Tamil Nadu

StateCommission

CC/81/2015

Mr.S.Karthik Ramnarayan - Complainant(s)

Versus

New Chennai Township Pvt Ltd, Rep by Managing Director, Marg Swarnabhoomi, and anr - Opp.Party(s)

K.Jagannathan

06 Oct 2021

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

BEFORE        Hon’ble Thiru. Justice R.SUBBIAH                          -   PRESIDENT

                         Tmt. Dr. S. M. LATHA MAHESWARI                        -   MEMBER

 

C.C. No.81/2015

DATED, THE 06^th DAY OF OCTOBER 2021

Mr. S. Karthik Ramnarayan,

No.F, Shree Bhavani Flats,

No.8/12, 36^th Street,

Nanganallur,

Chennai – 600 061.                                                                           .. Complainant.

                                                       - Versus -

1. New Chennai Township Pvt . Ltd.,

Represented by its Managing Director,

 Marg Swarnabhoomi,

 “Marg Axis”, No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.

 

2. M/s. Marg Properties,

Represented by Managing Director,

Marg Swarnabhoomi,

“Marg Axis”, No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.                                                                           .. Opposite parties.

 

Counsel for Complainant                           : M/s. K. Jaganathan

Counsel for Opposite parties 1 & 2           : M/s. B.R. Shankaralingam

 

This complaint having come up for final hearing before us on 06.10.2021  and on hearing the arguments of complainant and upon perusing the material records submitted by both parties this Commission made the following order in the open Court:-

 

ORDER

 Dr. S.M. LATHA MAHESWARI   : MEMBER

            Present complaint was filed by the complainant alleging deficiency in service on the part of the opposite parties along with a prayer to direct the opposite parties to refund the total amount paid towards one-time lease rental, interest paid to bank and also other charges relating to registration of Lease Deed amounting to Rs.12,28,714/- with 18% interest and Rs.15,00,000/- towards compensation for the mental agony and torture suffered by the complainant with cost.

1.         Brief facts necessitating the filing of complaint:

            The complainant was allured by the news paper advertisements made by the opposite parties who are reputed builders for the announcement of a residential project called “Marg Swarnaboomi”.  The complainant visited the site of the opposite parties and after believing the promises made by them had booked a flat in apartment – “UTSAV” at “Marg Swarnaboomi” a Flat No.3018 in Block ‘F’ measuring an extent of 1181 sq. ft. super built up area with undivided share of land to an extent of 846 sq. ft. for the cost of Rs.16,90,544/-.  Pursuant to which, the complainant had paid an advance amount of Rs.50,000/- vide cheque No.044896 dt.16.09.2009 drawn on SBI, Pondicherry for which, the 1^st opposite party had issued receipt.   An additional amount of Rs.1,66,832/- vide SBI cheque No.044897 was collected by the opposite parties.  Subsequently, when the opposite parties provided the Agreement for signature the complainant was shocked to see that it was only an Lease Agreement and not Ownership Agreement as advertised by them in the newspaper advertisements.   But the opposite parties persuaded him stating that it will be auto renewal after 99 years amounting to perpetual lease. Thus, the Agreement for Lease was entered on 11.05.2010 between the parties and as per the Lease Agreement, the possession of the flat was promised to be handed over within 3 months from the date of receipt of entire upfront one time lease rental out of totally agreed amount of Rs.16,90,544/-.  It was also agreed between the parties that the delay beyond 3 months to handover the flat would be compensated by the opposite parties by paying an amount of Rs.5/- per sq. ft. and that the power of termination of the contract should not be exercised by the lessor unless and until the lessor gives 30 days prior notice to the other party and in the event of termination of the agreement the lessor would forgo 15% of the amount paid towards the lease rental.  The complainant had thus paid advance amounts by cheques on several occasions amounting to Rs.12,28,714/- and the opposite parties had issued valid receipts for the same.  However, the construction was delayed by the opposite parties.   The complainant on the advice of the opposite parties contacted the SBI, Auroville Branch and after paying the processing fee of Rs.5,000/- the loan was sanctioned and a Tripartite Agreement was entered between the parties with the bank.  However, it was informed by the SBI that the loan could not be processed as Indian Bank had a lien over the Marg property.  In September 2011, SBI asked to file a fresh loan application which was processed after obtaining NOC from Indian Bank and an amount of Rs.13 Lakhs was sanctioned.  On 28.12.2011, the Lease Deed was executed.  Marg group did not hand over as promised in the month of April 2012 & after a long delay received a letter in June 2013 that the handing over will start soon.  However, no further communication was received from the opposite parties.   Thus, the complainant issued a legal notice dated: 04.03.2015 to the opposite parties. The complainant also registered an online complaint with the Government of India, for which a reply dt.09.04.2015 was furnished by the Under Secretary to the Government of India that, vide notification No.G.S.R.5(E) dated 02.01.2015, “rule 11A was inserted which allows dual use of infrastructure in the Non Processing Area of the SEZ subject to the conditions and that no sale is permitted and only lease hold rights are provided to only user of such infrastructure”.  Thus, it was made clear that lease of the project was not permitted to outsiders like the complainant. Thus the complaint was filed alleging deficiency in service and unfair trade practice on the part of opposite parties and for refund of the amount of Rs.12,28,714/- with 189% interest and a compensation of Rs.15,00,000/- for mental agony caused to the  complainant along with cost of the proceedings.

2.         The opposite parties filed written version admitting the booking of the flat by the complainant, however it was contented that the complaint for cancellation of the lease agreement and refund of the amount was not maintainable before the Consumer Forum as their existed no jural relationship of consumer and service provider between the complainant and the opposite parties. It was submitted that only the Civil Court has the Jurisdiction to try the above case.   Further, the opposite parties cited force majeure clause for the delay in completing the construction as to the non-availability of labour and raw materials.  They also cited that the arbitration clause in the agreement was to be given priority and hence the complaint was liable to be dismissed as they have not committed any deficiency in service or unfair trade practice as they have invested a huge amount in purchase of the land and their sole intention was to complete the project at the earliest.

3.         The complainant filed his proof affidavit and submitted documents marked as Ex.A1 to Ex.A16.  The opposite parties filed their proof affidavit but no documents were marked on their side.

4.         Points for Consideration:

1. Whether the complaint is maintainable before the Consumer Commission?
2. Whether there is any deficiency in service and unfair trade practice on the part of the opposite parties as alleged by the complainant?
3. If so, for what relief the complainant is entitled to?

5.         Point No.1 :

Proven Facts called out from the documents submitted by complainant:-

1. The complainant in response to the advertisements made by the 1^st opposite party had agreed to book a flat No.3018 for 99 years lease in ‘UTSAV’  in Block ‘F”’ measuring an extent of 1181 sq. ft. super built up area with undivided share of land 846 sq. ft.  by paying an advance amount of Rs.50,000/- vide cheque No.044896 dated:16.12.2009 drawn on SBI Bank, Pondicherry for an one-time lease rental for 99 years at the cost of Rs.16,90,544/-;
2. That the Brochure of the Marg UTSAV project was marked as Ex.A1;
3. That the email copy of the advertisement of Marg Swarnabhoomi dt.15.12.2009 was marked as Ex.A2;
4. That the Booking Form dt.16.12.2009 was marked as Ex.A3;
5. That the Agreement to Lease dt.11.05.2010 was marked as Ex.A4;
6. That the copy of payment request and receipt of money was marked as Ex.A5;
7. That the Housing Loan Application made the complainant to  State Bank Of India dt..24.12.2010 was marked as Ex.A6;
8. That the Tripartite Agreement with SBI upfront Home Loan and the SBI letter to NCTPL dt.13.01.2011 was marked as Ex.A7;
9. Copy of Home Loan sanction from SBI dt.10.12.2011 was marked as Ex.A8;
10. That the copy of the Lease Deed dt.28.12.2011 was marked as Ex.A9;
11. That the Memorandum of deposit of Title Deed dt.16.05.2012 was marked as Ex.A10;
12. That the e-mail communications was marked as Ex.A11;
13. That the letter from SEZ and HEOUs in Tamil Nadu, Pondicherry, Andaman and Nicobar Isand dt.29.01.2015 was marked as Ex.A12
14. That letter dt.09.04.2015 from the Government of India, Ministry of Commerce was marked as Ex.A13;
15. That the letter from GRK Reddy, Chairman and Managing Director of the Opposite party company intimating the complainant delay in construction dt.18.11.2013 was marked as Ex.A14;
16. That the legal notice dt.04.03.2015 was marked as Ex.A15;
17. That the reply legal notice dt.15.03.2015 was marked as Ex.A16;

That the complainant had filed the complaint for refund of the amount of Rs.12,28,714/- with 18% interest p.a. and a compensation of Rs.15,00,000/- with cost of the complaint.

6.         Heard the learned Counsel for complainant.  Though the opposite parties had filed written version, proof affidavit and written arguments, the Counsel for the opposite parties did not adduce any oral arguments. In the written version, the opposite parties had raised an issue with regard to the maintainability of the complaint as the transaction involved which is the subject matter of the complaint is lease.  It is contended by the opposite parties that the Consumer Commissions has no jurisdiction to try a case involving lease and that the appropriate forum would be the Civil Court and thus prays for the dismissal of the complaint on the issue of jurisdiction. We are unable to accept the above contention, for the reason that once the agreement dated 11.05.2010 was executed between the parties and signed by the 2^nd opposite party for the development of the project and leasing out the apartment for a period of 99 years to the complainant, the agreement derives the colour of “Development Agreement” and the jural relationship of ‘the Developer’ and ‘the Purchaser’ comes into existence between the parties and the agreed total payment of lease amount to be considered as ‘consideration’.  Hence, the issue with regard to the non-maintainability of the complaint before the Consumer Commission does not arise. The presence of arbitration clause in the development agreement is not a bar to file a complaint before Consumer Commission as held by various precedents of the Apex Court.  Thus we answer point No.1 in favour of the complainant holding that the complaint is maintainable before the consumer commission.

7.         Point No.2 :-

From the admitted facts as mentioned above, we could see that the opposite parties had issued alluring advertisement inviting public to purchase the apartments, the residential project called “UTSAV”  to be constructed  by the 2^nd opposite party who is the builder and the complainant after visiting the 2^nd opposite party and on seeing the model flat of the project had agreed to book a flat for 99 years lease in project ‘UTSAV’, Flat No.3018, Block ‘F’, Third Floor measuring an extent of 1181 sq. ft. super built up area with undivided share of land 846 sq. ft.  for an one-time lease rental for 99 years at the cost of Rs.16,90,544/- and both the opposite parties assured the complainant that the project would be completed within a period of 24 months.  The complainant in pursuance of the agreement has made the total payment of Rs.12,28,714/- out of the total one time lease rental amount of Rs.16,90,544/-.  

8.         The opposite parties for the delay in construction and handing over of the schedule of properties had cited the reason of ‘force majeur, i.e. due to global recession, labour problem, shortage of basic materials etc., which are beyond their control.  But they have not produced any materials in support of their contentions.  Hence, it was mere bald statements made by way of defence by the opposite parties without any proof for the same.   As per Ex.A4, Agreement entered between the parties, the flat was promised to be handed over to the complainant within 24 months from the date of Agreement.  As per Ex.A5, the receipts issued by the opposite parties the complainant has made a total payment of Rs.12,28,714/- out the total amount of Rs.16,90,544/-.  Hence, they are legally obliged to construct and handover the apartment to the complainant as per the agreed schedule found in the agreement. Therefore failing to comply the terms as clearly found in the agreement after receipt of amount by citing irrelevant reasons clearly amounts to deficiency in service.  

10.       We could see from the Ex.A13, letter issued by the Ministry of Commerce, wherein it has been specifically replied for the email  complaint registered the complainant to the Government as follows:-

“The provision to prevent lease of apartment in SEZ to outside SEZ individuals was contained in Rule 11(10) of SEZ Rules 2006. However, vide Notification No. G.S.R. 5(E) dated 2.1.2015, this Rule was omitted and Rule 11A was inserted, which allows dual use of infrastructure in the Non-processing Area (NPA ) of the SEZ subject to the conditions prescribed in the Rule itself. However, no sale is permitted and only leasehold rights are provided to users of such infrastructure”.

11.       As per the reply given as cited above the opposite parties are not entitled to lease the properties in SEZ Zone to outsiders as per law but they had issued advertisement for selling of apartments against the said provision. Therefore, when it is clearly mentioned that no sale is permitted and even the lease hold rights are provided in the Special Economic Zone only  to the users of the infrastructure and not to any third party, the advertisement for leasing the said property by opposite parties clearly amounted to unfair trade practice on part of them. Thus we hold that the opposite parties had committed clear deficiency in service and unfair trade practice and we answer point No.2 in favour of the complainant and as against the opposite parties.

12.       Point No.3:-

As we have come to the conclusion that the opposite parties have committed deficiency in service and unfair trade practice the complainant should be compensated in terms of money. It is evident as per the payment receipts Ex.A5, issued by the opposite parties that they have received Rs.12,28,714/- from the complainant.  Thus complainant is entitled for refund of the said amount with interest at the rate of 18% p.a. from the date of complaint till realization. Further, he is also entitled for a compensation of Rs.2,00,000/- for the mental agony and hardship suffered by him.  Cost of Rs.10,000/- is awarded to the complainant. Thus, we answer point No.3 in favour of the complainants.

In the result, this complaint is partly allowed as follows :-

1. The opposite parties shall refund the sum of Rs.12,28,714/- (Rupees Twelve Lakhs twenty eight thousand seven hundred and fourteen only) with 18% interest from the date of complaint till realization;
2. Compensation of Rs.2,00,000/- (Rupees Two lakhs only) for the mental agony & hardship;
3. Cost of Rs.10,000/- (Rupees Ten thousand only) towards litigation expenses. 

 

 

S.M.LATHA MAHESWARI                                                                         R. SUBBIAH            

          MEMBER                                                                                          PRESIDENT

 

List of Documents filed by the complainant:-   

Ex.A1		Copy of brochure of Marg Properties Utsav Project
Ex.A2	15.12.2009	Copy of email copy of the advertisement of Marg Swarnabhoomi
Ex.A3	16.12.2009	Copy of Booking Form
Ex.A4	11.05.2010	Copy of Agreement to Lease
Ex.A5		Copy of payment request and receipts on various dates
Ex.A6	24.12.2010	Copy of the Housing Loan Application to State Bank of India
Ex.A7	13.01.2011	Copy of the Tripartite Agreement with SBI upfront Home Loan & SBI letter to NCTDL
Ex.A8	10.12.2011	Copy of the Home Loan sanction from SBI
Ex.A9	28.12.2011	Copy of Lease Deed
Ex.A10	16.05.2012	Copy of the Memorandum relating to deposits of Title Deeds
Ex.A11		Copy of various email correspondence between complainant and opposite parties
Ex.A12	29.01.2015	Copy of letter from SEZ & HEOUs in Tamil Nadu, Pondicherry, Andaman & Nicobar Island
Ex.A13	09.04.2015	Copy of letter from the Government of India, Ministry of Commerce
Ex.A14	18.11.2013	Copy of letter from GRK. Reddy, Chairman & Managing Director
Ex.A15	04.03.2015	Copy of legal notice
Ex.A16	15.03.2015	Copy of reply legal notice

 

List of Documents filed by the opposite parties:-   

Nil

 

 

S.M.LATHA MAHESWARI                                                                         R. SUBBIAH            

          MEMBER                                                                                          PRESIDENT