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

DATED 09^th DAY OF MAY 2024

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complainants have filed this complaint under Section 35 of C.P.Act, 2019 seeking for a direction to the OP to refund a sum of Rs.10,33,670/- with interest at the rate of 18% p.a from 09.01.2013 to 15.09.2021 of Rs.16,16,433/- and compensation for deficiency of service of Rs.1,00,000/- and for litigation expenses of Rs.25,000/-  in total, a sum of Rs.27,75,103/-.

2. It is not in dispute that the OP had launched a project “Skyline Exaltus” in lieu of the joint development agreement dated 28.02.2007 in between the OP and land owners.  Further, on 09.01.2013, the OP and the owners of the land had executed the sale cum construction agreement with the complainants.  Further, it is not in dispute that the OP had agreed to sell the apartment in favour of the complainants for a total sale consideration of Rs.41,37,800/-.  Further, it is not in dispute that in total, the complainants have paid a sum of Rs.10,33,670/- as consideration.

3. It is the further case of the complainants that the OP in spite of the receipt of the part consideration stated above, failed to commence the construction of apartment complex “Sklyline Exaltus”.  Further, on 11.05.2016, the OP, complainants through their representative Mr.Deepam and Mr.Narayan had a meeting wherein the OP informed the complainants that they were going to re-launch the Exaltus project in the month of September, 2015 at the rate of Rs.4000/- per sq.ft. and if the complainants were interest, they can take the apartment for the higher rate or in the alternative, OP would refund the amount with interest at the rate of 18% p.a.  Since the complainants had no other option they opt for refund of the payment with interest.  Further, by way of                E-mail dated 28.08.2019 the OP communicated the complainants that they would refund the amount with interest.  In spite of legal notice being sent on 30.09.2019, the OP did not return the amount.  Hence, the complaint came to be filed.

4. The OP1 has denied the averments of the complaint other than the admissions stated above.  It is the further contention of the OP that once the parties have entered into the sale cum construction agreement, the complainants are not permissible to cancel the agreement.  Further, the complainants were irregular in the payment of consideration.  Further, the complaint is barred by limitation.   

5.       During the pendency of this complaint, our predecessor in the office has directed the complainant to implead the OP2 to 7 in this complaint.  In view of this the complainant has impleaded OP2 to 7.  This commission has not impleaded the proposed OP4 since he is dead and the complainant has not brought his LRs on record. After that OP2, 3 and 5 have appeared before this commission and filed their version. Even though the OP6 and 7 have appeared before this commission have not filed their version and have not led their evidence.

6.       It is the contention taken by the OP2, 3 and 5 that there is no privity of contract between these OPs and complainant, since the sale cum construction agreement entered between the OP1 and complainant is wholly unauthorized.  They have admitted about the JDA entered between them and OP1. But OP1 miserably failed to execute the work in terms ofo the JDA and caused inordinate delay. Hence these OPs have terminated the JDA and GPA and took the dispute to the arbitration in view of the arbitration clause.  The said arbitration dispute have been adjudicated by the Hon’ble tribunal in AC168/2018 and the same was allowed whereby the Hon’ble Arbitral Tribunal declare that the termination of JDA dated 28.02.2007 and GPA dated 28.02.2007 is valid and directed the sub-registrar to make necessary entries evidencing cancellation of GPA and JDA which was accordingly done on the request made by the parties. 

7.       In addition to this the dispute between the OP1 and these OPs are settled by entering into compromise in AP No.77/2022 and the said compromise petition was allowed by learned 25^th ACC and sessions Judge Bangalore on 19.04.2023 by which the OP1 indemnified these parties from all alleged claim against the third parties.  Hence the OP2, 3 and 5 prays to dismiss the complaint against them.

8. To prove the case of the complainants, complainant No.1 had filed affidavit in the form of his evidence in chief and got marked Ex.P.1 to Ex.P.8 documents. SPA holder of OP2, 3 and5 have filed his evidence and they have relied on Ex.R1 to R3. OP1 has not filed any evidence and filed only written arguments. Counsels for both the sides have filed written arguments.

9. Heard the learned counsel for the complainants.

10. The points that would arise for our consideration are as under:-

1. Whether there is deficiency in service on the part of the OP?
2. Whether the complaint is maintainable against OP2 to 7?
3. Whether the complainants are entitled for the relief as sought for?
4. What order?

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

       Point No.1:-  In affirmative.

      Point No.2:- In the Negative.   

      Point No.3:-Partly affirmative

      Point No.4:- As per the final order for the following

REASONS

12. Point Nos.1, 2 and 3: In order to avoid the repetition of facts and as both the points are interlinked, both the points are taken together for discussion.  Complainant No.1 (P.W.1) has reiterated the fact stated in the complaint in the affidavit filed in the form of his evidence in chief. Ex.P.1 is the certificate under Section 65(B) of Indian Evidence Act.  Ex.P.2 is the copy of sale cum construction agreement.  To substantiate with regard to the payment made by the complainants to the OP, the complainants have produced receipts vide Ex.P.3. The said receipts, the averments made in the affidavit and the admission made by the OP in the version are sufficient to prove that the OP had received the total sum of Rs.10,33,670/- from the complainants.
13. It is the case of the complainants that in the meeting held on 11.05.2016 in between the OP, complainants’ representative Mr.Deepam and Mr.Narayan, OP told that they were going to re-launch the project for higher rate for the apartment at the rate of Rs.4000/- per sq.ft., or in the alternative, OP would refund the amount paid by the complainant with interest at the rate of 18% p.a. Hence, the complainants opt for refund.  Ex.P.4 is the copy of the E-mail. On perusal of the same, it appears that the OP had confirmed the refund to the customers with 8% interest.  Ex.P.6 is the copy of the conversation took place between the OP and the complainants, in which it appears that on 09.07.2021, the OP had replied that they have already settled the issue.
14. It is the contention of the learned counsel for the complainants that the OP1 did not give evidence before this Commission, thereby it infers that the OP had admitted the claim of the complainants.  Further, even though the OP in the version in para 10 had stated that they have completed the project, but the complainants had defaulted to occupy the possession, the OP should have filed the occupancy certificate before this Commission to substantiate their claim.  Admittedly, the OP did not file the occupancy certificate.  Since, the complainants had applied for the apartment with the OP and the OP is a developer and the OP did not complete the work as assured in Ex.P.2 sale cum construction agreement, we feel complainants are the consumers within the meaning of Section 2(7) of C.P.Act.  Further, since the OP did not complete the work of construction, we feel there is deficiency of service from the side of OP.  Apart from that even though legal notice been issued to the OP for return of the amount paid vide Ex.P.5, the OP neither replied to the said notice nor paid the amount as claimed.  Hence, it amounts to inaction from the side of OP and that also amounts to deficiency of service on the part of OP. We feel since the OP did not return the entire amount claimed by the complainant without any reason, it amounts to imperfection and short coming on the part of the OP and it amounts to deficiency of service within the meaning of Section 2((11) of C.P.Act, 2019 Act. 
15. It is the further contention of the learned counsel for the OP as averred in the written arguments that the complainants were irregular in payment.  Admittedly, the OP did not issue any notice to the complainants for payment to be made and it is also not its case that OP requested the complainants to pay the balance.  Further, the OP did not enter the witness box to give evidence in that regard.  Hence, we feel there is no merit in the said contention.
16. It is further contended that the complaint is barred by limitation, even though the cause of action arose on 09.01.2013, the complaint was filed on 23.09.2021 and application for condonation of delay under Section 24(A) of C.P.Act has not been filed.  On perusal of the E-mail communication vide Ex.P.4 it appears that the communication was made by the OP on 28.08.2018 and in Ex.P.6 the representative of OP in the year 2020-21 had promised the complainants with regard to the refund of the amount.  Since, the complaint was filed on 23.09.2021, we feel there is no merit in the contention of OP that complaint is barred by limitation.
17. It is pertinent to note here that when the OP2 to 7 who are impleaded have taken the contention that there is no privity of contract between them and the complainants. They have also relied on the order passed by the Arbitral Tribunal in AC 168/2018 and also the order passed by the Hon’ble City Civil 25^th Hon’ble City Civil Judge No.AP No.77/2022.  It is clear from these two documents that as per the terms and conditions of the compromise entered between the OP1 and OP2 to 7. The OP1 undertakes to settle all the amount due to the third party, bank, financial institution etc., whomsoever having any claim against the OP2 to 7 relating to the rights if any created by this OP1 based on the JDA and the GPA entered with the OP2 to 7.  Under these circumstances, the complaint is not at all maintainable against the OP2 to 7. The OP1 is only liable to refund the amount since the entire responsibility was taken by the OP1 after cancellation of JDA and GPA entered between himself and the OP2 to 7.  Hence the complainants are only entitled for the relief from OP1 and not from OP2 to 7.
18. The complainants had claimed a sum of Rs.10,33,670/-, the amount which they had paid.  We feel, the complainants are entitled for the said amount.  Further, the complainants claimed 18% interest p.a. from 09.01.2013 from the date the first payment was made.  Further, even though it is contended by the learned counsel for the complainant that the OP had assured to pay 18% interest p.a., no such admission from the side of OP has been pointed out by the learned counsel for the complainant.  Hence, we feel interest at the rate of 9% p.a. would suffice the circumstances of the case.  The said interest shall be calculated from the date of the meeting held i.e. on 11.05.2016 and the complainant had opt for repayment of the amount paid.  Further, the complainants claimed a sum of Rs.1,00,000/- towards mental agony and deficiency of service from the side of the OP.  We feel under the said head, a sum of Rs.20,000/- be awarded for mental agony undergone and the complainants are entitled for the said sum.  Further, the complainants claimed Rs.25,000/- towards litigation cost.  We feel, the complainants are entitled to a sum of Rs.10,000/- towards litigation cost.  Hence, in total, the complainants are entitled for a sum of Rs.30,000/- towards mental agony undergone, deficiency in service and litigation cost.  Accordingly, we answer the point No.1, in affirmative, Point No.2 in the Negative and point No.3 partly in affirmative.
19. Point No.4:- In view of the discussions made above, we proceed to pass the following 

O R D E R

1. The complaint is allowed in part.
2. The OP is directed to pay a sum of Rs.10,33,670/- to the complainants with interest at the rate of 9% p.a. from 11.05.2016 till realization. 
3. Further, the OP is directed to pay a sum of Rs.20,000/- to the complainants towards mental agony undergone and Rs.10,000/- towards litigation cost.
4. The OP shall comply the order within 30 days from the date of the order.
5. In the event, the OP fails to pay the said amount of Rs.10,33,670/- within 30 days from date of order, the same shall carry interest at the rate of 12% p.a. from the date of order till realization.
6. Furnish the copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 09^th day of May, 2024)

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

Documents produced by the representative of opposite party2, 3 and 5 – R.W.1;