BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL

FORUM AT BANGALORE (URBAN)

07^TH JANUARY 2011

       PRESENT:- SRI.B.S.REDDY                      PRESIDENT           

                         SMT. M. YASHODHAMMA     MEMBER

                         SRI.A.MUNIYAPPA                MEMBER

SMT. M. YASHODHAMMA, MEMBER

These complaints are filed by the complainant u/s. 12 of the Consumer Protection Act of 1986 seeking direction against the Opposite Parties (herein after called as O.Ps) to refund whatever advance amount paid by her along with compensation of Rs.10,000/- and interest at 15% p.a. and costs on the allegations of deficiency in service.

          Since complainant and OPs in both the complaints are common, the question involved, relief claimed being the same, in order to avoid the repetition of facts and multiplicity of reasonings these two cases are stand disposed by this common order.

2.      The brief averments as could be seen from the contents of these complaints are as under:

          OP-1 is the promoter.  OP-2 is the developer.  OPs are engaged in the business of forming layouts and residential sites in their layout in Mysore known as “Rajajinagar”. Lured away with the offer made by OPs complainant became the member of the OPs project. OP-1 is having his office in Koramangala, Bangalore which is reflected in the brochure. OP-1 & 2 presented the housing sites in “Rajajinagar” as modern residential township at the Royal City of Mysore with all the amenities. After going through the brochure and personnel discussion with OP-1, Complainant decided to purchase two sites situated at Rajajinagar Layout bearing No.234 & 235, ‘B’ block measuring 30 x 40 Sq.ft. at the rate of Rs.500/- per Sq.ft. amounting to Rs.6,00,000/- each. OP-2 entered into an agreement with the complainant on 28.02.2007 and on 20.09.2007 for the sale of the said schedule sites and in each case an initial amount of Rs.1,50,000/- was paid by the complainant to OP-2 by way of cheque dated 28.02.2007 and 20.09.2007 drawn on National Co-Operative Bank, Jayanagar Branch, Bangalore. Which has been encashed and accepted by OP-2 in the said agreement. The balance sale consideration of Rs.4,50,000/- is agreed to be paid in 3 instalments. The time limit fixed for development of schedule layout was one year. As per clause-3 (a) of the said agreement if sites are not handed over with all development work completed to second party by the first party within one year then 2^nd party may choose to withdraw from purchasing the sites and first party is liable to pay the additional 15% extra on the received amount to the second party. Complainant enquired OP-1 and 2 about the development of the said township on the several occasions through phone and also went personally to the office of the OP-1 at Koramanagala, Bangalore. OPs gave false assurances that the development will take place shortly and possession will be handed over. Complainant having waited for nearly 2 years decided to withdraw and to cancel the agreement and requested OP-2 to return advance amount as agreed at the earliest as per the clause-3(a) of the said agreement. OPs accepted the decision of the complainant and promised to return the advance amount of Rs.1,50,000/- in each case along with 15% interest.  But Inspite of repeated visit and request complainant wrote a letter on 01.01.2009 to OP-2 requesting to return the advance amount of Rs.1,50,000/- in each case.  There was no reply from OPs. Complainant caused legal notice on 15.10.2009 to both OP-1 and 2. Inspite of service of notice OPs failed to reply. Hence complainant felt deficiency in service.  Under these circumstances she is advised to file these complaints for the necessary reliefs. For the convenience sake date of agreement of sale, Site No, measurement of site, amount paid by complainant in each case, date of payments are noted below in the chart.

3.      On appearance OP-1 and 2 filed the version. The defence set out by OP-1 & 2 in both the complaints are almost identical and same.

The brief averments made in the version are as under: OP-1 filed version mainly contending that complaints filed by the complainant are not maintainable as there is no privity of contract between OP-1 and complainant only for the purpose of the jurisdiction; has made OP-1 as a party to the complaint. Entire transaction was taken place at Mysore City between second OP and complainant; the alleged agreement was entered between complainant and OP-2 at Mysore alone. Second OP is residing and carrying on the business at Mysore. Transaction relating to the property as well as subject matter of the complaint will not come within the jurisdiction of this Hon’ble Forum. Hence this forum has no territorial jurisdiction to entertain these complaints.  OP-1 denied that he is the promoter of the layout called as Rajajinagar. The agreement discloses that OP-2 as a promoter promoting the sites in the name of the Rajajinagar at Lingam Budhi village, Mysore taluk and Mysore district.  OP-1 is the marketing agent who is dealing with marketing of the project carried out by OP-2 and is not entered into any agreement with the complainant at no point of time. OP-1 has assured to give sites to the complainant in the layout formed by OP-2. OP-2 has received the amount from the complainant, who is the developer of the layout being the owner of the land.  If any grievance of the complainant same shall be solved by the OP-2 only. Since OP-1 is nowhere concerned to the alleged transaction under agreement of sales as contended by the complainant. Hence claim of the complainant against OP-1 is not maintainable and OP-1 is not liable for any deficiency in service; in allotment of sites committed by OP-2. The letter transaction made by the complainant with OP-2 is not within the knowledge of OP-1. The said letter discloses that the transaction is only between complainant and OP-2. Among other grounds O.P-1 prayed for dismissal of these complaints.

4.      On appearance OP-2 filed its version admitting that OP-2 is a developer of the township.  OP-2 admits that complainant decided to purchase sites bearing No.234 and 235 ‘B’ block, at Rajajinagar, Mysore Taluk, measuring 1200 Sq.fit. at the rate 500 per square. OP-2 entered into agreement with the complainant on 28.02.2007 and 20.09.2007 and admits receipts of advance amount of Rs.1,50,000/- in each case.  Further OP-2 admits that it is a registered company and time fixed for development of the layout was one year.  Unfortunately the delay in providing sites to the complainant was due to unavoidable circumstances. Now MUDA has approved the plan and the OP-2 has started developing site with all latest technology by providing developed sites duly approved by the MUDA at most economical price with all amenities. The delay was also due to Ring Road which has completed now.  Since the road cutting work was taking place and Ring road is very close to the schedule property. OP-2 is in touch with the complainant and corresponding with the complainant and complainant was very well aware of the facts of the delay and frequent meetings were held with the customers. OP-2 has kept their problem faced by them for getting delayed various reasons such as the modified plan, lying of the roads with latest development and the customers had agreed to the terms.  When OP-2 requested to pay the second instalments for carrying out the work complainant has approached this forum for recovery of the amount. OP-2 is not denying the execution of the agreement and they are ready to provide the sites; since project is huge they have already started the work and working is in progress.  OP-2 is required one more year time to complete the work. Complainant want refund of amount paid by her for which OP-2 have kept their problems faced by herself. The execution of the agreement was taken place at Mysore where the schedule property is situated. Hence this Hon’ble Forum has no jurisdiction. Hence complaints are not maintainable. The complaints are barred by limitation. The complainant is not entitled for reliefs.  There is no deficiency in service on the part of the OP-2. Among other grounds O.P-2 prayed for dismissal of these complaints.

5.      In order to substantiate the complaints averments the complainants filed her affidavit evidence and produced copy of the brochure, website extract of OP-1, copy of the agreement, copy of the correspondences, copy of the legal notice, postal receipts and acknowledgements. Inspite of giving sufficient time OP-1 has not filed his affidavit evidence. Hence taken as no evidence. On behalf of OP-2 Mr. Syed Nizam Ali, Managing Director of OP-2 filed his affidavit evidence and produced copy of the letter issued by planning officer Mysore dated 01.06.2010, copy of the Deed of relinquishment, copy of the MUDA approval layout plan dated 27.08.2010, copy of the letter dated 16.11.2010 issued by Mysore Development Authority, abstract estimate issued by MUDA, 8 nos. photos. Complainant filed further affidavit evidence and produced 3 photos along with negatives and also filed memo along with list of citations.  Complainant submitted written arguments. Heard arguments from both the sides.

6.      In view of the above said facts, the points now that arises for our consideration in these complaints are as under:

   Point No. 1 :- Whether the complainant has proved           

      the deficiency in service on the part of      

      the OPs?

  Point No. 2 :-  If so, whether these complainant is

                        entitled for the reliefs now claimed?

         Point No. 3 :- To what Order?

7.      We have gone through the pleadings of the parties both oral and documentary evidence and the arguments advanced. In view of the reasons given by us in the following paragraphs our findings on:

Point No.1:- In Affirmative

Point No.2:- Affirmative in part

Point No.3:- As per final Order.

R E A S O N S

8.      At the outset it is not in dispute that complainant in both the complaints became the member of the project floated by OPs in the name and style Rajajinagar layout and booked two sites measuring 30 X 40 Sq.ft. bearing No.234 and 235 situated at ‘B’ block, Rajajinagar Layout, Lingambudhi village, Kasaba Hobli, Mysore Taluk & District. OP-2 entered into agreement of sale with complainant and accepted the advance sale consideration of Rs.1,50,000/- in each case.  We have perused copy of the agreements. OP-2 has confirmed the receipt of advance sale consideration of Rs.1,50,000/- in both the complaints by way of cheque dated 28.02.2007 and 20.09.2007 drawn on National Co-OperativeBank, Jayanagar, Bangalore and further agreed to receive the balance sale consideration of Rs.4,50,000/- in 3 instalments. i.e., a) Rs.1,50,000/- to be paid after demarcation of site and road cuttings. b) Rs.1,50,000/- to be paid after providing rest of the civic amenities. c) Rs.1,50,000/- has to be paid at the time registration. The time limit for completion of the development of the layout is one year. OPs failed to complete the schedule layout within the agreed time limit of one year.

9.      As per the clause – 3(a) of the of the agreement if OP fails to hand over the sites with all developments works within one year, complainant can withdraw from purchasing the sites and second party is liable to pay 15% extra on the received amount. Inspite of giving sufficient time, OPs failed to complete the layout work. Inspite of repeated requests made by the complainant OPs failed to refund the amount inspite of service of legal notice. Hence complainant felt deficiency in service against the OPs and approached this forum.

10.    As against the case of the complainant the defence of the OPs that this forum has no territorial jurisdiction to entertain these complaints has no basis. Section-11 of Consumer Protection Act reads as follow;

“11. Jurisdiction of the District Forum.- (1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed *[ does not exceed rupees twenty lakhs]

(2) A complaint shall be instituted in a District forum within the local limits of whose jurisdiction,-

(a) the Opposite party or each of the Opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or **[carries on business or has a branch office or] personally works for gain, or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or *** [carries on business or has a branch office], or personally works for gain, provided that in such case either the permission of the District Forum is given, or the Opposite parties who do not reside, or @[carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.”

Since OP-1 is having office at Kormangala, Bangalore and payment has been made by the complainant through her banker National Co-Operative bank, Jayanagar, Bangalore, transaction had taken place at Bangalore. Hence part of the cause of action arisen within the jurisdiction of this Forum.  Hence defence of OPs that this Forum has no territorial jurisdiction is not sustainable.

11.    When once OP accepts sale consideration with a promise to allot a site, as long as OP allot and register the sites in favour of the complainant, the recurring cause of action will accrue to the complainant.  Hence the contention of the OPs that the complaints are barred by limitation is not accepted.

12.  OP-1 in its  letter dated 03.08.2009 addressed to the complainant informed the complainant that all legal formalities from the concerned authority (MUDA) has being completed and requested the complainant to release further funds to enable further development work and to pay betterment charges in advance.  From the documents produced by OP it is clear that still said layout is not ready.  OPs have made false representation that all legal formalities completed and MUDA has approved the plan in the year 2005 itself. It was the duty of the OPs to obtain the required permissions and sanctions from the statutory authorities; thereafter to enter into an agreement to sell and recover consideration amount from the complainant for purchase of sites. This act of OPs amounts to deficiency in service and unfair trade practice on their part.

13.    As per Clause – 3 of the agreement the time limit for completion of the layout development work and handing over the sites was one year, the date of agreements is 28.02.2007 and 20.09.2007. It is almost more than 3½ years; still OP-2 has not completed the layout and handed over possession of the sites to the complainant. There is no basis for seeking further time of one more year to complete the project by OP-2. Complainant cannot be made to wait indefinite time. OP-2 admits the facts that layout work has not been completed till date. Inspite of repeated request, correspondences and service of legal notice, there is no response from OP-2. When OP-2 was aware that layout could not be completed within the prescribed time, it could have fairly refunded the amount to the complainant along with 15% extra amount as agreed as per Clause – 3 of the agreement. The failure of OP-2 in completing the project and handing over the possession of the sites to the complainant or to refund the amounts, amounts to deficiency in service on its part. We are satisfied that complainant is able to prove the deficiency in service against OPs.

OP-1 has not received any amount from the complainant and is not party to the agreement, it appears that OP-1 is only a Marketing Agency dealing with marketing of projects carried out by OP-2. Therefore OP-1 cannot be made liable to refund amount. Under these circumstances we are of the considered view that complainant is entitled for whatever amounts she has paid along with interest at 15% p.a. from the date of respective payments till realization and for litigation cost of Rs.2,000/- in each case. Accordingly we proceed to pass the following:

                                      O R D E R

The complaints are allowed in part.

1. In the complaint No.456/10 OP-2 is directed to refund Rs.1,50,000/- along with interest at the rate of 15% p.a. from 20.09.2007 till realization and pay litigation cost of Rs.2,000/- to the complainant.

2. In the complaint No.457/10 OP-2 is directed to refund Rs.1,50,000/- along with interest at the rate of 15% p.a. from 28.02.2007 till realization and pay litigation cost of Rs.2,000/- to the complainant.

The complaint against OP-1 stands dismissed.

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

          This original order shall be kept in the file of the complaint No.456/10 and copy of it shall be placed in other respective file.

          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 07^th day of January 2011.)

                                                PRESIDENT

MEMBER                                          MEMBER                   

gm.