BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
C.C. No. 39/2008
Between:
1. Saroj Devi Nahata
W/o. Babulal Nahata
Age: 50 years,
2. Vineeth Kumar Nahata
S/o. Babulal Nahata
Age: 31 years.
Both R/o. 3-6-689, Street No. 10,
Himayathnagar, Hyderabad. *** Complainants
And
1) R.K. Gupta, S/o. Kedarnath Gupta
(Died)
Rep. by his LRs (3 to 7)
2) The Legend Group of Constructions
Rep. by its Managing Director
Nageswara Rao, Street No. 2
Himayathnagar, Hyderabad.
3. Dayarani Gupta, W/o. Late R. K. Gupta
Age: 55 years, C/o. R.D. Network P. Ltd.
H.No. 3-5-329, Vithalwadi Lane
Opp. Water Tank, Narayanguda
Hyderabad.
4. Hemant Gupta, S/o. Late R.K. Gupta
Age: 36 years, C/o. R.D. Network P. Ltd.
H.No. 3-5-329, Vithalwadi Lane
Opp. Water Tank, Narayanguda
Hyderabad.
5. Mrs. Renu, W/o. Arvind Vashney
Age: 44 years, R/o. Divya Jyothi
D-76, Pragathi Vihar, Marria Road
Aligarh, Utter Pradesh
6. Shalini Varshney,
D/o. Late R.K. Gupta, Age: 39 years
R/o. # 109, Jackson Street,
Apartment 2A, Hoboken, New Jersey
07031, U.S.A.
7. Malini Gupta, W/o. Sunil Aggarwal
Age: 37 years, R/o. No. 2868, SW 153
Drive Apartment, 303, Beaverton
Oregon – 970065108, USA. *** Opposite Parties
Counsel for the Complainant: M/s. Rakesh Sanghi.
Counsel for the OPs: M/s. Ksihore Rai (R2)
M/s. K. Anoop Kumar. (R3 to R7)
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
FRIDAY, THIS THE TWENTY THIRD DAY OF APRIL TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
***
1) This is a complaint filed to direct opposite parties 3 to 7 to execute registered sale deed in respect of flat No. 402 and direct opposite party No. 2 to complete internal and external works of the said flat and deliver vacant possession or alternatively to refund advance sale consideration paid to Ops 3 to 7 together with interest and costs.
2) The case of the complainants in brief is that complainant No. 1 is the mother of complainant No. 2. Opposite Party No. 1 since died represented by opposite parties 3 to 7, his L.Rs are the owners of premises bearing No. 3-6-467, 3-6-467/A/B and 3-6-465 situated at Road No. 5, Himayatnagar, Hyderabad. Opposite party No. 1 the owner entered into development agreement with OP2 builder for construction of multi-storeyed residential flats providing all external and internal fittings and connections to each and every apartment within the building. Flat No. 402 fell to the share of OP1 consisting of 2,529 sq.yd located in fourth floor. While so, Op1 entered into an oral agreement of sale with them for Rs. 86,45,000/-. They paid Rs. 1 lakh on 7.12.2006 and Rs. 24 lakhs on 27.12.2006. As on 18.1.2007 they paid Rs. 33,50,000/- towards sale consideration with an understanding that balance would be paid on the date of registration. When there was unprecedented rise in value of the flats in the year 2007, OP1 was evading to execute even a formal agreement of sale. On that they gave legal notice directing him to execute formal agreement of sale for which he did neither give reply nor execute the agreement of sale. On that they gave complaint of cheating on 27.10.2007, basing on which the police registered a case in Crime No. 412/2007, wherein High Court of A.P. granted anticipatory bail to OP1 in Crl. P. No. 6802/2007. During the course of hearing Op1 himself has agreed that he was ready to execute the sale deed if the entire balance of sale consideration was paid. They got issued legal notices on 17.12.2007 and 27.12.2007 stating that they were ready to pay balance sale consideration and calling upon him to execute the sale deed. On 19.6.2008 while the construction was in progress OP1 issued a notice stating that he received a sum of Rs. 33,50,000/- which constitutes 40% of the total sale consideration out of Rs. 83,75,000/- and refused to honour his commitment, and sent a cheque drawn on ING Vysya Bank, Banjara Hills Branch, Hyderabad for Rs. 33,50,000/-. There was no delay on their part, however, Op1 alleged that they committed delay in payment of sale consideration. It was made in order to get over the execution of sale deed in their favour. They were ready and willing to perform their part of contract. The transaction inter-se pertains to housing construction whereby Ops 1 & 2 herein have entered a joint venture for carrying on the housing construction business. Op1 contributed the land while Op2 contributed capital, skill and labour towards his share, it comes under the purview of Consumer Protection Act. Therefore, they sought direction against Ops 3 to 7 to execute registered sale deed in their favour after receiving balance sale consideration of Rs. 50,25,000/- and direct Op2 to complete internal and external works, and deliver vacant possession or alternatively direct Ops 3 to 7 to refund the amount with interest @ 18% p.a., from 7.12.2008 till the date of realization together with costs.
3) Opposite Party No. 1 filed counter resisting the case. He denied that he was engaged in real estate business of selling apartments. It was alleged in order to attract the jurisdiction of this Commission such a plea was raised. He is the owner of the property. He entered into development agreement with Op2 wherein flat No. 402 fell to his share, he being the owner. Op2 has nothing to do with the allegations made by the complainants. When deliberately the complainants in order to cause prejudice had impleaded Op2 as party, he has issued reply by way of paper notice in Deccan Chronicle on 14.7.2008 alleging that he had nothing to do with the said transaction. OP2 has been shown as a party in order to allege that it was a construction activity. He denied that there was oral agreement of sale with the complainants pertaining to Flat No. 402 on 7.12.2006 nor issuance of receipt for Rs. 1 lakh. The receipt Dt. 27.12.2006 for Rs. 24 lakhs was issued for booking the flat. He alleged that on 7.12.2006 it was clearly agreed that the complainants had to pay 40% of the sale consideration at the time of booking and the remaining 20% was to be paid by 31.1.2007. As per the said understanding they paid 40% and the remaining 20% has to be paid by 31.1.2007. However, it was not paid. They had requested for extension of time up till 31.3.2007 for which he agreed. The complainants instead of complying with the said condition prolonged the matter on one ground or the other. When insisted, the husband of the first complainant informed that he was busy with his fan manufacturing business and that he was anticipating amounts from his business and as soon as he received the amount he would get the agreement of sale executed. As there was no response he had cancelled the booking and refunded by way of cheque drawn on ING Vysya bank. The complainants in order to pressurize him issued a false complaint against him on 27.10.2007. It was purely a civil transaction. The Hon’ble High Court granted anticipatory bail in Crl. P. No. 6802/2007 wherein it was specifically held that “ the contention that there was an oral agreement contemplating execution of registered agreement of sale after payment of 40% of the sale consideration amount, prima facie appears to be unacceptable. The learned senior counsel reports that the complainant is ready and willing to execute the sale deed itself in case the entire money is paid by the complainant”. Despite the said order the complainants did not pay the balance. He became old. Taking advantage of this frivolous complaints are being made against him, he made it clear that only after receipt of remaining sale consideration he would execute registered agreement of sale. They knew full well that the booking was cancelled,. They filed the complaint deliberately for prolonging the issue for 20 months. In fact he lodged a caveat before several courts. At no point of time they offered to pay remaining balance of sale consideration. The complainants issued notice on 27.12.2007 addressed to the site where no one will be present on his behalf at the site. Various decisions relied in the very complaint is only to mis-guide and to create an impression that this Commission had jurisdiction to entertain the complaint. It is only the Civil Court that could adjudicate the dispute as the relief prayed is for specific performance. There is no service involved in the transaction. OP2 was impleaded in order to impress that it was a consumer dispute. This is a pure question of purchase and sale of immovable property attracting the provisions of Transfer of Property Act, and Specific Relief Act. Therefore he prayed for dismissal of the complaint with costs.
4) Opposite Party No. 2 filed counter. While denying each and every allegation made in the complaint, he stated that there was no privity of contract between him and the complainant. The alleged agreement of sale pertaining to Flat No. 402 is in respect of property owned by Op1. He was un-necessarily dragged into the matter without any claim whatsoever. He has no obligation to rectify anything in the apartment. It was in possession of Op1. There is no cause of action against him and therefore prayed for dismissal of the complaint with costs.
5) The complainants in proof of their case filed their affidavit evidence and got Exs. A1 to A11 marked. Refuting their evidence Opposite Party No. 3 wife of OP1 and GPA of Ops 4 to 7 filed her affidavit evidence and got Ex. B1 marked. OP2 filed his affidavit evidence reiterating the facts mentioned in the counter.
6) The points that arise for consideration are:
i) whether non-execution of registered agreement of sale or registered sale deed by Ops 3 to 7 on the death of OP1 pertaining to Flat No. 402 amounts to deficiency in service?
ii) Whether this Commission has jurisdiction to try the case?
iii) To what relief?
7) It is an undisputed fact that the complainants had agreed to purchase Flat No. 402 at 3.-6-465, Street No. 5, Himayatnagar, Hyderabad from Op1 the owner on 7.12.2006 evidenced under xerox copy of receipt Ex. A1. Later they had paid Rs. 24 lakhs towards advance for the above said flat evidenced under xerox copy of receipt Ex. A2. In all the complainants had paid Rs. 33.50 lakhs admitted by Op1 while issuing notice under Ex. A9. The complainants have issued notices Exs. A7 dt. 17.12.2007 and Ex. A8 27.12.2007 directing him to execute sale deed. They did not issue any notice to Op2 on the ground that they had booked the flat while in the process of construction or that OP2 had to complete internal and external works. Evidently, the agreement was to purchase the flat which was already contracted. It has nothing to do with the agreement entered into between Op1 & Op2. Had the complainants entered into a contract during the course of construction wherein OP2 agreed to complete construction work and hand over the flat along with the owner Op1 for consideration, whether it amount to construction activity or not would have been an issue. Even the agreement between the complainants and Op1 is oral, where Op2 is not a party. Op1 never complained that Op2 did not construct the apartments properly and there is till some works to be done. Op2 handed over possession to Op1 owner after construction. It is strange that complainants never entered into possession in order to plead that some internal and external works were in-completed. The contract between OP1 and OP2 is concluded.
8) We may state that when Op1 refunded the advance by way of cheque for Rs. 33.50 lakhs the complainant issued a complaint before the Station House Officer, Narayanaguda Police Station, Hyderabad u/s 406, 420, 506 IPC. The police registered it as a case in Crime No. 412/2007 vide FIR Ex. A5. He did not allege that OP2 had anything to do with the agreement to purchase flat No. 402. He did not even mention the name of Op2 in the complaint. He alleged that OP1 was threatening him sending goondas and anti social elements to attack him and evading to execute the sale deed. OP1 was aged about 72 years. He filed Crl.P. No. 6802/2007 seeking anticipatory bail and the Hon’ble High Court by its order Dt. 28.11.2007 Ex. A6 allowed the application. During the course of arguments it was represented that :
“The grievance of the complainant is that the petitioner entered into an oral agreement of sale with her for sale of plot and in pursuance of it she paid 40% of the cost of the plot afterwards, the petitioner-accused is not executing the agreement of sale, as such the offence is constituted.
Learned senior counsel appearing for the petitioner reports that there is no dispute about the payment of amounts claimed by the complainant, but there was never any contemplation for agreement of sale and in case the complainant pays the entire money, the petitioner would execute the sale deed itself. The contention that there was an oral agreement contemplating execution of registered agreement of sale after payment of 40% of the sale consideration, prima facie, appears to be unacceptable. Learned senior counsel reports that the petitioner is ready and willing to execute the sale deed in case the entire money is paid by the complainant.”
9) Though Op1 made it clear before the High Court that he would execute the registered sale deed provided the amount was paid to him, the complainants did not choose to tender the said amount up till now. Except undertaking that they would pay as and when this Commission directed them to do so, the complainants could not show or file any evidence by way of bank statement etc., that they got the amount and was ready to pay. Op1 had admittedly refunded the amount which was received as advance through a cheque Ex. A11. He issued notice enclosing the cheque drawn on ING Vysya Bank, Banjara Hills Branch, Hyderabad drawn in favour of first complainant for Rs. 33.50 lakhs which was not encashed by her. All through the complainants were alleging that Op1 being the owner of the flat was not willing to execute registered sale deed and was unnecessarily postponing despite the fact that they were ready to pay balance sale consideration. They did not file any document to establish the said fact. Instead they have filed the complaint before this Commission to direct Op1 to execute registered sale deed. Obviously, in order to attract the jurisdiction of this Commission Op2 builder was impleaded. It is not their case that Op2 has not completed the construction works when they entered into the agreement. At no stage they ever averred that he had to complete some internal or external works. They did not ex-facie know as to the execution of work that Op2 has to make. The complainants did not bother to allege the so called deficiencies leave alone proving the said fact. Obviously Op2 was dragged into the affair in order to create jurisdiction under the Consumer Protection Act.
10) While considering as to the exact nature of dispute pertaining to the construction work that would attract Consumer Fora the Hon’ble Supreme Court in Luknow Development Authority Vs. M. K. Gupta reported in AIR 1994 SC 787 observed that “ construction of a house or flat is for the benefit of a person whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act.” The owner never pleaded any deficiency against the builder Op2.
11) Unfortunately in the present case no complaint is made in regard to housing activity of either the owner or that of the builder. What all they seek is specific performance of the oral agreement of sale between them and the owner. We are afraid that the relief which they sought would not attract the jurisdiction of the Consumer Fora. The complainants ought to have filed a civil suit for specific performance in order to direct Op1 to execute registered agreement/sale deed.
12) The Hon’ble Supreme Court in Faquir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. Reported in III (2008) CPJ 48 (SC) held that :
“Land owners who get into joint venture pacts with developers for flat, consumers collaboration agreement could not be called joint venture to escape scrutiny of Consumer Forums. Services of builder availed by land owner for house construction for consideration ( in form of sale of undivided share in land and permission to construct and own upper floors), is a consumer, while the builder is a service provider. Dispute regarding deficiency in service in construction will be consumer dispute.”
13) At the cost of repetition, we may state that this is not a case between the builder and owner. An agreement holder alleges non-performance of terms of oral agreement of sale by Op1 the owner. Incidentally Op2 was impleaded in order to get the jurisdiction of the Commission. The complainants have nothing to do with Op2 as there was no agreement with him, nor they could plead anything with regard to agreement entered into between Op1 & Op2.
14) The learned counsel for the complainants relied several decisions to impress that the case attracts the jurisdiction of this Commission.
Baba Construction Vs. Bandaru Goutham reported in 2008 (1) ALT 23 (NC) (CPA), a case where dispute pertains to not only to register the flat in favour of complainant but also for extra amount. It was held that the complainant was liable to pay extra amount for the work done less value of material supplied and amount paid by him. Since the dispute is with the owner as well as with the builder and in view of the nature of dispute it was held that it was rightly adjudicated by the State Commission.
Delhi Development Authority Vs. Indra Prakash reported in 2008 (1) ALT 25 (NC) (CPA) a case of conversion of property from leasehold to free-hold sought by the complainant. Two years time was taken by the authority for such conversion instead of taking action within 90 days as per procedure. It was held that it amounts to deficiency in service by the statutory authorities.
Kishori Lal Vs. Chairman, ESI Corporation reported in AIR 2007 SC 1819, a case where their Lordships considered the distinction between expressions ‘contract of service’ and ‘contract for service’. We do not see how it is relevant to the facts of the present case.
Dr. J. J. Merchant Vs. Shrinath Chaturvedi reported in AIR 2002 SC 2931 a case of medical negligence. When the Dist. Forum opined that complicated issued were involved directed the party to approach Civil Court. It was held that such order would be unjust and would frustrate the very object of C.P. Act.
Finally Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. Lalitha reported in AIR 2004 SC 448 where it was held that the dispute between the member and co-operative society is amenable to the jurisdiction of the Consumer Protection Act.
The learned counsel for the complainant also relied following decisions of Hon’ble Supreme Court as well as High Court of A.P.
(1) Brij Mohan Vs. Sugra Begum, (1990) 4 SCC 147.
(2) Prabhakara Rao Vs. P. Krishna, 2007 (4) ALT 569
(3) Sri Brahadambal Agency Vs. Ramasamy, AIR 2002 MAD 352.
(4) D.N. Raju Vs. Santosh Verma, 2007 (4) ALT 492
(5) Nirmala Anand Vs. Advent Corporation Pvt. Ltd., AIR 2002 SC 2290.
(6) R.V.E. Venkatachala Gounder Vs. AV&VP Temple, AIR 2003 SC 4548.
(7) Shyam Singh Vs. Daryao Singh, AIR 2004 SC 348.
(8) P. Purushottam Reddy Vs. M/s. Pratap Steels Ltd. AIR 2002 SC 771.
(9) P.D’Souza Vs. Shondrilo Naidu, AIR 2004 SC 4472.
(10) Budda Adeyamma Vs. Kandregula Simhachalam, 2009 (2) ALT 196.
that this Commission had to consider the complainant’s readiness and willingness to perform his part of contract is to be seen for the purpose of Section 16 ( c ) of Specific Relief Act and that time is not essence of contract pertaining to immovable property. There is no quarrel as to the proposition laid down in the above decisions.
15) Coming to the facts that the complainants had entered into an oral agreement of sale for purchase of a flat with Op1. They paid 40% of the sale consideration. They did not pay balance sale consideration. Op1 during his life time refunded the amount by way of cheque. It was not encashed. Instead they filed this complaint for specific performance of oral agreement of sale. Since it has nothing to do with either construction activity or housing activity, we are unable to appreciate the contention that it was a consumer dispute which this Commission could redress. They have to necessarily file a civil suit for specific performance of oral agreement. The questions as to who committed default and whether they were entitled to specific performance of the relief prayed for all these questions that could be considered in a civil suit, necessarily not by the Consumer Fora, as it has nothing to do with the housing activity as defined u/s 2(1)(o) of the Consumer Protection Act.
16) In the result the complaint is dismissed. However, no costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
APPENDIX OF EVIDENCE
WITNESSES EXAMINED FOR
COMPLAINANT: OPPOSITE PARTIES
None None
Exhibits marked for complainant:
A1- Receipt dt.7-12-2006 executed and issued by1st OP to complainants
A2-Receipt dt.27-12-2006 executed and issued by 1st OP to complainants
A3-Specification of apartment, fitness & Fixures issued by 2nd OP to Complainants
A4-Legal Notice and Postal receipts dt.7-8—07 issued by complainant counsel to 1st OP
A5-FIR No.412\2007 dt.27-10-2007 issued by SHO Narayanaguda.
A6-T\c of orders of Hon’ble A.P.High Court in Crl.P.No.6802\2007,
dt.28-11-2007
A7&A8 Legal notice and postal receipts dt.17-12-2007 issued by Complainant counsel to 1st O.P.
A9&A10 legal notice and postal receipts dt.27\12\07 issued by complainant counsel to 1st OP.
A11- original Cheque bearing No.663726, dt.19-6-2008, drawn on the
ING Vysya Bank Banjara Hills Branch for Rs.33,50,000\- issued by the
1st OP.
Exhibits marked for Opposite parties :
Ex. B1 copy of G.P.A.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 23. 04. 2010.
*pnr
“UP LOAD – O.K.”