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

DATED 02^ND DAY OF MAY 2024

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 refund Rs.35,70,000/- to the complainants being the amount paid by the complainants to the OPs for purchase of schedule B and C properties.
2. Direct the OPs to pay damages from 01.01.2019 to the date of realization at the rate of 24% p.a., plus Rs.4,000/- per month, as agreed under construction agreement the damages agreed to be paid by the OPs to the complainants.
3. Direct the OPs to pay the entire interest amount to te complainants being the amount paid by the complainants to HDFC bank towards interest of home loan for purchasing schedule C property.
4. Direct the OPs to pay Rs.15,000/- per month from 31.12.2018 to till repayment being the loss of rental revenue from schedule C property.
5. Direct the OPs to pay Rs.5,00,000/- to the complainants towards unfair trade practice, deficiency in service.
6. Direct the OPs to pay Rs.6,00,000/- to the complainants towards pain and suffering caused by the OPs to the complainants.
7. Grant cost of this complaint to the complainants.

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

The case of the complainant is that they are husband and wife.  The OP1 is a private limited company and is a developer by profession.  The OP2 and 3 are the directors of OP1 and OP4 and 5 are the land owners.

3. The complainants have entered into agreement with the OP for purchase of residential apartment bearing NO.226 C Block, II Floor, measuring super built up area of 1210 sq. feet in the building being constructed known as “Venkat Windsor East”.  The floors are constructed on the A schedule property.  The complainants are also having a car parking area i.e., the C schedule property together with the B schedule property measuring 446 sq.feet of undivided land share.

4. The OP4 and 5 are the land owners of A schedule property. They entrusted the same to the OP1 for development on the basis of JDA dated 15.11.2013 to develop A schedule property into multi storied apartment building and simultaneously the OP4 and 5 also executed a power of attorney dated 15.11.2013 in favour of OP1 to do various acts and deeds and things including to sell the developer share in the A schedule property.  The JDA and the GPA both are registered documents.

5. The complainants were impressed by the representation made by the Ops that licence and sanctioned plan are obtained for the development of the A schedule property from BDA and they will commence the construction on the A schedule property.  The land owners have also entered into supplementary agreement sharing residential apartments developed on the schedule A property.  The flat allotted in favour of the complainant bearing No.226 was allotted to the share of the OP1 the developer towards the developer share.  

6. The complainants and the Ops have entered into the sale agreement dated 24.07.2018 and further the OP1 to 3 agreed to construct the residential apartment with one car parking in favour of the complainants under the construction agreement dated 24.07.2018. They have specifically agreed to complete the construction and deliver the possession of schedule C unit on or before 31.12.2018.  

7. It is further case of the complainants that the complainants have agreed to purchase the schedule B and C properties for the entire sale consideration amount of Rs.42,00,000/-.  The complainants have already paid Rs.35,70,000/- to the Ops towards sale consideration by availing loan from HDFC Bank. They have been paying interest from 01.10.2018 to till date.  Despite having received Rs.35,70,000/- and despite promising to deliver the completed apartment with all amenities on or before 31.12.2018 the Ops neither completed the construction of the apartment even in the year 2023.  The Ops have also liable to pay damages as agreed for delay in completion and handing over of the apartment as agreed under the sale agreement and construction agreement dated 24.07.2018. The Ops have failed to honor the agreed terms and committed breach of agreed terms and are guilty of deficiency of service and unfair trade practice. The complainants are suppose to pay Rs.78,40,561/- to the HDFC Bank only towards interest on the housing loan since 15.11.2018.  They have been paying EMIs of Rs.29,208/- every month to HDFC Bank.  The complainants have paid Rs.15,44,499/- till the date and out of that the complainants have paid Rs.13,11,101/- only towards interest.  The complainants have incurred in all Rs.51,15,979/- for the purchase of B and C schedule property.  

8. It is further case of the complainants that the Ops have not completed the construction and they have not come forward to deliver the possession of Schedule C unit to the complainants.  The copies of have agreed to sell the B and C schedule properties prior to covid 19 pandemic and housing loan was sanction on 30.09.2018 prior to covid 19 pandemic despite the financial difficulties the complainants have paid Rs.35,70,000/- to the OPs.  It is the duty of the OPs to deliver the possession of C unit and register the same by obtaining occupancy certificate from the statutory authorities, discharge the mortgage/loan on the C schedule property from the oriental bank and complete the construction with all amenities. The complainants have now learnt that there are litigations in relation of ownership of A schedule property of the OPs and there are many cases pending before different courts.  Under these circumstances there is no legal authority or right to the OP1 to sent a letter on 13.11.2022 to the complainants stating that their purchase of B and C schedule properties is cancelled.  The OPs have gulped Rs.35,70,000/- out of Rs.42,00,000/- they have neither delivered the apartment nor refunded the amount received.  The OPs are liable to compensate the complainants for the losses suffered by the complainants. The complainants have agreed for cancellation if their amounts are refunded along with interest and damages and the interest paid to the bank.  The complainants have made all attempts at resolving the issue amicably but the OPs have been evading and escaping from fulfilling the agreed terms of agreement. Hence they have filed this complaint.

9. In response to the notice, OP1 and 2 have appeared before this commission, but failed to file the version in time. OP3 to 5 have not appeared before this Commission.  Hence OP3 to 5 have placed exparte.

10. The complainant has filed his affidavit evidence and relies on Ex.P1 to P27 documents. 

11. Heard the arguments of the complainant. OP1 and 2 have filed their written arguments.

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

1. Whether the complainants prove deficiency of service on the part of OPs?
2. Whether the complainants are entitled to relief mentioned in the complaint?
3. What order?

13. 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

14. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, affidavit evidence of complainants, written arguments of the OP1 and 2 and documents. Inspite of issue of notice through paper publication to OPs 3 to 5, they remained absent. Hence OPs 3 to 5 have placed exparte.
15. The complainant has filed this complaint for the relief to direct the OP to refund the advance amount of Rs.35,70,000/- and also damages from 01.01.2019 till the date of realization at the rate of 24% p.a., + Rs.4,000/- pm., as agreed under the construction agreement and further direct the OP to pay the entire interest amount to the complainants being the amount paid by the complainants to the HDFC Bank for purchase of C schedule property towards interest of home loan and further direct the OP to pay Rs.15,000/- p.m., from 31.12.2018 to till repayment being the loss of rental revenue from C schedule property and also for Rs.5,00,000/- towards unfair trade practice, deficiency of service and Rs.6,00,000/- to the complainants for pain sufferings and for cost and other reliefs.
16. It is undisputed fact that the OP1 is the company and is engaged in the real estate business and marketing and OP2 and 3 are the directors and OP4 and 5 are land owners. The OP4 and 5 have entered into JDA as per Ex.P1 on 15.11.2013 for development of the schedule A property and to develop the property into a multi storied residential apartment. The OP4 and 5 have also executed power of attorney as per Ex.P2 on 15.11.2013 in favour of OP1 to do various acts and deeds.
17. The complainants being attracted and lured by the advertisement given by the OPs have agreed to purchase flat No.226 in A schedule property for a total consideration of Rs.42,00,000/-in the apartment i.e., going to be constructed known as Venkat Windsor East by the OPs and entered into sale agreement as per Ex.P8 and construction agreement as per Ex.P9.  The complainant have raised loan from HDFC bank for the purchase of the schedule C property and they have already paid an amount of Rs.35,70,000/- to the OPs as per Ex.P17 to P22.  The complainants have also produced the bank statement as per Ex.P16 for having raised the housing loan from the HDFC bank.
18. As per the construction agreement Ex.P9 the OPs undertook complete the construction and deliver the possession of schedule C unit on or before 31.12.2018. They have further agreed that they will indemnify and pay the damages to the complainants if there is a delay in completion of the construction and handing over of the agreed apartment at 24% p.a., along with Rs.4,000/-. This offer was made only to the customers who are booking the apartments in the year 2018 and it is not available to the customers who entered into agreement after few months. In addition to this the OPs have also offered to sell the residential apartment assuring that they will provide all the facilities to the customers by using RCC frame work structure and also smooth finishing of walls by using the ACE asian paints and also use good teak panels for doors etc.  Even though the complainants have paid Rs.35,70,000/- out of Rs.42,00,000/- the OPs neither come forward to hand over the possession of the flat to the complainants nor refunded the amount. The complainants have made several request to the OP to execute the sale deed in their favour but they are dodging the complainants and they have successfully avoided the complainants in executing and registration of sale deed in respect of B and C schedule properties.
19. The OPs have not even completed the construction of the apartment with the specifications that were promised and they have also constructed using the substandard material and they are not in accordance with the specification offered by them.
20. In view of the delay the complainants have to pay EMI of Rs.29,208/- to the HDFC Bank till date and they have also paid Rs.15,44,499/- to HDFC bank as EMIs. The complainants have incurred totally Rs.51,15,979/- for the purchase of B and C schedule properties.  
21. The OPs have failed to obtain the occupancy certificate for the C schedule unit confirming that it is fit for human habitation. The OPs have not even completed the construction work. OPs have agreed to sell the schedule B and C properties prior to covid 19 pandemic and the loan was also sanctioned on 13.09.2018. Inspite of that the complainants have paid Rs.35,70,000/- with great difficulty. Inspite of that the OPs have failed to honor the terms and conditions of Ex.P8 and 9 of the agreements.  
22. Even though the OP1 and 2 appeared before this commission have neither filed version nor adduced any evidence, but they have simply filed the written arguments.  This commission cannot consider the written arguments since it is not supported by any version or the evidence of the OP1 and 2. The OPs have failed to prove their allegations made against the complainants in their written arguments. If the OPs are not in a position to complete the construction and hand over the possession of the schedule C property in favour of the complainant nothing prevented them from refund the amount paid by the complainants as per the terms and conditions of Ex.P8 and P9.
23. We have perused 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. 
24. We have also perused 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.
25. We have 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.
26. 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 complainant shall be entitled to seek execution of the order under the C.P. Act.  
27. We have also relied on the decision of Hon’ble Supreme Court of India in Civil Appeal No.6044/2019.
28. It is clearly held by the Hon’ble Supreme Court that the complainants are entitled for interest from the date of deposit of the amount.
29. It is clear from the documents produced by the complainant that the complainant has entered into the sale agreement with the OP on 24.07.2018 and as per the agreement the OP has to complete the construction and hand over the possession of the apartment on 31.12.2018. The OP has failed to complete the construction and deliver the possession of the apartment even after lapse of five 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. 
30. The complainants who are 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.  OP has failed to deliver the possession of building even after lapse of five years.  The OPs have cancelled the agreement on 13.11.2022 and issued the cancellation letter as per Ex.P24.  Hence the complainants have decided withdraw from the project and seek for refund of the amount with interest and also the damages and litigation expenses.   Hence the complainants have 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.
31. 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. OPs are directed to refund Rs.35,70,000/- with interest at 18% p.a., from 01.01.2019 + Rs.4,000/- p.m., till the realization as per the terms of the construction agreement.
3. The OPs are further directed to pay the entire interest amount to the complainants being the amount paid by the complainants to HDFC bank towards interest of home loan for purchase of C schedule property.
4. OPs are further directed to pay Rs.15,000/- p.m., from 31.12.2018 till repayment being the loss of rental revenue from C schedule property.
5. The OPs are further directed to pay compensation of Rs.3,00,000/- and Rs.25,000/- towards litigation expenses to the complainants.
6. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 20% p.a. after expiry of 60 days on Rs.35,70,000/- till final payment.
7. 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 02^ND day of MAY 2024)

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

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

NIL