State Consumer Disputes Redressal Commission
1. Vallabhaneni Venkateswara Rao, Son ... vs Ms. Pooja Developers And Constructions ... on 20 January, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana First Appeal No. A/295/2014 (Arisen out of Order Dated 27/03/2014 in Case No. Complaint Case No. CC/28/2013 of District Rangareddi) 1. 1. Vallabhaneni Venkateswara Rao, Son of V. Hanumantha Rao Aged about 49 years Indian Occ Private Service R.o. Plot No22, SN Reddy Enclave, NCL South, Kompally, Ranga Reddy District 2. 2. Smt. Vallbhaneni Lakshmi Wife of V. Venkateswara Rao, Aged about 42 Years, Indian Occ Private Srvice, R.o. Plot No.22 SN, Reddy Enclave, NCL South Komapally, Ranga Reddy District ...........Appellant(s) Versus 1. Ms. Pooja Developers and Constructions Rep. by its Proprietrix Smt. K. Raja Rani Wife of K. Anand, D.No.LIG 144, APHB Colony, Medchal, Ranga Reddy District ...........Respondent(s) BEFORE: HON'BLE MR. JUSTICE B. N. RAO NALLA PRESIDENT HON'BLE MR. Sri. PATIL VITHAL RAO JUDICIAL MEMBER For the Appellant: For the Respondent: Dated : 20 Jan 2017 Final Order / Judgement BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD FA NO.295 OF 2014 AGAINST CC NO.28 OF 2013 ON THE FILE OF DISTRICT FORUM, RANGAREDDY Between: 1) Vallabhaneni Venkateswara Rao S/o V.Hanumantha Rao, Aged about 49 years, Indian, Occ: private Service, 2) Vallabhaneni Lakshmi W/o V.Venkateswara Rao, Aged about 42 year, Indian, Occ: Private Service, Both R/o Plot No.22, SN Reddy Enclave, NCL South, Kompally, Rangareddy district. ...Appellants/Complainants And M/s Pooja Developers & Constructions, Rep. by its Proprietrix, K.Roja Rani W/o K.Anand, D.No.LIG-144, APHB Colony, Medchal, R.R. district. ...Respondent/Complainant Counsel for the Appellants : Sri V.Gouri Sankara Rao Counsel for the Respondent : Sri P.Subba Rao Coram : Hon'ble Sri Justice B.N.Rao Nalla ... President and Sri Patil Vithal Rao ... Member
Friday, the Twentieth day of January Two thousand Seventeen Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** This is an appeal filed by the unsuccessful Complainants aggrieved by the orders of District Consumer Forum, Ranga Reddy dated 27.03.2013 made in CC No.28/2013 in dismissing the complaint of Complainants in seeking direction to the Opposite parties to complete the construction in all respects and handover the possession of house in plot No.85/part & 86 in Pooja Enclave, Sy.no.344, situated at Athvelly, Medchal mandal, RR district along with all common amenities; to pay interest @ 18% p.a. on Rs.7,25,000/- from 01.07.2009 till the date of handing over possession of house towards delay; to pay compensation of Rs.1,00,000/- towards mental agony and costs of Rs.25,000/-.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
3) The case of the complainants, in brief, is that the Opposite party which is engaged in real estate and housing construction activity, issued colourful brochure representing the general public that they are bringing housing colony under name and style "Pooja Enclave" in Sy.No.144, situated at Athvelly village of Medchal mandal and would provide basic amenities with other features. Induced by said representations, complainants intended to purchase a house in the said venture and accordingly paid the amounts on various dates, total amounting to Rs.7,45,000/-.
4) On 07.11.2008, the Opposite party executed the sale deed through GPA holder of the landlords conveying the title in respect of open plot No.85/part & 86 measuring 150 sq. yards. It also executed Construction Agreement on 01.11.2008 for a sum of Rs.7,70,000/-. Thus, the total cost of house is Rs.10,02,500/- and the OP agreed to construct and handover the possession of the house within a period of 6 months with grace period of 2 months from the date of agreement i.e., on or before 30.06.2009.
5) Though substantial amount was paid by the complainants, the OP failed to complete the house in all respects. The walls of the house developed cracks, there is seepage of water, peeling of painting. There are several internal works to be attended. The OP failed to provide common amenities such as drinking water, drainage facility, black top roads, avenue plantation, electricity, etc., Instead, OP got issued a notice on 27.10.2009 calling on the complainants to pay Rs.8,54,272/-, to which a suitable reply was issued. A complaint was made to DCIC, Hyderabad, which in turn, requested the Deputy Commissioner of Police, CCS, Hyderabad to take action against the OP. The complainants are ready and willing to pay the balance amount of Rs.2,77,500/- provided the possession of house is handed over to them duly completing in all respects. Vexed with the attitude of the OP, complainant got issued notice on 17.12.2012 demanding to complete the house in all respects and to handover the possession but the OP failed to respond.
6) For purchase of said house, complainant availed home loan of Rs.5-00 lakhs from State Bank of Hyderabad, Medchal branch and is paying the EMI of Rs.3,000/- per month and Rs.6,000/- towards rent and staying in a rented house. On account non-completion of house, complainants are subjected to inconvenience, hardship, mental agony apart from financial loss. All these acts of the OP amount to deficiency in service and unfair trade practice.
7) The Opposite party filed its written version admitting execution of Construction Agreement on 01.11.2008 for construction of independent house with built-up area of 900 sft (slab area) for a consideration of Rs.7,70,000/-. As per said agreement, Complainants agreed to pay Rs.2,40,000/- at the time of basement level and Rs.2,40,000/- at the time of slab level and Rs.50,000/- at the time of completion of construction work. It admitted to have issued notice dated 27.10.2009 on completion of the house except some minor works, demanding the complainants to pay Rs.8,54,272/- including penal interest but denied to have received any reply for the same.
8) The complainants merged the plot cost in the house construction amount. The payments made upto 07.11.2008 pertain to plot cost. After entering into construction agreement dated 01.11.2008, complainants paid small amounts as against the agreed amount and failed to make payment of balance amount. Having failed to pay the same, the complainants have no right to file the present complaint without fulfilling their part of obligation. The contents of legal notice dated 17.12.2012 got issued by complainants is contrary to the terms of construction agreement.
9) Though complainants availed the loan of Rs.5,00,000/- from State Bank of Hyderabad, Medchal branch, the same were utilized for their own but not paid any amount to the Opposite party. There arose no cause of action to file the complaint. In fact, complainants agreed to pay Rs.7,70,000/- towards the construction of house and also deposited the original title deed bearing document No.5671/2008, dated 07.11.2008 as collateral security. The complainants agreed to pay Rs.2,40,000/- after completion of basement level; Rs.2,40,000/- after completion of slab level work; Rs.2,40,000/- after construction of walls and Rs.50,000/- after completion of entire finishing work, which they failed to. On failure to comply with the said terms, the complainants are liable to pay interest @ 3% upto 3 to 6 months from the date of default.
10) The Complainant No.1 issued cheque bearing No.604552, dated 31.01.2009 for Rs.2,40,000/-; cheque bearing No.604553, dated 02.04.2009 for Rs.2,40,000/-; cheque bearing No.604555 dated 01.03.2012 for Rs.50000/- of State bank of Hyderabad, Balanagar branch towards payment of charges for construction of house but the same were returned unpaid for the reason "funds insufficient" on 04.04.2009; 04.04.2009 and 13.04.2012 respectively on its presentation. From the date of construction agreement, the Complainants have not paid the agreed amounts and are liable to pay Rs.8,54,272/- including penal interest.
11) As per the agreement, the Opposite party has no obligation to construct the compound wall with gate, grills, and tiles in bathroom, even then it completed the said works. It also completed metal roads, street light, electricity connection, water lines work, underground drainage work. In spite of demanding several times, the complainants failed to pay the balance amount. The present dispute is of specific performance, which shall have to be agitated before a civil court and does not come under the ambit of C.P. Act. The complaint is barred by limitation. Hence, prayed to dismiss the complaint.
12) During the course of enquiry before the District Forum, in order to prove their case, the Complainants got filed the evidence affidavit of Vallabhaneni Venkateswara Rao and Exs.A1 to A18 and on behalf of the Opposite party, got filed the evidence affidavit of one K.Roja Rani @ Roja Anand, proprietrix of OP and the documents Ex.B1 to B19.
13) The District Forum after considering the material available on record, partly dismissed the complaint bearing CC No.28/2013 by orders dated 27.03.2013, as stated, in paragraph No.1, supra.
14) Aggrieved by the above orders, the Appellants/Complainants preferred the above appeal contending that the forum below failed to see (i) the deficiency in service on the part of the Respondent having failed to complete the construction and handover the possession of house; (ii) that Respondent agreed to handover the possession of house within six months with a grace period of two months; (iii) that admittedly Appellants paid Rs.7,25,000/- and balance remains to be paid is only Rs.2,77,500/-; (iv) that the respondent has not completed the house in all aspects and not provided the amenities as agreed; (v) that the internal pending works of the house and the cost of external common amenities are more than the admitted balance amount; (vi) forum erred in observing that the Appellants paid only Rs.3,00,000/- and still liable to pay Rs.4,80,000/- without considering all the payments made under Ex.A13 to A18; (vii) that the forum below dismissed several complaints filed by various individual purchasers against the same builder but the same were set-aside in the appeal by this Commission. Hence, prayed to set aside the orders of the District Forum made in CC No.28/2013, dated 27.03.2014 and consequently allow the complaint as prayed for as well as the appeal.
15) The point that arises for consideration is whether the impugned orders as passed by the District Forum suffer from any error or irregularity or whether they are liable to be set aside, modified or interfered with, in any manner? To what relief ?
16) It is not in dispute that the Appellants entered into Construction Agreement dated on 01.11.2008 with the Respondent for a sum of Rs.7,70,000/- and as per the recitals of the Agreement, the Appellants are bound to pay a sum of Rs.2,40,000/- after completion of basement level; Rs.2,40,000/- after completion of slab level; Rs.2,40,000/- after construction of walls and Rs.50,000/- after completion of entire finishing work. The only dispute, as per the Respondent is that the Appellants have not paid any amount after the agreement. To vouchsafe its contention, the Respondent placed its reliance on Ex.B2, B3, B4, B5, B6, B7, B8, B9, B10, B13, B15, B18 and B19.
17) Ex.B2 is the letter dated 16.11.2008 addressed by the Respondent to the Appellants demanding to pay Rs.2,40,000/-. Ex.B3 is similar letter dated 10.12.2008 demanding Rs.2,80,000/-; Ex.B3, letter dated 16.02.2009 demanding Rs.5,00,000/-; Ex.B4 letter dated 06.05.2009 demanding Rs.7,40,000/-. Ex.B6, B8 and B18 are the cheques for Rs.2,40,000/-, Rs.2,40,000/- and Rs.50,000/- stated to have been issued by the Appellants towards the amounts payable to the Respondent while B7, B9 and B19 are the cheque return memos issued by the Respondent's banker assigning the reason "funds insufficient". In that regard, the Respondent got issued Ex.B10 dated 16.04.2009, Ex.B11 dated 27.10.2009 and Ex.B15 dated 17.03.2010 notices to the Appellants, admittedly, the same have been returned unserved. From the recitals of the said notices, it is evident that the same have been issued invoking the provisions of Negotiable Instruments Act. Nothing prevented the Respondent from initiating action against the Appellants under the provisions of Negotiable Instruments Act and for the reasons best known to the Respondent, no action appears to have been initiated.
18) To prove that the Appellants paid amount to the Respondent, they placed reliance on Ex.A13 to A18 receipts, which are neither denied nor disputed by the Respondent. Ex.A13 is receipt bearing No.24, dated 02.05.2007 for Rs.1,70,000/-; Ex.A14 is receipt bearing No.264 dated 15.07.2007 for Rs.80,000/-; Ex.A15 is receipt bearing No.20, dated 09.04.2007 for Rs.50,000/-; Ex.A16 is receipt bearing No.755, dated 31.10.2007 for Rs.1,25,000/-; Ex.A17 is receipt bearing No.404, dated 05.01.2009 for Rs.1,00,000/- and Ex.A18 is receipt bearing No.769, dated 15.05.2009 for Rs.2,00,000/-. All these receipts are issued by Pooja Enclave (Developers & Constructions), Medchal. The sum total of all these receipts would come to Rs.7,25,000/-. It is the case of the Appellants that they agreed to purchase the subject house from the Respondent for a total sale consideration of Rs.10,02,500/-, out of which, a sum of Rs.7,25,000/- is already paid and there remained a sum of Rs.2,77,500/- to be paid by the Appellants, provided the Respondent completes the construction of house in all aspects as agreed in terms of the Construction Agreement dated 01.11.2008.
19) Admittedly, the sale deed dated 07.11.2008 registered as document No.5671/2008 in respect of the subject property was executed by one K.Roja Rani and Santhi S.I. in favour of the Appellants conveying the open plot bearing No.85/part & 86, in Pooja Enclave admeasuring 50 sq. yards + 100 sq. yards, total admeasuring 150 sq.yards, situated at Athvelly village, Medchal mandal, Ranga Reddy district in favour of the Appellants, for a total sale consideration of Rs.2,32,500/-. The construction agreement was executed in between the Appellants and the Respondent on 01.11.2008 for a sum of Rs.7,70,000/-, wherein the Appellants agreed to pay the consideration amount in instalments as per the progress of construction.
20) From the perusal of recitals of the sale deed, it is crystal clear that after receipt of the sale consideration amount, the same has been executed by the executants in favour of the Appellants. As stated supra, the Exs.A13 to A18 are not in denial and the same have been executed by none other than the Respondent. Except contending that the Appellants failed to pay any money except Rs.3,00,000/- (under Ex.A17 and A18) after execution of Construction Agreement, no explanation is given as to the acknowledgement and receipt of amounts under Ex.A13 to A16, amounting to Rs.4,25,000/-.
21) We may state here that if at all the Appellants really failed to pay the monies as agreed in pursuance of Construction Agreement, there was no occasion for the Respondent to carry-out the construction of house and complete the same, except some minor works, as admitted. Nothing prevented the Respondent from bringing a suit for recovery of amount before a competent court of law. Even it is not the case of the Respondent that the cheques under Ex.B6 for Rs.2,40,000/-; B8 for Rs.2,40,000/- and B18 for Rs.50,000/- have been issued by the Appellants towards discharge of legally enforceable debt. On a keen perusal of these cheques, the date caused therein is in different hand-writing to that of the other endorsements therein. In such a circumstance, we may presume that as a security, the same appears to have been given by the Appellants.
22) As stated supra, the Respondent failed to account for the amount of Rs.7,25,000/- being acknowledged under Ex.A13 to A18 and no explanation is forthcoming from the Respondent. It is obligatory on the part of the Respondent to explain as to under what count the monies under Ex.A13 to A18 were received and towards which account the same have been adjusted. Nothing is explained in that regard. In such a circumstance, we have no hesitation to hold that the Appellants paid an amount of Rs.7,25,000/- to the Respondent and on failure on the part of the Respondent in non-completion of the house, the Respondent had invoked the jurisdiction of the Forum below seeking redressal of their grievance.
23) The counsel for the Respondent would contend that the present dispute will not fall within the ambit of Consumer Protection Act and that the same is barred by limitation. In this regard, we may state that as per the decision of the Hon'ble Supreme Court in Fakir Chand Gulati Vs.Uppal Agencies Pvt. Ltd. reported in 2008 (4) CPR 449 (SC) and the decision reported in C.D.J 2012 S.C 370 between M/s Narne Construction (P) Ltd., Vs Union of India and others and so also, the decision rendered in the matter of Lucknow Development Authority Vs M. K. Guptha, reported in (1994) I SCC 243, it was held that "the housing activity comes under the definition 'service' and Consumer For a can entertain the complaint and thus jurisdiction point agitated by the Respondent is not helpful to it.
In several decisions rendered by the Hon'ble Supreme Court of India as also the Hon'ble National Consumer Disputes Redressal Commission, it was held that "the development of the flat for the purpose of selling it as flats and house sites and to construct the residential flats after duly adding the value by way of providing infrastructure, obtaining lay outs and other permission from the local Government etc., constitute by itself a kind of 'service' and that in view of the matter, when the person purchases the plots or flats from the developer, he/she, as the case may be, is not only purchases the same, but also the services associated with it. In view of the said definition, the complainant undoubtedly is entitled to file the instant consumer complaint and therefore the Consumer Commission has jurisdiction to entertain the complaint."
24) As regards the aspect of limitation is concerned, we may state that in view of the decision rendered by Hon'ble National Commission in Juliet Quadres Vs. Mrs. Malathi, reported in 2005 (2) CPR 1, it is observed therein that "till the amount is refunded or the possession is delivered by a developer, the cause of action would be continuing and the complaint would not be barred by limitation." Hence, we are inclined to reject the plea of the Respondent that the complaint is barred by limitation.
25) In view of the aforesaid discussions, we do not find any merit in the findings of the forum below and accordingly we set aside the same. We answer the point framed at paragraph No.15, stated supra, in favour of the Appellants and against the Respondent.
26) In the result, we allow the appeal and set aside the orders of District Consumer Forum, Rangareddy dated 27.03.2013 made in CC No.28/2013 and accordingly direct the Respondent herein to complete the construction of house over plot No.85/part & 86 admeasuring 150 square yards, with a built-up area of 900 square feet (slab area) in Pooja Enclave, in Sy.No.344, situated at Athvelly village, Medchal mandal, Ranga Reddy district and handover the possession of the same, subject to payment of balance amount of Rs.2,77,500/- by the Appellants within a period of 3 months and the costs of Rs.5,000/-. The claim for other relief is rejected.
PRESIDENT MEMBER Dated 20.01.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER