STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 271 OF 2013
Between :
1) Mrs.P.Bhavana W/o R.Praveen Kumar,
Aged 33 years, Occ: Computer Engineer,
2) R.Praveen Kumar S/o Mr.Yellaiah,
Aged 37 years, Occ: Computer Engineer,
Both are represented by their Special
Power of Attorney holder R.Arun Kumar
S/o R.Yellaiah, aged about 51 years,
Occ: Government Service, R/o 2-2-1073/A to K,
Flat No.202, Sai Mitra Estates,
Amberpet, 6 No., Hyderabad.
Complainants
And
M/s Aliens Developers Private Ltd.,
Represented by its Joint Managing Director,
Mr.Venkat Prasanna Challa,
Aliens Space Station,
Gachibowli, Tellapur, Hyderabad – 502 032.
R/o Flat No.910, Teja Block,
My Home Navadweepa, Hi-tech City,
Hyderabad – 500 081.
Opposite party
Counsel for the Complainants : Sri Y.Lanka Reddy
Counsel for the Opposite party : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Friday, the Twenty Nineth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainants complaining deficiency in service against the Opposite party and claimed to award an amount of Rs.81,92,212/- with interest @ 18% per annum from the date of complaint till date of payment or alternatively to pay Rs.82,80,415/- with interest @ 18% per annum from the date of filing till date of payment with costs.
2. Lured by the wide publicity made by the Opposite party, the Complainants were attracted to the project named and styled as “Space Station 1” at Tellapur, Hyderabad and have approached the Opposite party on 04.12.2006 and paid an advance of Rs.1,00,000/- booked a flat with a priority No.289 for an area of 1200 sqft. On 6th floor of Space Station-1 in Sy.No.384, 385 and 426 of Tellapur village, Ramachandrapuram mandal, Medak district, for a total consideration of Rs.40,22,935/- and also entered into an Agreement for Reservation of Flat on the same day.
3. The Opposite party allotted Flat No.605, admeasuring 1430 sft. On sixth floor in Block “Station-1” vide allotment confirmation sheet dated 16.12.2007 increasing the cost from Rs.40,22,935/- to Rs.47,06,984/-. On 10.06.2008, the parties entered into Agreement of Sale, wherein, the Opposite party agreed to deliver the flat within 3 years from the date of booking with a further grace period of six months. A “Tripartite Agreement” was also entered into by the parties with State Bank of India, Banjara Hills, Hyderabad branch for sanction of housing loan of Rs.32,46,000/-. By which time, the Complainants paid their margin amount towards the sanction of loan. The banker paid an amount of Rs.13,13,620/- to the Opposite party on 03.07.2008. The Opposite party reduced the flat rate and fixed at Rs.38,77,197/-.
4. As per the terms agreed, the Complainants paid monies on various dates in the form of cash and cheques. All the payments were acknowledged by the Opposite parties. Altogether, the Complainants paid an amount of Rs.35,49,156/- excluding the registration charges of Rs.93,900/-. The Opposite party had registered a “semi finished flat” showing a photograph of some other construction which is not existing at the relevant time or even of now, which is nothing but cheating in addition to deficiency in service. The Complainant got issued a notice dated 16.09.2013 to the Opposite party, but the Opposite party neither responded to the notice nor complied with.
5. The Complainants calculated the principle amount with interest and thereby claimed a total amount of Rs.82,80,415/- including compensation or in the alternate claimed the refund of amount paid together with loss of investment value at Rs.81,92,212/-. Hence, prayed to allow the complaint.
6. The Opposite party resisted the claim on the premise that the complainants filed the complaint to gain out of their breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process. The complainants suppressed some facts and camouflaged some facts in order to make out a case. That the complaint is filed with all concocted allegations giving colour as if there is a consumer dispute.
7. The Opposite party submitted that originally the land in Sy.No.384 was an agricultural land and it filed application for conversion of the same into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006. Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the Opposite parties have filed application for change of use of the land as commercial use zone.
8. It is averred by Opposite party that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.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 Sy.No.384 is made. Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008. Opposite party had obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. After following due procedure and process, the Opposite party obtained NoC from Airports Authority on 10.07.2009.
9. It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission upto 29 floors is awaited. In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996. It had taken necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the Opposite party could not complete the project within the time frame and they informed the complainants that the project required sanction from statutory authorities and mentioned the same as ‘force majeure’ in the agreement of sale. It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.
10. It is stated that for the delay, the Opposite party had agreed to pay Rs.3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and they agreed to adjust the amount towards dues payable by the complainants. The complainants filed the complaint with ulterior motive to defame the opposite parties. The Complainants shall file relevant receipts and documents to prove the payments.
11. The Complainants are not entitled for any compensation and their claim is illegal. The complainants are not entitled for refund of amount and interest thereon and any compensation and costs. There is no deficiency of service on the part of the Opposite party. Hence prayed for dismissal of the complaint.
12. On behalf of the Complainants, R.Arun Kumar, the General Power of Attorney holder on behalf of the Complainants filed his evidence affidavit and the documents, Exs.A1 to A26. On behalf of the Opposite party, its Managing Director has filed the affidavit and the documents, Ex.B1 to B18.
13. The counsel for the complainants and the Opposite party have advanced their arguments reiterating the contents of the complaint and the written version. In addition, the counsel for Complainant filed written arguments. Heard both.
14. 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 party?
iv) To what relief ?
15. POINT NO.1 : The Complainants entered into “Agreement of Sale” on 10.06.2008 with the Opposite party for purchase of flat bearing No.605 admeasuring 1430 sft. on 6th floor in Block “Station-1” for a total consideration of Rs.40,22,935/- which was subsequently reduced to Rs.38,77,197/- on an offer and thereafter the Complainants paid the part consideration amount as per the pricing pattern of the flat issued by the Opposite party on various dates. Subsequently, the Opposite party executed a sale deed dated 08.04.2009 registered as document No.3076/2009 with the office of the District Registrar of Medak at Sangareddy in respect of the subject Flat No.605. What remained is that there exists no such flat and the flat which is registered is non-existent. This is not denied by the Opposite party and nothing is stated in their written version. The learned counsel for the opposite party has contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission. Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) That all disputes/issues arising out of and/or concerning this transaction will be subject to the exclusive jurisdiction of the Courts at Ranga Reddy district, A.P.
c) That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
d) However, disputes or differences arising out of and or in connection with and or in relation to this transaction/agreement, which cannot be amicably settled, shall be finally decided and resolved by an Arbitrator appointed by Developer in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Arbitration as aforesaid shall be a domestic arbitration under the applicable Laws.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
16. In terms of the agreement of sale, the dispute has to be decided by means of arbitration. 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.”
For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite party.
17. In the arguments, counsel for Complainants reiterated the same facts as averred in the complaint besides stating that the Opposite party 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. She 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. She 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.
18. On the other hand, the counsel for the Opposite party in the arguments submitted that as per agreement, if the Complainants want to cancel the booking of the flat, they shall forego 10% of the total flat cost as charges which is agreed by them and in that regard, relied on Judgment reported in 2009 (2) CPR 197 (NC) : II (2009) CPJ 276 (NC) in Punjab Urban Planning and Development Authority and another Vs. Shyam Sunder Tiwari and others, wherein, it is held that “courts cannot add anything or improve upon the terms of contract between the parties.” Admittedly, in the instant case, no such Agreement is entered into between the parties except the Agreement for reservation of flat and thereafter execution of sale deed by the Opposite party conveying the non-existent property in favour of the Complainant. However, this Commission perused the said order. The facts of the said case and facts of the case on hand are different. In the said case, the Petitioner Authority withdrew the scheme and there was provision for refund of earnest money. In the case on hand, there is no provision for refund of earnest money. Admittedly, on failure to comply with terms and conditions of agreed terms by the Opposite party, the Complainants sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite party.
19. POINTS No.2 & 3 : The Opposite party 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 Complainants in accordance with the terms and conditions agreed upon and consented thereof and as per specifications given thereto.
20. In pursuance of the development agreement, the opposite party had 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 party had attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The opposite party would contend that the cause for delay is beyond their control which is force majeure. The Opposite party stated the reasons for the delay in completion of the construction of the residential complex as under:
“The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project. The said fact was informed to the complainant and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”
21. The complainants have submitted that owing to failure of the opposite party in completing the construction of the flat No.605, they opted for cancellation of the sale deed and the opposite party have contended that in order to maintain cordial relations with the complainants, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The complainants got issued a notice dated 16.09.2013 setting forth series of events of delay and negligence and false promises made by the Opposite party, seeking for refund of the amount on the premise of inaction on the part of the opposite party.
22. The opposite party had promised to complete construction of the flat and hand over its possession to the complainants by November 2011 with a grace period of six months as agreed and on their failure to perform its part of contract, the opposite party had proposed to pay rents but failed to pay the same. However, there is no communication from the side of the opposite party in this regard and the opposite party has not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the complainants. Even otherwise, though the Complainants claimed compensation of Rs.3/- per sft. in the complaint, the same is missing in their notice. Hence, this Commission does not incline to accept this relief as the same is time-barred.
23. Not keeping 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 party. The complainants 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 party that the complaint is not maintainable is not sustainable.
24. The complainants claimed refund of amount paid together with interest but failed to mention the period from which they are entitled to besides claim for damages to the tune of Rs.3,00,000/-. The complainants acquiesced to the delay in construction of the project. The complainants have not disputed that the opposite party had informed them about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainants cannot claim damages. However, the complainants are entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization.
25. It is pertinent to state here that as per Ex.A10 to A22, the Complainants paid an amount of Rs.35,49,156/- excluding the registration charges of Rs.93,900/- as against the total sale consideration of Rs.38,77,197/-.
26. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite party is liable to pay the amounts to the Complainants.
26. In the result, the complaint is allowed holding that Opposite party is liable and it is directed to pay an amount of Rs.36,43,056/- inclusive of registration charges paid by the Complainant with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. And the Complainant is directed to reconvey the subject property covered by sale deed dated 08.04.2009 registered as document No.3076/2009 in favour of the Opposite party by way of Cancellation Deed or as required, at the cost of the Opposite party. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of R.Arun Kumar Affidavit evidence of Hari
the GPA holder of Complainants as PW1. Challa as RW1.
EXHIBITS MARKED
For Complainant :
Ex.A1 is the original Special Power of Attorney executed by Complainants in favour of R.Arun Kumar, dated 30.08.2013.
Ex.A2 is copy of Agreement for Reservation of Flat, dated 04.12.2006.
Ex.A3 is copy of Allotment Confirmation sheet, dated 16.12.2007.
Ex.A4 is copy of Agreement of Sale, dated 10.06.2008 executed by Opposite party in favour of the Complainant.
Ex.A5 is copy of Tripartite Agreement, dated 20.06.2008 executed by the Opposite party, Complainants and the State Bank of India, Banjara Hills branch.
Ex.A6 is copy of the sale deed dated 08.04.2009 registered as document No.3076/2009 executed by the Opposite party in favour of the Complainants and also the Construction Agreement.
Ex.A7 is office copy of the legal notice, dated 16.09.2013 got issued by the Complainants to the Opposite party.
Ex.A8 is the original postal receipt, dated 16.09.2013.
Ex.A9 is the original letter dated 24.10.2013 addressed by the Senior Superintendent of Post Offices, Hyderabad to the counsel for Complainants.
Ex.A10 is the statement showing payments by the Complainants.
Ex.A11 is the copy of receipt No.1428, dated 04.12.2016 for Rs.1,00,000/-.
Ex.A12 is the copy of receipt No.1450, dated 11.12.2006 for Rs.3,82,752/-.
Ex.A13 is the copy of receipt No.1497, dated 11.01.2007 for Rs.4,02,294/-.
Ex.A14 is the copy of receipt No.2008, dated 16.12.2007 for Rs.1,50,490/-.
Ex.A15 is the copy of letter addressed by the OP to the Complainants, dated 02.07.2008.
Ex.A16 is the copy of receipt No.02410, dated 03.07.2008 for Rs.13,13,620/-.
Ex.A17 is the copy of receipt No.878, dated 31.03.2009 for Rs.12,00,000/-.
Ex.A18 is the copy of receipt No.03121, dated 03.04.2009 for Rs.93,900/-.
Ex.A19 is the copy of receipt for Rs.3,50,000/- passed by the OP, dated 31.03.2009.
Ex.A20 is the copy of cheque bearing No.513514, dated 01.04.2010 for Rs.1,00,000/-.
Ex.A21 is the copy of cheque bearing No.513517, dated 01.10.2011 for Rs.1,50,000/-.
Ex.A22 is the copy of cheque bearing No.513515, dated 01.04.2011 for Rs.1,00,000/-.
Ex.A23 is the copy of e-mail addressed to the Complainant, dt.16.04.2012.
Ex.A24 is the copy of e-mail addressed by the Complainant, dt.08.05.2012.
Ex.A25 is the copy of e-mail addressed by the OP to Complainant, dt.09.05.2012.
Ex.A26 is the copy of e-mail addressed by the Complainants to OP, dt.17.04.2012.
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 29.02.08 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 photographs of flat occupants occupying the completed flats.
PRESIDENT
29.04.2016
