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

DATED 09^TH DAY OF AUGUST 2024

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 OPs to complete the construction of flat bearing No.109 by executing the necessary deed of conveyance in favour of the complainant. Or in the alternative direct the OPs to pay to the complainant of Rs.35,45,000/- with interest at 24%.
2. Direct the Ops to pay Rs.10,00,000/- towards deficiency of service.
3. Direct the OPs to pay Rs.5,00,000/- towards mental agony.
4. Direct the Ops to pay Rs.40,00,000/- towards the appreciation amount to be incurred and paid by the complainant.

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

The OP2 claiming to the MD of the OP1 have apprise the complainant to buy a residential flat bearing No.109 measuring 1260 sq.feet on the first floor, Tower A in the project called Tranquil Towers, said to be developed by the OP1 in the lands situated at Nagondanahalli, K.R.Puram Hobli, Bengaluru East Taluk, representing that the OP1 has entered into the JDA and GPA with the land owners for the development of the project.

3. The complainant agreed to purchase the said flat from OP1 and 2 and the OP2 has agreed to construct the said flat for a total consideration of Rs.31,10,000/- and collected Rs.23,00,000/- from the complainant being the agreed sale and construction cost and further promise to execute the construction and the sale agreement in favour of the complainant on or before 31.05.2014. The complainant has paid the amount though cheque and the OPs have acknowledged the same by issuing receipt.

4. Inspite of repeated reminders and demands the OPs rather executed the sale and construction agreement even after collecting the part sale consideration of Rs.23,00,000/-.  They have enhanced the consideration from Rs.31,00,000/- to Rs.35,45,000/- and demanded the complainant to pay further consideration of Rs.12,45,000/-.  The complainant has already paid the maximum sale consideration of Rs.23,00,000/- to the OP left with no alternative has paid the consideration amount of Rs.12,45,000/- by way of cheque.  The OPs after collected the entire sale consideration amount after prolonged process have executed the agreement of sale and construction agreement on 03.06.2014.
5. In the said agreements the OPs have agreed and undertake to complete the construction of the apartment and hand over the possession of the same on 31.03.2016 by completing the apartment in all aspects and agreed to execute the necessary registered conveyance in favour of the complainant. The OPs adopted unfair trade practice and have collected entire sale consideration prior to execution of the agreement and even after collecting the entire sale consideration have failed to complete the construction of the apartment and handing over the possession of the same. 

6. The complainant also got issued legal notice on 17.11.2022 demanded the OPs to complete the construction and hand over the possession of the same as promised. The notice sent to registered address was returned with shara left and the notice addressed to the Bangalore address of the OPs was duly served on 19.11.2022 even after receipt of the legal notice the OPs have failed to fulfill the demands made in the said notice. Hence this complaint filed.

7. In response to the notice, OP1 and 3 appears and files version. OP2 and OP4 to 6 remained absent.  The OP1 is none other than the OP3 who is one of the Director of the OP1 has filed version.

8. The OP1 and 3 have taken the contention that the OP1 is incorporated under the companies act. They have further admitted about the agreement of sale and construction agreement entered between the complainant and OP1 being represented by the OP2.  

9. It is further case of the OP1 that any payments towards the construction of the apartment were made to the account of OP1 and not to the account of OP2 to 6. There was no privity of contract between the complainant and OP2 to 6 and no consideration was received by them.  They were not obligated to provide any service to the complainant. Hence the complaint against OP2 to 6 is not at all maintainable and liable to be dismissed.  The OP2 is no more the MD or a director of a company and cannot be held liable for the actions of the OP1. Hence complaint is liable to be dismissed against OP1.

10. It is further case of the OP that the company is engaged in construction of multi storied residential apartment complexes in and around Bangalore. The OP1 took up the project for construction of residential apartment complex namely tranquil Towers. Even though the project was originally planned as a residential complex. In the light of the difficulties faced by the OP1 and prevailing market condition the OP1 has been constrained to discontinue the project.  The promoters of the OP1 are desirous to keep the apartment for personal use and not for considering to sell or offer to sell the apartment.  Accordingly the OP1 is taking active steps to cancel all the agreements and sell regarding the residential apartment project.

11. The OP1 has already cancelled some agreements to sell by way of cancellation agreement and they are making active steps to cancel all the bookings. Hence the construction of the residential apartment complex named Tranquil Tower project.

12. The OP1 has informed the complainant on multiple times that it could not continue the project and take back the principal amount by entering into a cancellation agreement. The complainant has approached this OP1 for purchase of apartment through one Surya. This OP1 has contacted Mr.Surya through phone and requested him on multiple occasions to request this complainant to enter into cancellation agreement by taking the full refund of the principal amount.  The complainant has rejected the request of the OP1 with respect to cancellation of the agreement even after this OP has informed their inability to continue the project. Even today the OP1 is ready to refund the entire principal amount by entering into cancellation agreement. 

13. The OP1 has denied all other allegations made in the complaint. The complainant is not entitled to any of the amount sought for in the prayer from the OPs. These OPs are not jointly and severally liable to pay any amount to the complainant as claimed by him.  The OP1 has denied that the OP company is represented by OP2 to 6 who being the MD and directors of the OP1 are involved in the day to day business transaction of OP1. Hence OP1 prays for dismissal of the complaint.

14. The GPA holder of the complainant has filed his affidavit evidence and relies on 11 documents.  Affidavit evidence of official of OP3 has been filed and OP relies on 06 documents.
15. Heard the arguments of advocate for the complainant.  No oral argument is advanced on behalf of OP1 and 3.  Perused the written arguments filed by complainant.

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

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

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

Point No.1:  Affirmative in part

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

18. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence of both the parties, written arguments and documents.

19. It is undisputed fact that the complainant has agreed to purchase the flat No.109 measuring 1260 sq.feet on the first floor, Tower A in the project being developed by the OPs namely Tranquil Towers in the land bearing Sy.No.92/1 measuring 2 acre 8.8 guntas and land bearing sy.No.102 measuring 1 acre 4.8 guntas, both situated at Nagondanahalli, K.R.Puram Hobli, representing that the OP1 has entered into JDA and GPA with the land owners for the development of the project.  

20. It is further undisputed fact that the complainant has agreed to purchase the flat for a total consideration amount of Rs.31,10,000/- and had made the part payment of Rs.23,00,000/- as per Ex.P2 to P5.  After that the OPs have increased the sale consideration amount from 31,00,000/- to 35,45,000/-.  The complainant has paid the full sale consideration amount demanded by the OPs as per Ex.P6. After that the OP1 represented by the developer has executed the sale and construction agreement as per Ex.P7 and P8 on 03.06.2014.  after that the OPs have failed to complete the project and hand over the possession  even though they have agreed to hand over the possession of the flat on 31.03.2016 by completing the apartment in all aspects and further agreed to execute the registered conveyance deed in favour of the complainant.

21. The complainant has also got issued legal notice as per Ex.P10 and the notice issued to the Hyderabad address unserved. The notice issued to other OPs was served but they did not issue any reply or complied the demands of the complainant.

22. On the other hand, the contention taken by the OP1 is that they have admitted about the transaction and they have further admitted about the consideration amount received by them from the complainant and also execution of Ex.P7 and P8.

23. It is the specific contention taken by the OPs that the OP1 has been constrained to discontinue the project in view of the difficulties faced by them and the prevailing market condition. The OP1 has taken active steps to cancel all the agreement to sell regarding the residential apartment project. The OP1 has already cancelled some of the agreement entered into with other customers. This complainant has approached the OP1 through one Mr.Surya who was coordinating with OP1 and the complainant with respect to purchase of the apartment.  The OP1 has contacted Mr.Surya on multiple occasions and request him to request the complainant to enter into cancellation of the agreement by taking full refund of the amount, but the complainant has rejected their request. Even today the OP1 is ready to refund the entire principal amount to the complainant after entering into cancellation agreement. The OP2 to 6 are in noway connected with this transaction. There was no privity of contract between them and the complainant. The complaint is also not at all maintainable. The OP2 is no more, the MD or the director of the company and therefore is no longer a representative of the company and cannot be held liable for any actions of the OP1.  There is no deficiency of service or unfair trade practice on the part of this OP1. Honestly they have requested the complainant to enter into cancellation agreement and to take back the principal amount, but the complainant has refused to do so.

24. In support of their contention the OP3 filed the affidavit evidence and relied on Ex.D1 to D6.  Ex.D3 and D4 and D6 the copies of the cancellation agreement. Ex.D5 is the letter sent to the complainant proposing to cancellation of the agreement and to receive the amount.

25. It is clear from the evidence and documents placed before this commission that the OP1 being the company has been constrained to discontinue the project in the light of the difficulties faced by them and the prevailing market condition.  Accordingly they have taken steps to cancel all the agreement executed in favour of the purchasers and return the principal paid by the purchasers, they have also requested the complainant to enter into cancellation agreement and to receive the principal amount paid by him, but the complainant refused to receive the amount.

26. When the OPs have stopped the project in the light of the problems faced by them, the question of completing the project and hand over the possession of the flat by executing necessary deed of conveyance in favour of the complainant does not arise.  

27. The complainant is only entitle for the alternative relief to receive the entire sale consideration amount paid by him to the OPs.  When the OPs have requested the complainant to come and receive the principal amount by executing the cancellation agreement by sending a letter as per Ex.D5 date 24.02.2022 the complainant has refused to accept their proposal. In turn the complainant has sent a legal notice to the OPs as per Ex.P9 on 17.11.2022 after received the letter from the OPs as per Ex.D5. The OPs have also sent an account payee cheque for Rs.34,00,000/- dated 21.09.2022 along with the letter.  The complainant even after coming to know about the affairs of the OP1 company that they are not in a position to continue the project and they are executing the cancellation agreements by paying the principal amount to the purchasers have refused to accept the offer made by the OPs and refused to execute the cancellation agreement by receiving the principal amount.

28. The complainant has filed this complaint on 17.03.2023 after lapse of more than one year from the date of issue of the letter by the OPs as per Ex.D5.  Under these circumstances, it is clear that the OPs have not at all played any fraud or practiced any unfair trade practice or committed any deficiency of service on their part. They were unable to continue the project in view of the problems faced by them and they have clearly brought to the notice of the complainant by sending letter and also by personal request. Inspite of that the complainant by rejecting their offer have filed this complaint for the reasons best known to him. Under these circumstances the complainant is not entitle for any interest from the date of letter Ex.D5 dated 24.02.2022.

29. When the OPs have not committed any deficiency of service or unfair trade practice and they are fair enough to return the principal amount received by the complainant, we feel it is necessary to direct the OPs to return the amount in favour of the complainant after getting the necessary cancellation agreement from the complainant. The complainant is only entitle for the principal amount with litigation expenses from the OPs.  Hence we answer point No.1 and point No.2 partly in affirmative.

30. 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. OPs 1 to 6 are directed to refund Rs.35,45,000/- with interest at 9% p.a., from the date of actual payments till 24.02.2022.
3. The OPs 1 to 6 are further directed to pay litigation cost of Rs.25,000/- to the complainant.
4. The OPs 1 to 6  shall comply this order within 60 days from this date, failing which the OPs shall pay interest at 12% p.a. after expiry of 60 days on Rs.35,45,000/- 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 09^th day of AUGUST 2024)

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

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