LAKSHMI VAIDYANATHAN vs HOYSALA BUILDING DEVELOPMENT CO. LTD.

IN the complaint, the complainant has sought the following reliefs: "(a) direct the opposite party to deliver completed flat No. 19 of an area of 850 sq. ft. and register the undivided share in favour of the complainant; (b) on failure to do so direct the opposite party to pay the entire amount paid in a sum of Rs. 95,303-74 together with interest at 30% per annum as contemplated under the agreement; (c) direct the opposite party to pay a sum of Rs. 25,000/- towards damages; (d) provide for costs."

The facts, briefly stated, are as follows:

THE opposite party - a builder, represented to the complainant that they were builders of repute of flats and apartments and were constructing flats in Palm Grove Road, Bangalore, and offered a flat in the said apartments. THE complainant agreed to purchase a flat bearing No. 19, known as "Mukund Apartment", in consideration of Rs. 2,38,257/- i.e., at Rs. 280/- per sq. ft. of an area of 850.92 sq. ft. with an undivided interest of 0.952 sq. ft. The complainant further averred that in pursuance of the said agreement in the month of Jan., 1987, paid a sum of Rs. 50,000/- to the opposite party. The agreement was signed on 14.5. 1987 and it was registered on 14-8-1988. The balance amount was to be paid by the complainant to the opposite party at different stages of construction as stipulated under Clause 3 of the agreement. The opposite party agreed to handover the possession of the flat on completion of construction within 18 months from the date of agreement, which can be extended by a further period of three months.

It was further stipulated in the agreement that the opposite party shall give 15 days prior notice to the anticipated completion of the respective stages of construction. The complainant shall pay subsequent instalment for the next stage of construction on receipt of such a notice. It was also stipulated in the said agreement that if the complainant failed to pay the instalments due within a period referred above, the complainant should pay the same with interest at the rate of 18% p.a. for the said period of delay. It was also farther stipulated that in case the opposite party committed default in completing the construction of the fiat within a period of 18 months from the date of agreement, the opposite party shall pay interest at the rate of 18% p.a. in respect of the amount paid by the owner for a period of 6 months after the expiry of 21 months and thereafter at the rate of 30% p.a. till the date of completion of the building.

THE complainant averred that she paid a further sum of Rs. 10,000/- to the opposite party on 22-6-1987 and a sum of Rs. 35,303-74 on 25-5- 1988, in all a sum of Rs. 95,303-74 by 25-5-1988. The complainant, nextly averred that when she failed to get intimation of any progress of the construction work from the opposite party, caused many letters written by her husband to the opposite party on 24-12-1988, again on 11-1-1989, 16-2- 1989 and 16-3-1989 seeking to know the stages at which the construction of the building was going on but failed to receive any response from the opposite party to any of her letters and requests on phone and so a legal notice, was caused to be issued on 29-3-1989, to which also the opposite party failed to respond. A further legal notice was caused to be issued in the month of April 1989 to which a reply was sent by the opposite party taking untenable grounds.

THE complainant further averred that enen though the stipulated period for completion of the construction, 18 months and 21 months, was over long back, but the construction of apartments was at an unfinished stage. The complainant further averred that due to this indifferent and negligent attitude of the opposite party, she did undergo a great mental torture and agony. The complainant on the basis of these averments, sought the reliefs as narrated above.

THE opposite party filed objection and contended that this Commission had no jurisdiction to entertain the complaint as the complainant cannot be classified as a "consumer".

THE opposite party averred that the construction work was hampered due to the non-payment of instalment amounts by the apartment holders including the complainant He has averred that at every stage of construction, a notice demanding the payment of the instalment amount, as stipulated in the agreement, was given to the complainant, but the complainant failed to make the payment of the required instalments. He further averred that though the construction has come to a finishing stage, but the complainant has not paid the instalment amounts so far except a sum of Rs. 95,303-74 and so the complainant has no right to seek any relief. It was the complainant who had committed a breach of the terms of agreement and in consequence of which, the agreement has taken an automatic termination. The opposite party on the basis of these averments, sought the complaint to be dismissed.

The complainant, during enquiry, filed her affidavit in support of her case and got Ex.C-1 to C-15 marked in evidence.

THE opposite party examined R.W-1, its Managing Director and got Ex.R-1 to R-10 marked in evidence. Ex.C-1 to C-15 and R-1 to R-4 were marked by consent. Before considering the evidence, it is necessary to notice a preliminary objection raised by the opposite party. The learned Counsel for the opposite party submitted that the complainant cannot be classified as a consumer, not the allegations contained in the complainant can be classified as complainant as defined under Section 2(1)(c) of the Consumer Protection Act, so this Commission has no jurisdiction to entertain the complaint. This objection has to fail. The latest ruling of the National Commission reported in I (1991) CPJ 1 (NC). U.P. Awas EVP v. Garima Shukla covers this point.

THE un-disputed facts of the case are that the opposite party - a builder - allotted fiat No. 19 in "Mukund Apartments" in consideration of Rs. 2,38,257/- i.e., at Rs. 280/- per sq. ft. of an area of 850.92 sq. ft. with an un-divided interest of 0.952 sq. ft. in favour of the complainant. It is also not disputed that in pursuance of which the complainant paid a sum of Rs. 50,000/- to the opposite party in the month of Jan., 87, another sum of Rs. 10,000/- in the month of Jun., 1987 and a further sum of Rs. 35,303-74 in the month of May, 1988, towards the payment of consideration of this flat. THE agreement of sale as per Ex.C-1 was executed in respect of this flat by the parties. As per terms of agreement at Clause 3, the consideration amount was to be paid by the complainant in instalments at various stages of construction. It is also stipulated in Clause 3 of Ex.C-1 that the opposite party - the promoter - shall give 15 days prior notice of the anticipated completion of respective stages of construction, demanding payment of the subsequent instalment from the complainant. Clause 4 of the said agreement, Ex. C-1, stipulated that the construction shall be completed within a period of 18 months from the date of the deed. Though the amount of Rs. 50,000/- was obtained by the opposite party from the complainant in the month of Jan. 1987, but the agreement came to be signed in the month of May 1987 and it was registered in the month of Aug. 1988.

CLAUSE 9 of Ex.C-1, provided that in case the flat owner - complainant - failed to pay the instalments due within a period as specified above, he or she shall pay the same with interest at the rate of 18% p.a. for the said delayed payment. It further provided that if, in case, the apartment holder, committed default in payment, consecutively two defaults of for a period of more than 4 months, the promoter i.e., the opposite party was at liberty to treat the agreement as cancelled and refund the entire payment made by the apartment holder. The said clause further stipulated that if the promoter failed to complete the construction within a period of 18 months, he shall pay interest at the rate of 18% p.a. in respect of the amount paid by the apartment holder and after the expiry of 21 months he shall pay interest at the rate of 30% p.a. till the date of completion of the building.

HAVING regard to these facts and in the circumstances of the case, the only point that arises for consideration is whether there was any deficiency in service rendered by the opposite party; if so, whether the complainant did suffer any loss or injury due to the negligence on the part of the opposite party and if it is answered in the affirmative, to what amount of compensation the complainant is entitled to? The complainant has filed her affidavit. She has stated that she paid to the opposite party a sum of Rs. 95,303-74, that is, Rs. 50,000/- in the month of Jan. 1987, Rs. 10,000/- in the month of June 1987 and a sum of Rs. 35,303-74 in the month of May 1988. She has further stated that the opposite party did not give any notice i.e., 15 days prior notice to her as provided under Clause 3 of Ex.C-1. The complainant has further stated that her husband sent a letter, dated 26-12-1988 as per Ex.C-2 calling upon the opposite party to give details of the construction that was going on but she did not receive any reply for the same. A further letters was sent on 11.1.1989 as per Ex.C-3 enclosing a copy of the letter, Ex.C-2 to the opposite party. This was a registered letter. Even to this, there was no response from the opposite party. Thereafter another letter, as per Ex.C-4 dated 16- 2-1989 was sent to the opposite party. This was also a registered letter. Even to this, there was no response from the opposite party and so a further letter, Ex.C-5, dated 16-3-1989 was sent. It was also a registered letter and even for this there was no response by the opposite party. The complainant has further stated that a notice as per Ex. C-9, dated 29-3-1989, was sent through her Counsel to the opposite party. Even for this there was no response from the opposite party and so a reminder, as per Ex.C-10 dated 24-4-1989, was sent to the opposite party through her Counsel, to which the opposite party gave reply as per Ex.C- 11, dated 17-5-1989 taking certain frivolous grounds. On receipt of the-said reply, the complainant, through her Counsel, sent a rejoinder notice as per Ex.C-12 on 22-5-1989 stating that they were prepared to pay the entire balance amount with interest as stipulated provided the opposite party allowed the complainant to know as to when the construction of flat would be completed and the possession would be delivered. For this, there was no reply from the opposite party. So a reminder was sent on 25-6-1989 as per Ex.C-13, to which the opposite party sent a reply on 8-7- 1989, as per Ex.C-14.

The opposite party; though has stated that he has replied to the complainant several communications received, but in his evidence has staled thus : "Ex.C-2, dated 26-12-1988 is the letter written by the husband of the complainant wherein he has stated that he had not heard anything from me for a long period of 4 months. In the said letter, the complainant''s husband has also referred to the fact that on 1-7-1988, as per Ex.R-4, had requested me to give the internal pillar locations so as to make internal arrangements. I have not replied for Ex.C-2. But my office has orally told him that there is a plan in the agreement and he has himself to take the measurements. Ex.C-3, letter dated 11-1-1989 under which the complainant''s husband reminded of his earlier letter, Ex. C-2, and sent a copy of it. I have not replied Ex. C-3, Ex. C-4 is another letter sent by the complainant''s husband to me reminding his earlier letters - Ex. C- 2 & Ex. C- 3. The complainant''s husband in the said letter has also stated that if her was not to receive any reply on or before 1-3-1989, he would take legal steps against the company. I did not reply even to this letter. Ex.C-5 is yet another letter sent by the husband of the complainant dated 16-3-1989. This letter was also sent by him under registered post A.D. The husband of the complainant stated in the said letter that none of his letters for the last four months were answered. He has also stated in the said letter that he made several phone calls but none of the phone call was replied. Ex.C-9 is the notice of the learned Counsel for the complainant dated 29-3-1989.I did not send any reply even to this legal notice. On 24.4.1989 the husband of the complainant through their Counsel sent a reminder as per Ex. C 10."

The. opposite party has further, in his evidence stated thus: "Ex.C-12, dated 22.5.1989 is the reply notice sent by the learned Counsel for the complainant to the learned Counsel for the company. In paragraphs 11 to 16, has called upon the company to give certain details. We have not supplied those details. In paragraph 12 of the said notice he has called upon the company to give as to when the company will be able to give the possession of the flat. To that also we have not replied. As per paragraph 11 of the said letter, Ex.C-12, they have also stated that they were agreeable to pay stipulated interest for which also we have not given any reply. Ex.C-14, dated 8-7-1989, is the rejoinder sent by my Counsel. In this Ex.C-14, we have not shown as to when the flat will be ready In Ex.C-8, at paras 5 and 6, it has been stated that the complainant and myself were to meet at common place or at the place of learned Counsel of the company with all the records. I did neither comply with the said request nor did reply the complainant as I thought it was not necessary as I had by then completed my part of the duty."

THIS would go to show that the opposite party did not act in accordance with the provisions contained under Clause 3 of the agreement, Ex. C- 1. The opposite party has virtually admitted that several notices sent by the complainant and her learned Counsel were received but no reply was sent to them. The notices given by her would go to show that the complainant was all along requesting the opposite party to furnish the details and the stage at which the construction was going on. She even offered to pay the entire balance consideration amount with interest to the opposite party; as per her notice, Ex.C-12 dated 22-5-1989, if the opposite party were to furnish her the details of the progress of construction and the probable date, of completion of construction. Even then the opposite party turned a deaf ear to all her requests and implorings. So she was unable to make payment of instalment amount that were, to be paid by her at different stages of construction. The opposite party filed the copies of some letters, Ex.R-5 dated 26-5-1988, Ex.R-7 dated 24- 8-1988, Ex.R-9 dated 3-1-1989 and Ex.R-10 dated 15-2-1989 alleged to have been addressed by them to the husband of the complainant. These copies were filed at the time of recording the evidence of R.W-1 that is on 4-6- 1992. They were all alleged to have been sent under certificates of posting.

THE opposite, party with regard to the correspondence handled in his company has stated that "I did not personally handle all the correspondence". This would go to show that R.W-1 was not the person who had sent the letters referred by him as per Ex.R-5, R-7, R-9 and R-10. No official of the company who had actually handled the correspondence, has been examined by the opposite party. Ex.R-9 is the letter dated 3-1-1989 alleged to have been written by the opposite party to the husband of the complainant. It shows that by 3-1- 1989, 4th slab was completed and they were getting ready for casting the 5th slab. Ex.C-11(a), is the statement regarding the construction work. It shows that by 4-1-1989, 5th slab was completed and they were getting ready for casting the 6th slab. THEse two documents would go to show that either statement at Ex.C-11 (a) is not correct or contents in the letter Ex.R-9 are not correct. THE opposite party has in his evidence with regard to the casting of the slabs, has stated thus: "It is possible to cast more than one slab at a time." It is very difficult to accept the say of this witness that at one and the same time more than one slab to building could be cast. THErefore, the circumstances would go to show that it is highly un-safe to accept the evidence of RW 1. As referred above, the complainant was all along by writing registered letters and even issuing registered notices through her Counsel was insisting upon the opposite party to furnish details of progress of construction and take from her the entire balance consideration amount with interest and intimate her the probable date of completion of the construction. But the opposite party, as referred to above, in his evidence, has admitted that he did not take the trouble of replying to any of her requests. The opposite party has averred in the objection statement at para 9 with regard to the cancellation of agreement thus: "termination and cancellation of agreement is automatic upon the expiry of the period stipulated under the agreement."

THE recitals in Clause 9 of Ex. C-1, with regard to the cancellation of agreement reads thus: "that if the apartment holder commits default in payment consecutively two defaults or for a period more than 4 months, and after giving 10 days notice to the apartment holder to pay the entire arrears due to the promoter, it is open to the promoter to treat this agreement as cancelled and refund the entire payment made to the apartment holder without interest."

It is clear from the material on record that the opposite party did not give any 10 days notice to the complainant to pay the, entire arrears due. to him nor he did refund the amount paid by the complainant. THE recitals in Clause 32 of the agreement clearly show that such a notice shall be sent by registered post acknowledgement due. THE relevant recitals under this clause, read as under : "However, a notice which proposed to take action to terminate the rights given to the apartment holder in this agreement including cancellation of allotment of apartment shall be. sent by registered post acknowledgment due to the apartment holder."

THE material on record show that no such notice was sent to the complainant by the opposite party So the Right and title of the complainant to the apartment allotted to her subsists.

HAVING regard to the material referred above, it is clear that the complainant has satisfactorily established the fact that the opposite party has committed default and that the services rendered by him were completely deficient in nature and in consequence of which, and due to the negligence on the part of the opposite, party, the complainant did suffer loss and injury. The opposite party, Sri C.R. Nagaraj Setty, Managing Director, was present on 1-8-1992 when the arguments were heard. He fairly submitted that the purchase price of the flat at present would be Rs. 750/- per sq. ft. He further submitted that he would not part with the flat in favour of the complainant even if the complainant were to pay the entire balance consideration amount with interest.

The purchase price admittedly was at Rs. 280/- per sq. ft. The complainant had purchased apartment area being 850,92 sq. ft. for a total consideration of Rs. 2,38,257/- . As per the present rate i.e., at Rs. 750/- per sq. ft. the value of the flat would approximately come, to Rs. 6,38,190/- . The purchase consideration amount is Rs. 2,38,257/- . If this is deducted from out of Rs. 6,38,190/- damages to which the complainant would be entitled conies to Rs. 3,99,933/- .

IN the present case, the complainant has made on alternate claim, claiming refund of the money paid by her i.e., Rs. 95,303- 74 with interest at 30% p.a. The recital under Clause. 9 of Ex.C-1, with regard to the payment of interest provides thus: "that if the apartment holder fails to pay the instalments due by him within the period set out above, the apartment holder shall pay the same with interest at the rate of 18% p.a. for the said delayed payment; That if the apartment holder commits default in payment consecutively 2 defaults or for a period more than 4 months and after giving 10 days notice to the apartment holder to pay the entire arrears due to the promoter, it is open to the promoter to treat this agreement as cancelled and refund the entire payment made to the apartment holder without interest; If the promoter commits default in completing the construction of flats within 18 months from this day and making it fully ready for occupation and only work remains to be done for obtaining occupancy certificate, water, electricity and sanitary connections after having made a reasonable and necessary attempts on that behalf, the promoter shall pay interest at the rate of 18% p.a. in respect of the amount paid by the owner for a period of six months after expiry of 21 months from today and thereafter at the rate of 30% till the date of completion of the. building."

THE interest at 30% p.a. on the amount of Rs. 95,303-74 paid by the complainant to the opposite party from the date of its payment would approximately work out to Rs. 1,14,375/- . This sum is far lesser than the sum calculated at para 31 towards the amount of damages for which the complainant is legitimately entitled to. Having regard to the facts and in the circumstances of the case, we find it just and proper to direct the refund of sum of Rs. 95,303-74 paid by the complainant to the opposite party with in- terest at 30% p.a. from the dates of payment of the instalments till the opposite party refunds the same to the complainant. It is clear from the material referred above that the complainant has undergone a considerable mental agony and torture due to the negligence on the part of the opposite party and the deficiency in service rendered by them. So we deem it proper quantify and award by them. So we deem it proper to quantify and award the compensation on this count at Rs. 25,000/- . ORDER

IN die result, therefore, this complaint is allowed. The opposite party is directed to refund the sum of Rs. 95,303-74 together with interest at 30% p.a. (a) Rs. 50,000/- from 31st Jan. 1987 (b) Rs. 10,000/- From 14th Jun. 1987; and (c) Rs. 35,303-74 from 14th Aug. 1988

till the date of refund of the same to the complainant and pay a sum of Rs. 25,000/- as compensation towards mental agony caused to the complainant. The opposite party shall pay a sum of Rs. 2,500/- to the complainant towards the costs of the proceedings. The opposite party shall pay the sums so awarded to the complainant within a period of two months from this date. Complaint allowed with costs.