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

DATED 12^TH DAY OF NOVEMBER 2024

COMPLAINT No.158/2023

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 execute and register the sale deed immediately in favour of the complainant by handing over physical possession of flat or in the alternative return the sale consideration amount of Rs.43,50,000/- paid by him with interest @ 12% p.a., from 22.11.2019 till full realization.
2. Award damages and cost of the proceedings.
3. Such other orders as this Hon’ble Commission deems fit.

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

The OP1 is a registered partnership firm and they are engaged in purchasing, selling and development of the land and building and other related work pertaining to real estate business.  OP2 is the Managing Partner, who is responsible for day today affairs and overall business activities of the firm.  OP3 is one of the partner and OP4 is the land owner.

3. The OPs are well known to the complainant in connection with real estate business. They have developed the project known as Sri Ravi Shantha, situated at Sy.Nos.6/1, 6/2, 10/1, 10/2, 11, 12, 13, 14/1, 18, 21 and 28 situated at Mallathahalli Village, Yeshwanthpur Hobli, Bangalore North Taluk, Bangalore. At the time of commencement of construction of the said project, the OPs have offered the flats to the complainant.  The complainant was enticed and allured and decided to purchase a flat, accordingly OPs entered into an Agreement of Sale with the complainant for purchase of 3 BHK apartment bearing No.307, for a total consideration of Rs.43,50,000/-.  Entire sale consideration was paid by Mr.K.S.Ravi, chartered Accountant (Colleague of the complainant) to OP1 on behalf of the complainant in the form of loan. The OPs have agreed to register the said property within 18 months from the date of agreement i.e., on or before 21.05.2021.
4. The complainant further submits that he is eagerly waiting to get his property registered in his name and take possession of flat but the OPs have miserably failed to arrange for registration of the flat and transfer of possession of the same as per the commitment made in the said agreement.  Whenever complainant demanded for getting the flats registered in his name, the OPs were dodging the same on one pretext or the other or sometimes giving evasive replies. The attitude of the OPs amounts to deficiency of service as contemplated under the Act.  Hence complainant got issued legal notice on 05.11.2022 requesting the OPs to arrange for registration of flat or to return the sale consideration amount paid by him with 18% interest per annum. Said notice was returned as unclaimed by OP1 to 3, though notice was duly served to OP4, no reply was given. Hence this complaint is filed.  
5. Though notice was sent to OP1 to 3 have not appeared before this commission nor have filed their version. Hence OP1 to 3 placed exparte.
6. After service of notice to OP4, has appeared and filed his version denying all the allegations made against him.
7. It is the case of the OP4 that he is the absolute owner in possession and enjoyment of site property formed by ITI Employees Gruha Nirmana Sangha Ltd., situated at Mallathahalli village, measuring all  about 8528 sq.feet.  He has entered into a Joint Development Agreement with OP1 to 3 dated 03.09.2018 and also executed a general power of attorney on the same day to develop the property.  In consideration of developer agreeing to deliver the owners constructed area i.e., 45% of super built up area in the residential apartment to the owner.  The developer shall be entitle about 55% of undivided share in the schedule A property either as a whole or in portion or in the form of undivided share at the sole discretion of the developers.
8. OP4 further submits that the 45% of the super built up area shall be sole and absolute property of the owner and he is entitled to dispose of the said property according to his wish and will. On the other hand the developers shall be entitle to remaining constructed 55% of super built up area in the residential complex.
9. It is the specific contention taken by the OP4 that the developers shall proceed to commence the construction of the residential complex in the schedule A property within 15 days thereof after obtaining the sanction plan.  The developers shall take all reasonable precaution and ensure that the activity in the construction site does not disturb or cause nuisance to the occupants.  The OP4 has handed over permissive possession of A schedule property to the developers immediately after they obtain all or necessary sanctions for putting up construction of the proposed residential complex.  The developer shall hand over the owner’s share of builtup area in all respects within 24 months from the date of obtaining the plans and approvals and they were also entitle to a further period of 3 months from the expiry of 24 months to obtain electrical, water and sanitary connection from the respective government department for the builtup areas and to deliver the owner share to the owner ready and fit for occupants in all respect.
10. It is the specific grievance of the OP4 that the OP1 to 3 have obtained the commencement certificate from BBMP on 30.07.2019.  as per the above clause they were require to complete the project within a period of 24 months from the date of commencement of the work but they have not completed and no constructing activities are going on in the property from the past 2 to 3 years. After that the OP1 to 3 have approached the RERA and got registered the project vide registration certificate dated 22.07.2019 and the same was valid till 01.04.2021.  The same was extended for another nine months from the date of expiry of the said registration certificate.
11. It is further contention taken by the OP4 that the OP1 to 3 without complying the terms of the registered JDA have entered into sale agreement with the complainant without the knowledge and consent of this OP4. Hence the said sale agreement does not binding on this OP4. Since the OP1 to 3 have failed to comply with the terms of the registered JDA this OP has got issued legal notice terminating the contract and cancelled the registered JDA and GPA executed by him in favour of the OP1 to 3 by issuing a legal notice dated 19.03.2022.  The notice was duly served but none of the OP1 to 3 have sent any reply to the said notice.
12. In addition to this legal notice the OP4 has also issued a general public notice dated 19.03.2022 with an intention to avoid general public by entering into any transaction with OP1 to 3 which was published in the newspaper also.  Even after waiting for a period of years by this OP with a hope that the OP1 to 3 may conclude the construction by getting proper approvals and permissions from the competitive authorities but the hopes of this OP went in vein. Hence without any other option this OP4 approached the Hon’ble City Civil Court CCH 43 in O.S.No.7113/2023 and obtained an interim order restrain this OP1 to 3 from alienating or creating any third party interest over the schedule property or any portion of it pending for disposal.
13. This OP is neither a party to the contract entered into between the complainant and OP1 to 3 and not a signatory to any documents. Hence the said contract is not binding on the OP4.  Hence OP4 prayed for dismissal of the complaint against him.

14. The complainant has filed his affidavit evidence and relies on 04 documents.  The OP4 has filed his affidavit evidence and relied on 15 documents.
15. Heard the arguments of advocate for the complainant and OP4. Perused the written argument filed by the complainant and OP4 with citations. 
16. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OPs?
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 against OP1 to 3

Point No.2: Affirmative in part against OP1 to 3

Point No.3: As per final orders

                  REASONS

18. 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, affidavit evidence, written argument and citations.
19. It is undisputed fact that the OP1 is a registered partnership firm and OP2 is the Managing partner and OP3 is one of the partner and OP4 is the land owner and they have entered into JDA  with OP1 to 3.  The OP1 to 3 have undertaken to developing the housing project under the name and style Sri Ravi Shantha at Mallathahalli Village. 
20. The OPs are known to complainant and the complainant impressed by the assurance and amenities offered by them has decided to purchase flat NO.307 for a total sale consideration of Rs.43,50,000/-.

21. It is the specific case of the complainant that he has entered into sale agreement Ex.P1 with OP1 to 4 and paid the entire sale consideration amount of Rs.43,50,000/- and the same is appropriated by OP2 to the loan advanced by Mr.K.S.Ravi, chartered accountant and also the colleague of the complainant.  As per the agreement the OP1 to 3 have to complete the construction and hand over the possession within 18 months from the date of execution of the sale agreement. Inspite of expiry of the agreed period the OPs have failed to execute the sale deed and transfer possession of the flat in favour of the complainant.  When the OPs 1 to 3 have not responded or come forward to complete the project and execute the sale deed the complainant has got issued legal notice as per Ex.P2.  Inspite of service of notice none of them have come forward to comply the terms of the agreement. Even the OP4 has not at all issued any reply after received the notice.  The OPs failed to complete the construction of the apartment within the agreed period of 18 months from 21.05.2021 and to transfer possession within the promised time even after collected the entire sale consideration amount. 
22. Even after service of the notice the OP1 to 3 failed to appear before this commission and they were placed exparte.  They have not at all challenged the allegations made in the complaint and the Ex.P1 sale agreement entered between the OPs and the complainant.
23. On the other hand the OP4 who is the land owner has appeared before this commission and taken the contention that as per the registered JDA and the GPA entered between him and OP1 to 3, the OP1 to 3 agreed to deliver the constructed area i.e., 45% of the super builtup area in the residential apartment to the owner, the developers shall be entitle about 55% of the undivided share in the schedule property. As per the JDA and GPA the OP1 to 3 have to commence the construction of the complex within 15 days after obtained the commencement certificate and this OP4 the owner shall hand over permissive possession of the A schedule property to the developers immediately after they obtain all necessary sanctions for putting up construction of the proposed residential apartment.  The OP1 to 3 have obtained commencement certificate from BBMP on 30.07.2019 and they are required to complete the construction activities within a period of 24 months from the date of commencement of work i.e., 30.07.2019 as per Ex.R5. The OP1 to 3 have also approached RERA and got registered the project and obtained the registration certificate on 22.07.2019 as per Ex.R6 and it was valid till 01.04.2021 and the same was extended for another nine months from the date of expiry of the registration certificate. 
24. The main grievance of the OP4 is that the OP1 to 3 have entered into sale agreement Ex.P1 with the complainant without his knowledge and hence it is not binding on him.  This OP4 has already terminated the contract and cancelled the registered JDA and GPA executed between him and OP1 to 3 by issuing legal notice dated 19.03.2022.  He has also given a paper publication and issued a general public notice informing the public not to enter into any transaction with OP1 to 3. In addition to this he has also filed O.S.No.7113/2023 before the Hon’ble City Civil Court for cancellation of JDA and GPA and obtain an interim order restraining the OP1 to 3 from alienating or creating any third party interest over the schedule property pending disposal of the suit. This OP is not a signatory to any of the documents entered between the complainant and OP1 to 3 and hence the complainant is not at entitled for any relief from this OP4.  
25. Even though the complainant has paid the entire amount but the OP1 to 3 have not at all completed even 25% of the civil work and the remaining part of the work will take many years to complete.  The complainant has borrowed loan from his colleague Mr.K.S.Ravi and he is repaying the same on the installment basis.  On perusal of the Ex.P1 produced by the complainant, it is clear that the OP4 is not at all a signatory to the said document.  The OP1 to 3 have only put their signature in the Ex.P1 and they have clearly stated in the agreement that they have received the entire sale consideration from the complainant. Under these circumstances, the OP1 to 3 who are the developers are only responsible either to deliver the flat or to refund the amount to the complainant.
26. Admittedly the OP4 the owner of the land has already terminated the contract and also he has filed a suit against the OP1 to 3 seeking the relief of cancellation of registered JDA and GPA executed in favour of the OP1 to 3 and the O.S.No.7113/2023 before the city civil court is still pending. Under these circumstances, it is clear that the OP1 to 3 will not complete the project and hand over the flat to the complainant. When they have not at all completed even 25% of the civil work the question of completion of the project and handing over of the flat to the complainant do not arise.  Under these circumstances, we feel it is necessary to direct the OP1 to 3 to refund the entire amount paid by the complainant with interest.  The OP1 to 3 even though have no valid right at present to continue with the project since the very JDA and GPA executed by the OP4 is under dispute and the OP4 has already terminated the contract.  The OP1 to 3 even after received the entire sale consideration amount have failed to honour the terms and conditions of the agreement and failed to complete the project and thereby they have committed deficiency of service, unfair trade practice and they have also played fraud on the complainant.  Therefore the complainant is entitled for the relief from OP1 to 3 since they are only the signatories to the sale agreement Ex.P1 and they have received the entire sale consideration from the complainant.  When the OP4 is not at all a signatory to the Ex.P1 and not received any amount from the complainant is not liable to refund any amount to the complainant. Hence the complaint against OP4 is not at all maintainable and liable to be dismissed.  Hence we answer point No.1 in affirmative and point No.2 partly in affirmative against OP1 to 3 and answer Point NO.1 and 2 in Negative against OP4.
27. Point No.3:- In view the discussion referred above the complaint is liable to be allowed in part against OP1 to 3 and they are liable to refund the sale consideration amount with interest at 9% p.a., from respective payment to till the date of realization with compensation of Rs.5,00,000/- along with litigation expenses of Rs.20,000/- to the complainant. We proceed to pass the following;

O R D E R

1. The complaint is allowed in part against OP1 to 3 and complaint is dismissed against OP4.
2. OP1 to 3 are directed to pay Rs.43,50,000/- with interest at 9% p.a., from the date of respective payment to till the date of realization to the complainant.
3. OP1 to 3 are further directed to pay compensation of Rs.5,00,000/- with litigation cost of Rs.20,000/- to the complainant.
4. The OP1 to 3 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.43,50,000/- 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;