BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

C.C.No.118 OF 2010

Between:

Venugopal Innani S/o late Sitaram
aged 45 years, Occ: Legal Practitioner

R/o H.No.14-4-81, Begum Bazar
Hyderabad.

                                                                        Complainant

 A N D

1.   Sri Sikhara Constructions having its office at
flat No.102, Sphinx Apartments Street No.1,
Himayatnagar, Hyderabad being rep. by its
Managing Partner Mr.K.Vishnu Vardhan Reddy
S/o late K.Kista Reddy, aged 52 years, Occ:Business
R/o Flat NO.301, Star Homes, Domalguda, 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 R.Satyanarayan Reddy
aged 54 yrs, Occ:Business, R/o Flat No.101
Sphinx Apartments, Street No.1, Himayatnagar
Hyderabad

4.   Jaligama Prakash S/o late J.Balaiah @ Balappa
aged 56 years, Occ:Business R/o Flat No.301
Gokulkinj Apartments, St.No.5, Himayatnagar, Hyd

5.   Jaligama Ramesh late J.Balaiah @ Balappa
aged 50 years, Occ:Business

6.   Jaligama Suresh late J.Balaiah @ Balappa
aged 47 years, Occ:Business

7.   Jaligamma Ashok late J.Balaiah @ Balappa
aged 42 years, Occ:Business

Ops NO.5 to 7 all are R/o H.No.3-6-369/A/22,
Street No.1, Himayatnagar, Hyderabad

                                                                        Opposite parties

Counsel for the Complainants                        Sri D.V.Reddy

Counsel for the opposite parties             Sri J.Srinivas Reddy (Ops 1&2)

Sri S.Ramachandra Prasad (OP3)

                                                        Sri M.Durga Prasad (Ops 4 to 7)   

QUORUM:   SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
               

                                                AND

SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

FRIDAY THE THIRTEENTH DAY OF JULY

                                TWO THOUSAND TWELVE

Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)

                                        ***

1.             The complaint is filed seeking relief  for delivery of possession of the flat bearing number 401 and for completion of construction of the flat and for providing amenities to the flat as also for execution of sale deed or in the alternative for refund of the amount of `31,50,000/- with interest and for payment of `4,00,000/- towards compensation and costs.

2.             The averments of the complaint are that the first opposite party through the second and third opposite parties entered into ‘Development Agreement cum General Power of Attorney with the opposite parties no.4 to 7 who are the owners of the site admeasuring 773 sq.yards with building bearing door no.3-6-369 situated at Himayatnagar locality of Hyderabad city, on 29.08.2005 whereunder it was agreed that the opposite parties no.1 to 3 would construct  a residential complex consisting of 20 flats of which the opposite parties no.4 to 7 are entitled to 50% of the total built up area and the opposite parties no.1 to 3 are entitled to balance 50% built up area.

3.             The complainants entered into agreement of sale with the opposite parties no.1 to 3 to purchase flat bearing number 401 admeasuring 1034 sft for sale consideration of `36,50,000/- and as per the terms of the agreement, the complainants paid the sale consideration of `31,50,000/- to the opposite parties no.1 to3 till 03.10.2009.

4.             The opposite parties no.1 to 3 did not complete the construction of the flat and the complainants got issued notice dated 15.09.2010 requesting the opposite parties no.1 to 3 to complete the construction work of the flat for which the opposite party no.2 issued reply requiring payment of balance sale consideration by the complainant in view of the order of this Commission in C.C.No. 80 of 2009 filed by one of the purchasers, Surender Reddy and informed the complainant that the sale deed was executed and pending before the sub registrar. As per the terms of the agreement of sale, the flat has to be handed over to the complainant on or before 15.08.2009. The opposite party no.3 had not completed the construction work of the flat and has been demanding excess amount from the complainant.

5.             The opposite parties no.1 and 2 filed counter contending  that the first opposite party started construction work of the project and completed five floors in super structure and the finishing work to some extent is pending. The complainant entered into agreement to purchase flat no.401 at the first instance and subsequently the flat no.402 is also allotted to the complainant.   The opposite parties allotted flat no.401 to the complainant for `36,50,000/- and the complainant has paid `31,50,000/-. The complainant still has to pay the balance amount of `5,00,000/-.

6.             On account of intervention of the neighbourers and due to filing of suit, O.S.No. 3363 of 2008 against the Municipal Corporation by the land owners, i.e., the opposite parties no. 4 to 7, the City Civil Court passed status quo order consequent to which the first opposite party could not proceed with construction work. Later, the suit was withdrawn and the Municipal Corporation accorded permission under Building Regularization Scheme.  Thereafter, the opposite parties started the construction further and the finishing work is pending apart from installation of elevator, transformer, overhead tank and municipal water work board connection and electrical fitting. The opposite parties are ready and willing to hand over the flat to the complainant after executing all the pending work as per requirement of the complainant and in accordance with the terms of the agreement. The finishing work would be completed within 6 to 8 months. The opposite parties executed the sale deed and presented it for registration. The complainant has been creating hurdles to the opposite parties no.1 and 2 in performing their part of the contract.

7.             The opposite party no.3 filed counter resisting the claim and stated that initially the complainant entered into an agreement for purchase of flat No.401 for consideration of `39,50,000/- and paid `12 lakhs towards advance for the flat.  Subsequently, the complainant requested the opposite parties to allot a bigger flat and the opposite parties allotted flat no.402 for `56,50,000/-.  The complainant paid a sum of `19,50,000/-.     The opposite parties have received an amount of `31,50,000/-.  The complainant agreed to pay the balance amount of `25 lakhs at the time registration of flat No.402.  The parties reduced the agreement into writing with regard to change in the flats with an adjustment of `12 lakhs which was paid towards flat no.401 and the earlier agreement entered in respect of flat no.401 stood cancelled. 

8.             The opposite party no.3 has not received any notice from the complainant.  The opposite party no.2 has colluded with the complainant.  Surender Reddy filed CC No.80 of 2009 in respect of flat no.302 which was tendered in exparte order.  The opposite party no.3 has taken steps to prefer an appeal before the National Commission.  The opposite party no.3 has no knowledge of execution of the sale deed which is pending before the Sub-Registrar and subsequently it was refused for registration by the SRO Red Hills, for want of signature of opposite party no.3. 

9.             The opposite party no.3 filed criminal case against the complainants and the opposite party no.2 and the case was referred to the police for investigation and report.  The police registered a case in Cr.No.67 of 2009.  The complainant got filed through his wife and daughter another C.C.No.108 of 2010 before this Commission with fabricated agreement and receipts in respect of Flat No.402 and also presented forged sale deed before SRO and SRO refused to register the document.  There is no deficiency in service on the part of the opposite party no.3 and hence prayed for dismissal of the complaint against the opposite party no.3. 

10.            The complainant filed his affidavit and the documents, ExA1 to A17 and on the side of the opposite parties no.1 and 2,  K.Vishnu Vardhan Reddy, the Managing Partner and the opposite party no.3 have filed their affidavits  and Exs.B1 to B3 are marked. 

11.            The points for considerations are:

i)                    Whether there is deficiency in service on the part of the opposite parties?

ii)                    To what relief?

12.            POINT NO.1:    There is no dispute of the fact that the opposite parties no.1 to 3 entered into development agreement with the opposite parties no.4 to 7 for development of the land and construction of a residential complex consisting of 20 flats and the opposite parties no.4 to 7 are entitled to 50% of the total built up area while the opposite parties no.4 to 7 are entitled to the balance 50% built up area. On 15.5.2007 the complainant entered into agreement for sale with the opposite parties no.1 to 3 for purchase of Flat No. 401 admeasuring 1034 sft for consideration of `31,50,000/-. As per clause 12 of the agreement of sale the opposite parties no.1 to 3 have to complete construction work of the flat and hand over it to the complainant within fifteen months from the date of agreement of sale. 13.         The complainant paid the amount of `31,50,000/- on various dates till 03.10.2009. As per clause 3 of the agreement of sale, the complainant has to pay balance sale consideration at the time of handing over of the flat by the opposite parties no. 1 to 3. 

14.            The learned counsel for the opposite party no.3 has vehemently contended that the complainant forged the signature of the opposite party  no.3 and presented the sale deed for registration and that failed to get the registered sale deed for want of signature of the opposite party no.3 in the sale deed as also that the opposite party no.3 initiated criminal proceedings against the complainant.  Further, he has represented that the complainant has played fraud on this Commission by filing complaint.

15.            The wife and daughter of the complainant filed complaint filed C.C.No.108 of 2010 which was allowed by this Commission.  At the time of admission this Commission directed to club the complaints, C.C.No.108 of 2010 and the present complaint viz., C.C.No.118 of 2010.  Inadvertently, C.C.No.108 of 2010 was disposed of and the present complaint is requested to be heard in the light of the findings recorded in the order C.C.No.108 of 2010 as also keeping in view of the contents of the agreement filed therein. 

16.            A perusal of the agreement filed in C.C.No.108 of 2010 would show that at the first instance the complainant herein has entered into purchase of flat  no.401 with the opposite parties no.1 to 3.  Admittedly, the opposite parties no.1 to 3 at logger heads and the opposite parties no.1 and 2 have been taking a different stand from that of the opposite party no.3.  A perusal of the agreement would show that at a subsequent stage the complainant has changed his mind and entered into agreement with the opposite parties no.1 to 3 for purchase of a bigger flat than the flat no.401 in the name of his wife and the daughter.

17.            The contents of the agreement  filed in C.C.No.108 of 2010 would show that the complainant has agreed to pay the balance amount that was to be paid in respect of the flat no.401 and the difference amount in sale consideration of the flat no.402.  The document provides for sale of flat no.402 in lieu of the sale of flat no.401 as also adjustment of sale consideration relating to flat no.401 to the sale consideration for flat no.402.  Thus it is clear that the complainant is not entitled to any relief in respect of Flat no.401 which he had relinquished for the flat no.402. 

18.            The agreement of sale clinchingly provides for sale of flat no.402 and not  for sale of flat no.401.  The relevant paragraph of the agreement of sale wherein it is stated that the flat no.401 which was agreed to be purchased was relinquished and flat no.402 was agreed to be purchased for sale consideration of Rs. `56,50,000/-.  Out of which the sale consideration already paid in respect of flat no.401 was agreed to be adjusted.      The alteration to the contents of the agreement of sale as pointed out by the learned counsel for the opposite party no.3 in page 2 of paragraph 3 of the agreement sale reads as under:

Whereas the Second Party already entered into agreement of sale with the Frist Party to purchase Flat No.401 fourth floor, admeasuring 1034 sq.ft. along with an undivided share of 30.63 sq.yds., along with amenities and car parking and paid Rs.10,50,000/- as per agreement dated 15-05-2007.  Now the second party with a view to purchase a big flat with three bed rooms admeasuring 1712 sq.ft approached the first party and the first party agreed to sell the big flat no.402 admeasuring 1712 sq.ft. in (exchange) addition of the earlier flat No.401 admeasuring 1034 sq.ft. on an enhanced amount of rS.20,00,000/- (Rupees Twenty Lakhs only) in addition to the sale consideration of rs.36,50,000/- (Rupees Thirty Six Thousand (Lakh) Fifty Thousand Only) under the agreement of slae dated 15.05.2007.  The first party agrees confirms and admits the allotment of the flat No.402, admeasuring 1712 sq.ft.

19.            The complainant has approached this Commission with unclean hands and he is not fair enough to state that the agreement of sale  was executed for purchase of flat no.402 which was originally meant for purchase of flat no.401.  In the circumstances, this Commission does not think it proper to allow the complaint.  The learned counsel for the opposite party n.3 has relied upon the decisions of the Hon’ble Supreme Court in “Oriental Insurance Company Ltd., Vs Muni Mahesh Patel” reported in 2006 (VII) SCC, 655 to contend that proceedings before the Consumer Forum are summary in nature and  adjudication of issues involving disputed factual questions cannot be made and that the complainant has to seek relief elsewhere and not before the Consumer Forum. 

20.            He has relied upon the decision of the Hon’ble National Commission in “Neelima Gupta vs Reliance Life Insurance and another” reported in I (2011) CPJ, 241 in support of his contention that material suppression of facts of the case disentitled the person approaching Consumer forum  from claiming any relief.

21.            He has also relied upon the decision of the High Court of AP in Divisional Forest Officer, Eluru vs. District Judge, West Godavari Eluru and others reported in 2011(2) ALD 147 (DB) and it was held that a judgment/decree/order obtained by playing fraud on court is a nullity and non est in eye of law and it cannot be assailed in any court even in collateral proceedings.  The High Court held that:

Before examining whether or not he proceedings of the Forest Settlement Officer dated 18-12-1984 is vitiated by fraud, it is necessary to understand what the expression “fraud” means. A ‘fraud’ is an act of deliberate deception with the design of securing something by taking unfair advantage of another to gain by another’s loss. (S.P. Chengalvaraya Naidu (4 supra); T. Suryachandra Rao (2 Supra); Behari Kunj Sahkari Avas Samiti (3 supra)). ‘Fraud’ has been defined as an act of trickery or deceit. In Webster’s Third New International Dictionary, ‘fraud’ in equity has been defined as an act or omission to act, or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black’s Law Dictionary, ‘fraud’ is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, is one which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to the Halsbury’s Laws of England, a representation is deemed to be false and, therefore, a misrepresentation if it was, at the material date, false in substance and in fact. From the dictionary meaning or even otherwise fraud arises out of the deliberate active role of the representor about a fact which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of a fact with knowledge that it was false. “Fraud” is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless of whether it be true or false. A false statement, made through carelessness and without reasonable ground for believing it to be true, may be evidence of fraud. (Ram Chandra Singh (1 supra); T. Suryachandra Rao (2 Supra); Behari Kunj Sahkari Avas Samiti 93supra); Derry v. Peek (12) 1886 (90) All. E.R.1). The expression ‘fraud’ invokes two elements, deceit and injury to the person deceived. A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied (Vimla (Dr.) v. Delhi Admn (13) 1963 Supp.2 SCR 585; Indian Bank v. Satyam Fibres (India) (P) Ltd. (14)(1996) 5 SCC 550; T. Suryachanda Rao (2 supra: Behari Kunj Sahkari Avas Samiti (3 Supra) and Bhaurao Dagdu Paralkar (10 supra)). In fraud one gains at the loss of another. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. (A.V.Papayya Sastry v. Govt. of A.P. (15)2007 ALT (Rev.) 49 (SC) = 2007(3)SCJ 871 = (2007) 4 SCC 221 = 2007 (5) ALT 143 (DN SC)). Fraud is a conduct which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former. Although negligence is not fraud, yet it can be evidence of fraud. Misrepresentation itself amounts to fraud. Innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensures therefrom although the motive from which the representation proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Fraud is anthema to all equitable principles and any affair tainted with fraud cannot be saved by the application of any equitable doctrine including estoppels and res judicata. (Ram Chandra Singh (1 Supra); T. Suryachandra Rao (2 Supra); Behari Kunj Sahkari Avas Samiti (3 supra); Ram Preeti Yadav (8 supra); Aditya Pratap Bhanj Dev (5 supra)). A representation is fraudulent not only when the person making it knows it to be false, but also when he ought to have known, or must be taken to have known, that it was false. A false statement which a person ought to have known was false, and which he must therefore be taken to have known was false, cannot be said to be honestly believed in. ‘ A consideration of the grounds of belief’ is, no doubt, an important aid in ascertaining whether the belief was really entertained. A man’s mere assertion that he believed the statement he made to be true is not accepted as conclusive proof that he did so (Kerr on Fraud and Mistake; Ram Chandra Singh (1 supra)). Fraud can either be proved by established facts or an inference can be drawn from admitted and/or undisputed facts. When fraud is inferred the Court, as well as the authority alleging fraud, can ignore a decision obtained by fraud. (Aditya Pratap Bhanj Dev (5 supra)). If, on the facts, the average man would have intended wrong, that is enough. This concept of fraud, steadily kept in view, will render the administration of the law less difficult, or rather will make its administration more effective. (Bigelow on Fraudulent Conveyances; Ram Chandra Singh (1 supra).

22.            In the light of the ratio laid in the aforementioned decisions and the complainant having played fraud on this commission in order to obtain an order in respect of flat no.401 and as such the claim of the complainant cannot be entertained before this Commission. 

23.            In the result the complaint is dismissed.  The complainant shall be at liberty to approach civil court. In case they initiate legal proceedings,  they are entitled to seek exclusion of the time spent before the Commission under Section 14 of the Limitation Act in view of the judgment of the Hon’ble Supreme Court in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, II (1995) CPJ 1 (SC).  There shall be no order as to costs.

                                                                        MEMBER

                                                                        MEMBER

                                                                   Dt.13.07.2012

KMK*

APPENDIX OF EVIDENCE

                                 WITNESSES EXAMINED

                                                NIL

                                     EXHIBITS MARKED

For complainant

Ex. A1       Agreement dt.15.05.2007

Ex. A2       Specification sheet

Ex. A3       Receipt cum Ack. Dt.31.05.2007

Ex. A4       Photo Copy of Cheque with ACk. Dt.02.06.2007

Ex.A5                Photo Copy of Cheque with Ack. Dt.04.06.2007

Ex.A6                Photo Copy of Cheque with Ack. Dt.22.09.2007

Ex.A7                Photo Copy of Cheque with Ack. Dt.27.09.2007

Ex.A8                Request letter from OP No.1 dt.17.12.2008

Ex.A9                Cash Receipt dt.02.01.2009

Ex.A10       Cash Receipt dt.10.02.2009

Ex.A11       Cash Receipt dt.03.10.2009

Ex.A12       Postal Receipts dt.16.09.2010

Ex.A13       O/c of Legal Notice dt.16.09.2010

Ex.A1        4      Reply legal notice by OP NO.1 dt.9.10.2010

Ex.A15       Confirmation Letter by OP NO.1 dt.15.03.2010

Ex.A16       Order in CC NO.80 of 2009 dt.06.09.2010

Ex.A17       Regd. Develop. Agreement dt.29.08.2005

For opposite parties

Ex.B1                Copy of Acknowledgement of Registration of Firm

Ex.B2                Copy of Sale Deed dt.3.10.2009

Ex.B3                Copy of FIR dt.5.3.2011

                                                                                MEMBER

                                                                                MEMBER