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

DATED 03^RD DAY OF DECEMBER 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 OP to refund the advance amount of Rs.8,33,802/- along with interest (15% per annum) of Rs.15,31,981/-.
2. Direct the OP to refund the bank loan amount paid as part of sale consideration amounting to Rs.23,46,822/- along with EMI interest(7% per annum) of Rs.7,20,690/- (until September 2021) for the interest of loan paid by the complainants to the bank.
3. Direct the OP to pay an amount of Rs.5,00,000/-.
4. Direct the OPs to pay Rs.50,000/- as cost of legal expenditure incurred in prosecuting this complaint and
5. Granting such other relief as the Hon’ble Commission deems fit.

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

The case of the complainant is that the OP is running the real estate business in the name and style M/s Sanchaya Land and Pvt Ltd., (India Estates) and marketing the business.

3. It is further case of the complainant OP is the absolute owner of all the piece and parcel of immoveable property bearing Sy.No.412, 416/1 and 416/2 of Devanahalli Village, Kasaba Hobli, Devanahalli Taluk, measuring 7 acres 16 guntas and it is converted for residential purpose, vide order passed by the Deputy Commissioner, Bangalore Rural District, on 20.04.2013.
4. The OP has formulated a scheme to construct residential apartment under the name Sky View consisting of several blocks with basements, ground and upper floors, common compound, entrances, lobbies, stair case, lifts and passages with rights in the common areas of the residential complex referred as apartment.
5. The complainant contacted the OP for the purchase of the schedule apartment.  The OP introduced the new project which was yet to be constructed.  Believing the words of the OP the complainants agreed to purchase the schedule apartment and after scrutinization of the documents and after the OP parties representation the complainants were agreed to purchase flat bearing No.505, 5^th Floor, Jupiter Block – A tower measuring super built up area of 118.45 sq. meter with one covered car parking area.  The complainant believing the OPs representations and assurances were agreed for all the terms and conditions and the OP has executed the sale agreement on 29.10.2014 and the complainants have paid advance sale consideration amount of Rs.8,33,802/-.  The complainants have paid the amount by taking loan from the SBI, hence they have executed the tripartite agreement dated 21.10.2016 with the OP and SBI and availed a loan of Rs.33,00,000/- and after the agreement OP had assured that he will hand over the possession of schedule apartment by December 2017. But the OP has failed to keep the promise. The complainants have made further advance amount as per the OP demand of Rs.23,46,822/- with the help of the loan taken by the SBI and thereby the complainants have paid the total sale consideration amount of Rs.31,80,654/- by 21.04.2018 in good faith believing that the OP will hand over the possession of the schedule apartment atleast by the end of year 2018.
6. It is further grievance of the complainant that the P has failed to complete the project and failed to hand over the schedule apartment even after 2018.  The OP was making various excuses and also by giving fake reasons that he had made an application before RERA on 18.02.2020 for the extension of more time to complete the project.
7. It is further grievance of the complainant that even though they have paid the total sale consideration as demanded by the OP in the year 2018 itself the OP has failed to perform their part of the contract even after lapse of two years.  After lapse of seven years the project is not completed and not ready for delivery. The OP is making unlawful demand of money i.e., nearly Rs.5,14,960/- which is totally illegal.  These complainants are not bound to make any further payment for the negligence and delay caused by the OP.
8. It is further grievance of the complainants that they have paying the interest on Rs.23,46,822/- from the year 2016.  The OP had promised to pay the penalty of Rs.5/- per sq. feet from October 2016 till the handing over the possession of the schedule apartment.  The complainants have already undergone financial losses after investing the money in the aforesaid apartment. The complainants have also sent a legal notice to the OP on 22.01.2020. inspite of service of the notice the OP neither complied the demands nor refund the advance amount. Hence they filed this complaint.  
9. In response to the notice, OP appears and files version. The OP has denied all the allegations made in the complaint except the fact that the complainants have agreed to purchase the apartment bearing No.505 and they have paid the advance amount and entered into the sale agreement and construction agreement on 29.10.2014.
10. It is the main contention taken by the OP that this OP had never been negligible or rendered deficiency in service for the reason that the failure in completing the construction activities was wholly dependent o the amounts that were required to be paid by the intending purchasers and all most about 780-800 intending purchasers had failed in making payments in time and there were severe labour problems faced during the time of construction by the OP and it was for this reason that the OP did not complete the construction as assured.
11. It is further case of the OP that due to covid 19 the entire labour class had shifted to their native and as such the construction came to halt. In furtherance the OP and several construction companies had to face issues with the pollution control board regarding the approvals and hiking fees.  The OP had to approach the Hon’ble High Court in WP No.16497/2019 and subsequently the state has now filed a R.P. No.1/2021 which is pending for consideration.  Due to the pendency of the statutory approval the OP had sought for extension of time to complete the construction before the RERA and being aggrieved by the order of RERA the OP had approached Hon’ble High Court in W.P.No.5937/2021 in this regard.  The clause 15 of the construction agreement clearly contemplates that the OP shall not be responsible for delays in obtaining sanctions/approvals from the statutory authorities.  In view of this there is an inordinate delay to complete the construction. This OP is making hectic efforts and all attempts to secure the approvals and to complete the construction.
12. The OP further undertakes to complete the construction immediately after securing approvals and deliver the possession.  The failure on the part of the OP is for bonafide reason and there is no deliberate intention of this OP and they never been negligent in rendering their services.  
13. It is further contention taken by the OP is that the damages of Rs.5,00,000/- claimed by the complainant with interest on the loan availed by them and interest on the payment and cost is wholly unjustifiable and untenable considering the facts and circumstances in this case.  This OP has never been negligent nor have rendered deficient services and because of the mistake on the part of the investing purchasers to pay the amount in time and due to the approval issues the construction could not be completed in the agreed time.  Hence it would not be justifiable to hold the OP guilty and made to cough up exorbitant damages and interest.  
14. The complainant has filed her affidavit evidence and relies on Ex.P1 to P11 documents.  Affidavit of evidence of OP has been filed and OP relies on Ex.R1 to R3 documents
15. Heard the arguments of both the parties and also filed their Written arguments. Perused the written arguments.
16. 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, documents, version and evidence of both the parties and arguments and citation submitted by both the parties.

16.     The complainant has filed this complaint for the relief to direct the OP to refund the advance amount of Rs.8,33,802/- with interest at 15% p.a., of Rs.15,31,981/- and further direct the OP to refund the bank loan amount paid as sale consideration amounting to Rs.23,46,822/- along with EMI interest 7% p.a., of Rs.7,20,690/- until September 2021 for the interest loan paid by the complainant to the bank and Rs.5,00,000/- for the inconvenience and mental agony caused to the complainant and litigation expenses of Rs.50,000/- and other expenses from the OP.

17.     It is undisputed fact that the OP is engaged in the real estate business and marketing the business. The OP is the absolute owner of the schedule property. The OP have formulated a scheme to construct a residential apartment under the name ‘Sky View’ apartment.

18.     The complainant have contacted the OP for purchase of the schedule apartment.  The complainant has entered into construction agreement and sale agreement with the OP on 29.10.2014.  The complainant has paid Rs.8,33,802/- at the time of executing the sale agreement.  After that the complainants have paid the total consideration of Rs.31,80,654/-, believing that the OP will hand over possession of the schedule apartment atleast by the end of 2017 but they have failed to hand over the schedule apartment even in 2018.  The OP has taken the contention that he did not have money to complete the project and he will file application before RERA asking for extension in order to manipulate the buyers. The OP has just played tricks in order to extend the time and the contentions taken by the OP are not at all genuine.  The complainant has clearly taken the contention that the statement made by the OP that they had shortage of labours and had to face severe problems due to covid 19 and all the labours shifted to their neighbors are all false. 

19.     These complainants have booked the apartment in 2014 which was way before the onset of pandemic covid 19 cannot be taken as excuse to delay in handing over possession of property which was supposed to be given in the year 2017.  The OP have crossed the stipulated time and he has failed to prove that any of the reasons taken by them have occurred during the stipulated time and hence the aforesaid justifications are not valid.

20.     The complainant has also relied on the decisions of State Commission Disputes Redressal Commission, U.T., Chandigarh, Usha Yadav –vs- Manohar Infrastructures and others, it is clearly held in this decision a failure of the developer to comply with contractual obligations to provide the apartment to the purchaser within a contractually stipulated period amounts to be deficiency.  There is a fault, short coming or inadequacy in nature and manner of performance, which has been undertaken to be performed in pursuance of the contract in relation to the service.  

