SANTOSH DEVI GUPTA vs L I C OF INDAI & ANR

V. B. Gupta, Presiding Member

[1] Appellants/Opposite Parties have preferred this appeal against impugned order dated 8.4.2013, passed by Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short, ''State Commission'') in C.C. No.14 of 2010, vide which complaint of Respondent/Complainant was allowed in part, directing appellants to pay Rs.49,98,075/- to the respondent together with interest at the rate of 18% per annum from the date of respective payments made by respondent to the appellants, till the date of payment. Appellants were further directed to pay a sum of Rs.2,94,000/- to the respondent, as per Clause-9 of the Construction Agreement with costs of Rs.5,000/- towards litigation expenses.

[2] Brief facts are, that respondent an NRI residing in U.S.A. along with her husband is frequently visiting Bangalore, as her son is running Legal Process Out Sourcing Company in Bangalore. Respondent wanted to gift a suitable property to her son. After coming to know about an advertisement in the newspaper and internet, wherein appellants have invited bookings for residential apartments known as "Purva Venezia" proposed to be constructed in Mandalakunte village, Yelahanka Hobli, respondent booked a three bed room apartment bearing No.VN1304 on the 13th floor, in Francesco Block/wing. The built up area is 1356 sq. ft. alongwith proportionate undivided share of land and a common area together with car parking space and other amenities. The respondent entered into agreement of sale as well as construction agreement, both dated 20th February 2007 with appellants. Respondent paid a sum of Rs.52,569/- on 20th February 2007 towards the cost of booking the flat and agreed to pay the rest of the amount as per the Construction Agreement. Initially, appellants fixed the total consideration at Rs.24,77,490/- but at later stages, they stated that there is a high escalation in the price and respondent will have to pay Rs.25,20,585/- in addition to the amount agreed, for which respondent agreed to pay the same. Thus, respondent has paid a sum of Rs.49,98,075/- towards full and final cost of the flat.

[3] As per agreement of sale and construction agreement, appellants are required to hand over the vacant possession of the flat on or before 31.05.2009 with a grace period of four months which has come to an end on 30.09.2009. But till date, appellants have not delivered the vacant possession. Thus, alleging deficiency in service on the part of the appellants, respondent filed the complaint.

[4] In written statement appellants have stated that at the time of allotment of flat, respondent has made payment of booking amount of Rs.1,00,000/-. Respondent has undertaken to make further payments in accordance with the payment schedule as mutually agreed between the parties. Though, respondent had agreed to pay a sum of Rs.3,71,429/- on or before 15.02.2007, another sum of Rs.9,42,861/- on or before 15.03.2007 and thereafter, balance 70% was to be paid in 25 monthly instalments of Rs.1,32,000/-. But there is a delay in making the payments. As per clause 7(a) of the construction agreement, if there is any default or delay in payment by the respondent, the appellants could treat such delay as breach of agreement by the respondent and had the discretion to terminate the agreements. The project is proceeding as per the revised schedule in spite of global recession but other purchasers of flats have not made payment. Further, there were several force majeure events which have occurred. The delay if any, is on account of unfortunate death of matinee idol Dr. Rajkumar, the violence resulting thereto, the bandh called and city of Bangalore having come to a stand still for quite some time. As per clause 7(a) and 15 of the Construction Agreement, in case respondent still desire for refund of the amount paid, appellants would be constrained to terminate the agreements. Accordingly, cancellation charges at the rate of 15% of the total amount paid, would be applicable in terms of clause 5(b) and 7(b) of the Agreement. The respondent is yet to make payments towards possession charges of Rs.3,48,593/-, apart from payment towards registration fee and stamp duty charges and etc.

[5] I have heard learned counsel for parties and gone through the record.

[6] It is submitted by learned counsel for appellants, that it is respondent who has terminated the agreement on 22.10.2009 and not the appellant. In fact, e-mail dated 26.08.2009 illustrates that respondent had sought to cancel her purchase, because of undue delay even before the stipulated time for the delivery of possession, that is 30.09.2009.

[7] It is further contended, that respondent has not only delayed in making the payments towards allotment of the said property but has failed to make the payment towards possession charge of Rs.3,48,593/-, apart from payment towards registration fee and stamp duty charges. In support, learned counsel has relied upon following judgments; (i) Baij Nath Vs. Lucknow Development Authority (First Appeal No.464 of 2005) decided by this Commission on 22nd January, 2010;

(ii) Shamsu Suhara Beevi Vs. G. Alex & Anr., 2004 8 SCC 569.

[8] On the other hand learned counsel for respondent has contended, that respondent has not delayed any payment and was prompt to pay the amount. According to the agreement of sale and construction agreement, appellants are required to hand over the vacant possession of the flat on or before 31.05.2009 with a grace period of four months which comes to an end on 30.09.2009. But till date, appellants have not delivered the vacant possession. Therefore, respondent approached appellants on several occasions personally and contacted through e-mails but they instead of understanding respondent''s necessity to get the flat and explaining the reasons for delay, appellants have been revising the date of completion from time to time.

[9] The State Commission, while allowing the complaint observed; "According to the complainant she paid in all Rs.49,98,075/-. The total receipt of the said amount has not been disputed by the Ops. But their main contention is that the complainant is not prompt in payment of the remaining balance sale consideration as per the Construction Agreement as mentioned in Ex.C-3(a).

On careful scrutiny of the said exhibit, it clearly envisages that the first instalment commenced from 9th February 2007, the second one from 15th February 2007 and the last instalment that is 28th instalment ends in the month of April 2009.

According to the contents of Ex.C-3(a), the complainant paid a um of Rs.1,00,000/-on 17th February 2007 and Rs.3,70,429/- has been paid on 27th February 2007. Likewise she has paid the payment of entire sale consideration by the end of 27th June 2008. Though the complainant was allowed to make the balance of sale consideration that is under the agreement of sale and construction agreement she is expected to pay the balance amount commencing from 15th February 2007 to 15th April 2009. Apart from making her payments, at the time of execution of the agreement of sale to the tune of Rs.52,569/- has been paid. Therefore, the contention of the learned counsel for the Ops is that there is a delay on the part of the complainant while making balance of sale consideration cannot be accepted.

As per Clause 5 (1) of the Sale Agreement, the Vendor has agreed to sell the undivided share in the Schedule ''A'' property proportionate to the size of the Schedule ''c'' apartment as more fully set out in the schedule ''B'' for a total sale consideration of Rs. 24,77,490/-. The very same day she has paid Rs.52,569/-. As per clause 5 (3) of the Agreement of Sale, the purchaser has to pay Rs.1,95,196/- on 15th February 2007 and Rs.4,95,500/- on 15th March 2007. The remaining 25 installments payable at the rate of Rs.69.369/- on or before 15th of every month and the last instalment in the month of 15th April 2009.

In the instant case, Ex. C-3 (a) clearly indicates the entire sale consideration amount under the agreement of sale and construction agreement has been paid. In our opinion, there is no delay as such in making the payments to the tune of Rs.49,98,975/-. As per the agreement of sale and construction agreement, the Ops are expected to register the sale deed and handover the possession on or before 30.04.2009 with grace period of four months. Therefore, the Ops are bound to handover the possession and to execute the registered sale deed which they have failed to do so.

In paragraph 39 of the affidavit evidence of the OP, the OP has stated that the complainant is yet to make payments towards possession charges of an amount of Rs.3,48,593/- for which the OP has not produced any documentary evidence. Of course, the usual practice, the purchaser has to bear the stamp duty and registration charges and in paragraph 24, the ops have stated that several of the other purchasers have not made payment of the due amounts there is a delay. In our view if the other purchasers were not prompt in making payment of balance sale consideration for which the complainant cannot made responsible to hold that she is liable to pay. As per the terms and conditions of the Construction Agreement, the Ops are utterly failed to execute the register the sale deed and handover the possession. Therefore, it is not proper on the part of the Ops to blame the complainant who invested huge amount with a fond hope that flat would be registered in her name.

In this behalf, the learned counsel for the complainant relied on several decisions rendered by the National Commission in the case of Arun Mahadev Naik v- Smt. Shashi nandkishore Julka & Anr.,2003 1 CPC 22 NC regarding payment of interest Section 21 Housing Agreement failure to honour commitment for building flats default in construction. The complainant also relied on one more decision in the case of Lalit Kumar Gupta & Ajay Kumar Gupta v- M/s D.L.F. Universal Limited, 2002 3 CPJ 54 (NC) held that housing possession delayed deficiency in served proved upheld in appeal.

Therefore, after considering the documentary evidence placed on record by both the parties we are of the view that there is a deficiency of service on the part of the Ops in not keep up their promise in executing the registered sale deed and delivered the possession of the premises allotted to her. We have also taken note of the fact that there is no delay as such by the complainant in making the payments to the Ops. We hold that there is a delay on the part of the Ops in not completing the construction of the flat within the stipulated period.

The complainant herein apart from seeking refund of Rs.49,98,075/- with interest at 21% p.a. from the date of agreement of sale till payment also claimed compensation of Rs. 5,00,000/- towards mental agony and hardship, etc. Further under prayer (c) prayed to pass such other order or orders as deemed fit in the facts and circumstances of the case, in the interest of justice and equity.

Though there is no specific prayer to seek the relief like the rents, had they/OP been executed the sale deed and handover the possession, the complainant would have got the rents at Rs. 7,000/- pm. But the Ops have not allotted the flat within the stipulated period. Therefore, we can mould the prayer column (c) under the heading any other relief as deem fit to grant. When once we are awarding interest on the amount sought for by the complainant, question of awarding compensation does not arise.

In paragraph 46 of the affidavit evidence of the OP, the OP has stated that as per Clause 9 of Construction Agreement, the OP agreed to pay an amount of Rs. 7,000/- pm from the due date till date of completion provided that there is no breach in payment committed by the complainant. In the instant case, there is no breach in making payments by the complainant. Therefore, as per Clause 9 of the Construction Agreement, the complainant is entitled to get Rs. 7,000/- pm by way of rentals from October 2009 till March 2013 to the tune of Rs.2,94,000/-. In view of the law laid down by the Hon''ble Supreme Court as well as the National Commission, the complainant who has invested the huge amount is entitled for interest at the rate of 18% pa on the amount paid by her."

[10] As per copy of application for allotment of apartment placed at (Page 56-57 of the paper book), cost of apartment is Rs.46,14,290/-(44,14,290/- + 2,00,000/- for car park). In addition, a sum of Rs.1 lac is to be charged for club membership.

[11] Thereafter, agreement of sale was executed on 20.02.2007 between the parties. As per this agreement, total consideration of apartment was Rs.24,77,490/-. Respondent on that date had paid a sum of Rs.52,569/-. Thereafter, construction agreement of even date, i.e., 20.02.2007, was executed between the parties. According to it, cost of construction shall be Rs.22,36,800/-. Respondent had paid a sum of Rs.47,431/- on that date itself.

[12] In the construction agreement, schedule for payment of installments has also been mentioned. According to it, total amount of Rs.21,89,369/-was to be paid by the respondent on or before 15.04.2009.

[13] As per application for allotment, respondent had to pay a sum of Rs.1 lac on or before on or before 09.02.2007 and Rs.3,71,429/- on or before 15.02.2007 and Rs.9,42,861/- on or before 15.03.2007. However, as per construction agreement, respondent had to pay a sum of Rs.1,76,233/- on or before 15.02.2007 and Rs.4,47,361/- on or before 15.03.2007.

[14] Further, as per application for allotment, respondent has to pay Rs.2,00,000/- for car parking. However, as per construction agreement as per Schedule-B, the Apartment would have covered car parking space. Thus, levy of Rs.2 lakh towards car parking space is illegal, arbitrary and it amounts to deceptive and unfair trade practice on behalf of the appellants.

[15] The State Commission in its impugned order observed, that as per Ex.C-3(a), respondent has paid a sum of Rs.1,00,000/- on 17th February, 2007 and Rs.3,71,429/- on 27th February, 2007. Likewise, respondent has paid the payment of entire sale consideration by the end of 27th June, 2008. Therefore, this contention of learned counsel for appellants, that there was delay on the part of respondent while making payment of sale consideration, is not sustainable.

[16] It is an admitted fact, that as per agreement executed between the parties, appellant had to hand over possession of the apartment by 31.05.2009 with a grace period of four months and latest by 30.09.2009.

[17] Appellants in their written version have admitted, that delay has occurred due to heavy rains during monsoon. Secondly, there was severe shortage of cement and steel in the year 2007. Thirdly, there was a stand off between the State Government and sand suppliers/ transporters on account of various issues. Fourthly, due to the death of matinee idol Dr.Raj Kumar, the violence resulting thereto,the Bandh called and City of Bangalore having come to stand still for quite some time. Fifthly, several other applicants for apartments did not make payment on time. Lastly, there was economic slowed down. Thus, delay has occurred in completing the apartment in question, due to above factors.

[18] Bare perusal of record shows, that appellants have not led an iota of evidence in this regard.

[19] Further, appellants have put much reliance upon ''e-mail dated 26.08.2009'' sent by the respondent for cancelling her purchase. In this e-mail, respondent states; "She wants to cancel the purchase because of the undue delay in Purvankara Building Apartment as promised."

[20] Admittedly, this e-mail was sent only one month prior to the extended date of completion of the apartment. There is nothing on record to show, that even till date appellants have completed the apartment in question. Thus, deficiency on the part of appellants is writ large in this case.

[21] Appellants in the present case "wants to have the cake and eat it too", as admittedly after having received the entire cost of the apartment in question they are sitting over the hard earned money of the respondent. In addition, the apartment is also with them. On the other hand, respondent after having paid entire consideration amount of the apartment, is still empty handed.

[22] Such type of unscrupulous act on the part of the appellants, should be dealt with heavy hand who after grabbing the hard earned money from the consumers, goes on enjoy and utilize that money but do not hand over possession of the apartment, on one pretext or the other. Appellants want the respondent to run from one fora to other, so that appellants can go on enjoying respondent''s hard earned money, without any hindrance.

[23] A five member Bench of this Commission in Haryana Urban Development Authority Vs. Darsh Kumar (Revision Petition No.1197 of 1998) decided on 31st August, 2001, observed; " A Consumer Forum is to take a pragmatic view of the whole situation guided as it is by rules of natural justice only in the matters. When the hope and expectations of an allottee are violated there is a legal injury or loss suffered by him. We may refer to Black''s Law Dictionary to understand what the expressions ''loss'' and ''injury'' would mean. Injury is ''any wrong or damage done to another, either in his person, rights, reputation or property; the invasion of any legally protected interest of another''. ''Loss'': is generic and relative term. It signifies the act of losing or the thing lost; it is not a word of limited, hard and fast meaning and has been held synonymous with or equivalent to, ''damage'', ''damages'', ''deprivation'', ''detriment'', ''injury'' and ''privation.

Further when clause (i) of sub section (1) of Section 14 empowers the consumer fora to provide for adequate cost to parties, it is not necessarily confined to litigation cost only.

HUDA, GDA and other Urban Development Authorities, each one being an Authority constituted under the law and being an extended arm, of the State government a consumer has full faith that when he has applied for allotment of plot to build his house and the Authority agreed to do so, he will be able to get the plot fully developed within a reasonable period. He has no choice but to wait for a fully developed plot/flat be allotted to him for him to start construction. He is not in a bargaining position. He has to apply for allotment of plot/flat on dotted lines as required by HUDA/GDA. An allottee is not buying plot/flatfor any speculative purpose. It is for him to build a house for residence of himself and his family. It is a well-known fact that construction cost increases over the time. Why should allottee suffer for inaction on the part of HUDA and others in not developing a plot within a reasonable time after having received the amount as per its own requirement? Allottee has therefore to be compensated. Why HUDA is using his money and allottee is also deprived of earning interest on that? Rate of interest for delayed allotment of handing over possession of the plot of land is to be reasonable so as to properly compensate the allottee. Considering the decisions rendered by the Supreme court in the cases referred to above, we have already taken the view in the case of Punjab Urban Planning & Development Authority vs. Dr. Dalbir Kaur Dhillon (First Appeal No.157 of 1999) decided on 1.8.2001 that element of interest @ 18% per annum would take into account not only loss of interest but escalation in the cost of construction. There was certainly deficiency in service in depriving the complainant of the land for all these years with the result that the complainant could not construct her house for her own residence and meanwhile cost of construction escalated. We are thus of the opinion that in the circumstances of the cases before us award of interest @ 18% per annum is quite reasonable and equitable."

[24] It is well settled, that no leniency should be shown to such type of litigants who in order to cover up their own fault and negligence, goes on pursuing the litigation having no merit and legal force at all. Equity demand that such unscrupulous litigants whose only aim and object is to deprive the consumer the fruits of the decree, must be dealt with heavy hands. Unscrupulous developer like appellants who after taking entire consideration amount, do not perform their part of obligation, should not be spared. A strong message is required to be sent to such type of developers, that this Commission is not helpless in such type of matters.

[25] Now question arise for consideration is as to what should be the quantum of costs which should be imposed upon the appellants for pursuing this litigation, when it had no case at all. It is not that every order passed by the judicial fora, is to be challenged by the litigants even if the same is based on sound reasonings.

[26] In Ravinder Kaur Vs. Ashok Kumar, 2004 AIR(SC) 904 the Apex Court observed; "Courts of law should be careful enough to see through such diabolical plans of the judgment debtor to deny the decree holders the fruits of the decree obtained by them. These type of errors on the part of the judicial forum only encourage frivolous and cantankerous litigations causing law''s delay and bringing bad name to the judicial system."

[27] Further, Apex Court in Ramrameshwari Devi and Ors. Vs. Nirmala Devi and Ors. (Civil Appeal Nos.4912-4913 of 2011 decided on July 4, 2011) observed ; "45. We are clearly of the view that unless we ensure that wrong doers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the Courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that court''s otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases".

The court further held;

Learned Amicus articulated common man''s general impression about litigation in following words;

"Make any false averment, conceal any fact, raise any plea, produce any false document, deny any genuine document, it will successfully stall the litigation, and in any case, delay the matter endlessly. The other party will be coerced into a settlement which will be profitable for me and the probability of the court ordering prosecution for perjury is less than that of meeting with an accident while crossing the road."

Lastly, Apex Court observed;

While imposing the costs we have to take into consideration pragmatic realities and be realistic what the defendants or the respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyers and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter affidavit, miscellaneous charges towards typing, photocopying, court fee etc.

The other factor which should not be forgotten while imposing costs is for how long the defendants or respondents were compelled to contest and defend the litigation in various courts. The appellant in the instant case have harassed the respondents to the hilt for four decades in a totally frivolous and dishonest litigation in various courts the appellants have also wasted judicial time of the various courts for the last 40 years.

On consideration of totality of the facts and circumstances of this case, we do not find any infirmity in the well-reasoned impugned order/ judgment. These appeals are consequently dismissed with costs, which we quantify as Rs.2,00,000/-. We are imposing the costs not out of anguish but by following the fundamental principle that wrongdoers should not get benefit out of frivolous litigation".

[28] Thus, present appeal is nothing but gross abuse of the process of law and same is required to be dismissed with punitive damages. Accordingly, present appeal stand dismissed with punitive damages of Rs.1,00,000/-(Rupees One Lac only).

[29] Appellants are directed to deposit the amount of punitive damages by way of demand draft in the name of ''Consumer Legal Aid Account'' of this Commission, within four weeks from today.

[30] In case, appellants fail to deposit the aforesaid amount within the prescribed period, then they shall also be liable to pay interest @ 9% p.a. till realization.

[31] Pending applications, if any, stand disposed of.

[32] List for compliance on 30th October, 2015.