Tamil Nadu

StateCommission

CC/123/2017

S.Sathyanarayanan, Rep by POA Malini - Complainant(s)

Versus

New Chennai Township Pvt. Ltd., Rep by M.D., & anr - Opp.Party(s)

K.Jagannathan-Compt

24 Dec 2021

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI – 600 003.

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

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

 

C.C. No.123/2017

DATED, THE 24^th DAY OF DECEMBER 2021

Mr. S. Sathyanarayanan,

S/o. Mr. N.S. Sampath,

Represented by his Power of Attorney

Mrs. Malini,

Plot No.5, Door No.7, 3^rd Cross Street,

Shanthi Apartments,

Kannapa Nagar,

Thiruvanmiyur,

Chennai – 600 041.                                                                           .. 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. Jagannathan

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

 

This complaint having come up for final hearing before us on 24.12.2021 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.13,24,674/- 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 ”UTSAV” in 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 measuring an extent of 1053 sq. ft. together with the Undivided Share of 663 sq. ft. for an one-time lease rental for 99 years at the cost of Rs.17,70,440/-. On    08.11.2010 vide cheque No. 581730 drawn on HDFC Bank, Nungambakkam Branch an amount of Rs.2,33,767/- was paid as booking amount plus first installment.  The Agreement to Lease was entered on 06.12.2010 and as per the said Agreement to Lease the opposite parties agreed to execute the Lease Deed and handover the possession of the Apartment during or after February 2012 with a grace period of 3 months.  The opposite parties contacted the complainant in June 2012 and informed that the plinth has been completed and as per the Agreement, requested to pay a sum of Rs.1,55,844/- and the same was paid vide cheque dt.30.06.2012 drawn in Citi Bank for which, receipt was issued.   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 complainant was contacted in the month of July 2012, September 2012, January 2013 and on several dates and was requested payment informing about the stages of construction which was promptly paid by the complainant.   But though the Lease Agreement was entered no Lease Deed was executed by the opposite parties nor the possession was handed over as promised in the Lease Agreement.  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 thus paid advance amounts by cheques on several occasions amounting to Rs.13,24,674/- and the opposite parties had issued valid receipts for the same.   However, the construction was delayed by the opposite parties and the complainant waited patiently till October 2014 but to his shock there was no communication from the opposite parties.  Thus, the complainant issued a legal notice dated:23.11.2015 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 the 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.13,24,674/- with 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.A8.  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 :

Proved 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 for 99 years lease in Marg Swarnabhoomi measuring an extent of 1053 sq. ft. super built up area with undivided share of land 663 sq. ft. by paying an advance amount along with 1^st installment of Rs.2,33,766/- for an one-time lease rental for 99 years at the total cost of Rs.17,73,440/-;
2. That the payment receipts and payment request letter were marked as Ex.A1;
3. That the Lease Agreement dt.06.12.2010  was marked as Ex.A2;
4. That the Account Statement issued by the opposite parties dt.09.02.2013 was marked as Ex.A3;
5. The email correspondences between the parties were marked as Ex.A4;
6. That the Agreement to Lease dt.04.12.2012 was marked as Ex.A5;
7. That the letter from the NCTPL Chairman and Managing Director GRK Reddy dt.18.11.2013 was marked as Ex.A5 in which, the complainant was informed that the work at the project site was slowed down and intimating that the work would be started in only by December 2013;
8. That the legal notice dt.23.11.2015 was marked as Ex.A6;
9. That the reply legal notice dt.27.01.2016 was marked as Ex.A7;
10. That letter dt.09.04.2015 from the Government of India, Ministry of Commerce was marked as Ex.A8;

That the complainant had filed the complaint for refund of the amount of Rs.13,24,674/- with compensation of Rs.15,00,000/- along with interest at the rate of 18% p.a. and 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 06.12.2010 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 lease amount payable was 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 “Marg Swarnabhoomi”  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 the project ‘Marg Swarnabhoomi’, a flat measuring an extent of 1053 sq. ft. super built up area with undivided share of land 663 sq. ft.  for an one-time lease rental for 99 years at the cost of Rs.17,73,440/- 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 a total payment of Rs.13,24,674/- out of the total one time lease rental amount of Rs.17,73,440/- for which, proper receipts were issued by the opposite parties.  

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.A2, Agreement entered between the parties, the flat was promised to be handed over to the complainant within 24 months from the date of Agreement with a grace period of 3 months.   The opposite parties also 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 gross negligence and deficiency in service.  

10.       We could see from the Ex.A8, letter issued by the Ministry of Commerce, 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 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 Account Statement dt.19.02.2013 Ex.A3, issued by the opposite parties that they have received Rs.13,24,674/- from the complainant for which, receipts were issued which is marked as Ex.A1. 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.13,24,674/- (Rupees Thirteen Lakhs twenty four thousand six hundred and seventy four 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 payment receipts and payment request letters
Ex.A2	06.12.2010	Copy of Lease Agreement
Ex.A3	19.02.2013	Copy of Account Statement from Marg
Ex.A4		Copy of emails
Ex.A5	18.11.2013	Copy of letter from the NCTPL Chairman and Managing Director GRK Reddy
Ex.A6	23.11.2015	Copy of legal notice
Ex.A7	27.01.2016	Copy of reply legal notice
Ex.A8	09.04.2015	Copy of letter from the Government of India, Ministry of Commerce

 

List of Documents filed by the opposite parties:-   

Nil

 

 

S.M.LATHA MAHESWARI                                                                         R. SUBBIAH            

          MEMBER                                                                                          PRESIDENT