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

C.C.No.119 of 2012

Between

Mr.Shankar Mazumder S/o.late Manoj Kumar

Mazumder, aged about 35 years,

Occ:IT Professional,R/o. Flat No.601

Vishnu Shreyas CHS,

Plot No.87/87 A Sector 50 New

Seawoods West, Nerul,

Navi, Mumbai-400 706.                                        ..Complainant

And

M/s. Aliens Developers (P) Ltd.,

Having its registered office at

Flat No.911, Teja Block

My Home Navadweepa, Madhapur

Hyderabad, rep. by its Directors

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

Managing Director, aged about 33 years,

Occ:Business.

2.   Mr.Venkat Prasanna.C, S/o.Mr.C.V.R.Choudary

Jt.Managing Director, aged about 32 years,

Occ:Business, both are R/o.Flat No.910,

Teja Block, My Home Navadweepa,

Madhapur, Hyderabad.                                      ..Opposite parties.

Counsel for the complainant : M/s A.M.Rao

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

QUORUM:  SMT.M.SHREESHA, HON’BLE Incharge President

AND

SRI S.BHUJANGA RAO, HON’BLE MEMBER. 

TUESDAY, THE EIGHTH DAY OF OCTOBER,

TWO THOUSAND THIRTEEN

Order (Per Smt.M.Shreesha, Hon’ble Incharge President)

***

        The brief facts as set out in the complaint are that the complainant was approached by the marketing executives of the opposite parties builder  and attracted by their representations, he decided to buy a flat in SPACE STATION-II in Sy.Nos.204/A, 210, 211, 212, 213, 220/A of Tummuur Village, Maheswaram Mandal Ranga Reddy District and he agreed to purchase  flat No.702 for a total sale consideration of Rs.28,01,942/- and accordingly entered into an agreement of reservation of flat dated 11-9-2008.  In pursuance of the said agreement, the complainant paid the following amounts towards advance sale consideration:

The complainant submitted that subsequent to the receipt of the said amounts, opposite parties informed that the project had run into problems and is not likely to be completed within the stipulated time and requested the complainant for the allotment to be transferred to the other project SPACE STATION-I, in Sy.Nos.384, 385 and 426/A situated at Tellapur Village, Ramachandrapuram Mandal, Medak District and also informed that if the booking amount was not transferred, the complainant’s payment would be forfeited.  The complainant having left with no other alternative agreed for transfer upon the same terms and conditions contained in Agreement dated 11-9-2008 and accordingly was allotted flat No.424, in Space Station-I, Project.  The complainant submitted that the flat booked in Space Station-II admeasured 1018.50 sft. whereas the second flat was 1122 sft. and the complainant agreed to pay an additional amount of more than 2 lakhs and the total sale consideration agreed for flat No.424 was Rs.30,64,506/- and the amount earlier paid was adjusted to the new booking which was made on 11-1-2010.  The complainant paid the following amounts towards part sale consideration of the new flat to the amounts already paid:

Thus the complainant paid an amount of Rs.10,40,466/- and submitted that he was given an impression that the project would be completed within 3 years from the date of agreement i.e. 11-9-2008.    The complainant submitted that while matters stood thus, the opposite parties had sent an agreement of sale dated 25-3-2010 required to be signed by the complainant and sent back to opposite parties and the complainant submitted that he was surprised to note the contents that this Agreement of sale dated 25-3-2010 contained a clause which permitted the opposite parties three years time for completion of the project from the date of agreement which means that the project would be completed only after 25-3-2013.   The complainant submitted that the date of completion as per agreement dated 11-9-2008 is 11-9-2011 and the subsequent agreement is clear deviation which was not acceptable to the complainant.  The complainant raised several objections and requested the opposite parties to modify the agreement in consonance with the earlier agreement dated 11-9-2008 but the opposite parties had not conceded to the changes suggested by the complainant.  Therefore the complainant for the first time visited  Space Station-I and stated that to his surprise he noticed that the project was in nascent stage and nowhere near completion within next three years and he immediately approached the opposite parties and sought clarification and was informed that the project would be completed by 2015.  The complainant submitted that he had no intention of waiting for severally years after paying considerable amount of consideration and sought for refund of the amounts paid by him along with interest and several mail communications were exchanged and ultimately vide mail dated 22-2-2012, opposite parties conceded to refund the amount paid by the complainant in three instalments starting in March, 2012 but declined to pay appreciation i.e. interest but has not made any payment till now.  Therefore the complainant got issued a notice dated 02-5-2012 seeking refund of the amount of Rs.15,76,387/- being prorate amount along with interest at @2% p.a. for which the opposite parties neither replied nor made any such payment.  The complainant submits that the act of the opposite parties in accepting part sale consideration and not handing over flat in time  and secondly unilaterally changing the schedule of property beyond 70 Kms and also not honouring the promise of refund of money amounts to deficiency in service .  Hence the complaint for a direction to the opposite parties to pay an amount of Rs.18,88,820/- being principal amount of Rs.10,40,466/- along with interest @ 18% p.a. together with damages of Rs.5,00,000/- and costs.

        Opposite parties filed written version resisting the complaint and contended that the complaint is not maintainable under the provisions of Consumer Protection Act and hence it is liable to be dismissed.  The opposite parties submitted that the complainant booked a flat with opposite party No.1 and wants to cancel the flat for his own reasons and opposite party No.1 agreed for the said cancellation and the amount to be paid is also settled.  The present complaint is filed for recovery of the said amounts which does not fall under the provisions of consumer dispute.  The agreement of sale between the complainant and opposite party No.1 entered into was cancelled which is admitted by the complainant and therefore the relationship between the complainant and opposite parties is ceased as builder and consumer in view of novation of contract between the parties and therefore the complainant cannot claim his status basing on a cancelled agreement.  Opposite parties submit that once the accounts between the parties are settled, the party is entitled for the said amount and therefore recovery of the said amount is like a recovery suit and therefore payment of money by the opposite parties does not fall under the definition of deficiency as defined under Section 2(g) of Consumer Protection Act, 1986. 

Opposite parties further submitted that the complaint be dismissed for non joinder of necessary parties as the complainant and his wife Mrs.Sonali Mazumder jointly booked the said flat and paid an amount of Rs.10,40,466/- but only the complainant filed the complaint without arraying his wife as a party.  Opposite parties submitted that there is no deficiency in service on their behalf in rendering service and that the complainant accepted the terms and conditions recorded in the agreement.  Clause 3 of the terms and conditions of Pre-Launch offer attached to the agreement manifest that the compensation to the agreement holder is provided in the event of the project being delayed beyond period of 3 and half years and the quantum of compensation payable by opposite party No.1 is also fixed at Rs.3/- per sq. ft. per month as penalty and therefore it is not a one sided agreement and the interest of the customer is protected under the said agreement and opposite party no.1 is still having time to complete the project as provided in clause 3.  Clause No.4 of the terms and conditions state that in case of cacellation of reservation of flat 10% of the total flat cost or total advance paid whichever is less shall be deducted and the remaining amount will be returned within 45 days from the date of cancellation.  Opposite parties submitted that the complainants did not approach personally till date to cancel the agreement and wanted refund of the advance amount without deducting the charges as per the agreement and have not even returned the agreement, which shows that they are in a hurry and without even negotiating with the opposite parties they want to cancel the agreement and take refund the eligible amount.  The opposite parties are ready to refund the amount after deduction of 10% of total flat cost from the advance paid and the complainants paid an amount of Rs.10,40,466/- out of which an amount of Rs.3,06,450/- has to be deducted towards 10% of the flat cost and the complainant is entitled for Rs.7,34,016/- and not entitled for any interest as per the terms of the agreement. 

Opposite parties admitted to the booking of the flats at Space Station II Tummaluru village but denied that they informed the complainant that the project is going to be delayed and requested to take flat in another project at Thummalur but admitted that the complainants’ booking was transferred from Thummalur project to Tellapur project and also admitted that the complainants paid part of consideration of Rs.10,40,466/- and further submitted that the complainant failed to execute the agreement dated 25-3-2010.  The opposite parties submitted that the complainants booked the flat under a pre launched scheme as the terms were attractive and since there is a recession due to various local factors including an agitation for formation of separate state of Telangana, there is an adverse impact on the price in the realty sector and under those circumstances, the complainant sought for refund of the amount and hence the complaint is not maintainable under law.  Opposite parties submit that there is no deficiency in service on their part and reservation of flat and pre launch scheme relating to Space Station –I at Tellapur being executed and the delay was caused due to various factors including the statutory regulations being changed from time to time by the government authorities and submitted that the complainant is not entitled for refund of the amount with interest and prayed for dismissal of the complaint with costs.

