PREM SAJANANI vs RANKA DEVELOPERS

IN this complaint, the complainant has sought the following relief : (a) to direct the Respondent to hand over/ deliver vacant possession of flat bearing No. 101-A, "A" Wing, I Floor. Ranka Corner Apartments, Cambridge Layout, Bangalore, alongwith garage, as promised by the Respondent; (b) to direct the Respondent to pay interest at the rate of 21% with effect from Aug., 1989, the date on which the Respondent was supposed to deliver possession of the flat to the complainant of the total amount of Rs. 5,59,500/- paid by the complainant; till the delivery of the flat to the complainant; (c) to direct the respondent to pay a sum of Rs. 3,00,000/- (Rupees three lakhs only) towards damages and inconvenience caused to the complainant; (d) grant such other and further reliefs as this Hon''ble authority deems fit to grant under the facts and circumstances of the case, including an order for costs, in the ends of justice and equity."

THE complainant averred that in pursuance of an advertisement issued by the opposite party-a builder, the complainant applied for a flat and the opposite party allotted a flat bearing No. 101-A, on 1st floor of "A" Wing along with a garage at Ranka Corner Apartments, No. 14, Cambridge Layout, Bangalore, for a price of Rs. 5,59,300/- in the month of May 1989, and made payment of one lakh of rupees as earnest money and agreed to pay the balance amount in 9 instalments as required to be paid to the opposite party at different stages of construction for which the opposite party issued a letter of agreement on 23-5-1989, as per EX.C-1. The complainant made payment of all the instalments to the opposite party, as per demand made by him, at different stages of construction. The payment of the last instalment was made by him on 20-11-1990.

The opposite party, though had agreed to complete the Construction and deliver the possession of the flat to the complainant by the end of 1989, but failed to do so. The opposite party failed to complete the construction and deliver the possession of the flat to the complainant even by the end of 1990.

THE complainant is a ''non-resident Indian''. He had required the flat to set up his family but due to the failure of the delivery of the possession of flat by the opposite party, the complainant suffered financial loss and mental torture. The complainant wrote letter on 23-12-1990, as per Ex. C-3, to the opposite party, requesting him to deliver the possession of the flat at an early date and sent a draft for a sum of Rs. 84,213/-, the balance consideration amount towards water, electricity deposits and registration charges, etc. for which the opposite party replied on 22-1-1991, as per Ex. C-5, stating that he would be able to deliver the possession of the flat on or before 1st of June, 1991 and returned the draft stating that it was to be paid at the time of delivery of the possession of the flat.

THE complainant further averred that due to the failure of the delivery of the possession of the flat by the opposite party, he has been put to an irreparable financial loss and injury and claimed the reliefs as narrated above. The opposite party filed its version and admitted the fact that the complainant was allotted a flat as claimed by the complainant in Ranka Corner Apartments, for a price of Rs. 5,59,300/-. The opposite party aver ed that it had never promised to the complainant that the flat would be handed over by the end of 1989 but he had informed the complainant that the possession of the flat was expected to be handed over by June, 1991.

THE opposite party further averred that the amount of Rs. 84 ,213/-, the final instalment amount, that was sent by the complainant, was not accepted as it was due to the opposite party only at the time of handing over of the possession of the flat to the complainant. THE opposite party nextly submitted that under all circumstances the possession of flat was to be handed-over to the complainant by June 1991. THE opposite party on the basis of these averments sought the complaint to be dismissed.

DURING enquiry, the complainant examined himself as CW-1, and got EXs. C-1 to C-7 marked in evidence, Ex. C-2 is brochure. The opposite party examined its power-of-attorney holder, Sri. Bhavarilal Hastimal Ranka as R.W.-1 and got EXs. R.-1 and R-2 marked in evidence. We have heard the learned Counsel for the parties.

Having regard to the pleadings of the parties and the submissions made by them, the only point that arises for our consideration is, whether there was any deficiency in service rendered by the opposite party and in consequence of which did the complainant suffer any loss or injury and, if so to what compensation the complainant is entitled to?

BEFORE considering the evidence, it is necessary to noticed a preliminary objection raised by the opposite party at the time of arguments. The learned Counsel for the opposite party submitted that the complainant cannot be classified as "Consumer" nor the allegations contained in the complaint can be classified as "Complaint" as defined under Sections 2(1)(d) and 2(1)(c) of the Consumer Protection Act, 1986. So this Commission has no jurisdiction to entertain the complaint. His objection has to fail. The ruling of the National Commission, in U.P. Awas Evam Vikas Nigam v. Garima Shukla reported in I (1991) CPJ page 1 (NC), covers this point. This Commission also has in complaint Nos. 13, 67, 82, 107, 115 and 113 of 1991, held as follows : " There is no dispute that flats are immovable property and if it is the case of mere sale of the constructed flats, this Commission will have no jurisdiction to entertain complaints. But on careful perusal of the agreements, we are convinced that the agreements are not for sale of flats pure and simple. In all agreements, the intention of the respondents is loud and clear. Their intention is to purchase prime land in the city, develop it, build flats at the cost of the complainants. The dominant aim is to construct the apartments and make a profit out of the services so rendered. Entire investment for the construction comes from the complainants. Even though in the ultimate analysis, there is a sale of the flat involved. The dominant purpose is rendering of services. If that is so, we have no doubt in out mind that the complainants have hired the services of the respondents and they are all consumers within the meaning of the Consumer Protection Act, 1986. We are fortified in this view by the decision of the National Commission in U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. Garima Shukla and Others in First Appeal No. 5 of 1989, reported in CPJ on January 1991, Vol. I In the said case, the National Commission held that the Housing Development Board engaged in serving the public in the matter of providing housing by acquisition of land, development of sites, construction of house thereon and allotment of plots and houses to the public and, therefore, the persons who have been allotted house/flats/ sites from the Board are consumers falling within the definition of Section 2(1) (d) (ii) of the Consumer Protection Act, 1986."

It is not disputed that the opposite party - a builder, allotted a flat bearing No. 101-A, on 1st floor of. "A" Wing along with a garage at Ranka Comer Apartments situates at No. 14, Cambridge Road, Bangalore, in consideration of a sum of Rs. 5,59,300/- to the complainant. Ex. C-1, a letter given by the opposite party dated 23-6-1989, gives the details of the amount paid as earnest money and the amounts to be paid by the complainant at different stages of the construction.

EX.C-2 is a brochure issued by the opposite party. The material part of it reads thus : "Ranka Corner offers a total of 92 flats distributed across 3 buildings, and a choice of 2 bed/rooms and and 3 bed-rooms flats. With build up area ranging from 1,160 sq.ft. to 1,610sq.ft. Construction is scheduled to commence in August 1987. Apartments will be ready by August 1989." The opposite party has not denied the issue of that brochure, Ex. C-2. The opposite party has averred that, that was issued at a very initial stage and it was only a rough indication of the project contemplated by the developer and the same cannot be relied upon as a promise made by the developers. R.W.-1, has in this regard, stated thus : "Ex. C-2 was issued for the information of the intending buyers. The plan had not been sanctioned by the Corporation when Ex. C-2 was issued. Only the expected date of commencement and completion was given in Ex. C-2."

THE complainant has stated that on 23-5-1989 when he made the payment of earnest money deposit of One lakh of rupees to the opposite party, it was the opposite party who gave brochure, Ex. C-2. He has further stated that he had visited the spot and that the building was under construction. THE complainant, in this regard, has in his evidence stated thus : "That was on 23-5-1989 as agreed to by us in Ex. C-1, dated 23-5-1989.1 was given Ex. C-2 and was assured that the apartments would be ready by Aug. 1989 as stated in Ex. C-2.1 visited the spot and found that the building was under construction. THE bricks work had progressed more than the first floor. Subsequently the respondents told me that the building would be ready on or before 1-12-1990."

This evidence of the complainant has remained unchallenged.

IT is material on record that the complainant made the payment of the balance final instalment amount of Rs. 84,213/- to the opposite party on. 29-6-1991. The order-sheet, dated 29-6-1991 reads, thus : "The complainant gave a cheque for Rs. 84,213/- in favour of the respondent to the respondent''s Counsel as desired by the Counsel for the respondent. The Counsel for the respondent undertakes to see that the sale deed is executed on 4-7-1991 and to give possession of the flat to the complainant on 10-7-1991 with occupancy certificate and the house complete in all respects including supply of water, electricity, painting etc. Call on 11-7-1991."

This would go to show that the opposite party agreed to hand-over the possession of the flat to the complainant on 10-7-1991, complete in all respects, including supply of water, electricity etc. The order sheets maintained by this Commission would go to show that even till the end of Sept., 1991, the possession of the flat could not be delivered to the complainant by the opposite party. So, on 26-9-1991, the complainant was examined as C.W.- 1 and on 8-10-1991 R.W.-1 was examined. R.W.-1, who was examined on 8-10-1991, has stated that the flat allotted to the complainant was ready for occupation. Permanent power connection was yet to be obtained for that apartment. He has further stated that there was temporary power connection, by which fans, lights, geysers and fridges could be operated; the air conditioner cannot be operated. R.W.-1, has further stated that K.E.B. authorities had informed that permanent power connection could not be given to these apartments in view of Circular, Ex. C-6. The Circular, Ex. C-6, dated 28-5-1991, reads thus : "Sub : - Servicing of new installations fed from "A" Station, "B" Station and "C" Station at Bangalore. It is observed that the power transformers at "A" Station, Pottery Road, Hebbal, NGEF and Austin Town are over loaded. To avoid further over loading of the power transformers and avoid further loading on these stations, restrictions are hereby imposed with regards to servicing of new installations proposed to be fed from "A", "B" and "C" Station as follows : 1. AEH and Commercial lighting installations are to be limited to 1 KW only; 2. Domestic water supply installations to be limited to 1 HP only; 3. No new services under LT & HT power should be given to the industries and commercial installations and also to Multistoried buildings. However, the restrictions will not apply to public waterworks and street lights. This will come into force with immediate effect. Sd/-J.P. Jayaprabhu, Additional Secretary."

We are unable to find in this Circular, any material to show that this restriction in power supply, as referred to in Circular, Ex. C-6, would also apply to the building in question. R.W.-1 also has not stated anything in this regard except referring to this circular, Ex. C-6, in his evidence.

R.W.-1, has further, at para 5 of his evidence, stated thus : "Because of lack of permanent power connection, only 5 persons have occupied the flats and others have not occupied, although they are ready for occupation and as I have not offered them to occupy the flats."

R.W.-1, has further stated at para 6 in his evidence, thus : "With the temporary power connection only 10 or 15 flats can be occupied I cannot give the exact time when I will be able to get the permanent power connection because it is not in my hands."

IT is evident from this material on record that the flat of the complainant is not fully ready for occupation as admitted by R.W.-1. No permanent power connection, has so far been given to this building which consists of 92 flats. As per the admission of R.W.-1, he could not deliver the possession of the flats to the other flat-holders except 5 persons, because no permanent power has been supplied. He has further admitted that he was not in a position to say as to when he would be able to get the permanent power connection. Therefore, it is clear from this material that the services rendered by the opposite party are clearly deficient in nature. IT was the duty of the promoter to make sure that he would get all the amenities to the building even before he issued the brochure and called for applications from the intending buyers. He cannot at this late stage be allowed to disown his liability by putting the blame on public authorities. The complainant made the final payment of installment amount of Rs. 84,213/- which was to pay at the time of delivery of the possession of the flat to him on 29-6-1991. The opposite party was under a duty to deliver the possession of the flat complete in all respects including the supply of electricity by 10-7-1991 as promised by him on 29-6-1991. It is evident from the material placed on record as referred above, that the opposite party even on this day has failed to deliver the possession of the flat to the complainant fully serviced including the services of supply of permanent electricity. In our opinion, this lapse is due to the negligence on the part of the opposite party. It is material on record that the complainant is a "N.R.I." who wanted to settle in Bangalore with his family for which he booked the flat from the opposite party. The complainant has averred in the complaint that due to the non-delivery of the flat fully complete in all respects on time, he has suffered loss and injury. In our opinion, the complainant is entitled, having regard to these facts, to be compensated.

THE complainant has stated that the opposite party had agreed to construct only 3 floors in that building, but mow 4th floor also has been constructed. R.W.-1 has admitted that a sanction for the construction for the 4th floor has been obtained and also possession of a strip of land measuring 120 X 2 has been handed over to the Corporation to widen the road. THE learned Counsel for the complainant having regard to these facts submitted that the interest and the enjoyment of the complainant in the flat has suffered and reduced, for which the complainant has to be compensated.

WE are not going to consider this aspect of the matter as the complainant has neither averred this fact in his complaint or he was produced any material to prove the loss and injury sustained by him. Having regard to the facts and in the circumstances of the case, we find it just and proper to award to the complainant a reasonable interest on the purchase money of Rs. 5,59,300/- towards compensation from 10-7-1991 the date on which the opposite party had agreed before this Commission on 29-6-1991 to hand over the delivery of the possession of the flat to the complainant in a condition fit for occupation in all respects. ORDER In The Result, therefore, this complaint is allowed. The opposite party is directed to pay interest at the rate of 18% p.a. on the sum of Rs. 5,59,300/- from 10-7-1991 till the date of delivery of possession of the flat to the complainant in a condition fit to occupy the same with all necessary amenities including permanent supply of electricity. The opposite party shall also pay a sum of Rs. 2,000/- to the complainant towards the cost of the proceedings. The opposite party shall pay the said sum so awarded to the complainant within a period of 2 months from this day. Complaint allowed with costs.