State Consumer Disputes Redressal Commission
Lanco Hills Technologies Park Pvt. ... vs Smt.Sireesha Choppa W/O.Sreenivasa ... on 13 September, 2012
BEFORE THE A BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD. FA.No.1020/2011 against C.C.No.1076/2010 District Forum-I, Hyderabad. Between Lanco Hills Technologies Park Pvt. Ltd., Rep. by S.Venkata Rama Reddy, Director, Affairs, Lanco Hills, Plot No.565, Phase 3, Road No.92, Jubilee Hills, Hyderabad-500 033. ..Appellant/ Opp.party 1 And 1. Smt.Sireesha Choppa W/o.Sreenivasa Reddy Kanamatha Reddy, Hindu, aged about 31 years, Occ:Pvt. Employee. 2. Sreenivasa Reddy Kanamatha Reddy S/o.Madhava Reddy, Hindu, aged about 38 years, Occ:Pvt. Employee. Both are presently residing 17063, Courville drive Northville Mi-48168, United States of America, Rep. by GPA holder Choppa Prabhakar Reddy S/o.Venkata Subba Reddy, aged 62 years. Occ:Retd.Employee R/o.Flat No.302, Aditya Pride Kapadia Lane, Somajiguda, Hyderabad. Respondents/ Complainants. 3. Bank of Baroda, Khairtabad Branch, Rep. by its Branch Manager. Respondents/ Opp.party No.2 Counsel for the Appellant : Mr.N.Manohar Counsel for the Respondents : Smt.K.Sesharajyam & Associates-R1 and R2 M/s.J.Ch.Y.Narasimham-R3 FA.No.1021/2011 against C.C.No.1077/2010 District Forum-I, Hyderabad. Between Lanco Hills Technologies Park Pvt. Ltd., Rep. by S.Venkata Rama Reddy, Director, Affairs, Lanco Hills, Plot No.565, Phase 3, Road No.92, Jubilee Hills, Hyderabad-500 033. ..Appellant/ Opp.party 1 And 1. Sri Ram Pradeep choppa S/o.Choppa Prabhakar Reddy, Reddy, Hindu, aged about 33 years, Occ:Pvt. Employee. R/o.Flat No.302, Aditya Pride Papadia Lane, Somajiguda, Hyderabad, Presently residing 284, Shadow brior drive, Apt. No.1118, Huston Texas 7777, United States of America, represented By his father & GPA holder Choppa Prabhakar Reddy S/o.Venkata Subba Reddy, Aged about 62 years, Occ:Retired Employee R/o.Flat No.302, Aditya Pride, Kapadia Lane, Somajiguda, Hyderabad. Respondent. Complainant 2. Bank of Baroda, Khairtabad Branch, Rep. by its Branch Manager. Respondents/ Opp.party No.2 Counsel for the Appellant : Mr.N.Manohar Counsel for the Respondents : Smt.K.Sesharajyam & Associates-R1 and R2 M/s.J.Ch.Y.Narasimham-R3 FA.No.10/2012 against C.C.No.1076/2010 District Forum-I, Hyderabad. Between 1. Smt.Sireesha Choppa W/o.Sreenivas Reddy Kanamatha Reddy, Hindu, aged about 31 years, Occ:Pvt. Employee. 2. Sreenivasa Reddy Kanamatha Reddy S/o.Madhava Reddy, Hindu, aged about 38 years, Occ:Pvt. Employee. Both are presently residing 17063, Courville drive Northville M.I-48168, United States of America, Rep. by GPA holder Choppa Prabhakar Reddy S/o.Venkata Subba Reddy, aged 62 years. Occ:Retd.Employee R/o.Flat No.302, Aditya Pride Kapadia Lane, Somajiguda, Hyderabad. Appellantss/ Complainants. And 1. Lanco Hills Technology Park Pvt. Ltd., Rep. by V.Srinivas, Director, Corproate Affairs, Lanco Hills, Plot No.565, Phase 3, Road No.92, Jubilee Hills, Hyderabad-500 033. Respondent/ Opp.party 1 2. Bank of Baroda, Khairtabad Branch, Rep. by its Branch Manager. Respondent/ Opp.party No.2 Counsel for the Appellant : Smt.K.Sesharajyam Counsel for the Respondents : (Mr.N.Manohar-R1) R2-served. FA.No.11/2012 against C.C.No.1077/2010 District Forum-I, Hyderabad. Between 1. Sri Ram Pradeep choppa S/o.Choppa Prabhakar Reddy, Reddy, Hindu, aged about 33 years, Occ:Pvt. Employee. R/o.Flat No.302, Aditya Pride Papadia Lane, Somajiguda, Hyderabad, Presently residing 284, Shadow brior drive, Apt. No.1118, Huston Texas 7777, United States of America, represented By his father & GPA holder Choppa Prabhakar Reddy S/o.Venkata Subba Reddy, Aged about 62 years, Occ:Retired Employee R/o.Flat No.302, Aditya Pride, Kapadia Lane, Somajiguda, Hyderabad. Appellant. Complainant And 1. Lanco Hills Technology Park Pvt. Ltd., Rep. by V.Srinivas, Director, Corproate Affairs, Lanco Hills, Plot No.565, Phase 3, Road No.92, Jubilee Hills, Hyderabad-500 033. Respondent/ Opp.party 1 2. Bank of Baroda, Khairtabad Branch, Rep. by its Branch Manager. Respondents/ Opp.party No.2 Counsel for the Appellant : Smt.K.Sesharajyam Counsel for the Respondents : (Mr.N.Manohar-R1) R2-served. QUORUM: SRI R.LAKSHMINARASIMHA RAO, HONBLE MEMBER.
AND SRI T.ASHOK KUMAR, HONBLE MEMBER.
THURSDAY, THE THIRTEENTH DAY OF SEPTEMBER, TWO THOUSAND TWELVE Order (Per SRI T.ASHOK KUMAR, Honble Member) *** F.A.Nos.1020/11 & 1021/2011 and F.A.Nos.10/2012 & 11/2012 are the appeals and cross appeals filed by opposite party No.1 and the complainants respectively as against orders of District Forum-I, Hyderabad in C.C.Nos. 1076/2010 and 1077/2010 dated 18-11-2011. Since the opposite party is one and same in both the matters and complainants are relatives of each other and as common questions of facts and law are involved, we intend to dispose of these matters by a common order.
For convenience sake, the parties as arrayed in the complaints are referred to hereunder. F.A.No.1020/2011 and F.A.No.10/2012 taken as lead case.
The brief facts of the complaint pertaining to the said appeals are as under:
Having attracted with the advertisement, publicity and projections made by opposite party no.1, the complainants intended to purchase flats from the said opposite party No.1 and therefore they requested their G.P.A. holder who is father of the second complainant and father in law of first complainant to visit the site and enquire about the residential project as the second complainant was working in U.S.A. Then the said G.P.A. holder of the complainants visited opposite party no.1 and he was shown the film/picture as to how the proposed project would look after the completion and explained him that the growth would be tremendous as the project would have IT related offices, business and commercial centres along with places of entertainment and leisure such as group houses, theatres, restaurants and swimming pools and that the sales promotions staff of opposite party No.1 induced and prevailed upon the said GPA holder and supplied him with the copies of brochures showing the concept of the project and also floor plans specifications of different types apartments and assured him that they would arrange finance through nationalized bank i.e. opposite party No.2. The said GPA holder was also informed that since his son is an NRI and having good income, it would not be a problem for them to arrange for the loan with opposite party no.2. Basing on the said assurances and undertaking and also the projection of the growth of the project, the said GPA holder booked two flats i.e. Flat No.704 in 7th tower and 8th tower on 05-7-2007 with opposite party no.1 and on the same day paid Rs.2,50,000/- for each flat by way of cheques. As per the terms of the application, the said GPA holder of the complainants paid Rs.11,17,520/- on 11-8-2007 and thus in total he paid Rs.13,67,520/- including the said advance when the agreement was due to be entered into within one month. As per clause 8 of the terms and conditions of the application, in case the applicant decides to cancel the allotted flat after entering into sale agreement or other agreement, cancellation charges of Rs.50,000/- shall be levied from the applicants and as per clause 14 of the terms and conditions of the application, the refund of the balance amount after deducting cancellation charges will be paid only after three months from the date of cancellation. Second opposite party bank approved the loan and accordingly a tripartite agreement was executed on 17-12-2007. After entering into the said agreement dated 17-12-2007, GPA holder of the complainants left for USA on 18-12-2007 and then opposite party no.1 in collusion with second opposite party started drawing the instalment amounts directly from opposite party No.2 and blindly second opposite party has been releasing the same without monitoring the progress of the construction and without even collecting the margin money from the complainant borrower. Second opposite party bank being in fiduciary position failed to monitor progress of the construction and also exercise due diligence and caution before releasing the loan amounts to opposite party no.1 on behalf of the complainant borrower and thereby committed deficiency in service by making the complainant liable.
On his return from USA in January 2009, GPA holder of the complainant noticed that the progress of the construction was slow and on enquiry he came to know that the reason for it was on account of downfall in the real estate business and that number of bookings were cancelled and number of purchasers sought refund of the amount paid by them and as a result there was a cash crunch and that opposite party no.1 was seriously contemplating for reduction of the price so as to retain its customers and ultimately reduced the price on public demand without change in the specification area and plans and the same was made applicable to the complainants also.
In the month of February, 2009, complainant No.2 came to India along with father in law i.e. the said GPA holder, visited the apartment which they have booked and to their utter shock and surprise, they found several variations and deviations from the original projections made in the brochure and also in the specifications booklet. There was reduction in the living place from 1936 sft. to 1400 sft. approximately and noticed that the construction of Malls, theatres, hotels, office spaces and the signature tower consisting of 100 floors surrounding the residential premises was not commenced. The GPA holder of the complainants sought for clarification with regard to the reduction in the living space, since they did not receive any favourable reply, they were constrained to seek clarifications in writing by sending a letter through registered post acknowledgement due on 26-5-2009 marking copy thereof to opposite party no.2 bank and after meeting the General manager of opposite party No.1, GPA holder of the complainants realized that there was no use in seeking for any clarification as the opposite parties staff were not giving any convincing reply and on the other hand they have been behaving rudely and in most unprofessional and unethical manner by stating that they are not responsible for the material published by them and that it does not bind them. Then the GPA holder of the complainants addressed a letter dated 5-6-2009 to opposite parties 1 and 2 informing that he has no intention to proceed further and that he wants to cancel the agreement and repayment of the amount paid by them with interest. He also addressed a letter to opposite party no.2 bank informing them to collect the amount released by them to opposite party no.1 with interest from it.
Opposite party No.1 received the said cancellation letter but did not choose to reply to the same. However, the staff of opposite party no.1 asked the complainant to select apartment in any other towers which are going to be completed saying that they would not proceed with construction in respect of 7th and 8th towers in which the complainants booked the flats as there was poor response from the purchasers. The GPA holder of the complainants refused the said offer and sought for refund of the amounts paid by him stating that he was not interested in taking flats in any other apartment towers. Subsequently there was no communication from opposite party no.1. On account of deficiency in service on the part of opposite parties, the complainants have suffered a loss of Rs.20,00,000/- as their money was stuck up as opposite party No.1 reduced the living space and later gave up construction of tower Nos. 7 and 8 and also for the reason that opposite party No.2 bank contrary to clause 18 has released the instalment amounts in favour of opposite party No.1 without collecting the approval letter or margin money from the complainant and also failed to keep up the trust imposed in it as banker thereby causing loss to the complainants. On 24-6-2010, the said GPA holder has received copy of letter from opposite party no.2 bank stating that pursuant to withdrawal of agreement for purchase of the flat with opposite party no.,1, they have received Rs.11,81,230/- to the credit of loan account from opposite party no.1 and still Rs.52,59,396/- debit balance is there and that they have been pursuing the matter with opposite party No.1 for repayment of the balance with interest. Thus acts of opposite parties 1 and 2 amount to deficiency in service. Hence the complaint seeking direction to opposite party No.2 to refund Rs.13,67,520/- along with interest @ 12% p.a. paid by the complainant towards flat No.704 in 7th Tower of Lanco hills and to award Rs.3,00,000/- towards damages, Rs.1,00,000/- compensation for mental agony and Rs.25,000/- towards legal expenses.
Opposite party no.1 filed its written version denying the allegations made in the complaint and disputing the claim of the complainants. However, it admitted that the complainant has booked unit No.8 LH/704 in the township of Lanco Hills.
The brief facts of written version are as under:
In respect of unit No.8 LH/704 in the township of Lanco Hills, three agreements were executed between the parties, i.e. agreement of sale dated 24-11-2007, agreement of sale-I (land) dated 24-11-2007 and agreement of sale-II (built up area) dated 24-11-2007. There is identical clause in all the three agreements with regard to refund of payment made by a purchaser in case of cancellation and the complainants are bound by the same. The purchasers already authorized bank to disburse the amount in favour of opposite party no.1 in stages (phased manner) as per the schedule and accordingly opposite party No.1 had released the payments and that allegations to the contra made by the complainants in the complaint are incorrect.
Opposite party No.1 has paid Rs.11,08,692/- to opposite party no.2 at the request of the GPA holder of the complainants only with an intention to maintain good relations with the customers.
The agreement of sale contains arbitration clause to the effect that Any dispute, defence or controversy arising between the parties hereto under or in connection with or in relation to this agreement or its validity or the interpretation of any clause or provision of this agreement, (including this clause) shall be referred to arbitration of a sole Arbitrator to be appointed by the developer and such arbitration shall be subject to the provisions of the Arbitration and Conciliation Act, 1996 and shall be held at Hyderabad. The award of the Arbitrator shall be final and binding on the parties thereto.
As per the said clause, the complainants are bound to refer the matter to arbitration and cannot rush to the Consumer Forum by way of a consumer complaint. Opposite party no.1 did not render any deficiency in service nor is guilty of any unfair trade practice and that as per clause 7.6 of the agreement, the developer shall be entitled to charge Rs.50,000/- towards cancellation and alienate the schedule property to any third party without any further notice to the purchaser and adjust the sale proceed against the unpaid consideration payable under the said agreement and if there is any deficit, the developer shall be entitled to recover the same as compensation from the purchaser. Since the flat is not yet sold to any third party, the question of refund does not arise at this stage. Provisions of Consumer Protection Act, 1986 are not attracted and the complainants have to invoke the Arbitration clause in terms of agreement of sale and that opposite party no.1 is not liable to pay any amount as prayed for by the complainant and thus prayed to dismiss the complaint with costs.
Second opposite party bank filed written version stating that the complaint is not maintainable particularly against opposite party No.2 since no specific relief has been sought by the complainants against it and that opposite party No.2, Nationalized bank was made as a party to the proceedings to harass it and to achieve their evil desire of avoiding payment of loan that was granted and availed by the complainants. There is no deficiency of service on the part of the opposite party No.2 and that it did not violate or deviate any of the terms of the loan agreement, more particularly clause 18 of the agreement and that opposite party no.2 bank released the amount to opposite party no.1 only basing on the authorisation given by the complainants and also as per the terms and conditions of the agreement. No obligation or duty cast upon the opposite party no.2 to inform about the progress of the construction to the complainants and tripartite agreement and other relevant documents executed by the complainants are more specific and clear in the said aspects. With regard to recovery of money and payments is also governed by clauses under tripartite agreement and other documents executed by complainants and thus prayed to dismiss the complaint with exemplary costs.