The complainant filed his affidavit evidence reiterating the facts stated in his complaint and denied the allegations made by opposite parties in their written version that he is not a ‘consumer’ and that he approached the  Commission in a hurry without negotiating with the opposite parties and that the opposite parties are entitled to deduct 10%  out of the paid amount i.e. 10,40,466/- and pay only Rs.7,34,016/- without interest  and got marked Exs.A1 to A10.

Opposite party No.1 filed affidavit evidence reitatering the facts stated in the complaint.

The brief point that falls for consideration is whether there is any deficiency in service on behalf of the opposite parties and if the complainant is entitled for the relief claimed in the complaint?

Ex.A1 is the agreement executed between the complainant and the opposite parties on 11-9-2008 for an amount of Rs.28,01,942/- with a booking advance of Rs.2,50,000/- and the balance payments are to be made as follows:

Booking Advance Rs.2,50,000/-  -   Paid

15% of the Total Flat cost                on or before 15^th November, 2008

35% of the Total flat cost                 within 25 days from the date of Permission

20% of the Total flat cost                 At the time of structure/Slab of respective flat

15% of the Total flat cost                 At the time of Brick work of Respective flat

10% of the Total flat cost                 At the time of plastering of Respective flat.

5% of the Total flat cost                   At the time of flooring of Respective flat

Ex.A2 is the receipt for the advance amount of Rs.2,50,000/- which was paid.  Exs.A4, A5, A6 and A7 are the receipts issued by the opp. parties in the name of the complainant for an amount of Rs.2,50,000/- on 11-1-2010, Rs. 2,00,000/- on 24-2-2010, another amount of Rs.4,20,466/- on 19-3-2010 and Rs.1,70,000/-on 09-3-2010 respectively.  Ex.A8 is another agreement of sale dated 25-3-2010 according to which the purchaser has to pay a total amount of Rs.30,64,506/- for flat No.424 in Space Station-I with built up area of 1122 sft with 24.12 undivided share of land together with all amenities and common areas

It is the complainant’s case that he was given alternative option to transfer his booking from Space Station-II to Space Station I and the complainant submits that as per the promise made by the opposite parties, the possession of the flat was to be given by 11-11-2011 but when he visited the site, he found that there was no progress of construction at all and there is no hope of the flat being delivered even in 2012 i.e. after 4 years from the date of booking.  The complainant got issued a legal notice vide Ex.A9 dated 02-5-2012 calling upon the opposite parties to refund an amount of Rs.15,73,387/- and the complainant calculated the prevalent rate at Rs.3100/- per sft  with interest at 24% p.a., compensation and costs. Ex.A10 is the correspondence between the complainant and the opposite parties vide emails dated 09-5-2012, 01-5-2012, 23-4-2012,  06-3-2012 05-3-2012, 02-3-2012,27-2-2012, 22-2-2012, 20-2-2012 15-2-2012,17-5-2012, 24-5-2012,27-5-2012, 29-5-2012, 31-5-2012, 28-10-2010, 10-8-2011, 12-4-2010, 10-8-2011, 16-8-2011, and in email dated 28-10-2010 the complainant has submitted that inspite of paying 1/3^rd of the total cost and his shifting from Space Station II to Space Station I was also not a decision of choice and even to the subsequent emails there was no response from the opposite parties. 

        It is the opposite parties case that as the project of Space Station II at Tummulur was being delayed, they have requested the complainant to take a flat at Tellapur village in Space Station I and they also admit that the complainant had paid a part consideration of Rs.10,40,466/-.  They admit in their written version that there was a delay in completing the project but submit that it is the complainant who wants to cancel his booking because of the changed market conditions and that they have no knowledge of the legal notice and that as per the terms of the agreement the complainant is entitled for refund of the amount paid, after deducting 10% of the flat cost.  In para 5 (d) of their written version, the opposite parties admit as per clause 3 of their terms and conditions of their pre-launch offer attached to the agreement, compensation is to be paid at the rate of Rs.3/- per sft per month as a penalty in the event of the project being delayed more than 3 and half years. 

        In the instant case when the amount paid by the complainant i.e. Rs.10.40,466/- is not in dispute and it is also not in dispute that an agreement was entered into way back on 11-9-2008 , the contention of the opposite parties that the project was delayed only because of the agitation for a separate state and changed market conditions is unsustainable as the complainant had contended that there was no progress in the construction at all and that the project was very much at the initial stage.  The progress which the opposite parties made is not substantiated by any documentary evidence. Admittedly, the booking of the flat was done on 11-9-2008 and even as on the date of filing of complaint i.e. in August,  2012 even after 4 years of booking, the complainant submits that there is no hope of the project being completed.  In the present circumstances as there is deficiency in service on behalf of the opposite parties in not completing the project on time and not even giving any time frame for future completion of the project, we are of the considered opinion that they cannot forfeit 10% of the flat cost as this will amount to unfair trade practice.  The complainant is entitled to refund of the amount i.e. Rs.10,40,466/- with interest at 15% p.a. from the date of last payment i.e. 09-3-2010 till the date of realization together with compensation of Rs.1,00,000/- and costs of Rs.5,000/-.  This compensation is being awarded for the mental agony and inconvenience caused to the complainant and also towards penalty for having booked a flat and paid 1/3^rd of the total cost and the flat has not seen the light of the day till the date of filing of the complaint.  We also rely on the judgement of the Apex court in Brij Pal Sharma Vs.   Ghaziabad  Development Authority  reported in III (2005) CPJ 43 (SC) in which the Apex court  opined that grant of interest @ 18% p.a., by way of damages and compensation  is justified.   Their lordship referring to an earlier decision in  Ghaziabad  Development Authority Vs. Balbir Singh  reported in II (2004) CPJ 12  held by stating that “ in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest at the rate of 18%.  We say so because it  is  clear that  even if the body has not already floated  another scheme on the same land it is clear that the body is going to derive great profit from the land and therefore compensating the allottee  with interest @ 18% p.a. is just and fair.”  

        Keeping in view the facts of the instant case that it is a flat and only part of the consideration has been paid, we find it a fit case to award interest at 15% p.a. as the complainant had paid 1/3^rd of the total cost and

opposite parties have cited grounds of recession as the cause for non completion.   So the opportunity loss for the complainant with respect to market escalation is justified with 15% interest.

        In the result this complaint is allowed in part directing the opposite parties 1 to 3 jointly and severally refund the amount paid i.e. Rs.10,40,466/- to the complainant with interest at 15% p.a. from the date of last payment i.e. 09-3-2010 till the date of realization together with compensation of Rs.1,00,000/- and costs of Rs.5,000/- within four weeks from the date of order. 

                                                        INCHARGE PRESIDENT.

                                                                MEMBER.

JM                                                             Dt.08-10-2013

APPENDIX OF EVIDENCE

For the complainant:                                    For Opp.parties:

Affidavit evidence of the                      Affidavit evidence of Mr.Hari

complainant filed                                Challa filed on behalf of O.Ps

Exhibits marked on behalf of the complainant:

Ex.A1-Agreement for reservation of flat dt.11/9/2008.

Ex.A2-Receipt dt.11/9/2008 for Rs.2,50,000/-

Ex.A3-Customer information sheet

Ex.A4-Receipt dt.11/1/2010 for Rs.2,50,000/-

Ex.A5-Receipt dt.24/2/2010 for Rs.2,00,000/-

Ex.A6-Receipt dt.19/3/10 for Rs.4,20,466/-

Ex.A7-Receipt dt.09/3/2010 for Rs.1,70,000/-/

Ex.A8-Agreement of sale dated 25-3-2010

Ex.A9-Legal notice dt.02-5-2012

Ex.A10-E-mails

Exhibits marked on behalf of opposite party:

        -Nil-

INCHARGE PRESIDENT.

                                                        MEMBER.

JM                                                     Dt.08/10/2013