BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE (ADDL. BENCH)

DATED THIS THE 23^rd DAY OF FEBRUARY, 2024

PRESENT

SRI.RAVISHANKAR, JUDICIAL MEMBER

SMT.SUNITA C. BAGEWADI, MEMBER

Appeal No.1042/2018 TO 1051/2018

1.      Sintangudia Zairdudeen

# A33, C-Block, Gul Mohar,

Apartments, Thyagaraj Nagar,

Chennai-17

...Appellant/s

2.      Mohamed Zaraulla

Rahamath Ali Khan,

#215, Pallivassal Street,

Vadakkumangadi, Paanasam,

Thanjavur District,

Tamil Nadu-03  

(Appellant is common in all the appeals)

(By Sri.Sudharsan Suresh, Advocate)

-V/s-

1.     Appeal No.1042/2018

1. N.Sriram

S/o Nagan, Age: Major,

Residing at C-601,

Purva Fountain Square,

Marathalli, Bengaluru-03

                         .. Respondent/s

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

2.     Appeal No.1043/2018

1. N.Prasad,

S/o T.L.Narayana Rao,

Age: Major,

Residing at No.52, 1^st A-Main,

5^th Cross, ISRO Layout,

Bengaluru-03

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

... Respondent/s

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

3.     Appeal No.1044/2018

1.     Kalaiselvi

W/o Senthil Kumar,

Age: Major,

Residing at No.2D-302,

DOS/ISRO Housing colony,

Jalahalli, Bengaluru-13

2.     KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

... Respondent/s

3.     Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

4.     Appeal No.1045/2018

1.     P.Lakshsmansamy,

S/o Mr.Palanisamy,

Aged: Major,

Residing at No.3D-302,

DOS/ISRO Housing colony,

Jalahalli, Bengaluru-13

2.     KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3.     Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

5.     Appeal No.1046/2018

1. S.Bharath S/o Sriram

Age: Major,

Residing at C-601,

Purva Fountain Square,

Marathalli, Bengaluru-03

                         .. Respondent/s

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

6.     Appeal No.1047/2018

1. V.R.Mahesh Kumar,

S.V.Ramurthy, Age: Major,

Residing at No.703, 17^th C-Main,

6^th Block, Koramangala,

Bengaluru-03

                         .. Respondent/s

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

7.     Appeal No.1048/2018

1. V.R.Jaiprakash,

S.V.Ramurthy, Age: Major,

Residing at No.703, 17^th C-Main,

6^th Block, Koramangala,

Bengaluru-03

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

.. Respondent/s

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

8.     Appeal No.1049/2018

1. K.N.Suma W/o A.Shankara

Age: Major,

Residing at No.331,

4^th Avenue, Teachers colony, 

 Koramangala, Bengaluru-34

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

.. Respondent/s

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

9.     Appeal No.1050/2018

1. S.Bharath S/o Sriram

Age: Major,

Residing at C-601,

Purva Fountain Square,

Marathalli, Bengaluru-03

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

.. Respondent/s

10.   Appeal No.1051/2018

1. Venkatesh Cheluvaraju,

S/o M.R.Cheluvaraj,

Age: Major, Residing at 748, 7^th Main,

BEML Layout, Rajarajeshwari,

Nagar, Bengaluru - 98

2. KRK Properties Pvt. Ltd,

A company incorporated

Under the Companies Act, 1956

Having its office at 1779/15,

9^th Cross, 6^th Main, Hampinagar,

Vijaynagar, Bengaluru-04

Currently operating from:

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

Represented by its Managing

Director Mr.K.R.Kannan,

3. Mr.K.R.Kannan,

Managing Director, KRK

Properties Pvt. Ltd.,

#215, 3^rd Main, 5^th Cross,

Behind ITI layout, Geology layout,

Nagarbhavi, Bengaluru-560 056

(Respondent No.1-By Sri.T.Chandra Naik, Advocate)

(Respondent No.2 & 3-Notice duly served- absent)

C O M M O N   O R D E R

BY SMT.SUNITA C. BAGEWADI, MEMBER

The Appellants/Opposite Party Nos.3 and 4 being aggrieved by the order dated 21-6-2018 passed by the 1^st Additional District Consumer Commission, Bengaluru in Complaint Nos.1750/2017 to 1759/2017 respectively.

          2. The Appellant/Opposite Party Nos.3 and 4 are the same in all these Appeals and the facts involved in these Appeals are one and the same.  Hence, these Appeals are taken up together and are being disposed of by a common order.  

          3. The brief facts of the complaints are that the OP No.1 is a Private Limited Company engaged in the business of developing residential layout, the OP Nos.2, 3 and 4 are its Managing Directors and Additional Directors. The OPs offered to sell the sites to be developed by them in Sy.Nos.50, 51, 52, 56, 57, 58 at Darapura village, Kasaba Hobli, Ramanagaram Taluk and project was named as ‘THE HERITAGE’ and also entered into agreement of sale and received part consideration and further agreed to complete the formation of the site within 15 months from the date of agreement and club house within 24 months from the said date of agreement. They have also issued receipts for having received the amount under the agreement of sale and afterwards.  The details of the site for which the complainants have agreed to purchase and the OPs agreed to sell and the amount of total sale consideration and the amount of advance sale consideration received is mentioned hereunder:-

The complainants further alleged that, inspite of advance payments received by the O.Ps as shown above and undertaken to complete the process of documents as per the date of agreements, the OPs failed to carry out the development of layout.  Hence the complainants got issued legal notices to the OPs. Though the OPs received the notices, the OP Nos.1 and 2 did not bothered to reply the notices, whereas, the OP Nos.3 and 4 have sent reply to the said notices.  Hence, these complaints.

          4. Upon the issuance of notice, the OP No.2 being the Managing Director of the OP No.1 for himself and on behalf of the OP No.1, though received notice of the complaints, did not appear before the Forum and hence placed exparte. Whereas the OP Nos.3 and 4 have appeared through their advocate before the Forum and filed their version.

5.      In the versions filed by the OP Nos.3 and 4, they contended that, they were inducted as directors on 20.5.2015 and subsequently they retired as directors on 30.9.2015. In view of the above, since the transaction has taken place in the year 2013 with the OP No.1 Company, the said transactions do not bind them.  They are not signatories to the agreement of sale and hence no liability can be fastened on them. They have denied all the allegations made against them in the complaints. Hence, prayed to dismiss the complaints.

          6.  After trial, the District Consumer Commission allowed the complaints in part against the OP Nos.1 to 4 along with compensation and litigation expenses.

          7. Being aggrieved by the said order, the OP Nos.3 and 4 have filed these Appeals before this Commission.

8. Heard the arguments.

9. Perused the appeal memo, the order passed by the District Consumer Commission and materials on records, we noticed that, it is not in dispute that, the OPs offered to sell the sites to be developed by them in Sy.Nos.50, 51, 52, 56, 57 and 58 at Darapura village, Kasaba Hobli, Ramanagaram taluk and project name was “THE HERITAGE”. It is also not in dispute that, the complainants have entered into an agreement of sale and paid part consideration amount to the OPs as an advance. It is also not in dispute that, the OPs agreed to complete the formation of the sites in the said layout within 15 months from the date of agreement and execute the sale deed.

10. The allegations of the complainants is that, inspite of receiving the part consideration amount by the OPs, the OPs have not formed the layout and executed the sale deeds by receiving the balance sale consideration.   

11. Per-contra, the OP Nos.3 and 4 herein in appellants, in their objection before lower court and in the appeals memo contended that, they were not the directors either on the date of executing the sale deed or on the date of filing the complaints. They were inducted as Directors on 20-5-2015 and ceased to be on 30.9.2015, they are not responsible for day to day affair of the Company.

          12. Perused the order passed by the District Commission and documents produced by the OP Nos.3 and 4/appellants, the Company master data and letter issued by the OP No.4 to the Board of Directors, KRK Properties Pvt. Ltd. We noticed that that, the OP Nos.3 and 4 inducted in as Directors on 20-5-2015 ceased to be Directors of the Company on 30-9-2015. However, the company master data is only a printed document, it is not an authentic document, there is no any seal or signature of any authority such as KRK properties. Moreover, it is true that, the OP No.4 has written letter on 28.2.2017 to the Directors of KRK Properties Pvt. Ltd. and also Registrar of Company. However, in the said letter the OP No.4 has mentioned that, he was inducted into the board of director with a motive to commit fraud on him and he came to know number of irregularities, misappropriation committed by company directors before his induction as well as during his tenure. But he has not said about the management of company and was not allowed to perform his duty as a Director of the Company. It is only a letter issued by the OP No.4; there is no any other document or any order of the Registrar of the Company put forth before the District Commission and before us to show that, the OP Nos.3 and 4 ceased to be Director on 30-9-2015. Hence, the OP Nos.3 and 4/appellants cannot discharged their liability.         

          13. Hence, considering the facts and discussion made here, we are of the opinion that, the order passed by the District Commission is just and proper. No interference is required.  Accordingly, the appeals are dismissed and we proceed to pass the following:-

O R D E R

The appeals are dismissed. No order as to costs.

The amount in deposit shall be transmitted to the concerned District Consumer Commission to pay the same to the complainants.

Send a copy of this order to both parties as well as Concerned District Commission.

Keep the original of this order in appeal No.1042/2018 and copies thereof in connected files.

MEMBER                                                  JUDICIAL MEMBER