Akbar Nanjibhai vs Nishan Developers

THE present revision petition has been filed by Akbar Nanjibhai (hereinafter referred to as the Petitioner) against the order of the State Consumer Disputes Redressal Commission, Gujarat (hereinafter referred to as the State Commission) in favour of Nishan Developers (hereinafter referred to as the Respondent).

THE facts of the case, according to the Petitioner (original complainant before the District Forum) are that he had purchased twin tenements under construction by the Respondent for a total price which was fixed at Rs.8 lakhs per tenement. Petitioner availed of home loan from ICICI Bank for payment towards the purchase of these tenements and he was issued allotment letter in respect of each tenement on 8th April, 2003 with the assurance that the Petitioner could shift into the accommodation by 30.06.2003 after completion of all legal formalities as well as after obtaining necessary Building Use(B.U.) permission and electricity connection. However, when he was not given possession of the tenements, as assured, Petitioner sent representations to the Respondent and later came to know that although the tenements have been completed, B.U. permission and electricity connection permissions were still pending. THE construction material used in the building was also of inferior quality as was noted by the Petitioner and his wife during inspections. Subsequently, Petitioner was told that he would have to pay Rs.25,000/- for extra work and when the Petitioner sought specific information on this issue, he got no response. He was finally handed over the possession of the tenements on 31.12.2003. Aggrieved because of the delay in handing over the possession of tenements due to which Petitioner had to pay more interest to the bank on the loan and also because of the poor quality of construction and lack of sufficient facilities, Petitioner filed a complaint before the District Forum on grounds of deficiency in service and unfair trade practice seeking compensation of Rs.4,01,722/-. Respondent, on the other hand, has denied the contentions and stated that the Petitioner had made a false complaint because he was refusing to pay an outstanding amount of Rs.1,15,835/- that was due from him. Further, Petitioner had taken over the possession of the tenements in the first week of October, 2003 and had also given an assurance to the Respondent that he would pay the outstanding amount of Rs.1,15,835/- for the extra work provided due on the tenements by the Respondent. Respondent further stated that the Petitioner had sold both the tenements through a registered sale deed dated 27.11.2006 for Rs.9 lakhs each and, therefore, if the construction had indeed been of a poor quality, Petitioner would not have been able to sell the two tenements for a price higher than what he had paid. Keeping in view these facts, it was submitted that the complaint had no merit and further the case because Petitioner had sold both the tenements for profit, thus, the transaction falls within the purview of commercial purpose and is outside the purview of the Consumer Protection Act, 1986. The District Forum after hearing both parties dismissed the complaint. The relevant part of the order of the District Forum reads as follows: We found substance in this submission made by the learned advocate for the opponents and it cannot be denied, because the complainant had purchased house at a price of Rs.8,00,000/- and sold out the same at a price of Rs.9,00,000/- and thereby he has received profit of Rs.1,00,000/- per tenement. Under these circumstances, case of the complainant falls within the purview of the commercial purpose and therefore complainant does not fall within the definition of Customer and under these circumstances, case of the complainant deserves to be rejected. Allegations made by the complainant are not tenable as he has not produced any reliable and concrete evidence in support thereof. Moreover, the complainant has ceased to be owner and occupier of both the disputed houses. Therefore, complaint becomes infructuous.

Aggrieved by this order, Petitioner filed an appeal before the State Commission which also dismissed the appeal on the grounds that since the tenements had been sold for Rs.9 lakhs each, Petitioner had got more amount than what he had paid for purchasing the same and if there was any deficiency of service on account of use of inferior quality of material in construction then the purchasers would not have paid the higher price.

HENCE the present revision petition. Counsel for both parties were present. Counsel for Petitioner stated that in fact the tenements had to be sold three years after purchase because they suffered from many deficiencies and defects due to the poor quality of construction and wiring. Even though, each tenement was sold for Rs.9 lakhs, this was actually a distress sale because if the tenements were constructed with good quality material, keeping in view the prevailing real estate prices, they would have fetched about Rs.12-13 lakhs per tenement. Counsel for Petitioner further stated that the learned District Forum erred in not taking the cognizance of the detailed report of the Court Commissioner, Shri Mitesh J. Thakkar, who after inspecting the premises found three types of defects in the tenements (i) that there was infestations of termites in a number of places and rooms including in the main drawing room, two bedrooms as well as in the toilets; (ii) there was moisture in several places; and (iii) there were some small as well as large ordinary cracks on several walls. Under the circumstances, it was wrongly concluded by the fora below that there was no evidence of the poor quality of construction. Counsel for Respondent while reiterating the submissions earlier made before the fora below stated that it had also appointed an engineer to examine the building but no such defects were noted. We have carefully considered the submissions made by the counsel for both parties and have gone through the evidence on record.

THE fact that the Petitioner had bought the two tenements from the Respondent in 2003 for Rs.8 lakhs each is confirmed. It is also not in dispute that the tenements were sold to two different parties in 2006 by the Petitioner for a higher price of Rs.9 lakhs per tenements and no complaints about these tenements have been received from the new owners of the two tenements. THErefore, the Petitioner in a short period 3 years got back reasonable returns by selling the two tenements. THEre is no evidence on record that this was a distress sale or that real estate prices had risen significantly during this period. However, the contentions of the Petitioner that the construction was not of the best quality has credibility in view of the report of the Court Commissioner who has clearly pointed out that there were termites infestations in several places as well as some major and ordinary cracks in the walls. Thus even though there were no structural defects in the tenements the deficiencies noted in the Court Commissioners report would have certainly caused both discomfort and inconvenience to the Petitioner. Keeping in view these facts, it is felt that some compensation on this account would be justified. We, therefore, direct the Respondent to pay the Petitioner a sum of Rs.25,000/- in respect of each tenement for the inconvenience and harassment caused to him because of the poor quality of construction. THE revision petition stands disposed of on the above terms.