Tamil Nadu

StateCommission

CC/118/2015

Mr.Srnivasa Narasimhan, - 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.118/2015

DATED, THE 6^th DAY OF OCTOBER 2021

Mr. Srinivasa Narasimhan,

S/o. Late Mr. A.V. Sundararajan,

Flat No.4, Sri Lakshmi Flats,

No.4, Velayutha Raja Street,

Mandavelli,

Chennai – 600 028.                                                                           .. 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”, g

No.4/318, Rajiv Gandhi Salai,

Kottivakkam,

Chennai – 600 041.                                                                    .. Opposite parties.

 

Counsel for Complainant                           : M/s. D. Latha

Counsel for Opposite parties                     : 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 on the open Court:-

 

 

 

ORDER

 Dr. S.M. LATHA MAHESWARI   : MEMBER

1.         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 booking amount of Rs.9,68,040/- paid by the complainant along with interest at the rate of 18% p.a. and Rs.15,00,000/- towards compensation for mental agony suffered by the complainant with cost.

2.         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 – “AAYUSH” at “Marg Swarnaboomi” Block “C”, Apartment No.1101 in 11^th Floor measuring 629 sq. ft. together with an undivided share of land of 221 sq. ft. and for an one-time lease rental for 99 years at the cost of Rs.11,10,850/-.  The complainant paid an advance amount of Rs.50,000/- vide cheque No.2667 dated:01.01.2012 drawn on IOB Bank, Velachery Branch for which, the 2^nd opposite party had issued a receipt.   The flat was booked only after the second opposite party showed the model flat and offered it for 99 years lease and also on assurance that the construction of the flat would be over in 24 months.  The Agreement for Lease was entered on 23.04.2013 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.11,10,850/-.  It was also agreed between the parties that the delay beyond 3 months to handover 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 thus paid advance amounts by cheques on several occasions amounting to Rs.9,68,040/- between 01.01.2012 to 29.01.2013 and the opposite parties had issued payment valid receipt for the same. However the construction was delayed by the opposite parties and even in the month of December 2014 the project stood only with skeleton of pillars. Thus, the complainant issued a legal notice dated: 04.04.2015 to the opposite parties.  One of the Marg’s customer  registered an online complaint with the Government of India, for which a reply 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.9,68,040/- along with interest at the rate of 18% p.a. on the booking amount and compensation of Rs.15,00,000/- for mental agony caused to the  complainant along with cost of the proceedings.

3.         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.

4.         The complainant filed his proof affidavit and submitted documents marked as Ex.A1 to Ex.A10.  The opposite parties filed their proof affidavit but no documents were marked on their side.

5.         Points for Consideration:

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

6.         Point No.1 :

Admitted facts:-

1. The complainant in response to the advertisements made by the 1^st opposite party had agreed to book a flat for 99 years lease in ‘AAYUSH’ in Block “C”  Apartment No.1101 in 11^th Floor measuring 629 sq. ft. together with an undivided share of land of 221 sq. ft. by paying an advance amount of Rs.50,000/- vide cheque No. 2667 dated:01.01.2012 drawn on Indian Overseas Bank, Velachery Branch for one time lease rental for a period of 99 years for total consideration of Rs.11,10,850/-;
2. That the Booking Form of AAYUSH was marked as Ex.A1;
3. That the payment receipts made during the period from 01.01.2012 to 29.01.2013 were marked as Ex.A2;
4. That Agreement to Lease for the Project “AAYUSH” was entered between the complainant and the opposite parties dt.23.04.2012 marked as Ex.A3;
5. That the Provisional Allotment Letter dt.26.12.2012 was marked as Ex.A4;
6. That the Lease Deed dt.01.02.2013 was marked as Ex.A5;
7. That the loan sanction letter from Andhra Bank and affidavit was marked as Ex.A6;
8. That the letter dt.31.03.2014from Marg confirming delay in the project was marked as Ex.A7;
9. That email communications made on various dates from Government of India and Ministry of Commerce was marked as Ex.A8;
10. That the legal notice dt.04.04.2015 was marked as Ex.A9;
11. That the reply legal notice dt.15.04.2015 was marked as Ex.A10;

That the complainant had filed the complaint for refund of the booking amount of Rs.11,10,850/- along with interest at the rate of 18% and a compensation of Rs.15,00,000/- with cost of the complaint.

7.         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 23.04.2012 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 ‘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.

8.         Point No.2 :-

From the admitted facts, we could see that the opposite parties had issued alluring advertisement inviting public to purchase the apartments, the residential project called “AAYUSH”  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  ‘AAYUSH’, Block C, Apartment No. 1101, 11^th Floor measuring 629 sq. ft. with an undivided share of 221 sq. ft. for one time lease rental for a period of 99 years for a consideration of Rs.11,10,850/- 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 payment as follows:-

1. Rs. 50,000/- vide cheque No.2667, dt.01.01.2012
2.  Rs.1,53,410/- vide cheque No.448457 dt.30.01.2012, 
3. Rs.50,000/- vide cheque No.760684 dt.09.12.2012 &
4. Rs.7,14,630/- vide receipt No.4731 dt.29.01.2013

Thus totally an amount of Rs.9,68,0405/- had been paid out of the total one time lease rental amount of Rs.11,10,850/-.  

9.         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. However as per Ex.A3 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.A2, the opposite parties had issued valid receipts for the total amount paid by the complainant. Thus the opposite parties had not denied the receipt of the amount.  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 letter issued by the Ministry of Commerce - Ex.A8, wherein it has been specifically replied for the email  complaint registered by one of the Marg customer 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 cited above the opposite parties are not entitled to lease properties in SEZ Zone to outsiders as per law but they had issued advertisement for selling of apartment 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 infrastructure and not to any third party, the advertisement for leasing the said property 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 against 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 receipts Ex.A2, issued by the opposite parties that they have received Rs.9,68,040/- from the complainant by cheques between the period of 01.01.2012 to 29.01.2013.  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.9,68,040/- (Rupees Nine lakhs sixty eight thousand and forty 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	03.01.2012	Copy of thanking letter for booking the apartment
Ex.A2	01.01.2012 to 29.01.2013	Copy of payment receipts
Ex.A3	23.01.2012	Copy of Agreement to Lease
Ex.A4	26.12.2012	Copy of provisional allotment letter
Ex.A5	01.02.2013	Copy of lease Deed
Ex.A6	23.01.2013	Copy of loan sanction letter from Andhra Bank and affidavit
Ex.A7	31.03.2014	Copy of letter from Marg confirming delay in the project
Ex.A8		Copy of e-mail communications from Government of India & Ministry of Commerce
Ex.A9	04.04.2015	Copy of legal notice
Ex.A10	15.04.2015	Copy of reply legal notice

 

List of Documents filed by the opposite parties:-   

Nil

 

 

S.M.LATHA MAHESWARI                                                                         R. SUBBIAH            

          MEMBER                                                                                          PRESIDENT