V.L.BHANUKUMAR vs DEGA SUNDARA RAMA REDDY

THIS complaint was originally filed before the Tamil Nadu State Consumer Disputes Redressal Commission at Madras and was registered on its file as O.P. No. 386 of 1993. However, vide Order dated 11th February, 1994 the complaint was returned by it for presentation to this Commission as the valuation of the reliefs claimed was found to be beyond its pecuniary jurisdiction. The Complainant has thus filed this complaint before this Commission.

THE case of the Complainant is that he was in need of a residential accommodation in the city of Madras. He came across an advertisement/brochure issued by M/s. Pioneer Building Syndicate Pvt. Ltd. (Opposite Party No. 3) and the Architect, Mr. Sarat Kakumanu (Opposite Party No. 6) advertising their building project as "Pioneer Homes constructing Mandira Apartments in T. Nagar area." The classic and distinctive features mentioned in the brochure included amongst other facilities like glass capsule lift, purview theater, indoor recreation room, basement car parking for the owners of the flats to be constructed by them. In response to the enquiries made by the Complainant he received a letter dated 30th January, 1991 informing him that the Opposite Parties are tentatively allotting to him flat No. 3 M measuring 1724 sq.ft. at Mandira Apartments to be constructed at No. 35, L. Raman Street, T. Nagar. The total cost of the flat was quoted as Rs. 13,56,800/- comprising among other things - value of the proportionate share in the land - Rs. 74,496/-, cost of the flat construction - Rs. 7,06,100/-, cost of amenities - Rs. 1,49,200/- and the amount to be paid under the agreement of finishes - Rs. 4,26,204/-. The Opposite Parties assured the Complainant that the flat with all the facilities and the amenities would be delivered to him in the month of June, 1991. The Complainant was persuaded to make the entire payment in one lump sum by way of full payment in a sum of Rs. 13,50,000/-. Believing the said representation the Complainant arranged to pay the entire sum of Rs. 13,50,000/- as early as on 22nd February, 1991 and a receipt was issued by the Opposite Parties. The Complainant thus became entitled to the allotment of flat bearing No. 3 M on the third floor in the project together with the sale of the undivided share in the land proportionate to the flat. Separate agreements for the sale of the proportionate share of the land, for construction, for amenities and for finishes all dated 25th February, 1991 were entered into at Madras between the Opposite Parties and the Complainant who was made to believe that the completed flat with all the facilities will be delivered to him within the stipulated time of six months as per the conditions in the agreement. However, the Opposite Parties have not adhered to the time schedule or other stipulations and till date the flat together with all the amenities has not been completed. In the mean time, when the work was in progress the Opposite Parties persuaded the Complainant and on their suggestion he opted for extra works to be carried out by the Opposite Parties for his flat and an estimate dated 24th April, 1991 was given by them to the Complainant and as per the consensus the Complainant agreed to pay the amount when the Opposite Parties completed those additional works as per specifications in the proposed flat. The Complainant visited Madras from Bombay, where he was then working, several times for the purpose of inspecting the flat. He has incurred heavy expenditure on this account. However, on all occasions the Opposite Parties used to admit that there was delay on their part in completing the project and used to assure him that the same would be completed as early as possible. Having made the full payment, the Complainant had no other option but to wait for the Opposite Parties to complete the construction. When the Complainant visited the work spot in the month of March, 1993 he found that the work was not completed and the progress was not as promised by the Opposite Parties. The Complainant demanded that the Opposite Parties must come forward with a final commitment as to when they would be able to deliver possession of the flat as he was being put to heavy loss. The Opposite Parties started raising untenable disputes with a view to side track the issue and cover up their default, demanding that cost for the additional work also has to be paid by the Complainant in advance. As the Complainant had already burnt his fingers by paying the entire cost of the flat in advance and since the construction was not completed the Complainant flatly refused to comply with their demand and demanded that they should deliver the flat with all the amenities as per the agreement immediately to him. The Complainant also visited the work site in May, 1993 and found that several of the works were yet to be completed like providing the lift for the third floor flat and provision of car park amongst various other works left unfinished. When the Complainant threatened to take remedial measure unless the Opposite Parties completed the work and delivered the flat to him, the Opposite Parties in a hasty move issued a notice dated 16th June, 1993, falsely alleging that the flat was ready a long time ago and the handing over possession of the flat was being delayed by them for the alleged non-payment of the value of the additional work agreed to be carried out by them. The Opposite Parties falsely demanded payment of the amount for the alleged additional works together with interest at an exorbitant rate which was never agreed upon between the parties. They refused to complete the construction and hand over the flat to him. In such circumstances, the Complainant caused to issue a lawyer''s notice dated the 10th July, 1993 to the Opposite Parties demanding, amongst other things, delivery of the original registered sale deed conveying the undivided share in the land to him or his Bankers, completing construction of the flat together with all the amenities agreed upon and fitting and fixtures and handing over possession thereof to him forthwith and also payment of damages for the loss and inconvenience and mental strain caused to him by the default committed by the Opposite Parties. The Opposite Parties sent a reply dated 18th July, 1993 on behalf of the Opposite Parties Nos. 2, 4, 5 and 6 raising false and untenable contentions. A due rejoinder dated 6th August, 1993 was issued on behalf of the Complainant. The Complainant further states in the complaint that the Opposite Parties have the benefit of the above amount of Rs. 13,50,000/- for all this period and the Complainant has been deprived of the same. The Opposite Parties also did not complete the construction of the flat with all the amenities and fixtures and fittings as per the original agreement and failed to deliver the possession of the flat to him by June, 1991. The Complainant claimed interest at the rate of 24% per annum on the said amount of Rs. 13,50,000/-, from the agreed date of completion till date which according to him, comes to Rs. 6,50,000/-. According to the Complainant, the Opposite Parties are liable to pay this amount by way of loss of interest suffered by him by reason of the full payment of Rs. 13,50,000/- in advance. He also claimed Rs. 50,000/- on account of expenses said to have been incurred by him on his several trips from Bombay to Madras. The Complainant has further stated that he has been deprived of the flat measuring 1,724 sq.ft. in the prestigious locality of T. Nagar for all these years and thus he has sustained loss by reason of the loss of rental income for over two years and the amount of loss sustained by him on this account even calculated at a modest rate of Rs. 3/- per sq.ft. comes to about Rs. 1,50,000/-. The Opposite Parties are falsely accusing him for non-payment of the amount for the alleged additional work which is yet to be carried out by them for the flat. In the first instance, non-payment of the alleged additional work is due to non-carrying out of the additional works by the Opposite Parties to the satisfaction of the Complainant and moreover, these additional works are not part of the original contract and since the Opposite Parties have received full cost of the flat as per the original agreements, they have no justification to deny delivery of the possession of the flat to him. The Complainant also claimed Rs. 1 lakhs as compensation for the inconvenience and mental strain caused to him. Thus, according to the Complainant, the Opposite Parties are liable to pay to him Rs. 9,50,000/- in addition to the delivery of the constructed flat with all the amenities, fixtures and fittings and also hand over the original title deed conveying the undivided share in the land.

THE Opposite Party No. 1 did not appeal in spite of service of notice. The Opposite Party Nos. 2 to 6 filed joint counter affidavit contesting the complaint. According to them the Complainant is an employee of Standard Chartered Bank and in order to avail the facilities provided by the said Bank for purchase of a house or a flat by an employee the Complainant was looking for some decent flat and after having seen the advertisement made by the Opposite Parties and after ascertaining the entire material facts from them, he agreed to purchase the flat in Mandira Apartments, the price of which was Rs. 13,56,800/-. Since the Complainant was an employee of the Bank and as per the regulations of the bank, they used to make the entire payment in one lump sum for the purchase of a flat or house by the employee and in consonance with such policy, the Complainant also availed of the loan and had it sanctioned for Rs. 13,50,000/- in the name of the third Opposite Party, M/s. Pioneer Building Syndicate (P) Ltd. The Complainant''s brother was scheduled to apply for American Visa for his higher studies and he had to prove that he had enough funds in the Bank for his higher studies. The Complainant requested the Opposite Party to pay back a sum of Rs. 3,50,000/- as the flat was not fully complete. He wanted the money to be transferred to his brother, Mr. V. C. Hemasagar and agreed to repay the same at the time of taking possession of the flat. The Standard Chartered Bank paid a sum of Rs. 13,50,000/- to the Opposite Parties on 22nd February, 1991 and on the very next date the Opposite Party issued a cheque drawn on Andhra Bank in the name of the Complainant''s brother for a sum of Rs. 3,50,000/-. The Opposite Parties also got registered the undivided share of the land in the name of the Complainant and kept the sale deed with them. The Complainant agreed to collect the same at the time of repaying the said amount of Rs. 3,50,000/- and the balance amount of Rs. 6,800/-. After inspecting the flat during the month of April, 1991, the Complainant wanted to have certain additional facilities provided to him in his flat and made a requisition on 24th April, 1991 for carrying out the extra work for a sum of Rs. 59,855/- and also agreed to make payment for the additional work by paying 75% in advance and 25% on completion of the extra work. Later on he also came forward with certain more additional amenities costing Rs. 13,700/- to be provided to him. Believing the representations of the Complainant, the Opposite Parties carried out the extra work and got the flat ready for delivery, even though the Complainant did not make the advance payment as agreed to in his letter dated the 24th April, 1991. The Complainant was also making periodical inspection of the flat and in view of the fact that he was not able to repay the sum of Rs. 3,50,000/- paid to him for the purpose of enabling his brother to proceed to U.S.A. and also failed to pay the amount for the extra work carried out for Rs. 73,555/- as requested by him, the flat could not be delivered. The Complainant was postponing taking delivery of the flat. As far as the Opposite Parties were concerned, they have made the flat ready for delivery as early as August, 1991 and only due to non-payment of Rs. 3,56,800/- and the amount due in respect of extra work done, delivery of possession was not given. Since he has not paid the amount for the additional amenities, the Opposite Parties claimed a sum of Rs. 1,42,460.30 including the value of reserved car parking to be provided to him, association fee, maintenance charges etc. The Complainant was, thus, postponing the payment and at no point of time was there any negligence or any deficiency or defect in the service rendered by the Opposite Parties both in complying with the original agreements as well as construction of flat in accordance with the specifications. The Opposite parties were always ready and even now ready and willing to deliver the flat No. 3 M in Mandira Apartments provided the Complainant pays the sum due from him. Even at the time when the Complainant entered into the agreement for the purchase of flat, he had the same inspected by his own Engineer, who had certified that 60% of the work was already over even as early as February, 1991 and therefore in spite of the fact that the flat was ready as per schedule it is only by reason of extra work the Complainant was wanting to be carried out and also due to the fact that he has not paid the entire amount and has been postponing payment of the same and taking delivery of the flat, the flat could not be delivered to him. The Opposites Parties have never refused to deliver possession of the flat provided the Complainant made the payment. The Opposite Parties had not persuaded the Complainant for the extra work and in fact the Complainant himself gave two letters about the extra work to be carried out. Other allegations of the Complainant were also denied.

