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



M/s Crescent Real Estates & Developers rep. by its Sole Proprietor v/s M. Vijaya Bhaskara Reddy & Others

    F.A.No. 822 of 2011 Against C.C.No.224 of 2009 District Consumer Forum ?II Hyderabad

    Decided On, 09 October 2012

    At, Andhra Pradesh State Consumer Disputes Redressal Commission Hyderabad

    By, MR. R. LAKSHMINARASIMHA RAO
    By, HONOURABLE MEMBER & MR. THOTA ASHOK KUMAR
    By, HONOURABLE MEMBER

    For the Appellant : M/s. M.A. Mukheed, Advocate. For the Respondents : R1, M/s T.C. Krishan, Advocate.



Judgment Text

Oral Order: (R. Lakshminarsimha Rao, Member)

1. The first opposite party is the appellant. The first respondent filed complaint seeking for refund of the amount of `4,36,400/- with interest thereon and a sum of RS.4,00,000/- towards compensation and an amount of `25,000/- towards costs.

2. The first respondent paid on 15.10.2007 an amount of `4,34,600/- towards 1/4th sale consideration for purchase of Plot no.5 in ' Crescent Enclave' a venture floated by the appellant-company. The appellant issued receipt in token of acknowledgement of receipt of the amount from the respondent.

3. The first respondent claimed for refund of the amount paid by him on the premise of the appellant’s failure to receive the balance consideration and execute sale deed and he has stated that he made oral representation and on phone as well about his request for execution of the sale deed by the appellant.

4. The appellant contended that as per the terms of the application form the first respondent agreed to pay 25% of the cost of the plot within 30 days therefrom and balance 50% of the consideration within 60 days from the date of the application and that the first respondent paid 1st instlament amount of `2,34,600/- and failed to pay the balance sale consideration of the plot. It is contended that the 1st respondent has not made request to them in person or on phone for refund of the amount and due to his failure to pay the balance sale consideration, the appellant could not sell the plot to third parties and as the boom receded, it sustained huge loss.

5. The first respondent filed his affidavit and the documents, Exs.A1 to A3. On behalf of the appellant firm and the respondents no.2 and 3, Kadar Basha, the proprietor of the appellant firm has filed his affidavit and the application form Ex.B1.

6. The District Forum allowed the complaint on the premise that the appellant rendered deficient service by its failure to issue notice to the first respondent in terms of clause B of the application form.

7. Feeling aggrieved by the order of the District Forum, the first opposite party-company has filed appeal contending that the first respondent is a defaulter and he failed to pay balance sale consideration of the plot and that the appellant had been ready and willing to perform its part of contract by executing its part of contract by executing registered sale deed. It is contended that the 1st respondent opted to pay balance sale consideration by availing loan from the bank and he had not adduced evidence to prove sanction of loan from any bank.

8. It is contended that the first respondent failed to prove that he was ready to pay the balance sale consideration and that he cannot unilaterally cancel the contract and claim for refund of the amount, compensation and interest during the subsistence of the complaint. It is contended that the first respondent being a retired District Judge has not issued notice in writing for specific performance of the contract or cancellation of the agreement. It is contended that the first respondent filed complaint as the cost of the land has gone down drastically and that the appellant is ready to execute sale deed in favour of the first respondent.

9. The point for consideration is whether the order of the District Forum is vitiated by misappreciation of fact or law?

10. The appellant is a developer and floated venture under the name and style of 'Crescent Enclave' wherein the first respondent opted to purchase plot no.51 for consideration of `17,88,400/-. The first respondent submitted application and along with application he had submitted cheque bearing No.546947 for `4,34,600/- dated 15.10.2007. The first respondent attributed deficiency in service to the appellant firm on the premise that it had failed to execute sale deed whereas the appellant branded the first respondent as defaulter stating that he failed to pay balance sale consideration.

11. The application form issued by the appellant-firm and submitted by the first respondent is made basis by the appellant-firm in support of its contention that it contains payment schedule and infringement of the terms thereof by the first respondent. The terms and conditions mentioned in the application form read as under:

Terms and Conditions:

A) PAYMENT TERMS-NO LOAN CASES

25% along with the Application & Booking

25% 30 days from the booking date

50% 60 days from the booking date

B) PAYMENT TERMS-LOAN CASES

25% Along with the Application & Booking

Sanctioned loan amount will be released by the Bank

Balance if any to be paid by the Purchaser before Registration

Bank loan is subjected to entitlement & sanction

GENERAL TERMS & CONDITIONS

a) Bank Processing Fees, Advocate Fees, Valuation Fees, Registration Expenses and any other miscellaneous expenditure to be borne by Purchaser

b) If the Purchaser fails to pay the first installment within the stipulated period, the
Developer will serve a written notice of the forfeiture giving a time period of 15
days from the date of serving the notice and if the Purchaser fails to pay the installment within this period, the Developer is at liberty to forfeit the entire amount of booking advance and cancel the booking of the plot.

c) If the Purchaser fails to pay the second installment within the stipulated period,
the Developer will serve a forfeiture notice giving 15 days’ time for the Purchaser to pay the second installment, failing which the Developer is at liberty to forfeit 50% of the amount received till the date and cancel the allotment of the plot.

d) If the Purchaser does not pay the balance amount, if any, and register the plot within the stipulated period, the Developer is at liberty to forfeit 25% of the amount received till that date and cancel the allotment of the plot.

e) Purchaser have to pay the Welfare Association Fees as fixed by the Developer.

12. In terms of the brochure and the application form, the first respondent has to make payment of 25% sale consideration at the time of submitting the application form, 25% of the amount within 30 days from the date of submitting the application form and balance 50% of the sale consideration from the date of payment of the first portion of the sale consideration. The first respondent paid first installment of `4,34,600/- and submitted application form on 15.10.2007. The balance amount is payable in two installments. 25% of the consideration by 15.11.2007 and the remaining amount by 15.12.2007. Admittedly, the first respondent had not paid the balance sale consideration as required by the terms of brochure or application form.

13. The respondents no.2 and 3 are the agents of the appellant company. The first respondent had stated that he was induced by the second respondent and third respondent to purchase the plot in the venture floated by the appellant and they promised him to get executed the sale deed immediately after he has paid the advance or initial sale consideration of the plot and believing them he paid the amount of `4,34,600/- to the appellant-company. Admittedly, the second respondent and the third respondents are the agents of the appellant-company presumably working in the course of their employment as per the instructions of the appellant-company for propagating its business. The respondents no.2 and 3 had not chosen to contest the claim and the appellant makes evasive denial of their role in making the first respondent to subscribe for the scheme to purchase the plot.

14. The appellant has not denied that the respondents no.2 and 3 are still under the employment of the appellant-company. It is not the case of the appellant company that it has terminated the service of the respondents no.2 and 3 and they are no more its agents and not amenable to its instructions. The appellant instead of making evasive denial of the inducement its agents had implored on first respondent, could have filed their affidavits or examined them to establish its contention that there was no deficiency in service on its part to render it liable to refund the amount paid by the first respondent.

15. The appellant contends that the first respondent has not been able to establish that he made calls requesting it to perform its part of contract and he has not stated the dates on which he made his demand for execution of the sale deed. It is true the first respondent has not mentioned the details or particulars of the time of his request made for execution of the sale deed. The appellant submitted that there was no notice in writing from the first respondent requesting it to perform its part of contact as per the promise made by the second respondent and the third respondent. The second respondent and the third respondent working under its employment and the appellant’s decision for not examining them coupled with the appellant’s insistence at for a notice in writing for execution of sale deed immediately after receipt of the sale consideration would be sufficient to come to the conclusion that the appellant played unfair trade practice upon the first respondent.

16. Section 2(1)(r) of the Consumer Protection Act describes what is unfair trade practice and the provision of law reads as under:

(r) "unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;-

(1) the practice of making any statement, whether orally or in writing or by visible representation which,-

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii)makes to the public a representation in a form that purports to be-

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation. - For the purposes of clause (1), a statement that is-(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation .-For the purpose of clause (2), "bargaining price" means-

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;(3) permits-

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation. - For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(6) manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

17. The appellant has contended that the first respondent is banking his contention in unforeseen conditions of the contract. The first respondent required the appellant to perform it part of contract in terms of the promise made by the agents of the appellant-company. The appellant cannot make basis the non-issuance of notice in writing by the first respondent to deny the refund of the amount paid by him.

18. The appellant projected two contradictory and mutually destructive pleas that the first respondent cannot proceed against payment schedule mentioned in the brochure and the application form and that it is ready and willing to perform its part or contract in case the first respondent is ready to pay the entire balance sale consideration. The first respondent had consistently made his intention clear to pay the balance sale consideration and the appellant cannot embark on his source of income either in the form of loan from a Bank or from any other source. The terms and conditions of the application form which had been relied upon by the appellant fir would apply with equal force to the case of the appellant which obligate the appellant to issue notice to the first respondent.

19. The appellant company failed to issue notice to the first respondent in terms of its obligation thrust upon it by the terms of the application form. The appellant attempted to attribute to the first respondent the drastically decrease in the prices in the realm of real estate as the cause for his not honouring the contract. The first respondent paid 25% of the sale consideration 15.10.2007 and he filed the complaint before the District Forum in 2009. If the fluctuation of prices in the real estate market is the cause for the first respondent not to proceed further by paying the balance sale consideration, the appellant would have taken steps by issuing notice in terms of the application form. The appellant being oblivious of the unfair trade practice it had played through its agents, the second respondent and the third re

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spondent attempted to find lacunae in the case of the first respondent. 20. On the failure to fulfill the appellant’s commitment, the first respondent requested to refund his amount. The appellant had not paid back the amount to the first respondent and again committed mischief on the pretext that the first respondent had opted for contracting out owing to decrease in the prices of the land at Hyderabad. 21. The appellant thus played unfair trade practice upon the first respondent and is liable to refund the amount paid by him towards part of sale consideration. The appellant did not establish that it obtained layout approval and other required permission for the execution of sale deed in favour of the first respondent. The appellant had not executed sale deed in favour of the first respondent nor refunded the amount to him. The appellant had retained the amount with it without any justifiable cause. The first respondent had also not taken steps at proper time in regard to the execution of sale deed by the appellant and as such he is not entitled to interest @ 12% per annum as awarded by the District Forum which is on higher side and it is just and reasonable to award interest @ 9% p.a. on the amount from the date of filing the complaint. 22. It is settled law that once interest is awarded in the form of compensation, no damages or compensation in any other form cannot be granted. The first respondent had not filed appeal against the finding of the District Forum that he is not entitled to claim damages in view of the award of interest on the amount paid by him. The appellant deserves to be held entitled to the limited extent of decrease in interest from 12% p.a. to 9 % p.a. 23. In the result, the appeal is partly allowed. The order of the District Forum is modified. Interest awarded @ 12% p.a. on the amount of `4,34,600/- is reduced to 9% p.a. The rest of the order is confirmed. The parties shall bear their own cots in the appeal.
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