BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 04 OF 2014
Between :
- Mrs Jyoti Achar W/o Mr.Mukund Vedavyas Achar
Aged about 57 years, Occ: Housewife
- Mukund Vedavyas Achar S/o Matada Vedvyas Achar
Aged about 57 years, Occ: Retd. India Air Force Pilot
Both are R/o 8-2-540/4, Sai Residency
Road No.4, Banjara Hills, Hyderabad-500034
…Complainants
A N D
Aliens Developers Private Limited
Regd. Off: Flat No.911, Teja Block, My Home
Nawadeep Apartments, Madhapur,
Hyderabad-500081
Branch Off: Space Station 1, Gachibowli, Tellapur
Hyderabad rep. by its Managing Director and
Joint Managing Director, Hari Challa S/o CVR Chowdary
Aged 29 years, & Venkata Prasanna Challa
S/o CVR Chowdary, aged 30 years, R/o Flat No.911,
Teja Block, My Home Nawadeep Apartment, Madhapur
Hyderabad500081
… Opposite Party
Counsel for the Complainant: M/s A.P.Suresh & Associates
Counsel for the opposite party Sri Raja Sripathi Rao
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT
AND
SRI VITHAL RAO PATIL, MEMBER
MONDAY THE FIFTH DAY OF JUNE
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed u/s 17(1) of C.P.Act for recovery of amount of Rs.46,76,430/- with interest @ 24% per annum; to pay Rs.1,59,900/- towards penalty for breach of the agreement; to pay Rs.10,00,000/- towards damages and costs of Rs.1,00,000/- for deficiency in service on the part of the opposite party.
2. The case of the Complainant in brief, is that the Opposite party company represented to them that they are engaged in the business of constructing multi-storied apartments situated at Tellapur village, Ramchandrapur Mandal, Medak district to construct high rise apartments under the name and style of ‘Aliens Space Station’ and they would provide all amenities therefor, would give possession by the end of December 2011 with a grace period of 6 months and on such representation of the opposite party, the complainants entered into agreement of sale dated 12.03.2010 for purchase of flat No.1731 on 17th floor at Space Station -5, having super built-up area of 2132 sft with one car parking along with undivided share of land of 45.84 sq.yd for a total sale consideration of Rs.53,03,320/-. The complainant subsequently paid total amount of Rs.46,76,430/- on different dates out of the total sale consideration of Rs.53,03,320/-. The Opposite party had not commenced construction of the flat even after the stipulated period is expired. There is no possibility of the construction of the flat as also the Opposite party had not responded to the repeated requests of the Complainants. Due to the fraudulent action on the part of the opposite party, complainants suffered with mental agony, escalation of cost and physically by wandering in and around the office of the opposite party for the past few years, for which, the opposite party is liable to pay compensation. The Opposite party promised to deliver the possession of the flat to the Complainant as prescribed in the agreement of sale with some grace period. Having agreed to purchase the above flat, Complainants entered into Agreement of sale with the Opposite party paying the earnest money. The opposite party has failed to commence even the base/pillar footing works at the site in respect of the subject flat, as such, Complainants requested for cancellation of the booking and sought for refund of the amount. Hence, prayed to allow the complaint as prayed for above.
3. The Opposite party resisted the claim on the premise that the complainants filed the complaint to gain out of their breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process.
4. The Opposite party submitted that originally the land in Sy.No.384 was an agricultural land and they filed application for conversion of the same into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006. Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the Opposite parties have filed application for change of use of the land as commercial use zone.
5. It is averred by opposite party that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.384 as residential use zone. The project could not be commenced in view of proposed road under Master plan, until realignment of the proposed road without affecting the land in Sy.No.384 is made. Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008. Opposite parties have obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. After following due procedure and process, the Opposite parties obtained NoC from Airports Authority on 10.07.2009.
6. It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission upto 29 floors is awaited. In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996. That they have taken necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the Opposite parties could not complete the project within the time frame and they informed the complainant that the project required sanction from statutory authorities and mentioned the same as ‘force majeure’ in the agreement of sale. It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.
7. It is stated that for the delay, the Opposite party has agreed to pay Rs.3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and they agreed to adjust the amount towards dues payable by the complainants. The delay was only due to Telangana agitation, Sakala Janula Samme, etc. The complainant filed the complaint with ulterior motive to defame the opposite party. The Complainants shall file relevant receipts and documents to prove the payments.
8. They denied to have not given any response. The Opposite party is taking all necessary steps to deliver the flats at the earliest. The Complainants are not entitled for any compensation and their claim is illegal. The complainants are not entitled for refund of amount and interest thereon and any compensation and costs. There is no deficiency of service on the part of the Opposite party. Hence prayed for dismissal of the complaint.
9. During the course of enquiry, the Complainant No.1 got filed evidence affidavit and also got marked the documents as Exhibits A1 to A3. On behalf of the opposite party the Managing Director of the Opposite party by name Hari Challa filed his affidavit and no documents have been filed.
10. The counsel for the Complainants and the Opposite party had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments on behalf of Complainants. Heard both sides.
11. The points for consideration are :
i) Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?
ii) Whether the complaint is not a ‘consumer dispute’?
iii) Whether there is any deficiency in service on the part of the Opposite party?
iv) To what relief ?
12. POINT NO.1 : The Complainants entered into “Agreement of Sale” with the Opposite party for purchase of flats as detailed supra, for the consideration thereof and paid the amounts shown therein, proposed to be constructed by the Opposite party, which are not in dispute. The agreement of sale was entered into between the Complainants and the Opposite party in respect of the above stated flats as detailed in the table supra. Thereafter, the Complainants paid the part consideration amount as per the pricing pattern of the flat issued by the opposite party on various dates. The agreement of sale provides for reference to arbitration. The learned counsel for the opposite party have contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission.
13. However, remedy provided under the provisions of Consumer Protection Act is an additional remedy and in the light of law laid in “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the Complainants having exhausted the other remedy was considered as under:
“The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”
Thus, in view of the ratio laid in aforementioned decision, the consumer has two options, either to proceed for arbitration process or to invoke the provisions of the Consumer Protection Act. As such, it cannot be said that the complaint is not maintainable before this Commission in view of the arbitration clause in the agreement. For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite party.
14. POINTS No.2 & 3 : The Opposite party entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 384, 385 and 426/A situate at Tellapur village of Ramachandrapuram Mandal, Medak district and they agreed to deliver the residential flat to the Complainants in accordance with the terms and conditions agreed upon and consented thereto and as per specifications given therein. The Development Agreement is not merely an agreement and in fact, it is “Development Agreement-cum-Power of Attorney”.
15. In pursuance of the development agreement, the opposite party have obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as these complaints are concerned. The opposite party have attributed the delay to the authorities concerned in granting permission and No Objection Certificate, bifurcation of the State etc., as to the cause for delay in completion of the project. The opposite party would contend that the cause for delay is beyond their control which is ‘force majeure’.
16. The force majeure clause in the Agreement of sale does not include within its ambit the delay caused in granting permission, NOC etc. The Opposite party failed to explain how they could take shelter under the cover of “force majeure”. We may state that the delay caused in obtaining permission or NOC etc., cannot be considered as ‘force majeure’. It is quite not understandable how the bifurcation of State can be attributed to be cause for delay in completion of the project. The opposite party ought to have informed the Complainants about the delay likely to be caused in obtaining the permission which they failed to. For that matter, the Opposite party cannot receive any sale consideration from any person in respect of any flat unless they have obtained permission from HUDA or HMDA.
17. The Complainants have submitted that owing to failure of the opposite party in completing the construction of the subject flats, they opted for cancellation of the agreement of sale of flats and the opposite party have contended that in order to maintain cordial relations with the Complainants, they agreed to pay compensation in terms of the agreement which they entered into in normal course with other customers. The Complainants got issued a notice to the Opposite party through their counsel setting forth series of events of delay and negligence and false promises made by the Opposite party seeking for refund of the amount on the premise of inaction on the part of the opposite party.
18. The opposite party have promised to complete construction of the flat and hand over its possession to the Complainants within the stipulated time therein with a grace period of six months as agreed and on their failure to perform their part of contract, the opposite party have proposed to pay rents but failed to pay the same. However, there is no communication from the side of the opposite party in this regard and the opposite party have not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the Complainants. Having received the part sale consideration amount, the Opposite party kept with them without commencing the construction work of the building.
19. Not keeping-up promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in service on the part of the opposite party. The Complainants have two options left for recovery of the amount, either by filing suit in court of law or by way of filing complaint before State Consumer Disputes Redressal Commission in view of the amount claimed falling within the pecuniary jurisdiction of this commission. The contention of the opposite party that the complaint is not maintainable is not sustainable.
20. The Opposite party can only receive such amount of sale consideration which would be in accordance with the payment schedule and correspond to the stage of construction of the flats. However, the Opposite party had received the sale consideration in excess of what was to be received from the Complainants particularly the construction of the building was not yet commenced. Not keeping-up the promise to complete construction of the building and failure to deliver possession of the flat as also not keeping-up promise to refund the amount as per the terms of the repayment scheduler constitutes deficiency in service on the part of the Opposite party.
21. The Complainants claimed refund of amount paid together with interest besides claim for damages. The Complainants cannot be said to have acquiesced to the delay in construction of the project. Though the Complainants have not disputed that the opposite party have informed them about the cause for delay in obtaining permission and NOC etc., which does not disentitle them from claiming compensation. The Complainants are entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization. For the reasons stated supra, the Points No.2 and 3 are answered in favour of the Complainants and against the Opposite party.
22. POINT No.4 : In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite party liable to refund the amount to the Complainants.
In the result, the complaint is allowed directing the opposite party to pay an amount of Rs.46,76,430/- (as per Ex.A2) with interest @ 12% per annum from the date of last payment till payment and a sum of Rs.1,00,000/- towards compensation together with costs of Rs.5,000/-. Time for compliance: four weeks. In case sale deed was executed, the Complainants shall re-convey the same to the developer on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the developer opposite party.
PRESIDENT MEMBER
Dated : 05.06.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For Complainants :
Ex.A1 Original agreement of Sale dated 12.03.2010 executed by the Op in favour of the Complainants
Ex.A2 Original State of Account issued by the opposite party dated 01.09.2013
Ex.A3 Copy of Form No.32
For opposite party
NIL
PRESIDENT MEMBER
