State Consumer Disputes Redressal Commission
1. M/S Emaar Mgf Land Limited And Another vs Mr.Jagadesh Reddy S/O ... on 20 March, 2014
BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD. F.A.No.234 OF 2013 AGAINST C.C.NO.608 OF 2011 DISTRICT FORUM-I, HYDERABAD Between: 1. M/s Emaar MGF Land Limited Manikonda Village, Gachibowli Hyderabad-032 2. M/s Emaar MGF Land Limited Regd.Off: ECE House, 28 Kasturba Gandhi Marg New Delhi-001 Rep. by its authorized signatory Ms Anjana Bali Appellants/opposite parties. A N D Mr.Jagadesh Reddy S/o Mr.V.Adhinarayana Reddy Aged about 40 years, R/o # 701, 3rd Block Hill Ridge Springs Gachibowli, Hyderabad-032 Respondent/complainant Counsel for the Appellants M/s Shireen Sethna Baria Counsel for the Respondent M/s Indus Law Firm QUORUM: HONBLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT SRI THOTA ASHOK KUMAR, HONBLE MEMBER
AND SRI S.BHUJANGA RAO, HONBLE MEMBER THURSDAY THE TWENTIETH DAY OF MARCH TWO THOUSAND FOURTEEN Order (As per Sri T.Ashok Kumar, Honble Member) ***
1. The opposite parties are the appellants. For convenience sake the parties as arrayed in the complaint are referred to hereunder. The brief facts as stated in the complaint are that the complainant applied to the opposite parties for purchase of a three bed room apartment No.49, Tower C, with an approximate built up area of 2723.13 sft for a total sale consideration of `1,92,53,441/-. The complainant paid the registration fee of `9,62,672/-
through cheque dated 18.0-7.2008 to the opposite parties.
2. The complainant submits that in spite of several representations and requests the opposite parties failed to furnish the standard templates of construction agreement along with a detailed sale price payment schedule. Even though no construction agreement was provided the opposite parties have presented the second cheque without intimation to the complainant and the said cheque got dishonoured. The complainant due to personal inconvenience requested for cancellation of booking vide email seeking refund of the amount paid by him. The opposite parties through their letter dated 2.1.2009 informed the complainant as per clause (7) of the booking form the amount once paid is not refundable and the amount of `9,62,672/- would be forfeited. Vexed with their attitude the complainant got issued a legal notice dated 22.05.2009 calling upon the opposite parties to refund the amount paid by him with interest at 24% p.a. The opposite parties by their reply stated that they tried to send the construction agreement but as the complainant was hospitalised they could not deliver it to him and requested to come to their office for collection of the agreement. Hence the complaint seeking direction to the opposite parties to refund `9,62,672/-
together with interest at 24% p.a. from 25.6.2008, compensation of `5,00,000/- for mental agony and other costs.
3. The opposite parties filed their written version stating that the complainant is not a consumer within the meaning of Section 2(1)(d) of the Act and that the complainant is bound by the terms and conditions of the application form.
They admit that the complainant has paid `9,62,672/- towards booking of unit NO.49, Tower C. Hence the complainant cannot now depart from his commitment and moreover the complainant has paid only 5% of the total sale price. The complainant was required to pay another 10% of the total sale price within 15 days from the date of booking which the complainant did not pay despite sending reminders and thereby committed breach of contractual compliance required by him.
The opposite parties stated that as the complainant failed to pay the balance amount and they have right to forfeit 10% of the total sale price excluding registration fee as per clause 7 of the application form. Since the complainant is a defaulting party, he cannot be permitted to take benefit of the own wrong and therefore, the opposite party cannot be made held responsible for the deliberate breaches committed by the complainant. The relief sought by the complainant is refund of money and the said remedy is in the realms of a civil court. The present dispute pertains to breach of contract and therefore does not fall within the ambit of Consumer Protection Act, 1986 and thus prayed to dismiss the complaint.
4. The complainant filed his chief affidavit and got marked Exs.A1 to A12. The Opposite parties filed affidavit of the Vice President, Legal of EMAAR MGF Land Limited and the documents, Exs.B1 to B4.
5. Having heard both side and considering the material on record, the District Forum allowed the complaint directing the opposite party to pay `9,62,672/- with interest @ 9% from 10.1.2009 till realisation together with costs of `5,000/-.
6. Aggrieved by the order of the District Forum, the opposite parties filed the appeal contending that the opposite parties are well within its contractual rights to forfeit the 10% of the sale price of the apartment from the amounts paid by the complainant and the order of the District Forum is contrary to the settled principles of law laid down in Bharathi Knitting Co. vs. DHL Worlwide Express Courier Division of Airfreight Ltd., (AIR 1996 SC 2508). The complainant had to make payments in accordance with clause 2 of the terms and conditions that the complainant had paid only 5% of the total consideration and failed to adhere to the payment schedule despite being sent repeated reminders and thereby committed a breach of contractual compliance required by him. The order of the District Forum is contrary to law laid down by the Honble National Commission in II(2011) CPJ 95 (NC), II (2011) CPJ 3 (NC) and II (2010) CPJ (NC) and thus prayed to allow and set aside the impugned order.
7. Heard both side counsel in this appeal.
8. Now the point for consideration is whether the order of the District Forum is vitiated either in law or on facts?
9. The undisputed facts are that the complainant applied to the opposite parties for booking a Unit and paid registration charges of `9,62,672/- to them. The opposite parties issued allotment letter dated 18.07.2008 allotting unit No.49, Tower C with an approximate built up area of 2723.13 sft. for a total sale consideration of `1,92,53,441/-. The complainant due to personal inconvenience stopped payment of subsequent instalments and sought for cancellation of the booking and requested to refund the amount paid by him. The opposite parties contended that as per clause 2 of the terms and conditions the complainant undertook to pay the registration fee amounting to 5% of the sale price immediately and 10% of the total sale price within 15 days from the date of booking and the remaining 5% of the total sale price within 30 days from the date of booking. The complainant had paid only the first 5% of the total sale price and failed to pay subsequent instalments despite sending several reminders to the complainant. As per clause 7 of terms and conditions of the booking form the booking amount paid is non-refundable in the event of cancellation. Clause 7 of the booking form reads as follows:
The Developer upon final allotment favouring the Applicant shall within seven (7) working days provide the Allottee standard templates of Construction Agreement along with a detailed Sale Price Payment Schedule.
The Allottee(s) within (30) days from the date of issue of the standard templates execute the Construction Agreement and comply with the payment schedule therein to the developer.
Failure to do so shall result in automatic cancellation of the allotment along with forfeiture of (10%) percent of the Total Sale Price, excluding applicable registration fee, on account of damages for loss of business, opportunity and administrative expenses.
10.
It is the complainants case that inspite of repeated requests the opposite parties failed to provide the standard templates of construction agreement along with a detailed payment schedule and therefore he sought for cancellation of booking and for refund of his amount.
Later, the opposite party replied on 02.01.2009 in which they informed the complainant that as per his request they cancelled the apartment allotted to him and stated that as per clause 7 of the Terms and Conditions of the Booking Form, the booking amount paid is non-refundable in the event of cancellation and accordingly the amount paid by him towards the booking of the unit BH EXCL TC F00-C3-03/C4 of `9,62,672/- stands forfeited.
11. The opposite parties also raised objection with regard to the maintainability of the complaint stating that the complainant is not a consumer as defined u/s 2(1)(d) of the C.P.Act as the complainant failed to plead nor demonstrated the elements of the C.P.Act more specifically deficiency of service or unfair trade practice on their part.
12. The learned counsel for the opposite parties relied on the following decisions:
1.
Bharathi Knitting Col. Vs DHL Worldwide Express Courier Divisional of Airfreight Ltd., reported in AIR 1996 SC 2508
2. Mangilal Soni v. T.Marappa and others II (2011) CPJ 95 NC
3. Sahara India Commercial Corp.Ltd., & Anr Vs C.Madhu Babu, II(2011) CPJ 3 (NC)
4. Sahara India Commercial Corp. Ltd., vs. P.Gajendra Chary, III(2010) CPJ 190 (NC) In Bharathis knitting (supra) it was held that the court or tribunal cannot go behind the terms of the contract entered between the parties and the parties are bound by the terms of the contract.
In Mangilal Sonis case (supra) the National Commission held:
in case of non performance of its obligation by a vendor under an agreement to sell, i.e. as per stipulation in agreement, on failure of vendor to execute sale deed, complainant is entitled to 5 times of the consideration paid, then it falls under specific performance and the complainant was advised to approach civil court. But the facts in the instant case are different in the sense that the complainant has never sought for execution of the sale deed and in fact has sought for refund of the amount paid and therefore this cannot be termed as a case for specific performance.
In C.Madhu Babus case (supra) the National Commission held:
When there is a written agreement between the parties, it is well settled that the consumer fora have to consider the relief in the light of such agreement and it is not open to them to add or subtract any of the conditions or words thereof while doing so.
In P.Gajendra Charys case the National Commission held:
Consumer Fora are not the Courts of plenary jurisdiction having the power either to strike down the provisions of the Act or have the power of judicial review. Consumer For a have limited jurisdiction and operate in the defined area only. Consumer Fora have to decide the cases in a summary manner which does not require elaborate and lengthy arguments. It would be necessary implication exclude the jurisdiction of either going into the questions regarding the validity or striking down the provisions of the Act or Rules or Clauses of lawful agreement entered into between the parties.
13. In all the above cases, there was an agreement entered into by the parties and in the instant case there was no occasion to consider the terms and conditions of the agreement in the absence of any such an agreement enetered into by the parties.
14. We rely on the judgement of the apex court in Lucknow Development Authority vs M.K. Gupta IN 1994 AIR 787, 1994 SCC (1) 243. Bench in which their lordships observed as follows:
What remains to be examined is if housing construction or building activity carried on by a private or statutory body was service within the meaning of clause (o) of Section 2 of the Act as it stood prior to inclusion of the expression 'housing construction' in the definition of "service" by Ordinance No. 24 of 1993. As pointed out earlier the entire purpose of widening the definition is to include in it not only day to day buying and selling activity undertaken by a common man but even such activities which are otherwise not commercial in nature yet they partake of a character in which some benefit is conferred on the consumer. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub-clause (ii) of clause (r) of Section 2 as unfair trade practice. If a builder of a house uses substandard material in construction of a building or makes false or misleading representation about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular. The entire approach of the learned counsel for the development authority in emphasising that power exercised under a statute could not be stretched to mean service proceeded on misconception. It is incorrect understanding of the statutory functions under a social legislation. A development authority while developing the land or framing a scheme for housing discharges statutory duty the purpose and objective of which is service to the citizens. As pointed out earlier the entire purpose of widening the definitions is to include in it not only day to day buying of goods by a common man but even such activities which are otherwise not commercial but professional or service-oriented in nature. The provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan, development of land, and framing of scheme etc. Therefore if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service made available to potential users'. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression 'service of any description'. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993.
15. From the aforementioned judgment, it is clear that When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to.
In the instant case we see from the documentary evidence that the builder has not performed his obligation as agreed to. We observe that non-furnishing of the standard templates construction agreement amounts to deficiency in service. The opposite parties in the instant case did not establish that they have furnished the standard templates construction agreement along with detailed payment schedule. The act of the opposite parties in calling upon the complainant to pay the balance amount or forfeit the booking amount, amounts to unfair trade practice. The opposite parties have the advantage of these amounts from the year August, 2009 till this date and now cannot turn around and state that the complainant has to forfeit the amount if he does not pay the balance amount when the complainant sought cancellation of the allotment. As the opposite parties have not furnished the standard templates construction agreement along with detailed payment schedule and have not adhered to their own terms, forfeiture of 10% of the consideration amount is unsustainable as the opposite parties have committed an act of deficiency in service and unfair trade practice causing mental agony to the complainant whose money has been blocked with the opposite parties for certain period. There are no reasons to interfere with the impugned order and the appeal is liable to be dismissed.
16. In the result this appeal is dismissed confirming the order of the District Forum. There shall be no order as to costs. Time for compliance four weeks from the date of receipt of the order.
PRESIDENT MEMBER MEMBER Dt.20.03.2014 కె.ఎం.కె.*