STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO.21 OF 2015
Between :
- Sadanand Tumma S/o Dayanand Tumma
Aged about 42 years, Occ: Software Engineer
- Mrs Anitha Sadanand Tumma W/o Sadanand Tumma
Aged about 37 years, Occ: House wife
Both are R/o 3-6-913/1, Dattanagar
Narayanguda, Hyderabad
…Complainants
A N D
1) M/s Aliens Developers (P) Ltd.,
Rep. by its Managing Director & Joint Managing Director
O/o Flat No.911, Teja Block, My Home Navadeepa
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.911, Teja Block,
My Home Navadeepa Apartments,
Madhapur, Near Hitech City,
Hyderabad – 500 081.
3) C.Venkat Prasanna S/o CVR Chowdhary,
Joint Managing Director M/s Aliens
Developers (P) Ltd., O/o Flat No.911,
Teja Block, My Home
Navadeepa Apartments,
Madhapur, Near Hitech City,
Hyderabad – 500 081.
( present addresses of Ops No.1 to 3 are at
Aliens Space Station, Tellapur, Ramachandrapuram Mandal
Medak District, Hyderabad (Telangana-502032)
… Opposite Parties
Counsel for the Complainant: Sri D.Raji Reddy, Advocate
Counsel for the Opp. Parties: M/s P.Rajasripathi Rao
No.1 to 3
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT
AND
SRI VITHAL RAO PATIL, MEMBER
FRIDAY THE SEVENTEENTH DAY OF FEBRUARY
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
1. The complaint is filed under Section 17 of the Consumer Protection Act seeking refund of the sale consideration of Rs.17,00,000/- with interest @ 24% p.a. from the respective dates of payment till the realisation together with compensation of Rs.10,00,000/- and costs of Rs.50,000/-.
2. The case of the complainant, in brief, is that the opposite party no.1 company, represented to him that they are engaged in the business of constructing multi-storeyed apartments and entered into development agreement with the owners of the land comprised in survey nos. 384, 385 and 426/A situate at Tellapur village, Ramachandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ . Apart from that the opposite parties have also started two new projects, namely, Aliens HUB and Aliens Skypark. As the complainant already booked the flat in Aliens Space Station-1 again on the representations of the opposite parties, he also entered into agreement of sale dated 19.02.2013 in respect of plot consisting of 625 sq.yards by paying Rs.2,00,000/- out of total sale consideration of Rs.13,12,500/- in Aliens HUB/Smart City with the opposite parties. The complainant has also entered into another agreement of sale on 19.02.2013 in respect of plot consisting of 220 sq.yds out of total sale consideration of Rs.15,00,180/- in Aliens Skypark by paying Rs.4,00,000/- with the opposite parties. As there was no progress in the said project because they did not receive any permission yet, the complainant asked for refund of the amount. The opposite parties instead of refunding made him believe that they started new lay out which was more organized with various villas, apartments and that they will get permission from the government in one or two months requested to entered into a new agreement of sale with new rates. With no option the complainant was forced to enter into fresh agreement of sale with a new rate and paid Rs.5,00,000/- towards part payment in the said project. Accordingly the complainant, in total, paid Rs.11,00,000/- out of total sale consideration of Rs.22,42,800/- for 267 sq.yds in Aliens Skypark project. Believing the words of the opposite parties the complainant paid further amount of Rs.6,00,000/-. There was no progress in the said project even by the month of March 2015 as they did not get the permission from the government. For the loss and hardship he suffered, the complainant claimed refund of the amount with interest thereon and compensation as also costs.
3. The opposite Parties 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 in the agreement of sale providing for arbitration. It is contended that the complaint is filed for recovery of money which is not a consumer dispute. The opposite party submitted that on their application for conversion of agricultural land into non-agricultural land and FTL clearance, permission was granted for conversion of agricultural land into non-agricultural land on 14.04.2007 and FTL clearance was granted on 30.12.2006 and thereafter HUDA earmarked the land as agricultural zone and the opposite patties have filed application for change of use of the land as commercial use zone.
4. The Municipal Administration and Urban Development (I) Department notified the land in survey number 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 survey number 384 is made. Realignment of the proposed road was approved on 3.04.2008 and the permission was accorded approving the building plan on 11.04.2008.The opposite parties have obtained NOC from the AP Fire Services Department on 15.12.2007 and permission was granted in respect of the building with height of 90.40 meters. The opposite parties obtained NOC from Airport Authority on 10.07.2009.
5. The opposite party has submitted that HUDA accorded technical approval on 14.10.2009for ground +20 upper floors and release of building permission up to 29 floors is awaited. The opposite party had taken all necessary steps to complete the project at the earliest and the project being massive and due to the reasons beyond the control of the opposite parties, the opposite party could not complete the project within the time frame. The opposite party informed the complainants about the delay in completion of the project due to delay in clearance from the authorities concerned. In view of arbitration clause the complaint is not maintainable before this Commission.
6. The opposite party submitted that they agreed to pay Rs.3/- per sft in terms of Clause VIII(g) of the Agreement for the delay caused in completing the project and adjust the amount towards dues payable by the complainants. The opposite party completed some of the Towers and delivered them to the customers. Unexpected global recession, separate Telangana Agitation and the mass people strike effected the construction which is beyond the control of the opposite party. The complainants not bearing with the opposite party taking advantage of the situation opted to take back his amount instead of the Flats.
7. The complainant failed to pay balance sale consideration as per the terms of the Agreement. If the complainant cancel the agreement and take back their money, he will forego amount towards cancellation charges and to avoid the loss , he approached this Commission. The opposite party had taken every care as to the benefit of their customers and incorporated clause in the Agreement as to their liability to pay damages @Rs.3/- per sq.ft. which would show their fairness and the complainants are not entitled to any money or compensation. Hence, the opposite party prayed for dismissal of the complaint.
8. The complainant filed his affidavit and the documents, ExA1 to A-20. On behalf of the opposite parties 1 to 3, the Managing Director of the Opposite party no.1 by name Hari Challa filed his affidavit and the documents, Ex.B1 to B18. The complainant has also filed his written arguments.
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.
9. 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 ?
10. POINT NO.1: The complainant entered in to two Agreements of Sale on 19.02.2013 with the opposite parties for purchase of plots admeasuring 625 sq.yards and 220 sq.yards in Aliens Hub and Aliens Skypark projects by paying part sale consideration of Rs.2,00,000- and Rs.4,00,000/- out of total sale consideration of Rs.13,12,500/- and Rs.15,00,180/- respectively. As there was no progress in the said projects due to not getting permission from the government, the complainant sought for refund but instead of refunding the amount, the opposite parties offered another plot in their new venture for higher rate. With no other option the complainant was forced to enter into a new agreement of sale for purchase of plot admeasuring 267 sq.yards by paying Rs.6,00,000/- on 22.07.2014 for a total sale consideration of Rs.22,42,800/-. Even this project was also delayed due to not getting the permission from the government, the complainant sought for refund of the sale consideration amount of Rs.17,00,000/- . The agreement of sale provides for reference to arbitration. The learned counsel for the opposite party 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 process which reads as under:
- This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
- 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.
- 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.
- 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.
- That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
11. 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.”
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. The point no.(i) is answered accordingly against the opposite parties.
12. 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 384, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they agreed to deliver possession of the residential flat/plot 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”.
13. In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building on the land and without obtaining proper permission from the government for development of their new projects, namely, Aliens HUB and Aliens Skypark 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’.
14. 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 parties 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 parties ought to have informed the complainants about the delay likely to be caused in obtaining the permission which they failed to. For that matter, the Opposite parties cannot receive any sale consideration from any person in respect of any flat/plot unless they have obtained permission from HUDA or HMDA.
15. The complainants have submitted that owing to failure of the opposite parties in completing the construction of the subject flats/plots, they opted for cancellation of the agreement of sale of plot and the opposite parties have contended that in order to maintain cordial relations with the complainants, they agreed to refund the amount received from the complainant towards sale price with an interest @ 10% per annum. 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.
16. The opposite parties have promised to complete the project within 5 years and hand over its vacant possession to the complainant within the stipulated time therein as agreed and on their failure to perform their part of contract, the opposite parties have agreed to refund the amount received from the complainant towards sale price with an interest @ 10% per annum. 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 initiating the project work.
17. Not keeping-up promise to complete project and failure to deliver vacant possession of the plot constitutes deficiency in service on the part of the opposite parties. The complainants have 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.
18. The Opposite parties can only receive such amount of sale consideration which would be in accordance with the payment schedule. . Not keeping-up the promise to complete the project and failure to deliver vacant possession of the plot as also not keeping-up promise to refund the amount as per the terms of the repayment constitutes deficiency in service on the part of the Opposite parties.
19. 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 completing 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 complainants are 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.
20. POINT No.4 : In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties 1 to 3 are jointly and severally liable to refund the amount to the Complainants.
21. In the result, the complaints are allowed holding the Opposite parties 1 to 3 jointly and severally liable to refund the amount of Rs.17,00,000/- paid by the Complainant with interest @ 12% per annum from the date of last payment till payment/refund and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. In case, sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above direction. The registration charges and stamp duty etc., shall be borne by the developer OP No.1. Time for compliance four weeks.
PRESIDENT MEMBER
Dated : 17.02.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Sadanand Sri Hari Challa, as RW1 (on behalf of
Complainant Op No.1)
EXHIBITS MARKED
For Complainants :
Ex.A1 Copy of email with respect of agreement of sale dated 19.02.2013
Ex.A2 Copy of agreement of sale dated 19.02.2013 executed by the Op No.1 in favour of the complainant
Ex.A3 Copy of email with respect to delay in sending the agreement dated 13.03.2013
Ex.A4 Copy of agreement for reservation of plot dated 19.02.2013
Ex.A5 Copy of email with regard to payment of Rs.15 lakhs by the complainant dated 30.03.2013
Ex.A6 Letter dated 13.03.2013 addressed by Op1 to the complainant no.1
Ex.A7 Copy of receipt bearing No.665 dated 17.01.2013 for Rs.1,00,000/-
Ex.A8 Copy of receipt bearing No.00590 dated 12.01.2015 for Rs.1,00,000/-
Ex.A9 Copy of receipt dated 15.04.2013 for Rs.1,50,000/-
Ex.A10 Copy of receipt bearing No.00705 dated 12.07.2014 for Rs.5,00,000/-
Ex.A11 Copy of receipt bearing No.00706 dated 06.08.2014 for Rs.5,00,000/-
Ex.A12 Copy of receipt bearing No.759 dated 03.09.2014 for Rs.1,00,000/-
Ex.A13 Copy of email dated 9.7.2014 sent by the Aliens Sky Park to the complainant
Ex.A14 Copy of agreement for reservation of plot dated 22.07.2014
Ex.A15 Copy of bank statement dated 16.04.2009
Ex.A16 Copy of Bank statement dated12.07.2014
Ex.A17 Office copy of legal notice dated 19.01.2015 got issued by the complainants to the Opposite parties no.1 to 3
Ex.A18 Original Postal Receipts
Ex.A19 Copy of receipt dated 17.01.2013 for Rs.1,50,000/-
Ex.A20 Copy of receipt bearing No.00591 dated 12.01.2015 for Rs.1,00,000/-
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 Environment 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 MEMBER
Dated: 17.02.2017
