BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
FA NO.333 OF 2008 AGAINST CC NO.19 OF 2005
ON THE FILE OF DISTRICT FORUM, NIZAMABAD
Between:
1) M/s Narne Estates Pvt., Ltd.,
No.1, Gunrock Enclave,
Secunderabad – 500 009,
Represented by its Chairman
& Managing Director Col.N.Ranga Rao
S/o late N.V.Naidu, aged about 63 years,
2) M/s Narne Estates Pvt., ltd.,
Nizamabad branch, SR Mallaiah Complex,
Beside Kapila Hotel, Hyderabad Road,
Rep. by its branch manager.
…Appellants/Opposite parties
And
1) Dr.E.Surender Rao S/o Mutyam Rao,
Aged about 53 years, Occ: Medical
Practitioner, R/o Khaleelwadi,
Nizamabad.
2) E.Sridevi W/o E.Surender Rao,
Aged about 39 years, Occ: Household,
R/o Khaleelwadi, Nizamabad.
…Respondents/Complainants
Counsel for the Appellants : Sri K.R.Koteswara Rao
Counsel for the Respondents : Sri V.Gouri Sankara Rao
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
and
Sri Patil Vithal Rao … Member
Monday, the Second day of January
Two thousand Seventeen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
1) This is an appeal filed by the Opposite parties aggrieved by the orders dated 30.11.2007 of the District Forum, Nizamabad made in C.C.No.19 of 2005 in directing the Opposite parties jointly and severally to execute and register the sale deed in respect of Plot No.323 at Golden Heights, Phase-I, Medchal in favour of the Complainant after receiving Rs.4,80,000/- (being original cost of the plot) from the complainant within 30 days from the date of receipt of the order; vacating the interim orders passed in IA No.33/2005, dated 11.08.2005; permitting the complainant to withdraw Rs.4,96,236/- to the credit of the district forum in pursuance of orders in IA No.29/2007; and further directing Opposite parties to pay Rs.50,000/- towards compensation and costs of Rs.1,000/- granting time of one month for compliance.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
3) The case of the Complainants, in brief, is that the complainant No.1 is a medical practitioner and complainant No.2 is his wife. The Ops started a scheme called Golden Heights at Medchal and in that regard, at the instance of OP No.2 joined in the scheme for purchase of plot No.323 measuring 500 square yards for Rs.4,80,000/-. The first instalment was payable at the time of joining the scheme was Rs.1,00,000/- (Rs.99,900/- for instalment plus Rs.100/- towards membership). The balance was payable in 35 monthly instalments of Rs.10,560/- and 36th instalment of Rs.10,500/-.
4) While joining the scheme, Complainants expressed their inability to pay monthly instalments @ Rs.10,560/- for which, Ops agreed to arrange loan and that bank will pay the amount to them and in turn, complainants can pay the amount to the bank with interest. On such assurance, complainants paid Rs.1,00,000/- lakh by two cheques of Andhra Bank, Hyderabad road branch, Nizamabad on 01.10.2002, for which, receipts were passed and allotted the plot No.323 in favour of complainants. Complainants selected the plot after verifying the vastu and other facilities. The Ops obtained signatures of the complainants on various documents including agreement without explaining the contents and without furnishing the copy thereof.
5) Till August 2003 the bank loan was not arranged nor any information was given. The complainants started paying instalments from August 2003 @ Rs.5,000/- per month expecting the loan, which were acknowledged. By letter dated 13.03.2004 Ops cancelled the plot alleging that instalments in proper form were not paid. And by letter dated 25.03.2004, the Ops informed the complainants that there was no way to reduce the amount of instalment and it was contrary to their assurance. By letter dated 12.06.2004 informed to pay Rs.2,27,415/- on or before 25.06.2004 inclusive of outstanding arrears and interest. The Complainants have paid Rs.1,96,760/- on 19.06.2004 towards arrears of instalments. The same was collected by OP No.2 and addressed a letter to waive the interest. As there was no reply, a reminder was sent on 30.06.2004, to which, a reply dated 05.07.2004 is sent accepting the request of complainants as a special case, but, however, directed to clear the dues with interest by 25.07.2004 to avoid cancellation. By letter dated 16.07.2004 Ops agreed to reduce the interest to 15% p.a. from 2% p.m. and requested the complainants to pay the amount by 31.07.2004 towards plot No.323. The complainants paid the interest amount of Rs.22,572/- on 24.07.2004 and also paid Rs.1,40,000/- as advance for future balance instalments for plot No.323 and claimed 5% concession that was offered by the Vice-President of Ops for advance payment of instalments. Altogether, the Complainants paid an amount of Rs.4,96,332/- (Rs.4,73,760/- towards instalments and Rs.22,572/- towards interest excluding 5% concession).
6) Complainants received a letter dated 21.08.2004 from OP No.1 changing the plot allotment assigned from plot No.323 to GH-335, which is unilateral act of the OP No.1. The membership was taken for plot No.323 and payments were received for the same, as against which, by letter dt.09.09.2004 falsely mentioned that complainants have accepted verbally for change of plot. The complainants by letter dated 13.09.2004 denied the same. Again it was informed that the plot No.323 was sold-out and complainants were given plot No.335 facing east. Complainants agitated the change of plot No.323 to 335. Hence the complaint with a prayer to direct the Ops to convey the plot No.323 at Golden Heights scheme, Medchal by executing and registering sale deed in the name of the complainants or in alternate to refund the amount of Rs.4,80,000/- to the Complainants and further to pay Rs.4,80,000/- towards escalation of the cost of the plot as per the market value; to pay Rs.1,00,000/- towards damages for subjecting them to mental torture and suffering; to pay Rs.1,00,000/- towards expenses for their visits to Hyderabad; to pay interest on the amounts awarded and costs of the complaint.
7) Opposite parties resisted the claim by way of written version contending that the complaint is false, frivolous and vexatious and not maintainable either in law or on facts, hence, liable to be dismissed. They denied to have made promise to arrange the bank loan. The Ops cancelled the allotment of plot No.323 and returned the advance paid in May 2004. But as a special case, on the recommendation of Dr.C.Jalpath Rao, complainants’ membership was restored but not the plot held by them as it was sold by then and alternatively, Plot No.335 was given. As complainants did not agree, the Ops offered three more east facing plots, out of which, Plot No.371 was found to be most suitable but the Complainants did not agree, as such, plot No.335 was also cancelled.
8) The complainants have no right to seek re-allotment of plot much less claim for damages. There is no deficiency of service. The dispute between the Complainants and the Ops is a contractual obligation and is purely of civil nature. Hence, prayed to dismiss the complaint with exemplary costs.
9) During the course of enquiry before the District Forum, in order to prove their case, the Complainants filed evidence affidavit and the documents Ex.A1 to A58 and the Opposite parties got filed the evidence affidavit of one K.Ram Kishan, Branch Manager, Nizamabad and the document Ex.B1.
10) The District Forum after considering the material available on record, allowed the complaint bearing CC No.19/2005 by orders dated 30.11.2007, as stated, in paragraph No.1, supra.
11) Aggrieved by the said orders, the Appellants/Opposite parties preferred this appeal contending that the forum below (a) failed to consider any of the documents marked in IA 33/2005; (b) erred in applying the principles laid down by the Hon’ble Supreme Court in Bangalore Development Authority Vs. Syndicate Bank, reported in 2007 (6) SCC 1711; (c) failed to see that when alternative site is offered in view of its inability to deliver the earlier allotted plot or where the delay in delivery of possession of allotted plot is for justifiable reasons, the allottees will not be entitled to any interest or compensation; (d) erred in directing to allot alternative plot for same consideration when there was default on the part of respondents; (e) failed to appreciate the fact that the plot allotted at a tentative price subject to final determination of price after completion of project by collecting further development charges, the appellants are entitled to revise or increase the price; (f) erred in applying the principles of the Judgment reported in 2007 (3) CPJ 330; (g) failed to consider that the respondents do not fall within the definition of “consumer”. Hence, prayed to allow the appeal by setting aside the orders of the forum below.
12) The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief ?
13) We may need to state it necessary that during pendency of above appeal, the Respondents herein filed an application seeking impleadment of the purchaser of plot No.323 namely Rita Garg as party respondent. The said application was dismissed by the erstwhile A.P. State Commission by orders dated 25.09.2013. Being aggrieved by the same, the Respondents herein filed a writ petition No.31320/2013 before Hon’ble High Court at Hyderabad, which, too was dismissed as not maintainable, by orders dated 17.06.2014. Aggrieved by the same, the Respondents herein preferred RP No.3211/2014 before the Hon’ble National Commission, wherein, vide orders dated 28.08.2014, the same was dismissed.
14) We may further state that the Appellants filed an application seeking to receive the documents on record and mark the same as Exs.B2 to B11 in view of the fact that Ex.B1, authorization letter was already marked before the forum below but failed to mention it in the orders. This application was allowed by orders dated 24.08.2011 in FAIA No. 1784/2011. All the documents sought to be marked are the copies of letters addressed by the Appellants to the Respondents and they are the replica of the documents filed by the Respondents before the forum below except the Ex.B3 letter. Ex.B2 is the letter dated 13.03.2004 (Ex.A20); Ex.B3 is letter dated 05.05.2004; Ex.B4 is letter dated 17.06.2004 (Ex.A24); Ex.B5 is letter dated 28.06.2004; Ex.B6 is letter dated 05.07.2004 (Ex.A28); Ex.B7 is letter dated 16.07.2004 (Ex.A29); Ex.B8 is letter dated 21.08.2004 (Ex.A34); Ex.B9 is letter dated 09.09.2004 (Ex.A37); Ex.B10 is letter dated 14.09.2004 (Ex.A41); Ex.B11 is letter dated 27.09.2004 (Ex.A47).
15) It is not in dispute that the Respondents became members in the scheme Golden Heights-I floated by the Appellants for purchase of plot No.323 measuring 500 square yards, situated at Medchal of Rangareddy district as long back in the year 2002 by paying the advance amount of Rs.1,00,000/- and thereafter paid the subsequent instalments, however, with delay, amounting to Rs.4,96,332/-. The only dispute is when the Respondents defaulted in payment of instalments, the Appellants cancelled the plot No.323 and allotted plot No.335, which is not accepted by the Respondents. However, to convince the Respondents, the Appellants offered three more east facing plots, which the Respondents refused.
16) Admittedly, the plot No.323, which the Respondents are seeking to be registered in their favour is already registered in favour of one Rita Garg, by sale deed dated 19.05.2006 registered as document No.11791/2006 with the office of Sub-Registrar, Medchal. This transaction is much prior to passing of orders which are impugned under this appeal. No steps were taken by the Respondents to bring the same on record before the forum below. Had this fact been brought to the notice of the forum below, the direction to register the sale deed in respect of plot No.323 could not have been passed. However, we may state that it is not in the power of the District Forum to cancel the sale deed in exercise of the powers conferred upon it by Section 14 of the Act.
17) In so far as the question of consumer dispute is concerned, we may state that the Hon’ble Supreme Court of India in the matter of “Lucknow Development Authority Vs M.K.Gupta” while examining the jurisdiction of the Consumer Fora under the Act considered the various definitions such as ‘Consumer’, ‘Service’, ‘Trader’, ‘Unfair Trade Practice’, observed that a scrutiny of various definitions indicate that legislature has attempted to widen the reach of the Act. Each of these definitions are in two parts, one, explanatory and the other expandatory. The explanatory or the main part itself uses expressions of wide amplitude indicating clearly its wide sweep, then its ambit is widened to such things which otherwise would have been beyond its natural import.
18) It is, therefore, manifest that the transaction between the parties is not a sale simplicitor but coupled with obligations for development and provision of infrastructure. Inevitably, there is an element of service in the discharge of the said obligations. We may state that when a person offers plots coupled with an assurance of development of infrastructure/amenities/lay-out approvals, such an offer/sale and the obligations undertaken pursuant thereto is “service” within the meaning of Section 2(1)(o) of the Consumer Protection Act, 1986 and would, therefore, be amenable to the jurisdiction of the fora established under the statute.
19) It is to be stated that the Hon’ble Supreme Court of India after referring to the judgments in Regional Director, Employees’ State Insurance Corpn v. High Land Coffee Works of P.F.X. Saldanha and Sons [(1991) 3 SCC 617]; CIT v. Taj Mahal Hotel, Secunderabad [(1971) 3 SCC 550]; and State of Bombay v. Hospital Mazdoor Sabha (AIR 1960 SC 610) observed thus:
“The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to the attempted objective of the enactment.”
20) Sections 21, 16 and 11 of the Consumer Protection Act, 1986 provides for entertaining a complaint by the National Commission, State Commission and a Consumer Forum depending on the valuation of goods and services and compensation claimed, and the nature of the complaint which can be filed according to Clause (c) of Section 2 of the Act, and by referring to the same, the Hon’ble Supreme Court of India observed as under:
“The right thus to approach the Commission or the Forum vests in consumer for unfair trade practice or defect in supply of goods or deficiency in service. The word ‘consumer’ is a comprehensive expression. It extends from a person who buys any commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services. In Oxford Dictionary a consumer is defined as, “a purchaser of goods or Services”. In Black’s Law Dictionary it is explained to mean, “one who consumes”. Individuals who purchase, use, maintain, and dispose of products and services. A member of that broad class of people who are affected by pricing policies, financing practices, quality of goods and services, credit reporting, debt collection, and other trade practices for which state and federal consumer protection laws are enacted. The Act opts for no less wider definition.”
In construing the meaning of ‘consumer’ as defined in Section 2(d) of the Act (as it stood before the Amendment Act 62/2002 w.e.f. 15.3.2003, which inserted the words “but does not include a person who avails of such services for any commercial purpose”) and the explanation was made applicable to clause (i) and (ii), the Hon’ble Supreme Court observed thus:
“It is in two parts. The first part deals with goods and the other with services. Both parts first declare the meaning of goods and services by use of wide expressions. Their ambit is further enlarged by use of inclusive clause. For instance, it is not only purchaser of goods or hirer of services but even those who use the goods or who are beneficiaries of services with approval of the person who purchased the goods or who hired services are included in it. The legislation has taken precaution not only to define ‘complaint’, ‘complainant’, ‘consumer’ but even to mention in detail what would amount to unfair trade practice by giving an elaborate definition in clause (r) and even to define ‘defect’ and ‘deficiency’ by clauses (f) and (g) for which a consumer can approach the Commission. The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services. The common characteristics of goods and services are that they are supplied at a price to cover the costs and generate profit or income for the seller of goods or provider of services. But the defect in one and deficiency in other may have to be removed and compensated differently. The former is, normally, capable of being replaced and repaired whereas the other may be required to be compensated by award of the just equivalent of the value or damages for loss.”
21) The Apex Court further examined the meaning of word ‘Service’ (as it stood before Amendment Act 62/2002 which inserted words “but not limited to”) and observed as under:
“It is in three parts. The main part is followed by inclusive clause and ends by exclusionary clause. The main clause itself is very wide. It applies to any service made available to potential users. The words ‘any’ and ‘potential’ are significant. Both are of wide amplitude. The word ‘any’ dictionarily means ‘one or some or all’. In Black’s Law Dictionary it is explained thus, “word ‘any’ has a diversity of meaning and may be employed to indicate ‘all’ or ‘every’ as well as ‘some’ or ‘one’ and its meaning in a given statute depends upon the context and the subject-matter of the statute”. The use of the word ‘any’ in the context it has been used in clause (o) indicates that it has been used in wider sense extending from one to all. The other word ‘potential’ is again very wide. In Oxford Dictionary it is defined as ‘capable of coming into being, possibility’. In Black’s Law Dictionary it is defined as “existing in possibility but not in act. Naturally and probably expected to come into existence at some future time, though not now existing; for example, the future product of grain or trees already planted, or the successive future installments or payments on a contract or engagement already made.” In other words service which is not only extended to actual users but those who are capable of using it are covered in the definition. The clause is thus very wide and extends to any or all actual or potential users. But the legislature did not stop there. It expanded the meaning of the word further in modern sense by extending it to even such facilities as are available to a consumer in connection with banking, financing etc. Each of these are wide-ranging activities in day to day life. They are discharged both by statutory and private bodies. In absence of any indication, express or implied there is no reason to hold that authorities created by the statute are beyond purview of the Act. When banks advance loan or accept deposit or provide facility of locker they undoubtedly render service. A State Bank or nationalised bank renders as much service as private bank. No distinction can be drawn in private and public transport or insurance companies. Even the supply of electricity or gas which throughout the country is being made, mainly, by statutory authorities is included in it. The legislative intention is thus clear to protect a consumer against services rendered even by statutory bodies. The test, therefore, is not if a person against whom complaint is made is a statutory body but whether the nature of the duty and function performed by it is service or even facility.”
22) It is needless to say that a scheme which promotes sale of immovable property coupled with development, obligates the promoter not only to develop the property but also convey title to the purchaser. The obligation to convey title by executing a registered sale deed is an integral part of the scheme and the obligation of the promoter which commences on the acceptance of the offer of the intending purchaser is co-terminus with the execution of the sale deed. Any activity or component of such obligation forms single inseparable transaction. In view of the discussions made supra, the Respondents are “consumers” as defined under the Act and the dispute is amenable to the jurisdiction of this forum.
23) The learned counsel for the Appellants would contend that they have refunded the entire amount paid by the Respondents, which was acknowledged and received, however, under protest. The same was deposited before the forum below and subsequently withdrawn. The said amount did not carry any interest and if the same is ordered to be accepted for the plot, it would amount to unjust enrichment to the Respondents and would cause loss to the Appellants. In this regard, we may say that the Respondents have been pursuing the matter since long having paid the total amount long back, with some delay which is not in denial. Keeping in view the long pending litigation, it would be unfair to order for payment of any further sum to the Appellants by the Respondents.
