National Consumer Disputes Redressal
Nandita Ray vs Maytas Hill County Pvt. Ltd. & Ors. on 3 November, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 197 OF 2010 1. NANDITA RAY W/o Late Sh. Smarajit Ray,
Through Special Power of Attorney Holder Mr. Arijit Ray,
R/o Flat No. 33,
Tulip Towers,
Serene County Residential Township,
Telecom Nagar,
Gachibowli,
Serilingampally Hyderabad - 500 032 ...........Complainant(s) Versus 1. MAYTAS HILL COUNTY PVT. LTD. & ORS. G.P.A Holder & Developer of the Land Owners Rep. byits nominees Mr. M. Theja Pratap Raju,
Regis. Off. at 6-3-1186/5/A,
II Floor, Amogh Plaza,
Begumpet Hyderabad - 500 016 2. MAYTAS HILL COUNTY PVT. LTD. G.P.A. Holder & Developer of the Land Owners, Rep. by its nominees Mr. D.V.S. Subba Raju, Regis. Off. at 6-3-1186/5/A, IIFloor, Amogh Plaza, Begumpet Hyderabad - 500 016 3. MAYTAS PROPERTIES LTD. Rep. by its Chairman & Managing Director, Regis. Off. at 6-3-1186/5/A, II Floor, Amogh Plaza, Begumpet, Hyderabad - 500 016, Also at Maytas Prop. Ltd., Maytas Hill County Ltd., Bachupally, Miyapur Hyderabad - 500 072 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER
For the Complainant : Mr. Sukumar Pattjoshi, Sr. Advocate
Mr. Somesh Kumar Dubey, Advocate
Ms. Nayan Chauhan, Advocate
Mr. Sahil Narang, Advocate For the Opp.Party : Mr. Raghenth Basant, Advocate
Mr. Hardeep Singh, Advocate
Dated : 03 Nov 2015 ORDER HON'BLE MR.JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)
1.The complainant booked a residential flat measuring 2158 sq. feet with the opposite party and entered into an agreement of sale dated 16.10.2006. As per the agreement, the construction of the flat was to be completed by 31.08.2008 or 24 months from the date of the agreement, whichever be later. The complainant paid a sum of Rs. 1,00,48,984/- to the opposite party, out of the total agreed sale consideration of Rs. 1,02,64,545/-. Since the construction of the flat was nowhere nearing completion, the complainant served a legal notice dated 20.07.2010 upon the opposite party, seeking delivery of possession of the flat purchased by her or in the alternative refund of the amount paid by her alongwith interest @ 18% per annum. The opposite parties responded to the notice, but did not offer possession of the flat booked by the complainant. The amount paid by her was also not refunded. Being aggrieved, she has filed this complaint seeking refund of Rs. 1,00,48,984/- alongwith interest @ 18% per annum and damages quantified at Rs. 25,000/-/
2. In their reply, the opposite parties have admitted the agreement with the complainant as well as receipt of Rs. 1,00,48,984/- from her. The complaint has been resisted inter-alia on the ground that there was a wrong perception of the opposite parties being associated with one Mr. B. Ramalinga Raju who was arrested and prosecuted by the State. Investigations against Mr. B. Ramalinga Raju drew attention of the electronic and press media as a result of which, private investors and financial institutions who had committed funding the project, withdrew from the said project, thereby causing acute shortage of funds. It is also alleged in the reply that various attachments and court orders have also delayed the project which is in the final stage of completion. It is also pointed out in the reply that one Mr. Ved Jain was appointed by Company Law Board as a nominee Director. Later, Company Law Board inducted M/s. Infrastructure Leasing & Financial Services Ltd., M/s. IL&FS Financial Services Ltd. and M/s. IL&FS Engineering and Construction Company Limited as major shareholders in the company and new management took steps to inject funds into the company which then started paying off its liabilities.
3. A perusal of the agreement for sale dated 16.10.2006 would show that it was executed between certain companies described as land owners, the opposite party Maytas Hill County Private Limited described as the Developer and the complainant described as the purchaser. However, the land owners executed the agreement through none other than Maytas Hill County Private Limited, which was stated to be their GPA holder.
4. Clause 7 of the agreement between the parties, to the extent it is relevant, reads as under:
a. The developer and land owner assures to complete the construction of the scheduled apartment by 31st August, 2008 or 24 months from the date of execution of this agreement whichever is later, as corrected to any time overrun consequent upon actions arising out of recital 6 and subject to the availability of steel or other construction material and any other causes beyond the control of the developer.
b. Provided that the developer shall have a further grace period of three (3) months.
c. The developer shall be entitled to further periods if the construction is delayed due to natural calamities like floods, war, earthquake, fire or stay of construction by any court or authority or any other emergencies including riots and any terrorist activities, which are beyond the normal control of the first party.
d. In the event of any further delay beyond the time stipulated in Clause 7(a), 7(b) and 7(c), the developer and the land owner shall pay the purchaser an amount of Rs. 5/- per sq. ft. of contracted built-up area for every month of delay upto a maximum of 8 months. This amount shall be adjusted out of the amount still due and receivable from the purchaser(s) or if the purchaser(s) has paid the amount in full and there are no further amounts payable to the developer, the same shall be paid to the purchaser on the 5th of each following calendar month.
f. Where construction of scheduled apartment is not yet complete on execution of this agreement for sale, it is the responsibility of the developer to complete construction of the apartment. It is fully understood by the purchaser that any construction in Hill County shall be solely arranged by the developer and the purchaser has agreed to the same.
5. In terms of the agreement dated 16.10.2006, the opposite party was required to complete the construction of the flat sold to the complainant, by 16.10.2008. If a grace period of three months is added, the last date for completion of the construction would be 16.01.2009. It is an admitted position that the construction of the flat was not complete by that date. In fact, the construction was nowhere near completion when the aforesaid deadline expired. Vide reply dated 05.08.2010, the opposite party admitted that the construction of the flats was not complete and sought further time for completion of the construction. The written version to the complaint filed on 02.05.2011 shows that the construction was not completed even on that date. Therefore, the opposite party clearly defaulted in performance of its contractual obligation to the complainant.
6. Though the time stipulated in the agreement for completion of the construction was subject to availability of steel or other construction material, this is nobody's case that either steel or some other construction material was not available in the market during the relevant period. Under clause 7(c), the opposite party was entitled to relaxation for the period construction was delayed due to natural calamities such as flood, war, earthquake or fire or any other emergency such as riot and terrorist activities. However, this is not the case of the opposite parties that the construction was delayed due to occurrence of any unnatural calamity or any riot or any other terrorist activity. The only question which needs to be seen is whether there were causes beyond the control of the opposite party which resulted in delaying the completion of the construction.
7. The learned counsel for the opposite parties has drawn my attention to the order dated 05.03.2009 passed by the Company Law Board in C.P. No. 04/2009, whereby the said Board directed the Central Government to appoint an eminent person as a nominee of Company Law Board as a Director on the Board of Directors of the opposite party and contended that on account of reconstitution of the Board, work of the company was disrupted. I however, find no merit in the contention. It is not as if the Board of Directors of the opposite party was superseded by Company Law Board. Only an additional Director was appointed as nominee of Company Law Board on the Board of Directors of the opposite party. The Board of Directors was never prevented from functioning as such and undertaking the business activities of the company. Therefore, the appointment of the nominee Directors in my view could not have been a valid ground for delayed completion of the project.
8. The learned counsel for the opposite party has also drawn my attention to the order of the Company Law Board dated 13.01.2011, permitting the induction of IL&FS Group as the new promoter of the opposite party and also permitting reconstitution of the Board as provided in the said order. The aforesaid order came to be passed on 13.01.2011, which after the last date for completion of the construction had expired. Therefore, the above referred order passed by the Company Law Board had no bearing on the completion of the project in which a residential flat was booked by the complainant.
In any case, neither the appointment of a nominee director nor induction of IL&FS Group, can be said to be a reason beyond the control of the opposite party, as far as the timely completion of the project is concerned. The complainant was dealing with a company, and for her it was immaterial as to who was managing its affairs.
9. The learned counsel for the complainant, on the other hand has pointed out that the grounds taken by the opposite party in its reply have already been rejected by this Commission in First Appeal No. 327 of 2012 Maytas Properties Ltd. Vs. Bharati Khurana and connected matters decided on 08.07.2013 as well as in First Appeal No. 189 of 2010 M/s. Maytas Properties Ltd. Vs. Srinivas Mopuri decided on 12.08.2010.
10. In Bharati Khurana (supra) & connected matters, the complainants purchased houses from the opposite party, construction of which was required to be completed within one year with a grace period of three months. The construction having not been completed in time, the complainants approached the concerned State Commission by way of a complaint. The complaint was resisted inter-alia on the ground that due to a wholly incorrect understanding of its association with Mr. B. Ramalinga Raju, the banks and financial institutions which had committed funding the project, withdrew from the said project, as a result of which it could not be developed. It was further stated in the reply that Company Law Board vide order dated 13.01.2011, inducted IL&FS Group into the company as shareholders by allotting preferential shares. Rejecting all these contentions, the concerned State Commission allowed the complaints and directed refund of the money paid by the complainants to the opposite party. Being aggrieved from the order passed by the State Commission, the opposite party approached this Commission by way of an appeal. Rejecting the appeal filed by it and upholding the order passed by the State Commission, this Commission inter-alia held that the order dated 13.1.2011 passed by Company Law Board was not a consent order as far as the complaints were concerned.
It was also contended before this Commission that since the construction had since been completed, the order of refund passed by the State Commission was unsustainable. The contention, however, was rejected by this Commission noticing that even completion certificate had not been obtained by the opposite party and the apartment could not be transferred even without obtaining a completion certificate and a certificate of occupation from the local authorities. This Commission upheld the order of the State Commission for refund of the amount paid by the complainant alongwith the interest on that amount @ 12% per annum with compensation quantified at Rs.1,00,000/- and the cost of litigation quantified at Rs.10,000/- to each complainant.
11. For the reasons stated hereinabove, I hold that the complainant is entitled to refund of the amount deposited by her with the opposite party alongwith appropriate interest. The learned counsel for the complainant relying upon the decision of this Commission in Puneet Malhotra Vs. Parsvnath Developers Ltd. II (2015) CPJ 18 (NC), submits that the complainants are entitled to interest @ 18% per annum. I however, find that the facts in Puneet Malhotra (supra) were somewhat different. In those cases, there was delay of about 7-8 years in completion of the construction and the case of the complainant was that they cannot get comparable flats even at the price they had agreed to pay + interest on that price @ 18% per annum. On the other hand, in the present case, not only has the opposite party made an offer to deliver possession of the flat in question to the complainant, there is no evidence or even allegation of appreciation to the extent of more than 18% per annum in the market value of similarly situated flats. Moreover, the delay in this case has been much less than the delay in Puneet Malhotra (supra). Therefore, in the facts and circumstances of this case, the complainant is not entitled to interest @ 18% per annum.
12. For the reasons sated hereinabove, the complaint is allowed and the opposite party is directed to refund the sum of Rs.1,00,48,984/- alongwith simple interest on that amount @ 12 % per annum from the date of payment till the date on which the aforesaid amount is refunded to the complainant. The opposite parties shall also pay compensation quantified at Rs. 1 lac and cost of litigation quantified at Rs. 10,000/- to the complainant. The complaint stands disposed of accordingly.
......................J V.K. JAIN PRESIDING MEMBER