State Consumer Disputes Redressal Commission
Bajaji Ramaswamy vs M/S Mantri Developers Pvt. Ltd. on 3 March, 2023
Cause Title/Judgement-Entry KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION BASAVA BHAVAN, BANGALORE. Complaint Case No. CC/505/2017 ( Date of Filing : 25 Sep 2017 ) 1. Bajaji Ramaswamy Aged about 52 years, S/o Late K.C.Ramaswamy, R/a No.8/2, Ferms Meadows, Bilishivale, Doddagubbi, Bangalore-560077 2. Mrs.Heather M.Ramaswamy Aged about 63 years, W/o Balaji Ramaswamy, R/a No.8/2, Ferms Meadows, Bilishivale, Doddagubbi, Bangalore-560077 ...........Complainant(s) Versus 1. M/s Mantri Developers Pvt. Ltd. Regd. Office at: Mantri House, No.41, Vittal Malya road, Bengaluru-560001 2. PNB Housing Finance Ltd. Property No.5, Mathushree Arcade,100 ft. Ring road, 1st phase, 2nd stage BTM layout,Bangalore-560076 Rep. by its Branch Manager,Also at:9th floor, Antriksh Bhawan,22 Kasturba Gandhi Marg, Near Connaught place, New Delhi-110001 Rep. by its ............Opp.Party(s) BEFORE: HON'BLE MR. Ravishankar PRESIDING MEMBER HON'BLE MRS. Smt.Sunita Channabasappa Bagewadi MEMBER PRESENT: Dated : 03 Mar 2023 Final Order / Judgement BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE (ADDL. BENCH) DATED THIS THE 3rd DAY OF MARCH 2023 PRESENT MR. RAVISHANKAR : JUDICIAL MEMBER MRS. SUNITA CHANNABASAPPA BAGEWADI : MEMBER CONSUMER COMPLAINT NO. 505/2017 1. Mr. Balaji Ramaswamy, Aged about 52 years, S/o Late K.C. Ramaswamy, R/at No.8/2, Ferns Meadows, Bilishivale, Doddagubbi, Bangalore 560 077. ....... Complainant/s 2. Mrs. Heather.M.Ramaswamy, Aged about 63 years, W/o Mr. Balaji Ramaswamy, R/at No.8/2, Ferns Meadows, Bilishivale, Doddagubbi, Bangalore 560 077. (By Sri T.K. Vinay Paul) V/s 1. M/s Mantri Developers Pvt. Ltd., A Company incorporated under the Companies Act, 1956, Having its Registered Office at 'Mantri House', No.41, Vittal Mallya Road, Bengaluru 560 001, Rep. by Mr. Sushil Mantri, (Chairman & Managing Director). (By Sri Umakanth) .... Opposite Party/ies 2. PNB Housing Finance Ltd., Property No.5, Mathushree Arcade, 100 Ft. Ring Road, 1st Phase, 2nd Stage BTM Layout, Bangalore 560 076, Rep. by its Branch Manager, And also having its registered Office at 9th Floor, Antriksh Bhawan, 22, Kasturba Gandhi Marg, Near Connaught Place, New Delhi 110 001, Rep. by its MD & CEO. (Placed exparte) ORDER
MRS. SUNITA CHANNABASAPPA BAGEWADI : MEMBER
1. This is a complaint filed by the complainant alleging deficiency in service on the part of the Opposite Parties and prays to direct them to pay Rs.89,28,692/- to the complainants with interest at 18% p.a. from the date of filing of the complaint, till recovery. Further prays to direct the Opposite Parties to pay Rs.5,00,000/- for the loss suffered and Rs.3,00,000/- being financial loss, mental stress cause for the negligence of the Opposite Parties with interest at 18% p.a. from the date of filing of the complaint, till recovery.
2. The brief facts of the complaint is hereunder;
It is the case of the complainant that the Opposite Party No.1 is a developer of the residential apartment namely 'Mantri Webcity'. Enticing by the advertisement of the Opposite Party No.1 that "Assured 100% Return" buyback Scheme and "Double Your Investment In Just 3 years", the complainant entered into an Agreement of Sale dt.27.05.2014 and Agreement for Construction with the Opposite Party No.1 for purchase of flat No.M-805, situated on the 8th Floor, Tower-M measuring 1010 sq.ft with one covered car park for a total sale consideration of Rs.66,29,977/-. As per the agreements, the complainant has paid total sale consideration amount of Rs.66,29,977/- to the Opposite Party No.1 by way of cheques on different dates. The Opposite Party No.2 in collusion with Opposite Party No.1 had disbursed the entire loan amount of Rs.53,04,132/- on 11.07.2014 at a mere request. The complainants further submit that as per the contract, the Opposite Party No.1 was to refund the pre-EMI amount to the complainants by the end of the following month. However, except for a few months at the start, the Opposite Party No.1 has defaulted on refunding this pre-EMI amount nearly every month with the delays ranging for more than 3 months. These delays have been continuous from September, 2015 till date. This fact was brought to the knowledge of the Opposite Party No.1 through innumerable emails and calls.
3. The complainants further submit that they also exercised the option of buyback and foreclosing the loan and to that effect sent an email to the Opposite Party No.1 on 22.06.2016. The Opposite Party No.1 vide email dt.28.06.2016 conveyed the complainants that it would take another 3 to 4 months for the buyback and foreclosure of the loan outstanding with the Opposite Party No.2. The complainants inform the Opposite Party No.1 that the original date of buyback scheme has ended on March 2017. There has been no realistic initiative taken from the Opposite Party No.1 for the buyback option and foreclosure of the loan till date. The Opposite Parties have been deliberately avoiding the complainants email and telephone calls. The complainants visited the Mantri Webcity on 19.03.2017, but there foundations were just being excavated. The Opposite Party No.1 has not bothered to reply nor comply with the demand of the complainants. The complainants issued a legal notice dt.16.05.2017 to the Opposite Parties, but, the Opposite Parties have given untenable reply. Hence, the complaint.
4. After service of notice, the Opposite Party No.1 appeared through counsel and filed version. The Opposite Party No.2 placed exparte. The Opposite Party No.1 contended in his version that the complaint is not maintainable either in law or on facts and the same is liable to be dismissed. The complainants do not come under the definition the 'Consumer' as per the provisions of the Consumer Protection Act. Further contended that if the complainants are aggrieved or if there are any disputes arising out of the Agreement between the parties the same shall be resolved by the Arbitration as per clause-21 of the Agreement of Construction. The Opposite Party No.1 denied the allegations made by the complainant and prayed to dismiss the complaint.
5. The complainants have filed affidavit evidence and marked documents as Ex.C1 to C16. The Opposite Party No.1 filed affidavit evidence, but, not marked any documents. The Opposite Party also files written arguments. Heard both sides.
6. On perusal, the following points will arise for our consideration;
(i) Whether the complainant is a 'Consumer' as per the provisions Consumer Protection Act?
(ii) Whether the complainant has proved any deficiency in service on the part of the Opposite Parties?
(iii) Whether the complainant is entitled for any reliefs as prayed? (iv) What order? 7. The findings to the above points are; (i) Affirmative (ii) Affirmative (iii) Partly Affirmative (iv) As per final order REASONS
8. Perused the contents of the complaint, objections filed by the Opposite Parties, affidavit evidence of both parties and materials on record, it is an admitted fact that the complainants booked a flat in the project of the Opposite Parties under the Mantri Webcity launched by Opposite Party No.1. It s also not in dispute that the complainants and Opposite Party No.1 entered into an Agreement of Sale of undivided share of land dt.27.05.2014 and also Construction Agreement bearing No.M-805 situated at 8th Floor in Tower-M having super built up area of 1010 sq.ft. with one car parking for a total consideration of Rs.66,29,977/-. It is also not in dispute that the complainant has made total consideration amount of Rs.66,29,977/- out of, his own contribution of 20% i.e. Rs.13,25,845/- and loan of Rs.53,04,132/- from Punjab National Bank on 11.07.2014.
9. Perused the contents of the complaint, affidavit evidence of the complainants and materials on record, the allegations of the complainant is that as per the contract the Opposite Party No.1 was refunded the pre-EMI amount for a few months at the start and from September 2015 till date there is a delay in every month and defaulted in their commitment. Further submitted that the original date of buyback scheme has ended on March 2017 and the last premium was received from Opposite Party No.1 on 5th July. From February 2017 and still he is paying the loan EMIs. Moreover, up to 19th March 2017 there was only a foundation work has started and when the complainant enquired about that the Opposite Parties are started to avoid phone calls and emails of the complainant. When the complainant issued legal notice, the Opposite Party No.1 gave evasive reply which is deficiency in service on the part of the Opposite Parties. Per contra, the contention of the Opposite Parties are that the complainants are invested the money with an intention to making gains on their investments and not for the purpose of obtaining flat for residential purpose. Hence, as per the Consumer Protection Act, there is no relationship between the complainants and Opposite Parties as 'Consumer' and 'Service Provider', hence, there is no question of deficiency in service on the part of the Opposite Parties.
10. As per the Consumer Protection Act, 2019, the definition of 'Consumer' in Sec.2 (7) reads as under;
"CONSUMER" means any person who-
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 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.
(a) the expression "commercial purpose" does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
(b) The expressions "buys any goods" and "hires or avails any services" includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.
In the present case, the complainants have booked the flat with the Opposite Party No.1 by paying full consideration amount and the Agreement of Sale and Construction Agreement was executed between both parties means there is contract between both parties and the Opposite Party No.1 failed to deliver the flat within the stipulated period i.e. 31st March 2017 as per Clause-6.4 of Agreement of Construction. When the complainant visited the layout on 19th March 2017, there was only foundation work has started. Moreover, it is a settled proposition that burden is upon the Opposite Party No.1 to prove that the complainant is indulging in commercial activities of purchase and sale of flats and he had booked the flat with an intention to sell it to earn profit as a part of commercial activities. There is no any document that the complainant is indulging in the business of sale and purchase of the properties. Since the Opposite Party No.1 failed to prove, we hold that the complainant is a 'Consumer' as per Sec.2(7) of the Consumer Protection Act, 2019. Also, the Consumer Protection Act is an alternative remedy to the consumers, hence, Consumer can sought relief under the Consumer Protection Act other than Arbitration Clause of agreement of construction.
11. Perused the emails of the complainants and they opted for buyback option for closing the loan on 22.06.2016 and the Opposite Parties agreed for the same option and issued prorata buyback calculation through email dt.28.06.2016. As per the allegation of the complainants, the Opposite Party No.1 was refund the pre-EMI amount for the month at starting and from September 2015 till date there is a delay in every month and defaulted in their commitments. When the Opposite Parties accepted for buyback scheme, it is their duty to handover the possession of the flat as per the Agreement or refund the amount of the complainants and to close the buyback scheme. However, the Opposite Parties are failed to handover the flat and also failed to end the buyback scheme and refund the amount to the complainants. Hence, in our opinion, the act and conduct of the Opposite Parties amounts to breach of trust as Opposite Party No.1 failed to honour the terms and conditions of the agreement and buyback option. The Opposite Party No.1 failed to refund the amount which amounts to deficiency in service and unfair trade practice on the part of the Opposite Party No.1. Moreover, the complainants alleged that in collusion with Opposite Party No.1, the Opposite Party No.2 has disbursed the entire loan amount on 11.07.2014 within one and a half month of the agreement executed between the complainant and the Opposite Party No.1 wherein no foundation stone was laid.
12. Perused the order sheet, we noticed that after service of notice, the Opposite Party No.2 remained absent. To disprove the allegation, the Opposite Party No.2 not present before this Commission, hence, we assumed that the allegation of the complainants is admitted by the Opposite Party No.2. However, the complainants have paid the amount is with Opposite Party No.1 and Sale Agreement & Construction Agreement executed between the complainants and Opposite Party No.1. Hence, the Opposite Party No.1 is liable to pay the amount paid by the complainants for the flat and the Opposite Party No.2 is liable to pay compensation as Opposite Party No.2 has disbursed the amount to Opposite Party No.1 not as per the terms and conditions of the agreement and without consent of the complainants. Hence, considering the facts and discussion made here, we are of the opinion that the complainants have proved deficiency in service on the part of the Opposite Parties. Hence, the following;
ORDER The complaint is allowed.
The Opposite Party No.1 is directed to pay a sum of Rs.89,28,692/- to the complainant along with interest at 6% from the date of Agreement of Construction i.e. 12.06.2014, till realization and to retain the flat with him.
The Opposite Party No.1 is directed to pay compensation of Rs.2,00,000/- and Opposite Party No.2 is directed to pay compensation of Rs.50,000/- to the complainants for deficiency in service.
The Opposite Party Nos. 1 & 2 are jointly and severally directed to pay a sum of Rs.25,000/- to the complainant as costs of litigation.
The Opposite Party is granted 45 days time from this date to comply the order.
Forward free copies to both the parties.
Sd/- Sd/- MEMBER JUDICIAL MEMBER KCS* [HON'BLE MR. Ravishankar] PRESIDING MEMBER [HON'BLE MRS. Smt.Sunita Channabasappa Bagewadi] MEMBER