BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
C.C. 132 of 2013
Between:
Kalasapudi Venkata Ganesh Subramanya Arun Kumar
S/o K Sanyasi Raju, aged about 36 years, Indian,
Occ : Software Engineer, R/o 3599 Cinnamon Ridge Rd San Ramon
CA 94582, USA and a permanent Resident of Vista Diu -9,
Flat No. 306, Rain Tree Park, malayasian Township, KPHB Colony,
Kukatpally, Hyderabad – 500 072
Rep. by his father and POA holder Mr. Kalasapudi Sanyasi Raju,
S/o Mr. Kalasapudi Venkateswarlu, aged about 59 years, Male,
Hindu, occ : Retd Bank officer, R/o Block No. 9, Flat no. 306,
Rain Tree Park, Malaysian Township, KPHB Colony,
Kukatpally, Hyderabad – 500 085 .. complainant
And
01. M/s. Aliens Developers (P) Ltd
Office at Flat No. 911, Teja Block,
My Home Navadeepa Apartments, Madhapur,
Near Hitech City, Hyderabad - 500081
Rep. by its Managing Director
Mr. Hari Challa, s/o C.V.R. Chowdary.
Counsel for the Complainant : M/s. V. Gourisankara Rao
Counsel for the Opposite parties : M/s. Alluri Krishnam Raju
QUORUM:
HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT
AND
SRI R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER
TUESDAY, THE FIFTH DAY OF AUGUST
TWO THOUSAND FOURTEEN
Oral Order : ( As per Sri R. Lakshminarasimha Rao , Hon’ble Member )
****
1. The complaint is filed under Section 17 of the Consumer Protection Act seeking for possession of Flat bearing number 680 on 6th floor in Station No. 13 for an amount of Rs.34,28,702/- towards compensation, interest @ 15% P.A. and costs .
2. The case of the complainant in brief is that the opposite party company, represented to him that they are engaged in the business of 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 ,Ramachandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and obtained permission bearing number HUDA/621/P4/PLG/HUDA/2008 and they would provide all amenities therefor, by the end of December, 2011 with a grace period of 9 months and on such representation of the opposite parties, he entered into agreement of sale for purchase of the Flat,
3. The complainant entered into agreement of reservation in respect of Flat No.680 on 25.10.2006 and including common area and two car parking slots together with undivided share of land to the extent of 82,976.800 sq.yards . The basic cost of the Flat No. 680 is Rs.52,92,540/- and the complainant paid a sum of Rs,34,28,702/- out of the sale consideration of the Flat. The opposite party has not completed the construction of the flat. The opposite party executed sale deed in favour of the complainant on 22.05.2010 conveying title in respect of semi finished flat. The opposite party also executed agreement in favour of the complainant to complete the pending work in the flat. The opposite party failed to complete the pending construction work of the flat and deviated from the initial approved plan. The opposite party has not provided fire fighting system, CC cameras geysers in every bath room and it has not demarcated the car parking slots. The opposite party offered discount at Rs.50/- sft on the total price with modular kitchen. The complainant addressed letter on 22.08.2012 for which the opposite party issued reply with false allegations. The complainant sent e-mail on 19.05.2013 demanding the opposite party to inform him the amount payable by the complainant. The opposite party has not given any reply and there has been abnormal delay on the part of the opposite party in completing the construction of the flat. Hence the complaint.
4. The opposite Party resisted the claim on the premise that the complainant filed the complaint to gain out of his 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. The opposite party 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.
5. 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 3.04.2008 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.
6. The opposite party has submitted that HUDA accorded technical approval on 14.10.2009for ground +20 upper floors and release of building permission up to 29 floors is awaited. The opposite party had 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 party could not complete the project within the time frame. The opposite party informed the complainants 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.
7. The opposite party submitted that the opposite party agreed to pay Rs.3/- per sft 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 complainants. The opposite party completed some of the Towers and delivered them to the customers. Unexpected global recession, separate Telangana Agitation and the mass people strike effected the construction which is beyond the control of the opposite party. The complainants not bearing with the opposite party taking advantage of the situation opted to take back his amount instead of the Flats.
8. The complainant failed to pay balance sale consideration as per the terms of the Agreement. If the complainant cancel the agreement and take back their money, he will forego amount towards cancellation charges and to avoid the loss , he approached this Commission. The opposite party 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. Hence, the opposite party prayed for dismissal of the complaint.
9. The complainant filed his affidavit and the documents, ExA1 to A-22 On behalf of the opposite parties, the Managing Director of the opposite party filed his affidavit. The opposite parties had not chosen to file any documents.
10. The points for consideration are:
- Whether the compliant is maintainable in view of arbitration clause in the agreement of sale?
- Whether the complaint is not a consumer dispute?
- Whether there is any deficiency in service on the part of the opposite parties?
- To what relief?
11.POINT NO.1: The complainant entered in to “Agreement for reservation of Flat” with the opposite party on for purchase of Flat bearing number 680 in the 6th floor of ‘Station-9’ proposed to be constructed by the opposite party. The Agreement was entered into between the complainant and the opposite party in respect of the Flat no 680. The agreement of sale provides for reference to arbitration. The learned counsel for the opposite party has contended that in view of the arbitration clause in the agreement, the complainant 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 process reads as under:
- This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
- 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.
- 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.
- 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.
- That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
12. 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 complainant 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. The point is answered against the opposite parties.
13. POINTSNO.2&3: The opposite Party entered into development agreement with the land owners of the land admeasuring 07.10.2006 in survey number 383, 385 and 426A situate at Tellapur village of Ramachandrapurami Mandal, Medak District and they entered into agreement for construction of residential flats in accordance with the terms and conditions contained therein and as per specifications annexed to the Agreement. The Development Agreement is the “Development Agreement –cum-Power of Attorney ”.
14. In pursuance of the development agreement, the opposite party had obtained permission for construction of the residential building in the land and admittedly there has been delay in completion of the project. The opposite party had attributed the delay on the part of the authorities concerned in granting permission and NOC etc. as the cause for the delay in completion of the project. The opposite parties would contend the cause for delay is beyond their control which is Force Majeure. The opposite party has stated;
‘
‘The above referred facts clinchingly reveal that the opposite party is committed to the project and taking all necessary steps to complete the project at the earliest. The Project itself is massive project and due to the reasons beyond in its control, the opp. Party could not complete within the time frame. 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 an described as ‘force majeure’ . The above referred facts mentioned squarely fall under the said clause”
15. The Force Majeure Clause in the Agreement of Reservation does not include within its ambit the delay caused in granting permission, NOC etc.,. The opposite party failed to explain how they could take shelter under the cover of Force Majeure Clause which is extracted below:
THAT if the completion of the apartment is delayed for reasons of “ Force Majure’ which inter alia include delay on account of non-availability of steel, cement or any other building material or water supply or electric power back up or slow down, strike or due to dispute with the construction agency employed by the developer , civil commotion or war or criminal action or earthquake or any act of God, delay in certain decision/clearances from the statutory bodies or any notice, order, rule or notification of the Government or any other public or competent authorities or any change in the policy of the Government/statutory bodies or for any other reason beyond the control of the Developer and in any of the aforesaid events, the Develop shall be entitled to a reasonable tension fo time stipulated for delivery of possession of the apartment. The Developer also reserves the right to alter any other term or condition of allotment in the event of any such contingencies, as aforesaid, and if the circumstance is beyond the control of the Developer”.
The delay caused in obtaining permission or NOC etc cannot be considered as Force Majeure. The opposite party ought to have informed the complainants about the delay likely to be caused in obtaining the permission. For that matter, the opposite party cannot receive any sale consideration from any person in respect of any Flat unless they have obtained permission from the HUDA or HMDA.
16. The opposite party have promised to complete construction of the Flat and hand over its possession to the complainant within three years with a grace period of 6 months from the date of the booking. The amount that the opposite parties received from the complainant towards part sale consideration was kept by the opposite party with them without completing the construction work of the building.
17. The opposite party 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 Flat. However, the opposite party had received the sale consideration in excess of what was to be received from the complainant. Not keeping the promise to complete construction of the Building and failure to deliver possession of the Flat as per the terms of the agreement schedule constitutes deficiency in service on the part of the opposite party.
18. The complainant has stated that the opposite party had sent him a letter on 5.4.2010 with an offer of discount. The opposite party would contend that the complainant instead of paying the balance sale consideration as per the terms of the agreement, made false allegations and the complainant availing loan from M/s. Jayalaxmi Capital MAM Co operative Housing Society Limited, Visakhapatnam is not within the knowledge of the opposite party.
19. The complainant entered into agreement of reservation in respect of Flat No.680 on 25.10.2006 and including common area and two car parking slots together with undivided share of land to the extent of 82,976.800 sq.yards . The basic cost of the Flat No. 680 is Rs.52,92,540/- and the complainant paid a sum of Rs,34,28,702/- out of the sale consideration of the Flat. The complainant paid a sum of Rs.1,00,000/- on 25.10.2006 towards advance at the time of booking and thereafter he paid an amount of Rs.1,00,000/- on 6.11.2006, Rs.1,00,000/- on 25.10.2006, Rs.5,70,059/- on 6.11.2006, Rs.6,40,000/- on 6.12.2006, Rs.1,23,821/- on 21.6.2008, Rs.18,46,772/- on 21.7.2008, rs.90,000/- on 12.5.2010 and a sum of Rs.58,050/- on 12.05.2010. Thus, the complainant had paid Rs.34,28,702/-of which the amount of Rs.90,000/- was stated to have been paid towards registration charges.
20. Admittedly, there had been delay caused in constructing the flat. The agreement of sale dated 02.07.2008 has stipulated the period of three years with grace period of six months for the opposite party to complete construction of the flat. The period so prescribed was to be reckoned from the date of booking. The complainant booked the flat on 25.10.2006 including the grace period, the time required for construction of the flat would expire on 24.4.2010. By the prescribed date viz., the opposite party failed to complete the construction and hand over possession of the flat. However, the opposite party executed sale deed on 22.5.2010 conveying title in respect of semi finished flat. On the same day, i.e., on 22.5.2010, the opposite party entered into agreement for construction with the complainant whereunder the opposite party agreed to complete the pending work in the flat bearing No. 680 for consideration of Rs.33,44,850/-.
21. The flat was under construction by the date of execution of sale deed. The learned counsel for the complainant has submitted that the complainant has not paid balance sale consideration since there was no further development of the flat and there was no demand for the amount from the opposite party. He has contended that the opposite party has not even demanded the ING Vysya Bank which sanctioned loan under the tripartite agreement. We find substance in the contention of the learned counsel as the failure of the opposite party to stick to the schedule for construction of the flat has made the opposite party not to demand the balance sale consideration.
22. According to the payment schedule, the complainant has to pay the balance sale consideration of Rs.44,98,660/- in installments, 15% of the final cost was already paid. 35% of the cost i.e. Rs.18,52,390/- is payable within 30 days of agreement. 20% of the final cost, Rs.10,58,508/- is payable after completion of the slab of the flat; 50% of the flat cost ie., rs.7,93,881/- is payable after completion of the brick work. 10% of the cost, Rs.5,29,254/- as to be paid after completion of plastering and balance 5% of the cost i.e., Rs.2,64,627/- is payable after completion of flooring.
