State Consumer Disputes Redressal Commission
Jabeen Farooki vs 1. M/S. B.K. Oakwood Estates on 9 October, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana Complaint Case No. CC/17/2015 1. Jabeen Farooki W/o. Samad Farooki , Aged 58 years, R/o.Plot No.5. Srinagar Colony, Hyderabad and 3323 Meadowside Drive, Sugar Land, Texas USA ...........Complainant(s) Versus 1. 1. M/s. B.K. Oakwood Estates at B.K. Oakwood Builders, A partnership Firm represented by its partners 1. Arhad Ayub 2. Asim Quadri and 3. Imaad Farooqui, office at Baitul Aziz, M No. 8-2-684/2/A, Road No. 12, Banjara Hills Hyderabad Telangana 2. 2. Arshad Ayub S/o. MD Ali, Aged 57 Years, R/o. Flat No.L3, 2nd Floor, Lake View Apartments, Road No.11, Banjara Hills,, Occ: Construciton and real estate and partner, M/s. B.K. Oakwood Estates Hyderabad Telangana 3. 3. Asim Quadri, R/o. H.No.8-2-684/3/1/1, Road No.12, Badar E Alam Qadri ABEN , Hyderabad 500034, Occupation Partner, M/s. B.K.Oakwood Estates at B.K.Oakwood Builders. Hyderabad Telangana 4. 4. Imaad Farooqui S/o, Mohammed Roufuddin Farooqui, Aged 46 years, Office at Baitul Aziz, M No. 8-2-684/1/2/A, Road No.12, Banjara Hills, Hyderabad, Occupation Partner M/s. B.K.Oakwood Estates at B.K.Oakwood builders Hyderabad Telangana ............Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE B. N. RAO NALLA PRESIDENT HON'BLE MR. Sri. PATIL VITHAL RAO JUDICIAL MEMBER For the Complainant: For the Opp. Party: Dated : 09 Oct 2017 Final Order / Judgement BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD. C.D. No.17 of 2015 Between: Jabeen Farooki W/o Samad Farooki aged 58 years, R/o Plot No.5 Srinagar Colony Hyderabad and # 3323 Meadowside Drive, Sugar Land, Texas, USA-77478, Occ: Household *** Complainant A N D M/s B.K.Oaakwood Estates @ B.K.Oakwood Builders a partnership firm rep. By its partners 1. Arhad Ayub, 2. Asim Quadri and 3. Imaad Farooqui Off: at Baitul Aziz H.No.8-2-684/1/2/A, Road No.12 Banjara Hills, Hyderabad 2. Arshad Ayub S/o Mohammed Ali Aged 57 years R/o Flat No.L3, 2nd Floor Lake View Apartments, Road NO.11, Banjara Hills Hyderabad, Occ: Construction and Real Estate and partner M/s B.K.Oakwood Estates @ B.K.Oakwood Builders 3. Asim Quadri S/o Badar-E-Alam Qadri (ABEN), Occ: Partner M/s B.K.Oakwood Estates @ B.K.Oakwood Builders H.No.-2-684/1/2/A, Road No.12 Banjara Hills, Hyderabad 4. Imaad Farooqui S/o Mohammed Roufuddin Farooqui Aged 46 years, Occ: Baitul Aziz H.No.8-2-684/1/2/A, Road No.12 Banjara Hills, Hyderabad *** Opposite parties Counsel for the Complainant: Sri Rakesh Sanghi Counsel for the Opposite Parties: M/s Mahmood & Co., QUORUM : HON'BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT & SRI PATIL VITHAL RAO, MEMBER
MONDAY THE NINETH DAY OF OCTOBER TWO THOUSAND SEVENTEEN Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** This is a complaint filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainant to direct the opposite parties jointly and severally remit a comprehensive amount of Rs.59,85,405/- along with pendent lite and post decretal interest @ 12% per annum on the principal sum of Rs.34,79,887/- till the date of realization and costs.
2. In brief, the facts of the case, are that the complainant entered into an agreement of sale cum GPA dated 04.10.2008 with the opposite party no.1 and its partners for the purchase of an apartment bearing No.601 on 6th floor at A Block having built-up area of 1795 sft for a total sale consideration of Rs.51,17,545/-. As per the agreement the opposite parties had agreed to complete the apartment besides entire complex and building with all respects within a period of 16 months from the date of the agreement of sale. In anticipating of being delivered the apartment as agreed, the complainant has paid advance sale consideration amount of Rs.34,79,887/- to the opposite parties. Despite the assurance, the opposite parties not completed the construction even after six long years and during the course of the meeting which took place between the complainant and the opposite party no.2 on 17.01.2014, the opposite party no.2 showed his inability to complete the project and agreed to refund the advance sale consideration amount of Rs.34,79,887/- with reasonable interest. But the opposite parties despite the said assurance failed to refund the advance sale consideration amount received from the complainant and also failed to complete the proposed project and the same constitutes deficiency of service. Hence, the complaint with the reliefs as prayed in paragraph no.1 supra.
3. The opposite parties resisted the case contending that the Commission has no jurisdiction to entertain the complaint in as much it relates to an alleged breach of agreement to sell between the parties. The complaint is hopelessly barred by limitation. The remedy sought can only be granted by a Civil Court and is not within the jurisdiction of the Commission. The opposite party no.1 entered into a registered Development Agreement dated 17.02.2005 and according to the said agreement the opposite party no.1 applied to HUDA for the construction of multi-storied building consisting of 2 cellars, Ground plus 5 floors named as 'Sky City' and the said permission was granted by HUDA. As per the Development Agreement the opposite party no.1 has 65% share in the total built up area in the proposed construction. The opposite parties while admitting the payment of Rs.34,79,887/- denied that Block 'A' of the proposed complex is incomplete in fact it is completed in all respects and it is only the complainant who expressed her inability to pay the balance sale consideration. Therefore, it was mutually agreed to cancel the agreement dated 04.10.2008 and that the advance paid by the complainant would be refunded to her after the said flat was sold and the same was specifically agreed by the complainant. The question of the opposite parties being equally liable for the liabilities of the opposite party no.1 firm just does not arise in the present case. It is submitted that the development of properties does not come under the definition of "housing construction" and is not within the ambit of service as defined in Sec.2(o) of the C.P. Act and as such the complainant is not a consumer. The claim of the complainant is an exorbitant and is not within the jurisdiction of the Commission. Hence, the opposite parties prayed for dismissal of the complaint.
4. The complainant filed her affidavit evidence and got Exs. A1 to A10 marked. On behalf of the opposite parties, the Managing Partner of the Opposite party no.1 filed his evidence affidavit and no documents have been marked on their side.
5. The counsel for the Complainant present and was heard. No representation for the opposite parties no.1 to 3. Counsel for both the parties have filed their respective written arguments.
6. The points that arise for consideration are :
Whether the complaint is barred by limitation?
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 ? 7. Point No.1: The counsel for the opposite parties would contend that as per Sec.24(A) of the C.P.Act the complaint is barred by limitation. The complainant entered into agreement with the opposite party no.1 on 04.10.2008 for purchase of immovable property and the complaint was filed in the year 2015 i.e., after 6 ½ years of execution of agreement which clearly goes to show that the complaint is barred by limitation. The only remedy been available tot he complainant is to invoke the jurisdiction of the Civil Court for recovery of money and since the limitation also barred there she did not file the suit and hence the present complaint was filed. 8. As per clause 2 of the Agreement to Sell the flat was to be delivered to the complainant within 16 months from the date of the agreement of sale with a grace period of 4 months and in the event of failure to deliver the same within time the opposite parties agreed to pay interest till the delivery of the possession till the time of possession. Admittedly, the opposite parties were not completed the project and the possession of the plot was not delivered to the complainant. Though the opposite parties stated to have been completed the project but they did not file any proof to show that the project was completed in all respects long back. It was held by the Hon'ble Supreme Court in Meerut Development Authority Vs. M.K. Gupta IV (2012) CPJ 12 that a buyer has a recurrent cause of action for filing a complaint for non-delivery of possession of the plot. A consumer books a residential flat for the purpose of having a shelter over his head and not for the purpose of taking refund at later date with or without interest. If the builder performs all his contractual obligations under the sale agreement, the buyer in such a case would have no right to claim refund and will be entitled only to possession of the flat as per the terms and conditions agreed between the parties. It is only in a case where the builder fails to perform his contractual obligations and deliver possession of the flat to the buyer that he would have a cause of action to seek refund of the money which he has paid to the builder, along with appropriate compensation in the form of interest or otherwise. It would be unrealistic to expect a flat buyer to seek refund of the sale consideration paid by him, immediately on expiry of the time period agreed between the parties for delivery of the possession of the flat to him. His purpose behind taking the flat being to have a shelter over his head, he would like to give some more time to the builder in order to enable him to complete the construction and deliver possession of the flat. It is only when he finds that the builder is unable or unwilling to complete the construction and deliver possession to him within a reasonable time from the last date stipulated for delivery of possession that he would ask the builder to refund the sale consideration paid by him. Therefore, in such a case, the date on which the refund is demanded by the flat buyer for the first time will be the date from which the period of limitation prescribed in Section 24A of the Consumer Protection Act has to be computed, unless the builder has even before the flat buyer asking for a refund, expressed his inability or unwillingness to complete the construction and deliver possession to him. Admittedly, in the present case, both parties executed an Option Agreement dated 17.01.2014 according to which the opposite party no.1 agreed to pay back Rs.34,79,887/- with negotiated penalty of Rs.5,00,000/- totaling to Rs.39,79,887/- till 31st May 2014. Therefore, as per the said decision of the Hon'ble Supreme Court, the complaint filed in the year 2015 had limitation. Therefore, it would be difficult to say that the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. Accordingly the point is answered in favour of the complainant. 9. Point no.2: The counsel for the opposite parties next contended that the complainant is trying to bring a civil dispute into a consumer to invoke the jurisdiction of the Commission and in doing so the motive of the complainant is to see that a civil dispute, if it is otherwise prosecuted by invoking provisions of Specific Relief Act. It is further contended by the OP that if there is any breach of contract, complainants have to approach the Civil Court. The complainant has submitted that owing to failure of the opposite parties in completing the construction of the Flat No.601 which amounts to deficiency in service, they opted for cancellation of the agreement of sale and the opposite parties contend that in order to maintain cordial relations with the complainant, they agreed to cancel the agreement of sale. When the complainant has availed the service of the opposite parties for consideration, she is a Consumer. In pursuance of the mutual agreement for cancellation of the agreement of sale, as the opposite parties have not refunded the amount paid, the complainant has filed the complaint claiming the amount paid. As the complainant was not asking for any declaration or specific performance of contract etc., and her very prayer as per the complaint is for refund of the money, she had parted with, we are of the view that this complaint is maintainable and this is a consumer dispute and this Commission has jurisdiction to entertain the complaint. Accordingly the point is answered in favour of the complainant. 10. Point No.3 : Now coming to the question of deficiency in service on the part of the opposite parties in not completing the flat of the complainant in all respects including the promised amenities that were agreed in the agreement of sale. Ex.A8 is the Copy of the Option Agreement dated 17.01.2014 between the opposite party no.1 and the complainant and the relevant paras of the said agreement is as follows:
Whereas, the Buyer agreed to pay a price of RS.51,17,545.00 (Rupees Fifty One Lakhs, Seventeen Thousand and Five Hundred and Forty Five) for the said property mentioned above. The Buyer paid a down payment of 20% of the total purchase price, Rs.10,23,400/- in 2008 when the contract was executed between the parties and the Buyer paid three subsequent installments of Rs.8,18,829/- eac. Total payments made to date to BK Oakwood for the purchase of the flat with Parking spots is Rs.34,79,887/-.
Xxx Now, therefore, to amicably resolve the issue, Seller and Buyer agree to the following in good faith:
Buyer is willing to give the Seller till 31st May 2014 to exercise the option and pay back the Buyer Rs.34,79,887/- principal amount paid to date plus a reduced negotiated penalty of Rs.5,00,000/- for a total amount of RS.39,798,887 9Option Payment. In consideration of the payment of Rs.39,798,887/- by Seller, the Buyer will waive any legal claim over the Residential Flat #601 mentioned above and any accrued penalty per the original contract.
11. From the above said Option Agreement it is clear that the complainant has paid a total amount of Rs.34,79,887/- towards part sale consideration amount of the flat. The opposite parties have agreed that there was considerable delay in completion of the project and most of the agreed conditions are not met and therefore, the opposite parties have agreed to refund the said amount with negotiated penalty of Rs.5,00,000/- to the complainant. The opposite parties contended that the complainant agreed for the refund of the amount when the flat was sold to the third parties. But it was not found in the Option Agreement. Even otherwise, the opposite parties themselves admitted that they have not completed the construction and in such a situation there is no possibility of the selling the flat to third parties and make the refund to the complainant. It is also contended by the opposite parties that Block 'A' of the proposed complex is complete in all respects and since the complainant expressed her inability to pay the balance sale consideration, it was mutually agree to cancel the agreement dated 04.10.2008. The defense of the opposite parties does not hold much water. The opposite parties themselves admitted in the Option Agreement that they failed to construction apartments and due to the said fact they agreed to refund the amount. When opposite parties failed to discharge their obligation then opposite parties were defaulters. We are satisfied that the complainant is able to prove and establish the deficiency in service and unfair trade practice on the part of the opposite parties. If the opposite parties fair and transparent they would have produced certain documents to show that the Flats are completed, the Flats are ready for occupation, free from any constructional defects etc and that they have obtained the completion and occupancy certificates from the statutory authorities. Not even a single piece of document is produced by the opposite parties to substantiate their so-called defense.
12. Under such circumstances, we do not find any force in the defense set out by the opposite parties. On the other hand the evidence of the complainant is trustworthy. For these reasons, we have no other go but to believe the evidence of the complainant and to accept the same. As already held by us the complainant is able to prove the deficiency in service on the part of the opposite parties. The opposite parties having retained the said huge amount without completing the project accrued wrongful gain to self and thereby caused wrongful loss to the complainant that too at no fault of her. With all fairness opposite parties would have returned the said amount when admitted agreed by the them in their Option Agreement, it is not done. She is unable to get the Flat either for self-occupation or for letting out. So all these problems accrued to the complainant because of the deficiency in service on the part of the opposite parties and consequently she must have sustained mental agony and financial loss. In the interest of justice, we find it is a fit case, wherein the complainant deserves the relief. The opposite parties jointly an severally liable to refund the amount of Rs.34,79,887/- with admitted penalty amount of Rs.5,00,000/- to the complainant together with interest @ 9% per annum from the date of Option Agreement i.e., 17.01.2014 till the date of payment together with costs of Rs.5,000/-. Accordingly we answer point Nos. 3 & 4 in favour of the complainant and against the opposite parties.
In the result, the complaint is allowed directing the opposite parties no.1 to 3 jointly and severally to refund Rs.39,89,887/- (Rs.34,89,887/-+Rs.5,00,000/-) with interest @ 9% per annum from the date of Option Agreement i.e., 17.01.2014 till the date of payment together with costs of Rs.5,000/-. Time for compliance four weeks.
PRESIDENT MEMBER 09.10.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER