STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA AT HYDERABAD
CC NO.306 OF 2014
Date of filing : 16.11.2015
Date of Disposal : 09.11.2016
Between :
Subbiramaniam M S/o Muralidhar.N,
Aged about 31 years, R/o Plot No.13,
D.No.202, Laxminivas, Kamalapuri
Colony, Yellareddyguda, Hyderabad -500 073.
(Present address D.No.E3 Samhitha Vintage
Apartments, 16-D cross, 1st Main Road,
Pai Lay-out, Bangalore – 560 016).
… Complainant
AND
1) M/s Aliens Developers (P) Ltd.,
Rep. by its Managing Director &
Joint Managing Director Mr.Hari Challa
S/o CVR Chowdhary & C.Venkat Prasanna Challa
S/o CVR Chowdary respectively, O/o Flat No.910,
Teja Block, My Home Navadweepa Apartments,
Madhapur, Near Hitech City, Hyderabad- 500 081.
2) Hari Challa S/o CVR Chowdhary,
Managing Director, M/s Aliens Developers
(P) Ltd., O/o Flat No.910, Teja Block,
My Home Navadweepa Apartments,
Madhapur, Near Hitech City,
Hyderabad – 500 081.
3) C.Venkat Prasanna S/o CVR Chowdhary,
Joint Managing Director M/s Aliens Developers
(P) Ltd., O/o Flat No.910, Teja Block,
My Home Navadweepa Apartments,
Madhapur, Near Hitech City, Hyderabad-81.
… Opposite Parties
Counsel for the Complainants : M/s V.Appa Rao & B.Srinivas
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
and
Sri Patil Vithal Rao … Member
Wednesday, the Nineth day of November
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The case of the Complainant in brief, is that the Opposite party No.1 company represented to him that they are engaged in the business of constructing multistoried apartments and entered into development agreement with the owners of the land comprised in survey nos. 384, 385 and 426/A situate at Tellapur village, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and obtained permission bearing No.HUDA/621/P4/PLG/HUDA/2008 and they would provide all amenities therefor, possession by the end of November, 2011 with a grace period of 9 months and on such representation of the opposite parties, the complainants entered into agreement of sale for purchase of flat bearing No.1036 on 10th floor at Station-6 having super built-up area of 1597 sft., with one car parking along with undivided share of land admeasuring 34.34 square yards.
2. The complainant entered into agreement of sale in respect of above stated flat at Aliens Space Station, situate at Tellapur village, Ramachandrapuram mandal, Medak district for a total sale consideration of Rs.42,48,261/- and accordingly paid the amount of Rs.35,32,130/- on different dates. On receipt of the said amount, the Opposite parties executed a sale deed dated 25.04.2012 registered as document No.5460/2012 in favour of the Complainant and also executed Construction Agreement on 25.04.2012 agreeing to complete the construction of the flat by 31.08.2012.
3. The Opposite parties had not commenced construction of the flat even after the stipulated period is expired, as such, complainant got issued legal notice dated 16.10.2014 to the Opposite parties, but there has been no response from them. In view of cheating, mischief and fraud committed by the Ops, the Complainant lost the opportunity to have a residential accommodation in the year 2010 on the then prevailing costs. Now the Ops are quoting the price in the said project @ Rs.3200/- per sft besides amenities cost of Rs.5,95,000/- (cost about Rs.475/- per sft. above the price quoted), as such, the total cost of the flat would be Rs.58,68,975/-.
4. The Complainant is paying monthly instalments and interest on the home loan amount besides rent of Rs.17,200/- per month to the house where he is staying at present. Due to the fraudulent actions on the part of the Ops, complainant suffered with mental agony, escalation of cost and physically by wandering in and around the office of the Ops for the past few years, for which, the Ops are liable to pay compensation to the tune of Rs.5,00,000/-. Hence the complaint with a prayer to direct the Ops to handover the flat forthwith on completion in all aspects besides obtaining the necessary Occupancy Certificate; to pay the rent of Rs.17,200/- per month w.e.f. 01.09.2012 to till handing over the flat or fair rental value of Rs.10/- per sft. From 01.09.2012 to till delivery of possession of the flat; to pay compensation of Rs.5,00,000/- for mental agony and suffering; to pay legal charges of Rs.50,000/-.
5. The opposite parties no.1 and 3 resisted the claim on the premise that the Complainant filed the complaint to gain out of the breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause in the agreement of sale providing for arbitration. It is contended that the complaint is filed for recovery of money which is not a consumer dispute and that once the agreement is cancelled and account is settled there is no relationship between the parties.
6. The opposite parties submitted that on their application for conversion of agricultural land into non-agricultural land and FTL clearance, permission was granted for conversion of agricultural land into non-agricultural land on 14.04.2007 and FTL clearance was granted on 30.12.2006 and thereafter HUDA earmarked the land as agricultural zone and the opposite patties have filed application for change of use of the land as commercial use zone. The Municipal Administration and Urban Development (I) Department notified the land in survey number 384 as residential use zone. The project could not be commenced in view of proposed road under Master Plan, until realignment of the proposed road without affecting the land in survey number 384 is made. Realignment of the proposed road was approved on 03.04.2008 and the permission was accorded approving the building plan on 11.04.2008. The opposite parties have obtained NOC from the AP Fire Services Department on 15.12.2007 and permission was granted in respect of the building with height of 90.40 meters. The opposite parties obtained NOC from Airport Authority on 10.07.2009.
7. The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground + 20 upper floors and release of building permission up to 29 floors is awaited. The opposite parties have taken all necessary steps to complete the project at the earliest and the project being massive and due to the reasons beyond the control of the opposite parties, the opposite parties could not complete the project within the time frame. The opposite parties informed the complainant about the delay in completion of the project due to delay in clearance from the authorities concerned. In view of arbitration clause, the complaint is not maintainable before this Commission.
8. The opposite parties submitted that the opposite parties agreed to pay Rs.3/- per sqft in terms of Clause VIII (g) of the Agreement for the delay caused in completing the project and adjust the amount towards dues payable by the complainant. The opposite parties completed some of the Towers and delivered them to the customers. Unexpected global recession, separate Telangana Agitation and the mass people strike affected the construction which is beyond the control of the opposite parties.
9. The complainant failed to pay balance sale consideration as per the terms of the Agreement. The opposite parties had taken every care as to the benefit of their customers and incorporated clause in the Agreement as to their liability to pay damages @Rs.3/- per sq.ft. which would show their fairness and the complainants are not entitled to any money or compensation. The Complainant is not entitled for any compensation and his claim is illegal. The delivery of the flat is subject to the balance payments and additional charges whatever liable to be paid for the flat and the common amenities and other certificates, etc., will be made available to the Complainant after completion of the project along with other residents. The complaint is barred by limitation and liable to be dismissed on this ground alone. There is no deficiency of service on the part of the Opposite parties. Hence prayed for dismissal of the complaint.
10. The Complainant filed his affidavit as evidence and the documents Ex.A1 to A17. On behalf of the opposite parties, the Managing Director of the Opposite party no.1 by name Hari Challa filed his affidavit and the documents, Ex.B1 to B19.
11. The counsel for the Complainants and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments by either of them. Heard both sides.
12. The points for consideration are :
i) Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?
ii) Whether the complaint is not a ‘consumer dispute’?
iii) Whether there is any deficiency in service on the part of the Opposite parties?
iv) To what relief ?
13. POINT NO.1 : The Complainants entered into “Agreement of Sale” with the Opposite parties for purchase of flat as detailed supra, for the consideration thereof and paid the amount of Rs.35,32,130/-, proposed to be constructed by the Opposite parties, which is not in dispute. The agreement of sale was entered into between the Complainant and the Opposite parties in respect of the above stated flat on 02.08.2010. Thereafter, the Complainant paid the part consideration amount as per the pricing pattern of the flat issued by the Ops on various dates. The agreement of sale provides for reference to arbitration. The learned counsel for the opposite parties had contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission.
14. However, remedy provided under the provisions of Consumer Protection Act is an additional remedy and in the light of law laid in “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainants having exhausted the other remedy was considered as under:
“The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”
Thus, in view of the ratio laid in aforementioned decision, the consumer has two options, either to proceed for arbitration process or to invoke the provisions of the Consumer Protection Act. As such, it cannot be said that the complaint is not maintainable before this Commission in view of the arbitration clause in the agreement. For the above reasons, the Point No.1 is answered in favour of the Complainant and against the Opposite parties.
15. In the arguments, counsel for Complainant reiterated the same facts as averred in the complaint besides stating that the Opposite parties ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreements and hence pleading ‘force majeure’ does not arise. They relied on Section 72 of Indian Contract Act supported by the Judgment of Hon’ble Apex Court in Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) and submitted that the Apex Court opined that grant of interest @ 18% p.a. by way of damages and compensation is justified. He further relied on decision in Ghaziabad Development Authority Vs.Balbir Singh reported in II (2004) CPJ 12 wherein it is stated “in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest @ 18%.” This Commission perused the said Judgments. In Ghaziabad Development Authority versus Balbir Singh, the Hon’ble Supreme Court further observed that the interest shall be payable from the dates of deposit of the amounts till the date of repayment.
16. On the other hand, the counsel for the Opposite parties in the arguments submitted that the Opposite party No.1 could not complete the project within the time frame as it could not get the required clearance from statutory bodies and they had taken shelter under clause No.XIV ‘force majeure’. The Complainant, therefore, seek possession of the completed apartment, compensation and costs.
17. POINTS No.2 & 3 : The Opposite parties 1 to 3 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they agreed to deliver the residential flat to the Complainant in accordance with the terms and conditions agreed upon and consented thereto and as per specifications given therein. The Development Agreement is not merely an agreement and in fact, it is “Development Agreement-cum-Power of Attorney”.
18. In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as this complaint is concerned. The opposite parties have attributed the delay to the authorities concerned in granting permission and No Objection Certificate etc., as to the cause for delay in completion of the project. The opposite parties would contend that the cause for delay is beyond their control which is ‘force majeure’.
19. The force majeure clause in the Agreement of sale does not include within its ambit the delay caused in granting permission, NOC etc., The Opposite parties failed to explain how they could take shelter under the cover of “force majeure”. We may state that the delay caused in obtaining permission or NOC etc., cannot be considered as ‘force majeure’. The opposite parties ought to have informed the complainants about the delay likely to be caused in obtaining the permission which they failed to. For that matter, the Opposite parties cannot receive any sale consideration from any person in respect of any flat unless they have obtained permission from HUDA or HMDA.
20. The Opposite parties agreed to complete construction of the flat and deliver its possession to the complainant on or before December 2011 with a grace period of nine months. The complainant paid the sale consideration amount of Rs.35,32,130/- and agreed to pay the balance amount at the time of handing over of the possession. Complainant paid almost the sale consideration amount of the flat with the hope that the Opposite parties would complete the construction and deliver the flat wherein he could reside with his satisfaction having been fulfilled and he could avoid payment of rent as well. However, the Opposite parties have not kept their promise and for the delayed period they expressed their readiness to pay the amount in terms of the agreement. However, the opposite parties have not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the complainant. Having received the part sale consideration amount, the Opposite parties kept with them without commencing the construction work of the building.
21. Not keeping-up promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the opposite parties. The complainant have two options left for recovery of the amount, either by filing suit in court of law or by way of filing complaint before State Consumer Disputes Redressal Commission in view of the amount claimed falling within the pecuniary jurisdiction of this commission. The contention of the opposite parties that the complaint is not maintainable is not sustainable.
22. The Opposite parties can only receive such amount of sale consideration which would be in accordance with the payment schedule and correspond to the stage of construction of the flats. However, the Opposite parties had received the sale consideration in excess of what was to be received from the complainants particularly when the construction of the building was not yet commenced. Not keeping-up the promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the Opposite parties. The difficulty that the complainant faced due to the delay caused in completing the construction of the flat on the part of the Opposite parties has grown many folds as the complainant has to pay EMIs irrespective of the completion of the flat and he has to reside in a house paying rent. It is natural for a person to suffer mental tension by being deprived of residing in the flat and on being obligated to pay EMIs to the bank.
23. The Complainant claimed a sum of Rs.5,00,000/- as compensation for causing mental agony, suffering and escalation of construction cost. By virtue of Clause-VIII (f) of the Agreement, the Opposite parties are liable to pay Rs.3/- per sft. from the due date as agreed to handover the flat. Admittedly, the Opposite parties agreed to deliver the possession of the flat by November 2011 with grace period of nine months. As such, the Opposite parties are liable to pay the compensation from September 2012 onwards. Taking into consideration of the hardship the complainant undergone and the amount of Rs.3/- per sft from 01.09.2012 payable by the opposite parties, we are inclined to award a sum of Rs.10,000/- per month towards the rent from 01.09.2012 and a sum of Rs.50,000/- towards compensation. The Opposite parties are liable to pay the rent of Rs.10,000/- per month from 01.09.2012 till possession of the flat is delivered and Occupancy Certificate is handed over to the Complainant. As such, the complaint deserves to be allowed.
24. POINT No.4 : In the above facts and circumstances, the points 1 to 4 are answered accordingly in favour of the Complainant and against the Opposite parties 1 to 3.
25. In the result, the complaint is allowed directing the Opposite parties 1 to 3 to complete the construction of the flat bearing No.1036, station-6 on 10th floor of the complex by name Space Station-1, situate at Tellapur village, Ramachandrapuram mandal, Medak district and deliver its possession to the Complainant and handover copy of Occupancy Certificate to the complainant and pay from 01.06.2012 an amount of Rs.10,000/- towards rent to the complainant till possession of flat is delivered. The Complainant shall pay the balance sale consideration of Rs.7,16,131/- to the Opposite parties. Further, the Opposite parties shall pay to the complainant a sum of Rs.50,000/- towards compensation and an amount of Rs.6,000/- towards costs. Time for compliance four weeks.
PRESIDENT MEMBER
Dated : 09.11.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of M.Subbiramaniam Affidavit evidence of Hari
Challa (on behalf of Ops 1 to 3)
EXHIBITS MARKED
For Complainant :
Ex.A1 is Photostat copy of the Agreement of Sale, dated 02.08.2010 executed by the Opposite parties in favour of the Complainants.
Ex.A2 is Photostat copy of the sale deed, dated 25.04.2012 registered as document No.5460/2012, with the office of District Registrar, Medak at Sangareddy.
Ex.A3 is Photostat copy of the Construction Agreement, dated 25.04.2012 entered into by the Ops 1 to 3 and the Complainant.
Ex.A4 is Photostat copy of the receipt bearing No.05584, dated 09.07.2010 for Rs.1,50,000/-.
Ex.A5 is Photostat copy of the receipt bearing No.05585, dated 09.07.2010 for Rs.1,00,000/-.
Ex.A6 is Photostat copy of the receipt bearing No.05629, dated 28.08.2010 for Rs.2,50,000/-.
Ex.A7 is Photostat copy of the receipt bearing No.06206, dated 30.09.2010 for Rs.3,09,727/-.
Ex.A8 is Photostat copy of Arrangement letter for Home Loan for Rs.34,00,000/-, dated 28.08.2010 issued by the OP No.4.
Ex.A9 is Photostat copy of the statement of account of Complainant’s bank account, for the period from 28.08.2010 to 31.03.2012.
Ex.A10 is Photostat copy of the Rental Agreement dated 01.03.2012, for monthly rent of Rs.16,000/-, for a period of 11 months.
Ex.A11 is Photostat copy of the Rental Agreement dated 27.12.2013, for monthly rent of Rs.17,200/-, for a period of 11 months.
Ex.A12 is Photostat copy of the rent receipt for Rs.17,200/- executed by Rekha Rani, K., for the month of October 2014, dated 01.10.2014.
Ex.A13 is Photostat copy of the appraisal letter addressed by the Ops to its patrons.
Ex.A14 is Photostat copy of the legal notice, dated 16.10.2014 got issued by the Complainants to the Opposite parties.
Ex.A15 are the original postal receipts (2) Nos, original postal acknowledgement and original returned postal cover.
Ex.A16 is Photostat copy of Certificate of Incorporation, dated 21.03.2006 obtained from the Registrar of Companies, in respect of the OP No.1 company.
Ex.A17 is Photostat copy of the Form-32 obtained from the Registrar of Companies, in respect of the OP No.1 company.
For Opposite parties
Ex.B1 Copy of Lr.No.252931/4/2007 addressed by Principal Secretary to Government to Vice, Chairman, HUDA, Hyderabad for change of land use.
Ex.B2 Copy of G.O.Ms.No.288, Municipal Administration & Urban Development (I1) Department, dated 03.04.2008 (HMDA revised master plan).
Ex.B3 Copy of (report) Lr.No.D1/3601/2007, dated 05.05.2007 addressed by District Collector, Medak to Vice-Chairman & Managing Director, HUDA along with map.
Ex.B4 Copy of minutes of meeting of multi-storeyed building committee for HUDA area held on 29.02.2008 at 3-00 pm in the chambers of Vice-Chairman, HUDA (4 basements + Ground + 13 Upper Floors).
Ex.B5 Copy of Lr.No.1927/Misc/Plg/H/2008, dated 31.03.2008 addressed by HUDA to the Principal Secretary to Government for 30 meters road alignment in Sy.No.384 & 385.
Ex.B6 Copy of Lr.No.621/P4/Plg/HUDA/2008, dated 11.04.2008 addressed by HUDA to OP No.1 approving 4 basements + Ground + 13 upper floors).
Ex.B7 Copy of Lr.No.621/Pr/Plg/HUDA/ 2008, dated 11.04.2008 addressed by HUDA to Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments.
Ex.B8 Copy of minutes of meeting of multi-storeyed building committee for MSB in HUDA area held on 05.06.2008 at the chambers of Vice-Chairman, HUDA (4 basements + ground + 29 upper floors).
Ex.B9 Copy of Lr.No.621/P4/Plg/HMDA/2008, dated 14.10.2009 addressed by HMDA to the Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments (4 basements + ground + 20 upper floors).
Ex.B10 Copy of Lr.No.SEIAA/AP/MDK-14/08, dated 12.08.2008 addressed by State Level Enviornment Impact Assessment Authority, Hyderabad to according environmental clearances to Opposite parties.
Ex.B11 Copy of Lr.No.19038/I1/2009, dated 24.11.2009 addressed by Principal Secretary to Government to Ops (clearance of GOMs.No.111).
Ex.B12 Copy of letter addressed by Opposite parties, dated 08.10.2010 to the HMDA, Hyd (revised application and plans for building permission consisting of 3 basement + ground + 29 upper floors).
Ex.B13 Copy of Lr.No.10186/MP1/Plg/HMDA dated 28.03.2011 addressed by HMDA to the Ops to pay publication charges for change of land use from residential to commercial.
Ex.B14 Copy of cash acknowledgement receipt bearing No.825631 for Rs.1,000/- in File No.2011-2-431 for new water connection.
Ex.B15 Copy of Certificate of best compliments issued by Indian Green Building Council in favour of the Opposite parties company.
Ex.B16 Copy of certificate of best compliments awarded by Cityscape in favour of the Opposite parties company.
Ex.B17 Copy of letter addressed by the Opposite parties to the purchaser by name S.Pragathi intimating to take possession of the flat, dated 02.11.2015.
Ex.B18 Copies of customer feed back of various customers.
Ex.B19 Copies of photographs of flat occupants occupying the completed flats.
PRESIDENT MEMBER
Dated : 09.11.2016
