State Consumer Disputes Redressal Commission
Kakulavaram Sanjay Reddy, Son Of K. ... vs 1.Mr. Om Shri Gayathri Constructions, on 13 April, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana Complaint Case No. CC/60/2014 1. Kakulavaram Sanjay Reddy, Son of K. Raghunatha Reddy, Aged 39 Years, Occ Service, R.o. G.1, 1.10.84 by A, Godha Nilayam, Mayuri Marg, Begumpet, Hyderabad.500 016 ...........Complainant(s) Versus 1. 1.Mr. Om Shri Gayathri Constructions, Registered Partnership firm No. 643 by 2006, Having its registered office at Shop No.419, Padmavathi Plaza, KPHB Colony, Hyderabad. Rep. by its Partner A.Ch.Jaganmohan Rao, Son of S.Ch. Naidu, Aged 37 Years, R.o. Kukatpally, Hyderabad 2. 2.A.Ch. Jaganmohan Rao, Son of A.Ch. Naidu, Aged 37 Years, Occ Partner, M.s. Om Sri Gayathri Constructions, Registered Partnership firm No. 643 by 2006, Having its registered office at Shop No.419, Padmavathi Plaza, KPHB Colony, Hyderabad 3. 3.Challa Ramachandra Reddy, Son of C. Prabhakar Reddy, Aged 48 Years, Occ Partner, M.s. Om Sri Gayathri Constructions, Registered Partnership firm No. 643 by 2006, Having its registered office at Shop No.419, Padmavathi Plaza, KPHB Colony, Hyderabad ............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 : 13 Apr 2017 Final Order / Judgement BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD. CC 60 of 2014 Between: Kakulavaram Sanjay Reddy K.Raghunatha Reddy Aged 39 yars, Occ: Service, R/o G-1, 1-10-84/A Godha Nilayam, Mayuri Marg, Begumpet Hyderabad-500016 *** Complainant A N D M/s Om Shri Gayatrhi Constructions Regd. Partnership frim No.643/2006 Regd. Off: Shop No.419, Padmavathi Plaza KPHB Colony, Hyderabad, rep by its Partner A.Ch.Jaganmohan Rao S/o A.Ch.Naidu, aged 37 years, R/o Kukatpally Hyderabad A.Ch.Jaganmohan Rao S/o A.Ch.Naidu aged 37 years, Occ: Partner M/s Om Shri Gayathri Constructions Regd. Off: Shop No.419, Padmavathi Plaza KPHB Colony, Hyderabad, Challa Ramachandra Reddy S/o C.Prabhakar Reddy Aged 48 years, Occ: Partner M/s Om Shri Gayathri Constructions Regd. Off: Shop No.419, Padmavathi Plaza KPHB Colony, Hyderabad *** Opposite Parties Counsel for the complainant: Sri A.Venkatesh Counsel for the Opposite parties Served QUORUM : HON'BLE SRI JUSTICE B.N.RAO, PRESIDENT & SRI PATIL VITHAL RAO, MEMBER
THURSDAY THE THIRTEENTH DAY APRIL TWO THOUSAND SEVENTEEN Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** Complaint is filed under Section 17 of the Consumer Protection Act, complaining deficiency in service against the opposite parties no.1 to 3 and seeking for direction to the opposite parties to take steps to complete construction of the house and handover the same; to pay Rs.29,00,000/- towards damages suffered by the complainant ; to pay an amount of Rs.6,60,000/- towards penalty from the month of April 2008 to September 2013 together with compensation of Rs.10,00,000/- and costs.
2. The case of the complainant, in brief, is that the opposite party no.1 is a partnership firm, inter alia, engaged in the housing and construction activity and the opposite parties no.2 and 3 are the partners of the opposite party no.1. The opposite parties represented to the complainant that they had purchased Plot Nos.1495 and 1505 totally admeasuring 2100 sq.yds in Block No.103 in Sy.No.s165, 166, 167,178 and 179 situated at Bachupally Village, Quthbullapur Mandal Randa Redy District under a registered sale deed dated 30.08.2006 and that they have got necessary permissions to divide the plot into smaller units and also the construction in those plots. The complainant being lured and induced by the opposite party agreed to go ahead to by house in " Dollar Hills" and the complainant also agreed to follow the module as suggested by the opposite parties i.e., initially to buy a plot and then enter into separate construction Agreement for construction of the house. Accordingly the complainant entered into two separate agreements one for Construction and second for purchase of plot. As the complainant intended to obtain loan from ICICI Bank, the opposite parties informed that they will first enter into a Construction Agreement for construction of the house and thereafter they would execute the sale deed and convey the Plot No.57 to the complainant by receiving the consideration of the plot. It was agreed between the parties that the opposite party shall sell plot no.57, admeasuring 200 sq.yards in Sy NOs.165, 166, 167, 178 and 179 situated at Bachupally Village, Ranga Reddy District for Rs.4,00,000/- and the cost of the construction of the house would be Rs.23,00,000/-. As per the Construction Agreement dated 29.09.2006 the opposite parties agreed that they would construct and handover to the complainant good quality house comprising of 2,200 sft. built up area i.e., 1100 sq.ft in the ground floor and 1,100 sq.ft on the first floor within a period of 12 months and a grace period of 2 months from the date of registration of the plot in favour of the complainant and that the opposite parties shall be responsible to obtain all permissions/approvals including obtaining building sanction. The opposite parties also requested that as the complainant was availing house loan, there should be an understanding that the house loan should be directly released to the opposite parties and that the payment of Rs.23,00,000/- should be made in five tranches as mentioned in the agreement. As per the Construction Agreement dated 29.09.2006 the complainant had to pay a consideration amount of Rs.23 lakhs in the following manner.
Sl.No. State of Construction Work Release of payment to the party of the second Part Amount Schedue
1. Completion of work upto the basement level 25% of agreement amount 5,75,000/-
2 months
2. Completion of work upto Slabs 25% of agreement amount 5,75,000/-
2 months
3. Completion of Brick work and plastering 25% of agreement amount 5,75,000/-
2 months
4. Completion fo flooring and wood works 15% of agreement amount 3,45,000/-
3 months
5. At the time of handing voer of the house 10% of agreement amount 2,30,000/-
3 months
3. The complainant submitted that, he has paid Rs.5,00,000/- as advance amount out of total cost of construction of Rs.23,00,000/- and after entering into construction agreement with the opposite parties he has obtained loan from ICICI Bank and thereafter paid valid sale consideration of Rs.4,00,000/- and the plot No.57 was registered in his name vide registered sale deed dated 21.12.2006. The opposite parties after entering into Construction Agreement and after executing Sale Deed did not take up the project in right earnest and there was continuous delay. Upon continuous request made by the complainant, the opposite parties informed that they are having some liquidity problems due to which the activity could not be taken up at a pace and they requested the complainant to pay entire consideration amount of Rs.23,00,000/- in advance so that it would help the opposite parties to complete the construction at a faster pace within the agreement time. The complainant as per the request of opposite parties got the loan released in favour of the opposite parties at time of execution of the sale itself i.e., 19.12.2006. The complainant paid the amount of Rs.18,00,000/- through ICICI bank out of which Rs.4,00,000/- was adjusted towards cost of the plot and balance amount was received by the opposite parties towards substantial part of the construction agreement. In spite of receiving the amount, the opposite parties did not complete the construction as required.
4. The complainant submitted that as the construction was not completed in spite of lapse of almost two years, he approached the opposite parties and demanded them to either complete the construction or to return the entire amounts paid to them failing which he informed them that he would be initiating legal proceedings against them. In order to pacify the complainant the opposite parties entered into Supplementary Agreement which would be in continuation to the initial construction agreement dated 27.09.2008. As per the Supplementary Agreement the opposite parties were duty bound to complete and hand over the construction of the residential house on or before 30.03.2009. In case they fail to complete the construction and hand over the completed house to the complainant within stipulated time the opposite parties agree to pay Rs.10,000/- as penalty with effect from April 2009. As the opposite parties did not adhere to the terms and conditions of the Supplementary agreement, the complainant approached the opposite parties and demanded them to remit back the entire amounts that were paid to them. The opposite parties requested the complainant that they would complete the said work within 12 months with a promise that they would offer discount to the extent of Rs.2,00,000/- and would provide common amenities of electrical connection and water connections at their cost and assured the complainant that he has to execute a fresh supplementary construction agreement incorporating the said conditions but they failed to comply with the said fresh supplementary construction agreement.
5. The complainant submitted that the opposite parties had laid two slabs in the month of Aril 2010 and August 2010 and further work was being carried out at a very snail pace and no progress was seen. While the matter stood thus the retaining wall raised by the opposite parties at a distance of 30 feet width from the plot of complainant collapsed in August 2011 owing to poor quality of planning and material used by the opposite parties. The complainant upon the request of the opposite parties to expedite the construction of house had also paid them additional sum of Rs.6,00,000/- in two instalments of Rs.3,00,000/- each in the month of April and August 2010. After receipt of Rs.6,00,000/- towards construction, opposite parties absconded and their whereabouts were not known to the complainant and in spite of his best efforts the complainant could not find them till October 2011. Upon repeated requests and demands made by the complainant, opposite parties informed in February 2012 that they are about to start their wok once again by engaging a different agency by name " Geosol Associates" and that the Geosol Associates had already been entrusted with the work of construction of the retaining wall and promised to handover the house with road and retaining wall by end of November 2012 but the opposite parties failed in that regard. As such was the situation, in the last week of July 2013 the said Geosol Associates which has completed a part of the wall stopped the work and left the site because the opposite parties failed to supply the raw material required for the construction of the retaining wall and road. The complainant immediately approached the opposite parties and requested them to either complete the construction or to pay back the tire amounts. However, the opposite parties expressed their helplessness in either completing the construction or repayment as they did not have funds and started giving evasive replies.
6. The complainant submitted that he has availed house loan in the year 2006 and he does not have any house for almost seven years though he has been paying the loan amount along with interest to the financial institutions. The act of the opposite parties in collecting huge amount without rendering any service amounts to deficiency of service and further as the opposite parties have been enjoying the said amount from the date of the payment they are also liable to pay interest on the said amount. Hence, the complaint.
7. The notices sent to the opposite parties no.1 to 3 were return as not claimed. Therefore invoking Section 28A(3) notice of the opposite parties held sufficient.
8. The complainant has filed his affidavit and got Exs.A1 to A7 marked.
9. The learned counsel for the complainant has filed his written arguments.
10. The points for consideration are:
i) Whether the opposite parties have rendered deficient service in construction of the house and in providing the amenities thereto?
ii) To what relief?
11. POINTS NO.1 & 2 : The complainant entered into a construction agreement, Ex.A2, on 29.09.2006 whereby the opposite parties agreed to construct the dwelling unit of 2200 sq.ft in Plot No.57 admeasuring 200 sq.yards situated at Dollor Hills for a consideration of Rs.23,00,000/-. As per the construction agreement the opposite parties would complete the construction within 12 months with a grace period of 2 months. After entering into the construction agreement with the opposite parties, the complainant had obtained loan from ICICI Bank and thereafter paid valid sale consideration of Rs.4,00,000/- and got the plot no.57 registered in his name vide sale deed dated 21.12.2006, Ex.A3. Though the complainant paid full sale consideration vide receipts Exs.A6 and A7, the opposite parties did not complete the construction as per the construction agreement. As the construction was not completed in spite of two years, the complainant approached the opposite parties and demanded them to either complete the construction or return the entire amounts paid by him. For which the opposite parties have entered into a Supplementary Agreement dated 27.09.2008 marked as Ex.A4 wherein the opposite parties were duty bound to complete and handover the construction of the residential house on or before 20.03.2009 failing which the opposite parties agreed to Rs.10,000/- p.m. as penalty with effect from April 2009. The opposite parties did not adhere to the terms and conditions of the supplementary agreement also and did not complete the construction. As a final resort the complainant again approached the opposite parties and informed them that he would take legal recourse against them for violating the terms of the agreement for which the opposite parties no.2 and 3 requested the complainant for further time of 12 months with a promise that they would offer discount to the extent of Rs.2,00,000/- and provide common amenities of electrical connection and water connections at their cost. In spite of entire amount including extra sums of Rs.6,00,000/- towards construction was paid, the opposite parties absconded. Upon requests and demands in the month of February 2012, opposite parties informed that they were about to start their work once again by engaging a different agency but the said agency also failed to construct the house and left the site because the opposite parties failed to supply the raw material required for the construction of retaining wall and road. Finally when the complainant demanded the opposite parties either to complete the construction or to pay the amount, however the opposite parties expressed their haplessness in either completing the construction or repayment as they did not have funds and started giving evasive replies.
12. Ex.A1 is the brochure pertaining to various projects where they undertook the construction activity. Ex.A2 is the copy of Construction Agreement dated 3.11.2006 executed by the opposite parties in favour of the complainant wherein under clause 6 the opposite parties were bound to complete the construction and of the said independent house and hand over the possession of the same within 12 months with a grace period of 2 months from the date of plot registration. Ex.A3 is the copy of sale deed dated 21.12.2006 executed by the opposite parties in favour of the complainant for a consideration of Rs.4,00,000/-. Ex.A4 is the Supplemental Agreement dated 27.09.2008 executed by the opposite parties in favour of the complainant which reads as under:
The party of the second part hereby declare that he could not complete the construction of the duplex house as agreed upon as per earlier construction agreement dated 29.09.2006 due to his personal inconvenience. But the construction of the said duplex house has at foundation level and laid the pillars and filing work has to be started.
The party of the second part further agreed that he will commence the construction work on day to day basis without any delay as per the following schedule From 20.08.2008 to 10.10.2008 shall complete the foundation work by way of laying the further foundation ad raise RCC Pillars and filing with mud to the basement level On or before 20.10.2008 shall lay plinth beams On or before 20.11.2008 shall lay second floor RCC Slab From 21.10.2008 to 30.03.2009 shall complete the brick construction while fixing the doors and windows as per th specification shown in the construction agreement referred above.
From 30.09.2008 to 30.03.2009 shall commence the plastering work with internal and external including colouring work and handover the duplex house by 30.03.2009 with all fixture and fitting to enable the part of the first part to perform house warming ceremony.
Whereas the party of the first part further agreed simultaneously with the schedule work he agreed to complete the laying of roads, providing of amenities like drainage, water tank, bore well connection of the electricity supply, fixing of transform etc. Xxx If in any circumstance, the delay in construction as per schedule shown above, the second party agreed to pay every month a sum of Rs.10,000/- as a penalty such time the construction is completed and handover the duplex house agreed by the second part if he fail to handover the said duplex house to be constructed on schedule property by 30.03.2009.
13. Ex.A5 are the photographs of the under construction duplex house of the complainant. Ex.A6 is the copy of receipt dated 13.06.2006 for Rs.3,50,000/-. Ex.A7 is the copy of receipt dated 13.05.2006 for Rs.1,00,000/- Ex.A7 is the home loan disbursement letter of ICICI Bank wherein it shows that the Bank had disbursed Rs.19,45,680/- towards home loan. Ex.A8 is the copy of statement of account.
14. When the opposite parties failed to adhere to the construction agreement dated 29.09.2006, they executed the Supplementary Agreement dated 27.09.2008 entered into, between the Opposite parties no.1 to 3 wherein they revised the terms and conditions. The learned counsel for the complainant has laid stress on Clauses 1 to 5 of the Agreement and contended that even to the supplementary agreement the opposite parties did not adhere to the terms and conditions and failed to complete the construction of the house as per the schedule mentioned in the supplementary agreement.
15. As per Ex.A6 dated 13.06.2006 the complainant paid an amount of Rs.3,50,000/- and Rs.1,00,000/- on 13.05.2006. As per Ex.A7 the loan disbursement letter of the ICICI Bank, the Bank had disbursed an amount of Rs.19,45,680/- and in total an amount of Rs.23,95,680/-. Though the complainant stated in his complaint that he has paid extra amount of Rs.6,00,000/- for that there is no proof to show that he had paid the said amount. It is the complainants case that the opposite parties despite receiving Rs.23,95,680 failed to complete duplex house like the walls, external internal plastering, painting, flooring, sanitary ware, doors and windows, kitchen plat form compound walls etc., and other facilities like overhead tank and common facilities like road electrical connection as promised were not provided. Though the complainant requested the opposite parties several times for the completion of the house construction specifying all these details or refund his amount with interest and compensation for which the opposite parties gave evasive replies.
16. As per clause 5 of the construction agreement, the opposite parties agreed to pay every month a sum of Rs.10,000/- as penalty till such time the construction of the house is completed and handover by 30.03.2009. The opposite parties no.1 to 3 have not completed the construction of duplex house despite receipt of the amount of Rs.23,95,680/- from the complainant and the failure of the opposite parties no.1 to 3 to carry out the construction work in accordance with the terms of the construction agreement constitutes deficiency in service on their part. The complainant is entitled to compensation for being deprived of the amount and the duplex house.
In the result this complaint is allowed directing the opposite parties no.1 to 3 jointly and severally to pay Rs.23,95,680/- with interest @ 12% per annum from the date of last payment till the date of realisation together with compensation of Rs.1,00,000/- and costs of Rs.5,000/-. The complainant shall re-convey the sale deed to the opposite parties on compliance of above directions. The registration charges and stamp duty etc., shall be borne by the opposite parties.
PRESIDENT MEMBER Dated : 13.04.2017 APPENDIX OF EVIDENCE WITNESSES EXAMINED NIL EXHIBITS MARKED For Complainants : Ex.A1 Copy of Brochure Ex.A2 Copy of Construction Agreement dated 03.11.2006 Ex.A3 Copy of Sale Deed dated 21.12.2006 Ex.A4 Supplemental Agreement dated 27.09.2008 Ex.A5 Photographs of Duplex House Ex.A6 Copy of receipt dated 13.06.2006 for Rs.3,50,000/- and receipt dated 13.05.2006 for Rs.1,00,000/- Ex.A7 Copy of Bank Statement. For the opposite parties NIL PRESIDENT MEMBER Dated : 13.04.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER