BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION

OF TELANGANA: AT HYDERABAD

          CC NO. 228 OF 2014

Between :

Subba Rao Tiruvuri S/o late Rama Murthy

Aged about 63 years, Occ: Retd. Govt. Employee

Occ: Retd., Govt. Employee, R/o 12-2-833/2

MIGH Colony, Flat No.101, Mehak Residency

Mehdipatnam, Hyderabad-028

                                                                                      …Complainant

          A N D

1)       M/s Aliens Developers Private Ltd.,

Rep by its Managing Director, Hari Challa

Regd. Off: Space Station No.1, Gachibowli

Tellapur, Hyderabad

2)       Hari Challa S/o CVR Chowdhary,

          Managing Director, M/s Aliens Developers Private Ltd.,

Regd. Off: Space Station No.1, Gachibowli

Tellapur, Hyderabad

3)       C.Venkat Prasanna S/o CVR Chowdhary,

          Joint Managing Director, 

M/s Aliens Developers Private Ltd.,

Regd. Off: Space Station No.1

Gachibowli, Tellapur, Hyderabad

                                                                             … Opposite Parties

Counsel for the Complainant:           Sri G.Chandra Sekhara Rao

Counsel for the Opp. Party No.1to3   Sri  P.Rajasripathi Rao   

QUORUM             :

HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT   

AND

SRI VITHAL RAO PATIL, MEMBER 

TUESDAY THE EIGHTEENTH DAY OF APRIL

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) of C.P.Act  for recovery of amount of Rs.21,78,432/- with interest @ 18% per annum from the date of agreement together with compensation of Rs.2,00,000/- and costs  for deficiency in service on the part of the opposite parties  

2.                The case of the Complainant in brief, is that the Opposite party No.1 company represented to them that they are engaged in the business of constructing multistoried 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, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station-I’ and obtained permission bearing No.HUDA/621/P4/PLG/HMDA(HUDA)/2008 and they would provide all amenities there for, possession by certain period of time as detailed in the table below with a grace period and on such representation of the opposite parties, the complainants  entered into agreement of sale for purchase of flats, having super built-up area with one car parking along with undivided share of land, the details of which are shown in the table below.

3.                The complainants entered into agreements of sale/reservation in respect of flats at Aliens Space Station, situate at Tellapur village, Ramachandrapuram mandal, Medak district for the consideration thereof as detailed in the table below:

4.                The Opposite parties had not commenced construction of the flats even after the stipulated period is expired and there is no possibility of the construction of the flats as also the Opposite parties had not responded to the repeated requests of the Complainants.  The Complainants had sought for return of the amount with interest, compensation and costs of the complaint, in each case, as detailed below.

5.                The opposite parties no.1 to 3 resisted the claim on the premise that the complaint alleging deficiency of service on the part of opposite parties relating to the sale transaction entered into between the parties is not maintainable either under law and also in view of the facts of the case and hence liable to be dismissed in limine and also in view of the fact that the Complainants did not approach them before filing the complaint either for refund of money or for cancellation or with any request, hence, cannot attribute any deficiency of service, hence, does not fall under the purview of the C.P. Act.

6.                The opposite parties 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. 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 03.04.2008 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.

7.                The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground + 20 upper floors and release of building permission up to 29 floors is awaited. The opposite parties have 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 parties could not complete the project within the time frame. The opposite parties 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.

8.                The opposite parties submitted that the opposite parties agreed to pay Rs.3/- per sqft 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. Though the delay occurred for completion of the project is beyond the control of the opposite parties, the opposite parties to maintain goodwill and relationship with the customers, willing to pay the compensation at agreed rate.  But the Complainants filed the present complaints with an ulterior motive to defame and to gain.  The complainants are put to strict proof of the payments made by producing the relevant receipts.  The complainants have to pay admittedly the balance consideration and other charges, therefore, unless the complainants pay the balance consideration, asking for delivery of flat is illegal and arbitrary. 

9.                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 sand even mentioned in the agreement of sale under clause No.XIV and described as “force majeure”.  The Complainants who paid the part of sale consideration want to take back the investment from Hyderabad due to the changed circumstances in Hyderabad market after bifurcation of the State, thereby sought for refund of the amount.  As there is some delay on the part of the Ops in delivering the flat, the complainant taken advantage of the same and filed the present complaint to avoid cancellation charges.  The complaint is not within the limitation as time prescribed under Section 24A of the C.P. Act, hence not maintainable.  The complainants are not entitled for refund of amount and interest thereon and any compensation and costs.  There is no cause of action for the present complaint.  If the complainants want to take refund of the amount, the complainants shall forego 20% of the flat cost out of the amount paid towards cancellation charges as per the terms of agreement.  Hence prayed for dismissal of the complaints.

10.              During the course of enquiry, the Complainant got filed evidence affidavit and also got marked the documents as Exhibits A1 to A17.  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 no documents have been filed.    

11.              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 Complainants.  Heard both sides.

12.              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 ?

13.              POINT NO.1 :  The Complainants entered into “Agreement of Sale” with the Opposite parties for purchase of flats as detailed supra, for the consideration thereof and paid the amounts shown therein, 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 parties in respect of the above stated flats as detailed in the table supra.  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. 

14.              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.

15.              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 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”. 

16.              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 these complaints are 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’. 

17.              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 unless they have obtained permission from HUDA or HMDA. 

18.              The complainants have submitted that owing to failure of the opposite parties in completing the construction of the subject flats, they opted for cancellation of the agreement of sale of flats 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.

19.              The opposite parties have promised to complete construction of the flat and hand over its possession to the complainant(s) within the stipulated time therein with a grace period of six/nine 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 complainants.  Having received the part sale consideration amount, the Opposite parties kept with them without commencing the construction work of the building.

20.              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 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. 

21.              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 flats.  However, the Opposite parties had 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 scheduler constitutes deficiency in service on the part of the Opposite parties.

22.              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 have 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.

23.              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.

          In the result, the complaint is allowed directing the opposite parties no.1 to 3 jointly and severally to pay an amount of Rs.21,78,432/- (as per Exs.) with interest    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 OP No.1.

PRESIDENT                                       MEMBER

Dated : 18.04.2017

APPENDIX OF EVIDENCE

 WITNESSES EXAMINED

                                                          NIL

EXHIBITS MARKED

For Complainants :

Ex.A1           Copy of agreement of Sale dated 21.10.2009 executed by the Op1 in favour of the complainant

Ex.A2           Copy of demand draft dated 10.10.2009 for Rs.2,50,000/-

Ex.A3           Copy of receipt bearing no.04079 dated 04.11.2009 for Rs.5,01,297/-

Ex.A4           Copy of receipt bearing No.04186 dated 08.12.2009 for Rs.8,26,946/-

Ex.A5           Copy of receipt bearing No.04288 dated 10.12.2009 for Rs.3,00,000/-

Ex.A6           Copy of receipt bearing No.05971 dated 11.10.2010 for Rs.3,00,000/-

Ex.A7           Copy of letter dated 20.10.2010 addressed by Op1 to one Y.L.Kumari

Ex.A8           Copy of email dated 03.07.2013

Ex.A9           Copy of email dated 08.07.2013

Ex.A10         Copy of email dated 15.10.2013

Ex.A11         Copy of email dated 29.10.2013

Ex.A12         Copy of email dated 11.11.2013

Ex.A13         Office copy of legal notice dated 25.11.2013 got issued by the complainant to the Opposite parties no.1 to 3

Ex.A14         Acknowledgement

Ex.A15         Returned Cover

Ex.A16         Returned Cover

Ex.A17         Returned Cover

For opposite parties

NIL

PRESIDENT                                       MEMBER

Dated : 18.04.2017