BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE

DATED THIS THE 26^TH DAY OF MAY 2021

PRESENT

HON’BLE Mr. JUSTICE HULUVADI G. RAMESH    : PRESIDENT

MR. KRISHNAMURTHY B. SANGANNAVAR      : JUDICIAL MEMBER

Consumer Complaint No.169/2009

O R D E R

BY MR. KRISHNAMURTHY B. SANGANNAVAR, JUDICIAL MEMBER

This is a complaint filed under Section 17 of the Consumer Protection Act 1986 to direct OPs to refund the entire amount of Rs.25.00 lakhs along with 18% p.a. interest from the date of payment till the date of refund and to pay Rs.5.00 lakhs as compensation and Rs.1.00 lakh towards mental agony.

2. The OPs herein had introduced as a land developer and builder formed a scheme for formation of residential apartment for general public under the name and style ‘KNS Sannidhi’ and they agreed to construct Schedule C flats for a total consideration of Rs.25.00 lakhs.  The complainant herein is a resident of Karatagi Village of Gangavathi Taluk situated in Koppal District which of course in Karnataka State.  He with an intention to purchase one residential apartment paid Rs.25.00 lakhs by way of cash to OPs with fond hope to believe that they would form a residential apartment.  In this regard they entered into an agreement on 01.07.2008 agreeing to sell an apartment measuring 1279.70 sq.ft. bearing flat No. 409 situated in 3^rd floor with covered car parking area in the stilt floor.  They agreed to provide electricity connections, sewerage, compound wall, car parking area, 24 hours water supply etc.  They agreed to complete the project by the end of August 2009.  However, unfortunately, OPs got flat No. 409 which was agreed to sell to complainant as per agreement dated 01.07.2008 was sold to one Smt.M.R. Varini W/o. N. Vasanth Kumar by executing registered sale deed dated 05.12.2008.  It is in this state of affairs sought for refund of Rs.25.00 lakhs along with interest at the rate of 18% p.a. and sought for Rs.5.00 lakhs towards damages and Rs.1.00 lakh towards mental agony caused to him.
3. The OPs by submitting their version have contended complainant is colluded with his brother Amaresh Honnagudi, who was given electrical contract by the OPs.  In view of his illegal activities the said contract came to be terminated.  At the time of entrusting electrical works to Amaresh Honnagudi, as he demanded OPs to provide blank cheques, blank letter heads with signatures of OPs and also an agreement for sale as security till completion of the electrification works at the said project.  Therefore, it became very much necessary for the OPs to provide such documents.  However, Amaresh Honnagudi colluded with his brother complainant herein has created all these documents which complainant found to be his case for refund of Rs.25.00 lakhs.  The OPs never received such amount from the complainant and the complaint is liable to be dismissed.
4. In view of rival contentions of complainant and OPs, the Commission held an enquiry by receiving affidavit evidence of complainant and Ex.C1 to C 5.  On the contrary received Ex.R1 to R31 documents for OP.  After conclusion of enquiry this Commission recorded finding that as there is a serious dispute which involves a legal question and matter requires detail trial and it would not be decided in a summary trial, thereby formed an opinion that matter involves legal question of facts has to be decided by civil court, thereby dismissed the complaint.
5. Aggrieved by the said order of this Commission complainant preferred an appeal in F.A.No.160/2011 before the Hon’ble National Consumer Disputes Redressal Commission which came to be allowed by an order dated 03.08.2016 by setting aside the order dated 25.02.2011, matter is remanded back to Commission to decide complaint on merits as per law after giving opportunity of being heard to the parties.
6. The parties to this complaint put their appearance after remand on 15.09.2016 and the Commission gave an opportunity of being heard to both parties.  Since, this is one of the oldest matters pending on the Commission, taken up for disposal in accordance with law as directed by the Hon’ble National Consumer Disputes Redressal Commission.
7. Commission perused contents of complaint, version, affidavit evidence and documents placed on behalf of parties.  Now we have to decide whether complainant has proved that OPs have entered into agreement of sale on 01.07.2008 agreeing to sell apartment bearing No.409 at 3^rd floor, measuring 1279.70 sq.ft. in KNS Sannidhi ?  If so, whether OPs are deficient in providing service pursuance to said agreement of sale ?  Further to examine whether complainant is entitle for refund of Rs.25.00 lakhs as prayed ?
8. At the very outset we have to examine the first  document  marked  as Ex.C1, an agreement entered between OPs and complainant on 01.07.2008 which in fact is not disputed by OPs either in their version or otherwise.  However, their contention would be that Mr. Amaresh Honnagudi is none other brother of complainant herein to whom OPs have given electrical contract in respect of the project in question and he in connivance with his brother complainant demanded them to provide blank cheques, blank letter heads with their signature with an agreement for sale as security till completion of the electrical works in the said project.  In other words, in such state of affairs OPs were forced to give such documents in favour of Amaresh Honnagudi and he has created documents through his brother complainant.  In this regard, it would be just and proper to examine the documents on behalf of OPs to rebut the case of the complainant.  They are copies of legal notice, reply notice, postal covers, copy of complaint in OS No.290/2009, written statement, copy of police complaint dated 30.10.2009, FIR.  Thus, we have to examine whether these documents would rebut case alleged in complaint by the complainant against OPs, in respect of agreement dated 01.07.2008.  The most important factor to be noted herein that Mr. Amaresh Honnagudi is not a party in this complaint nor the complainant herein his brother Mr. Veeresh Honnagudi is a party in  OS No.290/2009 on the file of Civil Judge, Jr. Division, Maddur in Mandya District.  If we examine copy of plaint M/s. KNS Constructions i.e., the OPs herein instituted a suit against M/s.ABK Electricals represented by its proprietor Mr. Amaresh Honnagudi as first defendant and Amaresh Honnagudi, as second defendant.  The relief sought in this suit is for grant of perpetual injunction against the defendants restraining from interfering with the peaceful business activities carried on by the OPs herein at the suit schedule property.  The second relief would be to restrain defendants from removing the electrical fittings, fixtures, pipes, control panel boards, transformers and such other items in relation to electrification works from the industrial shed/ factory building constructed by the OPs herein in the schedule property.  We could see the Schedule Property is described as plot No.26/A situated at Survey No. 12, Somanahalli Industrial Area within the limits of Somanahalli Village of Maddur Taluk in Mandya District totally measuring 4356.00 sq.mts. bounded on the East by KIADB road, West by Shimsha Canal, North by Temple land and Plot No. 26/A1 and South by plot No.27.  Thus, for this property OPs herein filed suit for injunction against Mr. Amaresh Honnagudi, who is not a party in the present complaint nor he is made a party by OPs herein.  Further to be noted herein Agreement for sale as founded in complaint by complainant herein as per Ex.C1 is entirely different property and it is in respect of purchase of apartment to be built under the name and style KNS Sannidhi for Rs.25.00 lakhs bearing flat No.409 situated at 3^rd Floor measuring 1279.70 sq.ft. which is situated in Bangalore District.  When this is dated 01.07.2008 and when complainant alleged against OPs that while this agreement of sale was in force, on 05.12.2008 Ops  sold this property to Mrs. M.R. Varini W/o. N. Vasanth Kumar under a registered sale deed, it is seen that under this sale deed OPs have sold the very property for Rs.20.00 lakhs by way of cash which the property agreed to be sold in favour of complainant as per Ex.C1 and further shown that complainant  is assessed  tax and shown he had sufficient source of income to mobilize Rs.25.00 lakhs paid to OPs and the OPs herein have also received Rs.20.00 lakhs under Ex.C2 through cash, as such inference could be similarly, under Ex.C1 could have also received Rs.2500 lakhs from complainant.  It is stated by  complainant that as he came to know  about sale of property agreed to be sold by OPs under sale deed dated 05.12.2008 is sold to the party stated above, could be said  rightly raised a consumer complaint under Section 17 of the Consumer Protection Act 1986 before this Commission on 24.12.2009. He got issued a prior legal notice dated 18.09.2009 while OPs replied on 30.09.2009.  Thus, on going through these documents coupled with documents produced on behalf of OPs and the legal notice dated 27.07.2009 issued by Mr. Amaresh Honnagudi, reply thereon by OPs dated 09.08.2009, police complaint against Amaresh Honnagudi, a civil suit as already stated above in OS No.290/209 we could opine, did not substantiate the defence put forth by OPs that they were compelled to hand over some blank cheques with their signatures, blank letter heads with their signatures and as security an agreement which is created by Mr. Amaresh Honnagudi in the name of his brother Mr.Veeresh Honnagudi.  If they had such defence could have set up such defence right from inception, by impleading Mr. Amaresh Honnagudi as one of the party either in this complaint or they could have also impleaded Mr. Veeresh Honnagudi in a suit filed by OPs against Mr. Amaresh Honnagudi on the file of Civil judge and JMFC, Maddur in Mandya District. 
9. In the above such circumstances, question of performing their performance pursuant to Ex.C1 agreement for sale does not arise at all, since they have already sold the said property for Rs.20.00 lakhs to a third party which is already stated above.  It is therefore, complainant has rightly raised consumer complaint for refund of Rs.25.00 lakhs paid by him under Ex.C1 in favour of OPs.  In this regard it would be appropriate to place reliance on judgment of Hon’ble Apex Court in Appeal (Civil) 7975/2001 in Dr.J.J. Merchant and Ors. Vs. Shrinath Chaturvedi in which it was observed as under:

“It was next contended that such complicated questions of facts cannot be decided in summary proceedings.  In our view, this submission also requires to be rejected because under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided.  Therefore, merely because it is mentioned that Commission or Forum is required to have summary trial would hardly be a ground for directing the consumer to approach the Civil Court.  For trial to be just and reasonable long drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary.  It should be kept in mind that legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground.  It would also be totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of facts are required to be dealt with or decided.  The Act provides sufficient safeguards.  For this purpose, we would refer to the procedure prescribed under the Act for disposal of the complaint”.

10. In fact this judgment is incorporated in paragraph 8 of the Hon’ble National Consumer Disputes Redressal Commission in F.A.No.160/2011 preferred by complainant herein Mr. Veeresh Honnagudi.  Further in paragraph 9, the judgement of Hon’ble National Commission in F.A.No.41/2008 – Sutlej Textile and Industries Vs. Punjab National Bank in which aforesaid judgement was followed and it was observed that Consumer Fora has sufficient mechanism to decide complaints. 
11. Thus, followed by the above two judgments and the materials placed herein by the complainant, it is seen that the very record is nothing to do with any of the cases filed by OPs against his brother Mr. Amaresh Honnagudi, the proprietor of M/s. ABK Electricals.  Further as already stated above that complainant herein is neither a party in the criminal proceedings nor in civil proceedings initiated by the Ops stated supra. The complainant herein although is a brother of said Amaresh Honnagudi, has placed sufficient materials to establish that OPs have received Rs.25.00 lakhs cash and executed an agreement for sale on 01.07.2008 agreeing to sell an apartment in KNS Sannidhi project and they failed to execute sale deed as promised and in fact on 05.12.2008 sold the very flat without notice to complainant herein to a third party which amounts to deficiency in service on their part is one thing, but, it also amount to unfair trade practice.  Accordingly, Commission record finding to that effect and held complainant is entitle to receive Rs.25.00 lakhs cash paid under Ex.C1.  In other words, OPs are liable to refund such amount along with interest from the date of Ex.C1 i.e., 01.07.2008 and till realisation.
12. Learned Counsel for complainant placed reliance on Hon’ble National Commission in Appeal No. 667/1993 decided on 21.06.1996, Revision Petition No.485/2001 decided on 05.12.2002, Revision Petition No.1114/2001 decided on 03.08.2001, Revision Petition No.2414/2002 decided on 18.02.2003 and revision Petition No.5/2003 decided on 31.01.2003 to substantiate that he is entitle for compensation, cost of litigation and interest at the rate of 18% p.a.   It is to be noted herein that he has paid cash on 01.07.2008 and not by way of cheques.  Of course, he has proved that cash has been received by OPs.  Thus, considering date of receipt of such cash by OPs and in consideration of guidelines issued by RBI from time to time irrespective of lending rate, justice would be met out by holding that complainant is entitled for interest at the rate of 9% p.a. from the date of receipt of such amount by the OPs and till realisation.  Further complainant is entitle for compensation of Rs.1.00 lakh as damages and for mental agony etc. and also cost of Rs.50,000/-.
13.  Thus, in the above such conclusion, Commission proceed to allow the complaint filed by the complainant under Section 17 of Consumer Protection Act 1986. 

          Accordingly, the OPs are directed to pay Rs.25.00 lakhs along with interest at the rate of 9% p.a. from 01.07.2008 till realisation. 

        Further they are directed to pay Rs.1.00 lakh as damages towards mental agony and hardship etc., and do pay Rs.50,000/- as litigation costs within three months from the date of receipt of this order. 

         The liability of OP Nos. 1 to 3 is held joint and several.

PRESIDENT

JUDICIAL MEMBER

CV*