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

DATED 17^TH DAY OF DECEMBER 2022

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 OP to refund a sum of Rs.20,12,000/- received by the OP1 along with interest as per the agreement, calculated from December 2018 till the date of actual payment.
2. Direct the Ops to pay a sum of Rs.6,00,000/- being the ex-showroom price of the basic Hyundai i10 grand car, which the Ops promised to give to the complainant, along with interest at 12% p.a., from March 2018 till the date of actual payment.
3. Direct the Ops to pay a sum of Rs.2,97,198/- paid towards the Pre-EMI interest and regular interest on the loan amount availed by the complainant, as on 30.12.2021.
4. Direct the Ops to pay such amount being paid by the complainant to his banker towards the EMIs from the date of filing this complaint till the date of realization of the entire amount due from the Ops.
5. Direct the OP to pay a sum of Rs.5,00,000/- for mental agony and pain inflected upon him and due to the inconvenience caused.
6. Direct the OPs to pay Rs.50,000/- as cost of legal expenditure incurred in prosecuting this complaint and pass such other order.

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

The case of the complainant is that the OP is running the real estate business in the name and style M/s Sanchaya Land and Pvt Ltd., (India Estates) and marketing the business.

3.       It is further case of the complainant OP is the absolute owner of all the piece and parcel of immoveable property bearing Sy.No.412, 416/1 and 416/2 measuring 7 acres 16 guntas situated at Devanahalli Village, Kasaba Hobli, Devanahalli Taluk, Bangalore Rural District, Bangalore, and it is converted for residential purpose.   

4.       The OP has formulated a scheme to construct residential apartment under the name Sky View consisting of several blocks with basements, ground and upper floors, common compound, entrances, lobbies, stair case, lifts and passages with rights in the common areas of the residential complex referred as apartment. Further the project was advised to include a variety world class facilities and amenities such as an infinity pool, an Amphi Theater, cafe and other amenities.  The OP also flouted a lucky draw offer whereby the winners would be gifted a car or a golden coin with every booking.  

5.       The complainant contacted the OP for the purchase of the schedule apartment in the year 2017.  The OP introduced the new project which was yet to be constructed.  Believing the words of the OP the complainant agreed to purchase the schedule apartment and after scrutinization of the documents and after the OP parties representation the complainant was agreed to purchase flat bearing No.809, 8^th floor of Venus Block in C Tower, Sky View, having super built up area of 650 sq. feet and undivided right title and interest in land with open car parking area.  The complainant believing the OPs representations and assurances were agreed for all the terms and conditions and the OP has executed the sale agreement on 02.03.2018 and the complainant have paid advance sale consideration amount of Rs.20,12,000/- as on 29.08.2018.  The OP had assured that he will hand over the possession of schedule apartment by December 2018 with extension of six months. But the OP has failed to keep the promise.  The complainant has been requesting for the delivery of lucky draw prize.  However on several follow-ups on the delivery of the car OPs have intimated that they will not be able to provide the car as promised.  However despite a Hyundai i10 grand car being of higher value they shall adjust the price of the car from the sale consideration payable on the apartment.  However the OP not only failed to adhere to the said promise but also failed to adjust the price of the car against the sale consideration. The complainant has paid the amount by taking loan from the ICICI bank.  The complainant and the OP have entered into a fresh agreement of sale dated 09.08.2018 for a revised sale consideration of Rs.25,15,000/- after adjusting the Pre-EMI discount of Rs.85,000/-. Even after execution of the revised sale agreement the OP has undertaken to hand over the apartment to the complainant in December 2018.

6.       It is further grievance of the complainant that the OP has failed to complete the project and failed to hand over the schedule apartment even after completion of December 2018.  The OP has also failed to deliver the car won by the complainant in the lucky draw.   

7.       It is further grievance of the complainant that even though they have paid the advance sale consideration of Rs.20,12,000/- against the total sale consideration of Rs.25,15,000/-, the OP has failed to perform their part of the contract even after lapse of two years.  After lapse of five years the project is not completed and not ready for delivery. The OP had stopped construction activities after receipt of the last payment made by the complainant and hence the complainant has realized that the OPs are not willing to complete the project and he is carrying out a fraudulent act and they are enriching themselves at the cost of the complainant. There is a prolong delay in construction with poor construction quality and even today the apartment does not have any basic service facilities.  There is lack of transparency and the OPs keep changing the contact persons.  Recently the complainant came to know that the OP parties are defaulters and does not honor the payment of any money inspite of order been passed against them in various cases as seen from public display records from the RERA website. Since the Ops are involved in large scale financial mismanagement and irregularities and does not show any interest to complete the project. Hence the complainant decided to cancel the agreement and to take the refund of the amount along with interest and compensation.

8.       The complainant has also sent several emails to the OP, but OP has neither complied the demands nor refund the advance amount. Hence they filed this complaint.  

9.       In response to the notice, OP appears and files version. The OP has denied all the allegations made in the complaint except the fact that the complainants have agreed to purchase the apartment bearing No.809 and they have paid the advance amount and entered into the sale and construction agreement on 02.03.2018 and paid the advance sale consideration of Rs.20,12,000/-.  The OP has specifically denied that they have informed the complainant that he has won a Hyundai i10 grand car and further intimated to the complainant that they shall adjust the price of the car from the sale consideration payable on the apartment.

10.     It is the main contention taken by the OP that this OP had never been negligible or rendered deficiency in service for the reason that the failure in completing the construction activities was wholly dependent o the amounts that were required to be paid by the intending purchasers and all most about 780-800 intending purchasers had failed in making payments in time and there were severe labour problems faced during the time of construction by the OP and it was for this reason that the OP did not complete the construction as assured.

11.     It is further case of the OP that due to covid 19 the entire labour class had shifted to their native and as such the construction came to halt. In furtherance the OP and several construction companies had to face issues with the pollution control board regarding the approvals and hiking fees.  The OP had to approach the Hon’ble High Court in WP No.16497/2019 and subsequently the state has now filed a R.P. No.1/2021 which is pending for consideration.  Due to the pendency of the statutory approval the OP had sought for extension of time to complete the construction before the RERA and being aggrieved by the order of RERA the OP had approached Hon’ble High Court in W.P.No.5937/2021 in this regard.  The clause 15 of the construction agreement clearly contemplates that the OP shall not be responsible for delays in obtaining sanctions/approvals from the statutory authorities.  In view of this there is an inordinate delay to complete the construction. This OP is making hectic efforts and all attempts to secure the approvals and to complete the construction.

12.     The OP further undertakes to complete the construction immediately after securing approvals and deliver the possession.  The failure on the part of the OP is for bonafide reason and there is no deliberate intention of this OP and they never been negligent in rendering their services. 

13.     It is further contention taken by the OP is that the damages of Rs.5,00,000/- claimed by the complainant is wholly unjustifiable and untenable considering the facts and circumstances in this case.  This OP has never been negligent nor have rendered deficient services and because of the mistake on the part of the investing purchasers to pay the amount in time and due to the approval issues the construction could not be completed in the agreed time.  Hence it would not be justifiable to hold the OP guilty and made to cough up exorbitant damages and interest. 

14.     The complainant has filed her affidavit evidence and relies on Ex.P1 to P18 documents.  Affidavit of evidence of OP has been filed and OP relies on Ex.R1 to R3 documents.

15.     Heard the arguments of both the parties and also filed their written arguments. Perused the written arguments.

16.     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?

17.   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

18.    Point No.1 AND 2: Perused the complaint, documents, version and evidence of both the parties and arguments and citation submitted by both the parties.

19.     The complainant has filed this complaint for the relief to direct the OP to refund the advance amount of Rs.20,12,000/- along with interest as per the agreement and to direct the OP to pay a sum of Rs.6,00,000/- being the ex-show room price of basic Hyundai i10 car which the OP promised to give it to the complainant along with interest at 12% p.a., from March 2018 till the date of actual payment and further direct the OP to pay a sum of Rs.2,97,198/- paid by the complainant towards pre-EMI interest and regular interest on the loan amount availed by the complainant as on 30.12.2021, and further direct the OP to pay the amount being paid by the complainant to his banker towards EMIs from the date of filing this complaint till realization of entire amount due from the OP. Rs.5,00,000/- for the inconvenience and mental agony caused to the complainant and litigation expenses of Rs.50,000/- and other expenses from the OP.

20.     It is undisputed fact that the OP is engaged in the real estate business and marketing the business. The OP is the absolute owner of the schedule property. The OP has formulated a scheme to construct a residential apartment under the name ‘Sky view’ apartment.

21.     The complainant has contacted the OP for purchase of the schedule apartment.  The complainant has entered into construction agreement and sale agreement with the OP on 02.03.2018 and revised agreement dated 09.08.2018.  The complainant has paid Rs.20,12,000/- at the time of executing the sale agreement believing that the OP will hand over possession of the schedule apartment at least by the end of December 2018 but they have failed to hand over the schedule apartment even in 2021.  The OP has taken the contention that he did not have money to complete the project within the stipulated time as many customers of the OP including this complainant have failed to make the payments as per the schedule.  The OP has just played tricks in order to extend the time and the contentions taken by the OP are not at all genuine.  The complainant has clearly taken the contention that the statement made by the OP that they had shortage of labours and had to face severe problems due to covid 19 and all the labours shifted to their neighbors are all false. 

22.     These complainants have booked the apartment in 2017 which was way before the onset of pandemic covid 19 cannot be taken as excuse to delay in handing over possession of property which was supposed to be given in the year December 2018.  The OP has crossed the stipulated time and he has failed to prove that any of the reasons taken by them have occurred during the stipulated time and hence the aforesaid justifications are not valid.

23.     The complainant has also relied on the decisions of State Commission Disputes Redressal Commission, U.T., Chandigarh, Usha Yadav –vs- Manohar Infrastructures and others, it is clearly held in this decision a failure of the developer to comply with contractual obligations to provide the apartment to the purchaser within a contractually stipulated period amounts to be deficiency.  There is a fault, short coming or inadequacy in nature and manner of performance, which has been undertaken to be performed in pursuance of the contract in relation to the service. 

24.     The complainants have also relied on the case cited in Pioneer Urban Land –vs- Govindan Raghavan on 2^nd April 2019 in this case it is clearly held when the appellant builder failed to fulfill his contractual obligation of obtaining the occupancy certificate and offering possession of flat to the respondent/purchaser within the time stipulated in the agreement or within a reasonable time thereafter, the respondent flat purchaser could not be compelled to take possession of the flat even though it was offered almost two years after the grace period under the agreement expired.  During this period the respondent flat purchaser had to service a loan that he had obtained for purchase of the flat by paying interest at 10% to the bank.  Under these circumstances the flat purchasers is entitled to the relief for refund of the entire amount deposited by him with interest. 

The complainant has also relied on the decision of National Consumer Disputes Redressal held in Mili Jain & two others –vs- Wave City Centre Pvt. Ltd., on 29^th October 2021

25.     It is also clearly held in the above decision that the complainant is entitled for the refund of the amount with interest and if he failed to pay the amount then the complainant is also entitled for additional interest. If the OP failed to deliver possession and pay the compensation the complainants shall be entitled to seek execution of the order under the C.P. Act.   

26.     In support of the contention, complainants have relied on totally 18 documents Ex.P2 is the brochure of the project, P3 is the booking form, P4 the complainant’s cheque with receipt dated 14.10.2017, P5 is the copy of the estimation sheet, Ex.P6 are the two demand notices, Ex.P7 is the statement of account issued by OP1, Ex.P8 is the sale agreement, P9 is the copy of demand notice, P10 is the bunch of email communication, Ex.P11 is the loan offer letter, Ex.P12 bunch of payment receipt, Ex.P13 is the bunch of copies of cheques towards partial payment, Ex.P14 and 15 are the statement of account issued by OP, Ex.P16 is the board resolution dated 07.08.2018, Ex.P17 is the fresh sale agreement dated 09.08.2018, and Ex.P18 is the bunch of email including loan account issued by ICICI Bank.

27.     On the other hand the contention taken by the OP is that they have not committed any deficiency of service or unfair trade practice and negligence in the construction activities. They could not complete the construction due to covid 19 and in view of the financial problem since 780-800 intending purchasers have failed to make the payment in time and in view of this the construction came to halt.  The OP was forced to approach the Hon’ble High Court in W.P.No.16497/2019 and the state has now filed Revision petition No.1/2021 and he has also filed W.P.No.5937/2021 and in view of all these they could not complete the construction. 

28.     In support of their contention the OP has also relied on three documents. Ex.R1 is the Resolution dated 15.08.2020, Ex.R2 is the Review petition copy and R3 is the stay order passed in W.P.No.5937/2021.

29.     It is  clear from the very documents produced by the complainant and admitted by the OP that the complainants have entered into the sale agreement with the OP on 02.03.2018 and 09.08.2018 and as per the agreement the OP has to complete the construction and hand over the possession of the apartment within December 2018. The OP has failed to complete the construction and deliver the possession of the apartment even after lapse of seven years at the time of filing of the complaint and even after filing of the complaint the OP is not ready to hand over the possession of the building.  It is undisputed fact that there was no covid pandemic in the year 2018, when the sale agreement was entered between the parties. The covid 19 problem was started from 2020 march afterwards. Under these circumstances the contention taken by the OP that they could not complete the construction due to labour problem and other financial problems cannot be accepted. 

30.     The complainants who are the purchasers cannot wait for an indefinite period to take delivery of possession of the apartment after investing huge amount by raising loan from the banks.  The complainant has taken the contention that he has participated in the lucky draw and the OP has informed him that he has won a Hyundai i10 grand car and OP has promised that he will provide the car to the complainant at the time of execution of the agreement.  Inspite of several request the OP has failed to deliver the lucky draw prize i.e., Hyundai i10 grand car to the complainant.

31.     It is further contention taken by the complainant that the OP has also intimated him that if they are not able to provide the car as promised they will adjust the price of the car to the sale consideration amount payable by the complainant.  The OP has specifically denied that they have informed the complainant that he won the lucky draw and they have promised him to deliver the Hyundai i10 car or they will adjust the price of the car to the sale consideration amount payable by the complainant.  Except the say of the complainant and sending of emails demanding delivery of the car there is no other documents produced by the complainant in order to prove his contention.  There is no such averment in the agreement about the delivery of the car or to adjust the value of the car to the sale consideration amount. Under these circumstances the complainant is not at all entitle for the relief to direct the OP to pay Rs.6,00,000/- towards the Hyundai car value with interest.

32.     When the OP has failed to deliver the possession of building even after lapse of five years, the complainants are entitle for refund of the amount with interest and also the damages and litigation expenses.   Hence the complainant has clearly established the deficiency of service and negligence and unfair trade practice on the part of the OP. Therefore the complaint is liable to be allowed in part. Hence we answer point No.1 in the affirmative and Point No.2 partly in affirmative.

33.     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. The OP is directed to refund the advance amount of Rs.20,12,000/- with interest at 10% p.a., from the date of complaint till realization.
3. OP is further directed to pay Rs.2,97,198/- paid by the complainant towards pre-EMI interest and regular interest on the loan amount availed by the complainant.
4. The complainant is also entitled for the compensation of Rs.3,00,000/- and litigation expenses of Rs.10,000/-.
5. The OP 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.20,12,000/- till final payment.
6. 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 17^TH day of DECEMBER, 2022)

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

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