C.C.Nos.2/2010 AND 3/2010

Between:

1. Kuchakula Surendar Reddy

    S/o.late K.Kantha Reddy,

    Aged 74 years, Occ:Business

    R/o.73 W.Ridgewood Avenue

    Parmus, New Jersey, U.S.A. being

    Represented by its Power of Attorney

    Holder, K.Raj Kumar Reddy S/o.K.Surender

    Reddy, age R/o.Flat No.505,

    Ashokchandra Enclave, Lakdi-ka-pul,

    Hyderabad.                                                     Complainant in  

                                                                              C.C.2/10.

2. K. Sunitha,

    W/o.Kuchakula Rajkumar Reddy,

    Aged 30 years, Occ: Housewife

    R/o.Flat No.505,

    Ashokchandra Enclave, Lakdi-ka-pul,

    Hyderabad.                                                      Complainant in

                                                                                      C.C.3/10

And

1. Sikhahara  Constructions having its office

   At flat No.102, Sphinix apartments, street No.1

   Himayathnagar, Hyderabad, being represented

   By its Managing Partner Mr.K.Vishnu Vardhan

   Reddy S/o.late K.Kista Reddy, aged  about 50 years,

   Occ:Business, r/o.flat No.301, Star Homes,

   Domalguda, Hyderabad.

2. K.Vishnu Vardhan Reddy, S/o.late K.Kista Reddy

    Aged  50 years, Occ:Business, r/o.flat No.301,

    Star Homes, Domalguda, Hyderabad.

3. R.Narasimha Reddy S/o.R.Satyanarayana Reddy

    Aged   years, Occ:Business, r/o.flat No.102

    Sphinix apartments, Street No.1, Himayathnagar

    Hyderabad.

4. Jaligamma Prakash S/o.late J.Balaiah @ Balappa

    Aged 55 yars, Occ:Business

5. Jaligamma Ramesh S/o.late J.Balaiah @ Balappa

    Aged 50 years, Occ:Business.

6. Jaligamma Suresh S/o.late Balaiah @ Balappa

    Aged 47 years, Occ:Business.

7. Jaligamma Ashok S/o.late J.Balaiah @ Balappa

    Aged 42 years, Occ:Business.

   Opp.parties No. 4 to 7 are R/o.H.No.3-6-369/A/22,

   Street No.1, Himayathnagar, Hyderabad.                                                                                                                                 ..Opposite Parties

                                                                          in CCs 2/10 & 3/10

Counsel for the Complainant: Mr.P.Raja Sripathi Rao

Counsel for the Opp. Parties :Mr.M.Durga Prasad-O.Ps 1, 4 to 7

                                                 O.Ps ! & 2-Mr.Santhosh Kumar Agarwal

                                             O.P.No.3-Mr.S.Ramachandra Prasad

 QUORUM:   THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT                                                                                        AND

SMT.M.SHREESHA,  MEMBER

.

WEDNESDAY, THE NINTH DAY OF MARCH,

                                                 TWO THOUSAND ELEVEN

 (Typed to the dictation of Smt.M.Shreesha, Hon’ble Member)
***    

        Since both the complaints deal with similar facts they are being disposed of by a common order.                                                                                                                                                                                               

        The brief facts as set out in the complaint are that opposite parties 1 to 3 are doing real estate development of plots into residential complexes and approached opposite parties 4 to 7, landlords for development of their property and entered into a registered Development    Agreement  cum  General Power of Attorney      with opposite parties 4 to 7 vide registered document No.3456/2005 dated 29-8-2005 in accordance which the opposite parties 1 to 3 are permitted to construct a residential complex consisting of 20 flats for which opposite parties 4 to 7 are entitled to 50% of the total built up area.  Opposite party no.1 represented by opposite parties 2 and 3 approached the complainant and he entered into agreement of sale in the proposed residential complex in respect of flat No.102 admeasuring 1700 sq. ft. for a total sale consideration of Rs.40,30,000/-.  The details of payment made by the complainant in CC 2/2010 are as follows:

i)                  Rs.5,00,000/- through cheque No.455868 ICICI Bank dated 5-7-06.

ii)                Rs.5,00,000/- by cash on 22-6-2007

iii)             Rs.10,00,000/- by cash on 24-10-2007

iv)              Rs.5,00,000/- by cash on 24-3-2007

v)                Rs.5,00,000/- by cash on 25-10-2008

vi)              Rs.5,30,000/- by cash on 17-1-2009.

Totally Rs.40,30,000/- and also induced complainant in C.C.No.3/2010 and induced her to purchase flat No.504 admeasuring 1387 sq. ft.  and 120 sq. ft. of parking area lot No.8 for scooter and car parking lot No.9 along with undivided share of land admeasuring 44.79 sq. yds. initially for a total sale consideration of Rs.21,80,000/- and on the request of opposite parties 2 and 3, she agreed to increase it from Rs.21,80,000/- to Rs.35,00,000/-.  The details of payment made by the complainant are as follows:

i)                  Rs.20,00,000/- in cash under valid receipt dated 16-12-2006

ii)                Rs.5,00,000/- by cash under valid receipt dated 10-1-2008

Totalling Rs.25,00,000/-.  Opposite parties 2 and 3 having received the total sale consideration had executed valid receipts for the same and opposite party No.3 had executed unregistered agreement of sale on 24-4-2009 in respect of complainant in CC No.2 of 2010.   As per the recitals of the said agreement of sale, the schedule completion of construction of the complainant flat is on or before 31-12-2009 in the property bearing No.3-6-369/A/22, Street No.1, Himayathnagar, Hyderabad. 

        It is the case of the complainants that opposite parties stopped the construction activity after receiving the total sale consideration in CC.No.2/2010 and part sale consideration in C.C.No.3/2010 with an intention to cause loss to them and inspite of their repeated requests and demands to commence the construction, there is no positive response from them and in turn opposite party no.3 behaved highhandedly and challenged the complainants to approach any court of law.  The complainants therefore got issued a legal notice dated 16-11-2009 calling upon opposite parties 1 to 3 to commence the construction within two days and opposite party No.2 having received the said legal notice issued a reply dated nil contending that opposite parties 1 to 3 have executed sale deed and the same is produced with the concerned sub Registrar pending registration.  However, the said reply is silent with regard to the demand of construction of the work.  Further the contents of the said reply notice are self admitting facts of interse disputes between opposite parties 2 and 3 and for the said dispute, the complainants cannot be put to loss. The complainants submit that they strongly believe that it is the conspiracy between opposite party 2 and 3 to knock away the sale consideration paid by them.  The complainants submitted that in the prevailing circumstances,  opposite parties 1 to 3 cannot complete the project in the given period of time and there is no likelihood of settlement of interse disputes between them and taking advantage of this situation, opposite parties 4 to 7, who are landlords are contemplating cancelling, terminating the Development agreement  No.3456 of 2005 and create a charge or third party encumbrance over the property and in such event, they will be put to irreparable loss.  The complainants submitted that as per the agreement of sale dated 24-4-2009, the flats should be handed over to them on or before 31-12-2009 but looking at the present stage of construction, it is impossible for opposite party No.1 to complete the construction and in turn opposite party No.3 is demanding excess sale consideration to commence work in the schedule plot which is illegal and amounts to unfair trade practice.  The complainants further submitted on the pressure of the complainants and even complainant No.2 was also ready to pay the balance sale consideration, the opposite parties 1 to 3 promised to execute registered sale deed in respect of the schedule flats and accordingly got the papers drafted and the complainants also paid the requisite stamp duty but due to non-cooperation of opposite party No.3, the registration could not be completed and the said sale deeds are pending.  The complainants submitted that opposite parties 1 to 3 are trying to abandon the project leaving the complainants to their fate and opposite parties 4 to 7 are also made proper and necessary parties.  Hence the complaint for a direction to the opposite parties in C.C.No.2/10:

a)    to hand over the schedule flat by completing the construction

 in all perspectives so as to enable the complainant to complete the project being developed in the premises bearing No.3-6-369/22/A in street No.1, Himayathnagar, Hyderabad to his requirements.

