COMPLAINT FILED:02.11.2011

                                               DISPOSED On:27.02.2012

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

27^th DAY OF FEBRUARY-2012

       PRESENT:- SRI. B.S.REDDY                 PRESIDENT                        

                         SRI.A.MUNIYAPPA                   MEMBER              

O R D E R

SRI. B.S.REDDY, PRESIDENT

The complainant filed this complaint U/s.12 of the Consumer Protection Act of 1986 seeking direction against Opposite Party (herein after called as OP) to allot the site and execute the sale deed or to refund the amount of Rs.31,000/- with interest at 18% p.a. and to pay compensation for mental agony to an extent of Rs.50,000/- on the allegations of deficiency in service.

2. The case of the complainant to be stated in brief is that:

The OP-Society is a registered Society under the provisions of the Karnataka Co-operative Societies Act. The object of the OP is to acquire the land and form the sites and allot the sites in favour of its members. OP invited applications from interested persons to become its members. Accordingly, the complainant became a member of OP-Society in the year 1984 and OP has enrolled him as a member in Roll No.1141 on 02.12.1984. The complainant paid an amount of Rs.31,000/- on various dates in 6 instalments commencing from 02.12.1984 to 07.12.1993 for allotment of site measuring 1200 sq.ft formed in Visweswarayanagar II Stage Layout, at Belakahalli, Kodichikkanahalli Villages, Bangalore. OP-Society issued provisional letter of allotment of site in favour of complainant on 16.12.1987 and demanded the remaining balance amount. The complainant paid total cost of the site of Rs.31,000/-. OP has not executed the sale deed, in spite of repeated requests and demands. The legal notice was issued on 30.09.2010 demanding to allot the site and execute the sale deed. But OP has not taken any steps till date. The cause of action arose on 16.12.1987 and 30.09.2010 i.e., when provisional allotment letter was issued by OP and when the complainant issued notice to OP. Thus the complaint.       

3. On appearance, OP filed version contending that the complainant has not approached this Forum with clean hands. It is admitted that the complaint was member of OP-Society and Provisional Allotment of site measuring 1200 Sq.ft was issued in favour of the complainant. OP-Society has done its best and diligently prosecuted all legal avenues available for the purpose of acquiring the lands for formation of the layout and for distribution of sites among its members. Even though the acquisition was notified the same could not be completed in view of the acquisition proceedings quashed by the Hon’ble High Court of Karnataka and the same confirmed by the Hon’ble Supreme Court of India. The OP-Society has spent huge amounts towards land acquisition, development, deposit of compensation to landlords with the Government etc. All the amounts paid by the Society are lying blocked with the Government of Karnataka in the form of compensation. The State Government is a proper and necessary party to the proceedings. The OP-Society cannot directly purchase agricultural lands in view of the express bar under the Karnataka Land Reforms Act. OP has taken further steps by approaching the Government to acquire other alternative lands. The matter is pending active consideration with the Government of Karnataka. The question of paying interest does not arise, as the society is not making any profit from the site deposits received from its members. The site deposited amounts have been duly deposited and spent by the society for the purpose of acquiring lands and allotting sites to its members. The society is a non-profit oriented. Every member together forms the co-operative society and the co-operative society is governed and controlled by the collective, democratic co-operative decision of the General body. There is no concept of any service being rendered for any consideration, as the society is not making any profit for itself. The question of refunding the amount with interest does not arise. The Karnataka Appellate Tribunal, in Appeal Nos.551 to 559/2006 set aside the order to the extent of interest awarded at 18% p.a. passed by the Joint Registrar on the deposit amount of its members. The disputes relating to a co-operative society and its members have to be adjudicated as per the provisions of Section71 of the Karnataka Co-operative Societies Act. This Forum has no jurisdiction to adjudicate the dispute. The complaint is barred by limitation. Hence it is prayed to dismiss the complaint with costs.

4. In order to substantiate the complaint averments, the complainant filed affidavit evidence. The Secretary of OP filed affidavit evidence in support of the defence version.

5. Arguments on both sides heard.

6. Points for our consideration are:

      Point No.1:- Whether the complainant proved the          

                         deficiency in service on the part of

                           the OP?

Point No.2:- Whether the complainant is entitled

                   for the reliefs now claimed?

      Point No.3:- To what Order?

7. We have gone through the pleadings of the parties, both affidavit and documentary evidence and the arguments advanced. In view of the reasons given by us in the following paragraphs our findings on the above points are:

Point No.1:- Affirmative.

               Point No.2:- Affirmative in part.

               Point No.3:- As per final Order.

R E A S O N S

8. At the out set it is not in dispute that the complainant became member of the OP-Society on the basis of the propaganda made by OP who claims to be the house building co-operative society, with a hope of getting a site and deposited entire sital value to an extent of Rs.31,000/- on various dates in 6 instalments commencing from 02.12.1984 to 07.12.1993 for allotment of site measuring 1200 sq.ft proposed to be formed in Visweswarayanagar II Stage Layout, at Belakahalli, Kodichikkanahalli Villages, Bangalore. The OP has enrolled the complainant as a member in Roll No.1141 on 02.12.1984. Even after collecting the entire sital value OP failed to fulfill its obligations of forming any layout and allotting a site. The provisional allotment letter was issued in favour of the complainant on 16.12.1987. Since OP failed to allot and register any site, the complainant demanded for refund of the amount, OP has not taken any steps. Thus the main grievances of the complainant is in spite of OP collecting the entire sital value failed to execute and register the sale deed by allotting a site as promised or refund the amount received towards sital value.

9.As against the case of the complainant the defence of the OP is that due to legal hurdles it is unable to complete the project and whatever the amount they received from the members is paid to the developers and deposited towards compensation payable to the landlords, with the Government etc. But OP has failed to substantiate the said defence by producing documents. The land acquired for the purpose of formation of the layout is repossessed by the land owners in the view of the quashing of the land acquisition proceedings. Thus the sum and substance of the defence set out by OP is that it is unable to complete the project due to the quashing of the land acquisition proceedings and it is unable to refund the sital value because of the amounts are used for paying compensation to the land owners by depositing the same with the Government and for paying the development expenses.

10.On the close scrutiny of the defence set out by OP it can be made out that OP collected the sital value from the complainant with a promise that it would complete the project and register the site but the project could not be completed on account of the acquisition proceedings being quashed. When OP was aware of the fact that it is unable to complete the project, it could have been fair on its part to refund the sital value collected to the complainant. No such steps are taken. Hence we find deficiency in service on the part of the OP in not refunding the sital value to the complainant. Having retained the amount for more than 14 years, OP accrued wrongful gain to itself and thereby caused wrongful loss to the complainant.

11.We are unable to accept the defence of the OP that the complaint is barred by limitation. When once OP accepted the deposit towards sital value with a promise to allot a site to the complainant, till OP allot and register the sale deed recurring cause of action will accrue to the complainant. Further we are unable to accept the defence that OP is not liable to pay interest on the deposit amount as OP is not making any profit from the site deposit received from its members. It may be noted that the acquisition proceedings of the lands was quashed long back, till now OP has not refunded the amount received towards sital value. In Appeal No.5041/2010 dt.19.08.2011 in similar circumstances against the same OP, the Hon’ble State Commission modified the Order passed in CC.No.2201/2010 to refund the sital value with interest at 18% p.a. from the date of respective payments till realization. Under these circumstances, we are of the view that the complainant is entitled for refund of the amount with interestat18% p.a. as compensation from the date of respective payments till the realization along with litigation cost of Rs.2,000/-. Accordingly we proceed to pass the following:

O R D E R

The complaint filed by the complainant is allowed in part.

OP is directed to refund an amount of Rs.31,000/- with interest at 18% p.a. from the date of respective payments, till the date of realization and pay litigation cost of Rs.2,000/- to the complainant.

This order is to be complied within four weeks from the date of its communication.

Send copy of this order to both the parties free of costs.

(Dictated to the Stenographer and typed in the computer and transcribed by her, verified and corrected, and then pronounced in the Open Court by us on this the 24^th day of February-2012.)

MEMBER                                                          PRESIDENT

Cs.