State Consumer Disputes Redressal Commission
M/S Narne Estate Pvt. Ltd., vs Smt. J.Chandravathi W/O Raghava Rao on 16 November, 2010
A A.P.STATE CONSUMER DISPUTES REDRESSAL COMMMISSION: AT HYDERABAD FA 332/2008 AGAINST C.C.No.272/2007 DISTRICT CONSUMER FORUM-III, HYDERABAD. Between: M/s Narne Estate Pvt. Ltd., Gunrock Enclave, Secunderabad 500 009. Rep. By its Chairman & Managing Director, Col. Rtd. Narne.Ranga Rao. .. Appellant/Opposite Party. And Smt. J.Chandravathi W/o Raghava Rao, Aged about 40 yrs., occ:House Wife, H.No.1-3-5E, 1st floor, Near Police Station, Mehadipatnam, Hyderabad 28, Presently R/o Nirmal Nagar, Ongole, Prakasam District, Occ: Housewife, R/o Ramngar, Ongole 523 001. .. . Respondent/Complainant. FA 337/2008 AGAINST C.C.No.276/2007 Between: M/s Narne Estate Pvt. Ltd., Gunrock Enclave, Secunderabad 500 009. Rep. By its Chairman & Managing Director, Col. Rtd. Narne.Ranga Rao. .. Appellant/OPP. Party. And Smt.J.Satyavathi Devi W/o Gandhi choudhary, C/o Gandhi Choudhary, aged about 44 years, Occ:House wife, Annapurna Nilayam, Woodnagar, Chirala, Prakasam District. .. . Respondent/Complainant. Counsel for the Appellant : M/s K.R.Koteswara Rao Counsel for the Respondent : Mr. M.Hari Babu QUORAM: SRI.SYED ABDULLAH .. .. HONBLE MEMBER.
AND SRI.R.LAKSHMI NARSIMHA RAO HONBLE MEMBER.
TUESDAY THE SIXTEENTH DAY OF NOVEMBER, TWO THOUSAND TEN.
Oral Order (As Per Sri.R.Lakshminarsimha Rao, Member) ******
1. M/s Narne Estates (P) Ltd the appellant in both the appeals. The appeals arise out of identical circumstances and similar facts and as such they are proposed to be disposed of by a common order.
2. The facts of the case are that for the purpose of purchasing a plot in East City at Beebingar, Nalgonda District, the respondent became a member in the scheme floated by the appellant company and on 7th February, 1992, paid an amount of Rs.150/- towards membership fee whereof he was allotted membership number 8899. The respondent paid an amount of Rs.15,000/- through cheque being the cost of the plot bearing number 17, block-R admeasuring 250 sq. yards.
The respondent stated to have requested the appellant on several occasions to complete the development work and quantify the development charges and subsequent upon failure of the appellant to complete the development work of the plot, got issued notice dated 18th December, 2006 with a request to quantify the registration charges and development charges. The appellant stated to have attempted to sell the allotted plot to third parties compelling the respondent approach the District Forum by filing complaint for seeking delivery of possession of the plot besides the relief for an amount of Rs.50,000/- for the loss of professional income, pain and suffering.
3. The appellant company contested the claim on the grounds that the respondent failed to pay the development charges which forms part of the total cost of the plot, on commencement of the civil work in terms of clause 10 of the application form and as a result of nonpayment of the development charges by the respondent and most of the allottees, the cost of the development work increased whereby financial hardship was caused to the appellant company in carrying out the development of the entire project. The development charges were said to have been enhanced in the year, 1999 from Rs.100/- to Rs.150/- per Sq.yard without being hedged with component of interest. The appellant company stated to have issued letters dated 11-06-1999, 9-06-2000, 10-12-2001, 21-06-2002, 6-11-2003, 15-12-2003, 7-04-2004, 11-08-2004, 31-10-2004 demanding the respondent to pay development charges of Rs.37,500/- and subsequent upon her failure to pay the amount, cancelled the allotment besides the cancellation of nearly 1000 allotments in the similar circumstances.
4. The respondent has filed her affidavit and the documents, Ex.A1 to A4. The chairman and Managing Director, of the appellant company, N.Ranga Rao has filed his affidavit and got marked Ex.B.1 to B.13.
5. The District Forum has allowed the complaint on the premise that the appellant failed to prove that the cancellation of the allotment was intimated to the respondent as also of the demand for 15% service charges. The appellant company was directed to pay interest @9% p.a. on the amount of Rs.15,150/-, paid by the respondent, besides directing it to execute the registered sale deed on receipt of the development charges of Rs.37,500/- from the respondent.
6. Aggrieved by the order of the District Forum, the opposite party has filed the appeal contending that it was entitled to charge interest and cancel the allotment on default in monthly installments committed by the respondent and that the respondent had admitted by the pleadings the service of letters on her.
7. The point for consideration is whether the cancellation of the allotment by the appellant company is arbitrary and amount to deficiency in service?
8. The appellant company admitted the respondent as its member on receipt of membership fee of Rs.150/- on 15th February, 1992 in its venture East City at Beebinagar locality of Nalgonda town and district. The appellant company allotted plot bearing number 17 in bloc R admeasuring 250 Sq. Yards on payment of a sum of Rs.15,000/- by the respondent through cheque dated 7th February, 1992. It appears the amount covered under the cheque was realized on 15th February, 1992 and on the same date the respondent was allotted membership number 8899. Both parites are in agreement as to the application of the terms and conditions laid down in the application form in relation to payment of the development charges by the respondent. Yet the parties are at loggerheads in regard to the development charges.
9. The appellant contends that the respondent committed default in payment of development charges and consequently the appellant cancelled the allotment whereas the respondent submits that the appellant had not completed the development charges nor did it quantify the development charges despite the request made therefor.
The clause 10 of the application form provides for payment of development charges on commencement of the civil work and the balance cost of the plot in installments . The component of balance cost to be paid installment is intended for those purchasers who pay the basic cost of the plot in installments and it has no application to the facts of the case as the respondent had paid the entire basic cost of the plot, Rs.15,000/- through cheque dated 7th February, 1992. The development charges have to be paid by the respondent as and when the civil works commence and the appellant has to inform the respondent about the commencement of the development work. The commencement of the civil works, quantification of the development charges and fixation of the number of installments in which the development charges are to be paid which are required to be done by the appellant company precedes the casting of obligation on the part of the respondent to pay the amount in the manner demanded and schedule fixed by the appellant company.
10. The copy of the letter dated 24-01-1996 indicates the commencement of the development works from the month of July,1994 and the commencement of the civil works was said to have been informed through news letter dated 30-06-1994 and subsequent news letters. The letter contains the particulars of the development charges that an amount of Rs.14,250/- till the month of January 1996 and there after an amount of Rs.750/- per month with a remark that non payment of the development charges as per the schedule would attract interest @15% and this letter is followed by the news letter dated 11-06-1999 with a demand for development charges of Rs.37,500/-@150/- per sq.yard on the premise that nonpayment of the development charges by the respondent and other allottees resulted in escalation of the development expenses as the appellant company had completed the development work by investing huge amounts by drawing funds from alternate sources. The new letters dated 9-06-2000, 10-12-2001, 21-06-2002, 6-11-2003, 15-12-2003, 7-04-2004, 11-08-2004, 31-10-2004 and 10-01-2006 for development charges of Rs.37,500/- were said to have been issued with a demand for development charge of Rs.32,500/- with interest @15% thereon. For these news letters there is no evidence as to their dispatch and for their service upon the respondent.
11. The appellant company had not brought any evidence as to the communication of the matter in the newsletters to the knowledge of the respondent. These letters are of least assistance to the contention of the appellant company. The appellant contended that the respondent had admitted that letters were communicated to her. The cancellation letter was sent through registered post and it was returned to the appellant. All the other letters said to have been sent to the respondent had not been sent through registered post nor there does exist any evidence to show that they had been sent by any other means of service. The respondent in the complaint has pleaded that she is not aware of commencement or completion of the development work by the appellant company.
In 4th paragraph of the complaint it was pleaded as under:
it is submitted that the complainant expressed her readiness to pay the said developmental charges but she has not received any communication from the OP for the said words in other words, the OP failed to fulfill in commencing and completing the developmental works as promised by it. While soothe complainant visited the plot in the month of February, 2006 and on physical verification it is noticed that a small quantum of development works have been completed against the OP promise to complete the works within a reasonable time from the date of allotting the plot.
12. The contention of the appellant company that the respondent has admitted the commencement of the civil works is not sustainable. What the respondent has pleaded that she has come to know in the month of February,2006 that little development work was completed and the statement as such does not mean that the respondent had the knowledge of the commencement of the civic works from the time the appellant meant her to know.
13. The respondent had got issued notice through her advocate on 18-12-2006 to the appellant company that appellant had not informed her the stage of the development activity nor the development charges were fixed and on her visit to the plot in the month of February, 2006, she had noticed that only a minor quantum of development work was completed. The letter dated 11th February, 2006 addressed to the respondent was returned, without being communicated, with the endorsement that the respondent left without instructions. The respondent has stated that she has been residing at Ongole. The appellant company contended that the respondent had avoided receiving in order to file the complaint. The appellant company had relied upon the letters 9-06-2000, 10-12-2001, 21-06-2002, 6-11-2003, 15-12-2003, 7-04-2004, 11-08-2004, 31-10-2004 and 10-01-2006 to justify the cancellation of the allotment. We have held herein above that the letters had not been communicated to the respondent.
Though the respondent was at fault in leaving the address given to the appellant company without informing the appellant company of her new address, her statement has to be considered that she has been residing at Ongole recently and without giving any notice or prior intimation about the development charges, the cancellation of the allotment is held arbitrary particularly in the light of the appellant company issuing letters with the statement in the earlier letters that the development work was completed and in contradistinction stating in the later letters that the development work was completed to the extent of 50% to 90% and it would take 3 months to complete the rest of the work.
Therefore, the cancellation of the allotment by the appellant is arbitrary and not in consonance with the terms and conditions of the application form.
14. The learned counsel for the appellant has relied upon the decision of this commission in the case reported in 2000 ALD (Cons) 108 to contend that the complainant cannot seek for registration of the plot unless he pays the development charges. In that case, the complainant was informed of the commencement of the civil works and the number of installments in which the development charges were to be paid. In the present case, the appellant had not communicated the letter to the respondent. As such the decision is not of any help to the case of the appellant company.
15. The learned counsel for the respondent has relied upon the decision of the Honble High Court in batch of W.Ps. 28246 of 2009, 5121 of 2010, 5131 of 2010 etc., in M/s Narne Constructions Private Limited, Secunderabad Vs., the Union of India and others wherein it was held that the consumer forum is empowered to entertain complaint in regard to the relief of the execution of the sale deed and its registration by the builder/developer. The decision is not relevant as the issue involved in the case is the cancellation of the allotment by the appellant. The other two decisions the learned counsel relied upon are: Bangalore Development Authority Vs., Syndicate Bank II (2007) CPJ 17 (SC) and Karnataka Housing Board Vs., R.Shankar in RP No. 3371 of 2007 decided on 19-11-2009. In Bangalore Development authoritys case (Supra), it was held that time is not essence of contract as the Brochure relating to the scheme did not mention any specific date for delivery of possession of the houses.
The complainant was not held entitled to any compensation or interest and the development Authority was directed not to claim any extra amount for execution and registration of the sale deed.
16. In Karnataka Housing Board case the Honble National Commission relied upon the decision of the Supreme Court in Secretary Bhubaneshwar Development Authority Vs., Susantha Kumar wherein it was held that penal interest is a provision to ensure the prompt payment of installments and avoid misuse of concession given by permitting payment in installments. The National Commission held that the opposite party should calculate the amount as per the terms of the agreement.
17. The learned counsel for the appellant company has contended that the appellant is entitled to interest @ 15% on defaulted monthly installments. The installments mentioned in the Membership Form are in regard to the basic cost agreed to be paid in installments. The clause 11 of the Membership Form provides for simple interest @ 15% on defaulted monthly installments, clause 11 has to be read in conjunction with clause 10 of the Membership Form and on such reading the picture emerges is that there is no condition in the Membership Form as to the interest charged in case the development charges are not paid within the time prescribed by the time. In the absence of any terms and conditions as to the imposition of interest on the defaulted development charges, the appellant company cannot seek to charge any interest on the unpaid amount under the head of development charges. The District Forum has awarded interest @ 9% on the amount paid by the respondent which in our view is not justified for a two fold reason, the respondent has not visited the office of the appellant company to know about the development charges till she had chosen to issue notice on 18th December, 2006 and secondly she has the benefit of the increase in the cost of the plot. Therefore, direction to the extent of the interest on the amount of Rs.15,150/- is liable to be set aside. The rest of the order is upheld as sustainable.
18. In the result, the appeals are allowed. The order of the District Forum is modified to the extent of imposition of interest @9% on 15,500/- against the appellant. The rest of the order is upheld. In the circumstances of the case, there shall be no order as to costs.
MEMBER MEMBER DATED: 16.11.2010 * KMK.