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

DATED 29^TH DAY OF SEPTEMBER 2022

ORDER

SRI.K.S.BILAGI, PRESIDENT

This complaint has been filed by the complainant under section 35 of C.P.Act 2019 (herein after referred as “Act”) against the OPs for the following reliefs.

The complainant prays this Hon’ble court may be pleased to pass an order, directing the opponent to refund the sale consideration of Rs.18,00,000/- along with damages of Rs.5,00,000/- for the mental agony, hardship and inconvenience caused to her i.e., Rs.23,00,000/- with 12% p.a., interest from the date of execution of the letter of intent, to the complainant for the deficiency of service rendered by the opponent, to meet the ends of justice.

2.     The case of the complaint in brief is as follows:

The complainant having shown his interest to purchase two BHK flat measuring 900 sq feet had approached the OP.  The total sale consideration of the flat is Rs.18,00,000/-.  The complainant has paid Rs.16,91,991/- by NEFT and balance of Rs.1,08,009/- by means of cheque.  Even though OP promised to develop the project and deliver the possession of the flat by December 2018, but OP failed to keep his promise.

3. It is further case of the complainant that the OP has committed inordinate delay in completion of the project and delivery of physical possession of the flat.  Therefore by issuing legal notice dated 27.10.2020, the complainant called upon the OP to refund the amount with interest and compensation.  But OP failed to comply the request of the complainant.  There is a deficiency of service on the part of the OP in non refunding of the amount with compensation and interest. Hence this complaint.
4. After receipt of notice, OP appears and files version.  OP contends that the complaint is not maintainable and based on surmises and conjecture.  The complainant is not the consumer and complainant invested the amount to earn interest.  The complaint is barred by limitation.  As per the intent letter dated 08.10.2014, the complainant was entitled to return the invested amount or flat in consideration of her investment on or before 30.06.2017.
5. There is no deficiency of service on the part of the OP.  the complainant suffers from non joinder of necessary parties namely Evalia Projects Pvt. Ltd., which name is specifically mentioned in letter of intent dated 08.10.2014. The letter of intent is to enter into an agreement and not enforceable.  In view of the arbitration clause in letter of intent dated 08.10.2014, the complainant shall have to approach the arbitrator and complaint before this commission is not maintainable.  The complainant is not entitled to refund of money with interest and compensation. There is no deficiency of service on the part of the OP.  The OP request to dismiss the complaint.
6. The complainant files affidavit evidence of her special power of attorney and relies on 12 documents. OP has filed affidavit evidence of its authorized signatory with copy of board resolution. Heard the arguments of both side and perused the records.
7. The points that would arise for our consideration are as under:-

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

8. Our answer to the above points are as under:

       Point No.1 :- Affirmative

      Point No.2 :- Affirmative in part

       Point No.3:- As per the final order.

                                REASONS

9. Point No.1 and 2:    These two points are taken into common consideration to avoid repetition of discussion and overlapping of the reasons.  The payment of Rs.18,00,000/- by the complainant to the OP is not only undisputed, but it is proved from Ex.P2 to P8 that the OP has received in all Rs.18,00,000/- from the complainant.  The documents produced by the complainants are not in dispute.
10. Ex.P1 is the Special Power of Attorney executed by the complainant in favour of Azaz Pasha who has filed affidavit evidence on behalf of the complainant.  Ex.P3 is the letter of intent dated 08.10.2014 written by the OP addressed to the complainant.
11. At this stage, it is relevant to refer the defence of the OP.  The OP has raised the following defence and requested this commission to dismiss the complaint.

1. Complainant is not the consumer under Consumer Protection Act 2019
2. The present complaint is barred by limitation.
3. There is no deficiency of service
4. The complaint suffers from non joinder of necessary parties
5. Letter of intent is an agreement to enter into an agreement and thus not enforceable.
6. Letter of intent is unstamped and enforceable.
7. The parties are bound by the arbitration clause of letter of intent dated 08.10.2014

