V.BHAKTHA KUMAR vs K.T.GURUDEVA PRASAD

THIS appeal is directed against the order dated 2.12.03 of Karnataka State Consumer Disputes Redressal Commission, Bangalore allowing complaint with direction to the appellant/opposite party to return the entire deposited amount with interest @ 18% p.a. from the dates of deposit and pay Rs.50,000/- towards compensation to the respondent/complainant.

RESPONDENT , an Advocate booked for his office flat No. 135, 6th Cross, Gandhi Nagar, Corporation Division NO. 22, Bangalore under two agreements, both dated 19.4.96 with the appellant builder. One of these agreements was for sale of land for a consideration of Rs.2,11,413/- while another for construction for a consideration of Rs.8,38,587/-, total being Rs.10,50,000/-. Amount of Rs.8,50,000/- was paid on different dates upto 26.2.97 to the appellant. Under the said agreements the appellant after completing construction was to hand over possession of the booked flat by 31.3.97. On possession of flat not being handed over and/or said money refunded with interest the respondent filed complaint against the appellant claiming certain reliefs. At a later stage the respondent confined his claim to the return of deposited amount with interest and damages only. Appellant contested the complaint by filing written version. Though the execution of two agreements and receipt of total amount of Rs.8,50,000/- from the respondent were not disputed but it was alleged that complaint was barred by limitation and possession of the flat could not be given by the stipulated date due to unforeseen reasons beyond the control of appellant. It was stated that only a suit for specific performance would lie to enforce the agreements dated 19.4.96.

SUBMISSION advanced by Shri Y. Prabhakar Rao for appellant was that the finding returned by State Commission of the respondent not having committed default in paying balance installments is erroneous and order for refund of deposited amount with interest and damages could not have been passed as the deposited amount had been forfeited by the appellant as per the terms of the agreements. It was pointed out that the letter dated 9.2.99 (copy at page 116) was not admitted by the appellant nor was it proved by the respondent. Copy of the agreement for sale of land is at pages 80-89 while that for construction at pages 90-106. Former agreement would show that out of the sale consideration of Rs.2,11,413/-, a sum of Rs.2,00,000/- was paid as advance and balance amount of Rs.11,413/- was to be paid on or before 31.11.96 by the respondent. Later agreement would indicate that out of total consideration of Rs.8,38,587/- an amount of Rs.1,00,000/- was paid as advance and the balance amount was to be paid in the following manner:- Possession of the flat duly constructed was to be delivered on or before 31.3.97. It is not in dispute that respondent paid a total sum of Rs.8,50,000/- upto 26.02.97. At this stage letters dated 9.2.99 (Exhibit C-11 at page 116) and dated 16.3.2000 (Exhibit C-12 at page 113) need be referred to. Housing loan for purchase of flat was taken by the respondent from M/s. Hometrust Housing Finance Co. Ltd., Bangalore. Letter dated 16.3.2000 was admittedly sent by the appellant to this finance company with reference to their letter dated 28.2.2000 addressed to the respondent. This letter notices that because of financial problem the appellant could not complete the project in time and flat is not ready for occupation and as soon as the project is completed the registered sale deed will be sent to the company. Thus, according to own showing of appellant the flat was not ready by March, 2000. Respondents letter dated 2.4.98 (Exhibit C-9), the receipt whereof is admitted by the appellant, is referred to in aforesaid letter dated 9.2.99, authorship whereof is denied by the appellant. In the letter dated 2.4.98 the respondent had insisted upon the appellant to hand over possession of the flat without further delay as he had been forced to take another accommodation on rent at a monthly rate of Rs.4,000/- from July, 1997.. Reference to the said letter dated 9.2.99 is made in para No. 5 of the complaint. It is stated therein that the appellant gave a reply on 9.2.99 to the respondents letter dated 2.4.98. In corresponding para of written version the appellant has not denied the issuance of reply on 9.2.99 to the respondent. Affidavit filed in support of written version too is silent in regard to reply dated 9.2.99. In absence of specific denial the appellant will be deemed to have admitted the issuance of the reply dated 9.2.99 to the respondent. Contents, omitting immaterial portion, of the reply dated 9.2.99 is reproduced below:- With reference to above and personal discussion we had with you, we were supposed to had over the flat on 31.3.97 as per the agreements dated 19.4.96. Due to unavoidable circumstance and financial crisis we could not complete the building within the period. However, we are arranging the finance through financial institutions and we are in a position to complete the building within six months from this date. It is mutually agreed and the company has undertaken to indemnify the loss suffered by you that is by way of monthly rent and damages by way of interest on deposited amount. In case if you really wants your money back by canceling the agreements the company is also prepared to return your money with interest within six months from this letter"

APPELLANT alleges that respondent defaulted in paying the balance amount of Rs.11,413/- of the agreement for sale of land and Rs.1,88,587/- of the agreement for construction. Clause No. 21 of the agreement for sale of land which is material, provides thus:- Notwithstanding anything contained in this agreement if the second party commits any default in the payment of any instalments aforesaid or fails to comply with the terms and conditions of this agreement within days from the date of issue of the notice of payment by the first party and/or for observing any performing any terms and conditions of this agreement shall forfeit of the entire contract amount agreed to be paid by the second party and the first party thereafter shall have the right to allot/sell or construct the schedule property to any other person or persons without any further reference to the second party."

Clause 4 of the agreement for construction which is material, reads thus:- The second party shall pay the aforesaid installments voluntarily on the respective due dates, default in payment of the installments will entail this agreement null and void on the option of the First Party and/or terminate or put an end to this Unit and the amount received by the First Party shall stand forfeited. However, the First Party shall have an option to condone the delay provided the second party pays interest at the rate of 24% p.a. on the outstanding amount which shall not be extended for a period of more than two months."

IN said clauses expression second party refers to the respondent while first party to the appellant. Amount paid upto 26.2.97 by the respondent constituted payment around 80% of the total sale consideration. Pursuant to aforesaid clauses of agreements the appellant had not issued any notice demanding the balance amount and stating that the flat was complete and ready for occupation. On the contrary, stand taken by the appellant in aforesaid two replies dated 9.2.99 and 16.3.2000 was that because of financial problem he was unable to complete the project and flat was not ready for occupation. In this backdrop, appellant cannot be heard to say that amount of Rs.8,50,000/- stood forfeited because of default in making payment of the said balance amount by the respondent. There is, thus, no infirmity in the order passed by the State Commission in ordering refund of the deposited amount with interest etc. by the appellant and appeal deserves to be dismissed being without any merit. Dismissed as such with cost of Rs.15,000/- to the respondent.