21.     The complainants have also relied on the case cited in Pioneer |Urban Land –vs- Govindan Raghavan on 2^nd April 2019 in this case it is clearly held when the appellant builder failed to fulfill his contractual obligation of obtaining the occupancy certificate and offering possession of flat to the respondent/purchaser within the time stipulated in the agreement or within a reasonable time thereafter, the respondent flat purchaser could not be compelled to take possession of the flat even though it was offered almost two years after the grace period under the agreement expired.  During this period the respondent flat purchaser had to service a loan that he had obtained for purchase of the flat by paying interest at 10% to the bank.  Under these circumstances the flat purchasers is entitled to the relief for refund of the entire amount deposited by him with interest.  

The complainant has also relied on the decision of National Consumer Disputes Redressal held in Mili Jain & two others –vs- Wave City Centre Pvt. Ltd., on 29^th October 2021

22.     It is also clearly held in the above decision that the complainant is entitled for the refund of the amount with interest and if he failed to pay the amount then the complainant is also entitled for additional interest. If the OP failed to deliver possession and pay the compensation the complainants shall be entitled to seek execution of the order under the C.P. Act.   

23.     In support of the contention, complainants have relied on totally 11 documents Ex.P1 is the construction agreement, P2 sale agreement dated 29.10.2014 and Ex.P3, P4 are the copy of the cheques and Ex.P5 is the bunch of payment receipts and Ex.P6 is the copy of Tripartite Agreement, Ex.P7 is the copy of the application to RERA and Ex.P8 is the letter written by the OP and Ex.P9 is the legal notice sent by the complainant and Ex.P10 and 11 are the postal receipt and postal acknowledgement.  

24.     On the other hand the contention taken by the OP is that they have not committed any deficiency of service or unfair trade practice and negligence in the construction activities. They could not complete the construction due to covid 19 and in view of the financial problem since 780-800 intending purchasers have failed to make the payment in time and in view of this the construction came to halt.  The OP was forced to approach the Hon’ble High Court in W.P.No.16497/2019 and the state has now filed Revision petition No.1/2021 and he has also filed W.P.No.5937/2021 and in view of all these they could not complete the construction.  

25.     In support of their contention the OP has also relied on three documents. Ex.R1 is the Resolution dated 15.08.2020, Ex.R2 is the Review petition copy and R3 is the stay order passed in W.P.No.5937/2021.

26.     It is  clear from the very documents produced by the complainant and admitted by the OP that the complainants have entered into the sale agreement with the OP on 29.10.2014 and as per the agreement the OP has to complete the construction and hand over the possession of the apartment within 2016. The OP has failed to complete the construction and deliver the possession of the apartment even after lapse of seven years at the time of filing of the complaint and even after filing of the complaint the OP is not ready to hand over the possession of the building.  It is undisputed fact that there was no covid pandemic in the year 2014, when the sale agreement was entered between the parties. The covid 19 problem was started from 2020 march afterwards. Under these circumstances the contention taken by the OP that they could not complete the construction due to labour problem and other financial problems cannot be accepted.  

27.     The complainants who are the purchasers cannot wait for an indefinite period to take delivery of possession of the apartment after investing huge amount by raising loan from the banks.  When the OP has failed to deliver the possession of building even after lapse of seven years, the complainants are entitle for refund of the amount with interest and also the damages and litigation expenses.   Hence the complainants have clearly established the deficiency of service and negligence and unfair trade practice on the part of the OP. Therefore the complaint is liable to be allowed in part. Hence we answer point No.1 in the affirmative and Point No.2 partly in affirmative.

28.     Point No.3:- In view the discussion referred above,

O R D E R

1. The complaint is allowed in part.
2. The OP is directed to refund the advance amount of Rs.8,33,802/- with interest at 10% p.a., from the date of complaint till realization.
3. The OP is further directed to refund the bank loan amount as part of sale consideration amount Rs.23,46,822/- with interest at the rate of 10% p.a., from the date of complaint till the date of realization.  
4. The complainant is also entitled for the compensation of Rs.5,00,000/- and litigation expenses of Rs.10,000/-.
5. 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.8,33,802/- and Rs.23,46,822/- till final payment.
6. 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 03^RD day of DECEMBER, 2022)

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

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