NATIONAL CONSUMER PROTECTION COUNCIL vs POORVADEEP CORPORATION

THESE complaints which involve common questions of law and facts have been consolidated at the request of the parties to these complaints and common evidence is recorded in complaint No. 51 of 1990. Since common questions are involved in these complaints, they are disposed of by this common judgment.

FACTS giving rise to these complaints are as follows: One Vasudev Lallubhai Dalwadi and others owned land bearing. Survey Numbers 352/1 to 352/3 of Rakhial admeasuring 14610 sq. mts. The owners of the land obtained sanction of Competent Authority under the Urban Land Ceiling Act for construction of houses for persons belonging to weaker section of the Society. Under the scheme, price of each residential unit of C type was fixed at Rs. 27,000/-. It is alleged that opponent No. 1 M/s. Poorvadeep Corporation (Corporation for short), a partnership-firm, entered into an agreement with the owners of the land to develop the land and to organize housing scheme for persons belonging to weaker section of the Society under the sanction given by the Competent Authority. The Corporation framed and organized housing scheme consisting of apartments/flats. Several buildings which are described as blocks were to be constructed and each block consisted of several residential units/flats. The scheme was given wide publicity by issuing brochures and pamphlets and publishing advertisements in newspapers to attract buyers for the residential units. The whole scheme consisting of several blocks was given the name of Mahalaxmi apartments and the blocks were to be constructed for two co-operative housing Societies viz. (1) Mahalaxmi Rakhial Co-operative Housing Society (Society for short); and (2) Matruvandana Co-operative Society (Matruvandana Society for short). The blocks consisting of flats were to be completed within specified time. The complainants became members of the Society. The blocks consisting of flats were to be completed within specified time. The complainants were given possession of the flats allotted to them between 1988 and 1990. Several other persons had also become members of the Society and Matruvandana Society and they were also allotted and given possession of the flats in the blocks constructed for said Societies. Blocks consisting of 384 flats'' were constructed by the Corporation and allotment and possession of these flats to the members of the Societies and Matruvandana Society were given as stated above. It is alleged that the quality of construction was poor but the complainants did not come to know about it till the blocks were damaged or collapsed after rain on August 24,1990. It is alleged that on August 24,1990 the area in which the blocks were constructed-was inundated due to rain and several blocks developed cracks. The damage to the blocks was so extensive that they were not considered safe for human habitation. The Ahmedabad Municipal Corporation within the local limits of which the block were located issued notices to the occupants of the flats i.e., the complainants and other members of the aforesaid two Societies in August, 1990 calling upon them to vacate me blocks and informed them that in case it was considered advisable the blocks or buildings would be pulled down because, in the opinion of the Ahmedabad Municipal Corporation, the blocks/buildings were not safe for habitation. The complainants and other occupants of the flats were asked to get the blocks inspected by competent structural designer holding appropriate licence and to carry out necessary repairs in the blocks as advised by such structural designer. The occupants were asked to submit structural designer''s report alongwith his opinion regarding load bearing capacity of the blocks before occupying or using the blocks. It is alleged that some blocks totally and some partially fell down on account of the damage to their structure. Complainants are members of the Society who were allotted flats in Block Numbers 5 and 6. Block No. 5 consisted of two buildings with a stair case in between. There were sue flats in one building which totally collapsed. Staircase between the two buildings of Block No. 5 had also collapsed making flats on the upper floors of the building inaccessible. In this building there were 12 flats. This building had also developed cracks making it uninhabitable Block No. 6 consisted of 24 flats out of which 12 totally collapsed and the remaining 12 were not habitable on account of damage and cracks in the buildings. It is submitted that the block and /or building were damaged or part of them collapsed because of poor quality of construction. It is submitted that Corporation had not used building materials of goods or standard quality and that resulted in damage to the building or collapse of building.

We have referred to the members of the Society who have filed complaints alongwith National Consumer Protection Samiti, a voluntary consumer association, as complainants because in fact and substance these complaints are on their behalf. The complainants have prayed that the Corporation be directed to construct building of the same type which are without any defect and allot flats to the complainants as per the agreement with them. It may be mentioned here that the complainants had joined Partners of Bhalani Patel & Co., Architects and Engineers as Opponent Nos. 2 and 3. However, at the time of hearing of these complaints, it was stated on behalf of the complainants that these complaints were not pressed against opponent Nos. 2 and 3. We have therefore referred to only the Corporation as the opponent against whom the complainants have sought relief as aforesaid.

IT may be mentioned that persons other than the complainants who were allotted flats in the blocks of buildings constructed for the Society and Matruvandana Society had filed complaints for a appropriate relief against the Corporation and other opponents for damage to their blocks or flats. These complaints which were 36 in number were consolidated with the present complaints and common evidence was directed to be recorded in Complaint No. 51 of 1990. The Commission had appointed Commissioner to make local inspection and record details of damage to various blocks, buildings and flats. The Commissioner submitted his report to the Commission. The Corporation submitted written objections to the report. The Commission heard the parties and ultimately, it appears, the Corporation accepted the report with some modification. So far as persons other than the complainants were concerned, or in other words, persons who were complainants in the aforesaid group of 36 complaints and the opponents in those complaints arrived at settlement and the Commission by its order dated August 28, 1992 disposed of the said 36 complaints directing the Corporation to pay different amount to complainants of the said 36 complaints as stated in the order. Thus, the group of said 36 complaints came to be disposed of. IT was, however, made clear that the present complaints which were regarding Block Nos. 5 and 6 were separated from the said group and they were to be decided on merits. The Corporation resisted the complaints by filing written statements. It denied the allegations of poor construction or defect in construction of the blocks made by the complainants and raised several contentions. It is not necessary to set out all the contentions raised by the Corporation, since, at the time of hearing of these complaints, only the following pleas were pressed into service viz., (1) The dispute which was raised in the complaint was dispute between the members of co-operative Society and Society and therefore the only remedy which is available to the complainants is to approach the Board of Nominees under Section 96 of the Co- operative Societies Act;

(2) If breach of terms and conditions on which sanction was granted by the Competent Authority under the Urban Land Ceiling Act for construction of houses for weaker section was committed, complainant should approach the Competent Authority;

(3) Damage to buildings or collapse of building was due to an act of God. There was very heavy rain as a result of which the area in which the blocks/ building stood was inundated and that caused damage to the building or collapse of the buildings; and

(4) The complainants had failed to prove the loss. Since complainants have not been pressed against opponent Nos. 2 and 3, it is not necessary to refer to the contentions which are raised by them in their written statements.

IT is not disputed that six flats of building in Block No. 5 and twelve flats in Block No. 6 have totally collapsed. IT is also not disputed that there are cracks, crevices and damage to other flats in block Nos. 5 and 6. As stated above the Commission had appointed Commissioner to make local inspection of the blocks of the Society and Matruvandana Society and the Commissioner submitted his report Exh. 207. At the time of local inspection, the Commissioner found that Flat Numbers 1, 2, 7, 8, 13 and 14 of Block No. 5 had totally collapsed and household articles lying in the flats were totally damaged or destroyed. The Commissioner found Flat Nos. 3, 4, 5, 6, 9, 10, 11, 12, 15, 16, 17 and 18 of Block No. 5 vacant and damaged. IT is stated that as northern part of the flats had collapsed the flats were damaged and they were likely to totally collapse any time. So far as Block No. 6 was concerned, the Commissioner found that western wall of Block No. 1 had collapsed and there were cracks in other walls of the flats. The flooring of the flat had also sunk. Flooring of Flat No. 3 was also damaged. There was a large hole in Flat No. 5 and flooring of Flat No. 6 had sunk and it was unfit for habitation. Same was the condition of Flat Nos. 6 and 8. The Commissioner could not see the condition of other flats of Blocks No. 6 since they were locked. At the request of the complainants, further direction was given by the Commission to the Commissioner to take samples of the materials used for construction from the flats which were damaged. Thereafter it was reported to the Commission that total 12 flats of Block No. 6 had totally collapsed on January 31, 1992 and remaining blocks had become totally uninhabitable. These flats which had become uninhabitable were not accessible as the stair- case had collapsed. The Commission was requested to direct the Commissioner to collect samples of building materials from the blocks which had collapsed or which were damaged. The Commissioner collected samples in presence of the parties or their representatives. These samples were sent for analysis to the L.D. Engineering College, Ahmedabad. The building materials were analysed by Professor J.N. Joshi of said Engineering College. He has submitted his reports which are placed on record. The reports show that so far as samples taken from walls were concerned, proportion of cement, sand was 1 : 7. In other words, for one unit of cement, seven units of sand were used. In another sample, it was found that this proportion was 1 : 9. In third sample, proportion was 1 : 4. So far as concrete structure or slab was concerned, the proportion of cement, sand and ''kapchi'' was 1 : 2 : 4. The aforesaid reports are proved by the testimony of Prof. J.N. Joshi. He has stated that in his opinion the proportion of cement and sand should be 1 : 4 so far as plaster is concerned and it should be 1 : 6 so far as construction of walls is concerned. So far as slab is concerned, according to Prof. Joshi, the proportion of cement, sand and ''kapchi'', is required to be 1 : 2 : 4. IT is, therefore, clear that so far as plaster and construction of walls are concerned, proper proportion of cement and sand was not maintained whereas so far as slab was concerned, proper proportion was maintained. Prof. Joshi stated that if proper building materials are used, normal life of a building is about 60 years. There is no cross examination of Prof. Joshi on behalf of the Corporation. Corporation''s witness Bholabhai Valjibhai Patel has admitted that six flats of one block and 12 flats of another block had fallen down. He has no doubt, denied that the flats had collapsed or fallen down because of poor construction. Bholabhai Patel, who was the Manager of the Corporation did not have any personal knowledge regarding the work of construction or the quality of construction. In any case, he does not possess any qualification or expert knowledge regarding construction of building. The Corporation has examined P.H. Anandjiwala, Consulting Engineer to establish that ''the reports and opinion of Prof. Joshi are not reliable. However, as observed above. Prof. Joshi has not been cross examined and he has not been confronted with the opinion of P.H. Anandjiwala. No reliance could be placed on the testimony of P.H. Anandjiwala, unless Prof. Joshi was given opportunity to meet with the points raised by him in his evidence. The fact remains that the flats or buildings as stated above collapsed and there was damage to the flats/buildings. There were cracks in the buildings. Staircase also fell down and many flats were inaccessible. In our opinion, principle of res ipsa loquitur would be attracted in a case like this. If a building which is expected to last for sixty years collapses within four years, it is for the person in charge of construction to explain as to why it so collapsed. It is not disputed that the Corporation was given contract for construction of the building or blocks. Whether or not it gave sub-contracts to other persons is not relevant. It was the responsibility of the Corporation to construct buildings with proper foundation and according to the plans and standard practice and specifications. It was, therefore, for the Corporation to prove by positive evidence that the buildings/flats collapsed, although it had used good quality building materials in proper proportion and had also followed standard practice and specifications for construction of buildings. When any person undertakes to construct building, he is expected to possess adequate qualification, knowledge and experience for putting up construction and if he does not possess such qualification, knowledge and experience, he has to put up construction with the help of experts. In the instant, case, the Corporation engaged Bhalani Patel & Co., as Architects and Engineers to draw up plans etc. It was not enough to prepare plans and get them passed by concerned authorities. It was also the duty of the Corporation to engage qualified or experienced persons to supervise the work of construction. It was also the duty of the Corporation to see that good quality building material in proper proportion was used. It should have also seen that the construction work was carried out in accordance with the plans approved by the concerned authorities. These facts could have been established by the Corporation by leading proper evidence. There is hardly any evidence, much less, satisfactory or convincing, led by the Corporation to prove the above facts. In absence of any satisfactory evidence on the part of the Corporation, adverse inference has to be drawn against the Corporation that the construction was not done in accordance with the plans and that good quality building materials in proper proportion were not used. In the instant case, not only the Corporation has failed to prove that the construction was done according to the plans and standard practice and specifications but we have evidence of expert namely Prof. Joshi to prove that the building materials were not used in proper proportion in constructing the buildings or blocks. It is also significant to note that all the buildings or blocks have not collapsed. All the buildings were subjected to same stress as the building which collapsed. The entire area was inundated and if canal adjoining the buildings had overflowed or broken its banks as alleged by the Corporation, it would have affected all the buildings and all the buildings would have collapsed. It is therefore obvious that Block Nos. 5 and 6 were extensively damaged and part of them collapsed on account of poor quality of construction. We are not prepared to believe that the buildings were damaged or some of them collapsed because of act of God namely heavy rain. This theory of act of God is advanced only to escape from the liability to make good the loss or pay compensation to the complainants. The Corporation is guilty of negligence or in any case deficiency in rendering services to the complainants. We hold that the Corporation is liable for the loss suffered by the complainants on account of damage to the building or the collapse of the buildings.

IT is the case of the Corporation that the Society and Matruvandana Society had given it contract to construct the houses. IT was submitted that it had not agreed to develop the land for and on behalf of the original owner and that it had not framed or organized the scheme for construction of houses as alleged by the complainants. IT was in that context that it was submitted that the Societies of which the complainants and others were members had given it contract to construct the houses. However, the fact remains that the Corporation was in charge of construction, in fact, Bholabhai Valjibhai Patel had to admit that the Corporation was given power of attorney by the original owners of the land and it was in pursuance of this power of attorney that the Corporation had developed the land and organized the housing scheme. Bholabhai Patel also admitted that the plans for construction of the buildings were got sanctioned by the Corporation in 1975 even before the Societies came into existence. There is therefore no doubt that it was the Corporation which had framed and organized the scheme for construction of the buildings and carried out the work of construction. There is no dispute regarding the construction or workmanship of construction between the Society and the complainants who are members of the Society. The dispute is between the complainants and the Corporation. Even assuming that it was the Society which had given contract for construction of buildings to the Corporation, it cannot be denied that the complainants are beneficiaries of these contracts and, therefore, they are consumers within the meaning of the definition of "Consumer" given under Section 2(1)(d) of the Consumer Protection Act, 1986. They are, therefore, entitled to approach this Commission by way of these complaints under the Consumer Protection Act. There being no dispute between the Society and the complainants, there is no question of the complainants, approaching the Board of Nominees under Section 96 of the Co-operative Societies Act.

WE also do not find any substance in the Corporation''s contention that the complainant should have approached the Competent Authority under the Urban Land Ceiling Act. The Competent Authority, under the said Act could not have given any relief to the complainants with regard to the damage to or collapse of the buildings. Having regard to the facts and circumstances of the case, in our opinion, the complainants have successfully proved the allegations made in the complaints. There is no doubt that they have suffered loss inconvenience and hardship on account of damage to the buildings or collapse of the buildings. It is also evident from the Commissioner''s report that the complainants had occupied their flats in the buildings and their household articles were totally damaged/destroyed when the buildings were damaged or collapsed. Now, the next question which arises for our consideration is what relief should be granted to the complainants. As pointed out above, the complainants have sought direction against the Corporation to put up new constructions without any defects and to allot them flats in these new buildings. The prayer which is made by the complainants could not be said to be unreasonable having regard to the facts stated above. It is common knowledge that the prices of building materials have gone up very high and it would be well-nigh impossible for the complainants to put up new construction at their own costs at present. They belong to weaker section of the Society or what is popularly known as lower middle class. They have invested their own hard earned money and taken loan from Housing Finance Corporation. They are liable to pay instalments of loan to the Finance Corporation. Under these circumstances, the proper relief to grant is to direct the Corporation to repair or construct blocks or buildings of same dimension, specifications as per the approved plans under strict supervision of qualified structural and other engineers at its own cost. The complainants are members of the Society and by virtue of their being members of the Society they are entitled to continue to occupy the land on which the aforesaid buildings or blocks were constructed. Neither the Society nor anyone else could take away the land from them which is legally in their occupation. Therefore, the proper order to pass would be to direct the Corporation to repair or construct blocks or building on the said land as stated above. It was however felt by the complainant that it may not be possible or practical to enforce or implement such order or direction. It was submitted that instead of directing the Corporation to put up new constructions or repair the buildings as observed above, it would be in the interest of the complainants to direct the Corporation to pay compensation in terms of money so that the complainants could themselves make arrangement for constructing buildings or repair the buildings, as the case may be. It was, therefore, suggested on behalf of the complainants that each complainant should be awarded compensation in terms of money. The complainants have submitted adequate compensation having regard to the loss which each complainant has suffered be awarded. We have already observed above that each complainant has invested his own money and taken loan for acquisition of flats or residential unit in the buildings which were constructed by the Corporation. The complainants have expressed desire to receive compensation in terms of money instead of directing the Corporation to reconstruct or repair the blocks/buildings as stated above.

Compensation payable to each of the complainants of the present group of complaints has to be determined on the basis of some principle. In other words, we cannot award an arbitrary lumpsum compensation. Flats in Block Nos. 5 and 6 have become uninhabitable since August, 1990 and, therefore, they are lying vacant since them. In other words, all the complainants have not been able to use their residential units or flats since last about 6 years. Repair or reconstruction of the flats will take at least about six more months. Therefore, the total period during which the complainants would be deprived of occupation of the flats would be at least about 6: years. Block No. 5 consisted of 18 flats. Out of them six have totally collapsed. Block No. 6 consisted on 24 flats, out of which 12 have totally collapsed. The remaining flats, which could not be used have been damaged or have developed cracks.

EACH of the complainants has invested Rs. 27,000/- of his own and taken loan of Rs. 20,000/- from financial institute. Thus total investment made by each complainant was Rs. 47,000/-. So far as complainants whose flats totally collapsed will have to make fresh investment for reconstructing flats. They have also not been able to use the flats inspite of investment of Rs. 47,000/-. So far as other complainants whose flats have been damaged are concerned, they have also not been able to use their flats. These complainants have also not been able to use their flats because of the collapse of stair-case. All the complainants have thus not been able to use their flats after investing amounts as aforesaid and they must have had to stay in rented permises. In our opinion, as stated in the final order, the Corporation should be made liable to pay to each complainant interest @ 15% p.a. on the amount invested by each complainant by way of compensation for being unable to use his/her flat. We have taken the rate of interest @ 15% because had the complainants invested the above amounts in fixed deposits with a reputed company, they would have been able to earn interest @ 15%. In any case, they must have spent amount equivalent to such interest by way of rent. In addition to this amount, each of the complainants whose flats have collapsed are entitled to claim Rs. 47,000/- together with interest @ 12% p.a. as stated in the final order. We have decided to award the amount invested together with 12% interest because these complainants will have to pay escalated cost for building materials for constructing their flats because it is well-known that the cost of building materials have considerably risen as compared to the prices prevailing in 1985. In addition to compensation as aforesaid, each complainant whose flat has been damaged shall be entitled to compensation of Rs. 1,000/- for repair of the flat. The complainants have been awarded compensation as aforesaid also keeping in view cost which they will have to incur for constructing new staircase. We, therefore, pass the following order. ORDER These complaints are partly allowed and the Corporation i.e. Poorvadeep Corporation is directed to carry out and comply with the directions given herein below within three months from the date of this order. (1) It shall pay to each of the complainants of all the complaints by way of compensation a sum equal to interest @ 15% p.a. on sum of Rs. 47,000/- from September 1,1996 till the payment thereof is made or for the period of six and half years whichever is higher.

(2) In addition to the aforesaid compensation, it shall pay Rs. 47,000/- together with interest @ 12% p.a. from September 1,1990 till payment thereof is made to each of the following complainants: (a) Manubhai Patel (Complaint No. 95/ 90) (b) Babubhai Prajapati (Complaint No. 96/90) (c) Ranjanben Shukla (Complaint No. 110/90) (d) Mahendra Vora (Complaint No. 111/ 90) (e) Kamlesh Golani (Complaint No. 112/ 90) (f) Rajnikant Pandya (Complaint No. 116/90) (g) Arvindbhai Patel (Complaint No.75/ 90) (h) Atulkumar Mansukhbhi (Complaint No.75/90) (i) Kanubhai Patel (Complaint No. 75/ 90) (j) Bharatkumar Patel (Complaint No. 90/90) (k) Daxaban Vyas (Complaint No. 107/ 90) (l) Pushpaben Soni (Complaint No. 90/ 90) (m) Natvarlal Vora (Complaint No. 107/ 90) (n) Ushaben Kothari (Complaint No. 78/ 90) (o) Gunvantbhai Vora (Complaint No. 82/90) (p) Padmaben Vora (Complaint No. 82/ 90) (q) Prabhavatiben Vora (Complaint No. 25/91)

(3) In addition to the aforesaid compensation to pay to each of the complainants other than the complainants at (2) above, lumpsum compensation of Rs. 1,000/- to carry out repairs of his/her flat.

(4) to pay to each of the complainants, besides National Consumer Protection Samiti, Rs. 500/- by way of costs; and (5) to pay to complainant No. 1 National Consumer Protection Samiti Rs. 5,000/- by way of costs.

Complaints partly allowed with costs.