Landowners entering Joint Development Agreements with builders qualify as consumers under the Consumer Protection Act, allowing them to seek redress for service deficiencies.

1. The present Appeal has been filed against the Order dated 24.06.2022 passed by the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as State Commission), whereby the Complaint filed by the Complainants was dismissed with cost to ₹50,000/- to be paidin Consumer Welfare Fund of the State Commission.

2. Brief facts of the case are that Appellants/Complainants Sri M. Govinda Reddy and M. Yashodamma,are the absolute owners of the Property of bearing Sy. No. 101 of Kittaganur Village, BidarahalliHobli, Bangalore measuring 4 acres (hereinafter referred to as the land). Respondent No. 1, M/s. Venkat Estates Pvt. Ltd., approached them to develop multi-story residential apartments with all amenities in 2 acres out of the total 4 acres of Land. A Joint Development Agreement (hereinafter referred to as the Agreement) was executed between the Appellants and the Respondent No. 1 on 15.11.2013. As per terms of the Agreement, the Respondent No.1 was solely responsible to develop/construct/complete the multi-story residential apartments on the Land. A Supplementary Agreement was also executed on 10.07.2015 between the Parties for sharing of Flats on the Land. As per terms of the Agreement, the Appellant was entitled for 45% of the total built-up area, which works out to 1,04,778 sq. ft. 80 Apartmentsmeasuring 1,04,719 sq. ft. fell into the share of the Appellants and for the shortage of 59 sq. ft., was to be compensated by the Respondent No.1 by paying mutually agreed amount, in due course of time. As per terms of the Agreement, the Respondent No.1 Developer ought to have completed the Appellants’ share, i.e., 80 Apartment within 38 months from the date of execution of the JDA, i.e., 15.01.2017. But the Respondent No. 1 Developer could not complete the Project within stipulated period. Alleging deficiency in service on the part of the Respondent No. 1 Developer the Appellants filed a consumer complaint before the State Commission seeking following reliefs:-

“a. Pay the amount of ₹4,61,81,079/- towards damages for not completing the building within the stipulated period as per JDA.

b. Pay future damages for the delay in completing the project at the rate of 18% p.a on the value of ₹3,000/- per sq.ft of the carpet area of the Complainants share till the OP completes the project.

c. Complete the project with all amenities as shown in the brochure issued by OP and JDA within a reasonable period as may be fixed by this Commission.

d. Obtain Occupancy Certificate from the competentauthority after completion of the project.

e. Provide all interiors for 2 apartments out of the apartments fallen to the share of the Complainants as per JDA.

f. Replace the sub-standard materials used for interior works including electrical fixtures and plumbing fittings and sanitary items.”

3. The Complaint was contested by the Respondent No.1 Developer before the State Commission by denying all the allegations made by the Complainants and it wassubmitted that the Complainants are not consumers within the definition of either U/s 2(1)(d) of CPA 1986 or U/s. 2(7) of CPA 2019. It was submitted that as per terms of the Joint Development Agreement & Supplementary Agreement, out of the total Apartments, 80 Apartments were fell in the share of the Appellants and 96 Apartments were fell in the share of Respondent No. 1. Out of their 96 Apartments, they have already sold 76 apartments to the prospective buyers and 20 Apartments are yet to be sold. 46 Apartment purchasers are in physical possession and are enjoying the same as they have provided all the basic amenities to the Flat owners. As far as the share of the Complainants is concerned, they too have already sold 4 Apartments out of