State Consumer Disputes Redressal Commission
M.Govinda Reddy vs M/S Venkat Estates Pvt Ltd on 24 June, 2022
1 CC/27/2021
Date of Filing : 23.03.2021
Date of Disposal : 24.06.2022
BEFORE THE KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)
DATED THIS THE 24th DAY OF JUNE 2022
PRESENT
Mr. K.B.SANGANNANAVAR : JUDICIAL MEMBER
Mrs M.DIVYASHREE : LADY MEMBER CC-NO.27/2021
1. M.Govinda Reddy S/o P.Munikrishna Reddy, Aged about 64 years, R/at No.40, Domlur village, Bengaluru-71.
2. M.Yashodamma W/o V.Krishna Reddy, Aged about 68 years, R/at No.109, Munekolala, Marathahalli post, Bengaluru. . ..Complainant/s (By Adv.Sri.B.S.Reddy) VS
1.
1. M/s.Venkat Estates Pvt., Ltd., Regd. Office at Flat No.205, 6th floor, Rajnigandha block, Garden apartments, Opp: UB City, Vittal Malya road, Bengaluru-01.
Rep. By its Director Venkat Reddy S/o Reddappa Reddy. ... Opposit party no.1 (By Adv.Sri.M.Veerabhadraiah)
2. Punjab National Bank BO:Sastra Department Circle office, Bengaluru east, 2 CC/27/2021 Raheja towers, 1st floor, 26-27 MG Road, Bengaluru-01.
Rep. by its Authorised officer Sundara Raman.V.S ....Opposit party no.2 (By Adv.Sri.B.Prasannakumar) Orders on maintainability of the complaint filed U/s.47 of CPA 2019 BY Mr. K.B.SANGANNANAVAR : JUDICIAL MEMBER
1. The complaint filed U/s.47 of CPA 2019 through advocate on 23.03.2021. Initially OP.1 alone impleaded as opponent and pursuant to application filed U/o I Rule 10(2) R/w Sec.151 of CPC, OP.2 came on record and the opponents submitted their version in the meantime and while OP.1 & 2 raised objections as to maintainability of the complaint.
2. The Complainant in his complaint sought for the below mentioned prayers in respect of schedule A & B property mentioned therein:
a. Pay the amount of Rs.4,61,81,079/- towards damages for not completing the building within the stipulated period as per JDA.
b. Pay future damages for the delay in completing the project at the rate of 18% p.a on the value of Rs.3,000/- per sq.ft of the carpet area of the Complainants share till the OP completes the project.
3 CC/27/2021 c. Complete the project with all amenities as shown in the brochure issued by OP and JDA within a reasonable period as may be fixed by this Commission.
d. Obtain Occupancy Certificate from the competent authority after completion of the project. e. Provide all interiors for 2 apartments out of the apartments fallen to the share of the Complainants as per JDA.
f. Replace the sub-standard materials used for interior works including electrical fixtures and plumbing fittings and sanitary items.
3. According to the Complainant cause of action for the complaint has arisen on 15.11.2013 when OP.1 entered into Joint Development Agreement (JDA) and on 15.01.2017 when the OP.1 failed to complete the project and handover the Complainants share to them and also on 07.10.2020 when the opponent failed and refused to comply the demands of the Complainants and the same is continuing and subsisting even now. The Complainants placed certified copy of JDA entered between the Complainants and OP.1 which is a registered document along with brochure, supplementary agreement, legal notice and reply thereon. We have examined all these documents.
4. In view of the rival contentions of the parties to the complaint, commission heard the learned counsels on record for 4 CC/27/2021 Complainants and OP.1 & 2 on application filed U/s.47 & 49 of CPA 2019, wherein sought for rejection of complaint for want of jurisdiction.
5. Learned counsel for OPs would submit that, Complainants herein are not the consumers within the definition of either U/s.2(1)(d) of CPA 1986 or U/s.2(7) of CPA 2019 as the case may be to entertain their complaint either under CPA 1986 or under CPA 2019. In this regard would submit that OP.1 being company on obtaining necessary plan, permission, registrations from the competent authority started construction and at present completed 90% of the construction works and in process of construction a sharing/supplementary agreement dtd.10.07.2015 came to be registered between the company and Complainant. In terms of JDA dtd.15.11.2013 on deliberation both the parties decided to have 45 & 55 percentage ratio same are demarked and identified the flats for sharing ratio. As per the sanction plan 176 residential flats has constructed out of which in terms of JDA and supplementary agreement 96 flats were allotted to the company share and remaining 80 flats were allotted to Complainants share.( Bolding is mine) Further would submit, as per the supplementary agreement dtd.10.07.2015 the OP.1 sold 76 apartments to the prospective buyers and 20 flats yet to be sold 5 CC/27/2021 and searching for the prospective buyers. And the 46 apartment purchasers ever since acquiring the title of the respective flats they are in physical possession and enjoyment of the same since OP.1 company provided all the basic amenities to the flat owners. As far as the Complainants are concerned in terms of the sharing agreement they too sold 4 flats out of 80 flats and the prospective buyers are in the physical possession and enjoyment of respective flats from the said flat owners, no complaints as far related to quality of the constructions, suffice to hold that the dispute in the matter prima facie a dispute purely commercial and joint venture transaction. In other words, such transaction revolves around business dispute and not a business to consumer dispute.
6. Let us examine the contentions of Complainants, since placed huge documents along with huge pleadings, contending that the Hon'ble Supreme court has declared the law that when the builder is entrusted the work of constructing house, he is service provider. It is held that in a JDA, the owner transfers the land as a price for construction of the flats which are allotted to the share of the owners. The entire responsibility of construction is undertaken by the builder and therefore the builder is a provider of service to the owners. When deficiency arises the owners are entitled to claim compensation before the consumer forum. In this regard placed 6 CC/27/2021 reliance reported in 2020 (16) SCC 512 in the case of Wing Commander Arifur Rahman Khan vs Aleya Sultana and others, wherein at para 28 held that "the builder is liable to pay compensation for breach of obligation undertaken by him to deliver the flats as per the agreement" and submits the Commission has jurisdiction to entertain the complaint filed by the Complainants no.1 & 2, which in our view could not be apply to the facts of the case, since the Complainants and OP.1 entered into JDA for sharing of apartments as stated above. In our view it makes no difference, whether 96 apartment units will go to the OP.1 or 80 apartment units will go to the Complainants as share, facts remain that, the dispute prima facie appears to be a commercial activity and the same has to be said is a business to business and not as consumer to service provider, which could not be entertained by the Commission under consumer laws.
7. Learned counsel for the Complainants placed reliance in the case of Imperia Structures Ltd., vs. Anil Patni and another reported in (2020) 10 SCC 783 at para 23 & 39, wherein held "the provisions of RERA Act will not come in the way of consumer forum granting reliefs when the default is committed by the builder in providing service". As already stated above question of default could not be examined by the consumer commission, since Complainant nos.1 7 CC/27/2021 & 2 and OP.1 entered in to JDA is purely commercial activity and in other words Complainants.1 & 2 could not be said consumers within the definition of Sec.2(1)(d) of CPA 1986 or Sec.2(7) of CPA 2019. No doubt, Sec.3 of CPA 1986 or Sec.100 of CPA 2019 is not in derogation of the provisions of any other law provided under other acts, when there is clear bar, Complainants cannot contend that they are consumers and their dispute has to be examined by this Commission under consumer laws, since the issues raised by parties to the complaint are all hard issues are to be tried in comprehensive manner by a court competent to try, definitely not before the consumer commissions.
8. In so far as contentios of learned counsel for the Complainants that Sec.7(6) of the Insolvency and Bankruptcy Code, 2016, provides "the corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5)", as such, even a case is not registered under the said Act, Commission can examine their dispute. In our view, all such contentions are irrelevant since they could not be examined by the commission for simple reason that the complainants have failed to prove that they are the consumers.
9. In the above such view in our view it is not necessary for the Commission to go in detail, either on facts or on other aspects 8 CC/27/2021 raised before the Commission by the learned counsel for the Complainants, since they are all beyond the purview of the consumer laws.
10. It would be appropriate for the Commission to make mention that as OP.1 said to have failed to pay the loan dues of OP.2, loan accounts were classified as NPA on 31.03.2021. Thereafter OP.2 proceeded further with SARFAESI action. The Commission also has to take notice of the fact from complaint papers that Complainants have advertised a public notice in Times of India English daily news paper giving caution to the public at large not to purchase any of the flats of OP.1. Further OP.1 filed OS/1160/19 which subsequently transferred to commercial court in OS/221/2021. It is also submitted by OP.2 that, Complainant has already taken possession of the four flats and have sold the same, suffice to hold that they are not to be defined within the meaning of consumers either under 1986 Act or under 2019 Act, for the simple reason that the dispute between the Complainants and OP.1 without any doubt has to be held a dispute from business to business and not as that of consumer to business or consumer to service provider. In our view, it would be appropriate here to make mention that in 2015 SCC online NCDRC 961 in the case of Indrajit Datta vs. Samruddi Developers Pvt., Ltd., wherein 9 CC/27/2021 held "when a consumer has booked more than one unit of residential premises, it amounts to booking of such premises for commercial purposes." If this be the position of law as to deal consumer cases, here on facts, the Complainants being entered in to JDA with OP.1 as already stated above could not be said consumers and their dispute has to be held a dispute between to business men or to be said from business to business and not that of consumer to business or consumer to service provider as the case may be. In such conclusion, Commission proceed to record finding that complaint raised by Complainant no.1 & 2 U/s.47 of CPA 2019 is not maintainable and in view of such finding proceed to dismiss the complaint with cost of Rs.50,000/- payable to Consumer Welfare Fund of State Commission.
11. The Registrar is directed to recover the Cost amount and credit to proper Head of Account only after expiry of the appeal period.
12. Supply free copy of this order to both the parties.
Lady Member Judicial Member
*NS*