b)    direct the opposite parties to register the sale deed in favour of the complainant in respect of the scheduled flat or

c)     in the alternative to direct opposite parties 1 to 3 to jointly and severally pay a sum of Rs.40,30,000/- together with interest @ 24% p.a.

d)    to direct opposite parties 1 to 3 to pay Rs.5,00,000/- as compensation for their omissions

e)    award costs of the litigation

f)      pass such other further orders as this Commission may deem fi and proper in the circumstances of the case

In C.C.No.3/2010 to direct the opposite parties:

a) to hand over the schedule flat by completing the construction

 in all perspectives so as to enable the complainant to complete the project being developed in the premises bearing No.3-6-369/22/A in street No.1, Himayathnagar, Hyderabad to his requirements.

g)    direct the opposite parties to register the sale deed in favour of the complainant in respect of the scheduled flat or

h)    in the alternative to direct opposite parties 1 to 3 to jointly and severally pay a sum of Rs.25,00,000/- together with interest @ 24% p.a.

i)      to direct opposite parties 1 to 3 to pay Rs.5,00,000/- as compensation for their omissions

j)      award costs of the litigation

k)    pass such other further orders as this Commission may deem fi and proper in the circumstances of the case.

Opposite parties 1 and 2 filed counter and also written arguments contending that the complaint is not maintainable and admitted that that opposite party No.1, a registered partnership firm, entered into Development agreement and also agreement of sale with complainant in 2/2010 in respect of flat No.102 for a total sale consideration of Rs.40,30,000/- and entered into an oral agreement with complainant No.3/2010 in respect of flat No.504 for a total consideration of Rs.35,00,000/-.   They submitted that the complainants are trying to take advantage of the internal disputes between opposite parties  1, 2 and 3 and submitted that there is no deficiency in service on their part.  They submitted that the construction upto brick level is complete and the balance work will be completed within 10 months and denied the contention that the construction  of the schedule flats is stopped or that there is no activity.  They submitted that opposite party No.3 misused the funds of opposite party No.1 for his self accounts and self interest and created hurdles to opposite parties 1 and 2 in performing their part of obligation to the complainants.  They however submitted that they will complete the balance work in 10 months and the complainants should also pay the balance consideration to them to enable to complete the construction.  They also denied the contention that they are going to knock of the sale consideration paid by the complainants and admitted receipt of legal notice dated 16-11-2009 and stated that they have replied the same and prayed for dismissal of the complaint.

Opposite party 3 filed counter as well as written arguments and admitted receipt of Rs.40,30,000/- and also admitted that they have agreed to complete the construction of the flats by 31-12-2009 in  C.C.No.2/2010.  They submitted that opposite party no.3 and opposite party no.2 jointly executed receipt for payment of part of sale consideration as at that time, the relationship between them is cordial and not strained.  They submitted that the complainant in CC No.2/2010 has to still pay Rs.2,00,000/- towards remaining balance sale consideration as agreed before Hon’ble High Court in CRL.P.No.7170/2009 but failed to pay the said amount.  Opposite party no.3 submitted that with a view to extend helping hand, he prepared draft sale deed and submitted to the court but the complainant adamantly refused to adhere to the said terms and conditions enunciated in the draft sale deed.  Even prior to that, opposite party No.2 in collusion with the complainant executed a sale deed without the consent of the opposite party no.3 got  filed a registered criminal case in Crime No.274/2009 on 24-8-2009 for the alleged offences U/s.307, 420, 506 of IPC. in Narayanaguda P.S. even before the stipulated time lapsed.  In connivance and collusion with opposite party No.2, the complainant is harassing and torturing opposite party No.3.  He denied  the allegations made by the complainant and submitted that the construction work is still in progress and it reached almost finishing stage.  They submitted that due to the intervention of the Municipal authorities, the work could not be proceeded with for a very short period.  They further submitted that at that point of time, opposite parties 4 to 7 filed a suit in O.S.No.3363/2008 against the Municipal Corporation and obtained status quo on account of which the work could not be proceeded.  In pursuance of a scheme issued by the Govt. for regularization of deviation of the construction which were identified by the Corporation, they made an application to the Corporation for regularization and the same was considered and necessary orders were passed vide proceedings No.9874/CP 9/CS dated 5-10-2009 and the aforementioned suit was withdrawn as recited in the orders pronounced in W.P.No.1069/2007 by the Hon’ble High court of A.P.  Opposite party No.3 also denied the receipt of legal notice sent by the complainant and also stated that he has no knowledge of execution of sale deed which is pending before the Sub-Registrar and denied the other allegations made in the complaint. 

Opposite parties  4 to 7 filed  counter  contending that there is no privity of contract between them and the complainant so far as the averments in the complaint are concerned.  They submitted that the construction work is in progress and it reached its finishing stage.  They submitted that opposite party no.2 is also a partner in the firm and he is not at all taking active part either in the construction of the apartment or  in financial matters pertaining to construction.   They further stated that in fact opposite party No.3 is instrumental in completing the construction by incurring huge amounts from his pocket and inspite of that he is being harassed by the complainant with connivance of opposite party No.2 but for the timely action of opposite party No.3, the construction would have been stalled long back.  They submitted that except stating that they are also proper and necessary parties, the complainant failed to canvass any thing or placed any material evidence in support of his case and submitted that there is no deficiency in service.  They also submitted that the provisions of Consumer Protection Act, 1986 do not have any application and submitted that they are neither proper nor necessary parties and prayed to dismiss the complaint.

        The complainant filed his affidavit  by way of evidence and Exs.A1 to A7 in C.C.No.2/2010 and filed her affidavit and marked Exs.A1 to A6 in C.C.No.3/2010. The opposite parties also filed their affidavits of opposite party Nos. 2, 3 and 5 by way of evidence and Exs.B1 to B6 are marked on their behalf in C.C.No.2/2010 and  Exs.B1 and B2 in C.C.No.3/2010

        The brief point that falls for consideration is whether there is any deficiency in service on behalf of the opposite parties and if the complainant  is entitled for the relief sought for in the complaint?

It is the complainant’s case that he purchased a flat 102 admeasuring 1700 sq. ft. from the opposite parties by paying an amount of Rs.40,30,000/- as evidenced under Ex.A1 sale agreement dated 24-4-2009.  Clause 2 of the sale agreement states as follows:

2. That the seller/builder has agreed and shall complete the schedule ‘B’ property, flat No.102 on or before 31-12-2009 and the same shall be handed over to the seller.

It is the complainants’ case that the flat are still incomplete and the construction activity has stopped and inspite of several complaints and even a legal notice, dated 16-11-2009, (Ex.A3) opposite parties 1 to 3 have not commenced with the completion of the construction work.  In their reply notice dated 27-11-2009 (Ex.A6) opposite parties 1 to 3 contend that they are willing to complete their part of the work and handover the flat to the complainant provided the amounts due are paid to them and that the complainant  has pending registration for two flats with the Joint Registrar, Hyderabad.   

        It is the opposite parties 1 & 3 case that there is no dispute with regard to payment of Rs.40,30,000/- with respect to flat 102 and that the completion of the flats would be on or before 31-12-2009.  The complainant  is still due an amount of Rs.2,00,000/- towards the remaining balance sale consideration as agreed before the Hon’ble High Court in Cr.M.P.No.7170/2009 but the complainant failed to pay the said amount.  With respect to this contention, the counsel for the complainant submitted before this Commission that he is ready and willing to pay the amount of Rs.2,00,000/- in C.C.No.2/2010 and Rs.10,00,000/- in C.C.3/2010 and there is no objection raised by the opposite party.  In C.C.No.3/2010 there is only an oral agreement and the opposite parties in their reply notice admitted receipt of the amounts with respect to flat No.504 but contend that Rs.13,22,000/- is due whereas the counsel for the complainant submitted that an amount of Rs.10,00,000/- is due for which the opposite parties did not file any objection.

        It is the case of opposite party No.3 that the complainant is harassing him on account of which an FIR is also filed, Ex.B3.  He contends that opposite party no.2 conspired with the complainant to cause wrongful loss to opposite party No.3.  It is also the case of O.P.3 that in C.C.No.3/2010 he has not received any payment but in the sale deed, the amounts have been mentioned.  Any dispute whatsoever in regard to genuineness of sale deed, aggrieved party has to approach civil court.

    Opposite parties 4 to 7 filed their written arguments contending that there is no privity of contract between and the complainant and that only opposite party No.3 is instrumental in completing the construction and as such there is no deficiency of service on their behalf.  They also rely on the decision of the Division bench of High Court of A.P. in V.Kamala & Others v. A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION & OTHERS in 2010(3) ALD 548 wherein it was held that a consumer complaint against land owners to enforce a agreement of sale entered by developer with complainant in pursuance of a development agreement between land owners and development is not maintainable and in such a case, the complainant cannot be termed as ‘consumer’ of land owners to maintain complaint for the relief claimed against them on the ground that there is no privity of contract and prayed for dismissal of the complaint.

We rely on the decision of the Apex court in  FAKIR CHAND GULATI v. UPPAL AGENCIES PVT. LTD.,  reported in III (2008) CPJ 48 (SC) In the aforementioned decision, the apex court has clearly laid down that the dispute between land owner and builder also attracts the purview of Consumer Fora.

        The learned counsel for the opposite parties 1 & 3 filed the sale deed as Ex.B6 dated 02-9-2010.  In their affidavit filed along with Ex.B6 opposite party No.3 contends that the complainant has forged his signature in collusion with opposite party No.2 and got the sale deed registered. Opposite party No.3 has also contended the same in his written arguments. Both sides admit that the sale deed was pending registration before the Sub-Registrar.  We observe from Ex.B6, that there is an endorsement by the Joint Sub Registrar that Ex.B6 sale deed was registered on 02-9-2010.   Exfacie it bears the signatures of complainant and opposite party No.3.  The genuineness or correctness of Ex.B6 which is a registered document cannot be agitated before this Commission and the aggrieved party should work out his remedies before the civil court.  

In clause 8 of the sale deed it is stated as follows:

8. The vendors and the developers/builders declare that the remaining work of the unfinished scheduled flat shall be completed within one year from the date of sale deed not only of the Flat No.102 but also the other work such as installation of generator, lift, water head tank, electrical fittings, plumber work, municipal water sump elevation, flooring and colouring etc. as specified in the development agreement.  The vendee shall become the member with the other flat owners by complying the rules and regulations of the A.P.Apartments Act shall apply for all clarifications and other decisions of the association or society.  By virtue of this Sale Deed the vendees have become absolute owners of the said unfinished flat premises as shown in the “B” schedule.

Keeping in view the aforementioned clause, it is clear that the complainant has agreed for the flat to be completed within one year from the date of sale deed i.e. by 02-9-2011.  The complainant has not disputed his signature in this sale deed.   We direct the complainant  to pay the amount of Rs.2,00,000/- (as per direction of A.P.High Court) within 30 days from the date of receipt of this order and opposite parties 1 to 3 shall deliver the said flat 102 by completing all the required amenities as agreed upon before 01-9-2011 as evidenced under clause of Ex.B6.  The complainant is also entitled to compensation of Rs.50,000/- from opposite parties 1 to 3 to be paid jointly and severally together with costs of Rs.5,000/-.   Since the complainant  as per the orders of Hon’ble High court has to pay Rs.2,00,000/- to the opposite parties 1 to 3 and as also the sale deed was registered on 02-9-2010 we are of the considered view that a period of six months i.e. till 01-9-2011 is to be given to the opposite parties to complete the flat in all respects and hand over possession.  However, for the delay  that ensued for non completion of the flat as per the terms of agreement of sale when the amounts were paid by the complainant way back between 5-7-2006 and 17-1-2009, we are of the considered view that an amount of Rs.50,000/- can be paid towards compensation by opposite parties 1 to 3 to the complainant.   Complaint against 4 to 7 is dismissed without costs as no deficiency in service can be attributed to them. 

        In the result this complaint is allowed in part directing opposite parties 1 to 3 jointly and severally to accept the balance amount of  Rs.2,00,000/- from the complainant within 30 days from the date of receipt of this order and opposite parties shall deliver flat No.102 to the complainant  with all required amenities as agreed upon before 01-9-2011 as evidenced under Ex.B6.  We reiterate, that the genuineness or correctness of Ex.B6, Registered sale deed, cannot be agitated before this Commission and the aggrieved party should approach the Civil Court. Opposite parties 1 to 3 shall also pay a compensation of Rs.50,000/- to the complainant for having delayed the construction, (as per the original schedule) together with costs of Rs.5,000/-.  Complaint against opposite parties 4 to 7 is dismissed without costs. 

C.C.No.3/2010:

The learned counsel for the complainant submitted before this Commission that they are ready and willing to pay the balance of Rs.10,00,000/- within four weeks and sought for delivery of the flat No.504.  In this case also the opposite parties filed the sale deed executed on 02-9-2010.  

In the result this complaint is allowed in part directing opposite parties 1 to 3 jointly and severally to accept the balance amount of  Rs.10,00,000/- from the complainant within 30 days from the date of receipt of this order and opposite parties 1 to 3 shall deliver flat No.504 to the complainant  with all required amenities as agreed upon before 01-9-2011 as evidenced under sale deed. We reiterate that the genuineness or correctness of Ex.B6, which is a registered document cannot be agitated before this Commission and the aggrieved party should approach the civil court.   Opposite parties 1 to 3 shall also pay a compensation of Rs.50,000/- to the complainant for having delayed the construction (as per the original schedule )together with costs of Rs.5,000/-.  Complaint against opposite parties 4 to 7 is dismissed without costs. 

                                                                Sd/- PRESIDENT.

Sd/-MEMBER.

JM                                                                     Dt.09-3-2011

//APPENDIX OF EVIDENCE//

Witnesses examined for

Complainant:                                                      Opposite Parties:

Affidavit of complainant filed                        Affidavits of O.Ps 2,3 and 5 filed

.

Exhibits marked on behalf of the Complainant in CC No.2/2010:

Ex.A1 Agreement of sale dated 24-4-2009

Ex.A2 Receipt for an amount of Rs.40,30,000/- dated 24-4-2009

Ex.A3-Legal Notice issued by the complainant dated 16-11-2009

Ex.A4-Postal receipts of returned covers dt.17-11-2009

Ex.A5-Postal returned covers with acknowledgement

Ex.A6-Reply notice.

Ex.A7-Power of attorney.

Exhibits marked on behalf of opp.partiesin C.C.No.2/2010:

Ex.B1-copy of order of Hon’ble High Court in WPMP No.1276/2008 in

         WP No.1069/2008.

Ex.B2-Order copy of IV junior Civil Judge in IA 284/2008 in OS

         No.3363/2008 dated 21-10-2008

Ex.B3-First Information report dt.24-8-2009.

Ex.B4-Order of Hon’ble High Court in CRLP No.7170/2009 dt.22-10-

         2009.

Ex.B5-Proceedings of Deputy Commissioner Circle-GHMC vide

          No.9874/BPSW/C09/CZ/2008 dt.5-10-2009.

Ex.B6-Sale deed dated 2-9-2010.

Exhibits marked on behalf of the Complainant in CC No.3/2010:

Ex.A1 Receipt for an amount of Rs.20,00,000/- dated 16-12-2009

Ex.A2 Receipt for an amount of Rs.5,00,000/- dated 10-1-2009

Ex.A3-Legal Notice issued by the complainant dated 16-11-2009

Ex.A4-Postal receipts of returned covers dt.17-11-2009

Ex.A5-Postal returned covers with acknowledgement

Ex.A6-Reply notice.

Exhibits marked on behalf of opp.parties in CC No.3/2010

Ex.B1-Copy of Partnership deed

Ex.B2-Sale deed copy dated 02-9-2010.

                                                                Sd/-PRESIDENT.

Sd/-MEMBER.

JM                                                                     Dt.09-3-2011