STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 272 OF 2013
Between :
M.Padma D/o M.Subbarayudu,
Aged 47 years, Occ: Service,
R/o 10-5-814/2, Tukaramgate,
North Lalaguda, Secunderabad – 500 017.
Complainant
And
Aliens Developers Pvt., Ltd.,
Represented by its Managing Director
Hari Challa S/o C.V.R. Chowdary,
Aged 34 years and Joint Managing Director
Venkat Prasanna Challa, S/o C.V.R.Chowdary,
Aged 33 years, registered office at Plot No.911,
Teja Block, My Home Navadweepa,
Madhapur, Hyderabad – 500 081.
Opposite party
Counsel for the Complainant : Sri Eranki Phani Kumar
Counsel for the Opposite party : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Friday, the Twenty Nineth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainant complaining deficiency in service against the Opposite party claiming refund of Rs.16,91,500/- towards amount paid together with interest @ 24% per annum; Rs.10,00,000/- towards compensation, mental agony and damages and Rs.1,00,000/- towards costs.
2. That the Opposite party entered into Development Agreement under documents bearing Nos.23198/2006 and 23230/2006 dt.07.10.2006 and 13321/2007 dt.23.06.2007 with the owners of land for development of their land measuring Ac.19.26 guntas in Sy.No.384, 385 and 426/A situated at Tellapur village, Ramachandrapuram mandal, Medak district for construction of residential apartment complex. The Opposite party made complainant believe that it had undertaken construction of multi-storied apartment complex in the name and style Alien Space Station-I and will obtain necessary permissions for construction of multistoried apartment complex and thereby induced the Complainant to purchase a residential flat bearing No.1224B, Station-4 on 12th (B) floor admeasuring 1122 sft. of super built-up area including common areas along with one car parking facility.
3. Attracted by very rosy picture placed by Opposite party about the project, complainant paid an amount of Rs.7,25,000/- on the day of entering into Agreement dated 14.05.2009 and the total price per square feet was fixed at Rs.2,440/- for 1122 sft., and the basic flat cost was fixed at Rs.27,37,680/- and the amenities at Rs.4,05,000/- together with service tax at 3.4% being Rs.1,06,851/- and 1.25% VAT being Rs.40,619/- and corpus fund being Rs.1,40,250/-, in all making the total cost of the flat at Rs.34,30,400/-. Altogether, complainant made payment of Rs.16,91,500/- and since then there is no progress in construction. As per terms of the agreement, the project was to be completed within three years of the booking with a grace period of 6 months and failure to complete within the said period would entail a penalty of Rs.3/- per sft. per month which would have to be paid as penalty to the customer.
4. On account of gross and inordinate delay on the part of the Opposite party in to commence the construction and deliver the vacant possession of the flat, complainant is deprived of a shelter even after paying considerable amount and hence is no more interested to continue the Agreement as her purpose to acquire a flat for her living is defeated and frustrated causing any amount of mental agony on account of deficiency in service.
5. The Complainant got issued a notice dated 02.11.2013 demanding return of the amount but the same was got returned with an endorsement as “addressee left”. The Complainant is constrained to file the present complaint seeking indulgence of this Commission for non-compliance of terms of the agreement with the reliefs, as stated, supra.
6. The Opposite party resisted the claim on the premise that the complainant filed the complaint to gain out of her breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. The complainant suppressed some facts and camouflaged some facts in order to make out a case. That the complaint is filed with all concocted allegations giving colour as if there is a consumer dispute.
7. The Opposite party submitted that originally the land in Sy.No.384 was an agricultural land and they filed application for conversion of the same into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006. Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the Opposite party had filed application for change of use of the land as commercial use zone.
8. It is averred by the Opposite party that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.384 as residential use zone. The project could not be commenced in view of proposed road under Master plan, until realignment of the proposed road without affecting the land in Sy.No.384 is made. Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008. Opposite party had obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. After following due procedure and process, the Opposite party obtained NoC from Airports Authority on 10.07.2009.
9. It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission upto 29 floors is awaited. In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996. That it had taken necessary steps to complete the project. The project is a massive project and due to reasons beyond its control, the Opposite party could not complete the project within the time frame and it informed the complainant that the project required sanction from statutory authorities and mentioned the same as ‘force majeure’ in the agreement of sale. It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.
10. It is stated that for the delay, the Opposite party had agreed to pay Rs.3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and it agreed to adjust the amount towards dues payable by the complainant. The complainant filed the complaint with ulterior motive to defame the opposite party. The Complainant shall file relevant receipts and documents to prove the payments.
11. The Complainant is not entitled for any compensation and her claim is illegal. The complainant is not entitled for refund of amount and interest thereon and any compensation and costs. There is no deficiency of service on the part of the Opposite party. Hence prayed for dismissal of the complaint.
12. On behalf of the Complainant, she herself filed her evidence affidavit and the documents, Exs.A1 to A5. On behalf of the Opposite party, the Managing Director of the Opposite party Company has filed the affidavit and the documents, Ex.B1 to B18.
13. The counsel for the complainant and the Opposite party have advanced their arguments reiterating the contents of complaint and the written version.
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” on 14.05.2009 with the Opposite party for purchase of flat bearing No.1224(B), Station-4 on 12th (B) floor admeasuring 1122 sq.ft of super built-up area including common areas along with one car parking facility 574 in Block Space Station-12 and thereafter the Complainant paid the consideration amount of Rs.16,91,500/- as per the pricing pattern of the flat issued by the Opposite party and the agreement of sale provides reference to arbitration. The learned counsel for the opposite party has contended that in view of the arbitration clause in the agreement, the Complainant cannot maintain the complaint before this Commission. Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) That all disputes/issues arising out of and/or concerning this transaction will be subject to the exclusive jurisdiction of the Courts at Ranga Reddy district, A.P.
c) That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
d) However, disputes or differences arising out of and or in connection with and or in relation to this transaction/agreement, which cannot be amicably settled, shall be finally decided and resolved by an Arbitrator appointed by Developer in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Arbitration as aforesaid shall be a domestic arbitration under the applicable Laws.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
16. In terms of the agreement of sale, the dispute has to be decided by means of arbitration. 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.”
For the above reasons, the Point No.1 is answered in favour of the Complainant and against the Opposite party.
17. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the Opposite party ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreement 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 party in the arguments submitted that as per agreement, if the Complainant wants to cancel the booking of the flat, she shall forego 10% of the total flat cost as charges which is agreed by her 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.” Admittedly, in the instant case, no such Agreement is entered into between the parties except the Agreement for reservation of flat. 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 of agreed terms by the Opposite party, 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 party.
19. POINTS No.2 & 3 : The Opposite party 1 to 3 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they agreed to deliver the residential flat to the Complainant0in accordance with the terms and conditions agreed upon and consented thereof and as per specifications given thereto.
20. In pursuance of the development agreement, the opposite party had obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as this complaint is concerned. The opposite party had attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The opposite party would contend that the cause for delay is beyond its control which is force majeure. The Opposite party stated the reasons for the delay in completion of the construction of the residential complex as under:
“The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project. The said fact was informed to the complainant and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”
21. The complainant had submitted that owing to failure of the opposite party in completing the construction of the flat No.1224(B), she opted for cancellation of the agreement for reservation of flat and the opposite party had contended that in order to maintain cordial relations with the complainant, it 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 on 11.11.2013 incorporating all the facts attributing gross negligence and delay and false promises made by the Opposite party seeking for refund of the amount on the premise of inaction on the part of the opposite party.
22. The opposite party had promised to complete construction of the flat and hand over its possession to the complainant by 13.05.2012 with a grace period of six months as agreed and on its failure to perform its part of contract, the opposite party had proposed to pay rents but failed to comply with the same. However, there is no communication from the side of the opposite party in this regard and the opposite party had not filed a piece of paper to show its readiness to pay compensation and adjust the same towards the dues payable by the complainant.
23. Not keeping promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the opposite parties. The complainant had 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 party that the complaint is not maintainable is not sustainable.
24. The complainant claimed principal together with interest and further claimed compensation and costs of the complaint to the tune of Rs.11,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the opposite party have informed her about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainant cannot claim damages. However, the complainant is entitled to interest @ 12% p.a. on the amount paid from the respective dates of payment till realization.
