.s have not produced any document that draw was conducted for allotment of sites after a period of 50 months. The scheme comes to an end in the month of December 2001. Hence, the complainants are entitled for future interest at the rate of 9% p.a. from 1-1-02. So, point no.9(d) is answered accordingly and we proceed to pass following order:-<br /> <br /> <br /> ORDER<br /> <br /> 1. C.C.No.365, 366 and 367/05 are allowed.<br /> <br /> 2. O.P.s are directed to repay the deposited amount of Rs. 45,000/-; and additional amount of Rs.10,000/- towards damages to the each complainant with interest at the rate of 9% p.a. from 1-1-02, with a cost of Rs.1,000/- each.<br /> 3. The above amount shall be paid within a period of 2 months from the date of this order, failing which each complainant would be entitled to receive future interest at the rate of 12% p.a. on the total amount of Rs.55,000/- till the date of payment.<br /> <br /> 4. Keep the original order copy in C.C.365/05 and keep the Xerox copy in C.C.366/05 & 367/05.<br /> <br /> 5. Give a copy of this order to both parties according to Rules.<br /> <br />