Failure To Deliver Possession And Resale Of Same Unit, Bangalore District Commission Holds Sai Kalyan Builders & Developers Liable

Brief Facts:

The Complainant booked a residential flat. This flat, with a super built-up area of 1050 square feet, included two bedrooms, a hall, a kitchen (2 BHK), one covered car parking space, and an undivided share of 430.5 square feet in converted land located in Bangalore East. The property, covering an area of 4 acres was within the Bruhath Bengaluru Mahanagara Palike (BBMP) limits. The Complainant entered into a sale agreement and construction agreement with Sai Kalyan Builders & Developers (“Builder”) and agreed to pay a total flat cost of Rs. 58,51,080/-.

According to the terms of the agreement, the Complainant paid a booking amount of Rs. 3,00,000/- via a cheque. Additionally, she paid an advance of Rs. 26,00,000/- in cash, followed by another Rs. 9,00,000/- through a cheque. The Complainant thus paid a total of Rs. 38,00,000/-, which the builder acknowledged with receipts. In a letter, the builder confirmed receipt of the Rs. 38,00,000/- and noted that Rs. 20,51,080/- remained outstanding against the total flat consideration.

The builder agreed to hand over possession of the flat by 30.05.2019. However, when the apartment was not ready for occupancy by that date, the Complainant requested the cancellation of the flat and a refund of the Rs. 38,00,000/- paid, along with interest. During this period, the Complainant experienced personal tragedy, losing her son. Despite numerous requests from the Complainant and her husband, the builder only refunded Rs. 10,00,000/- and another Rs. 10,00,000 on 17.11.2021, leaving an outstanding balance of Rs. 18,00,000/- plus interest. The Complainant, aged 87, repeatedly requested the remaining payment, but the builder failed to respond adequately. The Complainant issued a legal notice demanding the remaining Rs. 18,00,000/- with interest. Despite the notice being served, the builder neither refunded the amount nor replied.

Furthermore, the Complainant discovered that the builder sold the same flat with the same measurements and car parking space to a third party. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Bangalore, Karnataka (“District Commission”) and filed a consumer complaint against the builder.

The builder didn't appear before the District Commission for proceedings.

Observations by the District Commission:

The District Commission held that it was unjust for the builder to withhold the Complainant's money without delivering the flat or providing a timely refund. The Complainant presented a calculation memo, showing the amount payable by the builder from the date of respective payments at 12% interest per annum totaling Rs. 30,29,480/-. The District Commission noted that the Clause 13 of the agreement stipulated that if the allottee withdraws from the project, the promoter must refund the total amount received with interest at the standard SBI HFL rate within 45 days. Although the Complainant was initially willing to take possession of the flat, she was forced to cancel due to the builder's inaction and mismanagement. The District Commission noted that the builder refunded only Rs. 20,00,000 /- after seven months and retained the balance of Rs. 18,00,000/-.

The District Commission noted that the builder breached the agreement by selling the same flat for Rs. 53,28,700/-. It held that this action, taken while the Complainant awaited a refund, constituted an unfair trade practice.

The District Commission noted that despite the Complainant's substantial payment and prolonged wait, the builder sold the property to another party, reflecting a severe deficiency in service and unfair trade practice.

Therefore, the District Commission directed the builder to refund Rs. 18,00,000/- with interest to the Complainant. It was also directed to pay a compensation of Rs. 1,00,000/- to the Complainant and Rs. 15,000/- towards litigation costs. To deter such unfair trade practices, the builder was also required to pay Rs. 25,000/- as punitive damages under Section 39 (1) (g) of the Consumer Protection Act 2019, to be remitted to the Consumer Welfare Fund.

Case Title: Mrs. Sulochana Sripati Koimattur vs M/s Sai Kalyan Builders & Developers Pvt. Ltd.

Case Number: CC/268/2023