Tamil Nadu

South Chennai

CC/250/2013

Sri Ramakrishna rao - Complainant(s)

Versus

REAL Value Promoters Pvt, Ltd., - Opp.Party(s)

L.Maithili Associates

11 Mar 2019

ORDER

                                                                        Date of Filing  : 30.07.2013

                                                                          Date of Order : 11.03.2019

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

                 TMT. K. AMALA, M.A., L.L.B., PGDCLP.                : MEMBER-I

TR. R. BASKARKUMARAVEL, B.Sc., L.L.M., BPT., PGDCLP.  : MEMBER-II

 

C.C. No.250/2013

DATED THIS MONDAY THE 11^TH DAY OF MARCH 2019

                               

Sri Ramakrishna Rao,

S/o. Late. Dr. K. Sanjeeva Rao,

Flat No.4, Ceeamvee Apartments,

No.10, Kelly’s Lane,

Kilpauk,

Chennai – 600 010.                                                       .. Complainant.                           

..Versus..

 

M/s. Real Value Promoters Pvt. Ltd.,

Represented by its Directors

Mr. V. S. Saravanan & Mr. V. S. Suresh,

Ambojini, No.17-1,

Poes Road, 2^nd Street,

Teynampet,

Chennai – 600 018.                                                    ..  Opposite party.

          

Counsel for the complainant     :  M/s. L. Maithili Associates

Counsel for the Opposite party :  Mr. A. Palaniappan

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 prays to pay a sum of Rs.7,59,946/- towards compensation for mental agony, irreversible hardship and monetary loss caused to the complainant due to the negligence and deficiency in service of the opposite party.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that he entered into an agreement with the opposite party on 03.10.2008 for purchasing a flat with super built up are of 1,402 sq. ft. in the 4^th floor of “Sai Surya - Block A” at Kamakoti Nagar, Pallikaranai, Chennai – 601 302.   The complainant has acquired 850 sq. ft. of undivided share vide registered Sale Deed dated:10.11.2008.   As per the agreement, the complainant has paid the entire consideration of Rs.51,07,000/- being the sale value and the cost of construction.  The complainant also has made prompt payment at every stage of construction on receiving the payment schedule from the opposite party.   At the stage of 84% of the construction, the complainant became aware of the payment and requested the opposite party to collect the cheque in the month of July 2010.  Since the opposite party failed in collecting the cheque, the complainant was forced to pay interest.  The complainant submits that at the end of 100% construction, the complainant was constrained to pay a total sum of Rs.54,51,575/- is seen from keeping a balance of Rs.5,57,233/- including interest service tax etc.   The complainant submits that the opposite party was required to handover the possession of the flat not later than 02.07.2010 inclusive of the 3 months grace period.   But the opposite party has handed over possession only during July 2012 i.e. after a delay of over 2 years.    The complainant submits that the claim of service tax by the opposite party is whimsical and against the prevailing law.  The opposite party collected a sum of Rs.1,72,207/- towards service tax as per Circular No. 108/2/2009 dated:29.01.2009 attached with letter dated:30.03.2009 and the complainant is not liable to pay any service tax.  The complainant submits that if the opposite party constructed the apartment and handed over possession within the reasonable time as per the agreement, there shall be no payment towards service tax arise.   The complainant submits that due to inordinate delay in handing over the apartment, the complainant was compelled to avail rental building on payment of rent of Rs.10,000/- per month.   The act of the opposite party amounts to deficiency in service and unfair trade practice which caused great mental agony.  Hence, the complaint is filed.

2.      The brief averments in the written version filed by opposite party is as follows:

The opposite party specifically denies each and every allegation made in the complaint and puts the complainant to strict proof of the same.    The opposite party states that the complainant entered into an agreement on 03.10.2008 for purchase of an apartment measuring 1402 sq. ft. for a total cost of Rs.54,51,575/-   All the construction works of the opposite party starts after due approval and appropriate sanction of the authorities.   The delay in handing over the possession of the apartment is due to unforeseen circumstances for which, a compensation of Rs.84,120/- was paid on 21.07.2012 towards full satisfaction.  The opposite party states that the claim of Rs.10,000/- towards by the compensation is an imaginary one.   The opposite party states that as per the Government Circular, rules, regulations and norms, this opposite party is liable to pay service tax.  The opposite party states that he paid a huge amount towards service tax.   Hence, the complainant is liable to pay service tax and accordingly the complainant paid the amount also.  The opposite party states that the possession was handed over on 21.07.2012 thereby, the opposite party is liable to pay service tax.  Hence, the complainant was compelled to pay the service tax.  Therefore, there is no deficiency in service on the part of the opposite party and hence the complaint is liable to be dismissed.  

3.     To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A31 are marked.  Proof affidavit of the opposite party is filed and documents Ex.B1 to Ex.B5 are marked on the side of the opposite party. 

4.      The points for consideration is:-

1. Whether the complainant entitled to a sum of Rs.7,59,946/- towards compensation for deficiency in service and mental agony as prayed for?
2. Whether the complainant entitled to a sum of Rs.27,000/- towards the cost and expenditure towards prosecuting the case as prayed for?

 

5.      On point:-

The complainant filed his written arguments.  The opposite party advanced his oral arguments.  Perused the records namely the complaint, written version, proof affidavits and documents. Admittedly, the complainant entered into an agreement with the opposite party on 03.10.2008 as per Ex.A2  for purchasing a flat with super built up area of 1,402 sq. ft. in the 4^th floor of “Sai Surya - Block A” at Kamakoti Nagar, Pallikaranai, Chennai – 601 302.   The complainant has acquired 850 sq. ft. of undivided share vide registered Sale Deed dated:10.11.2008 as per Ex.A3.   As per the agreement, Ex.A2, the complainant has paid the entire consideration of Rs.51,07,000/- being the sale value and the cost of construction.  The complainant also has made prompt payment at every stage of construction on receiving the payment schedule from the opposite party.   At the stage of 84% of the construction, the complainant became aware of the payment and requested the opposite party to collect the cheque in the month of July 2010.  Since the opposite party failed in collecting the cheque, the complainant was forced to pay interest.  But on a careful perusal of records, the complainant has not produced any document to prove that he was ready to issue cheque during the month of July 2010.  On the other hand from Ex.A10 to Ex.A15, it is very clear that the complainant was liable to pay interest for belated payment. 

6.     Further the contention of the complainant is that at the end of 100% construction, the complainant was constrained to pay a total sum of Rs.54,51,575/- is seen from keeping a balance of Rs.5,57,233/- including interest service tax etc as per Ex.A24.   Further the contention of the complainant is that the opposite party was required to handover the possession of the flat not later than 02.07.2010 inclusive of the 3 months grace period.   But the opposite party has handed over possession only during July 2012 i.e. after a delay of over 2 years.  On the other hand, it is seen from Ex.A2, Agreement that as per clause G, the handing over possession of the flat shall be within 18 months from the date of obtaining approval and sanction from the competent authority.  In this case, both the parties has not filed any document to prove the date of sanction and plan permission except the recitals.  In Ex.A26, the completion certificate shows the approval by the authority on 18.09.2007.  It is also seen from the records that the complainant and the opposite party after due discussion came to the conclusion and acceptance of sum of Rs.84,120/- as per Ex.A29 towards delay in handing over possession.  Thereby, the allegation of deficiency in service never arise.  

7.     Further the contention of the complainant is that the claim of service tax by the opposite party is whimsical and against the prevailing law.   The opposite party collected a sum of Rs.1,72,207/- towards service tax as per Ex.A5 Circular No. 108/2/2009 dated:29.01.2009 attached with letter dated:30.03.2009 and the complainant is not liable to pay any service tax by the complainant.  Thereafter, the service tax to be paid.  But the opposite party demanded service tax and collected huge amount which amounts to deficiency in service.  But on a careful perusal of Ex.A23, Circular No.151/2/2012-ST dated:10.02.2012 it reads as follows:

(A) Taxability of the construction service:

(i) “For the period prior to 01.07.2010: construction service provided by the builder/developer will not be taxable, in terms of Board’s Circular No.108/02/2009-ST dated:29.01.2009.

(ii) For the period after 01/07/2010, construction service provided by the builder / developer is taxable in case any part of the payment / development rights of the land was received by the builder / developer before the issuance of completion certificate and the service tax would be required to be paid by builder / developers even for the flats given to the land owner”.

8.     In this case, the contention of the complainant is that he entered into a construction agreement on 03.10.2008.   The opposite party handed over possession of apartment during July 2012 there was an inordinate delay of over 2 years in handing over possession for which, the opposite party paid a compensation of Rs.84,120/- also.  If the opposite party constructed the apartment and handed over possession within the reasonable time as per the agreement, there shall be no payment towards service tax arise.  As per the recitals in Ex.A30, due approval was obtained by the opposite party on 18.09.2007 from 18 months from that day fall on 18.07.2009 claiming service tax due to the default and delay in construction by the opposite party amounts to deficiency in service.    As per Ex.A23, upto 01.07.2010 there is no service tax.  Any amount paid towards service tax by the opposite party is only on his own wrong or default.  Further the contention of the complainant is that due to inordinate delay in handing over the apartment, the complainant was constrained to avail rental building on payment of rent of Rs.10,000/- per month.  But the complainant has not produced any rental receipts or agreement in this Forum. 

9.     The learned Counsel for the opposite party would contend that admittedly, the complainant entered into an agreement on 03.10.2008 for purchase of an apartment measuring 1402 sq. ft. for a total cost of Rs.54,51,575/-   All the construction works of the opposite party starts after due approval and appropriate sanction of the authorities.   The delay in handing over the possession of the apartment is due to unforeseen circumstances for which, a compensation of Rs.84,120/- was paid on 21.07.2012 towards full satisfaction.  But the opposite party has not explained the unforeseen circumstances in this Forum.   Further the contention of the opposite party is that the claim of Rs.10,000/- towards by the compensation is an imaginary one without any record.   Further the contention of the opposite party is that as per the Government Circular, rules, regulations and norms, this opposite party is liable to pay service tax.  In this case, as per Ex.B5, the opposite party paid a huge amount towards service tax.   Hence, the complainant is liable to pay service tax and accordingly the complainant paid the amount also.  As per Ex.B4, letter from ministry of Finance, it is very clear that the service tax shall be paid for the residential complex also.  But on a careful perusal of Ex.A23 such service tax shall be paid after 01.07.2010.  Further the contention of the opposite party is that the possession was handed over on 21.07.2012 as per Ex.A30 thereby, the opposite party is liable to pay service tax.  Hence, the complainant was compelled to pay the service tax.  But on a careful perusal of records including agreement, the opposite party shall construct the apartment and handover the possession of the apartment within 18 months from the date of approval plus a grace period of 3 months.  In this case, due approval was obtained on 18.09.2007.  Thereby, the possession shall be handed over within 02.07.2010.  The delay was only due to the latches on the part of the opposite party for which, the complainant shall not be penalize proves the deficiency in service.   Considering the facts and circumstances of the case this Forum is of the considered view that the opposite party shall refund a sum of Rs.1,72,207/- being service tax collected and a compensation of Rs.30,000/- towards mental agony with cost Rs.5,000/-.

In the result, this complaint is allowed in part.   The opposite party is directed to refund a sum of Rs.1,72,207/- (Rupees one lakh seventy two thousand two hundred and seven only) being service tax collected from complainant and to pay a sum of Rs.30,000/- (Rupees Thirty thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The aboveamounts shall be payablewithin six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% p.a. to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 11^th day of March 2019. 

 

MEMBER-I                        MEMBER-II                      PRESIDENT

 

COMPLAINANT SIDE DOCUMENTS:-

Ex.A1	30.09.2008	Copy of payment break-up for 50% completion of construction
Ex.A2	03.10.2008	Copy of agreement of Project Promotion and Construction
Ex.A3	10.11.2008	Copy of Sale Deed
Ex.A4	30.03.2009	Copy of the complainant’s letter to opposite party
Ex.A5		Copy of Circular No.108/02/2009 dated:29.01.2009 attached with the letter dated:30.03.2009
Ex.A6	15.04.2009	Copy of the complainant’s email to opposite party
Ex.A7	28.04.2009	Copy of the complainant’s email to opposite party
Ex.A8	15.05.2009	Copy of the complainant’s letter to opposite party
Ex.A9	19.05.2009	Copy of letter from the opposite party to complainant reg. Service Tax not applicable
Ex.A10	18.06.2009	Copy of payment break up for 67% completion of construction
Ex.A11	21.12.2009	Copy of payment break up for 84% completion of construction
Ex.A12	26.02.2010	Copy of changes made in finance bill dated:08.05.2010
Ex.A13	22.07.2010	Copy of letter from the opposite party Reg. payment dues and interest thereon
Ex.A14	29.07.2010	Copy of the complainant’s communication to opposite party
Ex.A15	03.03.2011	Copy of payment break up for 95% completion of construction
Ex.A16	09.03.2011	Copy of complainant’s letter to the opposite party regarding the non-leviability of service tax
Ex.A17	09.03.2011	Copy of the complainant’s letter to opposite party
Ex.A18	26.04.2011	Copy of the complainant’s letter to opposite party requesting not to charge service tax, as already agreed by the opposite party
Ex.A19	18.05.2011	Copy of the complainant’s letter to opposite party requesting not to charge service tax
Ex.A20	25.05.2011	Copy of service tax demand through e-mail sent by the opposite party to complainant, making it a precondition for handover of flat
Ex.A21	06.06.2011	Copy of service tax demand through e-mail sent by opposite party to complainant along with letter reference No.C No.IV/10/285/09. SR0502 dated:22.10.2009
Ex.A22	17.08.2011	Copy of complainant’s email communication to the opposite party
Ex.A23	10.02.2012	Copy of Circular No.151/2/2012-ST
Ex.A24	01.06.2012	Copy of payment break up for 100% completion of construction
Ex.A25	01.06.2012	Copy of email from the opposite party to complainant
Ex.A26	14.06.2012	Copy of email from the opposite party to complainant with ‘Completion Certificate dated:23.12.2011’
Ex.A27	01.07.2012	Copy of the complainant’s letter to opposite party to revise the payment schedule
Ex.A28	20.07.2012	Copy of revised payment break-up for 100% completion of construction
Ex.A29	21.07.2012	Copy of the complainant’s letter to opposite party on receiving payment for delay in possession
Ex.A30	21.07.2012	Copy of the complainant’s letter to opposite party on taking possession of the flat
Ex.A31	05.06.2013	Copy of legal notice issued by the complainant to the opposite party along with acknowledgement card

 

OPPOSITE PARTY SIDE DOCUMENTS:-

Ex.B1	23.08.2013	Copy of Board Resolution
Ex.B2	01.06.2012	Copy of letter specifying the compensation amount
Ex.B3	04.02.2011	Copy of letter specifying the service Tax amount
Ex.B4	22.10.2009	Copy of letter from the Ministry of Finance Office of the Deputy commissioner of Service Tax
Ex.B5		Copy of counter foil of the bank evidencing payment of service Tax

 

 

MEMBER-I                        MEMBER-II                      PRESIDENT