CC 30 of  2012

Between:

1) Smt. Sweenie Reddy

W/o.  P. Radhive Reddy

Age:  32 years

Associate Professor

2)  P. Radhive Reddy

S/o.  Podduturi Hanmanth Reddy

Age: 35 years, Advocate

Both are  R/o. 104,

Gouri Apartments

Urdu Hall Lane,

Hyderabad-500 029.                                   ***               Complainants

And

1.  Govt. of Andhra Pradesh

Rep. by its Principal Secretary

(Revenue), Secretariat Building

Secretariat, Hyderabad.

2.  A.P. Industrial Infrastructure Corporation Ltd.

(APIIC), Parishram Bhavan

6^th Floor, Fatehmaidan Road

Basheerbagh, Hyderabad

Rep. by its Managing Director

3.  M/s. Emaar Hills Township  Pvt. Ltd.

Office at :  Manikonda Village

Gachibowli, Hyderabad

Rep. by its  Authorised Signatory

G.V. Vijay Raghav,

S/o. G. Hara Gopal Krishna

Flat No. 313,

My Home Mount View Apartments

Navodaya Colony, Yellareddyguda

Hyderabad.

4. M/s. Emaar MGF Land Ltd.

Regd. Office at ECE House

28, Kasturiba Gandhi Marg

New Delhi-110 001.

Rep. by its Authorised Signatory

G.V. Vijay Raghav,

S/o. G. Hara Gopal Krishna

Flat No. 313,

My Home Mount View Apartments

Navodaya Colony, Yellareddyguda

Hyderabad.                                                 ***               Opposite Parties

CC 40 of  2012

Between:

1)  Prabhakar Solipuram

S/o. Late S.L.N. Reddy

2)  Mrs. Veena,

W/o. Prabhakar Solipuram

Both are  R/o. Villa No. A-8

Hill Ridge Villas,Gachibowli

Hyderabad.                                                          ***               Complainants

And

1.  Govt. of Andhra Pradesh

Rep. by its Principal Secretary

(Revenue), Secretariat Building

Secretariat, Hyderabad.

2.  A.P. Industrial Infrastructure Corporation Ltd.

(APIIC), Parishram Bhavan

6^th Floor, Fatehmaidan Road

Basheerbagh, Hyderabad

Rep. by its Managing Director

3.  M/s. Emaar Hills Township  Pvt. Ltd.

Office at :  Manikonda Village

Gachibowli, Hyderabad

Rep. by its  Authorised Signatory

G.V. Vijay Raghav,

S/o. G. Hara Gopal Krishna

Flat No. 313,

My Home Mount View Apartments

Navodaya Colony, Yellareddyguda

Hyderabad.

4. M/s. Emaar MGF Land Ltd.

Regd. Office at ECE House

28, Kasturiba Gandhi Marg

New Delhi-110 001.

Rep. by its Authorised Signatory

G.V. Vijay Raghav,

S/o. G. Hara Gopal Krishna

Flat No. 313,

My Home Mount View Apartments

Navodaya Colony, Yellareddyguda

Hyderabad.                                                 ***               Opposite Parties

Counsel for the complainant:                      M/s.  P. Raja Sripathi Rao

Counsel for the Ops:                                   Govt. Pleader (Op1)

                                                                   M/s. K. Srinivasa Rao (Op2)

                                                                   Ops 3 & 4 – Notice held sufficient

CORAM:

                              SMT. M. SHREESHA, PRESIDING MEMBER

&

                             SRI  S. BHUJANGA RAO, MEMBER

THURSDAY, THE NINETEENTH DAY OF SEPTEMBER TWO THOUSAND THIRTEEN

ORAL ORDER:  (Per Smt. M. Shreesha, Member)

***

1)         This is a complaint filed u/s 17(a)(i) of the Consumer Protection Act.

2)                 The brief facts as  stated in the complaint are that the complainants are purchasers of one of the flats  in  Excelsior Project  bearing No.  BH EXCL TB-F04-B2-04/B4.    The complainants submit that  the land in Sy. No.91 of  Gachibowli village was   the government  land known as Kancha Muktha which was transferred in bits and pieces to Op2  i.e., APIIC and Op1 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 dt. 6.11.2002 and Collaboration Agreement dt. 19.8.2005  and Supplementary  Agreement  were entered into between Op2 and EMAAR Projects  PJSC, Dubai.   Thereafter Op2 along  with EMAAR Projects  PJSC, Dubai  created  “SPV”   with equity holding of  both the parties.  The SPV is ‘EHTPL’  i.e.,  Op3 which is the parent company. 

          The collaboration agreement entered into between Op2 & Op3 designates Op3 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.   Op2 is the nodal agency of Op1  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  Op2 constitutes 26% shareholding in Op3 and executed a deed of conveyance dt. 28.12.2055  in favour of Op3 and later on Op3  sold 95%  of its 74% shareholding  in the ‘SVP’  to Op4.    Op3 entered into a development agreement dt.  3.12.2006 and thereafter cancelled this  agreement and entered into  Development  Agreement-cum- GPA dt.  25.7.2007  in which there is no time limit for Op4 to complete the project.   The complainant submits that clause 2.3 of the Development  Agreement-cum-GPA  is against the principles of natural justice. 

          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 Op2  was fully involved in the said project.   They paid  an amount of  Rs. 6,57,029/-  as advance for  purchase of   said flat.   Op4 issued a letter 17.10.2008 allotting  Flat No. BH EXCL TB-F04-B2-04/B4  admeasuring 2612.62 sft along with undivided interest  in the land for a sum of Rs. 10,968,632/- which works out to Rs. 4,800/-  per sft along with two car parks.  The total sale price including two  car parks is Rs. 13,140,576 out of which the complainants  paid  an amount of Rs. 98,45,270/-

          The complainants  submits that  CBI was investigating  into the deals of Op2 & Op4 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 Ops 3 & 4.  In addition to this  OS No. 655/2010 has been filed by Op2 against Op4 before the  IInd Addl. Chief Judge, City Civil Court, Hyderabad for permanent injunction, which  evidences that Op4 will not be able to proceed with the construction of the flat.   The complainants  submit that Ops 3 & 4 with a malafide intention has 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  Ops 3 & 4 behaved in a high handed manner and challenged the complainants  to approach any court of law. 

The complainants  having considered all the developments  demanded the Ops 1 to 4  to refund Rs. 98,45,270/-  and  got issued a legal notice on 23.12.2011 for which they  received a vague reply on  13.1.2012   stating that the construction could not be completed on account  of force majeure.    Vexed with the attitude of the  opposite parties the complainants approached this Commission seeking the following directions:

                     i.        To direct Ops 1 to 4  to jointly and severally to pay a sum of Rs.  98,45,270/-  together with interest @ 24% p.a., from the date of complaint.

                   ii.        To direct the Ops 1 to 4  for the acts of omission to pay  compensation of Rs. 1 lakh to the complainants.

                  iii.        Awarding costs of the litigation  of Rs. 50,000/-.

3)                 Op1   though not filed written version filed   the  Affidavit evidence of  Smt. A. Vani Prasad, Collector Ranga Reddy Dist.

4)                 Op2 filed written version stating that the it is wholly   owned  company of  the Govt. of A.P. with the main object of promoting industries in the State of A.P.  and as per the Collaboration  Agreement with  EMMAR  Properties PJSC, Dubai  incorporated  SVP M/s. EMMAR  Hills Township Pvt. Ltd. (Op3) for the development of the  township component  of Integrated Project.    Op2 submits that they filed  a company petition in  C.P. No. 108/2010 before the  Company Law Board against EMMAR Properties PJSC (Op3)  and  also  instituted a suit  against Op4 for rendition of accounts and for  permanent injunction in  OS No. 655/2010 in which the IInd Addl. Chief Judge, City Civil Court,  Hyderabad  was pleased to grant status quo orders in IA No. 3941/2010.    Op2 admits that they entered into an MOU on 6.11.2002 for the  development and also  Collaboration  Agreement and  a Supplementary  Agreement dt. 19.8.2033 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 Op2 is  having 26% equity  in Op3 company.

          Op2 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.    Op2 has taken  various legal steps to protect  its interest.  This Op is not a party to any agreement entered into by Ops 3 &4 including  the Development Agreement-cum- GPA dt.  25.7.2007  and therefore the said agreements are not binding on this  opposite party.    They deny that Op4 gave massive publicity that Op2 is also a partner of the project.    Op 2 further contends that no amounts were paid to them either by the complainant or by Ops 3 & 4 and therefore deny that they were part of any dubious deals with Ops 3 & 4 and further submits that there is no privity of contract between the complainants and this Op.    In fact  they have instituted a suit  in O.S. No. 655 of 2010 on the file of  IInd Addl. Chief Judge, City Civil Court, Hyderabad against Op4.   As they did not receive any complaints either from the complainants  or from Ops 3 &4 nor entered into any agreement with the complainant  and rather  Op2 itself initiated steps against Ops 3 & 4  to protect its interests and therefore the question of deficiency of service or refund of amount  does not arise. 

5)                 The notice sent  by this Commission to Ops 3 & 4 were returned with   an endorsement ‘Left’ . Since they are  sent to  last known  addresses, service of notices held sufficient by virtue of  Section 28 (A)(3)  of the Consumer Protection Act.  None appeared for Ops 3 & 4.   No representation. 

6)                 The complainants filed  their affidavit evidence and Exs. A1 to A29 are marked on their behalf.   Op1 filed  affidavit  of  Smt. Vani Prasad, Collector, Ranga Reddy Dist. by way of evidence and Exs. B8 to B15 are marked on their behalf and Op2  filed affidavit  of the General Manager by way of evidence and Exs. B1 to B7 are marked on their behalf.   

7)                The points that fall for our consideration are:

                     i.    Whether there is any deficiency of service on behalf of Ops?

                   ii.    whether the complainants are  entitled to the reliefs sought for  in the complaint?

8)                The facts not in dispute are that  Op1 is the State and Op2 is the APIIC  and EMAAR Projects  PJSC, Dubai  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 Projects  PJSC, Dubai.   It is also an admitted fact that Op2 and EMAAR Projects  PJSC, Dubai  Dubai created an ‘SPV’  with equity holding of both parties i.e., 26% of Op2 and 74% of Op3.  As per the Collaboration  Agreement  Op3  which is designated as developer  required to develop the  Integration  Project consisting of  Convention Centre Complex, Golf Course and also a township consisting of residential plots for villas, town houses and apartments.  

 9)               It is the complainants case that Op2 being the nodal agency of Op1 transferred the land admeasuring 258.36 acres in S.No. 210(P) and 211(P) of Manikonda  Village, Rajendranagar, Mandal, 91(P) of  Gachibowli Village, Serlingampally Mandal, Ranga Reddy Dist.  etc.   and executed a deed of conveyance  in favour of  Op3 which is evidenced under Ex. A1.  A2 is the Development  Agreement-Cum-GPA dt. 25.7.07 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.   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 of sale on 31.10.2008 with Op3 evidenced under Ex. A3  in which Op3 has assured  that physical possession of the flat would be handed over in 24 months from the date of 1^st payment which was made on 17.10.2008. Ex. A4  is the construction agreement dt. 31.10.2008.    Ex. A5 is the letter  addressed  by  ‘The Excelsior  Boulder Hills Golf and Country Club’  to the complainants intimating the payment schedule. 

10)               The complainants submit that they have paid an amount of Rs. 98,45,270  out of the sale consideration of Rs. 13,140,576/-  for the flat  No.  BH EXCL TB –F04-B2-04/B4 admeasuring 2612.16  sft  which  includes two Car  parkings.  Ex. A7 to A19  evidence the payments as follows:

11)              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 Op4 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 evidenced under Ex. B2

12)               Op1 filed  the affidavit of evidence  of Smt. Vani Prasad, Deputy Collector, R.R. Dist. and also filed  their written arguments.    It is the main contention of Op1 that  the construction agreement  dt. 31.10.2008  was entered into between Op3  and complainants  wherein Op3 is  shown as the Developer- cum-GPA  which  shall complete the construction within 36 months 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.   Op1 also denies for want of personal knowledge  about any MOU  dt. 6.11.2012 entered into between Ops2 & 3 for development and also Collaboration  Agreement and Supplementary  Agreement by Op2.  Op1 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.

13)              It is the main contention of Op2 that  there is no privity of contract between them  and the complainants and that all payments were made to Ops 3 & 4 and that they are not  a party to the Development Agreement-Cum-GPA entered into between the complainants and Ops 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 to suffer permanent injunction and the Hon’ble Court granted  Status Quo orders on 16.10.2010 in IA No. 3941/2010.    Op2 admits that they entered into an MOU on 6.11.2002 for the  development and also  Collaboration  Agreement and  a Supplementary  Agreement dt. 19.8.2033 with  M/s. EMMAR Projects PJSC, Dubai  and also admits that ‘SPV’  was created for the township component  of the Integrate Project.   

14)              It is also not in dispute that the complainant got issued a legal notice Ex. A20  dt. 23.12.2011 for which  they  received a reply  on 13.1.2012 evidenced under Ex. A21.  Ex.A28  & A29 are  copies   of  Hindi and English version of Certificate of Incorporation of Op3 company.    

15)              Notices  to Ops 3 & 4 were sent to the following addresses:

3.  M/s. Emaar Hills Township  Pvt. Ltd.

Office at :  Manikonda Village

Gachibowli, Hyderabad

Rep. by its  Authorised Signatory

G.V. Vijay Raghav, S/o. G. Hara Gopal Krishna

Flat No. 313, My Home Mount View Apartments

Navodaya Colony, Yellareddyguda

Hyderabad.

4. M/s. Emaar MGF Land Ltd.

Regd. Office at ECE House

28, Kasturiba Gandhi Marg

New Delhi-110 001.

We observe from  Ex. A5 which is the payment request letter dt. 26.3.2010 wherein  the address of Ops 4 is  listed as follows:

Emaar MGF land Ltd., Hyderabad,

Manikonda Village, Gachibowli

Hyderabad-500 032.

Regd. Office:  ECE  House,

28, Kasturiba Gandhi  Marg,

New Delhi-110 001.

As these notices were sent to the last known address and they were returned with an endorsement ‘Left’.  Since they were sent to last known addresses, service of notices  held sufficient by virtue of Section  28A(3)  of the Consumer Protection Act.

16)              It is also pertinent to note that the legal notice sent by the complainant evidenced under Ex. A20 to the same aforementioned addresses have been served as per the postal   acknowledgement and in fact Ex. A21 is the reply given by Op4. 

17)              The complainants have established the payment of Rs.  98,45,270 to Op4 vide Exs. A6 to A19.   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.     Much reliance can be placed on reply notice  Ex. A21 dt. 13.1.2012  which has been issued by Op4  in which they have relied on Article 7.1  of Article  7 and 28.2.2 and 28.2.4  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 28.2.2 of  Article 28 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 …….

Article 28.2.4 of  Article 28 of Construction Agreement:

During the  operation of  force majeure  events, the obligations of Owner and  Developer-cum-GPA hereunder  shall be suspended  until the  termination of such  force majeure  events.

18)              It is their main  contention 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 reply notice  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 practise on their behalf. 

19)               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.”

20)              With respect to liability of Op1 we are of the considered opinion that Principal Secretary representing  the State cannot be made  personally liable for the acts of Ops 2 to 4 as per the law laid down  in the Consumer Protection Act, 1986.      The complainants  have  not established by way of documentary evidence the deficiency of service if any on behalf of Op1 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.

Therefore, we do not find  Op1 personally liable  with respect to  deficiency of service  as laid down under the Consumer Protection Act.

21)              Now we address ourselves to the question of liability of Op2  who admittedly  owns 26% share in ‘SPV’  which is created by Ops 2 & 3 jointly. Ex. A4 construction agreement is dt.  31.10.2008 entered into between Ops 3 & 4 and the complainant  which reads as follows : 

“The purchaser, owner and the  Developer-cum-GPA  shall wherever  the context  so requires  or admits, be  collectively referred to as parties and severally as party.

1.     Andhra Pradesh Industrial  Infrastructure Corporation (APIIC)  as the nodal agency of Govt. of A.P.   issued a Govt. order  No.  359 dt. 4.9.2002 approving the proposal to set up an Integrated  Township Project  including  Golf Course  and multiuse land development  at Manikonda, Ranga Reddy Dist in favour of EMAAR Properties  PJSC (EMAAR PJSC)  and conveyed the free hold land  admeasuring  258.36  acres forming part of Survey Nos. 210(P)  and 211(P) of Manikonda Village, Rajendranagar Mandal,  91(P)  of Gachibowli Village, Serilingampally Mandal, Ranga Reddy Dist, 4 to 26(P), 27/4 to 35(P), 36 to 40, 42, 43 to 46P), 47, 48(P) and 49(P)  of Nananakramguda village, Serlingampally Mandal, Ranga Reddy Dist. more fully described  in Sch.-4 (hereinafter referred to as the ‘Project Land’) to and in favour of  M/s. EMAAR Hills Township Pvt. Ltd.  the owner  herein, a special purpose vehicle incorporated  by EMAAR PJSC and APIIC vide Conveyance  Deed dt. 28.12.2005 registered as D.No. 25060/07 in the Office of the Dist. Registrar, Ranga Reddy Dist.

