Andhra Pradesh

Visakhapatnam-II

CC/314/2011

Chaganti Gowri Sankar - Complainant(s)

Versus

K. Peethamabara Rao - Opp.Party(s)

P. Rama Rao

09 Jan 2015

ORDER

 

 

Reg.of the Complaint:22-08-2011

                                                                                                                                    Date of Order:09-01-2015 BEFORE THE DISTRICT CONSUMERS FORUM-II

AT VISAKHAPATNAM

                   Present:

1.Sri H.ANANDHA RAO, M.A., L.L.B.,

       President

2.Sri C.V.N. RAO, M.A., B.L.,

                                             Male Member

3.Smt.K.SAROJA, M.A., B.L.,

       Lady Member

                                            

 

FRIDAY, THE 9^TH DAY OF JANUARY, 2015

CONSUMER CASE NO.314/2011

 

BETWEEN:

CHAGANTI GOWRI SANKAR S/O CH.SIVA PRASAD RAO,

HINDU, AGED 53 YEARS, R/O D.NO.45-49-5,

AKKAYYAPALEM, VISAKHAPATNAM.

                                                                                             …COMPLAINANT

A N D:

1.K.PITHAMBARA RAO S/O NOT KNOWN, HINDU,

AGED ABOUT 62 YEARS, PROPRIETOR,

KALLURU CONSTRUCTIONS(ENGINEERING WORKS),

FLAT NO.501, GOLDEN VIEW APARTMENTS,

KANAKADURGA NURSING HOME LANE,

MAHARANIPETA, VISAKHAPATNAM-2.

 

2.K. AURNA W/O K.PITHAMBARA RAO,

HINDU, AGED 58 YEARS, PROPRITRIX,

KALLURU CONSTRUCTIONS(ENGINEERING WORKS),

FLAT NO.501, GOLDEN VIEW APARTMENTS,

KANAKADURGA NURSING HOME LANE,

MAHARANIPETA, VISAKHAPATNAM-2.

 

                                                                                      …OPPOSITE PARTIES

 

This case coming on 29-12-2014 for final hearing before this Forum in the presence of Sri. P.VEERRAJU, P.RAMA RAO & A.K.NAIDU, Advocates for the Complainant and of Sri C.R.VASANTHA KUMAR, Advocate for the Opposite Parties, and having stood over till this day for consideration, the Forum made the following:

 

O  R  D  E  R

(As per the Honourable President on behalf of the Bench)

1.       The Complainant filed the present complaint against the OPs directing them to refund an amount of Rs.5,00,000/- with interest thereon @ 24% p.a., from the date of receipt of the same till the date of realization and Rs.5,00,000/- towards compensation for deficiency  of service with costs.

2.       The case of the complainant is that the 1^st OP is a Builder and the 2^nd OP is his wife started sole proprietorship concern called as Kalluru Constructions (Engineering Works) and OP NO.1 is acting as its proprietor and that he with an intention to purchase an apartment after negotiations  paid an amount of Rs.5,00,000/- with a flat consisting of 1000sft in Lalithanagar, Visakhapatnam  from OP1 but the OP.1 failed to perform his part of contractual obligation and never he executed nor got executed joint and undivided interest of immoveable property relating to the said apartment in his favour though OP.1 executed a receipt on 1-1-2011 on his letter pad evidencing receipt of an amount of Rs.2,10,000/- as advance. Similarly, OP1 had also received further amount of Rs.2,90,000/- vide two cheques and the same was acknowledged by OP1 by way of receipt on another letter pad. However, the cheque for Rs.2,00,000/- dated 1-1-2011 was issued in the name of the OP2 as desired by OP1 and the receipt of entire amount of Rs.5,00,000/- was acknowledged by OP1 and the said cheques were encashed by OPs.

3.       Though the OP1 endorsed receipt of the aforesaid 5 lakhs by way of endorsement on his letter pad dated 1-11-2011 and also by another endorsement on 12-01-2011 and thereby  received Rs.5 lakhs but he never performed his part of contractual obligations despite several demands made by him while. So, OP1 having expressed the inability to deliver the flat and agreed to return the said amount issued 4 cheques dated 9-5-2011. While so, OP1 on 10-05-2011 requested him to present the said cheques only on 16-05-2011 by way of a separate letter. Further, when rendered the cheques for collection, they were dishonoured due to insufficiency of funds which resulted in filing of Complaint under section 138 of NI Act. As they have collected amounts for providing flat and non performance of contractual obligations on the part of the OP1, is a clear case of deficiency of service and there were exchange of notices in between both parties. Since, no amount was paid, the present complaint was filed.

4.       The case of the OP-1 denying the material averments of the complainant is that the complainant approached along with K.V.Ramana Murthy and agreed to purchase a flat in Ground Floor and paid an amount of Rs.5,00,000/- towards advance vide receipt on 01-01-2011 and subsequently, they both approached and requested the complainant due to financial problems, they could not sell the flat and on their requests to return the advance amount, he agreed to return the same without interest. Further, both complainant and his friend forcibly obtained 6 cheques from him and 2 cheques from his wife and further obtained letter dated 10-05-2011 that the complainant deposited the cheques on 16-05-2011.

5.       That on 26-05-2011 got sent a telegram that on 18-05-2011, the OP paid the entire advance amount after receiving the original agreement to sell taken on 10-03-2011 executed by OP in favour of the complainant in the presence of 2 mediators. The complainant has not returned the cheques obtained from him on 9-5-2011 subsequently on 2-6-2011, they got issued a notice to OP incorporating the details of consideration and payment etc., the complainant demanding to pay an amount of Rs.1,00,000/- towards interest and damages only for wrongful gain, sale agreement executed by them was cancelled on 10-03-2011 and return the original agreement after receiving the amount. There are no merits in the complaint and therefore, it is liable to be dismissed.

6.       The case of the OP2 denying the material averments is that the registered extract issued by the District Industries Centre to OP1 clearly suggest that the transaction such as Pipes Fabrication Engineering Works clearly cause to show that the 1^st OP deals in Mechanical Engineering Works and not in Civil Works as alleged by the complainant and what all the 1^st OP intend is to have sole site developed and portion of it, to be sold to the complainant. Therefore, on that ground alone the complaint is liable to be dismissed.

7.       That the dispute is not a consumer dispute as averred by the complainant and the complainant is neither the consumer nor the OPs are the providers nor rendering any service and it is an independent transaction of sale by OP and as such, this forum has no jurisdiction to entertain the complaint. Therefore, the complaint is entitled to any of the reliefs sought for.

8.       To prove the case, the complainant, filed his Evidence Affidavit and got marked Exhibits A1 to A 8. On the other hand, on behalf of the OPs, OP1 filed his Affidavit and got marked Exhibits B1 to B6.

9.       Exhibit A1 is the bunch of cheques (4) in Nos., dated 09-05-2011 Exhibit A2 is the Cheque Return Memo dated 01-06-2011, Exhibit A3 is the legal notice issued by the complainant along with Rt.No.5307 dated 1-6-2011, Exhibit A4 is the acknowledgements dated 13-06-2011 , Exhibit A5 is the receipt towards flat Booking dated 1-1-2011, Exhibit A6 is t he receipt dated 12-01-2011, Exhibit A7 is the letter from the OPs dated 10-05-2011, Exhibit A8 is the reply notice from the OP to the Complainant dated 27-06-2011.

10.     Exhibits B1 is the   Enterprises Memorandum dated  14-02-2007, Exhibit B2 is the sale deed in favour of the 1^st OP dated 04-08-1978 and Exhibit B3 is the Construction agreement dated 06-10-2011, Exhibit B4 is the complaint copy U/s 138 of NI Act, Exhibit B5 is the evidence affidavit filed in NI Complaint dated 21-04-2014, Exhibit B6 is the Complaint filed in the consumer Forum-II, Visakhapatnam dated 09-08-2011.

11.     Both parties filed their respective written arguments.

12.     Heard oral arguments of both sides.

13.     Now the point to be determined in this case is;

Whether there is any deficiency of service on the part of the OPs and the Complainant is entitled to any reliefs asked for?

14.     The first contention of the OP is that the present dispute is not a Consumer dispute as neither of the OPs are dealing in construction activity nor the complainant is the consumer to the OPs.

15. As seen from record, it is not in dispute that prior to the filing of the complaint, the complainant gave notice vide Exhibit A3 for which a reply was sent by the OP vide Exhibit A8. Exhibit A5 And Exhibit A6 dated 01-01-2011 and 12-01-2011 are the receipts towards flat booking which are filed as on behalf of the complainant. In the body of the said receipts, clearly mentioned advance for booking flats at Lalithanagar bearing flat No.13 S.No.23/10 and 22 at Resapuvanipalem, Division 4, Zone-2, GVMC, Visakhapatnam which clearly indicates that the OP is a builder and started sole partnership firm called as Kalluri constructions (Engineering Wroks). Thus, it is clear at the time of booking, the intention of the OP is to built the said premises and dispose of the same. It is not a case where already constructed apartment  are offered for sale. Therefore,  it cannot be held that the complainant is a consumer and the OP is a builder received advance amount for booking of the flat for construction of the same.

16.     Further, there is no difference in between the proprietary and sole proprietorship firm. More so, in the evidence affidavit filed by the OP at Para 4, they admitted that he received an advance and issued receipt on 1-1-2011. So at the time of issuance of the receipts, the OP is builder who has undertaken to render service to the Complainant. If he alleges otherwise, it amounts to deficiency of service. As far as Exhibit B2 filed along with additional version i.e., construction agreement totally proves the case of the complainant which is initially on 1-1-2011 and on 12-01-2010 when booking the flats, the first OP and his wife as builders promised to deliver flats to the complainant. As the property is mortgaged to the Bank, the OP failed to execute the sale agreements and he returned advance amounts by cheques which were dishourned, the details are mentioned in the complaint. The said fact do further strengthened by the Construction Agreement executed by the OP on 6-10-2011.  At page No.3 of Exhibit B3, it was mentioned whereas the first party with a view to develop the above mentioned property by constructing Ground Plus 3 floors by demolishing the existing RCC house. The Municipal Corporation has approved the plan. Whereas the 1^st OP due to some financial problems and other family troubles would not commence the construction or develop the property. Whereas the 2^nd party is the contractor and they are having vast experience in Civil Construction i.e., constructing Individual Houses, Group Houses and Apartments. This recital amply proves that the OP initially intended to develop the property on his own but due to some financial problems unable to do so and he has given the said construction to the contractor. Probably, these aspects happened after issuance of cheques which proves the intention of the OPs at the time of receiving the advance amount, his intention to deliver the flats as a builder. So, this construction agreement which is filed by the OP further strengthens and proves the case of the complainant. For these reasons, we are of the considered view that the contention of the learned counsel for the OP that the complainant does not come under purview of Consumer has no legs to stand.   

17.     The evidence affidavit of complainant clearly goes to show after negotiations, he paid an amount of Rs.5,00,000/- by way of cheques vide Exhibit A1 but the OP with an intention to purchase Flat of 1000sft in Lalithanagr, Visakhapatnam but the OP failed to perform his part of contractual obligation and he never executed immoveable property concerning the said apartment and finally OP1 executed a receipt on 1-1-210 on his letter pad evidencing the fact that they have received a sum of Rs.2,10,000/- from the complainant towards advance for booking of the aforesaid flat. Similarly, also received an amount of Rs.2,90,000/- and that the cheques given by the complainant were encashed by the OPs. The evidence let in by the complainant and exhibits clearly shows that the OPs received a sum of Rs.5,00,000/- but never performed their part of contractual obligations in spite of demands made by the Complainant. The evidence of the Complainant also goes to show having expressed the inability to deliver the flat, the OPs agreed to return the said amount and issued cheques but vide Exhibit A2 they were bounced. Having received the amount while return the cheques issued without having sufficient balance in their accounts is also a clear case of deficiency of service and unfair trade practice. The evidence of complainant coupled with exhibits marked clearly and categorically cause to show that the complainant substantiated his case.   Therefore, the OPs are liable to refund an amount of Rs.5,00,000/-  from 1.6.2011 i.e., from the date of demand to the complainant.

18.     Now the question that comes up for consideration, at this stage of our discussion is, what is the rate of interest for which the Complainant is entitled.   The rate of interest claimed by the Complainant is 24% p.a.  This rate of interest claimed by the Complainants appear to be excessive, of course, it is a fact that the transaction covered by Ex.A 5 and 6 is commercial in nature, but that does not and cannot mean to say that the Complainant is a licensed to claim interest @ 24% p.a. on Ex.A 6.  But at the same time, it is imperative on our part to award a reasonable interest.   Having regard to all these facts and circumstances, we sincerely feel having considered the case on hand awarding of interest @ 9% p.a. would better serve the ends of justice.    Consequently, we proposed to fix at rate in question @ 9% p.a. on Ex.A 3 in question.   Accordingly interest is ordered.

19.     Whether the Complainant is entitled for compensation of Rs.5,00,000/- is to be considered.   It appears as seen from the evidence of Complainant that the Complainant was compelled to approach the Opposite Parties and therefore experienced a lot of physical strain besides mental agony and financial loss. It is an un-disputed fact that the Opposite Parties did not refund the advance amount paid by the Complainant.   Naturally, that made have put the Complainant to suffer some mental agony besides physical stress and strain.   In this view of the matter, we sincerely feel that it is a fit case to award compensation.   But that does not and cannot mean to say that the Complainant claim for compensation is acceptable.    Having regard to all these facts and circumstances, we are of the considered opinion, award of compensation of 50,000/- would serve the ends of justice.   We therefore, proposed to award compensation of Rs.50,000 /-,  in the circumstances of the case on hand. Accordingly this point is answered.

20.     Before parting our discussion, it is incumbent and imperative on our part to consider the costs of litigation.    The Complainants ought not have to approach this Forum had his claim for refund of the advance amount of Rs.5,00,000/- or reliefs sought for have been honored by the Opposite Parties within a reasonable time and in view of the matter, the Complainant’s claim for costs deserves to be allowed.   In our considered and unanimous opinion awarding a sum of Rs.5,000/- as costs would appropriate and reasonable.   Accordingly costs are awarded.

21.     In the light of our discussion, referred supra, the complainants are entitled to receive the sum of Rs.5,00,000/- together with subsequent interest @9% p.a., from 1-6-2011 till the date of realization, a compensation of Rs.50,000/- and also costs of Rs.5,000/- to the Complainant.

22.     In the result, the complaint is allowed in part, directing the OPs 1 and 2 to pay the insured sum of Rs.5,00,000/- (Rupees Five lakhs only) with subsequent interest @ 9% p.a., from the date of issuance of legal notice i.e., 1-6-2011 till the date of realization and further directed to pay an amount of Rs.50,000/- (Rupees fifty thousand only) towards compensation and costs of Rs.5,000/- (Rupees Five Thousand only) to the Complainant. Time for compliance, one month from the date of this order.

 Time for compliance, one month from the date of this order.

Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open Forum, on this the 9^th day of January, 2015.

 

   Sd/-                                            Sd/-                                        Sd/-

LADY MEMBER                       MALE MEMBER                       PRESIDENT        

 

 

APPENDIX OF EVIDENCE

  For the Complainant:-

Exhibits	Date	Description	Remarks
A1	09-05-2011	Cheques (4 nos)	Photostat Copies
A2	27-05-2011	Cheque return memo	Photostat Copies
A3	01-06-2011	Copy of legal notice issued by the complainant along with Rt.No.5307 dated 3-6-2011	Office copy
A4	13-06-2011	Acknowledgements	Copies
A5	01-01-2011	Receipt towards flat booking	Photocopy
A6	12-01-2011	Receipt towards flat booking	Photocopy
A7	10-05-2011	Letter from the OPs to Complainant	Photocopy
A8	27-06-2011	Reply Notice issued by the OPs	Original

For the Opposite Parties:-

Exhibits	Date	Description	Remarks
B1	14-02-2007	Enterprises Memorandum	Photostat Copy
B2	04-08-1978	Sale deed in favour of 1st OP	Photostat Copy
B3	06-10-2011	Construction agreement	Photostat Copy
B4	04-07-2011	Complaint filed u/s 138 of NI ACT	Photocopy
B5	21-04-2014	Evidence affidavit filed  in NI Act Complaint	Photocopy
B6	09-08-2011	Complainant filed in the Consumer Forum-II, VSKP.	Photocopy

 

   Sd/-                                                  Sd/-                                  Sd/-

LADY MEMBER                       MALE MEMBER                       PRESIDENT