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

DATED 23^RD DAY OF AUGUST 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 OP1 to 3 jointly and severally to pay Rs.32,22,377/- along with interest at 18% p.a., from the respective date of payments.
2. Direct the OP1 to 3 to close the outstanding loan amount along with pre-EMI, late payment, penalty due and other charges amounting to Rs.52,89,658/- to ABHFL towards the loan account LNBANHL-09170031415 along with future interest, penalty etc., and provide no due certificate.
3. Direct the Ops to pay Rs.5,00,000/- towards mental agony and torture.

or

4. Direct the OP4 to collect the entire outstanding amount from builder and issue NOC to the complainant.
5. Direct all the Ops to pay Rs.5,00,000/- towards mental agony and torture.
6. To pay cost towards this complaint.

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 and was incorporated in the year 2007 and was known as Mantri Technology Constellation Pvt. Ltd., and currently renamed M/s Buoyant Technology Constellations Pvt. Ltd., rep. by its MD and also the land owners of various parcel of land of the schedule property. The OP2 is a partnership firm and OP3 is an incorporated company and is also engaged in the business of real estate. The OP4 is a registered company engaged as non banking financial corporation undertaking financial activities including finance etc.

3.       It is further case of the complainant that OP1 to 3 in order to develop a residential project entered into JDA and marketed the project as Mantri Manyata Energia.  OP1 to 3 are jointly referred as Developer/builder. The complainant was impressed by the amenities and facilities and security systems, special amenities green building amenities and lifts agreed to purchase the schedule property for a valuable sale consideration of Rs.49,99,950/- towards the agreement for sale of undivided interest and further entered into construction agreement for a sum of Rs.38,23,000/-. Which included the cost of construction of apartment, common area and amenities and car parking and entirely the complainant agreed for a sum of Rs.88,22,950/-.  The agreement was entered into in the joint name of complainant and his deceased father Sri.H.N.Sriman Shetty. The OP has agreed to hand over the possession of the apartment with all amenities and hand over the possession on or before 31.12.2019.  The complainant as per the request of the builder has processed the loan and got sanctioned the housing loan to an extent of Rs.80 lakhs from the OP4 under pre EMI scheme.  The OP4 agreed with the OP1 to release huge sum of money in single lumpsum without any corresponding developmental project.

4.       As per the offer the complainant was informed that until possession all EMIs will be deducted out of the sale process payable by the complainant.  The OP has further informed that as per its certain understanding with the scheme sponsoring bank the OP4 loan proceeds would be disbursed upto 60 to 75% of the loan sanctioned amount and out of the same a portion would be retained towards the principal repayment and a certain portion will be retained towards payment of pre EMI or EMI as the case may be. The builder has also assured that the complainant that he would be paying a sum of pre EMI or EMI until possession or the same would be deducted out of the pending sale consideration.  

5.       It is further case of the complainant that as per the offer the complainant has paid totally an amount of Rs.52,85,735/- through cheque and also through loan disbursement.  All the paper work were prepared by the builder containing terms and conditions favorable to them without any scope of negotiation or alteration. The said agreements were in the nature of dotted line agreements. The complainant did not understand the financial matters and the same lead to lot of confusion which was never cleared by the builder.  The OP builder had an understanding with the OP4 that the possession would be handed over by 31.12.2019 as such the OP4 had in advance retained a sum of Rs.9,33,391/-  as per pre EMI for the period commencing from 10.10.2017 to 10.11.2019. The OP4 had also collected all requisite fee, processing fee etc., and acted as financial consultant and thereby the complainant became a consumer of OP4 as a banker /financial service provider.

6.       It is further case of the complainant that as per the scheme of the OP the OP4 sanctioned a sum of Rs.80 lakhs and out of that the OP4 released over all Rs.54,44,000/- in three tranches.  Out of the said money a sum of Rs.41,61,727/- was paid to Mantri developer group and a sum of Rs.9,33,391/- is shown as disbursement internally and adjusted as pre EMI installment without the installment actually becoming due and again Rs.4,48,882/- is again internally adjusted as principal repayment without it becoming due.

