BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD
C.C.NO.114 OF 2012
Between
1. K.Ram Prasad Reddy S/o K.Saya Reddy
Aged about 55 years, Occ: Business
2. Miss K.Monika D/o K.Ram Prasad Reddy
Aged about 25 years, Occ: Employee
rep. by her GPA Holder K.Ram Prasad Reddy
Both are R/o H.No.1-6-336
Near Narasimha Swamy Temple
Chaitanyapuri, Hyderabad-060
Complainants
A N D
1. M/s Andhra Pradesh State Housing Board (APHB)
A body constituted under the provisions of APHB Act, 1956
Office at Gruhakalpa, M.J.Road, Nampally
Hyderabad-001, rep. by its Vice Chairman
& Managing Director
2. M/s Indu Eastern Province Projects Pvt Ltd.,(IEPPPL)
Reg.Off: at 1009, 13th Phase, Kukatpally
Hyderabad-072
rep. by its Chairman & Managing Director
Mr.I.Syam Prasad Reddy S/o late Venku Reddy
aged about 53 years.
Opposite parties
Counsel for the Appellant M/s C.R.Vasantha Kumar
Counsel for the Respondent M/s B.Janardhan (OP1)
M/s V.Goursankara Rao(OP2)
QUORUM: SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER
&
SRI THOTA ASHOK KUMAR , HON’BLE MEMBER
FRIDAY THE TWENTY THIRD DAY OF AUGUST
TWO THOUSAND THIRTEEN
Oral Order ( As per R.Lakshminarsimha Rao, Member)
***
1. The complaint is filed seeking direction to the opposite parties to complete construction work and amenities and deliver possession of Flat bearing No.104 in Indu Aranya at Thattiannaram, R.R.District and to execute tripartite agreement or registered sale deed alternatively refund the amount with interest @ 24% per annum as also a sum of `5 lakhs towards compensation for suffering mental agony and `20,000/- towards costs.
2. The averments of the complaint are that the complainants applied for allotment of flat and paid a sum of `2,40,000/-. The opposite party no.2 issued allotment letter dated 16.8.2008 allotting flat no.104 at Indu Aranya at Thattiannaram, R.R.District. On 2.2.2009 the opposite parties offered for alteration/modification of the flat and demanded for an amount of `11,91,625/- of which the complainant’s had already paid `7,91,000/-.
3. The complainant no.1 issued cheque dated 27.12.2009 for `1,10,000/- and expressed his intention to pay balance amount on release of loan by the bank. The opposite party no.2 issued reminder on 23.1.2010 and on the same day the complainant intimated the opposite party no.2 that the amount will be paid by the bank directly to the opposite party no.2 and requested the opposite party no.2 to provide for agreement in the place of allotment letter as required by the bank.
4. The opposite party no.2 furnished allotment letter dated 18.2.2010 and on 19.2.2010 the second opposite party had sent agreement of the sale requiring the complainant no.1 to sign it and return to the opposite party no.2. On 27.5.2010 the opposite party no.2 issued another reminder demanding for an amount of `17,59,843/- and informed the complainant no.1 that in case the amount is not paid the allotment would be cancelled and 20% of the sale consideration i.e., `5,11,100/- would be retained by the opposite party no.2.
5. On 4.6.2010 the second complainant addressed letter to the opposite party no.2 that she was informed that executives of the opposite party no.2 company collected sanction letter from the bank and the bank requested her to furnish tripartite agreement or registered sale deed to release cheque for the loan amount to the opposite party no.2. The opposite party no.2 issued another reminder on 14.9.2010 demanding for payment of outstanding amount and addressed letter dated 7.3.2011 requesting the complainants to take possession of the flat by submitting dues clearance and other certificates.
6. On 22.9.2011 the opposite partyno.2 issued final reminder for the outstanding due and on 27.3.2012 the opposite party no.2 sent letter informing the complainants that electricity meter was going to be installed in the flat and demanded for payment of necessary charges to avoid disconnection of power supply to the flat. On 28.5.2012 the second opposite party sent another letter informing the complainants that in case they require parking space they are required to pay a sum of `1,50,000/-. The complainants through their letter dated 4.11.2011 requested the opposite party no.2 to waive the interest on outstanding due.
7. The flat owners association through letter dated 17.7.2012 requested the opposite party no.2 to bear the registration charges as the opposite party no.2 was not executing registered sale deeds. The complainant had sent mail on 10.7.2012 to furnish information that housing board and GHMC stopped registering the sale deeds. On 9.7.2012 the members of flat owners association requested the minister Sri Uttam Kumar Reddy to take appropriate action and the minister expressed his inability to do anything in the matter since investigation was carried out by several agencies against the Indu Group.
8. On 3.8.2012 the opposite party no.2 cancelled the allotment of flat. The opposite party no.2 played unfair trade practice upon the complainants by demanding for sale consideration, without possessing marketable title. The complainants are always ready to pay the balance amount provided tripartite agreement is entered into, by the opposite party no.2 with the bank. The opposite party no.2 without furnishing necessary documents demanded the complainants to pay the balance sale consideration.
9. The opposite party no.1 resisted the claim contending that it is the owner of the land and entered into development agreement with the opposite party no.2 on 22.3.2006 and in pursuance of the agreement the opposite party no.2 has taken up construction of flats in the land. It is contended that the opposite party no.2 agreed to design, plan finance, market develop necessary infrastructure, provide necessary service, operate and maintain the infrastructure, administer and manage the project in accordance with the terms of development agreement. It was agreed that the opposite party no.2 would be responsible for marketing of the project and the opposite party no.1 agreed to execute sale deed in favour of the persons on instructions from the opposite party no.2 in accordance with the terms of power of attorney.
10. The opposite party no.1 submitted that it is a formal party and has no role in the transaction between the complainant and the opposite party no.2 and that there is no privity of contract between the complainants and the opposite party no.1. The opposite party no.1 is ready and willing to honour the terms and conditions of the development agreement. It is contended that in view of arbitration clause in the development agreement, the complaint is not maintainable and the District Forum has no jurisdiction to entertain the complaint.
11. The opposite party no.1 submitted that there is no cause of action against it and as such there cannot be any deficiency in service on the part of the opposite party no.1. The complainants had not issued any notice or communication to the opposite party no.1 till filing of the complaint. There is no deficiency of service on the part of the opposite party no.1. Hence, prayed for dismissal of the complaint.
12. The opposite party no.2 contended that complaint filed against the opposite party no.2 in his individual capacity is not maintainable. It is contended that the opposite party no.2 entered into development agreement on 22.3.2006, in terms of which the opposite party no.2 developed housing project. The opposite party no.2 entered into agreement of sale with the complainants on 19.2.2010 for sale of the flat for consideration of `25,55,500/-.
13. The complainants had not paid the instalments of sale consideration as per payment schedule annexed to the allotment letter. The complainants agreed to pay the stamp duty, registration charges, transfer charges, legal charges, deposits for water and electricity connection, maintenance for common facilities, club house, car parking, corpus fund and other charges levied by the government. The complainants are still due an amount of `17,55,500/- and the opposite party no.2 issued several reminders from time to time to the complainants demanding for the outstanding amount. The complainants failed to pay the amount due.
14. The opposite partyno.2 terminated the agreement of sale for default committed by the complainants. The complainants had to forego 20% of the sale consideration . The opposite party no.2 had not advised the complainants to approach State Bank of Hyderabad for housing loan. Availing loan from the Bank is the responsibility of the complainant. The role of the opposite party no.2 is that of a facilitator and it will become a party to the tripartite agreement, along with the complainants.
15. The complainants are not ready at any point of time to make payment of balance sale consideration. The complainants paid due till September 2009. As per clause 3 of the agreement of sale the opposite party no.2 is entitled to claim interest @ 18% per annum. The flat is ready for occupation. The complainants are defaulters in payment of sale consideration. The complainants have not approached this Commission with clean hands. The opposite party no.2 has no objection to hand over the possession of the flats if the complainants paid the arrears of sale consideration including the charges for amenities along with stipulated interest and penalties as per the terms of the agreement of sale.
16. On behalf of the complainants, the first complainant filed his affidavit and the documents, Exs.A1 to A29.
17. On behalf of the opposite parties, the AEE Project Coordinator Section of the opposite party no.1 Housing Board filed his affidavit and Sri L.Lavanya Kumar filed his affidavit and the documents, Exs.B1 to B4.
18. The points for consideration are:
i) Whether the opposite parties rendered deficient service in terminating the agreement?
ii) Whether the complainant is entitled to tripartite agreement /refund of the amount paid to the opposite party no.2?
iii) To what relief?
19. POINTS NO.1 & 2 The opposite party no.2 in collaboration with the opposite party no.1 developed Housing Project “Indu Aranya “ which is an integrated project with individual villas and Flats of different types. The opposite party no.2 entered into Agreement on 22.03.2006 with the opposite party no.1 whereunder the opposite party no.2 was authorized to take up the Housing Project. The complainant entered into Agreement of sale on 19.02.2010 with the opposite party no.2 for purchase of Flat No. K-104 in ‘K’ Block of Indu Aranya Project for sale consideration of `25,55,500/-
20. The complainants contend that the opposite party no.2 had not heeded to their request to enter into tripartite agreement with the Bank and the opposite party no.2 suppressing the fact that it had no title over the flat under sale, demanded for balance amount which is not sustainable whereas the opposite party no.2 would contend that the complainant did not stick to payment schedule of installments of sale consideration and as such it had terminated the agreement.
21. The opposite party no.2 expressed its readiness to execute sale deed subject to payment of arrears by the complainant and further the learned counsel for the opposite party no.2 agreed to refund the amount paid by the complainant subject to deductions as per the terms and conditions of the insurance policy. Thus, there is no much serious dispute between the parties except the amount to be ascertained to be paid by the complainant to the opposite party no.2 in case of further proceeding with the contract for execution of sale deed and the amount to be refunded by the opposite party no.2 in case the termination of agreement was agreed upon. As such the amount is to be ascertained on the basis whether there is any deficiency of service on the part of the opposite party no.2.
22. The opposite party no. 2 issued allotment letter on 16.08.2008. Payment schedule is annexed to the allotment letter and in paragraph 4 of allotment letter, circumstances in which the repudiation of the allotment letter be considered, payment of installments and consequences for non-payment of the installments in terms of the payment schedule is stated as under:
“If the allottee fails to comply with any of the terms of this allotment letter or if any instalments and interest thereon remain unpaid within 21 days from its demand date or dated of notice whichever is earlier, the developer shall treat this allotment letter as having been repudiated by the allottee, and this allotment letter will be annulled and automatically cancelled by the developer.
If the allottee fails to pay any installmetns payable in accordance with the Payment Schedule hereto or any part thereof and any interest payable of commits any breach of the terms of conditions contained in this Allotment Letter, the Developmer may, annul the sale of the said flat and forthwith terminate this Allotment Letter and in such an event the Developer shall be entitled to deal with or otherwise dispose of the said flat in such manner as the Developer shall see fit and the isntallments previously paid by the Allottee to the Developer, excluding any interest paid, shall be dealt with and disposed of follows:
i. Firstly, all interest hereof owing and unpaid shall be paid to the Developer;
ii. Secondly, 20% of the sale consideration shall be forfeited.
iii. Lastly, the residue thereof shall be refunded to the Allottee or to his Assignee
1. Neither party hereto shall have any further claim against the other for costs, damages, compensation or otherwise hereunder; and
2. Each party hereto shall be its own costs in the matter.
23. The complainant paid an amount of `1,00,000/- on 18.04.2008 towards booking for the Apartment bearing no.104. The opposite party no.2 through letter dated 2.02.2009 requested the complainants to inform them whether the complainants opted for any modification or alteration of plan as there is an option for open kitchen. The letter reads as under:
“ There have been requests form some of the customers for certain alterations. Post our review with technical team the only possible option is open kitchen (Pantry-as per Model apartment size) in west facing apartments. This alteration would be executed at no costs to you”
24. The letter bears an endorsement that the complainants confirmed their option for open kitchen facility. The opposite party issued payment reminders on 17.12.2009, 27.12.2009 and 23.01.2010 and after receiving the first reminder the complainant no.1 addressed letter dated 27.12.2009 informing the opposite party no.2 that as advised by the opposite party no.2 he had approached the Bank and submitted relevant documents to the Bank. He expressed his hope that the Bank would release the loan amount directly to the opposite party no.2. The letter reads as follows:
With reference to above we bring to your attention that we are very much interested in purchasing the above referred flat from your Bandlaguda Venture, accordingly we paid the initial payments for the balance we have submitted the required documents to the Bank as advised by you. As soon as the loan amount is released the necessary payments will be arranged directly from the Bank. However please update the progress of construction and tentative commitment for handover the flat to us.”
25. The letter would establish payment of part of sale consideration of `1,00,000/- made through cheque dated 27.12.2009 which had been purportedly done in response to the demand made under Reminder-1 by the opposite party no.2-company. The letter and the letter dated 29.01.2009 belied the plea of the opposite party no.2 that it had no role to play in the matter of loan to be obtained by the complainants.
26. The opposite partyno.2 and the complainants entered into agreement i.e., agreement of sale on 19.2.2010 whereunder sale consideration of the flat was fixed at `25,55,500/- and default/termination clause incorporated in the allotment letter is reproduced as also most of the other terms and conditions of the allotment letter find place in agreement of sale.
27. Summeta Prashanth has filed writ petition W.P.No.34550 of 2012 before the Hon’ble High Court against the opposite parties no.1 and 2 herein, seeking direction to them to execute and register sale deed in favour of the petitioner in respect of flat C2 in the building constructed by the opposite party no.2 in terms of the development agreement entered into, between the opposite parties no.1 and 2 herein.
28. The learned counsel for the complainant has submitted that the opposite party no.2 has no marketable title over the flat and the opposite partyno.2 had violated the terms of allotment letter and agreement of sale by not entering into tripartite agreement along with the complainants, with the State Bank of Hyderabad. He has referred to the counter filed by the opposite party no.1 herein in the writ petition wherein the opposite party no.1 has contended that the opposite party no.2 herein is not authorized to enter into agreement on behalf of the opposite party no.1 with the purchasers for sale of the flats.
29. The Developer Company has entered into an Agreement of Sale, dated 15.09.2008, with the Petitioner for sale of Flat NO.C2-2-202 (in the Project to be constructed by it pursuant to the Development Agreement and Supplementary Development Agreement) both on behalf of A.P. Housing Board, purportedly on the basis of the Power of Attorney executed by A.P. Housing Board and on behalf of the Developer Company.
30. It is respectfully submitted that as per Clause 9 of the Power of Attorney, dated 26.2.2008, executed by A.P. Housing Board in favour of the Developer, the Developer is authorized to only negotiate with purchasers for sale and/or transfer of flats or portions thereof together with undivided share in the land and the rights appurtenant thereto, and to receive Earnest Moneys and/or part and/or full premium/consideration, rents, service charges, taxes and other amounts thereof and grant valid receipts and discharges for the same.
31. But there is no authority to enter into agreements on behalf of A.P. Housing Board. Therefore, the Agreement of Sale executed by the Developer in favour of the Petitioner is beyond the scope and authority of the Power of Attorney and is therefore not binding on the A.P. Housing Board and the Petitioner cannot seek to enforce it against the A.P. Housing Board by way of this Writ Petition.
32. The opposite party no.2 entered into agreement of sale with the complainants beyond the scope of GPA executed in its favour by the opposite party no.1. As such, the opposite party no.2 cannot insist on compliance of the terms and conditions of the agreement of sale. The opposite party no.2 has projected the picture to the complainants as to its power to enter into agreement of sale as if it has the authority to sell the flat in question to the complainants. The opposite party no.2 cannot proceed on the basis of an in valid agreement and retain the amount paid by the complainants. The opposite party no.2 has promised the complainants that it would facilitate the sanction of loan and it did not keep its promise leaving alone the role of facilitator, the opposite party no.2 has not heeded to the request of the complainants to enter into a tripartite agreement with the bank.
33. The written version of the opposite party no.1 would deal with the scope and power of opposite partyno.2 in regard to the provisions of infrastructure, finance, marketing and management of the project. Any sale transaction and the power thereof is vested with the opposite party no.1. Clause 2.1, 2.7.1 and 3.3 of the Development Agreement do not empower the opposite party no.2 to enter into agreement of sale with the purchaser and aforementioned clause read as under:
2.1 the Developer Company shall design, plan, finance, market, develop necessary infrastructure, provide necessary services, operate and maintain the infrastructure, administer and manage the Project and shall for such purposes do all such acts, deeds and things as may be required in accordance with the terms and conditions set out in this Agreement.
2.7.1. The Developer Company shall be solely responsible for the marketing of the Project and shall make its best endeavors in this regard. The Developer Company shall undertake all marketing activities in this regard at its own costs and expenses. However, subject to Section 2.5.7(b), the Developer Company may appoint Contractors for the marketing of the Project.
3.3 On completion of the development of the Project as per the Developmental standards agreed to in SCHEDULE 2: Development Standards, APHB shall execute sale deeds with Persons on instructions from the Developer Company as per the process specified in the Power of Attorney. Provided that the transactions in this regard between APHB and the Unit Owners shall be carried out in a fair and equitable manner and on an arm’s length basis.
34. The opposite party no.2 has not filed GPA or its copy stated to have been executed in its favour by the opposite party no.1 as also the deponent of the affidavit L.Lavanya Kumar claimed himself to be an authorized person of the opposite party no.2 company to file the affidavit which however, has not been filed. The lapses on the part of the opposite party no.2 in the similar fashion, can be found many fold. This Commission would hold the complainants entitled to refund of the amount `7,91,000/- with interest thereon @ 9% per annum.
35. In the result, the complaint is allowed directing the opposite party no.2 to refund the amount of `7,91,000/- with interest @ 9% per annum from the date of complaint till payment together with costs of `5,000/-. Complaint against the opposite party no.1 is dismissed without costs. Time for compliance four weeks.
Sd/-
MEMBER
Sd/-
MEMBER
Dt.23.08.2013
కె.ఎం.కె*
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For complainant
Ex.A1 Certificate of incorporation Ex. A2 Annual Return & AGM 28.09.2011
Ex.A3 Booking application form dated 04.04.2008
Ex.A4 Receipt dated 18.04.2008 for Rs. 1,00,000/-
Ex.A5 Allotment letter dated 16.08.2008
Ex. A6 Letter of O. P. No. 2, dated 06/09/2008
Ex.A7 Letter dated 02.02.2009 of the O.P. No.2
Ex.A8 Letter dated 27.12.2009
Ex.A9 Letter dated 27.12.09 of the complainants
Ex.A10 Letter dated 23.01.10
Ex.A11 Letter dated 29.01.10 of the complainant
Ex.A12 Allotment letter dated 18.02.2010
Ex.A13 Letter of O.P.No. 2 to complainants
Ex.A14 letter of O.P.No.2 to the complainants
Ex.A15 Agreement dated 19.02.2010.58-76
Ex.A16 Letter dated 27.05.2010
Ex.A17 Letter dated 04.06.2010 of the complainant
Ex.A18 Demand note Dated 14.09.2010
Ex.A19 Letter dated 07.03.2011 of O.P.No.2
Ex.A20 Letter dated 27.03.2012
Ex.A21 Letter dated 11.04.2011
Ex.A22 Letter dated 22.09.2011
Ex.A23 Letter dated 17.07.2012
Ex.A24 Letter dated 03.08.12 of OP.2
Ex.A25 E-mail dated 08.07.2012 of complainants
Ex.A26 Reply e-mail dated 08.08.12 of O.P. 2
Ex.A27 Termination letter, dated 03.08.12
Ex.A28 E-mail dated 08.08.2012
Ex.A29 GPA ,
Ex.A30 Certified copy of the writ petition,
Ex.A31 Counter of the 1st Respondent in W.P.No. 34550 of 2010.
Opposite Parties
Ex. B1 Development Agreement dated 22.03.2006
Ex.B2 Power of Attorney by APHB to Indu Eastern Province Projects Private Ltd, dated 26.02.2008.
Ex.B3 Rectification dated 14.09.2006
Ex.B4 Supplement Development Agreement, dated 02.12.2009.
MEMBER
MEMBER
