BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSIONAT HYDERABAD.
C. C. 37/2009
Between:
1. Anki Reddy Seelam
S/o. Anki Reddy, Age: 37 years
2. Smt. Bharamara Seelam
W/o. Anki Reddy Seelam
Age: 31 years,
Both R/o. Flat No. 203,
Sri Enclave, White Fields
Kondapur, Hyderabad. *** Complainants
And
1. Aditya Construction Company India P. Ltd.
Chandralok Complex, Plot NO. A/12
Road No. 2, Filmnagar,
Apollo Hospital Road, Jubilee Hills
Hyderabad. Rep. by its Chairman
Chandrasekhar
2. Chandrasekhar, Chairman
Aditya Construction Company India P. Ltd.
3. Rajesh, Managing Director
Aditya Construction Company India P. Ltd.
4. Satyanrayana, Director
Aditya Construction Company India P. Ltd.
5. Ravi, Director
Aditya Construction Company India P. Ltd.
6. Sridhar Bothula,
Senior Manager (Marketing)
Aditya Construction Company India P. Ltd.
7. Sanjya, General Manager
Aditya Construction Company India P. Ltd.
R2 to R7 are C/o. Aditya Construction
Company India P. Ltd., Chandralok Complex,
Plot NO. A/12, Road No. 2, Filmnagar,
Apollo Hospital Road, Jubilee Hills
Hyderabad.
8. Sub Registrar/Registrar
Registration Office, Moosapet
Ranga Reddy Dist. Hyderabad. *** Opposite Parties
Counsel for the Complainants: M/s. M. Haribabu.
Counsel for the O.Ps: M/s. J. Lokesh Reddy.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
THURSDAY, THIS THE FIRST DAY OF JULY TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
***
1) This is a complaint filed against a builder a construction company for refund of Rs. 28 lakhs paid as advance together with compensation and costs.
2) The case of the complainants in brief is that the opposite party a construction company floated a venture under the name and style of ‘Windsor’ wherein they agreed to sell the flat No. 402 for Rs. 95 lakhs. Accordingly they paid in all Rs. 28 lakhs. As per the oral understanding they had to pay 30% sale consideration towards margin money and the balance by way of loan on the documents furnished by the opposite party. Despite State Bank of India had sanctioned the loan they did not provide requisite documents. They did not issue payment schedule in order to execute agreement of sale in their favour, contrarily they are threatening to cancel the allotment of flat. In fact they were forced to give a letter to the bank to release the entire amount on the ground that they would complete all other formalities without completing the work for which they did not agree. The work of the building was not completed even up to 65% after 1-1/2 years. There is no hope that they would complete it in near future. In those circumstances they sought for refund of the amount. However, they threatened to forfeit an amount of Rs. 5 lakhs for cancellation of the agreement. Vexed with their attitude they got issued a legal notice. In fact for payment of advance they have cancelled the fixed deposits and other deposits on loss of interest. They also borrowed amounts from relatives. All through they suffered mental agony and therefore they sought for refund of Rs. 28 lakhs paid towards advance sale consideration with interest @ 45% p.a., together with compensation of Rs. 15 lakhs towards mental agony and Rs. 30,000/- towards costs.
3) Opposite parties 1 to 4 resisted the case. While denying each and every allegation made in the complaint they contended that Op1 is a registered company engaged in construction of multi-storey buildings and commercial complexes. It had floated a project under the name and style of “ Windsor” wherein the complainants had agreed to purchase flat No. 402 for Rs. 98,26,000/- payable by 26. 11. 2007. A letter of allotment was issued which the complainants had acknowledged. They had paid in all Rs. 28 lakhs only that too in instalments. In fact they had to pay the entire sale consideration by May, 2008. They paid less than 28.5% of the flat cost. They had in fact completed 95% of the construction till date. The complainants had committed default in payment without any valid reason. They were ready to register the flat in favour of the complainants provided they pay the balance of sale consideration. The project was approved by the banks after satisfying with all the documents. They did not promise to provide 70% bank loan. It is for the individual purchasers to get the loan sanctioned by the bank on the basis of their eligibility. Though the bank has asked to provide requisite documents to release the loan, the complainants did not do so. Therefore the bank cancelled the loan sanctioned to the complainants. The complainant has submitted only an application to State Bank of India without submitting any documents. The banks never asked the complainants to submit the property documents as they were already having those documents. No bank would release the loan without verifying the progress of construction. Without making payment and to get over the payment the complainants filed the complaint for refund of the amount. In fact they are ready to hand over the flat within three months from the date of payment of balance of sale consideration. As per the valuation it exceeds Rs. 1 crore and therefore this Commission had no pecuniary jurisdiction. Therefore it prayed for dismissal of the complaint with costs.
4) The complainants in proof of their case filed affidavit evidence and got Exs. A1 to A22 marked while the opposite parties filed the affidavit evidence of its Executive Director and got Exs. B1 to B3.
5) The points that arise for consideration are :
i) Whether the complainants are entitled for refund of amount with interest if any?
ii) If so, to what amount?
iii) To what relief?
6) It is an undisputed fact that the opposite parties agreed to sell flat No. 402 in their venture by name ‘Windsor’ for Rs. 98,26,000/-. As against the said amount, the complainants altogether paid Rs. 28 lakhs. In the first instance an amount of Rs. 5 lakhs was paid on 28.11.2007, Rs. 3 lakhs on 11.1.2008, Rs. 10 lakhs on 17.3.2008 vide Ex. A1 and Rs. 10 lakhs vide Ex. A4 dt. 19.5.2008. No formal agreement was executed in between the parties stipulating the terms and conditions. While the opposite parties allege that it had issued letter of allotment besides payment schedule which the complainants had acknowledged it did not file in proof of it. The complainants in turn filed Ex. A2 issued by Op1 acknowledging receipt of Rs. 5 lakhs for booking of flat No. 402. Later when the amounts were paid by way of cheques the very opposite party endorsed on Ex. A2 as to the receipt of cheques. The opposite parties did not file the so called payment schedule wherein the complainant said to have acknowledged. In fact this is a crucial document which the opposite parties had suppressed. Had it been filed, it could have been known as to the payment schedule and whether in fact the complainant had committed any default. It had filed Ex. B1 payment schedule to show the percentage of amount to be paid on completion of each floor. The opposite parties did not file the dates on which these constructions were made and the amounts that the complainants had to pay on prorate basis. On 28. 12. 2009 after filing of the complaint the opposite parties seems to have got the valuation report from Navanirman Associates which had certified that after completion the value of the building would be Rs. 97,72,000/- vide report Ex. B2. It had noted at coloumn 23 © against stage of work, it was noted “ 90% work is completed in flat and 90% work is completed’ which would come to Rs. 86,79,800/- as against Rs. 97,72,000/-. For the last coloumn whether its occupied ? It is mentioned it was “Under Construction”. Even up till this date, the flat was not in fact ready. The opposite parties could have got it estimated by the time of filing of the complaint in order to show that major portion of the flat was completed by the time of complaint. When estimate was made, no notice was issued to the complainants in order to verify the credentials of the report.
7) When the complainants had approached the IDBI bank for loan, the bank by its letter Ex. A6 dt. 10. 12. 2008 directed that the disbursement would be subject to ‘satisfactory legal and technical clearance of the property’. Immediately the complainants approached State Bank of India which in turn by its letter Ex. A9 dt. 23.12.2008 agreed to sanction loan of Rs. 142 lakhs. However, sanction was subject to following :
- Verification of original documents in respect of proof of identity/residence/income and property.
- Legal and technical clearances and the rules of the bank governing home loans, as applicable from time to time.
- Creation of valid equitable mortgage over the land/house/flat.
Basing on the said letter the complainants requested the opposite parties to submit “1) Agreement of sale and the work order 2) the documents requested by the SBI which you have understood based on the discussions you had with bank officer, that will help to release the funds with an immediate effect.” Evidently the same was received by the opposite parties on 24.2.2009 vide acknowledgement under Ex. A12. Despite several notices Exs. A14, A16 and finally under Ex. A17 legal notice they did not submit those documents to the complainant or to the bank. Had the documents been furnished to the bank, the entire amount could have been paid in one go.
8) Opposite party though alleged that it had got approval from the statutory authorities and the banks including IDBI bank, State Bank of India and ICICI bank therefore there is no need to submit the property documents prescribed to those banks it did not file any documents evidencing approval of their project. However, by way of solace it stated “if the complainants receives any request from the bank to submit the property documents the opposite party is ready to submit the documents once again to the bank.” The opposite party was not even responded though complainant was requesting for submitting documents.
9) It is not the case of the opposite parties even that the entire project is completed and is ready to hand over possession. The venture has to be completed by May, 2008, and the agreed amount to be paid before the said date. This it did not fulfil. The fact is that without furnishing the requirements of the complainant, when they have been requesting the builder to furnish whatever the banks had directed them to submit which we have earlier mentioned, they did not do so, we reiterated that representation that these banks have approved the venture were not evidenced by any documents though the opposite parties were asserting about it.
10) The banks could not have asked the complainants to submit the documents which they sought under Ex. A22 if really the very project has been approved by the banks. At any rate there could not have been any difficulty for the opposite parties to furnish those documents in order to enable the complainants to obtain the loan and pay the amount. The opposite parties cannot unilaterally forfeit the amount paid by the complainants and unilaterally cancel the allotment without fulfilling corresponding obligation on it.
Undoubtedly it could be equally stated that the complainant did not insist for written agreement to be executed mentioning the stipulations in order to find out whether it had stuck to its schedule. At the cost of repetition, we may state that the opposite parties did not execute agreement of sale despite the fact that it is a company doing construction business. It cannot be oral. Had there been an execution of agreement mentioning the clause of forfeiture it could forfeit whatever amounts it had received. Non-execution of agreement spelling out the terms and conditions would itself constitutes deficiency in service and more so when it has been in construction business. It should not have been by way of correspondence. The stipulations cannot be spelled out from the letters, even then they are not clear. By looking into the photographs or from the report filed by Navanirman Associates it cannot be said that it had adhered to the stipulations.
11) In the light of above facts, we are of the opinion that the complainant is entitled for refund of advance amount paid by them with interest. In view of latches equally on the part of complainants, we do not intend to award any compensation. However, as the amounts must have been utilized by the opposite parties for its construction business, the complainant cannot be denied interest on these amounts.
12) In the result the complaint is allowed in part directing the opposite parties to refund Rs. 28 lakhs together with interest @ 6% p.a., from the date of complaint viz., 30.06. 2009 till the date of realization together with costs of Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
APPENDIX OF EVIDENCE
WITNESSES EXAMINED FOR
COMPLAINANTS: OPPOSITE PARTIES
None None.
Documents marked for complainant:
Ex A-1 Brochure issued by Ops
Ex A-2 Letter issued by OP to Complainant acknowledging payment of Rs.18 lakhs
Dt : 28.11.2007
Ex A-3 Letter issued by OP to complainant dt : 17.5.2008
Ex A-4 Receipt issued by OP to complainant dt : 19.5.2008
Ex A-5 OP demand letter to complainant dt : 06.10.2008
Ex A-6 IDBI Loan sanction letter to the complainant dt : 10.12.2008
Ex A-7 Reminder letter of OP dt : 6.11.2008
Ex A-8 Final call for outstanding amounts dt : 19.11.2008
Ex A-9 SBI –Home Loan – in principal clearance dt : 23.12.2008
Ex A-10 Final reminder letter of OP dt : 24.12.2008
Ex A-11 Payment over due letter of OP to Complainant dt : 29.10.2008
Ex A -12 Complainant letter to OP dt : 24.2.2009
Ex A-13 OP letter to complainant dt : 4.3.2009
Ex A-14 Complainant letter to OP dt : 9.3.2009
Ex A-15 OP letter to complainant dt : 30.03.2009
Ex A-16 Complainant letter to OP dt : 2.4.2009
Ex A-17 Legal Notice to Ops dt : 26.5.2009
Ex A-18 Postal acknowledgements and Receipts of OP for the Legal notice dt:26.5.2009
Ex A-19 Reply notice issued by OP dt : 3.6.2009
Ex A-20 Photos of Flat with negatives and Photo Studio receipt dt : 17.6.2009
Ex A-21 Valuation certificate dt : 4.2.2010 from Registration Dept., R.R.Dist.
Ex A-22 Check List for Housing Loan for SBI
DOCUMENTS MARKED FOR OPPOSITE PARTEIS :
Ex B-1 Windsor Payment Schedule.
Ex B-2 Valuation Report dt : 28.12.2009
Ex B-3 Photos.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 01.07.2010
*pnr
“UP LOAD – O.K.”
