BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA : AT HYDERABAD
CC NO. 186 OF 2016
Between :
- Mr.Sonal Ojha S/o Virendra Kumar Ojha
Aged about 42 years
- Mrs Megha Ojha W/o Sonal Ojha
Aged about 36 years, R/o Flat No.508, Block-1
SBC Pristine, Gajularamaram
- Mrs Parampreet Kuar W/o Mr.Gurpreet Singh Gill
Aged about 34 years.
Both are R/o Flat No.T2, Plot No.671,
Vadlamudi Inn, Ayyappa Society, Madhapur
Hyderabad-500 081
…Complainants
A N D
- 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, S/o Mr. CVR Chowdhary,
Respectively, O/o Flat No. 910, Teja Block,
My Home Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad - 500081.
- Mr. Hari challa, S/o Mr. CVR Chowdhary,
Managing Director, M/s. Aliens Developers (P) Ltd
O/o Flat No. 910, Teja Block,
My Home Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad - 500081.
- Mr. C. Venkat Prasanna, , S/o Mr. CVR Chowdhary,
Joint Managing Director, M/s. Aliens Developers (P) Ltd
O/o Flat No. 910, Teja Block,
My Home Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad - 500081.
(Present addresses of parties s.no. 1 to 3 are at
Aliens space station, Tellapur post,
Ramachandrapuram Mandal,
Medak Dist, Hyderabad – 502032
… Opposite Parties
Counsel for the Complainants : Sri V.Appa Rao
Counsel for the Opp. parties : M/s P.Raja Sripathi Rao
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT
&
SRI PATIL VITHAL RAO, MEMBER
MONDAY THE TWENTIETH DAY OF NOVEMBER
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed u/s 17(1),A(i) of C.P.Act for recovery of amount of Rs.31,41,500/- with interest @ 24% per annum amounts to Rs.32,25,000/- for the period 31.10.2011 to 30.09.2016 and subsequent interest w.e.f., from 01.10.2016 with interest @ 24%; to pay Rs.10,00,000/- towards compensation and costs of Rs.50,000/- for deficiency in service on the part of the opposite parties.
2. The case of the Complainants in brief, is that the Opposite party company represented to them that they are engaged in the business of constructing multi-storied apartments situated at Tellapur village, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and they would provide all amenities therefor, would give possession by 31.05.2013 with grace period of 9 months and on such representation of the opposite parties, the complainants entered into agreement of sale dated 31.10.2011 for purchase of flat No.2066 on 20th floor at Space Station-11, having super built-up area of 1344 sft with one car parking along with undivided share of land of 28.90.yds for a total sale consideration of Rs.44,68,000/-. The complainants paid an amount of Rs.14,00,000/- at the time of booking of the flat and subsequently paid Rs.3,33,000/- besides payment of Rs.14,08,500/- by availing home loan from State Bank of India, Serilingampally Branch in total an amount of Rs.31,41,500/- out of the total sale consideration of Rs.43,68,852/-. The Opposite parties have not commenced construction of the flat even after the stipulated period is expired. There is no possibility of the construction of the flat as also the Opposite parties have not responded to the repeated requests of the Complainants. Due to the fraudulent action on the part of the opposite party, complainants suffered with mental agony, escalation of cost and physically by wandering in and around the office of the opposite party for the past few years, for which, the opposite party is liable to pay compensation. The Opposite parties promised to deliver the possession of the flat to the Complainants as prescribed in the agreement of sale with some grace period. Having agreed to purchase the above flat, Complainants entered into Agreement of sale with the Opposite parties paying the earnest money. The complainants has lost the hope on the opposite parties and came to a conclusion to demand the opposite parties for refund of the amounts paid by him and as such demanded the opposite parties to pay Rs.31,41,500/- with interest, compensation and costs. Hence, prayed to allow the complaint as prayed for in paragraph no.1 supra.
3. The Opposite parties resisted the claim on the premise that the complainants 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.
4. 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.
5. It is averred by 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.
6. 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 complainants 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.
7. 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 delay was only due to Telangana agitation, Sakala Janula Samme, etc. The complainants filed the complaint with ulterior motive to defame the opposite party. The Complainants shall file relevant receipts and documents to prove the payments.
8. They denied to have not given any response. The Opposite parties are taking all necessary steps to deliver the flats at the earliest. The Complainants is not entitled for any compensation and their claim is illegal. The complainants are 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 Opposite party. Hence prayed for dismissal of the complaint.
9. During the course of enquiry, the Complainants got filed the evidence affidavit of the complainant no.1 and also got marked the documents as Exhibits A1 to A11 (though Exs.A1 to A11 were stated to have been marked but only Exs.A1 to A10 were found in the file). On behalf of the opposite parties, the opposite party no.2 filed his affidavit and got marked the documents Exs.B1 to B19 (though Exs.B1 to B19 were stated to have been marked but only Exs.B1 to B18 were found in the file).
10. 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 on behalf of Complainants. Heard both sides.
11. 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 party?
iv) To what relief ?
12. POINT NO.1 : The Complainantss entered into “Agreement of Sale” with the Opposite party no.1 for purchase of flat no. 2066, 11th floor, Station No.11 with super built up area of 1344 sft with one covered parking area besides undivided share of land of 28.90 sq.yds for the consideration of Rs.44,68,000/- and paid an amount of Rs.31,41,500/-, proposed to be constructed by the Opposite parties which are not in dispute. The agreement of sale was entered into between the Complainants and the Opposite party no.1 in respect of the said flat. Thereafter, the Complainants paid the part consideration amount as per the pricing pattern of the flat issued by the opposite parties on various dates. The agreement of sale provides for reference to arbitration. The learned counsel for the opposite parties have contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission.
13. 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.”
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.
14. POINTS No.2 & 3 : The Opposite party entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 384, 385 and 426/A situate at Tellapur village of Ramachandrapuram Mandal, Medak district and they agreed to deliver the residential flat to the Complainants in accordance with the terms and conditions agreed upon and consented thereto and as per specifications given therein. The Development Agreement is not merely an agreement and in fact, it is “Development Agreement-cum-Power of Attorney”.
15. 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 No Objection Certificate, bifurcation of the State 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’.
16. The force majeure clause in the Agreement of sale does not include within its ambit the delay caused in granting permission, NOC etc. The Opposite party failed to explain how they could take shelter under the cover of “force majeure”. We may state that the delay caused in obtaining permission or NOC etc., cannot be considered as ‘force majeure’. It is quite not understandable how the bifurcation of State can be attributed to be cause for delay in completion of the project. The opposite party ought to have informed the Complainant about the delay likely to be caused in obtaining the permission which they failed to. For that matter, the Opposite party cannot receive any sale consideration from any person in respect of any flat unless they have obtained permission from HUDA or HMDA.
17. The Complainants has submitted that owing to failure of the opposite parties in completing the construction of the subject flat, he opted for refund of the amount and the opposite parties have contended that in order to maintain cordial relations with the Complainants, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The Complainants got issued a notice to the Opposite parties through their counsel setting forth series of events of delay and negligence and false promises made by the Opposite parties seeking for refund of the amount on the premise of inaction on the part of the opposite parties.
18. The opposite parties have promised to complete construction of the flat and hand over its possession to the Complainants within the stipulated time therein with a grace certain grace period as agreed and on their failure to perform their part of 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 Complainants. Having received the part sale consideration amount, the Opposite parties kept with them without commencing the construction work of the building.
19. Not keeping-up promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the opposite parties. The Complainants 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 opposite parties that the complaint is not maintainable is not sustainable.
20. The Opposite parties can only receive such amount of sale consideration which would be in accordance with the payment schedule and correspond to the stage of construction of the flat. However, the Opposite parties have received the sale consideration in excess of what was to be received from the Complainants particularly the construction of the building was not yet commenced. Not keeping-up the promise to complete construction of the building and failure to deliver possession of the flat as also not keeping-up promise to refund the amount as per the terms of the repayment schedule constitutes deficiency in service on the part of the Opposite parties.
21. The Complainants claimed refund of amount paid together with interest besides claim for damages. The Complainants cannot be said to have acquiesced to the delay in construction of the project. Though the Complainants has not disputed that the opposite parties have informed them about the cause for delay in obtaining permission and NOC etc., which does not disentitle them from claiming compensation. The Complainants is entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization. For the reasons stated supra, the Points No.2 and 3 are answered in favour of the Complainants and against the Opposite parties.
22. POINT No.4 : In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties liable to refund the amount to the Complainants.
In the result, the complaint is allowed directing the opposite parties to pay an amount of Rs.31,41,500/- with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance: four weeks. In case sale deed was executed, the Complainants shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer opposite parties.
PRESIDENT MEMBER
Dated : 20.11.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainants : For Opposite parties :
Affidavit evidence of Mr.Sonal Ojha Sri Hari Challa, as RW1 (on behalf
Complainant no.1 of Ops
EXHIBITS MARKED
For Complainantss :
Ex.A1 Copy of agreement of Sale dated 31.10.2011 executed by the Op1 in favour of the complainants
Ex.A2 Copy of receipt dated 19.04.2012 for Rs.2,60,950/-
Ex.A3 Copy of receipt dated 11.08.2013 for Rs.68,542/-
Ex.A4 Copy of Home Loan Arrangement Letter dt.09.03.2012
Ex.A5 Copy of Home Loan Statement dt.13.09.2010
Ex.A6 Copy of offer letter of Ops
Ex.A7 Copy of legal notice dt.17.09.2016
Ex.A8 Copy of postal receipts and acknowledgements
Ex.A9 Copy of letter of incorporation dated 21.03.2006
Ex.A10 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 29.02.2008 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.
Ex.B19 Copy of Tripartite Agreement (stated to have been filed but not found in
file)
PRESIDENT MEMBER
