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

DATED 16^TH DAY OF AUGUST 2022

ORDER

SRI.K.S.BILAGI, PRESIDENT

        The complainant has filed this complaint under Section 35 of C.P. Act, 2019 seeking for a direction to the OP for the following reliefs;

1. Direct the OPs to refund the complete consideration amount of Rs.15,19,978/- received by the OP1 along with agreed penalty of Rs.53.82/- per sq. meter per month calculated from March, 2016 till the date of actual payment.

Or

Direct the OPs to develop and complete the project and register the sale deed pertaining to the apartment in the name of the complainant and to deliver the vacant physical possession of the apartment along with the agreed amenities/facilities as promised by the OP1 in its brochure and the agreements, within a stipulated time period.

2. Direct the OPs to pay a sum of Rs.3,67,109/- paid towards the interest on the loan amount availed by the complainant, as on August 2021.
3. Direct the OPs to pay such amount being paid by the complainant to his banker towards the interest on the loan amount availed by the complainant from the date of filing this complaint till the date of realization of the entire amount due from the OPs.
4. Direct the OPs to pay damages of Rs.5,00,000/- due to the mental agony and pain inflicted upon the complainant and due to the inconvenience caused.
5. Direct the Ops to pay Rs.50,000/- towards cost of the complaint.
6. Grant such other relief/s.

2.     The case of the complainants in brief is as under;

The complainant having agreed to purchase flat from the OP for consideration of Rs.20,50,059/- paid in all Rs.15,19,978/- between the 25.06.2014 to 31.05.2018 by means of cash/cheque/NEFT.

3.     It is further case of the complainant that even though sale agreement and agreement of construction are executed between the parties, but OP failed to complete the project, deliver the possession of the flat and execute the sale deed. This act of the OP amounts to deficiency of service.  The complainant called upon the OP to complete the project, deliver the possession on execution of sale deed but failure of the OPs directed the complainant to file this complaint.

4.     In response to the notice OPs appeared and filed version.  While admitting the agreement in respect of apartment bearing No.709 for sale consideration of Rs.20,50,059/- and receipt of amount on different dates, but the complainant failed to make the payment as per the agreed terms.  The photos of the construction progress were sent to the complainant.  The OPs also contend that there is a delay in completion of the project as 782-800 intending purchasers failed to make payment, due to labour problem during covid-19, due to pendency of statutory approval due to pendency of writ petition and review petition before the Hon’ble High Court of Karnataka.  There is no deficiency of service on the part of the OPs.  Therefore OPs request to dismiss the complaint.

5.     The complainant files his affidavit evidence and relies on 07 documents.  The affidavit evidence of the authorized person of OP has been filed and relied on 2 documents. Heard the arguments and perused the records.

6.     The points that would arise for our consideration are as under:-

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

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

       Point No.1:- Affirmative

      Point No.2:- Affirmative in part

       Point No.3:- As per the final order.

                                REASONS

8.     Point No.1 AND 2:   There is a need of common discussion of these two points to avoid lengthy discussion.

9.     Even though both the parties have reiterated the respective contention in the affidavit evidence and rely on the documents, but it is relevant to refer admitted facts.

10.   Complainant and OPs have entered into sale agreement dated 31.10.2014, wherein the complainant agreed to purchase the schedule ‘C’ apartment i.e., 709, for a sale consideration of Rs.5,33,488/- on 31.10.2014.  It also indicates how the payment shall be made in installment looking to the progress of the construction.  Ex.P2 is the Construction Agreement dated 31.10.2014 between the complainant and OPs.  In order to appreciate the contention of the OPs it is relevant to refer certain clauses of this construction agreement.  

V. Now this construction agreement witnesses that in pursuance of the foregoing and in consideration of the second party having agreed to purchase a proportionate undivided share in the schedule “A” property, the first party agrees to construct an apartment in the building “SKY VIEW” being constructed in the schedule “A” property which is more fully set out in the schedule “B” hereto and deliver the same to the second party on or before March 2016, extendable for 6 months buffer period to complete of the apartments, subject to clause 7(a) and 15 below and the parties hereby agree as follows:

7(a) Either continue with this contract and claim the amounts in default/arrears with interest at the rate of 2% per month from the date of default to the date of payment and even after the amounts with interest are paid, the first party will be entitled to reasonable extension of time for delivery of the schedule B apartment;

9.     In the event of first party delays in completing the construction of the schedule B apartment, within a six months buffer period from the stipulated date of delivery, for reasons otherwise than set out in clauses 7(a) and 15 of this agreement, then in that event the first party shall pay the second party an amount of Rs.53.82/- per sq. meter per month from the due date till the date of completion.  This clause will become applicable only if the second party has not committed any period of delay in making payments under this agreement or under the corresponding sale agreement or has not committed any breach of the terms of this agreement as well as the agreement for sale;

15.   The date stipulated for delivery of the schedule “b’ apartment is subject to variation on account of force majeure or acts of God or government orders/restriction/controls, natural calamities or any strike including transport strike and other reasons which are beyond the control of the first party.  The first party shall make every effort to obtain occupation certificate, electrical, sanitary, water and pollution connections/clearances within the stipulated date, however the first party shall not be responsible for delays in obtaining such connections from statutory authorities.  The second party shall not be entitled to claim any damages/losses against the first party under any circumstances on the ground mentioned herein;

11    According to this agreement, the OPs agreed to complete the construction and deliver the possession by March 2016 and extended period of six months.  It means the OPs were supposed to complete the project by September 2016.

12.   It is the duty of the OPs to prove the construction progress from time to time. OPs have not produced any evidence on what date construction work was in progress and stages of construction.  Even though the project was supposed to be completed by September 2016, but as admitted by the complainant, the payments were made in 11 installments from 25.06.2014 till 31.05.2018.  It means the parties were not adhere to the terms and conditions with regard to completion of the project by September 2016.

      13.     Ex.P4 is a particulars with regard to paid amount. According to Ex.P4 as on 31.05.2018 the complainant made a payment of Rs.15,19,978/-.  Ex.P5 is the copy of loan account statement. Ex.P6 is the certificate u/s 65B of the Evidence Act.  The OPs have not disputed the receipt of in all Rs.15,19,978/-.  Ex P7 is the bunch of email copies. After receipt of this intimation, the complainant made further payment.  The act of both the parties is a clear indication that they were not strictly adhere to the period fixed for completion of project by September 2016.

      14.     Admittedly the agreement with the complainant is in respect of flat No.709 of D wing.  This email clearly indicates that the OP was not in a position to deliver the possession of apartment even on March 2021.

      15.     The OPs while admitting agreement of sale, construction agreement, consideration amount and payment of amount by the complainant set up a defence in three fold.  Firstly OPs contend that the project could not be completed for non payment of amount by interesting purchasers of 782-800 secondly due to covid-19 the construction work was collapsed due to severe labour problems.  Thirdly, OPs contend that due to pendency of statutory approval and pendency of writ petition and review petition before the Hon’ble High Court of Karnataka and thereby there is no deficiency of service.  

      16.     The OPs have not furnished the list of defaulted prospective purchasers with due amount. Therefore, first contention of the OPs is rejected.  Even though entire nation and activities of the nation suffered due to covid-19 effect but, OP was supposed to complete the project latest by September 2016 and allowed the complainant to make payment after September 2016.  Except vague contention about labour problems, the OPs have not furnished on what date there was a labour problem.  In the absence of acceptable evidence the second contention of the OP delay in completion of project cannot be accepted. Accordingly, second contention is rejected.

      17.     Thirdly, the OPs contend that due to pendency of statutory approval, litigation before Hon’ble High Court of Karnataka the project was not completed.  The OPs rely on Ex.R1 and R2.  Ex.R1 is the copy of review petition filed by the government, wherein the OP 1 is the respondent No.5. The government filed a Review Petition seeking review of orders in Writ Petition No.16507/2018 against OP1 and other writ petitions and orders in other Writ Petition against other respondents.  The order under review is nothing to do with this case.  As could be seen from Ex.R1 that the Hon’ble High Court of Karnataka was pleased to allow the bunch of Writ Petition directing the government to refund excess recovered amount by setting aside the order of the government enhancing the taxes imposed by Fire and Energy Services Department.  Ex.R2 is the copy of the Writ Petition filed by OP1 against state of Karnataka and Real Estate Regulatory Authority Karnataka challenging the order dated 15.02.2021 passed by RERA.  The order of the RERA came to be passed much prior to the filing of this complaint.  The OP1 had approached RERA for extension of time. Accordingly RERA Karnataka rejected the request of the complainant.  Mere pendency of Writ Petition 5937/2021 cannot be the ground for delay in completion of the project.  The OP1 has not approached RERA Karnataka prior to 2020.  Therefore, the third contention of the OP requires to be rejected.  

      18.     It has been proved that the complainant made payment of Rs.15,19,978/- in 11 instalments to the OPs from 25.06.2014 to 2018.  The complainant proves deficiency of service on the part of the OPs.  Therefore, OPs are liable to refund this amount of Rs.15,19,978/-.

      19.     The complainant seeks penalty at the rate of 53.82/- per sq. meter per month from March 2016. As per the construction agreement the project was supposed to be completed on or before March 2016 and buffer period of 6 months i.e., on or before September 2016.  The complainant himself has made major payment from 25.06.2014 till 31.05.2018.  Moreover, as per the clause 9 of the construction agreement the payment of penalty of Rs.53.82/- per sq. meter per month from the due date till date of completion.  The complainant seeks refund of amount, and he has not made full payment prior to September 2016.  Therefore, complainant is not entitled to this penalty amount.

      20.     The complainant alternatively seeks direction against OPs to develop, complete the project and execute the registered sale deed with vacant physical possession of the apartment.  There is no whisper in the complaint that complainant is ever ready to pay the balance consideration amount.  More over the relief of execution of sale deed with possession cannot be granted by this commission for want of jurisdiction.  Therefore, first alternative relief requires to be rejected.  

      21.     The complainant seeks to direct OPs to pay sum of Rs.3,67,109/- towards interest paid on the loan. It is true that as per Ex.P4 the complainant made payment of Rs.15,19,978/- in instalment between 25.06.2014 to 10.02.2018.  Ex.P5 clearly indicates that interest rate is at 7.60% p.a.  As per the latest decision of Hon’ble Supreme Court of India an order for refund of amount with interest at 9% p.a., from the date of payment till refund of amount can be granted. Under such circumstances, the complainant is not entitle to an interest portion paid by him to the tune of Rs.3,67,109/-.

      22.     The complainant also seeks Rs.5,00,000/- as damages for mental agony. When we are awarding interest at 9% p.a., the complainant is not entitle compensation separately.  We are awarding interest at the rate of 9% p.a., from the date of respective payments till refund as a compensation.

      23.     The complainant also seeks direction against OP for payment of cost of Rs.50,000/-.  The complainant has paid court fee of Rs.1,000/- and availed the service of an advocate. The cost of Rs.50,000/- is exorbitant.  Therefore, cost of litigation is quantified at Rs.25,000/-. Accordingly we answer point NO.1 and 2.

24.       POINT NO.3: In view of the discussion referred above, complaint requires to be allowed in part. Ops are liable to refund Rs.15,19,978/- with interest at 9% p.a., from the date of respective payments till realization.  The Ops are also liable to pay Rs.20,000/- towards cost of litigation. It is necessary to put time limit on the OP to comply the order and in case of failure the Ops are liable to pay interest at 12% p.a., on Rs.15,19,978/- after expiry of time limit till realization.  In the result, we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OPs shall refund Rs.15,19,978/- with interest at 9% p.a., from the date of respective payment till realization with Rs.20,000/- towards cost of litigation.
3. The OPs shall comply this order within 60 days from this date, failing which the Ops shall pay interest at 12% p.a., on Rs.15,19,978/- after expiry of 60 days till realization.
4. Furnish the copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 12^TH day of August, 2022)

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

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

HAV*