BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY

PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President

Smt. Meena Ramanathan, B.Com., Lady Member

                Sri G.Sreenivas Rao, M.Sc., B.Ed.,LL.B.,PGADR (NALSAR),Member

Tuesday, the 17^th day of September, 2013

CC. No. 22 of 2012

Between:

Leena Suresh Singh w/o Suresh Gopal Singh,

Aged 37 years, R/o 5-1-1/6A, Shantinagar,

Sangareddy town and Mandal,

Medak District.                                                                        ……Complainant                      

                   And

1. M. Nagoor Rao S/o Hazrathaiah,

Aged 39 years, Occ: Business & Proprietor of

Sri Sravani Engineering Industries,

R/o Flat No. 101, Siri Residency,

Madeenaguda, Serilingampalli Mandal,

Rangareddy District.

2. Chief Manager, S.B.I. Sangareddy Branch
3. Asst. General Manager, State Bank of India,

Regional business office, Sharda Complex,

Chanda Nagar, Sirilingampalli Mandal, Rangareddy.

4. Regional Business Officer, Sharada complex,

Chanda Nagar, Rangareddy.

5. Chief General Manager, State Bank of India,

Local Head Office, Koti, Hyderabad.

6. General Manager, State Bank of India,

Customer Grievance Cell, Local Head Office, Koti.

7. Chairman, State Bank of India, Mumbai.

                                                                                    ……Opposite parties

                        This case came up for final hearing before us on 13.09.2013                                                                   in the presence of Sri S. Bhagwan Rao Patil, Advocate for complainant, Sri M. Giridhar and Associates, Advocate for opposite party no. 1 and Sri M. Sunil Kumar, Advocate for opposite parties no. 2 to 7 and on hearing the arguments and perusing the record and having stood over for consideration till this day, this Forum delivered the following:

O R D E R

(Per se Smt. Meena Ramanathan, Lady Member)

                   This complaint is filed under Section 12 of the Consumer Protection Act, 1986 by the complainant stating that she entered into an agreement with opposite party no. 1 towards purchase of flat no. G10 on the ground floor. At the time of entering into the agreement, opposite party no. 1 is said to have obtained her signatures on blank formats. The complainant paid an advance of Rs. 55,000/- towards sale consideration. A loan amount was sanctioned by opposite party no. 2 and the sale deed was registered vide document no. 10843/08 dated 28.07.2008 for the agreed sale consideration of Rs. 5,00,000/-.  Although in the sale deed the possession of flat is delivered to the complainant, she is not in possession of it till today. She also states that although the loan sanction amount was only Rs. 4,55,000/- opposite parties no. 1 & 2 colluded with one another and released a loan amount of Rs. 15,00,000/- taking undue advantage of her signatures on the  blank forms. Therefore the following reliefs are prayed for:

1. Interest on loan for 39 months Rs. 2,90,222/-.
2. Rent payable for non handing over of premises by opposite party no. 1, for 26 months @Rs. 5000/- p.m. total Rs. 1,30,000/-.
3. Reimbursement of difference of cost received by the opposite party no. 1 from opposite party no. 2 by way of loan Rs. 10,55,000/- (loan amount Rs. 15,55,000/- Minus consideration as per sale deed Rs.5,00,000/- = Rs. 10,55,000/-.
4. Difference of built up area as per physical measurement, 100 sq. ft, amounting Rs. 1,50,000/-.
5. Cost of grill not provided, amounting to Rs. 20,000/-.
6. Damages for causing mental agony Rs. 2,00,000/-.

2.               Opposite party no. 1 filed their counter denying the allegation of the complainant and further contending that this complaint is not maintainable as the same is not filed against the firm and that the complaint is barred by limitation and further to be dismissed for non-joinder of necessary parties. He also contends that the Forum has no jurisdiction on pecuniary grounds.

                   Opposite party no. 1 further submits that he is the sole proprietor of M/s Sri Sravani Engineering Industries. After entering into development agreement with the land owners, the complainant entered into an agreement of sale for Rs. 19,00,000/- and that he received an advance of Rs. 55,000/- from the complainant. The agreement of sale for semi-finished i.e. registered with the sub-registrars’ office and the sale deed is also registered. The bank released the loan amount after physical verification and on the consent letter addressed by the complainant. In total, opposite party no. 1 received Rs. 55,000/- from the complainant and she needs to pay Rs. 2,90,000/-. The report of the private investigator is of no value. Therefore he prays to dismiss the complaint.

3.            The opposite party no. 2 filed their counter on behalf of opposite party nos. 3 to 7 denying the claim of the complainant and state that the sale deed was executed for Rs. 5,00,000/- for semi-finished flat. Moreover the complainant entered into an agreement for completion of semi-finished flat with opposite party no. 1. They deny obtaining signatures of complainant on blank forms. Allegations are made against Mr. Sheshagiri Rao (field officer – SBI). The opposite party no. 1 handed over the finished flat to the complainant and opposite party no. 1 was given the loan amount from opposite party no. 2 with the consent of the complainant. There is no cause for complaint against opposite party no. 3 to 7 and the dispute is purely between opposite party no. 1 and the complainant. Accordingly prayed to dismiss the complaint.

4.             In support of their claim both the parties let in their respective evidence and got marked as Ex.A1 to A21 by the complainant. Ex.B1 to B7 by the opposite parties 2 to 7 and opposite party no. 1 did not file any document except a copy of order in F.A. 884 of 2011 of the Hon’ble A.P. State Commission. However written arguments have been filed by all the parties as mentioned supra.

5.             Now the point for consideration is, whether the complainant is able to prove the deficiency in service and negligence against the opposite parties? If so, to what relief?

Point:

6.             It is not in dispute that the complainant agreed to purchase flat no. G10 on the ground floor built over plot no. 86 to 90 in survey nos. 802, 806 & 807, Sri Sai Sravani Nilayam, Beeramguda Hamlet of Ameenpur village, Patancheru Mandal.

         a. The dispute is regarding the completion and handing over the physical possession of the said flat within 24 months – according to the agreement of sale.

b. The dispute is also regarding the loan sanctioned to the complainant and disbursed by opposite party no. 2  to opposite party no. 1

c. The dispute is also regarding the built up area of 1000 – sq.ft including common areas.

d. whether the case is bad for non-joinder of a necessary party?

7.            Opposite party no. 1 contends that the complaint in the present form is not maintainable on the following grounds: As the same is not filed against the firm under which the entire ‘alleged’ transaction took place. And that this transaction took place in the year 2008 and hence is barred by limitation.  For non-joinder of necessary parties and on the ground of pecuniary jurisdiction.

8.           Ex. A1 is the legal notice issued by the complainant’s counsel to the counsel of opposite parties. In the notice they state that the claim is for causing deficiency of service and non-handing over of the possession and also for lack of amenities provided. They also mention the I.A. filed to appoint an advocate commissioner to survey the flat. This notice is dated 21.12.2012 and the date of the advocate commissioner’s visit is given as under – 30.12.2012 at 12:00 noon. Ex.A2 is the speed post acknowledgement. Ex.A3 is the letter addressed to Mr. Bhasker – Licensed Civil Engineer from the complainant – where, in his report and evidence is to be adduced on physical verification of the said flat. Ex. A4 is the report of the licensed civil engineer in respect of flat no. G-10 belonging to Mr. Leena Suresh Singh. In his detailed report he states that the applicant and his counsel and himself waited for the opposite parties but they did not come. As per his observations there was a lot of seepage and wiring not properly installed and sadly lacking in amenities.  And according to his survey, cost of 119.176 sq.ft was collected in excess by the builder. The engineer in his exhibit A4 – values per sft @ 1500/-. The total cost to complete the work of flat G10 is evaluated for Rs. 2,97,764/-. Photographs and CD to prove the same duly enclosed. Ex.A4 also has the layout and actual area of the said flat.

9.                Ex.A6 is the postal acknowledgement. Ex.A5 (52 photographs) are the photographs submitted by the licensed engineer, PW.2. These photographs are taken on 30.12.2012 at around 1 p.m. It is clearly visible from the photographs that there is a lot lacking and that the builder did not complete the works. The electrical work is shabby and seepage in the bathroom and ceiling in visible. Considering it is a new apartment building the quality of construction is extremely poor.

10.              Raising of the 4^th floor is stated to be an illegal addition. In the photographs the elevation is not completed as per the builders’ specifications. The complainant filed Ex. A8 – which is the electricity bill of his rental premises. The bill is dated 13.03.2013 and is for an amount of 332/- Ex. A9 is the agreement of sale for Rs. 5,00,000/-. Whereas the total cost of the flat is estimated at Rs. 12,45,000/- the builder has made a special mention of the balance due with regard to car parking, transformer, manjeera water, lift etc. This document is dated 11.06.2008 and is signed by both the parties and witnessed.

11.              An agreement for completion of semi finished flat was made and executed on 22.07.2008. In this agreement, the total sale consideration mentioned is Rs. 12,45,000/- and permission for construction is ground + 3 floors. In the agreement the said flat is to have a plinth area of 970 sq.ft.

12.           Ex.A10 is the sale deed for the flat, dated 28.07.2008 and total value of the flat is valued as Rs. 5,00,000/-. Ex. A11 is a receipt issued by opposite party no. 1 favouring the complainant for Rs. 5,000/- towards booking the flat end is dated 21.02.2008. Ex. A12 is the bank statement of accounts of the complainant from 28.07.2008 to 24.10.2008. Regular amounts in this short period have been disbursed amounting to 15,00,000/- i.e. the loan amount advanced by opposite party no.2 to opposite party no. 1 on account of the complainant’s flat. This loan amount sanctioned is in dispute. A further perusal of the loan account throws light on regular EMI payments being deducted from the complainant’s account.

13.           Ex.A13 is the authorization letter issued by opposite party no. 1 to the complainant, dated 07.04.2010, handing over the flat G10 and to pay the balance dues for the safe possession of the property. Here they also add that despite several reminders the complainant has not responded. Ex. A14 is the letter addressed by the complainant to opposite party no. 1 listing the in adequacies of the flat and categorically stating that for these lack of amenities, she is unable to take possession of the flat. Ex.A15 is the postal acknowledgement copy. Ex.A16 legal notice issued to opposite party no. 1 to 7. Ex. A17 reply to the legal notice by opposite party no. 1 counsel. Ex. A18 is the postal acknowledgement copy. Ex. A19 is the notice from the SBI to the complainant regarding her loan account and irregular repayments. This letter is dated 06.02.2012. Ex.A20 is the reply to Ex. A19 and here in the complainant denies giving instructions to release Rs. 10,00,000/- to the vendor (opposite party no. 1). And despite all this the flat is not in a finished condition.

           Ex.A21 is reply notice by complainant to opposite parties counsel and attached to this is the floor plan and front elevation of the apartment building as given by the builder in their brochure.

14.         As per Exs. A4 & A5 the report and photographs submitted by the licensed engineer it is obvious that the said flat is not properly finished and the seepage is extensive.  Herein we rely on a judgment given by Hon’ble National Commission – in “In Raghava Estates limited vs Vishnupuram Colony welfare association and another”, IV (2012) CPJ 36 (NC). For using sub-standard material and modern facilities not being provided, the builder is held responsible for deficiency of service.

                  As per Consumer Protection Act, 1986 – Sec 24-A, 21(b) – where there is immovable property and amenities promised by opposite parties were not provided, it can be construed as continuing cause of action and it cannot be said to be barred by time.

15.              In their defense opposite parties filed Ex. B1 – agreement of sale. Ex. B2 is agreement for completion of semi finished flat. Ex. B3 is Sale deed for flat. Ex.B4 is notice. Ex.B5 is reply notice. All these documents are also filed by the complainant. Ex.B6 is the letter addressed by the complainant’s husband to opposite party no. 2. This letter states that the complainant availed a loan in the said bank to purchase a flat from Sri Sravani Engineering Industries and he availed a loan of Rs. 15,00,000/-. Also to deduct monthly EMI for the said loan amount from his salary account from December 2008 onwards.

16.        On the basis of this exhibit, the complainant definitely availed a loan to the tune of Rs. 15,00,000/- and constantly denying any knowledge and being irrational in his denial is not acceptable to the Forum. Ex. A12 the statement of accounts filed by the complainant show regular EMI deductions, why did the complainant accept these deductions by keeping quiet for quite long period if she truly did not avail the loan facility.

17.              The opposite party no. 1/builder has filed copy of the order of Hon’ble A.P. State Commission, Hyderabad in F.A. 884/2011 between “M. Nagoor Rao AND Sanjay Vithalrao Bhosale & others”, against CC. 40/2010 DCF, Medak at Sangareddy, which is not relevant to this case.

18.              The opposite parties in their defense state that they were not present during the survey done by the licensed engineer. That cannot be viewed favourably, as sufficient notice was given to them and they chose to be absent.

19.              As per his report the built up area + 20% of common area comes to 880.824 sft. Therefore he states that the builder collected an excess amount of Rs. 1,78,764/- for 119.176 sq.ft. His total amount of compensation due for lack of amenities and difference in plinth area comes to Rs. 2,97,764/-.

                  The total cost of the flat as per Ex. A9 is Rs. 5,00,000/- + Rs.12,45,000/-. These agreements are signed by both the parties. The fact that the flat was not in a fit condition to be occupied is obvious and the opposite party no. 1 is definitely liable for not fulfilling his responsibility.

                   From the above observation and material on record we are of the opinion that the services of opposite party no. 1 towards the complainant are definitely lacking and as a result the complainant faced great hardship. She was also forced to stay in a rented house by paying Rs. 5,000/- towards monthly rent to the land lord, PW.3. He has also filed his affidavit to prove it. Ex.A8 also supports this aspect. No doubt the complainant has claimed Rs. 1,30,000/- towards rent for 26 months but as per record he is entitled for the rent of 58 months and the same has to be given by opposite party no. 1 and we direct accordingly to meet the ends of justice.

                     At the outset it is to be seen that the opposite party no. 1 is sole proprietor of Sri Sravani Engineering Industries and carrying on construction activities in the field of real estates. The said business concern is not a partnership firm. Therefore the learned counsel for the complainant has, in our opinion, rightly contended that the sole proprietor was made as a party to the case. Therefore the question of impleading partners of the firm does not arise and as such we hold that the case is not bad for non-joinder of a party.

20.              Points a, c & d are answered in favour of the complainant, but point b (regarding the sanction of the loan) is answered against the complainant.

21.              In the result, the complaint is partly allowed and the opposite party no. 1 is directed to pay the complainant the following amounts along with interest @ 9 % p.a. till the payment is made:

1. To pay an amount of Rs. 2,90,000/- on account of rental accommodation (for 58 months @ Rs. 5,000)
2. To pay loss of interest on bank loan (on EMIs) for the period March 2009 to October 2011 (32 months only) to be calculated by opposite party no. 2/ bank.
3. To pay amount of Rs. 1,78,764/- for shortfall of the built up area of 119.176 sft of the flat.
4. To pay Rs. 56,000/- on account of deficiencies in amenities/ facilities in the flat.
5. To pay a compensation of Rs. 50,000/- for mental agony and hardship caused with costs as Rs. 10,000/-.
6. The opposite party no. 2 / bank is directed to start collecting the pending EMIs from September 2013 onwards with a waiver of interest and penalty during the disputed period i.e. from October 2011 to August 2013. Time for compliance is one month only.

            Dictated to Stenographer, after transcription and correction the order is pronounced by us in the open court today on this the 17^th day of September, 2013.

                       Sd/-                                                Sd/-

          MALE MEMBER                          LADY MEMBER                

                  Dissenting view per Se Sri Patil Vithal Rao, President

                     While agreeing with the view expressed by the learned Members on all aspects, with due respect I disagree with the view to the extent of quantum of rent granted by them. Because, in my view, this Forum cannot grant the quantum of rent more than the claim of the complainant. Therefore when he claimed only Rs. 1,30,000/-, he is not entitled for more than the said amount. Accordingly this part of relief is hereby restricted to Rs. 1,30,000/- only. 

                                                                                         Sd/-

                                                                                PRESIDENT

Copy to

1. The Complainant
2. The Opp.parties
3. Spare copy