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

DATED 17^TH DAY OF DECEMBER 2022

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 jointly and severally refund to the complainant the sum of Rs.16,80,000/- collected from the complainant together with interest @ 24% per annum, from the date of its respective payments till the date of realization.
2. Direct the Ops to pay a sum of Rs.5,00,000/- to the complainant towards, travel expenses, mental agony and physical stress and  strain suffered by the complainant for the deficiency of service on the part of the OP.
3. Grant such other and further relief as this Hon’ble Commission deems fit to grant under the circumstances of the complaint, in the interest of justice and equity.

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

The complainant is a practicing lawyer in Bangalore and he is representing the OP2 in several cases filed against the company owned by the OP2 in the capacity of director before various courts, tribunals and other authorities.  In view of the acquaintance during the year 2018 the OP2 has appriciated the complainant about the residential project called ‘LGCL happy days’.  the OPs have further represented that they have entered into joint development agreement dated 10.02.2017 with the land owner for the development of the lands in Sy.No.33/3 measuring 1 acre 4 guntas and land in sy.No.34/1 measuring 1 acre situated at Chikkagubbi village, Bidarahalli Hobli, Bangalore East Taluk.  The land owners have also executed GPA empowering the OP1 to fulfill the terms of the Joint development agreement.  

3.       It is further case of the complainant that the OP have apprised the complainant to buy the flat bearing No.A-227 having super built-up area 905 sq. feet on the second floor of phase 1 of the residential project LGCL happy days to be constructed on the above lands along with one covered car parking space for a total consideration of Rs.48,00,000/-.  

4.       The complainant has agreed to purchase the plot from the OP for the above said sale consideration and accordingly he has paid a sum of Rs.4,80,000/- by raising loan from Karnataka Bank on 02.02.2018.  The OP have acknowledged the receipt of the amount by issuing receipt on 02.02.2018.   After that OP1 has executed the sale agreement on 23.03.2018 in favour of the complainant’s where under the OPs have agreed and undertaken to complete the construction of the apartment and hand over the possession of the same on or before 31^st march 2021 as per clause 8 of the agreement of sale.  

5.       It is further grievance of the complainant that the OPs have further collected an additional sale consideration of Rs.12,00,000/- from the complainant on 28.03.2018 by pleading their financial inability to complete the construction of the project.  Thus the OP have totally collected Rs.16,80,000/- from the complainant being part of the agreed sale consideration.

6.       As per clause 8 of the agreement of sale the OPs are liable and responsible to complete the construction of the apartment and hand over the possession of the same to the complainant on or before 31^st March 2021 by executing necessary deed of conveyance but they have failed to complete the construction of the apartment. The complainant left with no alternative visited the project site on 03.06.2022 and to the shock and surprise of the complainant there was no construction activities are being taken up in the project and the construction was in the same stage as it was when the complainant booked the apartment during the year 2018.  After enquiry it is brought to the notice of the complainant that the project is stalled by the builder.  After that the complainant tried to contact the OP by visiting to their office but the office was also closed.  The attempts made by the complainant to contact the OP by over telephone was also went in vein.  There is already a delay of more than 12 months in completing the construction of the apartment and handing over the possession the OPs are duty bound to hand over the possession of the subject apartment or they have to refund the entire amount collected from the complainant along with interest and damages as per clause 10 of the agreement of sale.  

7.       The complainant has also got issued a legal notice on 07.06.2022 and it was returned with shara “the addressee left on 08.06.2022”.  The notice sent to OP2 was returned unclaimed.  The OP has rendered deficiency of service in not completing the construction of the apartment and handing over the possession.  Hence the complainant has filed this complaint.

8.       Though notice sent to OPs, same is returned with an endorsement unclaimed. Notice sent to OP1 was taken as served, since OP2 and 3 are the designated partners and the notice of OP2 and 3 amounts to service on OP1 partnership firm in view sec 24 of the Indian Partnership Act. Hence OPs placed exparte.

9.       The complainant has filed his affidavit evidence and relies on 10 documents. 

10.     Heard the arguments of advocate for the complainant.  Perused the written arguments filed by the complainant.

11.     The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

12.   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

13.   Point No.1 AND 2: Perused the complaint, evidence and documents produced by the complainant and also written argument of the complainant.  Inspite of service of notice OPs remained absent and they are placed exparte. Hence the complaint and the evidence and documents produced by the complainant remained unchallenged.

14.   It is clear from the evidence and documents produced by the complainant that the OPs have developed the residential project called LCGL happy days and the OP2 and 3 are the designated partners of the OP firm.  They have converted the lands bearing No.33/3 measuring 1 acre 4 guntas and sy.No.34/1 measuring 1acre situated at Chikkagubbi village and they have shown their brochure of the said project to the complainant.  

15.   The complainant being a practicing advocate was acquainted with the OP2 and 3 and he is also representing their cases before the various courts, tribunals.  He has entered into a sale agreement with OP1 and 2 to purchase plot No.A-227 having a super built-up area 905 sq. feet on the II floor of phase 1 of the residential project LGCL happy days to be constructed by the OP2 and 3 with one covered car parking space for a total consideration of Rs.48,00,000/-.  The complainant has entered into sale agreement with the OP on 23.03.2018 after received Rs.4,80,000/- on 02.02.2018.  After execution of the sale agreement the OPs have pleaded their financial inability and further collected Rs.12,00,000/- from the complainant towards sale consideration amount on 30.03.2018 and 15.05.2018 and they have totally collected Rs.16,80,000/-.  According to clause 8 of the agreement of sale the OPs have to complete the construction and hand over the possession of the same to the complainant on or before 31.03.2021. When the complainant has visited the project on 03.05.2022 to his shock and surprise there was no construction taken up in the project and the construction was in the same stage as it was when the complainant has booked the apartment during the year 2018.  After enquiry it is brought to the notice of the complainant that project is stalled by the builder.  

16.   The complainant tried to contact the OP2 and 3 in their office but the office was closed.  The efforts made by the complainant to contact the OPs through telephone also went in vein.  At last he has got issued a legal notice to the OPs on 07.06.2022.  The notice addressed to the OPs returned with shara “they left the address” and the notice sent to OP2 to his residential address was returned unclaimed and the notice to OP3 was duly served on 08.06.2022.  Inspite of service of notice, the OP neither complied the demands nor refund the amount.  

17.   In support of his contention the complainant has filed his affidavit and reiterated all the allegations made in the complaint and relied on 10 documents.  Ex.P1 is the Joint development agreement, P2 is the GPA, P3 is the receipt, P4 is the copy of the letter with copy of agreement of sale, P5 is the copy of the receipt, P6 is the copy of the bank statement and Ex.P7 is the copy of the legal notice, P8 is the bunch of postal receipts and P9 is the bunch of unserved postal cover, P10 is the postal track consignment.

18.   On these background we have gone through the following decisions;

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. 

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. 

National Consumer Disputes Redressal held in Mili Jain & two others –vs- Wave City Centre Pvt. Ltd., on 29^th October 2021

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

20.   It is clear from the very documents produced by the complainant that the complainant has entered into the sale agreement with the OP 23.03.2018 and as per the agreement the OP has to complete the construction and hand over the possession of the apartment within 31.03.2021. The OP has failed to complete the construction and deliver the possession of the apartment even at the time of filing of the complaint and even after filing of the complaint the OP is not ready to hand over the possession of the building. 

21.   The complainant who is the purchaser cannot wait for an indefinite period to take delivery of possession of the apartment after investing huge amount by raising loan from the banks. 

22.   When the OP has failed to deliver the possession of building within 31.03.2021, the complainant is entitled for refund of the amount with interest and also the damages and litigation expenses as per clause 8 and 10 of the agreement.   Hence the complainant has clearly established the deficiency of service and negligence and unfair trade practice on the part of the OP. 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.

23.   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.
2. The OP is directed to refund the advance amount of Rs.16,80,000/- with interest at 10% p.a., from the date of complaint till realization.
3. The complainant is also entitled for the compensation of Rs.2,00,000/- and litigation expenses of Rs.10,000/-.
4. The OP 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.16,80,000/- 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 17^TH day of DECEMBER, 2022)

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

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

NIL