COMPLAINT FILED ON:17.01.2011

DISPOSED ON:29.02.2012

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

       29^th DAY OF FEBRUAR-2012

  PRESENT:-  SRI. B.S. REDDY                      PRESIDENT

                     SRI. A. MUNIYAPPA                    MEMBER

       COMPLAINT NO.106/2011

O R D E R

SRI. B.S. REDDY, PRESIDENT

The complainant filed this complaint U/s. 12 of the Consumer Protection Act 1986, seeking direction against Opposite Parties (herein after called as OPs) to refund an amount of Rs.15,60,000/- and to pay compensation of Rs.1,00,000/- towards the hardship suffered with costs of the proceedings on the allegation of deficiency in service.

2. The case of the complainant to be stated in brief is that:-

Ops are carrying on the business activity as Developers of land by forming layouts and selling the sites to the buyers in the name and style of M/s ‘PRESIDENCY ELITE’. Ops advertised in a news papers offering to sell the residential plots developed by it, on various locations. The complainant expressed his desire to purchase residential plot. Accordingly, Ops agreed to sell three residential plots at ‘PRESIDENCY ELITE’ layout, Doddamarahalli, Yelluvahally, Varamallenahalli, Nandi Hobli, Chikkaballapura Taluk, Kolar District. Both the parties entered into three different agreements in respect of three residential plots bearing Nos.665, 690 and 381. Clause-6 of the agreement dt.15.05.2008 associated with the 2^nd Plot bearing No.690 and 3^rd plot bearing No.665, stipulated for Buy Back Scheme offer, wherein the complainant had the option to register the said property in his name or to sell the same under the buy back scheme to the OPs. Ops had agreed to buy back the said property with a condition that 1/3^rd amount of appreciation will be given on the booking amount (i.e.,75,000/-) along with the booking amount of Rs.2,25,000/- after 180 days from the date of booking within 3 months after the notice from the purchaser, the settlement of the payment cannot be delayed further (Clause 6 of agreement of sale dt.15.05.2008). The complainant made payments both by mode of cash as well as cheque towards advance Sale consideration amount for the purchase of the said three plots. Ops issued acknowledgment receipt for the same. The payments made are as under:

The Agreement of Sale dt.15.05.2008 and 16.08.2008 are produced and the receipts issued by OP are also produced. OP assured that the required approval for the layout would be obtained within a short time. In case of delay or failure to execute Agreement within three months to get an approval to form layout and execute the sale deed, Ops agreed to repay the advance sale consideration paid in respect of first and 2^nd plot with appreciation amount of Rs.75,000/- totally amounting to Rs.6,00,000/- and for the 3^rd plot bearing No.381, OP agreed to pay the advance with appreciation of 60% as held by the agreement thereby totally amounting to Rs.9,60,000/-. However, after receiving the advance sale consideration, OP never bothered to inform the status to the complainant with respect to the approval of the layout nor furnished the date for executing of the sale deed. In spite of several requests, OP failed to get the sale deed registered. OPs were giving false assurances that the layout would be approved shortly and needful would be done. Even after the lapse of 2 years neither returned the advance amount nor executed the registered sale deed. Despite several requests, OP never bothers to register the sale deeds or return the advance sale consideration. With respect to the plot bearing No.690, OP has convanted with one Smt.Suman Lata through an agreement of sale dt.27.05.2008 for the same 2^nd plot which the complainant had already entered into an agreement of sale with OP. The complainant got issued legal notice dt.06.01.2011 calling upon the OP to refund the amount the said notice returned with endorsement as OP “LEFT” the address. Thus the complainant felt deficiency of service on the part of the Ops and filed the complaint.

3. On appearance OPs filed version contending that the complaint is not maintainable, the same is liable to be dismissed. It is admitted that the complainant had entered into an agreement of sale in respect of plot No.665  formed in the layout called as ‘PRESIDENCY ELITE’ and had paid a sum of Rs.2,25,000/- towards advance sale consideration. It is stated that OP had informed the complainant that the previous government in order to approve the Master Plan had banned land conversion and layout development from July 2006 because of which the Op was not able to get any conversion or any plan from the concerned authority. The Government by approving the master plan, unlocked the said land lock and now the OP has applied for conversion and approval of the layout. Delay in completion of the project is not intentional and it is only due to restriction laid by the Government. The complaint is bad for non-joinder of necessary parties. The complainant is not a ‘Consumer’ as defined under the CPA, the dispute is not a ‘Consumer’ dispute, the complaint is barred by limitation. Hence, it is prayed to dismiss the complaint.

4. In order to substantiate the complaint averments, the complainant filed affidavit evidence. Ops not filed the affidavit.

5.The complainant filed written arguments.

6. Arguments on the complainant’s side heard, Ops side taken as heard.

7. Points for consideration are:  

Point No.1:- Whether the complainant proved

                   deficiency in service on the part of

                    the OPs?

Point No.2:- Whether the complainant is entitled

                    for the relief’s now claimed?

Point No.3:- To what Order?

8. We record our findings on the above points:

Point No.1:- Affirmative.

Point No.2:- Affirmative in part. 

Point No.3:- As per final Order.

R E A S O N S

9.   The copies of the agreement of sale deeds dt.15.05.2008 produced by the complainant clearly goes to show that OP1 has received an amount of Rs.2,25,000/- in respect of site No.665 and another sum of Rs.2,25,000/- in respect of site No.690 proposed to be formed in the layout called                 “M/s Presidency Elite”. Further the agreement deed dt.16.08.2008 reveals that OP1 has received an amount of Rs.4,00,000/- through cheque dt.14.08.2008 towards initial sale consideration in respect of site No.381 proposed to be formed the said layout. OP1 was unable to form the layout by acquiring the land as it is stated that the State Government banned land conversion and layout development from July-2006 and the said land lock was unlocked recently. It is stated that the OP1 has applied for the conversion and approval of the layout from the concerned authorities. The process of completion of the project is very much on and it shall be completed within period of 6 months. OP1 has not produced any material to substantiate this fact. The complainant cannot be made to wait indefinitely till OP gets the conversion and approval of the layout. When OP1 was unable to get the conversion of the land and approval of the layout, it would have been fair enough on its part to refund the amount received as initial sale consideration for all the 3 plots booked by the complainant. OP1 has issued the receipts acknowledging the receipt of the amounts paid for these 3 sites.

10.   There is no merit in the contention that the complainant is not a ‘Consumer’ and complaint is barred by limitation. The initial sale consideration paid towards the sites to be registered includes the service charges for development of the layout as such the complainant is a ‘Consumer. Once the complainant has paid the initial consideration and booked the sites, recurring cause of action arises till OP1 allots the sites by executing the sale deeds or refund the amount received.

11.   The complainant cannot enforce the Buy Back Scheme in respect of plot No.665 and 690 as per Clause-6 of the agreement deeds. For the reason that the project has not yet commenced and if such Buy Back Scheme is to be enforced, the same amounts to earning profit by booking the site and selling the same to the developer which may not amounts to ‘Consumer dispute’ and such claim would not fall within the consumer dispute under the Consumer Protection Act. Without there being any land acquired for formation of the layout and approval of the layout OP was not justified in receiving initial sale consideration and executing the agreement deeds. The act of OP1 neither developing the layout and allotting the sites nor refunding the initial sale consideration received amounts to deficiency in service and unfair trade practice. The complainant is entitled for refund of initial sale consideration paid for 3 sites totally amounting to Rs.8,50,000/- with interest at 18% p.a. by way of compensation from the respective date of payments, till the date of realization along with litigation cost of Rs.3,000/- from OP1.

12.   Op2 is not a party to the agreement deeds and there is no privity of contract in respect of the transaction between the complainant and OP2 as such the complaint against OP2 is liable to be dismissed.  Accordingly we proceed to pass the following:

O R D E R

        The complaint filed by the complainant is allowed in part against OP1.

OP1 is directed to refund an amount of Rs.8,50,000/- with interest at 18% p.a. from the respective date of payments, till the date of realization and pay litigation cost of Rs.3,000/- to the complainant.  

The complaint against OP2 stands dismissed.

This order is to be complied within four weeks from the date of its communication.

 Send copy of this order to both the parties free of costs.

(Dictated to the Stenographer and typed in the computer and transcribed by her, verified and corrected, and then pronounced in the Open Court by us on this the 29^th day of February– 2012.)

MEMBER                                                         PRESIDENT

Cs: