STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :
AT HYDERABAD
CC NO. 40 OF 2014
Between :
1) Manoj Kumar Kaparwan,
S/o Mr.Tungeshwar Prasad,
Aged about 38 years,
2) Swetha Kaparwan W/o Manoj Kumar Kaparwan,
Aged about 30 years,
Both are R/o VIII-Margaon, Goda Post,
Pauri (Gharwal) district, Uttarakhand State.
Complainants
And
1) M/s Aliens Developers (P) Ltd.,
Rep. by its Managing Director &
Joint Managing Director, Mr.Hari Challa
S/o CVR Chowdhary & Mr.C.Venkat Prasanna
S/o CVR Chowdhary respectively,
O/o Flat No.910, Teja Block, My Home
Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad – 500 081.
2) Mr.Hari Challa S/o Mr.CVR Chowdhary;
Managing Director M/s Aliens Developers (P) Ltd.,
O/o Flat No.910, Teja Block, My Home
Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad – 500 081.
3) Mr.C.Venkat Prasanna S/o Mr.CVR Chowdhary,
Joint Managing Director M/s Aliens Developers (P) Ltd.,
O/o Flat No.910, Teja Block, My Home
Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad – 500 081.
Opposite parties
Counsel for the Complainants : M/s V.Appa Rao & B.Srinivas
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Tuesday, the Sixteenth day of February
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(a)(i) of the Consumer Protection Act, 1986 by the Complainants complaining deficiency in service against the Opposite parties 1 to 3 and claimed refund of Rs.32,00,000/- towards amount paid and an amount of Rs.16,88,000/- towards interest for the period from 18.04.2011 to 28.02.2014 and subsequent interest from 01.03.2014 @ 24% p.a. and a sum of Rs.10,00,000/- towards compensation and also the costs of Rs.50,000/-.
2. That the Opposite parties entered into Development Agreement under documents bearing Nos.23198 of 2006, 23230 of 2006 dt.07.10.2006 and 13321 of 2007 dt.23.06.2007 with the owners of land for development of their land measuring Ac.19.26 guntas in Sy.No.384 and 385 situated at Tellapur village, Ramachandrapuram mandal, Medak district for construction of residential apartment complex. The Opposite parties made complainants believe that they have undertaken construction of multi-storied apartment complex in the name and style M/s Alien Space Station-I and will obtain necessary permissions for construction of multistoried apartment complex. Believing its version, Complainants undertook/ entered Agreement of sale dt.18.04.2011 for purchase of flat No.1107, Station-1, on 11th floor of the complex by name Space Station-I, comprising of 1687 square feet with covered car parking besides proportionate undivided share of land measuring 36.27 square yards out of total land of 82976.89 square yards, for a consideration of Rs.53,99,053/-. The Complainant paid token advance of Rs.50,000/- and also an amount of Rs.31,50,000/- by availing home loan from Corporation Bank, Madhapur, Hyderabad totaling Rs.32,00,000/-.
3. As per agreement, the possession of flat under sale was to be handed over on or before 31.08.2012 with a grace period of nine months, which they failed to and on approach, they failed to respond.
4. It is stated that as the construction of the apartment complex is at preliminary stage and had not commenced construction work of the flat, the complainants got issued notice demanding refund of amount. The complainants lost opportunity to own a flat in the year 2009 as per the prevailing cost then. The Opposite parties are presently quoting cost of similar flat at Rs.61,99,725/-. The complainants suffered mental agony, escalation of cost and other problems due to wrongful act of the Opposite parties.
5. The Complainants submitted that as there was no scope in near future of the Opposite parties completing the project, they demanded refund of the amount. That their notice had not drawn any response from the opposite parties. For the loss and hardship they suffered, the complainants claimed refund of the amount paid by them to the Opposite parties with interest thereon and compensation as also costs.
6. The Opposite parties resisted the claim on the premise that the complainants 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 complainants 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.
7. 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.
8. 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.
9. 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.
10. 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 complainants. The complainants filed the complaint with ulterior motive to defame the opposite parties. The Complainants shall file relevant receipts and documents to prove the payments.
11. That, it is utterly false to say that there is any cheating, mischief and fraud committed by the Opposite parties. It is also false to say that the Opposite parties are quoting to the new customers high price. There are various types of flats and the price of the same will depend upon various terms and conditions agreed between the parties and the amenities provided and other aspects. Therefore, the same cannot be taken as yardstick for present cost of the flat. The Complainants are not entitled for any compensation and their claim is illegal. The complainants are 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.
12. It is pertinent to mention here that when the subject matter is reserved for orders, the Opposite parties herein filed an application U/s 14(2A) & Section 18 of C.P. Act r/w Section 151 of CPC seeking to re-open the complaint and keep pending the same till getting the quorum in compliance of Section 14 (2-A) and 18 of the Act. But for the reasons best known, the counsel not pressed the said application on 04.02.2016.
13. On behalf of the Complainants, Manoj Kumar Kaparwan, Complainant No.1 filed his affidavit and the documents, Exs.A1 to A13. On behalf of the Opposite parties, the Joint Managing Director of the OP No.1 Company has filed the affidavit and the documents, Ex.B1 to B18.
14. The counsel for the complainants and the Opposite parties have filed written arguments.
15. 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 ?
16. POINT NO.1 : The Complainants entered into “Agreement of sale” on 18.04.2011 with the Opposite party No.1 for purchase of flat bearing No.1107, Station-1 on 11th floor of Space Station-I admeasuring 1687 square feet 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 agreement, the Complainants 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.
17. 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 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 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 Complainants and against the Opposite parties.
18. In the written arguments, Complainants reiterated the same facts as averred in the complaint besides stating that the Opposite parties 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.
19. On the other hand, the Opposite parties in their written arguments submitted that as per agreement, if the Complainants want 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.” 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 agreement by the Opposite parties, the Complainants sought for refund of amount. Hence, this Commission does not find any merit in the contention putforth by the learned counsel for Opposite parties.
20. POINTS No.2 & 3 : The Opposite parties 1 to 3 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 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.
21. 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 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.”
22. The complainants have submitted that owing to failure of the opposite parties in completing the construction of the flat No.1107, they opted for cancellation of the agreement of sale of flat and the opposite parties have contended that in order to maintain cordial relations with the complainants, they agreed to pay compensation in terms of the agreement. The complainants got issued notice dated 25.11.2013 seeking for refund of the amount on the premise of inaction on the part of the opposite parties mentioned as under:
“On noticing about the same my clients prevailed upon you but you have deaf earned and gave evasive replies. It is pertinent to mention that as per the recital of Agreement of sale dt.18.04.2011 under clause-VIII (Delivery of Possession), the construction and hand over of the flat under sale shall be on or before 31.08.2012 including the grace period of nine months under any circumstances which denotes that you have made false promises and executed the Agreement of Sale dt.18.04.2011 is nothing but cheating, mischief, fraud, etc., for that you are liable not only vicariously but also individually under IPC.”.
In view of cheating, mischief, fraud committed by you my clients lost the opportunity to have a residential accommodation on the then prevailing prices and also sustained huge loss due to escalation of cost of construction in the market. Due to your fraudulent actions my clients suffered with mental agony and other physical sufferings by wandering in and around your office in this regard for the past few years, for which you are liable.”
23. The opposite parties have promised to complete construction of the flat and hand over its possession to the complainants by 31.08.2012 with a grace period of nine 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 pay compensation. 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 complainants.
24. 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 complainants have 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.
25. The complainants claimed interest till the date of 28.02.2014 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 complainants acquiesced to the delay in construction of the project. The complainants have not disputed that the opposite parties have informed them about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainants cannot claim damages. However, the complainants are entitled to interest @ 12% p.a. on the amount paid from the respective dates of payment till realization.
26. It is pertinent to state here that as per Ex.A1 to A8, the Complainants paid an amount of Rs.28,00,000/- as against the total sale consideration of Rs.53,99,053/-. Though Complainants stated that they paid Rs.32,00,000/- to the Opposite parties, no documents are exhibited to that effect.
27. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties 1 to 3 are jointly and severally liable to pay the amounts to the Complainants.
28. In the result, the complaint is allowed holding that Opposite parties 1 to 3 are jointly and severally liable and they are directed to pay an amount of Rs.28,00,000/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. Time for compliance four weeks.
PRESIDENT
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainants : For Opposite parties :
Affidavit evidence of Manoj Kumar Affidavit evidence of Venkat
Kaparwan as PW1. Prasanna Challa as RW1.
EXHIBITS MARKED
For Complainants :
Ex.A1 Copy of Agreement of sale, dated 18.04.2011.
Ex.A2 Copy of Receipt bearing No.07294, dated 27.03.2011 for Rs.50,000/-.
Ex.A3 Copy of Receipt bearing No.10392, dated 13.06.2012 for Rs.1,00,000/-.
Ex.A4 Copy of Receipt bearing No.08234, dated 25.06.2011 for Rs.1,00,000/-.
Ex.A5 Copy of Receipt bearing No.08141, dated 07.05.2011 for Rs.24,00,000/-.
Ex.A6 Copy of Receipt bearing No.10851, dated 14.07.2012 for Rs.50,000/-.
Ex.A7 Copy of Receipt bearing No.11337, dated 09.11.2012 for Rs.1,00,000/-.
Ex.A8 Copy of Credit Sanction Intimation, issued by Corporation Bank, Retail Hub, Hyd.
Ex.A9 Copy of letter issued by the Ops intimating the revised price list.
Ex.A10 Office copy of notice, dated 26.11.2013 got issued by Complainants to Ops.
Ex.A11 Original postal receipts, postal acknowledgement and returned postal cover.
Ex.A12 Copy of Certificate of Incorporation dated 21.03.2006 of OP No.1 company.
Ex.A13 Copy of Form32 furnished by the Ops to complainants.
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
