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Peeti Real Estates (P) Ltd., rep. by Sri Sanjay Parasrmka & Others v/s Siruvuri Siva Prasad Varma rep. by his Power of Attorney Holder Sri Veluvarthy Venkata Rao

    F.A.No. 406 of 2012 Against C.C.No. 263 of 2011 District Forum-I Visakhapatnam

    Decided On, 06 August 2013

    At, Andhra Pradesh State Consumer Disputes Redressal Commission Hyderabad

    By, THE HONOURABLE MR. R. LAKSHMINARASIMHA RAO
    By, MEMBER & THE HONOURABLE MR. S. BHUJANGA RAO
    By, MEMBER

    For the Appellants: M/s. G. Ramagopal, Advocate. For the Respondent: M/s. K. Srinivasa Rao, Advocate.



Judgment Text

Oral Order: (R. Lakshminarasimha Rao, Member)

1. The opposite parties are appellants. The first appellant is a company and the appellants no.2 and 3 are its directors. The respondent filed complaint claiming refund of Rs.7,27,00/-towards sale consideration of Flat No.511 with interest and to handover possession letters , for a direction to the appellants for construction of two pent houses and to pay an amount of Rs.3 lakh towards compensation.

2. The respondent along with his sister, Venkata Ramana Kumari and her husband Venkata Babji are owners of 5082.4 sq. yards of site at Chinagadili Village and they entered into Development Agreement with the appellants on 5.06.2002 and another agreement on 2.01.2006 which was entered into between the appellants and the respondent’s sister. In terms of the Development Agreement, it was agreed that the appellant would construct on the site two multi- storied building complex, ' HILL VIEW RESIDENCY’ in two blocks, Block-A with 60 residential flats and Block –B with 80 residential flats within a period of two years failing which the appellants agreed to pay damages @Rs.8,000/- per month for 10000sft.

3. The respondent submitted that as per the terms of agreement, Flat No.511 was fallen to the share of the respondent and on request of the appellants he allowed them to sell Flat No.511 subject to their allotting another Flat to him in B Block plus market value for 640 sft and the appellants did not stick to their promise as a result of which he sought for alternative Flat , Flat No.106 in Block ’B' and amended the pleadings seeking for sale consideration of Flat No.511 in view of the pleadings of the appellants that the Flat No.511 was disposed of.

4. The appellants contended that the complaint is not maintainable in view of arbitration clause in the Development Agreement and the respondent is not a consumer. It is contended that the respondent frustrated the contract by resorting to delay tactics and still he has to execute sale deeds for certain Flats sold by the appellants and compelling circumstances the appellants entered into Agreement for Sale with the purchasers for sale of Flat Nos. 106 and 303 and the respondent avoided to execute sale deed in faovur of the purchasers which contributed financial loss to all parties.

5. The appellants agreed to sell Flat No.106 to third party-purchaser and delivered possession of the Flat to the purchaser. It is contended that the respondent received the amount more than agreed for and the Flat No.106 did not fell to the share of the respondent and that the respondent had not referred to allotment of Flat No.106 to him in his notice got issued on 27.03.2011. By filing additional written version the appellants pleaded for set off of the sale consideration of Flat No.511 for the amount due from the respondent pertaining to additional work. There was no deficiency in service on the part of the appellants and hence prayed for dismissal of the complaint.

6. The respondent filed his affidavit and the documents, Exs.A1 to A6. On behalf of the appellants, the Director of the first appellant filed his affidavit and no documents.

7. The District Forum allowed the complaint on the premise that there was no dispute as regards to allotment of Flat No.511 and sale thereof to third party by the appellants and as such the appellants are liable to pay the amount to the respondent. The District Forum held that the appellants are liable to hand over possession letters to the respondent and pay compensation to the extent of Rs.25,000/- towards compensation. The District Forum declined to award relief as regards to pent houses on the premise that no direction can be given in respect of illegal construction.

8. Aggrieved by the order of the District Forum, the opposite parties have filed appeal contending that transaction between Landlords and the builder is construction of multistoried buildings and any dispute between them will not give rise to consumer dispute and that the respondent allowing the appellants to receive the sale consideration of Flat No.511 is outside the purview of the construction agreement and the Consumer Forum does not have jurisdiction to resolve such disputes. It is contended that the District Forum failed to appreciate statement of account filed along with additional written version wherein sale consideration of Flat No.511 was claimed as set off for the amount payable to the appellants.

9. The learned counsel for the appellants has filed written submissions that relief claimed in respect of sale consideration of Flat No.511 and pleadings of the complaint as also the nature of transaction between the respondent and the appellants being commercial nature, the complaint is not maintainable and that in view of arbitration clause, the complaint is not maintainable.

10. The point for consideration is whether the order of the District Forum suffers from misappreciation of facts or law?

11. The respondent along with his sister is the joint owner of property, viz., land measuring 5082.4 square yards in survey number 42/5 situated at- Chinagadili Village , Visakhapatnam Corporation. The respondent entered into Development Agreement with the appellants on 5.06.2002 and subsequently, the appellants entered into agreement dated 2.01.2006 with the respondent and his sister whereunder the appellants agreed to construct two multistoried buildings by name, 'Hill View Residency' each comprising stilt floor for parking and ground plus four upper floors with residential apartments as Block-A with 60 residential flats and Block B with 80 residential flats.

