Andhra Pradesh

StateCommission

CC/39/08

MRS. SAROJ DEVI NAHATA - Complainant(s)

Versus

M/S R.K.GUPTA - Opp.Party(s)

M/S RAKESH SANGHI

23 Apr 2010

ORDER

 
Complaint Case No. CC/39/08
 
1. MRS. SAROJ DEVI NAHATA
H.NO.3-6-689, STREET NO.10, HIMAYATH NAGAR, HYDERABAD.
HYDERABAD
Andhra Pradesh
2. MR. VINEETH KUMAR NAHATA
H.NO.3-6-689, STREET NO.10, HIMAYATH NAGAR, HYD.
HYDERABAD
ANDHRA PRADESH
...........Complainant(s)
Versus
1. M/S R.K.GUPTA
H.NO.3-5-329, VITHALWADI LANE, OPP.WATER TANK, NARAYANGUDA, HYD.
HYDERABAD
Andhra Pradesh
2. M/S LEGEND GROUP OF CONSTRUCTIONS
STREET NO.2, HIMAYATH NAGAR
HYDERABAD
............Opp.Party(s)
 
BEFORE: 
 HON'ABLE MS. M.SHREESHA PRESIDING MEMBER
 
PRESENT:
 
ORDER

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.”

 

 

 

 
 
[HON'ABLE MS. M.SHREESHA]
PRESIDING MEMBER

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