STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 89 OF 2014
Between :
V.Arun Kumar Patro S/o Mr.V.Binodo
Bihari Patro, aged about 46 years,
R/o 102,Laxmi Nivas, H.No.1-11-110/98/1,
Shyamlal Building, Begumpet,
Hyderabad – 500 016.
Complainant
And
1) M/s Aliens Developers (P) Ltd,
Rep. by its Managing Director & Joint Managing Director
Mr.Hari Challa S/o Mr.CVR Chowdhary &
Mr.C.Venkat Prasanna Challa S/o CVR Chowdhary,
Respectively, O/o Flat No.910, Teja Block,
My Home Navadweepa Apartments,
Madhapur, Near Hitech City, Hyderabad-500 081.
2) Hari Challa S/o CVR Chowdhary,
Managing Director, M/s Aliens Developers (P) Ltd,
O/o Flat No.910, Teja Block, My Home
Navadweepa Apartments, Madhapur,
Near Hitech City, Hyderabad – 500 081.
3) C.Venkat Prasanna Challa S/o CVR Chowdhary
Joint Managing Director, M/s Aliens Developers (P) Ltd.,
O/o Flat No.910, Teja Block, My Home
Navadweepa Apartments, Madhapur,
Near Hitech City, Hyderabad – 500 081.
(Present addresses of parties 1 to 3 are at
Aliens Space Station, Tellapur Post,
Ramachandrapuram Mandal, Medak district,
Hyderabad (A.P) PIN – 502 032).
Opposite parties
Counsel for the Complainants : M/s V.Appa Rao & B.Srinivas
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Friday, the Twenty Nineth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainants complaining deficiency in service against the Opposite parties and claimed to handover the possession of the flat forthwith on completion in all aspects including completion of common areas besides obtaining of necessary statutory permissions thereof including Occupancy Certificate from the concerned authorities; to pay Rs.10,00,000/- as compensation for causing mental agony, suffering and escalation of construction cost; to pay compensation @ Rs.3/- per square feet from 6.9.2013 till handing over of the flat; to pay legal charges of Rs.50,000/- and award any other reliefs.
2. Having regard to the representation and assurances made by the Opposite parties, the Complainant agreed to purchase Flat No.1081 in Station-13 on the 10th floor, having a super built-up area of 1792 sqft. in the complex Space Station-1 together with 38.53 square yards of undivided share of land and one car parking space, for a total sale consideration of Rs.52,82,478/- in pursuance of Agreement of Sale dated 06.03.2010 and paid a sum of Rs.47,29,538/- and agreed to pay the balance amount of Rs.5,52,940/- at the time of handing over of the flat.
3. In consideration of receipt of substantial amount, the Opposite parties executed the sale deed dated 24.04.2012 registered as document No.5430/2012 in respect of the subject flat in favour of the Complainant. The Complainant also entered into Construction Agreement with the Opposite parties on 24.04.2012, by virtue of which, the Opposite parties agreed to handover the flat on or before 06.09.2013 with a grace period of six months, failing which they agreed to pay a sum of Rs.3/- per square feet of built up area from the due date of handing over of the possession till the flat is handed over.
4. Complainant noticed that the flat under sale has been completed in some aspects and have to complete in some other aspects. On requests of the Complainant to complete the same, the Opposite parties did not respond. As such, got issued a notice on 03.03.2014 but there has been no response. The Complainant paid the sale consideration amount by availing home loan of Rs.38,00,000/- from State Bank of India, Abids branch, Hyderabad on 25.03.2010 and paying the monthly instalments. Though Complainant performed his part of obligation, the Opposite parties failed to perform their part of obligation and thus committed deficiency in service and negligence. Hence, the complaint with the above reliefs, as stated, supra.
5. The Opposite parties resisted the claim on the premise that the complainant filed the complaint to gain out of their breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. The complainant suppressed some facts and camouflaged some facts in order to make out a case. That the complaint is filed with all concocted allegations giving colour as if there is a consumer dispute.
6. The Opposite parties submitted that originally the land in Sy.No.384 was an agricultural land and they filed application for conversion of the same into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006. Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the Opposite parties have filed application for change of use of the land as commercial use zone.
7. It is averred by the Opposite parties that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.384 as residential use zone. The project could not be commenced in view of proposed road under Master plan, until realignment of the proposed road without affecting the land in Sy.No.384 is made. Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008. Opposite parties have obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. After following due procedure and process, the Opposite parties obtained NoC from Airports Authority on 10.07.2009.
8. It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission upto 29 floors is awaited. In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996. That they have taken necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the Opposite parties could not complete the project within the time frame and they informed the complainant that the project required sanction from statutory authorities and mentioned the same as ‘force majeure’ in the agreement of sale. It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.
9. It is stated that for the delay, the Opposite parties have agreed to pay Rs.3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and they agreed to adjust the amount towards dues payable by the complainants. The Opposite parties are committed to complete the venture at the earliest, part of the towers/flats are already completed and delivered to the customers. The claim for handing over of the flat without paying the balance sale consideration is not justified under law. Therefore, the Complainant is not entitled for any relief and not entitled for any compensation.
10. The Complainant cannot seek a direction for delivery of the flat in the above circumstances and further claiming compensation is also not justified under law. Hence prayed for dismissal of the complaint.
11. On behalf of the Complainant, he himself filed his evidence affidavit and the documents, Exs.A1 to A21. On behalf of the Opposite parties, the Managing Director of the Opposite parties Company has filed the affidavit and the documents, Ex.B1 to B18.
12. The counsel for the complainant and the Opposite parties have advanced their arguments reiterating the contents of the complaint and the written version while the counsel for Complainant filed written arguments. Heard both.
13. The points for consideration are :
i) Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?
ii) Whether the complaint is not a ‘consumer dispute’?
iii) Whether there is any deficiency in service on the part of the Opposite parties?
iv) To what relief ?
14. POINT NO.1 : The Complainant entered into “Agreement of Sale” on 06.03.2010 with the Opposite parties for purchase of flat bearing No.1081 in Station-13 on 10th floor admeasuring 1792 sq.ft. of super built-up area including common areas along with one car parking space together with 38.53 square yards of undivided share of land and thereafter the Complainant paid the consideration amount of Rs.47,29,538/- and in pursuance of the same, the Opposite parties executed a sale deed dated 24.04.2012 registered as document No.5430/2012 in favour of the Complainant in respect of the subject flat. The Complainant agreed to pay the balance sale consideration of Rs.5,52,940/- at the time of handing over of the flat. The agreement of sale provides reference to arbitration. The learned counsel for the opposite parties have contended that in view of the arbitration clause in the agreement, the Complainant cannot maintain the complaint before this Commission. Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) That all disputes/issues arising out of and/or concerning this transaction will be subject to the exclusive jurisdiction of the Courts at Ranga Reddy district, A.P.
c) That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
d) However, disputes or differences arising out of and or in connection with and or in relation to this transaction/agreement, which cannot be amicably settled, shall be finally decided and resolved by an Arbitrator appointed by Developer in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Arbitration as aforesaid shall be a domestic arbitration under the applicable Laws.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
15. In terms of the agreement of sale, the dispute has to be decided by means of arbitration. However, remedy provided under the provisions of Consumer Protection Act is an additional remedy and in the light of law laid 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.”
Admittedly, in the present case, the Opposite parties have executed sale deed in favour of the Complainant in respect of the subject flat and only handing over of the possession is remained. It is agreed by the Complainant to pay the balance sale consideration at the time of handing over of the possession. For the above reasons, the Point No.1 is answered in favour of the Complainant and against the Opposite parties.
16. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the Opposite parties ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreements and hence pleading ‘force majeure’ does not arise. He relied on Section 72 of Indian Contract Act supported by the Judgment of Hon’ble Apex Court in Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) and submitted that the Apex Court opined that grant of interest @ 18% p.a. by way of damages and compensation is justified. She further relied on decision in Ghaziabad Development Authority Vs.Balbir Singh reported in II (2004) CPJ 12 wherein it is stated “in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest @ 18%.” This Commission perused the said Judgments. In Ghaziabad Development Authority versus Balbir Singh, the Hon’ble Supreme Court further observed that the interest shall be payable from the dates of deposit of the amounts till the date of repayment.
17. On the other hand, the counsel for the Opposite parties in the arguments submitted that the Opposite party No.1 could not complete the project within the time frame as it could not get the required clearance from statutory bodies and they had taken shelter under clause No.XIV ‘force majeure’. The Complainant, therefore, seek possession of the completed apartment, rent incurred, compensation and costs.
18. POINTS No.2 & 3 : The Opposite parties 1 to 3 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they agreed to deliver the residential flat to the Complainant in accordance with the terms and conditions agreed upon and consented thereof and as per specifications given thereto.
19. In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as this complaint is concerned. The opposite parties have attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The opposite parties would contend that the cause for delay is beyond their control which is force majeure. The Opposite parties stated the reasons for the delay in completion of the construction of the residential complex as under:
“The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project. The said fact was informed to the complainant and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”
20. The Opposite parties agreed to complete construction of the flat and deliver its possession to the complainant on or before 06.09.2013 with a grace period of six months. The complainant paid the sale consideration amount of Rs.47,29,538/- and agreed to pay the balance amount of Rs.5,52,940/- at the time of handing over of the possession. In pursuance of the same, the Opposite parties executed the sale deed dated 24.04.2012 in favour of the Complainant. Complainant paid the substantial amount of the flat with the hope that the Opposite parties would complete the construction and deliver the flat wherein he could reside with his satisfaction having been fulfilled and he could avoid payment of rent as well. However, the Opposite parties have not kept their promise and for the delayed period they expressed their readiness to pay the amount in terms of the agreement.
21. The opposite parties have promised to complete construction of the flat and hand over its possession to the complainant by 06.09.2013 including the grace period of six months as agreed and on their failure to perform their part of the contract; the opposite parties have proposed to pay rents but failed to pay the same. However, there is no communication from the side of the opposite parties in this regard and the opposite parties have not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the complainant. The difficulty that the complainant faced due to the delay caused in completing the construction of the flat on the part of the Opposite parties has grown many fold as the complainant has to pay EMIs irrespective of the completion of the flat and he has to reside in a house paying rent which according to him is Rs.10,000/- per month. It is natural for a person to suffer mental tension by being deprived of residing in the flat and on being obligated to pay EMIs to the bank.
22. The complainant claimed compensation @ Rs.3/- per square feet from 06.09.2013 till handing over of the flat and a sum of Rs.10,00,000/- as compensation for causing mental agony, suffering and escalation of construction cost. By virtue of Clause-VIII (f) of the Agreement, the Opposite parties are liable to pay Rs.3/- per sft. From 06.09.2013. Taking into consideration of the hardship the complainant undergone and the amount of Rs.3/- per sft from 01.12.2012 payable by the opposite parties, this Commission is inclined to award a sum of Rs.10,000/- per month towards the rent from 01.10.2013 and a sum of Rs.50,000/- towards compensation. The Opposite parties are liable to pay the rent of Rs.10,000/- per month from 01.10.2013 till possession of the flat is delivered and Occupancy Certificate is handed over to him. As such, the complaint deserves to be allowed.
23. In the result, the complaint is allowed directing the Opposite parties 1 to 3 to complete the construction of the flat bearing No.1081, station-13 on 10th floor of the complex by name Space Station-1, situate at Tellapur village, Ramachandrapuram mandal, Medak district and deliver its possession to the Complainant and handover copy of Occupancy Certificate to the complainant and pay from 01.10.2013 an amount of Rs.10,000/- towards rent to the complainant till possession of flat is delivered to the complainant. The Complainant shall pay the balance sale consideration of Rs.5,52,940/- to the Opposite parties. Further, the Opposite parties shall pay to the complainant a sum of Rs.50,000/- towards compensation and an amount of Rs.6,000/- towards costs. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Asif Masood Affidavit evidence of Hari
as PW1. Challa as RW1.
EXHIBITS MARKED
For Complainant :
Ex.A1 is the copy of Agreement of sale dated 06.03.2010 entered into by the Opposite parties with the Complainant.
Ex.A2 is the copy of sale deed dated 24.04.2012 registered as document No.5430/2012 executed by the Opposite Parties in favour of Complainant, in respect of the subject flat.
Ex.A3 is the copy of Construction Agreement, dated 24.04.2012 executed by the parties.
Ex.A4 is the copy of the term loan (home loan) sanction letter dated 25.03.2010.
Ex.A5 is the copy of statement of account of the Complainant for the period from 23.03.2010 to 31.12.2012.
Ex.A6 is copy of receipt bearing No.06879 dated 21.01.2011 for Rs.5,00,748/-.
Ex.A7 is copy of receipt bearing No.04809, dated 23.02.2010 for Rs.2,50,000/-.
Ex.A8 is copy of receipt bearing No.04954, dated 05.03.2010 for Rs.4,00,000/-.
Ex.A9 is copy of receipt bearing No.05425, dated 25.03.2010 for Rs.17,52,617/-.
Ex.A10 is copy of receipt bearing No.07103, dated 07.02.2011 for Rs.1,50,000/-.
Ex.A11 is copy of receipt bearing No.06546, dated 08.02.2011 for Rs.1,00,000/-.
Ex.A12 is copy of receipt bearing No.07326, dated 11.03.2011 for Rs.1,00,000/-.
Ex.A13 is copy of receipt bearing No.06931, dated 23.03.2011 for Rs.3,50,673/-.
Ex.A14 is copy of receipt bearing No.07856, dated 10.06.2011 for Rs.2,00,000/-.
Ex.A15 is copy of receipt bearing No.07768, dated 11.06.2011 for Rs.50,000/-.
Ex.A16 is copy of receipt bearing No.09992, dated 20.04.2012 for Rs.3,48,051/-.
Ex.A17 is copy of receipt bearing No.11478, dated 28.12.2012 for Rs.9,00,000/-.
Ex.A18 is office copy of legal notice, dated 03.03.2014 got issued by the Complainant to the Opposite parties.
Ex.A19 is the original postal receipts (2) Nos, dated 03.03.2014; original postal acknowledgement and original postal returned cover.
Ex.A20 is the copy of Certificate of Incorporation, dated 21.03.2006 pertain to the OP No.1 firm.
Ex.A21 is the copy of Form No.32.
For Opposite parties :
Ex.B1 Copy of Lr.No.252931/4/2007 addressed by Principal Secretary to Government to Vice, Chairman, HUDA, Hyderabad for change of land use.
Ex.B2 Copy of G.O.Ms.No.288, Municipal Administration & Urban Development (I1) Department, dated 03.04.2008 (HMDA revised master plan).
Ex.B3 Copy of (report) Lr.No.D1/3601/2007, dated 05.05.2007 addressed by District Collector, Medak to Vice-Chairman & Managing Director, HUDA along with map.
Ex.B4 Copy of minutes of meeting of multi-storeyed building committee for HUDA area held on 29.02.08 at 3-00 pm in the chambers of Vice-Chairman, HUDA (4 basements + Ground + 13 Upper Floors).
Ex.B5 Copy of Lr.No.1927/Misc/Plg/H/2008, dated 31.03.2008 addressed by HUDA to the Principal Secretary to Government for 30 meters road alignment in Sy.No.384 & 385.
Ex.B6 Copy of Lr.No.621/P4/Plg/HUDA/2008, dated 11.04.2008 addressed by HUDA to OP No.1 approving 4 basements + Ground + 13 upper floors).
Ex.B7 Copy of Lr.No.621/Pr/Plg/HUDA/ 2008, dated 11.04.2008 addressed by HUDA to Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments.
Ex.B8 Copy of minutes of meeting of multi-storeyed building committee for MSB in HUDA area held on 05.06.2008 at the chambers of Vice-Chairman, HUDA (4 basements + ground + 29 upper floors).
Ex.B9 Copy of Lr.No.621/P4/Plg/HMDA/2008, dated 14.10.2009 addressed by HMDA to the Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments (4 basements + ground + 20 upper floors).
Ex.B10 Copy of Lr.No.SEIAA/AP/MDK-14/08, dated 12.08.2008 addressed by State Level Enviornment Impact Assessment Authority, Hyderabad to according environmental clearances to Opposite parties.
Ex.B11 Copy of Lr.No.19038/I1/2009, dated 24.11.2009 addressed by Principal Secretary to Government to Ops (clearance of GOMs.No.111).
Ex.B12 Copy of letter addressed by Opposite parties, dated 08.10.2010 to the HMDA, Hyd (revised application and plans for building permission consisting of 3 basement + ground + 29 upper floors).
Ex.B13 Copy of Lr.No.10186/MP1/Plg/HMDA dated 28.03.2011 addressed by HMDA to the Ops to pay publication charges for change of land use from residential to commercial.
Ex.B14 Copy of cash acknowledgement receipt bearing No.825631 for Rs.1,000/- in File No.2011-2-431 for new water connection.
Ex.B15 Copy of Certificate of best compliments issued by Indian Green Building Council in favour of the Opposite parties company.
Ex.B16 Copy of certificate of best compliments awarded by Cityscape in favour of the Opposite parties company.
Ex.B17 Copy of letter addressed by the Opposite parties to the purchaser by name S.Pragathi intimating to take possession of the flat, dated 02.11.2015.
Ex.B18 Copies of photographs of flat occupants occupying the completed flats.
PRESIDENT
29.04.2016
