BEFORE A.P. STATE CONSUMER DISPUTES REDRESSAL AT HYDERABAD
CC No.23 OF 2013
Between :
Mr.Aileni aged about 38 years, Technology, through his GPA holder aged about 31 years, Narmada Near Green Field Colony,
Complainant
1. M/s Aliens Developers Pvt. Ltd., rep. by its
Managing Director,
2. Hari Aged about 39 years,
Both are R/o Regd. Off: Flat No.911
Opposite parties
CC No.24 OF 2013
Between :
Mr.Pramod Rao aged about 35 years, down to Hyderabad
Complainant
1. M/s Aliens Developers Pvt. Ltd., rep. by its
Managing
2. Hari Aged about 39 years,
Both are R/o Regd. Off: Flat No.911
Opposite parties
Counsel for the Complainant M/s
Counsel for the opposite parties M/
QUORUM: SRI R.LAKSHMI NARASIMHA RAO, HON’BLE I/C PRESIDENT
AND
SRI S.BHUJANGA RAO, HON’BLE MEMBER
WEDNESDAY THE TWENTIETH DAY OF NOVEMBER
TWO THOUSAND THIRTEEN
Oral
***
1. Since both these complaints deal with similar facts, they are being disposed of by a common order. C.C.No.23 of 2013 is taken as lead case.
2. The complaint is filed through General Power of Attorney Holder under Section 17 of the Consumer Protection Act, complaining deficiency in service against the opposite parties no.1 and 2 and claimed a sum of `26,53,960/- towards the amount paid and interest thereon and an amount of `26,53,980/-towards interest @ 24%p.a. from the date of filing of complaint till payment and a sum of `10,00,000/- towards damages as also the costs of `75,000/-.
3. The opposite entered into development agreement under documents bearing nos.23198/2006 and 23230/2006 on 23.06.2007 and development cum general power of attorney in favour of the first opposite party-company with the owners of land for development of their land measuring Ac.19.26 at
4. The complainant booked residential flat bearing no.656 at Station-9, 6th Floor admeasuring 1597sft, super built up area including common area with 2 car parking spaces along with 34.34 for consideration of Rs.41,83,767/-. The complainant entered into Agreement for Reservation with the opposite party no.1 on 28.10.2010 and thereafter Agreement of sale on 4.03.2009 where time is made essence of contract. As per the payment schedule, the complainant has to pay at various stages of construction and the complainant as per the payment schedule paid an amount of Rs.20
5. The complainant submitted that the opposite party agreed to pay `3/- per fresh agreement of sale on 28.10.2008 with the opposite party no.1 for purchase of Flat No.938 at Station-6, 9th Floor, and the opposite parties promised to deliver possession of the Flat on or before November,2011.
6. The complainant submitted that since construction of a single Space Station is not completed, the complainant decided to cancel the agreement of sale and the second opposite party also cancelled the agreement of sale on 12.01.2012 and promised to return the amount with interest in 3-4 installments beginning with March The opposite party no.2 addressed letter dated 4.02.2012 and issued postdated
7. The cheque issued by the opposite party no.2 for `5,00,0000/- was realized and the other dated 24.2.2012, 23.3.2012 and 26.4.2012 are bounced on account of insufficient funds in the account of the opposite parties no.1 and 2. The complainant was made to pay the amount to the opposite parties though no construction was started at the site and the opposite party failed to complete construction of the alternative flat. The complainant paid the amount to the opposite parties borrowing the amount from private financiers at higher rate of interest. The opposite parties have not paid the amount as per refund schedule and the complainant suffered mental tension due to the act of the opposite parties.
8. 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 and that once the agreement is cancelled and account is settled there is no relationship between the parties.
9. The opposite parties have submitted that the agreement was mutually cancelled and in view of novation of the contract there exists no relationship of builder and consumer between the opposite parties and the complainant. The opposite parties submitted 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 patties have filed application for change of use of the land as commercial use zone.
10. 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 propose 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 parties obtained NOC from Airport Authority on 10.07.2009.
11. The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground +20 upper floors and release of building permission parties , the opposite parties could not complete the project within the time frame. The opposite parties 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.
12. The opposite parties submitted that the opposite parties agreed to pay `3/- per in terms of Clause VIII(g) of the Agreement for the delay caused in completing the project. The complainant cancelled the agreement of sale and agreed to receive the amount paid by him and the opposite parties have refunded part of the amount agreed to be paid to the complainant as also the opposite parties have issued
13. The GPA, On behalf of the opposite parties, its Managing filed the affidavit and no documents have been marked.
14. The points for consideration are:
i) Whether the compliant 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
iv) To what relief?
15. POINT NO.1: The complainant entered in to “Agreement for reservation of Flat” with the opposite party no.1 28.10.2010 for purchase of Flat bearing number 656 and thereafter the parties entered into agreement of sale on 4.3.2009. Later, the parties have entered into fresh agreement of sale in respect of the Flat bearing 938 in lieu of the Flat bearing number 656, on 28.10.2010 and the agreement of sale provides reference to arbitration. The learned counsel for the opposite parties has contended that in view of the arbitration clause in the 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 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.
16. 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 Corporation Ltd. Vs. M. 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 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.”
17. NO.2 & 3: The opposite parties no.1 and 2 entered into development agreement with the land owners of the land admeasuring 07.10.2006 in survey number 383, 385 and 426A situate at village of and they entered into agreement for construction of residential flats in accordance with the terms and conditions contained therein and as per specifications annexed to the Agreement. The Development Agreement is the “Development Agreement –cum-Power of Attorney”.
18. In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building in the land and admittedly there has been delay in completion of the project. The opposite parties have attributed the delay on the part of the authorities concerned in granting permission and NOC etc. as the cause for the delay in completion of the project. The opposite parties would contend the cause for delay is beyond their control which is Force Majeure. The opposite party no. 2 stated the reasons for the delay in completion of the construction of the residential complex as under:
The 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 dt.3.8.2008 under clause The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the
19. The and the opposite parties no.1and 2 for claiming enforcement of their rights thereunder.
20. The complainant has submitted that owing to failure of the opposite parties in completing the construction of the Flat No.656 previously agreed to be purchased and the No, 93 8 subsequently agreed to be purchased in lieu of the Flat No. 656-, he opted for cancellation of the agreement of sale and the opposite party has contended that in order to maintain cordial relations with the complainant, they agreed to cancel the agreement of sale. The cancellation of the agreement of sale is termed as ‘
This letter is confirm that prestigious project SS1 with Priority NO A9/SS/54 bearing the
Hereby we confirm that the below mentioned
Bank | Chq No | Date | Amount |
ICICI Bank | 199014 | 23-Jan-12 | 500000 |
ICICI Bank | 199015 | 24-Feb-12 | 500000 |
ICICI Bank | 199016 | 23-Mar-12 | 500000 |
ICICI Bank | 199017 | 26-Apr-12 | 552322 |
After the clearance of these The customer reserves the right to revert back the cancellation prior to realization of all the checks and the same Flat will NOT be resold or reassigned to a new customer until all the checks have been realized.
21. In pursuance of the mutual agreement for cancellation of the agreement of sale, the opposite parties had issued dated 24.2.2012, 23.3.2012 and 26.4.2012. The complainant had realized a sum of Rs.5 The complainant has filed the complaint claiming the amount covered under the dishonoured cheques and the opposite parties would contend that the claim for recovery of money and compensation which cannot be a consumer dispute.
22. The opposite parties have promised to complete construction of the Flat and hand over its possession to the complainant within three years with a grace period of 6 months from the date of the agreement of sale and on their failure to perform their part of contract, the opposite parties had proposed to sell another Flat, Flat No.938 and the opposite parties have failed to keep promise and complete the Project whereof the Flat subsequently agreed to be sold is constituent and on their failure to hand over possession of the Flat, the opposite parties agreed for proposal for cancellation of the Agreement of sale and refund of the amount received from the complainant in pursuance of which the opposite parties had issued cheques which on being presented for collection of the amount, were bounced as there were no sufficient funds for realization of the amount in the account of the drawer of the cheques.
23. Not keeping promise complete construction of the Building and failure to deliver possession of the Flat as also not keeping promise to refund the amount as per the terms of the repayment schedule 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 or by way of filing complaint before Consumer Forum. The contention of the opposite parties that the complaint is not maintainable is not sustainable.
24. The complainant claimed interest till the date of issuing of the cheques and from the time till filing of the complaint as also future interest besides claim for damages to the tune of Rs.10,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the opposite parties have informed him about the delay in obtaining permission and NOC etc., which ultimately was found to be valid. The complainant agreed to receive the amount without interest or any other charges. Thus, the complainant cannot claim for damages and he is entitled to interest @ 9% p.a. on the amount paid from the date of agreement for cancellation of the agreement of sale.
25. In the result, the complaint CC No.23 of 2013 is allowed directing the opposite parties no.1 and 2 to pay an amount of `15,70,404/- with interest @ 9% `5,000/-.
CC No.24 of 2013
In the result the complaint CC No.24 of 2013 is allowed directing the opposite parties no.1 and 2 to pay `22,10,729/- with interest @ 9% `5,000/-.
I/C PRESIDENT
MEMBER
Dt.20.11.2013
కె.ఎం.కె.*
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For complainant
Ex.A1 Copy of the agreement of sale dt.4.3.2009
Ex.A2 Copy of the agreement for reservation of flat dt.28.10.2010
Ex.A3 Copy of cheque for Rs.5 lakh dt.24.02.2012
Ex.A4 Copy of cheque
Ex.A5
Ex.A6 Copy of cheque
Ex.A7 Copy of cheque for Rs.5 lakh dt.24.02.2012
Ex.A8 Copy of cheque
Ex.A9 Copy of legal notice dt.15.06.2012
Ex.A10 3Nos. of Acknowledgement cards
Ex.A11 Copy of letter dated 12.01.2012
Ex.A12 Copy of GPA
Ex.A13 Copy of Incorporation Certificate
For opposite parties
NIL
C.C.No.24 of 2013
For complainant
Ex.A1 Copy of the agreement for reservation of flat dt.22.01.2011
Ex.A2 Copy of cheque for Rs.5 lakh dt.19.02.2012
Ex.A3 Copy of cheque
Ex.A4 Copy of cheque for Rs.5 lakh dt.29.03.2012
Ex.A5 Copy of cheque
Ex.A6 Copy of cheque for Rs.5 lakh dt.29.04.2012
Ex.A7 Copy of cheque
Ex.A8 Copy of cheque for Rs.5
Ex.A9 Copy of cheque
Ex.A10 Copy of legal notice dt.15.06.2012
Ex.A11 3Nos. of Acknowledgement cards
Ex.A12 Copy of letter dated 12.01.2012
Ex.A13 Copy of GPA
Ex.A14 Copy of Incorporation Certificate
For opposite parties
NIL
I/C PRESIDENT
MEMBER
