STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 43 OF 2014
Between :
Manikonda Nagendra Babu
S/o M.K.S.V.Prasada Rao,
Aged about 38 years, Indian,
Occ: Software Engineer,
R/o H.No.398, BHEL-MIG,
RC Puram, BHEL, Medak district.
Hyderabad – 502 032.
Complainant
And
1) M/s Aliens Developers (P) Ltd.,
Aliens Space Station,
Corporate Office: Gachibowli,
Tellapur, Hyderabad – 500 032,
Rep. by its Managing Director
Mr.Hari Challa.
2) M/s State Bank of India,
8-2-629/K, Shivalik Plaza,
Road No.1, Banjara Hills,
Hyderabad – 500 034,
Rep. by its Branch Manager.
Opposite parties
Counsel for the Complainants : M/s V.Gouri Sankara Rao
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar-R1
Sri Ch.Govardhan Rao-R2.
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 Complainant complaining deficiency in service against the Opposite party No.1 claiming refund of Rs.25,75,848/- along with accumulated interest of Rs.22,62,584/- @ 15% p.a. from the respective dates of payment till 10.02.2014 and thereafter to continue to pay at the same rate till date of realization; to pay Rs.5,00,000/- as compensation for hardship and mental agony; to pay costs of Rs.1,00,000/-.
2. The Opposite party No.1 is engaged in housing construction activity and made vide publicity through colourful brochure informing the general public that they were constructing a modern residential complex under the name and style “ALIENS SPACE STATION”, Hyderabad’s first platinum rated green township situated at Tellapur village, Ramachandrapuram mandal, Medak district over the land admeasuring 82,976.800 sq. yards. The OP No.1 got approval from HUDA vide letter No.621/P4/Plg/HUDA/2008, dt.11.04.2008 for construction of multi-storied building consisting of residential apartments (4 basements + ground + 13 upper floors).
3. The OP No.1 offered to provide the utilities such as water, power and gas, lift, call button in each apartment, EV ready cark park, gas leak & smoke detect system; fire alarm, wet sprinklers, rescue areas, etc., Induced by the various representations made by OP No.1, the Complainant intended to purchase flat No.659 admeasuring 1500 sft., along with 2 car parking slots and undivided share of land in “Space Station-10” situated at Tellapur, Hyderabad, for a total consideration of Rs.41,55,025/- by paying an amount of Rs.1,00,000/- and the OP No.1 executed agreement for reservation of flat. Thereafter, the Complainant paid further amounts on various dates, amounting to Rs.25,75,848/-, but the Ops failed to mention the amount of Rs.1,98,603/- towards the cheque dated 10.01.2007.
4. The Complainant gave GPA to his mother M.Sai Lakshmi. Taking advantage of her innocence, OP No.1 got home loan from OP No.2 bank by executing necessary documents with her signatures sanctioning the loan to the tune of Rs.30,00,000/- fixing the EMI at Rs.34,676/-. The OP No.2 bank released the amount of Rs.14,63,139/-. On 05.02.2014, OP No.2 furnished the copies of Agreement of sale and tripartite agreement dated 03.01.2009. Surprisingly, the OP No.1 failed to commence the construction work. As per the agreement for reservation of flat, the OP No.1 shall handover the possession of the flat within three years from the date of booking with grace period of 6 months, i.e., on or before 17.04.2010. Presently, the OP No.1 abandoned the project at sub-cellar level. Taking the present scenario at the site, there is no possibility of completing Station-10 project even by 2017. The OP No.1 paid compensation of Rs.2,62,000/- on 18.10.2013 to enable the Complainant to close the loan account and the Complainant almost discharged the loan amount leaving a balance of Rs.2,66,576/- as on 08.02.2014. All these omissions and commissions on the part of the OP No.1 amounts to deficiency in service and negligence. As such, addressed e-mail on 25.01.2014 informing the OP No.1 to initiate appropriate legal proceedings.
5. There is also negligence on the part of the OP No.2 bank in releasing Rs.14,63,139/- at a time without verifying the progress in the construction of the flat. Hence, the complaint praying to allow the complaint with the reliefs as prayed for, supra.
6. The Opposite party No.1 resisted the claim on the premise that the complainant filed the complaint to gain out of his 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.
7. The OP No.1 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.
8. It is averred by OP No.1 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. OP No.1 had 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 OP No.1 obtained NoC from Airports Authority on 10.07.2009.
9. 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 it had taken all necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the OP No.1 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.
10. It is stated that for the delay, the OP No.1 had 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 complainant. The complainant filed the complaint with ulterior motive to defame the OP No.1. The Complainant shall file relevant receipts and documents to prove the payments.
11. The Complainant is not entitled for any compensation and his claim is illegal. The complainant is not entitled for refund of amount and interest thereon and any compensation and costs. There is no deficiency of service on the part of the OP No.1. Hence prayed for dismissal of the complaint.
12. The Opposite party No.2 resisted the claim contending that complaint against it is false, frivolous, baseless and coercive in nature. The complaint does not raise any consumer dispute as defined under the Consumer Protection Act and hence liable to be dismissed. The Complainant has not disclosed any cause of action to proceed against the OP No.2 and there is no deficiency in service or negligence on the part of it. It denied the other allegations made against it as false and baseless. It admitted to have releasing of loan amount in favour of the Complainant fixing the loan instalment @ Rs.34,676/- and the repayment commences 2 months after completion of construction or after eighteen months from disbursement of first instalment, whichever is earlier. In pursuance of the Tripartite Agreement, the loan amount was released in favour of the OP No.1. The GPA holder of complainant is well educated and having capacity to enter into any contract on behalf of the Complainant. Hence, prayed to reject/dismiss the complaint with exemplary costs as the same is vexatious litigation.
13. On behalf of the Complainant, he got his evidence affidavit and the documents, Exs.A1 to A22. On behalf of the Opposite parties, the Managing Director of the OP No.1 Company by name Hari Challa has filed the affidavit and the documents, Ex.B1 to B18 and the Chief Manager of OP No.2 by name A.Ravi Kumar filed his affidavit and the documents Ex.B19 to B25.
14. The counsel for the complainant and the Opposite parties have advanced their arguments reiterating the contents of the complaint and the written version. Heard both.
15. 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 ?
16. POINT NO.1 : The Complainant entered into “Agreement for Reservation” of flat on 18.06.2006 with the OP No.1 for purchase of flat bearing No.659 in Station-10 on 6th under Space Station-1 and thereafter the Complainant paid the part consideration amount as per the pricing pattern of the flat issued by the Ops. Thereafter, the OP No.1 entered into an Agreement of Sale on 12.07.2008 with the Complainant. Subsequently, the Complainant appears to have approached the OP No.2 for sanction of loan, which in turn entered into a Tripartite Agreement on 03.01.2009 and basing on the same, sanctioned the loan to the Complainant upon certain terms and conditions enumerated therein. Admittedly, the agreement of sale provides for reference to arbitration. The learned counsel for the OP No.1 has 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.
17. 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 complainant 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.”
For the above reasons, the Point No.1 is answered in favour of the Complainant and against the OP No.1.
18. Though the Complainant made averments in the complaint against OP No.2, no relief is sought against the OP No.2 bank, as such, this Commission feels that there is no need to into those averments. Be that as it may, the Complainant admitted to have repaid most of the loan amount outstanding, to the OP No.2 bank leaving a balance of Rs.2,66,576/- as on 08.02.2014. Nothing is stated either by the Complainant or by the OP No.2 in this regard as to whether this amount is cleared off or not.
19. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the OP No.1 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. He 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.
20. On the other hand, the counsel for the OP No.1 in the arguments submitted that as per agreement, if the Complainant wants to cancel the booking of the flat, he shall forego 10% of the total flat cost as charges which is agreed by him and in that regard, relied on Judgment reported in 2009 (2) CPR 197 (NC) : II (2009) CPJ 276 (NC) in Punjab Urban Planning and Development Authority and another Vs. Shyam Sunder Tiwari and others, wherein, it is held that “courts cannot add anything or improve upon the terms of contract between the parties.” The facts of the said case and facts of the case on hand are different. In the said case, the Petitioner Authority withdrew the scheme and there was provision for refund of earnest money. In the case on hand, there is no provision for refund of earnest money. Admittedly, on failure to comply with terms and conditions of agreed terms by the OP No.1, the Complainant sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for OP No.1.
21. POINTS No.2 & 3 : The OP No.1 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.
22. In pursuance of the development agreement, the OP No.1 had 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 OP No.1 had 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 OP No.1 would contend that the cause for delay is beyond their control which is force majeure. The OP No.1 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.”
23. The complainant has submitted that owing to failure on the part of OP No.1 in completing the construction of the flat No.659, he opted for cancellation of the agreement of sale and the OP No.1 had contended that in order to maintain cordial relations with the complainant, it agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The complainant sent e-mail on 25.01.2014 cautioning the OP No.1 to invoke the legal proceedings on account of delay and negligence and false promises made by the OP No.1 seeking for refund of the amount on the premise of inaction on the part of the OP No.1.
24. The OP No.1 hade promised to complete construction of the flat and hand over its possession to the complainant within three years from the date of booking with a grace period of six months i.e., on or before 17.04.2010 as agreed and on its failure to perform its part of contract, the OP No.1 had proposed to pay rents but failed to pay the same. However, there is no communication from the side of the OP No.1 in this regard and the OP No.1 had not filed a piece of paper to show its readiness to pay compensation and adjust the same towards the dues payable by the complainant.
25. Not keeping promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the OP No.1. The complainant has two options left for recovery of the amount, either by filing suit in court of law or by way of filing complaint before State Consumer Disputes Redressal Commission in view of the amount claimed falling within the pecuniary jurisdiction of this commission. The contention of the OP No.1 that the complaint is not maintainable is not sustainable.
26. The complainant claimed refund of amount paid together with interest besides claim for compensation to the tune of Rs.5,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the OP No.1 had informed him about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainant cannot claim damages. However, the complainant is entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization.
27. It is pertinent to state here that as per Ex.A1 to A10, A13 and A15 the Complainant paid an amount of Rs.20,26,703/- as against the total sale consideration of Rs.41,55,025/- towards the subject flat. However, the amounts claimed are not disputed by the Opposite parties.
28. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the OP No.1 liable to pay the amounts to the Complainant. However, no relief is granted against the OP No.2.
29. In the result, the complaint is allowed holding that OP No.1 is liable and accordingly OP No.1 is directed to pay an amount of Rs.25,75,848/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. The complaint against OP No.2 is dismissed but under circumstances, no costs. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Manikonda Affidavit evidence of Hari
Nagendra Babu as PW1. Challa as RW1.
Affidavit evidence of A.Ravikumar
as RW2.
EXHIBITS MARKED
For Complainant :
Ex.A1 is Photostat copy of receipt bearing No.1242, dated 18.10.2006 for Rs.1,00,000/-.
Ex.A2 is Photostat copy of receipt bearing No.1456, dated 15.12.2006 for Rs.2,00,000/-.
Ex.A3 is Photostat copy of receipt bearing No.061, dated 30.12.2006 for Rs.1,98,603/-.
Ex.A4 is Photostat copy of receipt bearing No.092, dated 19.01.2007 for Rs.1,00,000/-.
Ex.A5 is Photostat copy of receipt bearing No.136, dated 13.03.2007 for Rs.50,000/-.
Ex.A6 is Photostat copy of receipt bearing No.1671, dated 29.05.2007 for Rs.45,000/-.
Ex.A7 is Photostat copy of receipt bearing No.1739, dated 02.07.2007 for Rs.1,00,000/-.
Ex.A8 is Photostat copy of receipt bearing No.1865, dated 23.07.2007 for Rs.1,50,000/-.
Ex.A9 is Photostat copy of receipt bearing No.1975, dated 30.08.2007 for Rs.40,000/-.
Ex.A10 is Photostat copy of receipt bearing No.1774, dated 14.09.2007 for Rs.60,000/-.
Ex.A11 is Photostat copy of Allotment Confirmation sheet issued by the OP No.1.
Ex.A12 is Photostat copy of Revised Flat calculations issued by the OP No.1.
Ex.A13 is Photostat copy of receipt bearing No.02561, dated 06.02.2008 for Rs.69,106/-.
Ex.A14 is Photostat copy of Statement of account of the Complainant, issued by OP No.1, dated 13.10.2008.
Ex.A15 is Photostat copy of statement of account furnished by the OP No.1 in favour of the Complainant acknowledging the receipt of Rs.8,45,000/- on various dates.
Ex.A16 is Photostat copy of Agreement for Reservation of flat executed by OP No.1 in favour of the Complainant, dated 18.10.2006.
Ex.A17 is Photostat copy of Agreement of Sale, dated 12.07.2008 executed by OP No.1 in favour of the Complainant.
Ex.A18 is Photostat copy of Tripartite Agreement, dated 03.01.2009 executed among the OP No.1, Complainant and the OP No.2.
Ex.A19 is Photostat copy of Home Loan-term loan saction proceedings for Rs.30,00,000/- issued by the OP No.2, dated 03.01.2009.
Ex.A20 is Photostat copy of cheque bearing No.213888, dated 18.10.2013 for Rs.2,62,000/- favouring the Complainant, issued by the OP No.1.
Ex.A21 is Photostat copy of e-mail addressed by Complainant to the OP No.1, dt.25.01.2014.
Ex.A22 is Photostat copy of provisional interest certificate, dated 05.02.2014 issued by OP No.2
For Opposite parties :
For OP No.1 :
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.
For OP No.2 :
Ex.B19 is Photostat copy of Agreement of sale, dt.12.07.2008 executed by OP No.1 in favour of the Complainant, in respect of the subject flat.
Ex.B20 is Photostat copy of General Power of Attorney executed by the Complainant in favour of Manikonda Sai Lakshmi, dated 08.10.2008.
Ex.B21 is Photostat copy of Housing Loan application made by the Complainant to the OP No.2, dated 27.10.2008.
Ex.B22 is copy of home loan sanction letter, dated 03.01.2009.
Ex.B23 is copy of Memorandum of loan agreement for SBI Maxgain Home loan granted to public, dated 03.01.2009.
Ex.B24 is copy of Tripartite Agreement, dated 03.01.2009.
Ex.B25 is copy of bank statement of account of the Complainant, for the period 31.12.2008 to 30.11.2015.
PRESIDENT
29.04.2016
