C.C.No.35 OF 2011

Between

B.SUMAN W/o.B.Ranganath

Aged 38 years, Occ:Household

Resident of Peace Villa Somajiguda,

Hyderabad, rep. by her GPA Y.Suresh

S/o.Y.Seetaram, aged 46 yrs.,

Puranapul, Hyderabad.                                         Complainant

        And

1. Sri Sikhara Constructions rep. by its

    Managing Partner, K.Vishnuvardhan Reddy,

    S/o.late K.Kista Reddy, aged 52 years

    Occ:Business, R/o.Flat No.301,

    Star Homes, Domalguda, Hyderabad.

    Having office at Flat No.102, Sphinix Apartments,

    Street No.1, Himayathnagar, Hyderabad.

2. K.Vishnu Vardhan Reddy S/o.late K.Kista Reddy

    Aged 52 years, Occ:Business, R/o.Flat No.301,

    Star Homes,Domalguda, Hyderabad.

3. R.Narasimha Reddy S/o.late R.Satyanarayan

    Reddy, aged 57 years, Occ:Business,

    R/o.101 Sphinx apartments, Streeet No.1,

    Himayathnagar, Hyderabad.

4. Jaligama Prakash S/o.Late J.Balaiah @ Balappa

    Aged 55 years, Occ:Business,

5. Jaligama Ramesh S/o.Late J.Balaiah @ Balappa

    Aged 50 years, Occ:Business,

6. Jaligama Suresh S/o.Late J.Balaiah @ Balappa

    Aged 47 years, Occ:Business,

7. Jaligama Ashok S/o.Late J.Balaiah @ Balappa

    Aged 42 years, Occ:Business,

Opposite parties 4 to 7 all are R/o.H.No.3-6-369/A/22,

 Street No.1, Himayatnagar, Hyderabad.                     Opp.parties 1 to 7

Counsel for the Complainants               :  M/s K.Muralidhar

Counsel for the Opposite parties   : Mr. J.Srinivas Reddy-O.Ps.1 & 2

  Mr.S.Ramachandra Prasad-O.P.3

  O.Ps.4, 6 and 7 served.

  M/s. Mohd. M.A.Samad-O.P.5

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

SMT.M.SHREESHA, HON’BLE MEMBER,

AND

SRI S.BHUJANGA RAO, HON’BLE MEMEBR.

FRIDAY, THE SEVENTH DAY OF SEPTEMBER,

TWO THOUSAND TWELVE

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

***

        The brief facts as set out in the complaint are that the complainant entered into an agreement of sale on 19-10-2009 for purchase of flat No.501 admeasuring 947 sft. in the proposed residential complex situated at No.3-6-369/A/22, Street No.1, Himayatnagar, Hyderabad for a total sale consideration of Rs.20,00,000/- out of which an amount of Rs.15,25,000/- was paid by the complainant as under:

i)                  Rs.5,00,000/- (Rupees five lakhs only) by cash on 03-5-2007.

ii)                Rs.5,00,000/- (Rupees five lakhs only) by cash on 05-5-2007

iii)             Rs.25,000/- (Rupees twenty five thousand only) by cash on 05-5-2009 (Given for registration expenditure)

iv)              Rs.5,00,000/- (Rupees five lakhs only) by cash on 19-10-2009.

The complainant submitted that opposite parties 2 and 3 received the above part of sale consideration and executed receipts and promised to construct the flat before 31-12-2009.  The complainant submitted that the opposite parties 1 to 3 with a malafide intention to cause loss to her stopped the construction and inspite of her repeated requests there was no response from them.  The complainant submitted that still the electrical fitting work, wood work, plumber and drainage work have not commenced yet and opposite parties have to instal lift/escalator and water motor pumps with sump for all the dwellers and even the door fittings, marble/tiles flooring, windows, kitchen, toilets and concealed wiring and wall paintings are also incomplete.  The complainant submitted that the specifications of construction work in schedule A property are as follows:

a)     Structure:- R.C.C. Frame structure with brick walls and cement mortar.

b)       Doors:-    Entry door is to be polished Teak wood frame with a teak wood shutter of minimum 35 mm thickness with necessary brass safety fittings other doors well seasoned teak  wooden frames with teak shutter  and standard design of complete grill.

c)      Window:- Teak wooden frames  with glass paneled teak shutter and complete grill with standard design.

d)     Flooring:-   Marble flooring with skirting and tin oxide polish or vitrified tiles as per choice purchaser.

e)     Painting:-   Alteck smooth finish for internal walls.  All internal walls plastic emulsion paint and external walls with Asian paint.

f)      Kitchen:-    RCC kitchen platform topped with polished granite slab 2 heights dado with granite tiles.

g)     Toilets:-    Good quality of light colored sanitary ware from parry ware/Hindustan with Chrome plated fittings from plumber make.  Common toilets will have one Indian WC and attached toilets will have western WC.  All toilets will be provided with wash basins shower hot and cold water mixture 7 feet dado glazed tiles and non skid tiled flooring.

h)     Electrification:-   ISI company finolex concealed copper wiring with modular switches adequate points in all rooms, TV sockets in all master, bedroom and living room.

i)      Water Supply:-  Bore-well and municipal water to be provided.

j)      Sanitary:-    PVC pipes for waste water lines and sewer lines.,  ISI qualities G1 pipes for water lines.

k)     Lift:- Johnson.  Lift with 6 passenger capacity, with stand by generator for common areas and lift.

        The complainant further submitted that being vexed with the attitude of the opposite parties 1 to 3, the complainant got issued a legal notice dated 14-3-2012 calling upon the opposite parties to complete the construction work and opposite parties having received the legal notice failed to give any reply.  The complainant submitted that because of the conspiracy between opposite parties 1 to 3, they could not complete the project in the given schedule  and there are several disputes between them and opposite parties 4 to 7 who are the landlords of the site are attempting to create charge or third party encumbrance over the property and thereby the complainant will be put to great loss.  The complainant submitted that she is ready to deposit the balance sale consideration of Rs.4,75,000/- but having doubt about the completion and handing over the said schedule flat to her, she submitted that she should not be put to loss because of the illegal acts of the  opposite parties.  The complainant submitted that according to the promise of opposite parties 1 to 3, the schedule flat should be handed over before 01-1-2010 but in the present stage,  it is impossible for opposite parties 1 to 3 to complete the construction and on the other hand, they are demanding excess sale consideration to complete the flat which is illegal and arbitrary and amounts to unfair trade practice and deficiency in service for which opposite parties are liable to pay compensation.  The complainant further submitted that opposite parties 1 to 3 are now attempting to abandon the projects leaving the purchasers to their fate.  Hence the complaint for a direction to the opposite parties to hand over the Schedule B flat to the complainant by completing the construction with all amenities mentioned in the premises bearing No.3-6-369/A/22 situated at street No.1 Himayatnagar, Hyderabad and register the sale deed in favour of the complainant or her nominee in respect of flat No.501 or alternatively direct opposite parties 1 to 3 to jointly and severally return Rs.15,25,000/-together with interest at 24% p.a. from the date of receipt of advance to the date of refund and pay compensation of Rs.5,00,000/- together with costs.

        Opposite parties 1 and 2 filed written version resisting the complaint and submitted that opposite party 2 is the Managing Partner of opposite party No.1 firm and fully acquainted with the facts of the present case.  Opposite party 2 submitted that opposite party Nos. 2 and 3 are equal partners of opposite party No.1 firm and opposite parties 4 to 7 approached them and made a proposal for development of their house property bearing No.3-6-369/A/22 situated in street No.1, Himayathnagar, Hyderabad.  After several negotiations, opposite parties 1 and 2 accepted the terms and conditions gave deposit amount and executed Development agreement as per which opposite parties 4 to 7 shall get 50% of built up area and opposite party No.1 firm will get 50%  built up area and opposite parties 1 and 2 started construction and completed all the slabs and also the elevation in front side is being completed.  Opposite parties submitted  that out of eight flats fallen to their share, they have executed various documents in the name of respective prospective purchasers:

i)                  Flat No 102 was allotted to Sri K.Surendar Reddy 3(Complainant in CC No 2  of 2010 on the file of this honourble commission) on receiving of sale    consideraion of Rs 40,30,000/- by O.P.  No.3. leaving balance of Rs.2,00,000/-.

ii)                Flat No.202 in favour of Smt Padmavathi on receiving of part sale consideration of Rs.,46,00,000/- by O.P. No.3 out of Rs.62,50,000/-

iii)             Flat No. 502 in favour of Willy C/o Chung Hua Hotel on receiving of part sale consideration of Rs.50,00,000/- out of Rs.68,00,000/-.  These three above flats are agreed, collected and sold independently by opp.party No.3

iv)              Flat No 402 in favour of Smt Sangeeta Innani & Venu Gopal Innani on receiving of part sale consideration of Rs 44,50,000/- out of total Rs 56,50,000/- and the sale agreement is jointly executed by the both partners O.P.1 & 2 (They are Complainants in C.C.108 of 2010).

v)                Flat No 401 in favour of Sri Venu Gopal Innani S/o, Late sitraram on receiving of part sale consideration of Rs.31,50,000/- out of Rs.36,50,000/- and the sale agreement is jointly executed  by the both partners O.P.s 1and 2.

vi)              Flat No.501 in favour of Smt Suman W/o Ranganath (Complainant in CC 35 of 2011) on receiving part sale consideration of Rs.15,25,000/- out of Rs.20,00,000-.  The sale agreement is executed  by the Opposite Parties 1 & 2 with active connivance and consent of the Opposite Party No 3 who joined his hands in the receipt dated 5-5-2009 along with the Opposite Parties 1 & 2 while accepting the part sale consideration of Rs.25,000/- (Rs twenty five thousand only) towards the Flat No 501 from the complainant.  However still the complainant has to pay the balance sale consideration of Rs.4,75,000/- to Opposite Party No.1.

vii)           Flat No.504 in favour of Smt K.Sunitha W/o. K.Raj Kumar Reddy (Complainant in CC No 2 of 2010 on the file of this Honourable Commission) on receiving of part sale consideration of Rs.25,00,000/- out of Rs.35,00,000/. The sale agreement is executed by the Opposite Parties No. 1 & 2.

viii)         Flat No.302 in favour of K.Surender Reddy S/o. Late Kantha Reddy (Complainant in CC No.80 of no.2009 on receiving of part sale consideration of Rs.23,50,000/- out of Rs.36,00,000/-.  The sale agreement is executed by the Opposite Parties 1 & 2.

These three flat agreements are executed by opposite party No.2 as equal partner and major amounts are being collected by opposite party No.3 without participating in the construction work of the schedule residential complex.  Opposite party No.2 submitted that there were unnecessary complaints by the neighbours to municipal authorities and there was labour problems due to which the construction was delayed but they are committed to complete the complex in all respects.  Opposite party No.2 submitted that opposite party No.3 misappropriated the funds of opposite party No.1 and diverted major amounts for lavish construction of his new house in Durga Bai Deshmukh colony, Hyderabad due to which huge financial problems were faced in proceeding with the construction.  Opposite party No.2 further submitted that he spent much amounts from his pocket  and admitted that the construction of the scheduled premises is still incomplete and lift, water head tank, electric transformer and other common facilities are yet to be completed.  Even the laying of marble flooring, electrical wiring work and sanitary fittings are not completed, wooden doors and windows are pending and kitchen and toilets are yet to be completed and other things  such as painting, generator and municipal water arrangements are also to be completed.  Opposite party No.2 submitted that in these circumstances, it is just and proper that the complainant be directed to pay the balance sale consideration of Rs.4,75,000/- for completion of her flat and the averment made by opposite party No.3 in his counter that the construction of the schedule complex is almost completed is incorrect and false and also the allegation of opposite party No.3 that the cash receipt dated 5-5-2009 is forged is also baseless and submitted that it was executed by opposite parties 1 to 3 jointly and collectively towards part of sale consideration for flat No.501 and in pursuance of agreement of sale dated 19-10-2009.  Opposite party No.2 admitted the issuance of legal notice by complainant but denied that they abandoned the property and submitted that they are not having any objection for completion and handing over the flat and the question of creating any encumbrance or charge over the flats does not arise and submitted that to show his bonafides executed sale deeds in favour of several purchasers and the question of opposite parties 4 to 7 making any cancellation or terminating of power of attorney cum Development agreement does not arise and submitted that the complaint is premature  and the complainant without making the balance sale consideration cannot insist for registration of sale deed and prayed to dismiss the complaint.

        Opposite party No.3 filed counter resisting the complaint and submitted that as many as 5 complaints were filed complaining non registration of the flats.  He submitted that a bare reading of the complaints go to show that the complaints were filed by the complaints with active connivance and collusion between the complainants and opposite party No.2 who swallowed and swindled away the amount mentioned in para 2 of the complaint without paying a single pie to him who is equally entitled to receive the sale consideration.  Opposite party No.3 submitted that in para 2 of the complaint referred to various payments and booking of flats are not within his knowledge and they are no way concerned with those allegations.  He submitted that there is no privity of contract between these opposite parties and the complaint in para 2 and are totally false and hereby denied.  The alleged receipt of Rs.25,000/- dated 5-5-2009 is concocted one by forging his signature and reserved his right to take appropriate steps under the provisions of IPC and civil liability.  In a similar situation at the instance of opposite party No.3, FIR Nos. 66 and 67 of 2011 was lodged against opposite party No.2 and the complainants there in CC No.80/09, C.C.Nos.2 and 3 of 2010 and C.C.Nos.108 and 118 of 2010 for forging the signature and thumb impression of opposite party No.2 is pending investigation on the file of Nampally P.S. Hyderabad. Opposite party No.3 submitted that the receipts and sale agreements alleged to have taken place are totally false and denied and submitted that opposite party no.2 became so habituated to

take monies from the purchasers without accounting for the same or paying respective share to him and utilizing the amounts for his selfish ends and personal gains.   Opposite party No.3 denied that the construction work is not yet complete and in fact the entire work is over except internal work and even as per recitals (clause h) of Partnership deed, any kind of agreement or receipt of money is valid and binding the partners to the deed only and if it is signed by both the partners of the firm and submitted that he did not receive even a single pie or entered into any agreement of sale in respect to the subject flat.  Opposite party No.3 submitted that there is no proof or evidence to show that he received money or  entered into agreement as alleged by the complainant and even if it is true, it does not bind him  and he is not responsible or answerable to those payments.  Opposite party No.3 submitted that the complainant in collusion with opposite party No.2 created fictitious receipts and filed the complaint to harass him taking undue advantage of the disputes between him and opposite party no.2 and trying to extract money by unlawful means.  He denied that he and opposite party No.2 agreed for completion of construction in all respects of the schedule flat on or before 31-12-2009.  Opposite party no.3 denied the execution of agreement and submitted that he had no knowledge about receiving the sale consideration and execution of receipts for and on behalf of the firm  and the legal notice was not received by him and submitted that the allegations in the complaint are absolutely false and incorrect and submitted that there is no deficiency in service and prayed for dismissal of the complaint with costs.

        The complainant filed her affidavit in lieu of evidence and reiterated the facts  stated in the complaint and relied on Exs.A1 to A14.  Opposite party No.2 filed his affidavit reiterating the facts stated in his written version and opposite party No.3 filed his affidavit reiterating the facts stated in his counter and relied on Exs.B1 and B2.

          The brief point that falls for consideration is whether there is deficiency in service on behalf of the opposite parties and if the complainant is entitled for the reliefs sought for in the complaint?

        It is the complainant’s case that she entered into an agreement of sale with the opposite parties/builder for purchase of flat No.501 and has paid Rs.15,25,000/- out of the total sale consideration of Rs.20,00,000/-.  It is also the complainant’s case that opposite party no.1 is a registered partnership firm of which opposite parties 2 and 3 are partners and they entered into a development agreement with opposite parties 4 to 7 who are the land owners for construction of a residential complex and opposite parties 1 to 3 are entitled to 50% of the built up area.  Ex.A1 is the development agreement dated 29-8-2005 entered into between the land owners and opposite parties 1 to 3 and a brief perusal of the same shows that flat No.501, the subject flat herein falls to the share of builders i.e. opposite parties 1 to 3.  Ex.A2 is a certificate of registration of opposite party no.1 firm.  A brief perusal of Ex.A3, agreement of sale, shows that it was entered into between the complainant and opposite party no.2 on 19-10-2009 for flat No.501 for a total sale consideration of Rs.20,00,000/- out of which admittedly Rs.15,00,000/- was paid to opposite party no.2.  it is pertinent to note that the signature of opposite party no.3 is not reflected in this agreement of sale, Ex.A3.  Exs.A4, A5 and A7 are the receipts issued by opposite party no.2 to the complainant herein for Rs.5,00,000/- each evidencing that the entire payment of Rs.15,00,000/- was made to opposite party No.2 only.  Ex.A6 is a white slip of paper on which an amount of Rs.25,000/- is written and which is alleged to have been signed by opposite party no.3 and which is denied by opposite party No.3.  Taking into consideration the nature of this receipt and that the signature was denied by opposite party No.3, the complainant ought to have taken steps to send the signature to a handwriting expert to prove that opposite party No.3 has signed the same, which she did not do so and hence failed to conclusively establish that opposite party No.3 received Rs.25,000/-.  We are of the considered view that from this piece of paper alone, it cannot be construed that an amount of Rs.25,000/- was paid to opposite party no.3 for flat No.501 specially in the absence of his name and signature in Ex.A3, agreement of sale.  It is the contention of the complainant that the construction has not been completed as per the specifications given in the schedule  and inspite of getting a legal notice issued under Ex.A12 to opposite parties 1 to 3, there was no progress.  It is the contention of opposite party no.2 that opposite party no. 3 is also liable and that opposite party No.3 has misappropriated the funds of opposite party No.1.  It is the contention of opposite party no.3 that there is no privity of contract between the complainant and opposite party no.3 because he has never signed the agreement.   The learned counsel for opposite party No.3 brought to our notice that C.C. 85/2011 filed before this Commission against the same opposite parties also deals with the same flat No.501 in the same residential complex.  Opposite party No.3 has also lodged an FIR against opposite party No.2 for alleged forging of his signature.  The complainant’s prayer to handover the flat and to execute the sale deed is being disallowed because the agreement of sale itself has not been signed by both the partners i.e. opposite parties 2 and 3 but signed by opposite party no.2 alone which is against the terms of partnership deed evidenced under Ex.B1.    Keeping in view the balance of equities and the documentary evidence on record and also the fact that two agreements of sale have been executed by opposite party No.2 against the same property i.e. flat No.501, we are of the considered view that a sale deed cannot be executed based on an agreement of sale which was signed by opposite party no.2 alone against the terms of partnership deed and instead we are of the considered opinion that the complainant should not suffer for any disputes between opposite parties 2 and 3 and therefore, we direct opposite party No.2 to refund Rs.15,00,000/- received by him vide Ex.A3, together with interest at 12% p.a. from the respective dates of payment till the date of realization together with compensation of Rs.1,00,000/- and  costs of Rs.5,000/-.  This compensation of Rs.1,00,000/- is being awarded as opposite party no.2 had entered into an agreement of sale with the complainant against the terms of the partnership deed and also did not deliver possession within time as promised in Ex.A3. Case against opposite parties 1 and 3 to 7 is dismissed as there is no privity of contract between the complainant and opposite parties 1 and 3 to 7.  To reiterate, as per the terms of the partnership deed, opposite party no.1 should be represented by both the partners which did not happen in the instant case and therefore opposite party no.2 alone is liable to refund the amounts.

        In the result this complaint is allowed in part directing opposite party  2 to refund an amount of Rs.15,00,000/- received by him vide Ex.A3, together with interest at 12% p.a. from the respective dates of payment till the date of realization, together with compensation of Rs.1,00,000/-                       and costs of Rs.5,000/- within four weeks  from the date of receipt of this order.  Case against opposite parties 1 and  3 to 7 is dismissed.

Sd/-PRESIDENT.

                                                                        Sd/-MEMBER.

                                                                        Sd/-MEMBER.

JM                                                                     Dt.07-9-2012

APPENDIX OF EVIDENCE

For the complainants:                                       For Opp.party:

Affidavit evidence of  complainant     Affidavit evidence of O.P.2 filed

Filed.                                           Affidavit evidence of O.P.3 filed.

Exhibits marked for the complainants

Ex.A1-Copy of Development Agreement-cum-GPA dated 29-8-2005.

Ex.A2-Acknowledgement of Registration of firm dated 6-5-2005.

Ex.A3-Agreement of sale dated 19-10-2009.

Ex.A4-Receipt for Rs.5,00,000/- dated 19-10-2009

Ex.A5- Receipt for Rs.5,00,000/- dated 05-03-2008

Ex.A6- Receipt for Rs.25,000/- dated 05-05-2009

Ex.A7- Receipt for Rs.5,00,000/- dated 03-05-2007

Exs.A8 & A9 Postal receipts dated 14-3-2011.

Ex.A10 & A11- Returned postal covers.

Ex.A12-Office copy of legal notie dated 14-3-2011.

Ex.A13-G.P.A.

Ex.A14-Copy of order in CC 80/2009.

Exhibits marked for the opposite parties

Ex.B1- Copy of Partnership deed dated 14-3-2002.

Ex.B2-FIR dated 5-3-2011.

Sd/-PRESIDENT.

                                                                        Sd/-MEMBER.

                                                                        Sd/-MEMBER.

JM                                                                     Dt.07-9-2012