<br /> Date of Order:03.07.2008<br /> <br /> <br /> <br /> BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20<br /> <br /> Dated: 3RD DAY OF JULY 2008<br /> PRESENT<br /> <br /> <br /> <br /> Sri. S.S. NAGARALE, B.A, LL.B. (SPL.), President.<br /> Smt. D. LEELAVATHI, M.A.LL.B, Member.<br /> Sri. BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member.<br /> <br /> <br /> <br /> COMPLAINT NO: 169 OF 2008<br /> Date of Order: 17.01.2008<br /> <br /> Sathish Sreedharan,<br /> S/o Sreedharan Nambiar,<br /> R/at No. 428, 9th Main, <br /> HRBR Layout I Block,<br /> Banaswadi,<br /> Bangalore-560 043. Complainant<br /> <br /> <br /> COMPLAINT NO: 170 OF 2008<br /> Date of Order: 17.01.2008<br /> <br /> <br /> Anand Venkitasubramani,<br /> S/o A. Venkitasubramani,<br /> R/at No. 2320, 2A Cross,<br /> 16th B Main, HAL 2nd Stage,<br /> Indira Nagar,<br /> Bangalore-560 008. Complainant<br /> <br /> COMPLAINT NO: 171 OF 2008<br /> Date of Order: 17.01.2008<br /> <br /> <br /> Nilakanta Mallick,<br /> S/o Lt Harikrishna Mallick,<br /> R/at No. 2781, 18th A Main, <br /> HAL II Stage, <br /> Bangalore-560 008. Complainant <br /> COMPLAINT NO: 172 OF 2008<br /> Date of Order: 17.01.2008<br /> <br /> <br /> Kayiti Devanandam,<br /> S/o K. Devadattam,<br /> R/at No. RB-309, Purva Riviera,<br /> Airport Varthur Main Road,<br /> Marthalli, Bangalore-560 037. Complainant <br /> <br /> COMPLAINT NO: 173 OF 2008<br /> Date of Order: 17.01.2008<br /> <br /> <br /> Hemanth Kumar. B.L,<br /> S/o Late Linganna.B,<br /> R/at No. 133, 10th A Cross,<br /> J.P. Nagar I Stage,<br /> Bangalore-560 078. Complainant <br /> <br /> COMPLAINT NO: 177 OF 2008<br /> Date of Order: 18.01.2008<br /> <br /> <br /> Rajesh Thiagarajan,<br /> S/o V. Thiagarajan,<br /> R/at SA 604, Purva Sunshine,<br /> Sarjapur Road, Kaikondrahalli,<br /> Bangalore-560 035. Complainant <br /> <br /> <br /> V/S<br /> Sobha Developers Ltd.,<br /> No. 368, VII Cross, Wilson Garden,<br /> Bangalore-560 027,<br /> Represented by its <br /> Executive Director,<br /> Mr. Jackbastian Nazareth. Opposite Party<br /> <br /> ORDER<br /> By the President Sri. S.S. Nagarale<br /> <br /> These six complaints are clubbed together for common order since the question of facts and law involved in all these six complaints are one and the same and the opposite party in all these complaints is also one and the same. These complaints can be conveniently disposed off by common order.<br /> The respective complaints have filed U/Sec.12 of the Consumer Protection Act, 1986.<br /> The facts of the case are that, in December-2004 the opposite party announced a project called Shoba Dreams-1 near White Field, Bangalore. On 29th March-2005 opposite party accepted Rs.1,00,000/- from the complainants towards the initial booking amount. Opposite party offered a rate of Rs.1,552/- per square feet and promised to entered into an agreement of sale of the apartment proposed to be constructed. The opposite party intimated that statutory approvals were pending and completion of the project is likely to be delayed. The opposite party sent e-mail citing several reasons for the delay. The opposite party unilaterally cancelled the proposal to build the apartment complex and returned the booking amount remitted by the complainant. The opposite party has several reasons for cancellation of the complex in the letter. The opposite party has cited false and untenable reasons for cancellation of apartment project. The failure of the opposite party to obtain statutory clearance is deliberate. If the complainants were to book apartment in same area they have to pay Rs.3,500/- per square feet. Escalation of prices between March-2005 to December-2007 is to tune of nearly 100%. The complainants have claimed Rs.18,50,000/- towards escalation costs and refund of Rs.1,00,000/-, the initial booking amount with interest at 9% p.a. The complainants also claimed Rs.22,0000/- towards mental agony.<br /> 2. Notice was issued to opposite party. Opposite party put in appearance and filed detail version running into 12 pages submitted stating that opposite party is a company incorporated under the provisions of Companies Act. The opposite party is known for its construction and ethical manner. It has established reputation as regards its business activities. It is the case of the opposite party that since the environmental clearance has been refused on account of BWSSB not satisfying the requirements of Ministry of Environment and Forests as regards supply of water which is beyond the control of the opposite party. It is false that opposite party has failed to obtain statutory clearance deliberately as alleged. It is also false to say that cancellation of booking was due to untenable grounds. Opposite party requested the complainants that they could transfer their booking to another project of the opposite party which was not accepted by the complainants. The complainants cannot claim the escalation costs. Opposite party informed the complainants in September-2005 to refund the amount. Delay of project was not on account of opposite party. On account of refusal of the clearance by the Ministry of Environment and Forests it has become impossible for the opposite party to put up construction, the opposite party ready to refund the amount with interest. For all these reasons stated above, the opposite party requested to dismiss the complaint. <br /> 3. Both the parties have filed affidavit evidence and documents. Arguments of learned advocate for the parties are heard. <br /> 4. The points for consideration are:- <br /> 1. Whether the complainants are entitled for <br /> refund of booking amount with interest?<br /> 2. Whether the complainants are entitled for costs <br /> of escalation as claimed in the complaints?<br /> 3. Whether the complainants are entitled for compensation?<br /> <br /> REASONS<br /> <br /> <br /> 5. The opposite party is a company incorporated under the provisions of Companies Act 1956. Opposite parties are in business of Real Estate Development. It is submitted that opposite party over a period of time established a valuable reputation, it is known for its quality of construction and ethical manners. One of the complainants Sathish Sreedharan himself has written a letter to the opposite party stating that opposite party is a leading Real Estate Developer in Bangalore City and having considerable repute for being fair and even handed. As regards the facts of the case are concerned there is absolutely no dispute. The opposite party had written a letter on 11/5/2007 explaining its inability to go head with the project for legal hurdles and for want of clearance from the Ministry of Environment and Forests, Government of India and it has sent cheque being refund of the booking amount with interest. The complainants have not accepted the cheque and approached the Forum with these complaints. During the course of hearing of the matter, on the directions of the Forum the respective complainants received booking amount with interest at 18% p.a. from the date of payment till handing over of the D.D to them. Therefore, the matter as regards refund of amount with interest had been settled. The complainants though sought interest at 9% p.a of the booking amount, on the directions of the Forum, the opposite party readily agreed to pay interest at 18% p.a. The only point now to be considered is whether the complainants are entitled for escalation costs and damages if any on account of cancellation of booking. Each of the complainants have paid Rs.1,00,000/- on 29/3/2005. The receipt has been issued by the opposite party. In the said receipt it is stated as blocking amount. Except paying the blocking amount the complainants have not paid any further amount. Agreement had not come into existence. There is no construction agreement between the parties. There is no payment schedule. The learned advocate for the complainant argued that, a letter dated 29/3/2005 is allotment letter. This letter cannot be considered as allotment letter because the amount was paid on 29/3/2005 and letter was given on the same date itself. This is only confirmation letter for having booked the apartment. It is stated in the letter that the opposite party is happy to welcome the members to the family of Sobha Home Owners. Therefore, the letter dated 29/3/2005 cannot be said as allotment letter. In registration Form condition No.10 clearly states that initial booking amount will be 25% of the apartment costs. The apartment costs was more than Rs.29,00,000/-. The respective complainants except paying Rs.1,00,000/- either we can consider as blocking amount or booking amount. No further payment is made. On 13/9/2005 within six months from the date of booking the opposite party had written letter explaining the sequence of events for getting the various sanctions and approvals and the opposite party had given option to the complainants for cancellation and offered to refund the booking amount with interest at 9% p.a with sincere regret. This letter of the opposite party shows their bonafide. There was absolutely no deliberate delay or postponement of project on account of the failure of the opposite party in taking steps. The opposite party had written letter on 11/5/2007 to the complainants explaining that the comprehensive development plan of BDA had expired, the revised comprehensive development plan is yet to be given effect. The Ministry of Environment and Forests, Government of India brought in a notification, the project has been struck with them. The approval is now uncertain and the same is beyond their control. It is stated in the letter that BDA will give sanction of plans for a project only after receiving the clearance from the Ministry of Environment and Forests. It is stated in the letter by the opposite part that with so many procedural hurdles in getting various approvals which are interlinked with so many approvals and consents to be obtained still being uncertain it is now not possible to go ahead with the project. Therefore, the opposite parties have stated that they have no other alternative, but to refund the initial amount paid by the complainants. So, taking into consideration of all the documents produced by the parties, it is clear that the opposite party was not in a position to go on with the project on account of legal and procedural hurdles. The learned advocate for the complainants argued that the prices of the apartments have gone high. The property price escalation is to the tune of nearly 100%. Therefore, the complainants should be awarded adequate compensation. So that they can purchase flat at the rate agreed upon. The learned advocate for the complainants referred to us a decision of Hon’ble National Commission in Brig (Retired) Kamalsudh V/S DLF Universal Limited. I have gone through the facts of that case. In that case the DLF demanded additional amount of more than Rs.4,00,000/- as escalation charges and the complainant had paid large amount without there being any delay. Under those circumstances, the DLF was directed to refund the escalation costs recovered from the complainant and Rs. 1,00,000/- was granted as compensation to the complainant for delay in delivery of possession. Therefore, the said decision has no bearing to the facts of the present case. The facts of the present case are entirely different from the facts of the above authority. Therefore, it will not in any manner help the complainants. The other decision referred to us by the advocate for the complainant is of Hon’ble National Commission in Veena Khanna V/S Ansal Properties and Industrial Limited. I have gone through the said authority in detail. The consideration fixed for the flat in that case was Rs.23,33,344/- and the complainants had paid Rs.15,12,000/- on different dates and complainants stopped payment of balance amount as there was no progress of construction work. On the facts of that case, the Hon’ble National Commission directed the builder to pay Rs.7,50,000/- as compensation to the complainant. Alternatively, it was ordered the builder to provide an alternate flat of the size and price agreed. Again the facts of the case referred above are entirely different to the facts of the present case. Because the complainant in that case paid more than Rs. 15,00,000/- on different dates. The purchase price of the flat was Rs.23,00,000/-. So, under those circumstances, the Hon’ble National Commission awarded compensation. But in this case, the complainants have paid booking amount of Rs.1,00,000/-. Except this amount there is no further payment. There was no construction agreement. There was no payment schedule. Therefore, the above authority cannot be made applicable to the facts of the present case. Each case has to be decided on the set of facts of the particular case. No case will be similar on facts with another case. The authorities relied on by the learned advocate for the complainant will not in anyway helpful to the complainant in getting the escalation price. The learned advocate for the complainant referred to us the unreported judgment of Hon’ble Karnataka State Commission decided on 10th day of July-2007 in M. Chandrashekaran and Others V/S BEML SC/ST Employees Welfare Association. I have gone through the judgment of the Hon’ble Commission in detail, in that case the complainants have paid the entire cost of the site to the society. The Hon’ble Commission at para-8 of the judgment observed that most of the Housing Societies in Karnataka are not functioning properly. They collect money from large number of members promising allotment of sites and after collecting money they start acquiring some land ............... The societies for one or another reason would not allot sites and members are made to run from pillar to post even to get back their money......... If the functioning of these societies is not improved, people will loose faith in societies. So, under those circumstances, the Hon’ble State Commission awarded compensation of Rs.10,00,000/- to each of the complainants. Therefore, the said authority cannot be made applicable to the facts of the present case. In the present case on hand the costs of the flat was more than Rs. 29,00,000/- whereas the complainants have paid only Rs. 1,00,000/- as blocking amount. Therefore, under these circumstances, the complainant cannot claim compensation of Rs. 10,00,000/- or they are not justified to demand payment of market value of the property as on the date of the complaint. The learned advocate for the complainant argued on the line that the payment of booking amount was an executory consideration. He tried to distinguish between contracts of executed consideration and executory consideration. I think it would not be appropriate to discus on this point in the present complaint which are required to be disposed off in summary manner under the Consumer Protection Act, 1986 though the point might well have been arguevable one before the Civil Court. The opposite party in this case has promptly within six months from the date of booking intimated the complainants by writing letter. the legal hurdles in starting the project and had given option to the complainants to take back the booking amount. The opposite party has refunded the amount with interest at 18% p.a. The only point to be considered in these complaints is that what would be the compensation that could be awarded to each of the complainants for inconvenience and hardship caused to them on account of not materializing the project. No doubt the complainants received principle amount and interest still they have been put into some kind of inconvenience and hardship. Their hope of getting flat has not been materialized. Therefore, it would be just, fair and reasonable to grant some compensation to the complainants. In this case the builder without any planning and without obtaining effective permission to construct apartments invited offers and collected booking money from the prospective buyers and ultimately the project could not be taken up for so many reasons. The opposite party no doubt farley have come forward to refund the amount with interest promptly to the complainants and this will not absolve the opposite party from the payment of just and reasonable compensation to the complainants. On the facts and circumstances of the case, I feel the ends of justice will be met in awarding Rs.50,000/- as compensation to each of the complainants. Before concluding the judgment, I want to place on record my appreciation to both the learned advocates for the parties who have presented their respective cases very nicely by placing number of authorities and assisting the Forum in proper appreciation of facts and law. Both the counsel for the parties argued the case in a very nice and dignified manner, they deserve our appreciation. In the result, I proceed to pass the following:-<br /> ORDER<br /> <br /> 6. All the complaints are partly allowed. The opposite party is directed to pay Rs.50,000/- to each of the complainants as compensation within 30 days from the date of this order. In the event of not complying the order by the opposite party within 30 days, in that case the compensation amount carries interest at 10% p.a from the date of this order till payment/realization. Each of the complainants are entitled to Rs.5,000/- towards costs of the present proceedings from the opposite party.<br /> <br /> 7. The original of this order shall be kept in complaint No.169/2008 and a true copy thereof shall be kept in each of the other cases. <br /> <br /> 8. Send the copy of this Order to all the parties free of costs immediately. <br /> <br /> 9. Pronounced in the Open Forum on this 3RD DAY OF JULY 2008. <br /> <br /> Order accordingly,<br /> <br /> PRESIDENT<br /> We concur the above findings. <br /> <br /> MEMBER MEMBER <br /> <br /> <br /> <br /> <br />