Full Judgment
Oral Order: (R. Lakshminarasimha Rao, Member)
1. Since all the four complaints bear similar facts and obtained from same circumstances, they are being disposed of by a common order. C.C.No.147 of 2013 is taken as lead case.
2. The complaint is filed under Section 17 of the Consumer Protection Act, complaining deficiency in service against the opposite parties no.1 and 2 and claimed a sum of Rs.15,67,500/- towards the amount paid and an amount of 2.12.2009 to 31.08.2013/-towards interest and for subsequent interest @ 24%p.a. from the date of filing of complaint till payment and a sum of Rs.10,00,,000/- towards compensation as also the costs of Rs.50,000/-.
3. The opposite parties entered into development agreement under documents bearing nos.23198/2006 and 23230/2006 on 23.06.2007 and development cum general power of attorney in favour of the first opposite party-company with the owners of land for development of their land measuring Ac.19.26 gts., in Sy.No.384, 385 and 426A at Telapur village in Ramachandrapuram Mandal of Medak District and for construction of building therein. In pursuance of the development agreement, the opposite parties had obtained permission for the construction of residential complex, Space Station-I over the land on 11.04.2008.
4. The complainant booked residential flat bearing no.1225 (A) at Station-4, 12th Floor admeasuring 1254sft, super built up area including common area with 1 car parking space along with 26.96 sq. yards of undivided share of land for consideration of Rs.36,70,052/-. The complainant paid an amount of Rs.7,34,000/- towards part sale consideration and agreed to pay balance sale consideration of Rs.29,36,052/- in accordance with the terms of agreement of sale. The complainant paid further sum of Rs.8,33,500/- by availing housing loan from State Bank of India, Abids Branch and he paid a total amount of Rs.36,70,052/-.
5. As per the payment schedule, the complainant has to pay at various stages of construction and the complainant as per the payment schedule paid an amount of Rs.8,33,500/- towards part sale consideration for the Flat. The opposite parties agreed to complete construction within a period of 3 years with a grace period of 6 months from the date of the agreement of sale.
6. The complainant submitted that as the opposite parties had not commenced construction work the Flat, he got issued notice to them on 01.07.2013. The complainant lost opportunity to have a Flat in the year 2009 on the then prevailing costs. The opposite parties presently quoting cost of the Flat at Rs.46,07,800/- and he paid interest on the home loan to the Bank. The complainant suffered mental agony, escalation of costs and other problems due to the act of the opposite parties.
7. The complainant submitted that as there was no scope in near future of the opposite parties completing the project, he demanded for refund of the amount and his notice had not drawn any response from the opposite parties. For the loss and hardship he suffered, the complainant claimed refund of the amount with interest thereon and compensation as also costs.
8. The opposite parties resisted the claim on the premise that the complainant filed the complaint to gain out of his breach of contract and the complaint is not maintainable in view of there being no consumer dispute and the arbitration clause mentioned in the agreement of sale providing for settlement of disputes by means of arbitration process.
9. The opposite parties submitted that they filed application for conversion of agricultural land into non-agricultural land on 23.10.2006 and FTL clearance was granted on 30.12.2006. Permission was granted on 14.04.2007 for conversion of agricultural land into non-agricultural land and thereafter HUDA earmarked the land as agricultural zone and the opposite parties have filed application for change of use of the land as commercial use zone.
10. The opposite parties submitted that Municipal Administration and Urban Development (I) Department notified the land in survey number 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 survey number 384 is made. Realignment of the proposed road was approved on 3.04.2008 and the permission was accorded approving the building plan on 11.04.2008.The opposite parties have obtained NOC from the AP Fire Services Department on 15.12.2007 and subsequently it was reduced from 91.40 meters to 90.40 meters. The opposite parties obtained NOC from Airport Authority on 10.07.2009.
11. The opposite parties have submitted that HUDA accorded technical approval on 14.10.2009 for ground +20 upper floors and release of building permission upto 29 floors is awaited. The opposite parties have taken all necessary steps to complete the project at the earliest and the project being massive and due to the reasons beyond the control of the opposite parties , the opposite parties could not complete the project within the time frame. The opposite parties informed the complainant about the delay in completion of the project due to delay in clearance from the authorities concerned. In view of arbitration clause the complaint is not maintainable before this Commission.
12. The opposite parties submitted 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 complainant that the project required sanction from statutory authorities and mentioned the same as force majure in the agreement of sale.
13. The opposite parties have submitted that the opposite parties 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 to the dues payable by the complainant. The complainant filed the complaint with ulterior motive to defame the opposite parties.
14. The opposite parties had delivered some Flats to the customers and they are in possession of their respective Flats. The complainant with malafide intention got issued to the notice on previous address of the opposite parties. The complainant cannot seek for any other relief when there is a clause in agreement of sale providing for payment of compensation. Hence, the opposite parties prayed for dismissal of the complaint.
15. The complainant filed her affidavit and the documents, Exs.A1 to A7. On behalf of the opposite parties, the Managing Director of the opposite party no.1-company has filed the affidavit and no documents have been filed on behalf of the opposite parties.
16. The counsel for the complainant and the opposite parties have filed written arguments.
17. The points for consideration are:
i) Whether the compliant 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?18. POINT NO.1: The complainant entered in to œAgreement for reservation of Flat? with the opposite party no.1 for purchase of Flat bearing number 1225(A) and thereafter the parties entered into agreement of sale on 02.12.2009 and the agreement of sale provides reference to arbitration. The learned counsel for the opposite parties has contended that in view of the arbitration clause in the agreement, the complainant 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 process 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.19. In terms of the agreement of sale, 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 œNational Seeds Corporation Ltd. Vs. M. Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainant having exhausted the other remedy was considered as under:
œThe 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, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of 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.?
20. POINTS NO.2 and 3: The opposite parties no.1 to 3 entered into development agreement with the land owners of the land admeasuring 07.10.2006 in survey number 383, 385 and 426A situate at Tellapur village of Ramachandrapurami 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. The Development Agreement is the œDevelopment Agreement “cum-Power of Attorney?.
21. In pursuance of the development agreement, the opposite parties have obtained permission for construction of the residential building in the land and admittedly there has been delay in completion of the project. The opposite parties have attributed the delay on the part of the authorities concerned in granting permission and NOC etc. as the cause for the delay in completion of the project. The opposite parties would contend the cause for delay is beyond their control which is Force Majeure. The opposite party no. 2 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 complainant and even mentioned in the agreement of sale dt.3.8.2008 under clause No.XIV and described as œforce majeure?. The above referred facts mentioned squarely fall under the said clause. Therefore, the present complaint is not maintainable before the Honble Commission as there is no deficiency of service on the part of the opposite party in executing the project and if the complainant wants to cancel her booking she can do so in conformity with terms of agreement only.
22. The complainant has submitted that owing to failure of the opposite parties in completing the construction of the Flat No1225(A), he opted for cancellation of the agreement of sale and the opposite party has contended that in order to maintain cordial relations with the complainant, they agreed to pay compensation in terms of the agreement of sale. The complainant got issued notice dated 01.07.2013 seeking for refund of the amount on the premise of inaction on the part of the opposite parties mentioned as under:
On noticing about the non-start of the project my client prevailed upon you but you have deaf eared and gave evasive replies. It is pertinent to mention that as per the recital of Agreement of Sale dt.2.12.2009 under clause VIII (Delivery of Possession), the construction and hand over of the flat under sale shall be on or before 30.6.2012 including the grace period fo six months under nay circumstances. Whereas you have even not start the constructions of the apartment complex thereby the flat under sale. Which denotes that you have made false prmi8ses and executed the Agreement of Sale dt.2.12.2009, is nothing but cheating, mischief, fraud etc; for that you are liable not only vicariously but also individually under IPC.
In view of cheating, mischief, fraud committed by you my client lost the opportunity to have a residential accommodation in the year 2009 on the then prevailing prices, besides my client paid interest on the home loan amount paid to you. Due to your fraudulent actions my client suffered with mental agony and other physical sufferings by wandering in and around your office in this regard for the past few years, for which you rare liable.
23. The opposite parties have promised to complete construction of the Flat and hand over its possession to the complainant within three years with a grace period of 6 months from the date of the agreement of sale and on their failure to perform their part of contract, the opposite parties had proposed to pay compensation. However, there is no communication from the side of the opposite parties in this regard and the opposite parties have not filed a piece of paper to show their readiness to pay compensation and adjust to the dues payable by the complainant.
24. Not keeping promise to complete construction of the Building and failure to deliver possession of the Flat constitutes deficiency in service on the part of the opposite parties. The complainant has two options left for recovery of the amount, either by filing suit in court or by way of filing complaint before Consumer Forum. The contention of the opposite parties that the complaint is not maintainable is not sustainable.
25. The complainant claimed interest till the date of 31.08.2013 and from the time till filing of the complaint as also future interest besides claim for damages to the tune of Rs.10,00,000/-. The complainant acquiesced to the delay in construction of the project. The complainant has not disputed that the opposite parties have informed him about the cause for delay in obtaining permission and NOC etc., which ultimately was found to be valid. The complainant agreed to receive the amount without interest or any other charges. As such, the complainant cannot claim for damages. However, the complainant is entitled to interest @ 9% p.a. on the amount paid from the date of agreement for cancellation of the agreement of sale.
26. In the result, the complaint is allowed directing the opposite parties no.1 to3 to pay an amount of Rs.15,67,500/- with interest @ 9% p.a from 2.12.2009 till payment together with costs of Rs.5,000/-. Time for compliance four weeks.
CC No.148 of 2013
In the result the complaint is allowed directing the opposite parties no.1 to 3 to pay Rs.18,33,861/- with interest @ 9% p.a from 21.03.2009 till payment together with costs of Rs.5,000/-. Time for compliance four weeks.
CC No.149 of 2013
In the result the complaint is allowed directing the opposite parties no.1 to 3 to pay Rs.29,29,320/- with interest @ 9% p.a from the date of last payment to till the date of realization together with costs of Rs.5,000/-. On deposit of the amount before this Commission by the opposite parties, the complainant is directed to execute re-conveyance deed in favour of the opposite parties. Time for compliance four weeks.
CC No.150 of 2013
In the result the complaint is allowed directing the opposite parties no.1 to 3 to pay Rs.25,25,000/- with interest @ 9% p.a from the date of last payment to till the date of realization together with costs of Rs.5,000/-. Time for compliance four weeks.