CC Nos.270 & 271/2016

Filed on:17.02.2016

Disposed on:31.08.2017

BEFORE THE III ADDITIONAL BANGALORE URBAN DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BANGALORE – 560 027.                                

DATED THIS THE 31^st DAY OF AUGUST 2017

CONSUMER COMPLAINT NOs.270 & 271/2016

PRESENT:

Sri.   H.S.RAMAKRISHNA, B.Sc., LL.B.

                            PRESIDENT

                   Smt. L.MAMATHA, B.A., (Law), LL.B.

                           MEMBER

V/S

COMMON ORDER

BY SRI.H.S.RAMAKRISHNA, PRESIDENT

1.      These complaints filed by the different Complainants against same Opposite Parties i.e.,                        Syndicate Bank Retired Employees’ Welfare Association An Association Registered under Karnataka Societies Registration Act and the relief claimed in both complaints are one and the similar.   Hence, in order to avoid repetition of work and conflict of order, these two cases are clubbed together and pass the common order.

2.   In the complaints, the Complainants alleges that the above said parties as an Association registered under Karnataka Registration Act 1960 admitted that the Complainants as one of the Associate Members of the Association as per Membership No.Gen/376/06 in CC.No.270/2016 and Membership No.Gen/442/06 in CC.No.271/2016.  The Complainants have associate member of the Association submitted an application for booking a residential sites with dimension of 30 X 40 Feet to be form in the Layout under Association’s Housing Scheme at Bidadi near Eagleton Resorts and Wonder La Children’s Park.  As per decision taken in the Managing Committee Meeting held on 18.01.2006 the Opposite Party fixed Rs.4,50,000/- for sites dimension of 30 X 40 Feet at Rs.375/- per sq.ft to be payable in 3 installments of Rs.1,00,000/-, Rs.1,50,000/- and Rs.2,00,000/- and conveyed the terms of the allotments to all the members assuring completion of the entire project within a span of 8 months and representing that the Opposite Party has arranged to book about 65 acres of land.   Along with their applications the Opposite Party had received a sum of Rs.1,00,000/- towards sites booking amount vide receipt No.383 dt.28.03.2006 in CC.No.270/2016 and receipt No.425 dt.31.03.2006 in CC.No.271/2016.  The Opposite Party having received the aforesaid sum of Rs.1,00,000/- as booking amount, later, the Opposite Party informed the Complainants regarding the eligibility of allotment of sites, required the Complainants to remit second installment of Rs.1,50,000/-. The Letter dt.21.05.2006, the Complainants in terms of Opposite Party’s demand remitted the said amount vide Opposite Party’s receipt No.1194 dt.12.06.2006 in CC.No.270/2016 and receipt No.1123 dt.12.06.2006 in CC.No.271/2016 and the third and final installment amount of Rs.2,00,000/-was also paid by the Complainants as per Opposite Party’s demand vide Opposite Party’s receipt No.468 dt.16.10.2006 in CC.No.270/2016 receipt No.469 dt.26.10.2006 in CC.No.271/2016.  The Opposite Party having received the aforesaid sum of Rs.4,50,000/-did not proceed with formation of Layout but was postponing the same citing technical problem faced by the Opposite Party and assuring of expedite resolving of the same. Despite providing of assurances, after assurances nothing positively happened and the Complainants having lost hope of getting site in the Layout the Opposite Party proposed to form in the land proposed to be acquired by the Opposite Party.  The Complainants having shown sufficient indulgence in the matter and as they could not afford to extend further indulgence to the Opposite Party got issued Legal Notice dt.04.08.201.  The Opposite Party having received the Legal Notice instead of complying with the demand of refund of aforesaid amount sent reply through its Advocate advising the Complainant to wait for some more time for allotment of sites.  The Opposite Party failed to proceed to form the layout, allot sites nor refunded the amount paid to the Opposite Party, thereby, rendered deficiency in service by not providing sites nor refunded the amount.  Hence these complaints.

3. In response to the notice, the Opposite Party put their appearance through their Counsel and filed their version.  In the version pleaded that the complaints are not maintainable either in law or on facts. The Complainants are not ‘Consumer’ as per Section 2(1)(d) of the Consumer Protection Act.   The service rendered by the Opposite Party-Society is not a service as per Section-2(1)(o) of the Act.  And the deficiency alleged by the Complainants in the Complaints cannot be called as deficiency of service as defined under Section-2(g) of the Act.  The Opposite Party having received the sum of Rs.4,50,000/-did not proceed with formation of layout but was postponing the same citing technical problem faced by the Opposite Party and assuring of expedite resolving of the same are hereby denied as false and baseless.   The Complainants have not paid any remuneration or charges to the Opposite Party.  The service provided by the Opposite Party is free of service and taking welfare measures and assisting to its members to get a site in a welfare manner. Hence, the service provided by the Opposite Party to the Complainants are not a service as per the Consumer Protection Act.  Hence, the complaints are not maintainable in law and same is liable to be dismissed.   The Aim and objectives of the Opposite Party-Society is that, to promote and encourage the sprit and practice of mutual help.  Cooperation and collaboration among its members.  To help the members of the Association to purchase residential sites in the layout formed in and around Bangalore or any place decided by the Counsel of Members. To help the members of the Society to have residential site in the layout, to construct the construction and such other way of help for welfare activities of its members.  The Opposite Party Society Managing Committee has been functioning to achieve the aims and objectives of the Society without getting any remuneration or charges from the Society.   The Society works/acts only as a facilitator for the members to meet their aspiration and helping the members of association to acquire residential sites as one of the objectives.  The Opposite Party is welfare service to its members on no profit no loss basis.  The Opposite Party has not doing any business and not getting any profit.  The audit report do not shows that, the Society has made any profit.  In view of the main object of the board as stated above, it is not a profit making body it is providing welfare service to its members without any lost or profit.  Hence, services rendered by the Opposite Party-Society to its members are free of charge.  The service rendered by the Society will not be service for the purpose of Section 2 (1)(o) of the Act.  Hence, the Complainants will not be a Consumer and this Complaints cannot be entertained by this Commission.  The Opposite Party is not collecting a free or charges for its acts.  The Opposite Party had come up with a scheme of forming residential layout at Bidadi Vicinity and got circulated a Circular dt.01.04.2006 detailing therein the due dates of the installments payable by the members towards booking of sites.  The Society has collected the amount from its sites aspirant members and utilized the said amount to purchase the land in the area at Bidadi and to develop the land by forming layout to allot sites to its members.  On 14^th July 2007 the Opposite Party has sent communication under reference No.37 that the Society has acquired 40 acres of land and the development of layout has been assigned to one Thimme Gowda, Managing Director of M/s SPR Developer Private Limited Bangalore.  Due to non-cooperation of the developer even after receipt of the amount from the Society, the formation of layout and allotment of sites to its members has been delayed.  Due to dilatory tactics in progress of the project and developments becomes delayed. The Society invoked the Arbitration clause referred in the MOU and MOA and requested to appoint Hon’ble Justice G.Patri Basavana Goud (Rtd) as the Sole Arbitrator.   This was agreed by developer and others.  Hon’ble Justice G.Patri Basavana Goud (Rtd) has given consent vide his letter dt.11.07.2013.  The dispute between the Society and developers and others has been pending in that regard with Arbitrator.   The above said acts has been communicating to every members of the Society by sending circulars to its members and further the said activities and other proceedings were conveyed in Annual General Body Meeting of the Society to its members.  The Opposite Party is maintaining its accounts properly and auditing the accounts and its transactions regularly by the auditor and auditor report is publishing at Annual General Body Meeting.  The Managing Committee has not misusing the funds of the Society.  The Society amount is not misused or misappropriated.  Hence, there is no necessity to get apprehend about amount paid by them to the Society for allotment of sites.  In the Annual General Body Meeting it was agreed that not to refund the amount to its members and insisted to the Managing Committee to complete the project at the earliest.   Return or refund to the members would defeat the aim and objectives of the Society and aspiration of members in getting site and it is adverse to the interest of majority members of the Society.  The Society has already utilized the amount for acquiring the land and for its development, meanwhile if the amount is ordered to be returned, it would cause hardship to majority members aspiration of getting site and would put in trouble.  The Society has not doing any business and not getting any profit.  Hence, the Complainants have not entitled to amount and Opposite Party Society is not liable to pay interest on the received amount to the Complainants as claimed in the complaints.  The Opposite Party is not liable to pay any compensation to the Complainants.  The Managing Committee has been doing its genuine effort to complete the project and there is no room for any suspicious.  The every transaction in respect of money has been accounted and transaction is doing through cheques and accounts has been maintaining promptly and honestly. There is no necessity to get apprehension about the amount of its members.  The Society is doing its best effort to get site allotted at early as possible.  The Managing Committee has no personal interest in the Society or its property.  The reason for delay in allotment of site is only aforesaid genuine and bonafide one.  Members have to wait further some time to get allot their site and Society has been taking steps to get resolve its dispute as early as possible.  In view of the above the complaints are not maintainable and same is liable to be dismissed.  Hence prays to dismiss the complaints.  

4.     The Complainants have filed their affidavits by way of evidence and closed their side. On behalf of Opposite Party, one Sri.M.Ramachandra Reddy has been filed his affidavit in Complaint Nos.270 & 271/2016.   Heard the arguments of both parties.

5.      Now the points that arise for consideration are:-

1. Whether the Complainants are ‘Consumer’ ?
2. Whether the Complainants have proved the alleged deficiency in service by the Opposite Party?
3. If so, to what relief the Complainants are entitled?

6.     Our findings on the above points are:-

                POINT (1):- Affirmative  

                POINT (2):- Affirmative

POINT (3):- As per the final Order

REASONS

7.     POINT NO. 1:-    The learned Counsel for the Opposite Party argued that the Opposite Party-Society is doing Welfare Service to its members on no profit no loss basis.  The Complainants are not ‘Consumer’ within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and that the deficiency alleged by the Complainants cannot be called as deficiency as defined under Section 2(g) of the Act.  On this ground itself, the complaints are liable to be dismissed.  In support of this argument, he relied upon a decision II 1(1991)CPJ 371,   I (1992) CPJ 318.

Section-2(1)(d) defines Consumer means:-

(ii) hires or avails of any services 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 services 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 services for any commercial purposes;

In this case also the Opposite Party being the Association received consideration of Rs.4,50,000/- and promised to allot sites to the Complainants, thereby nodoubt it may not be for profit purpose.  But the Opposite Party have received the consideration amount from the Complainants, thereby, the Complainants are ‘Consumer’ as defined under Section 2(1)(d) of the Act. 

2(1)(g) defines deficiency means any fault, imperfection, shortcoming or inade­quacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

          The Opposite Party Society undertake to perform service by allotting the sites after forming the layout and received the consideration amount, but the Opposite Party fails to allot the sites that means there is a shortcoming of the service as under taken by the Society, thereby there is a deficiency of service on the part of the Opposite Party as defined under Section 2(1)(g) of the Act.

          2(1)(o) defines "service" means service of any description which is made avail­able to potential users and includes, but not limited to, the provision of  facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

8. But in this case, the Complainants are not rendering free service as alleged but in order to allot the sites they have collected consideration amount of Rs.4,50,000/-, thereby it amounts to deficiency of service  as defined Under Section 2(1)(g).  Hence, the Complainants are Consumer’ as defined under Section 2(1)(d) of the Act.  Therefore, it is not proper to accept the contention taken by the Opposite Party. On perusal of decisions relied by the learned Counsel for Opposite Party.  These decisions are prior to the amendment act of 50/1993, thereby the law laid down in the said decisions are not applicable to the present case.  Therefore, we answer point No.1 is ‘Yes’.

9. POINT NO.2:-  As seen from the allegations made in the complaints and also the version of the Opposite Party, it is not in dispute that the Complainants are the members of the Opposite Party Association and also booked for sites with a dimension of 30 X 40 feet residential sites by paying consideration amount of Rs.4,50,000/-.  Further to substantiate this fact, the Complainants in their sown testimony, they have reiterated the same and produced the Membership receipts issued by the Opposite Party.  As looking into this document, this Membership receipt issued by the Opposite Party infavour of the Complainants, for receiving a sum of Rs.2,000/- towards Membership fee and allotted a Membership No.Gen/376/06 in CC.No.270/2016 and Membership No.Gen/442/2006 in CC.No.271/2016 and also produced the Application Form for booking of the residential sites.  By looking into this document, on 28.04.2006 in CC.No.270/2016 and on 31.03.2006 in CC.No.271/2016 the Complainants booked a residential sites measuring 30 X 40 Feet by paying advance amount of Rs.1,00,000/- and also produced the receipt issued by the Opposite Party-Society for receiving advance amount of Rs.1,00,000/- under receipt No.383 dt.05.04.2000 in CC.No.270/2016 and under receipt No.425 dt.06.04.2006 in CC.No.271/2016 and produced the letter addressed by the Opposite Party for requesting to pay second installment which is dt.21.05.2006.  In this letter they have clearly mentioning that request to remit the installment on 01.06.2006 to 15.06.2006 otherwise there will be charged with overdue interest at the rate of 12% p.a., after 16.06.2006 are liable for cancellation of sites booking and as per the request, the Complainants have remitted all the installments for a sum of Rs.4,50,000/-.  This is further submitted that the receipt issued by the Opposite Party for receiving a sum of Rs.1,50,000/- on 12.06.2006 and Rs.2,00,000/- on 16.10.2006 as per receipt No.1194 & 468 respectively in CC.No.270/2016 and the receipt issued by the Opposite Party for receiving a sum of Rs.1,50,000/- on 12.06.2006 and Rs.2,00,000/- on 16.10.2006 as per receipt No.1123 & 469 respectively in CC.No.271/2016.  This evidence of the Complainants have not been denied or challenged by the Opposite Party.  From this evidence, it is very clear that the Complainants are become the member of the Opposite Party Association by paying Membership Fee and also booked the sites measuring 30 X 40 Feet by paying advance amount of Rs.1,00,000/- and thereafter the Complainants have paid the installments total consideration amount of Rs.4,50,000/- for allotment of sites in the Year 2006 itself. 

10. It is further case of the Complainants that after receiving the aforesaid consideration amount of Rs.4,50,000/-did not proceed with formation of Layout but was postponing the same citing technical problem faced by the Opposite Party and assuring of expedite resolving of the same. Despite providing of assurances after assurances nothing positively happened and the Complainant having lost hope of getting site in the Layout the Opposite Party proposed to form in the land proposed to be acquired by the Opposite Party. The Complainants having shown sufficient indulgence in the matter and as they could not afford to extend further indulgence to the Opposite Party got issued Legal Notice demanding of refund of aforesaid amount but Opposite Party instead of complaining the Legal Notice send reply affixing the Complainants to wait for allotment of sites.  In support of these, the Complainants in their evidence reported the same and produced the Legal Notice dt.04.08.2015.  In this Legal Notice, the Complainants calling upon the Opposite Party to refund the aforesaid amount of Rs.4,50,000/- with interest at 12% and to this Legal Notice the Opposite Party issued reply on 24.08.2015 requesting the Complainants to wait for some more time and Society has been taking steps to resolve dispute and to allot the sites as early as possible to its members.  From this evidence itself, it is clear that even though the Complainants have paid the consideration amount of Rs.4,50,000/- in the Year 2006 after more than 9 Years.  The Opposite Party fails to discharge their duty by allotting the sites as promised by them. Due to that reason, the Complainants were demanding for refund of the amount with interest.  Inspite of refund of the amount, the Opposite Party issued Reply to the Legal Notice, wait for some more time it is unreasonable and uncalled for. 

11. The defence of the Opposite Party is that due to non Co-operation of the developer even after receipt of the amount from the Society, the formation of layout and allotment of sites to its member has been delayed.  Due to dilatory tactics in progress of the project and developments becomes delayed. The Society invoked the Arbitration clause referred in the MOU and MOA and requested to appoint Hon’ble Justice G.Patri Basavana Goud (Rtd) as the Sole Arbitrator.   This was agreed by developer and others.  Hon’ble Justice G.Patri Basavana Goud (Rtd) has given consent vide his letter dt.11.07.2013.  The dispute between the Society and developers and others has been pending in that regard with Arbitrator.   The above said acts has been communicating to every members of the Society by sending circulars to its members and further the said activities and other proceedings were conveyed in Annual General Body Meeting of the Society to its members.  In the Annual General Body Meeting it was agreed that not to refund the amount to its members and insisted to the Managing Committee to complete the project at the earliest.   Return or refund to the members would defeat the aim and objectives of the Society and aspiration of members in getting sites.  In order to substantiate this defence, one Sri.M.Ramachandra Reddy, Vice President of the Opposite Party Society, in his sworn testimony, he has reiterated the same and produced the copy of the Memorandum of Association and Rules and Regulations and the copy of Annual General Body Meeting Book and Audit Report.  Except this, the Opposite Party have not filed any other evidence.  To substantiate their defence i.e., Memorandum of Understanding, MOU and MOA and also the concerned letter issued by the Hon’ble Justice G.Patri Basavana Goud (Rtd) as the Sole Arbitrator dt.11.07.2013 and also they have communicating every member of the Society by sending circulars and also in AGM of the Society.  In that event, the Opposite Party ought to have produced that Circular communicated to the Complainants but they have not produced the same.  To substantiate their defence, further even as the evidence placed by the Opposite Party is that the Annual General Body Meeting of the Society held on 08.12.2013.  As looking into this document, the President Sri.Y.M.Shetty, in his remarks it is clears that in response to this, majority of the Members were infavour of disposing off the land and refund the amounts to the members.  It is falsifies the defence taken by the Opposite Party in their version, in the General Body Meeting it was agreed that not to refund the amount to its members and insisted to the Managing Committee to complete the project at the earliest, thereby it is not proper to accept the defence taken by the Opposite Party. 

12. On the other hand, as the evidence placed by the Complainants, it is crystal clear that even though the Complainants have booked the allotment of sites of 30 X 40 Feet in the year 2006 by paying a sum of Rs.4,50,000/- in the year 2006 itself and they are waited eagerly of getting sites upto 2015 i.e., more than 9 Years.  The Opposite Party failed to perform their promise by allotting sites thereby finally got issued Legal Notice demanding for refund.  Inspite of issuing Legal Notice instead of refunding the amount as per the proceedings in the General Body Meeting held in the year 2013 issued still wait for some more time that clearly amounts to deficiency of service as defined under Section 2(1)(g) of the Act.

13. Nodoubt, the Opposite Party is not doing any business but the Opposite Party collected huge amount in the Year 2006 itself from its members and that huge amount will fetch interest but on the other hand, the Complainants were invested hard earned money without any income or sites even after long period of more than 9 Years, thereby the Complainants are entitled for interest as demanded in the Legal Notice or at least reasonable interest and also the Complainants are entitled for compensation for causing mental agony.  Since, the Complainants are waiting for more than 9 Years.  In spite of demanding for refund, the Opposite Party failed to refund the amount or allot the sites as promised by them, thereby, it is causes mental agony to the Complainants.  Therefore, they are entitled for compensation for causing mental agony.  Hence, this point is held in the Affirmative.

14. POINT NO.3:- In the result, for the foregoing reasons, we proceed to pass the following:

ORDER

The Complaints are allowed holding that there is deficiency of service by the Opposite Party.

The Opposite Party is directed to refund booking advance of Rs.4,50,000/- together with interest at 12% p.a. from 31.03.2006 to each Complainants.

The Opposite Party is directed to pay a sum of Rs.50,000/- as compensation for causing mental agony to each Complainants.

The Opposite Party is liable to pay a sum of Rs.5,000/- as cost.

The Opposite Party is directed to pay the aforesaid amount within 45 days from the date of this order.  Failing which the above said amount will carry interest at 12% p.a. from the date of order, till the date of payment.

Keep the copy of the order in Complaint No.271/2016.

Supply free copy of this order to both the parties. 

(Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the Open Forum on 31^st day of August 2017)

    MEMBER                                       PRESIDENT         

LIST OF WITNESSES AND DOCUMENTS

Witness examined on behalf of the Complainants:

1. Sri.Srikant Nagesh Prabhu and Smt.Radhika Gokulda Prabhu, who being the Complainants have filed their affidavit.

List of documents filed by the Complainant in Complaint No.270 & 271/2016

1. Membership Receipt issued by the Opposite Party
2. Copy of the Application Form for booking Residential Site
3. Site Booking Receipt
4. Letter issued by the Opposite Party
5. Receipt issued towards site booking second instalment
6. Letter issued by the Opposite Party
7. Receipt issued towards Site Booking third instalment
8. Legal Notice
9. Reply Notice.

Witness examined on behalf of the Opposite Party in CC.270 & 271/2016

1. Sri.Srikant Nagesh Prabhu, has filed his affidavit on behalf of the Opposite Party.

List of documents filed by the Complainant in Complaint No.270 & 271/2016

1. The copy of Memorandum of Association and Rules and Regulations
2. The copy of the Annual General Body Meeting Book, it includes Society Audit Report

MEMBER                                                   PRESIDENT