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

DATED 15^TH DAY OF DECEMBER 2023

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 OP to refund Rs.15,74,887/- along with interest at 18% p.a., from the respective date of payment until payment.

2.    Direct the OP to refund a sum of Rs.8,92,393/- paid towards bank interest along with interest at 18% p.a., from the respective date of payment until repayment.

3.    Direct the Ops to pay Rs.5,00,000/- for mental agony, torture, harassment and physical suffering and for deficiency of service.

3.   Direct the Ops to pay a sum of Rs.50,000/- to cost.

4.   Pass such other order.

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

The case of the complainant is that the OP is running the real estate business in the name and style M/s Sanchaya Land and Estate Pvt Ltd., and marketing the business.

3.       It is further case of the complainant OP is the absolute owner of all the piece and parcel of immoveable property bearing Sy.No.33, 35/3, 35/4, 36/2 and 174 of Karpur Village, Kasaba Hobli, and Sy.No.224, 184/5, 188/1, 188/2 and 189 of Bidaragere Village, Kasaba Hobli, together measuring 12 acres 24.08 guntas and both are situated at Anekal Taluk, Bangalore Rural District, Bangalore, whereby it propose to construct the residential apartment building under the name The Greens in the said project.

4.       The OP has formulated a scheme to construct residential apartment under the name The Greens consisting of several blocks with basements, ground and upper floors, common compound, entrances, lobbies, stair case, lifts and passages with rights in the common areas of the residential complex referred as apartment.

5.       The complainant contacted the OP for the purchase of the schedule apartment.  The OP introduced the new project which was yet to be constructed.  Believing the words of the OP the complainants agreed to purchase the schedule apartment and after scrutinization of the documents and after the OP parties representation the complainants were agreed to purchase flat bearing No.310 3^rd floor of PINE Block, Tower C, the Greens, having super built up area of 750 Sq.feet along with 303.93 Sq.feet., and undivided right title and interest in land with covered car parking area.  The complainant believing the OPs representations and assurances were agreed to purchase the apartment for a sale consideration of Rs.17,30,642/- and for all the terms and conditions and the OP has executed the sale agreement and construction agreement on 04.06.2013 and the complainants have paid advance total sale consideration amount of Rs.15,74,887/- on various dates.  The OP had assured that he will hand over the possession of schedule apartment by December 2014 with six months grace period. But the OP has failed to keep up the promise.

6.       It is further grievance of the complainant that the OP has failed to complete the project and failed to hand over the schedule apartment even after completion of December 2014.  The complainant pursuant to the demand made by OP have paid substantial amount towards sale consideration to OP1 on various dates amounting to Rs.15,74,887/-. The complainant has obtained the housing loan through LIC Housing Finance Ltd., and as per the demand made by the Ops, the bank has disbursed the amount. 

7.       It is further grievance of the complainant that even though they have paid the substantial sale consideration of Rs.15,74,887/- as demanded by the OP itself the OP has failed to perform their part of the contract even after lapse of two years.  After lapse of seven years the project is not completed and not ready for delivery. The OP had stopped construction activities after receipt of the last payment made by the complainant and hence the complainant has realized that the OPs are not willing to complete the project and he is carrying out a fraudulent act and they are enriching themselves at the cost of the complainant. There is a prolonged delay in construction with poor construction quality and even today the apartment does not have any basic service facilities. 

8.       There is lack of transparency and the OPs keep changing the contact persons.  Recently the complainant came to know that the OP parties are defaulters and does not honor the payment of any money inspite of order been passed against them in various cases as seen from public display records from the RERA website.  The complainant learnt that in the month of March 2022 and first week of April 2022 the Tahsildar, Anekal Division, and other revenue and panchayath officials have taken possession nearly to an extent of three acres of project land by claiming that the occupied project land by the Ops is a Gomala land and the office of the Tahsildar have also issued notice for demolition of some of the towers built thereon as mentioned in the schedule property.  Further some of the land parcels are having litigations pending before civil court with regard to the project land and the same has not been disclosed by the OP. 

