BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.

C.C.No.70/2013

Between:

Dr.Jayachandrareddy Atluri

R/o.Plot No.HIG 310,

Near PJR Congress Party Office,

6^th phase, KPHB colony

Kukatpally, Hyderabad-500 072                                                                               Complainant

        And

1. M/s Aliens Developers Private Limited,

A company registered under Indian

Companies Act, 1956,

Rep. by its Managing Director & Joint

Managing Director, Mr.Hari challa

S/o.C.V.R.Chowdary &

Mr.C.Venkatprasanna S/o.Mr.C.V.R.Chowdary

Respectively, office at Flat No.910, Teja

Block, My Home Navadweep Apartments

Madhapur, Hi-tech City, Hyderabad-500 081.

1. Mr.Hari challa, S/o.Mr.C.V.R.Chowdary

Managing Director

M/s Aliens Developers Private Limited,

Regd. Office at Flat No.910, Teja

Block, My Home Navadweep Apartments

Madhapur, Near Hi-tech city Hyderabad-500 081.

1. Mr. C.Venkata Prasanna S/o.C.V.R.Chowdary

Joint Managing Director

M/s Aliens Developers Private Limited,

office at Flat No.910, Teja

Block, My Home Navadweep Apartments

Madhapur, Near Hi-tech city Hyderabad-500 081.                                             .Opposite parties.                       

Counsel for the  complainant: Mr.K.Parandhamachary

Counsel for the opposite parties:M/s A.Krishnam Raju.

QUORUM: HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT.

AND

SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER.

WEDNESDAY, THE EIGHTEENTH DAY OF JUNE,

TWO THOUSAND FOURTEEN

Oral Order (As per Hon’ble Sri Justice GopalaKrishna Tamada, President)

***

        This complaint is filed U/s.17 of Consumer Protection Act, 1986  for a direction to the opposite parties to pay the sale consideration received by opposite parties i.e. Rs.8,40,603/- along with interest amounting to Rs.3,07,250/- @ 18% from 31-12-2010 to 10-4-2013 and subsequent interest with effect from 11-4-2014, compensation of Rs.3,00,000/- for causing mental agony and pay penalty of Rs.1,08,864/- as per condition No.1 of agreement for reservation of flat No.2371 and for default committed by the opposite parties in handing over the flat (Rs.3/- per sq. ft per month for 1344 sq. ft. for 27 months), to pay escalation costs of Rs.13,44,000/- at Rs.1000/- per sft.  for 1344 sq. ft. for flat No.2371 and pay legal charges of Rs.50,000/- 

OR 

direct the opposite parties to register flat No.2371 within 2 months bearing the registration charges failing which a sum of Rs.30,000/- per month shall be deducted from the balance of sale consideration for failure to handover the flat to the complainant  together with compensation of Rs.3,00,000/- for causing mental agony and legal charges of Rs.50,000/- and the complainant will pay the balance sale consideration of Rs.35,37,328/- on the date of registration of flat No.2371 in 23^rd floor on Block 12 station in Project SSI.

        The case of the complainant is that believing the representations made by the opposite parties, he intended to purchase a residential flat admeasuring 1432 Sq. ft. (flat No.2315) in 23^rd floor in Station 3 in the residential complex ‘space station’ and paid an advance of Rs.50,000/- by way of cash and a Customer Information sheet No.1722242 was issued by opposite parties.  The details of Booking have been clearly mentioned in the Customer Information sheet and the total cost of the flat including amenities and taxes is Rs.46,14,193/- and the payment schedule duly signed by the opposite parties is given to the complainant.

The complainant due to personal reasons opted for change of flat from 2315(1432 sq. ft.) to 2371 (1344 sq.ft.) in 23^rd floor situated in Block 12 station in Project SSI.  The said change has been agreed and accepted by the opposite parties and thereby they issued fresh payment structure duly signed by them for changed flat No.2371  through email dated 09-2-2011.  The details are as follows:

The payment structure emailed by the opposite parties for flat No.2371 and the total cost of the flat is Rs.43,77,328/- situated in 23^rd floor Type C4A in Station No.12 with one car parking.  The complainant agreed for the same and made the following payments to opposite parties towards sale consideration of flat No.2371.

Accordingly the complainant paid a sum of Rs.8,40,000/- as part payment towards the sale consideration of flat No.2371 which amounts to 20% of total sale consideration  and passed specific receipts as under:

The complainant having paid 20% of total sale consideration towards flat No.2371 contacted the opposite parties on phone as well as through e-mail  and requested to send Agreement of sale for flat No.2371 and the opposite parties instead of sending Agreement of sale, they emailed on 29-3-2011 Agreement for reservation of flat purported to be executed on 23-3-2011 along with payment plan.  The payment plan mentioned by the opposite parties in the Agreement for reservation of flat is quite deviating from payment schedule given by opposite parties on 09-2-2011 and as the complainant already paid 20% of sale consideration, therefore, he sent number of e-mails to opposite parties to stick on to the earlier payment schedule and to give Agreement of sale  of the flat and further to intimate the progress of the construction of the flat booked by him. 

It is the case of the complainant that the unilateral execution of Agreement for reservation of the flat on 23-3-2011 by opposite parties discloses the details of flat booked and payment plan and the opposite parties without disclosing the building plans or progress of the project and further have not been furnishing agreement of sale but assured that the flat under booking would be completed on or before August,2012 with a grace period of 9 months and on failure to complete the same within the said period, an amount of Rs.3/- per sq. ft. per month shall be paid as penalty to the customer.  Therefore, the opposite parties ought to have handed over the finished flat 2371 on or before August, 2012 including the grace period of 9 months to the complainant.

The complainant submitted that the opposite parties in their entire e-mail correspondence have not disclosed any information about the building plan, statutory permissions for construction of apartment building and its progress and never gave agreement of sale though he periodically requested to follow payment schedule given on 09-2-2011.  The opposite parties evaded the same and thereby the complainant discontinued to pay the amounts as committed in the payment schedule.  The complainant paid an amount of Rs.8,40,000/- as on 02-2-2011 as against the total sale consideration of Rs.43,77,328/-  and he has to pay the balance of sale consideration of Rs.35,37,328/- on approval of the building permissions and progress of the construction work.

The complainant contacted the opposite parties and enquired about the stage of construction, Agreement of sale and also deviation of payment schedule but they did not disclose the same and also did not give Agreement of sale and contrary to it insisted the complainant through email on 29-3-2011 for further payment of Rs.2,21,760/- and also issued a email dated 17-9-2011 stating that they do not want to change the payment terms but still requested to release atleast 50% of payment so that they will close the discussion and the remaining amount can be paid by the complainant as per the progress.  The complainant sent a email stating that the opposite parties are not respecting the payment terms and requested to cancel the booking and return the money back and it is a violation of the contractual obligations under signed and sealed payment schedule dated 09-2-2011 and got issued legal notice on 31-3-2012 but there was no response. 

Thereafter the opposite parties in their email dated 28-9-2011 informed the complainant that they will deduct 20% or 2 lakhs whichever is higher from the amount paid by the complainant, if the complainant cancel his booking.  The complainant alleges that the opposite parties have no right to receive more than 20% of the sale consideration without even executing agreement of sale and also deduct cancellation charges and pressing him for payment of further instalments amounts to deficiency in service and unfair trade practice.   Hence the complaint.

Opposite parties filed written version contending that the complainant filed the complaint to gain out of breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause in the agreement of sale providing for arbitration. It is contended that the complaint is filed for recovery of money which is not a consumer dispute and that once the agreement is cancelled and account is settled there is no relationship between the parties.

The opposite parties have submitted that the agreement was mutually cancelled and in view of novation of the contract there exists no relationship of builder and consumer between the opposite parties and the complainant. The opposite parties submitted application for conversion of agricultural land 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.

The Municipal Administration and Urban Development (I) Department notified the land in survey number 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 survey number 384 is made. Realignment of the  proposed road was approved on 3.04.2008 and the permission was accorded approving the building plan on 11.04.2008.The opposite parties have obtained NOC from the AP Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. The opposite parties obtained NOC from Airport Authority on 10.07.2009.

The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground +20 upper floors and release of building permission upto 29 floors is awaited. The opposite parties have taken all necessary steps to complete the project at the earliest and the project being massive and due to the reasons beyond the control of the opposite parties, the opposite parties could not complete the project within the time frame. The opposite parties informed the complainants about the delay in completion of the project due to delay in clearance from the authorities concerned. In view of arbitration clause the complaint is not maintainable before this Commission.

The opposite parties submitted that they agreed to pay Rs.3/- per sq ft per month to maintain the goodwill  and that too after payment of dues payable by the complainants in terms of Clause VIII(g) of the Agreement  and the project was delayed due to reasons beyond their control.  The opposite parties admitted that the complainant paid 20% of the consideration but he did not choose to make further payments and the terms for agreement of reservation is conveyed to the complainant and payment of balance amounts depend upon the terms agreed between both the parties and therefore the change of payment schedule does not arise.   The progress of construction is based on various factors and stated that the opposite parties  secured all necessary permissions including building permission from the concerned authorities and the complainant is entitled for delivery of the flat after further payments.  They denied that they did not disclose the building permissions and stage of construction and also receipt of legal notice.    The cancellation of booking is subject to terms and conditions and therefore particulars given for cancellation of the flat is in accordance with the terms and conditions between the parties and they did not deviate any acts including A.P. Apartment Act and submitted that there is no deficiency in service and the complainant himself deviated the terms of payment and did not pay further amounts and therefore they could not enter into agreement of sale and payment of compensation and further the complainant is not entitled for the claim under the head damages under condition No.1 of agreement  as he failed to make further payments and submitted that the complainant  intentionally avoided to make further payments due to Telangana Agitations and drop or prices.  The delay in construction is beyond their control and both parties agreed regarding compensation when there was delay in delivering the project and submitted that the complainant is a defaulter of payments and prayed for dismissal of the complaint.

The complainant filed his affidavit and marked Exs.A1 to A9. The Managing Director of first opposite party filed his affidavit in support of their case.

The learned counsel for the complainants and opposite parties filed their written arguments. 

Heard.

The points for consideration are:

1. Whether the compliant is maintainable in view of arbitration clause in the agreement of sale?
2. Whether there is any deficiency in service on the part of the opposite parties ?
3. To what relief?

The facts not in dispute are that the complainant intended to purchase a residential flat admeasuring 1432 Sq. ft. (flat No.2315) in 23^rd floor in Station 3 in the residential complex ‘space station’ and paid an advance of Rs.50,000/- by way of cash and the total cost of the flat including amenities and taxes is Rs.46,14,193/- and the payment schedule duly signed by the opposite parties is given to the complainant.

The complainant due to personal reasons opted for change of flat from 2315(1432 sq. ft.) to 2371 (1344 sq.ft.) in 23^rd floor situated in Block 12 station in Project SSI.  The said change has been agreed and accepted by the opposite parties and thereby they issued fresh payment structure duly signed by them for changed flat No.2371  through email dated 09-2-2011.  Accordingly the complainant paid a sum of Rs.8,40,000/- as part payment towards the sale consideration of flat No.2371 which amounts to 20% of total sale consideration.  The complainant having paid 20% of total sale consideration towards flat No.2371 requested the opposite parties to send Agreement of sale for flat No.2371 but the opposite parties instead of sending Agreement of sale, they emailed on 29-3-2011, Agreement for reservation of flat, purported to be executed on 23-3-2011 along with payment plan.  The payment plan mentioned in the Agreement for reservation of flat is quite deviating from payment schedule given by opposite parties on 09-2-2011 and as the complainant already paid 20% of sale consideration, he sent number of e-mails to opposite parties to stick on to the earlier payment schedule and to give Agreement of sale  and further to intimate the progress of the construction of the flat booked by him. 

It is the case of the complainant that the unilateral execution of Agreement for reservation of the flat on 23-3-2011 by opposite parties discloses the details of flat booked and payment plan and the opposite parties without disclosing the building plans or progress of the project and have not disclosed any information about the building plan, statutory permissions for construction of apartment building and its progress and never gave agreement of sale  though he periodically requested for the same and follow payment schedule given on 09-2-2011.

The learned counsel for the opposite parties that the complainant paid 20% of the consideration but did not choose to pay further payments and the terms in the agreement of reservation is conveyed to the complainant and the balance amount has to be paid as per the terms.  The details of the building permission were very much available and contended that the complainant evaded to pay the amount due to Telangana agitation and drop of prices and the cancellation of booking is subject to terms and conditions.  The delay in completion of the project is for reasons beyond their control i.e. required clearances from statutory bodies which are necessary for execution of the project and as mentioned in agreement of sale dt.03-8-2008 under clause No.XIV ‘force majeure’ and the present complaint is not maintainable  and submitted that the complainant is not entitled for compensation as there is no deficiency of service and also for damages under condition No.1 of agreement and escalation of the cost and interest @ 18% p.a. claimed by the complainants.

The learned counsel for the opposite parties further contended that in view of the arbitration clause in the agreement, the complainants cannot maintain the complaint before this Commission. In terms of the agreement, 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 complainant 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.”

