STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO.223 OF 2013
Between :
1) K.Tulasi Ram Reddy
S/o Umapathy Reddy, aged about 31 years,
Occ: Private service, 47, Aravinda Nagar,
Domalaguda, Hyderabad – 500 038.
2) K.Praveen Kumar Reddy
S/o Umapathy Reddy, aged about 29 years,
Occ: Private service, 47, Aravinda Nagar,
Domalaguda, Hyderabad – 500 038.
(both are rep. by their GPA holder
K.Umapathy Reddy & K.Prathibha,
R/o D.No.4-5-32/19, Vidya Nagar, Guntur).
Complainants
And
1) M/s Sri Chakra Avenues (P) Ltd.,
Rep. by its Managing Director
M.Rajendra Prasad Varma,
O/o Flat No.304, Everest Block;
Aditya Enclave, Ameerpet, Hyderabad.
(present address 1st floor, Plot No.71,
Count Meadows, Ashwani Layout, Road
No.70, Jubilee Hills, Hyderabad-500 033).
2) M.Rajendra Prasad Varma
S/o M.Kranthi Raju, aged about 45 years,
Managing Director, M/s Sri Chakra Avenues (P) Ltd.,
R/o 1st floor, Plot No.71, Count Meadows,
Ashwani Layout, Road No.70,
Jubilee Hills, Hyderabad -500 033.
3) M/s Vriddhi Commercial (P) Ltd.,
Rep. by its Director Mr.Bimal Kumar Kedia
S/o BN Kedia, aged about 57 years,
R/o flat No.406, VV Vintage Boulevard,
Somajiguda, Rajbhavan Road,
Hyderabad – 500 082.
4) Bimal Kumar Kedia
S/o BN Kedia, aged about 57 years,
Director, M/s Vriddhi Commercial (P) Ltd.,
R/o Plot No.398, Road No.81, Film Nagar,
Jubille Hills, Hyderabad – 500 033.
(Ops 3 & 4 are formal parties)
Opposite parties
Counsel for the Complainants : Sri V.Appa Rao
Counsel for the Opposite parties : Sri V.Gouri Sankara Rao-Ops 1 & 2
Coram :
Hon’ble Sri Justice B.N.Rao Nalla, President
&
Sri Patil Vithal Rao, Member
Friday, the Twenty Fourth day of March
Two thousand Seventeen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, President)
***
This is a complaint filed under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainant complaining deficiency in service on the part of the Opposite parties and seeking direction to refund the sale consideration amount of Rs.29,50,000/- with interest @ 24% p.a. amounting to Rs.36,99,000/- for the period 26.08.2008 to 31.10.2013 and subsequent interest @ 24% p.a.; to pay Rs.10,00,000/- as compensation for causing mental agony, suffering and escalation of cost; to pay legal charges of Rs.50,000/- and other order or orders.
2. The case of the complainant, in brief, is that the OP No.1 representing to be the property holder of land admeasuring Ac.3-24 guntas in Sy.No.67 situated at Raidurg Navakalsa village, Serilingampally mandal, Rangareddy district vide sale deed No.22715 dated 31.10.2006, out of which, it sold away the property to the extent of 40% to M/s Sweet Homes vide sale deed No.421, dated 05.01.2007. To develop the land into commercial as well as residential buildings, the OP No.1 and M/s Sweet Homes entered into Development Agreement-cum-GPA and entrusted the same to OP No.3.
3. The OP No.1 made believe the complainants that they are entitled to 50% of the developed area and accordingly offered 2500 sft of developed building property @ Rs.1,260/- per sft out of its entitlement of 60% of the 50% of the building complex, amounting to Rs.31,50,000/- and executed an agreement of sale on 26.08.2008. The complainants paid a sum of Rs.29,50,000/- keeping balance of Rs.2,00,000/-. The complainants periodically reminded the OP No.1 to complete the construction and receive the balance sale consideration but there has been no response.
4. The OP No.1 was supposed to complete the construction within 30 months with a grace period of 3 months from the date of approving building plans. Though the period had elapsed, the Ops failed to take-up the construction at project site and there is no scope of completion in the near future. As such, complainants gave legal notice dated 30.07.2013 which has been received by the Ops but failed to give any reply. Thus, the Ops committed deficiency in service causing mental agony and loss to the complainants. Hence, the complaint with the reliefs stated supra.
5. Opposite parties 1 and 2 filed their written version resisting the claim on the premise that the complainants are not “consumers” and there is no hiring of services for consideration and that there is no deficiency in service on their part. The Commission has no jurisdiction and complainants have to approach a competent civil court for breach of agreement or to file a suit for specific performance. The complaint is absolutely barred by limitation as the date of agreement was 26.08.2008 and complaint was filed on 29.10.2013. There is no direct nexus between the complainants and the Ops. They do not know each other. No agreement was executed and there was no mutual identity of mind, as such, there is no valid contract.
6. The OP No.1 is owner of Ac.3-24 guntas of land in Sy.No.67 of Raidurg Navkhalsa village and they sold 40% of the land to M/s Sweet Homes and executed Development-cum-GPA to M/s Sweet Homes along with Ops 3 and 4. The Ops 3 and 4 never applied for the sanction of approved plan from GHMC. They have not even laid foundation of the residential complex and totally abandoned the project. OP No.2 borrowed an amount of about one crore rupees during December 2005 from K.Koteswara Reddy, a native of Nellore district who happen to be close relative of complainants. By way of security, said Koteswara Reddy obtained formal agreement of sale on 26.08.2008 in favour of present complainants and another such agreement of sale of even date in favour of the complainants in CC No.222/2013. In fact, neither the complainants herein nor the complainants in CC 222/2013 were available in India by that time. They were in abroad and no amounts have been paid by the complainants. The agreement of sale dated 26.08.2008 is not supported by any consideration as such, it is illegal and unenforceable.
7. A perusal of the agreement of sale dt.26.08.2008 reveals that the date of purchase of the stamp paper was 30.10.2006. There is no mention of flat number and no schedule of the flat to be sold with boundaries and specifications. There is no mention on which date they paid the amount. No receipts have been filed in support of the payment. As per clause-4 of the said agreement of sale, there was no permission/approval from the competent authorities much less any construction work. There is no mention of date as to schedule date of handing over the possession of the flat and mode of payment of balance consideration. No prudent person will pay Rs.29,50,000/- out of Rs.31,50,000/- without any receipts much less without any approval from the competent authorities.
8. The GPA holder of complainant No.1 in CC 222/2013 is a retired Bank Manager and is fully aware of the legal implications regarding the financial transactions and that all the payments beyond Rs.10,000/- must be routed through bank. The said facts clinchingly establish that the agreement of sale is not supported by any sale consideration and the same is fictitious one. The borrowed amount was cleared to Koteswara Reddy. In order to squeeze amount, the present complaint is filed, in collusion with Koteswara Reddy. Except the notice dated 30.07.2013 not even a single letter is addressed by the complainants. No prudent person much less employees would keep quiet for long years without addressing a letter or issuing a notice within a reasonable period of time demanding for commencement of work or to refund the amount. The stoic silence maintained by the complainants for about 5 years without any whisper speaks volumes. The notice dated 30.07.2013 is issued for the purpose of filing complaint.
9. To avoid court fee and other legal procedure, the complainants approached this Commission with all false allegations. Except the names of the complainant in CC No.222/2013, the date of agreement, the total cost of the flat, the alleged sale consideration amount paid are one and the same. In fact, the GPA holder of complainants herein and K.Koteswara Reddy are own brothers. This incident further proves that the facts are not co-incidental but a colluded one. There is no deficiency in service on their part. Since legal notice was issued with all false allegations, no reply was given. Hence prayed to dismiss the complaint with costs.
10. On their behalf, the GPA holder of Complainants by name K.Umapathy Reddy filed the affidavit evidence and the documents Exs.A1 to A7. On behalf of the Opposite parties, one M.Rajendra Prasad Varma, their Managing Director filed the affidavit evidence.
11. The points that arise for consideration are :
i) Whether the Complainant is a ‘consumer’ as defined under the Act?
ii) Whether the complaint of Complainants is barred by limitation as provided under Section 24A of the Consumer Protection Act?
iii) Whether there is any ‘deficiency in service’ on the part of the Opposite parties and whether the Complainant is entitled for the reliefs as prayed for?
iv) To what relief ?
12. POINTS No.1 TO 3: It is the case of complainants that the OP No.1 made them believe that the OP No.1 is owner of the land admeasuring Ac.3-24 guntas in Sy.No.67 situated at Raidurg Navakalsa village, Serilingampally mandal, Rangareddy district and that it sold 40% of the land to M/s Sweet Homes vide sale deed and thereby both the OP No.1 and M/s Sweet Homes entered into a Development Agreement with OP No.3 for construction of building complexes and out of the constructed area, both the OP No.1 and M/s Sweet Home are entitled to 50% of the constructed area while the OP No.3 is entitled the remaining 50% area. Stating so, the OP No.1 offered to sell an area of 2500 sq.ft. of developed property @ Rs.1,260/- per sft, out of its share in the building complex and accordingly entered into an agreement of sale on 26.08.2008. Out of total consideration of Rs.31,50,000/-, the complainants paid Rs.29,50,000/-. That, as per the Development Agreement-cum-GPA entered into by the OP No.1 and M/s Sweet Homes with OP No.3, the property agreed to be sold was to be delivered within 30 months from the date of approval of plan with a grace period of 3 months. As the OP No.1 failed to commence any construction work, the complainants filed the present complaint seeking refund of the amount together with interest, costs and compensation. In support of their claim, the complainants placed the reliance on Ex.A1 Agreement of sale dated 26.08.2008 and Development Agreement-cum-General Power of Attorney dated 22.01.2007.
13. On the other hand, the Opposite parties 1 and 2 would contend that the agreement of sale is not an agreement at all since no consideration is meted out and the recitals of the agreement are not enforceable as there is no mention of description of the property to be sold and the boundaries thereof and that the complaint is barred by limitation and that the parties are liable to be relegated to civil court since there are several complex and disputed questions are involved.
14. Admittedly, in the present case, it is the land owner which entered into an Agreement of sale of the property and not the builder. A perusal of Ex.A1 would go to show that the stamp was purchased on 30.10.2006 by one P.Ramakrishna S/o P.Chinna Nagaraju for Sri Chakra Avenues Pvt. Ltd., and the terms of Agreement were reduced into writing on 26.08.2008. The recitals of the agreement states that the OP No.1 agreed to sell the constructed area of 2500 sft. @ Rs.1260/- per sft to the complainants and already received the consideration amount of Rs.29,50,000/- and the balance amount of Rs.2,00,000/- to be paid after permission, approval from the concerned authorities and progress of construction work. There is no mention as to when the said amount was received by the OP No.1 and the mode and place of payment. To vouchsafe the same, no piece of paper is filed evidencing the payment of such a huge amount. As contended by the counsel for Ops 1 and 2, no prudent person would restrain to obtain a receipt of the payment and in the present case, both the complainants are well-educated. It is also the case of the Opposite parties on the particular date of alleged execution of Agreement under Ex.A1, the parties were in abroad, which the Complainants have not denied and have not chosen to file the passport to disprove the same.
