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M/s Sahara India Commercial Corporation Ltd. & Ors. vs. Mukamala Nataraja Rao & Anr. dated 2014-09-09

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW  DELHI

                                                                                          

FIRST APPEAL NO. 393 OF 2006

(From the Order dated 30.06.2006 in CD Nos. 52/2003, 76/2003 to 88/2003, 90/2003 & 92/2003 to 95/2003 of the State Commission, Andhra Pradesh)

 

M/s Sahara India Commercial Corporation Ltd. & Ors.                                                                                                ….Appellants

 

Versus

Mukamala Nataraja Rao & Anr.                                                                                                                             .........Respondents

 

FIRST APPEAL NO. 452 OF 2006

(From the Order dated 30.06.2006 in CD Nos. 52/2003, 76/2003 to 88/2003, 90/2003 & 92/2003 to 95/2003 of the State Commission, Andhra Pradesh)

 

Mukamala Nataraja Rao & Anr.                                                                                                                                .........Appellants

Versus

M/s Sahara India Commercial Corporation Ltd. &Ors.                                                                                            ......Respondents

 

ALONGWITH

FIRST APPEAL NO.394 OF 2006

FIRST APPEAL NO.438 OF 2006

FIRST APPEAL NO.395 OF 2006

FIRST APPEAL NO.455 OF 2006

FIRST APPEAL NO.396 OF 2006

FIRST APPEAL NO.397 OF 2006

FIRST APPEAL NO.444 OF 2006

FIRST APPEAL NO.398 OF 2006

FIRST APPEAL NO.457 OF 2006

FIRST APPEAL NO.399 OF 2006

FIRST APPEAL NO.445 OF 2006

FIRST APPEAL NO.400 OF 2006

FIRST APPEAL NO.401 OF 2006

FIRST APPEAL NO.402 OF 2006

FIRST APPEAL NO.403 OF 2006

FIRST APPEAL NO.446 OF 2006

FIRST APPEAL NO.404 OF 2006

FIRST APPEAL NO.405 OF 2006

FIRST APPEAL NO.447 OF 2006

FIRST APPEAL NO.406 OF 2006

FIRST APPEAL NO.407 OF 2006

FIRST APPEAL NO.448 OF 2006

FIRST APPEAL NO.408 OF 2006

FIRST APPEAL NO.456 OF 2006

FIRST APPEAL NO.409 OF 2006

FIRST APPEAL NO.449 OF 2006

FIRST APPEAL NO.410 OF 2006

FIRST APPEAL NO.411 OF 2006

FIRST APPEAL NO.450 OF 2006

FIRST APPEAL NO.412 OF 2006

FIRST APPEAL NO.451 OF 2006

FIRST APPEAL NO.413 OF 2006

AND

REVISION PETITON NO. 2978 OF 2006

(Against the order dated 30.6.2006 in First Appeal No. 1827 & 1828 /2005 of the State Commission, Andhra Pradesh)

The Project Manager,

Sahara States &Ors.                                                                                                                                           …..... Petitioners

Versus

 

Shri M. Bala Showry,

Son of late Shri M. Chinna Showry,

R/o- Unit No.13/303,

2nd Floor, Malhar Appartments,

Sahara States, Mansoorabad,     

Hyderabad- 500068                                                                                                                                           …....... Respondent

 

BEFORE:

HON’BLE MR. JUSTICE D.K. JAIN, PRESIDENT

HON’BLE MR. VINAY KUMAR, MEMBER

For Sahara India  :             Mr. Gunjan Kumar  & Mr. Rajeev  M. Roy,

                                            Advocates

 

For the Respondents :       Mr. R. Gopi Mohan,  Advocate

 

PRONOUNCED ON:  09-09-14

 

ORDER

PER MR. VINAY KUMAR,  MEMBER

          Sahara States Owners Welfare Association (hereinafter referred to as the ‘Welfare Association’), had filed consumer complaints on behalf purchasers of flat and houses in a newly constructed housing township in Andhra Pradesh.  All complaints have been considered by the Andhra Pradesh State Consumer Disputes Redressal Commission in the impugned order.  In all cases the complainants have taken physical possession of the flats/houses in and around 2002 and consumer complaints were filed soon thereafter, in 2003.

