Bharathi vs H.M.CONSTRUCTIONS

THIS is a complaint filed under Section 12 of the Consumer Protection Act for a direction to the opposite party for refund of a sum of Rs. 12,50,000/- paid through cheques with interest at 24% p.a. on the said amount from 2.8.1995 till the payment and also payment of income-tax as per Income Tax Rules alleging deficiency of service on the part of the opposite party for the work execution of the flat for which the said amount has been paid by two cheques on 2.8.1995.

THE allegations made in the complaint are that the opposite party M/s. H.M. Constructions, Builders and Developers has received a sum of Rs. 12,50,000/- through two cheques on 2.8.1995 acknowledging the same through a letter for allotment of flat in the 3rd floor, Type B1 of Prudence Hall, 19th Cross, Malleswaram, Bangalore-3. THE builders had orally assured the complainant that the apartment would be ready by December 96, However, despite repeated requests made by the complainant to enter into an agreement of sale and construction, the opposite party went on postponing the said event on some pretext or the other. Hence, there was no agreement of the sale and construction between them. THE complaint further reads that the complainant came to know that the opposite party had collected considerable booking amounts in respect of other apartment also assuring them that the construction work will start soon and the flats will be delivered by the end of December, 1996. THE complainant came to know that the monies collected from the purchasers have been diverted by the opposite party and hence, the project at Malleswaram standing for want of funds. In the month of December, 1996 the complainant realised that the opposite party had no intention to develop the said property and it was concentrating on other places. This was confirmed in a letter dated 30.3.1996 in which the opposite party had mentioned all other projects except the project under question. Sensing that the amount received from the complainant had been invested elsewhere, the complainant wrote a letter on 30.12.1996 cancelling her booking and seeking refund of her amount as the said apartment was delayed beyond unreasonable time. According to the complaint the construction commenced only in December, 1996. Since the repeated requests made by the complainant to the opposite party had fallen to the deaf ears, after issuing legal notice the complainant approached this commission with this complaint claiming the above reliefs.

On receipt of the notice from this Commission the opposite party filed its written version denying the allegations made in the complaint. However, it has admitted the fact that it has collected a sum of Rs. 12,50,000/- from the complainant by way of two cheques dated 2.8.1995 drawn on Punjab National Bank, Sadashivanagar Branch, Bangalore. It also further admitted that on receipt of the said amount it confirmed allotment of two bed-room apartment at Prudence Hall of approximate size 1320 sq. ft. on the 3rd floor, According to the opposite party that it made clear in a letter dated 2.8.1995 that balance amount would have to be paid on slabwise basis over the construction period. It has denied the fact that the apartment would be ready by December, 1996. Similarly, it has denied the allegation that it utilised the said amount in some other project. According to the opposite party the agreement of sale and construction could not be gone through on account of the complainant herself and not due to their default.

IT further contended that when there is no concluded agreement as contended by the complainant and when they backed out of their proposal, she cannot have any grievance before this Commission as the dispute of the nature pleaded by the complainant is beyond the scope of inquiry and this Commission has no jurisdiction to entertain the same. IT further contended that the construction is taken up and the first floor slab is already casted, the monies received from the purchasers has been spent towards construction. If at this stage, the complainant were to cancel the agreement the opposite party would be put to irreparable loss, hardship and inconvenience. The complainant who has committed default, who has backed out of the commitment and who accuses the opposite party that they have not entered into any agreement so far should not be permitted to agitate her non-existent right before this Commission which will be abuse of process of this Commission. Accordingly, it requested this Commission to dismiss the complaint. In support of the contentions the parties have filed their affidavits and they have been cross-examined. They also produced documents. On behalf of the complainant Exs. C1 to C3 were got marked and the opposite party placed reliance on Exs. R1 to R4.

THE short point for our determination is whether the complainant has proved by adducing sufficient material to grant the relief of refund of the amount paid by her ? There is no dispute that the said amount of Rs. 12,50,000/- has been received by the opposite party. The opposite party in its version as well as evidence has admitted this fact. According to the complainant the opposite party has promised that the construction will be completed by the end of December, 1996 and the apartment will be handed over to her. But the opposite party has stated that even though there was no written agreement between the parties regarding the construction, the understanding between them was that the construction will be completed and handed over by the end of January, 1998. According to the complainant in spite of repeated requests and demands the opposite party Developer in spite of promise made by him to enter into an agreement of sale in respect of construction of the apartment, it went on postponing on one pretext or the other and ultimately no agreement existed between the parties. The complainant also further stated that the opposite party has not taken up the construction of the apartment immediately, instead it has invested the said amount collected from the parties in different project. The complainant has written a letter to the opposite party on 30.12.1996 stating that she wishes to cancel her booking and sought for refund of money paid by her for the reasons that the construction of the apartment was delayed beyond the reasonable time. However, opposite party did not refund the amount, but went on postponing by untenable reasons. According to the complainant the fault lies with the opposite party and there was clear deficiency of service on its part and hence, this Commission should order for the relief claimed in the complaint. On the other hand the opposite party has contended that the complainant wanted the amount back on the ground that the opposite party has asked for payment of a sum of Rs. 1,94,716/-. It also contended that the opposite party has issued reply to the legal notice bringing to the notice of the complainant the default committed by her. According to the opposite party even though there was no written agreement regarding the construction, the parties had agreed orally that the construction will be completed and the complainant will put in possession of the apartment by the end of January, 1998 and the complainant has to pay the balance amount by then. Since the complainant has not paid the amount which was due to the opposite party, now she cannot ask this Commission to refund the amount paid by her. On these grounds the opposite party contended that there was no deficiency on its part and requested this Commission to dismiss the complaint.

AFTER hearing the arguments of the learned Counsels Mr. G.R. Lakshmipathy Reddy on behalf of the complainant and Mr. Giridhar, on behalf of the respondent, we are of the opinion that the complainant has proved beyond reasonable doubt that there was deficiency on the part of the opposite party in service and hence, she is entitled for the refund of the amount paid by her. Admittedly the said amount has been received by the opposite party on 2.8.1995 and as per the say of the complainant the apartment has to be handed over by the end of December, 1996, whereas, the opposite party contended that the apartment will be handed over by the end of January, 1998. From the materials produced by the parties, we are of the opinion that the opposite party has not kept up its promises in completing the work which it has undertaken to do. Even according to the opposite party as per the letter dated 19.12.1996 only the foundation work has been completed. Admittedly, the complainant has been allotted the apartment in the 3rd floor. Under those circumstances the complainant was justified in asking for the refund of the amount paid by her to the opposite party.

THE opposite party in his evidence has stated that it is true that generally they enter into an agreement of sale with a party who proposes to purchase a flat. However it depends upon the facts of each case. He has also further contended that all the terms and conditions of sale are specified in the sale agreement. In the case where there is no sale agreement they straightaway go for the registration of the sale deed treating the confirmation letter as agreement. In the present case the confirmation letter has been produced as Ex. R1. That being so the opposite party cannot contend that there was no concluded contract and there is no obligation on its part and the complainant without there being any written agreement cannot approach under the provision of the C.P. Act. We have carefully considered the materials and the evidence produced by the parties and also the argument addressed by the learned Counsels of both sides and we are of the opinion that the opposite party has committed deficiency in service in not completing and handing over the apartment as promised by it and hence, we do not find any legal infirmity to hold that the complainant is entitled for the refund of the amount deposited by her with the opposite party. However, the complainant has requested this Commission to award interest at the rate of 24% p.a. on the said amount. Having regard to the facts and circumstances of the case, we are of the opinion that the rate of interest should be 15% p.a.

In the result, we allow the complaint and directed the opposite party to refund a sum of Rs. 12,50,000/- to the complainant together with interest at 15% p.a. from 2.8.1995 till the date of payment. We further direct that the said amount should be paid to the complainant within a period of one month from the date of receipt of the order. We also direct the opposite party to pay a sum of Rs. 5,000/- as costs to the complainant towards this proceeding. Complaint allowed.