RAMA BANGIA vs PUSHPA BUILDERS LTD.

THE relevant facts, as stated in the present complaint, filed under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act''), are that the complainants, in response to the advertisements and a visit to ''Property Mela'' held by the opposite parties had jointly booked a Shop Unit in the complex ''Kewal Deep'' by depositing a sum of Rs. 50,000/- in August, 1989. In pursuance of the said booking, the complainants were allotted a Shop Unit bearing No. 2-02-GF in the aforesaid complex.

IT is stated by the complainants that they have paid the instalments regularly, as demanded by the opposite parties, from time-to-time and thus have paid a total amount of Rs. 6,87,880/- during the period from 10.3.1990 upto 30.9.1991 towards the total disposal cost of the shop allotted in their favour. IT is further alleged by the complainants, in their complaint, that the opposite parties had represented in their advertisements that the Shop Unit, booked by the complainants, would be ready to be delivered by September/October, 1991 positively. However, since the shops were not made available to the complainants even by the beginning of the year 1993, the complainants decided to visit the site and on reaching there, were surprised to see that the entire project was incomplete in many respects. Therefore, since already the possession of the Shop Unit had been delayed considerably, the complainants cancelled their booking vide letter dated 23.5.1993 and requested the opposite parties for the refund of their money together with interest @ 18% per annum. IT is further the case of the complainants that on the insistence of the opposite parties, complainants signed undertakings on the prescribed forms on 10.6.1993 and after a prolonged delay and with great reluctance the opposite parties issued cheques for the amount of Rs. 6,85,880/- after deducting Rs. 2,000/- towards cancellation charges. IT is further alleged by the complainants that on presentation, the said cheques were dishonoured, and consequently the complainants issued a number of legal notices to the opposite parties calling upon them to make the refund of the amount of the cheques with interest and costs. But since the opposite parties failed to respond to the said notices, the complainants filed the present complaint before this Commission praying for directions to the opposite parties to pay them Rs. 12,59,160/- as per the break-up shown in para 11 of the complaint along with interest @ 18% per annum from the date of institution of the complaint till final payment along with costs of the present proceedings. All the opposite parties were duly served but reply/written version was filed on behalf of the opposite parties 1 to 4 only. In their reply/ written version the opposite parties l to 4 have taken several preliminary objections stating therein that the complainants had failed to pay the total cost of the Unit booked by them and cancelled the booking on their own and as such, were not entitled to any relief under the Act; that since the Shop Unit booked by the complainants was for commercial purposes, the present dispute cannot be adjudicated upon under the Act; that the complainants had not come before this Commission with clean hands having paid only a sum of Rs. 3,45,345/- as against the total cost of the Shop Unit; i.e. Rs. 8,46,906/-; that the nature of the dispute required detailed evidence and as such should have been filed in a Civil Court and the same cannot be decided, by a summary procedure under the Act; that the complainants having already instituted a criminal complaint against the opposite parties cannot be allowed to seek reliefs on the basis of the same averments under the Act and as such the present complaint is liable to be dismissed; that the opposite party No. 1 is a Limited Company incorporated under the provisions of the Company''s Act and being a separate legal entity the present complaint is not maintainable against the other opposite parties and as such is liable to be dismissed on this ground alone. On merits it is the case of the opposite parties that the shop in question had been booked by Shri S.K. Bangia in the name of the complainants for purposes of speculation in property business to raise huge profits and that the complainants had only paid Rs. 3,45,345/- as against the total cost of Rs. 8,46,906/-. It is further stated in their reply/written version filed by the opposite parties 1 to 4 that the complainants had cancelled the bookings on their own volition and had also given undertakings agreeing to the refund of Rs. 3,43,345/- and had also received three cheques totalling for the said amount. It was however denied that the cheque numbers 510520 and 510521 dated 30.6.1994 for the sum of Rs. 2,00,000/- and Rs. 1,42,535/- respectively pertained to the transaction in question or were given to the complainants in discharging the obligation of the opposite parties under the booking in question. It was also alleged that the Shop Unit was complete for handing over possession. The opposite parties further denied their liability and prayed for the dismissal of the complaint with costs.

The complainants filed a rejoinder to the written statement filed by the opposite parties wherein the contents of the written version/ reply were denied and those of the complaint were reiterated.

THE parties filed affidavits by way of evidence. On behalf of the complainants, both the complainants filed their own affidavits as well as the affidavit of husband of complainant No. 1 Shri S.K. Bangia. On behalf of the opposite parties, the affidavit of Shri V.K. Soin, Managing Director of opposite party No. 1, was filed. We have carefully gone through the documents/material as well as evidence placed on record and have also heard the arguments addressed on behalf of the parties.

WE will first proceed to deal with the preliminary objections raised by the opposite parties in their reply/written version. One of the objections raised by the opposite parties 1 to 4 is that since the shop in question was booked for commercial purposes, the present dispute cannot be adjudicated upon under the Act. However we do not find any merit in the said preliminary objection, as it is only in case of goods purchased for commercial purposes that the FORA under the Act have no jurisdiction to adjudicate on the dispute related to the said goods but there is no such bar in respect of ''service'' availed of under the Act. Section 2(1)(d) of the Act reads as under : (d) "Consumer" means any person who,- (i) buys any goods for a consideration which has been paid or promised cr partly paid and partly promised, or under any system of deferred payment and includes any user cl such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ii) [hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised,, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person;

In the present case, the complainants have availed of ''services'' of the opposite parties in developing the commercial complex and building Shop Unit to be purchased by the allottees, thus, it is immaterial that the same were purchased for commercial purposes. Therefore, the said preliminary objection is not tenable and is liable to be rejected summarily. Another objection raised by the opposite parties is that the complainants have already instituted criminal proceedings by way of complaints under Section 138 of the Negotiable Instruments Act, which are pending adjudication before the concerned Magistrate and as such the present complaint is not maintainable under the Act. In this regard, it would be pertinent to refer to Section 3 of the Act which provides for an additional remedy which is not in derogation of the provisions of any other law. As such, the remedy claimed in the present complaint is for the refund of the price paid for the shop unit as well as compensation on account of mental harassment and agony undergone by the complainants on account of the negligence/ deficiency in service on the part of the opposite parties. Further, the proceedings under the Act are in the nature of a civil remedy whereas those pending under the Negotiable Instruments Act, are criminal complaints and as such both the proceedings can continue simultaneously. The State Commission, Madras in the case of M.K.S. Balasubramanian v. Jayalakshmi Planners, reported as 1992 (2) CPR 133, has also taken similar view wherein it has been Held : (Emphasis supplied)

IN view of the position explained above, the above said preliminary objection taken by the opposite parties is too devoid of merits and is liable to be rejected.

ANOTHER objection raised by the opposite parties in its reply/written version is that the opposite party No. 1 being a Limited Company incorporated under the provisions of the Companies Act, is a separate legal entity from the other opposite parties who are individuals and since the Shop Unit was booked with opposite party No. 1, therefore, the present complaint cannot be proceeded: against the other opposite parties/Directors of the Company in their individual capacity and as such, is liable to be dismissed. The fact that opposite party No. 1 is a Limited Company incorporated under the provisions of the Companies Act and has a separate legal entity is not in dispute, however, the Hon''ble Supreme Court in the case of Delhi Development Authority v. Skipper Construction Company Pvt. Ltd. & Anr., reported as AIR 1996 (SC) 2005, has Held : "The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defauding others, the Court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned."

(Emphasis supplied) Therefore, since the day-to-day affairs of a Company are being conducted by its directors/officials incharge, the said persons cannot escape liability under the garb of corporate veil, which needs to be lifted in order to bring to book the persons concerned who are responsible for defrauding the poor consumers behind the corporate veil. In view of the above decision of the Apex Court, as well as, the fact that in the present case it is the other opposite parties, i.e. 2 to 12 who are the persons responsible for carrying out the project of building a commercial complex undertaken by the Company and are, therefore, liable for its shortcomings as well. Therefore, the said legal objection of the opposite parties is also devoid of substance.

The opposite parties have also contended that the complainants have paid only a sum of Rs. 3,45,345/- and not Rs. 6,87,880/- (as alleged to have been paid by the complainants) against the total cost of the unit in question, i.e. Rs. 8,46,906/- and as such, the controversy in dispute being of complicated nature requires detailed evidence and proper trial which cannot be decided by summary procedure under the provisions of the Act. We do not find any merit in the said objection of the opposite parties, because, no such intricate question of fact and law is involved which cannot be decided in a summary procedure under the Act.

THE remaining preliminary objections relate to the merits of the case and will be discussed in due course while discussing the case on merits. On merits, it is an admitted case by both the parties that the complainants had booked a shop unit with the opposite parties in August, 1989, in the commercial complex named "Kewal Deep". It is also not denied that an amount of Rs. 50,000/- as registration amount was deposited with the opposite parties by the complainants for the booking of the said shop unit and a shop bearing No. 2-02-GF was allotted to the complainants in the aforesaid complex.

THE first point of controversy which arises between the parties is as to the actual amount paid by the complainants to the opposite parties towards the sale price of the shop unit. It is stated by the complainants that they had deposited a total amount of Rs. 6,37,880/- as per the details given in para 5 of the complaint. In the rejoinder filed by the complainants it has been clarified that an amount of Rs. 3,43,345/- was deposited by way of cheques and the remaining amount of Rs. 3,42,535/- was paid in cash. However, on the other hand, it is contended by the opposite parties that the complainants had only paid an amount of Rs. 3,45,345/-. In this regard the complainants have annexed copies of receipts issued on behalf of opposite parties as Exhibits CW 1/J to CW 1/X. Further, the photo- copies of dishonoured cheques issued by the opposite parties have also been annexed as Exhibits CW 1/A, B and C. THE total amount of the said cheques issued by the opposite parties being Rs. 6,65,880/- tallies, with the figure mentioned by the complainants as having been paid to the opposite parties as sale consideration for the shop, (inclusive of registration charges). It is contended by the opposite parties that two cheques numbering Nos. 510520 and 510521 were not issued to the complainants and have no connection with the transaction in question and that the complainants are in unlawful possession of the said cheques. THE said argument on behalf of the opposite parties is belied by the fact that the amount for which the cheques had been issued is the exact amount which the complainants had paid in cash, i.e. Rs. 3,43,345/ and that of the other cheques tallies with the figure of the amount tendered by the complainants by cheques, i.e. 3,42,435/-. Furthermore had the said two cheques which are in favour of self, been in unauthorised possession of the complainants, the opposite parties would have taken necessary steps to stop payment of the said cheques or other appropriate steps for the recovery of the same. No such averment has been made by the opposite parties during argument nor the same has been pleaded before us. Furthermore, the said contention of the opposite parties, stands belied by the fact that two undertakings were taken from the complainants by the opposite parties while issuing the said cheques which are annexed as R- 2 on record. Not only that, even the cheques are in consecutive serial number, i.e. 510517 to 510521. THE first 3 cheques are admitted to have been issued by the opposite parties, therefore, it cannot be believed that the other two cheques having consecutive serial number were not issued towards the same transaction to the complainants. Thus, from the documents/ evidence on record, it is proved that the complainants had indeed made the payment of Rs. 6,87,880/- to the opposite parties as the sale consideration for the shop unit booked by them. The second point of controversy for our consideration in the present complaint is whether there was any deficiency in service on the part of the opposite parties so as to entitle the complainants to seek relief under the Act. It is the case of the complainants that it was represented by the opposite parties that the shop unit in question would be ready to be delivered to the complainants positively by September/October, 1991 whereas the complex in which the shop unit, booked by the complainants, was situated was incomplete even till May, 1993. The complainants have also placed on record an advertisement issued in the newspaper ''Hindustan Times'' on 22.4.1990 (Annexure B to the complaint), wherein it is represented by the opposite parties that the possession of the shop units would be delivered to the allottees positively by September/October, 1991, and the said contention of the complainants has nowhere been denied by the opposite parties It is further contended by the complainants that after meetings and negotiations with the opposite parties the latter had assured delivery /possession by 31.3.1992 but despite promises the complex and shop booked by the complainants were incomplete till May,1993. The complainants have further specified the deficiencies which existed in the complex in which the shop units have been allotted to them, i.e. that the central air conditioning plant as well as the Lift had not been installed and the construction was in deviation of the approved plan and as such no Completion Certificate had been issued by the MCD and the said building could have been demolished at any time. However, in answer to the said specific allegations of the complainants there is no specific denial by the opposite parties except for a bald statement in their written version as well as affidavit of Mr. V.K. Soin that the complex is ''now'' complete and is ready to be handed over. Thereby indicating/admitting that the complex containing the shop units of the complainants was not ready for possession till 1993 as per the case of the complainants. In view of the said fact, we have no hesitation in holding that despite having received 85% of the cost of the shop in question, the same was not ready to be handed over to the complainants in time and as such, there has been inordinate delay in that regard on the part of the opposite parties. Therefore, the cancellation of their bookings by the complainants was justified and the complainants are entitled to refund of the amount paid by them as cost of the Shop Unit as well as compensation and costs. The Hon''ble National Commission has in the similar situation held the opposite parties deficient in service and has also granted relief to the complainants in the case of M/s. Pushpa Builders & Anr. v. N.R. Kapoor & Ors., reported as III (1994) CPJ 47 (NC), wherein it was Held : "Notwithstanding the persuasive arguments advanced before us by Mr. M.S. Dutta, learned Advocate appearing for the appellants, we are unable to discern any error of law or even of fact in the order of the State Commission. The facts on record clearly disclose that there was a deficiency in service on the part of the appellants who had undertaken to construct and provide flats to the respondents in these two cases and notwithstanding the lapse of more than five years after 50% of the cost price had been deposited by the complainants, even the construction of the flats has not so far been commenced by the appellant. The State Commission could have, with full justification, awarded compensation in addition to the amount of interest in favour of the complainant but it refrained from doing so and has only erred in favour of the complainant by directing the appellant herein only to refund the amount received by him from the complainant by way of price of the flat with interest at 18% p.a. from the date of payment of the amount. The order of the State Commission is accordingly confirmed and these two appeals are dismissed. The appellant will pay a sum of Rs. 2,500/- by way of costs to the respondents in each case."

(Emphasis supplied) The above decision of the Hon''ble National Commission virtually clinches the matter finally and following the above decision of the Hon''ble National Commission, we direct the opposite parties to refund the amount of Rs. 6,85,880/- to the complainants together with interest @ 18% per annum from the date of deposit till actual payment. The complainants are also entitled to cost of the present proceedings. The same are fixed at Rs. 5,000/-. The opposite parties are directed to comply with the above directions within a period of 60 days from the date of this order. Complaint allowed with cost.