COMPLAINT FILED ON: 11.06.2010

DISPOSED ON: 13.12.2010

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

13^TH DECEMBER 2010

  PRESENT :- SRI. B.S. REDDY                             PRESIDENT

                     SMT. M. YASHODHAMMA                MEMBER  

     SRI. A. MUNIYAPPA                         MEMBER         

       COMPLAINT NO.1307/2010

ORDER

SMT. M.YASHODHAMMA, MEMBER

          This is a complaint filed u/s.12 of the Consumer Protection Act of 1986 by the complainant seeking direction against the Opposite Parties (herein after called as O.P) to Pay

a)     A sum Rs.4,27,312/- towards penalty of 7% p.a. after deducting Rs.8,86,736/- due from the complainant.

b)    Complete all the construction, provide utilities BWSSB water, electricity supply, gas, complete construction of the Club house and recreational facilities and register the Sale deed in respect of the Schedule Property in favour of the complainant and hand over the possession.

c)     Penalty at the rate of 7% p.a. on the sale consideration paid by the complainant from the date of the filing of this complaint till the date of registering the sale deed and handing over the possession of the Schedule property to the complainant on the allegations of deficiency in service on the part of OPs.

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

          Complainant lured away with the offer made by the OP-1 who is the Builder of the project known as “Prestige Shanthiniketan” which is residential and commercial development. OPs are developing residential apartment complex on property measuring about 56 acres 39 guntas in survey Nos.70.71,72,73,74/1, 74/2 and 77 of Sadaramangala Village, and Survey No.130 of Hoodi Village, Krishnarajapuram Hobli, Bangalore South Taluk which is owned by the OP-2.  The residential apartment complex will be consisting of 24 towers and each tower further subdivided into units/apartments of various sizes and common areas such as staircases, lobbies, basement, etc together with facility of a club house, parks and open spaces, roads, pavements, drive ways and other amenities and infrastructures.  Complainant entered into an agreement to sell dated: 11.09.2006 with the OP-2 as the seller and OP-1 as the builder for the purchase of a residential flat bearing No. 4142 at level 14, Block 4, Prestige Shantiniketan, having super built up area of 1418 sq.ft and 1418/6200858 undivided share of the land along with one car parking space for the sale consideration of Rs.40,03,600/-. Copy of the agreement produced as per the clause 5(a) of the agreement to sell on 01.07.2005 OP had undertaken that possession of the schedule property would be delivered and sale would be completed within 39 months i.e. within 01.10.2008, with grace time of 3 additional months. OP is under contractual obligation to complete the construction and hand over possession and complete the sale of the Schedule Property latest on 01.01.2009 in favour of the complainant.  As per the clause 5(c) of the agreement to sell OP-2 agreed to pay the purchaser interest at the rate of 7% p.a. on the amounts paid under the agreement for any delay in completion of sale and delivery of possession of the Schedule property to the complainant.  Complainant made all the payments as per the payments schedule and has paid till date Rs.38,12,921/- under the said agreement to the sell.  Complainant ready and willing to pay even the last instalment of Rs.1,10,110/- but did not pay the same on instructions from the OP-1 who asked him to hold the payment on account of the delay in completion of the project.  Even in June 2010 construction of the residential complex is neither completed nor possession is handed over or the sale transaction has been complete even after the lapse of the grace period. It has been almost 18 months passed OP failed to hand over the possession of the same. OP had informed the complainant through its letter dated 01.03.2007 the revised handover date of the Schedule Property will be 31.12.2008 as OP has facing certain labour and sand delivery problems. The said letter was sent in 2 copies. In second copy of the letter the revised handover date was mentioned as 31.03.2009.  Hence complainant sent reply on 13.03.2007 to OP-1 bringing the said fact to the notice of the OP and further stated in his letter that OPs are liable to pay interest at the rate of 7% p.a. to the complainant on account of the delay as per the terms of the agreement. OP did not reply to the said letter. But confirmed over the phone that the date of handing over of Schedule property would be 31.03.2009. On 29.08.2008 OP-1 sent another letter stating last 3 towers of residential buildings would be completed by the second quarter of 2009 and were going to start the handing over the residential apartments in a phased manner from the beginning of April/May 2009 onwards. But in October 2008 the project was nowhere near completion and in fact there were serious lapses in the construction.  In the 2008 on two occasions there were instances of some floors of the block have collapsed due to sub standard construction and engineering and workers had died. On 24.10.2008 OP-1 sent a letter to complainant stating there was an accident at commercial tower ‘C’ which had collapsed and that they had suspended construction of commercial Tower ‘C’ till complete technical reports were received.  This fact was reported in Bangalore Mirror” dated 12.12.2008. On 19.11.2008 complainant received another letter from OP-1 stating that they had tied up with M/s. Home Solutions Retail India Ltd. (HSRIL) and Berloni and developed standard design options for modular kitchens and asked the complainant to select from the design options given in the brochures.  Since the said design were very expensive complainant selected some of the designs of Berloni and paid Rs.3,83,691/- as advance towards interiors and Rs.8,600/- towards installation of mosquito mesh. All these payments were additional and not mentioned in the agreement to sell. On 20.04.2009 again OP-1 sent a letter to the complainant stating they are in the completion and finishing phase and apartment would be ready for handing over in the month of September 2009. Complainant was asked to make a payment of Rs.19,500/- for the Gas piping, which was duly paid by the complainant. Finally on 03.02.2010 OP-1 sent another letter to the complainant informing him that the delivery of the Schedule property was again delayed.  Construction of the club house was still under process and that the Occupancy Certificate was not yet obtained, they have applied for it and also asked the complainant to make payments towards the car parking, service tax, advance maintenance charges and sinking fund, after receiving the same, they would complete the construction and hand over possession of the Schedule property.  No further correspondence was received intimating the complainant the exact amounts to be paid and the exact date of handing over and registration of the sale deed for the schedule property.  Frustrated by the inordinate delays on the part of the builders i.e OP-1, on 24.03.2010 complainant sent a letter to OP-1 narrating all the developments which took place since the day of agreement to sell was signed between the parties mentioning extensions, delays and lapses on the part of the OP and asked for the interest at the rate of 7% p.a. to be paid to the complainant for duration of the delay. Complainant also asked for refund of Rs.3,83,691/- paid towards the kitchen and wardrobes as the kitchen interiors were of substandard quality and other amenities like club house, water, gas piping etc. was not yet ready.  Therefore complainant would not make the last payment due unless all the work was completed.  On 15.04.2010 OP-1 sent reply admitting that with regard to the kitchen interiors, several other options were made available from other vendors due to customer demands and further states that the gas piping was not operational and that BWSSB water supply was also not operational.  Further OP admits the receipt of amount of Rs.8,86,736/- from the complainant and to take possession of the schedule property no mention was made as to sale deed along with reply and final invoice, showing accounts as of 16.04.2010 was sent to the complainant. As per this invoice complainant has paid Rs.38,12,921/- out of total sale construction of Rs.46,99,657/-.  There was a delay of more than 21 months which amounts to gross deficiency in service on part of the OP. Since facilities have not been provided schedule property is not in a condition to live in. OPs are liable to pay interest at the rate of 7% p.a. on the sale consideration paid by the complainant being Rs.38,12,921/- from the lapse of the grace period i.e. from 01.01.2009 to till date pursuant to clause (C) of the agreement to sell; Which amounts to total of Rs.4,00,357/- till  June 2010. OP has failed to complete the construction in time and not registering the sale deed in favour of the complainant failed to provide all services and facilities such as BWSSB water, gas piping, club house, common areas, power supply recreational facilities landscaping due to which the apartment cannot be effectively occupied. No occupancy certificate has been obtained by OP. Further Rs.3,83,691/- charged for the kitchen interiors by the OP is extremely high now complainant has been called upon to make the balance payment due of Rs.8,86,736/-.  Complainant is ready and willing to make payment of the same but upon the condition that the construction and all the facilities are completed and upon registration of the sale deed and handing over of possession to the complainant. The service of OP were deficient due to which complainant incurred severe financial losses. Hence complainant felt deficiency in service against the OPs under the circumstances he is advised to approach this forum for the necessary relief’s.

3.      After registration of the complaint notices were sent to OPs. In spite of service of notice OP-1 remained absent. In spite of notice by way of paper publication OP-2 also failed to appear before this forum without any sufficient reason or cause. Hence OP-1 and 2 are placed ex-parte.

4.      In order to substantiate the complaint averments, complainant filed his affidavit evidence and produced copy of agreement to sell dated 11.09.2006, letter dated 01.03.2007 along with second copy, copy of the reply letter dated 30.03.2007, copy of the letter dated 29.08.2008, copy of the newspaper report dated 12.12.2008, copy of the letter dated 19.11.2008, receipts for payments of advance towards interiors and for Gas pipe, copies of the letters dated 03.02.2010, 24.03.2010, 15.04.2010.  OPs not participated in the proceeding. Heard the complainant advocate. 

5.      It is contended by the complainant that he entered into an agreement to sell dated 11.09.2006 with the OP-1 & 2 who is a seller and builder for purchasing a residential flat of a built up area of 1418 Sq.ft. in flat No. 4142 in the project known as “Prestige Shanthiniketan” situated at Krishnarajapuram Hobli, Bangalore South Taluk for a total sale consideration of Rs.40,03,600/- OPs had agreed to complete the project and hand over the possession of flat within 39 months from 01.07.2005 with 3 months grace period i.e by 01.10.2008.  Complainant has paid all the instalments except last instalment as early as 24.04.2008; Complainant is ready to pay the balance amount also which is due on possession. OPs have miserably failed to perform their part of the agreement without any justifiable reasons. We have perused the copy of the agreement to sell dated 11.09.2006.  As per clause 5 (C) of the agreement to sell OPs have agreed to pay interest at the rate of 7% p.a. on the amounts paid by the complainant, for the delay caused in completion of construction and sale and delivery of  the flat.

6.      We have perused the newspaper report and the correspondences made by OP dated 30.03.2007, 29.08.2008, 24.10.2008, 19.11.2008, 20.04.2009 and 03.02.2010.  Seeking extension of time admitting that construction accident occurred on 23.10.2008 and some floors of the block ‘C’ have collapsed due to substandard construction and regretting for rescheduling the delivery of flat even in February 2010 i.e even after delay of 21 months.  Hence as per clause 5(C) of the agreement OPs are liable to pay penalty at the rate of 7% p.a. on the amount paid by the complainant i.e. Rs.38,12,921. Even in letter dated 15.04.2010 OPs have not mentioned the date of completion and handing over of possession of the flat to the complainant.  The complainant has suffered delay of around two years.

7.      As per clause 5 (C) of the agreement; OPs are liable to pay interest at the rate of 7% p.a. to the complainant on the amount paid under the agreement for any delay in completion of construction  and sale and delivery of the possession of the Schedule property to the complainant.  Complainant had made all the payments except balance of Rs. 8,86,736/- to OP. complainant is ready and willing to make the payment as soon as OPs completes the project and register the sale deed and hand over possession to the complainant.

8.      On 03.11.2010 counsel for complainant filed a memo stating complainant does not press the reliefs claimed under clause (B) of the prayer column. Same was allowed by this Forum.

9.      We have perused unchallenged affidavit evidence of the complainant and documents produced. There is nothing to discord the sworn testimony of the complainant. From the absence of the OPs-1 & 2 we can draw the inference that OPs admit all the allegations made by the complainant in toto.  OPs having entered into an agreement to sell with the complainant and having accepted the sale consideration failed to complete the construction work and complete the facilities within the time stipulated in the agreement and also failed to register sale deed and hand over possession to the complainant, in spite of repeated request and demands made by the complainant. This act of the OPs amounts to deficiency in service on their part.  We are satisfied that complainant is able to prove the deficiency of service on the part of the OPs.  Under the circumstances we are of the considered view that complainant is entitled for payment of penalty at the rate of 7% p.a. on the amount paid by the complainant to OP for the period of delay. Accordingly we proceed to pass the following:

ORDER

Complaint is allowed in part.  OP 1 & 2 are directed to pay penalty at the rate of 7% p.a. on the amount paid by the complainant from 01.01.2009 to till OP completes construction, execute register sale deed and put the complainant in possession and pay litigation cost of Rs.5,000/- to the complainant. This order is to be complied within four weeks from the date of its communication for payment of amount due till the date of order.

(Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 13^th day of December 2010.)

                                                PRESIDENT

MEMBER                                                  MEMBER                     

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