BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 20^th DAY OF FEBRUARY 2016

O R D E R

SRI. P.V SINGRI, PRESIDENT

The complainant has filed this complaint U/s.12 of the Consumer Protection Act, 1986 against the Opposite Party (herein after referred as OP) with a prayer to direct the OP to pay him a sum of Rs.2,80,000/- deposited with them towards EMD amount together with interest and Rs.2,00,000/- towards compensation for deficiency in service and cost of the proceedings.

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

The complainant by seeing a public notice dated 16.02.2014 advertised in Indian Express daily newspaper by OP for sale of Flat No.G004 situated at ‘Nandhini Lake View’ Apartment, Puttenahalli Village, Bangalore in a public auction under SARFAESI ACT, 2002, had submitted the tender.  The complainant in order to participate in the said auction, submitted a tender form and deposited a sum of Rs.2,80,000/- as EMD.  The complainant was declared as successful bidder in the said auction.  On 21.03.2014 OP sent a letter informing that the OP has decided to accept the offer and further informed that, the sale of the schedule property is subject to complainant’s payment of Rs.5,31,250/- within 31.03.2014 and the remaining balance Rs.24,34,000/- to be paid within 30 days from the receipt of the said officer letter.  Thereafter, the complainant wrote a letter dated 28.03.2014 to the OP to provide him title deeds, katha certificate, katha extract etc., in respect of the schedule property so as to enable him to pay the balance bid amount of Rs.5,31,250/-.

Inspite of the receipt of the said letter, OP failed to comply the demands made in the said letter and also failed to provide documents required for availing loan from Bank.  Hence, the complainant sent another letter dated 31.03.2014 informing the OP that the said documents are required for him to obtain loan and also requested him to grant 7 days time for balance payment of 25% bid amount.  That since the OP failed to reply to the said letter, the complainant wrote another letter dated 02.04.2014 informing that the EMD amount of Rs.2,80,000/- deposited by him shall be refunded to him as the required documents have not been furnished to him for taking opinion and loan.  On 23.04.2014 OP wrote a letter to the complainant asking him to come and collect the documents and settle the full and final settlement of the account by 15.05.2014, failing which the security deposit amount will be forfeited.  The complainant in response to the said letter visited the office of the OP for more than 4 times but was not provided with the copies of documents.  On 08.05.2014, the complainant received some of the documents and then complainant sent letter dated 14.05.2014 informing that the copies of the documents have been handed over to his advocate for the Bank from where he intends to avail loan and further informed that he cannot proceed further unless he receives opinion from the advocate and requested time to pay the balance amount till the opinion is received from the advocate.  On 27.05.2014 OP sent a letter to the complainant informing him to pay the balance amount of Rs.29,65,000/- within 3 days from the date of the said letter and in case of failure the EMD amount of Rs.2,80,000/- shall be forfeited and the purchase shall stand cancelled and the property shall be sold further.

The complainant sent another letter dated 29.05.2014 to OP to provide entire documents as per the requirement letter given by the advocate.  The OP without providing the documents required has caused an untenable notice on 07.06.2014 informing the complainant that the EMD amount of Rs.2,80,000/- paid by him is forfeited.  After having learnt that the OP is not holding necessary documents pertains to the above said property, the complainant sent a notice to the OP on 20.06.2014 calling upon to refund the EMD amount within 7 days from the date of the said notice.  The OP has neither replied to the said notice nor complied with the demands made therein.  The complainant has already spent thousands of rupees in due course of collecting the documents from the OP.  The OP has not followed proper procedure in advancing loan to the owner of the property.  The OP has not maintained proper and complete documents before advertising/publishing public notice for sale of an immovable property.  The failure of OP in furnishing the required documents as requested by the complainant shows the indifference, carelessness of the OP towards the successful bidder.  The conduct of OP amounts to deficiency in service and unfair trade practice.

For the aforesaid reasons, the complainant prays for an order directing the OP to pay him a sum of Rs.2,80,000/- paid towards EMD amount along with interest and compensation and Rs.2,00,000/- towards deficiency in service with cost of proceedings.

3. In response to the notice issued, the OP entered their appearance through their advocate and filed their version contending in brief as under:

In pursuance of paper publication dated 16.02.2014 the complainant participated in the auction of an immovable property bearing No.G-004, situated in ‘Nandhini Lake View’ Apartment.  The auction proceedings were conducted on 21.03.2014 under SARFAESI Act, 2002 and the complainant was declared as a successful bidder as he had quoted highest bid amount to purchase the said immovable property.  The complainant also deposited an amount of Rs.2,80,000/- accepting the terms and conditions of sale before participating in the auction, which was duly attached by OP with regard to the auction purchase of the property on 21.03.2014.  The complainant had agreed to 14 conditions of the tender by attesting the same.  The complainant was informed of the sale being confirmed in his favour of highest bidder based on terms and conditions enumerated in the form and the same was also agreed by the complainant before participating in auction.  The complainant was aware of condition Nos.6 & 11, as stated below.

Condition No.6 states as follows:

Successful bidder should deposit 25% of the purchase price (inclusive of amount paid and EMD within 8 days after the acceptance of the letter issued by the Authorized officer and in default of such deposit, the EMD paid shall stand forfeited.  The balance 75% of purchase price shall be paid within 30 days from the date of acceptance of the letter or such extended period as may be agreed upon in writing by and solely at the discretion of the Authorized officer.  In case of default, all amounts deposited till then shall be forfeited and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may be subsequently sold.

Condition No.11 states as follows;

The tenders / offerers are informed, in their own interest to satisfy themselves with the title pertaining to the immovable property/secured asset in question, including the size area, as also ascertain any other dues/liabilities/encumbrances from the concerned authorities to their satisfaction before submitting the tenders.  No query relating to title area, and size, etc., shall be entertained at the time of opening tenders/holding auction.

Even in the newspaper advertisement regarding auction of the property it was clearly stated that the property was being sold “AS IS WHERE IS & AS IS WHAT IS BASIS”.  The above sentence is very elaborative and is understood that the property is sold in the condition as is and what is and not in the condition how the auction purchaser wants it.  Therefore, the contention of the complainant that he declined to make balance amount due to non submissions of documents does not arise.  It seems that the complainant was not able to arrange balance amount to be paid and hence now is concocting stories of non issuance of documents and the complainant should have satisfied himself regarding title of the property before participating in the auction as per the terms but he started finding reasons to justify his stand for non payment.  The OP on humanitarian grounds provided all possible documents available with them as requested by the complainant and even thereafter complainant raised frivolous issues and demanded documents as per his whims and fancies only to see that the OP should not able to provide the same.  The OP has replied to the legal notice dated 20.06.2014 sent by the complainant.  Since the advocate of the complainant did not claim the RPAD hence it was returned as NOT CLAIMED.

Rule 9 Sub Rule 4 & 5 of Security Interest (Enforcement) Rules, 2002 provides as under.

(4)      The balance amount of purchase price payable shall be paid by the purchaser to the authorized officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.

(5)      In default of payment within the period mentioned in Sub-rule 4, the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

For the reasons stated above, the complaint is liable to be dismissed.  Despite sufficient time given to the complainant he failed and neglected to pay the balance deposit amount as demanded in the letter dated 15.05.2014.  Therefore, the OP as per the law forfeited the EMD amount.

For the aforesaid reasons, the OP prays for dismissal of the complaint.

4. On the rival contention of both the parties, the points that arise for our determination in this case are as under:

        5. The complainant to substantiate the allegations made in the complaint filed his affidavit evidence in lieu of oral evidence and placed reliance on certain documents including the communication in writing between himself and the OP.  OP filed affidavit evidence of their authorized officer Mr.Vinya and placed reliance of various documents including tender form, terms and conditions appended to it etc.  Both the parties submitted their written arguments.

          6. Perused the allegations made in the complaint, arguments made in the version, sworn testimony of both the parties, written submissions, various documents relied upon by both the parties and other materials placed on record.

7. Our answer to the above points are as under:

REASONS

8. The participation of the complainant in the auction of Flat bearing No.G004 of ‘Nandhini Lake View’ Apartment, Puttenahalli Village, Bangalore in public auction under SARFAESI Act, 2002, vide publication of sale notice published in Indian Express daily newspaper dated 16.02.2014 is not in dispute.  It is also not in dispute that, the complainant participated in the said auction by submitting his tender and depositing a sum of Rs.2,80,000/- as EMD for the purchase of the said property.  Admittedly, the complainant was declared as successful bidder in the said auction and the OP by letter dated 21.03.2014 informed the complainant that they have decided to accept the offer and further informed that, the sale of the schedule property is subject to complainant’s payment of Rs.5,31,250/- within 31^st March 2014 and he has to pay remaining balance of Rs.24,34,000/- from the receipt of the said letter.  The complainant has produced the copy of the said letter dated 21.03.2014 along with the complaint and thereafter the original of the same subsequently.  For better understanding of the said letter of acceptance dated 21.03.2014 by the OP, the relevant portion incorporating the requisite terms and conditions are extracted below:

The sale of the Schedule property (details of which is mentioned hereunder) to you is on “as is where is and as is what is basis” and subject to the payment of the purchase price as mentioned hereunder:

Your offer amount:                   Rs.32,45,000/-

EMD amount received:  Rs.2,80,000/-

The sale of the scheduled property is subject to your payment of Rs.5,31,250/- (Rupees FIVE LACS THIRTY ONE THOUSAND TWO HUNDRED & FIFTY RUPEES ONLY) within 31^st MARCH-2014 and remaining balance of Rs.24,34,000/- (Rupees TWENTY FOUR LACS & THIRTY FOUR THOUSAND only) within 30 days from the receipt of this offer letter.

We, now, request you to make payments within the time limits of this letter at our office.

Terms and conditions:

          9. The complainant did not dispute the terms and conditions mentioned in the said letter of acceptance at any point of time.  Apart from the conditions mentioned in the said letter of acceptance, separate terms and conditions of the tender have been appended to the said letter.