GPA holder of the complainant viz. Choppa Prabhakara Reddy filed affidavit evidence reiterating the case of the complainants set out in the complaint and marked Exs.A1 to A14. The Director and authorized signatory of opposite party No.1 filed his affidavit evidence but no documents were marked on its behalf. Senior Manager of opposite party No.2 bank filed his evidence affidavit and marked exhibits B1 to B8 in support of its case.
Having heard both sides considering the arguments of the complainants, opposite party No.1 and material on record, the District Forum vide impugned orders allowed the complaint in part directing opposite party no.1 to refund Rs.13,67,520/- to the complainants after deducting Rs.25,000/- towards cancellation charges along with 9% p.a. from the date of cancellation i.e. 5-6-2009 till realization and opposite parties 1 and 2 are directed to pay jointly and severally a sum of Rs.50,000/- to the complainants towards compensation for causing mental agony and financial loss so also Rs.2,000/- towards cost of litigation giving 30 days time for compliance.
Feeling aggrieved with the said orders, the unsuccessful opposite party No.1 filed, F.A.No.1020/2011 on several grounds and mainly contended that the impugned order is arbitrary, illegal and without any appreciation and basis and that the complainants do not come under the definition of consumers and that Consumer Forum has no jurisdiction to entertain the complaint and that the complainants ought to have resorted to arbitration proceedings as mentioned in the relevant agreements but did not do so and hurriedly designed consumer complaint which is not maintainable and that opposite party No.1 explained in detail the reasons in its written version but the same were not considered in correct manner and that mechanically the orders were passed and that there is no deficiency in service on the part of the opposite party No.1 and thus prayed to allow the appeal and set aside the impugned orders.
The complainants filed FA 10/2012 seeking enhancement of the compensation and mainly contended that the District Forum failed to consider the fact that if the complainant has invested the amount in any other venture, the value of the property would have been doubled and thus prayed to grant adequate compensation.
Heard both sides with reference to their respective contentions in detail and the complainants who also submitted written arguments in support of their case.
Now the point for consideration is whether the order of the District Forum is sustainable or whether it requires any modification?
There is no dispute that the complainants 1 and 2 having attracted with the publicity and advertisement etc. made by opposite party no.1 approached the opposite party no.1 through their GPA, viz. Mr.Choppa Prabahakara Reddy and booked two flats i.e. 704 in 7th tower, 704 in 8th tower on 05-7-2007 by paying initial advance of Rs.2,50,000/- for each flat through cheques and that vide letter dated 25-7-2007, opposite party No.1 informed the complainants about the provisional allotment of the said flats. It is also not in dispute that the said GPA holder of the complainants totally paid Rs.13,67,520/- to opposite party no.1 including the advance. It is also not in dispute that second opposite party i.e. Bank of Baroda, approved the loan and tripartite agreement dated 17-7-2007 was entered into. It is also not in dispute that agreements referred to in the written version of opposite party no.1 contain arbitration clause.
The first and foremost contention of opposite party No.1 is that in the circumstances of the case, the complainants ought to have approached a civil court for redressal and the consumer forum ought not to have entertained the complaint. In several decisions of the Honble Supreme Court of India and Honble National Commission it was held that the development of land for the purpose of selling it as plots and house sites and to construct residential flats after duly adding the value by way of providing infrastructure obtaining layouts and other permissions from the local Government etc., constitutes by itself a kind of service and that in view of the matter, when the person purchases the plot or flat from the developer, he not only purchases the same but also the service associated with it . The Honble high Court of A.P. in batch of W.P.Nos. 28246/2009 etc., vide orders dated 13-8-2010 held that Consumer Fora do not suffer lack of jurisdiction to entertain complaints in such matters. The said view was supported by Honble Supreme Court of India in a case reported in CDJ 2012 SC 370 between M/s.Narne Constructions P. Ltd., v. Union of India and Ors. Also the decision of Honble Supreme Court of India in Fakirchand Gulati v. Uppal Agencies Pvt. Ltd., reported in III (2008) CPJ 48 (SC) equivalent to 2009 (4) CPR 449 (SC) supports the case of the complainants so also Lucknow Development Authority V. M.K.Gupta (1994) 1 SCC
243. Coming to the question of jurisdiction, admittedly the opposite party No.1 has been engaged in housing construction activity at Hyderabad. It comes under Service as defined U/s 2(1)(o) of the Consumer Protection Act, 1986 which reads as follows:
"service"
means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
By virtue of Section 2(1)(o) of C.P.Act, the complainants undoubtedly are entitled to file the instant consumer complaint in the light of housing activity taken upon by opposite party No.1. Therefore, the contention of the opposite party no.1 that consumer Forum had no jurisdiction could not be appreciated in its favour.
Another aspect agitated by the opposite party no.1 is that in view of the Arbitration clause in the relevant agreements between parties to the lis, the complainant ought not to have approached the consumer forum and he ought to have resorted to the remedy under Arbitration and Conciliation Act, 1996. On the other hand, the contention of the complainants is that remedy under Sec.3 of Consumer Protection Act, 1986 is in addition to and not in derogation of the provisions of any other law for the time being in force and therefore the objection of the opposite party no.1 in the said context holds no water.
In Fair Air Engineers Pvt. Ltd, V. N.K.Modi (1996) 6 SCC 385, the Honble Supreme Court of India observed that:
It must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act.
It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words in derogation of the provisions any other law for the time being in force would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the Arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act, we think that the contention is not well founded. Parliament is aware of the provisions of Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Sec. 9 of the Code of Civil Procedure i.e. to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.
The Honble Supreme Court in Indochem Electronic and Another V. Addl. Collector of Customs, A.P. reported in (2006) 3 SCC 721, Secretary, Thirumurugan Co-op. Agrl.Credit Society reported in (2004) I SCC 305, CCI Chambers Co-op. HSG. Society Ltd., reported in (2003) 7 SCC 233 and State of Karnataka V. Viswabharati House Building Co-op. Society and others reported in (2003) SCC 412 has held that Consumer Protection Act, 1986 seeks to provide remedy in addition to the remedy provided under other Acts.
In a recent decision reported in (2012) 2 SCC 506 between National Seeds Corporation Limited V. M.Madhusudhan Reddy, the Honble Supreme court of India held that the remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act.
If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent consumer Forum than he cannot be denied relief by invoking Sec. 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Sec. 3 of the Consumer Act, makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. Admittedly in this case opposite party No.1 did not opt and seek reference to an arbitrator and in such circumstances so also in view of the said decision, the arbitration clauses in the relevant agreements, do not come in the way of the complainants in seeking redressal in the consumer Forum with reference to the subject matter of the complaint and thus the argument of opposite party no.1 in the said context is not helpful for it in this case.
In view of the above discussion and decisions, the legal points urged by opposite party no.1 with regard to jurisdiction of civil court and arbitration proceedings aspect are decided against it.
Now it is to be seen if there are any points in favour of opposite party no.1 on factual aspect. Ex.A1 is application form, dated 5-7-2007 disclosing that provisionally the booked flats described supra were allotted in favour of the complainants by opposite party no.1. Ex.A2 is the brochure of opposite party no.1 pertaining to the venture referred to above. Ex.A3 is the floor plans and specifications supplied by opposite party no.1 to the complainants. All the said documents support the case of the complainants that having attracted with the said brochure and other material collected by them, the said flats were booked by them and that opposite party no.1 allotted the same. When opposite party no.1 accepted the cheques from GPA holder and dealt with him with reference to the said transaction, the contention of opposite party no.1, that the said GPA holder has no right to file the complaint could not be appreciated in its favour. The case of the complainants is that after second complainant came to India along with GPA holder of the complainants, both of them visited the spot and observed several variations and deviations from the original projections made in the brochure and also in the specifications booklet and that there was reduction in the living place from 1936 sft. to 1400 sft. approximately and that the construction of Malls, theatres, hotels, office spaces and the signature tower consisting of 100 floors surrounding the residential premises were not commenced and thus they sought for clarification from opposite party no.1 in the said context. Ex.A10, copy of letter dated 26-5-2009 addressed by GPA holder of complainants to opposite party no.1 in the said context and the complainant did not receive any reply to it, because no documents were filed by opposite party No.1 that it gave suitable reply to the said letter. The complainants case is that when such clarifications were sought by him the staff of opposite party No.1 did not give convincing reply and on the other hand behaved rudely stating that they were not responsible for the material published and that they were not binding on them. The GPA of the complainants addressed a letter dated 5-6-2009 informing the opposite parties that they have no intention to proceed with further and wanted to cancel the agreement and thus they demanded refund of amount paid by them to opposite party no.1 with interest. Another letter was also addressed by GPA holder of the complainants to second opposite party informing them to collect the amount released by them to opposite party No.1 with interest from it. No replies were given by opposite party no.1 to the said cancellation letter. However, the complainants also contended that the staff of opposite party No.1 asked them to select apartment in any other towers which were going to be completed assuring that they would not proceed with constructions in respect of 7th and 8th towers in which the complainants booked their flats. The said inaction on the part of opposite party no.1 in not undertaking construction as agreed and also the deviations in the plan etc., certainly give cause of action to the complainants to cancel the agreement. When the complainants are not interested in taking alternate flats, one cannot compel them to take an alternate flat. When they received originals of Ex.A10 and A11 letters sent by GPA holder of complainants and did not give reply to them, opposite party no.1 has no case to defend itself. Ex.A12 letter dated 24-6-2010 was addressed by opposite party No.2 to the complainants and in the said letter, they admitted that subsequent to withdrawal from the purchase of flat at Lanco, opposite party No.1 have remitted an amount of Rs.11,08,692/- to the credit of the complainants account on 16-6-2010 leaving a debit balance of Rs.45,83,785/- and that the bank has been pursuing opposite party no.1 for the early settlement of the said amount with applicable upto date interest and thus it can be understood that the complainants have nothing to do with bank loan. Thus the case of the complainants, written version of opposite party no.1 reveal that Rs.11,08,692/- was paid by opposite party no.1 to second opposite party stands proved and that the opposite party no.1 accepted the cancellation of the flats also and that opposite party No.1 has to pay the remaining balance of Rs.45,83,785/- to the second opposite party.
Opposite party No.1 also did not file any documents to establish that they have completed the construction of 7th and 8th towers in which the complainants have booked the flats. The contention of opposite party No.1 that on account of downfall in the real estate business and number of bookings were cancelled, the progress of construction was slow could not be appreciated for want of legal and dependable evidence, therefore, there is justification in the complainants cancelling the said deal. Clause 8 of terms of Ex.A1, application form, gives right to the complainant to cancel the allotted apartment after entering into sale agreement or other agreements and that Rs.50,000/- cancellation charges shall be levied from the applicant and as per clause 14 of the terms and conditions of A1, the refund of balance of the amount after deducting the cancellation charges have to be paid only after three months from the date of cancellation.
There is no dispute that GPA holder of the complainants initially paid Rs.2,50,000/- on 05-7-2007 in respect of the said two booked flats to opposite party No.1 and so also some more amount totalling to Rs.13,67,520/- towards flat No.704 in 7th tower and an amount of Rs.11,17, 520/- for flat no. 704 in 8th tower in addition to the above advance, that apart Exs.A4, A5 and A6 receipts establish the same.
As seen from the orders of District Forum, Ex.A14 copy of opposite party No.1 quarterly financial year 2009 Minutes of meeting held in the month of February, 2009 reveals that opposite party No.1 have repaid almost entire amount by retaining nominal amount of Rs.25,000/- as such opposite party No.1 now cannot oppose the claim of the complainant and take shelter under the existence of the arbitration clause etc. and evidently opposite party no.1 did not dispute the said document and observation of the Forum. Mere denial of the case of the complainants by opposite party no.1 without any positive evidence is not helpful to it in any manner. In such circumstances, the contention of opposite party no.1 that the booked flats were not sold to any others and that the complainants is not entitled for refund of the money also could not be appreciated.
Opposite party no.2 contended that it did not violate or deviate from the loan agreement (Ex.B1) more particularly clause 18 of the agreement and that they released the amount to opposite party No.1 only basing on the authorization of the complainant and also as per the terms and conditions of banking laws. Clause 18 of the said Ex.B1 agreement discloses that the borrower to give a letter to the bank authorising it to disburse the loan amount in stages as per schedule mentioned in the sale/construction agreemetn to the developer on depositing the margin money by him. The borrower to deposit the required margin at each stage to enable the bank to make payment to the developer as per schedule. Opposite party No.2 did not dispute the fact that the complainants have not deposited the margin money at every stage of dispersal of loan amount by opposite party No.2 bank to opposite party No.1. The plea of opposite party No.2 that it has no obligation or duty to know about the progress of construction and disburse the loan amount, one could draw an inference that they did not release the amount in favour of opposite party No.1 as per schedule mentioned in Ex.A8 sale/construction agreement and in such circumstances, it has to be believed that opposite party No.2, the bank has released the amounts towards plots 704 in 7th tower and 8th tower without completion by opposite party No.1 and failed to monitor the progress of the work from stage to stage before releasing the amount and thereby opposite party No.2 is under obligation to answer the claim of the complainant and has violated the terms and conditions of clause 18 of B1 subjecting the complainants to financial and other inconveniences. The District Forum discussed the factual aspects in a right manner and arrived at a right conclusion in directing opposite party No.1 to refund Rs.13,67,520/- after deducting Rs.25,000/- towards cancellation charges along with interest at the rate of 9% p.a. from the date of cancellation of the agreement (Ex.A11) i.e. 5-6-2009 till the date of realisation. There is no evidence on record to say that opposite party No.1 earned profits from the disputed venture that apart as the amount paid by the complainants to opposite party No.1 is ordered to be refunded with interest at 9% p.a., and only Rs.25,000/- nominal cancellation charges are ordered to be collected from the complainant, we are of the opinion that awarding of Rs.50,000/- towards compensation for causing mental agony and financial loss is not desirable and therefore, the said part of the order is liable to be set aside while confirming costs of Rs.2000/- awarded by the District Forum.
In the result this appeal i.e. F.A.No.1020/2011 is allowed in part by modifying the order of the District Forum and deleting the compensation of Rs.50,000/- awarded by it while confirming the rest of the order of the District Forum.
Time for compliance four weeks from the date of receipt of order.
In view of the above discussion, the appeal, F.A.No.10/2012 preferred by the complainant to enhance compenstion fails and is accoridngly dismissed.
F.A.No.1021/2011 & F.A.No.11/2012:
For the same reasons as stated in F.A.No.1020/2011, appeal in F.A.No.1021/2011 is also allowed in part by modifying the order of the District Forum and deleting the compensation of Rs.50,000/- awarded by it while confirming the rest of the order of the District Forum. Time for compliance four weeks from the date of receipt of order.F.A.No.11/2012
preferred by the complainant to enhance compenstion fails and is accoridngly dismissed.
Sd/-MEMBER.
Sd/-MEMBER JM Dt.13-9-2012