w w w . L a w y e r S e r v i c e s . i n



Lanco Hills Technology Park Pvt. Ltd. v/s Tumu Kiran Praveen Choudary & Another


Company & Directors' Information:- PRAVEEN INDIA LTD . [Active] CIN = L21029WB1983PLC036326

Company & Directors' Information:- T R S TECHNOLOGY PRIVATE LIMITED [Active] CIN = U74899DL2003PTC119643

Company & Directors' Information:- A 1 TECHNOLOGY PRIVATE LIMITED [Active] CIN = U72200PB2002PTC035548

Company & Directors' Information:- E E I TECHNOLOGY PVT LTD [Strike Off] CIN = U31909WB1991PTC053259

Company & Directors' Information:- 5 I TECHNOLOGY PRIVATE LIMITED [Active] CIN = U72900UP2016PTC083186

Company & Directors' Information:- P & A TECHNOLOGY PRIVATE LIMITED [Active] CIN = U45208OR2011PTC014269

Company & Directors' Information:- Q & Q TECHNOLOGY PRIVATE LIMITED [Active] CIN = U74900DL2013PTC259002

Company & Directors' Information:- G I TECHNOLOGY PRIVATE LIMITED [Strike Off] CIN = U72200MH2005PTC156230

Company & Directors' Information:- M H T TECHNOLOGY PRIVATE LIMITED [Active] CIN = U74999TN2010PTC077205

Company & Directors' Information:- K S Q TECHNOLOGY PRIVATE LIMITED [Strike Off] CIN = U72900DL2006PTC154900

Company & Directors' Information:- M G TECHNOLOGY PRIVATE LIMITED [Strike Off] CIN = U72200DL2007PTC172003

Company & Directors' Information:- T & S TECHNOLOGY PRIVATE LIMITED [Strike Off] CIN = U32204DL2008PTC177037

    First Appeal No. 174 of 2014

    Decided On, 27 August 2020

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. PREM NARAIN
    By, PRESIDING MEMBER

    For the Appearing Parties: Tejasu Anand, Sumanth Nookola, Advocates.



Judgment Text

This appeal has been filed by the appellant Lanco Hills Technology Park (P) Limited challenging the order dated 27th December 2013 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission Hyderabad (in short the 'State Commission') in consumer complaint No. 125 of 2012.

2. Brief facts of the case are that the respondent no.1, after being satisfied with the proposed project of the appellant company agreed to purchase a flat bearing no.1802, on the 18 floor, th tower 14 LH, admeasuring 1900 sq.ft. in the said project of the appellant, vide provisional allotment application dated 13.07.2007. On 20.11.2007, the respondent no.1 signed the agreement for sale of above mentioned flat for a total consideration of Rs.1,00,40,000/- (rupees one crore forty thousand only). The respondent no.1 and appellant mutually agreed to allot another apartment being flat no.1703, tower no.10 LH to the respondent No.1 in place of previously allotted flat bearing no.1802, on the 18 floor, tower 14 LH and the appellant th thereafter issued a provisional allotment letter to the respondent no.1 on 17.05.2008 for the above flat. On 24.07.2008, the appellant and the respondent No.1 thereafter, through his GPA holder Mr. Tumu Veerabhadra Rao, entered into agreements for the sale of land and built-up area for flat bearing no.1703 on 17 floor, in tower no.10LH admeasuring 1904 sq.ft. for a total sale th consideration of Rs.1,00,03,360/-. The appellant and the respondent entered into a tripartite agreement on the same date i.e. 24.07.2008, according to which, respondent no.2 was to disburse the amount/instalment directly to the appellant company. The respondent no.2 thereafter on various dates in 2008-2009, disbursed to the appellant company a total amount of Rs.57,36,360/- (rupees fifty seven lacs thirty six thousand three hundred and sixty only). On 01.06.2011, respondent no.2 requested the appellant to pay the amounts disbursed under the sanctioned loan. On 13.06.2011, the appellant thereafter, received a letter whereby the respondent no.1 for the first time raised a demand for refund of the amount paid towards 15% of the consideration along with interest @ 18% p.a. from the date of receipt of amount till the date of settlement as also refund the entire amount paid by respondent no.1 to the respondent no.2 and the amount released by the respondent no.2 pursuant to the sanction of the home loan to the appellant. On 15.10.2012, the respondent no.1 filed a consumer complaint bearing CC No.125/2012 before the State Commission alleging deficient services on the part of appellant company and claiming refund of the amount paid by respondent no.1 and 2 along with interest and cost. The State Commission vide its order dated 27.12.2014, has allowed the complaint and has directed the appellant to:

(a) Pay an amount of Rs.15,06,075/- with interest @9% p.a. from the date of respective payments made by respondent no.1 to the appellant till the date of realization; and

(b) pay an amount of Rs.57,36,358/- towards repayment of loan (availed by the respondent no.1) received from the respondent no.2 bank herein along with an interest @11% p.a. from the respective date of payments by the bank to the appellant and penal interest, if any, till the date of payment.

3. Hence the present appeal.

4. Heard the learned counsel for the appellant as well as respondent No.1/ the complainant. None appeared on behalf of the respondent No.2 Indian Bank despite service of notice.

5. The learned counsel for the appellant stated that the State Commission failed to appreciate that the delay in construction and the handing over of the possession of the flat bearing no.1703 on the 17 floor, in tower 10LH was on account of force majeure events namely litigation and th stay orders by courts, which were beyond the reasonable control of the appellant and which events admittedly affected the development of the project.

6. The learned counsel for the appellant stated that the State Commission failed to appreciate that the unforeseen litigation initiated against the appellant company and stay orders by courts were force majeure events covered under the agreement between the parties. Therefore, the period during which the said events affected the development of the project stood suspended.

7. Learned counsel for the appellant further stated that the finding of the State Commission that the appellant failed to ensure necessary permission and to see that the project was free of litigation and therefore it amounted to deficiency in service and unfair trade practice is patently erroneous and without any pleadings to this effect. There is nothing on record to even suggest that there was any issue with title of the property when the project was floated.

8. It was further stated by the learned counsel for the appellant that the State Commission failed to consider the fact that as per the order dated 08.05.2012 passed by the Hon'ble Supreme Court in an SLP filed by the appellant seeking stay of operation of the orders passed by the Hon'ble High Court of Andhra Pradesh at Hyderabad and Andhra Pradesh State Wakf Tribunal, the title of the land with the appellant was undisputed and that compensation would be paid to the waqf/dargah in the event the land is finally declared as waqf/dargah land. This itself shows that the appellant company had taken all possible measure to mitigate force majeure events.

9. Learned counsel for the appellant also stated that the State Commission failed to take note of the order dated 08.05.2012 passed by the Hon'ble Supreme Court in an SLP filed by the appellant seeking stay of operation of the orders passed by the Hon'ble High Court of Andhra Pradesh at Hyderabad and Andhra Pradesh State Wakf Tribunal, which was filed along with the written statement filed by the appellant, on a hyper-technical ground that the said order was not exhibited in affidavit of evidence of the appellant. The respondent had not disputed the said order or raised any objection thereto. The State Commission ignored the fundamental legal principle that "Facts admitted need no proof".

10. It was pointed out by the learned counsel for the appellant that the finding of the State Commission that the respondent no.1 is entitled to terminate the agreement is patently erroneous and amounts to re-writing the agreement. Admittedly the agreement does not contain any provision entitling the respondent no.1 to terminate the same.

11. Learned counsel for the appellant mentioned that finding of the State Commission that the appellant sent SMS to the respondent no.1 to come and take refund of the money is erroneous as the appellant had categorically denied sending any SMS and the respondent no.1 was unable to prove that any SMS was sent by the appellant. The finding of the State Commission is thus based on surmises and conjectures.

12. It was further stated that the State Commission has erred in directing the appellant company to refund the amounts to the respondent on an incorrect and misconceived premise that the respondent no.1 had proved that the agreements for sale were terminated by the respondent no.1. The State Commission has failed to consider that terms of the termination clause in the agreements only provide for termination by the appellant. The appellant has never terminated the agreements.

13. Learned counsel for the appellant argued that the State Commission failed to appreciate that as per Clause 7.7 and similar clauses of the said agreements, pertaining to the termination clause, the appellant company is not liable to pay interest on the refund/reimbursement, if any. Thus, the grant of interest by the State Commission is illegal and erroneous.

14. Learned counsel for the appellant further argued that the State Commission erred in holding that the appellant company is liable to pay even the penal interest to the respondent no.2. The direction is harsh, oppressive and without any legal basis.

15. On the other hand, the learned counsel for respondent No.1 /complainant stated that the State Commission has given the finding that the opposite party had already agreed to refund the amount as an SMS was sent by the opposite party to the complainant. Once the opposite party had agreed to refund the amount, they cannot take an opposite position in the appeal. The opposite party is now denying the SMS that was sent by the opposite party.

16. It was further stated by the learned counsel for the complainant that the land on which the project was coming up went in dispute and the matter was litigated up to the Hon'ble Supreme Court and therefore, the complainant did not want to block his funds in a project where the land title itself was disputed. Therefore, the complainant decided to withdraw from the project and to get his money back from the opposite party.