24) The learned counsel for the Appellants would further contend that as per the clause in the agreement, only the courts at Hyderabad have jurisdiction to entertain the complaint but not the District Forum at Nizamabad. The said agreement being unilateral in nature, such contention is not worthy of consideration having regard to the fact that the home buyer is always considered to be at the receiving end. In this regard, it is necessary to deal with Section 11of the Consumer Protection Act, 1986, which reads as follows:
“11. Jurisdiction of the District Forum :
(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed (does not exceed rupees twenty lakhs’)
(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction, -
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or (carries on business or has a branch office or) personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or (carries on business or has a branch office) or personally works for gain provided that in such case either the permission of the District Forum is given or the opposite parties who do not reside, or (carry on business or have a branch office) or personally works for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part arises.”
From the reading of above provision, it is crystal clear that the Respondents can maintain their complaint at Nizamabad in view of the fact that the Appellants have got branch office at Nizamabad, which is not in denial. Hence, we negate the contention of the learned counsel for the appellants.
25) It is an admitted fact that on failure to pay the monthly instalments as agreed, the Appellants cancelled the plot No.323 and refunded the amount. But, on the request of the Respondents, the Appellants restored the plot and membership on the recommendation of Dr.C.Jalpath Rao, Nizamabad. Even after due opportunity, the Respondents failed to pay the remainder amount within the specified time, which necessitated the Appellants to allot the plot number 323 to the other members in the waitlist. In this context, it is to be stated that the Appellants knowingly sold away the subject plot to third parties pending consumer complaint proceedings, without placing it on record before the forum below. For that reason, Ms.Rita Garg was allotted the plot number 323. However, the Appellants offered plot No.335 and other three east facing plots, which the Respondents refused to accept.
26) We may state by the time orders were passed by the forum below, the plot was already conveyed in favour of Rita Garg. Whatever be the reason, we are of the opinion, in view of the fact that very complainant did not fulfil the terms of offer by paying the amounts in instalments periodically and that there was enormous delay on the part of the Respondents, we do not intend to direct the respondent to execute sale deed in favour of the Respondents in respect of plot No.323. However, the Appellants have been contending without any demur their readiness to convey the other east facing plots of same measurement and it is the Respondents who refused to accept. For the aforesaid reasons, we are inclined to modify the order of the forum below and allow the appeal in part.
27) In the circumstances, we modify the order of the District Forum and direct the Appellants to register the plot No.335 or any plot of Respondents choice with same measurement, from and out of the available plots, without making any additional demand towards the charges of the plot except the amount paid by the Respondents, in view of the fact that pending proceedings before the forum below, the Appellants have sold away the plot no.323 to third party without bringing the same to the notice of the forum below and also in view of the fact that the Respondents lost interest on the refunded amount. For the foregoing reasons, we answer the point framed at paragraph No.12, supra, accordingly.
28) In the result, we modify the order of the District Forum, Nizamabad dated 30.11.2007 made in CC No.19/2005 and direct the Appellants to register the plot No.335 or any plot of Respondents choice, with same measurement, from and out of the available plots, without making any additional demand towards the charges of the plot except the amount paid by the Respondents, within two months from the date of receipt of this order. In which event, the Respondents shall bear the stamp duty and registration charges and we confirm the rest of the order. No costs.
PRESIDENT MEMBER
Dated : 02.01.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Appellants: For Respondents :
None None
EXHIBITS MARKED
For Appellants :
Ex.B2: is copy of the letter dated 13.03.2004 addressed by the Appellants to the Respondents.
Ex.B3 : is copy of letter dated 05.05.2004 addressed by the appellants to the respondents.
Ex.B4 : is copy of letter dated 17.06.2004 addressed by the appellant sto the respondents.
Ex.B5 : is copy of letter dated 28.06.2004 addressed by the appellant sto the respondents.
Ex.B6 : is copy of letter dated 05.07.2004 addressed by the appellant sto the respondents.
Ex.B7 : is copy of letter dated 16.07.2004 addressed by the appellant sto the respondents.
Ex.B8 : is copy of letter dated 21.08.2004 addressed by the appellant sto the respondents.
Ex.B9 : is copy of letter dated 09.09.2004 addressed by the appellant sto the respondents.
Ex.B10 : is copy of letter dated 14.09.2004 addressed by the appellant sto the respondents.
Ex.B11 : is copy of letter dated 27.09.2004 addressed by the appellant sto the respondents.
PRESIDENT MEMBER
Dated : 02.01.2017
