‘No land, returns’ after sandalwood project investment, man wins Rs 17.8 lakh payout

“The complaint is allowed in part, directing the first opposite party (real estate company) to refund Rs 17.5 lakh to the complainant with interest accrued on it at the rate of 9 per cent with effect from July 1, 2024, the date on which (cheque) was issued, till its realisation,” the August 21 order read.

No promised land registered

The complainant claimed that the representatives of the real estate company approached him and proposed the purchase of property for cultivation of white sandalwood trees. Relying on their assurances, he invested Rs 17.5 lakh in the project. He was allegedly promised a plot of about 267 square yards, on which white sandalwood trees would be planted and maintained, besides getting a payment of Rs 30,000 every month for 100 months. The investment, they allegedly claimed, would appreciate over 12–15 years, with profits from the eventual sale of the sandalwood trees to be shared with him.

The man claimed that the promised land was never registered in his name and the company paid the promised Rs 30,000 monthly amount for only July and August 2023. There were no payments from September 2023.

The man added that the company later issued three cheques totalling Rs 17.5 lakh, but all were dishonoured for insufficient funds. When he visited the project, he allegedly found that it was shown under a different name, with the main gate locked and no security staff. He also alleged that the project was not being maintained as promised.

The complainant eventually moved the commission seeking a refund of his entire Rs 17.5 lakh, along with compensation and litigation costs. He was represented by advocate Santhosh Reddy.

Realtor’s defence

The real estate company, through advocate Bathini Ramu, submitted that the complainant proposed to purchase the property for farming of white sandalwood trees on land which will be registered in his name.

It was added that the transaction was commercial in nature and the complainant did not fall within the definition of “consumer” under the Consumer Protection Act, 2019. The lawyer also submitted that the matter was already under investigation by the Economic Offences Wing (EOW) after an FIR was lodged for alleged financial offences under relevant provisions of the law, including the Telangana State Protection of Depositors of Financial Establishments Act, 1999.

The counsel added that the alleged financial fraud could not be decided by a consumer court and the complainant should have pursued the appropriate criminal/civil remedy. It was alleged that the complaint was filed to harass the real estate company.

The commission, after going through the submissions, directed the real estate company to refund Rs 17.50 lakh to the man and pay Rs 25,000 towards compensation for mental agony and physical trauma. The real estate company was also directed to pay Rs 5,000 for litigation costs within 45 days.

Takeaway

The ruling highlights that a consumer who pays for a promised property-linked investment cannot be left without the promised land or returns.

Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.

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