Consumer Forum Orders Repayment of ₹17.77 Lakh to Complainant in Flat Purchase Case Involving DK Shivakumar

Consumer Forum Orders Repayment of ₹17.77 Lakh to Complainant in Flat Purchase Case Involving DK Shivakumar

A recent judgment by a consumer court in Bengaluru has directed Karnataka Deputy Chief Minister DK Shivakumar and his siblings to reimburse roughly ₹17.77 lakh, along with interest, they had previously levied as a cancellation fee for a flat purchase, in the case of Raghavendra J vs DK Shivakumar and Others.

A panel consisting of President M Sobha and member Suma Anil Kumar from the District Consumer Disputes Redressal Commission (CDRC) determined that numerous clauses in the agreement were heavily skewed, unreasonable, and disadvantageous to the buyer (complainant).

The dispute revolved around the sale agreement and construction agreements finalised on April 10, 2017, for the acquisition of a 3-BHK apartment owned by DK Shivakumar, DK Manjula, and DK Suresh (opposite parties), with a combined value of ₹86,06,800.

The complainant claimed to have paid ₹30,81,352 but was unable to fulfil the remaining payment obligation of ₹55,25,448 due to unforeseen circumstances, including the impact of the COVID-19 pandemic.

The complaint additionally alleged that Shivakumar had capriciously terminated the sale agreement and transferred the property to another purchaser without prior notice to the complainant or allowing them to present their case.

The complainant further contended that they had received only ₹13,03,930 as a refund, with a deduction of ₹17,77,422 from the initial amount, and this reduction was made without a clear and adequate explanation.

Additionally, he informed the consumer court that the Deputy Chief Minister and his siblings had resold the property to another buyer at a higher price.

Shivakumar and the other opposite parties argued that the complainant had not fulfilled the payment requirement for the outstanding sale consideration of ₹55,25,448 within the established time frame. They specifically noted that the complainant's last payment was made on June 6, 2017, and that the complainant had not adhered to the terms outlined in the contract.

They further informed the consumer court that the complainant not only failed to make the pending payments but also did not respond to multiple notices sent by them regarding the outstanding payment. This, they contended, forced them to issue a cancellation letter on December 13, 2019, explaining that they would deduct ₹17,98,077 towards cancellation charges and taxes.

The opposite parties also highlighted specific clauses in the agreements, which permitted them to terminate the agreement and forfeit 25 per cent of the entire sale consideration in the event of the purchaser's default in making instalment payments. They cited these provisions as a justification for terminating the agreement.

The consumer forum conducted a thorough examination of the agreements and observed that several clauses were evidently biased, unjust, and prejudicial to the complainant. The forum specifically found the deduction of ₹17,77,422 to be excessively high and in violation of the law, categorizing it as an unfair trade practice under the Consumer Protection Act.

Consequently, the forum issued a directive for them to reimburse ₹17,77,422 to the complainant, along with 10 per cent annual interest starting from the date of the agreement. Furthermore, the forum ordered them to cover the litigation expenses, amounting to ₹10,000, and pay the same to the complainant.