State Consumer Disputes Redressal Commission
Mr. Habeeb Mohammed Khan Son Of Sri Saleh ... vs 1. Ms. Aditya Housing And ... on 21 March, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana Complaint Case No. CC/234/2014 1. Mr. Habeeb Mohammed Khan Son of Sri Saleh Mohammed Khan, 5.9.1038 by A, 1st Floor, Gunfoundry, Hyderguda, Hyderabad 500 029 ...........Complainant(s) Versus 1. 1. Ms. Aditya Housing and Ingrastructure Development Corp Pvt. Ltd., Aditya Manasion, Plot No.29by A, Road, No.5, Jubilee Hills, Hyderabad 500 033 Phone No.9140 44605566 Rep. by its Chairman Managing Director 2. 2. The Chairman Managing Director, Ms. Aditya Housing and Infrastructure Development Corp. Pvt. Ltd., Aditya Mansion, Plot No.29 by A, Road No.5, Jubilee Hills, Hyderabad 500 033 ............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 : 21 Mar 2017 Final Order / Judgement STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA : AT HYDERABAD CC NO.234 OF 2014 Between : Mr.Habeeb Mohammed Khan S/o Sri Saleh Mohammed Khan, 5-9-1038/A, 1st Floor, Gunfoundry, Hyderguda, Hyderabad - 500 029. Complainant And 1) M/s Aditya Housing & Infrastructure Development Corp. Pvt., Ltd., Aditya Mansion, Plot No.29/A, Road No.5, Jubilee Hills, Hyderabad - 500 033. Rep. by its Chairman/Managing Director. 2) The Chairman/Managing Director, M/s Aditya Housing & Infrastructure Development Corp. Pvt., Ltd., Aditya Mansion, Plot No.29/A, Road No.5, Jubilee Hills, Hyderabad - 500 033. Opposite parties Counsel for the Complainant : Sri K.Vishweshwar Reddy Counsel for the Opposite parties : M/s Kochhar & Co., Coram : Hon'ble Sri Justice B.N.Rao Nalla, President & Sri Patil Vithal Rao, Member
Tuesday, the Twenty First day of March Two thousand Seventeen Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, President) *** This is a complaint filed under Consumer Protection Act, 1986 by the Complainant complaining deficiency in service on the part of the Opposite parties directing them to refund Rs.10,50,000/- paid by the complainant as part sale consideration; to pay Rs.6,25,000/- towards loss of rent for 25 months in delay in getting the mortgage released for enabling the complainant to pay the balance amount and enter into the sale deed (loss of rent @ Rs.25000/- per month for 25 months); to pay Rs.3,78,000/- towards interest @ 18% p.a. on Rs.10,50,000/-; to grant interest on the above sums @ 18% p.a.; to pay Rs.3,00,000/- to the complainant towards compensation for mental agony; to pay Rs.50,000/- towards costs of the complaint and also award any other reliefs with alternative prayer directing the Ops to get the mortgage released from GHMC and execute the registered sale deed in favour of the complainant conveying the Apartment No.109 in Floor No.1 of Empress heights, saleable area 1560 sft., along with 1 car parking and proportionate undivided share in the land, in Aditya Empress heights, Shaikpet, Jubilee Hills, Hyderabad by receiving the balance sale consideration.
2. The case of the complainant, in brief, is that the Ops taken-up the project to construct residential township known as Aditya-Empress Heights, Shaikpet, Jubilee Hills, Hyderabad. It was represented that they are one of the leading company engaged in the business of real estate and Township development. They claimed that they obtained all necessary approvals and permissions from the local authorities including the approved lay-out for the above Township. The complainant intended to purchase the flat No.109 in Floor No.1 of Empress Heights for a consideration of Rs.54,59,000/- which is declared to have free from all encumbrances and mortgages.
3. Relying on the representations, on 26.03.2012 and 01.04.2012 the complainant personally visited the apartment proposed to be purchased by him, who in turn told that the flat No.109 is available for sale. When the complainant again visited the site in the afternoon of 09.04.2012 with his family, the site engineer informed that the entire first floor was mortgaged to GHMC. Immediately, the complainant visited the office of Ops and sought clarification from them as to why the same was not brought to his notice, to which, the Ops evaded to give any explanation, instead, informed the complainant that they will get the mortgage released very soon and execute the sale deed in favour of the complainant.
4. On the assurance of the marketing personnel of Ops, the complainant visited the Head Office of Ops again on 09.04.2014 and met senior official by name C.Sai Kumar Naidu, who assured the complainant that the construction is in final stage and they have already applied to GHMC for releasing the mortgage and GHMC may release the mortgage anytime during the month of August 2012. Accordingly, the complainant paid the amount of Rs.1050000/- on different dates. In turn, the Ops allotted the flat No.109 in Floor No.1 of Empress Heights, saleable area of 1560 sft., along with one car parking to the complainant. It was informed by the Ops that the balance sale consideration is payable basing on the payment progress reports provided by them.
5. The complainant informed the Ops that he will instruct his banker to release the loan amount to the Ops only after the mortgage on the flat is released by GHMC. The Ops sent letter dated 26.04.2012 with new payment terms and conditions. Confused by the same, complainant called up the marketing team and sought clarification. The Marketing Manager by name Nirav Mehta informed the complainant to ignore the same as it is a standard letter sent to all the members, hence, asked the complainant to get release the balance payment of Rs.10,00,000/-, which, he conceded to, on 06.06.2012 and 07.07.2012 as stated above.
6. Complainant received project progress and payment status reports on 12.05.2012 and 05.06.2012 which they got issued without getting released the mortgage from GHMC. Accordingly, complainant got started the loan processing for 80% agreed amount, which was sanctioned by Axis Bank on 02.06.2012. However, the bank personnel asked to get the mortgage released from GHMC. The complainant was eagerly waiting to hear from the Ops on the release of mortgage. Complainant, expecting that his dream flat would be ready, started his relocation plans as he was residing 25 kms away from his office and was trying to shorten the distance by 18 kms. Complainant also started searching the nearby schools for his kids.
7. To his surprise, he received an e-mail dt.07.08.2012 from customer relation department to release the payment of Rs.35,40,000/-, upon which, he sought clarification from the Ops as to how they can insist the payment without getting the mortgage released from GHMC and as against the revised payment schedule, but there was no response. In the meanwhile, he relocated to Hyderguda, by paying high rentals. Complainant also sent a reply e-mail to the Ops on 08.08.2012. While so, complainant was busy with his job and working abroad on international assignments, he received harassing and impolite e-mails from the Ops on 28.08.2012, 18.09.2012 and 09.10.2012 which impacted his official work also. It was assured to release the mortgage in March 2013 but with no possession commitment date. On 13.10.2012, when he met the officials, it was assured that they will not insist payment until the mortgage is released by the GHMC and that they will get the same released within one month.
8. Complainant sent e-mail on 03.12.2012 requesting the confirmation in respect of mortgage release, expected date and possession dates, to which, they failed to respond. When he visited the site, it was informed by the site engineer that the completion of the construction may get delayed for years. All of sudden, the complainant received a letter dated 28.07.2014 from Ops that they are cancelling the flat and forfeiting the amount of Rs.10,50,000/- on the ground of default in payment of balance consideration by referring to letters dated 16.01.2013, which the same is not received by the complainant.
9. Though years together have elapsed, the building has not been completed and the Ops have now resorted to cancel the allotment and withholding the entire amount paid by complainant which amounts to deficiency of service and negligence. Hence the complaint with a prayer to direct the Ops to refund Rs.10,50,000/-; Rs.6,25,000/- towards the loss of rent for 25 months of delay @ Rs.25,000/- p.m. in getting the mortgage released; to pay Rs.3,78,000/- towards interest @ 18% p.a. on Rs.10,50,000/-; to pay Rs.3,00,000/- towards compensation for mental agony and costs of Rs.50,000/- or in the alternate to direct the Ops to get the mortgage released from GHMC and execute the sale deed in his favour conveying the apartment No.109 in Floor No.1 of Empress Heights, saleable area 1560 sft, along with 1 car parking and proportionate undivided share in the land, by receiving the balance sale consideration.
10. Opposite parties filed written version contending that the complaint is not maintainable either in law or on facts as there is no consumer dispute. There is no privity of contract between OP No.2 and complainant, who is the Chairman of OP No.1 company. It is settled law that Directors cannot be held liable for each and every act of the Company in as much as the Company is a separate/distinct legal entity. Complainant is not a consumer within the definition of the Act. The complainant has not availed any services from the Ops to file the present complaint claiming for deficiency in service or unfair trade practice. The relationship between the parties is contractual in nature and the disputes, if any, have to be contested before competent civil court. For his wrong, the present complaint is filed and the complainant cannot acquire a right of action from his own wrong.
11. The complainant failed to adhere to the terms of agreed payment schedule which resulted in cancellation of allotment and forfeiture of amount. They admitted taking up of construction of township known as Aditya-Impress Heights, Shaikpet, Jubilee Hills, Hyderabad. It is a common practice that certain flats in any project under construction will be mortgaged to GHMC and will be later released from mortgage once the construction is completed. During continuance of mortgage, the mortgaged flats cannot be sold, however, agreement of sale or booking can be done with the undertaking that it can be sold subject to release or mortgage.
12. They agreed to sell the subject flat to the complainant for a consideration of Rs.54,59,000/-. The booking form has been executed by complainant and OP No.1 wherein it clearly stipulates that in case of cancellation, the booking amount will be forfeited. Thereafter, the OP No.1 has issued a flat booking letter dt.10.04.2012 which contained terms and conditions including payment schedule. By making payments, complainant accepted the terms and conditions. Clause-1 of booking terms stipulate that in case of cancellation prior to initial 10% payment, Rs.5.00 lakhs will be forfeited from the booking amount. Further, as per clause-2, timely payment of the instalments as per the work progress is compulsory and in case of delay in making payments for first 30 days, an interest of 18% will be levied and beyond 30 days will attract an interest of 24% and that non-payment for 3 months after the due date shall lead to the cancellation of the flat and normal forfeiture clause shall apply.
13. The sale agreement would be entered into only on payment of 30% of the total flat cost. They denied to have absolute rights to convey the apartment No.109 in Floor No.1 of Empress Heights. Complainant made booking of flat as per his choice. They denied the approach of complainant seeking clarification of mortgage from them. They never concealed the fact that flat No.109 was mortgaged to GHMC. It was also informed to the complainant that as the said flat being under mortgage, is not eligible for bank loan. However, complainant has liked the location of the said flat very much and he indeed wanted to purchase a flat only on the 1st floor and therefore agreed that he will not be opting for bank loan but will pay the entire sale consideration out of his own funds, upon which, they issued booking letter dated 10.04.2012.
14. After realizing that he is not in a position to pay the balance outstanding dues either through his own funds or arranging the same from some sources, the complainant started blaming the OP No.1 with intention of claiming refund of advance amounts, knowing fully well that such amount cannot be refunded as per the terms of booking. They denied meeting of complainant with any of their officials. They addressed e-mails dated 07.08.2012, 28.08.2012, 18.09.2012 and 09.10.2012 calling for the payment of outstanding dues of Rs.35,40,400/- along with interest as per the agreed payment schedule. By which time, the work pertaining to laying of 7th slab was completed and commencement of brick work/plastering was started. Complainant did not have adequate amount and had addressed an e-mail dated 08.08.2012 alleging the alteration in payment schedule. The complainant further addressed e-mails on 31.08.2012, 18.09.2012, 08.11.2012, 29.11.2012, 03.12.2012 and 07.12.2012 making further false and baseless allegations and averments which were never raised in correspondence with the OP No.1 and inasmuch were mere dilatory tactics to delay the payment.
15. Though ample time was given by OP No.1, complainant failed to make use of the same. In fact, as per flat booking letter, non payment for 3 months after the due date shall lead to cancellation of flat but they did not do so considering that complainant may make payment. OP sent e-mail dated 04.09.2012 along with project photographs asking the complainant to clear the outstanding dues. They also sent e-mails dt.09.10.2012 and 21.12.2012 requesting the complainant to clear the dues informing that if not paid, it will have no option but to cancel the booking. Project progress and payment status reports along with photographs were being regularly sent to the complainant.
16. The complainant was due Rs.44,09,000/- plus delayed payment charges to the OP No.1 and therefore, they were constrained to issue a letter informing the complainant that due to default in payment of amounts, they are left with no option but to invoke the terms of booking letter dt.10.04.2012 and cancel the flat and forfeit the amount paid by the complainant which do not amount to deficiency of service or negligence. Hence, prayed to dismiss the complaint with exemplary costs.
17. On his behalf, the Complainant filed his affidavit and the documents, Exs.A1 to A32. On behalf of the Opposite parties, its Executive Director by name Thota Satyanarayana has filed his affidavit.
18. The points that arise for consideration are :
i) Whether there is any 'deficiency in service' on the part of the Opposite parties and whether the Complainant is entitled for the reliefs as prayed for?
ii) To what relief ?
19. POINT No.1: There is no dispute that the Complainant approached the OP No.1 company for purchase of flat bearing No.109 in Floor No.1 of Empress Heights for a consideration of Rs.54,59,000/- and in consideration of the same, paid an amount of Rs.10,50,000/- on different dates as is evident from Ex.A2, A9 and A10. It is the case of the complainant that the Ops have offered the subject flat without disclosing the fact that the same is under mortgage to the GHMC, which the Ops deny the same.
20. The Opposite parties would contend that as per Ex.A5, in case of cancellation, Rs.5 lakhs will be forfeited. Even non payment of instalments in time for 3 months after the due date will lead to cancellation of the flat. It would further contend that the Complainant failed to make payment of the monies as per the schedule which resulted in cancellation of the booking and forfeiture of the amount. It would also contend that the complainant opted for outright payment fully aware of the fact that the flat is under mortgage to the GHMC and thereby failed to make payment, compelling them to cancel the booking.
21. The Ops would also contend that the complainant is not a consumer and there arose no consumer dispute and that there is no deficiency in service on their part, which is denied by the complainant. A perusal of Ex.A14 goes to show that the complainant agreed to purchase the subject flat by paying 20% of the amount in cash and 80% of the amount by obtaining loan from bank subject to release of mortgage by August 2012 and delivery of possession in September 2012. The same had been reiterated time and again by the Complainant through his e-mails addressed to the Opposite parties from time to time under Ex.A14, A16, A19, A20, A21, A24, A25, A27 and A28. For all the letters addressed by the complainant, there is no clarification from the Ops as to release of mortgage and delivery of possession except making demand for payment of the balance sale consideration as per schedule.
22. It is not in dispute that the Ops have informed the project progress and payment status report as is evident from Ex.A6, A8 and A11 but the perusal of the progress photographs, nothing can be evaluated as to the progress of the project except the skeleton structures. Not even a single photograph is filed to show that the flat is complete in any of the aspect to claim that the progress is made as per the schedule time and seek payment of sale consideration. Even to the letters addressed by the complainant from time to time, there is no response from the Opposite parties.
23. A perusal of Ex.A2 application made by the complainant dated 09.04.2012 goes to show that the complainant opted for bank loan for payment of sale consideration as is evident from the mode of payment contained therein. From the perusal of Ex.A5, under clause-1, it is mentioned "no cancellation is permitted once initial 10% payment is made". In spite of making repeated requests by the complainant to inform the date of release of mortgage and delivery of possession of the subject flat, the Ops failed to adhere. From the perusal of Ex.A7 home loan sanction letter dated 02.06.2012, issued by the Axis Bank, it is evident that the complainant is sanctioned the home loan amount of Rs.45 lakhs with EMI @ Rs.46,448/- repayable in 240 months. The agreed sale consideration of the subject flat is Rs.54,59,000/- as against which, the Complainant had already paid an amount of Rs.10,50,000/- and if the home loan amount is added to the same, it would suffice the entire payment.
24. The Opposite parties failed to discharge their part of contract by placing on record that the subject flat had progressed as per the time schedule except filing the photographs showing skeleton structures, nothing is placed on record. Even under letters addressed in the form of e-mails from time to time, the complainant informed the Ops that the bank is ready to release the loan amount provided the mortgage is got released from the GHMC, to which, there was no proper response from the Ops, which certainly would amount to deficiency in service and negligence.
25. As can be seen from the documents filed, the complainant established deficiency of service on the part of the Opposite parties as defined under section 2(1)(g) of the Consumer Protection Act, 1986 which reads as follows:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;
26. Except making bald and vague allegations, no concrete material is brought on record by the Ops to show that they completed the construction of the flat in all aspects from time to time as per schedule and that the flat is got released under mortgage from the GHMC so as to release and make payment of the balance sale consideration. Even otherwise, we may state that Section-5 of the Andhra Pradesh Apartment (Promotion of Construction and Ownership) Act, 1987 contemplates that "A promoter who intends to transfer any apartment shall before, accepting any sum of money as advance payment or deposit, which shall not exceed twenty percent of the price, enter into a written agreement of sale with the intending transferee and the shall be registered as a document compulsorily registerable under clause (b) of sub-section (1) of Section-17 of the Registration Act, 1908" which is not done in the present case.
27. Admittedly, the Opposite party No.1 cancelled the flat booking by letter dated 28.07.2014 under Ex.A31. Much prior to cancellation, the complainant, under Ex.A27 e-mail had requested the Opposite parties either to stick to the condition at the time of deal or refund the money back with interest, which is not in denial and there is no response to the same. No steps were taken by the Ops therefrom to answer the queries of the complainant but instead went on requesting him to pay the balance amount without showing any bonafides. In support of the act of the Ops in forfeiting the amount, the counsel for the Ops rely on I (2015) CPJ 365 (NC). We have gone through the said order. The facts contained therein differ from the facts in the case on hand and hence, the same cannot be made applicable to the case on hand.
28. The other contention which the Opposite parties would raise is that the complainant is not a 'consumer'. In this regard, we may state that in the matter of Kishore Lal Vs. Chairman, Employees State Insurance Corporation, reported in 2007 (4) SCC 579, the Hon'ble Supreme Court of India has observed as follows:
"7. The definition of "consumer" in the CP Act is apparently wide enough and encompasses within its fold not only the goods but also the services, bought or hired, for consideration. Such consideration may be paid or promised or partly paid or partly promised under any system of deferred payment and includes any beneficiary of such person other than the person who hires the service for consideration. The Act being a beneficial legislation, aims to protect the interests of a consumer as understood in the business parlance. The important characteristics of goods and services under the Act are that they are supplied at a price to cover the costs and generate profit or income for the seller of goods or provider of services. The comprehensive definition aims at covering every man who pays money as the price or cost of goods and services. However, by virtue of the definition, the person who obtains goods for resale or for any commercial purpose is excluded, but the services hired for consideration even for commercial purposes are not excluded. The term "service" unambiguously indicates in the definition that the definition is not restrictive and includes within its ambit such services as well which are specified therein.....".
In the case on hand, the complainant falls within the meaning of above definition and he is a 'consumer' as defined under the Act. The complainant filed his complaint on 25.08.2014 immediately after cancellation of the flat booking, hence, within the period of limitation from the date of cause of action. We do not find any fault on the part of the complainant since he had already paid the 20% of the sale consideration as contemplated under Section-5 of the Andhra Pradesh Apartments (Promotion of Construction and Ownership) Act, 1987 and also expressed his willingness to get release the balance sale consideration immediately after release of the mortgage of the flat from the GHMC which is a condition precedent for the bank.
29. There is any amount of deficiency and laches on the part of the Ops in not coming forward with bonafide to show that the subject flat is completed in all aspects and they even failed to file any paper showing release of mortgage though they promised to get the same released in March 2013 itself. Having failed to comply the agreed terms on their part, the Opposite parties cannot turn round and contend that the complainant is at fault. As such, the act of the Ops in cancelling the booking is unfair and untenable. For the aforesaid reasons, we answer the point framed for consideration at paragraph No.18, supra, in favour of the Complainant and against the Opposite parties.
30. POINT No.2 : In the result, we allow the complaint of Complainant in part and direct the Opposite parties to refund the amount of Rs.10,50,000/- together with interest @ 12% p.a. from the date of last payment till realization together with compensation of Rs.1,00,000/- and costs of Rs.5,000/-. Time for compliance : four weeks.
PRESIDENT MEMBER Dated: 21.03.2017 APPENDIX OF EVIDENCE WITNESSES EXAMINED For Complainant : For Opposite parties : Affidavit evidence of Habeeb Affidavit evidence of Sri Thota Mohammed Khan as PW1. Satyanarayana, on behalf of Ops. EXHIBITS MARKED For Complainant : Ex.A1 is the copy of brochure and lay-out of Aditya Empress Heights. Ex.A2 is the copy of registration and booking form dated 09.04.2012. Ex.A3 is the copy of pricing confirmation from, dated 09.04.2012.
Ex.A4 is the copy of cheque bearing No.233937, dated 09.04.2012 for Rs.50,000/- issued to the Ops by the complainant.
Ex.A5 is the copy of flat booking letter dated 10.04.2012.
Ex.A6 is the copy of Project progress and payment status report, dated 12.05.2012.
Ex.A7 is the copy of Power Loan Sanction letter dated 02.06.2012 by the Axis Bank Ex.A8 is the copy of Project Progress and Payment Status report dated 05.06.2012.
Ex.A9 is the copy of cheque bearing No.287987, dated 06.02.2012 for Rs.5,00,000/- issued to the Ops by the complainant.
Ex.A10 is the copy of cheque bearing No.287988 dated 07.07.2012 for Rs.5,00,000/-, issued by the Complainant to the Ops.
Ex.A11 is the copy of Project Progress and Payment status report, dated 11.11.2012.
Ex.A12 is the copy of application made by the complainant to the Registrar of Companies under the RTI Act.
Ex.A13 is the copy of e-mail dated 07.08.2012 from the Ops to the complainant.
Ex.A14 is the copy of e-mail dated 08.08.2012 from the Complainant to the Ops.
Ex.A15 is the copy of e-mail dated 28.08.2012 from the Complainant to the Ops.
Ex.A16 is the copy of e-mail dated 31.08.2012 from the Complainant to the Ops.
Ex.A17 is the copy of e-mail dated 04.09.2012 from the Ops to the Complainant.
Ex.A18 is the copy of e-mail dated 18.09.2012 from the Ops to the Complainant.
Ex.A19 is the copy of e-mail dated 18.09.2012 from the Complainant to the Ops.
Ex.A20 is the copy of e-mail dated 18.09.2012 from the Ops to the Complainant.
Ex.A21 is the copy of e-mail dated 18.09.2012 from the Complainant to the Ops.
Ex.A22 is the copy of e-mail dated 09.10.2012 from the Ops to the Complainant.
Ex.A23 is the copy of e-mail dated 06.11.2012 from the Ops to the Complainant.
Ex.A24 is the copy of e-mail dated 08.11.2012 from the Complainant to the Ops.
Ex.A25 is the copy of e-mail dated 29.11.2012 from the Complainant to the Ops.
Ex.A26 is the copy of e-mail dated 29.11.2012 from the Ops to the Complainant.
Ex.A27 is the copy of e-mail dated 03.12.2012 from the Complainant to the Ops.
Ex.A28 is the copy of e-mail dated 07.12.2012 from the Complainant to the Ops.
Ex.A29 is the copy of e-mail dated 21.12.2012 from the Ops to the Complainant.
Ex.A30 is the copy of e-mail dated 25.03.2013 from the Ops to the Complainant.
Ex.A31 is the copy of letter dated 28.07.2014 addressed by the Ops to the Complainant cancelling the booking of the flat.
Ex.A32 is the copy of letter dated 13.01.2013 addressed by the Complainant to the Registrar of Companies for getting the details of the Directors of the Ops and informing the fraudulent actions of the Ops.
For Opposite parties :
NIL.
PRESIDENT MEMBER Dated: 21.03.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER