State Consumer Disputes Redressal Commission
M/S. Narne Estates Pvt. Ltd., vs D. Arun Kumar on 13 July, 2011
A
BEFORE THE A.P. STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 1067/2009
against C.C. 677/2008, Dist. Forum-I, Hyderabad
Between:
1) M/s. Narne Estates Pvt. Ltd.,
No.
1 Gunrock Enclave
Kharkana
Secunderabad-500
009
2) Narne Ranga Rao
S/o.
Late N.V. Naidu
Age:
65 years,
Chairman
& Managing Director
M/s.
Narne Estates Pvt. Ltd.
No.
1 Gunrock Enclave
Kharkana
Secunderabad-500
009 *** Appellants/
Opposite
Parties
And
1) D. Arun Kumar, S/o. D. Hari Hara Rao
Age:
34 years, Employee
R/o.
No. 6, 1st cross
Minithayyappa
Layout
Lingarajpuram,
Bangalore-80 *** Respondent/
Complainant
2) J. N. Dhanwale
C/o. M/s. Narne Estates Pvt. Ltd.
No.
1 Gunrock Enclave
Kharkana
Secunderabad-500
009 *** Proforma Party
Counsel
for the Appellant: M/s.
D. Venkat Reddy
Counsel
for the Resps: M/s.
P. Madhusudhan Kumar
CORAM:
HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT
SMT. M. SHREESHA, MEMBER
& SRI R. L. NARASIMHA RAO, MEMBER WEDNESDAY, THE THIRTEENTH DAY OF JULY TWO THOUSAND ELVEN Oral Order: (Per Honble Justice D. Appa Rao, President) *****
1) This is an appeal preferred by the opposite party developer against the order of the Dist. Forum directing it to refund Rs. 3,09,685/- with interest @ 24% p.a., together with compensation of Rs. 25,000/- and costs of Rs. 2,000/-.
2) The case of the complainant in brief is that he joined as a member in the venture floated by the appellant wherein he was offered plots Nos. 11 & 12 measuring 666 sq.yds for a total consideration of Rs. 3,09,685/-.
Despite the fact that he paid the amount the appellant failed to execute registered sale deed. In fact the appellant had no right to sell the plots and thus cheated him. It did not inform that the government had stayed the registration. It did not have marketable title, however it offered additional plots to the existing members at a concessional rate even while the stay was in force. It finally wrote a letter on 27.1.2006 stating that the plots in question were under land acquisition proceedings by the Government. Therefore he sought for refund of the amount together with compensation of Rs. 1 lakh towards mental agony, Rs. 25,000/- towards damages and Rs. 10,000/- towards costs.
3) The appellant developer resisted the case. It admitted that it had floated a venture and allotted two plots bearing Nos. 11 & 12 on 14.2.2001 admeasuring 666 sq.yds for a consideration of Rs. 3,09,685/- excluding registration charges, and that the complainant had paid the said amount. In fact it had promised to execute sale deed after obtaining final layout sanction at the end of scheme period of 48 months.
The plots were offered to the public for sale openly, and that there is no dishonest intention. Since the complainant had kept quiet knowing full well that there was stay from the appellants Digest of March, 2011 it was not open for him to question the transaction nor seek refund of the amount. It had initiated legal proceedings to vacate the unilateral and arbitrary stay orders. The government also initiated land acquisition proceedings to acquire the lands at East City for the purpose of establishing a medical university. The said orders of the Dist. Collector was known to the complainant and consequently it cannot execute any sale deed. As soon as the government pays compensation, it has informed that it would pay. It was not liable to pay interest as claimed nor compensation, and therefore prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A9 marked while the appellant filed the affidavit evidence of its Chairman & Managing Director N. Ranga Rao and got Exs. B1 to B3 marked.
5) The Dist. Forum after considering the evidence placed on record opined that in view of the fact that neither the amount was refunded nor executed registered sale deed the appellant was bound to refund Rs. 3,09,685/- with interest @ 24% p.a., besides compensation of Rs. 25,000/- and costs of Rs. 2,000/-
6) Aggrieved by the said decision the developer preferred the appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. It ought to have seen that the lands were acquired by the government for the public purpose and the said fact was informed to the complainant and therefore he was not entitled to any amount nor interest @ 24% p.a. The question of specific performance or refund of the amount being contractual obligation is to be determined by the civil court and not by consumer fora. The complainant is not a consumer. The dispute pertains to immovable property cannot be termed as consumer dispute. It does not attract definition of either service or deficiency. The relief granting refund equally interest and costs is misconceived and therefore prayed that the appeal be allowed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that appellant is doing real estate business a housing activity floated a venture wherein it had agreed to sell two plots bearing Nos. 11 & 12 to the complainant for a consideration of Rs. 3,09,685/- after enrolling him as a member. It was in the month of February, 2001 evidenced from Ex. A1. The fact that he paid the entire amount is evident from the statement of account issued by the appellant under Ex. A2. For the first time through its publication Narne Estates Digest-March, 2001, it has informed the purchasers that registrations at Sectors 1 & II were temporarily stayed by Collector, Nalgonda district during 1997, pending clearance of allegations on lands at Sector I and II as Bhoodan lands. If really that were to be the case the appellant could not have included these properties in this venture, when the appellant knew full well that certain properties could not be sold, for whatever reason, it could not offer the property for sale.
By letter Ex. A6 dt. 30.6.2005, it has informed the complainant that the property is going to be acquired by the government for establishing Medical University on the lines of All India Institute of Medical Sciences, next to East City, the land prices around had already escalated and hence the prices of plots of East City are being revised by 25% with effect from 1.8.2005. From now onwards, there is likely to be quick appreciation of plots of East City, at about 25% of every six months.
From this it is beyond doubt that it was never intimated to the complainant that the property allotted to him was acquired by the government. Later by letter Ex. A7 dt. 27.1.2006 it informed that plots were acquired by the government. It alleges that as and when compensation claim is settled by government the amount will be refunded. It may be stated herein that the appellant having received the entire sale consideration could have refunded the amount and since transfer of title was not made it could sell and collect the amount from the government, more so, when it could collect more amount in view of escalation of prices in and around the property purchased. Having realized the amount in March, 2001 up till 2006, it has been evading execution of sale deed on one ground or the other. The complainant is not a party to the dispute between the appellant and the government either in regard to acquisition of property or to the order of Dist. Collector, Nalgonda granting stay of registrations. The notices issued by the complainant under Ex. A8 & A9 did not evoke any reply.
It is obvious that the appellant does not want to refund the amount unless the complainant invokes some legal proceedings.
Even up till now it is not known as to what happened to the so called proceedings initiated by the appellant. The fact remains that the appellant could no longer execute registered sale deeds therefore it was bound to refund the amount received by it.
9) It is too late a day to contend that the complainant had to clutch the jurisdiction of civil court when he sought for refund of the amount. The Honble Supreme Court time and again opined that Consumer Fora have jurisdiction to deal with complaints of deficiency of service in relation to immovable properties vide Chandigarh Housing Board Vs. Avtar Singh reported in IV (2010) CPJ 9 SC.
10) In fact the Supreme Court in the case of Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) opined that grant of interest @ 18% p.a., by way of damages and compensation is justified. Their lordship referring to an earlier decision in Ghaziabad Development Authority Vs. Balbir Singh reported in II (2004) CPJ 12 held by stating that in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest at the rate of 18%. We say so because it is clear that even if the body has not already floated another scheme on the same land it is clear that the body is going to derive great profit from the land and therefore compensating the allottee with interest @ 18% p.a. is just and fair. Therefore granting of interest @ 18% p.a. was up held.
11) We may also mention herein that when the State Commission has reduced the interest from 18% to 12% the Supreme Court in Haryana Urban Development Authority Vs. Soma Devi reported in 1(2005) CPJ 11 (SC) set-aside the finding and awarded interest @ 18% p.a. When consistently the Supreme Court has been awarding interest @ 18% p.a., in cases where the dealings pertain to real estates, we do not see any reason for reducing the rate of interest.
12) In the light of the fact that appellant being a developer doing real estate business and on its own undertaking very huge commercial projects utilizing the amounts paid by the gullible consumers for its business and that the complainant all through waiting for refund of the amount or registration of plots for a period of more than 10 years is undoubtedly entitled to compensation. All through the complainant had suffered mental agony and the appellant successfully dragging on the matter for a period of more than 10 years, therefore we do not see any justification in reducing quantum of compensation except for reducing rate of interest. We do not see any merits in the appeal.
13) In the result the appeal is allowed in part modifying the order of the Dist. Forum by reducing the rate of interest from 24% to 18% however rest of the order in directing the appellant to refund the amount together with compensation and costs is confirmed. The complainant is entitled to costs of Rs. 3,000/- in the appeal. Time for compliance four weeks.
1) _______________________________ PRESIDENT
2) ________________________________ MEMBER
3) ________________________________ MEMBER 13/07/2011 *pnr UP LOAD O.K.