National Consumer Disputes Redressal
Nirmal Kumar Pandey vs M/S. Aditya Construction Company India ... on 20 February, 2019
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 593 OF 2014 1. NIRMAL KUMAR PANDEY Son of Late Shri. S.B. Pandey, House No. 3-6-158/5, Plot No. 21, LAKSHAMI ENCLAVE, MERREDPALLY (WEST), SECUNDERABAD - 500 026. ANDHRA PRADESH ...........Complainant(s) Versus 1. M/S. ADITYA CONSTRUCTION COMPANY INDIA PVT. LTD. & 2 ORS. THROUGH ITS MANAGING DIRECTOR, REGD. OFFICE AT 'ADITYA MANSION' PLOT NO. 29-A, ROAD NO. 5, JUBILEE HILLS, HYDERABAD - 500 033. TELANGANA 2. M/s. Housing Development Finance Corporation Limited (HDFC) Through its Branch Manager, HDFC Hose 3-6-310, Hyderguda Road, Basheerbagh, Huderabad - 500 029 Telangana. 3. Greater Hyderabad Municipal Corporation Through Commissioner CC Complex, Tank Bund Road, Lower Tank Bund, Hyderabad - 500 029, Telangana ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER
For the Complainant : Mr. Karunesh Tandon, Advocate
With Mr. Mohit Raj, Advocate
And the Complainant In person For the Opp.Party : Mr. Srinivas, Advocate
Dated : 20 Feb 2019 ORDER
MRS. M. SHREESHA, MEMBER
This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short "the Act") against M/s. Aditya Construction Pvt. Ltd., having its office at "Aditya Mansion" Plot No. 29-A, Road No. 5, Jubilee Hills, Hyderabad-500033, Telangana (hereinafter referred to as "the Developer"), M/s. Housing Development Finance Corporation Limited (HDFC) having its office at HDFC House, 3-6-310, Hyderavad-500029, Telangana and Greater Hyderabad Municipal Corporation CC Complex, Tank Bund Road, Lower Tank Bund, Hyderabad-500029, Telangana.
2. The brief facts as set out in the Complaint are, that the representatives of the Developer approached the Complainant advertising their venture, a mutli-floor residential complex developed in the name and style of "Aditya Heights" at Sy. No. 37, Kothaguda Village, Serilingampally Mandal and Municipality, Ranga Reddy District and mislead by their rosy representations, agreed to book one flat in the said project on the pre condition that the pre EMI interest would be paid by the Developer till the execution of Sale Deed and handing over possession of the flat. It is also represented by the Developer that they have a tie up arrangements with HDFC Corporation Limited arrayed as the second Opposite Party (hereinafter referred to as "the HDFC") for repayment of the disbursed loan through EMI's. An Allotment Letter was issued on 12.01.2011 confirming the allotment of residential flat bearing No. 805 on the 8th floor, admeasuring 2120 sq. ft. along with two car parking spaces. It is stated by the Complainant that he was assured by the
Developer that an Agreement of Sale would be entered into on or before 20.01.2011 and that the construction would be completed within 24 months from the date of allotment. But despite several requests and various rounds of visits to the office of the Developer neither Agreement of Sale was executed nor was there construction completed as per the promise made. On 11.10.2011 after expiry of 10 months from the date of allotment letter, the Developer sent the documents for signatures which includes Agreement of Sale and Tripartite Agreement.
3. On 12.10.2011 an Agreement of Sale was finally executed between the Complainant and the Developer. Under clause 3, 4 and 5 of the Agreement it was stated as hereunder:
"3. That the party of the second part herein has agreed to pay the sale consideration of Rs.82,94,000/- (Rupees Eighty Two Lakhs Ninety Four Thousand only) to the party of the first part as per the schedule below.
Schedule of Payment under Pre EMI Scheme:
S. No.
Stages of Payment
amount
1
Booking Advance
8,19,300
2
Margin Money
3,70,300
3
Payment through Bank/ financial Institution
62,75,000
4
At the time of possession for interior works prior to Registration
8,29,400
Total
82,94,000
4. If the purchaser opts for Pre EMI Scheme (10% at the time of booking, 80% Home loan and 10% at the time of possession). The purchaser should be eligible to get home loan to the extent of 80% of flat cost. The purchaser shall submit all the required documents within 10 days of issuance of confirmation letter to the bank approved by the party of the First part for processing the home loan. The purchaser shall sign on any/ all of the documents that are required for sanction and disbursement of Home Loan in favour of the Party of first Part to the extent of 80% of flat cost. Balance 10% of flat cost shall be paid by the purchaser prior to registration and handing over possession of the flat to interior work. The processing fee towards sanction of the home loan shall be borne by the purchaser.
5. Under the Pre EMI scheme the party of the First Part/ company would pay the pre EMI payments till the period of completion of the flat. The purchaser shall pay the EMI and interest from the date of initiation of Flat completion by the Party of the First part. If the purchaser fails to take possession of flat when intimated, the party of the First Part/ Company is indemnified from further interest payments and other financial liabilities and the purchaser undertakes the responsibility for making of all the EMI payments and interests to the bank."
4. To give effect to the afore-noted arrangement a Tripartite Agreement, was entered into on 12.10.2011 between the Complainant, the Developer and the HDFC, which agreed to disburse an amount of ₹62,75,000/-. Clause 21 of the Tripartite Agreement dated 12.10.2011 + 24 Months =12.10.2013 + 3 months = 12.01.2014 stipulates the time period to complete the flat and handover the possession, which is reproduced as hereunder:
"The Developer/ Builder confirms that the said flat shall be developer/ constructed in accordance with the sanctioned plan and shall complete by 24 months with a grace period of 3 months i.e. from the date of this agreement and in any deviation thereto shall be in accordance to the approval obtained from the respective authorities and further confirms that in the event of detection of deviation by the Developmental authorities and/ or any other appropriate/ competent authority on completion and/ or during the construction pending completion of the said flat shall be duly regularized as is directed by the concerned Authority and/ or the same would be duly compounded by the Developer, in accordance to due process of law."
(Emphasis supplied)
5. It is stated that the Developer willfully delayed the execution of the Agreement of Sale beyond 10 months from the date of Allotment Letter and finally executed it only on 12.10.2011 and extended the period to 24 months from that date. It was further stated that the Agreement of Sale dated 12.10.2011, is not as per the agreed terms and specifications. The Complainant sent emails to the representatives of the Developer reminding them of the schedule of completion and submitted that he was ready and willing to perform his part of the obligation as he has already paid 87% of the total sale consideration, but the delivery of the flat was delayed beyond the stipulated deadline of January 2013. While so, the Complainant received the letter dated 14.07.2014 demanding a further sum of ₹10,73,940/- stating that the final works are in progress. The Complainant issued a letter dated 30.08.2014 that there is no sum due as 80% of the consideration was already paid up and what remains is only a sum of ₹8,29,400/-. The Complainant also stated that upon inspection on 17.08.2014, it was found that only 40% of the works was completed and even the additional promised features were incomplete, but the Developer instructed the complainant to pay the balance amount as they were in financial difficulties. As a gesture of goodwill, the Complainant requested the HDFC to release a further amount of ₹3,25,000/- and the same was released on 8.9.2014. On 22.10.2014, after receipt of ₹3,25,000/-, the Developer sent an email stating that they are willing to handover possession for two months only for interior work and notified to stop the payment of pre-EMI. The Complainant deputed an Architect on 28.10.2014 for inspection of the said flat and Architect submitted the observations as hereunder:
No flooring in the Master bedroom
No taps in the toilet and kitchen
No wash basin in the hall
No water and electric connection
No door and window polishing
No floor polishing
Lift is not working
Gym/Swimming pool is not functional
No support on the stair case
No sewerage connection
Fire requirements
6. It was stated that the Developer has stopped the payment of pre- EMI which is contrary to the terms of the Agreement. The Complainant also sent an email dated 29.10.2014 informing the Developer about the incomplete works. It is submitted that the Developer replied vide letter dated 30.10.2014, admitting that the works were still to be completed. But once again on 22.10.2014, the Complainant received an email that payment of pre-EMIs will be stopped and to take possession of the flat. The Complainant has repeatedly requested the Developer that even basic amenities like sewerage, water electricity connection, fire equipment, lift etc., were not in place and therefore he was not in a position to take possession.
7. The Complainant submitted that the third opposite party (hereinafter referred to as ' GHMC') is allowing the Developer to take possession of the flats without Occupancy Certificate which is against the provisions of the GHMC Act. Hence, the Complainant approached this Commission seeking the following directions:
"(i) Hold and declare that opposite party no. 1 is deficient in providing the agreed services and indulged in to unfair trade practices AND consequently direct the opposite party no. 1 to complete the construction of the Complainant's flat in all respects as per agreed specifications vide agreement date 12.10.2014 and e-mail dated 01.12.2011;
(ii) Direct the opposite party no. 1 to reimburse an amount of Rs.1,11,564/- being the amount towards non payment of pre-EMI interest for the month of November, 2014 and December 2014 with further directions to continue to pay the pre EMI payments, till execution of Sale Deed and actual handing over of the flat to the complainant alternatively allow the complainant to adjust the Pre EMI amount being paid by him balance sale consideration;
(iii) Direct the Opposite Party No. 2 not to insist for payment of regular EMI till the flat is completed in all aspects and registered in favour of the complainant;
(iv) Direct the opposite party no. 3 to provide occupancy/ completion certificate to the building after having verified the terms of sanction plans, layout etc., with further directions to opposite party no, 3 to and restrict the opposite party no. 1 to offer possession of the incomplete flat unlawfully and illegally;
(v) Direct the opposite party no. 1 to pay compensation @ Rs.50,000/- (Rupees Fifty Thousand Only) per month from due date of the flat i.e. February 2013, till its actual possession towards loss of rental income;
(vi) Direct the opposite party NO. 1 to pay RS.20,00,000/- (Rupees Twenty Lacs only) towards damages for mental agony and harassment suffered by the Complainant;
(vii) Direct the opposite party no. 1 to pay interest @ 18% per annum on the amount payable to the Complainant, till its realization.
(viii) Direct the opposite party no. 1 to pay cost of this forced litigation in favour of the Complainant;
(ix) Pass such other and further order and directions to any other relief, which this Hon'ble court may deem fit and proper in the facts and circumstances of the case in the interest of justice and equity."
8. The Developer filed its Written Version, denying all the allegations made by the Complainant and stated that they had always acted in accordance with the terms of the Allotment, the Agreement of Sale and the Tripartite Agreement. The Allotment Letter was issued on 12.01.2011 and the Agreement of Sale on 12.10.2011. It was intimated to the Complainant in the month of November 2014 itself that the flat was ready to be handed over for starting work of the interiors. It is stated that the Complainant paid an initial advance amount of 10% between January 2011 to September 2011 but the Developer did not take coercive steps despite the enormous delay on behalf of the Complainant in making the payments. It is stated that the Complainant issued a cheque for an amount of ₹4,50,000/- on 25.06.2011 and ₹1,94,100/- on 28.06.2011, but the cheque for ₹4,50,000/- was dishonoured. Thereafter, the Complainant sent several emails seeking execution of the Agreement of Sale. The HDFC disbursed an amount of ₹56,25,000/- on 31.10.2011 towards the loan amount taken by the Complainant. On 01.02.2012, the Developer addressed a letter to the Complainant that they would transfer the pre-EMI amounts to the Complainant's account on or before 7th of every month till the date of intimation of completion of flat as per the terms and conditions of the Agreement dated 12.10.2011. In the instant case, the Complainant miserably failed to pay the advance booking amount within the stipulated time of 7 days. The total amount paid by the Complainant on the starting of pre-EMI scheme was only 83% of the total cost. It is stated that the builder agree to pay interest on behalf of the Complainant in the pre-EMI scheme only after receiving 90% of the total cost. There was outstanding amount due from the Complainant and therefore a demand was made on 14.07.2014 for an amount of ₹10,73,940/- which includes service Tax of ₹2,13,034/-. It is only because
of the failure of the Complainant to pay 90% of the total cost, that the Developer did not take any steps to immediately hand over the possession. But still on 22.10.2014, an email was addressed to the Complainant to take possession of the flat. But the Complainant stated that the Allotment was incomplete. It is stated that the letter intimating handing over possession of the flat for carrying out the interior works is in consonance with the Letter of Allotment and the Agreement of Sale. Clause 4 of the Allotment Letter read with clauses 4 and 5 of the Agreement of Sale makes it clear that the responsibility of the Developer to make the payment of pre-EMI ends from the date on which the Complainant is intimated about handing over of the flat for carrying out the interior works. Despite the Complainant having defaulted in making the payments, the Developer did not cancel the Allotment and therefore there is no deficiency in service on their behalf. It is stated that the total sale consideration of the flat booked by the Complainant was ₹82,94,000/- and the Complainant paid only ₹72,19,300/- and it was only after waiting for reasonable period of time for the Complainant to make the balance payments, that a letter dated 07.01.2015 was issued cancelling the Allotment for which act, the Developer cannot be said to be deficient in its service. Hence, the Developer seeks dismissal of the Complaint with costs.
9. The HDFC filed its written version admitting to the sanction of loan amount of ₹62,75,000/- vide Home Loan Agreement dated 29.10.2011 and to the execution of the Tripartite Agreement dated 12.10.2011, between the Complainant, the Developer and the HDFC. It is stated that an amount of ₹59,50,000/- was disbursed to the Developer on the request of the Complainant. It is averred that there is no specific allegation against the HDFC in the body of the Complaint and no cause of action is alleged against the HDFC, therefore the HDFC is neither a necessary party nor a proforma party to this Complaint. Accordingly the HDFC prayed for dismissal of the Complaint qua them with costs. The third Opposite Party, GHMC, did not file its Written Version.
10. The Complainant filed his Rejoinder reiterating the facts stated in the Complaint and further stated that there is a delay in not handing over possession of the flat on behalf of the Developer as they were required to be handed over within 24 months from the date of Agreement of Sale i.e., 20.10.2011; the Completion Certificate cannot be issued without having Fire NOC and the Complainant got a copy of the Fire Certificate through application under RTI which establishes that Fire NOC was issued on 11.01.2016; that the offer of possession dated 22.10.2014 is illegal since there was no Occupancy Certificate on that date; that the works mentioned by the Architect was also not completed and the same was admitted by the Developer in response to the mail dated 22.10.2013; that the loan disbursed by the HDFC to the Developer on behalf of the Complainant was invested by them in another project and they are liable to pay pre-EMI till the actual date of offer of possession of the flat.
11. The Complainant filed his Affidavit by way of Evidence and Annexure-C/1 (copy of the Brochure), Annexure-C/2 (copy of the Allotment Letter dated 12.01.2011), Annexure-C/3 (Colly) (copies of the emails), Annexure-C/4 (copy of the Agreement of Dale dated 12.10.2011), Annexure-C/5 (copy of the Tripartite Agreement dated 12.10.2011), Annexure-C/6 (Colly) (copies of the email dated 30.11.2011 and 06.12.2011), Annexure-C/7 (Colly) (copy of the email dated 10.12.2011), Annexure-C/8 (copy of the letter dated 01.02.2012), Annexure-C/9 (copy of the emails), Annexure-C/10 (notice dated 14.07.2014), Annexure-C/11 (copy of reply dated 30.08.2014), Annexure-C/12 (copy of email dated 23.08.2014), Annexure-C/13 (copy of email dated 30.10.2014), Annexure-C/14 (copy of email and reply dated 22.10.2014) and Annexure-C/15 (copy of email dated 12.11.2014) were marked on his behalf.
12. The Developer also filed its Affidavit by way of Evidence and Exhibit B/1(A copy of the project progress and payment status report dated 26.04.2011), Exhibit B/2 (A copy of the project progress and payment status report dated 17.06.2011) and Exhibit B/3 (A copy of the email dated 22.10.2011) were marked on their behalf.
13. The HDFC filed its Affidavit by way of Evidence and Exhibit- OP2/1 (Letter of Authority in favour of Authorized Representative), Exhibit-OP2/2 (copy of the Loan Application) and Exhibit-OP2/3 (Colly) (copy of the Home Loan Agreement dated 29.10.2011) were marked on their behalf.
14. Both sides also filed their written arguments. The Complainant was also present in person and submitted that the possession ought to have been given within two months from the date of Allotment but the Agreement of Sale was executed belatedly after 10 months from the date of Allotment and that the Occupation Certificate was obtained only in October 2016, whereas the possession was offered on 22.10.2014 without the Occupation Certificate and moreover most of the basic amenities were also incomplete. He further contended that the pre-EMI should be paid till actual date of offer of Possession.
15. The learned counsel appearing for the Developer vehemently contended that it was the Complainant who had defaulted on his payments and as per the terms of the Tripartite Agreement, the pre-EMI's had to be paid by the Developer only till the date when the intimation of offer of possession is given to the Complainant. He further submitted that the total amount paid by the Complainant on the starting of pre-EMI's scheme was only 83% of the total cost of the flat whereas the Developer agreed to pay the interest on behalf of the purchasers of the pre-EMI scheme, only after receiving 90% of the total cost of the flat and therefore there was no deficiency in service on its part.
16. The facts are not in dispute that there was an Allotment letter executed between the Complainant and the Developer on 12.01.2011; that there was an Agreement of Sale and a Tripartite Agreement executed on 12.10.2011 for Flat No. 805 in Aditya Heights, Kothaguda under pre-EMI scheme; that Clause 5 of the Agreement stipulates that under pre-EMI scheme the Developer would pay EMI payments to the HDFC till the period of completion of the flat. Clause 5 also stipulates that the customer shall pay the pre-EMI instalments from the date of intimation of the flat completion by the Developer. It is the Developer's case that if the customer fails to take possession of the flat when intimated, the Developer is indemnified from any further interest payments and other financial liabilities and the customer undertakes the responsibility of making the Pre-EMIs and EMI payments to the Bank.
17. From clause 21 of the Agreement, it is evident that the Developer shall complete the construction within 24 months with a grace period of 3 months from the date of the Agreement. It is the Complainant's case that 24 months from the date of Allotment i.e. from 12.01.2011 ends on 12.01.2013 and with a grace period of three months, it is supposed to be completed by April 2013. It is the case of the Developer that several opportunities were given to the Complainant to make the initial payment and the cheque of ₹4,50,000/- issued was dishonoured and therefore there was delay in executing the Agreement of Sale which was executed between the parties on 12.10.2011. A perusal of the material on record shows that the Demand Letter dated 14.11.2014 for an amount of ₹10,73,940/- includes an amount of Rs.5,90,300/- with interest and service tax of ₹2,13,034/-. Admittedly the total sale consideration of the flat is ₹82,94,000/- and it is the case of the Developer that the Complainant paid only ₹74,91,400/-. The contention of the Developer that the flat was completed on 22.10.2014 and offer of possession was made and therefore their liability to pay pre-EMI stops as on that date, is unsustainable, keeping in view the light of the admitted fact that the Occupancy Certificate was obtained only in the year 2016. In a catena of judgments, the Hon'ble Supreme Court has laid down that 'no legal possession can be offered without obtaining the Completion/ Occupation Certificate'. Therefore when the Developer states that the possession was offered on 22.10.2014 but the Occupation Certificate was procured only in October 2016, the Developer is bound to pay pre-EMIs till 'legal possession' is offered which was only in October 2016. It is observed from the record that vide order dated 31.10.2017 this Commission has recorded the submissions of the learned counsel for the Developer that the flat is ready and they are willing to hand over if the Complainant pays the balance amount and the Complainant was also directed to pursue the possibility of an amicable settlement by meeting Mr. D. Bhaskar Rao, General Manager (Customer Relations) of the Developer company. Since no settlement was arrived at, the matter was heard and keeping in view all afore-noted reasons and observations, we are of the considered opinion that the Developer was deficient in completing the project within the stipulated time. Even if 24 months + 3 months grace period is taken from the date of Agreement of Sale dated 12.10.2011, the project ought to have been completed by 12.01.2014, whereas an offer of possession without Occupation Certificate was made on
22.10.2014and the Occupation Certificate was admittedly obtained only in October 2016. It is directed that the Developer shall pay all the pre-EMIs till the date of receipt of Occupation Certificate as that date is construed to be the date of offer 'of legal possession' and the Complainant shall take possession of the flat which is ready after paying the amounts due. The construction of the flat shall be completed as per the agreed specifications vide Agreement dated 12.10.2011 within six weeks from the date of receipt of the copy of the order. The Developer is also directed to pay compensation of Rs.2 lakhs and costs of Rs.10,000/-.
18. In the result, this Complaint is allowed in part, directing the Developer to pay all the pre-EMIs till October 2016, the date on which the Occupation Certificate was obtained, handover possession of the subject flat complete in in all respects as per the agreed specifications of the Agreement dated 12.10.2011 within six weeks from the date of receipt of a copy of this order, pay compensation of Rs.2 lakhs and costs of Rs.10,000/-. Payments due, if any, from the Complainant shall also be adjusted from the decretal amount and the balance, if any, shall be paid by the Complainant to the Developer within six weeks from the date of receipt of a copy of this order. Time for compliance for the Developer to comply with the directions is six weeks from the date of receipt of a copy of this order, failing which, the amount shall attract interest @ 9% per annum from the date of filing of the Complaint till the date of realization. The case against the second Opposite Party HDFC and the third Opposite Party, is dismissed without costs.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER