ORDER
K.S. Gupta, J. (Presiding Member)
1. Relying on the decision in Rameswaran and Ors. v. Sujit Kumar Banerjee and Ors. IV (2005) CPJ 53 (NC), the submission advanced by Mr. Naresh Kaushik for the opposite parties was that neither the complainants in these two complaints are ‘consumer’ nor opposite party No. 1 whereof opposite party No. 2 is as partner, ‘service provider’ within the meaning of Consumer Protection Act, 1986 (for short the ‘Act’) and the complaints are, thus, liable to be dismissed on that score alone. On this issue we have heard Mr. Kumar Kant Patel, husband of the complainant in O.P. No. 194/1998 and representative of the complainant in O.P. No. 55/1999.
2. Plot No. 1/2, Fort Road, Raja Ram Mohan Rai Road, Corporation Division No. 73, Bangalore having an area of 928.03 sq. mtrs. was owned by the complainant in O.P. No. 194/98. For developing this plot she entered into an agreement dated 25.1.1993 with opposite party No. 1 through opposite party No. 2. Supplementary agreement between the parties was entered into on 12.4.1995. Identical agreement/supplementary agreement were entered into between the opposite parties and the complainant in O.P. No. 55/1999 in respect of plot No. 1/3 situated at Fort Road, Raja Ram Mohan Rai Road, Corporation Division No. 73, Bangalore having an area of 931.06 sq. mtrs. On the controversy on hand, reference to some of the clauses of the agreement dated 25.1.1993 (copy at pages 14 to 37 on the file of O.P. No. 194/1998) has become necessary and same are reproduced below:
Clause 1.1 : The owner shall sell 50% undivided right and interest in the Schedule-A property to the developer and/or its nominee/s in all equivalent to 464 sq. mtrs. or 4993 sq. ft. approximately (hereinafter called the saleable undivided right and interest in Schedule-A property) in consideration of the developer-
(a) paying interest free refundable deposit of Rs. 15,00,000 as set out in para 1.03 below;
(b) constructing and handing over to the owner 50% of Super Built Area permitted to be constructed on the Schedule Property approximately of about 8000 sq. ft. (out of a total of 16,000 sq. ft.);
(c) constructing and handing over to the owner 50% of car parking unit, viz., 4 units;
(d) Allotting 50% of saleable terrace are of 2000 sq. feet garden area of about 1000 sq. ft.
Clause 1.2 : The exchange value of the consideration for 50% of the land agreed to be conveyed to the developer and/or its nominee/s is computed as under:
(a) Estimated construction
cost of 8000 sq. ft. at Rs.
400 per sq. ft. in accor-
dance with specifi-
cation agreed upon Rs. 32,00,000
(b) Value of 4 car park
units at Rs. 75,000 Rs. 3,00,000
(c) Value of saleable
garden area of about
1000 sq. ft. Rs. 1,50,000
(d) Value of saleable
terrace area of about
2000 sq.ft. Rs. 3,00,000
(e) Benefit of interest on
Rs. 15,00,000 deposit
from this day to the
date of completion
(30 months from
commencement
period)
at 24% per
annum Rs. 9,00,000
Total exchange value ----------------
of 4993 sq.ft. Rs. 48,50,000
----------------
Therefore, exchange value of the land is Rs. 48,50,000.
In the event of an increase/decrease in constructed area, car parking units, saleable garden area and/or terrace area as a reuslt of which the share of the owner in the aforesaid increases/decreases the owner shall neither be required to pay for such increase nor shall be entitled to be paid for such decrease as the intention of parties herein is to exchange 50% of undivided right and interest in the land area covered by the Schedule – A property with 50% of constructed area, car parking units, saleable garden area and terrace area.
Clause 1.3: The developer shall pay an interest free refundable deposit of Rs. 15,00,000 as under:
(a) Rs. 7,50,000 has been paid by pay orders bearing Nos. 566346 and 566348 both dated 23.1.1993 for Rs. 6,00,000 and Rs. 1,50,000 respectively drawn on Indian Bank, M.G. Road, Bangalore, the receipt of which the owner herein hereby acknowledges as having been received;
(b) Rs. 7,50,000 shall be paid on or before 25.4.1993.
The owner shall be liable to refund the aforesaid amount of Rs. 15,00,000 as under:
(a) Within 15 days from
the date of securing
occupancy certificate Rs. 3,75,000
(b) Within 45 days from
the date of securing
occupancy certificate Rs. 3,75,000
(c) Against delivery of
owner's share of
apartments Rs. 7,50,000
The owner hereby agrees and undertakes not to dispose of or create any charge or encumbrance on one residential flat of approximately 1500 sq. ft. out of the owner’s constructed area and offer the same as security to the developer for repayment of the refundable deposit of Rs. 15,00,000 to the developer.
Clause 1.6 : The owner shall be the absolute owner of the owner’s constructed area in Schedule A property and any such area as and when constructed shall belong to and become the absolute property of the owner who shall alone be entitled thereto and to all income, gains, capital appreciation and benefits of all kinds and description accruing, arising or flowing from or in relation thereof. Likewise the remaining constructed area other than the owner’s constructed area in Schedule A property as and when constructed shall belong to and become the property of the developer and/or its nominees and the owner shall not have any manner of right over the same.
Clause 2 : The owner hereby permits the developers and the developer hereby undertakes to develop residential apartments on the Schedule-A property for such area and extent as is permissible under the bye-laws. The developer shall be entitled to appoint Architects and Consultants for the purpose of the project. The developer shall secure the consent of the owner to the tentative and final plans to be submitted to the corporation. The developer shall bear all the expenses connected with approval of plans including Arhitect’s fees, fines and other levies connected therewith. The developer shall bear the entire cost of construction of the superstructure on the Schedule-A property including providing all services, deposits to be paid to service agencies like KEB, BWSSB and the like except as set out in Clause 1.5 supra. The owner shall cooperate with the developer in preparatory work by signing such applications, forms indemnity bond(s), affidavit, specific power of attorney, plans and other papers required for the sanction of plans, from competent authorities. The owner shall execute a specific power of attorney in favour of the developer and/or his nominee for carrying out preparatory work and secure modification of plans if required.
Clause 3.1 : The developer shall be entitled to-
(i) Sell or otherwise dispose of the saleable undivided right and interest in the Schedule A property to the extent of 50% undivided right and interest in the Schedule A property.
(ii) Enter into agreement of sale in respect of 50% undivided right and interest in the Schedule A property.
(iii) Collect monies payable in respect of sale of 50% undivided right and interest in the Schedule-A property under various agreements of sale and/or deeds of sale executed in favour of the developer and/ or its nominees.
(iv) Appropriate the aforementioned sums so received to recoup the cost of construction of owner’s constructed area.
(v) Allot the remaining constructed area (other than the owner’s constructed area) at such rates and in such manner as the developer may deem fit to the buyers of saleable undivided right and interest in the Schedule-A property.
Clause 3.2 : The developer shall have absolute discretion in negotiating the terms and conditions for the sale of saleable undivided right and interest and construction of apartments directly with such prospective buyers of saleable undivided right and interest in the Schedule-A property. The developer shall be entitled to all profits, gains, capital appreciation and belief its of all kinds and description accruing, arising or flowing from or in relation to the sale of 50% undivided right and interest in the Schedule-A property and the construction of apartments on the Schedule -A property and shall alone be liable for all losses, if any, expenses pertaining to development, sale and for all taxes or levies that may accrue relating to such development and sale. The owner herein shall neither be entitled to in any manner nor shall have any right, title, interest or claim whatsoever on the profits derived by the developer nor shall be liable for any losses arising or flowing from or in relation to the construction of apartments in the Schedule-A property.
Clause 7.3 : The owner shall execute at the request of the developer agreement/s of sale and deed/s of conveyance in respect of saleable undivided right and interest in the Schedule-A property either by herself or by their constituted attorney in such divided and undivided shares and in such form as the developer may require in favour of the developers and/or the persons identified/located/produced by the developer, provided, however, that no such agreement/s of sale or deed/s of sale shall expose the owner to any outstanding obligations or liabilities other than indemnifying the buyers against losses suffered due to defect in the Schedule-A property. The developer shall not seek for execution of sale deed conveying the saleable undivided right and interest unless the construction of apartments is complete in all respect atleast to the extent of 75% and the owner’s apartments are also complete in all respects to the extent of 75% and a certificate from the architect to this effect is produced.
Clause 7.6 : All costs and expenses relating to transfer/s or saleable undivided right and interest in the Schedule-A property in favour of the developer and /or its nominees shall be borne by the developer and/or its nominees.
Clause 11 : It is specifically agreed that either party shall be entitled to enforce specific performance of this agreement.
3. In supplementary agreement dated 12.4.1995, details of the apartments falling to the shares of owner and developer have been given.
4. In said agreement/supplementary agreement the words “owner” refers to the complainant and the developer” to opposite party No. 1.
5. A combined reading of the above documents dated 25.1.1993 and 12.4.1995 would show that these, in fact, were collaboration agreements whereunder land was to be provided for commercial exploitation by the complainant(s)toopposite party No. 1; opposite party No. 1 had to raise construction on the land at its cost and in lieu thereof it was to be transferred 50% undivided share in the land and also allocated apartments as detailed in the supplementary agreement(s) with right to dispose them of; apartments other than falling to the share of opposite party No. 1 were to be owned absolutely by the complaint(s). Reliefs claimed in two complaints are referable to said collaboration agreement/supplementary agreement(s). Decision in Rameshwaran’s case (supra) which takes note of the ratio in Lucknow Development Authority v. M.K. Gupta III (1993) CPJ 7 (SC), thus, squarely applies to the facts of these complaints. Though said Mr. Patel had tried to distinguish the facts of these complaints from that of Rameshivaran’s case on grounds of 50% of undivided share in land having been transferred in favour of opposite party No. 1 and complainants having secured clearance under Chapter XX-C of the Income Tax Act, 1961 to implement the agreement(s) dated 25.1.1993 but in our view that distinction is of no avail as it is the gist of agreements between the parties which is to be seen. From this discussion it must follow that neither the complainants are ‘consumers’ nor opposite party No. 1 a service provider within the meaning of the Act and the complaints are, therefore, not maintainable.
6. Accordingly, both the complainant are dismissed with costs of Rs. 10,000 to the opposite parties in each case.