BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA : AT HYDERABAD
CC NO. 223 OF 2015
Between :
Abhishek Choudhry S/o Mr.Anil Choudhry
Aged about 34 years, R/o Ulsbergbakken 10, 301,
Satvanger-4034, Norway
(R/o Flat No.5D, Sri Gopal Complex, Kutchery Road
Ranchi, Jharkand) …Complainant
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 Complainant : 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.31,00,000/- with interest @ 24% per annum amounts to Rs.42,32,000/- for the period 26.04.2009 to 31.10.2015 and subsequent interest w.e.f., from 01.11.2015 with interest @ 24%; to pay Rs.5,00,000/- towards compensation and costs of Rs.50,000/- for deficiency in service on the part of the opposite parties.
2. The case of the Complainant in brief, is that the Opposite party company represented to him 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 31.12.2013 with grace period of 9 months and on such representation of the opposite parties, the complainant entered into agreement of sale dated 05.09.2012 for purchase of flat No.231 on 2nd floor at Space Station -5, having super built-up area of 2132 sft with one car parking along with undivided share of land of 45.84 sq.yd for a total sale consideration of Rs.52,66,195/-. The complainant subsequently paid total amount of Rs.31,00,000/- on different dates out of the total sale consideration of Rs.52,66,195/-. 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 Complainant. Due to the fraudulent action on the part of the opposite party, complainant 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 Complainant as prescribed in the agreement of sale with some grace period. Having agreed to purchase the above flat, Complainant entered into Agreement of sale with the Opposite parties paying the earnest money. The complainant 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.31,00,000/- 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 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.
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 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.
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 complainant. The delay was only due to Telangana agitation, Sakala Janula Samme, etc. The complainant filed the complaint with ulterior motive to defame the opposite party. The Complainant 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 Complainant is not entitled for any compensation and their claim is illegal. The complainant 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 Complainant got filed his evidence affidavit and also got marked the documents as Exhibits A1 to A14. On behalf of the opposite parties, the opposite party no.2 filed his affidavit and no documents have been filed.
10. The counsel for the Complainant 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 Complainant. 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 Complainant entered into “Agreement of Sale” with the Opposite party no.1 for purchase of flat no. 231, 2nd floor, Station No.5 with super built up area of 2132 sft with one covered parking area besides undivided share of land of 45.84 sq.yds for the consideration of Rs.52,66,195/- and paid an amount of Rs.31,00,000/-, proposed to be constructed by the Opposite parties which are not in dispute. The agreement of sale was entered into between the Complainant and the Opposite party no.1 in respect of the said flat. Thereafter, the Complainant 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 Complainant 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 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.”
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 Complainant 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 Complainant 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 Complainant 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 Complainant, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The Complainant 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 Complainant within the stipulated time therein with a grace period of six months 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 Complainant. 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 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 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 Complainant 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 Complainant claimed refund of amount paid together with interest besides claim for damages. The Complainant cannot be said to have acquiesced to the delay in construction of the project. Though the Complainant 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 Complainant 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 Complainant 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 Complainant.
In the result, the complaint is allowed directing the opposite parties to pay an amount of Rs.31,00,000/- (as per Ex.A14) 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 Complainant 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 Complainant : For Opposite parties :
Affidavit evidence of Abhishek Chourdry Sri Hari Challa, as RW1 (on behalf of
Complainant Ops
EXHIBITS MARKED
For Complainant :
Ex.A1 Copy of agreement of Sale dated 05.09.2012 executed by the Op1 in favour of the complainant
Ex.A2 Copy of receipt bearing no.03139 dated 265.04.2009 for Rs.5,00,000/-
Ex.A3 Copy of receipt bearing no.03426 dated 01.06.2009 for Rs.5,00,000/-
Ex.A4 Copy of receipt bearing No.609 dated 11.06.2009 for Rs.1,00,000/-
Ex.A5 Copy of receipt bearing No.03485 dated 11.06.2009 for Rs.4,00,000/-
Ex.A6 Copy of receipt bearing No.654 dated 25.06.2009 for Rs.5,00,000/-
Ex.A7 Copy of receipt bearing No.622 dated 18.07.2009 for Rs.3,00,000/-
Ex.A8 Copy of receipt bearing No.04407 dated 25.11.2009 for Rs.1,00,000/-
Ex.A9 Copy of receipt bearing No.741 dated 18.09.2011 for Rs.6,00,000/-
Ex.A10 Copy of latest offer documents list
Ex.A11 Office copy of legal notice dated 03.11.2015
Ex.A12 Originals of postal receipts and acknowledgements
Ex.A13 Copy of letter of incorporation dated 21.03.2006
Ex.A14 Copy of Form No.32
For opposite parties
NIL
PRESIDENT MEMBER
