Ranga Reddy Consumer Forum orders Rs. 33.8L refund from Main Street Infra over failed deal
Hyderabad: The District Consumer Disputes Redressal Commission, Ranga Reddy, has ruled in favor of a complainant, ordering real estate developer Main Street Infra (P) Ltd. to refund Rs. 33.8 lakh along with interest for a failed residential flat deal made under a pre-launch offer.
The complainant, Nadimpalli Veera Venkata Subbaraju Varma, a resident of Nizampet, Hyderabad, filed a complaint against Main Street Infra (P) Ltd. and its Managing Director, Srinivas Kakarla, for failing to deliver a residential flat as promised. According to the complaint, Subbaraju Varma entered into a Memorandum of Understanding (MOU) with the company on July 13, 2022, under a pre-launch offer for a flat in the Jayas Srinivasam project, located in Velimeal Village, Ramachandrapuram Mandal, Sanga Reddy District.
As per the terms of the agreement, Subbaraju Varma paid Rs. 33,80,000 for a residential flat on the 18th floor of Block-C, measuring 1300 square feet with an additional car parking space. The project was to be constructed on land admeasuring 5.20 acres, with an undivided share of land of 21 square yards. The developers had promised to obtain the necessary building permissions and complete the construction promptly.
Subbaraju Varma claimed that after paying the full amount, the developers did not start construction or obtain the necessary permits. He asserted that the company provided no updates on the project's status, leaving him uncertain about his investment. Additionally, he accused the company of making false promises and failing to fulfill its contractual obligations.
In his complaint, Subbaraju Varma stated that the developers had been involved in multiple legal cases and had faced criminal charges, which raised further doubts about the company’s ability to deliver on its commitments. He also pointed out that the developers had failed to respond to multiple attempts to contact them, including legal notices.
After his repeated efforts to seek clarity on the project’s status and the refund of his money went unanswered, Subbaraju Varma issued a legal notice to the company on July 22, 2023, demanding the refund of Rs. 33,80,000. The notice was sent by speed post but was returned with the postal endorsement stating "no such addressee." In response, the company issued a cheque on April 1, 2023, for Rs. 33,80,000 as part of a buyback offer but failed to honor the promise. The cheque was never presented for encashment, as it was allegedly given merely as a security deposit.
Despite the legal notice and follow-up efforts, the complainant reported that the company did not respond, forcing him to approach the District Consumer Disputes Redressal Commission for redressal.
Notices were issued to the company, but these were returned with the endorsement "left without instructions." Given the non-response from the company, the complainant, with the Commission’s permission, published a notice in the newspapers. However, the company did not appear before the Commission or submit a written defense within the stipulated time frame.
As a result, the Commission set the company ex-parte, meaning the case proceeded without the company’s defense. The complainant submitted an affidavit and evidence, including receipts (marked as Ex.A2 and Ex.A3) showing that the company had indeed received the full payment of Rs. 33,80,000.
The Commission’s Ruling
After considering the evidence and the failure of the company to comply with its contractual obligations, the District Consumer Disputes Redressal Commission found in favor of the complainant. The Commission ruled that the actions of the company amounted to a deficiency in service and unfair trade practices under the Consumer Protection Act, of 2019. The developers had not only failed to deliver the property as promised but had also failed to secure necessary building permissions, despite receiving a substantial amount of money.
The Commission directed Main Street Infra Pvt. Ltd. to refund the full amount of Rs. 33,80,000 to the complainant, along with interest at the rate of 9% per annum, calculated from the respective dates of payment until the amount is fully refunded. The Commission also awarded a nominal compensation of Rs. 5,000 to the complainant for the legal costs incurred during the process.
Additionally, the ruling specified that if the company failed to comply with the order within 45 days, the interest rate on the refund would be increased to 12% per annum from the date of default until the amount was fully realized.
