BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

F.A.No.586 OF 2010 AGAINST C.C.NO.459 OF 2009 DISTRICT FORUM-I HYDERABAD

Between:

N.Surendra Sai
R/o Flat NO.401, Paramount Towers
11-5-451, Redhills, Hyderabad-004

                                                                Appellant/complainant

        A N D

Aparna Construction Estates Pvt Ltd.,
rep. by D.S.Prasad, Director,

802, Astral Heights Road NO.1,
Banjara Hills, Hyderabad-034

                                                                Respondent/opposite party

Counsel for the Appellant              M/s N.Ramakrishna Paramahamsa

Counsel for the Respondent           M/s M.V.Durga Prasad

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

AND

SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

  WEDNESDAY THE FIRST DAY OF AUGUST

TWO THOUSAND TWELVE

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

***

1.                 The complainant is the appellant.

2.             The brief fact of the case as stated in the complaint are that the complainant booked a flat in the venture floated by the opposite party under the name and style of “Aparna Cyber Commune on 5.3.2008 by paying advance of `2 lakh.  The total sale consideration of the plot was `38,68,200/-.   The opposite party had promised to complete the project within 18 months after obtaining the GHMC approval and promised to take approval within 6 months form the date of booking.  However, even after 13 months the opposite party failed to obtain the approval of GHMC.

3.             The opposite party resisted the case contending that when they announced the project,  M/s synergy Welfare Association approached them and stated that they have formed as society for purchasing the flats for the members and requested the opposite party to sell the flats at concessional price at the rate of `3,070/- per sft.  Accordingly a memorandum of understanding was entered between the society and the opposite party on 14.2.2008.  It was agreed that the members should pay advance of 5% of the cost of the flat or `2 lakh whichever is higher.  The offer was given by the opposite party within the validity period upto 15.3.2008.  The members were required to pay the said amount before the said date and the balance as per the schedule.  It was also agreed that in case any applicant intends to cancel or withdraw from the booking within one month from the date of acceptance of the application, a sum of `1,00,000/- of initial booking advance would be forfeited.  It was also agreed if the cancellation was made midway 10% of total cost would be forfeited towards cancellation charges.

4.               The opposite party submitted application to GHMC for permission and also made applications for clearance from various authorities.  The applications made for high raise buildings could not be processed till 6.10.2008.  Later,  the government gave relaxation on payment of extra charges.  Due to recession in the Software Industry in order to facilitate the cancellation on easier terms the opposite party agreed to forfeit only `1,00,000/- uniformly in case of all cancellations made or opted on or before 23.3.2009.  The booking form contains a clause that `1,00,000/- of the initial booking advance would be forfeited in case of cancellation within one month and 10% if it is midway. 

5.             The complainant who participated in the open house meeting on 231.2.2009 along with other members sent e-mail confirming his option of cancellation on 24.2.2009.  The complainant’s request was processed and was informed on 1.4.2009 that the cheque for the balance amount after deducting the amount was made ready and was requested to collect the same by producing the original receipt.  The complainant did not surrender the original receipt.  The opposite party had to pay Rs.6,46,56,150/0- towards permission fees to the GHMC, `30,00,000/- to HMWS & SB towards water sewerage charges and also spent `25 crores towards construction made.  The complainant had no direct relationship with the opposite party and he booked the flat through the society.  He is not a consumer. 

6.             The complainant has filed his affidavit and the documents Exs.A1 to A10.  Mr.D.S.Prasad, one of the Director of the  opposite party filed affidavit and the documents Exs.B1 to B49.

7.             The District Forum partly allowed the complaint directing the respondent to refund the amount of `1,00,000/- which was agreed to be refunded even prior to filing of the complaint.

8.             Dissatisfied with the award for `1,00,000/-, the complainant has filed appeal contending that the District Forum failed to see that the respondent company had not only rendered deficient service,  it adopted unfair trade practice and he is entitled to refund of entire amount of Rs.2 lakh and not one lakh as directed by the District Forum.

9.             The point for consideration  is whether the appellant is entitled to refund entire  amount paid to the respondent ?

10.            The respondent company launched scheme ”Cyber Commune” in an area of Ac.9.20gts with high-raise residential complexes, consisting of 10 Blocks consisting of 660 apartments and located near the hubs of Gachibowli and Manidkonda. It is not disputed that the appellant paid an amount of Rs.2 lakh to the respondent on 5.03.2008 for purchase of flat in Aparana Cyber Commune.  The consideration of the flat is `38,68,200/- . It is also not denied and in fact admitted by the respondent company that it would obtain layout approval within six months and complete construction within 18 months and hand over the flat with all amenities and specifications as promised in the brochure. 

11.            The respondent company had raised objection on the premise that the appellant had no direct contact with it and he is the member of society.  The objection cannot be sustained for the reason that the society M/s Synergy Welfare Association of which the appellant is a member entered into memorandum of understanding on 14.2.2008 for purchase of flat for its members.  Authorization letter dated 3.3.2008 would indicate that the appellant is the member of society.  The respondent addressed letter dated 20.1.2009 stating that GHMC layout approval was sanctioned and demanded for payment of Rs.1,80,000/-.  The appellant apprehended that the respondent company had not obtained GHMC approval and he had sent email dated 22.1.2009 drawing the respondent’s attention to the fact that GHMC approval was not obtained by it and citing failure of the respondent company to keep its promise, the appellant expressed his intention to cancel the agreement and requested the respondent to return the amount paid by him.

12.            A month after the request for cancellation extended by the appellant, the respondent company invited the appellant to attend open house meeting which was held on 21.2.2009 and during the course of the meeting it was informed by the respondent that the layout approval from GHMC was not obtained and therefore, in view of several members of the society who entered into agreement for purchase of flats lost their jobs, it would agree for forfeiture of Rs.1,00,000/- and return the balance amount to the members of the society. 

13.            Clause 12.1 and 12.2 of the Memorandum of Understanding prescribe the amount to be forfeited in case the members of the society opt for cancellation.  12.1 and 12.2 of the memorandum of understanding read as under:

12.1     One Lakh of the initial booking advance shall be forfeited in case the applicant intends to cancel/withdraw from the booking within one month from the date of acceptance of application.

12.2.    In case of cancellation of midway through the construction process, 10% of the total cost of the Apartment shall be forfeited towards cancellation charges.

14.            A combined reading of the aforementioned clauses would make it clear that a member has to forego `1,00,000/- of the initial booking advance in case he intends to cancel the agreement within one month and 10% of the total cost of apartment if he chooses midway i.e., after the period of one month from the date of acceptance of application.

15.            It is not disputed that the respondent company had not obtained the layout approval and failed to construct the apartment as per the time schedule or even beyond the stipulated period.  The respondent agreed to refund `1,00,000/- out of the amount of `2,00,000/- paid by the appellant on the premise that all the other members of the society including the appellant agreed to forego `1,00,000/- in view of recession and as they lost their jobs.

16.            The learned counsel for the appellant had strenuously contended that the appellant had not admitted that he lost his job nor did he consent for forfeiture of `1,00,000/- from the amount paid by the appellant.  He has submitted that brochure is part of the agreement and the respondent company had failed to carry out its obligation in terms of the promise made in the brochure and the agreement.  He has relied upon the following decisions:

1.   Lucknow Development Authority Vs M.K.Gupta, AIR 1994 Supreme Court 787.

2.   National Commission’s decision in F.A.No.557 of 2008 is under. 

The brochure issued by the Opposite Party which has bearing in deciding whether escalation in cost is to be borne by the Complainant. Dealing with the case of Ghaziabad Development Authority v. Union of India , the Apex Court considered the term of the brochure that the Development Authorities shall not be liable to pay any interest in the event of occasion arising for return of amount and held as under:

The rate of interest awarded in equity should neither be too high nor too low. In our opinion awarding interest at the rate of 12 per cent per annum would be just and proper and meet the ends of justice in the cases under consideration. The provision contained in the brochure issued by the Development Authority that it shall not be liable to pay any interest in the event of an occasion arising for return of the amount should be held to be applicable only to such cases in which the claimant is itself responsible for creating circumstances providing occasion for the refund. In the cases under appeal the fault has been found with the Authority. The Authority does not therefore have any jurisdiction for resisting refund of the claimant's amount with interest.

Therefore, it cannot be said that the condition contained in the contract would only prevail and not the terms of the brochure which is an alluring promise given by the builder. If the contention of the learned counsel for the DLF is accepted that the terms of the agreement would prevail and not what is stated in the brochure, then it would amount to misleading advertisement with false promise to lure the needy prospective buyers. This would also be unfair trade practice as provided under Section 2(1)(r ) of the Consumer Protection Act. Such brochure also gives undue advantage to the builder vis-is other builders. Hence, the said contention cannot be accepted.

17.            The National Commission decisions is relied upon in support of the contention of the appellant that the respondent company issued brochure and failed to carry out its part of obligation of the contract.  The Lucknow Development authority decision was relied upon by the learned counsel in support of its contention that the interpretation of consumer protection Act has to be liberally made and compensation for harassment and mental agony can be awarded by the Consumer Forum. The Hon’ble Supreme Court held in regard to the entitlement of the allotments for compensation for harassment they were subjected to, by the developer or the development authority as under:

A public functionary if he acts maliciously or oppressively and the exercise of power results in harassment and agony then it is not an exercise of power but its abuse. No law provides protection against it. He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore, the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook.

18.            The respondent company had contended that the Synergy society addressed letter dated 30.3.2009 stating that the representative of the respondent company assured the society that the members of the society who applied for cancellation before 23.2.2009 would be considered for processing request after deducting `1,00,000/-.  The letter does not contain any recital as to acceptance of forfeiture of `1,00,000/- by members of the society in case they opt for cancellation before 23.2.2009.

19.            The respondent company failed to keep its promise in obtaining layout approval, completing the construction of the building or providing amenities therefor.  The Hon’ble Supreme Court and the National Commission held that issuing brochure with promise of providing the amenities within the time schedule approval of layout within the prescribed period would constitute deficiency in service on the part of the respondent company.  The respondent company having rendered deficient service cannot contend that it is entitled to deduct the amount of Rs.1,00,000/- in terms of the memorandum of understanding.  Both parties are obligated to perform their part of the contract and the respondent company failed to carry out its part of contract.  The appellant was made to pay the initial amount for purchase of the flat on the promise of the respondent company as to the layout, construction of the flat and provision of amenities.

20.            The appellant had been subjected to harassment owing to the attitude of the respondent company and he was deprived of the amount paid by him for a considerable period and even after the appellant expressed its intention to cancel the agreement, the respondent company has not come forward to pay the entire amount citing the clauses in the memorandum of understanding and the letter issued by the welfare association.  Taking into consideration of totality of circumstances, we are inclined to award an amount of Rs.40,000/- towards compensation.

21.            In the result, the appeal is allowed in part modifying the order of the District Forum and directing the respondent to refund an amount of `1,00,000/- as directed by the District Forum and pay a  sum of `40,000/- towards compensation as also `5,000/- towards costs.  Time for compliance four weeks.

                                                                MEMBER

                                                                MEMBER

KMK*                                                     Dt.01.08.2012