Consumer forum orders DK Shivakumar, siblings to refund ₹17.77 lakh cancellation fee to man who couldn't complete flat purchase

A consumer court in Bengaluru recently directed Karnataka Deputy Chief Minister (CM) DK Shivakumar and his siblings to refund approximately ₹17.77 lakh along with the interest they had deducted from a man as a cancellation fee for a flat purchase [Raghavendra J vs DK Shivakumar and Ors.]. .A coram of President M Sobha and member Suma Anil Kumar of the District Consumer Disputes Redressal Commission found that several clauses in the agreement were one-sided, unreasonable and unfair to the purchaser (complainant)..The dispute pertained to sale agreement and construction agreements entered into on April 10, 2017, for the purchase of a 3-BHK apartment owned by DK Shivakumar, DK Manjula and DK Suresh (opposite parties) for a total of ₹86,06,800..The complainant alleged that he had paid a total of ₹30,81,352 but couldn't make the balance payment of ₹55,25,448 due to unforeseen circumstances including the COVID-19 pandemic.The complaint further accused Shivakumar of arbitrarily canceling the sale agreement and selling the property to another buyer without informing the complainant or providing an opportunity to be heard.The complainant also claimed that only ₹13,03,930 was returned, after deducting ₹17,77,422 from the advance amount, without a proper explanation.It was further highlighted that the Deputy CM and his siblings sold the property to another buyer at a higher price..Shivakumar and other opposite parties argued that the complainant failed to pay the balance sale consideration of ₹55,25,448 within the stipulated time.They pointed out that the last payment made by the complainant was on June 6, 2017, and the complainant did not meet the agreed terms of the contract.Further, they stated that they had sent multiple notices to the complainant regarding the outstanding payment but the complainant did not respond. Consequently, on December 13, 2019, they issued a cancellation letter, indicating that ₹17,98,077 would be deducted towards cancellation charges and taxes.The opposite parties also highlighted certain clauses in the agreements that allowed them to terminate the agreement and forfeit 25 percent of the entire sale consideration if the purchaser defaulted in payment of installments. They maintained that the complainant failed to rectify the breach even after multiple notices, and this justified the termination of the agreement..The consumer forum scrutinized the agreements and noted that several clauses appeared to be one-sided, unreasonable and unfair to the complainant. The forum found the deduction of ₹17,77,422 to be highly exorbitant and illegal, deeming it an unfair trade practice under the Consumer Protection Act.It also noted that DK Shivakumar and other opposite parties had faced no loss as the property was bought by another party for the same consideration. Accordingly, the forum directed them to return ₹17,77,422 to the complainant with 10% annual interest from the agreement date. Additionally, the forum ordered them to pay litigation expenses of ₹10,000 to the complainant..[Read Order]