Tamil Nadu

StateCommission

CC/23/2013

N. DHAYALAN - Complainant(s)

Versus

ALLIANCE PROJECTS, MANAGING DIRECTOR - Opp.Party(s)

13 May 2022

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE. R. SUBBIAH                     :     PRESIDENT

                  THIRU R. VENKATESAPERUMAL                    :      MEMBER

 

C.C.No.23 of 2013

Tuesday, the 26^th day of April 2022

Complaint  filed on : 08.02.2013

Orders Pronounced on : 26.04.2022

N. Dhayalan

S/o. Nethiranathan

22/32-A, Manika Vinayagar Koil Street

Vyasarpadi,  Chennai -600 039.                                                                                                                                  .. Complainant

 

- Vs -

1.  M/s. Alliance Projects

     Rep.  By Managing Partner

     Jeevan Anand Building

     II Floor, 556 Anna Salai

     Teynampet,  Chennai- 600 018.                       

 

2.  M/s.Alliance Orchid Tech Parks Pvt.Ltd.,

     Rep. by GPA Holder

     M/s. Alliance Projects

     Jeevan Anand Building

     II Floor, 556 Anna Salai

     Chennai- 600 018.                                                                                                                                            .. Opposite Parties

 

 

    Counsel for the Complainant          :   M/s. V.Vadivel

    Counsel for the Opposite Parties    :   M/s. A. Joseph Durairaj

 

This complaint is coming before us for final hearing today, on 12.04.2022 and on hearing the arguments of both sides and on perusing the material records, this Commission made the following :-

O R D E R

R.SUBBIAH J., PRESIDENT

          This complaint has been filed by the Complainant under Section 17                                                                                                                                                                                                  of the Consumer Protection Act, 1986 (as amended) against the opposite parties, claiming for directions to the opposite parties,

1. To accept payment of 60% of the cost of the flat of Rs.51,29,485/- and execute the sale deed of undivided share of 196.38 sq.ft. for the unit No.103 of the “Orchid Springs” and thereby enable the complainant to avail housing loan from his bank i.e. Dena Bank, for the balance amount or in alternative to refund the sum of Rs.2,00,000/- retained by the opposite parties; and
2. to pay Rs.25,00,000/- with interest at the rate of 12% per annum with effect from 27.08.2012 towards compensation to the complainant for the loss, sufferings and hardships and mental agony caused to him by cancelling the sale and construction agreements dated 14.12.2011.

 

2.       The brief facts of the Complaint are as follows:   The complainant was looking forward to purchase a flat in Korattur area.  On seeing the advertisement given by the opposite parties in the internet about their proposal to construct flats in the name and style of ‘Orchid Springs’ in that area, with arrangement of loan facilities from LIC Housing Finance and State Bank of India, the complainant approached the opposite parties and booked a flat measuring 1091 sq.ft. with an undivided share of 196.38 sq.ft., with an exclusive car park for a sale consideration of Rs.51,29,485/- i.e., at the rate of Rs.4600/- per sq.ft., in the first floor of Unit No.103, in their Orchid Springs project.  The complainant signed an agreement for sale of undivided share and another agreement for construction of flat on 14.12.2011 with the opposite parties and paid a sum of Rs.11,04,449/- towards advance amount.  While booking the flat, the opposite parties, through the customer care executive orally assured for arrangement of loan from State Bank of India or LIC Housing Finance Ltd., stating that both the financial institutions had approved the project. Only based on the said oral assurance that the opposite parties would arrange for loan, the complainant booked the flat and paid the advance amount and signed the sale and construction agreements for the undivided share of the land and the flat.  As advised by the opposite parties, he approached the State Bank of India, Kilpauk Branch.  After a period of 3 months, he was informed that the loan will be sanctioned only if an immovable property is furnished as security.  The complainant had no immovable property as security.  He again contacted the opposite parties.  The opposite parties advised him to approach the LIC Housing Finance Ltd.  Hence, the complainant had approached the LIC Housing Finance Ltd., Anna Nagar branch.  They informed the complainant that they would process the loan application only if he produces Form 16 issued by his employer.  Since, the company in which the complainant was employed has not been registered in India, he could not furnish Form 16.  When the complainant informed this fact to the LIC Housing Finance Ltd., the Branch Manager told him that he cannot sanction loan without submission of Form 16 given by the employer.  Therefore, again the complainant approached the opposite parties.  The authorised signatory of the opposite parties asked him to approach the bank where the complainant has got an account.  Hence, the complainant approached Dena Bank, in which he was having Savings Bank account.  The Manager of Dena Bank stated that he would sanction loan only if the complainant produces a copy of the sale deed of the undivided share of the land.  Since the undivided share agreement was not executed, he approached the customer care executive of the opposite parties, who informed the complainant that the sale deed of the undivided share of land would be executed only at the time of handing over possession of the flat, as mentioned in the agreement.  When he informed this to the Branch Manager of Dena Bank, he informed the complainant that if he gets a letter from the opposite parties expressing their willingness to execute the sale deed for the undivided share of the land on payment of 60% of the cost of the flat, then they would sanction the loan and release payment of 60% of the cost of the flat and with that amount he should get the sale deed of undivided share of land executed in his favour.  But the opposite parties did not agree to execute the sale deed for the undivided share of the land stating, only on payment of the entire sale consideration, the sale deed would be executed in respect of the undivided share of the land, at the time of handing over possession of the flat.   In such a situation, the opposite parties, all of a sudden, by letter dated 27.08.2012 cancelled the booking and the agreements and refunded a sum of Rs.9,04,449/-, after deducting a sum of Rs.2,00,000/-.  On receipt of the cancellation order of the booking of the flat, he went to the opposite parties office and met the Sales Executive and Customer Care Executive and requested them to reconsider cancellation of booking.  But they refused to accept his request stating that he should re-book the cancelled flat at the current rate of Rs.5800/- per sq.ft., which was higher by Rs.1105/- per sq.ft. Hence, the complainant issued a legal notice dated 11.09.2012 to the opposite parties, raising his objection for cancellation of the booking and requesting for re-allotment of the same flat i.e. Unit No.103 of the Orchid Springs.  Since no reply was received, he was under the impression that the opposite parties are willing to consider his request for allotting the flat to him.  Again he sent a letter dated 17.10.2012 requesting the opposite parties to re-consider the order of cancellation.  Whileso, the complainant received a reply from the opposite parties through their lawyer refusing to reconsider the order of cancellation stating that the cancellation of the booking and the agreements were proper, legal and valid.  Once again the complainant sent a rejoinder notice dated 06.12.2012 refuting the allegations.   The stand of the opposite parties is that the sale deed of undivided share would be executed only at the time of handing over the flat.  Thus, their action in cancelling the agreements not only amounts to unethical and unfair trade practice in the business of constructions and sale of flats but also deficiency of service.  Hence, he has come forward with the present complaint alleging deficiency of service, for the relief stated supra.

 

3.  Resisting the said complaint, the opposite parties have filed a version interalia stating that the complainant approached them for booking a flat in their project ‘Orchid Springs’ at Korattur.  He notionally agreed to buy a flat in the said apartment measuring about 1091 sq.ft. built up area, in the first floor.  The complainant entered into an agreement of sale on 14.12.2011 with the opposite parties. In the said agreement it was made clear that the sale deed could be made in favour of the complainant in respect of the B-Schedule property at the time of handing over of possession of C-Schedule property, on payment of the entire cost of undivided share of land and construction, with all the additional charges.  The complainant had agreed for the said terms and had signed the sale agreement without raising any issues.  As per the sale agreement the amount payable towards sale consideration of the undivided share of land comes to Rs.3,92,760/- and the total sale consideration inclusive of the construction of flat, comes to Rs.51,29,485/-.  In the sale agreement as well as in the construction agreement, the mode of payment was given clearly.  It has also been made clear that the agreement holder should strictly adhere to the payment schedule as per the terms and conditions.  It is a specific clause in the agreement that if the purchaser fails to make the payment on the respective due dates, the vendor will call upon the purchaser to make the payment within a period of 15 days on receiving such notice and on failure to make the payment the agreement will be terminated at the discretion of the vendor.   In the event of termination, the vendor shall be entitled to recover from the purchaser 15% of the total sale consideration reserved any as liquidated damages by adjusting the same against the amount spent by the purchaser till the date of termination and refund the balance within a period of 60 days from the date of cancellation of this agreement.  In the present case, the complainant has made a payment of Rs.11,04,449/- at the time of executing sale and construction agreement.  As per the agreement, the complainant has to pay a sum of Rs.10,25,897/- within 10 days from 14.12.2011.  But he has not made any further payments.  At no point of time, the opposite parties ensured that they would be facilitating the loan process either from SBI or LIC Housing Finance Ltd.  It was made clear to all the prospective purchasers that it is their look out to avail the loan from any financial institutions, as per their choice.  All that the opposite parties were insisting was that the purchasers should make the payments promptly as per the schedule given by them.   Despite repeated demands and demand notices, no payments were made by the complainant to the opposite parties.  Non-payment of the amount as per the terms of agreement, empowers the opposite parties to cancel the agreement and the complainant will lose all the rights which were given to him as per the sale agreement and construction agreement.    Therefore, there is no deficiency of service on the part of the opposite parties as they have given ample opportunities to the complainant.  Infact they have sent letters dated 22.12.2011, 28.03.2012, 04.04.2012, 19.04.2012 and final reminder dated 13.08.2012.  In all the above letters the complainant was called upon to make the payment.  Despite receiving the letters, the complainant had shown chill indifference in making the payment to the opposite parties.  In such circumstances, the opposite parties had no other option except to cancel the booking.  As per the agreement though the opposite parties are entitled to retain 15% of the total cost of the flat towards liquidity damages, they have retained only a sum of Rs.2 lakhs as a good gesture and refunded the balance amount of Rs.9,04,449/- to the complainant.   The complainant being a chronic defaulter in making payment, there is no question of reconsidering the cancellation of booking for re-allotment.  By suppressing all the material facts the complainant had sent a lawyer’s notice dated 11.09.2012 making false and vexatious averments and requesting the opposite parties to re-allot Flat No.103 to him.  Refuting all the allegations, a proper reply was sent on 17.10.2012 by the opposite parties.  As there is no provision in the agreement for execution of sale of undivided share on receipt of 60% of the total consideration, the complainant cannot seek the relief for execution of sale deed in respect of the undivided share of land, as a matter of right.  With regard to the contention of the complainant that he was asked to pay a sum of Rs.5800/- per sq.ft., towards re-booking of the flat, the opposite parties state that having allowed the agreement to get cancelled the complainant cannot seek to enforce the terms of the non-existing agreement and if at all he wants a flat, he would be construed only as a new allottee.  Therefore, there is no deficiency of service on the part of the opposite parties. Thus he sought for dismissal of the complaint.

 

4.  In order to prove the case, the complainant has filed 16 documents along with proof affidavit and the same were marked as Ex.A1 to A16.   On the side of the opposite parties proof affidavit was filed but no documents were marked.

 

5.  Heard the submission of the counsel for the complainant and the opposite parties and perused the material on record. 

 

6.  It is the main submission of the counsel for the complainant that only on the assurance of the opposite parties for arrangement of loan, he has agreed to purchase the flat.    When the financial institutions, which approved the project of the opposite parties and to whom he was referred by the opposite parties, refused to give loan, the complainant’s bank came forward to give loan on submitting a letter from the opposite parties to the effect that the sale deed of the undivided share could be executed on payment of 60% of the cost of the flat.  But the opposite parties refused to give such a letter.  When he arranged money and came forward and offered to pay the dues with interest, the opposite parties’ Sales Executive and Customer Care Executive refused to accept his request saying that he should re-book the flat at the then current rate quoted by them, i.e. Rs.5800/- per sq.ft.  The insistence of the opposite parties that they would execute the sale deed of undivided share in the land only at the time of handing over the flat and not on payment of 60% of the cost of the flat and when the complainant came forward to pay the dues with interest he was asked to re-book the flat at the rate of Rs.5800/- per sq.ft., would show the oblique motive of the opposite parties to make undue gains and also deficiency of service.  The stand of the opposite parties that the sale deed of the undivided share would be executed only at the time of handing over the flat and their action in cancelling the agreements, not only amounts to unethical and unfair trade practice in the business of constructions and sale of flats, but also deficiency in service.  Hence, he has come forward with the complaint.

7.       But, it is the reply of the opposite parties that at the time of entering into the agreement itself, it was made clear to the complainant that the sale deed of the undivided share would be executed in favour of the complainant only on payment of the entire amount as per the Construction Agreement.  The said clause is also signed by the complainant without any protest.  Therefore, it is incorrect to state that, had the sale deed been executed in respect of the undivided share, he would have availed the loan from Dena Bank, deserves no merit.  At no point of time the opposite parties ensured that they would be facilitating loan process through the above two financial institutions.  It is for the purchasers, who have booked the flat with the opposite parties, look out to go for loan with any financial institutions as per their choice.  In the instant case, the complainant has paid only a sum of Rs.11,04,449/- at the time of agreement.  Thereafter, he has not paid any amount.  As per the Agreement, the complainant should have paid a sum of Rs.10,25,897/- within 10 days from the date  of agreement  i.e., on or before 24.12.2011.  However, despite issuance of several reminders no payment has been made by the complainant.  The non-payment of the amount as per the terms of the agreements empowers the opposite parties to cancel the agreement and in the event of cancellation, the complainant would lose all the rights which were given to him as per the sale agreement and construction agreement.  Therefore, there is no deficiency of service on the part of the opposite parties, as they have given ample opportunities to the complainant.  With regard to the allegation made by the complainant that when he approached the opposite parties after cancellation of agreement, he was asked to pay a sum of Rs.5800/- per sq.ft., towards the re-booking charges of the flat, the opposite parties state that having allowed to get the agreement cancelled, the complainant cannot seek to enforce the terms of the non-existing agreement and if at all he wants a flat, he would be construed only as a new allottee and he is liable to make the payment as per the rate prevailing on the date of booking.    Therefore, there is no deficiency of service.

 

8.  From the above submissions, it is clear that the issue involved in this case has to be decided only based on the clauses of the agreement.  It is the main grievance of the complainant that, had the sale deed been executed in favour of him with regard to the undivided share of the land, he would have obtained loan from Dena Bank.  It is the further contention of the counsel for the complainant that the Branch Manager of Dena Bank told him that if he gets a letter from the opposite parties expressing their willingness to execute the sale deed for the undivided share of the land, on payment of 60% of the cost of the flat, they would sanction the loan and release payment of 60% of the cost of the flat and with that amount he should get the sale deed of undivided share of the land executed and deposit it with them and they would release further payments as per the statement of payment for the balance amount. But the opposite parties refused to give such a letter.  It would be appropriate to see the clause for ‘Execution of the Sale Deed’ in the sale Agreement.  Reading of the said clause would clearly show that the sale deed of the Schedule-B property i.e., the undivided share of the land would be executed only at the time of handing over possession of the Schedule-C property, on payment of the entire cost of UDSL and construction with all the additional charges.  According to this clause, the opposite parties had refused to give the letter.  In Ex.A-2, the Construction Agreement a clear schedule of payment is given as follows :-

Payment at the time of Agreement                                           ..    7,68,793

Within 10 days from the date of Agreement                    ..   10,25,897

On completion of Foundation of the respective Tower               ..   13,02,009

On completion of 3^rd floor slab of the respective tower             ..    3,31,335

On completion of 6^th floor slab of the respective tower             ..    3,31,335

On completion of 9^th floor slab of the respective tower             ..    3,31,335

On completion of 12^th floor slab of the respective tower ..    3,31,335

On completion of 15^th floor slab of the respective tower ..    3,31,335

On handing over individual apartment                                      ..    2,76,112

Except the sum of Rs.11,04,449/- the complainant has not paid any amount.  Having agreed and signed, the terms and conditions of the Agreement, now the complainant cannot say that when his bank was ready to pay 60% of the loan amount, the opposite parties ought to have executed the sale deed.  The issue involved is purely contractual in nature.  After cancellation, out of Rs.11,04,449/- paid by the complainant, the opposite party had returned only a sum of Rs.9,04,449/- after deducting Rs.2,00,000/- which amounts to unfair trade practice.  But, we are of the opinion that under the clause of cancellation of agreement, it has been clearly stated that,

“In the event of termination as aforesaid or at the instance of Purchaser, the vendor shall be entitled to recover from the purchaser 15% of the total sale consideration reserved herein as liquidated damages by adjusting the same against the amounts paid by the purchaser till the date of termination and refund the balance, if any, within sixty days from the date of cancellation of this Agreement.  In which event the construction agreement also stands terminated automatically as it is co-terminus in nature, after forfeiture of 15% of sale price stipulated herein and 15% of cost of construction of schedule ‘C’ Apartment.”

 

Therefore, deduction of Rs.2,00,000/- is only in accordance with the terms of Agreement.  In this regard it would be appropriate to place reliance in the judgment submitted by the counsel for the opposite parties in the case of DLF Southern Towns Pvt. Ltd., vs. Dipu C.Seminlal reported in I (2015) CPJ 365 (NC), wherein it has been held that, when the complainant had not paid any subsequent instalments and committed default in making payments of instalments and also committed default in returning back duly signed agreement, the opposite party had every right to forfeit amount of Earnest Money Deposited by the complainant.  The said judgment squarely applies to the facts of this case.  Hence, absolutely, we do not find any deficiency of service in this case. 

 

9.   Therefore, the complaint deserves no merit and the complaint is liable to be dismissed.  In the result, the complaint is dismissed.

 

 

R.VENKATESAPERUMAL                                                                                                           R.SUBBIAH

         MEMBER                                                                                                                               PRESIDENT

 

 

DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT

 

Ex. A1     16.12.2011              Copy of the Sale Agreement                          

Ex.A2      16.12.2011              Copy of the Construction Agreement

Ex.A3      17.12.2011              Copy of the cash receipt 

Ex.A4      22.12.2011              Copy of the letter from Opposite Party to

Complainant

Ex.A5      15.02.2012              Copy of the reply letter from Complainant to

Opposite Party      

Ex.A6      28.03.2012              Copy of the letter from Opposite Party to

Complainant

Ex.A7      04.04.2012              Copy of the reply from Complainant to

                                           Opposite Party

Ex.A8      19.04.2012              Copy of the letter from Opposite Party to

Complainant

Ex.A9      19.04.2012              Copy of the reply from Complainant to

                                           Opposite Party

Ex.A10     04.09.2012             Copy of the Application for housing loan

Ex.A11    27.08.2012              Copy of the cancellation of agreement

Ex.A12    11.09.2012              Copy of the lawyer notice sent by opposite party

Ex.A13    17.10.2012              Copy of the letter from Complainant to

                                           Opposite Party

Ex.A14    02.12.2012              Copy of the reply notice from Opposite Party

Ex.A15    06.12.2012              Copy of the rejoinder notice to opposite party

Ex.A-16                                  Copy of the acknowledgement

 

 

DOCUMENTS MARKED ON THE SIDE OF THE OPPOSITE PARTIES

 

          Nil

 

 

R.VENKATESAPERUMAL                                                                                                         R.SUBBIAH

         MEMBER                                                                                                                              PRESIDENT

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/May/2022