IMPORTANT POINT
Owners of site could not be directed to act as Developers.

Ashok Bhan, President—This Revision Petition has been filed against the order dated 6th January, 2006 of the State Consumer Disputes Redressal Commission, Andhra Pradesh at Hyderabad (for short, the State Commission). By the impugned order, the State Commission has confirmed the order passed by the District Consumer Disputes Redressal Forum, Visakhapatnam (for short, the District Forum).

2. Factual matrix leading to the filing of this revision petition is set out hereunder:

3. Petitioners Nos. 1 to 3 who were opposite parties Nos.3 to 5 before the District Forum, being the owners of the site, entered into a development agreement with M/s. Clcons Promoter and Builders, opposite party No.1, through their Managing Director – opposite party No.2, arrayed as respondents Nos. 2 and 3 in this revision petition.

4. Complainant is respondent No.1 herein and will be referred to as respondent No.1 hereinafter. Petitioner No.4 herein was opposite party No.6; namely, M/s. Padmavathi Constructions, before the District Forum.

5. Respondent No.1 agreed to purchase flat No.11 on the second floor which was to be constructed by respondents Nos. 2 and 3. The case of respondent No.1 was; that impressed by the brochure issued by respondents Nos. 2 and 3 he paid, initially, Rs.1,05,000 on 9th November, 2001 to respondents Nos.2 & 3 for the purpose of reserving a flat measuring 630 sq.ft.. He paid further sums of Rs.95,000 on 22nd January, 2001 and Rs.1,00,000 on 21st April, 2001 towards the sale consideration of the flat. In all, he paid a sum of Rs.3,00,000. The respondents No. 2 and 3 abandoned the construction activity. After abandonment of the construction, respondent No.1 allegedly approached Respondent No.2 and Managing Director of respondent No.2 who promised to execute the sale deed of the undivided site in favour of respondent No.1, but failed to do so in spite of repeated requests made, even though the respondent No.1 was ready to pay the balance sale consideration of 1,85,000/-.

6. Respondent No.1 and his friend then approached the owners of the site i.e. the petitioners to make construction on their site and asked them to register the undivided site but petitioners refused to do so. Further, allegation of respondent No.1 was that the petitioners were making attempts to sell the flats without complying with the earlier promise made by respondents Nos.2 and 3 to sell the flat No.11 on 2nd floor to him. Thus, alleging deficiency in service and unfair trade practice, respondent No.1 approached the District Forum seeking a direction to the opposite parties to complete the construction and deliver flat No.11 on 2nd floor of the building by collecting balance amount of Rs.1,85,000 or, in the alternative, to refund the amount paid by the respondent No.1 i.e. Rs.3,00,000 along with interest @ 24% per annum from the respective dates of payment till the date of refund and pay compensation of Rs.2,00,000 for causing mental agony, physical pain, financial hardship and deprivation of the flat and Rs.5,000 towards litigation cost.

7. Respondents Nos.2 & 3 (opposite parties Nos. 1 & 2) were proceeded ex parte as they did not appear in spite of service.

8. Petitioner No.1 (opposite party No.3) filed the written statement on behalf of the petitioners. In the written statement, it was admitted that the petitioners Nos.1 to 3 had entered into a development agreement with the respondents Nos. 2 & 3 for construction of a commercial-cum-residential complex. As per clause 8 of the agreement the developer alone was answerable to the claims, if any, with whom they had entered into an agreement to sell and the petitioners had nothing to do with the so-called agreement entered into by the respondents Nos.2 and 3 with the respondent No.1. Allegation of respondent No.1 that he had approached the petitioners was denied being false. It was asserted that the petitioners had not transferred their undivided share in favour of the respondents Nos.