BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.
CC NO.199 OF 2015
Between:
- Ketineni Sayaji Rao,
S/o Late Sri K. Satyanarayana Rao
Aged about 53 years, occ : business
- Ms. Ketineni Suchita Rao,
D/o Sri K. Sayaji Rao
Aged about 25 years, Occ : Household
Both R/o 47, Gunrock Enclave,
Phase -1, Secunderabad – 500 009
Both represented by their GPA holder,
V. Suryanarayana Murthy,
s/o V. Anantha Rao,
aged 56 years, Occ : Private employee,
R/o Flat No. 449, Block II,
Janapriya Apartment, Gandhi nagar,
Hyderabad – 500 080 .... complainants
A N D
- Govt. of Telangana, rep. by its Principal Secretary
Revenue, Secretariat Building, Secretariat,
- Telangana Industrial Infrastructure Corporation Ltd.
Parishram Bhavan, 6th Floor, Fatehmaidan Rd.,Basheerbagh, Hyderabad,
Rep. by its Managing Director
- M/s. Emaar Hills Township Pvt. Ltd.
Company incorporated under provisions of
Companies Act, 1956, Having its office at
Manikonda Village, Gachibowli, Hyderabad
Being rep. by its authorized signatory Mr.Vijay Raghave
S/o Mr.G.Hara Gopal Krishna, aged about 42 years,
R/o Flat No.313, My Home Mount View Apartments
Navodaya Colony, Yellareddyguda, Hyderabad
- M/s. Emaar MGF Land Ltd.,
Company incorporated under provisions of
Companies Act, 1956, Having its Regd. Off: at ECE
House, 28, Kasturiba Gandhi Marg
New Delhi 110 001 ... Opposite Parties
Counsel for the complainant: M/s. Sharad Sanghi& Associates
Counsel for the Opposite party No.1 Government Pleader
Counsel for the Opposite party No.2 Sri K.Srinivasa Rao
Counsel for the Opposite party No.3 M/s Link Legal India Law Services
Counsel for the Opposite party No.4 Ms Shireen Sethna Baria
QUORUM :
HON’BLE SRI JUSTICE M.S.K. JAISWAL , HON’BLE PRESIDENT
AND
SRI K. RAMESH, HON’BLE MEMBER
FRIDAY, THE THIRTY FIRST DAY OF AUGUST
TWO THOUSAND EIGHTEEN
Oral Order :
***
1. The case of the complainants, in brief, is that they are purchasers of one of the flats in Excelsior Project bearing No. BH EXCL TD-F04-D2-01/B1 at Boulder Hills in Tower D Floor 04 Core D2 Unit Number 01, Unit Type B1, a 3 BHK apartment with approximate super built up area of 2582.99 sft. The complainants submit that the land in Sy. No.91 of Gachibowli village was the government land known as Kancha Maktha which was transferred in bits and pieces to opposite party No.2 i.e., APIIC and opposite party no.1 initiated a scheme for development of an integrated project including International Convention Centre with a hotel, township, Golf course, residential and commercial development etc. and EMAAR Projects PJSC, Dubai was selected as the developer and an MOU dated 6.11.2002 and Collaboration Agreement dated 19.8.2005 and Supplementary Agreement were entered into between opposite party No.2 and EMAAR Projects PJSC, Dubai. Thereafter opposite party No.2 along with EMAAR Projects PJSC, Dubai created “SPV” with equity holding of both the parties. The SPV is ‘EHTPL’ i.e., opposite party no.3 which is the parent company.
2. The collaboration agreement entered into between opposite parties no.2 and 3 designates opposite party no.3 as developer which is required to develop an Integrated Project consisting of Convention Centre Complex, Golf Course and also a township consisting of residential plots for villas, town houses and apartments. Opposite party No.2 being the nodal agency of opposite party No.1 had transferred the land admeasuring Ac. 258.36 gts in Survey No. 210 (P) and 211 (P) of Manikonda Village, Rajendranagar Mandal and land in Survey No. 91(P) of Gachibowli Village, Serilingampally Mandal, Ranga Reddy Dist. Therefore opposite party No.2 constitutes 26% shareholding in opposite party No.3 and executed a deed of conveyance dated 28.12.2005 in favour of opposite party No.3 and later on opposite party no.3 sold 95% of its 74% shareholding in the ‘SVP’ to opposite party no.4. Opposite party no.3 entered into a development agreement dated 3.12.2006 and thereafter cancelled this agreement and entered into Development Agreement-cum- GPA dated 25.7.2007 in which there is no time limit for opposite party No.4 to complete the project. The complainant submits that clause 2.3 of the Development Agreement-cum-GPA is against the principles of natural justice.
