K.ABDULLA vs SATISH A.DESSAI

MRS. Sandra Vaz e Correia, Member-The complainant has preferred this complaint alleging deficiency in service by opposite parties for their failure of complete the construction of the ground floor premises of the building of Taleigao, Tiswadi.

IN a nutshell, it is the complainant''s case that he entered into an agreement dated 27.5.1993 with the opposite parties for purchase of ground floor premises in the building to be constructed on a plot bearing survey No. 160/1 situated at Taleigao, Tiswadi, Goa. Under the said agreement, the complainant was required to effect total payment of Rs. 17,00,000 for the purchase of ground floor premises having a builtup area of 160 sq. mts. The complainant paid an amount of Rs. 11,00,000 receipt whereof was acknowledged and admitted by the opposite parties in the agreement itself. Separate stamped receipts were also issued for the said amounts. The opposite parties were duty-bound to complete the construction of the building and hand over possession of the premises on or before 30.9.1993. However, there was hardly any progress in the construction work as on September 1993. The complainant issued a legal notice to the opposite parties calling upon them to either complete the construction within the stipulated time or to refund the sum of Rs. 11,00,000 along with interest @ 24% p.a. The complainant also claimed damages of Rs. 6,00,000. IN repsonse, the opposite parties denied having received a sum of Rs. 11,00,000 but admitted receipt of Rs. 1,00,000. The complainant was thus a victim of unfair trade practices adopted by the opposite parties who were contractors in construction activities and the opposite parties denied receipt of Rs. 11,00,000 even after having admitted receipt in the agreements as well as issued stamp receipts. Hence the complaint. Upon being noticed, the opposite parties filed their written version and submitted that the complaint was misconceived, incompetent and untenable and filed mala fidely to blackmail the opposite parties into submitting to the complainant fraudulent demands. It was admitted that the opposite party No. 1 started construction of a building in a plot which he had earlier purchased. However, he could not complete the same on account of financial constraints. The complainant approached the opposite party No. 3 and offered to finance the completion of the construction or else to buy the ground floor premises having area of 160 sq. mts. The complainant further proposed that he would find a buyer or purchase the ground floor premises himself at a price of Rs. 17,00,000 and would make a down payment of Rs. 1,00,000 at the time of execution of the agreement and pay the balance amount within four months time. The complainant further proposed that in order to enable him to find a buyer and collect a substantial amount forthwith from the latter, it would be necessary to indicate in the agreement that a further sum of Rs. 10,00,000 had been paid by the complainant as part payment of the price. He further represented that no sooner he entered into a deal with a buyer he would effect payment of the said sum of Rs. 10,00,000. Furthermore, he represented that he would purchase the ground floor premises himself in case he did not succeed in finding a buyer. The complainant proposed that there should be two receipts in his favour, one with requisite details of the cheque in the sum of Rs. 1,00,000 and the other in respect of the sum of Rs. 10,00,000 without any details as also without any date. Accordingly, two agreements were executed simultaneously, one allegedly for being shown to the prospective buyer and the other for his own record as also two receipts, one for Rs. 1,00,000 and the other for Rs. 10,00,000.

Subsequently, on being approached regarding the payment of the sum of Rs. 10,00,000, the complainant went on giving assurances and finally handed over a letter dated 20.7.1993 proposing the sale of the ground floor premises @ Rs. 12,000 per sq. mt. The complainant assured the opposite parties that the deal was as good as struck and that he would effect the payment of Rs. 10,00,000 no sooner he entered into an agreement with the bank and that no further construction should be undertaken on the ground floor as the bank was likely to insist on changes and modifications. The complainant repeated his assurances about payment in August and September. In the last week of September 1993 the opposite party No. 3 again reminded the complainant about the payment of sum of Rs. 10,00,000 as also pay the balance price in the loan account of the opposite party No. 1 in Bank of India, Campal Panaji, by 30.9.1993. Instead the complainant issued legal notice to the opposite parties. The opposite parties denied that they are contractors engaged in construction activity. The opposite parties denied the claims of the complainant and prayed for dismissal of the complaint with costs.

OPPOSITE party No. 3 - Shri Anand J. Desai filed affidavit-in-evidence and reiterated the stand taken by the opposite party Nos. 1 and 2. This Commission by an earlier order dated 3.1.1995, had dismissed the complaint on the grounds that detailed and sufficient evidence would have to be tendered to establish the genuineness of the payment of Rs. 10,00,000 and referred the complainant to approach the Civil Court. The Hon''ble National Commission in appeal, remanded the matter with a direction to decide the case in accordance with law after hearing both the parties.

UPON resumption before this Commission the complainant filed affidavit-in-evidence and his cross-examination was recorded before the Commissioner Advocate Mr. J.F. Mello. In his affiavit-in-evidence, the complainant reiterated the averments made in the complaint as also his claim regarding payment of Rs. 10,00,000 to the opposite parties. In examination-in-chief the complainant produced a notarized copy of the agreement dated 27.5.1993 and stated that the original copy was with the Income Tax authorities. He also produced notarized copy of receipt dated 27.5.1993 for a sum of Rs. 1,00,000 as also copy of undated receipt for a sum of Rs. 10,00,000, and submitted that originals of both receipts were in possession of the Income Tax Department. He also produced copy of Advocates'' notice as well as opposite parties reply dated 12.10.1993. In cross, the complainant stated that his office and house was raided by the Income Tax Department in December 1997 and that all the documents produced by him were taken away by the said Department. Certified copies of the seized documents were not furnished to him by the Income Tax Authorities after the Income Tax raid, he submitted full accounts to the Income Tax Department in respect of all past transactions which included the payment of Rs. 11,00,000 paid to the opposite parties. He admitted that two agreements were executed simultaneously in respect with the transactions with the opposite parties on 27.5.1993 and there were two receipts one having a date and the other not having a date. He denied the suggestion that there was no mention of payment of the sum of Rs. 10,00,000 in his books of accounts. He also denied the suggestion that the earnest part payment was Rs. 1,00,000 by cheque and not Rs. 11,00,000. The complainant also denied the other suggestions of the opposite parties case put to him. Thereafter, at the request of the complainant, this Commission summoned the Assistant Commissioner of Income Tax with direction to produce original copies of the two agreements and the two receipts all dated 27.5.1993. The Assistant Commissioner of Income Tax, Panaji, produced original copies of the two agreements along with certified copies thereof which were retained. However, it was informed that the receipts for Rs. 1,00,000 and Rs. 10,00,000 were not seized by the department.

PARTIES filed written submissions through their Counsel.

WE have perused the pleadings, evidence and records in detail and have given our anxious consideration to the submissions made by the learned Counsel. In our opinion, in view of the rival contentions, the following issues crystallise for determination of this complaint: (i) Whether the complainant is a consumer within the meaning of the Consumer Protection Act? (ii) Whether there was deficiency in services rendered by the opposite parties to the complainant? (iii) Whether the amount of Rs. 10,00,000 was paid by the complainant to the opposite parties on 27.5.1993 as part consideration towards the purchase of the suit premises? (iv) Whether the complainant is entitled to the reliefs prayed for in the complaint?

Point No. 1 The execution of the first agreement dated 27.5.1993 at page C/9 between the parties is admitted. In the said agreement, Mr. Satish Dessai (the O.P. No. 1) is shown to be a "Civil Contractor". The recitals indicate that the "Owners" i.e., the opposite party Nos. 1 and 2, embarked upon construction of a multi-storeyed building on the plot of land purchased by them by a deed of sale with one Smt. Maria Afonso and her husband. The recitals further indicate that the purchaser i.e., the complainant approached the opposite parties for purchase of some premises on the ground floor. The above facts indicate that the opposite parties were in the business of real estate construction and their services were hired by the complainant for a consideration.

The opposite parties have also submitted that the premises have been purchased by the complainant in the commercial point of view and various provisions of the contract regarding the purchaser being free to negotiate and enter into agreements with third parties, etc. were highlighted. Reliance is also placed on Rajeev Metal Works v. MMTC of India, AIR 1996 SC 1083, in support of their contention that goods purchased for commercial purpose were excluded under the Consumer Protection Act. There is no dispute with the decision of the Hon''ble Apex Court. However, the issue in the matter before us is concerning deficiency in service in an immovable properties transaction, and not sale of goods. Hence the decision does not assist the case of the opposite parties.

WE, therefore, find this point in the affirmative. Even on facts, services hired for commercial purposes are not excluded from the purview of Consumer Protection Act. Point Nos. II & III taken together The second agreement between the parties at page C/17 is also admitted. In this agreement, the opposite parties have undertaken to deliver possession of the ground floor premises within a period of four months from the execution of the agreement upon payment of the entire consideration amount. The complainant has alleged at para 6 that there was hardly any progress as regards the construction work. On the other hand, the opposite parties in their written version have not produced any evidence to show that the construction was completed in all respects on the contracted date. Clause 9 of the agreement provides for notice in writing by the opposite parties to the complainant intimating completion of the said premises. It is seen from the records that no such notice was issued by the opposite parties nor any demand made for payment of alleged outstanding instalments.

THE main bone of contention between the parties is the payment of Rs. 10,00,000 made by the complainant to the opposite parties on 27.5.1993. It is the complainant''s case that the amount was paid against the consideration of the said premises and was mentioned in both the agreements executed between the parties. THE opposite parties further issued a stamped receipt for the said amount. On the other hand, it is the opposite parties'' case that the amount of Rs. 10,00,000 was never paid by the complainant and that the receipt was issued and payment mentioned in the agreement only to be shown to prospective purchasers. We are unable to accept the opposite parties'' version regarding non receipt of the said amount of Rs. 10,00,000. Firstly, the execution of the two agreements both mentioning about payment of the said amount of Rs. 10,00,000 is not disputed. Execution of the stamped receipt for Rs. 10,00,000 is also admitted by the opposite parties. In these circumstances, prima facie, the benefit of doubt ought to be given to the consumer-complainant. Secondly, even assuming that the opposite parties'' version regarding non-receipt of the amount is true, there is no documentary evidence on record to show that the opposite parties at any time during the contract period demanded payment of the said sum of Rs. 10,00,000 from the complainant. The first time that the receipt of the payment was denied was only in the reply to the legal notice issued by the complainant''s Advocate. This, it appears, was an afterthought. Thirdly, the opposite parties are literate persons and are business people engaged in civil construction. It is very unlikely that a prudent businessman would have admitted receipt of such a huge amount both in the agreement as well as issuing stamped receipts without actually receiving the money, and then remaining silent on the issue for four months. After the proceedings resumed before this Commission upon remand, the complainant filed a fresh affidavit and was cross-examined by the opposite parties. The complainant reiterated his stand that the said amount of Rs. 10,00,000 was paid to the opposite parties at the time of execution of the agreements and his testimony remained unshaken in cross.

IN the written submissions, the opposite parties submitted that all payments in excess of Rs. 20,000 ought to be paid by cheques and not in cash under the INcome Tax Act. While it is true that the INcome Tax Act disentitles an assessee from claiming revenue expenditure deduction of amounts over Rs. 20,000 paid in cash, there is no bar under any law from making such payments in cash. It is also to be noted that purchase of constructed premises is in the nature of capital expenditure where payments of this nature in cash are not disallowed. Whichever way one looks at it, it is the complainant who runs the risk as far as his INcome Tax assessments are concerned. Furthermore, the payment was reflected in the agreements. The opposite parties next contended that the Hon''ble National Commission did not set aside the findings rendered by this Commission in its order dated 3.1.1995. We are unable to agree with this contention. This Commission only held that detailed evidence would have to be tendered to establish the genuineness of the payment of Rs. 10,00,000. IN fact, this Commission also expressed an opinion that a receipt for an amount of Rs. 10,00,000 would not be issued by the opposite parties without having received the amount or any part thereof. It was felt that the matter required detailed evidence which is not possible in summary proceedings. The opposite parties have further submitted that the complainant ought to have produced his books of accounts and INcome Tax Returns. It would be highly unreasonable to expect every consumer to substantiate his payments made to traders and service providers by producing his books of accounts and INcome Tax Returns, more so, when payment of the amount has been mentioned in the contract coupled with issue of stamped receipts by the payee. It is also unreasonable to expect the complainant to show the source of the amounts claimed to have been paid, as further submitted by the opposite party in the written arguments.

IN their written submissions, the opposite parties have highlighted that the complainant ought to have proved through his books of accounts that he was holding a sum of Rs. 10,00,000 in cash on 27.5.1993 and ought to have produced his books of accounts as well as his balance sheet and INcome Tax returns showing that the alleged payments of Rs. 10,00,000 is reflected in his disclosures to the INcome Tax Department. As already stated earlier, the original copies of the two agreements dated 27.5.1993 are in the possession of the INcome Tax Department seized during the raid on the complainants. Both the agreements clearly disclose that an amount of Rs. 10,00,000 was paid by the complainant in cash on that day. The complainant has steadfastly stuck to his stand of having paid the said amount in cash and this has also been vindicated by his witness. As opined earlier, there is no need for us to dig deep into the complainant''s books of accounts, INcome Tax Returns, etc. when the fact of payment had admittedly been recorded in the two agreements coupled with the issuance of a stamped receipt by the opposite parties. Given these facts and circumstances, it is for the complainant to run the risk and face the music of the taxmen. The opposite parties have relied on a plethora of judgments of the Hon''ble Supreme Court to substantiate their point that the document tainted by fraud is void. Ningarvwa v. Byrappa Shiddappa Hirekarabar, AIR 1968 SC 956, Gorakhnath Dube v. Harinarayan Singh, AIR 1973 SC 2451, Dularia Devi v. Janardhar Singh, JT 1990 (1) SC 417, were cited. The facts and the law in the cited cases do not apply to the facts of this case. Firstly, a common thread that runs through all these judgments is that the plaintiffs were illiterate persons who could not read the contents of the documents had fraudulently misrepresented the character as well as the contents and legal effects of the documents. The plaintiffs never intended to sign what they singed and never intended to enter into the contract to which they unknowingly became parties. Their minds did not accompany their thumb impressions. In Gorakh Nath Dube''s case supra, the issue was one regarding invalidity of a document executed in excess of powers by the delegate. Besides, in Gorakh Nath Dube''s case and Smt. Dularia Devi''s case, supra, the Hon''ble Supreme Court was interpreting the provisions of the UP Consolidation of Holdings Act, 1954.

The opposite parties'' next submission is that only the Civil Court would have exclusive jurisdiction to decide on the issue of fraudulent misrepresentation as to the character of the document. No doubt the Civil Court alone has jurisdiction to set aside such a document. Having said that, nothing prevented the opposite parties from approaching the competent Civil Court to set aside the two agreements dated 27.5.1993. In fact, so long as the two agreements remain in force, it is all the more a reason to entertain causes for their performance.

IN the light of our discussions above we find that there was deficiency in services rendered by the opposite parties and further record a finding that an amount of Rs. 10,00,000 was paid by the complainant and received by the opposite parties on 27.5.1993. Point No. IV The complainant has prayed for a direction to the opposite parties to refund the amount of Rs. 11,00,000 along with interest @ 24% p.a. from 27.5.1993 and further for compensation/damages of Rs. 6,00,000.

IN view of our finding of deficiency in services rendered by the opposite parties, we are of the opinion that the complainant is entitled to the refund of the amount of Rs. 11,00,000 paid by him to the opposite parties. On the point of rate of interest, the rate of 24% claimed by the complainant is exorbitant and exaggerated. IN our opinion, a rate of interest of 12% p.a. would be fair and reasonable in the facts and under the circumstances of the case. The complainant has not given any justification for the claim of Rs. 6,00,000 towards compensation/damages. Although the complainant has claimed at Para 11 of the complaint that he would have earned Rs. 6,00,000 if the amount had been invested in a similar property, there is absolutely no evidence brought on record to substantiate the claim. It is an admitted fact that opposite party No. 3 Shri Anand J. Dessai was the duly constituted attorney of the opposite party Nos. 1 and 2. That being so, the opposite party No. 3 being merely an agent of the opposite party Nos. 1 and 2 would not be liable for the acts committed by him on behalf of his principals.

IN view of what is discussed above, we pass the following order: ORDER (i) The Complaint No. 57/1993 is partly allowed. (ii) The opposite party Nos. 1 and 2, jointly and severally, are directed to refund to the complainant the amount of Rs. 11,00,000 (Rupees eleven lakh only) along with interest @ 12% p.a. from 27.5.1993 till full settlement within thirty days. (iii) The opposite party Nos. 1 and 2, jonintly and severally, are directed to pay to the complainant an amount of Rs. 10,000 as costs of this litigation. Complaint partly allowed.