THE HON’BLE SRI JUSTICE N.V. RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD W.P. No. 4515 of 2011 Order: (Per N.V. Ramana, J.) The petitioners are into real estate business. They issued paper publication inviting general public to invest monies in their building venture at Annojiguda, Hyderabad. Responding to the same, respondent No.1 booked a flat by paying an amount of Rs.1,00,000/- to the petitioners by way of cheque bearing No. 556167, dated 06.08.2008, for which the petitioners also issued receipt. The petitioners informed respondent No.1 that he can pay the balance amount in instalments after the flat is allotted. After allotment of the flat, respondent No.1 visited the site and found that the construction of the building did not commence and that the petitioners failed to show the approval of layout etc. Therefore, respondent No.1 requested the petitioners to refund the amount paid by him and also issued legal notice. When the petitioners in spite of his several requests and receipt of legal notice, did not refund the amount paid by him, respondent No.1 filed complaint under Section 12 of the Consumer Protection Act, 1986, on the file of respondent No.3, namely the District Consumer Redressal Forum, Hyderabad, against the petitioners and claimed an amount of Rs. 2,33,484/- towards damages and mental agony along with interest thereon at the rate of 24% per annum from 06.12.2008 to till the date of realization. The petitioners contested the said complaint by filing counter. They contended that the complaint filed by respondent No.1 is not maintainable because there was no consumer relationship. That respondent No.1 failed to perform his part as per the allotment letter dated 07.08.2008. In the allotment letter, it is specifically mentioned that the price of the flat would be settled by the parties at the time of entering into agreement of sale, which would be entered upon respondent No.1 payment of 20% of the sale consideration within 30 days from the date of letter of allotment. As respondent No.1 failed to adhere to the conditions of the allotment letter, he is not entitled to claim refund of the amount. Thus contending, the petitioners prayed for dismissal of the complaint of respondent No.1. Respondent No.3 having considered the contention of the rival parties in the light of the evidence placed, and considering the fact that the petitioners are engaged in the business of housing construction activity, observed that such activity comes within the meaning of the definition “service” as defined under Section 2(1)(o) of the Consumer Protection Act, and that omission by a builder to fix the sale consideration or to give intimation to the allottees as regards the payment of balance consideration along with schedule of payment etc., would amount to deficiency of service. Respondent No.3 further observed that no material is placed by the petitioners to show the progress made by them in the construction of the building, and that they have also not filed any material to show that they have responded to the requests and replied to the legal notice issued by respondent No.1, requesting them to refund the advance amount paid by him. Having observed so, respondent No.3 held that there is deficiency in service on the part of the petitioners towards respondent No.1, and that equity and principles of natural justice demand that the petitioners should refund the amount paid by respondent No.1. Accordingly, respondent No.3 by order dated 23.07.2010, allowed the complaint filed by respondent No.1 and directed the petitioners to refund the amount of Rs.1,00,000/- to respondent No.1 along with interest thereon at the rate of 9% per annum from 06.08.2008 till the date of realization and also to pay costs of Rs..2,000/-. The petitioners questioned the said order passed by respondent No.3 in appeal before respondent No.2, namely the A.P. State Consumer Disputes Redressal Commission, which by the order dated 29.12.2010, dismissed the appeal filed by the petitioners, by confirming the order of respondent No.3 and awarded costs of Rs.2,000/-. The learned counsel for the petitioners submitted that there is no concluded contract or agreement or sale between the parties as regards sale of flat in the building proposed to be constructed by them, and as such, respondent No.1 cannot be treated as a consumer of the petitioners so as to mulct the petitioners for deficiency of service on their part. He further submitted that respondent Nos. 2 and 3 failed to consider that as per Ex. B1-terms and conditions of allotment, respondent No.1 was required to pay 20% of the sale consideration of the flat, within 30 days from the date of its receipt. Respondent No.1 having failed to perform his part of the obligation under Ex. B1, he submitted that both respondent No.3 and respondent No.2 committed a grave error in treating respondent No.1 as consumer of the petitioners basing on advance receipt dated 06.08.2008 and letter of allotment dated 07.08.2008, without considering the pleas in the light of the provisions of the Sale of Goods Act, 1930 and the Indian Contract Act, 1972, and directing the petitioners to refund the amount of Rs.1,00,000/- paid by respondent No.1. He submitted that the remedy of respondent No.1 to recover the amount is elsewhere and not before the Consumer Forum. Hence, he prayed that the order passed by respondent No.3, as confirmed by respondent No.2 by reason of the impugned order be set aside and the writ petition be allowed. On the other hand, the learned counsel for respondent No.1 submitted that respondent No.1 that believing the petitioners, he booked a flat by paying advance amount of Rs.1,00,000/- on 06.08.2008 for which the petitioners passed a receipt. On 07.08.2008, the petitioners issued letter of allotment, allotting a flat in the building. Pursuant to allotment of the flat, respondent No.1 visited the site and found that the construction of the building has not commenced and the petitioners failed to show the layout etc. Therefore, respondent No.1 demanded the petitioners to refund the advance amount and they also got issued legal notice, to which there was no reply from the petitioners. He submitted that respondent No.1 is a consumer of the petitioners and as there is deficiency of service on the part of the petitioners to respondent No.1, respondent No.3 allowed the complaint of respondent No.1 and directed the petitioners to refund the amount paid by respondent No.1, which was rightly confirmed by respondent No.2, and no interference is called for therewith by this Court in writ petition. In support of this argument, he placed reliance on the judgment of the Apex Court in Faqir Chand Gulati v. Uppal Agencies Private Limited[1]. He thus prayed that the writ petition be dismissed. Heard the learned counsel for the petitioners and the learned counsel for respondent No.1 and the learned Government Pleader for Civil Supplies for respondent Nos. 2 and 3 and perused the impugned orders passed by them. The contention of the petitioners that there is no concluded agreement between them and respondent No.1 for sale of the flat in the building proposed to be constructed, and as such, respondent No.2 and 3 committed an error in holding that respondent No.1 is the consumer of the petitioners and directing them to refund Rs.1,00,000/- paid by respondent No.1 towards advance on the ground that there is deficiency in service, cannot be accepted. Though the petitioners contend that there is no concluded contract or agreement between them and respondent No.1 for sale of flat in the building proposed to be constructed by them, the fact remains, it is their admitted case that they have issued paper publication inviting the general public for purchase of flats in the building proposed to be constructed by them. Responding to the paper publication, respondent No.1 paid an amount of Rs.1,00,000/- to the petitioners towards advance, who having acknowledged the said amount issued receipt dated 06.08.2008, which is marked as Ex. A1. On the next day, the petitioners issued letter of allotment dated 07.08.2008, which is marked as Ex. B1. Under Ex. B1, the petitioners allotted Flat No.5 in V Floor, “B” Block, admeasuring 1,584 Sft., including common area with proportionate undivided share in the land in the proposed building to respondent No.1. Even though respondent No.1 paid an amount of Rs.1,00,000/- towards advance towards purchase of flat, fact remains, the sale consideration was not fixed. Though in Ex. B1, there is a categorical mention that final price will be settled by both the parties at the time of entering into agreement of sale and that 20% of the sale consideration has to be paid by respondent No.1 within one week from the date of intimation or within 30 days of allotment letter, whichever is earlier, and that in default, the amount paid shall stand forfeited and the allotment stands cancelled without any further notice. It is the case of respondent No.1 that immediately upon receipt of allotment letter, he visited the site and found that there was no construction, and that the petitioners even failed to show the approved layout/building permission construction etc., and it is his further case that in spite of his several demands under Exs. A2 and A9, including registered legal notice, the petitioners having received the same, neither replied nor showed the approved layout/building construction permission. In the absence of the petitioners fixing the sale price of the flat and their non-responding to the demands and the legal notice issued by respondent No.1, respondent No.3, came to the conclusion that the question of respondent No.1 paying 20% of the cost price of the flat has no meaning and does not arise, which in our considered opinion, was rightly confirmed by respondent No.2 in appeal. It is the contention of the petitioners that there being no sale of goods to respondent No.1 by the petitioners for a consideration, respondent No.1 cannot be treated as a “consumer” as defined in Section 2(1()d) of the Consumer Protection Act, 1986. This contention of the petitioners cannot be accepted. Admittedly, the petitioners allotted a flat to respondent No.1 in the building proposed to be constructed by them, under the system of deferred payment by acknowledging payment of Rs.1,00,000/- towards advance, and having regard to the definition of “consumer” as defined in Section 2(1) (d) of the Consumer Protection Act, 1986, respondent No.1 can be safely be held to be a consumer of the petitioners. The law is well settled that an intending purchaser of an apartment/flat/house, can make a complaint against the builder with reference to the construction or delivery or amenities. In the Apex Court in Faqir Chand Gulati v. Uppal Agencies (P) Ltd., held as follows: There is no dispute or doubt that a complaint under the Act will be maintainable in the following circumstances: (a) Where the owner/holder of a land who has entrusted the construction of a house to a contractor, has a complaint of deficiency of service with reference to the construction. (b) Where the purchaser or intending purchaser of an apartment/flat/house has a complaint against the builder/developer with reference to construction or delivery or amenities. (emphasis supplied) Respondent No.1, admittedly, is an intending purchaser of flat in the building proposed to be constructed by the petitioners. That being so, having regard to the judgment of the Apex Court, referred to above, respondent No.1 being an intending purchaser of flat in the building proposed to be constructed and he having paid an amount of Rs.1,00,000/- to the petitioners which they even acknowledged receipt, can maintain the present complaint against the petitioners, who are builders of the proposed building. Since the definition of “service” as defining in Section 2(1)(o) of the Consumer Protection Act, 1986 also brings into its fold housing construction, and considering the fact that the petitioners, who are engaged in real estate, having invited customers for purchase of flats in the building proposed to be constructed, and having collected advance from respondent No.1 and having allotted a flat in the proposed building, failed to show the approved layout/building construction permission, much less started the construction of the proposed building in spite of several demands made by respondent No.1, we are of the considered opinion that respondent No.3, was justified in treating respondent No.1 as “consumer” of the petitioners and directing them to refund the amount of Rs.1,00,000/- with interest, paid by respondent No.1 towards advance, for purchase of flat in the proposed building on the ground that there was deficiency of service on the part of the petitioners towards respondent No.1, and no exception can be taken to the impugned order passed by respondent No.2, confirming the said view taken by respondent No.3, in the appeal preferred by the petitioners. During the pendency of the writ petition before this Court, it was brought to the notice of this Court that respondent No.3 non-bailable arrest warrants of arrest against the petitioners. This Court by order dated 19.04.2011 passed by W.P.M.P. No. 13418 of 2001, refused to stay the warrants of arrest. The petitioners to save themselves from arrest, paid the amount of Rs.1,00,000/-. Since the petitioners paid the amount, the order passed by respondent No.3, as confirmed by respondent No.2, stands complied with. However, for the foregoing reasons, we find no merit in the writ petition and the same is accordingly dismissed. No costs. ________________ N.V. RAMANA, J. _____________________ P. DURGA PRASAD, J. Dated: 16th September, 2011 KSR [1] (2008) 10 SCC 345