           The complainant has submitted that owing to failure of the opposite parties in completing the construction of the flat and unilateral execution of Agreement for reservation and as the opposite parties have not disclosed the building plans or progress of the project and have not disclosed any information about the building plan, statutory permissions for construction of apartment building and its progress and never gave agreement of sale  though he periodically requested for the same and also requested to follow payment schedule given on 09-2-2011 and as there was no response, he opted for cancellation of the flat. 

           Whereas on the other hand the opposite parties, Mr.Krishnam Raju contend that  the cancellation of the agreement of sale depends on the terms and conditions and made a reference to the judgement of the Hon’ble National Commission reported in 2009(2) CPR 197 (NC) wherein it was held that the courts cannot add anything or improve upon the terms of the contract between the parties and stated that the said principle is applicable to the present case.   Except merely stating as above, the learned counsel has neither placed the said judgement before us nor demonstrated as to how the said judgement is applicable to the case on hand.  What is to be inferred from the judgement is that the courts can neither add nor improve beyond the terms of the contract between the parties and such a view cannot be disputed.  As the said judgement is not demonstrated before us, we are unable to take any clue from the said judgement and accordingly the same is rejected.   The opposite parties contended that they are ready to refund the amount to the complainant according to the terms and conditions  i.e. after deducting 20% of the amount.

           Apparently the complainant parted with an amount of Rs.8,40,000/- and the last payment was made on 02-2-2011.  From a perusal of the documents which are marked as Exs.A2 to A5, there is no dispute with regard to the payment  and it is the case of the complainant that owing to failure of the opposite parties in completing the construction of the flat and unilateral execution of Agreement for reservation of flat instead of agreement of sale and as the opposite parties have not disclosed the building plans or progress of the project though he periodically requested for the same and also requested to follow payment schedule given on 09-2-2011 and as there was no response, he opted for cancellation of the flat. 

           The first payment was made on 31-12-2010 with a fond hope that he could live in the flat comfortably by the year 2012.  The opposite parties admitted that the delay in construction is beyond their control and as the complainant’s dreams were shattered, he opted for cancellation of the flat and the opposite parties contend that they are entitled to deduct 20% of the amount received.  As could be seen from e-mails and legal notice, the complainant had been insisting the opposite parties to send agreement of sale and also stick to payment schedule dated 09-2-2011  and also got issued Ex.A7, legal notice dated 31-3-2012   for which there was no response from the opposite parties and on the other hand they too admit that the delay in construction is due to reasons beyond their control and as they are laches on behalf of opposite parties in not completion the construction and the complainant parted his hard earned money with them and in those circumstances, they cannot deduct 20% out of the amount paid by the complainant and in those circumstances, we are of the view that the complainant is entitled for refund of the entire amount paid with interest at 12% p.a. from the date of last payment which was made on 02-2-2011 till the date of realization  together with costs of Rs.10,000/-.

           Accordingly this complaint is allowed in part and the opposite parties are directed to refund the amount of Rs.8,40,000/- with interest at 12% p.a. from the date of last payment i.e. 02-2-2011 till the date of realization together with costs of Rs.10,000/- to be paid within a period of four weeks from the date of receipt of this order.

                                                                Sd/-PRESIDENT.                                                 

                                                        Sd/-MEMBER.

JM                                                     Dt.18-6-2014.

                        //APPENDIX OF EVIDENCE//

                                WITNESSES EXAMINED

For complainants:                                                        For Opp.parties:

Affidavit of the  complainant filed.                                  Managing Director of OP.1

                                                                                      filed his affidavit.

Exhibits marked on behalf of the complainants:

Ex. A1:Copy of payment schedule issued by Ops to the complainant of flat No.2371

          Dated 23-12-2010.

Ex.A2-Copy of receipt No.06293 dated 31-12-2010 issued by the Ops for Rs.50,000/-.

Ex.A3-Copy of receipt No.06380 dt.10-1-2011 issued by the Ops for Rs.2,00,000/-.

Ex.A4-Copy of receipt No.06539 dt.02-2-2011 issued by the Ops for Rs.2,00,000/-.

Ex.A5-Copy of receipt No.06538 dt.02-2-2011 issued by the Ops for Rs.3,90,000/-.

Ex.A6-Copy of Agreement for reservation of flat No.2371 emailed by Ops

          dated 23-3-11.

Ex.A7-Copy of Legal notice issued by the complainant to Ops. Dated 31-3-2012.

Ex.A8-Copy of email correspondence made by the complainant.

Ex.A9-Copy of Certificate of Incorporation of OP Firm.

Sd/-PRESIDENT.                                                 

                                                        Sd/-MEMBER.

JM                                                     Dt.18-6-2014.