The Telangana State Consumer Disputes Redressal Commission awarded six months of simple imprisonment to an office-bearer of a construction firm for failing to hand over a property, and then failing to refund money.
The Commission bench comprising president M.S.K. Jaiswal, and members Meena Ramanathan and K. Ranga Rao were dealing with a batch of three similar execution applications (EAs) against the respondent, Gharonda Builders and Developers, and its authorised representative Sunil J. Sachdev. The six months simple imprisonment are to run consequently to each EA.
In EA 26 of 2019, the petitioners stated that the respondents did not comply with orders which the commission had passed on January 24, 2019, directing that ₹12,43,487 with interest at 9% per annum, ₹50,000 as compensation, and costs of ₹5,000 be paid. When the matter came up for cross examination, the respondents filed an interlocutory application (IA) under the Provincial Insolvency Act in the Small Causes Court, seeking a stay on the EA proceedings, pending disposal of an IP in Additional Judge, City Small Causes Court. This, however, the IA dismissed.
The Commission noted that the the respondents failed to put forward any evidence despite being provided with several opportunities.
Citing cases about the power of authorities under the Consumer Protection Act which the Supreme Court dealt with, the Commission noted that the respondent, a builder, took money from clients but failed to hand over the property to them. After a case was filed with the Commission, the respondent was directed to refund amounts within a specified time. While the respondent made several assurances and filed a memo in similar cases, he failed to make payments. Later, part payments were made, and negotiations for the sale of property were under way. After the sale, payments would be made to all petitioners.
The Commission stated that the respondent’s counsel argued that IP is pending and that proceedings in the present application cannot be taken up and the respondent “cannot be punished for non-payment of amounts”. The Commission was of the view that this aspect was dealt with in the IA.
“Such conduct on the part of the builder who has taken substantial amounts from several people and having suffered the orders, either failed to make payments or deliver possession of the flats as promised. Therefore, we have no hesitation in holding that the Respondent/Judgment Debtor is guilty of the offence that is punishable under Section-27 of the Consumer Protection Act, 1986,” the order reads.
Without imposing a fine, the Commission awarded six months simple imprisonment to the respondent and made it clear that the sentence should run consequently to EA 29 of 2019, followed by EA 27 of 2019.