          10. It is not the case of the complainant that, he was not aware of the terms and conditions of the tender at the time of submitting his tender and the EMD deposit of Rs.2,80,000/-.  Though the complainant did not produce the copy of the terms and conditions at the time of filing the complaint, but the OP produced the copy of the terms and conditions of the tender along with their version which bears the signature of the complainant at the end, thus making it abundantly clear that, the complainant was very well aware of the terms and conditions at the time of participating in the auction.  It is the case of the complainant that he could not proceed to pay the balance payment of 25% of the bid amount within the stipulated period mentioned in the letter dated 21.03.2014 as he was not furnished with the relevant documents pertaining to the subject property to satisfy himself that the same is free from encumbrance and the OP has clear titles.  As requested by the complainant though belatedly the OP furnished whatever documents in regard to approval of Bank loan and opinion from the advocate of the Bank for the purpose of raising loan.  However, the complainant was not satisfied with the said documents and wanted some more documents to get a clear opinion from and advocate, which were not furnished.  Therefore, the complainant alleges that due to failure on the part of OP to furnish the relevant documents pertaining to the said Flat he could not proceed to deposit the balance 25% of the amount as well as the remaining amount within the extended period.

          11. The OP referring to the terms and conditions of the tender as well as the conditions mentioned in the letter of acceptance submitted that the sale of the said Flat is “as is where is & as is what is basis”.  The said flat is sold in whatever condition it is available and wherever it is situated.  The learned advocate referring to condition no.11 of the terms and conditions of tender submitted that it is the duty of the complainant himself to ascertain and satisfy himself with the title of the said Flat including the size/area, ascertain any other dues/liabilities/encumbrances from the concerned authorities before submitting the tenders.  It is further contended on behalf of OP that, the OP is not obliged to entertain any query relating to the title, area and size of the schedule property either at the time of holding tender or at the time of opening the tender.

          12. As already stated above, the complainant was very well aware of the terms and conditions of the tender at the time of participating in the auction itself.  The careful perusal of condition No.11 of terms and conditions of tender produced by both complainant as well as the OP reveals that it is for the complainant in his own interest to satisfy himself regarding the title of the said property including size, area and ascertain regarding any other dues, liabilities, encumbrances from the concerned authorities.  Thus, the burden is on the complainant to satisfy himself as to the title and other liabilities of the said Flat before submitting the tenders or at least while participating in the auction.  The complainant having accepted the said terms and conditions of the tender now cannot held the OP responsible for not furnishing him relevant documents/title deeds in respect of the said property.  In fact, as per the terms and conditions of the tender, the OP is not at all obliged to entertain any query relating title, area, size etc., of the schedule property.  As already stated above, the sale of the schedule property is “as is where is & as is what is basis”.  Therefore, we are of the opinion that the complainant is not justified in not paying the 25% of the balance payment and thereafter the offer amount within the stipulated period. 

13. At the request of the complainant, the OP has extended the time for payment of 25% of the bid amount so also for payment of balance amount of Rs.29,65,000/-.  As per Rule 9 Sub Rule 4 & 5 of Security Interest (Enforcement) Rules, 2002 the complainant is obliged to pay the balance amount of purchase price to the authorized officer on or before 15^th day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing before the parties.  In the instant case on hand, the OP has extended time for payment of purchase price.  However, the complainant has failed to pay the purchase price even within the extended time.  Sub Rule-5 of Rule-9 of Security Interest (Enforcement) Rules, 2002 provides that, in default of payment within period mentioned in Sub-rule-4, the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum.  In view of the default committed by the complainant the OP has proceeded to forfeit the EMD deposit in pursuance of the conditions mentioned in the letter of acceptance as well as in pursuance of Sub-rule.4 & 5 of Rule-9 of Security Interest (Enforcement) Act, 2002.  We do not find any deficiency in service on the part of OP in dealing with the complainant.

          14. In view of the discussions made above, we are of the considered opinion that the OPs are justified in forfeiting the EMD amount of Rs.2,80,000/- deposited by the complainant while submitting the tender.  The complainant has miserably failed to prove the deficiency in service on the part of the OP as alleged in the complaint.  Therefore, the complaint is liable to dismissed.

          15. The order could not be passed within the stipulated time due to heavy pendency.

16. In the result, we proceed to pass the following:

O R D E R

The complaint filed U/s.12 of the Consumer Protection Act, 1986 by the complainant is dismissed.  Parties to bear their own costs.

Furnish free copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 20^th day of February 2016)

MEMBER                           MEMBER                     PRESIDENT

Vln* 

Witnesses examined on behalf of the complainant dated 20.04.2015.

1. Sri. H.G Das Prakash.

Documents produced by the complainant:

Witnesses examined on behalf of the Opposite party dated 27.05.2015.

1. Mr.Vinya

Documents produced by the Opposite Party:

MEMBER                            MEMBER                    PRESIDENT

Vln*