STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 241 OF 2013
Between :
Manoranjan Mandal
S/o Sri Ram Kishore Manjhi,
Aged 32 years, Occ: Private employee,
R/o Plot No.602, First Floor,
Secretariat Colony, Manikonda,
Hyderabad – 500 081.
Complainant
And
1) M/s Aliens Developers (P) Ltd.,
Rep. by its Manager, Finance & Accounts
Mr.Ravi Murali Krishna
Corporate Office: Aliens Space Station,
Station No.14, 3rd Floor, Tellapur,
Medak district – 502 032, A.P.
2) Mr.Ravi Murali Krishna
S/o Ramesh. Ravi, aged 33 years,
Occu: Manager, Finance & Accounts,
M/s Aliens Developers Pvt., Ltd.,
Station N o.14, 3rd Floor, Tellapur,
Medak district – 502 032, A.P.
3) Mr.N.Ashok Kumar,
S/o Nageswara Rao, aged 30 years,
Occu: B.D. Finance,
M/s Aliens Developers Pvt., Ltd.,
Station No.14, 3rd Floor, Tellapur,
Medak district – 502 032, A.P.
Opposite parties
Counsel for the Complainants : M/s V.Appa Rao & B.Srinivas
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
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 Complainant complaining deficiency in service against the Opposite parties claimed to allot fully constructed flat with number 1428 in Station-5 in the residential complex “Space Station-1” in survey numbers 384, 385, 426/A situated in Tellapur village, R.C. Puram Mandal, Medak district; to pay penalty at Rs.3/- per sqft for delay in construction as per clause No.1 of Terms and Conditions of the Agreement; to pay compensation of Rs.2,00,000/- for mental tension, agony and loss of peace caused to the Complainant due to the irresponsible and negligent acts and deficiency in service by the Ops; to pay Rs.10,000/- towards costs for filing the complaint and pass any such other order or orders OR IN THE ALTERNATE, to repay the amount of Rs.19,06,090/- together with interest @ 24% p.a.; to pay Rs.2,00,000/- as compensation towards mental tension, agony, harassment and towards deficient services; to pay Rs.10,000/- towards costs of the complaint.
2. That the Opposite parties have offered to general public to purchase flats developed in residential complex, “Aliens Space Station-1” project, which is a high rise residential apartment complex of 30 floors, consisting of 13 stations, each consisting of various towers, comprising a total of 2132 apartments, in Survey numbers 384, 385, 426/A located at Tellapur (v), Ramachandrapuram Mandal, Medak district, entered into Development Agreement under documents bearing Nos.23198 of 2006, 23230 of 2006 dt.07.10.2006 and 13321 of 2007 dt.23.06.2007 with the owners of land for development of their land measuring Ac.19.26 guntas in Sy.No.384 and 385 situated at Tellapur village, Ramachandrapuram mandal, Medak district for construction of residential apartment complex.
3. The Complainant paid an advance of Rs.2,50,000/- on 28.08.2011 and entered into an Agreement for Reservation of flat with the Opposite parties, who in turn, allotted priority No.A9/SS/2005, floor 14th, Flat No.1428 on Station-5 consisting of 1344 sft with one car parking, for a total consideration of Rs.39,80,180/- excluding service tax and registration expenses. Thereafter, the Complainant paid further amounts to the Opposite party as per the schedule prescribed by the Opposite parties, amounting to Rs.19,06,090/-. The Opposite parties promised and agreed to complete the project and deliver the possession of the flat on or before august 2012 with a grace period of 9 months but failed to complete the same. The Opposite parties also agreed to pay Rs.3/- per sqft as penalty to the complainant in case of delay in completion of the project. Surprisingly, the Opposite parties failed to comply with the terms of the Agreement and also failed to pay the amount of Rs.3/- per sqft and even they have not commenced the work at Station-5.
4. When the Complainant approached the Opposite parties demanding completion of the flat and handing over possession of the same, they have been evading to keep up their promise on one pretext or the other and causing monetary loss to him. The complainant addressed e-mails and also the notice to the Opposite parties, but it evoked no response. Hence the present complaint with a prayer to direct the Opposite parties either to handover the fully constructed flat as agreed or in the alternate to refund the amount together with interest along with other reliefs, as stated supra.
5. 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 mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. The complainant 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.
6. 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.
7. 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.
8. 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.
9. 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 complainant filed the complaint with ulterior motive to defame the opposite parties. The Complainant shall file relevant receipts and documents to prove the payments.
10. The Complainant is not entitled for any compensation and his claim is illegal. The complainant is 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 parties. Hence prayed for dismissal of the complaint.
11. The Complainant himself filed his evidence affidavit and the documents, Exs.A1 to A8. On behalf of the Opposite parties, the Managing Director of the OP No.1 Company has filed the affidavit and the documents, Ex.B1 to B18.
12. The counsel for the complainant and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version while the counsel for Complainant also filed written arguments. Heard both.
13. 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 ?
14. POINT NO.1 : The Complainant entered into “Agreement of Reservation of Flat” on 05.09.2011 with the Opposite party No.1 for purchase of flat bearing No.1428 in Station-5 on 14th floor and thereafter the Complainant paid the part consideration amount as per the pricing pattern of the flat issued by the Ops and the Agreement for Reservation of Flat do not provide for reference to arbitration. The learned counsel for the opposite parties has contended that in view of the arbitration clause in the agreement, the Complainant cannot maintain the complaint before this Commission. Since there is no provision as such in the Agreement for reservation of flat, any finding by this Commission on that regard would not serve any purpose.
15. 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 Complainant and against the Opposite parties.
16. During the course of arguments, the learned counsel for the Complainant sought for refund of the amount in view of the fact that the Opposite parties would not complete the construction of flats in all respects in the near future and it would be time lagging drawing further litigation. Hence, this Commission is inclined to concede the request of the learned counsel for Complainant.
17. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the Opposite parties 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.
18. On the other hand, the counsel for the Opposite parties in the arguments submitted that as per agreement, if the Complainant wants to cancel the booking of the flat, he shall forego 10% of the total flat cost as charges which is agreed by him 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.” Admittedly, in the instant case, no such Agreement is entered into between the parties except the Agreement for reservation of flat. However, this Commission perused the said order. 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 Opposite parties, the Complainant sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite parties.
19. 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 383, 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 thereof and as per specifications given thereto.
20. 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 NoC 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. The Opposite parties 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.”
21. The complainant has submitted that owing to failure of the opposite parties in completing the construction of the flat No.1428, he opted for cancellation of the Agreement for Reservation of Flat as an alternative prayer 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 by e-mail on 09.09.2013 and reminder on 14.09.2013 setting forth series of events of delay and negligence and false promises made by the Opposite parties seeking to complete the construction of flat and stick by their promise but as the case progressed, the Complainant sought for refund of the amount on the premise of inaction on the part of the opposite parties.
22. The opposite parties have promised to complete construction of the flats and hand over its possession to the complainant by August 2012 with a grace period of 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 complainant.
23. 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 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.
24. The complainant claimed refund of amount paid together with interest besides claim for damages to the tune of Rs.2,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the opposite parties have informed them about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainant cannot claim damages. However, the complainant is entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization.
25. It is pertinent to state here that as per Ex.A2 to A5, the Complainant paid an amount of Rs.19,06,090/- as against the total sale consideration of Rs.39,80,180/- towards the subject flat.
26. 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 pay the amounts to the Complainant.
27. In the result, the complaint is allowed holding that Opposite parties 1 to 3 are jointly and severally liable and they are directed to pay an amount of Rs.19,06,090/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of EH Jayaram Affidavit evidence of Hari
as PW1. Challa as RW1.
EXHIBITS MARKED
For Complainant :
Ex.A1 is Photostat copy of Agreement for Reservation of Flat, dated 05.09.2011.
Ex.A2 is Photostat copy of receipt bearing No.08655, dated 28.08.2011 for Rs.2,50,000/-.
Ex.A3 is Photostat copy of receipt bearing No.08656, dated 29.08.2011 for Rs.5,50,000/-.
Ex.A4 is Photostat copy of receipt bearing No.08313, dated 06.09.2011 for Rs.11,06,090/-.
Ex.A5 is Photostat copy of Statement of Account of the complainant furnished by the Opposite parties.
Ex.A6 are the Photostat copies of the e-mails exchanged in between Complainant and the Opposite parties.
Ex.A7 is Photostat copy of the statement of account obtained from State Bank of India, Bhagalpur branch for the period from 01.08.2011 to 30.09.2011 in respect of the Complainant, showing payments made to the Opposite parties.
Ex.A8 is Photostat copy of the statement of account obtained from HDFC Bank, 485-Udyog Vihar branch, for the period from 01.09.2011 to 30.09.2011 in respect of the Complainant, showing payments made to the Opposite parties.
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 29.02.08 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.
PRESIDENT
29.04.2016
