Bangalore District Commission Holds Nishitha's Developers Liable For Failure To Deliver Possession Of Flat, Register Sale Deed

Brief Facts:

The Complainant agreed to purchase a flat in a property located in Bengaluru from Nishitha's Developers (“Builder”). The sale consideration was set at Rs. 37,72,000/-, of which Rs. 36,00,000/- was paid by the Complainant, with an agreement to pay the remaining Rs. 1,72,000/- upon registration of the sale deed.

Despite the Complainant's payments and requests, the Builder failed to fulfil its obligations under the agreement. The Builder neither registered the sale deed nor handed over possession of the flat within the agreed timeframe. Feeling aggrieved, the Complainant filed a consumer complaint in the Additional District Consumer Disputes Redressal Commission-I, Bangalore, Karnataka (“District Commission”) against the Builder.

In response, the Builder denied the receipt of Rs. 36,00,000/- in cash. It claimed that the Complainant's brother was the agreement holder and financier of the project. It argued that the agreement of sale was merely for security purposes related to project financing and was therefore not enforceable under the Income Tax Act or the Specific Relief Act.

Observations by the District Commission:

The District Commission noted that despite receiving the agreed payment from the Complainant, the Builder failed to complete the construction or execute the registered sale deed as promised. Further, the Builder did not make any demand for the remaining balance payment and didn't deliver possession of the flat even after 8 years since the agreement was entered into.

Therefore, the District Commission held the Builder liable for deficiency in service, as it failed to deliver possession of the flat and complete the sale transaction despite receiving substantial payment from the Complainant. Consequently, the District Commission directed the Builder to receive the remaining balance sale consideration of Rs. 1,72,000/- from the Complainant and execute the registered sale deed in favour of the Complainant. It was further directed to pay Rs. 1,00,000/- as compensation and Rs. 5,000/- towards the cost of litigation.

Case Title: Sri. R. Ramesh Babu vs M/s Nishitha's Developers and Anr.

Case Number: Consumer Complaint No. 77/2023

Date of Order: 15.06.2024