3. In pursuance of development agreement wide publicity was given for sale of flats and villas in the ‘Boulder Hills Excelsior Project’ and the complainants were attracted by the advertisement as opposite party no.2 was fully involved in the said project. They paid an amount of Rs. 8,11,354/- as advance for purchase of said flat. Opposite party no.4 issued a letter dated 10.09.2008 allotting Flat No. BH EXCL TD-F04-D2-01/B1 admeasuring 2582.99 sft along with undivided interest in the land for a sum of Rs. 1,09,31,932/- which works out to Rs. 4,800/- per sft along with two car parks. The total sale price including two car parks is Rs. 1,62,27,090/- out of which the complainants paid an amount of Rs. 8,11,354/- to be completed within a period of 36 months with a further grace period of 3 months from the date of agreement of sale.
4. The complainants submit that CBI was investigating into the deals of opposite party No.2 & opposite party No.4 and the Enforcement Directorate has also taken cognizance of the acts and commissions of all the Ops and registered ECIMR which was reported in the media and that the Enforcement Directorate is taking steps to seize the properties of opposite parties No.3 and 4. In addition to this OS No. 655/2010 has been filed by opposite party no.2 against opposite party No.4 before the II Addl. Chief Judge, City Civil Court, Hyderabad for permanent injunction, which evidences that opposite party no.4 will not be able to proceed with the construction of the flat. The complainants submit that opposite parties no.3 and 4 with a malafide intention stopped the construction activity and in spite of receiving major part of the sale consideration and in spite of several representations made by the complainants to commence construction the opposite parties No.3 and 4 behaved in a high handed manner and challenged the complainants to approach any court of law.
5. The complainants having considered all the developments demanded the opposite parties no.1 to 4 to refund Rs. 1,09,31,932/- with interest and got issued a legal notice on 25.09.2014. Vexed with the attitude of the opposite parties, the complainants approached this Commission seeking directions to the opposite parties jointly and severally to pay a sum of Rs.99,00,000/- with interest @ 24% p.a. from the date of complaint together with costs.
6. Opposite party no.1 filed memo stating the written arguments filed on 26.07.2013 in CC No. 30 of 2012 and CC No. 40 of 2012 by the opposite party no.1 may be adopted and retreated as the same in the present case and dismiss the complaint against it as dismissed in the above cases.
7. Opposite party No.2 filed written version stating that it is wholly owned company of the State Govt. with the main object of promoting industries in the State and as per the Collaboration Agreement with EMMAR Properties PJSC, Dubai incorporated SVP M/s. EMMAR Hills Township Pvt. Ltd. (opposite party No.3) for the development of the township component of Integrated Project. Opposite party No.2 submits that they filed a company petition in C.P. No. 108/2010 before the Company Law Board against EMMAR Properties PJSC (opposite party no.3) and also instituted a suit against opposite party No.4 for rendition of accounts and for permanent injunction in OS No. 655/2010 in which the II Addl. Chief Judge, City Civil Court, Hyderabad was pleased to grant status quo orders in IA No. 3941/2010. Opposite party no.2 admits that they entered into an MOU on 6.11.2002 for the development and also Collaboration Agreement dated 19.8.2003 and a Supplementary Agreement with M/s. EMMAR Projects PJSC, Dubai and also admits that ‘SPV’ was created for the township component of the Integrated Project and that Op3 was also having equity holding and opposite party No.2 is having 26% equity in opposite party No.3 company.
8. Opposite party No.2 submits that the conveyance of the land in favour of SPV i.e., Op3 is a conditional sale for the development of the township project by Op3 and Op4 has nothing to do with the project. Opposite party No.2 has taken various legal steps to protect its interest. This opposite party is not a party to any agreement entered into by opposite parties No.3 and 4 including the Development Agreement-cum- GPA dated 27.12.2008 and therefore the said agreements are not binding on this opposite party. They deny that opposite party No.4 gave massive publicity that opposite party No.2 is also a partner of the project. Opposite party No.2 further contends that no amounts were paid to them either by the complainant or by opposite parties No.3 and 4 and therefore deny that they were part of any dubious deals with opposite parties No.3 and 4 and further submits that there is no privity of contract between the complainants and this opposite party. In fact they have instituted a suit in O.S. No. 655 of 2010 on the file of II Addl. Chief Judge, City Civil Court, Hyderabad against opposite party no.4. As they did not receive any complaints either from the complainants or from opposite parties No.3 and 4 nor entered into any agreement with the complainant and rather opposite party no.2 itself initiated steps against opposite parties No.3 and 4 to protect its interests and therefore the question of deficiency of service or refund of amount does not arise.
09. Opposite party No.3 filed written version stating that the then Govt. of A.P. through its nodal agency Andhra Pradesh Industrial Infrastructure Corporation Limited (“APIIC”) i.e., opposite party No.2 invited the Expression of Interest (“ EOI”) for the development of the integrated projects in A.P. which would include a township, golf course and mixed-used project and a convention centre-cum-exhibition complex with a business hotel to boost the tourism and business in the State. APIIC accorded approval to Emaar Properties PJSC, Dubai for development and construction of township as a part of Integrated Project, spread over 285 acres of land at Manikonda Village, Rajendranagar Mandal, Ranga Reddy District. Emaar Properties PJSC, Dubai and APIIC have executed various agreements in furtherance of the integrated project, having formulated the principal terms under an MoU dated 06.11.2002, Collaboration Agreement dated 19.11.2003 and Supplementary Agreement dated 19.04.2005. In furtherance of the Collaboration Agreement, Emaar Properties PJSC, Dubai incorporated a wholly owned subsidiary company under the laws of Mauritius under the name and style of Emaar Holding, which in turn, has incorporated three Companies as Special Purpose Vehicles (SPVs) namely (i) Emaar Hills Township Private Limited i.e., opposite party No.3 herein; (ii) Boulder Hills Leisure Private Limited; and (iii) Cyberabad Convention Centre Private Limited for carrying out the development work of the different components of the integrated project.
10. Opposite party No.3 further submits that in December 2005, opposite party No.2 transferred land admeasuring Ac.258.36 acres at Manikonda village in Rajendranagar Mandal, Gachibowli and Nanakramaguda Village in Serlingampally Mandal, R.R.Dist. in favour of opposite party No.3 in lieu of its equity contribution with clear and free title vide Registered Deed of Conveyance dated 28.12.2005. In the month of September 2006, the projects handled by opposite party No.3 had reached a critical stage with limitation on amount of debt that could be raised. There could not be any internal accruals as there was inordinate delay in commencement of project due to the pending litigation which was finally decided in favour of opposite party no.3 by the Hon’ble Supreme Court. Therefore, opposite party No.3 through its Board of Directors which include two nominee directors of opposite party no.2 had consented and decided to adopt alternate means of finance to develop the land. At this point of time, one of the options considered by opposite party no.3 was increase of equity by the shareholders and consequent infusion of funds by them. Alternatively, opposite party No.3 had also received a proposal from opposite party No.4 for the development and construction of the project at its cost and risk. In the absence of any increase of equity by opposite party No.2 or any other alternative mode of raising finances for implementing the concerned project, it was unanimously agreed by the Board of Directors of opposite party No.3 to enter into a development agreement with opposite party No.4 for developing township and to infuse/manage additional cost for the project and also to bear the cost of the entire project.
11. Opposite party No.3 further submits that accordingly a development agreement dated 03.11.2006 was executed between opposite party No.3 and opposite partyno.4. The said development agreement was later cancelled and replaced by a fresh duly registered Development Agreement-cum-General Power of Attorney dated 25.07.2007 to develop the said land for the integrated township “ Boulder Hills”. Immediately after the execution of the Development cum General Power of Attorney opposite party no.4 undertook development of the concerned project component of the integrated project at its own cost and expense by means of its own resources or through debts raised by it. The execution of the development works by opposite party no.4 was well within the knowledge of opposite party no.2 since very beginning.
12. Opposite party No.3 further submits that in the said backdrop, the complainants have entered into various agreements viz Sale agreement and construction agreement with opposite party No.3 as owner of the land and opposite party No.4 as developer. The parties are bound by the covenants mentioned as “ Articles” in both the agreements. The Sale Agreement inter-alia covers such as, allotment, undivided share in the land and semi-finished Apartments, Construction and Operation and Maintenance, original Sale deed, default in payments and Developer cum GPA’s lien, Rates & Taxes, Force Majeure, Governing Law and disputes resolution, Schedule of property etc. Whilst, the construction agreement inter-alia covers covenants like approvals, apartment specifications, construction schedule, payments, deposits, interior works, purchasers default and termination, Developer cum GPA’s default, purchasers covenants, general clauses including notices & force majeure, dispute resolution process etc. While the matter stood thus, all of a sudden after more than three years from the execution of Development cum General Power of Attorney agreement as well completion and/or pending development works by opposite party No.4, the opposite party No.2, in order to cover itself, has raised illegal, baseless and wrong allegations against SPV’s in regard to the Integrated Township project. The row of disputes had led the parties, i.e. opposite party No.2 and SPV’s into legal embarrassing situation and one such consequence led to an issuance of notification vide Memo No.G1.9132 dated 18.08.2010 and Go.Ms.No.1279 dated 08.10.2010 issued by the Govt. of the then A.P. wherein, the Govt. prohibited registration of documents in the said properties in exercise of powers conferred under Sec.22-A of the Registration Act, 1908. Aggrieved by the said G.O. dated 18.10.2010Excelsior Owners Welfare Association filed W.P.No.17618 of 2011 before the Hon’ble High Court and obtained suspension of the said GO. Similarly Boulder Hills Villas Owner Association also filed another WP NO.20098/11 for the same relief. One Mr.K.Bharat individual Villa owner also filed W.P .No.5143/2012 for the same relief. Subsequently, the High Court modified the above orders and granted conditional order to register the documents for the petitioner therein. Aggrieved by the same APIIC filed W.A.No.497 of 2012, Govt. of the then A.P. filed W.A.No.647 to 649 of 2012 and the orders for registration of documents passed in the above said writ petitions were stayed. The opposite party No.3 also filed W.P.No.7978 and 813 of 2012 which were pending in High Court for disposal.
13. Opposite party No.3 further submits that Shri P.Shanker Rao, MLA addressed a letter to Chief Justice of High Court. The said letter was taken up as WP NO.29358/2010 by the High Court and after hearing directed CBI to register an FIR and investigate into the alleged incidents. Accordingly the CBI conducted investigation and filed charge sheet in CBI Court at Nampally which is registered as CC No.6 of 2012 which is pending. Opposite party No.2 also filed a suit O.S.No.655 of 2010 before II Additional Chief Judge, City Civil Court, Hyderabad against opposite party No.4 seeking rendition of accounts and permanent injunction from carrying on any work or activity in the suit schedule property. In the suit, opposite party No.2 also filed interlocutory petition seeking ex-parte ad-interim injunction and the court has passed order directing the parties to maintain “status quo with regard to the suit schedule property”. Because of the aforementioned events and due to the embargo created Courts and State Government notification, the project has become stand still.
14. Opposite party No.3 submits that Sale Agreement and the Construction Agreement entered by complainants, opposite party No.3 and opposite party no.4 provides for force majeure condition which clearly stipulates that in the event of any delay for the reason of force majeure condition, the Owner and Developer cum GPA shall not incur any liability for failure to comply with the Agreement. Further the complainants cannot be regarded as ‘consumers’ within the meaning of Sec.(2)(d) of the C.P.Act against opposite party No.3. As per the terms of the agreement, the complainants have admitted paying the consideration to opposite party no.4 and hence the question of deficiency of service on the part of the opposite party No.3 does not arise at all. The opposite party No.4 is bound to complete the construction which is shown as Developer cum GPA and that the opposite party no.3 is shown as Owner of land. It is not a proper or necessary party to the complaint since it has admitted that it has neither received consideration from the complainants nor under any obligation to construct flat and handover the same to the complainants under the Construction Agreement. Without pre-judice to the said contentions, that under the agreements, payments have been made by the complainants to opposite party No.4 and that construction of the apartment is to be undertaken by opposite party No.4 and hence the claim for refund of amounts against the opposite party No.3 is untenable. As per the judgment of the Hon’ble National Commission in C.C.No.355 of 2014 filed by Perin Bazun Dittia and another the National Commission fixed the liability against the opposite party No.4 only and it has not fixed any liability on the opposite party No.3. Hence, the opposite party No.3 prayed for dismissal of the complaint against it.
15. Opposite party no.4 filed written version with most of the same contents as was stated by the opposite party No.3 in its version. It is submitted that the relief sought by complainant primarily refund of the amounts paid by the complainant towards the booking of an apartment and such a relief is to be adjudicated by a competent civil curt having jurisdiction and it does not fall within the purview of the C.P. Act. The agreement entered between the parties provides for referring all disputes arising between the parties to arbitration and thus any claim that the complainant has, must be referred to an arbitrator in accordance with the terms of the agreement. The reasons for delay is that the project required clearance from statutory bodies and as a result of political crossfire and litigations arising therefrom delayed completion of the project. The said fact was informed to the Complainants and even mentioned in the agreement of sale and described as “force majeure”. Hence, the delay is not attributable to the opposite party No.4. Further, since the stay on construction activity continues to date the opposite party No.4 could not resume construction at the project site. In regard to allegation that the construction was to be completed within 36 months from the date of commencement of construction, it is relevant to point out that clause 4.1 of the Construction Agreement provides for the same and is subject to force majeure clause 28.2 of the said agreement. It is relevant to mention that since, the preliminary issue is justifiable and requires detailed scrutiny of facts of the case and appreciation of surrounding circumstances attached thereto, the same cannot be adjudicated in a summary manner in these proceedings.
16. The complainants filed their affidavit evidence and Exs. A1 to A14 are marked on their behalf. Opposite party No.1 filed a memo stating that the affidavit evidence filed in CC No. 30 of 2012 may be adopted in this case and Ex.B-1 to B-9 are marked and opposite party No.2 filed affidavit of the General Manager by way of evidence and Exs. B10 to B-13 are marked on their behalf. Opposite party no.3 filed affidavit of Sri Madhusudhan Rao, Authjorised Signatory and marked Exs.B14 to B21. Opposite party No.4 filed affidavit of its Deputy General Manager-Legal and the documents Exs.B22 to B28 are marked.
17. The counsel for the Complainants and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments. Heard both sides.
18. The points that arise for consideration are :
- Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?
ii) Whether the issue in between the parties is not a ‘consumer dispute’?
iii) Whether there is any deficiency in service on the part of the Opposite parties?
iv) To what relief ?
19. Point Nos.1 & 2: The counsel for the opposite parties No.3 and 4 would contend that in view of the arbitration clause in the agreement. The Complainants cannot maintain the complaint before this Commission. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service is maintainable. The existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainants having exhausted the other remedy was considered as under:
“The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”
20. Thus, in view of the ratio laid in aforementioned decision, the consumer has two options, either to proceed for arbitration process or to invoke the provisions of the Consumer Protection Act. As such, it cannot be said that the complaint is not maintainable before this Commission in view of the arbitration clause in the agreement. For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite parties No.3 and 4.
21. Point No.2 The complainants have established the payment of Rs. 1,09,31,932/- vide payment of schedule vide Ex.A2. Keeping in view the admission of Op2 that the payments have been made to Ops 3 & 4 and also the receipts on record, we are of the considered view that the complainants have established their case that a major part of sale consideration was paid and that they did not complete the construction and delivered possession of the flat as agreed upon within the stipulated period. The opposite party No.3 placed much reliance on the articles 7.1 and 28.2.1 of Article 28 of the construction agreement which reads as follows:
Article 7.1 of Article 7 of agreement:
The owner and/or developer-cum-GPA shall not incur any liability for failure to comply with this agreement if the delay is due to reason of any force majeure condition viz., by reason of any Act of God or Act of Govt. or any other reasons beyond the reasonable control of the owner and/or developer-cum-GPA.
Article 28.2.1 of Construction Agreement:
The owner and/or developer-cum-GPA shall not be liable for any failure to perform its obligations hereunder to the extent that such performance has been delayed, hindered or prevented due to circumstances beyond the control of Owner and Developer-cum-GPA……., any act of any authority (including refusal or revocation of a license or consent or repossession of part of whole of the Project Land), compliance with any law or government order, rule, regulation or direction …….
22. It is the contention of the opposite parties No.3 and 4 that the force majeure clause has triggered in view of G.O. Ms. No. 1279 dt. 8.10.2010. The aforementioned clauses only refer to the reasons beyond the control of the developer but the facts in the instant case cannot be construed to be termed under force majeure i.e., they are not conditions which are by act of God but have arisen because of their own transactions which necessitated to file O.S No. 655/2010 and had obtained injunction. Therefore the contention of Ops 3 & 4 in their written versions invoking the aforementioned clauses under force majeure is unsustainable. Having accepted the payments and admittedly not completing the project stating that the conditions are beyond their control without refunding the amounts of the complainants amounts to deficiency of service and unfair trade practice on their behalf.
23. Now we rely on the judgement of Apex Court in Lucknow Development Authority Vs. M.K. Gupta reported in III (1993) CPJ 7 (SC) while dealing with the question whether the statutory authorities such as Lucknow Development Authority or Delhi Development Authority or Banga lore Development Authority constituted under State Acts to carry on planned development of the cities in the State are amenable to Consumer Protection Act 1986 (hereinafter referred to as 'the Act') for any act or omission relating to housing activity such as delay in delivery of possession of the houses to the allottees, non-completion of the flat within the stipulated time, or defective and faulty construction etc. Another aspect of this issue is if the housing activity carried on by the statutory authority or private builder or contractor came within the purview of the Act only after its amendment by the Ordinance No. 24 in 1993 or the Commission could entertain a complaint for such violations even before their Lordships held:
“9. This takes us to the larger issue if the public authorities under different enactments are amenable to jurisdiction under the Act. It was vehemently argued that the local authorities or Government bodies develop land and construct houses in discharge of their statutory function, therefore, they could not be subjected to provisions of the Act. The learned Counsel urged that if the ambit of the Act would be widened to include even such authorities it would vitally affect functioning of official bodies. The learned Counsel submitted that the entire objective of the Act is to protect a consumer against malpractices in business. The argument proceeded on complete misapprehension of the purpose of Act and even its explicit language. In fact the Act requires provider of service to be more objective and ca retaking. It is still more in public services. When private undertakings are taken over by the Government or corporations are created to discharge what is otherwise State's function, one of the inherent objectives of such social welfare measures is to provide better, efficient and cheaper services to the people. Any attempt, therefore, to exclude services offered by statutory or official bodies to the common man would be against the provisions of the Act and spirit behind it. It is indeed unfortunate that since enforcement of the Act there is a demand and even political pressure is built up to exclude one or the other class from operation of the Act. How ironical it is that official or semi-official bodies which insist on numerous benefits, which are otherwise available in private sector, succeed in bargaining for it on threat of strike mainly because of larger income accruing due to rise in number of consumers and not due to better and efficient functioning claim exclusion when it comes to accountability from operation of the Act. The spirit of consumerism is so feeble and dormant that no association, public or private spirited, raises any finger on regular hike in prices not because it is necessary but either because it has not been done for sometime or because the operational cost has gone up irrespective of the efficiency without any regard to its impact on the common man. In our opinion, the entire argument found on being statutory bodies does not appear to have any substance. A Government or semi Government body or a local authority is as much amenable to the Act as any other private body rendering similar service. Truly speaking it would be a service to the society if such bodies instead of claiming exclusion subject themselves to the Act and let their acts and omissions scrutinised as public accountability is necessary for healthy growth of society.”
24. Admittedly, the project floated by the opposite parties No.3 and 4 could undoubtedly attract the provisions of the Consumer Protection Act. The dispute pertains to housing activity. The opposite parties No.3 and 4 have been engaged in housing activity. It comes under ‘Service’ as defined u/s 2(1) (o) of the Consumer Protection Act which reads as follows:
(o) "service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
25. Service means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.
26. When the opposite parties themselves admit that they have executed Agreement Ex.A3 in favour of the complainants and therefore the question of not having jurisdiction, more so in the light Section 2(1) (o) the dispute attracts the provisions of the Consumer Protection Act. For the above reasons, the Point No.2 is answered in favour of the Complainants and against the Opposite parties No.3 and 4.
27. Points No.3 and 4:
The facts not in dispute are that opposite party No.1 is the State and opposite party No.2 is the TIICL and EMAAR Hills Township private Limited was selected as the developer and an MOU dt. 6.11.2002 and Collaboration Agreement dt. 19.8.2005 and Supplementary Agreement were entered into between Op2 and EMAAR Hills Township Private Limited. It is the case of the complainant that respondent No.2 constitute 26% share holding in the third respondent and executed a deed of conveyance 28.12.2005 in favour of the third respondent and later on the respondent No. 3 sold 95% of its 74% share holding in SVP to the fourth respondent. The respondent No. 3 entered into development agreement dated 3.12.2006 and thereafter cancelled this agreement and entered into development agreement cum GPA dated 25.07.2007 in which there is no time limit for the respondent no. 4 to complete the project consisting of Convention Centre Complex, Golf Course and also a township consisting of residential plots for villas, town houses and apartments.
28. It is the complainants’ case that opposite party no.2 being the nodal agency of opposite party no.1 transferred the land admeasuring 258.36 acres in Sy.No. 210(P) and 211(P) of Manikonda Village, Rajendranagar Mandal, in Sy. No. 91(P) of Gachibowli Village, Serlingampally Mandal, Ranga Reddy District and executed a deed of conveyance in favour of opposite party No.3 which is evident under Ex. A3. A8 is the construction agreement dated 27.12.2008 entered into between M/s. EMAAR Hills Township Pvt. Ltd. and M/s. EMAAR MGF Land Pvt. Ltd. who are the land owner and builder respectively and the complainant herein. The complainants submit that Clause 2.3 of the GPA agreement under the heading ‘Project Term’ does not state any specific time schedule which amounts to unfair trade practise. It is also the complainants’ case that they entered into agreement with the opposite party No. 3 and 4 under Ex. A7. The opposite party No.3 evidenced under Ex. A3 in which opposite party No.3 has assured that physical possession of the flat would be handed over in 36 months with a grace period of six months from the date of 1st payment which was made on 15.09.2008.
29. The complainants submit that they have paid an amount of Rs. 1,09,31,932/- out of the sale consideration of Rs. 1,62,27,090/- for the flat No. BH EXCL TD –F04-D2-01/B1 admeasuring 2582.99 sft which includes Car parkings. Ex.A.2 is the payment details filed by the complainant and the opposite parties have not denied the receipt of the said amount and in addition to that the opposite parties in their written version or in their evidence have not denied the amounts made by the complainant.
30. It is the complainants case that in spite of receiving major part of sale consideration and in spite of repeated requests and demands made by them opposite party No.4 has stopped construction and there is no likelihood of construction being completed in view of the investigations being done by CBI and Enforcement Directorate. The complainants further contend that a suit in O.S. No. 655/2010 on the file of II Addl. Chief Judge, City Civil Court, Hyderabad was filed by Op2 against EMR MGF Land limited which is evident under Ex. B2
31. Opposite party no.1 filed a memo stating that the affidavit evidence filed in CC No. 30 of 2012 may be adopted in this case. It is the main contention of opposite party No.1 that the construction agreement dt. 27.12.2008 under Ex.A8 was entered into between opposite party no.3 and 4 and complainants wherein opposite party No.3 is shown as the Developer- cum-GPA which shall complete the construction within 36 months from the commencement date with a grace period of Six months. As per clause 11.1 at page 149 of the Developer- cum-GPA the developer undertakes full liability for bearing any loss and harm caused to the purchaser. OP. NO.1 also denies for want of personal knowledge about any MOU dated 6.11.2012 entered into between opposite parties No.2 and 3 for development and also Collaboration Agreement and Supplementary Agreement by opposite party No.2. Opposite party No.1 submits that they are not necessary parties and are not liable to pay any amounts and there is no deficiency of service on their behalf.
32. With respect to liability of opposite party No.1 we are of the considered opinion that Principal Secretary representing the State cannot be made personally liable for the acts of Ops 3 and 4 as per the provisions of the Consumer Protection Act, 1986. The complainants have not established by way of documentary evidence the deficiency of service if any on behalf of opposite party No.1 as defined u/s of 2(1)(g) of the Consumer Protection Act which reads as follows :
g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
33. Therefore, we do not find opposite party No.1 personally liable with respect to deficiency of service as per the provision under the Consumer Protection Act.
34. Now with respect to liability of opposite party No.2 is that, it is the main contention of opposite party No.2 that there is no privity of contract between them and the complainants and that all payments were made to Opposite parties no.3 and 4 and that they are not a party to the Development Agreement-Cum-GPA entered into between the complainants and opposite parties no. 3 & 4 and that they have filed OS No. 655/2010 on the file of II Addl. Chief Judge, City Civil Court, Hyderabad against Ops 3 & 4 for rendition of accounts and permanent injunction and the Hon’ble Court granted Status Quo orders on 16.10.2010 in IA No. 3941/2010.
35. Admittedly, the opposite party No.2 is not a party to Exs.A7, copy of agreement and Ex.A8, construction agreement. Opposite party No.2 has not received any amount from the complainants either directly or indirectly, much less, from opposite parties no. 2. As such we are of th view that the Ops 1 and 2 are not at all liable to pay the amount to the complainant.
36. Keeping in view the aforementioned reasons, we are of the considered opinion that opposite parties No. 3 and 4 are jointly and severally liable for refund of the amounts paid by the complainants together with compensation of Rs.25,000/- towards mental agony and costs of Rs.10,000/-. For the above reasons, the Points No.3 and 4 are answered in favour of the Complainants and the opposite parties No.1 and 2 and also against the Opposite parties No.3 and 4. The principles laid down in the decisions relied upon by the opposite parties seems to be inapplicable to the facts of the present case .
37. In the result this complaint is allowed in part directing the opposite parties No.3 and 4 jointly and severally to pay Rs. 99,00,000/- to the complainants within one month from the date of receipt of this order failing which the amount will carry interest @ 9% P.A. from the date of filing of the complaint i.e., from 13.11.2014 till the date of payment. We also award compensation of Rs. 25,000/- and costs of Rs. 10,000/-. The complaint against opposite parties no.1 and 2 is dismissed but without costs.
PRESIDENT MEMBER
Dated : 31.08.2018.
APPENDIX OF EVIDENCE
DOCUMENTS MARKED
For complainant :
Ex.A-1: G.P.A.
Ex.A-2 : - : copy of payment details
Ex.A-3: 10.09.2008 : copy of allotment letter issued by the Excelsior
Ex.A-4: 15.09.2008 : copy of receipt issued by the Excelsior
Ex.A-5: - : copy of the payment schedule issued by the
Excelsior along with plan
Ex.A-6: 31.08.2008 : copy of cheque No. 170651
Ex.A-7: 27.12.2008 : copy of agreement between Emmar Hills Township
private Ltd, Emmar MGF land Limited and M/s. Ketineni Sayaji Rao
Ex.A-8: 27.12.2008 : copy of construction agreement
Ex.A-9: 10.01.2009 : copy of letter from the Exelsior
Ex.A-10: 25.09.2014 : O/c of notice
Ex.A-11: 25.09.2014 : Registered post ack. Due
Ex.A-12: - : Returned postal covers in CC No. 30/12
Ex.A-13: - : copy of orders in CC No. 30/12
Ex.A-14: - : Indian postal delivery status report
For opposite parties :
Ex.B-1: 13.08.2001 : Government Memo.No.61939/ASN.V2/98-8
Ex. B-2: 24.08.2001 : panchanama
Ex.B-3: 24.08.2001 : Location sketch
Ex.B-4: 09.10.2003 : G.O.Ms.No.1033
Ex.B-5: - : Panchanama
Ex.B-6: - : Location plan
Ex.B-7: 15.10.2003 : Lr.No.612/1990
Ex.B-8: 22.10.2003 : Panchanama
Ex.B-9: 16.06.2017 : copy of common judgment dt.16.6.2017 passed in CC No. 30 of 2012 and CC 40 of 2012
Ex.B-10: 06.05.2016 : copy of circular No.1/LW/TSIIC
Ex.B-11: - : copy of plaint in OS No. 655/2010
Ex.B-12: 15.12.2010 : copy of interim order
Ex.B-13: 16.06.2017 : copy of order in CC No.30/2012
Ex.B-14: - “ Board resolution
Ex.B-15: 19.08.2003 : copy of collaboration agreement
Ex.B-16: 19.04.2005 : copy of supplementary agreement
Ex.B-17: 25.07.2007 : copy of Regd.development cum GPA
Ex.B-18: - : copy of orders passed by the High Court of A.P.
Regarding GO Ms No. 1272
Ex.B-19: 15.12.2010 : copy of orders in IA No. 3941/2010 in OS No. 655
of 2010 passed by the Court of II Addl. Chief Judge, CCC, Hyderabad
Ex.B-20: 09.03.2016 : copy of order down loaded from NCDRC in CC No. 355/2014 between Perin Bazun Ditta and another and EHTPL and another
Ex.B-21: 19.02.2016 : copy of order passed by NCDRC in FA No. 818 and 819 of 2012
Ex.B-22: 29.05.2014 : Resolution passed
Ex.B-23: 08.10.2010 : G.O.Ms.no.1279, Revenue (Regn.I) Dept.
Ex.B-24: 24.04.2012 : copy of order in WP No. 497/12 dt.24.4.2012
Ex.B-25: 15.12.2010 : Status quo order
Ex.B-26: 16.12.2010 : interim stay order
Ex.B-27: 04.04.2011 : Letter
Ex.B-28: 19.02.2016 : order of NCDRC in batch of appeals
PRESIDENT MEMBER
DT : 31.08.2018
