Ms. Devikarani Rao Nallamala, widow of Late Mr. Nallamala Radhakrishna Rao, aged about 72 years, the complainant, has filed the present petition against builder Emaar Hills Township Land Ltd.   She applied for a 3-BHK apartment bearing No. BH EXCL TB-F07-B1-02/B2, the unit in Tower B, Floor 7, Core B1, Unit No. 2, Unit Type B2 with an approximate super built up area of 2723.13 sq. ft., for a total consideration of ₹1,93,89,597/- on 12.07.2008.  She paid the first instalment in the sum of ₹19,38,960/- on 26.07.2008.  She entered into an agreement with Emaar MGF Land Ltd., OP-1 and Emaar Hills Township Pvt. Ltd., OP-2, wherein it was agreed that OP-1 was to complete the construction of the apartment within a period of 36 months from the commencement date, i.e., 02.05.2008 with a grace period of 6 months.  Thereafter the OP-1 was required to handover the possession of the apartment and simultaneously execute and duly register the sale-deed in favour of the complainant. 

2.      The complainant paid next instalments in the sum of ₹9,69,480/- on 11.08.2008, ₹21,95,527/- on 24.09.2008, ₹4 lakh on 1.06.2009, ₹9,58,349/- on 24.08.2009, and ₹6 lakh vide receipt No. 416211.  The complainant paid instalment No. 6 for ₹29,39,524/- on 26.12.2009.  She further paid a sum of ₹9,79,175/- on 14.12.2009.

3.      The complainant received letter from OP-1 on 17.09.2010 to the effect that the project was near the completion and the possession was expected to be handed over in mid2011.  The complainant received letter from OP-1 requesting her to pay the final instalment.  Though such payment was only scheduled to be remitted at the time of intimation of possession in accordance with the payment schedule.  That letter was responded and she promised to pay the final instalment simultaneously with the execution and registration of the sale-deed.  However, the complainant paid final instalment of ₹16,69,506/- on 20.11.2010, which date is crucial and determinative of present controversy.

4.      In the meantime, the complainant received orders from Andhra Pradesh High Court wherein CBI investigations were ordered against the OPs.  SLP was filed before the Apex Court.  The complainant came to know that they were not going to receive the possession in near future.  Legal notice was sent by the complainant to the OPs that her amount be refunded with interest.  The legal notice was replied.  It also transpired that OPs had invoked force majeure clause.  Ultimately this complaint was filed before this Commission on 06.03.2014 with the following prayers:-

“(a)  Direct the opposite parties to refund the sum of ₹1,93,89,597/- which was paid by the Complainant, along with damages at the rate of Rs.5/- per square feet of the total built up area of the apartment for every month of delay;

(b)    Direct the Opposite Parties to pay interest on the aforesaid sum @18% per annum till date of payment;

(c)    Direct the Opposite parties to pay a sum of ₹3,20,42,166/- pursuant to the prayer as above, computed till 20.02.2014, and further amounts thereafter, till the date of payment;

(d)    Direct the Opposite Parties to pay costs of the present proceedings to the complainant;

(e)    Pass such other order(s) as this Hon’ble Commission may consider fit and proper in the facts and circumstances of the case. ”

DEFENCE

5.      OP-1 has contested this case.  It is alleged that the complainant has failed to disclose that the OP in order to transform Hyderabad into a world-class business-cum-leisure destination took up their project as well as other projects.  The Government of Andhra Pradesh envisaged a transparent framework for enabling private sector participation and investment in an integrated township project for which it appointed Andhra Pradesh Industrial Infrastructure Corporation (hereinafter referred to as ‘APIIC’) as the nodal agency.  The Constitution of APIIC was under the AP Industrial Development Enabling Act for the development of the integrated township consisting of 535 acres, which, interalia included 5-star Hotel, Golf Course, Convention Centre, Club, Villas and Apartments.  M/s. Emaar Properties, PJSC, Dubai was selected through a process of international bidding and evaluation of its proposal and MOU was executed between APIIC and M/s Emaar Properties, PJSC, Dubai on 06.11.2002.  It was contended that the flats are almost ready.  The activities of the projects were also mentioned as follows:-

6.      However, due to the notification issued by Government of AP dated 08.10.2010, the further work came to a stand-still.  The said notification runs as follows:-

“Whereas, the District Collector, Ranga Reddy in his letter dated 6.10.2010 has stated that the following properties mentioned in the annexure to the notification were allotted to M/s. Emaar Hills Townships Private Limited and M/s. Boulders Hills Leisure Pvt. Ltd., on concessional terms and the Andhra Pradesh Industrial Infrastructure Corporation Limited has 26% equity as consideration in Emaar Hills Townships Pvt. Ltd. for the lands so transferred so that the said Emaar Hills acts in a manner beneficial to the Government and the Andhra Pradesh Industrial infrastructure Corporation Limited to reap the benefits of development for the State of Andhra Pradesh. It is learnt that M/s. Emaar Hills Township and Builders Hills Leisure Pvt. ltd. had entered into a development agreement cum GPA without obtaining permission from Andhra Pradesh Industrial Infrastructure Corporation Limited and the same is against financial interests of Andhra Pradesh Industrial Infrastructure Corporation Limited, which is State owned undertaking.  Hence, the interest of the Government of Andhra Pradesh is going to be affected due to the above acts of the M/s. EMAAR Hills Township Pvt. Ltd. and to protect the interest of the Government the transaction to be conducted by Company must be prohibited forthwith.

2.     And whereas, Government after careful examination of the matter decided to prohibit the Registration of documents relating to the properties annexed to the notification.

3.     Now, therefore, in exercise of the powers conferred under clause (e) of sub-section (i) of Section 22-A of the Registration Act, 1908, (Act XVI of 1908) as amended by the Registration (Andhra Pradesh Amendment) Act, 2007, (Andhra Pradesh Act NO. 19 of 2007) the Government of Andhra Pradesh hereby prohibit the Registration of the document relating to following properties allotted by the Andhra Pradesh Industrial Infrastructure Corporation Limited, Hyderabad to M/s. Emaar Hills Township Pvt. Ltd. and Boulder Hills Leisure Pvt. Ltd. as shown in the Annexure, in the interest of the State Government.”

7.      Again, APIIC vide letter dated 29.10.2010 issued a termination notice to EMAAR Properties, PJSC for termination of the collaboration agreement entered between EMAAR MGF Land Ltd and APIIC.  EMAAR MGF Land Ltd had no option but to approach the High Court and obtained a stay of termination from the Hon’ble High Court.   The said notice of the termination was stayed by Hon’ble High Court of Andhra Pradesh vide order dated 14.01.2011 in WP No. 32285/2010 restraining APIIC from terminating the said collaboration agreement.

8.      Thereafter, the writ petitions were filed before the Hon’ble Andhra Pradesh High Court by OP-2 as well as Owners Welfare Association.  The copies of those writ petitions have been placed on the record as Annexure R-1/3 and Annexure R-1/4.  The Hon’ble High Court allowed the registration of the sale-deeds subject to certain conditions.  The orders passed by the Single Judge was stayed by the D.B. vide order dated 24.04.2012.  The case regarding rendition of accounts was filed before the Civil Judge.  Succinctly stated, the matter was still pending before the Court of Law till the present complaint was filed.  The OP have set-up the defence of force majeure.  It was also averred that as per the agreement, the OP has also agreed for payment of penalty for delay in possession of the premises in dispute.  The petitioner will pay the amount after deducting the amount which is covered by force majeure condition. 

9.      We have heard the learned counsel for the parties.  The Ld. Counsel for the complainant has invited our attention towards the judgment of this Commission titled as “Perin Hills Bazum Dittia & Anr. vs. M/s. Emaar Hills Township Pvt. Ltd. & Anr.” [CC No. 355 of 2014 dated 09.03.2016], in the similar circumstances, this Commission directed the OP-2 to refund the entire amount of ₹1,52,21,426/- to the complainants alongwith simple interest @10% p.a. with effect from 21.12.2010 till the date the aforesaid amount alongwith interest in terms of this order is paid.  It is not out of the place to mention here that the instant case pertains to a widow complainant and the stands on better footing.

10.    On the other hand, the Ld. Counsel for the OPs vehemently argued that the entire project is ready.  All the roads, houses and facilities have already been provided.  He argued that why the OPs should suffer for no mistake of themselves.  He submitted that in case all the complainants come here and get the prices back alongwith the interest, the OPs would be facing a big problem.  The OPs who have already spent about ₹700 crores on this project would be in a precarious and ruinous position.  He explained that complainant is a resident of Banjara Hills which is a posh-colony and she has not explained what is her position in Banzara Hills.  He further stressed that she has not explained whether she is the owner of that house or living there in any else capacity. 

11.    Ld. Counsel for the OP further argued that this Commission cannot arrogate those powers which it does not enjoy.  All these complex questions cannot be decided in this Commission which has the power to try the case only in a summary fashion.  He contended that this is a dispute between the State Governments of Andhra Pradesh and Telangana.  Writs are pending before the Hon’ble High Court.  Civil Case is also pending.  These controversies entail evidence in abundance.  The cross-examination which is the life-blood of a civil case is also necessary.  He emphasised that there is no provision of cross-examination in this summary trial court.  He argued that in case this complaint is allowed, the OPs will suffer an irreparable loss. 

12.    Lastly, the counsel for the OP placed reliance on the Constitution Bench Authority reported in “Jagatjit Distilling & Allied Industries Ltd. vs. Bharat Nidhi Ltd.”  [(1979) 15 DLT 152 (SN)].  Ld. Counsel drew our attention towards para No. 43 to 46 of the judgment, which run as under:-

43. In our opinion the doctrine of frustration embodied in section 56 of the Contract Act has no application. Under the doctrine of frustration a contract may be discharged if after its formation events occur making its performance illegal, impossible or commercially sterile. The doctrine of frustration is relevant when it is alleged that a change of circumstances after the formation of the contract renders it physically or commercially impossible to fulfil the contract. “Special importance is necessarily attached to the occurrence of any unexpected event that, as it were, changes the face of things.” But not every uncontemplated turn of events “changes the face of things”. See Davies Contractors Ltd. v. Fareham U.D.C. 1956 A.C. 696 (729) (1).

44. It has to be remembered that the doctrine of frustration does not protect a party whose own breach of contract actually is the frustrating event. A party cannot rely on “self-induced frustration, that is, on frustration due to his own conduct or to the conduct of those for whom he is responsible.” The principle of frustration assumes that the frustrating event was not caused by the fault of either party to the contract. “The essence of frustration is that it should not be due to the act or election of the party”: See Maritime National Fish Ltd. v. Ocean Trawlers Ltd., (1935) A.C. 524 (2). “Reliance cannot be placed on a “self-induced frustration”: See Bank Line Ltd. v. Capel & Co., (1919) A.C. 435 at page 452 (3).

45. On the facts of this case it appears that the frustrating event, if frustration ever there was, was caused by the bank's own fault. There was a default by the bank in selling the plant to Akhtar Ali which caused the allegedly frustrating event. As Lord Russell said in Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corporation Ltd., (1942) A.C. 154 (179) (4).

“possible varieties (of fault) are infinite.”

Giving an illustration he said: “Thoughtlessness of the prima donna who sits in a draught and loses her voice” cannot be said to be a frustration of the contract as the resultant frustration is “self-induced”.

46. The rule that frustration must not be self-induced applies to all deliberate or negligent acts, whether they are actually breaches of contract or not. For it is in all these cases unjust to make the other party to bear the loss. [See Treitel Law of Contract 4th edition page 600 (601)].”

13.    We are of the considered view that this authority is of no help so far this case is concerned.  It must be borne in mind that Consumer Protection Act came into force in the year 1986.  In “Charan Singh vs Healing Touch Hospital & Ors.” [2000 (7) SCC 668], it was held that Consumer Protection Act is one of the benevolent pieces of legislation in India to protect a large body of consumers from exploitation.  It must be borne in mind that the spirit of the benevolent legislation should not be over-looked and its object is not to be frustrated. 

14.    Certain harsh realities cannot be glossed over.  There is not even a scintilla of doubt in our mind that the OP has failed to establish its bonafides.  The principal deficiency on its part is that it went on accepting the instalment unashamedly even after the notification was published on 08.10.2010.  The last instalment was paid on 21.11.2010.  The OP is renowed promoter and builder.  It has many irons in the fire.  It has projects without number.  This lady being a widow should have been treated with kid gloves.  However, the OP was interested to feather its own nest, i.e., to make profits at the cost of others.  Again, it was well-explained by the counsel for the complainant that in the evening of her life, she wants to live all alone and lead a peaceful life separately, i.e., away from the house situated in Banjara Hills.  It is well said:-

“You are a king by your own fireside as much as any monarch in his throne”

15.    Eight years have elapsed and she has not got the possession of her house.  It cannot be said with guarantee that during her life time she would get this house or not.  It is well-said that justice delayed is not only justice denied, it is also justice circumvented, justice mocked and the system of justice under mind.  It is difficult to feather as to what is the fault of this old lady.  This is a peculiar case wherein we are not even following the law laid down in the case of K.A. Nagamani Vs. Karnataka Housing Board, Civil Appeal Nos. 6730-31 of 2012, decided on 19.09.2012, for the benefit of the OP but we follow the judgment of other Bench and we hereby direct the amount paid by the complainant to be returned to her alongwith interest @10% simple interest from the dates of deposits till its realization.  There shall be no order as to costs.