State Consumer Disputes Redressal Commission
T.Zubin David S/O.T.K.David ... vs Prabhakar Mirkhelkar (Land Owner) ... on 15 September, 2014
BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD. C.C.No.76/2013 Between: 1. T.Zubin David S/o.T.K.David Age 24years, Occ:Pvt. Service, R/o.D-3, F2 Krupa Apartments, Picket West Marredpally, Secunderabad. 2. Smt.T.Santha David W/o.T.K.David, age 52 years, Occ:Pvt.Service, R/o.D-3, F2 Krupa Apartments, Picket West Marredpally, Secunderabad. Complainants And 1. Prabhakar Mirkhelkar (Land owner) S/o.Ashwath Rao Mirkhelkar Age 73 years, Occ:Retired R/o.Plot No.12, Indrapuri Railway Colony, West Marredpally, Secunderabad. 2. Pabba Siddeshwar (Proprietor) (Builder cum GPA Holder) S/o.Pentaiah, M/s Mahalaxmi Estates, R/o.Plot No.13 Ganeshnagar Colony, West Marredpally, Secunderabad. ..Opposite parties. Counsel for the complainants: M/s C.M.R.Velu Counsel for the Opp.parties : M/s.C.Naganatha Prasad-OP1 M/s B.D.R.Nirmal Kumar-OP 2 QUORUM: HONBLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT. SRI T.ASHOK KUMAR, HONBLE MEMBER.
AND SRI S.BHUJANGA RAO, HONBLE MEMBER.
MONDAY, THE FIFTEENTH DAY OF SEPTEMBER, TWO THOUSAND FOURTEEN Order (per Sri T.Ashok, Kumar, Honble Member.) ***
1. This complaint is filed U/s.17 of Consumer Protection Act, 1986 by the complainants who are son and mother for refund of the amount, which has been paid by them towards part of sale consideration for flat bearing No.102 first floor admeasuring 1725 sft. together with car parking in the building known as AHILAY NIVAS i.e. Rs.25,25,940/- together with future interest, Rs.5,00,000/- towards compensation and Rs.10,000/- towards costs.
2. The brief facts that led to the filing of the complaint are that opposite party No.1 is the owner of plot No.12 admeasuring 341 sq. yds. in survey No.46, 48, 52/1 and 59/1 situated at West Marredpally, Secunderabad and opposite party No.1 appointed opposite party No.2 as his GPA holder for developing the said plot into apartments vide Development Agreement cum G.P.A. dated 23-9-2010. The opposite parties 1 and 2 obtained construction permission from Secunderabad Cantonment Board to construct stilt plus 3 upper floors vide permit dated 22-3-2011. The opposite party No.2 offered to sell to the complainants flat bearing No.102 in first floor admeasuring 1725 sft. together with car parking in the building known as AHILAY NIVAS for a valid sale consideration of Rs.60 lakhs. An agreement of sale was executed on 02-5-2012 between the complainants and opposite parties. The complainants paid in all a sum of Rs.15,50,000/- to opposite party No.2 by way of cash and cheques and opposite party No.2 duly acknowledged the receipt of the said amounts and thereafter the complainants observed that the builder is not using quality flooring tiles, electrical fittings and bathroom fittings and therefore requested opposite party no.2 to allow them to use quality tiles to which he agreed and the complainants purchased polish tiles, flush tanks, electrical fittings worth Rs.7,72,900/- and opposite party No.2 promised to reimburse the said cost.
3. The complainants approached City Bank and HDFC Bank for housing loan after paying process fee of Rs.11,240/- and Rs.5,800/- respectively and the representatives of the said bank visited the building premises and issued letters dated 29-1-2013 and 15-12-2012 stating that they cannot grant loan as their technical norms are not met and on enquiry they revealed that the construction is not as per the sanctioned plan and that there are deviations in the construction. On further enquiry by the complainants with Cantonment Board, they came to know that the Board issued notices to opposite party no.1 to stop the construction since it is unauthorised. Therefore the complainants demanded return of their money but opposite party No.2 refused and the complainants got issued a legal notice dated 8-1-2013 to opposite party No.2 calling upon him to refund the money to which opposite party No.2 gave a reply dated 28-1-2013 stating that the agreement of sale dated 02-5-2012 stands cancelled and the advance amount paid by the complainants will not be refunded. Since the opposite parties did not construct the building as per the sanctioned plan, the bankers did not agree to sanction loan and hence the opposite parties 1 and 2 are jointly and severally liable to pay 25,25,940/- together with future interest, compensation of Rs.5,00,000/- and costs of Rs.10,000/- and hence the complaint.
4. Opposite party No.1 filed written version contending that he is a retired person and land owner and opposite party no.2 is the builder and that no monetary transactions took place between him and the complainants and he did not enter into any agreement of sale with them. Opposite party no.1 denied the allegation of the complainants that they parted an amount of Rs.25,25,940/- to him and contended that he has not received a single rupee from the complainants and the agreement of sale is in between complainants and opposite party No.2 alone.
According to Development Agreement, opposite party No.2 has to give him 50% of the flats and opposite party No.2 can sell the balance flats and even in the reply notice dated 28-1-2013, opposite party No.2 admitted the receipts of the amounts from the complainants and that there is no deficiency in service on his part and thus prayed to dismiss the complaint filed against him.
5. Opposite party No.2 filed written version resisting the complaint. He admitted that the complainants entered into an agreement of sale for purchase of flat No.102 in first floor admeasuring 1725 sq. ft. with one car parking in stilt floor together with undivided share of land admeasuring 55 sq. yds. out of 444 sq. yds. on plot No.1 situated at Railway Employees co-operative House society, West Marredpally, Secunderabad on 02-5-2012 for a total sale consideration of Rs.60 lakhs and that the complainants paid an amount of Rs.10 lakhs and also Rs. 5 lakhs and in total paid Rs.15 lakhs towards part of sale consideration.
According to him he did not receive Rs.50,000/- from the complainants and that he cannot be held responsible for failure of the banks to disburse the loan amount and that one of the flat owner entered into an agreement of sale and also applied for loan from M/s Sundaram BMP Paribas Home Finance and subsequently obtained registered sale deed from opposite party No.2. Opposite party No.2 contended that he obtained construction permission from Secunderabad Cantonment Board on 22-3-2011 and that the complainant could not pay the balance sale consideration as per the terms of the agreement of sale and only to cover up their incapacity and latches to pay the balance sale consideration, they got issued a legal notice to opposite party no.2.
6. Opposite party No.2 also pleaded that an agreement of sale was executed on 02-5-2012 and as per the terms the total sale consideration was Rs.60 lakhs and he acknowledged receipt of Rs.12 lakhs towards advance sale consideration and another of Rs. 3 lakhs and the balance sum of Rs.45 lakhs has to be paid on or before 05-5-2012 i.e. within 45 days of agreement of sale and on failure to pay the balance sale consideration within the stipulated period, OP 2 is at liberty to forfeit the entire advance amount as well as cancel the agreement of sale. The complainants threatened opposite party No.2 and changed the clauses and submitted that even as per agreement of sale, the total sale consideration agreed is Rs.60 lakhs and a sum of Rs.10 lakhs was paid towards advance sale consideration and as per the terms i.e. clause 5, the complainant shall apply for bank housing loan and pay Rs.35 lakhs and balance Rs.15 lakhs at the time of registration of the sale deed or handing over possession within 6 months from the date of the said agreement. The entire construction has already been completed in the month of July, 2014 and the said fact is known to the complainants and they failed to comply with the terms of the agreement. Opposite party No.2 further contended that the complainants made an endorsement on the reverse of 3rd page stating that as per agreement a sum of Rs.25 lakhs will be handed over to the vendor through loan applied on 11-6-2011 and the process will take 30 days to close with grace period of 10 days from the date of application of loan and the remaining amount of Rs.10 lakhs will be paid as per the agreement before September 15th, 2012 and the said endorsement is signed by both the parties. Thereafter arbitration proceedings were initiated by the complainant to pacify the said matter and one Sri Goverdhan Reddy acted as Arbitrator on behalf of the complainants and one Sri Venkatesh acted as Arbitrator on behalf of OP 2 and during negotiations, the complainants stated that they would pay entire balance sale consideration within 10 days and also obtain registered sale deed and agreed to pay the settled amount as per the arbitrator and inspite of the said undertaking made by the complainants, they did not come forward to pay the balance amount.
Opposite party no.2 contended that during the course of construction of the said flat, the complainants made several alternations against the working plan and O.P.2 had to incur a sum of Rs.15 lakhs and OP2 is entitled for the said amount from the complainants and the complainants caused damage to the said flat which resulted in heavy loss due to non payment of the agreed amount and under these circumstances, OP 2 had no option but to cancel the agreement by forfeiting the advance amount as per the terms and conditions of agreement dated 02-5-2012. The complainants have to file a civil suit for specific performance in view of agreement dated 02-5-2012 and they are not consumers and the dispute between the complainants and OP2 does not come within the provisions of Consumer Protection Act, 1986 and thus prayed for dismissal of the complaint.
7. Affidavits in lieu of evidence were filed by both the parties and the complainant got marked Exs.A1 to A12 and opposite party No.1 filed Ex.B1.
8. Heard counsel on both sides with reference to their respective contentions in detail and further the complainant and opposite parties submitted their written arguments.
9. Now the points for consideration are:
1. Whether consumer complaint is maintainable?
2.
Whether the complainants are entitled for refund of the amount paid by them together with interest?
3. Whether the complainants are entitled to compensation?
4. To what relief?
10. Point No. (i) : .As rightly relied by the counsel for the complainant and also as per the decision of the Honble 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 between Lucknow Development Authority Vs M. K. Guptha reported in (1994) I SCC 243 the housing activity comes under the definition service and Consumer Fora can entertain the complaint and thus Jurisdiction point agitated by the opposite party No.2 is not helpful to him. , In several decisions of Honble Supreme Court of India and National 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 a person purchases the plots or flats from the developer , he/she as the case may be 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 and thus point No.1 is decided in favour of the complainants.
11. Since points 2 and 3 need common discussion, they are taken up to answer together. The main contention of the learned counsel for the complainants is that bonafidely believing the advertisement etc. issued by the opposite parties, the complainants entered into an agreement of sale Ex.A1 with the opposite parties for purchase of flat bearing No.102 first floor admeasuring 1725 sft. together with car parking in the building known as AHILAY NIVAS for a valid sale consideration of Rs.60,00,000/-. It is the contention of the counsel for the complainants that as per the terms of the contract an amount of Rs.15,50,000/- was paid and a further amount of Rs.7,72,900 was paid towards flooring etc. and in total an amount of Rs. 23,39,940/- was paid. When the complainants applied for sanction of loan amount, the bankers after inspection refused to advance the loan amount and the complainants made discreet enquiries and came to know that the said construction is contrary to the approved plan as approved by the Secunderabad Cantonment Board. Further according to the learned counsel for the complainants, the Cantonment Board also issued notice U/s.248 to opposite party no.1, Ex.A9 stating that the said construction is unauthorized and the opposite parties have to demolish the said construction and this only necessitated the complainants to retreat from the said construction and accordingly requested opposite party No.2 to pay back the amount which has been paid. As the said amount was not paid, they were constrained to issue a legal notice, Ex.A11, and they were surprised to receive a reply notice, Ex.A12 to the effect that the amount which has been paid by the complainants was forfeited for the reason that the complainants did not honour the contract.
12. The counsel for opposite party No.1 submitted that opposite party No.1 is not a necessary party to the present complaint for the reason that he has neither received any amount from the complainants nor did he enter into an agreement of sale with the complainants and he should not have been added as one of the opposite parties. According to him even if the entire case as contended by the complainants is accepted, opposite party No.1 has nothing to do with the same for the reason that the entire transaction is in between the complainants and opposite party No.2.
13. The counsel for opposite party No.2 admitted the fact that opposite party No.2 entered into an agreement of sale with the complainants and received of Rs.15 lakhs which is evidenced by a receipt, Ex.A2, dated 16-7-2012 duly signed by the second opposite party. But so far as the unauthorised construction aspect is concerned, opposite party No.2 denied the same stating that the entire construction was strictly in accordance with the plan which was approved by the Cantonment Board and that for obvious reasons, the complainants went back from the commitment and in those circumstances, the amount was forfeited. Opposite party No.2 has not chosen to file the sanctioned plan to establish the fact that the construction is as per the sanctioned plan and in fact opposite party No.2 did not choose to file and mark any documents on his behalf in support of his contentions.
14. The facts as per the pleadings and as canvassed by the counsel with regard to agreement of sale and payment as far as Rs.15,00,000/- is concerned are not in dispute. It is a fact that the complainants when applied for loan came to know the fact that there are deviations in the construction. In the normal circumstances as and when loan application is made by any individual for sanction of loan, the bankers will make discreet enquiries and it is only after such enquiries that the loan amount will be sanctioned. Here is a case where the complainants were informed by the bankers stating that the applications cannot be processed and the loan cannot be sanctioned. It is only when the bankers refused to grant the loan, the complainants entertained a doubt as to why the bankers refused to advance loan and they made discreet enquiries with the Cantonment Board and to their surprise, it came to light that the said construction made by second opposite party is contrary to the approved plan. In that context it came to light that the Cantonment Board had also issued notices U/s.248 and 320 of the Cantonment Act to opposite party No.1 i.e. land owner and they were marked as Exs.A9 and A10 and they read as follows:
NOTICE UNDER SUB-SECTION (1) OF SECTION 248 OF THE CANTONMENT ACT, 2006 To SHRI. PRABHAKAR MIRKHELKAR, R/O.PLOT NO. 63, FLAT NO.12, M.G.NEST, GANESH NAGAR COLONY, RAVI CHS, WEST MARREDPALLY, SECUNDERABAD 26.
Whereas it is considered that the erection/re-erection of the building, specified in the schedule below (herein after referred to as the said building), owned/occupied/taken on lease by you, constitute an offence under section 248 of the cantonment Act, 2006.
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 248 of the cantonment Act, 2006, I, as the Executive Officer of the Secunderabad Cantonment Board, hereby give you notice that the erection/ re-erection of the said building should be stopped/ the erection/re-erection completed by you should be removed in the manner specified in column (4) of the said.
SCHEDULE Name of the Building Location of the Building Details of construction undertaken by owners/occupier/lessee in contravention of section 247 of the Cantonment Act, 2006 Specification as to demolition & re-erection of the building to remove the un-authorized construction within 30 days from the date from the date of receipt of this notice.
PLOT NO.12, SY,NOS.46, 48,52/1.54/1.55/1 & 59/1 RAILWAY EMP CO-OP., HOUSE BUILDING SCTY LTD, INDRAPURI RAILWAY COLONY, WEST MARREDPALLY Un-authorized construction as follows:-
STILT FLOOR:
1.Rcc columns:1-9X0-9X8-6X18No.s AUTHORITY:CBR NO .3(11) DATED 21.03.2012 (S.BALAKRISHNA, IDES) CHIEF EXECUTIVE OFFICER, COMMON SEAL No.SCB/EB/PNo.12/Railway Emp CHS/460/1170/218/818, OFFICE OF THE CANTONMENT BOARD COURT HOUSE COMPOUND, S.P.ROAD SECUNDERABAD : DT 30.04.2012.
NOTICE UNDER SECTION 320 OF THE CANTONMENTS ACT, 2006 To SHRI.PRABHAKAR MIRKHELKAR, R/O.PLOT NO.63, FLAT NO.102, M.G.NEST, GANESH NAGAR COLONY, RAVI CHS, WEST MARREDPALLY, SECUNDERABAD 26.
Whereas you have failed to comply with the Notice No.SCB/EB/PNo.12/Rly Emp CHS/460/117/218/818 DATED 30-04-2012 issued on behalf of the Cantonment Board requiring you to carry out marginally noted works on Plot.No.12, Sy.No.46, 48, 52/1, 54/1, 55/1 & 59/1, RAILWAY EMP.CO-OP., HOUSE BUILDING SOCIETY LTD., INDRAPURI RAILWAY COLONY, SITUATED AT WEST MARREDPALLY, SECUNDERABAD.
To demolish and remove the unauthorized construction as listed in Notice under Section 248(1) of Cantonments Act, 2006 dated 30-04-2012 and carried out subsequently.
and whereas the Cantonment Board vide its Resolution No.3(11) dated 21-03-2012 has resolved to carry out the said works departmentally at your costs. Notice in hereby given to you under Section 320 of the Cantonments Act, 2006 that unless you carry out the marginally noted works within 08 (Eight)) thereof, the Cantonment Board will have works effected departmentally and that all expenses incurred by the cantonment Board for such works shall be recovered from you.
(By Order) (S.BALAKRISHNA, IDES) CHIEF EXECUTIVE OFFICER SECUNDERAD CANTONMENT BOARD Lr.No.SCB/EB/PNo.12/Rly Emp CHS/460/1170/218/818/1155 Office of the Cantonment Board, Court Compound, S.P.Road, Secuderabad 500 003.
Dated 08.06.2012.
15. When the notices are to the effect that the said construction is unauthorised and it requires to be demolished and if the said fact comes to the knowledge of the complainants, in normal circumstances, any one would not venture to proceed further to honour the said contract in between the parties and would be inclined to purchase a property by spending their hard earned money which is subject of demolition. It is normal human conduct of any individual that when it is within the knowledge that the said construction is unauthorised and there is every threat of demolition at any point of time they would be reluctant to purchase the subject flat and therefore the complainants have rightly sought for refund of the money and came forward and addressed letters to opposite party No.2 for refund of the said amount paid by them vide Ex.A10 dated 08-1-2013 which is inadvertently described as dt.08-1-2012. May be it is true as contended by opposite party no.2 that the entire construction was over but he has not denied the demolition notices dated 30-4-2012 and 08-6-2012 and there is no dependable evidence from the side of opposite party No.2 that there were no deviations in the construction and that he constructed it as per the norms. Therefore his self serving evidence of opposite party No.2 is not helpful to decide the said aspect in his favour, so also about alleged mediation it is much more so when the complainants exhibited the said demolition notices.
16. The counsel for complainants relied on Exs.A5 to A8 to establish that they purchased tiles, flush tanks and electrical fittings to a tune of Rs.7,72,900/- and also relied on Exs.A3 and A4 to establish that City Bank and HDFC Bank refused to sanction the loan after inspecting the construction.
As already described supra, opposite party No.2 agreed that he received a sum of Rs.15,00,000/- and also admitted in his written arguments that he made several alterations at the suggestion of the complainant and incurred Rs.15,00,000/- for which there is no basis. In this context the allegation of the complainants is that they incurred a sum of Rs.7,72,900/- towards flooring etc. and in support of their contention filed Exs.A5 to A8 to establish that they purchased tiles, flush tanks and electrical fittings. A perusal of Ex.A5 dated 15-10-2012 discloses that they purchased concealed flush tank, s/cover and fittings etc., the complainants incurred an expenditure of Rs.43,800/- and there is an endorsement that Parekh Bath Interiors received the said amount from the first complainant. Ex.A6, receipt, dated 05-8-2012 reveals that one K.Srinivasa Rao received Rs.83,000/- from the complainants in respect of subject flat for electrical works. Ex.A7, receipt, dated 06-9-2012 reveals that one Mr.Safiullah received Rs.27,800/- from the complainants towards material labour charges for false ceiling work pertaining to the subject flat. Ex.A8 dt. 02-8-2012 is a quotation and estimate for supply of granite random slabs for an amount of Rs.06,18,300/- and in the said document, it is mentioned that it is their best price and when it is a quotation unless invoice is filed showing the amount aforesaid which includes vat @ 14.5% is paid to Archean Marbles & Tiles (P) Ltd., it is not desirable to place reliance upon the said document and allow the claim of the complainants basing on it.
In the above circumstances the amounts covered by Exs.A2, A5, A6 and A7 totalling to Rs.16,54,600/- can be awarded. That apart the complainants spent an amount of Rs.11,240 and Rs.5,800/- towards loan processing charges and therefore they are entitled for such amounts as the bank refused to sanction loan to the complainants on the ground there were deviations in the construction. Merely because some private bank alleged to have granted loan to somebody in respect of the flat in the said building complex, it is not desirable to direct the complainants to approach the said bank for sanction of loan. The opposite party no.2 did not file any documents to establish that the private bank sanctioned such a loan to one of the prospective purchasers and therefore the said point canvassed by opposite party no.2 holds no water. When opposite party No.2 denied the receipt of Rs.50,000/- by cash and as the complainants could not establish such payment by filing any receipt, we are not inclined to grant the said Rs.50,000/-. Since no reliance is placed on Ex.A8, an amount of Rs.6,18,300/- also cannot be granted. Thus in total the complainants are entitled for Rs.16,71,640/- from opposite party No.2 only. However, the complaint against opposite party No.1 is dismissed as he did not receive any sale consideration and as the flat sold to the complainants fell to the share of opposite party No.2.
17. Accordingly this complaint is allowed in part directing opposite party No.2 to refund an amount of Rs.16,71,640/- (Rupees Sixteen lakhs seventy one thousands and six hundred forty only ) with interest at 9% p.a. from the date of respective payments till realization together with costs of Rs.5,000/. The rest of the claim of the complainants against opposite party No.2 stands dismissed so also the complaint against opposite party No.1 is dismissed without costs. Time for compliance four weeks from the date of receipt of the order copy.
Sd/-PRESIDENT.
Sd/-MEMBER.
Sd/-MEMBER.
JM Dt.15-9-2014 //APPENDIX OF EVIDENCE// WITNESSES EXAMINED For complainant: For Opp.parties:
Affidavit of the 1st complainant filed. Affidavit of OP.1 filed.
OP.2 filed his affidavit.
Exhibits marked on behalf of the complainants:
Ex.A1-Copy of agreement of sale dated 02-5-2012 Ex.A2-Copy of receipt dt.16-6-2012.
Ex.A3- Letter of City Bank Home loan dated 29-1-2013.
Ex.A4-Letter of HDFC Bank dt.15-12-2012.
Ex.A5- Bills/receipt dt.15-10-2012.
Ex.A6-Receipt dt.05-8-2012 Ex.A7-Receipt dt.06-9-2012.
Ex.A8-Bills for polish granites dated 02-8-2012.
Ex.A9-Notice from OP 3 dt.30-4-2012.
Ex.A10-Notice from OP 3 dated 08-6-2012.
Ex.A11-Office copy of legal notice dated 08-1-2013.
Ex.A12-Reply notice dated 28-1-2013.
Exhibits marked on behalf of the opposite parties Ex.B1-Certified copy of Development agreement cum Irrevocable General Power Of Attorney dated 23-9-2010.
Sd/-PRESIDENT.
Sd/-MEMBER.
Sd/-MEMBER.
JM Dt.15-9-2014.