Date of filing : 30.12.2013

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

BEFORE      Hon’ble Thiru. Justice R.SUBBIAH                          PRESIDENT

                     Thiru. R VENKATESAPERUMAL                             MEMBER

C.C. No.11/2014

DATED THIS THE 20^TH DAY OF OCTOBER 2022

Dr. A.V. Jayagopal,

S/o. Dr. A. Venugopal,

No.860 /C, Poonamallee High Road,

Kilpauk,

Chennai – 600 010.                                                                              .. Complainant. 

-Versus-

1. Mr. J. Ravi,

S/o. Mr. P. Jayaram,

Old No.1/3. New No.73/3,

‘M’ Block, 3^rd Avenue,

Anna Nagar,

Chennai – 600 102.

2. M/s. Jeyaram Civicon Pvt. Ltd.,

Represented by its Managing Director

Mr. J. Ravi,

Old No.1/3. New No.73/3,

‘M’ Block, 3^rd Avenue,

Anna Nagar,

Chennai – 600 102.                                                                       .. Opposite parties.

Counsel for the complainant                          : M/s. Sampath Kumar & Associates

Counsel for the opposite parties                      : M/s. S. Giritharan

This complaint having come up for final hearing before us on 22.09.2022  and on hearing the arguments of both parties and upon perusing the material records submitted by both parties and this Commission made the following:-

ORDER

Thiru. R VENKATESAPERUMAL, MEMBER

The present complaint was filed by the complainant against the opposite parties alleging deficiency in service and to direct them to refund a sum of Rs.35,00,000/- with interest at the rate of 24% p.a. with monthly rests from 25.02.2011, to pay a sum of Rs.25,00,000/- towards compensation for mental agony, deficiency in service and financial loss and to pay cost to the complainant.

1.         Brief facts necessitating the filing of complaint:

The complainant submits that the opposite parties have promoted a project of constructing individual Villas and Cottages named ‘Malgudi’ located at Punnapattu Village, Vittalapuram Group, Thirukazhukundram Taluk, Kancheepuram District. The opposite parties also have promised the delivery of a constructed liveable Villa within 6 months from the date of entering into an agreement.  The total cost of Villa was Rs.38,00,000/- (Land Cost of Rs.5,84,400/- + Construction Cost of Rs.32,15,600/-).  On 15.11.2010, an Agreement of Sale was entered into between the 1^st opposite party and the complainant for the sale of the Plot No.57 measuring an extent of 4870 sq. ft. or thereabout at “Malgudi Villa” comprised in S. No.270/4 situated at Pannapattu Village, Vittlapuram Group, Thirukazhukundram Taluk, Kancheepuram District for a sale consideration of Rs.5,84,400/- and the complainant paid an advance of Rs.1,00,000/- to the 1^st opposite party.   Further the complainant submits that the 2^nd opposite party executed a Construction Agreement on 15.11.2010 with the complainant for the construction and landscaping of a Villa in the said Plot No.57 with a built up area of 1100 sq. ft. at a cost of Rs.32,15,600/-.   Under the agreement, the complainant paid an advance of Rs.1,00,000/- towards construction.  The specifications of construction and the payment schedule were detailed under the Schedule ‘C’ and Schedule ‘D’ of the Construction Agreement.  Pursuant to the above agreements, the complainant paid the balance of Rs.4,84,400/- towards sale consideration and the Sale Deed dt.07.03.2011 in their names was registered in SRO, Thirukalikundram as Document No.911/2011. 

2.         The complainant submit that they took Housing Loan from the Axis Bank, Pallavaram Branch for a sum of Rs.15,00,000/-.  The complainant submits that the opposite parties had assured that the work in progress was in advanced levels and demanded for further payment for quicker delivery of constructed Villa.   The opposite parties also promised the delivery of constructed Villa by May/ June 2011.  The complainant is a Surgeon and Doctor by profession and did not have time to supervise the construction works who believed and trusted the opposite parties.   The complainant submits that Axis Bank released the funds to the tune of Rs.13,72,000/- out of housing loan sanction amount of Rs.15,00,000/-.  Thus, the complainant has paid a total amount of Rs.35,00,000/- out of the project cost + land cost of Rs.38,00,000/-.   The complainant submits that for the partly disbursed housing loan of Rs.13,00,000/- by Axis Bank, the complainant is paying interest at 10.50% p.a.  The complainant submits that from August @ Rs.25,497/- is being paid towards both Principal and Interest.  While being so, the opposite parties demanded to pay the balance amount of Rs.2,27,700/- of the project cost from the complainant.    During the last week of July 2012, the complainant visited the site and to his utter dismay and shock only 30% of the work has been completed.  The complainant submits that the opposite parties have cheated the complainant by not handing over possession of Villa.   Hence, the complainant has sent repeated emails on various dates to the opposite parties.  But the opposite parties have started avoiding totally any form of communication with the complainant.    The act of the opposite parties caused great mental agony and hardship to the complainant.   Hence, this complaint is filed before this Commission.

Resisting the case of the complainant, the opposite parties have filed a version stating that the complaint is not maintainable either by law or on facts of the case and is liable to be dismissed in limine.  The complainant agreed for payment without any default in payment as mentioned in Schedule ‘C’ of the Agreement.   The complainant was informed that any default in payment would result in diminution of work at the site.   The opposite parties state that the complainant was informed of the progress substantiated with photographs of site at that time.  As stated by the complainant periodic demands were raised along with dues if any were notified to the complainant from time to time to ease the quicker delivery of constructed Villa.   Though the complainant has paid a sum of Rs.35,00,000/- out of the total sum of Rs.38,00,000/- all the  payments were made belatedly.   The opposite parties state that regarding interest for the loan availed by the complainant, payment of EMI etc they are no way related with the same.   The opposite parties state that  the complainant was made known about the status and update of progress through e-mails periodically and attached the photographs regarding various stages of completion as and when the complainant sought for the stage.  The opposite parties state that the complainant had wantonly made defaulted payments and had cleared the payment dues only for the purpose of this case.     The opposite parties state that the Construction Agreement also provides for the Arbitration Clause wherein, the parties thereto agreed to refer any dispute or difference between the parties arising out of or relating to or touching upon the meaning, effect or interpretation or any breach thereof to arbitration in accordance with the Arbitration and Conciliation Act.   While so, this complaint is not maintainable before this Commission.  The opposite parties state that they are ready to handover the constructed villa to the complainant as per the Construction Agreement within a short span of time.    Therefore, there is no deficiency in service on the part of the opposite parties and hence, this complaint is liable to be dismissed.

4.         The complainant filed their proof affidavit and submitted documents marked as Ex.A1 to Ex.A10 on their side.  The opposite parties filed their proof affidavit and submitted documents marked as Ex.B1 to Ex.B6 on their side.

5.         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?

6.         Point No.1:

Heard the learned Counsels appearing for both parties.  The complainant has filed his written arguments.  In the written version, the opposite parties had raised an issue with regard to the maintainability of the complaint as the Construction Agreement also provides for the Arbitration Clause wherein, the parties thereto agreed to refer any dispute or difference between the parties arising out of or relating to or touching upon the meaning, effect or interpretation or any breach thereof to arbitration in accordance with the Arbitration and Conciliation Act.   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 22.06.2011 was executed between the parties and signed by the opposite parties for the development of the project 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 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.

7.         Point No.2:-

The contention of the complainant that the opposite parties have promoted a project of constructing individual Villas and Cottages named ‘Malgudi’ located at Punnapattu Village, Vittalapuram Group, Thirukazhukundram Taluk, Kancheepuram District.  The opposite parties also have promised the delivery of a constructed liveable Villa within 6 months from the date of entering into an agreement.  The total cost of Villa being Rs.38,00,000/- (Land Cost of Rs.5,84,400/- + Construction Cost of Rs.32,15,600/-).  On 15.11.2010, Ex.A2, an Agreement of Sale was entered into between the 1^st opposite party and the complainant for the sale of the Plot No.57 measuring an extent of 4870 sq. ft. or thereabout at “Malgudi Villa” comprised in S. No.270/4 situated at Pannapattu Village for a sale consideration of Rs.5,84,400/- and the complainant paid an advance of Rs.1,00,000/- to the 1^st opposite party.   Further the contention of the complainant that as provided under the Agreement of Sale, the 2^nd opposite party executed Ex. A3, Construction Agreement on 15.11.2010 with the complainant for the construction and landscaping of a Villa in the said Plot No.57 with a built up area of 1100 sq. ft. at a cost of Rs.32,15,600/-.  Under this agreement, the complainant paid an advance of Rs.1,00,000/- towards construction as per Ex.A1.  The specifications of construction and the payment schedule were detailed under the Schedule ‘C’ and Schedule ‘D’ of the Construction Agreement.  Pursuant to the above agreements, the complainant paid the balance of Rs.4,84,400/- towards sale consideration and the Sale Deed dt.07.03.2011 in their names was registered in SRO, Thirukalikundram as Document No.911/2011. 

8.         Further the contention of the complainant that they took Housing Loan from the Axis Bank, Pallavaram Branch.  The said Bank has sanctioned Housing Loan of Rs.15,00,000/- to the complainant for purchasing / construction of subject property.  The opposite parties had assured that the work in progress was at the advanced levels and raised periodic  demands from the complainant  for further payment for quicker delivery of constructed Villa.   The opposite parties also promised the delivery of constructed Villa by May 2011/ June 2011.    The complainant submits that the Axis Bank released funds to the tune of Rs.13,72,000/- out of housing loan sanction amount of Rs.15,00,000/-.  Thus, the complainant had paid a total amount of Rs.35,00,000/- out of the project cost + land cost of Rs.38,00,000/-.  The proofs for the payment of Rs.35,00,000/- is marked from Ex.A1, Ex.A5, Ex.A7 & Ex.A8.   Further, the opposite parties accepted the receipt of the sum of Rs.35,00,000/- from the complainant in their written version.  The complainant submit that the housing loan amount of Rs.13,00,000/- by the Axis Bank, the complainant are paying interest at 10.50% p.a. monthly compounded.  The complainant submit that the EMI payments are agreed to be commenced after taking possession of Villa.   Since the opposite parties failed and neglected to hand over the possession of the Villa to the complainant as per the Construction Agreement, the Bank insisted the complainant to start making the EMI.  Therefore, the complainant was forced to make the payment of EMI from March 2011 to July 2012 @ Rs.11,594/- per month for availing the home loan account.   The complainant have so far paid a sum of Rs.25,497/- towards Principal and Interest from August 2012.    The contention of the complainant that the opposite parties have cheated the complainant by not handing over the possession of Villa.    Hence, the complainant sent legal notice dt. 08.08.2012  to the opposite parties.  Album containing 17 photographs of the incomplete construction of the Villa is marked as Ex.A10.  But the opposite parties have started avoiding totally any form of communication with the complainant.    The act of the opposite parties in not handing over the Villa after receipt of amount of Rs.35,00,000/-  would clearly amount to unfair trade practice on part of them.  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 as against the opposite parties.

9.         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 in terms of money.  It is evident from the payment receipts and statement of loan account issued by the bank that the opposite parties have received Rs.35,00,000/- from the complainant.   Thus, the complainant is entitled for refund of the said amount with interest at the rate of 9% p.a. from the date of complaint  till realization.  Further, the complainant 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 allowed in part.  The opposite parties 1 & 2 jointly and severally are directed to refund a sum of Rs.35,00,000/- (Rupees Thirty five lakhs only) to the complainant along with interest at the rate of 9% p.a. from the date of filing of this complaint i.e. 30.12.2013 till the date of this order i.e. 20.10.2022, to pay a sum of Rs.2,00,000/- (Rupees two lakhs only) towards compensation for mental agony and hardship caused to the complainant with cost of Rs.10,000/- (Rupees Ten thousand only) to the complainant.

The above amounts shall be payable within a period of one month from the date of receipt of the order copy, failing which, it carries interest at the rate of 9% p.a. from the date of award till realisation.

R VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT

List of documents filed by the complainant:-   

List of documents filed by the opposite parties:-

R VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT