Venkatesan vs FUSION CONSTRUCTIONS

THE complainant Venkatesan entered into a tripartite agreement on 15.5.1992 with M/s. Anil & Sunil Traders and the opposite party M/s. Fusion Constructions and as per the terms thereof M/s. Anil & Sunil Traders will sell for a sum of Rs. 4,89,200/out of their property described in Schedule "A" 244/8000 undivided share of land described in Schedule "B" to the complainant and the opposite party M/s. Fusion Constructions agreed to build two flats described in Schedule "C" in the said land for the complainant for a consideration of Rs. 9,78,400/-. THE complainant paid the said sum of Rs. 4,89,200/- to M/s. Anil & Sunil Traders on 5.4.1993 and obtained a sale deed. THE consideration for building of the flat shall be paid to the opposite party M/s. Fusion Constructions in instalments as per me schedule of payment mentioned in the agreement. THE agreement provides that the opposite party shall as early as possible not exceeding a period of 24 months from the date of the agreement complete the construction of the flats subject to availability of materials, power and drainage and other factors which are beyond the control of the opposite party. THE case of the complainant is that the opposite party has not even started the construction at least within a reasonable time and they have arranged for commencement of the construction only in or about May, 1993. Because of this reason the complainant paid the 1st instalment amount only on 22.5.1993 which has been accepted by the opposite party without any demur. A further sum of Rs. 97.000/- was paid on 12.6.1993 and Rs. 97.000/- on 21.9.1993 being the 2nd and the 3rd instalments, and these payments also have been accepted by the opposite party without any demur. While so, on 26.8.1993, the opposite party sent a registered letter to the complainant requiring payment of a sum of Rs. 6,79,000 /- as due from her together with interest within 30 days and wanted the said letter to be treated as a notice as per Clause 12 of the agreement which enables the opposite party to terminate the agreement in case of default in payment by the complainant. THE complainant sent a reply dated 21.9.1993 informing the opposite party about their slow progress in the construction work. When the complainant made repeated requests to the opposite party to hand over all the original documents including the registered sale deed dated 5.4.1993 which had been given to them and complained about the slow progress of the construction work, the opposite party came forward with registered notice dated 22.4.1994 making untenable demands and preposterous claims. THE said notice was duly replied on 14.6.1994. THE entire construction work was in a standstill and it was only recently the opposite party bagan the construction and as on the date of the complaint the construction work is not yet over. THE complainant is ready and willing to pay the balance consideration amount of Rs. 7,76,000/- as per the terms agreed to. It is the further case of the complainant that when the opposite party had obtained permission for construction of only five floors of building, in violation thereof it has constructed 6th, 7th and 8th floors. THEse acts of the opposite party clearly amount to deficiency in service. On these allegations, the complaint has been filed for directing the opposite party to deliver the sale deed dated 5.4.1993 executed for the undivided interest of the land and to hand over possession of the flats to the complainant after completion and also to pay damages of Rs. 50,000/-.

THE opposite party contended in their written version that the complainant was never prepared to adhere to the terms of the agreement and the complainant failed to comply with the schedule of payment. THE complainant deposited with the opposite party the sale deed of undivided share of land agreeing to get it back on payment of the full consideration for construction. THE time fixed for payment of consideration is the essence of contract. Having failed to pay the amount as per the schedule "E" in the agreement the complainant cannot find fault with the opposite party saying that the construction is not over. THE opposite party submits that within a reasonable time from the date of agreement the construction was commenced and three floors upto ceiling level have been finished by 8.2.1993. In any event, the complainant has no locus standi to question the alleged delay in construction when he himself is in default in making payment of the consideration. THE opposite party denies that the construction was commenced only in May, 1995. If there was any slow progress in construction it was only due to the non payment of the amount by the complainant. Clause 12 of the agreement enables the opposite party to terminate the agreement giving 30 days'' notice if the payments were not proper and regular. Only because the opposite party received some amounts from the complainant it does not mean mat the opposite party is giving up any right of them under the agreement. THE opposite party issued a notice dated 22.4.1994 to the complainant only as per the terms of the agreement. THE complainant is entitled to receive back the original sale deed only after making payment of the entire amount due for construction. THE opposite party submits that they have not violated the permission of the MMDA. THE complainant ought to have paid Rs. 8,81,400/by October, 1993 for him to make a demand for delivery of the flats. THE complainant having failed to perform his part of the agreement, he cannot find fault with the opposite arty. THEy have terminated the contract and they are entitled to allot the flats to others. On these contentions the opposite party prayed for dismissal of the complaint. The point that arises for consideration is whether there was any deficiency in service on the part of die opposite party as alleged by the complainant.

It is common case that the consideration payable by the complainant for construction by the opposite party is Rs. 9,78,400/-. This amount shall be payble in instalments as per the Schedule "E" in the agreement which is as follows : "Schedule E (Payment Schedule) Total cost of construction Rs. 9,78,400/- Instalment Due dateAmount(Rs.) I 15.5.1992 8,400/- II 31.5.1992 97,000/- III 30.7.1992 97,000/- IV 30.9.1992 97,000/- V 30.11.1992 97/000/- VI 31.1.1993 97/000/- VII 31.3.1993 97,000/- VIII 31.5.1993 97,000/- IX 31.7.1993 97,000/- X 30.9.1993 97,000/- XI Handing Over Possession 97,000/- Total 9,78,400/-" The building has to be constructed within 24 months from 15.5.1992, the date of agreement. The relevant clause in the agreement is Clause 6 which reads as follows : "6. The party of the second part shall as early as possible not exceeding a period of 24 months from this date complete the construction of the flat described in the schedule C here under subject to availability of materials, power and drainage and other factors which are beyond the control of the second party herein."

Now admittedly, the complainant has paid only the 1st, 2nd and 3rd instalments and he has not paid any of the other instalments as mentioned in the Schedule of Payment extracted supra and even those instalments have been paid belatedly. This would clearly show that the complainant has been grossly negligent in payment of the consideration amount. According to the complainant, it was only in or about May, 1993 the opposite party arranged for the commencement of the construction. But the opposite party would contend that within a reasonable time from the date of agreement, the construction was commenced and three floors upto the ceiling level have been finished by 8.2.1993. The complainant has not let in any evidence to show that his case that the commencement of construction work was made only in May, 1993 is true and the contention of the opposite party is false. However it may be, it is quite apparent that the complainant has been grossly negligent in making the payments. It is not the case of anybody that the payment shall be made according to stages of construction as it would be stated in some of the builders agreements. Therefore, the complainant shall strictly adhere to the payment schedule. His case appears to be that since no progress has been made in the construction he has not paid the instalments. This excuse cannot be accepted at all because, on his own showing even this contention of his is not correct. As stated above, only three instalments have been paid as on date including the 1st instalment and he never paid any of me subsequent instalments upto the 11th instalment. At least, if he had paid some more subsequent instalments, there may be some merit in his contention that because of the non-progress in the construction work he did not pay the amount. The non-payment of any more instalments other than 1st, 2nd and 3rd instalments would only belie his contentions. It would appear that he has simply failed to pay the instalments and not because of any fault of the opposite party. The complainant has been requested to pay the amount in instalments on certain dates fixed therefor only with a view to enable the opposite party to make progress in the construction with his money received. Having failed to pay at least some reasonable amount of money it does not at all lie in the month of the complainant to complain that there was no com mencement on progress in the construction. We have seen above Clause 6 of the agreement in which it is clearly stated that the construction of the flats within 24 months is subject to the availability of materials, power and drainage and other factors which are beyond the control of the opposite party. The relevant words are and other factors which are beyond the control of the second party herein". The receipt of consideration for construction from the complainant is not within the control of the opposite party and they can get the amount only if the payment is made by the complainant. Hence in view of the said Clause 6 in the agreement, when the complainant has not made the payment at all, the opposite party cannot at all be found fault with for the slow progress of the construction or even for the non-commencement of the construction. Even now, according to the complainant himself, there is a balance of consideration of Rs. 7,76,000/-. According to the opposite party the balance amount payable is Rs. 8,81,400/- Clause 12 of the agreement enables the opposite party to terminate the agreement after giving 30 days'' notice in writing in case of default in payment of the amount as specified in Schedule "E". In view of the gross negligence on payment of the amount by the complainant, it cannot be said that the opposite party was not right in invoking its rights under Clause 12 of the agreement. The opposite party has written a letter Ex. A14 dated 26.8.1993 to the complainant as under : "This is reference to the agreement made on 15th May, 1992 for the purchase of the flat at 138, St. Mary''s Road, Madras-18 and as per the agreement Schedule E you have to pay Rs. 6,79,000/- together with interest thereon as per the agreement. We now call upon to pay us the amount due of Rs. 6,79,000/- together with interest within 30 days. This letter shall be treated as notice as per Clause 12 of the agreement. We may act upon Clause 12 if we fail to receive the money within 30 days from the date of receipt of this letter."

To this, the complainant has sent a reply Ex. A16 dated 21.9.1993 enclosing a cheque for Rs. 97,000/- which has been received by the opposite party, and thereupon the opposite party sent a letter Ex. A21 dated 22.4.1994 stating that since the complainant has failed to make payments even after their letter dated 28.7.1993 they cancel the allotment of the flats. It is argued that the acceptance of the 2nd and the 3rd instalments of Rs. 97,000/- each sent by the complainant to the opposite party without any demur would amount to the opposite party waiving their right to cancel the allotment of flats under Clause 12 of the agreement. We do not agree. When there is a balance of an amount of Rs. 7,76,000/- even according to the complainant, merely because the 2nd and the 3rd instalments of Rs. 97,000/- each sent by him have been received by the opposite party, it cannot be said that the opposite party had given up their right under Clause 12 of the agreement. Clause 13 of the agreement states that the opposite party shall have a lien over the undivided share of land purchased by the complainant and the complainant shall deposit the title deed with the opposite party and the title deeds shall be returned on payment of the full consideration. This being the case, when heavy amount is still due, there is no substance in the plea of the complainant that the opposite party is retaining the title deeds and therefore he could not get loan from L.I.C.

CONSIDERING all the above facts and circumstances in the case, the complainant has failed to make out a case against the opposite party of any deficiency in service. On behalf of the complainant, two orders of the National Commission were cited, viz., 1. M.M. Singh & Ors. v. Charanjit Kochhar, Proprietor. Mis. Charanjit Kochhar Engineers and Contractors & Anr., III (1995) CPJ 26 (NC). 2. Govinda Khurana & Anr v. Satya Sai Apartments (P) Ltd. & Ors., II (1996) CPJ 18 (NC). But, on perusal of these orders, we find that no principle of law has been laid down and the facts in those cases are different from the facts in our case, and therefore, they are of no assistance to the complainant.

IN the result, the complaint is dismissed. However, there will be no order as to costs. Complaint dismissed.