IMPORTANT POINT
Housing is a service and if housing firm/Authority failed to comply with its obligation under agreement, it is liable to compensate consumer.

Ashok Bhan, President—Appellants which were Opposite Parties before the State Commission have filed this Appeal against the judgment and order dated 24.08.07 passed by the State Consumer Disputes Redressal Commission, Karnataka (in short, ‘the State Commission’) in Complaint No. 576/2006 wherein the State Commission allowing the complaint filed by the Respondent has directed the Appellants to allot a two bed room flat in the First Floor of the Multi Storeyed Building constructed by them in the land bearing Corporation No.21 corresponding to new No.19, Melvelle House Grounds, Palace Cross Road, Bangalore-560 020 bounded on the “East by K.T. Apartments, West by Plot No.2 of Sri N. Govind, North by Palace Cross Road, South by Madras Bangalore Railway Line’ as described in the Agreement dated 24.01.04 within a period of 60 days from the date of the Complainant paying the balance amount, if any. Rs.5,000/- were awarded as costs.

FACTS:-

2. Complainant/Respondent was in possession of non- agricultural land in Property Nos.18, 19, 20 & 29 at Melvelle House Grounds, Palace Road, Bangalore and was managing same on behalf of the original owner Narayana Reddy. In 1983, a partnership firm, namely, M.M. Foundation was constituted to develop the property bearing No.19 at the request of original owner. Respondent was one of the Partners of the Firm. Since there was no progress in the development of the said property, a tripartite agreement was entered into among the Appellants builder (Opposite Party Nos. 1 & 2), original owner of the Property and the M.M. Foundation for constructing a multi-storeyed building consisting of residential flats for sale to the intending buyers.

3. Thereafter, on Respondent’s agreeing to give up his right as a partner of M.M. Foundation, Appellants entered into an agreement on 24.01.04 with the Respondent for sale of a residential flat measuring 1200 Sq. Ft. in the Ist Floor of the said multi-storeyed building for consideration @ Rs.2,000/- per Sq. Ft. Respondent paid a sum of Rs.15 lakh towards sale consideration to the Appellant which was also mentioned in the Agreement. In terms of the agreement, Respondent was liable to pay an additional sum of Rs.50,000/- in case the actual built up area in the flat sold to him exceeded 1200 Sq. Ft. Appellants did not deliver and register the sale deed in respect of the said flat in favour of the Respondent. Complainant, being aggrieved, filed the complaint before the State Commission.

4. Appellants, on being served, entered appearance and filed their written statement resisting the complaint, inter-alia, on the grounds; that the agreement relied upon by the Respondent was a sham and colourable document entered into just to wriggle out of the hurdles created by the Respondent to stall execution of the project and to cause hardship to the Appellants; that the Respondent should be relegated to the Civil Court for seeking the relief of specific performance of the agreement for sale.

5. State Commission, after scanning the material available on record and going through the evidence led by the parties allowed the complaint and directed the Appellants to allot a two bed room flat in the First Floor of the Multi Storeyed Building constructed by them in the land bearing Corporation No.21 corresponding to new No.19, Melvelle House Grounds, Palace Cross Road, Bangalore-560 020 bounded on the “East by K.T. Apartments, West by Plot No.2 of Sri N. Govind, North by Palace Cross Road, South by Madras Bangalore Railway Line’ as described in the Agreement dated 24.01.04 within a period of 60 days from the date of the Complainant paying the balance amount, if any. Rs.5,000/- were awarded as costs.

State Commission observed thus:-

“ In so far as the maintainability of the complaint under the Consumer Protection Act, we are of the view that under the Agreement the OPs have undertaken to built a flat for the complainant and to hand over possession executing the sale deed. Therefore, it is a