State Consumer Disputes Redressal Commission
K.Rajiv Hyderabad vs M/S.Kamala Builders And 6 Others ... on 5 December, 2008
BEFORE THE A BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD. C.D.No. 32 OF 2006 Between: K.Rajiv, S/o.K.Anand, Aged 26 years, Occ:Service, R/o.U.S.A., represented by Its G.P.A. Holder Mr.K.V.Babji, Aged 60 years, Occ:Retd. Addl. Supdt. Of Police, R/o.Plot No.48, Sri Ayyappa Society, Madhapur, Hyderabad. ..Complainant. And 1. M/s.Kamala Builders, A Proprietary concern, Represented by its proprietor, Mr.C.V.Subramanyam S/o.C.Venkatesan, aged 49 years, Occ:Business, R/o.6-3-88/9, Panjagutta, Hyderabad. 2. Mr.P.Narsing Rao, S/o.P.Narayana Rao, aged 49 years, Occ:Business, R/o.H.No.23-25/2, Jyothinagar, Ramachandrapuram, Hyderabad-500 032. 3. Smt.V.Kamala, W/o.V.Venkateshwar Rao, aged 46 years, Occ:Housewife, R/o.Q.No.265/A, B.H.E.L. Township Ramachandrapuram, Hyderabad-32. 4. Smt.B.Manjula, W/o.B.Bhaskar Reddy, aged 41 years, Occ:Housewife, R/o.H.No.4-61, Ramachandrapuram, Hyderabad-500 032. 5. Mr.Zahed Ali, S/o.Mahabub Ali, aged 41 years, Occ:Business, R/o.H.No.2-54/1, Guttala Begumpet Village, Madapur Post, Jubilee Hills, Hyderabad. 6. Smt.V.Vijaya, W/o.V.Krishna Rao, aged 37 years, Occ:Housewife, R/o.H.No.23-47/1, Jyothinagar, Ramachandrapuram, Hyderabad-32. 7. Mr.L.Veera Bhadra Rao, S/o.L.Venkateshwar Rao, Aged 47 years, Occ:Business, R/o.Plot No.5, Jyothinagar, Ramachandrapuram, Hyderabad-32. ..Opp.Parties. Counsel for the Complainants: M/s. K.Ram Mohan Rao & Mr.P.Naga Pradeep. Counsel for the Opposite parties: Mr.T. Laxminarayana-O.P.1 Mr.M.Ramaswamy-O.Ps 2 to 7 QUORUM : THE HONBLE JUSTICE SRI D.APPA RAO, PRESIDENT. AND SMT.M.SHREESHA, MEMBER.
FRIDAY, THE FIFTH DAY OF DECEMBER, TWO THOUSAND EIGHT.
ORAL ORDER: (Per Smt.M.Shreesha, Honble Member).
*** The brief facts as set out in the complaint are that opposite party No.1 is the developer and opposite parties 2 to 7 are the land owners of total land admeasuring 790 sq. yds. in S.No.166 covered by H.No.1-4/1 in Balanagar Mandal, Ranga Reddy District. Opposite party No.1 and opposite parties 2 to 7 entered into a Development Agreement on 5-7-1997 and as per the terms of the said agreement, opposite party No.1 is entitled for 60% of the constructed area and the owners are entitled for 40% of constructed area. Opposite party No.1 has constructed a building consisting of ground plus one floor and offered to sell 60% of the constructed area falling to his share to the complainant. He also informed the complainant that the building was regularized under B.R.S. The complainant accepted to purchase the same for a total sale consideration of Rs.45,00,000/- and the constructed area being 8,000 sq. feet spread over 2 floors admeasuring 4,000 sq. feet in each floor. 60% area falling to the share of opposite party No.1 comes to 4800 sq. ft. in two floors i.e. 2,400 sq. ft. in each floor and is located to the southern side of the building. Opposite party No.1 executed an agreement of sale on 13-2-2004 in favour of the complainant. The complainant paid Rs.15,00,000/- at the time of agreement. The area promised to be sold by opposite party No.1 under the said agreement is described in the schedule. The complainant paid the agreed consideration in four instalments for which the opposite party gave a reply dated 12-10-2005.
The complainant submits that opposite party No.1 handed over possession of the schedule property on 12-10-2005 and thereafter inspite of repeated requests did not arrange for execution of sale deed. On 10-4-2006, the complainant got issued a legal notice to opposite party No.1 to execute the sale deed and opposite party No.1 sent a reply expressing his inability to register the sale deed because of non-cooperation of land owners. The complainant submitted that the land owners i.e. opposite parties 2 to 7 are bound by the terms of Development Agreement and clause 8(ii) and 10 of Agreement of sale. Opposite parties 2 to 7 have undertaken to execute G.P.A. under clause 15 of the Development Agreement. Believing the representations of opposite party No.1 and recitals made by opposite parties 2 to 7 under Development Agreement dated 5-7-1997 the complainant entered into agreement of sale dated 13-3-2004 and paid the total consideration. He submits that the opposite parties are liable to execute the sale deed as per the terms of the Development Agreement dated 5-7-1997 and also as per the terms of agreement of sale dated 13-3-2004. Inspite of repeated requests, opposite parties did not execute the registration, the complainant, therefore has filed this complaint seeking directions to the opposite parties jointly and severally to execute the sale deed in his favour in respect of the schedule property and grant damages at 18% p.a. on Rs.45,00,000/- from the date of filing of complaint till the date of realization and also damages of Rs.25,000/- towards mental agony.
Opposite party No.1 filed counter stating that he had entered into a Development Agreement dated 5-7-1997 with opposite parties 2 to 7, who are the land owners.
After construction of the building, he entered into an agreement of sale dated 13-3-2004 with the complainant herein for sale of the schedule property. He submitted that he received the entire sale consideration of Rs.45,00,000/- from the complainant and has handed over physical possession of the schedule property.
The complainant is in occupation and enjoyment of the schedule property from 12/10/2005 till now. The land owners, i.e. opposite parties 2 to 7 are not co-operating for execution of the sale deed and he has no objection for executing the sale deed in favour of the complainant or his nominees and submitted that there is no deficiency of service on his behalf.
Opposite parties 3, 4, 6 and 7 filed counter affidavit stating that the complainant is not a consumer and does not fall within the definition of Section 2(1)(d) of Consumer Protection Act, 1986 and therefore this complaint is not maintainable before this Commission. The relief sought by the complainant is in the nature of specific performance of agreement and the same should be filed before a competent civil court. Opposite parties also submitted that the complaint is barred by limitation and has to be dismissed on this ground alone. They submitted that this complaint is filed more than 2 years since the date of alleged agreement of sale with opposite party No.1 and hence it is barred by limitation. They deny all other allegations made in the complaint and deny that they have authorized the developer to sell 60% of super built up area as per clause 11 of the Development Agreement. They deny that they have undertaken to execute G.P.A. in favour of the developer under clause 15 of the development agreement. They further contend that the Development Agreement is not properly stamped and registered and as such no rights accrue to the opposite party or the complainant and that the complainant is not entitled for any relief and prayed for dismissal of the complaint.
Opposite party No.7 has filed his evidence affidavit stating that he was cheated by opposite party No.1 along with opposite parties 4, 5 and 6 and played fraud on him and the documents have been fabricated. He submitted that he is not a party to the agreement of sale as alleged by the complainant and denies that he has ever authorized for sale of 60% of super built up area as per clause 11 of the Development Agreement and denied that they undertook to execute G.P.A. as per clause 15 of the Development Agreement and prayed for dismissal of the complaint.
The complainant filed his affidavit by way of evidence and got marked Exs.A1 to A7. Opposite parties filed their affidavits by way of evidence but did not choose to file any documents.
The brief point that falls for consideration is whether there is deficiency of service on behalf of the opposite parties and if the complainant is entitled to the relief sought for in the complaint?
Complainant has reiterated the facts of the complaint in his evidence affidavit and both sides filed written arguments.
Ex.A1 is the Development Agreement entered into between opposite party No.1 and opposite parties 2 to 7 and this is dated 5-7-1997 wherein it is clearly stated that the builder would develop the schedule property. Ex.A2 is the agreement of sale dated 13-3-2004 between opposite party No.1 and complainant in which it was stated that the builder is entitled to sell 60% of the built up area and offered to sell 4800 sq. ft. i.e. 2,400 sq. ft. in each floor for a total sum of Rs.45,00,000/- and the complainant has paid an advance of Rs.15,00,000/- to opposite party No.1 and he has acknowledged the same and passed receipt and the balance has to be paid in instalments before the end of October, 2005.
In this agreement of sale, it is clearly stated that the builder has promised to register the schedule property in favour of the complainant immediately after receipt of final instalment totalling to Rs.30,00,000/-. Ex.A3 reciept is for Rs.45,00,000/- which the complainant had paid to opposite party No.1 in pursuance of the agreement executed by the builder in favour of the complainant in full and final settlement of all demands. Ex.A4 is the letter of handing over possession dated 12-10-2005. Ex.A5 is the copy of legal notice dated 10-4-2006 got issued by the complainant to the opposite parties. Ex.A6 is the reply notice dated 20-4-2006. Ex.A7 is the G.P.A. given by the complainant to his uncle Sri K.V.Babji dated 25-1-2006.
The facts not in dispute are that opposite party No.1 is a developer and opposite parties 2 to 7 are the land owners of total land admeasuring 790 sq. yds. in S.No.166 covered by H.No.1-4/1 in Balanagar Mandal, Ranga Reddy District. In the reply notice dated 20-4-2006 i.e. Ex.A6, opposite party No.1 builder has admitted that the complainant has paid the entire amount to him and that land owners 2 to 7 are not co-operating. The main contention of opposite parties 2 to 7 is that the complainant is not a consumer and does not fall within the purview of Consumer Protection Act. We rely on the decision of the Apex court in III (2008) CPJ 48 (SC) in FAQIR CHAND GULATI v. UPPAL AGENCIES PVT. LTD., & ANR. wherein the Apex Court discussed as follows:
In a true joint venture agreement between the land-owner and another (whether a recognized builder or fund provider), the land-owner is a true partner or co-adventurer in the venture where the land owner has a say or control in the construction and participates in the business and management of the joint venture, and has a share in the profit/loss of the venture.
