BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: ATHYDERABAD.

C.C.No.54 of 2011

Between

V.Prabhu Kishore

S/o.V.K.R.Chowdary

Aged 51 years, 1-10-177,

VarunTowers, Begumpet,

Hyderabad.                                                                

1. Emaar MGF Land Limited

  ManikondaVillage

2. Emmar MGF Land Limited,

Counsel for the complainant 

Counsel for the Opposite parties  

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

SMT.M.SHREESHA, HON’BLE MEMBER,

         SRI S.BHUJANGA RAO, HON’BLE MEMBER.

FRIDAY, THE NINETEENTH DAY OF OCTOBER,

TWO THOUSAND TWELVE

Order (Per Smt.M.Shreesha, Hon’ble Member)

***

The brief facts as stated in the complaint are that the complainant applied to the opposite parties for purchase of a three bed room apartment in the “Éxcelsior” atBoulder 

When the complainant asked for the link documents and approvals/ sanctions, the opposite parties insisted for payment of registration fee of Rs.9,66,076/- which the complainant paid on 15-5-2008.      

        Boulder and moreover the complainant has paid only 3 instalments apart from the said registration charges and failed to pay the balance amount and therefore shall forfeit 10% of the total sale price excluding registration fee as per clause 7 of the application form. 

       th    

The Developer upon 

It is the complainant’s case that the approval and sanction plans have not been furnished to him inspite of repeated requests and therefore he sought for refund of his amount vide emails evidenced under Exs.A15, A16 and A17 in which the complainant on 21-10-2008, 17-11-2008 the complainant had requested for refund of his amount for which the opposite party replied on 24-11-2008 (Ex.A17) in which they requested not to cancel the apartment and that they would do their best meet his service expectations.   

It is an admitted fact that the complainant has paid an amount of Rs.60,51,977/-th    Thereafter after a period of almost one and half years, the opposite parties addressed Ex.A13/B1 dated 02-4-2010 calling upon the complainant to execute a buyer’s agreement and pay the remaining instalments within 30 days failing which his allotment would be cancelled and booking amounts would be forfeited.       

The learned counsel for the opposite parties relied on the decision of the National Commission reported in

in case of non performance of its obligation by a vendor under an

We rely on the judgement of the apex court inLucknow Development Authority vs M.K. Gupta IN

What remains to be examined is if housing construction or building activity carried on by a private or statutory body was service within the meaning of clause (o) of Section 2 of the Act as it stood prior to inclusion of the expression 'housing construction' in the definition of "service" by Ordinance No. 24 of 1993. As pointed out earlier the entire purpose of widening the definition is to include in it not only day to day buying and selling activity undertaken by a common man but even such activities which are otherwise not commercial in nature yet they partake of a character in which some benefit is conferred on the consumer. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub-clause (ii) of clause (r) of Section 2 as unfair trade practice. If a builder of a house uses substandard material in construction of a building or makes false or misleading representation about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular. The entire approach of the learned counsel for the development authority in emphasising that power exercised under a statute could not be stretched to mean service proceeded on misconception. It is incorrect understanding of the statutory functions under a social legislation. A development authority while developing the land or framing a scheme for housing discharges statutory duty the purpose and objective of which is service to the citizens. As pointed out earlier the entire purpose of widening the definitions is to include in it not only day to day buying of goods by a common man but even such activities which are otherwise not commercial but professional or service-oriented in nature. The provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan, development of land, and framing of scheme etc. Therefore if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service made available to potential users'. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression 'service of any description'. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993.

From the aforementioned judgment, it is clear that ‘’When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to’’.  It is a matter of common knowledge that for construction a building in a municipal area, the plan of the building is required to be sanctioned from the authorities and the opposite parties till date has not produced before this Commission any such sanctioned plan. Therefore, it cannot be inferred that the complainant committed any breach of the agreement entered into between the parties. We observe that without having the appropriate approvals and sanctions from the authority’s sale of flat/building amounts to deficiency in service.   The opposite parties have the advantage of these amounts from the year May, 2008 till this date and now cannot turn around and state that the complainant has to forfeit the entire amount if he does not pay the balance amount when the complainant sought cancellation of the allotment. :

The Developer upon

As the opposite parties have not furnished the approvals or sanction and have not adhered to their own terms,

                                                                       JM                                                                    APPENDIX OF EVIDENCE

For the complainant:                                        :

Affidavit evidence of   Vice President,

Filed.                                                 

Exhibits marked on behalf of the complainant

Ex.A1-Allotment letter dated 14-5-2008

Ex.A2-Plan of flat and tower

Ex.A3-Plan of flat and Tower

Ex.A4-Payment schedule

Ex.A5-Receipt for Rs.9,66,076/- dt.20-5-2008

Ex.A6-Cheque No.689482 dt.15-5-2008

Ex.A7-Receipt for Rs.19,32,152/- dt.30-6-2008

Ex.A8-Cheque for Rs.9,66,076/- dt.01-6-2008

Ex.A9-Receipt for Rs.9,66,076/- dt.23-6-2008

Ex.A10-Receipt for Rs.21,87,673/- dt.11-9-2008.

Ex.A11-Cheque No.590146 for Rs.21,87,573/- dt.08-9-2008

Ex.A12-Application form

Ex.A13-Letter dated 02-4-2010 from opposite party to complainant.

Ex.A14-Statement showing balance payable dt.14-5-2010

Ex.A15-Mail from complainant to cancel the unit dt.21/10/2008

Ex.A16-Mail from complainant to cancel the unit dt.17/11/2008

Ex.A17-Mail from opposite party to complainant dt.24/11/2008

Ex.A18-Postal receiptdt.11-5-2010

Ex.A19-Acknowledgement

Ex.A20-Postal receipt dt.11-5-2010

Ex.A21-Acknowledgement

Ex.A22-Legal notice dated 11-5-2010

Ex.A23-Memorandum of Association ofEMAARMGFLand

Ex.A24-Articles of Association.

Ex.A25-copy of OP’s Board of Directors.

Exhibits marked on behalf of the Opp.parties:

Ex.B1-Reminder letter from OP to complainant dt.02-4-2010

Ex.B2-Confirmation of Unit dated 27-2-2009

Sd/-PRESIDENT.

                                                                       JM