JAMES K.DANIEL vs JAYALEKSHMI BUILDERS PVT. LTD.

COMPLAINT for a direction to the opposite party to return the amount paid by him for construction and delivery of apartment along with the undivided interest.

THE allegations in the complaint in brief are as follows : Opposite party is a builder, as per Exbt. A2 agreement dated 9.7.1996, the opposite party agreed to construct and deliver the apartment along with undivided interest within nine months from 9.7.1996, that the schedule described in Exbt. A2 agreement is stated to belong to one Rajendra Babu and Balachandran, that the builders entered into an agreement with the said owners with the object of developing the land and constructing the buildings thereon, and since the complainant desired to have an apartment he entered into the aforesaid agreement with respect for construction and delivery of the scheduled apartment described in Exbt. A2 along with the undivided interest for a total consideration of Rs. 9,40,000/- (Rs. nine lakhs and fourty thousand only). As per the agreement the total consideration was paid by the complainant in instalments evidenced by Exbts. A3 to A9. But the opposite party did not perform his obligation by completing the construction and effecting delivery of the property. In violation of the stipulations in the agreement the opposite party issued Exbt. A10 letter dated 7.6.1999 demanding a further amount of Rs. 1,64,000/-. Since the building along with undivided interest was not delivered within the stipulated time the complainant wrote letters to the opposite party. But the opposite party failed to perform its obligation under the contract by pleading for further time. By communication Exbts. A11, A12 and A13 the opposite party admitted non-compliance and wanted further time. Ultimately complainant issued Exbt. A15 notice to which he received Exbt. A18 reply, the building is not ready for occupation. Complainant alleges opposite party has not only committed breach of the undertaking under the agreement but has utilised the fund collected from the consumers for other purposes. Thus the complainant is entitled to a direction to the opposite party to return the amount paid by the complainant along with interest at 20% and also compensation. In the version by the opposite party he contended, the complaint is not maintainable and the same is barred by limitation. Opposite party admits Exbt. A2 agreement but denies the allegations in paras 1 to 6 of the complaint maintains, the complainant did not pay the instalments as is stipulated in Exbt. A2 agreement. As per Exbt. A2 agreement itself the purchaser has to pay in addition the stamp duty and other incidental expenses towards which the opposite party issued Exbt. A10 letter but the complainant did not pay the amount as demanded. The opposite party is also not in a position to complete the construction and effect the delivery without the complainant paying the amount mentioned Exbt. A10. The construction was completed before the stipulated period and the same was informed to the complainant. The opposite party has invested huge amount for this project and most of the purchasers since failed to pay the amount the builder is not in a position to comply with the demand. The opposite party, therefore, wanted dismissal of the complaint.

Complainant filed affidavit and offered himself for cross-examination. Complainant produced Exbts. A1 to A19. A commission was issued, he filed Exbt. C1 report. Points that would arise for consideration are : (1) Whether the complaint is maintainable ? (2) Whether the complaint is barred by limitation ? (3) Whether there is deficiency of service as alleged ? (4) Reliefs and costs ?

Point No.1 :

THE terms and conditions in Exbt. A1 would show that the same includes the availing of service of opposite party for the construction of apartment; though the same is an agreement with respect to construction as well as delivery and execution of the relevant document with respect to immovable property, since there is availing of service of the opposite party for the construction of the apartment, the agreement in content and purpose since discloses availing of service for consideration, breach of the same would constitute deficiency of service. Supreme Court in the decision in Lucknow Development Authority v. M.K. Gupta, III (1993) CPJ 7 (SC)=1994 (1) CPR 569 (SC), held that an agreement to develop lands or allot site or to construct a house for the benefit of common man is as much service and if the service is defective or it is not what was represented that would constitute unfair trade practice as defined in the Consumer Protection Act, 1986. Here, admittedly the opposite party is a builder who entered into an Exbt. A2 agreement to construct the apartment and deliver the same within a stipulated time. THE allegation in the complaint is, though the complainant has performed his part of the contract by paying the consideration the opposite party did not discharge his obligation by completing the construction of the apartment and deliver the same within the stipulated period. Having regard to the said case of the complainant it has to be held that the complaint is maintainable as what is involved is the non-performance of the service availed by the complainant for consideration. Point found in favour of the complainant. Point No. 2 : It is contended by the learned Counsel for the opposite party relying on para 5 of the complaint that the cause of action since has arisen on 9.4.1997 and complaint having been filed only on 25.2.2000 is beyond the period of limitation prescribed under Section 24A of the Consumer Protection Act, 1986. Section 24A, Sub-section (i) enjoins, the complainant can be admitted only when the same is filed within two years from the date on which the cause of action arises. The Sub-section (ii) states that inspite of the said Sub-section (i) a complaint can be entertained after the expiry of the period specified in Sub-section (i) if the complainant satisfies the Commission that he had sufficient cause for not filing the complaint within such period. One cannot insist the separate petition in the case of an original complaint for condoning delay of sufficient cause; but there should be allegation as regards the same noted in the complaint and if the said aspect is supported by materials produced by the complainant, the delay can be condoned. Complainant enumerates there were correspondences between the complainant and the opposite party regarding the construction and delivery of the apartment, reliance is made on Exbts. A11, 12 and 13 letters issued by the opposite party to the complainant which according to the complainant would simultaneously show that the opposite party wanted time to complete the construction. Once that is the conduct revealed by the opposite party himself and if the complainant waited as per the assurance given by the opposite party in those correspondences, that would ordinarily constituted ''sufficient cause'' under law for condoning the delay. In this regard it is necessary now to note that the construction of the flat and delivery of the same performance by the opposite parties had to be on or before 9.7.1996. Exbt. A11 is on 21.11.1997 the same is the letter by the opposite party wherein it is stated that the work is in progress and they expect to finish all the major works within five months and they express regret for all inconvenience caused. So, as on that date not only the construction was not complete but they plead for further period of five months. As per Exbt. A12 dated 6.5.1998 again the opposite party apologises for the delay in the completion of the flat and pleads to adjust with the opposite party. Thereafter in Exbt. A13 letter dated 28.9.1998 again the opposite party states that the construction of the apartment is in "tremendous progress" and they are expecting to finish it at the earliest. As on 28.9.1998 the apartment was not complete, not only that, assurance is being given that it would be delivered. If the complainant waited in view of the said assurance, limitation could start only from Exbt. A13. As is noted on 28.9.1998 the complaint was filed on 25.2.2000. Even otherwise this Exbt. A13 shows that the construction was not over even on the said date. Consequently one cannot say that default was on the side of the complainant and once it is seen that the complainant expected and waited for the delivery of the building he cannot be found fault with to crown to all those the opposite party sends Exbt. A10 letter dated 7.8.1999 there also what is stated is the apartment is reaching the final stage of completion. Of course Exbt. A10 contains a further demand of Rs. 1,64,000/-. What is necessary to be noted is, that even on Exbt A10 date the construction was not complete. The question whether the complainant was at default is to be considered in the succeeding point, whether there was breach. Exbt. A10 would show that the complainant is successful in establishing sufficient cause for not filing the complaint within the period of limitation. Point is hence found in favour of the complainant. Point No. 3 :