17. I have carefully considered the arguments advanced by both the learned counsel for the parties and examined record. It is seen that land became disputed by filing of OS No. 7/2011 by the Waqf Board/Dargah Hazrath Hussain Shah wali and due to land dispute, the complainant decided to withdraw from the project and sought refund of the deposited amount. Accordingly bank also wrote letter dated 1st June 2011 seeking return of the amount paid by the bank to the appellant. The complainant also wrote letter on 13th June 2011 for refunding the amount deposited by the complainant. The order of the Hon'ble Supreme Court dated 8.5.2012 came later on and by that time, the complainant and the bank had already requested the appellant to refund the amounts paid by them. As there was no response from the opposite party, the complainant filed the consumer complaint on 15th October 2012. Most of the people would not like to invest in a project where the land is in dispute and the matter is in litigation. From this aspect, I find that the request of the complainant for refund of the amount was justified. Though the order of the Hon'ble Supreme Court dated 8th May 2012 had, in a way, allowed the project to continue, but the complainant may have still thought to dissociate from the project which was in litigation. In fact, the order of the Hon'ble Supreme Court reads as under:

"Heard counsel on either side at length. Considering the fact that the substantial portion of the construction is over and due for allotment, we are inclined to stay the orders dated 3.4.2012 passed by the High Court of Andhra Pradesh and 28.3.2011 passed by the Andhra Pradesh State Wakf Tribunal in OS No.7/2011, until further orders.

We also record the submissions of the learned counsel appearing for the State that ultimately if it is found that it is the Wakf property, the State will compensate the plaintiff in the suit by money or by providing an alternative land."

18. From the above order of the Hon'ble Supreme Court, it seems that the project could continue and if ultimately the land was found to be of Waqf or Dargah, then in that case, the IWaqf will be compensated in terms of money or by allotting some other land. Thus, there should have been no fear in the mind of the complainant about the land and the project. But for a conservative mind, even the request for refund cannot be treated as something illegal because the project was already delayed and the land was definitely in dispute.

19. The appellant has raised an issue that there is no provision for cancellation of the allotment and refund of the money in the agreement and therefore the complainant could not have cancelled the allotment and the State Commission should not have allowed the cancellation. As per clause 7.5 of the agreement, if the opposite party cancels the allotment then the amount will be refunded without interest. Clearly, this provision is unilateral and does not keep the opposite party and the complainant on the same footing, therefore, this clause is nothing but an expression of unfair trade practice on the part of the opposite party. Consumer forum has to see the deficiency in service on the part of the opposite party in a complaint case. If the deficiency in service is proved, then, the consumer forum has the right to order refund and to pass an order for compensation and even the penal compensation as per section 14(1)(c) and 14(1)(d) of the Consumer Protection Act 1986. Once the refund is ordered, the cancellation of the allotment and the agreement is consequential and does not require any formal request or order.

20. The major argument of the learned counsel for the appellant has been that the project could not progress as planned on account of various court orders and this should be treated as force majeure condition. Then as per the agreement, no interest is required to be paid for this period and even the refund should not have been ordered. In this regard, the fact is that the complainant was suffering due to the litigation as the project was getting delayed and the complainant saw no chance of getting the possession of the property then the complainant asked for refund. The money of the complainant was blocked with the project and the complainant was not responsible for the litigations. Therefore, in my view, the complainant is entitled to get compensation even for this period.

21. As has been examined earlier, that after the order dated 8 May 2012 of the Hon'ble th Supreme Court, there should have been no fear in respect of the completion of the project and about the handing over of the possession, but still the complainant chose to file the consumer complaint for refund of the amount paid. Though in the above examination, the request of the complainant for refund has been found to be justified, but the fact remains that once the complainant had booked a flat and had taken loan from the bank, seeking refund after the order of the Hon'ble Supreme Court dated 8th May 2012 was not really required and the complainant may have continued with the allotment. So far as interest is concerned, as the money remained with the opposite party for sufficient time, the opposite party is liable to pay interest on the amount of refund. The State Commission has ordered refund of the loan amount from the bank along with in

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terest at the rate of 11% per annum and the amount paid by the complainant has been asked to be refunded along with interest at the rate 9% per annum. Both these rates of interest seem to be reasonable. Clearly the liability of refunding the bank loan is on the complainant and therefore if he had taken loan at 11%, then it is to be refunded along with interest at the rate 11% by the opposite party so that burden does not come on the complainant because ultimately the complainant is not getting the flat. However, as the complainant has proceeded with his request for refund even after the passing of the order dated 8th May 2012 by the Hon'ble Supreme Court, though there was no impediment in the progress of the project or in getting the possession, in my view, the complainant should only get marginal interest on the amount paid by him which is Rs.15,06,075/-. In the facts and circumstances of the case, an interest @ 5% per annum would be sufficient. 22. Thus, on the basis of the above discussion, the first appeal No.174 of 2014 is partly allowed and the order of the State Commission is modified to the extent that the interest rate for refund of the amount paid by the complainant viz Rs.15,06,075/- will be 5% per annum instead of 9% per annum. It is also clarified that no penal interest beyond 11% per annum on house loan amount will be paid by the opposite party. If there is any, it shall be the responsibility of the complainant. Rest of the order of the State Commission including the refund of loan amount of Rs.57,36,358/- along with interest @ 11% per annum is confirmed.
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