IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.A.T.Munnoli<br /> B.A., L.L.B (Spl.) - President <br /> <br /> 2. Smt.Y.V.Uma Shenoi<br /> M.Sc., B.Ed., - Member<br /> 3. Shri. Shivakumar.J.<br /> B.A., L.L.B., - Member<br /> <br /> CC 19/10 DATED 22.03.2010<br /> ORDER<br /> <br /> Complainant Chamappa,<br /> S/o Late Boraiah<br /> Rep. GPA Holder, Gangadhar,<br /> S/o Chamappa, R/at D.NO.3556, 3rd Cross, Tilak Nagar, Mysore.<br /> <br /> (By Sri. K.C.Ravindra, Advocate)<br /> <br /> Vs. <br /> Opposite Party M.Sanjeeva Shetty, President and B.N.Shubashini, Secretary,<br /> Both are O/at Sri Ramakrishna Housing Co-operative Society Ltd., Mysore (South), Mysore,<br /> No.40/1, 4th Main Road, Sri Laxminarasimha Complex, V.V.Mohalla, Mysore City.<br /> <br /> (By Sri.R.Partha Sarthi Uttarkar, Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 18.01.2010<br /> Date of appearance of O.P. : 16.02.2010<br /> Date of order : 22.03.2010<br /> Duration of Proceeding : 1 MONTH 6 DAYS<br /> <br /> <br /> PRESIDENT <br /> <br /> <br /> <br /> MEMBER<br /> <br /> <br /> MEMBER<br /> <br /> <br /> Sri. A.T.Munnoli,<br /> President<br /> <br /> 1. Under Section 12 of the Consumer Protection Act, the complainant has filed the complaint alleging deficiency in house site allotment and has sought a direction to the opposite party to refund the advance amount paid towards the cost of the site amounting to Rs.2,25,000/- as well as Rs.1,400/- initial charges, with interest at the rate of 18% p.a. from the date of deposit and further, Rs.50,000/- damages and such other reliefs, with costs.<br /> <br /> 2. In the complaint it is alleged that, the complainant being an aspirant to have house site in Mysore city, knowing the fact of formation of layout by the opposite party, approached and on enquiry, opposite party assured handing over a site within two years. Reposing confidence in the words of the opposite party, the complainant became member of the opposite party society by paying Rs.1,400/-. The complainant applied for site measuring 30’ x 40’ in the 2nd stage of K.Hemmanahalli. He paid Rs.1,20,000/- first installment to the opposite party on 08.11.2006. He also deposited second and third installments of Rs.55,000/- and Rs.50,000/-. The complainant was waiting to take possession of the site by paying the last installment. Though, opposite party had given assurance to allot site within two years, has failed to keep up promise. The opposite party has not made any developmental works at the proposed layout, except putting name board of the society. The complainant is a middle-class person. By raising loan, the complainant applied for site to the opposite party. Since, the opposite party has not formed the layout, the complainant decided to take back the advance. The complainant is aged and has health problem. On 08.12.2009, a letter to the opposite party was written, explaining everything, requesting to refund the amount with interest at the rate of 18% p.a. Sending untenable reply, opposite party refused to refund the amount with interest. The opposite party has failed to distribute the sites as assured and to make developments to the tune of amount collected from the complainant, thereby committed deficiency in service. In appeal numbers 3919 and 3920/09, the Hon’ble State Commission has confirmed the order of this Forum between two other members and the opposite party society. Accordingly, it is prayed to allow the complaint.<br /> <br /> 3. In the version, the opposite party society has contended that, the complaint is neither maintainable in law nor on merits. It is a gross abuse of the process of the Forum. It is contended that, the complainant is not at all a consumer. The complainant has to prove statutory relationship between himself and the opposite party. Unless, that is proved, the complainant cannot be adjudicated upon merits. At the threshold, the complaint ought to be dismissed. Further, it is contended that, opposite party society is a statutory body under the Karnataka Co-operative Societies Act 1959. The complainant is one of the members. If any disputes between the member and the society, under section 70 of the Act, will have to resolved by the Competent Authority, not by this Forum. In other words, there is express bar for this Forum to entertain the complaint. It is stated that, the complainant as a share holder has interest in the opposite party society. Hence, himself cannot be consumer of the opposite party society. Opposite party society is an association of the members with a co-operative spirit of owing house sites on no profit and loss basis. The complainant being share holder of the opposite party society, cannot have grievance against his own society that too as consumer. There is no privity of contract between the parties in respect to allotment of site as sought to be contended by the complainant. In the notice sent by the complainant, there is no whisper that he is a consumer or there is deficiency in service. On receipt of the reply, the complainant should not have ventured in filing the complaint as it is categorically made clear that the opposite party is ready and willing to refund the amounts paid along with membership fees. On this account also, the complaint deserves to be dismissed. The complainant has sought refund of the amount with interest in respect of the proposed allotment of site. Admittedly, there is no agreement entered into between the parties. Hence, there is no contract between them. Opposite party has not undertaken in any way to pay any interest. Mention of rate of interest at 18% p.a. on the site application form, is nothing to do with the opposite party society’s obligation to pay interest. In the meeting dated 29.08.2009, Board of Directors of the society have resolved that the member who opt out of the housing scheme are not entitled to receive any interest while seeking refund. It is policy decision of the society. It is binding on all the members of the society. There is no deficiency in service of allotting the sites. Because of the inaction and lapse on the part of the Local Planning Authority in approving the layout, there is delay on the part of the opposite party society in allotting the house sites. It is denied that, the opposite party society assured to hand over a site to the complainant within two years. It is in the knowledge of the members of the society that it is a combursum process to acquire the agricultural lands and get approvals from the Authorities. Payment of three installments is admitted, but it is contended that, there is delay of 25 days in paying the second installment and 47 days in paying the third installment. The complainant has not at all paid fourth installment. Non-payment of fourth installment itself disentitled the complainant to exercise his right to get site or refund of the amount. Inaction or deficiency in service on the part of the complainant cannot give him any superior right to contend any deficiency on the part of the opposite party. Very approach of the complainant before the Forum is totally misconceived, mischievous besides being without jurisdiction. The approach of the complainant is too pre-mature to demand refund of installments without paying the fourth installment. Since, there is no promise, there is no question of not keeping up the same. It is denied that, the opposite party has not made any developmental works. It is contended that, opposite party is not responsible for the alleged borrowing of the loan by the complainant. It is contended that, there is no cause of action for the complainant to seek refund of the amount. Further, it is stated that, simply because opposite party has approached to refund the amount, itself will not confer any right on the complainant to seek any reliefs from this Forum. Also, it is stated that, the members including the complainant are aware of the inaction on the part of the MUDA in approving the layout and there is no lapse or deficiency in service on the part of the opposite party. Even otherwise, it cannot be said that, the opposite party has undertaken to provide any service to it’s members under guise to allotting sites. As regards the orders of Hon’ble State Commission in respect of other two members, it is stated that, same have not attained finality nor binding on this Forum, as much as the issue is subjudice before the Division Bench of the Hon’ble High Court of Karnataka in W.P.NO.1576 and 1577/10 filed by the opposite party society. Also, it is stated that, assuming but not admitting that, opposite party society has any obligation to allot a site to the complainant, it could become enforceable only if the complainant paid the entire sital value including fourth installment. Claim of refund of share capital by the complainant, is not maintainable. On these grounds, it is prayed to dismiss the complaint.<br /> <br /> 4. Power of attorney holder who is the son of the complainant has filed his affidavit, wherein the facts mentioned in the complaint are stated. For the complainant, certain documents are produced. On the other hand, President of the opposite party society has filed his affidavit stating that, the contentions raised in the version may be read as ‘part and porel of the affidavit’. Certain documents are produced for the opposite party. We have heard the arguments of the learned advocates for the complainant and the opposite party. For the opposite party, synopsis of arguments, are also filed. We have perused the entire records.<br /> <br /> 5. Now the points arises for consideration are as under:-<br /> 1. Whether the complainant has proved that he is a consumer and that there is deficiency in service on the part of the opposite party and further, he is entitled to the reliefs sought?<br /> 2. What order?<br /> <br /> 6. Our findings are as under:-<br /> Point no.1 : Partly in the Affirmative.<br /> Point no.2 : As per the order.<br /> <br /> REASONS<br /> <br /> 7. Point no. 1:- The complainant being member of the opposite party housing society, having paid Rs.2,25,000/- in the year 2006 to the opposite party society for allotment of the site, alleging that the opposite party society has not formed the layout and allotted the site as promised within two years, alleging deficiency in service on the part of the opposite party, has sought refund of the said amount with interest at the rate of 18% p.a. Admittedly, till today layout has not been formed. Before filing the complaint, complainant had sent notice to the opposite party for refund of the advance paid with interest. The opposite party replied stating that, it is ready and willing to refund the advance. However, opposite party denied liability to pay any interest. Thus, real dispute is regarding interest.<br /> <br /> 8. In CC Nos.328 and 329/09 filed by two other members against the present opposite party society, this Forum by the order dated 02.11.2009 awarded interest at the rate of 18% opposite party. Our Hon’ble State Commission in appeal numbers 3919 and 3920/09 by the order dated 15.12.2009, dismissed the appeals at the stage of admission observing that, “in our opinion awarding of interest at the rate of 18% p.a. in such type of cases, is just and proper”.<br /> <br /> 9. The Hon’ble National Commission in the ruling reported in IV (2009) CPJ page 159 has upheld awarding of interest at the rate of 18% p.a. by the lower Forum. In another ruling reported in II (2009) CPJ page 152, awarding of interest at the rate of 18% p.a. on the amount deposited, is confirmed. In the ruling reported in 2010 CTJ 108 Goa State Commission has upheld awarding of 18% p.a. interest in case of refund of the amount. In 2010 CTJ page 170 Hon’ble National Commission awarded interest at the rate of 18% p.a.<br /> <br /> 10. Hence, at the outset, firstly in view of the fact that, our Hon’ble State Commission against the present opposite party society that too under similar set of facts has held that, awarding of 18% p.a. is just and proper. So also, in the recent rulings, other Hon’ble State Commissions and Hon’ble National Commission in case of refund of the advance amount regarding house sites or houses, awarded interest at the rate of 18% p.a. Under the circumstances, at the outset, we are of the considered opinion that, interest claimed by the complainant in the present case, is just and reasonable.<br /> <br /> 11. The facts and the reasons noted in the earlier paragraphs are quite sufficient to dispose of the present case. However, the learned advocate for the opposite party vehemently argued hours together relying on various rulings and raised various objections and taken many contentions in the version running into 11 pages. The learned counsel relying on the ruling reported in 20007 (1) SCC 199 submitted that, it is necessary on the part of the Forum to consider the contentions raised by the parties. Also, he relied on the ruling reported in AIR 2008 SC 2568 and submitted that order passed by the Consumer Forum without considering the contentions, particularly regarding the jurisdiction, is liable to be set aside. In view of these rulings and the submission made by the learned advocate, it has become necessary for us to consider each and every contentions taken by the opposite party.<br /> <br /> <br /> <br /> <br /> 12. Before proceeding to consider the contentions of the opposite party, it is relevant to note paragraph 17 of the ruling reported in (2008) 10 SCC 345, which has been relied upon by the learned advocate for the opposite party. So that, in the light of the same, we can proceed further. Said paragraph reads thus:-<br /> “In Lucknow Development Authoirty Vs. M.K.Gupta referring to the nature and object of the Act, this Court observed: (SCC pp.251-52, para2)<br /> 2……. To begin with the Preamble of the Act, which can afford useful assistance to ascertain the legislative intention, it was enacted, ‘to provide for the protection of the interest of consumers. Use of the word ‘protection’ furnishes key to the minds of makers of the Act. Various definitions and provisions which elaborately attempt to achieve this objective have to be construed in this light without departing from the settled view that a Preamble cannot control otherwise plain meaning of a provision. In fact the law meets long felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons has become illusory. Various legislations and regulations permitting the State to intervene and protect interest of the consumers have become a haven for unscrupulous ones and the enforcement machinery either does not move or it moves ineffectively, inefficiently and for reasons which are not necessary to be stated. The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, ‘a network of rackets’ or a society in which, ‘producers have secured power’ to ‘rob the rest’ and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampant, widespread and deep that the society instead of bothering, complaining and fighting against it, is accepting it as part of life. The enactment in these unbelievable yet harsh realities appers to be a silver lining, which may in course of time succeed in checking the rot. A scrutiny of various definitions such as ‘consumer’, ‘service’, ‘trader’, ‘unfair trade practice’ indicates that legislature has attempted to widen the reach of the Act. Each of these definitions are in two parties, one, explanatory and the other expandatory. The explanatory or the main part itself uses expressions of wide amplitude indicating clearly its wide sweep then its ambit is widened to such things which otherwise would have been beyond its natural import.”<br /> <br /> 13. In the third paragraph of the version, it is contended that, section 70 of the Karnataka Co-operative Societies Act 1959, bars the jurisdiction of this Forum. It is so contended stating that, admittedly, the complainant is the member of the opposite party Co-operative Society and the dispute between them shall have to be resolved by the Authority under the said Act. In this regard, for the complainant ruling reported in I (2004) CPJ, is relied upon. The Hon’ble Apex Court has elaborately dealt with the matter and has held that, <br /> Thus, having regard to all aspects we are of the view that the National Commission was right in holding that the view taken by the State Commission that the provisions under the Act relating to reference of disputes to arbitration shall prevail over the provisions of the 1986 Act is incorrect and untenable. The National Commission, however, did not take note of the fact that the State Commission had not decided the other contentions raised in the appeals on merits. We are inclined to accept the alternative submission made on behalf of the appellant for remanding the case to the State Commission for deciding the other issues on merits while affirming that the complaints before the District Forum made by the respondents were maintainable and the District Forum had jurisdiction to deal with the disputes. In this view, while affirming the order of the National Commission as to the maintainability of the disputes before the Forum under the Act, we remand the appeals to the State Commission for their adjudication on other issues on merits without going to the question of maintainability of the disputes before the Forum under the 1986 Act.”<br /> <br /> Further, in the ruling reported in I (1991) CPJ 462, Hon’ble Maharashtra State Commission has held that, complaint by the member of the Co-operative society is maintainable. Likewise, in III (2009) CPJ 323, Hon’ble Keral State Commission has held that, complaint by the member of the Co-operative Society would not create bar in cheating remedy in C.P.Act, being additional remedy provided under the Act and the complaint is maintainable. Hence, we found no substance in the contention of the opposite party, that this Forum has no jurisdiction to entertain and try the present complaint.<br /> <br /> 14. In fourth paragraph of the version, it is contended that, complainant is not a ‘consumer’. Reason assigned is that, the complainant is a share holder of the opposite party society cannot have grievance against his own society. To consider this contention, the definition of the consumer provided under section 2 (1)(d) and the definition of the ‘service’ provided under section 2 (1)(o) needs to be quoted. Said sub-sections reads thus:-<br /> “2(1)(d):- Consumer means: any person who – (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person…..” <br /> “2(1)o):- Service means of any description which is made available to potential *users and includes, but not limited to, the provision of) facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”<br /> <br /> 15. It is contended by the opposite party that, there is no privity of contract between the complainant and the opposite party in respect of allotment of site. Then, the first question would be, what for the complainant has paid huge amount of Rs.2,25,000/-. Original receipts issued by the opposite party to the complainant, are produced. In the three receipts, there is specific mention as “site advance”. Hence, from the receipts issued by the opposite party society itself, it is crystal clear that, the complainant has paid the said amounts towards site. It is not at all the case of the opposite party that, for some other purpose, said amount has been paid by the complainant. Hence, from the documents of the opposite party itself, it is clear that, complainant has paid the amount towards allotment of site. Considering this, amongst other facts and the circumstances, the contention of the opposite party that, there is no privity of contract between the complainant and the opposite party with respect to allotment of site, cannot be accepted. It is not that, necessarily there must be a written contract or agreement between the parties regarding allotment of site. The fact of payment of the advance amount by the member to the housing society itself prima-facie establish a privity of contract between the parties and an obligation on the part of the opposite party society to allot the site. In the middle of 14th paragraph of the version, it is stated by the opposite party that, “even otherwise, it cannot be said that the opposite party society has under taken to provide any service to it’s members under the guise of allotting sites……………”. Again as noted above, why the members including the complainant have paid the amount would arise. So also, in para 15th of the version, it is stated, “even assuming, but not admitting that the opposite party society has any obligation to allot the site in favour of the complainant, the same obligation could become enforceable only if the complainant pays the entire sital value including fourth installment.”. Thus, the opposite party wants that the complainant to pay the last installment also to exercise his right. Admittedly, the complainant has paid three installments. It is submitted for the complainant that, last installment is to be paid at the time of registration of the sale deed. Hence, under the circumstances, the contention of the opposite party that, there is no privity of contract with respect to allotment of site or that the complainant can not exercise his right without paying the last installment, cannot be accepted.<br /> <br /> 16. In the 6th paragraph of the version, the opposite party has contended that Board of Directors of the opposite party society in the meeting dated 29.08.2009 have resolved that the members who opt out of the housing scheme, not entitled to receive any interest on the advance. Xerox copy of the said resolution is on record. At the outset, said resolution passed by the opposite party society is not binding on this Forum. Secondly, it is relevant to note that, on reading the said resolution it is clear that, after this Forum passed order awarding interest in two other complaints filed by the members of the opposite party society, the present resolution has been passed. In the resolution in fact, it is stated that, the amount collected from the members has been utilized for acquisition of the land or development of the same. Also, it is mentioned in the said resolution that, the development of the layout is slow for the 4 – 5 years, because of the local bodies etc., Even the opposite party society has gone to the extent of passing resolution, stating that, the dispute of the nature cannot be tried by the Consumer Forum. It is stated, such disputes shall have to be decided by the Assistant Registrars of the Co-operative Society. Moreover, the resolution has been passed by the Directors only. Hence, under the circumstances, because of the said resolution, it cannot be said that this Forum has no jurisdiction to entertain and try the present complaint.<br /> <br /> 17. Learned advocate for the opposite party relied on the ruling reported in (2008) 10 SCC 345. In that case, building construction agreement between the land owner and the builder was in question. The Hon’ble Apex Court has held that, if the land owner commits breach of his obligation, the builder would have to approach Civil Court seeking relief as to specific performance. But, in case of breach of his obligations by the builder, the land owner has two options, that is he can either enforce specific performance and/or claim damages or can approach the Forum under the C.P.Act. Hence, the law laid down by the Hon’ble Apex Court in that ruling will not help the opposite party. The learned counsel contended that, admittedly the complainant is a member of the opposite party society, and he being share holder, is also joint owner of the land held by the opposite party society and hence, he is not a consumer and cannot maintain the present complaint against his own society. We do not agree with this submission. Considering the various provisions of the Karnataka Co-operative Societies Act, it no stretch of imagination, it could be said that, member of the society is joint owner of the property held by the society, unlike the directors of the company. We feel it not necessary to narrate details of the relevant provisions of the Karnataka Co-operative Societies Act in this regard. It is suffice to notice that, the facts of the case of the ruling relied upon by the learned advocate noted above, are quite different and it will not help the opposite party. Another ruling reported in (2001) 9 SCC 604 is relied upon, and the learned advocate submits, since there is no agreement between the parties, the complainant is not a consumer. At the cost of repetition, first of all as noted here before, even though there is no written complaint between the parties regarding allotment of the site by the opposite party society to the complainant, it has been established beyond doubt from the receipts issued by the opposite party society itself that the complainant has paid the amount towards allotment of site. In the said ruling, the lease did not contain repairing and maintaining the building by the landlord and hence, it is held that, the tenant is not a consumer. Therefore, this ruling is of no use for the opposite party.<br /> <br /> 18. For the opposite party relying on that ruling reported in (2007) AIR SCW 3859, it is submitted that, delay in allotment of plots does not automatically mean deficiency in service. It is true, as held by the Hon’ble Apex Court, automatically the delay cannot be considered as deficiency. The Hon’ble Apex Court in paragraph 10 has laid down general principles regulating the grant of reliefs to the consumer amongst several principles. It is laid down that, where the development Authority having received the full price, did not deliver possession of the plot/house within the time stipulated or within the reasonable time without any justifiable cause, complainant is entitled for refund of the amount paid in addition to compensation etc., Hence, to hold that, there is deficiency in service on the part of the opposite party, it is to be made out that, within the stipulated time, the site has not been allotted or within a reasonable time. In the case on hand, the complainant has alleged that, the opposite party society had promised to complete the layout within two years and to allot the site. Of course, as on record, to substantiate said fact, the complainant has not produced any documents. The two years period put forth by the complainant is denied by the opposite party. To ascertain, whether there was any time stipulated or otherwise, various aspects and the circumstances needs to be noted. Firstly, it is to be noted that, price of the site was to be paid in four installments. Admittedly, the complainant has paid three installments. Of course, opposite party in the version has contended that, there is delay of 25 days in paying the second installment and 47 days in paying the third installment. It goes to show that, some time was stipulated regarding payment of the amount by the members and so also, completion of the process of development of layout as well as allotment of the sites. Resolutions or any other documents in this regard, must be in possession of the opposite party society. At the cost of repetition, specifically opposite party contend that, there is some delay in payment of second and third installments on the part of the complainant. To substantiate this fact, no document is produced by the opposite party. Admittedly, first installment is paid by the complainant in the year 2006 and the remaining installments in the year 2007. Now, we are in the year 2010. Nearly more than four years are elapsed. It is fact that the opposite party has not developed the layout in question and sites are not formed. Hence, the point would be, whether this nearly more than four years, is reasonable time. In the ruling relied upon for the opposite party in 12th paragraph, thers is mentioned that the commission found two years as reasonable period. Hence, under the circumstances, assuming that the complainant has failed to prove stipulated period was 2 years, the fact that in spite of lapse of more than four years, layout having not been developed as contended by the complainant except installing the board of the society, it is a reasonable delay.<br /> <br /> 19. In seventh paragraph of the version regarding delay in formation of the layout is alleged that, “inaction and lapse on the part of the Local Planning Authority”. For the opposite party, certain newspaper cuttings pointing out negligence on the part of MUDA, are produced. Firstly, on the basis of the said news alone, it cannot be held that, MUDA is the only responsible or negligent person or authority for non-development of the layout in question. There is no evidence, as to when the process commenced and when the opposite party society approached the MUDA and what steps it took are all shall have to be established. To consider this, there is no material for the opposite party. Secondly, assuming that the MUDA has not moved the file or not granted the required permission then what steps or action that the opposite party society has taken, shall have to be proved. To substantiate this aspect also, there is no material on record. In this regard, it is relevant to note that, in the ruling that the learned advocate for the opposite party has relied in Fakheer Chand, Hon’ble Apex Court has held that, if the documents were wrongly withheld by the Municipal Corporation, the builder may have to approach the appropriate Court or other Forum to get the reliefs. Hence, if at all, there is any fault or delay on the part of the MUDA, the opposite party society ought to have taken appropriate action in accordance with law against MUDA or all the concerned authorities. Hence, the opposite party society cannot shirk it’s responsibility or obligation making certain allegations against the MUDA or other Authorities.<br /> <br /> 20. In 10th paragraph of the version, opposite party has contended that, the right exercised by the complainant by filing the present complaint, seeking refund of the advance paid, it is disentitles him the relief. Also, in 15th paragraph, that is repeated. It is stated, obligation could become enforceable only if complainant pays entire sital value including 4th installment. By contending so, the opposite party intended that the complainant to pay the last installment also, even though there is no formation of the layout, development of the sites and then, take back the said amount. Absolutely, we found no substance in that contention. It is further stated, at the end of 10th paragraph that very approach of the complainant to the Forum is mischievous. The complainant having paid three installments for allotment of the site, the opposite party society having not developed the layout and formed sites has sought refund of the amount by filing the present complaint and that is termed by the opposite party as ‘mischievous’. As noted earlier, even though no layout has been formed and sites are developed, the opposite party contend that, unless the complainant pays last installment also, he cannot exercise his right to seek refund of the amount or that, there is no obligation on the part of the opposite party to refund the amount, whether can be termed as ‘non-mischievous’? In 10th paragraph of the version, it is stated that, approach of the complainant to the Forum is pre-mature. In spite of lapse of about more than four yeas, the opposite party having not formed layout, can it be said that the complainant to wait any number of years till the opposite party form layout without seeking refund of the advance amount? In the same paragraph, it is stated, without paying fourth installment, the demand made is pre-mature. At the cost of repetition as noted above, the opposite party society want that the complainant to pay last installment also and then seek refund. We are of the opinion that, said contention is without any substance. <br /> <br /> 21. In 14th paragraph of the version, it is stated that, the fact that orders passed by this Forum in earlier two cases against it by other two members, order which has been confirmed by the Hon’ble State Commission, has not attained finality and is not binding on this Forum. It is so contended alleging that, the opposite party has filed writ petitions before the Hon’ble High Court of Karnataka. Mere filing Writ Petitions or Appeals, cannot be said that the order passed by the Hon’ble State Commission is not binding on this Forum. It is not at all the case of the opposite party that, Hon’ble High Court of Karnataka has granted any stay. It is relevant to note that, in the ruling reported in (2004) 5 SC 65, that has been relied upon by the advocate for the opposite party, Hon’ble Apex Court has observed that, in the absence of stay, the order shall have to be complied with. Hence, the contention that, because Writ Petitions are filed, the order of the Hon’ble State Commission will not binding on this Forum, cannot be accepted.<br /> <br /> 22. It is contended by the opposite party that, in the notice that was issued prior to filing of the complaint, there is no whisper at all regarding deficiency in service on the part of the opposite party. Copy of the notice or letter, is on record. It is mentioned in this letter that, in the proposed site except fixing the board of the society, no development has taken place. Also, it is alleged, despite the fact that more than 3 years elapsed, as promised, layout has not been developed and possession of the site has not been delivered. Also, it is alleged that the complainant has lost faith in the opposite party society. Though the word ‘deficiency’ is not specifically mentioned in the letter, the facts noted above in fact constitute deficiency in service. Also, it is relevant to note that, it is not a notice issued by lawyer, but the letter written by the complainant himself in person. Hence, we found no substance in the contention of the opposite party.<br /> <br /> 23. Now, coming to consider the last and the main contention of the opposite party that, it is not liable to pay interest. It is so contended mainly on the ground that for payment of interest at 18% p.a. as claimed by the complainant in case the amount is to be refunded, there is no agreement. We do consider that, on record, no such agreement or contract imposing condition on the opposite party to refund the amount with interest, is available. However, at the same time, it is important to note that, as submitted for the complainant and mentioned in paragraph 6 of the version, in the application form to be submitted by the member to the opposite party society for allotment of site, there is condition that in case of delay in payment, the members are liable to pay interest at the rate of 18% p.a. When there is such an agreement between the society and the members and that the society is entitled for charging and collecting interest at that rate from the members, why the same cannot be done in case of opposite party, no justifiable reasons are placed on record. Under the circumstances, the condition in the said application itself is an implied indication that the members are also entitled for interest at the said rate in case, they are entitled for refund of the advance amount from the opposite party society.<br /> <br /> 24. It is definite and specific case of the complainant that, he is middle class person and paid advance amount to the opposite party for the site raising loans. That fact is stated in the affidavit. At the end of 11th paragraph, the opposite party has stated that, it is not responsible for the borrowing of the loan by the complainant from his friends and relatives. It is true, so far concerned to borrowing loan by the complainant, the opposite party may not be responsible or liable. But, the fact and the material on record establish that, the complainant has borrowed loan from some others and then paid that amount to the society towards allotment of site. That is one of the main reason for consideration as to whether the complainant is justified in claiming the interest. <br /> <br /> 25. Already in paragraphs 8, 9 and 10, we have referred to regarding the rate of interest. We feel it not necessary to again mention the same here.<br /> 26. The learned advocate for the opposite party has relied upon several rulings of the Hon’ble Apex Court on the point of interest. Amongst them, first we may take up Gaziabad Development Authority Vs. Balbir Singh reported in (2004) 5 SC 65. In this ruling, the Hon’ble Apex Court has elaborately dealt with the matter with reference to various decisions. It is observed that, for misfissions in public office, Forum has statutory obligation to award compensation. Interest had to be awarded at the rate of 18% p.a. taking into consideration the escalation in the cost of construction as well. The question that had arosed before the Hon’ble State Commission was, whether the Consumer Forums in all cases justifiable granting interest at that rate, irrespective of particular facts of the case. Regarding principle for awarding compensation, it is observed, to recompense for loss or injury. Therefore, necessarily it has to be based on finding of loss or injury. Also it is observed the principle for awarding interest arises if there is default or omission on the part of the body and while awarding interest as compensation, it must be shown that there is relationship between the amount awarded and the delay or harassment. Separate awards under each head with reasons has to be made. Hence, it is observed by the Hon’ble Apex Court that, awarding of uniform rate of interest at 18% p.a. by the Hon’ble National Commission irrespective of facts of case is unsustainable. However, further it is observed, if facts are gross that 18% interest could be given, but the Forum must conclude that facts justified such an award. It is also observed, normally in case of refund, interest will be payable from the date of monies were deposited. Also, it is observed compensation for harassment deprivation of plot and benefit of escalation of price thereof are all needs to be noted. At head note ‘m’, Hon’ble Apex Court has held, order awarding 18% interest was upheld by the Hon’ble Supreme Court. Further, at head note ‘n’ it is stated that, when no justifiable reasons are given by the authority award of interest of 18% of the commission is justified. Also, it is observed and held that, interest so awarded was not just interest on the amount invested, but so also, compensation for harassment and agony caused to alottee. Thus, what is laid down by the Hon’ble Apex Court is that, irrespective of particular case, the interest at particular rate cannot be awarded. In the ruling relied upon for the opposite party reported in IV (2004) CPJ 31 also has held that, interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. Also, it is reiterated that, compensation is a recompense for the loss or injury. In 10th paragraph, it is clarified that the order shall not be taken as precedent in any other matters and at the same time, further it is concluded that, the Forum to follow the principle laid down by the Gaziabad Development Authority Case. <br /> In AIR (2004) SC 4107 also it is held that, interest at 18% p.a. granted irrespective of facts of case, is not sustainable. In this case also, it is observed, the compensation is to recompense for the loss or injury. In fourth paragraph of the judgement, it is noted, District Forum had awarded interest at 18% p.a. and as noted in the next paragraph, Hon’ble State Commission had reduced, but in the 6th paragraph, Hon’ble Apex Court has held that, Hon’ble State Commission wrongly reduced the amount. Hence, ultimately award of interest at 18% has been confirmed by the Hon’ble Apex Court. <br /> In AIR (2005) SC 4772 again it is observed interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case and compensation is a recompense for the loss. <br /> In (2005) 9 SC 571 it is observed, when the alottee no longer interested in possession, but in refund of the amount, in such circumstances, interest awarded at 18% p.a came to be reduced at 12%. But, in the case on hand, it is not at all that the complainant is not interested to have site. The complainant has sought refund of the amount only because in spite of lapse of about more than four years, the opposite party has not developed the layout. <br /> In (2005) 9 SC 573, it is observed by the Hon’ble Apex Court that, in case of belated possession, rate of interest should not exceed 12%. As found from the facts of that case, delay was due to stay granted by the Court. However, further it is observed, no hard and fast rule can be laid down regarding grant of the interest. <br /> Relying on the ruling reported in (2009) 4 SC 684, the learned counsel submitted that, there being no agreement for payment of the interest, the complainant is not entitled for interest. We have already considered the clause in the application form to be submitted by the members to the society for allotment of the site, wherein admittedly 18% interest can be charged and claimed by the opposite party society. Even otherwise, in the ruling relied upon, the interest claimed by the authorities was prior the date of signing of the agreement.<br /> <br /> 27. Hence, taking into consideration of the law laid down by the various Hon’ble Courts and Commissions, taking into consideration of the fact that, the complainant raised loan and paid that amount to the opposite party society for allotment of the site and despite lapse of more than about 4 years, the opposite party even not formed the layout and further, taking into consideration of escalation of the cost of the site as well as construction and other inconvenience and mental agony caused to the complainant under the circumstances, award of interest that the 18% p.a. is quite just and reasonable.<br /> <br /> 28. Opposite party has contended that the complainant is not entitled for share amount. But, at the same time, in fact in the resolution, there is mention that, interest at the advance amount cannot be paid, but the advance amount as well as share amount may be returned. Hence, when in the resolution itself, the opposite party society has mentioned that the share amount can be returned to the members, the contention that complainant is not entitled for share amount, cannot be appreciated.<br /> <br /> 29. Accordingly, we conclude that the complainant is a consumer, has proved deficiency in service on the part of the opposite party housing society and that he is entitled for the refund of the advance amount paid, with interest at the rate of 18% p.a. Accordingly, our finding on the above point is partly in affirmative.<br /> <br /> 30. Point No. 2:- Considering the discussion made above and conclusion arrived at, we pass the following order:- <br /> <br /> ORDER<br /> <br /> 1. The Complaint is partly allowed.<br /> 2. The opposite party society represented by the President and the Secretary is hereby directed to refund the advance paid by the complainant towards allotment of house site, with interest at the rate of 18% p.a. from the respective dates, within a month from the date of this order, noted below.<br /> Sl. No. Receipt No. Date Amount<br /> 1. 2650 08.11.2006 1,20,000.00<br /> 2. 4116 30.10.2007 55,000.00<br /> 3. 6682 17.12.2008 50,000.00<br /> TOTAL 2.25,000.00<br /> <br /> 3. Further, opposite party society is directed to pay Rs.5,000/- cost of the proceedings to the complainant.<br /> 4. Give a copy of this order to each party according to Rules.<br /> (Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open Forum on this the day 22nd March 2010)<br /> <br /> <br /> <br /> <br /> (A.T.Munnoli) <br /> President <br /> <br /> <br /> <br /> (Y.V.Uma Shenoi)<br /> Member<br /> <br /> <br /> <br /> (Shivakumar.J.)<br /> Member<br /> <br />