2. Kallam Housing & Real Estate Pvt. Ltd.,

    Rep. by its Managing Director

    Kallam Harinatha Reddy, S/o. Chalama Reddy,  

    R/o. House No.1-2-8, 1^st line, JKC Nagar,

    Gujjangundla Circle, Guntur–6.                        … Opposite parties

              This complaint coming up before us for final hearing on                      05-09-11 in the presence of Sri V.Lakshmi Narayana Rao, Advocate for complainant and 1^st opposite party remained exparte, Sri B.S.Rajasekhar, Advocate for 2^nd opposite party, upon perusing the material on record, hearing both sides and having stood over till this day for consideration, this Forum made the following: 

O R D E R

Per Sri M.V.L.Radha Krishna Murthy, Member:

                This complaint is filed under section 12 of the Consumer Protection Act, 1986 by the complainant praying to direct the opposite parties to pay a sum of Rs.20,00,000/- (including refund of advance amount of Rs.10,00,000/- with interest, mental agony and damages) with interest at 24% p.a. from the date of complaint till realization and for costs.

The averments of complaint in brief are as follows:

                The 1^st opposite party represented that it is the absolute owner of scheduled mentioned property and going to construct an apartment in the scheduled property.  Believing the representations of 1^st opposite party, complainant and several others entered into agreement with 1^st opposite party for purchase of apartment that are going to be constructed in the scheduled property.  The complainant having agreed to purchase one such flat for a sum of Rs.34,89,750/- paid a sum of Rs.5,00,000/- by way of cheque dt.20-08-07, Rs.3,00,000/- under cheque dt.12-11-07 and Rs.2,00,000/- under cheque dt.31-12-07 i.e., total sum of Rs.10,00,000/- to the 1^st opposite party and on receipt of the same, 1^st opposite party executed agreement of sale of residential flat on 12-11-07 in favour of complainant mentioning the terms and conditions agreed upon.  As per the terms and conditions of agreement, complainant has to pay the balance amount of Rs.24,81,750/- to opposite party in three stages i.e., Rs.10,00,000/- on completion of slab of respective floor, Rs.10,00,000/- to be paid on completion of construction of brick work, plastering and electrification and the balance amount of Rs.4,89,750/- fifteen days prior to delivery of flat. On completion of work, 1^st opposite party has to get the flat registered in the name of complainant.

                1^st opposite party having received the advance amount of Rs.10,00,000/- from the complainant promised to complete the construction and deliver the flat but failed to start construction.  Complainant personally and through mediators demanded the 1^st opposite party to start construction and complete it and receive the balance amount and deliver possession of flat by registering the same in her favour.  The 1^st opposite party has been postponing the same on one pretext or the other. The 1^st opposite party committed breach of undertaking given by him and failed to construct the apartment. On account of conduct of 1^st opposite party, complainant suffered mentally and monetarily.  Inspite of best efforts of complainant, the 1^st opposite party failed to start construction of flats.  The 1^st opposite party thus committed deficiency of service. 

                It is reliably learnt that 1^st opposite party having failed to start construction executed a sham, nominal collusive agreement with 2^nd opposite party. The 2^nd opposite party knowing about the execution of agreement by 1^st opposite party in favour of complainant and others seems to have obtained documents, which are nominal, collusive and brought into existence only to defeat the rights of complainant and other purchasers.  As the complainant entered into an agreement for purchase of undivided share and paid consideration and as 1^st opposite party having received the consideration undertaken to start construction and handover the flat to the complainant long prior to entering into contract with 2^nd opposite party, the contract entered into by 1^st opposite party with 2^nd opposite party is not binding on the complainant and both are liable to pay damages suffered by complainant.  Hence, the complaint.

                The 1^st opposite party remained exparte.

The 2^nd opposite party filed its version, which is in brief as follows:

                Most of the averments made in the complaint are not true and the complaint is not maintainable either on law or on facts.  Complaint is bad for mis-joinder of parties and this opposite party is not a proper and necessary party to the proceedings.  The complaint is misconceived and not maintainable in view of the fact that the complainant is not a consumer since the persons who avail services of any kind for commercial purpose are taken out of the definition of the term consumer and this Forum has no jurisdiction.

                This opposite party (2^nd opposite party) purchased the property in an extent of 3541 sq.yards from 1^st opposite party for valid consideration under registered GPA-cum-sale agreement dt.19-05-10 and since then the 2^nd opposite party is in possession and enjoyment of the same in his own right, title and interest.  The property purchased by 2^nd opposite party is situated to the northern side of the property shown by the complainant and both the properties are different and distinct from each other.  The vendor of this opposite party i.e., 1^st opposite party is having larger extent of acres 4.33 cents and out of which he sold an extent of 3541 sq.yards to this opposite party.  Even prior to this transaction 1^st opposite party started construction of apartments more specifically described as B Schedule in the agreement for sale executed in between the complainant and 1^st opposite party.  The 2^nd opposite party purchased property only on         19-05-10.  A perusal of boundaries of both properties clearly shows that both the properties are different and not one and the same.  This opposite party is in no way concerned with the transactions between the complainant and 1^st opposite party.  The remedy of complainant is otherwise and not against this opposite party. There are no transactions in between the complainant and this opposite party.  The complaint has no cause of action against this opposite party and there is no relationship of consumer and service provider between the complainant and 2^nd opposite party.  As such this petition is not maintainable against this opposite party and is liable to be dismissed.

                Complainant and 2^nd opposite party filed their respective affidavits in support of their versions reiterating the same. 

                On behalf of complainant Ex.A1 and A2 are marked. Ex.A1 is the sale agreement dt.12-11-07 between the complainant and 1^st opposite party.  Ex.A2 is the sale agreement dt.19-05-10 between opposite parties 1 and 2.   No documents are marked on behalf of 2^nd opposite party.

Now the points for consideration are

1. Whether there is any deficiency of service on the part of opposite parties 1 and 2?
2. To what relief the complainant is entitled to?

POINT No.1

                 As seen from Ex.A1, 1^st opposite party executed sale agreement of residential flat for a sum of Rs.34,89,750/- in favour of complainant on receipt of Rs.10,00,000/-.  As seen from clause 5 of Ex.A1, the builder i.e., 1^st opposite party shall complete the construction work within a period of 15 months from the date of commencement of construction hereafter with a grace period of 90 days. The complainant has to pay remaining amount i.e., Rs.24,89,750/- as per the payment schedule mentioned in Ex.A1.  According to it complainant has to pay Rs.10,00,000/- on completion of respective floor slab, Rs.10,00,000/- on completion of respective flat brick work, plastering and electrification and Rs.4,89,750/- at the time of delivery of flat (15 days prior to delivery).  On receipt of Rs.10,00,000/- 1^st opposite party executed Ex.A1 in favour of complainant.  As per the allegation of complainant, 1^st opposite party has not started construction of flats and sold away 3541 sq.yards of sight to 2^nd opposite party under Ex.A2 dt.19-05-10 and that thereby 1^st opposite party failed to execute the terms of contract of sale as per Ex.A1.  Since 1^st opposite party remained exparte, the said allegation of complainant is deemed to have been proved.  The 2^nd opposite party is not a party to the contract of sale of flat agreement (Ex.A1).  Even though, 2^nd opposite party purchased sight to an extent of 3145 sq.yards from out of the B-Scheduled property of Ex.A1 under Ex.A2, there is no relationship of consumer and service provider between the complainant and 2^nd opposite party. Therefore, the dispute against 2^nd opposite party is not a consumer dispute.  Hence, we cannot find deficiency of service against 2^nd opposite party and he is not liable for the refund of amount paid by the complainant to 1^st opposite party or for any compensation.  As already stated above since 1^st opposite party remained exparte the allegations made against 1^st opposite party by complainant are deemed to have been proved and the act of 1^st opposite party amounts to unfair trade practice and that 1^st opposite party is liable to refund the amount received by him from the complainant together with interest thereon and also liable to pay compensation for the mental agony suffered by the complainant.  Accordingly this issue is answered in favour of complainant and against 1^st opposite party.     

POINT No.2

                The complainant claimed refund of Rs.10,00,000/- with interest, mental agony and damages total aggregating to Rs.20,00,000/- with interest at 24% p.a. from the date of complaint till realization. The amount of Rs.10,00,000/- claimed towards interest and damages for mental agony is too high and imaginary and there is explanation for the same as to how such figure is arrived at.  Therefore, we feel it just and necessary to order for refund of Rs.10,00,000/- (amount paid by the complainant) together with interest thereon at 9% p.a. from the date of Ex.A1 i.e., 12-11-07 till realization and also to pay an amount of Rs.50,000/- towards the damages for mental agony suffered by the complainant would meet the ends of justice. Accordingly this issue is answered in favour of complainant and against 1^st opposite party.   

                In the result, the complaint is allowed in part in terms as indicated below:

1. The 1^st opposite party is hereby directed to pay an amount of Rs.10,00,000/- (Rupees ten lakhs only)  to the complainant together with interest thereon at 9% p.a. from 12-11-07 (date of Ex.A1) till realization.
2. The 1^st opposite party is further directed to pay an amount of Rs.50,000/- (Rupees fifty thousand only) to the complainant towards the damages for the mental agony suffered by him. 
3. The 1^st opposite party is further directed to pay an amount of Rs.2000/- towards costs of complaint.
4. Complaint against 2^nd opposite party is dismissed.
5. The above orders shall be complied within a period of six weeks failing which, the amount ordered in item No.2 shall also carry interest at 9% p.a. till realization.  

Typed to my dictation by the Junior Steno, corrected by me and pronounced in the open Forum, this the 12^th day of September, 2011.     

       MEMBER                            MEMBER                            PRESIDENT

 APPENDIX OF EVIDENCE

                                        DOCUMENTS MARKED

For Complainant:         

For opposite parties:  NIL

                                                                                             PRESIDENT