9.       After establishment of Karnataka RERA she had lodged a complaint on 25.02.2020 for seeking compensation and handing over the apartment along with occupancy certificate etc., before the K-RERA which was numbered as CMP/2002025/0005533 and further due to non-completion of apartment and project till date, she also learnt about various pending litigation over the project land as well as legal proceedings initiated by the Revenue department, Government of Karnataka to take over a portion of the land claiming it to be government property.  It is unlikely to have good marketable title of land as such he decided to withdraw from the project and seek for refund of the money along with delay interest damages and compensation. He has withdrawn the complaint filed before the K-RERA and now seeking for refund of the consideration amount with interest, damages and compensation.

10.     Complainant further submits that she learnt about various pending litigation over the project land as well as legal proceedings initiated by the Revenue department, Government of Karnataka to take over a portion of the land claiming it to be government property.  It is unlikely to have good marketable title of land as such he decided to withdraw from the project and seek for refund of the money along with delay interest damages and compensation.

11.     The complainant has also sent several emails to the Ops. Inspite of the email correspondences the OP neither complied the demands nor refund the advance amount. Hence the filed this complaint. 

12.     The OP has denied all the allegations made in the complaint except the fact that the complainants have agreed to purchase the apartment bearing No.310 and they have paid the advance amount and entered into the sale agreement and construction agreement on 04.06.2013.

13.     It is the main contention taken by the OP that this OP had never been negligible or rendered deficiency in service for the reason that the failure in completing the construction activities was wholly dependent on the amounts that were required to be paid by the intending purchasers and all most about 780-800 intending purchasers had failed in making payments in time and there were severe labour problems faced during the time of construction by the OP and it was for this reason that the OP did not complete the construction as assured.

14.     It is further case of the OP that due to covid 19 the entire labour class had shifted to their native and as such the construction came to halt. In furtherance the OP and several construction companies had to face issues with the pollution control board regarding the approvals and hiking fees.  The OP had to approach the Hon’ble High Court in WP No.16497/2019 and subsequently the state has now filed a R.P. No.1/2021 which is pending for consideration.  Due to the pendency of the statutory approval the OP had sought for extension of time to complete the construction before the RERA and being aggrieved by the order of RERA the OP had approached Hon’ble High Court in W.P.No.5937/2021 in this regard.  The clause 15 of the construction agreement clearly contemplates that the OP shall not be responsible for delays in obtaining sanctions/approvals from the statutory authorities.  In view of this there is an inordinate delay to complete the construction. This OP is making hectic efforts and all attempts to secure the approvals and to complete the construction.

15.     The OP further undertakes to complete the construction immediately after securing approvals and deliver the possession.  The failure on the part of the OP is for bonafide reason and there is no deliberate intention of this OP and they never been negligent in rendering their services. 

16.     It is further contention taken by the OP is that the damages of Rs.5,00,000/- claimed by the complainant is wholly unjustifiable and untenable considering the facts and circumstances in this case.  This OP has never been negligent nor have rendered deficient services and because of the mistake on the part of the investing purchasers to pay the amount in time and due to the approval issues the construction could not be completed in the agreed time.  Hence it would not be justifiable to hold the OP guilty and made to cough up exorbitant damages and interest. 

17.     The complainant has filed his affidavit evidence and relies on Ex.P1 to P15 documents.  Though sufficient time was given to the OP to lead evidence, they have not appeared before this commission, hence the evidence of OP is taken as nil.

18.     Heard the arguments of the complainant and also perused the Written arguments filed by the complainant.

 19.    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?

20.   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

21.    Point No.1 AND 2 : Perused the complaint, documents, and evidence of the complainant and arguments and citation submitted by the complainant.

22.     The complainant has filed this complaint for the relief to direct the OP to refund the advance amount of Rs.15,74,887/- and also Rs.8,92,393/- paid towards bank pre-EMI with agreed interest at 18% p.a., and Rs.5,00,000/- for the inconvenience and mental agony caused to the complainant and litigation expenses of Rs.50,000/- and other expenses from the OP.

23.     It is undisputed fact that the OP is engaged in the real estate business and marketing the business. The OP is the absolute owner of the schedule property. The OP has formulated a scheme to construct a residential apartment under the name ‘The Greens’ apartment.

24.     The complainant has contacted the OP for purchase of the schedule apartment.  The complainant has entered into construction agreement and sale agreement with the OP on 04.06.2013.  The complainant has paid Rs.15,74,887/- at the time of executing the sale agreement  believing that the OP will hand over possession of the schedule apartment atleast by the end of December 2014. 

25.     The OP has taken the contention that he did not have money to complete the project within the stipulated time as many customers of the OP including this complainant have failed to make the payments as per the schedule.  The OP has just played tricks in order to extend the time and the contentions taken by the OP are not at all genuine.  The complainant has clearly taken the contention that the statement made by the OP that they had shortage of labours and had to face severe problems due to covid 19 and all the labours shifted to their neighbors are all false. 

26.     The complainant has booked the apartment in 2013 which was way before the onset of pandemic covid 19 cannot be taken as excuse to delay in handing over possession of property which was supposed to be given in the year September 2015.  The OP has crossed the stipulated time and he has failed to prove that any of the reasons taken by them have occurred during the stipulated time and hence the aforesaid justifications are not valid.

27.     We have relied on the decisions of 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. 

28.     We have relied on the case cited 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. 

The complainant has also relied on the decision of National Consumer Disputes Redressal held in Mili Jain & two others –vs- Wave City Centre Pvt. Ltd., on 29^th October 2021

29.     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.   

30.     In support of the contention, complainants have relied on totally 15 documents Ex.P1 is the copy of the Allotment letter, Ex.P.2 and Ex.P3 are the copy of the Sale Agreement and Construction agreement, Ex.P4 is the copy of the payment receipts (7 in Nos.), Ex.P5 is the copy of the LIC HFL Loan sanction letter, Ex.P6 is the copy of statement of account issued by OP, Ex.P7 copy of the LIC loan statement, Ex.P8 is the copy of the LIC HFL interest certificate, Ex.P9 is the copy of the email communication, Ex.P10 is the copy of the legal notice, Ex.P11 and P12 are the RPAD receipt and acknowledgement, Ex.P13 is the copy of the RERA order, Ex.P14 is the copy of the RERA inspection report and Ex.P15 is the certificate u/s 65B of the Indian Evidence Act.

31.     On the other hand the contention taken by the OP is that they have not committed any deficiency of service or unfair trade practice and negligence in the construction activities. They could not complete the construction due to covid 19 and in view of the financial problem since 780-800 intending purchasers have failed to make the payment in time and in view of this the construction came to halt.  The OP was forced to approach the Hon’ble High Court in W.P.No.16497/2019 and the state has now filed Revision petition No.1/2021 and he has also filed W.P.No.5937/2021 and in view of all these they could not complete the construction. 

32.     It is  clear from the very documents produced by the complainant and admitted by the OP that the complainants have entered into the sale agreement with the OP on 04.06.2013 and as per the agreement the OP has to complete the construction and hand over the possession of the apartment within December 2014. The OP has failed to complete the construction and deliver the possession of the apartment even after lapse of seven years 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.  It is undisputed fact that there was no covid pandemic in the year 2016, when the sale agreement was entered between the parties. The covid 19 problem was started from 2020 March afterwards. Under these circumstances the contention taken by the OP that they could not complete the construction due to labour problem and other financial problems cannot be accepted. 

33.     The complainants who are the purchasers cannot wait for an indefinite period to take delivery of possession of the apartment after investing huge amount by raising loan from the banks.  When the OP has failed to deliver the possession of building even after lapse of seven years, the complainant is entitle for refund of the amount with interest and also the damages and litigation expenses.   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.

34.     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.15,74,887/- along with interest at 10% per annum from the respective date of payment till realization.
3. OP is further directed to pay Rs.8,92,373/- along with interest at 10% p.a., from the respective date of payment till realization.
4. The complainant is also entitled for the compensation of Rs.3,00,000/- and litigation expenses of Rs.10,000/-.
5. 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.15,74,887/- and Rs.8,92,373/- till final payment.
6. 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 15^TH day of DECEMBER 2023)

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

Documents produced by the representative of opposite party;

NIL