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AMICUS AI
Citation Codes
Equivalent Citations
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Case Number
Attorney(S)
  • Mr. Bhagabati Prasad Padhy, Advocate
  • Mr. T. Baskar Gowtham, Advocates
Judges
  • V.K. Jain, Presiding Member
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mr. Bhagabati Prasad Padhy, Advocate
  • Mr. T. Baskar Gowtham, Advocates
Judges
  • V.K. Jain, Presiding Member
See more information ...
Smart Summary

Structured Summary of the Opinion (V.K. Jain, Presiding Member)

Factual and Procedural Background

The complainants/respondents booked four separate plots in a project called "Rolling Meadows" at Madeenaguda village, Serilingampalle Mandal, Ranga Reddy District, Hyderabad. The plots allotted to the respondents were numbers 184, 185, 189 and 190 with areas of 330, 311, 311 and 310 sq. yards respectively. The agreed sale price was Rs. 1,400 per sq. yard inclusive of development charges. The respondents paid Rs. 17,85,345 (which included Rs. 34,345 as interest for late payment) by 13.10.2001 and later paid an additional Rs. 8,65,900, making total payments of Rs. 26,51,245.

Despite payment, the petitioner did not execute title deeds and demanded further payments for alleged additional development costs. When the respondents did not accede to further demands, the petitioner cancelled the allotment by letter dated 01.08.2008.

The respondents filed a complaint before the District Forum seeking directions to register the plots in their favour, Rs. 3,00,000 each for mental agony, and costs and expenses. The District Forum, by order dated 27.08.2009, directed registration of the plots in favour of the respondents, apportioned registration charges (registration charges as prevailing in October 2001 to be borne by the first respondent and the balance by the petitioner), awarded Rs. 50,000 as compensation and Rs. 2,000 as litigation costs.

The petitioner appealed to the State Commission which, by order dated 08.08.2013, dismissed the appeal and confirmed the District Forum's order. The petitioner filed the present revision petition before this Commission challenging the orders below.

Legal Issues Presented

  1. Whether the petitioner was justified in demanding additional payment after the parties had agreed on a sale price of Rs. 1,400 per sq. yard inclusive of development charges, and consequently whether cancellation of allotment for non-payment of the additional demand was justified.
  2. Whether the petitioner was obliged to deliver possession and execute title deeds in favour of the complainants/respondents after receipt of the sale consideration agreed in the membership application.
  3. Who should bear any escalation in registration charges arising from delay — the allottee (complainant) or the petitioner (builder), particularly where delay in layout sanction by HUDA is implicated.
  4. Whether compensation was justified for alleged deficiency in services and delay in delivery/registration.

Arguments of the Parties

Petitioner's Arguments

  • The cancellation of allotment was justified because the complainants/respondents failed to pay the additional amounts demanded by the petitioner.
  • Clause 8 of the application for membership provided that registration charges "as per the rates prevailing at the time of registration" are to be borne by the allottee, and therefore the petitioner should not be required to bear increases in registration charges after October 2001.
  • Registration had been offered to the complainants in several letters; having failed to avail those offers, the complainants cannot insist that the petitioner bear escalation in registration charges.
  • There was no justification for awarding compensation when the petitioner had been directed to bear escalation in registration charges.

Complainants'/Respondents' Arguments

  • The sale price agreed at Rs. 1,400 per sq. yard was inclusive of development charges and there was no agreement to pay additional sums in case of escalation or additional facilities; therefore, the petitioner could not demand further payment or cancel allotment.
  • The complainants had paid the agreed consideration (and more), so the petitioner was obliged to execute title deeds and deliver possession.
  • Delay in final sanction of the layout by HUDA could not be attributed to the complainants and therefore any resultant escalation in registration charges should be borne by the petitioner.
  • The petitioner’s letters effectively conditioned registration on payment of additional sums shown in the statement of account; those additional demands were unjustified and therefore the complainants were not obliged to make such payments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court's analysis proceeded by examining the membership/application terms, the timeline of payments and actions by the petitioner, and the reasons offered for delay or refusal to register:

  1. Terms of contract: The Court noted the application for membership fixed the price at Rs. 1,400 per sq. yard "including development charges" and that there was no contractual provision obliging the complainants to pay additional amounts for escalation in development costs or for extra facilities. On that contractual basis, the petitioner was obliged to deliver possession and execute title deeds on receipt of the agreed sale consideration.
  2. Payments made: The complainants had paid in full by October 2001 (and in aggregate had paid Rs. 26,51,245). Given that the payments were made, the petitioner had no contractual ground to demand further payments or to cancel the allotment.
  3. Delay in development / commencement of work: The Court observed that although no fixed time for delivery was specified, development and possession were nonetheless expected within a reasonable time. The petitioner ought to have started development soon after booking and could not justify delaying commencement until receipt of the entire price where no contractual stipulation required such a delay.
  4. HUDA sanction issue: The Court considered clause 9 (registration after final layout sanction by HUDA and receipt of complete payment). While final sanction by HUDA had been delayed, the Court held that purchasers could not be penalized for delay attributable to HUDA or the petitioner’s choice to accept bookings without final sanction. Therefore, any escalation in registration charges due to delay in final sanction was the petitioner’s responsibility.
  5. Nature of registration offers: The petitioner’s correspondence purportedly offering registration was examined and the Court found the offers were not unconditional; rather, the letters demanded additional payment (as per attached statements) as a precondition to registration. Because those additional demands were unjustified, the complainants were not obliged to make them and could not be blamed for not availing registration offers.
  6. Compensation: The Court accepted that compensation had been awarded for deficiency in service and for substantial and unreasonable delay in possession and registration caused by the petitioner’s unjustified demands. The Court found the award of compensation by the District Forum and its affirmation by the State Commission to be justified.

Holding and Implications

The Court's final ruling is summarized below.

HOLDING: The revision petition is dismissed and the orders passed by the District Forum (dated 27.08.2009) and affirmed by the State Commission (dated 08.08.2013) stand confirmed.

Direct implications for the parties:

  • The District Forum's direction that the petitioner must register the plots in favour of the complainants/respondents is effectively upheld by this dismissal (i.e., the petitioner remains bound to register the plots as directed by the fora below).
  • The apportionment of registration charges as ordered by the District Forum (registration charges as prevailing in October 2001 to be borne by the first respondent/allottee; the balance increase thereafter to be borne by the petitioner) is maintained by implication because the lower orders were confirmed.
  • The monetary reliefs awarded by the District Forum — compensation of Rs. 50,000 and litigation costs of Rs. 2,000 — upheld by the State Commission, remain binding on the petitioner.
  • The revision petition was dismissed by this Commission "with no order as to costs" in respect of the revision itself; this does not negate the costs and compensation awards that were part of the orders of the fora below.

The opinion does not purport to lay down any new legal precedent beyond the facts and conclusions drawn in this matter; it affirms the findings and directions of the lower fora based on the contractual terms and conduct of the petitioner in this case.

Show full summary ...

    Narne Constructions Pvt. Ltd. v. Dr. Devendra Sharma

    V.K. Jain, Presiding Member:— The complainants/respondents booked 4 separate plots with the petitioner company in a project called ‘Rolling Meadows’ in Madeenaguda village, Serilingampalle Mandal, Ranga Reddy District, Hyderabad. The respondent no. 2 is wife of the respondent no. 1, whereas the respondents' no. 3 and 4 are their children. 4 separate plots bearing nos. 184, 185, 189 and 190 were allotted to the respondents. The sale price of the plots was agreed at Rs. 1400/- per sq. yards. The area of the plots nos. 184, 185, 189 and 190 was 330, 311, 311 and 310 sq. yards respectively. The respondents made a total payment of Rs. 17,85,345/- to the petitioner which included Rs. 34,345/- towards interest for the late payment. The aforesaid payment had been made by 13.10.2001. However, the title deed of the aforesaid plots was not executed in favour of the respondents/complainants and additional payment was demanded from them on account of alleged additional expenditure on carrying out development of the plots. The respondents made additional payment of Rs. 8,65,900/- to the petitioner, which wanted to them to make more payment towards cost of additional development. Since the additional charges demanded by the petitioner were not paid, the allotment came to be cancelled vide letter dated 01.08.2008.

    2. Being aggrieved the complainants/respondents approached the concerned District Forum by way of a complaint, seeking the following reliefs:-

    “It is therefore most humbly prayed that this Hon'ble forum may be pleased to direct the opposite party to register plot bearing Nos. 184, 185, 189 and 190, situated at Madeenagudi village, Serilingampalle Mandal, R.R. District in Sy. No. 43/part, 44, 47 and 50 in the venture named “ROLLING MEADOWS” in favour of the complainants/nominees of the complainant immediately transferring the rights in the plots.

    b) Direct the opposite party to pay an amount of Rs. 3,00,000/- each towards the mental agony;

    c) Directing the opposite party to pay the costs and expenses of the complaint to the complainants;”

    3. The complaint was resisted by the petitioner/opposite party primarily on the ground that the complainants/respondents having failed to make payment of the additional demand raised by it, the cancellation of the allotment was justified.

    4. Vide its order dated 27.08.2009, the concerned District Forum directed the petitioner to register the plots in question in favour of the respondents/complainants. The first respondent was directed to bear the registration charges as prevailing in October 2001, whereas the balance of the registration charges were directed to be borne by the petitioner. The petitioner was also directed to pay compensation quantified at Rs. 50,000/- and the cost of litigation quantified at Rs. 2,000/-.

    5. Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. Vide impugned order dated 08.08.2013, the State Commission dismissed the appeal filed by the petitioner, thereby confirming the order passed by the District Forum. Being aggrieved, the petitioner is before this Commission by way of this revision petition.

    6. A perusal of the application for membership would show that the price of the plot was agreed at Rs. 1400 per sq. yards including development charges. There was no agreement between the parties for payment of any additional amount in case there was escalation in the cost of development of the plot or in case any additional facility was provided in the complex. The petitioner, therefore, was required to deliver the possession of the plots and execute the title deed in favour of the complainants on receiving sale consideration at the rate of Rs. 1400/- per sq. yards inclusive of development charges. Admittedly, the complainants paid about 50% more than the agreed sale consideration, the total payment made by them to the petitioner being Rs. 26,51,245/- (Rs. 17,85,345 + Rs. 8,65,900). Therefore, the petitioner, in my opinion, was not justified in demanding any further payment and in cancelling the allotment on account of the complainants not making the said additional payment. The orders passed by fora below, directing the registration of the plots in favour of the complainants/respondents therefore cannot be faulted with.

    7. As regards registration charges, the learned counsel for the petitioner submits that as per clause 8 of the application for membership, the charges as per the rates prevailing at the time of registration have to be borne by the allottee and therefore in his submission there was no justification for the State Commission and the District Forum directing the petitioner to pay the increase in the registration charges after October, 2001.

    8. It is an admitted position that the plots in question were booked on 07.09.1998. Though no particular time was stipulated in the application for membership, for delivering possession of the developed plots to the complainants, it can hardly be disputed that in the absence of such a stipulation the development was required to be completed and possession was required to be delivered to the complainants within a reasonable time. The payment by the complainants as per clause 6 of the terms and conditions was to be made in installments. The petitioner ought to have started the development work in soon after accepting the booking and there was no justification for not carrying out in development work till receipt of the entire payment from the complainants. There was no stipulation in the membership application that development work will be started by the petitioner only after receiving the entire payment from the purchasers of the plots. Therefore, I find no justification for the petitioner delaying the commencement of the development work.

    9. The learned counsel for the petitioner points out that as per para 9 of the terms and conditions, the plots were to be registered after final sanction of layout by HUDA and receipt of complete payment from members. As far as payment is concerned, admittedly, the entire payment as per the agreement between the parties had been made by October 2001. As far as final sanction of layout by HUDA is concerned, in my view, the petitioner cannot penalize the complainants/respondents for the delay in the aforesaid sanction since delay cannot be attributed to any act or omission on the part of the complainants/respondents. In fact, in my opinion, the petitioner should not even have accepted the booking without final sanction of the layout by HUDA. If the petitioner chose to accept booking on the basis of provisional sanction of the layout by HUDA, it is to blame to only itself for the delay, if any, on the part of the HUDA in issuing the final sanction of the layout. The purchaser of the plot, who had nothing to do with the sanction of the layout by HUDA cannot be penalized, by postponing the possession or registration of the plot and therefore any escalation in the registration charges on account of delay in final sanction of layout by HUDA must necessarily be borne by the builder and not by the allottee of the plot.

    10. The learned counsel for the petitioner states that vide several letters, they had offered registration of the plots to the complainants and having failed to avail the offer, the complainants cannot insist on the petitioner bearing the escalation in the registration charges. A perusal of the letters sent by the petitioner to the complainants would show that there was no conditional offer to register the plots in favour of the complainants and the petitioner was demanding additional payment as per the statement of account attached to the letters, as a pre-condition for registration of the plots in favour of the complainants. Since the aforesaid additional demand was not justified, the complainants obviously could not have made the said payment. Hence, the petitioner, which postponed the registration by its own act of demanding additional payment from the complainants cannot hold the complainants responsible for the increase in the registration charges.

    11. The learned counsel for the petitioner submits that there was no justification for directing the payment of compensation, when the petitioner had been directed to bear the escalation in the registration charges. Again, I find no merit in the contention. The compensation has been awarded on account of deficiency on the part of the petitioner company in rendering services to the complainants. Moreover, as a result of unjustified and unlawful demand raised by the petitioner for possession and registration of the plots in favour of the complainants has been reasonably delayed for a number of years. Therefore, the compensation awarded by the District Forum and upheld by the State Commission, in my view, is justified.

    12. For the reasons stated hereinabove, I find no merit in the revision petition and the same is accordingly dismissed with no order as to costs.

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    Comments

    Narne Constructions Pvt. Ltd. v. Dr. Devendra Sharma
    (Dec 17, 2015)