Tamil Nadu

StateCommission

CC/74/2014

K. JAGANNATHAN - Complainant(s)

Versus

G.R.K. REDDY, MANAGING DIRECTOR - Opp.Party(s)

R. LATHA

25 May 2022

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI – 600 003.

BEFORE         Hon’ble Thiru. Justice R.SUBBIAH                        PRESIDENT

                      Thiru. R. VENKATESAPERUMAL                           MEMBER

 

C.C. No.74/2014

DATED, THE 25^th DAY OF MAY 2022

Mr. K. Jagannathan,

S/o. Mr. Krishnamachari,

No.10/26 A, 2^nd Floor,

Govindu Street,

T. Nagar,

Chennai – 600 017.                                                                           .. Complainant.

                                                       - Versus -

1. Mr. G.R.K. Reddy,

Managing Director,

Marg Properties-Marg Swarnabhoomi,

New Chennai Township Pvt. Ltd.,

“Marg Axis”, No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.

 

2. New Chennai Township Pvt. Ltd.,

Represented by its Managing Director,

 Marg Swarnabhoomi,

 “Marg Axis”, No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.

 

3. M/s. Marg Properties,

Represented by Managing Director,

Marg Swarnabhoomi,

“Marg Axis”, No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.                                                                           .. Opposite parties.

 

Counsel for Complainant                           : M/s. R. Latha & K. Jagannathan

Counsel for Opposite parties 1 to 3           : M/s. Dr. S. Padma

This complaint having come up for final hearing before us on  11.05.2022  and on hearing the arguments and upon perusing the material records submitted by both parties this Commission made the following order in the open Court:-

ORDER

HON’BLE THIRU.  JUSTICE R. SUBBIAH, PRESIDENT

            Present complaint was filed by the complainant alleging deficiency in service on the part of the opposite parties along with a prayer to direct the opposite parties to refund a sum of Rs.13,02,405/- being 95% of payment of the apartment cost along with 10% interest from the date of payments or to handover the flat to the complainant as per the Agreement dt.26.10.2013 and to pay a sum of Rs.20,00,000/- towards compensation for the mental agony suffered by the complainant with cost.

2.         Brief facts necessitating the filing of complaint:

            The complainant visited the site of the opposite parties and by believing the promises made by them, he had booked a flat in Marg Swarnabhoomi – “MahaUtsav” at Block ‘B’ – Apartment No.610 on 22.05.2011 for an one-time lease rental for 99 years at a cost of Rs. 13,65,850/-.   Pursuant to which, the complainant had paid an advance amount of Rs.50,000/- vide cheque No.893739 dt.22.05.2011 for which, the opposite party had issued receipt.   The flat was booked only after the opposite party showed the model flat and offered it for 99 years lease and also on assurance that the construction of flat would be over in 24 months.  The Builders Agreement was entered between the parties on 13.06.2011.  The complainant states that the construction was in slow progress from the initial days and the plinth area was completed only on 30.07.2012.  Since the Maha Utsav project got delayed, the opposite parties offered an apartment in Utsav – Block ‘M’ – Apartment No.101 on 24.12.2012 and the complainant had also paid an additional booking amount of Rs.50,000/- vide cheque No.375138 dt.26.12.2012 after cancelling the old Agreement of Maha Utsav.  Hence, a new Builders Agreement was entered between the complainant and the opposite parties on 12.01.2013.   The opposite parties had assured to complete the construction work during October 2013. 

3.         The complainant states that since the construction was delayed by the opposite parties and there was no further development in the construction works even in the month of September 2013, the complainant had given a complaint to Hon’ble Chief Minister of Tamil Nadu – Grievance Cell on 15.09.2013 against the opposite parties.  Hence, the opposite parties allotted another apartment in Utsav Block ‘B’ – Apartment No.403 for an one-time lease rental for 99 years at the cost of Rs. 13,70,950/- to the complainant.   For that, the complainant had made an additional payment of Rs.73,139/- vide cheque No.000001 dt.26.10.2013.   A fresh Agreement was made for the 3^rd time on 26.10.2013 and the entire amount paid for Block ‘M’ was transferred to Block ‘B’.  It was also agreed between the parties that the delay beyond 3 months to handover the flat would be compensated by the opposite parties paying an amount of Rs.5/- per sq. ft. and that the power of termination of the contract should not be exercised by the lessor unless and until the lessor gives 30 days prior notice to the other party and in the event of termination of the agreement the lessor would forgo 15% of the amount paid towards the lease rental.  The complainant thus paid the amount of Rs.13,02,405/- by cheques on several occasions between 22.05.2011 to 31.10.2013 and the opposite parties had issued valid receipts for the same. 

4.         On 22.12.2013, the complainant again sent a complaint to the CM cell mentioning the delay in commencement of work.   The complainant further states that as per the new agreement the target for 100% completion of Apartment is April 2014 and the complaint of the complainant was also closed based on the commitment given by the opposite party that they will start the work by November 2013 and the apartment would be handed over to the complainant by April 2014.   The delay made in the handing over of the flat caused great mental agony to the complainant.  Hence, the complainant issued a legal notice dated:09.01.2013  to the opposite parties.  Even after the receipt of legal notice, the opposite parties has neither replied nor commenced the civil work.   Hence, this complaint was filed alleging deficiency in service and unfair trade practice on the part of opposite parties and for refund of the amount of Rs.13,02,405/- i.e. the booking amount of the flat or to handover the flat to the complainant as per the Agreement dt.26.10.2013 and compensation of Rs.20,00,000/- for mental agony caused to the complainant along with cost of the proceedings.

5.         The 1^st opposite party filed his written version admitting the booking of the flat by the complainant, however it was contented that the complaint for cancellation of the lease agreement and refund of the amount was not maintainable before the Consumer Forum as there is no jural relationship of consumer and service provider between the complainant and the opposite parties. It was submitted that only the Civil Court has the Jurisdiction to try the above case.  Further, the opposite parties cited force majeure clause for the delay in completing the construction as to the non-availability of labour and raw materials.  They also cited that the arbitration clause in the agreement was to be given priority and hence the complaint was liable to be dismissed as they have not committed any deficiency in service or unfair trade practice as they have invested a huge amount in purchase of the land and their sole intention was to complete the project at the earliest.  Further, the opposite parties have completed all the booking formalities and NCTPL executed agreement to lease on 19.10.2013.  As per the Agreement the completion of Block B will be April 2014 with another 3 months of grace period.   The complainant has paid Rs.13,02,405/- towards the booking (includes the transfer amount of Rs.3,33,600/-) against the apartment cost of Rs.13,70,950/-.  The opposite parties promised the complainant to complete the flat in October 2014.  Therefore, there is no deficiency in service on the part of the 1^st opposite party and hence, the complaint is liable to be dismissed.

6.         The 2^nd & 3^rd opposite parties filed their version and stated that the originally the complainant had booked a flat in the Project Maha Utsav Block-B, Apartment No.610 on 22.05.2011 and the agreement entered thereon and at the request of the complainant the booking changed to Block M, Apartment No.101 on 26.12.2012 after cancelling the previous agreement and a new agreement was also entered into between the parties.  The total lease rental for the apartment as per the agreement is Rs.13,65,850/- and the complainant has not paid the entire Lease Rental amount.   However, at the request of the complainant he was allotted a flat in Block B, Apartment No.403 in UTSAV Project.  But later it is known that the complainant is not interested in the apartment but only to drag on the issue and to extort money from the opposite parties through illegal means and to lodge false complaints.   The opposite parties had constructed projects with the Special Economic Zone and the apartments were handed over to the satisfaction of the complainants and absolutely there is no need to invest the money collected for the particular project into other project of the opposite party.   As per Section 23 of the Special Economic Zones Act,  2005 no court has got Jurisdiction to try this petition.  Therefore, this Commission has no Jurisdiction to try this Complaint. 

7.         The clause 19 of the Agreement of Lease reads as follows”

“In the event of any dispute or difference between the parties arising out of or in connection with this agreement and or Lease Deed or with regard to performance of any obligations by either party, the parties hereto shall use their best efforts to resolve such dispute or difference amicably by mutual negotiations.   All disputes arising in connection with the agreement that have not been amicably in connection with the agreement that have not been amicably settled shall be referred to arbitration.  Each of the parties is entitled to appoint one Arbitrator and the presiding Arbitrator shall be appointed by two such arbitrators.    As the complainant being a party to the said agreement has raised a dispute in connection with the said agreement on the basis of the non performance of the obligations by the opposite party company, the dispute has to be referred to the Arbitration.  Hence, the present complaint is not maintainable before the Consumer Commission.  Thus, they sought for dismissal of the complaint.

8.         The complainant filed his proof affidavit and submitted documents marked as Ex.A1 to Ex.A18.  The opposite parties filed their proof affidavit but no document was marked on their side.

9.         Points for Consideration:

1. Whether the complaint is maintainable before the Consumer Commission?
2. Whether there is any deficiency in service and unfair trade practice on the part of the opposite parties as alleged by the complainant?
3. If so, for what relief the complainant is entitled to?

10.       Point No.1 :

Admitted facts made out from the documents submitted by the complainant:-

1. The complainant in response to the advertisements made by the 1^st opposite party had agreed to book a flat for 99 years lease in ‘MahaUtsav’ – Block ‘B’ – Apartment No.610 on 22.05.2011 by paying an advance amount of Rs.50,000/- vide cheque No.893739 dated:22.05.2010.  Subsequently, for the delay in the project the opposite parties offered to book an apartment in Utsav – Block ‘M’ Apartment No.101 and then again transferred the booking to the apartment in Utsav – Block ‘’B’ for one time lease rental for a period of 99 years for total consideration of Rs. 13,70,950/-.;
2. That the Project ‘Maha Utsav’ Booking Form was marked as Ex.A1;
3. That the transfer Booking form Maha Utsav to Utsav signed on 2412.2012 was marked as Ex.A2;
4. That the Builder Agreement of ‘M’ Block Flat No.101 dt.12.01.2013 was marked as Ex.A3;
5. That the letter written to General Manager dt.01.09.2013 was marked as Ex.A4;
6. That the complaint given to ‘CM’ Cell dt.15.09.2013 was marked as Ex.A5;
7. That the transfer booking form from ‘M’ Block Flat No.403 was marked as Ex.A6;
8. That the Builder Agreement of Block ‘B’ dt.26.10.2013 was marked as Ex.A7;
9. That the payment receipts was marked as Ex.A8;
10. That the bank transfer statement was marked as Ex.A9;
11. That the mail sent to the ‘CM’ cell thanking action taken was marked as Ex.A10;
12. That the fresh complaint to CM cell dt.12.12.2013 was marked as Ex.A11;
13. That the legal notice dt.09.01.2014 was marked as Ex.A12;
14. That the mail sent to dc and jd MEPZ was marked as Ex.A13;
15. That the complaint given to Mambalam Police Police station was marked as Ex.A14;
16. That the mail dt.18.02.2014 from K. Murali representing Marg Properties was marked as Ex.A15;
17. That the mail dt.06.03.2014 from K. Murali representing Marg Properties was marked as Ex.A16;
18. That the reply mail dt.07.03.2014 from Mr. K. Murali  was marked as Ex.A17;
19. That the mail from Marg Properties was marked as Ex.A18;

That the complainant had filed the complaint for refund of the amount of Rs.13,02,405/- and a compensation of Rs.20,00,000/- with cost of the complaint.

11.       Heard the learned Counsel for complainant.  The opposite parties had filed their proof affidavit and written arguments.  In the written version, the opposite parties had raised an issue with regard to the maintainability of the complaint as the transaction involved which is the subject matter of the complaint is ‘Lease’.  It is contended by the opposite parties that the Consumer Commissions has no jurisdiction to try a case involving lease and that the appropriate forum would be the Civil Court and thus prays for the dismissal of the complaint on the issue of jurisdiction.  We are unable to accept the above contention, for the reason that once the agreement dated 26.10.2013 was executed between the parties and signed by the 2^nd opposite party for the development of the project and leasing out the apartment for a period of 99 years to the complainant, the agreement derives the colour of “Development Agreement” and the jural relationship of ‘the Developer’ and ‘the Purchaser’ comes into existence between the parties and the agreed total payment of lease amount to be considered as ‘consideration’.  Hence, the issue with regard to the non-maintainability of the complaint before the Consumer Commission does not arise. The presence of arbitration clause in the development agreement is not a bar to file a complaint before Consumer Commission as held by various precedents of the Apex Court.  Thus, we answer point No.1 in favour of the complainant holding that the complaint is maintainable before the consumer commission.

11.       Point No.2 :-

From the admitted facts as mentioned above, we could see that the opposite parties had issued alluring advertisement inviting public to purchase the apartments, the residential project called “UTSAV”  to be constructed  by the 2^nd opposite party who is the builder and the complainant after visiting the 2^nd opposite party and on seeing the model flat of the project had agreed to book a flat for 99 years lease in project ‘UTSAV’, Apartment No.403, Block ‘B’, for an one-time lease rental for 99 years at the cost of Rs.13,70,950/- and both the opposite parties assured the complainant that the project would be completed within a period of 24 months.  The complainant in pursuance of the agreement has made the total payment of Rs.13,02,405/- out of the total one time lease rental amount of Rs.13,70,950/-.  

12.       The opposite parties for the delay in construction and handing over of the schedule of properties had cited the reason of ‘force majeur, i.e. due to global recession, labour problem, shortage of basic materials etc., which are beyond their control.  But they have not produced any materials in support of their contentions.  Hence, it was mere bald statements made by way of defence by the opposite parties without any proof for the same.   As per Ex.A7, Agreement entered between the parties, the flat was promised to be handed over to the complainant within 24 months from the date of Agreement.   As per Ex.A8, the receipts issued by the opposite parties the complainant has made a total payment of Rs.13,02,405/- out the total amount of Rs. 13,70,950/-.   Thus, the opposite parties had not denied the receipt of the amount.  Hence, they are legally obliged to construct and handover the apartment to the complainant as per the agreed schedule found in the agreement.  Therefore failing to comply the terms as clearly found in the agreement after receipt of amount by citing irrelevant reasons clearly amounts to deficiency in service.  Thus, we hold that the opposite parties had committed clear deficiency in service and unfair trade practice and we answer point No.2 in favour of the complainant and against opposite parties.

13.       Point No.3:-

As we have come to the conclusion that the opposite parties have committed deficiency in service and unfair trade practice and the complainant should be compensated.   The complainant is seeking for refund of a sum of Rs.13,02,405/- being the booking amount or to handover the apartment No.403 in Block ‘B’ as per the Agreement dt.26.10.2013.  It is evident from Ex.A8, receipts that the opposite parties have received Rs.13,02,405/- from the complainant by cheques between the period from 22.05.2011 to 31.10.2013.   But as per the Builder Agreement dt.26.10.2013 the sale consideration of apartment No.403 in Block ‘B’ is Rs.13,70,950/-.  The complainant have to pay Rs.68,545/- for claiming the handing over possession of  apartment No.403 in Block ‘B’.  Thus, the complainant is entitled for refund of the amount of Rs.13,02,405/- with interest at the rate of 18% p.a. from the date of complaint (i.e.) 20.06.2014 to till realization or in alternative, to handover the apartment No.403 in Block ‘B’ after receipt of Rs.68,545/- from the complainant as per the Agreement dt.26.10.2013.   Further, he is also entitled for a compensation of Rs.2,00,000/- for the mental agony and hardship suffered by him.   Cost of Rs.10,000/- is awarded to the complainant.   Thus, we answer point No.3 in favour of the complainant.

In the result, this complaint is partly allowed as follows :-

1. The opposite parties 1 to 3 are jointly and severally liable to refund the sum of Rs.13,02,405/- (Rupees Thirteen lakhs two thousand and four hundred and five only) along with 18% interest p.a. from the date of complaint (i.e.) 20.06.2014 to till the date of realization; or
2. In alternative, to handover the apartment No.403 in Block ‘B’ after the receipt of Rs.68,545/- (Rupees Sixty eight thousand five hundred and forty five only) from the complainant as per the Agreement dt.26.10.2013; and
3. To pay a sum of Rs.2,00,000/- (Rupees Two lakhs only) towards compensation for mental agony & hardship suffered by the complainant;
4. To pay a sum of Rs.10,000/- (Rupees Ten thousand only) towards litigation expenses. 

 

 

                

                                                                                                                                                                                                                                  R.VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT

 

List of Documents filed by the complainant:-   

Ex.A1	22.05.2011	Copy of project ‘Maha Utsav’ Booking form
Ex.A2	24.12.2012	Copy of Transfer Booking form Maha Utsav to “Utsav” signed on 24.12.2012
Ex.A3	12.01.2013	Copy of Builder Agreement of ‘M’ Block Flat No.101
Ex.A4	01.09.2013	Copy of Letter to General Manager dt.01.09.2013
Ex.A5	15.09.2013	Copy of complaint given to ‘CM’ Cell
Ex.A6	06.10.2013	Copy of Transfer Booking Form from ‘M’ Block to Block ‘B’ Flat No.403
Ex.A7	26.10.2013	Copy of Builder Agreement of Block ‘B’
Ex.A8	22.05.2011 to 31.10.2013	Copy of payment receipts
Ex.A9	22.05.2011 to 31.10.2013	Copy of bank transfer statements
Ex.A10	08.11.2013	Copy of mail sent to CM Cell thanking action taken
Ex.A11	12.12.2013	Copy of fresh complaint to CM Cell
Ex.A12	09.01.2014	Copy of legal notice
Ex.A13	27.01.2013	Copy  of mail sent to ‘dc’ and ‘jd’ MEPZ
Ex.A14	16.02.2014	Copy of complaint given to Mambalam Police station
Ex.A15	18.02.2014	Copy of mail from Mr. K. Murali representing Marg Properties
Ex.A16	06.03.2014	Copy of mail from Mr. K. Murali representing Marg Properties
Ex.A17	07.03.2014	Copy of reply mail from Mr. K. Murali
Ex.A18	31.03.2014	Copy of mail from Marg Properties

 

List of Documents filed by the opposite parties:-   

Nil

 

 

 

R.VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT