SHRI GAJANAN PRASAD GRIHA TARAN SAHAKARA SANSTHA LTD. vs AMOL GOVIND PARADKAR

FIRST Appeal No. 616 /93 by Shri Gajananprasad Griha Taran Sahakara Sanstha Limited, Nagpur and FIRST Appeal No. 617/93 by Shamkant W. Bagaddeo and Devidas Tukaram Padole are directed against the Order dated 26.8.93 passed by the Maharashtra Consumer Disputes Redressal Commission at Bombay allowing the complaint of Shri Amol G. Paradkar and directing the appellants in both the appeals to place the complainant in the possession of Flat No. G-3 and also execute sale deed in his favour within two months failing which the opposite parties would refund to the complainant Rs. 90,000/- together with interest at the rate of 18% from 6.3.91 till the realisation and also pay to the complainant Rs. 50,000/- towards the compensation for the delay in placing the complainant in possession and also for causing loss to the complainant by not constructing the flat according to the terms and conditions of the agreement.

BEFORE noticing the facts alleged in the complaint it is pertinent to notice the background leading to the formation of the contract between the parties. One Shri Gokul Prasad Tiwari of Nagpur held vacant land in excess of the ceiling limit in the Nagpur Urban Agglomaration. He applied for exemption under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976 to the said excess land for construction of houses for weaker section of the society as per the guidelines issued under the Government Resolution, General Administration Department No. H.W.S 1079 / XXXV dated 1.8.1979. The said Shri Tiwari undertook that his scheme of construction of houses for weaker sections would be governed by the Maharashtra Ownership Flats (Regulation of the Promotion of construction, sale management and transfer) Act, 1963 or by the Maharashtra State Co-operative Societies Act, 1960 and would be executed through Shri Gajanan Prasad Griha Taran Co-operative Housing Society Ltd. (Appellant in First Appeal No. 616 of 1993). In exercise of the powers conferred by Sub-section (1) of Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976, after having recorded in writing the reasons for making the order, the Government of Maharashtra exempted the said vacant land from the provisions of Chapter III of the said Act subject to the conditions laid down in the order dated 27th March, 1986. One of the conditions was that the final selling price all inclusive of each of the dwelling unit in the case of outright purchaser shall not exceed Rs. 125/- per square ft. After the sanction of the scheme by the State of Maharashtra, an agreement was entered into between the said Shri Tiwari, the appellant society and the land cost was paid to the surplus land owner as per the urban land ceiling rate. The original land owner had executed a power of attorney in favour of Shri D.T. Padoley, one of the appellants in F.A. No. 617/93 who was the member of the Managing Committee of the Society. Shri Amol Govind Paradkar the complainant before the State Commission was one of the allottees of the flat in the flat systems. He was allotted flat in Building No. 1 in which initially 16 flats were to be constructed on four floors. However, due to the restrictions imposed by the State Government and the city of Nagpur Corporation, only 12 flats were permitted to be constructed on three floors and out of the said 12 flats one flat was to be allotted to the complainant. A regular agreement was entered into between the appellant society and the complainant and total price was fixed as per the rates prescribed by the Urban Land Ceiling Authorities at Rs. 90,000/-, Rs. 78,000/- were towards the estithated construction cost and Rs. 12,000/- were towards the cost of development of land. One of the conditions of the agreement was that the consideration of Rs. 90,000/- was fixed tentatively taking the basic rates of cement, steel, bricks, bijja-wood, teak wood as shown in the agreement as existed at the time of execution of the agreement i.e., as on 1.1.89. It was agreed by the complainant that for every additional rise in price of the associates building material over the basic rates, he would pay the difference in increase calculated by the Architect and others on the basis of actual quantity of building material consumed in respect of the flat. The copy of the agreement entered into between the land owner, the appellant society and the complainant is on the record. The complainant admitted the execution of the said tripartite agreement in the complaint. The complainant made payments from time to time between 14.8.89 to 6.3.91 aggregating Rs. 90,126/- towards the cost of construction of the said flat. The complainant has referred to the correspondence exchanged and the representations made to the Deputy District Registrar of Societies in the complaint demanding the fulfillment of the said agreement by completion of the construction in all respects and handing over the possession with the title. The complainant alleged that he received a notice dated 13.10.92 from the appellant society calling upon him to furnish an indemnity bond, affidavit and to complete other formalities for delivery of possession. The complainant further alleged that although superstructure was completed by that time, but there was no door panels, windows, grills, electrification, sanitary fittings, fresh water, sewerage connections, water pumps, overhead tanks besides the inner and outer finishing job was not carried out when the possession of the flat was offered to be given on "as it is where it is" basis. The complainant alleged that he was not willing to accept incomplete construction and demanded the delivery of possession of the said flat after completion in all respects. On the failure of the appellant society, the complainant filed the complaint alleging deficiency in service on the part of the opposite parties and prayed for the grant of following reliefs : "1. The respondent be directed to hand over the possession of flats after completing in all respects. 2. Respondent be directed to execute sale deed in favour of complainant. 3. If for any justified reason it is not possible to hand over the possession, the amount of Rs. 90,000/- be refunded back to complainant alongwith 18% interest till the date of realisation. 4. In case of refund for loss of accommodation compensation of Rs. 50,000/- be awarded. 5. Cost of this complaint Rs. 10,000/- be awarded. 6. Any other relief, which the Hon''ble Commission deems fit and appropriate be awarded."

The State Commission issued notices to the opposite parties who are appellants in the two appeals. The appellants had not filed their written version within the time as prescribed under the Consumer Protection Act. The opposite parties were directed to appear on 2.6.93 for the hearing of the complaint. The notice was received by the appellant society on 15th May, 1993 and the other two appellants in the other appeal being officers of the appellant society. The complaint was fixed for hearing on 13th August, 1993 and a fresh notice dated 11.6.93 was sent to all the opposite parties. Those notices were received by the opposite parties on 14th July, 1993 and 16th July, 1993 but none of them appeared before the State Commission when the matterwas heard on 13th August, 1993. The State Commission considered the material on the record including the tripartite agreement between the complainant, the appellant society and the owner of the land as well as the correspondence and the affidavit. The State Commission came to the conclusion that the complainant had booked a flat with the appellant society for a consideration of Rs. 90,000/- and the opposite parties failed to place in possession of the duly completed flat till the filing of the complaint on 8.1.93. The State Commission granted relief as noticed earlier.

In the appeals the appellants have taken the stand that the notices of the hearing of the a complaint on 13.8.93 were duly received and that the appellants submitted their written reply to the complaint by reply dated 10.8.93 which was sent from Nagpur by Courier Service on 11.8.93 and the same was before the State Commission when it passed order on 26.8.93. The copy of the written statement of the appellant society is part of record of this appeal. There is, however, no proof of the service of the written version on the complainant or receipt of the written version by the Registry of the State Commission. There is no application for condonation of delay before the State Commission.

BE that as it may, we heard the Counsel for the parties on the merits of the complaint on the basis of the record before this Commission and we have gone through the records in both the appeals. The background of the case noticed by this Commission in the earlier part of the Order relating to history of the scheme launched by the appellant society, the Government notification dated 27th March, 1986, and the tripartite agreement filed alongwith the appeal is admitted by the complainant in his written version filed before this Commission. There is no dispute to the fact that when possession was offered by the appellant society to the complainant in the year 1992 it was not complete in all respects. The draft indemnity bond records : "3. That the flat allotted to me has been completed in all respects except the following finishing items : (a) wood work of shutters of doors and windows. (b) M.S. Grill work for windows. (c) white wash and colour wash. (d) internal and external electrification work of all the flats. (e) plumbing work, external and internal. (f) septic tank for twelve flats of Building No. 1 and its connection to main septic tank. (g) sump and over head tank for drinking water arrangement"

That I have demanded the possession of the flat allotted to me in ''As it is where it is'' position."

As already noticed the State Commission had granted the relief to the complainant for delivery of possession of Flat No. G-3 and also the execution of the sale-deed in his favour. The appellants had prayed for stay of the enforcement of the Order of the State Commission. This Commission by order dated 10th December, 1993 rejected the prayer for grant of stay as no, grounds were made out for it. The complainant took out execution proceedings under Sections 25 and 27 of the said Act before the State Commission. In the meanwhile the appellant society completed the construction of the building and obtained a completion certificate. The appellant society filed the completion certificate of the flat before the State Commission, executed the sale deed in favour of the complainant and also handed over the possession to the complainant. Before this Commission the complainant filed his affidavit dated 18th March, 1996 pointing out certain deficiencies in the construction of the flat. The complainant also filed an inspection report dated 12.3.96 of D.M.D. Architects who had inspected the building and had given the details of the deficiencies in its report, the completion of which would cost approxithately Rs. 19,000/-. The complainant prayed for a direction to the appellant society to complete the work immediately or to pay to the complainant Rs. 19,000 /- for completion of construction and also prayed for payment of Rs. 50,000/- as compensation already allowed by the State Commission.

THE appellants have now filed an affidavit that according to the original agreement the cost of the flat was determined to be Rs. 90,000/- but during the period the work of construction was in progress, it was noticed that there was increase in the cost of the tenement because of increase in the cost of construction material and therefore the appellant society demanded an extra amount of Rs. 15,000/- from each flat owner including the complainant. It is further pleaded that the allottees did not accede to the said demand and, on the other hand, accepted the flat on "as it is where it is" basis and also undertook to complete the remaining work of flats on their own. In so far as the complainant is concerned it is pleaded that he did not agree and so the possession of the flat was handed over to the complainant before the State Commission wherein the appellant society had undertaken to make the flat ready in all respects at their own costs but without prejudice to their right to claim expenditure incurred by the appellant society from the complainant. An affidavit has been filed that the flat has been completed in all respects by incurring an additional expenditure of Rs. 39,200/-. It is thus manifest from the record and additional affidavits that flat No. G-3 is now complete in all respects. The possession of the flat has already been handed over by the appellant society to the complainant. The only question that remains is whether the State Commission was justified in directing the appellants to pay to the complainant a sum of Rs. 50,000/- towards compensation for the delay in placing the complainant in possession and also for causing loss to the complainant by not constructing the flat according to the terms and conditions of the agreement. The complainant''s case before the State Commission as well as before this Commission is that the tenements were incomplete in all respects, latrine and bath rooms were not constructed, electricity and drinking water facility were not provided, road and development of site was not done, and considering the incomplete construction, it would cost at least Rs. 50,000/- to make tenement good enough for living purpose. The complainant was justified in insisting on the delivery of possession of the flat duly completed in all respects. The draft indemnity bond (part reproduced above) clearly spells out deficiencies in construction at the time when possession was offered to the complainant "as it is where is basis". The appellant society was bound by the agreement to complete the construction and recover the amount of extra cost from the complainant on the basis of the costing of the flat as per agreement. The appellant society has now completed the flat in all respects and has spent Rs. 39,200/- on the completion of the construction. Considering the facts and circumstances and in the interest of justice the direction given by the State Commission for grant of Rs. 50,000/- towards compensation is hereby set aside and deleted. The complainant would sufficiently be compensated for the delay in the delivery of possession by directing that the cost of Rs. 39,200/- incurred by the appellant society is borne by the appellant society and not by the complainant. The complainant may have been liable to pay the increase in the cost of the tenement because of increase in the cost of construction material etc. under the said tripartite agreement but the cost on that account was estithated at Rs. 5,067.40 even according to the appellant society as stated in para 19 of he written version on record. For the above reason we partly allow the appeals and set aside the grant of Rs. 50,000/- towards compensation and further direct that the appellant society shall not be entitled to recover Rs. 39,200/- from the complainant. The parties shall bear their own costs of these appeals. Appeal partly allowed.