1.M/s/Janachaitanya ... v. Sri.B.Kurma Rao, S/o...

2. M/s.Janachaitanya Housing Pvt. Ltd, Chairman & Managing Director, Mr.Sudhakar, H.No.4-5-29/66, 4^thlane, Vidyanagar, Guntur-522 006. …Appellant/

Opp.Parties.

And

Sri.B.Kurma Rao, S/o.Venkata Rao,

Hindu, aged 57 years, Railway Quarter No.637/4, Malakonda Area, Tatichetlapalem, Visakhapatnam. Respondent/ Complainant

Counsel for the Appellant : M/s.V.Chaitanya Latha Counsel for the Respondent : M/s.V.Gouri Sankara Rao QUORUM:THE HON'BLE JUSTICE SRI D.APPA RAO, PRESIDENT

AND

SRI R.LAKSHMINARASIMHA RAO, MEMBER

THURSDAY, THE TWENTY FIRST DAY OF JULY,

TWO THOUSAND ELEVEN.

Oral Order (Per Hon'ble Justice Sri D.Appa Rao, President )

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***** This is an appeal preferred by the opposite parties/developer against the order of the District Forum directing them to register the plot of an extent of 267 sq. yds. in Sai Vishnu Phase-II at Kottavalasa Village & Mandal, Vizianagaram in the name of the complainant within one month and if they failed to do so to refund Rs.77,000/- paid towards sale consideration together with interest at 18% p.a. together with compensation for financial loss at Rs.75,000/- and further Rs.25,000/- towards mental agony and costs of Rs.3,000/-. The case of the complainant in brief is that in the venture floated by the appellants, he purchased a plot of 267 sq. yds. in Sai Vishnu Phase-II at Kottavalasa Village & Mandal, Vizianagaram by paying altogether Rs.77,000/- under various instalments between 30-9-1998 to 11-1-2004 evidenced under entries in the pass book. When he received a letter dated 07-8- 2009 that it was not coming for registration of the plot, he approached the opposite parties however they replied that it was a routine letter. Since he paid the amount, he requested to register the plot but they failed to do so. After issuing a legal notice, he filed the complaint for registration of the plot or in the alternative to refund the amount paid by him together with interest at 24% p.a. from the date of last payment till realization, Rs.1,00,000/- for deficiency in service, compensation of Rs.2,00,000/- and costs of Rs.10,000/-.

The appellants, developer resisted the case. While admitting the sale of plot of 267 sq. yds. to the complainant, it alleged that as against Rs.85,440/- towards consideration, the complainant has paid Rs.77,000/- and denied that it gave a discount for the payments made by

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the complainant. They alleged that the complainant was not paying the amount on one pretext or the other. He did not pay the development charges and therefore was not entitled for registration of the plot. He is not entitled to either compensation or refund of the amount. The process of development and procedure for obtaining approvals were clearly explained. They were many hurdles like enhancement of charges for land conversion, fees, taxes etc. in view of change of government. In fact they filed W.P.No.15249/2009 for obtaining the conversion certificate when the concerned R.D.O, did not give it. They had to spent Rs.2,79,800/- and Rs.42,00,000/- for processing and balance conversion charges respectively to get lay out. Due to change in rules from time to time, the plotted areas are drastically reduced. They are ready to execute the sale deed provided the complainant pays the development charges and prayed for dismissal of the complaint.

The complainant in proof of his case filed his affidavit evidence and got marked Exs.A1 to A8 while the opposite party filed the affidavit evidence of its Legal and Estate Officer and did not mark any documents.

The District Forum after considering the evidence placed on record opined that the respondents having received the sale consideration cannot claim exorbitant amounts at their discretion and demand money for the amounts spent for getting lay out approvals etc. They ought to have taken steps to get layout within one year from the year of agreement and no steps were taken till the end of 2010. Almost 10 years have elapsed and in the circumstances, the value of the plots must have increased abnormally and therefore directed the respondents to register the plot of an extent of 267 sq. yds. in SAI Vishnu Phase-II at Kottavalasa Village &

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Mandal, Vizianagaram in the name of the complainant within one month and if they failed to do so to refund Rs.77,000/- paid towards sale consideration together with interest at 18% p.a. together with compensation for financial loss at Rs.75,000/- and further Rs.25,000/- towards mental agony and costs of Rs.3,000/-.

Aggrieved by the said order, the opposite parties, developer, filed this appeal contending that the District Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the District Forum has no jurisdiction in view of the fact that both parties reside at Visakhapatnam. The District Forum did not consider that it had spent huge amounts towards development charges to obtain lay out. It erred in awarding interest, compensation and costs and therefore prayed that the appeal be allowed.

It is an undisputed fact that in the venture floated by the appellants/developer as against Rs.85,440/- the complainant paid an amount of Rs.77,000/- evidenced under entries in the pass book, Ex.A2. The developer allotted the plot as long back as on 30-9-1998 evidenced under allotment letter, Ex.A1. Evidently the complainant has paid Rs.77,000/- as we have earlier stated by 11-1-2004. In the sale agreement, Ex.A3, dated 10-1-1999, the developer no doubt mentioned the cost of the plot, however, in regard to development charges, it did not specifically state the amount, what all it said was that Rs.240/- per sq. yd., Rs.15/- towards corner plot + Rs.70/- towards tentative development expenses have to be paid. When Rs.70/- is collected towards tentative development expenses, and at no time the developer demanded the complainant to pay a particular amount towards development charges, it cannot keep the complainant in suspense as to the amount he had to pay towards development charges. Even

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nine years after the transaction the developer could not specify the amount. For the first time on 07-8-2009 by letter, Ex.A4, it directed the complainant to pay the development, registration and other expenses in the office without mentioning the exact amount. We may state herein that the developer has no right to collect the registration charges. It is the complainant that has to pay the said amount at the registration office to the Registration Officer and not to the developer. They could not have claimed the said amount. Even otherwise, they did not mention the amount to be paid towards development charges, for the complainant to pay in order to get the property registered. Obviously that was the reason why the complainant only after issuing legal notice on 01-1-2010 filed the complaint.

It is very interesting to note that the so called layout was not approved by VUDA as revealed by its letter dated 24-11-2008. The final layout approval was given in L.P.No.2/2010 dated 07-1-2010. All through it was transacting, as though it was legally entitled to transfer the title in favour of the complainant. Therefore the appellants cannot turn around and state that the complainant did not pay the development charges and was not entitled for registration of the plot. This is an unethical plea raised by the appellants.

The learned counsel for the appellants contended that the District Forum has no jurisdiction to entertain the complaint since both parties reside at Visakhapatnam. Admittedly the property is situated at Vizianagaram and the dispute relates to an immovable property. It attracts 11(2)(c) of Consumer Protection Act, 1986, hence this contention has no legs to stand. Since the appellants did not agree to execute the sale deed unless development charges are paid, amounts of which were not even mentioned, the complainant being satisfied with the

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order of the District Forum in directing to refund did not choose to prefer appeal. Therefore, we do not intend to modify the said order by granting relief of execution of sale deed. The order grating refund of the amount together with interest at 18% p.a. more so in the light of the decisions reported in 2005 (9) SCC 464 in Haryana Urban Development Authority v. Shakuntala Devi . and 2004 SC 4123 would suffice. In fact the Supreme Court in the case of Brij Pal Sharma Vs. Ghaziabad Development Authority reported in III (2005) CPJ 43 (SC) opined that grant of interest @ 18% p.a., by way of damages and compensation is justified. Their lordship referring to an earlier decision in Ghaziabad Development Authority Vs. Balbir Singh reported in II (2004) CPJ 12 held by stating that " in our view, irrespective of whether there was genuine reason to cancel or not, the monies must be returned with interest at the rate of 18%. We say so because it is clear that even if the body has not already floated another scheme on the same land it is clear that the body is going to derive great profit from the land and therefore compensating the allottee with interest @ 18% p.a. is just and fair." Therefore granting of interest @ 18% p.a. was up held. We may also mention herein that when the State Commission has reduced the interest from 18% to 12% the Supreme Court in Haryana Urban Development Authority Vs. Soma Devi reported in 1(2005) CPJ 11 (SC) set-aside the finding and awarded interest @ 18% p.a. When consistently the Supreme Court has been awarding interest @ 18% p.a., in cases where the dealings pertain to real estates, we do not see any reason for reducing the rate of interest. However, the District Forum granted Rs.75,000/- towards financial loss in view of escalation of prices. In the first instance, the complainant did not seek that prayer and secondly there was no proof that there was escalation of prices. Even assuming that there was escalation,

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it is not known what was the exact value or the price which the District Forum can award towards financial loss to the complainant. Therefore, we do not agree with the finding that the complainant was entitled to Rs.75,000/- towards financial loss. Coming to compensation of Rs.25,000/- in view of the fact that for a period of 10 years, the appellants did not even take approval, we are of the opinion that it amounts to deficiency in service and naturally it caused mental agony to the complainant and the compensation granted cannot be said to be high in the circumstances. We do not see any error in granting interest at 18% p.a. In the result the appeal is allowed in part and the order of the District Forum is set aside only with respect of awarding compensation towards financial loss of Rs.75,000/- and the rest of the claim with regard to refund of amount together with interest at 18% p.a. and compensation of Rs.25,000/- towards mental agony, costs are confirmed. The appellants are also directed to ay costs of Rs.3,000/- in this appeal within four weeks from the date of receipt of this order.

Sd/-

PRESIDENT.

Sd/-

MEMBER.

JM Dt.21-07-2011

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[HONABLE MR. JUSTICE HON'BLE SRI JUSTICE D. APPA RAO]

PRESIDENT

[HONABLE MR. SRI R. LAXMI NARASIMHA RAO]

Member

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