7.       It is further grievance of the complainant that the OP have failed to given any kind of disclosure or calculation to the knowledge of the complainant. The Ops have colluded each other group to defraud the complainant to make unlawful gain. Inspite of constant flow of the construction of the project the same is in stand still position. The OP builder is seem to be disinterested to honour its commitment and failed to give any kind of service to the complainant. The very intention of the complainant to purchase an apartment is for the purpose of having a community living. However the builder have completely stalled many of the towers and it is unlikely that the OP would complete the entire project in foreseeable future. The OP states that he would not be able to complete and provide all amenities and there is an inordinate delay in completion of the project.  The builder was supposed to complete the entire project along with all amenities and handed over the possession on 31.12.2019. Inspite of lapse of more than two years the project is totally unfinished.  

8.       It is further grievance of the complainant that due to inordinate delay of completion of the project it had affected on mental and physical health of the father who was the joint purchaser of the apartment with the complainant succumbed with all financial stress and mental agony and unfortunately his father died on 02.05.2021 without being able to keep his foot into the apartment, which was booked by him along with the complainant.  

9.       It is further case of the complainant that he lost hopes of completion of the project in near future and he has stopped payment of EMI to OP4 and has become a defaulter and received notice from OP4.

10.     The complainant is no more willing to wait for completion of the project and intend to seek for exit out of the project and seek for refund of entire money paid along with all interest penalty paid to OP4 and also for compensation on the money paid by him.  The complainant along with his father have totally paid Rs.50,90,047/-.  The OP builder is liable to return a sum of Rs.32,22,377/- with interest thereon at 18% p.a., the complainant has also got issued legal notice on 25.10.2021. When the Ops have failed to comply with the demands of the complainant the complainant has filed this complaint for recovery of the amount from the Ops.

11. In response to the notice, OP1 to 4 appears through their counsel and filed their version.
12. The case of the OP1 is that the complaint is not maintainable and liable to be dismissed. The complainant has instituted this complaint for recovery of money and damages. The said reliefs can be granted by the competent civil court.  The complainant has claimed exorbitant amount towards interest and damages. These claims ought to be proved with cogent evidence and it cannot be a subject matter of consumer dispute.  
13. It is further case of the OP1 that the agreements and the booking form provide for cancellation subject to certain pre-defined conditions. In case of cancellation/termination of the agreements by the complainants he was required to follow specified procedure i.e., make a written request for cancellation along with their NOC for resale of the apartment in the market by the OP and upon acceptance of the request of cancellation by the Ops, the OP is entitle to forfeit a sum equivalent to 10% of the total value of the agreement, tax implication suffered by the complainant. Loss of profits incurred against reselling of the apartment. The complainant has forgone the provisions of the agreement and he has directly approached this commission. The complainant seeking relief of refund is nothing but seeking a cancellation of the agreement and the same can be done only terms of the agreement and on this ground also the complaint is liable to be dismissed.
14. It is further case of the OP1 that the OP2 and 3 and the complainant and independent parties to a contract and there is no service rendered by them and therefore the complaint against them is not maintainable and liable to be dismissed.   
15. It is the specific case of the OP1 that he is one of the leading real estate developers in South India. This OP1 for purpose of construction of residential apartment complex at Sy.No.2/1, 2/2 and 2/3 and 80 situated at Rachenahalli, K.R.Puram Hobli, formulated the scheme for the persons interested in owning the residential apartments. The complainant being desirous to get the residential apartments had entered into agreement of sale on 31.08.2017 with this OP to purchase the undivided right, title and interest within the plinth area of the building to be constructed in the project.  As per clause 6.1 the OP1 has to hand over possession of the completed apartment to the complainant on or before 31.12.2019 with a grace period of 12 months. Thus extending the delivery to 31.12.2020. the handing over possession was subject to limitation mentioned in clause 6.1 as well as 6.4 of the agreement of the construction, as per which based on certain force majeure consideration which were out of the hands of OP1.  The OP1 could be exempted in case of delay arising from the happening of events contemplated in clause 6.4.
16. It is the grievance of the OP that the subject flat could not be delivered in the stipulated period as mentioned in the construction agreement due to various reasons.  In the past few years the Bangalore experienced very heavy rain fall with flooding.  Such constant and incessant rain fall and flooding severely hampered the progress of the project during the monsoon months.  Due to the crack down on illegal sand mining it has adversely effect on the progress of the project. The demonetization was declared in November 2016. Due to demonetization there were several restrictions in the withdrawal of the cash. In view of this the work force left the project site the lot of time was lost by the time they had the confidence to come back and continue working and normalcy was restored to the cash flow.  When the OP1 was solely recovering from the blow of demonetization the OP1 as well as entire industry was delta with another blow i.e., implementation of GST in July 2017. When the OP1 had managed to overcome these hurdles and had continued construction of project in full swing. In the mean time it had to deal with another major hurdle in the form of covid 19 pandemic and the subsequent lockdown imposed throughout the country by the union government. In any event the Karnataka RERA authority has taken into consideration the serious adverse impact on the construction sector due to the lock down has circular dated 19.05.2020 extended the time for completion of all project by a period of six months and also extended the time line for compliance till 15.09.2020. When the project is under full swing and the same having not progressed as expected due to aforesaid stated force measure events the OP cannot be held liable. Recently the government of India has approved stress fund to give a boost to the real estate sector and the OP1 had applied for and got approval and now it is awaiting for release of fund.  This OP1 had completed the majority of the work and the balance work for completion is minimal. The work for the same will achieve full speed once the proposed fund by the government real estate stress fund is released. The complainant has claimed the relief by using the false and frivolous complaint to wriggle out of his loan payment obligations and armed twist this OP1 into accepting his unjustifiable demands.  The complainant has also not followed the conditions which are recalled for cancellation of the agreement. And the cancellation of the agreement can be done only in terms of the agreement and the complaint is liable to be dismissed. Hence the OP1 prayed for dismissal of the complaint.
17. OP2 and 3 have filed their version stating that they are not necessary parties to the proceedings since there is no privity of contract between the complainant and OP2 and 3.  The OP1 is a developer and these OP2 and 3 are the land owners. The OP1 has represented the delivery of the residential apartments and might have acted as power of attorney for technical purposes of conveying the undivided right, title and interest in the land. The considerations agreed upon and paid by the complainant to the OP1 does not create any liability on these OP2 and 3 as per the JDA and GPA and therefore these OP2 and 3 are unnecessarily impleaded by the complainant and complaint requires to be dismissed against these OP2 and 3.
18. It is further case of OP2 and 3 that this OP1 is the registered company engaged in the business of real estate activities and was incorporated in the year 2007 and was known as Mantri Technology Constellation Pvt. Ltd., and currently renamed as Buoyant Technology Constellation Pvt. Ltd., and rep. by its MD.
19. The OP2 and 3 have pleaded their ignorance about the transactions took place between the OP1 and the complainant.  It is the specific case of OP2 and 3 that they are not jointly and severally liable to pay any amount to the complainant as prayed by the complainant since they are land owners. The OP1 who is developing the project and marketing the same. The complainant has negotiated to purchase an apartment and booked the apartment bearing C-1604 in C Block, in 6^th Floor, with undivided interest in the plinth area with one covered car parking by approaching OP1. But this complainant never approached or had any sort of negotiations or discussions with this OP2 and 3.  
20. It is further case of the OP2 and 3 that they are the land owners have acquired the land in and around Rachenahalli Village. The OP1 has approached them and offered to develop the property. Hence they have entered into various JDA and also GPA with the OP1 and they have provided the lands for development activities to the OP1. After starting the construction activity though the construction activity took place with respect to residential project by name Manyatha Mantri Lithos while putting up construction of Manyatha Mantra Energier, the OP1 may be due to the vide spread of covid 19 and other reasons had slow down the construction activity. Unfortunately the OP1 though was required to start the construction activity and complete the same as per the time promised he did not complete the project nor complete the construction of the apartments even which was promised to this OP2 and 3.  These OP2 and 3 are also sufferer and on the victims of OP1. They are also standing in the same position as the complainant. Therefore it is left to the complainant to the notice of this commission as the transaction took place and the breach of terms and conditions committed by OP1 and these OP2 and 3 are noway concerned with the same. They have not received a single pai from the complainant and there is no question of this OP2 and 3 compensating the complainant.  The complainant has purchased and entered into agreement for the apartment which has fallen to the share of OP1.  Since the complainant has not purchased the residential apartment unit allotted to the share of the land owners these OP2 and 3 need not either repay or pay compensation to this to the OP1.
21. It is further case of the OP2 and 3 that the complaint is not maintainable under law as per the provisions of RERA, which came into force.  Hence the present complaint cannot be proceeded under law since the parallel authority is available to the complainant. The dispute between the complainant and promoter are to be transferred to the K-RERA constituted under the RERA act. Hence OP2 and 3 prays for dismissal of the complaint.
22. The OP4 being the financial institution has filed separate version. It is the case of the OP4 that the complaint itself is not maintainable since the complainant is a borrower of the OP4 and does not found within the definition of consumer. The complainant failed to prove any deficiency of services against OP4.  This complaint is filed only to avoid his legal obligation towards payment of EMI to OP4. The complainant needs to approach the appropriate court for addressing his alleged claims.
23. It is further case of the OP4 that the complaint is bad for non joinder and mis-joinder of parties. The complainant along with his father late Sriman Shetty and M/s Sri Sai Enterprises had entered into loan agreement. After the demise of Sriman Shetty all the legal heirs of Sriman Shetty were not brought on record and M/s Sri Sai Enterprises who is also the signatory to the loan agreement are not the parties to the complaint. Hence complaint is not maintainable.
24. It is further case of the OP4 that there is no privity of contract between OP1 to 3 and 4. The complainant has approached this OP4 for creating an equitable mortgage on the said apartment and entered into a loan agreement on 31.08.2017 along with his late father Sriman Shetty and M/s Sai Sai Enterprises and this OP4 for an amount of Rs.80 lakhs. The terms of loan was 240 months. Accordingly the loan amount is disbursed by this OP4 and it was legal contract which was duly agreed and signed by all the parties without any form of duress or fraud.  The MOU was entered between the complainant his late father Srirama Shetty and Mantri Technology Consultation Ltd.  This OP4 is not privy to the said MOU nor it is a signatory to the said MOU. Hence the said MOU relied by the complainant is not binding on this OP4.
25. It is further case of the OP4 that the complainant has claimed more than 50 lakhs which is beyond the pecuniary jurisdiction of this commission. A tripartite agreement dated 31.08.2017 was also entered between the complainant, OP1 and OP4. The OP1 has reiterated the clauses F, G and clause 5 and clause 11 as per schedule 1 of the tripartite agreement the subvention period was for 29 months.  The tripartite agreement was entered on 31.08.2017 hence the subvention period was still 31.01.2020. From February 2020 the complainant was liable to pay EMIs as per the loan agreement.
26. The OP4 has given parawise reply to the complaint. It is further case of the OP4 that the proceedings before this commission is a summary proceedings and hence the documents needs to be produced at once by the complainant. This OP is not aware of the transaction between the OP1 and complainant and they are also not aware of the legal notice issued dated 25.10.2021 to the OP1. The complaint itself is not maintainable against OP4. Hence prayed for dismissal of the complaint.
27. The complainant No.1 has filed affidavit evidence on his behalf and also on behalf of complainants No.2 and3 and relies on Ex.P1 to P12 documents.   The authorized person of OP1 and filed evidence affidavit and has produced Ex.R1 document. OP2 has filed his affidavit evidence and produced Ex.R2 to R6 documents. OP3 has filed his affidavit evidence and produced Ex.R7 document and OP4 filed affidavit evidence and produced Ex.R8 document.
28. Heard the arguments of the complainant and he has filed written arguments. OP2 and 3 have filed their written arguments. Perused the written arguments of the complainant and OP2 and 3.
29. 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?

30.   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

31.    Point No.1 AND 2: Perused the complaint, documents, version and evidence of the complainants and OPs and arguments filed by both the parties. 

32.    The complainant No.1 has filed his affidavit evidence reiterated all the allegations made in the complaint. After considering the version and the documents filed by the OP1 to 4 it is clear that the OP1 being the builder has clearly admitted the agreements executed by him and also payments made by the complainant.  He has further admitted that as per the agreements the date of delivery of possession being 31.12.2019 with an extension of grace period.

33.     The complainant has also relied on copy of the sale agreement dated 31.08.2017 as Ex.P1, Copy of construction agreement as Ex.P2 and copy of Memorandum of Understanding as Ex.P3 and bunch of three copies of payment receipts as Ex.P4, copy of loan agreement as Ex.P5 and copy of statement of account issued by OP4 as Ex.P6, the copy of death certificate of his father H.N.Sriram Shetty as Ex.P7, copy of notice issued by OP4 Ex.P8, legal notice issued by the complainant as Ex.P9 and bunch of postal receipts as Ex.P10 and bunch of postal acknowledgements as Ex.P11 and bank statement issued by the OP4 as Ex.P12.

34.     On the other hand the Ops in order to prove their contention were examined as RW1 to RW4 and relied on Ex.R1 to R8.

35.     It is also admitted by the OP2 and 3 that they are the land owners of the complaint schedule property and they have further admitted that the project is developed by the OP in the schedule property is not at all completed by OP1 as per the terms of the Joint Development Agreement marked as Ex.R2 executed between the OP1 and OP2 and OP3. These OP2 and 3 being the landlords and all are primarily engaged in the business of real estate activity and they have further admitted about the two agreements entered between the complainant and OP1 for sale of undivided interest for valuable sale consideration and agreement for construction for cost of construction of apartment with common areas and amenities and further admits the agreement entered between the complainant No.1 his deceased father on 31.08.2017.  The OP4 being the banker have also agreed with the agreements they have financed with the schedule apartment of the complainant No.1 and his father.

36.     It is pertinent to note here that the father of the complainant is no more and his LRs were brought on record. It is also clear from the very version filed by OP1 to 3 that the OP1 being the builder and OP2 and 3 being the land owners have admitted about the Ex.P1 and P2. The OP2 and 3 have further admitted that the apartment complex is incomplete and there is a delay on the side of OP1.

37.     The OP4 being the bank have also clearly admitted that they have approved the loan to complainant NO.1 and his father and they have further admitted that they have entered into tripartite agreement dated 31.08.2017 as Ex.R8. as per clause 11 of the Ex.R8 it is clear that the cancellation of allotment by the developer or surrender or withdrawal by the borrower from the scheme for any reasons whatsoever the borrower shall continue to make the payments of EMI/pre EMIs as agreed in the disbursement letter entered with OP4 till the amount referred above is refunded by the developers failing which the OP4 shall have full rights to initiate legal action against the borrower.

38.     It is also clear from the very admission made by the OP4 that as per the schedule 1 of the tripartite agreement Ex.R8 the Subvention period for 29 months the tripartite agreement was entered on 31.08.2017. Hence the subvention period was till 31.01.2020.  The complainant was liable to pay EMIs from February 2020 as per the loan agreement.  The OP4 is aware of the entire scheme of the OP1.  As per para 8 of the Ex.R8

“if the borrower desire to withdraw and/or in case of death of the borrower and/or if borrower failed to pay the balance amount representing the difference between the loan sanctioned by OP4 and the actual purchase price of the property the entire amount advanced by the OP4 will be refunded by the developers to OP4 forthwith”.

39.     It is also clear from the para 9 of the Tripartite agreement,

“In the event of death of the borrower the developers may permit their legal heirs to have continue interest in the property if they immediately deposit with the developers the amount refunded to OP4 as provided herein and undertake to pay the developers all such further sum or sums as would have been payable by the borrower to the developers”.

40.     It is also clear from para 10 of the tripartite agreement that

“The developers in the event of default of repayment of loan by the borrower shall on written intimation/instructions of OP4 cancel the allotment of the property of the borrower and refund the entire amount advanced/funded by OP4 direct to OP4 and the developers shall have right to recover or forfeit the earnest money from the borrower”.

41.     Further para 14 of the tripartite agreement it is clearly stated that

“The developers undertakes to OP4 and the purchaser that it shall register the project under RERA before 31^st July 2017 or before the time stipulated by the state RERA authority and shall comply with the provisions of RERA act 2016 and the rules and regulations enacted thereunder or any other applicable law.”

42.     It is clear from the above that the OP4 banker asper the scheme has disbursed the amount and also made developer and other OP liable and undertake to register the project under RERA and shall comply with the provisions of RERA act.

43.     The OP1 to 3 being engaged in the business of real estate activities are promoters and landlords the complainant being a customer.  The complainant impressed by the amenities and security system and green building amenities has entered into agreement with the OP1 as per Ex.P1 and P2. He has booked the schedule apartment bearing C-1604 in C Block in 16^th floor having super built up area of 1355 along with proportionate undivided interest in the plinth area of the building in the land along with one covered car parking.  The complainant was instructed to enter into Ex.P1 and P2 by the OP1.  The cost excluding certain statutory deposit and maintenance deposit the Ex.P1 and P2 were entered on 31.08.2017 in the Joint name of the complainant No.1 and his deceased father.

44.     It is also further grievance of the complainant that at the time of booking the OP1 had offered a scheme 10:75 scheme/subversion scheme pre EMI scheme wherein the complainant had to pay only 10% of the aforesaid consideration and balance sale consideration upto 75% was to be paid through the loan raised from OP4.  The complainant was further informed by OP1 that until possession all EMIs will be deducted out of the sale proceeds payable by the complainant.  The OP1 further assured that he will be paying some of pre-EMI or EMI until possession or the same will be deducted out of the sale consideration. As per the offer the complainant paid a sum of Rs.11,24,068/- as per the demands made by the OP1. 

45.     It is further grievance of the complainant that all the agreements and MOU etc., were prepared by OP1 without giving any scope of negotiation or alteration by the complainant and the OP1 has obtained the signature to the said agreement which were in the nature of dotted line agreements. The complainant subsequent to entering into the agreements and looking into the methods of the payments did not understand the financial matrix and the same lead to lot of confusion which was never cleared by the OP1. As per the loan statement the OP4 has unilaterally disbursed Rs.41,61,727/- as loan disbursement and Rs.4,48,882/- was credited as principle repayment and Rs.9,33,391/- was retained as pre-EMI interest installment for the period commencing from 10.10.2017 to 10.11.2017 upfront.  The OP4 had collected all the requisite fee processing fee etc.,

46.     As per the scheme of the OP1, the OP4 sanctioned a sum of Rs.80,00,000/- and out of the sanctioned amount OP4 released over all a sum of Rs.54,44,000/- in three tranches. Out of the said money a sum of Rs.41,61,727/- was paid to OP1 and a sum of Rs.9,33,391/- is shown as disbursement internally and adjusted as pre-EMI installment without the installment actually becoming due and Rs.4,48,882/- is again internally adjusted as principal repayment without it becoming due.

47.     It is further grievance of the complainant that inspite of constant follow up the construction of the project the same is stand still position. The OP1 is seem to be disinterested to honor its commitment and failed to give any kind of service to the complainant.  The complainant has agreed to purchase the schedule apartment for the purpose of having community living however the OP1 have completely stalled many of towers and it is unlikely that the OP would complete the entire project in foreseeable future.  When the complainant has visited the project site it is clearly evident that the OP1 would not be able to complete and provide all amenities and delay in completion of project is inordinate.  The OP1 was supposed to complete the entire project by along with all the amenities by 31.12.2019. However inspite of lapse of more than two years the project is totally unfinished.  Due to inordinate delay in completion of the project the complainant has lost interest and he has stopped payment of EMI to OP4 and he has become a defaulter and also received notice from OP4.

48.     On the other hand the contention taken by the OP1 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 wide spread of covid pandemic and other reasons have slowed down the construction activity. Even though as per clause 6.1 of the agreement of construction this OP1 has to hand over the possession of the completed apartment to the complainant on or before 31.12.2019 with grace period of 12 months therefrom thus extending the date of delivery to 31.12.2020. This hand over of the possession was subject to the limitation mentioned in clause 6.1 as well as in 6.4 of the agreement for construction. As per which based on certain force majeure considerations which are out of the hands of OP1. This OP1 could be excused in case of delay arising from the happenings of events contemplated in clause 6.4 of the agreement of construction.

49.     It is the main contention taken by the OP that he was unable to complete the project since in past few years Bangalore has experienced very heavy rain fall with flooding which severely hampered the progress of the project during the monsoon months. It is further grievance of the OP that due to the crackdown of illegal sand mining there was a delay in supply of sand, the sand being a critical raw material in construction of building it adversely affect on the progress of the project.  In addition to this the demonetization was declared in November 2016 by the central government which hindered the progress of the project. The workers carrying on the construction work at the project were paid in cash. Due to demonetization there were several restriction in the withdrawal of cash as well as severe crunch in availability of the liquid cash so as to make prompt and timely payments.  When the OP1 slowly recovering from the blow of demonetization the entire real estate industry was dealt with another blow i.e., implementation of GST in July 2017. That leads to delay due to various new complications and filing that had to be done not only by this OP but also by its suppliers. When the OP1 had managed to overcome these hurdles again he has to deal with another major hurdle in the form of covid 19 pandemic and the subsequent lock down initiated by the union Government which had completely halted the construction of project due to non availability of labour and raw material. In any event the Karnataka RERA has taken into consideration the serious adverse impact on the construction sector due to the lock down vide its circular dated 19.05.2020 and it has extended the time for completion of the project by a period of six months and the time line was extended for compliance till 15.09.2020. When the project is under full swing to complete the same having not progressed as expected due to the aforesaid force majeure events like shortage of sand supply, flooding due to rain fall, pandemic and the lockdown and hence this OP cannot be held liable.  

50.     The only grievance of OP2 and 3 is that the agreement was entered between OP1 and the complainant and they are no way involved in the said agreements and they are not liable to pay any amount.  The OP4 has taken the contention that the complaint is not maintainable as it involves complicated questions of law the complainant would have approached the civil court and this commission has no pecuniary jurisdiction to try this matter.

51.     We have 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. 

52.     We have also relied on the decision 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.

We have 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.

53.     OP2 to 4 have also relied on the decisions of the Hon’ble NCDRC and Hon’ble Supreme Court of India, they have not at applicable to the facts and circumstances in this case.

54.     It is also clearly held in the above decision that the complainant is entitled for the refund of the amount with interest and if OP 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.

55.  It is undisputed fact that there was no covid pandemic in the year 2017, when the sale agreement was entered between the parties. The covid 19 problem was started from 2020 march afterwards. Even though there was a continuous flow of funds to the project from the OP4 the OP1 failed to complete the project by giving one or the other reasons. When the complainant has borrowed the loan and he was paying the EMI and has paid the substantial amount to the OP1 he cannot wait for an unlimited period. 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. 

56.     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 native places are all false. 

  57.   This complainant has 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 2019.  The OPs have crossed the stipulated time and they have 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.

 58.    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.  When the OP has failed to deliver the possession of building even after lapse of four years, the complainants are entitle for refund of the amount with interest and also the damages and litigation expenses.   Hence the complainants have clearly established the deficiency of service and negligence and unfair trade practice on the part of the OPs. 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.

59.     Point No.3:- In view the discussion referred above,

O R D E R

1. The complaint is allowed in part.
2. The Ops1 to 3 jointly and severally liable to pay Rs.32,22,377/- with interest @ 10% p.a., from the respective date of payment till realization.
3. Ops1 to 3 are further directed to close the outstanding loan amount along with pre-EMI, late payment, penalty due and other charges amounting to Rs.52,89,658/- to OP4 towards the loan account LNBANHL-09170031415 along with future interest, penalty etc., and to provide NOC.
4. The Ops 1 to 3 are further directed to pay compensation of Rs.5,00,000/- towards mental agony to the complainants along with litigation expenses of Rs.10,000/- to the complainants.
5. The OP shall comply this order within 60 days from this date of this order,
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 23^rd day of AUGUST, 2023)

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

Documents produced by the representative of opposite party1 – R.W.1; 

Documents produced by the representative of opposite party2 – R.W.2; 

Documents produced by the representative of opposite party3 – R.W.3; 

Documents produced by the representative of opposite party4 – R.W.4;