15. A further perusal of Ex.A1 would go to show that there is no mention of the particulars of the property offered to be sold, viz., measurement, dimensions, boundaries, floor name, undivided share in the land, date of delivery of possession, and other particulars. And the clause-5 of the said agreement reads “the first part shall provide proportionate car parking as per the development agreement-cum-general power of attorney”. Admittedly, the Development Agreement-cum-General Power of Attorney provides for 50% of the parking area to the land owners and 50% of the parking area to the builder. If the Development Agreement-cum-General Power of Attorney dated 22.01.2007 is given effect, then the Agreement of sale dated 26.08.2008 would become a sham document in view of the fact that Ex.A2 agreement was entered into on 22.01.2007 and the stamp on which Ex.A1 was entered into was purchased on 30.10.2006. In such a circumstance, it is not convincing to believe the very execution of Ex.A1 agreement. Had really the parties entered into an agreement for purchase of property, there would have been a mention as to the description of the property. The property which is agreed to be sold is a non-existing property and is not given effect to so far. It is unbelievable that a person purchases the stamp before entering into an agreement by the very land owner itself. The document under Ex.A6 does not contain seal and stamp of the authority issued the same. For the reasons best known, the Complainants have not filed the entire pages of Ex.A7 document.
16. Under clause-3 CONSIDERATION AND DEPOSIT at 3.5 of Ex.A2, the following is incorporated:
“In case the Owners fails to refund the Security Deposit, or any part thereof as the case may be, then the such portion of the Security Deposit amount shall be treated as passing of consideration towards sale of such portion of the Owners’ Constructed Area at the rate of Rs.3000/- per sft. of built-up area together with proportionate share of the land comprised in the said property which will be equivalent to the amount of the non-refunded Security Deposit and earmarked separately and the Developer shall become entitled to sale and transfer the said portion of Owners’ Constructed area in its favour or its nominee/ nominees through the power of attorney holder.......”
Further, under clause-4 MODALITY OF IMPLEMENTATION OF THIS AGREEMENT, at clause 4.3 and 4.4, the following is incorporated.
“Before submission of the plans to CDA, the owners and the developer shall, on the basis of the plan, provisionally demarcate the Owners’ constructed area and the developer’s constructed area within 15 days of the plans being prepared. The basis of the location of the respective allocations shall be proportionate sharing of benefits and advantages. It is agreed between the Owners and the Developer that both the parties will not sale any area prior to demarcation of their prospective areas.”
“The details of the respective allocations, upon finalisation, shall be recorded under an instrument in writing as a supplementary agreement to this Agreement.”
And under clause-5 MISCELLANEOUS, at clause-5.1 and 5.7 respectively, it is mentioned as below:
“The project shall be named by the Developer and the Owners mutually. The said name shall be prominently displayed at the site.”
“The owners and/or their nominees and the Developer and/or their nominees undertake to pay a sum of Rs.100/- per sft towards corpus fund for the area allotted to their share and undertake to pay the same at the time of delivery of possession of their respective constructed areas.”
Under clause-7 POWERS OF ATTORNEY, at clause-7.2, it is mentioned as below.
“After the plan is sanctioned by the CDA and the concerned municipality, the area to be allotted to the Owners constructed area and the developer’s constructed area as above mentioned shall be earmarked in GREEN and BLUE colours respectively........”
From the perusal of above clauses, it can be safely inferred that the project is not given effect and it didn’t took a shape yet and there is no commencement of construction activity of the project at the site. Further, the parties thereto are not entitled to enter into any contracts for sale of any area prior to demarcation of their respective areas. Hence, the very execution of the Agreement of sale under Ex.A1 is questionable. Admittedly, for the reasons best known, the Complainants failed to make M/s Sweet Homes as a party to the proceeding and knowingly or unknowingly, the counsel for the complainants mentioned in the cause title that the Opposite parties 3 and 4 are formal parties, hence, need no service. That being so, how the terms of the contract are enforceable only against the Opposite party No.1 and 2 is not explained. It is also not explained as to how the Opposite party No.2 is liable in his individual capacity. There are several other questions which are to be decided in addition to consideration of the fact that whether the complaint is filed within limitation or not.
17. We may state further that no party would keep quiet for such long years without seeking enforcement of the terms of the agreement and without seeking refund of the amount from 26.08.2008. And for the first time, by causing the legal notice under Ex.A4, the complainants sought refund of money. Mere issuing a legal notice do not extend the period of limitation. Viewed from any angle, the complaint is barred by limitation from the date of entering into agreement of sale under Ex.A1.
18. There are several complicated questions involved in the matter which have to be decided by a competent civil court but not the Fora constituted under C.P. Act, 1986 which are vested with summary procedure are not competent to decide the matter. In this regard, we place our reliance on the decisions rendered by Hon’ble Apex Court as also the National Commission in the matter of (1) Synco Vs. State Bank of Bikanoor and Jaipore & others, decided on 15.01.2002 by the Hon’ble Supreme Court of India, wherein it is observed as follows:
“Given the nature of the claim in the complaint and the prayer for damages in the sum of Rupees fifteen crores and for an additional sum of Rupees sixty lakhs for covering the cost of travelling and other expenses incurred by the appellant, is obvious that very detailed evidence would have to be led, both to prove the claim and thereafter to prove the damages and expenses. It is, therefore, in any event not an appropriate case to be heard and disposed of in a summary fashion. The National Commission was right in giving to the appellant liberty to move the Civil Court. This is on appropriate claim for a Civil Court to decide and, obviously, was not filed before a Civil Court to start with because, before the Consumer Forum, and figure in damages can be claimed without having to pay court fees. This, in that sense, is an abuse of the process of the Consumer Forum”.
In the matter of Oriental Insurance Company Limited Vs. Muni Mahesh Patel, reported in 2006-2007 Supreme Court Cases 655 – wherein, it was held that “where there are real disputed questions of facts and law which require adjudication by civil court after recording the evidence and holding of a regular trial, the consumer Fora is not proper fora to determine such questions” and in the matter of Mohan Co., Pvt., Ltd., Vs. Santhosh Yadav, reported in 2012-I, CPJ-335 (NC), wherein it was held that “when complex issues of facts and law are involved, such cases must be relegated to civil court”. Accordingly, we answer the points 1 to 3 framed for consideration at paragraph No.11, supra, against the Complainants and in favour of the Opposite parties.
19. POINT No.4: In the result, the complaint fails and is accordingly dismissed but in the circumstances, the parties to bear their own costs.
PRESIDENT MEMBER
Dated: 24.03.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of K.Umapathy Affidavit evidence of M.Rajendra
Reddy, as PW1. Prasad Varma, as RW1
EXHIBITS MARKED
For Complainant :
Ex.A1 is the copy of Agreement of sale dated 26.08.2008 executed between the Opposite party No.1 and the Complainants.
Ex.A2 is the copy of Development Agreement-cum-General Power of Attorney dated 22.01.2007 executed in between M/s Sri Chakra Avenues Pvt., Ltd.,; M/s Sweet Homes as land owners with the Developer M/s Vriddhi Commercial Pvt., Ltd., registered as document No.2938/2007.
Ex.A3 is the copy of General Power of Attorney, dated 18.10.2013 executed by the Complainants in favour of Sri K.Umapathy Reddy.
Ex.A4 is the office copy of legal notice dated 30.07.2013 got issued by the Complainants to the Opposite parties 1 and 2.
Ex.A5 are the original postal receipts and the original returned postal cover addressed to Opposite party No.1.
Ex.A6 is the copy of Certificate of Incorporation, dated 14.11.2006 issued by the Registrar of Companies, Andhra Pradesh in respect of Sri Chakra Avenues Private Limited (without any stamp and seal of the issuing authority).
Ex.A7 is the copy of Form No.32 showing particulars of managing director (only page No.4 is filed out of 9 pages).
For Opposite parties :
NIL.
PRESIDENT MEMBER
Dated: 24.03.2017
