This is a complaint filed by the Complainants under section 17(1)(a)(i) of the Consumer Protection Act, 1986 praying to direct the Opposite parties to refund Rs. 32,22,836/- along with interest @ 15% per annum from the date of respective payments till realization; to pay compensation of Rs. 5,00,000/- for hardship and mental agony and to pay costs of Rs. 1,00,000/-.
2. It is the case of Complainants that Opposite party No.1 being engaged in housing construction activity and during 2007-2008, made wide publicity by way of colourful brochure through various media as to the construction of modern residential complex tobe undertaken by them under name and style "Aliens Space Station" at Tellapur village, Ramachandrapuram mandal, Medak district over the land admeasuring 82976.800 square yards and that they obtained approval from HUDA vide letter No.621/P4/Plg/HUDA/2008, dated 11.04.2008 for construction of multi-storied building permission for residential apartments (4 basements + ground + 13 upper floors).
3. Accordingly, the Opposite party No.1 offered to provide utilities such as water, power and gas, lift call button in each apartment, EV ready car park (electronic vehicle charging facility in each car park), gas leak 8s smoke detect system, fire alarm, wet sprinklers, rescue areas as a part of safety measurements. It also offered to provide Video streaming of visitors from main gate, visitor picture, video sent to inbox (when not at home, enable and disable security systems from miles away), biometric access, video surveillance, comprehensive security system with motion sensor cameras and video door frames and several other facilities and amenities apart from providing club house consisting of Mini gold driving range, squash, tennis and basketball courts, spa with sauna, Jacujji & gymnasium, swimming pool, jogging track, sky gardens, multiplex, shopping mall, restaurant and helipad in the township.
4. Lured by above offerings, the Complainants intended to purchase Flat No.1953 on 19th floor in Station-9 with super built-up area of 1432 sft along with one car parking space along with undivided share of land measuring 30.79 square yards in space Station-1 at Tellapur, Ramachandrapuram mandal, Medak district for sale consideration of Rs. 43,79,000/-. Accordingly, the Opposite party No.1 executed an Agreement of sale on 18.12.2010 in favour of the Complainants by receiving part consideration amount of Rs. 4,50,000/ - by themselves and rs.14,70,000/- through home loan obtained from State Bank of India. As per clause-VIII of the Agreement, it was agreed to deliver the possession of the flat on or before November 2011 with grace period of 9 months.
5. The Opposite parties failed to complete the construction and deliver the possession as agreed though much considerable period had elapsed which amounts to deficiency of service and unfair trade practice. After much persuasion, the Opposite parties offered an alternate flat in another station at enhanced sale consideration, for which the Opposite parties executed Agreement of sale of Flat No.1635 in Station-6 in 16th floor admeasuring 1538 sft along with one car parking slot including common areas for consideration of Rs. 46,49,747/- apart from corpus fund of Rs. 1,92,250/-. However, the Opposite party No.1 agreed to deliver the possession on or before 31.08.2012, thereby the Opposite party No.1 refunded the amount of Rs. 14,70,000/- to State Bank of India.
6. And for purchase of alternate flat, the Complainants obtained loan from Opposite party No.2 bank and got released the amount of Rs. 45,42,428/-, out of which, Rs. 14,70,000/- was refunded to earlier bank. Thus, the Complainant paid an amount of Rs. 31,92,428/-. This time too, the Opposite party No.1 failed to complete the pending works and handover the possession and instead, the Opposite party No.1 went on sending letters seeking to pay more amount than agreed price. Hence, Complainants got issued notice dated 15.10.2014 expressing their readiness to pay the margin money and corpus fund and accordingly requested to execute the sale deed but of no avail. As things stood thus, it came to the knowledge of Complainants that the Opposite party No.1 conveyed the subject property to one Himanshu Dixit on 21.10.2014, to which the Complainants got issued notice but of no avail.
7. The Opposite party No.1 resisted the claim on the premise that the Complainants approached the Commission without approaching them either for refund of money or for cancellation or with any request and therefore, they cannot attribute any deficiency of service on their part. The complaint is liable to be dismissed for want of jurisdiction since the transaction being commercial purpose. Even otherwise, the complaint is barred by limitation as the agreement was entered on 18.12.2010 and the complaint was filed on 01.10.2016, hence the complaint is barred by limitation.
8. Originally, the land in Sy.No.384 is an agricultural land and for conversion of land into non-agricultural land, Opposite parties made application for FTL clearance which was obtained on 30.12.2006. On 14.04.2007 they got conversion proceedings. Thereafter, they got approval for construction to the building plans on 11.04.2008. They also obtained permission from fire department and thereafter HUDA earmarked the land as agricultural zone and the Opposite party No.1 has filed application for change of use of the land as commercial use zone.
9. It is averred by Opposite parties that Municipal Administration and Urban Development (I) Department notified the land in Sy.No.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 Sy.No.384 is made. Realignment of the proposed road was approved on 03.04.2008 and permission was accorded approving the building plan on 11.04.2008. Opposite party No.1 had obtained NoC from the A.P. Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. After following due procedure and process, the Opposite party No.1 obtained NoC from Airports Authority on 10.07.2009.
10. It is further averred that HUDA accorded technical approval on 14.10.2009 for ground + 20 floors and release of building permission up to 29 floors is awaited. In view of arbitration clause in the agreement the complaint is not maintainable before this Commission and the same has to be referred for arbitration as per the provisions of Arbitration and Conciliation Act, 1996. That they have taken necessary steps to complete the project. The project is a massive project and due to reasons beyond their control, the Opposite parties could not complete the project within the time frame and they informed the Complainants that the project required sanction from statutory authorities and mentioned the same as 'force majeure' in the agreement of sale. It also agreed to pay compensation at agreed rate to maintain goodwill and relationship with the customers.
11. It is stated that for the delay, the Opposite party No.1 had agreed to pay Rs. 3/- per sq.ft. in terms of clause VIII(g) of the Agreement for the delay caused in completing the project and they agreed to adjust the amount towards dues payable by the Complainants. The Complainants filed the complaint with ulterior motive to defame the opposite party No.1. The Complainants shall file relevant receipts and documents to prove the payments. The Opposite party No.1 is not liable to pay any compensation and costs. There is no deficiency of service on their part. Hence prayed for dismissal of the complaint.
12. Opposite party No.2 filed written version contending that they sanctioned the home loan of Rs. 34,00,000/- to the Complainants on certain terms and conditions in pursuance of the agreement dated 18.12.2010 and accordingly disbursed the loan amount, which is repayable in 228 EMIs of rs.35,046/ - per month as per the terms of Tripartite Agreement. They are no way concerned with the interse disputes in between the Complainants and Opposite party No.1 or delay in completion of the project by the builder. It is the responsibility of the Complainants to repay the loan amount together with interest. There arose no cause of action to file the complaint against them. Hence, prayed to dismiss the complaint with costs.
13. In order to prove their claims, the Complainants filed the affidavit evidence of Shuba Deep Chandra, the Complainant No.1 and the documents, Exs.A1 to A15. On behalf of the Opposite party No.2, they got filed the affidavit evidence and the documents, Ex.B1 and B2.
14. The points for consideration are :
i) Whether the complaint is maintainable in view of arbitration clause in the agreement of sale ?
ii) Whether the complaint is not a 'consumer dispute?
iii) Whether there is any deficiency in service on the part of the Opposite parties?
iv) To what relief ?
15. Point No.1 : The Complainants entered into "Agreement of sale" on 18.12.2010 at the first instance with the Opposite party No.1 for purchase of flat bearing No.1953 on 19th floor in Station-9 admeasuring 1432 square feet together with undivided share of 30.79 square yards for consideration of Rs. 43,79,000/- under Ex.A1 and the agreement of sale provides reference to arbitration. Subsequently, by cancelling the above stated flat, entered into another Agreement of sale under Ex.A7 on 06.08.2012 for purchase of Flat No.1635 in 16th floor of Station-6 admeasuring 1538 square feet for a consideration of Rs. 46,49,747/-. The learned counsel for the opposite party No.1 has contended that in view of the arbitration clause in the agreement, the Complainants cannot maintain the complaint before this Commission. Clause XVIII of the Agreement of sale provides for deciding the disputes arising under the agreement by arbitration proceeds reads as under:
a) This agreement shall be construed according to the laws of India and the legal relations between the Parties hereto shall be binding accordingly.
b) That all disputes/ issues arising out of and/or concerning this transaction will be subject to the exclusive jurisdiction of the Courts at Ranga Reddy district, A.P.
c) That all disputes or differences relating to or arising out of or in connection with this agreement shall be mutually discussed and settled between the parties.
d) However, disputes or differences arising out of and or in connection with and or in relation to this transaction/ agreement, which cannot be amicably settled, shall be finally decided and resolved by an Arbitrator appointed by Developer in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Arbitration as aforesaid shall be a domestic arbitration under the applicable Laws.
e) That the venue of arbitration shall be at Hyderabad and the language for the Arbitration proceedings shall be English.
16. In terms of the agreement of sale dated 06.08.2012, 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., v. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the Complainants 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, (f he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8of 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."
For the above reasons, the Point No.1 is answered in favour of the Complainants and against the Opposite party No.1.
17. On the other hand, the Opposite party No.1 in their arguments submitted that as per agreement, if the Complainants want to cancel the booking of the flat, they shall forego 10% of the total flat cost as charges which is agreed by them. In support of the contention that the Opposite party No.1 sold away the flat in question to third parties, the Complainants filed Ex.A16 which will fortifies their contention. Admittedly, on failure to comply with terms and conditions of agreement by the Opposite party No.1, the Complainants sought for refund of amount. Hence, this Commission does not find any merit in the contention put forth by the learned counsel for Opposite party No.l.
18. Points No.2 And 3 : The Opposite party No.1 entered into Development Agreement with the land owners of the land admeasuring Ac.19.26 guntas in survey numbers 383, 385 and 426/A situate at Tellapur village of Ramachandrapuram mandal, Medak district and they entered into agreement for construction of residential flats in accordance with the terms and conditions contained therein and as per specifications annexed to the Agreement.
19. In pursuance of the development agreement, the opposite party No.1 had obtained permission for construction of the residential building on the land and admittedly there has been abnormal delay in completion of the project in so far as this complaint is concerned. The opposite party No.1 attributed the delay to the authorities concerned in granting permission and NoC etc., as to the cause for delay in completion of the project. The Opposite party No.1 would contend that the cause for delay is beyond its control which is force majeure. The Opposite party No.1 stated the reasons for the delay in completion of the construction of the residential complex as under:
"The reasons, for delay is, project required clearance from statutory bodies which are necessary for execution of the project. The said fact was informed to the Complainants and even mentioned in the agreement of sale under clause No.XIV and described as "force majure". The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Hon'ble Commission as there is no deficiency of service on the part of the opp.party in executing the project and if the Complainants wants to cancel her booking she can do so in conformity with terms of agreement only."
20. The Complainants had submitted that owing to failure of the opposite party No.1 in completing the construction of the flat No.1635 and selling away to third parties, they opted for cancellation of the agreement of sale of flat and the opposite party No.1 contended that in order to maintain cordial relations with the Complainants, they agreed to pay compensation in terms of the agreement. The Complainants got issued notice dated 15.10.2014 seeking registration of flat by receiving balance sale consideration and another notice on 24.01.2016 seeking to cancel the sale deed dated 21.10.2014 registered as document No.13498/2014 and to register the subject flat in favour of the Complainants on the premise of inaction on the part of the opposite party No.1.
21. The opposite party No.1 promised to complete construction of the flat and hand over its possession to the Complainants on or before 31.08.2012 including the grace period of nine months by an agreement of sale dated 06.08.2012 and on their failure to perform their part of contract, the opposite party No.1 had proposed to pay compensation. However, there is no communication from the side of opposite party No.1 in this regard and the opposite party No.1 has not filed a piece of paper to show their readiness to pay compensation and adjust the same towards the dues payable by the Complainants.
22. Not keeping promise to complete construction of the building and failure to deliver possession of the flat constitutes deficiency in se
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rvice on the part of the opposite party No. 1 . The Complainants have two options left for recovery of the amount, either by filing suit in court of law or by way of filing complaint before State Consumer Disputes Redressal Commission in view of the amount claimed falling within the pecuniary jurisdiction of this commission. The contention of the opposite party No.1 that the complaint is not maintainable is not sustainable. 23. The Complainants claimed interest @ 15% per annum on the amounts paid from the date of respective payments till the amount is paid besides claim for other reliefs. However, the Complainants are entitled to interest on the amount paid from the respective dates of payment till realization. It is pertinent to state here that though the Opposite party No.1 failed to file its evidence affidavit, they filed calculation memo showing that an amount of Rs. 46,62,248/- is received by them from the Complainants and that a sum of Rs. 40,79,412/- is repaid, which is disputed by the Complainants. But the fact remains that the amount of Rs. 46,62,248/- stated to have been paid by the Complainants to Opposite party No.1 is not in dispute. 24. In the above facts and circumstances, the points 1 to 4 are answered accordingly holding that the Opposite party No.1 is liable to pay the said amounts to the Complainants. 25. In the result, the complaint is allowed in part holding that Opposite party No.1 is liable and they are directed to pay an amount of Rs. 46,62,248/-, however, deducting the amounts already repaid to the Complainants, with interest @ 9% p.a. from the date of respective payments till realization, and a sum of Rs. 5,000/- towards costs. The claim for other reliefs is dismissed. The complaint against Opposite party No.2 is dismissed. Time for compliance four weeks.