BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD.
C.C.No.50/2011
Between:
Paradise Isle Apartments Owners
Welfare Association, Maharanipeta,
Represented by its Secretary. …. Complainant
And
The Managing Director,
Pratima Estates Ltd.,
House No.213, Road No.1, Family Nagar,
Jubilee Hills, Hyerabad – 500 090. …Opp. party
Counsel for the complainant : M/s.Kandala Srinivasa Rao
Counsel for the opp.party : M/s.G.Shashidar Reddy
QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT,
AND
SRI S.BHUJANGA RAO, HON’BLE MEMBER.
FRIDAY, THE TWENTY EIGHTH DAY OF SEPTEMBER,
TWO THOUSAND TWELVE.
Oral Order : (Per Sri S.Bhujanga Rao, Hon’ble Member).
***
The complainant association filed the complaint against the opposite party under Section 17(1)(a) of Consumer Protection Act seeking direction to the opposite parties to pay an amount of Rs.96,74,553/- as detailed below:
1. Amount collected towards corpus fund : Rs.33,00,000-00
2. Interest thereon @ 24% p.a. from 19.3.2009
when the Association was registered till date: Rs.11,61,600-00
3. Amount of Penal Charges paid on water : Rs.10,97,953-00
4. Compensation towards mental agony ,
Physical inconvenience, strain etc. : Rs. 15,00,000-00
5. Amounts collected towards parking slots
in the stilt area : Rs.18,00,000-00
6. Amount to be deposited with GVMC for
Water : Rs. 8,00,000-00
7. Charges incurred for this notice : Rs. 15,000-00
______________
Rs.96,74,553-00
_______________
and to pay subsequent interest on item no.2 and costs of the complaint.
The brief case of the complainant as set out in the complaint is as follows:
The opposite party issued a brochure assuring lofty common facilities like Swimming pool, Gim etc. Believing the representations opposite party made, individuals who formed later complainant association, purchased flats and entered into agreement with the opposite party and the opposite party collected huge amounts from each of the flat purchasers.
The opposite party collected Rs.50,000/- from each purchaser as non refundable deposit stating that it is for the purpose of ‘Corpus Fund’ promising it to be handed over to the complainant on its formation. Thus the opposite party collected Rs.33 lakhs and the amount has been lying with the opposite party and the opposite party failed to handover the same to the complainant association though promising to do so . Since the opposite party failed to handover the said amount when due and demanded, the opposite party is liable to pay interest at 24% p.a.
The opposite party promised to provide as per specifications annexed to the agreement and he has undertaken to provide the items 1 to 31 as detailed in paras 2 and 3 of the complaint as Item ‘A’.
For the reason of the opposite party not handing over the corpus fund, the association is finding it difficult in maintaining the apartment complex. In view of the improper maintenance of the opposite party, there is every chance of fire hazard, gas leak or accidents in the lifts or sudden shutdown of power supply or water supply to the apartments . If any of the above accidents or hazards occur, the complainant is not in a position to take necessary action or rectify or repair requirement in view of the non availability of the concerned documents and the contacts.
The opposite party retained certain flats and he has sent Sri Raghavendra Babu as his representative to the complainant. He was also elected to the Executive Committee of the complainant association. At the General Body meeting, the said representative of the opposite party, when demanded to handover the corpus fund, original documents etc., he promised that everything will be handed over , once the association gets registered. The complainant association was duly registered on 19.3.2009 and was allotted no.213/09. Inspite of repeated demands, the opposite party failed to handover the said corpus fund, documents and completion of unfinished jobs. Finally reminder also served on the opposite party on 23.4.2009. The complainant wrote a registered letter on 15.6.2009 reiterating the demands. The opposite party received the same on 21.6.2009, but he failed to comply or even reply.
The representative of the opposite party has unilaterally stopped attending to maintenance from 1.4.2009 compelling the complainant association to take up the responsibility. It is the responsibility of the opposite party till he handed over the total complex duly completed, in all respects, in terms of the agreement, brochure and handover the corpus fund and the approvals, permission and other documents.
The further case of the complainant is that it is brought to the notice of the association that the opposite party has not paid the water deposit as per the requirement of Greater Visakhapatnam Municipal Corporation and the opposite party has undertaken to GVMC. This has resulted in demand of penal charges from the Corporation for each drop of water consumed above 30 KL and the water charges are exorbitant. The opposite party is responsible for the penal charges, paid by the complainant in respect of water consumption charges which penal charges are the direct result of callousness and negligence of the opposite party in that regard. The following penalties are paid by the complainant to GVMC in respect of the penal charges on water for the entire complex.
May 2009 : Rs.61,200-00
June 2009 : Rs.55,680-00
July 2009 : Rs.54,660-00
August2009 : Rs. 57,000-00
September 2009 : Rs.86,040-00
October 2009 : Rs.89,760-00
November,2009 : Rs.81,060-00
December, 2009 : Rs.80,700-00
January 2010 : Rs.84,060-00
February 2010 : Rs.92,753-00
March 2010 : Rs.66,360-00
April,2010 : Rs.70,980-00
May 2010 : Rs.81,960-00
June 2010 : Rs.81,720-00
July2010 : Rs.42,600-00
___________
Rs.10,87,593-00
__________
The opposite party has not provided individual water meters though it was specifically agreed and demanded. The complainant has addressed a letter dt.26.5.2009 to the Commissioner , GVMC for investigation as to the correctness of the amounts demanded, surcharge, penal charges on water and reasons thereof. The entire expenditure is due to the non performance of terms of the agreement with the flat owners and providing individual meters etc. by the opposite party.
The further case of the complainant is that the opposite party has sold parking slots in the stilt area and has collected an amount of Rs.18 lakhs from the flat owners which the opposite parties bound to refund.The complainant states that because of negligence, non performance and deficiency in implementation of the terms of agreement, even after, full receipt of consideration from flat owners and inspite of repeated demands to make good the loss and to complete the works promised, to handover the duly completed complex and the corpus fund, the complainant as an association of the flat owners and the flat owners, as such, are put to mental agony, physical inconvenience, strain discomfort and the resultant loss. The opposite party is bound under law to compensate the complainant association and flat owners. Though, it is inestimatable, the complainant is putting loss at Rs.15 lakhs and the opposite party was asked to pay. The opposite party has also to provide, as promised, annual maintenance charges for one year after the registration of the Association and the opp.party has failed to provide the same.
When the opposite party failed to comply, a lawyer’s notice dt.30.9.2010 demanding payment of Rs.96,74,553/- was issued . The opposite party received the said notice and sent contentious reply dt.11.10.2010 with false , frivolous and untenable allegations. The opposite party failed in all respects and deficiency in service is actionable. Hence the complaint.
Resisting the complaint, the opposite party filed counter/version denying the material allegations made in the complaint and contended that the opposite party carried out the construction strictly adhering to the specifications mentioned in the purchase agreement of flat owners and provided all the amenities, in accordance with the said specifications, in the agreement . Regarding the title deeds , sanctioned plan etc. the opposite party contended that all the flat owners were provided with all the title deeds , sanctioned plan permits , water connection documents and NOC of fire service etc. for verification of opp.party’s valid title over proposed complex. It was only after due verification of opposite party’s title, the flat owners, having fully satisfied with its valid title, had entered into the purchase agreements. Later, all the flat owners have submitted full set of said documents to their respective bankers, for sanction of loans. After careful scrutiny and concluding the opp.party’s valid title and approvals from the civil authorities , the banks have disbursed the loans to the respective flat owners.
The opposite party further stated that he has provided, as per the agreed specifications as follows:
a). Provided two passenger and one service lifts, make “OTIS LIFTS” a leading and reputed company in India and handed over initial Annual Maintenance Contract to complainant.
b). Provided soundproof Diesel Generator set manufactured by reputed company “KIRLOSKAR” to meet power back up facility to the complex and handed over initial Annual Maintenance Contract to complainant.
c). Provided good Swimming pool with water treatment plant and furnished the information of periodical maintenance provider to the complainant .
d). Provided adequate Fire protection equipments and furnished information to the complainant.
e). Procured piped gas connection to the whole of the complex and passed on to the complainant relevant allotment papers/documents issued by gas agency after being satisfied with fire safety measures taken by opposite party.
f). Provided intercom facility in the complex as promised and handed over details of intercom provider to the association for their reference.
After flats are delivered to the buyers by completing the construction of complex as agreed, the flat owners took over the maintenance of the complex, as such, with the afore mentioned information provided by the opposite party, the complainant association is bound to maintain all such amenities, time to time, getting annual maintenance contracts renewed with respective manufacturers/service providers. The opposite party has never undertook the responsibility of maintenance of the said complex after its completion. Accordingly, during January, 2009, on the request made by the association vide letter dt.5.1.2009, the opposite party handed over initial annual maintenance contracts and other relevant documents with details of service providers, to the complainant. By the said date, the opposite party has completed all the left over minor works and reported the same to the complainant. The opposite party, further, contended that even after delivery of flats to the respective owners, some of the flat owners will owe certain amounts to the opposite party. Even after taking over the responsibility of the maintenance, the said debtors were reluctant to clear the opposite party’s legitimate dues. Even the opposite party had to file a criminal case vide C.C.No.5/2010 against one of the flat owners namely Smt. P.Gnaneshwari and another for bouncing the cheque issued in discharge of their liability and the said case is pending on the file of III Addl. Chief Metropolitan Magistrate , Hyderabad.
The opposite party contended that the allotment agreement executed by GVMC for supply of 30 KLD water to the apartment complex for 5 years goes to show that the opposite party got assessed the requirement of water by certified plumber and further declared its full construction plan detailing the number of flats to come up in the complex. Basing on the said information , the Vizag Water Board has assessed the exact requirement of water and allotted 30 KLD of water every day and collected requisite deposits from the opposite party. Even then, the complainant association bent upon in making totally false and baseless allegations and arrived at figure of amount Rs.10 lakhs to be paid by the opposite party. Infact during the month of January,2009 the complainant took over the responsibility of maintenance and arranged a registered association by March ,2009.
The opposite party has contended that after taking over maintenance of complex, the complainant started demanding huge amounts to meet their expenditure, instead of contributing monthly maintenance, among themselves. Even the complainant members went to the extent of demanding one flat for the opposite party for use as their office, without any justification. When the opposite party made it clear that giving of one flat for association use is not possible, the complainant’s members bore grudge against it and started harassing it on one pretext or the other. Beyond the scope of agreed amenities, the complainant started insisting opposite party to respond and provide amounts as per their whims. Even association has advised its members, who are due certain amounts to opposite party, to evade payments.
The opposite party further contended that they have proposed to collect non refundable security deposit of Rs.50,000/- from each flat owner with an intention to create corpus fund. But very few flat owners have paid said deposit and some of them, even till date, have not cleared legitimate dues of the opposite party. Thus, the opposite party’s intention of creation of corpus fund was defeated at very initial stage due to the non cooperation of majority flat owners. However, the opposite party in its reply dated 24.6.2009 and in its subsequent replies has requested the flat owners, who has paid said deposit, to approach it for settlement of said amount or in alternate requested the association to pursue opposite party’s payment follow up with its members and simultaneously to undertake refund of deposits after deducting company’s dues including the pending service tax demand against them. Having received said letters, the complainant conspicuously remained silent, on the other hand continued to maintain same allegation of non refund corpus fund.
In reply to paras IV, V and VI of the complaint, the opposite eparty has contended that the complainant has arrived at imaginary figures of corpus fund and interest there on, without there being any truth in their contention. Equally, the complainant without any justification has set up the claim of around Rs.10,00,000/- out of the water bills levied by GVMC against use of water by flat owners. It is pertinent to state that no parking fee was collected by the opposite party and all the flat owners are privy of said fact. The complainant projected totally false claim quite contrary to their agreements and misrepresented the facts in order to mislead the Forum.
The opposite party, further contended, that viewed from any angle there is no deficiency of service on the part of opposite party pertaining to construction of complex and delivery of flats to the purchasers. In fact, flat owners have occupied their respective flats and issued full satisfaction letters as regards specifications of their flats in particular and entire venture in general. The apartment association totally failed to establish opposite’s deficiency in service, which is a primary ingredient to establish prima–facie case as to press into force provisions of Consumer Protection Act. Since the complaint is devoid of merits, the same is liable to be dismissed with costs.
During the course of enquiry, in order to prove its case, the complainant filed evidence affidavit of its Secretary Vaddi Venkata Subba Rao and got marked Exs.A1 to A22. On behalf of the opposite party, Smt. I.Savithri , the Director of opp.party filed her evidence affidavit . The opposite party got marked Exs.B1 to B66
We heard the counsel for both the parties and perused the material evidence placed on record, by both the parties.
Now the points for consideration are :
1. Whether there is deficiency in service on the part of the opposite party ?If so, whether the complainant is entitled to the reliefs sought in the complaint in written version.?
2. To what relief?
Point No.1: The complainant filed the complaint seeking direction to opposite party to pay a sum of Rs.96,74,553/- with interest . The break up figures of the said amount are as follows:
1. Amount collected towards corpus fund : Rs.33,00,000-00
2. Interest thereon @ 24% p.a. from 19.3.2009
when the Association was registered till date: Rs.11,61,600-00
3. Amount of Penal Charges paid on water : Rs.10,97,953-00
4. Compensation towards mental agony ,
Physical inconvenience, strain etc. : Rs. 15,00,000-00
5. Amounts collected towards parking slots
in the stilt area : Rs.18,00,000-00
6. Amount to be deposited with GVMC for
Water : Rs. 8,00,000-00
7. Charges incurred for issuing : Rs. 15,000-00
Lawyer’s notice ______________
Rs.96,74,553-00
_______________
Regarding item no.1, the case of the complainant is that the opposite party collected Rs.50,000/- from each flat owner. Thus the opp.party collected Rs.33,00,000/- . The opposite party did not hand over the amount to the complainant association, even after its formation as promised and the amount is lying with the opposite party
The opposite party admitted the collection of Rs.50,000/- from each flat owner , amounting to Rs.33 lakhs towards the corpus fund and that he did not hand over the amount to the complainant even after its formation,. in his written version, in their evidence affidavit at para 9 at page 9 and also during their submissions, as non refundable deposit stating that it is for the purpose of corpus fund promising it to be handed over to the complainant on its formation. But the opposite party contended that a very few flat owners have paid the said amount and some of them, even till date, have not cleared legitimate dues of the opposite party. Thus the intention of creating corpus fund was defeated at very initial stage, due to non cooperation of majority flat owners and asked the flat owners who paid the said deposit to approach it for settlement but the complainant remained silent.
The fact that the opposite party collected Rs.50,000/- from each flat owner amounting to Rs.33,00,000/- towards corpus fund is also proved by Exs.A12 and A13 . It is an admitted fact that the Association was formed and registered on 19.3.2009 and was allotted Society no.231/2009 as is evident from Ex.A2 the copy of the Certificate of Registration of Societies. Admittedly the flat owners are in possession of their respective flats by the date of Ex.A2. The opposite party has not filed a list of the flat owners who paid and who have not paid Rs.50,000/- each, for the purpose of creation of corpus fund. When the bench put a question about the same to the counsel for the opposite party during the course of oral submissions, opposite party, filed copy of the complaint in C.C.No.5/2010 on the file of III rd Addl. Chief Metropolitan Magistrate , renumbered as C.C.No.356/2012 on the file of XV SMM and Statement of corpus fund, along with a petition to receive them as additional evidence. at that stage, both the documents are marked as Exs. B65 and B66 subject to proof and relevancy .
Ex,B65 is filed to show that the opposite party filed criminal case against flat owners namely Smt. P.Ganeswari and another for bouncing the cheque issued in discharging of their liability . In our considered view Ex.B65 is not relevant for the purpose of decision in this case. That apart , the complaint is filed against the two individuals for bouncing of cheques issued in discharge of their liability .From this fact alone it cannot be concluded that most of the members of the complainant association failed to pay Rs.50,000/- towards the corpus fund , especially when there is no evidence adduced by the opposite party to prove the same. Ex.B65 statement of corpus fund is not proved by the opposite party by placing supporting evidence. In addition to that it is a simple statement in tabler form and does not convey any particular aspect or point raised by the opposite party in their version. As stated above , it is not substantiated by placing any supporting material on record. The relevant accounts were not filed in proof of the contents of Ex.B65 statement. Neither in the counter/version nor in the evidence affidavit any specific mention was made about Ex.B65. As contended by the complainant, the said statement without any date , appears to have been brought into existence or the purpose for this case. Hence Ex.B65 cannot be relied upon for any purpose.
Absolutely there is are no details placed on record, as to how many flat owners paid Rs.50,000/- each and how many flat owners have not paid the said sum to create corpus fund. In the absence of proof of the said fact, the contention of the opposite party that some of the flat owners have not paid Rs.50,000/- each, to create corpus fund cannot be accepted.
Even if it is true that some of the flat owners have not paid Rs.50,000/- each towards creation of corpus fund, the opposite eparty has no right to retain the amount that was collected from the flat owners towards the creation of corpus fund, on the ground that some of the flat owners still owe certain amounts to him, when according to him, the purpose of creation of corpus fund was defeated at initial stage. If any individual flat owner is due to pay any amount to the opposite, the opposite party has to proceed against that flat owner for recovery of the dues as in the case of Smt.P.Ganeswari.
Having regard to the above facts and circumstances, the cause shown by the opposite party, for not handing over of the corpus fund to the complainant society, is not acceptable. He is bound to handover the amount to the complainant association to enable it to look after the maintenance of the flats. Since the opposite party kept the amount with him, without any reasonable cause, he is liable to pay the corpus fund amount with interest from the date of registration of the flat till realization .
Regarding the claims of the complainant under item nos. 3 to 7 mentioned above, the opposite party denied all the claims. Under Item No.3, the complainant claimed a sum of Rs.10,97,953/- towards penal charges said to have been paid by them to GVMC. The complainant has not filed any document to show that they have paid the penal charges to the Corporation and that the opposite party is responsible for such payment of penal charges. On the other hand, Ex.A7 letter dt.26.May,2009 addressed by the Secretary of the complainant association to the Commissioner G.V.M.C. and Ex.A8 copy of the agreement dt.21.5.2007 between the G.V.M.C. and M/s.Prathima Estates Ltd., Visakhapatnam clearly show that the opposite party had applied to the Commissioner , Municipal Corporation, Visakhapatnam for supply of 30 KLD of clear water per day and that the opposite party has paid an amount of Rs.24,33,000/- towards capital contribution charges,183 days advance consumption charges and estimation for laying out 100 mm. dia distribution pipelines for supply of 30 KLD of water to the flat owners of the complainant association and requested to investigate regarding the payment of excess amount of Rs.30,600/- towards water consumption by the flat owners. Under these circumstances , the complainant is not entitled to the claim made under Item no.3.
Under Item no.5 , the complainant claimed Rs.18 lakhs saying that the opposite party collected towards parking slots in the stilt area . Except the interested averments in the complaint and in the evidence affidavit, no other evidence has been placed on record by the complainant to show that the opposite party collected amounts from the flat owners towards the parking slots in the stilt area. Regarding the claim under Item No.6, there is no material on record to show that the opposite party is liable to deposit sum of Rs.8 lakhs with GVMC, for water, especially when the flat owners are in the occupation of their respective flats and the complainant association has been taking care of the maintenance of the flats. The complainant has not filed any proof that they paid Rs.5000/- to their advocate for issuing legal notice . In view of the above discussion , we hold that the complainant is not entitled to the claims under Item nos. 3 , 5,6 and 7 .
Regarding Item no.2 there is no evidence placed on record to show that the opposite party agreed to receive the corpus fund with interest there on @ 24% p.a. However, we are inclined to award some reasonable interest on the corpus fund amount retained by the opposite party. The claim of the complainant at Rs.15 lakhs towards compensation for mental agony physical inconvenience, strain etc., we are of the view that the claim is excessive. However the complainant is entitled to some reasonable amount under this claim.
In so far as return of original documents, as seen from the prayer portion of the complaint, the complainant has not sought any relief for return of original documents and for completion of works as stated in the complaint . Hence we have not considered the evidence adduced by both the parties on those aspects. That apart, the opposite party filed EXs.B13 to B63 acknowledgement issued by the flat owners to the effect that the builder has completed finishing work to their best satisfaction and that opposite party provided all the agreed amenities/common facilities
In view of the above facts and circumstances, we are of the view that there is deficiency of service on the part of the opposite party for not handing over the corpus fund, ever after formation of the complainant association, as agreed.
In the result, the complaint is allowed in part directing the opposite party to pay a sum of Rs.33,00,000/- to the complainant with interest at 9% p.a. from 19.3.2009 when the Association was registered till the date of realization. He is also directed to pay a sum of Rs.25,000/- towards compensation for mental agony etc. and to pay Rs.5000/- towards costs of the complaint. Rest of the claim of the complainant is dismissed without costs. The opposite party is directed to comply with the order within four weeks form the date of this order.
PRESIDENT
MEMBER
Pm* 28.9.2012
APPENDIX OF EVIDENCE
Witnesses examined
For the complainant : nil For the opp.parties : nil
Exhibits marked on behalf of the complainant::
Ex.A1-Copy of specifications issued by the opposite party.
Ex.A2-Certificate of registration of complainant society dated 19-3-
2009.
Ex.A3-Lr. addressed by complainant to the opposite party dated
23.4.2009.
Ex.A4- Reminder letter dated 18-5-2009 from the complt. to Opp.party.
Ex.A5-Final reminder by the complainant to the opposite party
Dated 17-6-2009.
Ex.A6-Reply given by O.P. to complt. dated 24-6-2009.
Ex.A7-Letter of complainant to Commissioner, GVMC dated 26-5-2009.
Ex.A8-Copy of agreement between opposite party and GVMC dated
21-5-2007.
Ex.A9-Copy of Minutes of General Body meeting dated 14-12-2008.
Ex.A10-Minutes of Executive Committee meeting of the complainant
Association dated 30-12-2008.
Ex.A11-Copy of Minutes of meeting of Executive committee with builder
dated 20-8-09.
Ex.A12-Statement of account issued by the opposite party in respect
of corpus fund.
Ex.A13-Receipt issued by the opposite party while collecting the
Corpus fund.
Ex.A14-Notice dt 15.6.2010 issued by the complainant to the opposite party along
with acknowledgement dated 21-6-2009.
Ex.A15-Notice issued by advocate for complainant to the O.P. along with
Acknowledgement dated 30-9-2010
Ex.A16-Reply dt.11.10.2010 by opposite party to the notice of complainant.
Ex.A17-Rejoinder issued by the complainant to reply of opposite party.
Ex.A18-Reply dt.23.11.2010 to rejoinder of complainant by opposite party.
Ex.A19-Copy of bills paid by complainant to GVMC towards penal
Charges for usage of water.
Ex.A20-Letter addressed by the Secretary of the complainant
Association to the opposite party dated 05-10-2009.
Ex.A21-Reply by opposite party to the letter addressed by the
complainant association dated 07-10-2009.
Ex.A22-Minutes of the meeting issued by complainant association
Exhibits marked on behalf of the Opposite party.
Ex.B1-Resolution passed by Board of Directors dated 01-7-2011.
Ex.B2-Original gas equipment bill dated 07-8-2008.
Ex.B3-Original piped gas installation certificate dated 17-7-2008
Ex.B4-Gas connection permission certificate by IOL dated 19-7-2008.
Ex.B5-Certificate issued by Fire and Emergency Services Department
Dated 28-2-2009.
Ex.B6-No objection certificate for height entrance dated 14-6-2002
Ex.B7-Work completion certificate issued by OTIS dated 31-1-2008.
Ex.B8-Receipt issued by OTIS dated 27-1-2007.
Ex.B9-Journel Voucher dated 31-1-2007.
Ex.B10-Order copy of WP No.13255/2003 dated 14-9-2006.
Ex.B11-Letter to Branch Manager Systems Tech India (P) Ltd.,
Dated 24-1-2005.
Ex.B12-Tax invoice dated 28-3-2008.
Ex.B13 to]
B63- ] Possession acknowledgements.
Ex.B64-Letter form GVMC, Visakhapatnam dated 27-7-2006 to O.P.
Ex.B65- Statement of Corpus fund.
Ex.B66-Criminal complaint on the file of Hon’ble III Addl.Chief Metropolitan
Magistrate, Hyderabad and renumbered on the file of XV SMM.
PRESIDENT
MEMBER
Pm* Dt. 28.9.2012