23. For the delayed payment of installments, clause (c) of the development agreement prescribed interest @18% pa. As per clause V of the development agreement, the opposite party has to provide recreation club with swimming pool and health club and as per clause 6 of the agreement the opposite party has agreed to provide two car parking slots to the complainant. According to the complainant, the opposite party has not completed the construction work such as second white wash of the flat, fixing the main door, installation of WCs and turfs in the toilet, sanitary and plumbing work, making provision for LPG gas connection to the flat, installation of Geezers in the bath room, installation of AC units. The opposite party through email dated 21.08.2012 informed the complainant that they will complete the finishing work of the flat by March, 2013.
24. According to the version of the opposite parties the project could not be commenced until there was a realignment of the proposed road passing through Sy. Nos. 384,385 and 386 and 387 of Tellapur village wherein the property is situate upon which the building was to be constructed as per the master plan approved by the development authority.
25 Whatever may be progress of the construction of the other towers, it can be concluded that the tower no. 13 consisting of the flat purchased by the complainant has been constructed. The opposite party has expressed its readiness to hand over possession of the flat to the complainant after receiving the balance sale consideration from him. The opposite party expressed its readiness to pay Rs. 3/- per sq ft as per the terms of the agreement for the delayed possession and the amount can be deducted from the time of receiving the balance payment from the complainant. Taking into consideration of the submissions put forth on both sides as to completion of construction of the flat, liability for delayed payment, we are inclined to allow the complaint.
26. The opposite party has contended that the complainant has not paid the balance sale consideration to get away from the booking of the flat in view of the recession in Hyderabad property market and also due to Telangana agitation. According to the version of opposite party the entire construction of the flat was completed except internal fixtures which can be affixed and completed within no time and unless the complainant is willing to receive possession of flat by paying the balance sale consideration. The balance sale consideration has to be paid by the complainant by deducting the amount payable to him by the opposite party at Rs.3/- per sft per month for the delayed possession of the flat.
27. In the result, the complaint is allowed directing the opposite party to hand over possession of the Flat bearing No. 680 on 6th floor in
Station No. 13, admeasuring 2150 sft built up area along with 2 car spacing spaces and undivided share of land of 46.23 sq. yards in Sy. No. 284, 285 and 446/A situate at Tellapur village, Ramachandrapuram Mandal, Medak District within one month from the date of receipt of balance sale consideration from the complainant. The costs of the proceedings quantified at Rs.7,000/-.
PRESIDENT
MEMBER
DATED : 05.08.2014.
Appendix of Evidence
Witnesses Examined
For complainant ; none
For opposite party : none
Documents Marked
For complainant :
Ex.A1 Copy of the agreement for Reservation of Flat
Ex.A2 copy of Bunch of receipts
Ex.A3 proc. Of HUDA dated 11.04.2008
Ex.A4 proc. Of HUDA dt. 11.04.2008
Ex.A5 Agreement of sale dt. 2.7.2008
Ex.A6 Specifications
Ex.A7 letter of OP dt. 5.4.2010
Ex.A8 Sale deed dt. 22.5.2010
Ex.A9 construction agreement dt. 22.5.2010
Ex.A10 price list
Ex.A11 Revised Flat calculation
Ex.A12 ING Vysya Bank Sanction letter dt. 09.07.2008.
Ex.A13 Jayalakshmi ‘CO.Op society sanction letter dt. 15.2.2012
Ex.A14 Jayalakshmi society statement of A/c.
Ex.A15 OP e-mail dt. 16.4.2008 with NOC
Ex.A16 Bunch of e-mails
Ex.A17 Axis Bank cheque dt. 3.3.2013
Ex.A18 calculation statement of OP
Ex.A19 Ghruhapravesham invitation letter
Ex.A20 GPA dt 15.6.2013
Ex.A21 Form No 32 of the OP
Ex.A22 Brochure ( 3 nos ) with photos
For opposite parties : NIL
PRESIDENT
MEMBER
DATED : 05.08.2014.
