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

DATED 21^ST DAY OF DECEMBER 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 refund Rs.27,50,000/- with interest at 18% p.a.,
2. Order the Ops to pay Rs.5,00,000/- as compensation
3. Direct the OP1 to pay costs of this proceedings and grant such other reliefs.

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

The complainant with fond of hope having her own flat booked the flat No.TF-066 in the project floated by the Ops in the name and style the NECTAR situated in Rajarajeshwari Nagarasabha vide property No.142, situated in Sy.No.39/5 of Srigandadakaval Village, Yeshwanthapura Hobli, Bangalore North Taluk.  OP1 is the builder/developer and OP2 is the owner of the land. There is a tripartite agreement between them.  

3. The complainant booked the flat and entered into a construction agreement on 28.06.2006 and paid a lumpsum amount of Rs.22,50,000/-.  The OP1 and 2 have agreed to sell the property to the complainant for a total cost of Rs.29,75,060/- which is inclusive of one covered car parking, charges of Rs.1,00,000/- towards BWSSB and BESCOM charges installation charges etc., of Rs.75,000/- and registration charges of Rs.2,70,460/-.  The OP1 who is the GPA holder of the OP2 has entered into agreement of sell dated 28.04.2006 to sell 543 sq. feet undivided share in the A schedule property for a sale consideration of Rs.11,90,024/- and again on the same day the OP1 executed construction agreement with the complainant on 28.06.2006 for a valuable consideration of Rs.17,86,036/-.  The complainant has also got sanctioned a housing loan of Rs.10,00,000/- to purchase this property from the Karnataka Bank, Amarjyoti Nagar Branch.
4. The complainant is the proprietor M/s Balaji Engineering Works carrying on grill and fabrication work. The OP1 was aware of the business being carried out by the complainant and requested her to undertaking to supply railings to the first and second floor of the apartment building. The OP1 agreed to adjust the proceeds of such supply of materials to the sale consideration payable by the complainant to the OP1 in respect of the property.  The OP1 also issued work order to the complainant to carry out stairs and balcony railings work in the first and second floor of the apartment.  As per the work order the complainant supplied railings worth more than five lakhs and OP1 had agreed to adjust the said five lakhs towards sale consideration.  The complainant so far has paid a total sum of Rs.27,50,000/- including material supplied by her to the tune of Rs.5,00,000/- and balance of Rs.2,25,060/- was liable to pay by the complainant at the time of registration of the sale deed.
5. As per clause 8 of the construction agreement the OP1 agreed to deliver the property on or before 31.12.2006 but has not completed within time even after completion of more than one to two years from the due date.  The OP1 not bother to finish the work. Hence the complainant got issued legal notice on 22.02.2008 to OP1 and 2 seeking to complete the work within 15 days from the date of receipt of notice and hand over the possession and also for damages for nonperformance of the contract. The OP2 had sent an untenable reply on 05.03.2008 again in the year 2018 i.e., on 15.05.2018. Complainant has got issued another legal notice demanding the Ops to register the property by receiving balance amount for which the OP2 has also issued untenable reply on 01.06.2018.
6. The complainant being one of the agreement holder with OP1 had already notified the OP1 and 2 and after receipt of the legal notices the OP2 being the owner of the land had already transferred his right, title and interest and possession of the said property in favour of OP3 who is his blood relative under the registered sale deed dated 14.03.2014. The OP2 and 3 have promised the complainant that they will refund the advance amount taken by OP1.  After that all the three Ops in collusion with each other have changed the use of land from residential purpose and constructed educational institution depriving the complainant and also public at large with an intention to cause monitory loss to the complainant. Hence the complainant is no more interested in waiting and listening to the OP2 and 3 and as a last resort the complainant has issued another legal notice on 20.07.2021 calling upon the OP to refund an amount of Rs.27,50,000/- together with accrued interest @ 18% p.a.   After receipt of notice OP2 and 3 have sent an untenable reply and the notice sent to OP1 was returned as no such firm in this address.
7. The OP1 being the builder made use of the complainant’s hard earned money along with other investors money and completed almost 80% of the building and the OP1 involved in cheating case and absconded after completion of 80% of the work.  By taking undue advantage of the abscond of OP1 along with her husband by name Vijay the OP2 by colluding with OP3 has sold the property and registered sale deed dated 14.03.2014.  When the Ops have neither completed nor refunded the amount the complainant has filed this complaint for deficiency of service and monitory loss and harassment suffered by her from the Ops.
8. In response to the notice, OP2 and 3 have appeared and filed their version. Though paper publication notice was given to the OP1, he has not appeared before this commission, hence OP1 placed exparte.
9. OP2 and 3 have filed their version and submitted that, the complaint is not maintainable and it is barred by limitation. As per the so called sale agreement entered between complainant and OP1 is on 28.04.2006 and the complaint is filed in the year 2021. Almost there is a delay of 15 years in filing this complaint.  According to the complainant the cause of action arose on 20.07.2021. when last communication was issued which is not the cause of action.  The complaint is filed after lapse of 15 years and without cause of action.
10. It is also the case of the OP2 and 3 that there is no privity of contract between the complainant and OP3 who is neither a party to the so called sale agreement or the so called JDA or POA dated 16.05.2005, therefore the complaint is liable to be dismissed for misjoinder of OP3.
11. The so called JDA dated 16.05.2005 and power of attorney are unregistered insufficiently stamped document and the so called sale agreement dated 28.04.2006 is also unregistered and insufficiently stamped and hence the complaint is not maintainable and liable to be dismissed.  The complainant has not disclosed the mode of payment in the entire complaint apart from mentioning some payments made through cheque and demand draft and by cash. The so called payments alleged to have made by the complainant to the OP1 is nothing to do with these OP2 and 3. No amount whatsoever has been received by this OP2 and 3. Hence the complaint is liable to be dismissed against these OP2 and 3 for want of consideration and in the absence of proof of any transaction between the complainant and these OP2 and 3. These OP2 and 3 is not at all having the knowledge about the so called supply of materials made by the complainant  proprietary firm and hence this complaint is again hit by misjoinder of cause of action and that too a time barred debt. There is no allegations regarding deficiency of service or unfair trade practice against these OP2 and 3 and hence the complaint is liable to be dismissed against them.
12. It is further case of the OP2 and 3 that the husband of the complainant namely Sri.Pradeep Kumar is aware of all the proceedings initiated between the OP1 and the OP1 has misused the unregistered power of attorney and JDA and in this regard the OP2 has cancelled the unregistered power of attorney issued by him.  In this regard the OP1 has raised arbitration clause and the Hon’ble High Court of Karnataka has pleased to appoint arbitrator. Accordingly Arbitral tribunal consisting of retired district judges have constituted and the Arbitral tribunal passed order dated 12.05.2013 in A.C.No.1/2009 and the claim of the OP1 was rejected and opportunity was given to him to complete the project.  That being the case without the knowledge of the OP2 the OP1 has went head to sell the apartment and received money from prospective buyers.  As per the arbitration clause consisting of the learned arbitrator who are all senior Retired district judges, have passed an award on 12.05.2013 in A C No.1/2006 and upheld the act of this OP2 in terminating the power of attorney.  The OP1 has challenged the said award u/s 34 of the Arbitration and Conciliation Act 1986 in AS No.38/2013 before the CCH No.11 and the court by its order dated 26.03.2016 has dismissed the AS No.38/2013 filed by the OP1.  The OP1 preferred an appeal in MFA N.4516/2016(AA) before the Divisional bench of Hon’ble High Court of Karnataka. After hearing the parties the said MFA was dismissed on 02.03.2018 confirming the award/judgements passed in AS 38/2013.
13. There is a concurrent findings of the facts by the arbitral tribunal in AC No.1/2006 and by the Hon’ble CCH 11 in A.S.No.38/2013 which was confirmed by the divisional bench of the Hon’ble High Court in MFA and it has reached its finality. After passing of the award dated 12.05.2013 there was no stay. Hence the OP2 has sold this property on 14.03.2014 in favour of OP3 under registered sale deed and the said fact was also brought to the notice of the Hon’ble CCH and also Hon’ble High Court of Karnataka wherein the purchaser OP3 was also made as party. All these facts are within the knowledge of the complainant and they are conveniently suppressed by the complainant.
14. The complainant has suppressed all the material facts as to the initiation arbitration proceedings. The OP1 has cheated this OP2 who is a rusting villager compelling him to execute the JDA and GPA. This OP2 has not received any amount from the prospective purchasers. There are seven complaints filed by the complainants before the Hon’ble state Commission bearing No.240/2010, 257/2010, 258/2010, 241/2010, 306/2010, 307/2010 and 141/2011. In all these complaints the OP2 herein was the party and after adducing the evidence the Hon’ble state commission by its common order dated 19.11.2018 has dismissed the complaint against this OP2 who is also a OP2 in those cases and allowed the complaint only against OP1. These proceedings are within the knowledge of the complainant and her husband.  Hence the complaint against these OP2 and 3 are not at all maintainable and liable to be dismissed.
15. In addition to this the OP2 and 3 have also furnished their parawise reply in respect of the allegations made in the complaint and prayed for dismissal of the complaint.
16. The complainant has filed his affidavit evidence and relies on 09 documents.  Affidavit evidence of OP2 has been filed and OP2 relies on 07 documents.
17. Heard the arguments of advocate for the complainant and also OPs.  Perused the written arguments.
18. 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?

19. 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

20. 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 of both the parties, written arguments and documents. Inspite of issue of notice through paper publication, the OP1 remained absent. Hence OP1 placed exparte.

21. The contention taken by the complainant is that she had entered into agreement to sell on 28.04.2006 with OP1 as per Ex.P3 who is the unregistered GPA holder of OP2 to 543 sq. feet undivided share in the A schedule property for a sale consideration of Rs.11,90,024/- and also executed construction agreement on 28.04.2006 as per Ex.P4 to construct the flat No.TF-066, having super built up area of 1532 sq. feet in the third floor for a valuable consideration of Rs.17,86,036/-.  The complainant has paid Rs.22,50,000/- by way of cheque and cash.  The complainant has paid Rs.12,50,000/- by cash and Rs.10,00,000/- has been paid by cheque/demand draft.
22. In support of her contention she has produced Ex.P5 the bank document and copies of receipts as per Ex.P6.

23. In addition to this the complainant being the proprietor M/s Balaji Engineering works, supplied railing to first and second floor of the apartment worth Rs.5,00,000/- and therefore she claim a total paid amount of Rs.27,50,000/- and balance is only Rs.2,25,060/-. When the OP1 and 2 have not at all completed the construction she has got issued a legal notice as per Ex.P7 through her counsel on 22.02.2008 sought for possession and damages.  At that time the OP2 has sent a reply as per Ex.P7C, again the complainant got issued a legal notice on 15.05.2008 as per Ex.P8 to the OP and the OP2 has given a reply as per Ex.P9a stating that this OP2 has executed a sale deed in favour of the OP3 on 14.03.2014.  Complainant has further taken the contention that the Ops in collusion with each other has changed the use of land from residential purpose and constructed an educational institution. 

24. This complainant was in constant touch with OP2 and 3 since 2010 and they have undertaken to refund the advance amount with interest, but they did not return the amount, she has also got issued legal notice on 20.07.2021 calling upon the Ops to refund the amount with interest, when they failed to comply the terms of notice, she has filed this complaint.

25. On the other hand, the OP1 inspite of service of notice through newspaper remained absent, placed exparte.

26. The OP2 and 3 have appeared and filed their version and adduced their evidence, have taken the contention that the complaint is barred by limitation and there is no cause of action to file this complaint. There is 15 years delay from the date of sale agreement dated 28.04.2006 and the complaint is filed in the year 2021.  Therefore, the complaint is not maintainable.  The complaint is further not maintainable due to misjoinder of parties i.e., OP3, who is neither a party to the agreements, JDA or PA dated 16.05.2005 nor has received any amount from the complainant, hence the complaint is liable to be dismissed for misjoinder of OP3. In addition to this the JDA and the GPA dated 16.05.2005 and the so called sale agreement dated 28.04.2006 are unregistered and insufficiently stamped documents and hence the complaint is liable to be dismissed.

27. It is also clear from the evidence and the documents produced by the OP2 and 3 that the complainant has paid the amount only to OP1 and she has not paid any amount to OP2 and 3. These OP2 and 3 are not at all aware of the material supplied by the complainant’s proprietary firm to the project. There is no allegation made by the complainant regarding deficiency in service or unfair trade practice against the OP2.

28. The evidence of RW1 the OP2 further discloses that the complainant and her husband namely Sri.Pradeep Kumar were aware of all the proceedings initiated between the OP2 and OP1.

29. The OP2 has cancelled the JDA and GPA executed in favour of the OP1 as he misused the documents.  Aggrieved by the same the OP1 raised arbitration clause and the arbitral tribunal was constituted and the arbitral tribunal passed order on 12.05.2013 in AC No.1/2009 and rejected the claim of the OP1 against the OP2.

30. The OP1 without the knowledge of the OP2 went ahead to sell the apartment and received payments from the prospective buyers.  The OP1 has also challenged the award u/s 34 of the Arbitration and Conciliation act in AS NO.38/2013 before the CCH-11 and it was dismissed on 23.06.2016.  Aggrieved by the said order the OP1 has again challenged the same before the Hon’ble High Court in MFA No.4516/2016(AA) before the Division bench of Hon’ble High Court of Karnataka, Bangalore and the same was dismissed on 02.03.2018 confirming the award as well as Judgement passed in AS No.38/2013.  There is a concurrent finding of facts by the arbitral tribunal and the Hon’ble CCH-11 and the Hon’ble High Court of Karnataka. After passing of the award dated 12.05.2013 there was no stay order. In the meantime the OP2 has sold the property in favour of OP3 under registered sale deed dated 14.03.2014 and the same was brought to the notice of the CCH-11 and also before the Hon’ble High Court of Karnataka, wherein the OP3 was made as a party. In view of the order passed by the arbitral tribunal as per clause D of the order of the arbitral tribunal the OP2 has alienated the property. Inspite of knowing all these facts the complainant has filed this complaint by suppressing all these facts.

31. In support of his contention the OP2 filed his affidavit evidence and also relied on Ex.R1 to R7 i.e., Copy of the arbitratory award dated 12.05.2013, marked as Ex.R1, copy of the order in OS No.38/2013 marked as Ex.R2, copy of the order in MFA No.4516/2016, marked as Ex.R3, Copy of the order of the Hon’ble State Commission in CC No.240/2010 and connected dated 19.11.2015, marked as Ex.R4, Copy of the order of Hon’ble National Commission in 1^st Appeal No.1652/2019, marked as Ex.R5, Copy of the order of Hon’ble National Commission in 1^st appealNo.1813/2019 to 1818/2019, marked as Ex.R6, Copy of the reply notice dated 23.07.2021, marked as Ex.R7.

32. The OP2 has also produced the copy of the common order passed by the Hon’ble State Commission in the connected complaints as per Ex.R4.  The Hon’ble State Commission has also come to the conclusion that the complainant has made all the payments to OP1 only.  After receiving the huge amount from the complainant and other buyers the OP1 never shown any progress in the construction and kept mum for many years.  He has neither constructed the apartment nor refunded the amount.  On the other hand, the OP2 after cancelled the JDA and the GPA has sold the property in favour of OP3 and the OP2 and 3 have constructed an education institution in the said schedule property. In view of this the complainant has lost the money.  The OP1 being the builder has misused the Ex.P1 and P2 executed by the OP2 the land owner and he has tried to sell the apartments on his own by collecting the amounts from the complainant and other prospective buyers. After that the OP1 absconded. These OP2 and 3 have not at all received any amount from the complainant and they are not aware of the transaction took place between the OP1 and the complainant.  Under these circumstances the complainant has made out a primafacie case against the OP1 and not against oP2 and 3.  The OP1 after received the substantial amount from the complainant has stopped the construction work at the Nector project and absconded. The complainant for no fault of her was made to suffer both mental agony and financial loss.  The complainant is able to establish the deficiency of service and unfair trade practice on the part of the OP1. Under these circumstances, the OP2 and 3 are not at all liable to pay any amount to the complainant.  The complaint is liable to be allowed only against OP1.  Hence we answer point No.1 in 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 against OP1 and dismissed against OP2 and 3.
2. The OP1 is hereby directed to pay a sum of Rs.27,50,000/- to the complainant with interest at the rate of 12% p.a., from the date of respective payment till realization.
3. OP1 is further directed to pay compensation of Rs.3,00,000/- with litigation cost of Rs.10,000/- to the complainant.
4. The OP1 shall comply this order within 60 days from this date, failing which the OP shall pay interest at 14% p.a. after expiry of 60 days on Rs.27,50,000/- 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 21^ST day of DECEMBER 2023)

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

Documents produced by the representative of opposite party2 – R.W.1;