STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA AT HYDERABAD
CC NO.269 OF 2014
Between :
Roshan Kumar Agarwal
S/o Raj Kumar Agarwal,
Aged 35 years, Occ: Service,
R/o Akshaya Towers, Flat No.502,
Madeenaguda, Miyapur, Hyderabad. …Complainant
AND
1) M/s Aliens Developers Private Limited,
Represented by its Assistant Manager (B.D. Finance)
N.Ashok Kumar S/o Nageshwar Rao
Ravi Murali Krishna S/o Ramesh Ravi,
Manager (Finance & Accounts), Flat No.911,
Teja Block, My Home Navadweepa
Apartments, Madhapur, Hyderabad – 500 081.
2) Aliens Developers Private Limited,
Represented by its Assistant Manager (B.D. Finance)
Hari Challa, Aliens Space Station, Survey
No.384, & 385, 3rd Floor, RC Puram,
Tellapur, Medak, Hyderabad – 502 032. … Opp. Parties
Counsel for the Complainant : Sri A.Naveen Kumar & J.Mukesh.
Counsel for the Opp. parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
and
Sri Patil Vithal Rao … Member
Friday, the Twentieth day of January
Two thousand Seventeen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
This is a complaint filed under section 17(1)(a)(i) of the Consumer Protection Act, praying to direct the Opposite parties to refund the principal amount of Rs.19,74,742/- along with interest @ 24% p.a. and compensation of Rs.5,00,000/- for mental agony and costs of the complaint.
2. The case of the Complainant, in brief, is that the Ops company represented that they are engaged in the business of constructing multistoried apartments and entered into development agreement with the owners of the land comprised in survey nos. 384, 385 and 426/A situate at Tellapur village, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and obtained permission bearing No.HUDA/621/P4/PLG/HUDA/2008 and they would provide all amenities there for.
3. Lured by the advertisement issued by the Ops, Complainant entered into an agreement of sale on 04.11.2011 for a total sale consideration of Rs.43,49,109/- towards purchase of flat bearing No.402 in Station-1 on 4th floor, with a super built-up area of 1597 sft in the complex by name “Aliens Space Station-1” including common areas with one car parking, situated at Tellapur village, Ramachandrapuram mandal, Medak district and accordingly paid the amounts in instalments on various dates, total amounting to Rs.19,74,742/-.
4. The Complainant also entered into Tripartite Agreement on 30.1.2011 with State Bank of India, Patny Centre, Secunderabad, for sanction of loan amount. Out of the sale consideration amount paid, the bank released an amount of Rs.12,44,844/- in favour of the Ops. The Ops agreed to complete the construction and deliver the possession of the flat on or before August 2012 with a grace period of 9 months. In case of delay in delivery, the Ops agreed to pay compensation @ Rs.3/- per sft per month. As such, complainant took house on rent and started paying monthly rents besides EMIs to the bank.
5. The Opposite parties have not commenced construction of the flat even after the stipulated period is expired and there is no possibility of the construction of the flat as also the Opposite parties had not responded to the repeated requests of the Complainant. The complainant has been paying the monthly instalments regularly to the bank. Hence, the complaint.
6. The opposite parties resisted the claim on the premise that the complaint alleging deficiency of service on the part of Ops relating to the sale transaction entered between them is not maintainable either under law and also in view of the facts of the case and hence liable to be dismissed in limine and also in view of the fact that the Complainants did not approach them before filing the complaint either for refund of money or for cancellation or with any request, hence, cannot attribute any deficiency of service, hence, does not fall under the purview of the C.P. Act.
7. The opposite parties submitted that on their application for conversion of agricultural land into non-agricultural land and FTL clearance, permission was granted for conversion of agricultural land into non-agricultural land on 14.04.2007 and FTL clearance was granted on 30.12.2006 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. The Municipal Administration and Urban Development (I) Department notified the land in survey number 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 survey number 384 is made. Realignment of the proposed road was approved on 03.04.2008 and the permission was accorded approving the building plan on 11.04.2008. The opposite parties have obtained NOC from the AP Fire Services Department on 15.12.2007 and permission was granted in respect of the building with height of 90.40 meters. The opposite parties obtained NOC from Airport Authority on 10.07.2009.
8. The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground + 20 upper floors and release of building permission up to 29 floors is awaited. The opposite parties have taken all necessary steps to complete the project at the earliest and the project being massive and due to the reasons beyond the control of the opposite parties, they could not complete the project within the time frame. They informed the complainant about the delay in completion of the project due to delay in clearance from the authorities concerned. In view of arbitration clause, the complaint is not maintainable before this Commission. As per clause-18 of the agreement, the disputes shall have to be resolved by way of arbitration.
9. The opposite parties submitted that they agreed to pay Rs.3/- per sqft in terms of Clause VIII (g) of the Agreement for the delay caused in completing the project and adjust the amount towards dues payable by the complainant. Though the delay occurred for completion of the project is beyond their control, the Ops to maintain goodwill and relationship with the customers, willing to pay the compensation at agreed rate. But the Complainant filed the present complaint with an ulterior motive to defame and to gain. The complainant is put to strict proof of the payments made by producing the relevant receipts. The complainant has to pay admittedly the balance consideration and other charges, therefore, unless the complainant pays the balance consideration, asking for delivery of flat is illegal and arbitrary.
10. 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 majeure”. The Complainant who paid the part of sale consideration want to take back his investment from Hyderabad due to the changed circumstances in Hyderabad market after bifurcation of the State, thereby sought for refund of the amount. As there is some delay on the part of the Ops in delivering the flat, the complainant taken advantage of the same and filed the present complaint to avoid cancellation charges. The complaint is not within the limitation in pursuance of time prescribed under Section 24A of the C.P. Act, hence not maintainable. The complainants are not entitled for refund of amount and interest thereon and any compensation and costs. There is no cause of action for the present complaint. If the complainant wants to cancel his booking, he can do so in conformity with terms of agreement only.
11. The complainant failed to pay balance sale consideration as per the terms of the Agreement. The opposite parties had taken every care as to the benefit of their customers and incorporated clause in the Agreement as to their liability to pay damages @Rs.3/- per sq.ft. which would show their fairness and the complainant is not entitled to any money or compensation. The Complainant is not entitled for any compensation and their claim is illegal. The delivery of the flat is subject to the balance payments and additional charges whatever liable to be paid for the flat and the common amenities and other certificates, etc., will be made available to the Complainant after completion of the project along with other residents. The complaint is barred by limitation and liable to be dismissed on this ground alone. There is no deficiency of service on the part of the Opposite parties. Hence, prayed for dismissal of the complaint.
12. During the course of enquiry, the Complainant got filed his evidence affidavit and the documents A1 to A6. On behalf of the opposite parties, the Managing Director of the Opposite party no.1 by name Hari Challa filed his affidavit and the documents, Ex.B1 to B19.
13. Heard both sides. The counsel for the Complainant and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments on behalf of Complainant.
14. 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 ?
15. POINT NO.1 : The Complainant entered into “Agreement of Sale” with the Opposite parties for purchase of flat bearing No.402 on Station-1 in 4th floor with a super built-up area of 1597 sft, for the consideration of Rs.43,49,109 and thereby paid the amount of Rs.19,74,742/-, towards the proposed construction of flat by the Opposite parties, which is not in dispute. The agreement of sale was entered into between the Complainant and the Ops in respect of the above flat on 04.11.2011. Thereafter, the Complainant paid the part consideration amount as per the pricing pattern of the flat issued by the Ops on various dates. The agreement of sale provides for reference to arbitration. The learned counsel for the opposite parties had contended that in view of the arbitration clause in the agreement, the Complainant cannot maintain the complaint before this Commission.
16. However, remedy provided under the provisions of Consumer Protection Act is an additional remedy and in the light of law laid in “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainants having exhausted the other remedy was considered as under:
“The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”
Thus, in view of the ratio laid in aforementioned decision, the consumer has two options, either to proceed for arbitration process or to invoke the provisions of the Consumer Protection Act. As such, it cannot be said that the complaint is not maintainable before this Commission in view of the arbitration clause in the agreement. For the above reasons, the Point No.1 is answered in favour of the Complainant and against the Opposite parties.
17. In the arguments, counsel for Complainant 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 counsel for the Opposite parties in the arguments submitted that as per agreement, if the Complainant wants to cancel the booking of the flat, they shall forego 20% 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.” However, 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 agreed by the Opposite parties, the Complainant sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite parties.
19. POINTS No.2 & 3 : The Opposite parties 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 agreed to deliver the residential flat to the Complainant in accordance with the terms and conditions agreed upon and consented thereto and as per specifications given therein. The Development Agreement is not merely an agreement and in fact, it is “Development Agreement-cum-Power of Attorney”.
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. The opposite parties have attributed the delay to the authorities concerned in granting permission and No Objection Certificate, bifurcation of the State 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’.
21. The force majeure clause in the Agreement of sale does not include within its ambit the delay caused in granting permission, NOC etc., The Opposite parties failed to explain how they could take shelter under the cover of “force majeure”. We may state that the delay caused in obtaining permission or NOC etc., cannot be considered as ‘force majeure’. The opposite parties ought to have informed the complainant about the delay likely to be caused in obtaining the permission which they failed to. For that matter, the Opposite parties cannot receive any sale consideration from any person in respect of any flat unless they have obtained permission from HUDA or HMDA.
22. The complainant had submitted that owing to failure of the opposite parties in completing the construction of the subject flat, he opted for cancellation of the agreement of sale of flat and the opposite parties have contended that in order to maintain cordial relations with the complainant, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The complainant got issued a notice to the Opposite parties through his counsel setting forth series of events of delay and negligence and false promises made by the Opposite parties seeking for refund of the amount on the premise of inaction on the part of the opposite parties.
23. The opposite parties have promised to complete construction of the flat and hand over its possession to the complainant on or before August 2012 with a grace period of nine months as agreed and on their failure to perform their part of contract, the opposite parties have proposed to pay damages @ Rs.3/- per sft but failed to pay the same. 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 complainant. Having received the part sale consideration amount, the Opposite parties failed in commencing the construction work of the building.
24. Not keeping-up 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 complainant has 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 Opposite parties can only receive such amount of sale consideration which would be in accordance with the payment schedule and correspond to the stage of construction of the flat. However, the Opposite parties had received the sale consideration in excess of what was to be received from the complainant particularly when the construction of the building was not yet commenced. Not keeping-up the promise to complete construction of the building and failure to deliver possession of the flat as also not keeping-up promise to refund the amount as per the terms of the repayment schedule constitutes deficiency in service on the part of the Opposite parties.
26. The complainant claimed refund of amount paid together with interest besides claim for damages. The complainant cannot be said to have acquiesced to the delay in construction of the project. Though the complainant had not disputed that the opposite parties have informed him about the cause for delay in obtaining permission and NOC etc., it does not disentitle him from claiming compensation. The complainant is entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization. For the reasons stated supra, the Points No.2 and 3 are answered in favour of the Complainant and against the Opposite parties.
27. POINT No.4 : In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties are jointly and severally liable to refund the amount to the Complainant.
28. In the result, we allow the complaint directing the Opposite parties 1 and 2 to pay an amount of Rs.19,74,742/- with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. In case sale deed was executed, the complainant shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer OP No.1. Time for compliance: four weeks.
PRESIDENT MEMBER
Dated : 20.01.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of Roshan Affidavit evidence of Hari
Kumar Agarwal Challa (on behalf of Ops 1 to 3)
EXHIBITS MARKED
For Complainant :
Ex.A1 is Photostat copy of the Agreement of sale, dated 04.11.2011 executed by the Opposite parties in favour of the Complainant.
Ex.A2 are the copies of receipts bearing No.08762, dated 14.10.2011 for Rs.5,000/-; 08765, dated 14.10.2011 for Rs.1,45,000/-; 08764, dated 14.10.2011 for Rs.1,00,000/-; 09929, dated 04.09.2012 for Rs.79,897/-; 09217, dated 03.12.2011 for Rs.1,00,000/-; 09216 dated 03.12.2011 for Rs.1,00,000/-; 09588, dated 31.01.2012 for Rs.1,50,000/- and 09587, dated 31.01.2012 for Rs.50,000/-.
Ex.A3 is the copy of statement of account of complainant’s loan account, for the period from 01.06.2011 to 22.08.2014.
Ex.A4 is the copy of e-mail correspondence between the Complainant and the Opposite parties, dated 18,01.2013, 22.01.2013 and 23.01.2013.
Ex.A5 is the copy of home loan sanction letter dated 29.11.2011 addressed by the State Bank of India, RACPC, Hyderabad to the Complainant.
Ex.A6 is the copy of Tripartite Agreement, dated 30.11.2011 executed by the OP No.1, Complainant and the State Bank of India.
For Opposite parties (common in all cases) :
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 29.02.2008 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 MEMBER
Dated : 20.01.2017
JBNRN (P) & PVR (M)
TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
