BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 21^st DAY OF JULY 2016

O R D E R

SRI. P.V SINGRI, PRESIDENT

The complainant has filed this complaint U/s.12 of the Consumer Protection Act, 1986 against the Opposite Parties (herein after referred as OP) with a prayer to direct them to pay him a sum of Rs.12,87,750/- together with damages of Rs.2,00,000/-, compensation of Rs.2,00,000/- along with litigation cost of Rs.25,000/-.

2. The brief averments made in the complaint are as under:

The complainant had entered into an agreement of sale dated 11.01.2014 with the OPs in respect of flat bearing no.P512 in Block-P of ‘Ittina Mahaveer’ situated at Bettadasanpura Main Road, Doddathagur Village, Begur Hobli, Bangalore with super built up area of 575 square feet for a total consideration of Rs.17,37,800/-.  That in pursuant of the said agreement the complainant paid an advance amount of Rs.2,37,750/- to OP-1.  That the complainant availed loan facility from Karnataka Bank, Sarakki Branch for the purpose of completing the sale transaction.  The complainant along with above said Bank and OP entered into a Tripartite Agreement and in pursuance of the said agreement, the Karnataka Bank paid a further sum of Rs.10,50,000/- to the OP-1 as further sale consideration which has been acknowledged by OP-1.  As per the terms of the agreement of sale the OP-1 should have delivered the vacant possession of the schedule property within two months from the date of agreement of sale dated 11.01.2014.  The complainant having believed the assurance of the OPs entered into sale agreement of same and paid the above mentioned amount to the OPs.  The complainant has paid a total sum of Rs.12,87,750/- to OP-1 which has been acknowledged by OP-1.

Despite having received the above mentioned amount, OP-1 failed to show any progress in the construction of the Flat and went on delaying the completion and execution of the registered sale deed.  OPs failed to abide by the terms and conditions of the agreement of sale thereby committed deficiency of service.  When the complainant noticed the lethargic attitude of OP-1 in completing the construction work he issued a letter dated 28.08.2014 asking for registration of the Flat or refund of the entire advance amount of Rs.12,87,750/- with interest and penalty.  Though OP-1 received the said letter but failed to comply the same and issued a evasive reply on 03.09.2014.  That the OP failed to adhere to the terms and conditions of the agreement of sale and also failed to handover vacant possession of the Flat and get the same registered in favour of complainant despite having received substantial amount within period stipulated in the agreement of sale.  The OPs are unnecessarily harassing the complainant having received substantial amount.  That the complainant is regularly paying the instalments to the Bank from where he borrowed loan to pay the consideration amount to the OPs.  Due to the conduct of OPs, the complainant has been put to great inconvenience, harassment and mental agony.

For the reasons stated above, the complainant prays for an order directing the OPs to refund him total sum of Rs.18,87,750/- including damages of Rs.2,00,000/-, Rs.2,00,000/- towards mental agony and suffering, Rs.2,00,000/- as compensation and Rs.25,000/- towards litigation cost.

3. OP-1 in response to the notice entered their appearance through their advocate and filed their version contending in brief as under:

It is true that the complainant entered into an agreement of sale dated 11.01.2014 with OP-1 in respect of Flat bearing No.P512 as claimed in the complaint.  That it is true that the complainant has paid an advance amount of Rs.2,37,750/- in terms of the said agreement of sale.  That the agreement of sale is in independent capacity and not as a developer/builder.  Therefore, OP-1 is not a service provider and complainant is not a ‘consumer’.  Hence, the present complaint is not maintainable in this Forum.  That the complainant has to approach the Civil Court for enforcement of the agreement of sale.  That the complainant except paying Rs.2,37,750/- has not paid the balance amount as required under the agreement and failed to perform his part of contract.  That the complainant has failed to pay the balance amount within time stipulated in the agreement.  The complainant has failed to perform his part of contract and was never ready and willing to perform his part of contract.  That this Forum has no jurisdiction in view of the arbitration clause in the agreement of sale.  That this OP was always ready and willing to perform their part of contract in terms of the agreement.  That due to failure on the part of the complainant to pay the balance amount, the agreement of sale could not be completed.  Therefore, OP-1 prays for dismissal of the complaint.

Though OP-2 appeared but failed to file their version and contest the complaint.

4. Subsequent to filing of the version by the OP-1, the complainant was called upon to submit his evidence by way of affidavit.  Accordingly, the complainant submitted his evidence by way of affidavit.  OP-1 also submitted his evidence by way of affidavit.  The complainant has produced several documents including copy of agreement of sale to substantiate the allegations made in the complaint.

5. The points that arise for our determination in this case are as under:

        6. Perused the allegations made in the complaint, averments made in the version, sworn testimony of both parties, documents produced by the complainant and other materials placed on record.  Also heard the arguments advanced by learned advocate appearing for both sides.

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

REASONS

8.  The agreement of sale dated 11.01.2014 is admitted by OP-1.  There is also no dispute as to the description, identity of the Flat as well as the total consideration agreed for the said Flat.  As could be seen from the agreement of sale, OP-1 is GPA holder of OP-2 M/s.Lalita Developers.  OP-1 M/s.Ittina Properties Private Ltd., is represented by its authorized signatory Mr.Manu Ittina S/o Late Mahabaleshwarappa.  The authorized signatory of OP-1 Mr.Manu Ittina has been described as developer in the agreement of sale.  Thus the description of OP-1 itself discloses that he is a developer and builder.  Therefore, he is a service provider and the complainant is consumer.  Absolutely there is no truth in the contention of OP-1 that the agreement of sale in question was entered into by OP-1 in his individual capacity.  As could be seen from the agreement of sale the same has been executed by OP-1 M/s.Ittina Properties represented by their GPA holder M/s.Ittina Properties Pvt. Ltd., (OP-1) and M/s.Ittina Properties Private Ltd., represented by its authorized signatory Mr.Manu Ittina.  Therefore, in view of the description of the vendors given in the agreement of sale, we are of the opinion that the OPs are land developers and builders and the agreement of sale was executed in the capacity of Builders and Developers and not in individual capacity as claimed by OP-1.

9. The Learned Advocate for the OP-1 argued that in view of Arbitration Clause in the agreement of sale, this Forum has no jurisdiction to entertain the present complaint.  In view of the provisions contained in section.3 of Consumer Protection Act, 1986 this Forum is competent to entertain the present complaint despite Arbitration Clause in the agreement of sale.

10. OP-1 in his version contended that he has received a sum of Rs.2,37,750/- only, from the complainant and has not received any other amount other than the said amount.  In para-7 of the version, OP-1 further contended that, the complainant was required to pay balance amount of Rs.15,50,000/- and since he failed to pay the amount the agreement of sale could not be completed and the sale deed could not be registered.  This statement of OP-1 is false and baseless in view of their own letter dated 03.09.2014 which was written to complainant in response to his letter dated 28.08.2014 in which OP-1 clearly admitted that apart from receiving Rs.2,37,750/- from the complainant they have received Rs.10,50,000/- from Karnataka Bank Ltd., against loan for the Flat No.P-512, Ittina Mahavir.  This conduct of OP-1 in denying the receipt of Rs.10,50,000/- in its version indicates their oblique motive and their intention to cheat the complainant.  The copy of the Tripartite Agreement produced by the complainant as well as the copy of the Bank statement produced and admission of OP-1 in their letter dated 03.09.2014 establish that immediately after the Tripartite Agreement a sum of Rs.10,50,000/- has been paid to OP-1 by the Karnataka Bank Ltd.  Thus the complainant has paid a total sum of Rs.12,87,750/- to OP-1 in compliance of the terms and conditions of the agreement of sale.  Though the complainant was required to pay Rs.15,50,000/- to OP-1 only at the time of registration however much earlier the registration the complainant has paid Rs.10,50,000/- to OP borrowing the same from Karnataka Bank, Sarakki Branch.  The complainant by paying Rs.12,87,750/- showed his willingness and readiness to get the said Flat registered in his name.  Therefore, we don’t find any truth in the allegations of OP-1 that the complainant was never ready and willing to perform his part of contract.

11. As per the terms and conditions of the agreement of sale, the OPs have agreed to execute the registered sale deed of the Flat in favour of complainant and deliver possession of the same within two months by receiving balance amount within two months from the date of agreement of sale with a grace period of three more months.  The complainant has produced a letter dated 11.04.2014 issued by OP-1 in which it has been stated that Flat No.P-512, Ittina Mahavir purchased by the complainant would be ready for occupancy by May 2014.  However, OP-1 has failed to complete the construction of the said Flat within May 2014 as promised in the said letter.  Subsequent to the said letter dated 11.04.2014 OP-1 never written any letter or communication to complainant stating as to the status of construction of the said Flat and the month or date on which the same would be ready for occupation.  Thus it is evident that OP-1 has miserably failed to perform their part of contract under the agreement of sale.

12. When OP-1 failed to adhere to the terms and conditions of the contract and also their letter dated 11.04.2014, the complainant having no other option shot them a letter dated 28^th August 2014 calling upon OP-1 to refund the advance amount received from him together with interest, penalty etc., for their failure to execute the registered sale deed as promised by them and also for their failure to refund the advance amount by 12^th August 2014.  The complainant has also mentioned in the said letter as to the withdrawal of Power of Attorney executed by OP-2 in favour of OP-1.  In response to the said letter OP-1 by their letter dated 03.09.2014 accepted the cancellation request of the complainant and promised to refund advance amount to the complainant, however after deduction of 30%, as administration charges.

13. As stated in the above paragraphs, it is the OP-1 who has failed to execute the registered sale deed in favour of complainant by receiving balance amount in terms of conditions of the agreement of sale.  OP-1 never intimated the complainant as to when the construction of the Flat would be completed and when the vacant possession would be handed over to him by executing a registered sale deed.  OP-1 subsequent to letter dated 11.04.2014 never communicated the complainant as to when the said Flat would be ready for occupation.  OP-1 having failed in performing their part of contract have certainly no right to deduct any amount from the advance amount received from the complainant.  The complainant who has borrowed a sum of Rs.10,50,000/- from the Bank is paying instalments together with interest to the Bank as could be seen from the Bank statements.  Due to the failure on the part of OP-1 in performing his part of obligation, the complainant has been put to great hardship, inconvenience and mental agony.  Therefore, in our opinion the complainant is justified in demanding damages and compensation from the OP for deficiency of service on their part.  OP-1 having failed to adhere to the terms and conditions of agreement of sale retained huge amount of Rs.12,87,750/- with them illegally.  OP-1 haing unable to execute a registered sale deed in favour of complainant ought to have refunded the advance amount immediately as promised by them in their letter dated 03.09.2014.  Therefore, we are of the opinion that, the OPs have to be directed to refund the advance amount received from the complainant together with damages of Rs.2,00,000/-.  Further in view of huge inconvenience, harassment and mental agony caused to the complainant, OPs have to be directed to pay compensation of Rs.2,00,000/- together with litigation cost of Rs.4,000/-.

14. The order could not be passed within the stipulated time due to heavy pendency. 

15. In the result, we proceed to pass the following:   

  O R D E R

The complaint filed by the complainant U/s.12 of the Consumer Protection Act, 1986 is allowed in part.  OPs are jointly and severally directed to refund a sum of Rs.12,87,750/- (Rupees Twelve Lakhs Eighty Seven Thousand Seven Hundred and Fifty only) to the complainant together with damages of Rs.2,00,000/-.  Further OPs shall pay compensation of Rs.2,00,000/- to the complainant for deficiency of service resulting in hardship and mental agony to him with litigation cost of Rs.4,000/-.

OPs shall comply the said order within four weeks from the date of communication of this order.

Furnish free copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 21^st day of July 2016)

MEMBER                            MEMBER                    PRESIDENT

Vln* 

Witnesses examined on behalf of the complainant dated 11.11.2015.

1. Sri.Nazeem Ulla Khan.

Documents produced by the complainant:

Witnesses examined on behalf of the Opposite party/s dated 06.01.2016.

1. Sri. Manu Ittina.  

Documents produced by the Opposite Party/s – Nil

  MEMBER                           MEMBER                     PRESIDENT

   Vln*