BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.
C.C.No.228/2013
Between:
Balaji Ragothaman S/o.Mr.Ragothaman
G2, Sai Raghava Towers, Madinaguda,
Hyderabad-500 049 Complainant
And
M/s Aliens Developers Private Limited,
Gachibowli, Tellapur, Hyderabad-502 032,
Represented by Sri Hari Challa,
Managing Director. .Opposite party
Counsel for the complainant: Mr.A.Narayan Rao.
Counsel for the opposite party :M/s A.Krishnam Raju.
QUORUM: HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT.
AND
SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER.
WEDNESDAY, THE EIGHTEENTH DAY OF JUNE
TWO THOUSAND FOURTEEN
Oral Order (As per Hon’ble Sri Justice GopalaKrishna Tamada, President)
***
This complaint is filed U/s.17 of Consumer Protection Act, 1986 for a direction to the opposite party to refund an amount of Rs.31,27,059 with interest at 24% p.a. from the date of last payment i.e. 30-11-2010 till the date of realization together with compensation of Rs.1,00,000/- towards mental agony and costs of Rs.10,000/-.
The case of the complainant is that he along with his wife Mrs.Anurada Jaganathan, as co-owner, booked a flat bearing No.646 in 6th floor Station-8 admeasuring 2150 sq. ft. along with one car port space and undivided share of land of 46.23 sq. yds. at Aliens Space Station. An agreement of sale was executed on 28-10-2010 and as per the same the sale consideration of the flat was Rs.55,83,370/-. A Tripartite agreement was executed on 15-11-2010 between the complainant and his wife, the opposite party and the Corporation Bank to raise the necessary loan by creating equitable mortgage of the property. The complainant made the following payments:
- Towards booking advance INR Rs.2,50,000/- by cheque on 11-7-2010
- 20% down payment 1 – INR Rs.3,00,000/- by cheque on 23-10-2010
- 20% down payment 2 – INR Rs.5,66,674/- by cash on 04-11-2010
The complainant submitted that the Corporation Bank sanctioned an amount of Rs.41,00,000/- and released an amount of Rs.15,60,000/- to the opposite parties by an order dated 13-11-2010 and the complainant is repaying the same with interest which comes to Rs.20,10,385/- and in all the complainant paid an amount of Rs.26,76,674/- exclusive of interest.
The complainant submitted that as per clause No.VIII of the Agreement of sale dated 28-10-2010 the opposite party has to make its best endeavour to deliver possession of the apartment on or before November, 2011 with a grace period of 9 months and as the construction of the flat No.646, 6th floor, Station-8 admeasuring 2150 sq. ft. has not been taken up and completed as per clause No.VIII of Agreement of sale and as per the schedule till today, he got issued a legal notice dated 07-10-2013 demanding refund of the amount of Rs.31,27,059-00 with interest at 24% p.a. from the date of last payment till realization but there was no reply. Hence the complaint.
Opposite party filed written version contending that the complainant filed the complaint to gain out of 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 and that once the agreement is cancelled and account is settled there is no relationship between the parties.
The opposite party has submitted an application for conversion of agricultural land 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.
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 subsequently it was reduced from 91.40 meters to 90.40 meters. The opposite party obtained NOC from Airport Authority on 10.07.2009.
The opposite party has submitted that HUDA accorded technical approval on 14.10.2009 for ground +20 upper floors and release of building permission upto 29 floors is awaited. The opposite party has 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 party, the opposite party could not complete the project within the time frame. The opposite party informed the complainant 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.
The opposite party submitted that they agreed to pay Rs.3/- per sq ft per month to maintain the goodwill and that too after payment of dues payable by the complainants in terms of Clause VIII(g) of the Agreement and the project was delayed due to reasons beyond its control. The opposite party submitted that the progress of construction is based on various factors and stated that the opposite party is committed to the project and taking all necessary steps to complete the entire project at the earliest. The opposite party submitted that they completed some of the flats and delivered to their customers and if the complainant wants cancellation of booking due to global recession and due to Telengana agitation the same can be done as terms and conditions of the agreement of sale dated 28-10-2010 between the parties. The opposite party contended that the complaint is liable to be dismissed for non joinder of necessary parties and submitted that there was a Tripartite agreement dt.15-11-2010 between the parties and the payments thereunder are subject to the Agreement of sale dt.28-10-2010 and the tripartite agreement and the complainant failed to make the Corporation Bank as a party to the proceedings and therefore the present complaint is liable to be dismissed for non joinder of necessary parties.
The opposite party admitted that it agreed to deliver the flat by November, 2011 with a grace period of nine months and the delay was caused due to circumstances beyond their control which fall under ‘force majure’ clause XIV of Agreement dt.28-10-2010 and therefore the said delay cannot be construed as deficiency of service and submitted that the complainant is not entitled for refund of Rs.31,27,059/- or any interest, compensation or costs and prayed to dismiss the complaint.
The complainant filed his affidavit and marked Exs.A1 to A10. The Managing Director of the opposite party filed his affidavit in support of their case.
The learned counsel complainant and the opposite party filed written arguments.
Heard.
The points for consideration are:
- Whether the compliant is maintainable in view of arbitration clause in the agreement of sale?
- Whether the complaint is not a consumer dispute?
- Whether there is any deficiency in service on the part of the opposite parties ?
- To what relief?
The facts not in dispute are that the complainant entered into an “Agreement for Sale”, Ex.A2 with the opposite parties on 28-10.2010 for purchase of Flat bearing No.646, 6th floor Station -8 admeasuring 2150 sq ft. together with 46.23 sq. yds. of undivided share and one car port space. The complainant and his wife along with the opposite party and Corporation Bank also entered into a Tripartite agreement on 15-11-2010 to create equitable mortgage of the property and the Corporation Bank sanctioned an amount of Rs.41,00,000/- and released a sum of Rs.15,60,000/- and he has been repaying the loan with interest which came to Rs.20,10,385/-.
The learned counsel for the opposite party submitted that the complainant does not come within the meaning of ‘consumer’ and his remedy is elsewhere but not before this Commission and as there is a clause of arbitration, this Commission has no jurisdiction to entertain the complaint. It is his further submission that interest @ 24% p.a. and compensation claimed by the complainant is on the higher side.
The agreement of sale provides reference to arbitration. The learned counsel for the opposite party has contended that in view of the arbitration clause in the agreement, the complainants cannot maintain the complaint before this Commission. 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.”
The complainant has submitted that owing to failure of the opposite party in taking up the construction of the Flat No.646 which amounts to deficiency in service, he opted for refund of the amount paid. As the complainant is not asking for any declaration or specific performance of contract etc., and his very prayer as per the complaint is for refund of the money, he has parted with, we are of the view that this complaint is maintainable and this is a consumer dispute.
The opposite parties further contended that as per the agreement para VIII (g) of the complaint, it is agreed between the parties that for any delay in delivering the possession, the opposite party shall pay compensation charges of Rs.3/- per sq. ft. per month that too after payment of dues payable by the complainant and also submitted that the complaint is bad for non joinder of Corporation Bank as a necessary party to the complaint. The learned counsel for the opposite parties, Mr.Krishnam Raju further contended that the cancellation of the agreement of sale depends on the terms and conditions and made a reference to the judgement of the Hon’ble National Commission reported in 2009(2) CPR 197 (NC) wherein it was held that ‘the courts cannot add anything or improve upon the terms of the contract between the parties’ and stated that the said principle is applicable to the present case. Except merely stating as above, the learned counsel has neither placed the said judgement before us nor demonstrated as to how the said judgement is applicable to the case on hand. What is to be inferred from the judgement is that the courts can neither add nor improve beyond the terms of the contract between the parties and such a view cannot be disputed. As the said judgement is not demonstrated before us, we are unable to take any clue from the said judgement and accordingly the same is rejected. The opposite parties contended that they are ready to refund the amount to the complainant according to the terms and conditions i.e. after deducting 20% of the amount out of the amount received.
Apparently the complainant parted with an amount of Rs.26,76,674/- and the last payment was made on 13-11-2010. From a perusal of the documents which are marked as Exs.A7 to A10, there is no dispute with regard to the payment and the harassment faced by the complainant due to non completion of the flat and refund of the amount paid. The first payment was made on 11-7-2010 with a fond hope that they could live in the flat comfortably by the year 2012. His dreams were shattered and in those circumstances, he opted for refund of the amount paid. As could be seen from the legal notice, the complainant sought for refund of the amount as the opposite party has not yet started construction and on the other hand the opposite party admit that the delay in construction is due to reasons beyond its control and offering Rs.3/- per sq. ft. after payment of entire amount is definitely unfair trade practice. As the opposite party after having received an amount of Rs.26,76,674/- has not yet started construction and relying on the clauses mentioned in the agreement and also contending that the Corporation Bank is not made a party and raising untenable pleas that unregistered documents cannot be looked into amounts to unfair trade practice as the opposite party is enjoying the hard earned money parted by the complainant and at the same time the complainant is repaying the loan to the Bank and therefore the contention that the Bank is not made a party does not hold water. Therefore, we are of the view that the complainant is entitled for refund of the entire amount paid with interest at 12% p.a. from the date of last payment which was made on 13-11-2010 till the date of realization together with costs of Rs.10,000/-.
Accordingly this complaint is allowed in part and the opposite parties are directed to refund the amount of Rs. Rs.26,76,674/- with interest at 12% p.a. from the date of last payment i.e. 13-11-2010 till the date of realization together with costs of Rs.10,000/- to be paid within a period of four weeks from the date of receipt of this order.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.18-6-2014.
//APPENDIX OF EVIDENCE//
WITNESSES EXAMINED
For complainants: For Opp.parties:
Affidavit of the complainant filed. Managing Director of OP.1
filed his affidavit.
Exhibits marked on behalf of the complainants:
Ex. A1:Information sheet
Ex.A2-Agreement of sale dated 28-10-2010.
Ex.A3-Tripartite Agreement dated 15-11-2010.
Ex.A4-Legal notice dated 07-10-2013.
Ex.A5- Returned postal cover.
Ex.A6-Postal acknowledgement.
Ex.A7-Receipt dt.10-7-2010.
Ex.A8-Receipt dt.23-10-2010
Ex.A9-Receipt dt.04-11-2010
Ex.A10-Receipt dt.13-11-2010.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.18-6-2014.
