STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 103 OF 2014
Between :
Santhosh Alla S/o Sri Jayapal Reddy Alla,
Aged about 28 years, Occ: Software Engineer,
R/o H.No.12-13-691/5, Nagarjuna Nagar Colony,
Tarnaka, Secunderabad – 500 017.
Complainant
And
1) M/s Aliens Developers Private Limited,
Rep. by its Managing Director Hari Challa,
Situated at Aliens Space Station-1,
Village & Post: Tellapur, Mandal: Ramachandrapuram,
Dist: Medak, A.P.-502 032.
2) Hari Challa S/o C.V.R. Chowdary,
Managing Director of M/s Aliens
Developers Private Limited i.e., O.P.No.1.
3) Venkat Prasanna C, S/o C.V.R.Chowdary,
Director of M/s Aliens Developers Private Limited
i.e., O.P.No.1.
4) C.V.R.Chowdary S/o Narasappa,
Director of M/s Aliens Developers Private
Limited, i.e., O.P.No.1.
5) Smt.Challa Nagarathna W/o C.V.R.Chowdary,
Director of M/s Aliens Developers
Private Limited i.e., O.P.No.1.
The addresses of the Opp.party Nos.2 to 5 for
the purpose of service of notices is Flat No.910,
Teja Block, My Home Navadweepa Apartments,
Madhapur, Hyderabad – 500 081.
6) The Branch Manager,
Bank of India, A.P. Police Academy Branch,
APPA Junction, Himayat Sagar,
P.O: Golconda, Himayat Sagar,
Ranga Reddy Dist., A.P. – 500 008.
Opposite parties
Counsel for the Complainants : M/s K.Yadagiri Reddy.
Counsel for the Opposite parties : M/s Alluri Krishnam Raju
& G.Dinesh Kumar-R1 to R5.
Ms.A.Vinoda Devi-R6.
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 Complainants complaining deficiency in service against the Opposite parties and claimed refund of Rs.23,43,516/- along with interest @ 24%; to pay Rs.3,00,000/- towards compensation for causing financial strain, mental agony, hardship, etc.,; to pay Rs.20,000/- towards costs of the complaint and award any other relief or reliefs.
2. That the Ops 2 to 5 are the Directors of OP No.1 Company and are doing real estate business in the name and style M/s Aliens Developers Private Limited. Opposite parties made publicity through print and electronic media offering to sell the flats. Lured by the offer made by Opposite parties with full of amenities, the Complainant intended to purchase flat bearing No.2258, Station-10 on 22nd floor having super built-up area of 1344 sqft. along with one car parking with undivided share of land measuring 28.90 sq.yards, situated in “Aliens Space Station-1” at Tellapur village, Ramachandrapuram mandal, Medak district, for a sale consideration of Rs.51,05,031/-.
3. The Opposite parties promised to deliver the possession of the flat to the Complainant on or before June 2014 with a grace period of 3 months. Having agreed to purchase the above flat, Complainant entered into an Agreement of sale dated 02.07.2012 with the Opposite party No.1 paying the earnest money of Rs.9,87,400/- and also obtained the home loan from the OP No.6 bank and got disbursed an amount of Rs.14,81,116/-. Altogether the Complainant paid an amount of Rs.24,68,516/-. The OP No.1 also executed a Memorandum of Understanding dated 23.07.2012.
4. The Complainant opted for pre-EMI scheme, as such, OP No.1 shall pay the pre-EMI on behalf of the complainant till the date of possession of the flat in pursuance of the Memorandum of Understanding dated 23.07.2012. Though the OP No.1 paid pre-EMI for about six months, it stopped payment thereafter. Upon which, the Complainant is compelled to pay the pre-EMI amount to OP No.6 bank. The Ops 1 to 5 have failed to commence even the base/pillar footing works at the site in respect of the subject flat, as such, Complainant requested for cancellation of the booking and sought for refund of the amount. Hence, prayed to allow the complaint as prayed for, supra.
5. The Opposite parties 1 to 5 resisted the claim on the premise that the complainant filed the complaint to gain out of their 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 their 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 OP No.6 filed written version contending that Complainant approached them and availed the loan facility of Rs.32,00,000/-, which was duly sanctioned fixing the EMIs @ Rs.34,214/- for a duration of 204 months commencing from 36months after 1st disbursement or one month after completion of the house, whichever is earlier. The OP No.1 paid a sum of Rs.14,81,116/- as per the terms of the Tripartite Agreement, on 07.07.2012. Hence, the OP No.6 cannot be made to suffer for the default committed by Ops 1 to 5. The OP No.6 disbursed the amount of Rs.14,81,116/-. There is no deficiency in service on its part and hence prayed for dismissal of the complaint with exemplary costs.
12. On behalf of the Complainant, he his evidence affidavit and the documents, Exs.A1 to A14. On behalf of the Opposite parties 1 to 5, the Managing Director of the OP No.1 Company has filed the affidavit and the documents, Ex.B1 to B18. On behalf of Opposite party No.6, the Chief Manager of OP No.6 filed the affidavit and marked no documents.
13. The counsel for the complainants and the Opposite parties have advanced their arguments reiterating the contents of the complaint and the written version. While the counsel for Complainant filed written arguments. Heard both.
14. 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 ?
15. POINT NO.1 : The Complainant entered into “Agreement of Sale” on 02.07.2012 with the Opposite party No.1 for purchase of flat bearing No.2258 in Station-10 on 22nd floor under Space Station-1 and thereafter the Complainant paid the part consideration amount as per the pricing pattern of the flat issued by the Ops 1 to 5 on various dates. A tripartite agreement was also executed by the Complainant and Ops . The agreement of sale provides reference to arbitration. The learned counsel for the opposite parties 1 to 5 have contended that in view of the arbitration clause in the agreement, 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 proceeds 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 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 complainants 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.
17. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the Opposite parties 1 to 5 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 1 to 5 in the arguments submitted that as per agreement, if the Complainant wants to cancel the booking of the flat, they shall forego 10% of the total flat cost as charges which is agreed by them 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 1 to 5, 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 1 to 5. Though averments are made against the Opposite party No.6 in the complaint, no relief is sought against it by the Complainant.
19. POINTS No.2 & 3 : The Opposite parties 1 to 5 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 1 to 5 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 1 to 5 in completing the construction of the flat No.2258, he opted for cancellation of the agreement of sale of flat and the opposite parties 1 to 5 have contended that in order to maintain cordial relations with the complainant, he agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The complainant got issued notice on 24.03.2014 setting forth series of events of delay and negligence and false promises made by the Opposite parties 1 to 5 seeking for refund of the amount on the premise of inaction on the part of the opposite parties 1 to 5.
22. The opposite parties 1 to 5 have promised to complete construction of the flat and hand over its possession to the complainant by June, 2014 with a grace period of three months as agreed and on their failure to perform their part of contract, the opposite parties 1 to 5 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 but failed to mention the period from which they are entitled to besides claim for damages to the tune of Rs.3,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the opposite parties 1 to 5 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.A6 and the Complainant paid an amount of Rs.24,68,516/- as against the total sale consideration of Rs.51,05,031/-. Admittedly, the Ops 1 to 5 returned the amount of Rs.1,25,000/- to the Complainant by way of cheque.
26. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties 1 to 5 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 5 are jointly and severally liable and they are directed to pay an amount of Rs.23,43,516/- with interest @ 12% p.a. from the date of respective payment till realisation, together with costs of Rs.6000/-. The complaint against OP No.6 is dismissed but no costs. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Santhosh Affidavit evidence of Hari
Alla as PW1. Challa as RW1.
Affidavit evidence of E.Narsimha
Rao as RW2.
EXHIBITS MARKED
For Complainant :
Ex.A1 is the copy of receipt bearing No.10553, dated 23.06.2012 for Rs.1,50,000/-.
Ex.A2 is the copy of receipt bearing No.10552, dated 23.06.2012 for Rs.3,00,000/-.
Ex.A3 is the copy of receipt bearing No.10479, dated 28.06.2012 for Rs.5,37,400/-.
Ex.A4 is the copy of Agreement of sale, dated 02.07.2012.
Ex.A5 is the copy of Tripartite Agreement, dated 07.07.2012.
Ex.A6 is the copy of Memorandum of Understanding, dated 23.07.2012.
Ex.A7 is the copy of letter dated 31.10.2013 addressed by Ops to the Complainant.
Ex.A8 is the copy of letter dated 28.01.2014 addressed by the Ops to the Complainant.
Ex.A9 is the copy of cheque bearing No.114538, dated 13.02.2014 for Rs.1,25,000/-.
Ex.A10 is the copy of statement of account of the Complainant, for the period from 07.07.2012 to 15.03.2014.
Ex.A11 is the copy of legal notice dated 24.03.2014 got issued by the Complainant to
the OP No.1.
Ex.A12 is the copy of postal receipt dated 24.03.2014.
Ex.A13 is the copy of postal acknowledgement.
Ex.A14 is the copy of Articles of Association of the OP No.1 firm.
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
