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

DATED 12^TH DAY OF OCTOBER 2022

ORDER

SRI.K.S.BILAGI, PRESIDENT

1.         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.

1. To refund a sum of Rs.57,30,168/- along with interest at the rate of interest being charged by SBI for housing loans.
2. To pay damages of R.10,00,000/-
3. Cost of the proceedings
4. Pas such other or further orders.

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

The complainant having entered into an agreement to sell and construction agreement dated 20.02.2016 with OP in respect of flat No.M604 measuring 1320 sq. feet for total consideration of Rs.8,76,624/- and Rs.57,60,756/- respectively paid Rs.1,00,000/- on 30.11.2015 and Rs.6,06,654/- on 15.12.2015 to the OP.

3. The complainant got sanctioned a loan from HDFC Ltd., by entering into Tripartite Agreement along with the OP and an amount of Rs.49,80,788/- came to be paid in favour of the OP.  It is further case of the complainant that as per the construction agreement and agreement to sell the OP was supposed to handover the apartment on or before 31.03.2019, but OP failed to deliver the possession with buffer period of six months. The OP had sent an email dated 26.06.2019 stating that the possession of the apartment would be ready only on 31.12.2020.
4. It is further case of the complainant that the OP had issued credit note for Rs.7,96,512/- and Rs.5,30,064/-, but failed to credit the amount and failed to deliver the possession as per the agreed agreement.  The non refund of amount despite legal notice dated 23.08.2021 amounts to deficiency of service.  Hence this complaint.
5. In response to the notice, OP appears and files version.  OP contends that the complaint has been filed on erroneous ground and there is no deficiency of service.  The agreement to sell does not demonstrate date of possession/completion of the project.  As per section 18 of real estate (Regulation and Development) Act 2016, the complainant is not entitle to interest and compensation.
6. OP also contends that as per the certificate of real estate regulatory authority, the possession would be delivered on or before October 2023.  There is no delay in deliver of possession of the apartment.  As per clause 7 of Sale Agreement and Clause 5 of Construction Agreement the amount can be refunded only after forfeiture of 20% of the paid amount on cancellation of the apartment.
7. In view of the clause in the agreement with regard to arbitration agreement, this commission has no jurisdiction to entertain the complaint.  The OP requests to dismiss the complaint.
8. The complainant has files affidavit evidence and relies on 11 documents.  Affidavit evidence of authorized signatory of OP came to be filed and 7 documents have been marked. Heard the arguments of complainant only. Perused the written argument filed on behalf of the complainant.
9. 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?

10. 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

11. POINT NO.1 AND 2:

About the jurisdiction of this Commission: It is one of the contention of the OP that in view of clause about arbitration in the agreement, this commission has no jurisdiction to entertain the complaint.  It is true that clause 16 of agreement of sale Ex.P1 indicates that the parties to the agreement shall settle their dispute through sole arbitrator appointed by the seller.

12.   The counsel for the complainant placing reliance on the decision of the Hon’ble Supreme Court of India reported in 2019(12) SCC 751 vehemently argues that the clause in the agreement of sale with arbitration does not oust the jurisdiction of this commission.  We carefully perused the above decision.  The Hon’ble Supreme Court of India categorically ruled that when the additional remedies provided under different status namely consumer forum, the clause in the agreement with regard to arbitration does not oust the jurisdiction of the consumer commission.  Sec 100 of Consumer Protection Act 2019 also speaks about the additional remedies provided to the parties under the Consumer Protection Act.  In view of this decision and section 100 of C.P. act 2019, the contents of the OP with regard to ouster of jurisdiction is not tenable.  Accordingly this contention is rejected.

13.   The complainant and OP have reiterated the respective contention in their affidavit evidence.  The documentary evidence produced by the complainant in Ex.P1 to P11 is not in dispute.

14.   Ex.P1 demonstrates that the complainant and OP have entered into agreement of sale dated 22.02.2016 in respect of schedule A to B property.  The schedule D of the agreement of sale Ex.P1 and schedule D of Ex.P2 construction agreement clearly demonstrate that both the parties to the agreement have made an agreement in respect of 2 BHK bearing No.604 apart from common area.  It is admitted fact that the total sale consideration under Ex.P1 was Rs.8,79,624/- and complainant paid Rs.87,962/- as advance money to the OP.  Ex.P2 the construction agreement indicates that the complainant and OPs have agreed for sale of apartment with undivided share in the area for sale consideration of Rs.57,16,766/-.  Payment in all Rs.7,06,654/- by the complainant to the OP is not in dispute.

15.   Even though OP contends that there is no recital in agreement for sale about date of delivery of possession, but Ex.P2 construction agreement clearly indicates that the OP agreed to deliver the schedule B apartment on or before 31.03.2019 with grace period of six months.  The grace period of six months came to be ended on 30.09.2019.  The OP does not dispute the terms of the Ex.P2 construction agreement.  Under such circumstances, OP is not right in saying that there is no time limit to complete the apartment work.  The payment of Rs.1,00,000/- and Rs.6,06,654/- under Ex.P3 is not in dispute.

16.   Ex.P4 tripartite agreement and Ex.P5 home loan agreement clearly indicate that the complainant, OP and Home Development Financial Corporation Limited have entered into Tripartite Agreement on 23.02.2016 for loan of Rs.56,02,000/-.  Ex.P5 loan agreement speaks about the terms and conditions of the agreement.  It is the specific case of the complainant that sum of Rs.49,80,788/- is paid by HDFC Limited to the OP.  This fact is not denied by the OP.

17.   Ex.P6 is the certificate u/s 65B of evidence act.  Ex.P7 is the list of email correspondence between the complainant and OP indicate that by email dated 26.06.2019 OP gearing to handover of the unit of the complainant by 31^st December 2020.  Despite such undertaking, the OP failed to complete the project.  Even though OP issued credit note that the credit note amount shall be applied against possession installment.  When the project is not completed the credit notes false to the ground.

18.   The complainant relies on Ex.P8 letter of clearance of the loan amount issued by HDFC on 31.07.2019.  It indicates that the complainant has repaid the entire pre amount of R.49,80,788/- towards full and final payment on 1^st August 2019.  It further indicates that pre EMI interest is Rs.42,726/-.

19.   The complainant by serving Ex.P9 legal notice as per Ex.P10 and P11 called upon the OP to refund Rs.57,30,168/- with compensation of Rs.10,00,000/-.  Despite receipt of notice the OP neither issued a reply denying its liability nor repaid the amount of Rs.57,30,168/- to the complainant.  This non payment of amount and non delivery of possession amounts to deficiency of service.

20.   The OP has filed affidavit evidence of its authorized signatory and relied on 7 documents.  OP contends that in view of clause 7 of agreement for sale and clause 5 of construction agreement, the OP is entitled to forfeit 20% of the paid amount in case of cancellation.  We carefully perused these two clauses.  According to these clauses in the event of request for cancellation being accepted by the seller, the seller shall forfeit 20% of the amount received under agreement.

21.   It is relevant to note that the complainant neither made a request for cancellation of agreement nor OP accepted its cancellation.  Therefore these two clauses do not help the OP.  It is relevant to note that the OP had sent Ex.P7 mail dated 26.06.2019 that the OP agreed to handover Unit No.M604 to the OP by 31.12.2020.  But OP failed to comply this undertaking.  This complaint came to be filed on 01.10.2021. The complainant had waited for 10 months from 31.12.2020 expecting that OP was going to complete the project by the end of December 2020.

22.   Ex.R1 is the certificate u/s 65B of Evidence Act.  Ex.R2 is the copy of award.  The complainant is not party to this award.  Ex.R3 and Ex.R4 Sale Agreement and construction agreement between the complainant and OPs are not in dispute.  However the OP placing reliance on Ex.R5 the award of RERA Jaipur contends that the OP is not liable to pay interest.  It is relevant to note that the complainant and OPs are not party to Ex.R5 award of RERA Jaipur.  Therefore this award does not help OP.

23.   OP also placing considering relies on Ex.R6 about the time extend by RERA Karnataka till 30.09.2023.  We carefully perused Ex.R6.  R6 dated 08.01.2021.  When the OP agreed to complete the project by September 2019 and delivered the possession latest by 31.12.2020 has obtained Ex.R6 against the interest of the complainant.  Mere extension of registration period does not help the complainant to deny the reliefs claimed by the complainant.  OP also relies on section 17 of RERA Act 2016.  Section 17 of the act speaks about execution of Registration of final Deed.  The OP cannot take benefit unilaterally under Ex.R6.  Therefore Ex.R6 does not help the OP.

24.   OP also relies on Ex.R7 circular of National Housing Bank dated 19^th July 2019.  The National Housing Bank advised Housing Finance Corporations to desist from offering products involving servicing of loan dues by builders/developers etc., on behalf of the builders.  But in this case the tripartite agreement between the complainant and OP with HDFC came to be executed on 23.02.2016 prior to Ex.R7 circular.  The complainant had executed Ex.P5 loan agreement with HDFC on 27.02.2016. Therefore Ex.R7 does not help the OP.

25.   The advocate for the complainant vehemently argues that the award of RERA Jaipur is not applicable to the present case on hand as the award was based on buyers agreement entered into between the complainant and builders.  Whereas, under the present case, there is an agreement for sale and construction agreement between the complainant and OP.  the complainant relies on the decision of Hon’ble Supreme Court of India reported in 2019(5) SCC 725 in the matter between Pioneer Urban Land and Infrastructure Limited –vs- Govindan Raghavan, wherein it has been held that sale cannot be completed to take deliver of flat when there is a delay in delivery of possession by the builder.  The OP cannot take the shelter under Ex.R6, the time extended by RERA Karnataka in favour of the complainant.  The OP not only violated the time limit of deliver of possession mentioned in the agreement of sale latest by 1^st September 2019 and promise made under Ex.P7 delivery of possession latest by 31.12.2020.

26.   The complainant proves deficiency of service.  It has been proved that the complainant paid Rs.7,06,654/- directly to the OP and got released Rs.49,80,788/-  from HDFC to the OP.  The complainant has also paid pre-EMI of Rs.42,726/-. Thereby complainant is entitle to refund of Rs.57,30,168/-.  The complainant seeks a damages of Rs.10,00,000/-.  The Hon’ble Supreme court of India was pleased to pass award 9% interest p.a., as compensation on the amount to be refunded from the date of respective payment till realization in the decision of 2022(2)CPJ(1) in the matter between Experian Developers Pvt. Ltd. –vs- Sushma Ashok Shiroor, the complainant is not entitled to compensation under separate head. Accordingly we answer point NO.1 and 2.

27.   POINT NO.3: In view of the discussion referred above, complaint requires to be allowed in part.  OP is liable to refund Rs.57,30,168/- with interest at 9% p.a., from the date of payment till realization as compensation.  OP is liable to pay Rs.30,000/- towards cost of litigation.  It is necessary to impose time limit on the OP to refund the amount.  We proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP shall refund Rs.57,30,168/- with interest at 9% p.a., as compensation from the date of respective payment till realization and Rs.30,000/- towards cost of litigation.
3. The OP shall comply this order within 60 days from this date, failing which the OP shall refund Rs.57,30,168/- with interest at 12% p.a., after expiry of 60 days till realization.
4. Furnish the copy of this order to both the parties and return the extra pleading and evidence to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 12^th day of OCTOBER, 2022)

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

Documents produced by the representative of opposite party :  

HAV*

O R D E R

The complaint is allowed in part. OP shall refund Rs.57,30,168/- with interest at 9% p.a., as compensation from the date of respective payment till realization and Rs.30,000/- towards cost of litigation. The OP shall comply this order within 60 days from this date, failing which the OP shall refund Rs.57,30,168/- with interest at 12% p.a., after expiry of 60 days till realization. Furnish the copy of this order to both the parties and return the extra pleading and evidence to the parties.