J. Nagi Reddy VS Ravi Shankar

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Sudip Ahluwalia, Presiding Member and AVM J. Rajendra, AVSM VSM (Retd.), Member
J. Nagi Reddy – Appellant
versus
Ravi Shankar and Ors. – Respondent
First Appeal No.63 of 2012 and
Appeal Execution No.205 of 2018
Decided on 10.11.2023

Counsel for the Parties:
For the Appellant:Mr. Shekhar G. Devasa, Mr. Manish Tiwari, Mr. Shashi Bhushan Nagar, Mr. Thashmitha Muthanna and Ch. Leela Sarveswar, Advocates
For the Respondent Nos.1 and 2:Mr. Mohinder J.S. Rupal, Advocate
For the Respondents Nos.3 and 4:Mr. Ashok Bannidinni and Mr. Sujeet Kumar, Advocates

Headnote:
Consumer Protection Act, 1986 – Section 19 [Consumer Protection Act, 2019 – Section 51] – Services – Real Estate – Allotment of Flat / Plot – Delayed Possession is clear that as on the date when the Appellant had entered into the subject agreement dated 07.12.2005 with the Complainant, there was a dispute about the title of the land in question, which the Appellant and respondent Nos.3 and 4 are aware and did not notify the Complainant. Further, in terms of Para 8 of the Agreement dated 07.12.2005, in any case, the possession of the property was to be delivered by February, 2006. However, the Sale Deed executed between the Parties on 06.01.2006 without physical possession of the Flat in question as evidently the Sale Deed was required to be Mortgaged with IDBI Bank for releasing of payments to Appellant (the Builder). On the other hand, in terms of (b) and (c) of the Sale Deed executed between the Parties on 06.01.2006, it was stated by the Appellant that there was no dispute in respect of the property in question – Therefore, as on the date of execution of the Agreement, the title of property was under dispute and the Appellant was aware and, however, did not notify the Complainants. On the other hand, asserted in the Sale Deed that the said property was free from and dispute and litigation. Therefore, there was unfair trade practice and deficiency in service by the Appellant – On facts, the Opposite Parties are jointly and severally directed to refund the amount – Appeal disposed off. [Paras 6 to 18].
Result: Appeal allowed.

ORDER

AVM J. Rajendra, AVSM, VSM (Retd.), Member—The present First Appeal, filed under Section 19 of the Consumer Protection Act, 1986, is brought forth by J Nagi Reddy, (henceforth referred to as the “Appellant” or “Opposite Party No.3”). This Appeal challenges the Order dated 08.12.2011 passed by the State Consumer Disputes Redressal Commission, Bangalore, Karnataka, (henceforth termed as “the State Commission”), in Consumer Complaint No. 145 of 2009, wherein the complaint filed by the Complainants (Respondents No. 1 & 2 herein) was allowed.

2. Concurrently, the Appellant, J Nagi Reddy filed an Appeal Execution against the Execution Order dated 31.08.2018 in Execution Petition No. 18/2014 in CC No. 145/2009 filed by the Complainants/Respondents herein before the State Commission, seeking issue of a Recovery Certificate for submission to Deputy Commissioner, Bangalore for the recovery of the specified amount.

3. Brief facts of the case as per the Complainant are that, the Complainants/Respondent No.1&2 entered into a Construction Agreement 07.12.2005 with the Appellant/OP3 to purchase a flat for a total cost of Rs.29,50,000/-. They paid Rs.4,35,000/- initially and obtained Rs.21,65,944/ IDBI bank loan. In addition, the Complainant made payment of Rs.8,96,826/- towards EMIs from December 2005 till 2009. Thus, they paid Rs. 34,97,770, which is acknowledged by OPs. The possession of the flat was to be delivered on or before 28.02.2006. A sale deed was executed in favour of Complainants on 06.01.2006. According to Complainants, the possession was not handed over, while the Appellant claimed handing over possession. Complainants later discovered that OPs did not in fact possess marketable title for the said land in questio2n. Some members of SC and ST community had initiated legal action, that the said land could not be sold or transferred under the Karnataka Scheduled Tribes Prohibition of Transfer of Land laws.

4. The OPs raised several objections before the learned State Commission that the Complaint was time-barred and is bad for non-joinder/misjoinder of parties. The dispute is purely a civil dispute and does not fall within the jurisdiction of a consumer court. The Complainant failed to verify diligently the land documents before entering into the Agreement with the Opposite Parties.

5. The State Commission did not find merit in these contentions and observed that the cause of action persisted as long as the Complainant fulfilled the agreement by making payments. Further, the EMIs were consistently paid from the date of the agreement till 2009, in the year the Complaints were filed. The State Commission in its Order dated 08.12.2011 observed and ordered as follows:—

“16. Viewed from any angle we are of the opinion that the Complainants are able to prove the deficiency in service and unfair trade practice on the parts of OPs. There is a remote possibility of complaints getting their property from the OP due to legal hurdle. When ops did not possess the legal title marketable title, complainants are justified in seeking refund of their amount. Complainants cannot be kept waiting indefinitely till the disposal of the said litigation pending before the court. We find there is a merit in the claim made by the Complainants. As already observed by us due to the carelessness and negligence of and hostile attitude of the Ops Complainants were put to greater hardship and prejudice that too at no fault of theirs. Under such circumstances, are entitled for the relief claimed. The approach of the complainants appears to be fair and honest. Hence, they derive reliefs. Accordingly we answer point Nos. 1 and 2 and proceed to pass the following:—

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......The Ops are jointly and severally directed to refund Rs.34,97,770/- to the Complainant in Complaint No. 145/2009 together with interest at the rate of 16% per Annum from February 2006 till realization and also pay a litigation cost of Rs.10,000/-......”

6. Aggrieved