STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :
AT HYDERABAD
CC NO. 11 OF 2014
Between :
1) Udathu Krishna Mohan
S/o Mr.Kesava Rao, aged about 44 years,
2) Udathu Indumathi W/o U.krishnan
Mohan, aged about 41 years,
R/o Plot No.11, SBI Officers Colony,
Bagh Amberpet, Hyderabad – 500 013.
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.55,64,865/- towards amount paid and an amount of Rs.41,57,000/- towards interest for the period from 09.07.2007 to 31.01.2014 and subsequent interest from 01.02.2014 @ 12% p.a. and a sum of Rs.2,00,000/- towards compensation and also the costs of Rs.40,000/-.
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 dt.09.08.2007 for reservation of flat No.A/SS/449, on 5th floor comprising of 2000 square feet with covered car parking besides proportionate undivided share of land for a consideration of Rs.57,54,225/-. The Complainant paid token advance of Rs.1,00,000/- on 22.07.2007; Rs.8,00,000/- on 16.08.2007; Rs.22,00,000/- on 29.08.2007; Rs.20,00,000/- on 28.09.2007; Rs.5,00,000/- on 10.12.2007 and Rs.8,00,000/- on 05.01.2008, totaling Rs.64,00,000/-. However, in view of variation of cost and built-up area of the flat under purchase, Opposite parties returned a sum of Rs.8,35,134/- on 15.02.2010, 15.03.2010 and 15.04.2010, out of total amount of Rs.64,00,000/-. Altogether complainants paid Rs.55,64,865/-.
3. In terms of allotment confirmation sheet dt.05.01.2008, Opposite parties allotted flat bearing No.641, Station-7, 6th floor type-A2 comprising 2191 square feet. As per agreement, the possession of the flat under sale was to be handed over on or before 3 years from the date of booking with a grace period of six months i.e., by 09.11.2010, which they failed to and on approach, they assured to complete the construction of the flat by 11.11.2011 but failed. On several requests, the Opposite parties failed to provide information as to the progress of the flat and also failed to furnish approved building plan as on date. As complainants were staying outside the country, they were unable to visit the project site, however, during December 2013, Complainants noticed no progress at project site.
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 2007 as per the prevailing cost then. The Opposite parties are presently quoting cost of similar flat at Rs.73,50,000/-. 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. This contention is raised in a rigmaroule manner without referring to any specific clauses of the agreement for reservation of flat which is entered into with the Complainants in respect of the subject property. 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 payment of Rs.55,64,865/-.
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, U.Krishna Mohan, Complainant No.1 filed his affidavit and the documents, Exs.A1 to A13. On behalf of the Opposite parties, the 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 for reservation of Flat” on 09.08.2007 with the Opposite party No.1 for purchase of flat bearing No.A/SS/449 on 5th floor and thereafter the parties signed allotment of work sheet on 05.01.2008 and the agreement for reservation of flat do not provide for any 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. Since there is no provision as such in the Agreement for reservation of flat, any finding by this Commission on that regard would not serve any purpose.
17. 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.
18. 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.
19. 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.
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 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 complainants have submitted that owing to failure of the opposite parties in completing the construction of the flat No.A/SS/449, they opted for cancellation of the agreement of reservation 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 24.12.2013 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 status of the project my clients prevailed upon you but you have deaf eared and gave evasive replies. It is pertinent to mention that as per the recital of Agreement dt.9.8.2007 under clause 2, the construction and hand over of the flat under sale shall be on or before 3 years from the date of booking with a grace period of six months accordingly you have to hand over the flat by 9.11.2010 however on approach of my client you have orally informed that the flat will be completed by 11.11.2011 and you does not do so even today.
In view of cheating, mischief, fraud committed by you my clients lost the opportunity to have a residential accommodation in the year 2007 on the then prevailing prices, besides my clients are paying huge interest on the amounts borrowed from near and dear. Due to your fraudulent actions my clients suffered with mental agony and other physical sufferings in this regard for the past few years, for which you are liable.”
22. Though the Opposite parties have referred to certain clauses in the agreement, the same is not filed before this Commission. Hence, any discussion in regard to those aspects would be mere waste of time and a futile exercise.
23. The opposite parties have promised to complete construction of the flat and hand over its possession to the complainants within three years with a grace period of six 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 31.08.2013 and from the time till filing of the complaint as also future interest besides claim for damages to the tune of Rs.2,00,000/-. 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.A3 to A8, the Complainants paid an amount of Rs.64,00,000/- as against the total sale consideration of Rs.57,54,225/-. It is further admitted by Complainants that the Opposite parties made refund of Rs.8,35,134/- retaining a sum of Rs.55,64,865/- with them. This averment is not disputed by the Opposite parties.
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.55,64,865/- 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 U.Krishna Affidavit evidence of Venkat
Mohan as PW1. Prasanna Challa as RW1.
EXHIBITS MARKED
For Complainants :
Ex.A1 Copy of Agreement for reservation of flat, dated 09.08.2007.
Ex.A2 Copy of Allotment confirmation sheet, dated 29.01.2008.
Ex.A3 Copy of acknowledgement receipt for Rs.1.00 lakh dated 22.07.2007.
Ex.A4 Copy of acknowledgement receipt for Rs.8,00,000/- dated 16.08.2007.
Ex.A5 Copy of acknowledgement receipt for Rs.22,00,000/- dated 29.08.2007.
Ex.A6 Copy of acknowledgement receipt for Rs.20,00,000/- dated 28.09.2007.
Ex.A7 Copy of acknowledgement receipt for Rs.5,00,000/- dated 10.12.2007.
Ex.A8 Copy of receipt for Rs.8,00,000/- dated 05.01.2008.
Ex.A9 Copy of letter addressed by the Ops to the patrons.
Ex.A10 Copy of notice dated 24.12.2013 got issued by complainants.
Ex.A11 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
JBNRN (P)
TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
CC NO. 11 OF 2014
ORDER DATE : 16.02.2016
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