2.    Subsequently,  the owner has executed a Development Agreement-Cum-GPA  dt. 25.7.2007 registered as D.No. 9648 of 2007 in Dist. Registrar’s Office, Ranga Reddy Dist. exclusively in favour of M/s. EMAAR MGF Land  Ltd., the  Developer-cum-GPA  herein, on a revenue  sharing basis to develop the  Project Land which shall without limitation include  Project Management, Design & Development, Architectural  Control, Construction, Landscaping, Operation &  Maintenance, Sales and Marketing etc., for the Integrated Township ‘Boulder Hills’ consisting of, without limitation, information technology, Special Economic Zones, Multi-storeyed Residential  Apartments, Semi-Independent Town-Houses,  Villas, Hotels, Retail Malls, Golf & Country Club, Parks, Play Grounds, Open Spaces, and other Public  Utilities  etc.  (herein after collectively referred to as the ‘Project’)

The aforementioned points 1 & 2 clearly state that  the development of  the project is on revenue sharing basis with Op2,  and that the owner has executed   Development-Cum-GPA on 25.7.2007 and therefore liability of  Op2 cannot be undermined.

 In plaint copy in O.S. No. 655/2010, Op2  stated as follows :

(7)      As required by the Collaboration Agreement the said Emaar Properties incorporated M/s. Emaar Hills Township Pvt. Ltd. (hereinafter referred to as “ EHTPL”) under the laws of India as a joint Venture Company for the development of the township component f the integrated project Emmar Properties (thorough Emaar Holdings its 100% subsidiary) held 74% equity therein and the remaining 26% shares were held buy Plaintiff. It is pertinent to mention here that EHTPL is a Special Purpose Vehicle (“SPV”). created pursuant to agreement between  Plaintiff and Emaar Properties. The government of Andhra Pradesh through the Plaintiff, was obliged to contribute to the equity by transferring its own land to the said Joint Venture Company for the purpose of developing the township component of the integrated project, Land being the most material contribution of the entire assets as without the land the project could not take off, receiving 26% of the equity as its share, the other 74% being held by Emaar Holdings.

(9)      As submitted above, by an order G.O. No.359 dated 4.9.2002, the Plaintiff was appointed as Nodal Agency, to develop and implement the integrated Project which facility was to cater to the potential tourist traffic arriving for Convention and Congresses likely to be held in Hyderabad. The Integrated Project was given the status of Tourism Project and related eligible incentives were also conferred thereon.  The details of the Project, extent of land and location besides other salient features, in line with which, Plaintiff and Emaar Properties were to enter into a Memorandum of Understanding (hereinafter referred to as “MOU”) for the purpose of execution of the Integrated Project, were also set out in the annexure thereto. It is submitted that the mandate of the Plaintiff as set out in the said G.O. defined the powers and terms of grant of land thereby, Copies of the G.O. are enclosed and marked Annexure 3. The Plaintiff always has to act only through its authorized signatory as a corporate entity. The Government order was modified later in some minor details but the basic character of the project and the role of the various parties remained the same.

(10)    That the Government of Andhra Pradesh issued G.O.M No.14 dated 11.1.2005, (Annexure 4) and some modifications were required to be carried out to the Collaboration Agreement and accordingly a supplementary agreement dated 19.4.2005 was executed between plaintiff and  Emaar Properties which is filed  herewith filed herewith ass Annexure 5.

          The legal effects of all the above documents executed between the parties in so far as the present suit is concerned are:

(a)      The Plaintiff ente4red into a Collaboration agreement with Emaar Properties for the implementation and grounding of the project as contemplated by the Plaintiff, in the property belonging to the plaintiff and granted to the said entity for the purpose.

(b)      The said Integrated Project is to be developed only by the Joint Venture Companies (SPVs) formed by Plaintiff, APIIC along Emaar Properties PSJC for that purpose.

(c)      Emaar Hills Township Pvt. Ltd., being the SPV Company promoted by the Developer (Emaar Properties) for the development of the land conveyed into the Integrated Township Project.

The aforementioned clause 10(b)  clearly establishes that the Integrated Project is to be developed  by the  ‘SPV’ formed  by the plaintiff i.e., Op2 along with  Emmar Properties PSJC.    It is clear that the property in question  also belong to  Op2 as it was allotted 26% of equity  in the ‘SPV’.    Therefore Op2  at this juncture cannot  shirk from its liability.    The duty of Op2 as to take  appropriate steps to protect the interests of  the Govt. of Andhra Pradesh and also interests of the public, and see that the property was not used for any other purpose  than what was  originally contemplated  in the Collaboration Agreement.   For any disputes between Op2 and Op3 & 4, the complainant cannot be made to suffer.   

Keeping in view  the aforementioned  reasons, we are of the considered opinion that  Ops 2 to 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/-. 

22)              In the result  this complaint is allowed in part directing  the Ops 2 to 4 jointly and severally to pay  Rs. 98,45,270/- 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 17.2.2012  till the date of  payment.   We also award compensation of Rs. 25,000/-  and costs of Rs. 10,000/-.  The complaint against Op1 is dismissed but without costs. 

CC 40  of 2012

23)              Consequently  for the aforementioned reasons and  in the light of payments  made by the complainants   vide Ex. A5 to A9,  CC No. 40 of 2012 is also allowed directing the  Ops 2 to 4 jointly and severally to pay Rs. 95,64,225/-  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 7.4.2012 till the date of payment.  We also award compensation of Rs. 25,000/-  and costs of Rs. 10,000/-.   The complaint against  Op1 is dismissed but without costs. 

1)       _______________________________

PRESIDING MEMBER    

2)           ________________________________

MEMBER    

CC 30  of 2012

APPENDIX OF EVIDENCE

WITNESSES EXAMINED FOR

COMPLAINANTS                                                                            OPPOSITE PARTIES

 None                                                                                      None

DOCUMENTS MARKED FOR  COMPLAINANTS:

Ex.A1: Deed of conveyance dt. 28.12.2005

Ex.A2 :  Development Agreement cum GPA dt. 25.07.2007

Ex. A3: Agreement dt. 31.10.2008 between complainant  and Ops 3 & 4.              

Ex.A4: Construction agreement dt. 31.10.2008 between complainant and Ops 3 & 4.

Ex.A5: Payment receipt dt. 26.03.2010 issued for Rs. 85,95,270/- by Op4  and amount

            outstanding statement.

Ex.A6 : Payment receipt dt. 28.05.2010  and amount outstanding statement.

Ex.A7 :    Receipt issued by Op4  as to receipt of Cheque dt. 21.6.2010 for Rs. 45,000/-

Ex. A8:   Receipt issued by Op4  as to receipt of Cheque dt. 21.6.2010 for Rs. 45,000/-

Ex. A9;   Receipt issued by Op4  as to receipt of Cheque dt. 21.6.2010 for Rs. 20,000/-

Ex. A10;  Receipt issued by Op4  as to receipt of Cheque dt.19.6.2010 for Rs. 30,000/-

Ex. A11:  Receipt issued by Op4  as to receipt of Cheque dt.19.6.2010 for Rs. 45,000/-

Ex. A12; Receipt issued by Op4  as to receipt of Cheque dt.17.6.2010 for Rs. 30,000/-

Ex. A13; Receipt issued by Op4  as to receipt of Cheque dt.16.6.2010 for Rs. 45,000/-

Ex. A14; Receipt issued by Op4  as to receipt of Cheque dt.16.6.2010 for Rs. 40,000/-

Ex. A15: Receipt issued by Op4  as to receipt of Cheque dt.14.12.2010 for Rs. 2 lakhs

Ex.A16:  copy of cheque  dt.  14.12.2010 for Rs. 2 lakhs  in favour of  OP4.

Ex. A17: Copy of cheque dt. 15.12.2010 for Rs. 2,50,000/- in favour of Op4.

Ex. A18: Copy of cheque dt. 11.12.2010 for Rs. 3,50,000/- in favour of Op4.

Ex. A19; Copy of cheque dt. 11.12.2010 for Rs. 1,50,000/- in favour of Op4.

Ex.A20:  Legal Notice dt. 23.12.2011 got issued by complainant to Ops

Ex.A21 : Reply notice dt. 13.01.2012 issued by Op4 to A20 notice.

Ex.A22 to A27 :  Postal Receipts & Acknowledgements.

Ex.A28 & 29 : Certificate of incorporation of Ops 3 & 4.

DOCUMENTS MARKED FOR Ops:

Ex.B1: Photostat copy of authorization dt. 2.3.2006 issued  by V.C & M.T of APIIC Ltd

to its officials.

Ex.B2: Photostat copy of plaint in OS No. 655/2010 filed by APIIC Ltd., against

            EMMAR MGF Land Ltd.,

Ex.B3: Photostat copy of statusquo orders granted by  IInd Addl. Chief Judge

            in IA 3941/2010 in OS No. 655/2010 dt. 15.12.2010

Ex.B4:Photosrat copy of CP 108/2010 filed by APIIC Ltd., against EHTP Ltd.,

and  others   the before Company Law Board at Chennai.

Ex.B5 : Photostat copy of GOMS No. 359 dt. 4.9.2012 issued by the Govt. of AP 

              in favour of APIIC Ltd.,

Ex.B6 : Photostat copy of reply notice dt. 9.6.2012 got issued by Op2 to complainant.

Ex.B7:  Postal Acknowledgment

Ex.B8: Govt. Memo No. 61939/ASN. (2)/98-8 dt. 13.8.2001

Ex.B9: Panchnama dt. 24.8.2001

Ex.B10: Locations Sketch dt. 24.8.2001

Ex.B11: Photostat copy of GOMS No. 1033  dt. 9.10.2003

Ex.B12: Panchnama

Ex.B13: Location Plan

Ex.B14: Letter  No. 612/1990 dt. 15.10.2003 addressed by APIIC Ltd.

  to  Dy. Collector &  MRO, Serlingampally,

Ex.B15: Photostat copy of panchnama dt. 22.10.2003

CC 40  of 2012

APPENDIX OF EVIDENCE

WITNESSES EXAMINED FOR

COMPLAINANTS                                                                            OPPOSITE PARTIES

 None                                                                                      None

DOCUMENTS MARKED FOR  COMPLAINANTS:

Ex.A1: Deed of conveyance dt. 28.12.2005

Ex.A2 :  Development Agreement cum GPA dt. 25.07.2007

Ex. A3: Agreement dt. 31.10.2008 between complainant & Ops 3 & 4.                  

Ex.A4: Photostat copy of intimation letter dt. 27.03.2008 issued by Op4 to complainant

Ex.A5 to A8: Photostat copy of cheques  issued by complainant to Ops 3 & 4 for various

amounts.

Ex.A9 : Photostat copy of  receipt dt. 09.01.2009 for Rs. 20,90,926/-

Ex.A10: Photostat copy of letter of comfort dt. 7.2.2009 issued by  Op4 to complainant

Ex.A11: Legal notice  got issued by complainant to Ops dt. 23.12.2011

Ex.A12:  Postal Acknowledgments

Ex.A13 : Reply notice dt. 13.01.2012 issued by Op4 to  Ex. A11 notice.

Ex.A14 to 16 :  Certificate of incorporation relating Ops 3  & 4 companies.

DOCUMENTS MARKED  FOR  Ops:

Ex.B1: Photostat copy of authorization dt. 2.3.2006 issued  by V.C & M.T of APIIC Ltd

to its officials.

Ex.B2: Photostat copy of plaint in OS No. 655/2010 filed by APIIC Ltd., against

            EMMAR MGF Land Ltd.,

Ex.B3: Photostat copy of statusquo orders granted by  IInd Addl. Chief Judge

            in IA 3941/2010 in OS No. 655/2010 dt. 15.12.2010

Ex.B4:Photosrat copy of CP 108/2010 filed by APIIC Ltd., against EHTP Ltd.,

and  others   the before Company Law Board at Chennai.

Ex.B5 : Photostat copy of GOMS No. 359 dt. 4.9.2012 issued by the Govt. of AP 

              in favour of APIIC Ltd.,

Ex.B6 : Photostat copy of reply notice dt. 9.6.2012 got issued by Op2 to complainant.

Ex.B7:  Postal Acknowledgment

1)       _______________________________

PRESIDING MEMBER    

3)           ________________________________

MEMBER    

*pnr

UP LOAD – O.K.