25. From the documents annexed to Ex.A1 agreement of sale, it is evident that the Complainant paid an amount of Rs.16,91,500/- to the Opposite party towards the part of the sale consideration of the flat.
26. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite party is liable to pay the amounts to the Complainant.
28. In the result, the complaint is allowed holding that Opposite party is liable and is directed to pay an amount of Rs.16,91,500/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of M.Padma Affidavit evidence of Hari
as PW1. Challa as RW1.
EXHIBITS MARKED
For Complainant :
Ex.A1 is copy of Agreement of sale dated 14.05.2009.
Ex.A2 is copy of the postal acknowledgement acknowledged by the Opposite party, dated
25.04.2009.
Ex.A3 is office copy of notice got issued by Complainant to the Opposite party, dated 11.11.2013.
Ex.A4 are the original postal receipts dated 12.11.2013.
Ex.A5 are the original returned postal covers addressed to the Opposite party and its Officers in charge.
For Opposite parties :
Ex.B1 Copy of Lr.No.252931/4/2007 addressed by Principal Secretary to Government to Vice, Chairman, HUDA, Hyderabad for change of land use.
Ex.B2 Copy of G.O.Ms.No.288, Municipal Administration & Urban Development (I1) Department, dated 03.04.2008 (HMDA revised master plan).
Ex.B3 Copy of (report) Lr.No.D1/3601/2007, dated 05.05.2007 addressed by District Collector, Medak to Vice-Chairman & Managing Director, HUDA along with map.
Ex.B4 Copy of minutes of meeting of multi-storeyed building committee for HUDA area held on 29.02.08 at 3-00 pm in the chambers of Vice-Chairman, HUDA (4 basements + Ground + 13 Upper Floors).
Ex.B5 Copy of Lr.No.1927/Misc/Plg/H/2008, dated 31.03.2008 addressed by HUDA to the Principal Secretary to Government for 30 meters road alignment in Sy.No.384 & 385.
Ex.B6 Copy of Lr.No.621/P4/Plg/HUDA/2008, dated 11.04.2008 addressed by HUDA to OP No.1 approving 4 basements + Ground + 13 upper floors).
Ex.B7 Copy of Lr.No.621/Pr/Plg/HUDA/ 2008, dated 11.04.2008 addressed by HUDA to Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments.
Ex.B8 Copy of minutes of meeting of multi-storeyed building committee for MSB in HUDA area held on 05.06.2008 at the chambers of Vice-Chairman, HUDA (4 basements + ground + 29 upper floors).
Ex.B9 Copy of Lr.No.621/P4/Plg/HMDA/2008, dated 14.10.2009 addressed by HMDA to the Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments (4 basements + ground + 20 upper floors).
Ex.B10 Copy of Lr.No.SEIAA/AP/MDK-14/08, dated 12.08.2008 addressed by State Level Enviornment Impact Assessment Authority, Hyderabad to according environmental clearances to Opposite parties.
Ex.B11 Copy of Lr.No.19038/I1/2009, dated 24.11.2009 addressed by Principal Secretary to Government to Ops (clearance of GOMs.No.111).
Ex.B12 Copy of letter addressed by Opposite parties, dated 08.10.2010 to the HMDA, Hyd (revised application and plans for building permission consisting of 3 basement + ground + 29 upper floors).
Ex.B13 Copy of Lr.No.10186/MP1/Plg/HMDA dated 28.03.2011 addressed by HMDA to the Ops to pay publication charges for change of land use from residential to commercial.
Ex.B14 Copy of cash acknowledgement receipt bearing No.825631 for Rs.1,000/- in File No.2011-2-431 for new water connection.
Ex.B15 Copy of Certificate of best compliments issued by Indian Green Building Council in favour of the Opposite parties company.
Ex.B16 Copy of certificate of best compliments awarded by Cityscape in favour of the Opposite parties company.
Ex.B17 Copy of letter addressed by the Opposite parties to the purchaser by name S.Pragathi intimating to take possession of the flat, dated 02.11.2015.
Ex.B18 Copies of photographs of flat occupants occupying the completed flats.
PRESIDENT
29.04.2016