12. We would like to consider all these points for common discussion as the contentions of the OP revolves around letter of intent dated 08.10.2014.  At one stage the OP tried to make us to believe that letter of intent dated 08.10.2014 is not enforceable under law and letter of intent is unstamped.  If this argument is accepted the OP is not entitle to take the benefit of Ex.P3 letter of intent to its convenience with regard to arbitration clause. The reference of arbitratin clause in Ex.P3 does not take away the jurisdiction of this commission in view of sec 100 of C.P. Act. 2019 and decision of Hon’ble Supreme Court of India reported in 2020 (10) SCC 783-Imperia structure –vs- Harith Pant.
13. Ex.P3 is the letter of intent dated 08.10.2014 addressed to the complainant requesting the complainant acknowledge and return the enclosed copy of this letter as token of purchasers acceptances, but complainant has not endorsed her acceptance to this offer.  Even though, OP admits receipt of Rs.16,91,991/- from the complainant in respect of the 2 BHK flat measuring saleable area of 900 sq feet, but this letter of intent is only an offer to the complainant. It means there is no concluded contract between the parties.  Therefore, either of the parties are not entitled to consider letter of intent as an agreement. Moreover this letter is signed by the OP only and it is not signed by the complainant acknowledging the contents of this letter as acceptance.  Therefore, clause with regard to resolving the dispute or difference through arbitrator does not help the OP. 
14. It is another contention of the OP that complainant is not the consumer as complainant invested the amount to earn interest.  The complainant has produced Ex.P4 letter dated 08.10.2014 wherein OP has stated that “we would also like to confirm details of your investment saleable area 900 sq. feet.  Ex.P4 is the letter of OP. There is nothing on record to show that the complainant invested Rs.18,00,000/- to earn interest.  The OP tried to toss the coin of interest on the basis of Ex.P4.  
15. It is pertinent to note that the OP neither pleaded nor proved that it is entitled to receive the deposit subject to payment of interest.  There is nothing on record to show that the OP is entitle to receive the deposits as an investment from the public and liable to pay interest on such investment.  More over the OP has not produced an article of association or Memorandum of association enabling it to accept the investment from the public for interest.  In the absence of such material document, the OP is not right in saying that the complainant made payment as an investment for commercial purpose.  
16. At this stage it is relevant to refer section 2(7) of the C.P. Act.

                          Sec 2(7) “Consumer” means any person who-

1. Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when  such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

2. Hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.

17. Admittedly the complainant has paid Rs.18,00,000/- under Ex.P2 to P8 to the OP in respect of sale price of 2 BHK flat No.153, measuring 900 sq. feet.  The complainant has not invested the amount with the OP under different projects for interest.
18. The complainant relies on decision of Hon’ble National Commission in Emaar MGF Land ltd., and another –vs- Amit puri dated 30^th March 2015 and decision of Hon’ble Supreme Court of India in Review Petition No.2629-2630/2018 in Civil Appeal Nos.23512-23513/2017 in the matter between M/s Emaar MGF Land Ltd., -vs- Abtab singh.  In both the cases the contention of developer/builder has been rejected.
19. Counsel for the OP relies on the following decisions:

1. 2015(11) CPJ 344 order of the National Commission in DLF Ltd., and others –vs- Abdul Azim and other.
2. 2009(80) AIC 91 in the matter between Condimath Raghavaiah and co., -v- national Insurance and another.
3. The decision of the National Commission in Sanjay Singh –v- Baby Chandan and other in R.P. No.2208-2209/2015.