12. In terms of the Development Agreement dated 5.06.2002, the appellants agreed to deliver 12 apartments of built up area of 10,000 sft in Block A as also equal number of parking areas and the appellants agreed to deliver Flats to the respondent within two years from the date of agreement and the appellants further agreed that in case of delay in delivering possession of the apartments, they would pay an amount of Rs.8,000/- per month towards damages and the period within which the apartments had to be delivered was three years as provided by the Agreement dated 2.01.2006.

13. In terms of the Development Agreement, the Flats Nos.104, 107, 108 in ground floor, 202, 207 and 208 in first floor, 308, 313 and 314 in second floor, 403 in third floor and flat nos.505 and 511 in fourth floor fell to the share of the respondent whereas in Block A the Apartments Nos.101, 102, 103, 105, 106, 112, 113 and 114 in ground floor, 201, 203, 204, 205, 206, 212, 213 and 214 in first floor, Flat Nos. 301 to 306, 309 to 312 in second floor, 401, 402, 404 to 412 and 414 in third floor, Flat Nos. 503, 504, 506, 509, 510, 513 and 514 in fourth floor and in Block B flat nos.101 to 108 and 110, 112 to 116 in ground floor, 301 to 306 to 308 to 316 in second floor, Flat Nos.401 to 416 in third floor and flat nos. 501 to 516 in fourth floor fell to the share of the appellants.

14. It is not disputed that Flat No.511 fell to the share of the respondent and he had allowed the appellants to sell the Flat to third party in view of financial exigency of the appellants and subject to understanding that the appellants would deliver apartment with equal area as that of Flat No.511 to the respondent which however, the appellants had not done.

15. The appellants sold Flat No.511 to Mangoti Rahda Krishnan for consideration of Rs.7,27,000/- through registered sale deed bearing document number 3037 dated 12.08.2009. Promise made by the appellants to the respondent that in lieu of Flat No.511 they would offer him Apartment No.106 and appellants’ failure to keep their promise in this regard is stated in paragraph 10 of the order as under:

'When admittedly the Builder received the amount representing the consideration of Sale deed of apartment, which fell to the share of the owner, unless there is a specific promise to compensate the same, the complainant/owner could not have allowed the Builder to receive the sale consideration by the Builder. Had it been the fact that it was allowed as a set off for the amounts due from the complainant, it should have been mentioned in the sale deed itself, as the payment to the Builder was specifically mentioned therein. Even at the time of enquiry, the Opposite party did not choose to come up with any evidence to substantiate his plea of set off except a bald statement of account, for the first time pressed into service at the time of filing additional counter. It is to be noted that it is the case of the complainant from the beginning that in lieu of Flat No.511, he was promised another Flat No.106 in B-Block of similar measurements. In these circumstances, in our view the case put forward by the complainant is more believable and probable, rather than that plea of the Opposite party. Hence this failure to fulfil the promise made after receiving full consideration namely the sale price of Flat No.511, in our view clearly amounts to deficiency in service on the part of Opposite parties.'.

16. The learned counsel for the appellants has contended that the District Forum has not answered as to whether the respondent is a consumer in view of arbitration clause in the agreement and in the light of commercial nature of transaction between the respondent and the appellants. He has contended that decision in 2008)10 SCC 345 is not applicable to the facts of the case.

17. In Faqiur Chand Gulati(supra), the Hon;ble Supreme Court considered whetehr the landlord who entered into Development Agreemnt with the builder for development of his land and construction of building therein, is a consumer within the meaning of provisions of Consumer Protection Act. The Supreme Court held :

The basic underlying purpose of the agreement is the construction of a house or an apartment (ground floor) in accordance with the specifications, by the builder for the owner, the consideration for such construction being the transfer of undivided share in land to the builder and grant of permission to the builder to construct two floors. Such agreement whether called as a Rs.collaboration agreement' or a Rs.joint-venture agreement', is not however a Rs.joint-venture'. There is a contract for construction of an apartment or house for the appellant, in accordance with the specifications and in terms of the contract. There is a consideration for such construction, flowing from the landowner to the builder (in the form of sale of an undivided share in the land and permission to construct and own the upper floors). To adjust the value of the extent of land to be transferred, there is also payment of cash consideration by the builder. But the important aspect is the availment of services of the builder by the land-owner for a house construction (construction of owner’s share of the building) for a consideration. To that extent, the land-owner is a consumer, the builder is a service-provider and if there is deficiency in service in regard to construction, the dispute raised by the landowner will be a consumer dispute. We may mention that it makes no difference for this purpose whether the collaboration agreement is for construction and delivery of one apartment or one floor to the owner or whether it is for construction and delivery of mult

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iple apartments or more than one floor to the owner. The principle would be the same and the contract will be considered as one for house construction for consideration. The deciding factor is not the number of apartments deliverable to the land owner, but whether the agreement is in the nature of a joint-venture or whether the agreement is basically for construction of certain area for the land-owner' 18. The appellants agreed to deliver Flat No.106 in lieu of Flat No.511 to the respondent and they did not hand over flat no.106 or pay the sale consideration of Flat No.511 which admittedly fell to the share of the respondent. The plea of set off introduced by way of filing additional written version by the appellants is negatived by the District Forum holding that the appellants except making bald statement did not adduce evidence thereof. Even Faqir Chand (supra) would provide the civil court as plat form for the appellants to ventilate their grievance as to set off which was rightly discarded by the District Forum in absence of evidence. The appeal is devoid of any merits and is liable to be dismissed. 19. In the result, the appeal is dismissed confirming the order of the District Forum with costs of Rs.5,000/-. Time for compliance four weeks.
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