BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 10^th DAY OF APRIL 2017

O R D E R

SRI. P.V SINGRI, PRESIDENT

These two complaints have been filed by two separate complainants, against one and same OP with identical allegations and prayer.  The issues involved in both cases are one and the same.  Hence both these complaints have been taken up together for disposal under this common order.

2. The complainants have filed these complaints U/s.12 of the Consumer Protection Act, 1986 against the Opposite Party (herein after referred as OP) with a prayer to direct the OP to refund a sum of Rs.10,00,000/- to each one of them together with interest @ 18% p.a, compensation of Rs.50,000/- together with litigation cost.

The complainant in complaint No.1233/2016 is in-person and he is also the special power of attorney holder of complainant in complaint No.1232/2016.

3. The sum and substance of averments made in the complaints are as under:

That the complainants due to their acquaintance with OP decided to purchase a residential site measuring 30x40 in OPs residential project called ‘THE RESIDENCY’ being developed in survey no.80 situated at Cholappanahalli in Kasaba Hobli of Hoskote Taluk.  That the said transaction was completed in 12 months as per the terms of sale agreement.  That since OP failed to show any progress in developing the project, the complainants jointly sent an e-mail dated 12.05.2015, followed by another e-mail dated 22.05.2015, expressing their intension to withdraw and claim refund of money paid by them with immediate effect.  That OP was bidding for time to refund the deposits without giving any written commitments or even post dated cheques as requested by the complainants.  That the complainants thereafter finally sent letter by speed post on 17.08.2016 expressing their desire to cancel the agreement of sale and for refund of the money paid by them.  That OP has failed to respond to the said letter.  Therefore, the complainants were compelled to approach this Forum, for redressal.

4. In response to the notice issued OP appeared and filed its version contending in brief, are as under:

That the agreement entered is undervalued and proper stamp duty is not paid on the agreement and the Director Sri.K.R Raja had no power to enter into any agreement on behalf of the company and the agreement between them is a private transaction and the executant of agreement is no more.  That the relationship of Director and ‘consumer’ does not exist between the complainants and OP.  That the agreement in question is not enforceable, since it is undervalued and the same has been signed by a partner/director, who is no authority to execute any such agreements.  That the complainants have failed to pay the balance amount within 15 months as per the terms of the agreement and get the sale deed registered in their favour.  That the dispute is purely a civil dispute and only course of action available to complainant is to approach the competent civil court with a suit for specific performance of the agreement.  That the complainants have made false and baseless allegations against OP just to damage the name of the company.

For the above amongst other reasons OP prays for dismissal of the complaint.

5. The points that arise for our determination in this case are as under:

        6. The complainant as well as OP tendered their evidence by way of affidavit in support of the respective averments.  Complainants have produced certain documents in support of their case.  Both the parties have submitted their written arguments.  We have also heard oral arguments.

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

REASONS

8. OP does not deny the execution of agreement of sale in favour of each of the complainants.  However OP contends that the executant of the said agreements Sri.K.R Raja, one of the Director of OP Company, had no power to enter into any agreement on behalf of the company.  Admittedly the said K.R Raja, is no more.  OP who claims that the said Mr.K.R Raja, had no power enter into any agreement on behalf of company, did not produce the byelaws of the company to show as to who actually was authorized to execute the agreements on behalf of the said company at relevant time.  Even Mr.K.R Kannan, who has signed the power filed in these complaints did not substantiate that he has been authorized by the company to appear on behalf of the OP Company and defend the company in these complaints.  In absence of any relevant documents including byelaws of the OP company we are not able to accept the contention of OP Company that late Mr.K.R Raja, had no power to enter into any agreements on behalf of the Company.  It appears to us that now OP is taking up such a contention may be due to the death of said K.R Raja.  Moreover OP Company also did not reply to the notice issued by the complainants demanding refund of the amount stating that they are not liable to refund the said amount since Mr.K.R Raja, the erstwhile director of the Company has not accounted the amount received by the complainants to the Company.  Therefore, we are of the opinion that, OP Company is bound by the agreements executed by Mr.K.R Raja in favour of both the complainants.

9. It is alleged by the complainant that, even after 11 months from the date of execution of the agreements of sale, OP did not complete the formation of the layout and therefore they decided to cancel the agreements and demand the refund.  OP either in their version or in their affidavit did not deny that they have failed to complete the formation of the layout within the stipulated time.  The complainants have paid the full consideration amount and they were to get registered sale deed in their favour immediately after formation of the layout.  However OP failed to complete the formation of the layout even after a year from the date of execution of the agreement.  It appears to us that even today OP has not completed the formation of the said layout.  As per the terms and conditions of the agreements, OP Company was bound to execute the registered sale deed in respect of the sites allotted in favour of complainants within 12 months from the date of execution of the agreements.  However OP Company has failed to complete the formation of the layout and also failed to execute registered sale deed.  This conduct of OP certainly amounts to grave deficiency of service.  The complainants who have paid entire sale consideration of Rs.10,00,000/- to OP must have been put to great hardship, inconvenience and mental agony due to failure of the OP in completing the formation of layout and also their failure to refund the money, despite repeated demands orally as well as by letter.

10. Time and again the Hon’ble Apex Consumer Court as well as Hon’ble Apex Court have held that in a case like this the complainants would become a ‘consumer’ as defined under the Consumer Protection Act.  Therefore, we are of the opinion that there is no basis for the OP in contending that the complainants are not the ‘consumers’ as defined under the Consumer Protection Act.

11. The learned advocate for the OP placing reliance on judgment rendered by Hon’ble Punjab & Haryana High Court reported in 2016 (1) ICC 39 (Pb. & Hry.) argued that the present complaints filed U/s.12 of the C.P Act are not maintainable and the complainants have to approach the appropriate civil courts for specific performance of the contract.  The facts referred to in the above cited authority and the facts of the case on hand entirely different.  Therefore, the ratio laid down in the said case law, in our humble opinion, cannot be made applicable to the case on hand.

12. Further the learned advocate for OP placing reliance on a judgment rendered by Hon’ble High Court of Calcutta, in a case reported in 2014 (2) ICC 853 argued that, this Forum has no jurisdiction to entertain the present complaints.  Perused the judgment referred supra.  The facts involved in the said authority are entirely different from the facts in the present case on hand.  Therefore, the principles laid down in the said authority, in our humble opinion, cannot be made applicable to the case on hand.

13. The complainants have successfully proved that the OP having executed an agreement to sell by collecting entire consideration amount of Rs.10,00,000/- from each one of the complainants, failed to execute the registered sale deed in favour of each one them in terms of the said agreements and thus committed grave deficiency of service.  Despite repeated oral request and letter demanding refund of the amount paid under the said agreements by cancelling the agreements, OP failed to respond and also failed to comply the request made in the letters.  This conduct of OP must have put the complainant great inconvenience & mental agony.  OP having failed in formation of the layout, ought to have refunded the said sum of Rs.10,00,000/- collected from each of the complainants, as soon as they demanded the same.  OP without their being any authority or valid cause has wrongfully retained the said amount with it thereby causing huge financial loss to the complainants.  Therefore, we are of the opinion that, OP has to be directed to refund said amount of Rs.10,00,000/- to each of the complainants, together with interest @ 18% p.a from the date of receipt till the date of realization.  Further OP has to be directed to pay compensation of Rs.50,000/- to each one of the complainants for having put the complainants to great hardship, inconvenience and mental agony together with litigation cost of Rs.5,000/-.  Accordingly point Nos.1 & 2 have been answered.

14. The order could not be passed within the stipulated time due to heavy pendency.

15. In the result, we proceed to pass the following:   

  O R D E R

The complaints filed by the complainants U/s.12 of the Consumer Protection Act, 1986 are allowed in part. 

The OP in complaint No.1232/2016 is directed to refund a sum of Rs.10,00,000/- (Ten Lakhs Only) to the complainant together with interest @ 18% p.a from the date of receipt till the date of realization.  Further OP is directed to pay compensation of Rs.50,000/- to the complainant towards deficiency of service resulting in hardship, inconvenience and mental agony to the complainant.

The OP in complaint No.1233/2016 is directed to refund a sum of Rs.10,00,000/- (Ten Lakhs Only) to the complainant together with interest @ 18% p.a from the date of receipt till the date of realization.  Further OP is directed to pay compensation of Rs.50,000/- to the complainant towards deficiency of service resulting in hardship, inconvenience and mental agony to the complainant. 

OP Company is directed to pay litigation cost of Rs.5,000/- to each of the complainants.

OP shall comply the said order within four weeks from the date of communication of the order.

Furnish free copy of this order to both the parties.

This original order shall be kept in complaint No.1232/2016 and a copy of it shall be placed in other connected file.  

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 10^th day of April 2017)

MEMBER                            MEMBER                    PRESIDENT

Vln* 

Witnesses examined on behalf of the complainant/s dated 02.12.2016.

Documents produced by the complainant:
    (Complaint No.1232/2016)

Documents produced by the complainant:
    (Complaint No.1233/2016)

Witnesses examined on behalf of the Opposite party dated 03.01.2017.

1. Sri.K.R Kannan.

Document produced by the Opposite party:

MEMBER                            MEMBER                    PRESIDENT

Vln*