National Consumer Disputes Redressal
Smart Asset Services India Private ... vs Ananth Parimi on 22 November, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 443 OF 2022 (Against the Order dated 07/02/2022 in Complaint No. 85/2018 of the State Commission Karnataka) 1. SMART ASSET SERVICES INDIA PRIVATE LIMITED & 3 ORS. REP. BY ITS AUTHORISED SIGNATORY, MR. PRAMOD KUSHALAPPA, HAVING ITS REGD OFFICE AT: 8TH FLOOR, DELTA BLOCK, SIGMA TECH PARK, WHITEFIELD, BANGALORE-560066 2. SMART OWNER SERVICES INDIA PRIVATE LIMITED REPRESENTED BY ITS AUTHORIZED SIGNATORY, MR. PRAMOD KUSHALAPPA, HAVING ITS REGD. OFFICE AT: 8TH FLOOR, DELTA BLOCK, SIGMA TECH PARK, WHITEFILED, BANGALORE-560066 3. REGAL DWELLINGS PRIVATE LIMITED REP BY ITS AUTHORIZED SIGNATORY, MR. PRAMOD KUSHALAPPA, HAVING ITS REGD. OFFICE AT: LEVEL 3 & 4, EMBASSY DIAMANTE, 34 VITTAL MALLYA ROAD, BENGALURU-560001 4. SILVERSTREAM DEVELOPERS PRIVATE LIMITED, REP. BY ITS AUTHORISED SIGNATORY, MR. PRAMOD KUSHALAPPA, HAVING ITS REGD. OFFICE AT: LEVEL 3 & 4, EMABSSY DIAMANTE, 34 VITTAL MALLYA ROAD, BENGALURU-560001 ...........Appellant(s) Versus 1. ANANTH PARIMI S/O. HANUMANTHA RAO PARIMI, RESIDING AT 253 RIBBON LEAF VIEW , SUWANEE, GA 30024 UNITED STATES OF AMERICA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER HON'BLE BHARATKUMAR PANDYA,MEMBER FOR THE APPELLANT : MR. SOUMYAJIT PANI, ADVOCATE FOR THE RESPONDENT : MR. ADITYA PAROLIA, ADVOCATE MS. SUMBUL ISMAIL, ADVOCATE MS. PRIYA, ADVOCATE Dated : 22 November 2023 ORDER
1. Heard Mr. Soumyajit Pani, Advocate for the appellants and Mr. Aditya Parolia, Advocate for the respondent.
2. Smart Asset Services India Private Limited, Smart Owner Services India Private Limited, Regional Dwelling Private Limited and Silverstream Developers Private Limited (the opposite parties-1 to 4 respectively) have filed above appeal against order of Karnataka State Consumer Disputes Redressal Commission, Bangaluru, dated 07.02.2022, passed in Consumer Complaint No.85 of 2018, allowing the complaint in part with the direction to the opposite parties to pay a sum of Rs.1723200/- and Rs.4545000/- to the respondent (complainant) with interest @ 14% p.a. from the respective dates of receipts of payment till realization. The State Commission also awarded Rs.5 lacs as compensation for mental agony and Rs.10000/- towards cost of litigation.
3. According to the office report, the appeal has been filed with a delay of 31 days. The appellants have stated that certified copy of the impugned order was received on 27.05.2022 and the appeal has been filed on 20.06.2022. From the date of receiving the certified copy, the appeal is within time.
4. Appellant No.1 (Opposite party No.1) is a company engaged in the business of sale of properties belonging to various builders and developers. Appellant No.2 (opposite party No.2) is the sister concerned of appellant No.1, appellant No.3 (opposite Party No.3) is the land developer and appellant No.4 (opposite party No.4) is engaged in construction of residential complexes/apartments. The respondent (complainant) is a non-resident Indian. As the respondent wanted to purchase a property, he wrote an email dated 20.10.2015 to appellant No.2, which was replied on 16.12.2015. The respondent executed two master service agreements (MSAs) with appellant No.1 dated 29.02.2016 and 02.03.2016 respectively. The respondent also executed a General Power of Attorney dated 29.03.2016 in favour of appellant-1 to act on his behalf for purchasing the plots and also to sign and execute the documents. The respondent also submitted a client application form dated 02.03.2016. The respondent, through his power of attorney entered into an agreement dated 01.04.2016 with appellant-3 in respect of two plots of 2400 sq. ft. each for construction of a residential complex for a consideration of Rs.6246720/-, out of which the complainant partly paid Rs.1561680/-. Similarly, appellant No.1 being the GPA holder of the respondent also entered into another agreement dated 01.04.2016 with opposite party No.4 whereby the respondent was entitled to an apartment of 1300 sq. ft. in the proposed residential complex "Vaishnavi Enessen Centreo", BBMP Khatha No.163/14/2, Ward No.198, Kengeri Sub Division, Raghuvanahalli, Bangalore, for a consideration of Rs.4258709/-. The respondent paid the said amount to appellant No.4. As per clause 3.1 of the agreement, appellants 3 & 4 were required to obtain the approval plan from the concerned authorities within a period of 12 months from the date of the agreement dated 01.04.2016, failing which the respondent was entitled to get refund of his entire amount with interest @ 24% p.a. Clause 3.2 provided that within 90 days of obtaining the approval plan, the sale agreement should be executed in favour of the respondent by appellant No.3. The respondent alleged that appellant-1 misused the GPA and in collusion with appellants-3 & 4 entered into two supplementary agreements both dated 25.03.2017 thereby appellants-3 & 4 were granted 12 months extension for obtaining the approval plan about which the respondent was not intimated. When the respondent came to know about the two supplementary agreements, he immediately contacted appellants-1 & 2 for clarification of the same but they did not provide clear information to the respondent. The respondent revoked the power of attorney, vide email dated 19.10.2017. The respondent also sent an email dated 03.11.2017 stating that the supplementary agreements dated 25.03.2017 are not binding on him. Alleging deficiency on the part of the appellants, the respondent filed consumer complaint No.85 of 2018 seeking refund of his amount with interest @ 24% p.a. as per clause 3.1 of the agreement dated 01.04.2016 and Rs.15 lacs as compensation for mental harassment.
5. Opposite parties contested the complaint by filing separate written statements, wherein booking of the plots, execution of master service agreements dated 29.02.2016 and GPA dated 29.03.2016 in favour of opposite party-1 have not been denied. Opposite party No.1 contended that he did everything on the behest of the complainant and never misused the power of attorney.
5 (a) Opposite party-2 stated that it had provided every service to the complainant. The complainant had two options either to avail its services for the purpose of resale of the property or to take possession of the property. There was no deficiency on its part.
5 (b) Opposite party-3 stated that the complainant had appointed opposite party No.1 as his power of attorney holder. Opposite party-1 executed supplementary agreement dated 25.03.2017 extending the time of 12 months for obtaining the approval plan. The allegation of collusion of opposite party-1 with opposite party-3 is false.
5 (c) Opposite party-4 stated that the complaint has been filed as a counterblast to a criminal case filed against the complainant. The complainant has made false allegations and the complaint is liable to be dismissed.
5 (d) The opposite parties also stated that the complainant was not a consumer as the complainant has executed the agreement for commercial transaction as the complainant booked the flats for earning profit by resale. As per agreement, the dispute between the parties was to redressed by way of arbitration and the Consumer Commission did not have the jurisdiction to entertain the complaint.
6. The State Commission, vide impugned order dated 07.02.2022 partly allowed the complaint with the directions as stated above.
7. Aggrieved by the impugned order dated 07.02.2022 passed by the State Commission, the opposite parties have filed the above appeal.
8. We have considered the arguments of the counsel for the parties and examined the record. It is relevant to mention that during the pendency of the appeal, execution proceedings were also proceeding simultaneously and the executing court, vide order date 31.03.2023 issued bailable warrants against the appellants. However, the bailable warrants were conditionally stayed by this Commission, vide order dated 19.06.2023.
9. Counsel for the appellants relying upon the communication between the parties submitted that as the respondent has asked to sale the plot and flat as such it is proved that the plot and flat were purchased for resale for earning profit, which is a commercial purpose. Therefore, the consumer complaint is not maintainable.
10. Supreme Court in Lilavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developers, (2020) 2 SCC 265, held that (i) ordinarily "commercial purpose" is understood to include manufacturing/industrial activity or business-to business transactions between the commercial entities; (ii) the purchase of goods or service should have a close and direct nexus with a profit generating activity; (iii) the identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser/or their beneficiary; (iv) If it is found that dominant purpose behind purchasing the goods or service was for the personal use and consumption of the purchaser and/or their beneficiary or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of "earning livelihood by means of self employment" need not be looked into.
11. Ordinarily the plot and the flat were booked for personal purpose. It is only when by misusing the power of attorney appellant-1 has entered into supplementary agreement and extended the period of possession, then the communications were made between the parties. From the communication, it is clear that due to inordinate delay the complainant wants to refund of his money and his purpose was not to resale and earn profit, as such it cannot be said that the complainant was not a consumer. Further appellant-2 in its written statement filed before the State Commission admitted that it gave an option to the respondent either to avail its service to resale the property to take possession and the respondent opted to take possession. Supreme Court in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, observed that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots/flats in his normal course of business to earn profits, shifts to the Opposite Party, which the appellants have failed to discharge by filing any evidence.
12. As per original agreement dated 01.04.2016, possession was to be handed over within a period of 12 months from the date of the agreement (i.e. on or before 01.04.2017). There is a dispute between the parties relating to genuineness of the supplementary agreement dated 25.03.2017 granting extension of 12 months to the opposite parties. The respondent has not produced any evidence to prove that the supplementary agreement was executed without his consent. According to supplementary agreement dated 25.03.2017, possession was to be handed over latest by 25.03.2018. The appellants failed to fulfil their obligation by completing the construction and delivering the possession to the complainant. Supreme Court in Fortune Infrastructure & Anr. v. Trevor D'Lima & Ors., (2018) 5 SCC 442, held that a person cannot be made to wait indefinitely for possession of the flat allotted to him/her, and is entitled to seek refund of the amount paid by him, along with compensation. Judgment of this Commission in C/307/2013 dated 03.11.202 relied upon by the counsel for the appellants is distinguishable on facts as in that case the complainant made investment as a partner in the money and sought refund of that investment. Regarding arbitration clause, Supreme Court in M/s Emaar MGF Land Limited vs. Aftab Singh - I (2019) CPJ 5 (SC), held that Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint.
13. The State Commission has rightly allowed the complaint holding the appellants guilty for deficiency in service and directing them to refund the amount with interest @ 14% p.a. as per agreement. However, Rs.5 lacs as compensation towards mental agony, is not justified. Supreme Court in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, (2020) 16 SCC 318 held that the compensation cannot be awarded in multiple heads. As such award of compensation of Rs.5 lacs is liable to be set aside.
O R D E R In view of the foregoing discussion, the appeal is partly allowed. The impugned order dated 07.02.2022 relating to payment of Rs.5 lacs as compensation for mental agony is set aside. Rest of the order is affirmed.
..................................................J RAM SURAT RAM MAURYA PRESIDING MEMBER ............................................. BHARATKUMAR PANDYA MEMBER