V. RAMAN vs MAXWORTH HOME LIMITED

BASED on the representations made by the opposite party about their projects of development of land and buildings, the complainant entered into an agreement for development and construction with the opposite party on 4.7.1997 for construction of a residential apartment of a built-up area of 783 sq. ft. for a consideration of Rs. 6,25,949/-. It was agreed that a sum of Rs. 1,40,010/- had to be paid by the complainant towards land development and project promotion and the same was thus paid and acknowledged by the opposite party on 4.7.1997. The complainant paid a sum of Rs. 1,25,000/- on 19.6.1996; a sum of Rs. 83,649/- on 3.7.1997 and a sum of Rs. 1,66,919/- on 3.9.1998. Thus the complainant paid all the amounts due under the agreement and a sale deed was executed in favour of the complainant on 3.7.1997 in respect of the plot measuring 2400 sq. ft. in Velachery project. He was nor issued with chitta, patta or adangal or panchayat approval for the plot sold. The complainant also alleges that the opposite party had not even obtained the approval for the house. The opposite party promised to complete the construction by November 1998, water supply lines and storm water drains by December 1998 and the road facility by first quarter of 1999. But the opposite party failed and neglected to keep up the time schedule. The complainant had to wade through water and cut across a kutcha mud path to reach his site. There was no progress in the opposite party''s project. The project was a total failure. The complainant had paid the entire amount due and payable by him. The complainant wrote to the opposite party on 19.12.2000 calling upon the opposite party to give written confirmation regarding the time frame within which the opposite party would complete the construction. The complainant also informed the opposite party that the construction cannot be kept pending indefinitely and a written assurance must be given to the complainant by the opposite party and otherwise he would prefer to terminate the contract and go ahead with the construction of his house on his own. The opposite party neither took any initiative to go ahead with the construction or send a reply to the complainant''s several letters. Therefore, the complainant issued a Lawyer''s notice on 17.1.2001.

ON 17.1.2001 subsequent to the Counsel''s notice, negotiation talks went on and the opposite party assured to obtain the building plan approval and provide revised schedule and recommence the construction. But in spite of the same, there was no further progress on the part of the opposite party. The complainant found that there was no progress in infrastructural facilities. There was no access road to the plot. Water has stagnated in and around the plot. There was an open sewerage pit in front of the plot and there was wild growth of weeds in and around the plot. The opposite party assured to make necessary arrangements to obtain the building plan approval and also undertook to provide basic amenities like access roads, sewerage and effluent treatment, water supply connection, electricity connection and street lights. The opposite party neither replied nor complied with the notice. ONce again, the opposite party on 14.9.1992 sent a letter assuring the complainant that they would obtain the building plan approval at the earliest. The opposite party has abandoned the construction since 1998. The complainant had invested a huge sum of Rs. 3,75,568/-. The opposite party has failed to obtain the necessary building plan approval. The opposite party failed to put up the construction as agreed upon. The complainant had to stay in a rented house paying rent of Rs. 5,000/- per month. Thus, the complainant has been put to loss which the opposite party is bound to make good. The opposite party has thus committed gross deficiency in service. They have adopted unfair trade practice. The action of the opposite party has caused mental agony to the complainant. Therefore, the complainant prays for a direction to the opposite party to obtain building plan approval from the concerned authorities and complete the construction or in the alternative to hand over possession of the house in "as is where" condition in order to enable the complainant to construct the house and in the alternative to refund a sum of Rs. 1,40,010/-, pay a sum of Rs. 1,566/- p.m. and Rs. 1,00,000/- as compensation. Neither the Counsel nor the opposite party cared to appear though as early on 23.5.2003 a Vakalat was filed by a Counsel on its behalf and version was filed later. The opposite party is, therefore, set ex parte. Exhibits A-1 to A-19 are marked. The Counsel appearing for the complainant was heard.

The points for determination are : (1) whether there was any deficiency in service? (2) if so, whether the complainant is entitled to damages?

THE Points : THE National Commission has held in 2002 (2) CPR 92 (NC) that if it is a case of continuous cause of action, public bodies should not really raise the technical pleas. THE Supreme Court in I (1992) CPJ 47 (NC) has held that it is appropriate for the Consumer Forums to compensate the consumer for such mental agony suffered by him due to the negligence on the part of the opposite party and the Consumer Forums are not debarred from granting reliefs not prayed for by the complainant in the complaint. In yet another decision reported in 2003 (2) CPR 25 (MRTP), the Monopolies and Restrictive Trade Practices Commission, New Delhi has held that when an applicant became a member of the society and a plot was allotted by the society to him but the scheme had not been approved by the appropriate authority, the prayer for refund of amount as compensation are in order and it would amount to unfair trade practice. In the background of the above facts, it has to be seen whether there is deficiency in service. The complainant, lured by the catchy ads issued by the opposite party and in a desire to own a house of his own, deposited a sum of Rs. 1,25,000/- with the opposite party on 19.6.1996 to buy a house in the scheme promoted and launched by them. He paid a sum of Rs. 83,649/- being the balance of 25% of the sale price on 3.9.1997 as it is seen from Ex. A-2. Ex. A-3 is the sale deed executed in favour of the complainant, whereby we find that the opposite party conveyed an area of 2400 sq. ft. and they have declared that the company is the sole and absolute owner and that the property does not suffer from any encumbrance and the purchaser shall enjoy it without let or hindrance and the vendor shall from time-to-time and at all times at the request of the purchaser do and cause to be done, execute and register all such acts, deeds, assurances and things, and that the vendor will indemnify the purchaser. After the execution of the sale deed, the original of Ex. A-4 agreement for development and construction was executed whereby the opposite party has agreed to construct and hand over the house for a consideration of Rs. 6,25,949/-. The agreement Ex. A-4 provides that they agreed to provide a house within 15 months from the date of commencement of construction. This agreement was executed on 4th July, 1997. On 20th July, 1998 under Ex. A-5, the opposite party writes to say that they have registered about 154 houses so far and the construction work is in various stages and that they proposed to hand over the first batch of houses before 31st March, 1999. They have stated that the transformer has been erected and the street lights are functioning in the main roads of the township and that they are working to put up the necessary infrastructural facilities and other amenities like sewerage and drainage and that the basic roads will be in place by the first quarter of 1999 and black topping of roads will be done after the work in the ownership is completed. They received a sum of Rs. 1,66,919/- on 2.9.1998. On 19.12.2000, under Ex. A-7 the complainant writes to say that in February, 1996 in response to the advertisement he joined the scheme and was allotted plot No. 982 and the sale deed and construction agreement were entered into but he has not been given the documents like patta, chitta, etc. of the property sold to him and the opposite party have not been able to keep up the schedule of construction and several requests have been made and that the complainant has paid a sum of Rs. 3,75,568/- and what he has got is only a plot and foundation of the house laid without proper documents issued to him, and that he is seeking basic amenities like road with lights, sewerage, electricity and water supply and completion of the house without further hike in payment and within the time schedule and that his attempts to talk to the President or Chairman of the opposite party has not been encouraged and that when he visited the plot there was no approach road, no sewerage facility or water connection nor electricity was there and that he had to wade through water and cut across a kutcha mud path to reach his site and this state of affairs was three years after signing up with the company. This letter of the complainant makes it graphics reading. The complainant has invested his hard-earned money with the opposite party, and the opposite party having received it and after showing a plot of land to him and probably after putting up a name-sake foundation, has not chosen to do anything, but they were bold enough to declare in their letter dated 20th July, 1998 marked as Ex. A-5 that they have finished about 154 houses and that provision of proper infrastructure facilities are being made and sewerage lines, water supply and electricity supply will be completed by November 1998. But on 19.12.2000 the poor investor goes there in all anxiety with his heart in his mouth and what he beholds is the pathetic condition of the plot purchased by him. Thus we find that the opposite party, having pocketed the monies of the investors like the complainant, have not cared at all to keep up their word and have been only meticulously honest in non-doing. Again, the unfortunate complainant writes on 17.1.2001 under Ex. A-8 setting out his plight and the deficiencies he noted and has listed them out in his letter in paragraph 10. To this, a reply is sent by the opposite party. This letter is vague and simply says that they are following the construction activities in general and that 35 houses have been completed whereas in the earlier letter they have stated that about 154 houses have been constructed. They have heaped up another pack of lies in this letter. But promptly they sent a letter on 18th September, 2000 stating that a sum of Rs. 1,25,000/- is due from the complainant. The complainant sends another letter through his Counsel again on 23.10.2001 reiterating the acts of omissions and Commissions committed by the opposite party. To this, a reply has been sent under Ex. A-11 stating that they have received certain documents pertaining to plot No. 982 including panchayat memo and that they are processing to obtain the building plan approval with Chitlapakkam Panchayat Union. Thus it is only in September, 2002 they think about applying for approval. A letter is again sent in November 2002 under Ex. A-12 by the opposite party. They have stated that plot No. 981 has been given building plan approval and for plot No. 982 they have been returned for want of further documents and that the matter has been taken up with higher authorities. Ex. A-3 is the brochure issued by the opposite party which enticed the complainant to join the scheme, wherein they have stated about owning a dream house and have promised to many attractive features. Ex. A-14 is the report published in a newspaper regarding the plight of the investors in Maxworth Group. Ex. A-15 is the photograph which shows that the construction has been made only upto the basement level. There is weed growth all around. There is no approach road. Thus we find that the complainant has been left high and dry, thanks to the machinations of the opposite party. The opposite party after advertising in the newspapers to provide the construction of house with all facilities, thus entrapped the complainant in their web of conspiracy and the scheme. The complainant is but another sucker in that game. They are out to suck the blood of the victims like the complainant. They have chosen to sell the property without providing the vendee with the documents such a chitta extract, kist receipts, adangal and the encumbrance certificate. They have not even cared to apply for the building plan approval. Yet they have been writing as though the construction work was going on at break-neck speed and that a transformer had been erected and kutcha roads have been laid and steps have been taken to provide sewerage and water supply and that the facilities would be made available by or before 1999. But what we find in this case is but a construction upto the basement level without even fences around and growth of weeds. There is no approach road. The plot does not show that any steps have been taken for providing the sewerage and water connection. Therefore, anyone who had invested so many lakhs of rupees in the fond hope of owning a house of his own would be rudely shocked to see that what has been built is only a construction upto the basement level. Therefore, there has been a persistent, consistent, open and defiant violation of all canons of fair play and decency. Apparently, the opposite party are masters in the game of no holds barred when it comes to money. Persons like the complainant are thus made easily a prey. They are left like a sucked out orange discarded on the streets. It is really sad to note that people like the opposite party are able to get away after having committed such a blatant acts of fraud. In such circumstances, we have no hesitation in holding that this is a fit case where we have to hold that there is deficiency in service and unfair trade practice.

NOW coming to the question of damages-The complainant has asked for a direction under three heads viz.- (1) to direct the opposite party to obtain the plan approval and complete the construction and hand over the same; or

(2) to hand over possession of the complainant''s house in ''as is where is'' condition to enable the complainant to construct the house of his own and for a direction to the opposite party to provide necessary sewerage, drainage, electricity and common amenities like approach road, etc., or

(3) to direct the refund of Rs. 1,40,000/- collected towards land development and project promotion together with interest at the rate of 24% from 4.7.1997 till payment and also to pay a sum of Rs. 1,560/- per month from 1.10.1998 till date on account of liquidated damages for delay and Rs. 1 lakh for compensation for mental agony.

The first head of prayer may not be feasible now since no step has been taken seriously by the opposite party to obtain the building plan approval. It is not known what are the conditions for obtaining the building plan approval and whether the site where the basement construction has been made forms part of any planned area, approved lay-out or not and whether there is any bar or impediment for the granting of approval to the said plot. Therefore, the other prayer viz., for directing the opposite party to hand over possession and a direction to the opposite party to provide necessary sewerage, drainage, electricity, will not also be feasible in the circumstances. Therefore, we feel that the ends of justice could be met adequately, if the opposite parties are directed to refund the sum of Rs. 3,75,568/- collected towards the land development and project promotion with interest at 2% from 1.4.1999 till date of complaint which comes to Rs. 2,17,848/-. Besides the complainant is entitled to a sum of Rs. 1,00,000/- towards deficiency in service, mental agony and hardship. Hence we hold that the complainant is entitled to Rs. 6,93,416/- in all as compensation. In the result, we allow the petition with a cost of Rs. 5,000/- directing the opposite party to pay a sum of Rs. 6,97,172/-. Time : two months. In the default to pay within the period provided the amount would carry interest at 15% till realisation. Petition allowed.