BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE.

DATED THIS THE 9^th DAY OF JUNE 2021

PRESENT

MR. RAVISHANKAR :                        JUDICIAL MEMBER

MRS. SUNITA CHANNABASAPPA BAGEWADI  :     MEMBER

COMPLAINT NO. 163/2014

V/s

ORDER

BY SMT. SUNITA CHANNABASAPPA BAGEWADI, MEMBER

1.      This is a complaint filed by the complainants against the Opposite Parties to refund the amount of Rs.97,62,827/- along with  interest at 12% p.a. and costs of this litigation.

2.      The averments in the complaint are as hereunder;

It is the case of the complainant that the Opposite Party No.1 represented itself to be a premier land developer in India.  Opposite Party No.2 is said to be the parent company of Opposite Party No.1 and is authorized to collect all payments for amounts payable to Opposite Party No.1.  The Opposite Parties have represented that among other projects in India, specifically at Bangalore, they have launched an Apartment/Villa project with five-star facilities/amenities including a golf course, resort etc., in all comprised total area of 17 acres and the entire project being a sub-city with all infrastructures and provisions, styled as “Royal Garden Villas & Resorts”.  The Opposite Parties represented that they have already acquired and were in the process of acquiring immovable properties and identified lands in Survey Nos.53/1, 53/2, 63/1 and 63/2 and 54 for the said project at Galipooje Village, Kasba Hobli, Doddaballapur Taluk, Bangalore Rural District.  The Opposite Parties have also represented that the said location is just a few kilometers from the upcoming Bangalore International Airport.  The Opposite Parties have also proposed to market the entire plots/ villas or flats in the said project to Non-Resident Indians.  The Opposite Parties have made all the above representations either through their website, personal representations, brochures as well as their authorized selling agent Mr. Ashok Goyal of NRI Houses.  The Opposite Parties have also highlighted that Vijay Amritraj, former international tennis player was their Brand Ambassador and that jack Nicklaus, internationally renowned gold legend would be the course designer for their golf course.

3.      The complainants are Non-Resident Indians living in the United States since the 1980’s.  The Opposite Parties had approached them solely on account of their NRI status and had misled them by a series of misrepresentations.  Based on the information presented to them, the complainants had opted to acquire a villa (the Villa Rosa model in Section N and in phase 1A) and a flat (Poppello model in Section-D, Building-4, Floor-1) in the project proposed by the Opposite Parties in Bangalore.  The complainants had entered into Booking Agreements for the two units, through the booking agent of the Opposite Parties, NRI Houses.

4.      It is submitted that he listed total cost of the villa was estimated to be approximately Rs.1,58,31,736=24 i.e., the equivalent of $385,930 (in U.S. Dollars) at the prevailing exchange rate of US $1 = Rs.41.0223 on 01.05.2007, the date of the Booking Agreement, excluding miscellaneous expenses such as statutory duties, documentation including execution of the Agreement of Sale.  Construction Agreement as well as Conveyance Deed, legal fees, maintenance charges etc.  After a discount of 30% from the Opposite Parties, the price of the unit was Rs.1,10,82,215=37 i.e., the equivalent of $ 270,151 (in U.S. Dollars) at the prevailing exchange rate of US $1 = Rs. 41.0223 on 01.05.2007, the date of the Booking Agreement.  It is submitted that the listed total cost of the flat was estimated to be approximately Rs.64,12,113=67 i.e., the equivalent of $ 156.308 (in U.S. Dollars) at the prevailing exchange rate of US $1 = Rs.41.0223 on 01.05.2007, the date of the Booking Agreement, excluding miscellaneous expenses such as statutory duties, documentation including execution of the Agreement of Sale, Construction Agreement as well as Conveyance Deed, legal fees, maintenance charges etc.  After a discount of 30% from the Opposite Parties, the price of the unit was Rs. 44,88,495=98 i.e., the equivalent of $ 109.416 (in U.S. Dollars) at the prevailing exchange rate of US $1 = Rs.41.0223 on 01.05.2007, the date of the Booking Agreement.

5.      It is submitted that at the time of booking the above units, the complainants paid 30% of the estimated cost, this being the sum of approximately Rs. 33,24,652=30 i.e., the equivalent of $ 81.045 (in U.S. Dollars) for the Villas and Rs.13,46,557/- i.e., equivalent of $ 32.825 (in U.S. Dollars) for the flat at the prevailing exchange rate of US $1 = Rs.41.0223 on 01.05.2007, the date of the Booking Agreement.  The said payment was duly acknowledged by Opposite Party No.2 and receipts were issued by them.  As per the Booking Agreement, the Opposite Parties would complete the project and have the units ready for occupation within a period of 24 months from the date of registration of the booking i.e. 01.05.2007.

6.      The complainants learned that Vijay Amritraj had dissociated himself from the role of Brand Ambassador for the Opposite Parties.  When the complainants contacted Jack Nicklaus’ office, they were told that Jack Nicklaus was not associated with the Opposite Parties or their projects in any capacity.  The complainant’s brother in law Mr. Viswanath Menon’s visit to RGCEPL office in mid-2010.  As per the documents they showed him, the permission for the land to be transferred from Agricultural to Residential zone has been granted.  The complainant’s friend Mr. Jayaraj Isaac spoke to Padmaja Bhoomireddy at Royal Garden Villas & Resorts.  She said that they had to do the land reclassification certification twice, the First conversion in 2006 and the second conversion in March 2010.  They have got Anti-Pollution Board approval in June-July 2010.  Environmental Clearance expected by end of January/ early February.  Final BIAPPA clearance may be received in 1-2 weeks after that (by March 2011) and construction may begin as early as April 2011.  She said they are still waiting for Environmental Clearance (should have been received 2 months ago).  Once clearance received, final approval will be obtained from BIAPPA and construction can start.  Geeta and her brother met Collins Beniamin at his residence (behind the Jakkur Flying Club) in the summer of 2011.  He kept assuring them that the money was safe and that the project was being help up by delays beyond their control.  No change in status in the year 2012.  Mr. Manoj Benjamin, Collin’s son in Vancouver, BC, Canada indicated by e-mail that approvals had been received for the project to go forward.  The complainant made a trip from the US to the site on 01.07.2014, but, they had not been laid out as one would expect and still looked like agricultural land.

7.      The complainant further submits that he went to the Panchayat office where he met E. Chandrashkar, Bill Collector, Kestur Gram Panchayat, Doddaballapur Taluk.  Mr. Chandrashekar knew of Collins Benjamin and said that the land complainant had seen was the one Royal Indian Gardens had bought.  He said RGCEPL was the only builder in that area.  The complainant showed him the Sale Deeds and the land conversion approval documents and he confirmed that they were both genuine.  He said that RGCEPL had not paid their taxes in 3 years and he has had no communication from them.  Drove back to Doddaballapur and obtained land deed documents from the Sub-Registrar’s office.  The documents still show the original owner’s names apparently Collins Benjamin had not filed his ownership papers with them to the Bangalore International Airport Area Planning Authority (BIAAPA) office in Devanahalli.  He knew of Collins Benjamin and said that RGCEPL had made a layout application, but, had not paid their fees and had not presented the Environmental Clearance Certificate from the Anti-Pollution Board.  He had not heard from them in 2 years and so he could not do anything regarding the approval.

8.      Drove to Mr. Collins’ residence behind the Jakkur Flying Club.  Was told by the security guard that Mr. Benjamin had left the premises two years ago and that it was locked but still in his possession.  He had left no forwarding address.  Only 02.07.2014 the complainant went to the JC Nagar Police Station in Jayamahal, Bangalore.  Mr. Ramesh Kumar of the station describing Mr. Collins Benjamin as a ‘cheater’.  They told complainant that he could get more information at the Bharathi Nagara Police Station.  The complainant went to Bharathi Nagar Police Station and was informed that in January 2014, Collins Benjamin had been admitted to the Baptist Hospital for 10 days for an abdominal surgery and had returned to his home behind Jakkur Flying Club.  Based on in Complaint No.56/08 filed with the State Consumer Commission (Execution Case No.08/2010, filed by the law firm Kittu & Associates for the Petitioner Sudha Murthy on 30/03/2010), an Arrest Warrant dt. 16.01.2014 was issued against him, asking him to be produced in court on 22.01.2014.  He was produced in Consumer Court by the Bharathi Nagar Police on 03.02.2014.  He was sent to the Bangalore Central Jail on Hosur Road on 24.02.2014 on a 2 year sentence.  The police has impounded his passport.  Apparently another warrant has been issued against him since then on the basis of EC.No.4/2012 filed by the V&V Law Office on behalf of another Petitioner (Case A-524/2013). 

9.      It is now clear that as recently as 2013, the company was misrepresenting facts to investors by issuing baseless reports of clearance permits and progress on the project.  Even after the lapse of seven years from the time of Booking Agreements and payment of 30% deposits, the Opposite Parties have failed to call the complainants to execute the Agreement of Sale as well as Construction Agreement with them.  The Opposite Parties have grossly failed to keep their promises and have failed the complainants according to the terms of the Booking Agreement.  As such the Opposite Parties are guilty of gross misrepresentation, negligence and dereliction of duty.  They are guilty of fraud and cheating the complainants.  Hence, the complaint.

10.    After issuance of the notice to the Opposite Parties, the notice to Opposite Party No.1 returned unserved unexecuted with an endorsement ‘left/returned to sender’.  Thereafter, the complainants vide memo have submitted that the Managing Director of the Opposite Party No.1 is serving sentence in Central Prison, Bangalore, hence, to meet the ends of justice may be pleased to issue notice to the Managing Director of Opposite Party No.1 through Jail Superintendent, Central Prison, Bangalore.  Notice was issued to Opposite Party No.1 through Jail Superintendent, Central Prison, Bangalore.  Inspite of service of notice, the Opposite Party No.1 was absent, hence, placed exparte.  Furthermore, the complainant filed another memo stating that the Opposite Party No.2 is not in existence and they are unable to find fresh address for service of notice.  Hence, issuance of notice to Opposite Party No.2 may be dispensed with and complaint against Opposite Party No.2 may be treated as not pressed.  Hence, this Commission in view of the second memo, dismissed the complaint against the Opposite Party No.2 as not pressed on 25.10.2017.

11.    The complainant No.1 has filed his affidavit evidence and the complainant No.2 also adopted the same and produced the same documents which are marked as Ex.C1 to C24.  Heard the arguments.

12.    On perusal of the documents produced by the complainant, the contention taken in the complaint and affidavit evidence, it is true that the complainants have opted to purchase a Villa (the Villa Rosa model in Section N and in Phase 1A) and a flat (Poppello model in Section-D, Building-4, Floor-1) in the project styled as Royal Garden Villas & Resorts proposed by the Opposite Parties and they are entered into booking agreements for the two units, through the booking agent of the Opposite Parties, NRI Houses.  It is also true that the complainants have paid 30% of the estimated cost at Rs.33,24,652=30 which is equivalent to $ 81.045 ( in US dollars) for Villa and Rs.13,46,557/- which is equivalent to $ 32,825 (in US dollars) for the flat.  At the prevailing rate of exchange the US $ was equal to Rs.41.0223 on 01.05.2007.  After several phone calls and visiting the site and also Managing Director Mr. Collin Benjamin, the Opposite Party did not have secured the necessary approvals to proceed with the project even after seven years.  Hence, in our opinion the Opposite Parties are guilty of misrepresentation, negligence and committed deficiency in service.

13.    On 27.12.2019 this Commission heard the arguments of complainant and raised a point of maintainability.  Because the complainant had booked one Villa and one flat and as per the Consumer Protection Act, 2019, the complaint is not maintainable.  The complainant contended that they had booked one Villa and one flat in the project styled as “Royal Garden Villas & Resorts” proposed by the Opposite Parties.  In our opinion, it cannot be concluded that the complainants had booked more than one property for commercial purposes and it is established that the complainants are dealing in sale and purchase of real estate or his real intention in booking the villa and flat was to sell the same on profit on appreciation of the value of the real estate.  Thus it is clear that whether a person has booked more than one property for commercial purpose is a mixed question of law and fact which can be decided only on the basis of evidence.

14.    On perusal of the receipt, the complainants had booked one villa and one flat and after receiving 30% of the estimated cost, the Opposite Parties have failed to complete the project within a period of 24 months from the date of registration of booking and do not have secured the necessary approvals to proceed with the project till today has to be accepted and believed.  Moreover, the inspite of service of notice from this Commission, the Opposite Party No.1 is absent means Opposite Party No.1 is accepted the averments and allegations made by the complainants.

15.    Taking into consideration of the facts, evidence and discussion made here, deficiency in service and unfair trade practice on the part of the Opposite Party No.1 has been proved.  Hence, the following;

ORDER

The complaint is allowed with costs of Rs.25,000/-. 

The Opposite Party No.1 is directed to refund a sum of Rs.46,71,209/- (Rs.33,24,652/- + Rs.13,46,557/-) to the complainant along with interest at 9% from 01.05.2009, till realization.

The Opposite Party No.1 is further directed to pay a sum of Rs.2,00,000/- towards compensation for the deficiency in service.

The Opposite Party is granted 30 days time from this date to comply the Order.

 Forward free copies to both the parties. 

                                      Sd/-                                                              Sd/-

                                 MEMBER                                           JUDICIAL MEMBER

KCS*