ADMITTEDLY Exbt. A2 agreement stipulated payment of the amount in four instalments. The total consideration of Rs. 9,40,000/- as paid is evidenced by Exbts. A3 to A9 receipts. At no point of time had the complainant raised an objection that since the payments were made not in accordance with the stipulation in the agreement the same cannot be treated as valid, instead, the opposite party accepted the said payment, and he never projected a protest even in Exbts. A10, 11, 12 and 13 letters send by him. In such circumstances having accepted the amount, now it is not open to the opposite party to plead that because the payments were not made in four instalments as stipulated, the work could not be executed. Now the next question for consideration is whether the construction of the building was complete. We have already adverted to the letters sent by the opposite party to the complainant those are Exbts. A10 to A13. These letters contain admission by the opposite party that the construction was not complete even on Exbt. A10, dated 7.6.1999 along with that there is the report of the Commissioner Exbt. C1. The report though would show that a major portion of the construction is over, the same is fit for occupation, the concluding part of the report mentions, the works yet to be completed for occupation. The acceptability of this report has to be considered in the context of the fact that no objection is filed to the Commission report by the opposite party and also in the context of letters issued by the opposite party Exbts. A10 to A13 particularly Exbt. A10. As has been noted by applying the principles laid down by the Supreme Court in Lucknow Development Authority v. M.K. Gupta (supra), referred early, it could be seen that the service is defective and the same would give raise to cause of action. Now an argument was advanced by the learned Counsel for the opposite party pointing out that in his version he has contended that a demand was made for payment of an additional amount of Rs. 1,64,000/- which the opposite party did not comply. It is urged by the learned Counsel, the said demand was made in accordance with the authority conferred on the opposite party as per Clause 3(a) and (b) of Exbt. A2 agreement. Clause (a) states that subject to inordinate increase in total construction cost, the Company reserves the right to change the value without notice, and (b) enjoins that the stamp duty and the incidental expenses like registration of the document, deposits before the authority and sales tax, etc. shall be made by the purchasers for the exercise of the power in the said clause, opposite party has to establish that there was inordinate increase in the total construction costs. As regards the demand in Exbt. A10, the very statements in Exbt. A10 itself would show the complainant did not discharge his whole obligation. The opposite party though had opportunity did not even file an affidavit nor has the opposite party produced any evidence in support of their contentions. The complainant has produced Exbt. A19 copy of order in O.P. No. 71/1999 which was filed by another consumer against the same complaint and, it is pointed out, with respect to the same structure apartments has sought to be purchased by different persons. It is urged that para 9 in the said order would show that the complainant has created a mortgage with respect of building and property in question for an amount of Rs. 1.30 crores. That was subsequent to the agreement in paras 9 and 10. It is found that there is unfair trade practice. The learned Counsel for the complainant also referred us to the decision of the National Commission in M.P. Bhava v. Malti Yogesh Karia, II (1996) CPJ 138 (NC), to urge that in a similar question the National Commission held that there would be deficiency of service when there is failure to comply with the condition by the builder. All that to be mentioned is that there is deficiency of service which would under law constitute unfair trade practice. Point found in favour of the complainant. Point No. 4 : In view of our findings in earlier points the opposite party is liable to return the amount received by them of Rs. 9,40,000/-. As regards compensation in a similar matter, in Exbt. A19 order it is held relying on the decision of this Commission in Dr. M. Thomas Abraham & Ors. v. Southern Investments (P) Ltd., 2000 (2) CPR 286, it would be justifiable in such circumstance to award interest at 18% on the amount in lieu of compensation. We are of the view that the complainant shall be entitled to interest at 18% on the aforesaid amount in lieu of compensation. Since the complainant is successful he shall be entitled to his cost, which we fix at Rs. 3,000/-. Point found accordingly.

IN the result the opposite party is directed to pay the complainant Rs. 9,40,000/- (Rs. nine lakh and fourty thousand) with interest at 18% on each of the instalments paid by the complainant from the date of such receipts of the respective instalments till payment of the whole amounts or recovery of the same. The complainant is entitled to his cost of Rs. 3,000/-. Complaint allowed.