Complaints filed on: 10-03-2022

                                                      Disposed on: 17-12-2022

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, TUMAKURU

          DATED THIS THE 17^th DAY OF DECEMBER 2022

PRESENT

SMT.G.T.VIJAYALAKSHMI, B.Com., LLM., PRESIDENT

SMT.NIVEDITA RAVISH, B.A., LLB. (Spl)., LADY MEMBER

CC.No.72/2022

Smt. B.N.Chandramani D/o Late Narayana .B

Aged about 62 years, C/o P. Raja, Bilwa Road,

Kumukaiah Extension, Banashankari, Tumkur.

……….Complainant

 (By Sri. S.R.Venugopal, Advocate)

V/s

1.       Smt. Noor Sultan, Sale Officer,

          Sri. Shivashakthi Souhardha

          Patthina Sahakari Sangha Niyamitha,

          Sri. Lakshminarasimha Nilaya,

          4^th Cross, Opp. Azad Park,

          Ashok Nagar, Tumkur.

2.       The Assistant Registrar of Co-Operative

          Societies, (Recover Officer-R 441),

          Karnataka Rajaya Souhardha Samyuktha Sahakari

          Niyamitha, No.248, Between 17^th and 18^th Cross,

          Margosa Road, Malleshwaram, Bangalore-560 055.

……….Opposite Party

(OP No.1 By Sri. K.S.Jagannatha, Advocate)

(OP No.2- served absent)

:ORDER:

BY SMT.G.T.VIJAYALAKSHMI, PRESIDENT

This complaint has been filed by the complainant against the OPs U/s 35 of the Consumer Protection Act 2019 with a prayer to direct the OPs jointly and severally to refund an amount of Rs.38,47,500/- along with interest @ 18% PA and to pay compensation of Rs.50,000/- for loss, pain, agony and sufferings etc.,

2.       The brief facts of the complaint are as under:-

With the permission of 2^nd OP, 1^st OP announced public auction on 16.08.2017 at 11 a.m. with respect to the scheduled property belonged to Sri.Ramakrishnaiah S/o Chikkarangaiah and Smt.M.K.Kusuma W/o Ramakrishnaiah for nonpayment of the outstanding amount in the loan account of Ramakrishnaiah.  The complainant participated in the auction and became the successful bidder of the auction with Rs.56,50,000/- and in furtherance of the auction final beat, the complainant had paid Rs.8,47,500/- on the date of auction itself.  There afterwards it was brought to the notice of the complainant that first OP without securing the original documents and actual physical possession of the notice schedule property had scheduled public auction on 16/08/2017, for which the 1^st OP had obtained the permission of the second OP.  Hence, it is a clear illegal act as the 1^st OP was not in a position to hand over the actual physical possession of the notice schedule property to the final bidder. It is further submitted that there was an original application vide NO.1057/2017 on the file of DRT at Bangalore filed by State Bank of India with whom the said Ramakrishnaiah had availed financial assistance by depositing the original title deeds in question.  Hence, the complainant requested the OPs to get the original title deeds, but the OP went on issuing evasive answers instead of securing the original documents.  It is further submitted that the OP had communicated to the complainant that if the complainant makes the payment of Rs.30,00,000/-, the OP will execute the registered sale deed in favour of complainant, reposting good faith on the words of the OPs, the complainant had made a payment of Rs.30,00,000/- to the 1^st OP on 04.04.2018.  It is further submitted that subsequent to payment when the complainant requested the OPs to execute the absolute registered sale deed in her favour and at that time, the OPs have stated that they have not secured the original title deeds and possession of the notice schedule property and even-though the 1^st OP demanding for payment of remaining amount of Rs.18,02,500/-. 

2(a).  The complainant further submitted that being a final bidder and made payment of Rs.38,47,500/-, she is residing in a rented house and due to the cheating and deficiency of service on the part of OPs, the complainant suffered lot of mental agony and financial loss.  Hence, the complainant got issued legal notice calling upon the OPs to refund the amount of Rs.38,47,500/- along with interest @ 18% per annum and despite receiving the legal notice, the OPs had not obliged to comply the same.  Hence, this complaint.  

3.       Notice issued to OP No.2 duly served, but the OP No.2 remained absent.  On receipt of notice issued by this Commission, the OP No.1 appeared through her counsel and filed the version contending that the OP No.1 is working as the Employee in Seri.Shivashakthi Souhardha Pathina Sahakari Niyamitha as Chief Executive Officer and the said Society is dealing with lending loan to its share holders/members of the society and one of its shareholder Ramakrishnaiah with the surety of Symen as a Guarantor was sanctioned a loan of Rs.10,00,000/- and the said Ramakrishnaiah was a chronic defaulter in payment of loan installments  and even demand notice, the Ramarkishaniah did not clear the loan installments, hence, they initiated dispute before the Joint Director, Co-Operative Societies, Bangalore and the said Court has ordered to recover Rs.17,09,027/- along with interest @ 2% together with cost from the date of suit till realization from the said Ramarkishanaiah.  It is further submitted that as per the orders of the Court, the OP society has executed the award through the Assistant Director of Co-Operative Societies by appointing of a sale officer, executed the award and issued public auction notice in the news paper and also beated Tam-Tam in accordance with the procedure of auction and subsequently the one Smt.B.N.Chandramani/the complainant  purchased t he suit schedule  property on 16.08.2017 for the total bid amount of Rs.56,50,000/- and deposited Rs.38,47,500/- and agreed to deposit the balance amount after the possession is delivered and sale deed is registered on the same day.

3(a).  The OP No.1 further contended that the OP society is very much interested in getting the possession of the suit schedule property form the hands of Ramakrishnaiah and accordingly took possession by taking police help and now the possession is with the OP.  After the possession is delivered, the OP requested the complainant to deposit the balance amount in order to pay the same to the Ramakrishnaiah by deducting the total amount as on the date of auction and during the process Ramakrishnaiah by taking law into his own hands to deprive the OP society from completing the auction process Ramakrishnaiah and defendant Nos. 2 to 5 have entered into a contract of sale agreement with the defendant No.6 on 18.01.2020 and all the defendants jointly together causing interference to the OP society to hand over the possession to the complainant. It is further contended that the defendants have entered illegally with the sale agreement and the same was registered before the Sub-Registrar office, Tumakuru on 21.01.2020 and the said alleged agreement is illegal, invented, created in collusion with the defendants just to harass the OP society and the said agreement is illegal and void and the parties to the said agreement cannot enforce the same under the Transfer of Property Act as already the suit schedule property was came into possession of the OP.  The said document created by the Ramakrishnaiah after completion of all the recovery procedure in accordance with law.  The said alleged agreement dated:21.10.2020 entered into between the defendants interse is not binding on the OP society.   Hence, there is no deficiency of service on the part of OP No.1.   On these among other grounds, the OP No.1 prays to dismiss the complaint.       

4.       The complainant has filed her affidavit evidence and also marked the documents at Ex.C1 to C18.  Smt. Noor Sultan, CEO (Sale Officer) has filed her affidavit evidence on behalf of OP No.1 and marked the documents at Ex.R1 to R18.

5.       We have heard the arguments of counsel for complainant and OP1.

6.       On perusal of pleadings and documents produced by both parties, the points that would arise for our consideration are:

1)                    Whether there is any deficiency in service on the part of OPs?

2)                     Whether complainant is entitled for reliefs sought for?

7.       Our findings to the aforesaid points are as under:

Point No.1: In the Affirmative

Point No.2: As per the final order

:REASONS:

8.       On perusal of pleadings, evidence and documents submitted by the parties, it is seen that the complainant participated in the auction conducted by the OP No.1 with respect to the scheduled property belongs to Sri.Ramkrishnaiah S/o Chikkarangaiah and Smt.M.K.Kusuma W/o Ramakrishan for nonpayment of outstanding amount in the loan account of Ramakrishna.  The complainant became the successful bidder of the auction with Rs.56,50,000/- and paid Rs.8,47,500/- on the date of auction itself as per procedure. 

9.       Now the main allegation of the complainant is that, OP No.1 without securing the original documents and actual physical possession of the schedule property, had scheduled public auction on 16/08/2017 and there was an original application vide No.1057/2017 on the file of DRT at Bangalore filed by SBI with whom the said Ramakrishnaiah had availed financial assistance by depositing the original title deeds of the scheduled property.  Therefore, the complainant requested the OPs to get the original title deeds relating to the property.  The OP communicated to the complainant that if the complainant makes payment of Rs.30,00,000/-, the OP will execute the registered sale deed in favour of the complainant.  Believing the words of OP No.1, the complainant had made payment of Rs.30,00,000/- to the OP No.1 on 04.04.2018, but OPs failed to execute the absolute registered sale deed in complainant’s favour and further demanding for payment of remaining amount of Rs.18,02,500/-.

10.     The OP No.1 contended that, she is working as the employee in Sri. Shivashakthi Souhardha Patthina Sahakari Sangha Niyamitha, as CEO and loan of Rs.10,00,000/- was sanctioned to one of the share holder Ramakrishnaiah.  The Ramakrishnaiah was chronic defaulter in payment of loan installments.  Hence, they initiated dispute before the Joint Director, Co-Operative Societies, Bangalore and the said Court has ordered to recover Rs.17,09,027/- along with interest @ 2% together with cost from the date of suit till realization from the said Ramarkishanaiah.  It is further submitted that as per the orders of the Court, the OP society has executed the award through the Assistant Director of Co-Operative Societies by appointing of a sale officer, executed the award and issued public auction notice in the news paper and also beated Tam-Tam in accordance with the procedure of auction and subsequently the one Smt.B.N.Chandramani/the complainant  purchased the suit schedule  property on 16.08.2017 for the total bid amount of Rs.56,50,000/- and deposited Rs.38,47,500/- and agreed to deposit the balance amount after the possession is delivered and sale deed is registered on the same day.

11.     On perusal of Exhibits, it is seen that as per SBI letter dated:28/09/2017, it is clear that the Ramarkishnaiah availed the loan in SBI by depositing the original title deeds of the scheduled property.  Hence, the SBI has primary charge over the property.  The Ex.C10, C13 and C15 disclose the following facts relating to scheduled house property.

1. Ramakrishnaiah availed loan from SBI by depositing original title deeds before the OP No.1 sanctioned loan to Ramakrishnaiah and SBI initiated action under SARFAESI ACT in DRT,

2. Ramakrishnaiah entered registered agreement of sale after auction sale and it is registered before the Sub-Registrar office on 21.01.2020,

3. Ramakrishnaiah also entered lease agreement with 3^rd party with regard to the scheduled property, and

4. One suit is filed by daughter of Ramakrishnaiah and that suit is also pending.

As per Ex.C15 dated:24.02.2018, the OP No.1 admitted the fact that the original title deeds with the SBI.  From the above Exhibits, it is clear that OP No.1 not discloses the facts relating to SBI primary charge over the scheduled property in public auction notice, before the Joint Registrar Co-Operative Federation and obtained the order for public auction.  The OP No.1 received the substantial amount from the complainant and by clearing the SBI loan, obtained the possession of original title deeds.  But not yet issued sale certificate to the complainant and civil and criminal cases are pending relating to the schedule property.   There is inordinate delay in registration and handing over the possession of the property to the complainant.  There is no point in waiting to clear all the cases relating to schedule property.  Considering the facts and circumstances of the case, lapse of time, age of the complainant and litigations pending in civil and criminal courts, it is just and proper to direct the OPs to refund the amount deposited by the complainant. 

12.     The OP No.1 has known very well that the SBI has primary charge over the house property and the OP No.1 has gave loan to Ramarkishnaiah and after default without disclosing the primary charge in SBI obtained the order for auction sale in the hands of OP No.2 amounts to unfair trade practice on the part of OP No.1.  Therefore, the auction sale is null and void.  Thus, the complainant is entitled to get refund of Rs.38,47,500/- with interest at 9% PA from the date of respective deposits till realization.  For no fault of the complainant, she is suffered and faces litigations due to recklessness act of the OP No.1.  Not only suffered mental agony, also incurred expenses in litigations wherein she made a party.  Therefore, complainant is entitled to claim compensation of Rs.50,000/- and litigation expenses of Rs.15,000/-.  For the unfair trade practice, the OP No.1 is liable to pay punitive damages of Rs.25,000/- to the complainant.  There is no allegation of deficiency in service or unfair trade practice against the OP No.2.  Hence, complaint is liable to be dismissed against OP No.2.  Accordingly, we pass the following:-

:ORDER:

The complaint is allowed in part.

The OP No.1 is directed to pay Rs.8,47,500/- and Rs.30,00,000/- with interest at 9% p.a. from the date of respective payments i.e. 16/08/2017 and 04/04/2018 to till realization to the complainant.

The OP No.1 is further directed to pay Rs.50,000/- as compensation and Rs.15,000/- for litigation expenses to the complainant.   

Further, the OP No.1 is directed to pay Rs.25,000/- as punitive damages to the complainant. 

The complaint against OP No.2 is dismissed.

It is ordered that the above order shall be complied by OP No.1 within 45 days from the date of receipt/knowledge of the order. 

Supply free copy of this order to both parties

(Dictated to the Stenographer, got it transcribed, corrected and then pronounced in the Open Commission on this the17^th day of December, 2022).

LADY MEMBER                                                                     PRESIDENT