20. We carefully perused the facts and ratio involved in the above decisions.  In the first decision the complainant booked two flat in two different projects for the purpose of investment, but in this case the complainant paid Rs.18,00,000/- to purchase only one BHK and there is no document to show that the complainant paid Rs.18,00,000/- as indicated above as an investment. Ex.P4 does not bind the complainant that complainant made the payment as an investment.  Therefore, this decision is not applicable to the present case on hand.
21. The second decision speaks about limitation.  In the second decision the date of incident was 23^rd March 1988 and respondent No.2 bank lodged FIR against the appellant firm and its partner.  On 14^th July 1988 respondent No.2 bank preferred a claim petition with respondent No.1 insurance company for an amount of Rs.1,32,85,760/-, but bank did not peruse the claim.  Only on 6^th November 1992 the appellant/complainant asked for claim form from the insurance company and issued legal notice dated 26^th October 1995 on 4^th January 1996.  On 21^st March 1996 the insurance company replied to the legal notice denying the factum of fire and refused to issue claim form.  On 21^st October 1997 the appellant filed a complaint before the commission.  It was observed that when the banker being the co-insured has lodged a claim with insurance company on 14^th July 1988 and failed to follow the claim with insurance company.  Therefore, denial of claim form on 31t March 1996 does not save the limitation.  This case is not applicable to the present case on hand.  At one stage the OP wants to rely Ex.P3 letter of intent as not an agreement, but at the same time OP wants to take the benefit of recitals of Ex.P3.  When there is no concluded contract, the OP having received the entire consideration of Rs.18,00,000/- was supposed to complete the project.  It is not the case of the OP that it had completed the project and asked the complainant to take the possession by getting the registered sale deed much two years prior to filing this complaint.  Under such circumstances the complaint is not barred by limitation.
22. The last decision also speaks about the limitation.  It was held that once the cause of action accrued cannot be extended by just writing a demand letter/legal notice.  It is relevant to note that the late complainant purchased a tractor cultivator and trailor from OP1 and took loan of Rs.2,00,000/- from OP3 bank.  OP1 having received consideration for tractor cultivator and trailor delivered the possession of tractor and cultivator and failed to deliver the trailor.  Rs.6,000/- in cash without receipt paid on August 2021, Rs.80,000/- was paid on 25.01.2001, Rs.2,00,000/- were directly paid by the bank on 31.01.2001 and on the date of delivery the bank draft of Rs.1,29,000/- delivered to the OP1.  Even though tractor and cultivator were delivered to the complainant between 25^th September 2001 to 30^th June 2002.  The cause of action raising the dispute regarding non delivery of trailor arose on 31.01.2002 but complainant got issued legal notice after lapse of almost four years in the year 2006.  Under such circumstances it was held that the complaint was barred by limitation. But in this case the OP has received the entire consideration of Rs.18,00,000/- between 18.02.2014 to 07.09.2014.
23. When Ex.P3 is not an agreement, the OP is not right in saying that the period of limitation commenced on 01.07.2017.  According to the OP the complaint should have been filed on or before 30.06.2019 and legal notice dated 13.11.2020 does not save the limitation.  It is the specific case of the complainant that the OP promised to deliver the possession in 2018 and thereafter in 2020 failed to deliver the possession and complaint is well within time.  Even though there is no concluded contract between the parties, the OP has not specifically denied that it promised to deliver the possession in 2018 and thereafter in 2020.  Under such circumstances, the cause of action to file this complaint arose from 13.11.2020 after issuing Ex.P9 legal notice.  Despite receipt of legal notice, the OP remains silent.  Therefore, OP is not right in saying that the complaint is barred by limitation.
24. Even though OP asserts that complaint is bad for non joinder of necessary parties i.e., Evalia Projects and development pvt ltd., and same has been specifically mentioned in letter of intent dated 08.10.2014.  As indicated above complainant is neither signatory to letter of intent nor paid any amount to Evalia projects development pvt. Ltd., The OP has referred in letter of intent that it would develop the project through its subsidiary Evalia project and development pvt. Ltd., This letter is only an offer to the complainant. Therefore, OP is not right in saying that complaint is bad for non joinder Evalia Projects Development Pvt. Ltd. The OP only issued receipts for having received the amount from the complainant.
25. Despite receipt of legal notice the OP failed to refund the amount of Rs.18,00,000/-.  The non refund of this amount after receipt of legal notice amounts to deficiency of service.  The payment made by the complainant to the tune of Rs.18,00,000/- is lying with the OP since 2014.  Even though complainant claims interest at 12% p.a., from the date of execution of letter and compensation of Rs.5,00,000/-, but there is no privity of contract with regard to payment of 12% interest and compensation.  In view of the decision of Hon’ble Supreme Court of India in 2022(2)CPR(1) in the matter between Experian Developers Pvt. Ltd., -vs- Sushma Ashok shiroor, the complainant is entitled to interest at 9% p.a. from the date of respective payments till realization. It is proper to award interest at 9% p.a., from the date of payment till realization. Accordingly we answer point NO.1 and 2.
26. POINT NO.3: In view of the discussion referred above complaint requires to be allowed in part. OP is liable to refund Rs.18,00,000/- with interest at 9% p.a., from the date of payment till realization as compensation with cost of Rs.25,000/-. In the result, we proceed to pass the following;

                            O R D E R                            

1. The complaint is Allowed in part.
2. OP shall refund Rs.18,00,000/- to the complainant with interest at 9% p.a., from the date of payment till realization as compensation and Rs.25,000/- towards cost of the litigation.
3. OP shall comply this order within 60 days from the date of this order failing which OP shall pay interest at 12% p.a., on Rs.18,00,000/- after expiry of 60 days till realization.
4. Furnish the copy of this order to both the parties.
5. 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 29^TH day of September, 2022)

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

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

HAV*