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

DATED 25^TH DAY OF NOVEMBER 2022

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Direct the respondent to pay a sum of Rs.1,00,000/- as damages for the deficiency of service and also towards unfair trade practice.
2. Direct the respondent to refund the entire advance amount of Rs.2,50,000/- along with interest at the rate of 9% per annum with effect from 25.02.2014 till the date of realization of amount to the complainant.
3. Direct the respondent to pay the cost of the proceedings and grant such other reliefs.

2. The case set up by the complainant in brief is as under:-

OP is a society registered under the Co-operative societies act 1959 has invited applications from its members for allotment of site in the layout proposed to be formed by the OP at Chikkanahalli near Doddaladamara, Bangalore South taluk.  The complainant being the member of the said society has filed application seeking for allotment of site measuring 40 X 30 feet in the layout proposed to be formed by the OP, vide receipt dated 25.01.2014.

3.         The complainant has paid a sum of Rs.2,50,000/- by way of cheque as an advance sale consideration to the OP towards purchase of the site.  The OP had agreed to allot the site in the residential layout proposed to be formed by them and further agreed to execute the sale deed and to deliver possession of the site to the complainant on or before June 2016.  

4.         It is the specific grievance of the complainant that the OP has completely gone back on its commitment and taken the complainant for a ride and has failed to complete the project and failed to executed the sale deed and to deliver the possession of the site in his favour and they have dodged the issue on one pretext or the other.

5.         The complainant has personally approached the OP on number of occasions but apart from holding out false assurances the OP has completely failed and neglected to comply their commitment.  The complainant has sent a letter dated 30.09.2021 through RPAD to the OP demanding the repayment of the advance amount of Rs.2,50,000/- with interest at the rate of 9% p.a. The OP has neither complied with demands nor given any reply to the letter. Hence the complainant has filed this complaint for the deficiency of service and unfair trade practice and fraud played by the OP society.

6.         In response to the notice, OP appears and files version. The OP has admitted the advance amount paid by the complainant.  It is the specific contention taken by the OP that the then president Sri.K.P.Shivaswamy and Sri.Hanumanthappa Majjagi, vice president had entered into agreement with M/s Sri Nanjundeshwara Infrastructure a registered partnership firm represented by its MD Sri.K.Rajashekar, who is the developer on 10.09.2010, whereby the developer had agreed to form a residential layout and to provide fully developed site in the full pledged layout formed in Sy.No.57/1 and 57/2 of Ajjanahalli Village, Bangalore South Taluk.  The value of the said lands was at Rs.550/- per sq. feet and had paid in all a sum of Rs.3,24,00,000/- to the developer on different dates.  

7.         It is further grievance of the OP that the Managing partner of the developer firm Sri.K.Rajashekar met with accident on 16.12.2014 and died on the spot on that day. His son namely Sri.R.Thirthak. later became the MD of the developer firm and he did not show any interest to discharge their obligation as per the agreement dated 10.09.2010 and thus the said agreement remained un acted.  By that time the developer firm had already received Rs.3,24,00,000/- from this OP towards the advance for formation of the layout project.  In view of this the layout project did not take off and the developer did not provide the site to the OP society.  The entire amount of Rs.3,24,00,000/- paid to the developer by the OP society is locked up with the developer firm.  Since the developer firm did not provide the sites to the OP society the OP has initiated recovery proceedings against the developer firm by raising dispute u/s 70 of the Act before the Joint Registrar of Co-operative Society Bangalore.  The said dispute is pending for adjudication before the said forum. 

8.         It is further case of the OP that after coming to know that the said layout project is not materialized the members who have paid the site advances started demanding the society to refund the site advance amount paid by them.  The OP society has to refund a sum of Rs.3,40,63,650/- to 104 site depositors including the complainant at present.  But there is no funds available with the OP society to refund the amount. The OP society would be able to meet the demand of the site depositors only after recovering the money from the developer.

9.         It is further case of the OP that the then president Sri.K.P.Shivaswamy and vice president Hanumanthappa Majjagi have paid Rs.3,24,00,000/- to the developer though no work was done in collusion with the developer.  They have made the payment to the developer even after the so called GPA given by the landlord in favour of the developer firm was cancelled by the land lord long back.  They have conspired with the developer and made payments to the developer out of the site advance amount collected from the members.  Both of them are responsible for the present situation.  The President Sri.K.P.Shivaswamy has owned the responsibility for the said money in the board meeting held on 20.08.2014 which he has not paid so far.  The layout work is not at all undertaken and no work is done and the land has also not come to the society.  

10.       It is further case of the OP that they could not allot a site to the complainant for the aforesaid reasons. The complainant has alleged imaginary and concocted allegations against this OP for the purpose of filing this complaint.  There is no deficiency of service on the part of the OP and what has happened is for the reason beyond the control of the OP society. Though the complainant is entitle to refund of Rs.2,50,000/- he is not entitled to refund any interest, damage or any cost.  There is no any agreement between the OP and the complainant to pay interest on the site advance amount. The claim made by the complainant is highly imaginary and unsustainable in law. Therefore the OP prayed for dismissal of the complaint.

11.       Though sufficient opportunity was given to complainant to adduce evidence, complainant has not appeared and nor adduced evidence. Hence evidence of the complainant is taken as Nil.  Affidavit of evidence of OP has been filed and relies on 04 documents.

12.       Heard the arguments of advocate for the complainant. Counsel for OP files written argument.  Perused the written argument.

13.       The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

14. Our answers to the above points are as under:

       Point No.1:  Affirmative

      Point No.2: Affirmative in part

      Point No.3: As per final orders

REASONS

15.      Point No.1 AND 2: Perused the complaint and documents produced by the complainant ad the version documents filed by the OP.

16.       It is undisputed fact that the OP is a registered society, registered under the Co-operative society act.  The complainant being a member o the OP society has filed an application seeking for allotment of site measuring 40 X 30 feet in the layout proposed to be formed by the OP. the complainant has paid a sum of Rs.2,50,000/- by way of cheque.  After receipt of the amount the OP has agreed to allot the site and to execute the sale deed and deliver the possession of the site to the complainant on or before June 2016.  But the OP have neither formed the layout nor allotted any site and they have failed to execute the sale deed.  The complainant has approached the OP on several occasions and also sent a letter dated 30.09.2021 requesting them for refund of the advance amount with interest.  The OP neither complied the demands nor issued any reply notice.  

17.       In support of his contention the complainant has produced the letter dated 30.09.2021 sent to the OP society with copy of the acknowledgement and postal receipt for having served the notice.  The complainant has also produced the receipt for apply for the site dated 25.01.2014 and copy of the application and the bank statement for having paid the advance amount of Rs.2,50,000/- to the OP society.

18.       The OP have taken the contention that the then President and the Vice President have entered into an agreement with the developer namely M/s Sri Nanjundeshwara Infrastructure, Managing Partner Sri.K.Rajashekar for formation of the layut and development of the sites by paying an amount of Rs.3,24,00,000/-.  The said MD K.Rajashekar the developer met with accident and he died on 16.12.2014 on the spot.  After that his son became the MD of the firm and he has not taken any interest in forming the layout as per the agreement entered between the OP society and his late father K.Rajashekar. In view of this the layout project did not take off and the developer did not provide the sites to the OP society and the entire amount of Rs.3,24,00,000/- is locked with the developer firm.  

19.       It is further case of the OP that the then President K.P.Shivaswamy and Vice President Hanumanthappa Majjagi who have paid the amount of Rs.3,24,00,000/- to the developer have made the payments out of the site advance amount collected from the members in collusion with the developer.  As per the decision taken in the board meeting held on 20.08.2014 in the OP society the President Sri.K.P.Shivaswamy has owned the responsibility for the said money which he has not paid so far.  The layout work is not at all undertaken and no work is done and land has not come to the society.  

20.       It is further case of the OP that even though the complainant is entitled for refund of the entire amount of Rs.2,50,000/- he is not entitled for any interest or damage and cost claimed by him for the aforesaid reasons.  

21.       The OPs part time secretary namely Manu H.S., has appeared on behalf of this OP society and filed his affidavit evidence reiterated all the allegations made in the version and relied on four documents. Ex.R1 to R4.

22.       Ex.R1 is the copy of the agreement dated 10.09.2010, Ex.R2 is the payment schedule, Ex.R3 is the details of refund amount to 55 members and Ex.R4 is the Board resolution dated 20.08.2014.  

23.       It is clear from the evidence and documents placed before this Commission that the OP society have received advance amount of Rs.2,50,000/- from the complainant by giving an assurance that they will allot a site on or before June 2016.  They are unable to form the layout and allot the site and execute the registered sale deed by delivering possession of site even today. The very evidence and allegations made by the OP society clearly discloses that they have not even started the formation of the layout even today. The contentions taken by the OP that the then President K.P.Shivaswamy and Sri.Hanumanthappa Majjagi in collusion with the developer M/s Nanjundeshwara Infrastructure a registered firm MD namely K.Rajashekar have paid Rs.3,24,00,000/- and they have misused the said amount. As per the board meeting held on 20.08.2014 the then president K.P.Shivaswamy has taken the responsibility to return the amount but he has not paid the amount so far. The OP society have to refund a sum of Rs.3,40,63,650/- to 104 site depositors including the complainant .  There is no funds available in their society.  Even though the complainant is entitled for refund of amount they are not liable to pay the interest and damages and litigation expenses to the complainant.  

24.       The contentions taken by the OP about misuse of the members amount in their society is an internal dispute between the society and their president.  The complainant has deposited the amount of Rs.2,50,000/- on 25.02.2014 as per the assurance given by the OP that they will deliver possession of site on or before June 2016.  They have not yet even started the formation of the layout.  They are only giving assurance that they will refund the amount only after the then president K.P.Shivaswamy returned the amount of Rs.3,24,00,000/- misused by him. The complainant is not at all responsible for the alleged misuse of the funds and the other activities of the society.  When the OP society is not at all formed the layout and not ready to allot any site in favour of the complainant, the complainant is entitled for the relief claimed in the complaint.  The complainant is also entitle for the interest and also the damages amounting to Rs.1,00,000/- for the financial loss and the mental harassment caused by the OP society.  The complainant is entitle for the advance amount of Rs.2,50,000/- with 9% interest from the date of filing of the complaint till realization.  The OP have also made the complainant to approach this Commission by filing this complaint even after he has paid the advance amount and has not got the site till today. Under these circumstances he is entitled for litigation expenses of Rs.10,000/-. Hence we answer point No.1 and 2 in affirmative.

25.      Point No.3:- In view the discussion referred above, we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP is directed to refund Rs.2,50,000/- with interest at 9% per annum from the date of complaint till the date of realization.
3. Op is further directed to pay compensation of Rs.1,00,000/- and Rs.10,000/- towards litigation expenses to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.2,50,000/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 25^TH day of NOVEMBER, 2022)

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

• NIL -

Documents produced by the representative of opposite party – R.W.1;