In such a case, the land owner is not a consumer nor is the other co-
adventurer in the joint venture, a service provider. The land owner himself is responsible for the construction as a co-adventurer in the venture. But such true joint ventures are comparatively rare. What is more prevalent are agreements of the nature found in this case, which are a hybrid agreement for construction for consideration and sale and are pseudo joint-ventures.
Normally a professional builder who develops properties of others is not interested in sharing the control and management of the business or the control over the construction with the land owners. Except assuring the land owner a certain constructed area and/or certain cash consideration, the builder ensures absolute control in himself, only assuring the quality of construction and compliance with the requirements of local and municipal laws, and undertaking to deliver the owners' constructed area of the building with all certificates, clearances and approvals to the land owner.
Joint venture is frequently defined as an association of two or more persons formed to carry out a single business enterprise for profit. More specifically, it is in association of persons with intent, by way of contract, express or implied, to business venture for joint profit, for which purpose such persons combine their property, money, effects, skill, and knowledge, without creating a partnership, a corporation or other business entity, pursuant to an agreement that there shall be a community of interest among the parties as to the purpose of the undertaking and that each joint venturer must sand in the relation of the prinicipal, as well as agent, as to each of the other coventurers within the general scope of the enterprise.
In view of the aforesaid judgement which applies to the facts in the instant case, we hold that the complainant is a consumer and entitled to maintain the complaint.
The next contention of opposite parties 2 to 7 is that the complaint is barred by limitation. We observe from the record that the legal notice, Ex.A5, is dated 10-4-2005 and the Agreement of Sale is dated 13-3-2004. We observe from the record that the legal notice got issued by the complainant for which opposite party No.1 has issued a reply on 20-4-2006 is within two years from the date of Agreement of sale and the complaint has also been filed on 26-6-2006, therefore, we hold that the complaint is within limitation.
We also observe from the record that Ex.A3 receipt evidences that the complainant has paid the entire amount of Rs.45,00,000/- to opposite party No.1 and opposite party No.1 also submits in his affidavit and written arguments that he is ready and willing to execute the sale deed provided opposite parties 2 to 7 co-operate with him. The complainant cannot be made liable for any internal differences between the opposite parties and taking into consideration the documents on record, i.e. Exs.A1 to A7 and also clause 15 of the Development Agreement which reads as under:
The first party shall execute a G.P.A. and get it registered in favour of the second party or its nominees to enable the second party to make application and obtain permissions and sanction from M.C.H., Electricity Department, Drainage, Water supply Departments and any other departments and also to enable him to commence the construction expeditiously and authorizing the second party to enter into the agreement of sale on executing registered Sale Deed in respect of undivided share of land and flats proposed to be constructed on the schedule property excluding portion reserved the owners together with the corresponding land.
in which opposite parties 2 to 7 have undertaken to execute the G.P.A. in favour of the developer and clause 11 of the Development Agreement in which the developer is authorized to enter into agreements and collect advances from third parties against areas falling to his share, we are of the considered opinion, not executing the sale deed by opposite parties 2 to 7 is an act of deficiency in service. Because of non co-operative attitude of opposite parties 2 to 7, registration could not be done and they knew fully well that the builder and the complainant entered into an agreement where they have to join for execution of sale deed. Undoubtedly there is a delay on the part of the owners in not executing the sale deed and this amounts to deficiency and necessarily they have to pay compensation for the latches committed by them. Considering the delay is on behalf of opposite parties 2 to 7, we are of the view that an amount of Rs.1,00,000/- should be awarded towards compensation which we feel reasonable together with costs of Rs.5,000/-.
In the result, we allow this complaint directing opposite parties 1 to 7 to execute the sale deed as per the Agreement of sale together with compensation of Rs.1,00,000/- to be paid by opposite parties 2 to 7 only and costs of Rs.5,000/- within a period of four weeks from the date of receipt of order.
PRESIDENT. LADY MEMBER.
JM Dt.05-12-2008 //APPENDIX OF EVIDENCE// Witnesses examined for Complainant: Opposite Parties:
-Nil- -Nil-
Exhibits marked on behalf of the complainant:
Ex.A1-Development Agreement entered into between opposite party No.1 and opposite parties 2 to 7, dated 5-7-1997.
Ex.A2-Agreement of sale dated 13-3-2004 between opposite party No.1 and the complainant Ex.A3-Reciept is for Rs.45,00,000/-.
Ex.A4-Letter of handing over possession dated 12-10-2005.
Ex.A5-Copy of legal notice dated 10-4-2006.
Ex.A6-Reply notice dated 20-4-2006.
Ex.A7-G.P.A. given by the complainant to his uncle Sri K.V.Babji dated 25-1-2006.
Exhibits marked on behalf of the Opp.parties:
-NIL-
PRESIDENT. LADY MEMBER.
Dt.05-12-2008.
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