BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
C.C. 34/2009
Between:
1) Palanki Nageswara Reddy
S/o. Pitchi Reddy, Age: 71 years
Retd. Engineer, R/o. Flat No. 201
Adhithi Arcades,
D.No. 10-3-811, Vijayanagar Colony
Hyderabad .
2. Palanki Padmakar Reddy
S/o. Palanki Nageswara Reddy
Age: 30 years, Pvt. Service
R/o. Flat No. 201
Adhithi Arcades,
D.No. 10-3-811, Vijayanagar Colony
Hyderabad .
3. Ms. Palanki Aruna Reddy
D/o. P. Nageswara Reddy
Age: 26 years, Pvt. Service
H.No. 67/9, Kamala Bhavan
Co-operative Housing Society
Ideal Colony, Kothrud
Pune-411 038.
4. Ms. Palanki Sandhya Reddy
D/o. Palanki Nageswara Reddy
Age: 25 years, Pvt. Service
H.No. 67/9, Kamala Bhavan
Co-operative Housing Society
Ideal Colony, Kothrud
Pune-411 038.
Complainants 2 to 4 are
Rep. by GPA hodler
P. Nageswara Reddy,
(Complainant No.1) *** Complainants
And
1) M/s. Adhiti Constructions
Flat No. 502, Adhiti Arcades
D.No. 10-3-811, Vijayanagar Colony
Hyderabad.
Rep. by its Managing Partner
G. Raghava Reddy
2) G. Raghava Reddy
Managing Partner
M/s. Adhiti Constructions
Flat No. 502, Adhiti Arcades
D.No. 10-3-811, Vijayanagar Colony
Hyderabad. *** Opposite Parties
Counsel for the Complainant: M/s. V. Gourisanakara Rao
Counsel for the OPs: Smt. K Swarna Seshu.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
TUESDAY, THIS THE TENTH DAY OF AUGUST TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
***
1) This is a complaint filed under the Consumer Protection Act to rectify the defects in the flats allotted to the complainants, carry out pending common works, reconstruct compound wall, and reimburse certain amounts, compensation towards rental loss, delay in handing over possession and other reliefs.
2) The case of the complainants in brief is that they are the absolute owners of an independent house bearing No. 10-3-811 situated at Vijayanagar Colony, Hyderabad. Op1 is a partnership firm engaged in housing construction activity for which Op2 is the managing partner. The said house was given for development into a multi-storeyed residential complex. Accordingly they entered into a development agreement through General Power of Attorney (GPA) on 1.6.2005, wherein they were entitled to 50% of the built up area. Ops had to get the approval from the municipal authorities at their cost. They agreed to complete construction and allot four flats to them within 15 months from the date of permission granted by MCH. As per clause-6 for any delay in handing over possession of flats beyond 15 months they would be entitled to a compensation of Rs. 25,000/- per month. Later, on 2.2.2006 they entered into an MOU for re-allotment of flat Nos. 201, 202, 401, 402 and 501. Though permission was obtained on 14.6.2005 from MCH, Ops did not complete construction or deliver possession of flats by 13.9.2006. They demanded completion of works in writing together with damages and compensation for which no reply was given. On that they have taken possession of semi-finished flats in last week of November, 2007. They got the value of all the pending works estimated by M/s. S.E. Consultants, Architects & Engineers and they estimated the value of pending works of flat No. 201 at Rs. 3,29,104/-, flat No. 202 at Rs. 2,89,975/-, flat No. 401 at Rs. 2,90,446/-, flat No. 402 at Rs. 2,88,285 and flat No.501 at Rs. 4,04,281/-.. The engineers also estimated the value of common works to be provided, replacement, rectification etc at Rs. 39, 47,280/-. The cost of left over defects and missed claims for flat No.501 were estimated at Rs. 3.02.700/-. Flat No. 501 is not yet completed and the other works in other flats were not completed. In order to settle the matter amicably they approached the Hon’ble High Court of A.P. by way of arbitration application No. 72/2008. It was disposed of by the High Court on 16.2.2009, on representation that the arbitrator was willing to resolve the dispute. They addressed a letter on 6.4.2009 to the named arbitrator. As there was no response from him they filed the complaint claiming the following reliefs.
To rectify the defects of flat No. 201, 202, 401, 402 and 501 in Adhithi archades or in the alternative to pay compensation as per the Civil Engineer estimation.
To carry out the pending common works or in the alternative to pay the compensation as per the civil engineer estimation
To reimburse Rs. 3, 03,000/- along with interest @ 18% p.a., from 1.3.2008 till the date of realization.
To pay compensation towards rental loss of Rs. 4,37,500/- along with interest @ 18% p.a., for five flats for the period from 14.9.2006 to 28.2.2008.
To pay compensation @ Rs. 5,000/- p.m. from 1.3.2008 till the date of handing over the possession of flat No. 501.
To pay compensation/damages of Rs. 2 lakhs for selling away flat No. 301.
To compensate the damages of Rs. 2.50 lakhs for the defective, improper construction of walls, laying out of pipes etc
To reimburse Rs. 24,000/- towards building regularization fee of flat No. 201, 202, 401 and 402 and Rs. 91,800/- towards flat No. 501 and drawing charges of Rs. 5,000/- per flat.
To reconstruct the compound wall
To pay compensation of Rs. 5 lakhs
To pay Rs. 25,000/- towards estimation charges
To pay costs of Rs. 25,000/- to each of the complainants.
3) The opposite parties resisted the case denying each and every allegation made in the complaint. They alleged that the complaint was not maintainable and liable to be dismissed in the light of orders of the Hon’ble High Court in arbitration application No. 72/2008. The complainants are estopped from filing the complaint. When the complainants asked them to develop the property they agreed to develop the property by sharing the built up area. They paid Rs. 9 lakhs by way of cash and Rs. 3 lakhs by way of promissory notes as non-refundable advance on 15.4.2005 and on the same day necessary documents for construction of G + 3 floors were signed. The development agreement was signed on 1.6.2005 at Pune and registered on 20.8.2005 at Hyderabad. The construction was completed in all respects in accordance with the agreement without any delay. In fact clause-6 stipulates that if there were any defects in the construction or other works under the development scheme, it has to be informed within 12 months of the delivery. The delivery having been made, the period has been expired by 1.1.2008 they were stopped from filing the present complaint. This is also evidenced by minutes of meeting held on 1.4.2008. M.O.U dt. 2.2.2006 was signed as per understanding only and there was no re-allotment of flats. The complainant No. 1 has filed interpolated copy of MOU by inserting two sentences and names of witnesses in MOU. The complainant has monitored the work and changed the internal plan of his flats which led to demolition and thus burdened them. MCH permission was granted on 14.6.2005, copy of which he received it on 22.6.2005. All the slabs except the top slab were completed by November, 2005. He had to wait for 10 months for want of wood which the complainants agreed to supply free of cost. However he supplied the same in April, 2006 on receipt of payment. They could not start brick work as the windows and door frames were not made ready for want of wood. There was escalation of material rates by 75% to 80%. They handed over the four flats after completing them in January, 2007. Flat No. 501 was not handed over as he did not settle his 20% share of the amount nor returned the promissory notes. The allegation that the complainant has spent about Rs. 3,03,000/- to complete the flats into habitable condition are all false. They completed all the common works. They were not aware of estimates of the architects or engineers. They were all fabricated for purpose of this case. It was a unilateral estimate. In fact in the development agreement there was a mention that the architect must be mutually agreed person. They cannot make imaginary estimates through their own men. In fact they agreed that after selling flat No. 501 the money has to be shared in 80 (owner) : 20 (builder) ratio. Later they stated that they wanted to retain flat No. 501 and pay difference of amount of 20% of the cost. Now they changed the version by filing one case or the other. They had completed 90% of the work in flat No. 501. As he was holding 20% of cost of flat he requested to return the promissory notes. Instead of approaching the arbitrator they are filing cases before various courts causing mental agony and harassment to him. In fact he was entitled to compensation. Flat No. 301 was allotted to him and that was sold by him and as per MOU dt. 2.2.2006. The complainant was not entitled to any compensation. By virtue of clause – 4 of the development agreement he was entitled to cost of market value for 2,722 sft which he provided to the complainant as per the agreement. He was not required to reconstruct the compound wall nor liable to pay the amounts claimed in this regard. The allegations that there was improper construction of walls, laying of pipes etc. are all false. He was not liable to pay any compensation. He need not pay any compensation for the claims made by the complainant, and therefore prayed for dismissal of the complaint with costs.
4) The complainants in proof of their case filed the affidavit evidence of complainant No. 1 and got Exs. A1 to A55 marked while the Opposite Parties filed the affidavit evidence of its Managing Partner Sri G. Rahava Reddy and got Exs. B1 to B19 marked.
5) The points that arise for consideration are :
Whether the complaint is maintainable by virtue of order Dt. 16.2.2009 of Hon’ble High Court of A.P. in arbitration application No. 72/2008?
Whether the complainants were entitled to the refliefs claimed by them in the complaint? If so to what relief?
6) Before going into the deviations/defects/deficiencies pointed out by the complainants, we may state that the complainants had filed CCIA No. 477/2010 for appointment of a qualified engineer to inspect and find out the defects or deficiencies pointed out by them.
7) Learned counsel for the respondent opposed the said application on the ground that this Commission was not clothed with the power to appoint a commissioner under the Consumer Protection Act and in support of his contention he relied a decision of High Court of A.P. reported in AIR 2005 A.P page 118 and also a decision of Calcutta High Court reported in AIR 1997 Calcutta-1.
8) We may state at this juncture that the complainants could have as well got the apartments inspected and verified through a qualified engineer or expert and filed his report along with his affidavit which would enable the opposite party either to admit or controvert the evidence by opposing the relevant evidence.
9) The proceedings under the Consumer Protection Act being summary in nature, the complainants ought to have resorted to the said procedure instead of seeking for appointment of a commissioner contrary to the decision in this regard.
10) When the complainants alleged various defects, deficiencies/deviations etc. in construction, equally the opposite party filed affidavit denying the same, it is oath against oath. There is no reason why the complainants did not file affidavit evidence of other flat owners in order to prove these defects or deficiencies pointed out by them in their complaint.
In the light of above, decisions, we are unable to appoint a commissioner, and consequently dismiss the petition.
11) Before adverting to the merits of the matter, it is an undisputed fact that the opposite party is a builder while the complainants are owners of the building/site which they have given for construction of residential flats to the opposite party evidenced under development agreement & GPA Ex. A1 Dt
1.6.2005 wherein they agreed to share 50% :50% built up area. Clause 16 & 17 of the development agreement stipulate that in case of any dispute it shall be referred to an arbitrator. They named Sri M. V. Durga Prasad as arbitrator for resolving the dispute. Clause-16 & 17 read as follows :
“16. In case of any dispute or difference arising out of or in pursuance of or in respect of this agreement, the same shall be referred to an arbitrator in accordance with the terms of this agreement and the provisions of the Arbitration and Conciliation Act, 1996, in other respects. The arbitral proceedings shall be subject to the jurisdiction of the Courts of Hyderabad District only.
17. The owners and the developers have mutually agreed that Sri M. V. Durga Prasad, Advocate, Plot No. 332-B, Road No. 82, Phase-III, Jubilee Hills, Hyderabad shall be the sole Arbitrator to adjudicate any disputes arising out of any transaction in pursuance of this agreement. The remuneration for the Arbitrator shall not be more than 1% of the value of such dispute or Rs. 25,000/- in case it is not capable of being valued in terms of money. The sole Arbitrator shall initiate proceedings within one month of reference and conclude the proceedings within three months thereafter, in accordance with the provisions of the Arbitration and Conciliation Act, 1996.”
12) Recoursing to the said clauses the complainants filed Arbitration Application No. 72/2008 Ex. B3 in High Court of A.P seeking “to appoint an arbitrator to adjudicate the claims and disputes between the complainants and the opposite parties and for costs.” Opposite Parties filed counter. By order Ex. B4 dt. 16.2.2009 the High Court passed the following order:
“This Arbitration Application has been taken out seeking intervention under section 11(2) & (6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator for resolution of the disputes between the parties.
It is represented by the learned counsel on either side that the learned Arbitrator named in the agreement is willing to arbitrate the disputes between the parties.
In this view of the matter, no further orders needed to be passed in this Arbitration Application. Hence, without expressing any opinion on merits, the Arbitration Application is dismissed. No costs.”
The complainants now allege that they have issued notice on 6.4.2009 to the arbitrator but there was no response from him. As such they filed this complaint.
13) We may state that if the arbitrator did not respond to the notice he could have approached the High Court for appointing of fresh arbitrator or informing hat he would pursue the matter under the Consumer Protection Act. This is necessitated in view of the fact that he had already clutched the arbitration proceedings.
14) In Basu on Law of Arbitration & Conciliation revised by P. K. Majumdar, 10th edition published by Orient Publishing Company at page 187 referring to a decision in Shiam Sundar Lal Vs. Bhairon Sigh, 3 ALJ 185, it was held that only under the Act the court can appoint a new arbitrator in place of a selected arbitrator. But the court has inherent jurisdiction and it can in the exercise of its inherent powers revoke a reference when it would be futile to proceed with the reference which is grossly irregular and defective.
In the absence of any provision requiring a written reference to be made to the arbitrators, who are appointed either by naming them in the arbitration agreement or itself subsequently, it cannot be argued that there is no appointment of the arbitrators at all because a written reference has not be made to the arbitrators, and there is, therefore no question of granting leave to revoke their authority.”
15) Learned counsel for the complainants vehemently contended by referring to a decision of Supreme Court in Secretary, Thirumurgan Co-operative Agricultural Credit Society Vs. M. Lalitha reported in I (2004) CPJ 1 (SC) that there was no bar for the complainants to file a complaint under the Consumer Protection Act despite a clause in the agreement to refer the dispute to an arbitrator.
16) The Hon’ble Supreme Court time and again up-held the jurisdiction of consumer fora to resolve the dispute despite a provision entitling the parties to refer the matter to arbitration. Those are the cases where the parties, without referring to arbitration clause, filed the complaints before the consumer fora under the Consumer Protection Act. It was held that there is jurisdiction to the consumer fora to resolve the dispute despite arbitration clause by virtue of Section 3 of the Consumer Protection Act. They did not consider the cases where the parties had already clutched the jurisdiction of Arbitration and Conciliation Act, 1996.
17) The question would be whether the parties could invoke simultaneous proceedings under two different enactments. It is altogether different if the complainants did not clutch clause 16 & 17 of the agreement and straight away filed a case under the Consumer Protection Act. In fact they invoked the said clauses and filed Arbitration Application before the High Court the order of which we have already excerpted. Instead of pursuing the same, they turned round and filed the complaint.
18) At the cost of repetition, we may state that they ought to have filed a petition before the High Court stating that the order is no longer be implementable in the light of arbitrator declining to take up the matter. He could have sought either for revocation or review of order by approaching the High Court. In fact when they issued a notice to arbitrator they did not mark a copy to the opposite party. The complainants could have explained the circumstances under which they did not want the named arbitrator to arbitrate and sought for directions from the High Court. They cannot ignore the orders of High Court, determine jurisdiction by themselves, and file complaint before this Commission under the Consumer Protection Act. This is impermissible under law. Therefore, we are of the opinion that this Commission lacks jurisdiction to try the case.
19) In the result the complaint is dismissed for want of jurisdiction. No costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
APPENDIX OF EVIDENCE
WITNESSES EXAMINED FOR
COMPLAINANTS: OPPOSITE PARTIES
None None.
Documents marked for complainant:
Ex A-1 Development Agreement cum General power of Attorney dt : 1.6.2005
Ex A -2 Memorandum of undertaking
Ex A -3 Notice dt : 27.6.2007
Ex A-4 Postal acknowledgement
Ex A-5 Check list and Acknowledgement issued by GHMC dt 28.03.2008
including D.D.No.806806 dt : 28.3.2008 for Rs.12,000/-
Ex A-6 Check list and Acknowledgement issued by GHMC dt 28.03.2008
including D.D.No.806805 dt : 28.3.2008 for Rs.12,000/-
Ex A-7 Check list and Acknowledgement issued by GHMC dt 28.03.2008
including D.D.No.806807 dt : 28.3.2008 for Rs.12,000/-
Ex A-8 Check list and Acknowledgement issued by GHMC dt 28.03.2008
including D.D.No.806808 dt : 28.3.2008 for Rs.12,000/-
Ex A-9 Check list and Acknowledgement issued by GHMC dt 28.03.2008
including D.D.No.806809 dt : 28.3.2008 for Rs.12,000/-
Ex A-10 Estimation of Flat No.201 dt : 6.12.2007
Ex A-11 Estimation of Flat No.202 dt : 6.12.2007
Ex A-12 Estimation of Flat No.401 dt : 6.12.2007
Ex A-13 Estimation of Flat No.402 dt : 6.12.2007
Ex A-14 Estimation of Flat No.501 dt : 6.12.2007
Ex A-15 Estimation damages /compensation to be claimed from the builder .
Ex A-16 Letter addressed to S.E consultants Artitects & Engineers Abstract
Estimation dt : 6.12.2007 Flat Nos.201, 202, 401, 402 Building for the defects & lapses.
Ex A-17 Defects and missed claims fund after the estimated claims dt :6.12.2007 for Flat Nos.201, 202, 401, 402 & 501 dt : 3.8.2008
Ex A-18 Receipt dt :6.12.2007
Ex A-19 KSN Hardware House Bill dt : 21.-9.-2009
Ex A-20 Bills dt :23-10-2002, 08-01-2009, 29-1-2008 m 31-01-2009, 31-01-2009
Ex A-21 Bill dt : 21-01-2008 & Bill dated : 3.3.2008
Ex A-22 Bill dt : 7.12.2007
Ex A-23 Electrical Repairs dt : 20-12-2007 and Bill dt : 10-2-2008
Ex A-24 Painting Receipt dt : 1.2.2008
Ex A-25 Subhani Lorry Supply office bill dt :16.10.2007 and 16.5.2007
Ex A-26 C.T.Dept. Bill dt ?: 16.5.2007
Ex A-27 Form No.2 dt : 10.4.2007
Ex A-28 Bills dt : 6.12.2007, 11.12.2007
Ex A-29 Legal Notice dt : 15.5.2009
EX A-30 Postal receipts and acknowledgments
Ex A-31 Reply Legal Notice dt : 12.6.2009
Ex A-32 GPA
Ex.A-33 Bill dt 14-12-2007,Bill dt:14-12-2007, again Bill dt:19-12-2007 and Bill dt :24-12-2007 for the replacement of 4 common WC-posts and connected Tiles fixing etc.
Ex-A-34 Bill dt:17-04-2009 for wire glass fixing with material to close the bath room Type ventilators for preventing gushing of water in the master bed rooms of Flat Nos.202 & 402.
Ex A-3 5 Allotment of Flat No.1 to 8 to the Builder and the owner which is in hand of OP No.2 after executing Development Agreement
Ex A-36 The 5th time changed tipical floor plan dt : 2-11-2005 (Drawing No.5)
Ex A-37 Unregistered Agreement of Sale dt : 5.10.2005.
Ex A-38 Legal Notice dt : 7-12-2005.
Ex A-39 Electrical Power Sanctioning Letter dt :6-2-2007
Ex A-40 Electrical Bills dt : 11-6-2007 for Flat Nos.201,202 & 401
Ex A-41 Electrical Bills dt : 8-1-2008 of Flat No.402 & 6-4-2008 for Flat No.501
Ex A-42 Receipts for payment of Electrical bills dt : 24-12-2007 for Flat Nos 201,202 & 401
Ex A-43 Payment of 2nd Inst. To the GHMC dt : 21-8-2009 along with D.D.No.634152 dt : 12-6-2009 for Rs.12,000/- for Flat No.201
Ex A-44 Payment of 2nd Inst. To the GHMC dt : 21-8-2009 along with D.D.No.634153 dt : 12-6-2009 for Rs.12,000/- for Flat No.202
Ex A-45 Payment of 2nd Inst. To the GHMC dt : 21-8-2009 along with
D.D.No.634154 dt :12-6-2009 for Rs.12,000/- for Flat No.401.
Ex A-46 Payment of 2nd Inst. To the GHMC dt : 21-8-2009 along with DD No. 634155 dt : 12-06-2009 for Rs.12,000/- for Flat No.402.
Ex A-47 Payment of 2nd Inst. To the GHMC dt : 21-8-2009 along with D.D.No.634156 dt : 12-06-2009 for Rs.45,900/- for Flat No.501
Ex A-48 Regd. Letter dt : 06-4-2009 along with postal acknowledgmemt
Ex A-49 Deccan Chronicle paper dt :Ist December, 2007
Ex A-50 5 Photographs taken on 01-12-2007 for Flat No. 201
Ex A-51 3 Photographs taken on 01-12-2007 for Flat No. 202
Ex A-52 11 Photographs taken on 01-12-2007 for Flat No. 401
Ex A-53 6 Photographs taken on 01-12-2007 for Flat No. 402
Ex A-54 8 Photographs taken on 01-12-2007 for Flat No. 501
Ex A-55 Copy of Account Book
DOCUMENTS MARKED FOR OPPOSITE PARTIES :
Ex B-1 Minutes of Metting held on 01-4-2008
Ex B-2 Order of Hon’ble High Court in Arbitration Application 72 of 2008
Ex B-3 Copy of Application filed in Aribitration Application 72 of 2008 dt : 16-02-2008
Ex B-4 Counter filed by the OP in 72 of 2008
ExB-5 Reply to the counter filed by the couple in 72 of 2008
Ex B-6 FIR 23-06-2008
Ex B-7 Complaint give to the SHO Humayunnagar Police Station dt : 24-01-2009
Ex B-8 complaint given to Sub-Reg Golconda office by the complaint
Ex B-9 Plans given by complaint 01-02-2006
Ex B-10 Plans given by complaint 07-02-2006
Ex B-11 Plans given by complaint
Ex B-12 Receipt dt : 15-02-2006 given by the complaint
Ex B-13 Copy of the document dt : 18-12-2007 created and filed by complainant No.1
Ex B-14 MOU of the OP dt : 2-2-2006
EX B-15 Reply dated : 11.12.2007 to the legal notice dt : 7.12.2005
EX B-16 Extract of Maintenance Book for the month of February and March 2008
EX B-17 Notice dt : 24.3.2008 issued by the complainant No.1
Ex B-18 Letter addressed by complainant to Arbitrator dt : 27.6.2007
Ex B -19 Letter dt : 14.7.2007 written by complainant No.1
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 10. 08. 2010
*pnr
