STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
CC NO. 105 OF 2014
Between :
1) Mohan Kumar Dalai,
Son of Sri Tata Rao Dalai,
Aged about 32 years,
Occupation: Private employment,
2) Smt.Gunti Sandhya Rani
Wife of Sri Mohan Kumar Dalai
Aged about 30 years,
Occupation: Private service,
Both were r/o No.9-3-58/2,
Pentaiah Nagar, High School Road,
New Gajuwaka, Visakhapatnam-5030026(A.P.)
and at present both R/o Johensburg,
South Africa and both are rep. by
their GPA holder Sri G.Narasing Rao,
son of late G.Ramaswamy,
aged about 58 years,
R/o H.No.20-367, West Venkatapuram,
Alwal, Secuderabad – 500 015 and
Working as the General Manager (Fin),
APIIC Limited, Parisrama Bhavan,
6th Floor, Basheerbagh, Hyderabad-500 004(A.P).
Complainants
And
1) M/s Aliens Developers Private Limited,
Company registered under the Indian
Companies Act, 1956 with Regd. Off:
at Flat No.911, Teja Block, My Home
Navadweepa Apartments,
Near Hitech-City, Madhapur,
Hyderabad – 500 081 (AP) rep. by its
Managing Director, Hari Challa,
S/o C.V.R. Chowdary.
2) Hari Challa S/o C.V.R.Chowdary,
Managing Director,
M/s Aliens Developers Private Limited,
Company registered under the Indian
Companies Act, 1956 with Regd. Off:
at Flat No.911, Teja Block, My Home
Navadweepa Apartments,
Near Hitech-City, Madhapur,
Hyderabad – 500 081 (AP).
3) Venkat Prasanna Challa,
S/o C.V.R. Chowdary,
Joint Managing Director,
M/s Aliens Developers Private Limited,
Companies Act, 1956 with Regd. Off:
at Flat No.911, Teja Block, My Home
Navadweepa Apartments,
Near Hitech-City, Madhapur,
Hyderabad – 500 081 (AP).
All the above (3) Ops. Now
r/o Aliens Space Station,
Tellapur Post,
Ramachandrapuram Mandal,
Medak dist., Hyderabad – 500 032 (A.P).
Opposite parties
Counsel for the Complainants : Sri G.Maloji Rao.
Counsel for the Opposite parties : M/s Alluri Krishnam Raju & G.Dinesh Kumar
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Friday, the Twenty Nineth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
The complaint is filed under section 17(2) of the Consumer Protection Act, 1986 by the Complainants complaining deficiency in service against the Opposite parties and claimed refund of Rs.18,43,989/- along with interest @ 24%; to pay compensation of Rs.1,07,400/- @ Rs.3/- per sft., per month for 1432 sq.feet amounting to Rs.4296/- per month for 25 months for the period from 01.02.2012 to 31.01.2014 together with interest; to pay Rs.6,36,000/- towards interest @ 24% p.a. from 04.02.2010 to 30.01.2014; to pay Rs.10.00 lakhs towards damages for breach of the Agreement; atleast sum of Rs.20.00 lakhs towards damages for the mental agony suffered by the Complainant; Rs.60,000/- towards rentals incurred by complainant from 2/2012; Rs.25,000/- towards the charges of the legal notice and other reliefs.
2. The Complainants were working in IT companies and intended to purchase a housing flat for their living. The Opposite parties represented that they have all the permissions and licences for the project Space Station-1 and would provide all facilities. Attracted by the glossy brochure with colourful photographs, complainants agreed to purchase the Flat and accordingly booked the flat No.1109, Station-2 on 11th floor with a built-up area of 1432 sqft. With one car parking along with undivided land share of 30.79 square yards situated in Space Station-1 at Tellapur village, Ramachandrapuram mandal, Medak district on 06.03.2010. Complainants availed the loan from Corporation Bank, Madhapur branch to the tune of Rs.30.00 lakhs as housing loan and entered into an Agreement with the Opposite parties on 19.03.2010.
3. The Complainants paid the earnest money of Rs.2,50,000/- and also paid further monies as per the schedule fixed by the Opposite parties, total amounting to 18,43,989/- as against the total sale consideration of Rs.36,57,978/- and fulfilled their part of obligation. Though the Opposite parties agreed to deliver the flat on or before December 2011, they failed to make any initiative in that regard. Even they failed to commence the construction work at the site compelling them to stay in a rented house paying Rs.10,000/- per month.
4. The Opposite parties even failed to abide by the terms and conditions of the agreement. On repeated requests and demands, they failed to respond. As such, the Complainants got issued notice on 05.02.2014 setting forth the series of events which they got returned rendering another notice on 27.02.2014 which they acknowledged but failed to comply with the demand. Hence the complaint with the prayer, as stated, supra.
5. The Opposite parties 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. The complainants suppressed some facts and camouflaged some facts in order to make out a case. That the complaint is filed with all concocted allegations giving colour as if there is a consumer dispute.
6. The Opposite parties 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.
7. It is averred by Opposite parties 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.
8. 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.
9. It is stated that for the delay, the Opposite parties have 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 complainants filed the complaint with ulterior motive to defame the opposite parties. The Complainants shall file relevant receipts and documents to prove the payments.
10. 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 parties. Hence prayed for dismissal of the complaint.
11. On behalf of the Complainants, their GPA holder G.Narasing Rao as PW1 filed his evidence affidavit and the documents, Exs.A1 to A7 and further filed the affidavit of Mohan Kumar Dalai as PW2. On behalf of the Opposite parties, the Managing Director of the OP No.1 Company has filed the affidavit and the documents, Ex.B1 to B18.
12. The counsel for the complainants and the Opposite parties have advanced their arguments reiterating the contents of the complaint and the written version while the Complainants also filed the written arguments. Heard both.
13. 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 parties?
iv) To what relief ?
14. POINT NO.1 : The Complainants entered into “Agreement of Sale” on 19.03.2010 with the Opposite party No.1 for purchase of flat bearing No.1109 in Station-2 on 11th floor under Space Station-1 and thereafter the Complainants paid the part consideration amount as per the pricing pattern of the flat issued by the Ops on various dates and the agreement of sale provides reference to arbitration. The learned counsel for the opposite parties have contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission. Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) That all disputes/issues arising out of and/or concerning this transaction will be subject to the exclusive jurisdiction of the Courts at Ranga Reddy district, A.P.
c) That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
d) However, disputes or differences arising out of and or in connection with and or in relation to this transaction/agreement, which cannot be amicably settled, shall be finally decided and resolved by an Arbitrator appointed by Developer in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Arbitration as aforesaid shall be a domestic arbitration under the applicable Laws.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
15. In terms of the agreement of sale, the dispute has to be decided by means of arbitration. 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.”
For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite parties.
16. In the arguments, counsel for Complainants reiterated the same facts as averred in the complaint besides stating that the Opposite parties ought to have acted in accordance with the provisions of the Andhra Pradesh (Promotion of Construction and Ownership) Act & Rules, 1987 while undertaking such agreements and hence pleading ‘force majeure’ does not arise. He relied on Section 72 of Indian Contract Act supported by the Judgment of Hon’ble Apex Court in Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) and submitted that the Apex Court opined that grant of interest @ 18% p.a. by way of damages and compensation is justified. She further relied on decision in Ghaziabad Development Authority Vs.Balbir Singh reported in II (2004) CPJ 12 wherein it is stated “in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest @ 18%.” This Commission perused the said Judgments. In Ghaziabad Development Authority versus Balbir Singh, the Hon’ble Supreme Court further observed that the interest shall be payable from the dates of deposit of the amounts till the date of repayment.
17. On the other hand, the counsel for the Opposite parties in the arguments submitted that as per agreement, if the Complainants want to cancel the booking of the flat, they shall forego 10% of the total flat cost as charges which is agreed by them and in that regard, relied on Judgment reported in 2009 (2) CPR 197 (NC) : II (2009) CPJ 276 (NC) in Punjab Urban Planning and Development Authority and another Vs. Shyam Sunder Tiwari and others, wherein, it is held that “courts cannot add anything or improve upon the terms of contract between the parties.” Admittedly, in the instant case, no such Agreement is entered into between the parties except the Agreement for reservation of flat. However, this Commission perused the said order. The facts of the said case and facts of the case on hand are different. In the said case, the Petitioner Authority withdrew the scheme and there was provision for refund of earnest money. In the case on hand, there is no provision for refund of earnest money. Admittedly, on failure to comply with terms and conditions of agreed terms by the Opposite parties, the Complainants sought for refund of the amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite parties.
18. POINTS No.2 & 3 : The Opposite parties 1 to 3 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 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 thereof and as per specifications given thereto.
19. In pursuance of the development agreement, the opposite parties 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 this complaint is concerned. The opposite parties have attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The opposite parties would contend that the cause for delay is beyond their control which is force majeure. The Opposite parties stated the reasons for the delay in completion of the construction of the residential complex as under:
“The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project. The said fact was informed to the complainant and even mentioned in the agreement of sale under clause No.XIV and described as “force majure”. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon’ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.”
20. The complainants have submitted that owing to failure of the opposite parties in completing the construction of the flat No.1109, they opted for cancellation of the agreement of sale of flat and the opposite parties 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 notices on 05.02.2014 and 27.02.2013 setting forth series of events of delay and negligence and false promises made by the Opposite parties seeking for refund of the amount on the premise of inaction on the part of the opposite parties.
21. The opposite parties have promised to complete construction of the flat and hand over its possession to the complainant by December 2011 with a grace period of six months as agreed and on their failure to perform their part of contract, the opposite parties have proposed to pay rents but failed to pay the same. However, there is no communication from the side of the opposite parties in this regard and the opposite parties 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. Even otherwise, though the Complainants claimed compensation of Rs.3/- per sft. in the complaint, the same is missing in their notice. Hence, this Commission does not incline to accept this relief as the same is time-barred.
22. Not keeping 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 parties. 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 parties that the complaint is not maintainable is not sustainable.
23. The complainants claimed refund of amount paid together with interest but failed to mention the period from which they are entitled to besides claim for damages to the tune of Rs.30,00,000/-. The complainants acquiesced to the delay in construction of the project. The complainants have not disputed that the opposite parties have informed them about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. As such, the Complainants cannot claim damages. However, the complainants are entitled to interest @ 12% p.a. on the amount paid from the date of complaint till realization.
24. It is pertinent to state here that as per Ex.A1 Agreement of sale and Ex.A2 statement of account of the Complainant No.1, the Complainants paid an amount of Rs.18,43,989/- as against the total sale consideration of Rs.36,57,978/-.
25. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite parties 1 and 2 are jointly and severally liable to pay the amounts to the Complainants.
26. In the result, the complaint is allowed in part holding that Opposite parties 1 and 2 are jointly and severally liable and they are directed to pay an amount of Rs.18,43,989/- with interest @ 12% p.a. from the date of respective payments till realisation, together with costs of Rs.6000/-. Time for compliance four weeks.
PRESIDENT
29.04.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of G.Narasing Affidavit evidence of Hari
Rao as PW1. Challa as RW1.
Affidavit evidence of Mohan
Kumar Dalai as PW2.
EXHIBITS MARKED
For Complainant :
Ex.A1 is the copy of Agreement of sale, dated 19.03.2010.
Ex.A2 is the copy of statement of account of the Complainant No.1, furnished by Corporation Bank, Madhapur branch, for the period from 01.04.2010 to 31.03.2011.
Ex.A3 is the copy of returned postal cover sent to the Opposite parties.
Ex.A4 is the office copy of notice, dated 27.02.2014 got issued by Complainant to the Ops.
Ex.A5 is the Photostat copy of General Power of Attorney executed by Complainants in favour of G.Narasing Rao, dated 02.01.2014.
Ex.A6 is the Photostat copy of the returned postal cover.
Ex.A7 is the Photostat copy of orders passed in R.P.No.4529 of 2010 by Hon’ble National Consumer Disputes Redressal Commission, New Delhi in the matter of Puran Chand Vs. Haryana Urban Development Authority and another, decided on 12.12.2011.
For Opposite parties :
Ex.B1 Copy of Lr.No.252931/4/2007 addressed by Principal Secretary to Government to Vice, Chairman, HUDA, Hyderabad for change of land use.
Ex.B2 Copy of G.O.Ms.No.288, Municipal Administration & Urban Development (I1) Department, dated 03.04.2008 (HMDA revised master plan).
Ex.B3 Copy of (report) Lr.No.D1/3601/2007, dated 05.05.2007 addressed by District Collector, Medak to Vice-Chairman & Managing Director, HUDA along with map.
Ex.B4 Copy of minutes of meeting of multi-storeyed building committee for HUDA area held on 29.02.08 at 3-00 pm in the chambers of Vice-Chairman, HUDA (4 basements + Ground + 13 Upper Floors).
Ex.B5 Copy of Lr.No.1927/Misc/Plg/H/2008, dated 31.03.2008 addressed by HUDA to the Principal Secretary to Government for 30 meters road alignment in Sy.No.384 & 385.
Ex.B6 Copy of Lr.No.621/P4/Plg/HUDA/2008, dated 11.04.2008 addressed by HUDA to OP No.1 approving 4 basements + Ground + 13 upper floors).
Ex.B7 Copy of Lr.No.621/Pr/Plg/HUDA/ 2008, dated 11.04.2008 addressed by HUDA to Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments.
Ex.B8 Copy of minutes of meeting of multi-storeyed building committee for MSB in HUDA area held on 05.06.2008 at the chambers of Vice-Chairman, HUDA (4 basements + ground + 29 upper floors).
Ex.B9 Copy of Lr.No.621/P4/Plg/HMDA/2008, dated 14.10.2009 addressed by HMDA to the Executive Authority, Tellapur Gram Panchayat according technical permission of residential apartments (4 basements + ground + 20 upper floors).
Ex.B10 Copy of Lr.No.SEIAA/AP/MDK-14/08, dated 12.08.2008 addressed by State Level Enviornment Impact Assessment Authority, Hyderabad to according environmental clearances to Opposite parties.
Ex.B11 Copy of Lr.No.19038/I1/2009, dated 24.11.2009 addressed by Principal Secretary to Government to Ops (clearance of GOMs.No.111).
Ex.B12 Copy of letter addressed by Opposite parties, dated 08.10.2010 to the HMDA, Hyd (revised application and plans for building permission consisting of 3 basement + ground + 29 upper floors).
Ex.B13 Copy of Lr.No.10186/MP1/Plg/HMDA dated 28.03.2011 addressed by HMDA to the Ops to pay publication charges for change of land use from residential to commercial.
Ex.B14 Copy of cash acknowledgement receipt bearing No.825631 for Rs.1,000/- in File No.2011-2-431 for new water connection.
Ex.B15 Copy of Certificate of best compliments issued by Indian Green Building Council in favour of the Opposite parties company.
Ex.B16 Copy of certificate of best compliments awarded by Cityscape in favour of the Opposite parties company.
Ex.B17 Copy of letter addressed by the Opposite parties to the purchaser by name S.Pragathi intimating to take possession of the flat, dated 02.11.2015.
Ex.B18 Copies of photographs of flat occupants occupying the completed flats.
PRESIDENT
29.04.2016
