STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 22 OF 2014
Between :
1) Nirmala K.Mondal W/o Nilay Kumar Mondal,
Aged about 42 years, Indian, Occ: Private
Service, R/o Flat No.201, Chakkilam
Ayesha Mansion, Road No.8, Gandhinagar,
Hyderabad – 500 080.
2) Nilay Kumar Mondal S/o Jayanta Kumar
Mondal, aged about 43 years, Indian,
Occ: Private Service, R/o Flat No.201, Chakkilam
Ayesha Mansion, Road No.8, Gandhinagar,
Hyderabad – 500 080.
Complainants
And
1) M/s Aliens Developers Pvt., Ltd.,
Aliens Space Station,
Corporate Office: Gachibowli,
Tellapur, Hyderabad – 500 032,
Rep. by its Managing Director
Mr.Hari Challa.
2) M/s IDBI Bank Ltd.,
3rd Floor, Door No.5-9-89/1 & 2,
Chapal Road, Basheerbagh,
Hyderabad – 500 001,
Rep. by its Branch Manager.
Opposite parties
Counsel for the Complainants : Mr.V.Gouri Sankara Rao
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar-R1
Sri K.P.Sardhi-R2.
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Friday, the Twenty Nineth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainants complaining deficiency in service against the Opposite party No.1 claiming refund of Rs.47,70,000/- along with accumulated interest of Rs.26,67,441/- @ 15% p.a. from the respective dates of payment till 20.01.2014 and thereafter to continue to pay at the same rate till date of realization; to pay rental loss @ Rs.15,000/- p.m. from September 2011 till the date of refund of the sale consideration amount; to pay Rs.5,00,000/- as compensation for inconvenience, hardship and mental agony; to pay costs of Rs.1,00,000/-.
2. The Opposite party No.1 is engaged in housing construction activity and made vide publicity through colourful brochure informing the general public that they were constructing a modern residential complex under the name and style “ALIENS SPACE STATION”, Hyderabad’s first platinum rated green township situated at Tellapur village, Ramachandrapuram mandal, Medak district over the land admeasuring 82,976.800 sq. yards. The OP No.1 got approval from HUDA vide letter No.621/P4/Plg/HUDA/2008, dt.11.04.2008 for construction of multi-storied building consisting of residential apartments (4 basements + ground + 13 upper floors).
3. The OP No.1 offered to provide the utilities such as water, power and gas, lift, call button in each apartment, EV ready cark park, gas leak & smoke detect system; fire alarm, wet sprinklers, rescue areas, etc., Induced by the various representations made by OP No.1, the Complainants intended to purchase flat No.857 admeasuring 1673 sft., in 8th floor in Station No.10 together with undivided share of land measuring 34.70 square yards in the “Space Station-1” along with one car parking slot situated at Tellapur, Hyderabad, for a total consideration of Rs.56,84,803/- by paying an amount of Rs.1,00,000/- and the OP No.1 executed agreement for reservation of flat. Thereafter, the Complainants paid further amounts on various dates, amounting to Rs.51,70,000/-, however, the Ops refunded the amount of Rs.4,00,000/- to the Complainants as such, the paid amount came to Rs.47,70,000/-.
4. The Complainants obtained bank loan from the OP No.2 to the tune of Rs.39,20,000/- which they paid to the OP No.1. The loan instalment was fixed at Rs.59,720/-, subsequently it was refixed at Rs.36,750/- p.m. The OP No.1 also entered Agreement of sale in favour of the Complainants. The OP No.1 agreed to deliver the flat duly completed in all respects within 3 years from the date of booking with a grace period of six months. Surprisingly, the OP No.1 failed to commence the construction work. As per the agreement for reservation of flat, the OP No.1 shall handover the possession of the flat within three years from the date of booking with grace period of 6 months, i.e., on or before 21.08.2011. Presently, the OP No.1 abandoned the project at sub-cellar level. Taking the present scenario at the site, there is no possibility of completing Station-10 project even by 2017. All these omissions and commissions on the part of the OP No.1 amounts to deficiency in service and negligence. As such, addressed e-mail on 22.07.2013 informing the OP No.1 they would initiate appropriate legal proceedings.
5. The OP No.2 sanctioned the loan amount basing on the Tripartite Agreement entered by Complainant and OP No.1 with it. There is also negligence on the part of the OP No.2 bank in releasing Rs.39,20,000/- at a time without verifying the progress in the construction of the flat and without following the procedure. The OP No.1 subsequently repaid an amount of Rs.12,01,885/- to the Complainants towards EMIs. The Complainants paid an amount of Rs.28,03,181/- to the OP No.2 bank towards EMIs upto December 2013 and could not pay from January 2014 onwards. Hence, the complaint praying to allow the complaint with the reliefs as prayed for, supra.
6. The Opposite party No.1 resisted the claim on the premise that the complainants 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 mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. The complainants suppressed some facts and camouflaged some facts in order to make out a case. That the complaint is filed with all concocted allegations giving colour as if there is a consumer dispute.
7. The OP No.1 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.
8. It is averred by OP No.1 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. OP No.1 had 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 OP No.1 obtained NoC from Airports Authority on 10.07.2009.
9. 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 it had taken all necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the OP No.1 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.
10. It is stated that for the delay, the OP No.1 had 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 complainants filed the complaint with ulterior motive to defame the OP No.1. The Complainants shall file relevant receipts and documents to prove the payments.
11. The Complainants are not entitled for any compensation and his 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 OP No.1. Hence prayed for dismissal of the complaint.
12. The Opposite party No.2 resisted the claim contending that complaint against it is false, baseless with incorrect statement with an intention to gain unlawfully and to avoid their liability to repay the loan instalments or to delay the repayment of instalments. The complaint does not raise any consumer dispute as defined under the Consumer Protection Act and hence liable to be dismissed. The Complainants have not disclosed any cause of action to proceed against the OP No.2 and there is no deficiency in service or negligence on the part of it. It denied the other allegations made against it as false and baseless. It admitted to have releasing of loan amount in favour of the Complainants fixing the EMIs. There is no deficiency or negligence on its part. Hence, prayed to reject/dismiss the complaint with exemplary costs as the same is vexatious litigation.
13. On behalf of the Complainants, Complainant No.2 Nilay Kumar Mondal filed his evidence affidavit and the documents, Exs.A1 to A20. On behalf of the Opposite parties, the Managing Director of the OP No.1 Company by name Venkat Prasanna Challa has filed the affidavit and the documents, Ex.B1 to B18.
14. The counsel for the complainant and the Opposite parties have advanced their arguments reiterating the contents of the complaint and the written version. Heard both.
15. 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 ?
16. POINT NO.1 : The OP No.1 confirmed the allotment of subject flat vide Allotment Confirmation Sheet, dated 21.02.2008. The Complainants entered into “Agreement for sale” with the OP No.1 for purchase of flat bearing No.857 in Station-10 on 8th under Space Station-1 and thereafter the Complainants paid the part consideration amount as per the pricing pattern of the flat issued by the Ops. Subsequently, the Complainant appears to have approached the OP No.2 for sanction of loan, which in turn sanctioned the loan to the Complainants upon certain terms and conditions enumerated therein. Admittedly, the agreement of sale provides for reference to arbitration. The learned counsel for the OP No.1 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 proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) 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.
c) 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.
d) 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.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
17. 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.”
For the above reasons, the Point No.1 is answered in favour of the Complainants and against the OP No.1.
18. Though the Complainants made averments in the complaint against OP No.2, no relief is sought against the OP No.2 bank, as such, this Commission feels that there is no need to go into those averments. Be that as it may, the Complainants stated to have repaid the EMIs to the OP No.2 bank to the tune of Rs.28,03,181/- upto December 2013 and from January 2014 they failed to pay.
19. In the arguments, counsel for Complainants reiterated the same facts as averred in the complaint besides stating that the OP No.1 ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreements and hence pleading ‘force majeure’ does not arise. He relied on Section 72 of Indian Contract Act supported by the Judgment of Hon’ble Apex Court in Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) and submitted that the Apex Court opined that grant of interest @ 18% p.a. by way of damages and compensation is justified. He further relied on decision in Ghaziabad Development Authority Vs.Balbir Singh reported in II (2004) CPJ 12 wherein it is stated “in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest @ 18%.” This Commission perused the said Judgments. In Ghaziabad Development Authority versus Balbir Singh, the Hon’ble Supreme Court further observed that the interest shall be payable from the dates of deposit of the amounts till the date of repayment.
20. On the other hand, the counsel for the OP No.1 in the arguments submitted that as per agreement, if the Complainants want to cancel the booking of the flat, he shall forego 10% of the total flat cost as charges which is agreed by them and in that regard, relied on Judgment reported in 2009 (2) CPR 197 (NC) : II (2009) CPJ 276 (NC) in Punjab Urban Planning and Development Authority and another Vs. Shyam Sunder Tiwari and others, wherein, it is held that “courts cannot add anything or improve upon the terms of contract between the parties.” The facts of the said case and facts of the case on hand are different. In the said case, the Petitioner Authority withdrew the scheme and there was provision for refund of earnest money. In the case on hand, there is no provision for refund of earnest money. Admittedly, on failure to comply with terms and conditions of agreed terms by the OP No.1, the Complainants sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for OP No.1.
21. POINTS No.2 & 3 : The OP No.1 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 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 thereof and as per specifications given thereto.
22. In pursuance of the development agreement, the OP No.1 had 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 OP No.1 had attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The OP No.1 would contend that the cause for delay is beyond their control which is force majeure. The OP No.1 stated the reasons for the delay in completion of the construction of the residential complex as under:
“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 and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”
23. The complainants have submitted that owing to failure on the part of OP No.1 in completing the construction of the flat No.857, they opted for cancellation of the agreement of sale and the OP No.1 had contended that in order to maintain cordial relations with the complainants, it agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The complainant sent e-mail on 22.07.2013 cautioning the OP No.1 that they would invoke the legal proceedings on account of delay and negligence and false promises made by the OP No.1 seeking for refund of the amount on the premise of inaction on the part of the OP No.1.
24. The OP No.1 had promised to complete construction of the flat and hand over its possession to the complainants within three years from the date of booking with a grace period of six months i.e., on or before 21.08.2011 as agreed and on its failure to perform its part of contract, the OP No.1 had proposed to pay rents but failed to pay the same. However, there is no communication from the side of the OP No.1 in this regard and the OP No.1 had not filed a piece of paper to show its readiness to pay compensation and adjust the same towards the dues payable by the complainant.
25. Not keeping promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the OP No.1. 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 OP No.1 that the complaint is not maintainable is not sustainable.
26. The complainant claimed refund of amount paid together with interest besides claim for rental loss @ Rs.15000/- p.m. from September 2011 till date of refund and compensation to the tune of Rs.5,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainants have not disputed that the OP No.1 had informed them about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainants cannot claim damages. However, the complainants are entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization.
27. It is pertinent to state here that as per Ex.A2, A3, A16 and A20, the Complainants paid an amount of Rs.47,70,000/- as against the total sale consideration of Rs.56,84,803/- towards the subject flat. However, the amounts claimed to be paid are not disputed by the Opposite parties.
28. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the OP No.1 liable to pay the amounts to the Complainants. However, no relief is granted against the OP No.2.
29. In the result, the complaint is allowed holding that OP No.1 is liable and accordingly OP No.1 is directed to pay an amount of Rs.47,70,000/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. The complaint against OP No.2 is dismissed but under circumstances, no costs. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Nilay Affidavit evidence of Venkat
Kumar Mondal as PW1. Prasanna Challa as RW1.
EXHIBITS MARKED
For Complainant :
Ex.A1 is copy of Allotment Confirmation Sheet, furnished by the OP No.1, dt.21.02.2008.
Ex.A2 is copy of Acknowledgement receipt acknowledging the amount of Rs.1,00,000/-, dt.26.01.2008.
Ex.A3 is copy of Agreement of Sale executed by OP No.1 in favour of Complainants, in respect of the subject flat.
Ex.A4 is copy of Specifications for “Space Station” Project ID-A9.
Ex.A5 is copy of Tripartite Agreement, executed in between Complainant and Opposite parties.
Ex.A6 is copy of Memorandum of Understanding executed by Complainant and OP No.1.
Ex.A7 is copy of receipt bearing No.02571, dated 16.02.2007 for Rs.95,000/-.
Ex.A8 is copy of receipt bearing No.02572, dated 16.02.2008 for Rs.6,50,000/-.
Ex.A9 is copy of sanction letter dated 27.08.2008 issued by the OP No.2.
Ex.A10 is copy of Certificate furnished by OP No.2, for the financial year 2012-2013.
Ex.A11 is copy of Certificate furnished by OP No.2, for the financial year 2013-2014.
Ex.A12 is copy of letter dated 28.06.2012 addressed by OP No.1 to the Complainants.
Ex.A13 is copy of statement ledger account of complainant showing payments made towards loan account.
Ex.A14 is copy of e-mail addressed by OP No.1 to complainant, dt.24.12.2013.
Ex.A15 are copies of e-mails exchanged between OP No.1 and complainants.
Ex.A16 is copy of customer account ledger of the Complainant for the period from 07.01.2000 to 07.01.2014.
Ex.A17 is copy of e-mail addressed by OP No.1 to complainant, dt.04.12.2009.
Ex.A18 is interest calculation sheet filed by the Complainants.
Ex.A19 is copy of General Powr of Attorney executed by Mr.Kalasapudi Venkata Ganesh Subramanya Arun Kumar in favour of Kalasapudi Sanyasi Raju.
Ex.A20 is copy of the calculation sheet furnished by the OP No.1.
For Opposite parties :
For OP No.1 :
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 29.02.08 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.
For OP No.2 :
Ex.B19 is Photostat copy of Agreement of sale, dt.12.07.2008 executed by OP No.1 in favour of the Complainant, in respect of the subject flat.
Ex.B20 is Photostat copy of General Power of Attorney executed by the Complainant in favour of Manikonda Sai Lakshmi, dated 08.10.2008.
Ex.B21 is Photostat copy of Housing Loan application made by the Complainant to the OP No.2, dated 27.10.2008.
Ex.B22 is copy of home loan sanction letter, dated 03.01.2009.
Ex.B23 is copy of Memorandum of loan agreement for SBI Maxgain Home loan granted to public, dated 03.01.2009.
Ex.B24 is copy of Tripartite Agreement, dated 03.01.2009.
Ex.B25 is copy of bank statement of account of the Complainant, for the period 31.12.2008 to 30.11.2015.
PRESIDENT
29.04.2016