2.      The complaints relate to not only quality deficits in construction of individual dwelling unit but go beyond.  It is the case of the Complainants that many infrastructure facilities, expressly assured in the brochure of the appellant company, have not been provided at all.  These include hospital, round-the-clock water supply, play ground, club house, community hall, shopping mall and underground sewerage.  Therefore, the complainants sought monetary compensation for quality deficits in construction of flats as well as direction to the appellants/OPs to provide parks, playgrounds, underground sewerage and uninterrupted water supply etc. 

3.      In a detailed order, the State Commission has awarded compensation of Rupees one lakhs to each complainant for construction deficits in their residential units and compensation of Rs.40,000/- to each towards cost of marble flooring and teakwood doors and windows.  In addition, the Commission has also directed the OPs to complete and hand over facilities such as parks, playgrounds, club house, shopping plaza, health centre, school building,  and the entire township.

4.      Challenging the above impugned order, the developers, Sahara India Commercial Corporation India Ltd. has filed 21 appeals and one revision petition.  Simultaneously, 13 appeals have been filed by the complainants.  Since the dispute in all these appeals is common, we have taken FA/393/2006 as the main appeal from the OPs and FA/452/2006 as the main appeal from the complainants. 

 5.     We have carefully considered the records submitted on behalf of the two sides. M/s A B Dial, Sr. Advocate, R M Roy and Gunjan Kumar, Advocates have been heard on behalf of Sahara India. M/s V Sridhar Reddy, R Gopinathan, Gopi Mohan, Sagar  Saxena, Advocates have represented the Welfare Association and other complainants.

GROUNDS OF APPEAL

6.      In the appeal of the OPs/Sahara India the impugned order is challenged on the ground that the finding of defects and failure to provide the facilities promised in the brochure is not based on any evidence. On this point, it needs to be mentioned that the State Commission had appointed an Advocate Commissioner on 1.12.2005. His report of 25.1.2006 has been considered and relied upon in the impugned order. The report shows that it was made after visit to the layout and 22 flats built there. The Memorandum of Appeal has challenged it on the ground that it had ignored the evidence produced on behalf of the OPs and that the Local Commissioner was an advocate, not an expert in building construction.

7.      The main ground urged by the appellant/OPs is that the State Commission has granted relief much beyond the prayer in the complaint. It is stated that the following reliefs were never sought in the complaints—

“(i)  hand over the maintenance of the township to the second complainant association;

(ii)  to provide ambulance facility to the residents of the Sahara States and hand over the second complainant association;

(iii)  to provide parks and play area as shown in the HUDA approved plan dated 07.07.1999 and hand over the same to the second complainant association;

(iv)  to complete the construction of second floor on the club andhand over the possession of the same to the second complainant association;

(v)  to construct the shopping plaza at the place earmarked for it and hand over the possession of the same to the welfare association;

(vi)  to provide dish antenna;

(vii) to construct health care centre earmarked for it;

(viii) to hand over possession of the school building to the second complainant association.”

8.      At the outset, it needs to be observed that a perusal of the prayer made in the Consumer Complaint supports this assertion of the appellant/OPs. In the first part, the prayer was to award compensation for non- provision/insufficiency of services and award of costs. In the second part, the prayer was to direct the OPs to ‘construct and provide’ those services. It was not for handing over maintenance and control over them.

9.      It is also contended that direction to hand over certain facilities/services in the impugned order is contrary to the provision in A P Apartments Promotion of Construction Act 1987. Thus, under section 4(2) (c) of this Act the promoter is required to transfer common facilities like parks, playgrounds, market places to the government through a registered gift deed.

10.    In the appeal of the complainantsthe primary ground urged is that in the facts and circumstances of the case, the quantum of compensation awarded by the State Commission is very low. The Memorandum of Appeal says that “since the opposite parties promised that the township of Sahara States with all amenities and facilities mentioned in the application forms, brochures, pamphlets and in the approved plans the complainants have purchased the houses/flats by paying the entire amount demanded by the opposite parties. It is submitted that the opposite parties did not fulfil their commitments as promised by them, due to which they are forced to take possession of houses/flats. After taking possession of the houses/flats they found deviations in the constructions and deficiency of services.” 

  11.  Another contention raised by the appellants/Complainants  is that under section 6 of the A P Apartments (Promotion of Construction and Ownership) Act 1987, no deviations from the approved plan could have been made without disclosing them to the intended transferees. Prior consent of the intended transferee is necessary. As per the Memorandum of Appeal, sale/transfer of the sites for the hospital and school to third parties also constituted violation of this Act.

EVIDENCE LED BEFORE THE STATE COMMISSION

12.    The affidavit of evidence of the OPs accepts the status of the 1stComplainant in each case as the legitimate buyer of a dwelling unit but raises issues about the position of the 2nd complainant/Welfare Association. It also carries a categorical denial that services and facilities like parks, drainage, roads electrical substations, community hall, health centre etc. have not been provided. The affidavit, filed on behalf of Sahara India in 2005, terms these allegations as “all incorrect, false and invented by the complainants only for the purpose of filing the above complaint”. As for the hospital para 22 of the affidavit stated that it “is under construction and nearing completion. It is a big venture and therefore it requires time to complete it and the opposite parties have no “Manthradanda” or “Magic Lamp” to complete all in overnight.”

  13.  Coming to the documentary evidence led by the OPs before the State Commission, we find .that It does not, in any manner, disprove the report of the Advocate Commissioner, which has been relied upon by the State Commission. Thus for example, the Report shows that no electrical substations were constructed, though 12 transformers had been provided at specific locations. As against this clear finding, the ‘documentary evidence’ produced by Sahara India before the State Commission comprised only extracts on Substations from a book by one Sri Tarlok Singh, captioned INSTALLATION, COMMISSIONING & MAINTENANCE OF ELECTRICAL EQUIPMENTS, together with some correspondence with the office of the concerned Superintending Engineer, Electricity, Ranga Reddy district. In our view, these documents do not  prove that the facilities are constructed, as per plan. At best they contain some evidence of steps being taken in that direction.  Similarly, copies of RESIDENT FEEDBACK FORM acknowledging that certain fittings and fixtures were found to be satisfactory at the time of taking possession of the dwelling unit in 2003, would have no bearing on a subsequent finding, in the Advocate Commissioner’s Report of 2006, on leakage from the walls of the dwelling units.

14.    On the issue of non-provision of services and facilities, the evidence led by the complainants before the State Commission is based substantially on  the brochure and pamphlets issued by the OPs at the time of launch of the proposed township, Sahara States.  They also filed evidence relating to defects in construction in the form of a technical expert report as well as evidence to show that the land earmarked in the project for a primary school had already been sold by the OPs to a third party namely, Kavya Educational Society.    

DEVELOPMENTS IN THE COURSE OF THE PRESENT PROCEEDINGS

 15.   During the course of consideration of these appeals, on 6.10.2010 the concerned authorities were directed to file comprehensive reports regarding sanction of the hospital project, potable water supply and the sewerage systems.  On 27.1.2011 the Commission directed that for proper adjudication of the dispute in these appeals the concerned officers from Hyderabad Metropolitan Development Authority, Greater Hyderabad Municipal Corporation and Hyderabad Metropolitan Water Supply and Sewage Board should file detailed affidavits on contentions in the appeal memorandum concerning their respective areas of work.

  16.  A compliance affidavit was filed on 13.4.2011 by Chief Planning Officer, Hyderabad Metropolitan Development Authority (HMDA).  The affidavit states that the layout plan for group housing project of the Sahara India was received on 2.12.1998. It was approved and forwarded to the Greater Hyderabad Municipal Corporation (GHMC) on 7.7.1999.  The HMDC affidavit also states that as per the draft layout plan approved by HUDA, an extent of 12,056 sq. meters had been earmarked for amenities like club house, school building and hospital block. The affidavit further states that, “It is humbly submitted that the title of the area earmarked for amenities in the layout will be with the developer. It will depend on the understanding and agreements between the developer and purchaser of the plots in the layout. It is for the purchaser of the plot to prove that there is understanding or agreement to prove their right over the area earmarked for amenities. However, the developer cannot use the area earmarked for amenities in the plan for any other purposes”.  It also shows that HUDA had technically approved proposal for construction of commercial complex and club house. 

17.    In  compliance with the direction of this Commission, a report has been received from Metropolitan Commissioner, Hyderabad Metropolitan Development Authority, vide reference Lr.No.14870/ MP2/Plg/H/98, dt: 22.11.2010.  It has reported that M/s. Sahara India had handed over the area under roads and open spaces to the Greater Hyderabad Municipal Corporation under the registered deed No. 4787 of 2009.  The last para of this communication reads as follows:-

“As per the rules and regulations in the Layouts and Group Housing Layouts the open spaces and the road area has to be handed over to the Local Body.  In this case the same has been complied.  Further in Layouts and Group Housing Layouts, the proposed amenities area (within 60% plotted area) like Commercial, Medical facilities, Club Houses, Educational etc., can be retained by the owner or the developer or disposed off for the same purpose for which it is earmarked in the Layout or Group Housing Layout.”

However, responding to the above, it has been urged on behalf of the complainants to issue the following directions to the GHMC:-

  1. “Direct the GHMC Authorities to close the Septic Tanks situated in Sahara States, Mansoorabad,Hyderabad.
  2. Direct the GHMC Authorities to take the possession of Open Space in Sy. No.33 (p) along with existing bore wells and all its related materials.
  3. Direct the GHMC Authorities to take the possession of site earmarked for Hospital and constructed the Hospital for the public purpose.
  4. Direct the GHMC Authorities to maintain the Township by doing the works such as collection of Garbage, cleaning the Township, Maintaining the Parks, Street lights etc.”                    

18.   On the question of supply of potable water the General Manager (Engineering) M & M Division X Hyderabad Metropolitan Water Supply and Sewerage Board had filed an affidavit on 13.4.2011.  As per this report, M/s. Sahara India was sanctioned bulk supply of 105000 gallons per day.  But, in their letter of 25.2.2003, the OPs limited their current requirement to only 30,000 gallons per day. Subsequently, a request was made on 23.7.2007 to enhance this quantity to 977.33KLD. As per this report, the HMWSSB has since been supplying over 60% of the enhanced quantity

19.    The developer had also submitted a hospital building plan which was approved on 20.6.2003. Later, it submitted a revised plan for the hospital which was under process.  In the proceedings of 12.10.2011, the Commission was informed that though the affidavit filed by the OP showed that the hospital is under construction, there was no structure on the spot which suggested that a false affidavit had been filed.  On 9.2.2012 it was revealed that the matter regarding approval of the construction plan of the hospital was still pending with the competent authority. Therefore, on 24.5.2012 the Commission directed the OPs to file a fresh affidavit. Upon failure to file it, a non bailable warrant was issued against Mr.Surendra Reddy proprietor of RVR Constructions.  The NBW was duly discharged with his appearance before the Commission on 14.9.2012. 

20.    The affidavit of Mr. Surendra Reddy was subsequently filed on 12.2.2013.  It states that he had purchased the plot for the hospital from M/s. Sahara India by a registered sale deed of 28.4.2005.  The affidavit contains a long and winding explanation of non-sanction of water supply for the hospital being the cause for delay in its construction.  In the lastpara, deponent says that he is annexing a new site plan for the proposed building, which the Commission may direct Greater Hyderabad Municipal Corporation to sanction.  It is thus, abundantly clear that after having stated in 2005 that the hospital was under construction, the OPs admit in 2013 that all they have is a proposed construction plan.

ARGUMENTS OF THE TWO SIDES                

21.    Learned counsel for the appellants/OPs, Mr. Dial argued that the dispute raised by the complainants falls in two parts.  The first carries allegations of defects/deficiencies in construction of individual dwelling units. The second revolves around the claims of owners/purchasers of these dwelling units, relating to the “common areas and facilities”. This term has been defined in Section 3(d) of the Andhra Pradesh Apartments (Promotion of Construction and Ownership) Act 1987, (hereinafter referred to as the Apartments Act).  This provision provides a detailed listing of all that is included within the meaning of this term, but qualifies it by saying “unless otherwise provided in the Declaration”. As defined in Section 3(h), “Declaration” is an instrument by which the property is submitted to the provision of Chapter III.  This Chapter deals with special facilities. He argued that the provision of Chapter III will not apply to the present case as no “Declaration” has been filed with the competent authority. In our view, the absence of a Declaration will not create a void.  In the admitted absence of the declaration, the common areas and facilities, as per Section 3 (d), will comprise—

“3 (d) “Common areas and facilities” unless otherwise provided in the declaration, means:

  1. the land on which the building is located;
  2. foundation, columns, girders, beams, supporters, main walls, roofs including terraces, halls, corridors, stairs, stairways, fire-escapes and entrances andexists of the building;
  3. basements, cellars, yards, gardens, parking areas, children’s playground and storage spaces;
  4. the premises for the lodging of janitors or caretakers or persons employed for the management of the property;
  5. installations of general services, such as power, light, gas, hot and cold water, heating, refrigeration, air-conditioning and incinerating;
  6. elevators, tanks, wells and bore-wells, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use;
  7. such other community and commercial facilities as may be provided for in the building plan and declaration;
  8. all other parts of the property necessary or convenient to its existence, maintenance and safety or normally in common use;”

22.    Learned counsel argued that the title over the individual flats/houses had already been transferred through duly executed conveyance deeds.  Similarly, the park and open spaces have been transferred to Greater Hyderabad Municipal Corporation through registered gift deeds.  The remaining question of transfer of the management of the layout can arise only after it is fully competed. He argued that these facts have not been duly considered in the award of the State Commission. This argument is nothing more than an attempt at over simplification. It avoids an answer to the question as to how long the purchasers/occupiers of apartments in this project can be made to wait for the facilities and services assured as special features of the project.

  23.  As per the written arguments of Sahara India, the impugned order does not take into consideration their submission in the counter-affidavit and in the objections to the report of the Advocate Commissioner.  The relief awarded by the State Commission was not warranted as all the facilities and amenities promised in the township had already been provided.    It is however admitted that some of the parks and play fields were under construction at the time of the inspection, though subsequently completed.   A school by the name Hyderabad Talent School is built and operational on the land earmarked for the school in the approve plan.  It is further argued that the school is being run byKavya Education Society, which has purchased the land.  Therefore, the order of State Commission to transfer it to the complainant association is a grave error under the law. 

24.    On the direction of the State Commission to hand over possession of the club building and the shopping plaza, it is contended by M/s. Sahara India that:-

“As per the terms of the sale deed signed between the appellants and Respondent No.1, the complainant can have unrestricted and uninterrupted right only over the super area consisting of the flat and proportionate undivided and joint interest in the land, common service and facilities appurtenant to the building raised over the block space as mentioned in the application form.  The price to be paid by the Respondent No.1 was only for the abovementioned (Clause 8 of the sale deed).  It is a well settled principal of law that a person can ask right/title only over the property for which he is legally entitled to and for which he has paid consideration.  All common services and facilities within the residential complex and residual rights were continue to vest with  appellant.”         

25.    Per contra, it has been argued on behalf of the complainants that Sections 8 of the Apartments Act, not only confers exclusive ownership and possession of the dwelling unit to the apartment owner, but also gives him a heritable and transferable right over the undivided interest in the common areas and facilities. Section 9 gives each apartment owner the percentage of undivided interest in the common areas and facilities “as expressed in the Declaration”.  However, learned counsel for the Complainants could not lead any evidence to show that the requisite ‘Declaration’ had actually been filed in this case. Consequently, arguments based on the provisions in Section 8 and 9 can lend no support to the claim of the Complainants.

26.    Learned counsel for the complainants referred to the brochure of M/s. Sahara India in which prospective buyers of residential units in the project called Sahara States were addressed.  The brochure offers it as a “Self contained ISO 9001 Certified Township”.  It has specifically listed facilities like playgrounds, parks, fully equipped club with indoor or outdoor facilities, banquet hall, library, community centre, school etc.  It was argued that in the pricing structure of these flats/houses, these facilities were included in the item of ‘Development works’ for which the purchaser has been charged @ Rs.2000/-(3500-1500) per sqm. Yet, several of these facilities were not provided till the filing of the complaint in 2003. The Healthcare and Welfare Centre (hospital) have not been provided even till the stage of the present proceedings.

27.    Mr. A B Dial, learned arguing counsel for the appellants/Sahara India argued that their case is substantially similar to the case in DLF Ltd. Vs. Manmohan Lowe  and others, (Civil Appeal No.10930 of 2013) . It was decided by Hon’ble Supreme Court of India on 10.12.2013.  The matter therein had arisen under the provisions of the Haryana Apartments Ownership Act, 1983 together with Haryana Development and Regulation of Urban Areas Act, 1975.  In the case before us, the Sahara States project of the OPs, was approved on 7.7.1999 under the provisions of the Andhra Pradesh Urban Areas Development Act, 1975. He argued that the provisions in the AP Apartments (Promotion of Construction and Ownership) Act 1987, referred to by both sides, are very similar to those in the Haryana Apartments Ownership Act, 1983.  

28.    The Haryana case arose out of the claim of the apartment buyers that ‘common areas and facilities should also include shops, parking areas, community centres, nursery schools, and other common facilities. Hon’ble Supreme Court has examined the matter with specific reference to an agreement entered into by the colonizer with the Directorate of Town and Country Planning (DTCP) and provisions of the two Acts. Internal development works like metalling of internal roads, paving of foot paths, tree plantation, street lighting, water supply, sewerage, etc. were to be executed by the colonizers and their cost recovered from the plot/apartment owners.  External development works, on the other hand, were to be executed at the periphery of the colony or outside the colony and included water supply, sewerage, roads, electrical works, disposal and management of solid waste, slaughter houses, colleges, hospitals, stadium/sports complex, fire stations, grid substations etc. Under the agreement, the external works were to by executed by the colonizer or by the government on deposit of their cost by the colonizer. Schools colleges, hospitals, community centres etc. were to be either built by the colonizer at his own cost on the land set apart for that purpose in the project. In the alternative, the colonizer could transfer such earmarked lands to the government, free of cost.

29.The Supreme Court has held that community and other facilities like schools, hospitals, community centres, shops, etc. provided in the land set  apart  under  Section 3 (3) (a) (iv)  are  meant  for  the  benefit  of the  entire  colony  and  are base on population norms. These are costs incurred in discharge of the statutory obligations and cannot be passed on to the apartment owners in a part of the colony. Hon’ble Apex Court drew a distinction between ‘common areas and facilities’ and ‘community and commercial facilities’ and has held that—

“There is a marked difference between “common areas and facilities” and “community and commercial facilities”.  A colonizer is duty bound to provide all the common areas and facilities as per Section 3(f), except community and commercial facilities referred to in Section 3(f)(7).  “Common areas and facilities” referred to in Section 3(f)(7) of the Apartment Act has a co-relation with the “Community and Commercial facilities” referred to in Section 3(3)(a)(iv) of the Development Act.  It is for that reason that a discretion has been given to the colonizer to either provide the same or not to provide the same in the declaration referred to in Section 3(f) of the Apartment Act. The expression “may” used in Section 3(f)(7) of the Apartment Act clearly indicates that no duty is cast on the colonizer to give an undivided interest over those community and commercial facilities exclusively to the apartment owners of a particular colony, since the same have to be enjoyed by other apartment owners of DLF City, Phase I, II and III as well.  Even otherwise, the colonizer could not have parted with his ownership rights exclusively to one Colony alone. ”

30.    However, in the case before us, parks and gardens have already been transferred by the OPs to the GHMC in compliance with the provision in Section 4(c) of the Apartments Act, 1987. As for transfer of school, Shopping plaza and Hospital, we have noted earlier in the order that the prayer of the complainants before the State Commission was to direct the OPs to ‘construct and provide’ those services. It was not for handing over maintenance and control over them.

CONCLUSIONS

  1. While the complainants seek their rights from the provisions of the A P Apartments (Promotion of Construction and Ownership) Act, 1987, the Project itself was sanctioned under A P Urban Areas Development Act, 1975. Therefore, provisions of Section 3(d) of the 1987 Act, dealing with common areas and facilities have to be construed in harmony with those in Section 6 of the Act of 1975. Accordingly, the OPs have a clear obligation to provide common areas, services and facilities in the locations fixed for them in the approved plan. But this does not, ipso facto, imply a further obligation to transfer operational control and title over facilities like parks, gardens, school, shopping plaza and the hospital. In this regard, we find ourselves in agreement with the view conveyed in the compliance affidavit of Hyderabad Metropolitan Development Authority in its affidavit of 13.4.2011.
  2. The direction in the impugned order to hand over maintenance and control over the abovementioned facilities cannot be sustained. Such a relief was not even sought as part of the pleadings of the complainants.
  3. From the evidence on record, it is very clear that several services and facilities assured to the purchasers of residential units in the Sahara States Township had not been provided when the consumer complaint was filed in 2003.  The parks and gardens were admittedly under construction and therefore incomplete.  The community hall and the club house were also similarly incomplete. 
  4. On the question of construction defects in the apartments the appellant/OPs have failed to substantiate their claims. Therefore, the relief granted to individual complainants inBahar, Malhar and Vrindavani Apartments has to be upheld.
  5. The issue of insufficiency of potable water was eventually addressed by the OPs with their request for enhancement of allocation in 2007. However, this was long after the complaint had been filed before the State Commission in 2003.
  6. Most shocking is the case of the hospital.  It was falsely claimed to be under construction and nearing completion in 2005, while the inescapable truth remains that until 2013 it had remained only as a proposal. Therefore, in our view the State Commission was right in holding the OPs/Sahara India responsible for this lapse.

31.    In so far as the obligation to provide facilities and services, as promised and approved as part of the total project is concerned, the facts in the present cases are quite similar to those in Civil Appeal No.16 of 2013, Pushpanjali Farms Owners and Residents Association, New Delhi Vs. Ansal Properties and Industries Ltd.decided by the Supreme Court of India on 25.4.2013.  In a scheme promoted by the Ansal Properties & Industries Ltd. in 1979, individual farm houses were offered to prospective buyers with developmental works like roads, water supply, electrification, sewage disposal etc.  The scheme also carried a special feature in the form of the Country Club with facilities of swimming pool, tennis/badminton courts, sauna and steam bath etc.  The sale deeds were registered during 1983-88.  

32.    In 1995 the farm owners were informed that the club would not be provided and alternatively they were offered membership of another club. Before the National Commission it was contended on behalf of the API Ltd that there was no commitment to provide the Club in the individual sale deeds signed with the buyers of these farms nor was there any other contractual obligation to provide the same.  The National Commission held that the Country-Club was projected and committed as a special feature of the Pushpanjali Farms marketed by the vendors.  Therefore, the failure to provide it for 15 years and subsequent unilateral decision of the developer to withdraw this commitment altogether, amounted to a deficiency of service as well as an unfair trade practice. For this, the Commission imposed punitive damages of Rs.100 lakhs on the developer, in addition to award of compensation to individual purchasers.

33.    Hon’ble Supreme Court upheld the order of the National Commission and while doing so specifically referred to the following observation of the National Commission:-

“This is a case where we need to consider the impact of the conduct of OP on the buyers ofPushpanjali Farms.  No special expertise is required to appreciate that the OP would have realized significantly lower price from these farms, had the project been marketed without the country club.  Therefore, the element of loss suffered by individual farm purchasers cannot be ignored.  Simultaneously, we also need to consider the future impact on consumers at large.  If the consumer fora were to allow the service providers to benefit from such conduct, the latter will be encouraged to renege on their commitments, without any fear of the law.  As already observed, in this case,  failure of the OP to provide the country club tantamounts to a deficiency of service as well as an unfair trade practice.”

 34.   The case presently before us is similarly poised. To put all developments in their time perspective, the proceedings before the Andhra Pradesh Consumer Disputes Redressal Commission started in 2003, soon after the sale deeds with individual flat purchasers/complainants were executed. The State Commission considered the Report dated 21.2.2006 from the Advocate Commissioner appointed by it and the impugned order was pronounced on 30.6.2006. The following major developments, mentioned earlier in this order, took place after the impugned order and only during the pendency of the present appeals/revision petition before this Commission:-

  1. The agreement for enhancement of supply of potable water to the residents and for handing over the sewerage system was executed with Hyderabad Metropolitan Water Supply and Sewerage Board on 23.7.2007.
  2. The parks and gardens were completed and transferred to Greater Hyderabad Metropolitan Corporation by a gift deed executed on 9.12.2009.
  3. Through an affidavit filed on 12.2.2013, this Commission was informed that construction of the Hospital, a major facility promised to the flat buyers in this project, was yet to start. This makes it a delay of over ten long years.

35.    In view of the detailed examination above, we hold that defects in construction of these apartments and long delays in provision of services like adequate potable water, external electrification, parks and gardens, amount to serious deficiency of service under Section 2(1g) of the Consumer Protection Act, 1986. Consequently, the award of compensation to individual complainants in the impugned order is upheld.  At the same time, the direction in the impugned order to hand over the maintenance and control over certain specific assets/facilities to the complainant Association (ambulance, club building, shopping plaza and school building) is set aside.

36.    More importantly, the complete failure on the part of the appellants/OPs to construct and provide the Hospital, a significant and highly projected feature of the township, without any acceptable explanation, makes it a clear case  of service as well as unfair trade practice, within the meaning of the provision in Section 2(1)(g) and2(1)(r)  of the Act. It adversely affects a large body of consumers who have been deprived of the promised services. The lapse of the OPs is compounded further by their attempt to mislead the consumer through a false affidavit. If such conduct were to go unpunished, developers of similar projects in future will get emboldened and encouraged to assure special features and facilities to attract prospective buyers, without any serious intent or effort to provide them. Therefore, considering the enormity of their conduct, we deem it necessary and proper to impose punitive damages of Rupees fifty lakhs on the OPs/ Sahara India Commercial .  The same shall be deposited into the Consumer Welfare Fund of the Central Government, in terms of the provision in Rule 10A of the Consumer Protection Rules, 1987. The amount shall be deposited within a period of three months from the date of this Order, failing which, interest at the rate of 9% per annum shall be payable for the duration of delay.  All appeals and revision petition are disposed of in the aforesaid terms.

 

………………Sd/-………….

(D.K. JAIN, J.)

PRESIDENT

                                                                                                     

 

 

……………Sd/-…………….

(VINAY KUMAR)

MEMBER                    

 

S./-

 

 

                                                                                            

 

                                                                      


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