COMPLAINT FILED: 26.11.2010

DISPOSED ON: 10.05.2011

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL

FORUM AT BANGALORE (URBAN)

10^TH  MAY 2011

       PRESENT:- SRI.B.S.REDDY                      PRESIDENT           

                         SMT. M. YASHODHAMMA     MEMBER

                         SRI.A.MUNIYAPPA                MEMBER

O R D E R

SMT. M. YASHODHAMMA, MEMBER

These are the complaints filed u/s. 12 of the Consumer Protection Act of 1986 by the respective complainants, seeking direction to the Opposite Party (herein after called as O.P) to refund the whatever the amount paid towards cost of the site along with interest at rate of 24% p.a., from 13.10.1986 till realization and damages of Rs.8 lakhs and costs on the allegations of deficiency in service on the part of the OP.

          As the OP in both these complaints is common, the question involved, relief claimed being the same, in order to avoid repetition of facts and multiplicity of reasoning both these complaints stand disposed of by this common order.

2.    The brief averments as could be seen from the contents of these complaints are as under:

These complainants became the members of the OP Society in the year 1986, OP formed a residential sites at their Chanakyapuri layout, (Nagawara, Cholanayakanahalli and Viswanathanagenahalli of Gangenahalli side) Bangalore. OP accepted their membership and collected the amount from the year 1986 to 1993 and gave the receipts and also issued provisional allotment letters as shown below in the chart. Thereafter OP failed to register the sites in favour of the complainants. For no fault of them complainants were made to suffer both mental agony and financial loss. For the convenience sake details of membership account No., measurement of site, amount paid by each complainant, date of payments and receipt Nos. are noted below in the chart.

3.      It is the contention of the complainants that they have paid the entire cost of the site on different dates from 13.10.1986 to 08.12.1993. The receipts issued by OP are produced. OP has executed provisional allotment letter dated 13.10.1986 and promised to allot a site at their Chanakyapuri layout, (Nagawara, Cholanayakanahalli and Viswanathanagenahalli of Gangenahalli side) Bangalore. Though complainants become the members of OP society in the year 1986 till date OP has failed to register the sites.  There was no proper response since 24 years.  OP neither refunded the amount nor registered the sites. Hence complainants felt deficiency in service on the part of the OP. Under these circumstances they are advised to file these complaints for the necessary reliefs.

4.      On appearance OP filed the version. The defence set out in both the complaints is almost identical and same. The brief averments made in the version are as under:

5.      On appearance in each complaint OP tendered the cheque for a sum of Rs.3,6013-15, dated 04.01.2011 along with a memo towards refund of admitted amount without prejudice to the contention raised in the version. Complainants not received the same. OP filed the version mainly contending that OP could not purchase the lands under the prevailing laws OP has to approach the state government to initiate land acquisition proceedings which involves gazette notification U/s. 4(1) of the Act to hold enquiries of the land owners U/s. 5-A of the Act and to issue final notification U/s. 6(1) of the act and thereafter to pass award granting compensation to the land owners u/s. 9 and 10 of the act. One being consent of land owners and another being the general award. After the procedure the state government will hand over possession of the land to society within 3 to 4 years.  The entire cost including payment to land owner and conversion charges and another expenses incurred should be paid by the society to the government.  The land acquired by the government in favour of the society was challenged by the land owners before the High Court. Unfortunately acquisition proceedings were set aside and notification were quashed.  The Appeal preferred by OP before Hon’ble Supreme Court confirmed the order of the high court.  Further directed the government to return the lands to land owners. OP has to get back the money from the government. Government will deduct 22% of the amount towards administrative heads. Hence OP is not in a position to pay the interest to its members. In AIR 2010 SC 486 it was held that developmental authorities need not pay interest on the deposit amount for the delay or failure of the projects due the order of the courts; The claim is barred by time. Among other grounds OP prayed for dismissal of the complaints.

6.      In order to substantiate the complaint averments, each one of these complainant filed their affidavit evidence and produced the copy of the provisional allotment letters and receipts issued by OP, brochures, magazine and news paper cuttings.  On behalf of OP H. Srinivas, Secretary of OP society filed his affidavit evidence in support of the defence version. Heard arguments from both the sides.

7.      In view of the above said facts, the points now that arises for our consideration in these complaints are as under:

       Point No.1:-  Whether the complainants have

   proved the deficiency in service

    on the part of the OP?

Point No.2:-   If so, whether the complainants are

                     entitled for the relief now claimed?

       Point No.3:-  To what Order?

8.      We have gone through the pleadings of the parties both oral and documentary evidence and the arguments advanced. In view of the reasons given by us in the following paragraphs our findings on:

Point No.1:- In Affirmative.

Point No.2:- Affirmative in part.

Point No.3:- As per final Order.

R E A S O N S

9.      At the out set it is not in dispute that the complainants became the members of the OP society on the basis of the propaganda made by the OP who claims to be the house building Co-Operative society with a hope of getting a site. OP assured to allot a residential site measuring 30 x 40 ft. situated at Chanakyapuri layout Nagavara, Cholanayakanhalli and Viswanathanagenahalli of Gangenahalli Bangalore and complainants paid a sum of Rs.36,000/- each on different dates from 13.10.1986 to 08.12.1993. To substantiate this fact each complainant has produced the receipts and provisional allotment letters issued by OP. OP has not disputed the fact of receipt of amount.  Now the grievances of each complainant is that though OP collected the entire sital value and membership fees, failed to execute and register the sale deed as promised or to refund the amount.

10.    As against the case of the complainants the defence of the OP that due to legal hurdles it is unable to complete the project and whatever the amount they have received from the members is paid to the developers and deposited towards compensation payable to 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 layout is repossessed by the land owners in view of the quashing of the land acquisition proceedings.  So 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.  It is unable to refund the sital value to the complainants because the said amounts are used for paying compensation to the land owners by depositing the same with the government and for paying development expenses.

11.    On the close scrutiny of the defence set out by OP it can be made out that OP collected the amount towards sital value from the complainants with a promise that it would complete the project and register the site but project could not be completed on account of the acquisition 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 complainants. 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 complainants. Having retained the amount for more than 18 years OP accrued wrongful gain to itself and thereby caused wrongful loss to the complainants.

12.    We are unable to accept the defence of the OP that the complaints are 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 complainants.

13.    The relief claimed by each complainant is for refund of amount with interest at 24% p.a. and compensation of Rs. 8 lakhs.  In our view each complainant is entitled for refund of amount deposited with interest at 12% p.a. and global compensation of Rs.50,000/- towards escalation cost. Compensation of Rs.8 lakhs and interest claimed at the rate of 24% p.a. on the sital deposit is on higher side.  OP could not complete the project of forming the layout and register the site for the reason that the acquisition proceeding acquiring the lands for formation of layout was quashed.

14.    In support of his arguments counsel appearing for OP has produced the citation reported in AIR 2010 Supreme Court 486 in Civil Appeal No. 433, 4335 and 4336/2004 of Punjab Urban Planning and development Authority and Another V/s. Daya Singh.

          In the above matter the Hon’ble Supreme Court has observed that possession could not be delivered in time to respondents in respect of the plots on account of the order passed by the High Court of Punjab and Haryana directing maintainance of status quo regarding possession. Hence it was found that delay was on account of the order passed by the High Court.  So the question of payment of interest for such delayed possession given to the respective respondents may not arise at all and directed the National Commission to take up the issue then decide the same on facts before passing the final order.

15.    In the present proceedings acquisition proceedings were quashed by the Hon’ble High Court of Karnataka in W.P. No.17429 to 17493/1986 and the said order was confirmed by the Supreme Court in the Special Leave petition filed by OP. Thereafter even after lapse of many years of the order of the Supreme Court OP has failed to refund the amount to the complainants.  Hence the principles laid down in the above case cannot be made applicable to the present proceedings.

16.    In both the cases on 05.01.2011 OP tendered the cheques dated 04.01.2011 for a sum of Rs.36,013-15 each towards refund of deposit and membership fees. Complainants not received the said cheques. Cheques are in the file and having validity. Since OP has refunded the sital deposit after 18 years and after filing these complaints, the complainants are entitled for reasonable interest and compensation of Rs.50,000/- towards escalation cost. As in the earlier proceedings of similar nature against OP interest has been awarded at 12% p.a. Under these circumstances we are of the considered view that complainants are entitled for interest at the rate of 12% p.a. from date of respective payments till the date of refund made i.e. till 05.01.2011 along with compensation of Rs.50,000/- and litigation cost of Rs.1,000/-. Accordingly we proceed to pass the following:

ORDER

          The complaints are allowed in part.

1.      It is order to hand over the cheques to the complainants available in the records issued by OP in favour of respective complainants towards refund of the principle amount.

2.      In Complaint No. 2655/10 OP is directed to pay interest at the rate of 12% p.a. on the deposited amounts from the date of respective payments till the date of refund made i.e. 05.01.2011 along with compensation of Rs.50,000/- and litigation cost of Rs.1,000/- to the complainant.

3.      In Complaint No.2656/10 OP is directed pay interest at the rate of 12% p.a. on the deposited amount from the date of respective payments till the date of refund made i.e. 05.01.2011 along with compensation of Rs.50,000/- and litigation cost of Rs.1,000/- to the complainant.

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

This original order shall be kept in the file of the complaint No.2655/2010 and copy of it shall be placed in other respective file.

Send the copy of this order both the parties free of cost.

(Dictated to the Stenographer and typed in the computer and transcribed by him verified and corrected, and then pronounced in the Open Court by us on this the 10^th day of May 2011.)

                                                  PRESIDENT

MEMBER                                          MEMBER             

gm.