WE have gone through the records and heard the parties. Before we proceed further we may take up two points urged by the Opposite Parties. According to the Opposite Parties, the price of the flat was settled at Rs. 13,56,800/- out of which Complainant has paid only Rs. 13,50,000/-. The Complainant has produced receipt (which is at page 16 of the paper-book) issued by the Opposite Party No. 3, M/s. Pioneer Building Syndicate (P) Ltd. which clearly states that Rs. 13,50,000/- was received as full payment of flat No. 3-M at Mandira Apartments from the Complainant. Now it does not lie in the mouth of the Opposite Parties to say that the price was fixed at Rs. 13,56,800/- and that Rs. 6,800 are still due from the Complainant towards the price of the flat. Hence, this plea of the Opposite Parties is patently false. The other contention of the Opposite Parties that Rs. 3,50,000/- were advanced to the Complainant''s brother at his instance and he had agreed to make good that payment before taking possession of the flat also cannot be believed. Letters dated June 19, 1992; August 6, 1992; September 6, 1992; October 8, 1992; January 27, 1993; February 1, 1993; March 8, 1993, March 16, 1993; March 24, 1993 and April 5, 1993 were written by the Opposite Parties to the Complainant for making payment for the extra work done. In those letters there was not even a whisper of the amount of Rs. 3,50,000/- said to have been advanced to the Complainant''s brother. On 20th April, 1993, the Opposite Parties again wrote a letter to the Complainant showing the details of the amount due to be paid before taking delivery of the possession. That letter is at page 82 = 136 of the paper book and the details given are a page 83 = 136A. These details are as follows : "Details of amounts to be paid by Mr. Bhanukumar, Flat No. 3M at Mandira Apartments : Extra work carried out in the flat Rs. 73,555.00 Car parking (Reserved car parking in front of the Building at Western Side) Rs. 25,000.00 Interest for delayed payment for extra work Rs. 25,450.00 Association fees (Membership) Rs. 3,000.00 Maintenance fees for 12 months @ Rs. 690/- Rs. 8,280.00 Rs. 1,35,285.00 Even in this letter there is no mention about the alleged amount of Rs. 3,50,000/- said to have been advanced at the instance of the Complainant to his brother. In these proceedings we are not to determine whether the said sum had been advanced by the Opposite Parties to the Complainant''s brother. But, the question to be decided is whether the Complainant made any promise to the third Opposite Party for the payment of the said amount before taking delivery of the possession of the flat. The documents referred to above do not substantiate the contention of the Opposite Parties. This allegation for the first time was made in the letter dated 18th July, 1993 which was in fact sent by a lawyer on behalf of the Opposite Parties in reply to the notice dated 10th July, 1993 sent by a lawyer on behalf of the Complainant demanding delivery of possession of the flat after completion plus damages for the loss etc. Hence, we are of the view that the Complainant is not liable to pay Rs. 3,50,000/- before taking delivery of the possession of the flat and this plea has been falsely raised by the Opposite Parties just to justify the delay in not delivering the possession of the flat to the Complainant.

THERE is no dispute between the parties that the Opposite Parties had not completed the flat which was to be delivered to the Complainant in June, 1991. There is also no dispute that at the instance of the Complainant some additional work has been carried out in the flat allotted to him at his instance. In this connection two points have been raised by the Opposite Parties. The first point is that the Complainant has not paid 75% cost of the additional works as an advance as agreed upon between the parties. The second point is that the Complainant has not paid the costs of the additional work up to this time in spite of several letters and reminders. The main question to be considered in the present case is whether the delay in the completion of the flat has been caused due to the additional work sought to be done at the instance of the Complainant. The Opposite Party''s plea is that the flat was completed in 1992 after completion of the additional work and the delay has been caused due to the additional work done at the instance of the Complainant and the delay in the delivery of possession of the flat to the Complainant is due to the fact that he has not paid the costs of the additional work and interest thereon. However, we are not satisfied with the explanation of the Opposite Parties. The flat was allotted to the Complainant on 3rd floor. According to the agreement between the parties which is at pages 38-41 of the paperbook three lifts with back up generators are to be provided, out of which one lift was to be a Glass Lift. Along with the complaint, the Complainant had filed inspection/valuation report of Er. T. M. Babu, Authorised Valuer, which is at pages 87-92 of the paperbook. This report is dated 19th November, 1993. The complaint was filed on 24th March, 1994. According to the said report, lift in Block-C in which Block the flat allotted to the plaintiff is located is not functioning. Complainant in the rejoinder filed to the counter has also stated that, in fact, the lift has not been installed so far. Thus, without the lift the flat allotted to the Complainant cannot be said to be habitable. It cannot be expected that the Complainant who has paid so much amount in advance should climb ground floor and two floors above it to reach his flat.

IN fact, the aforesaid valuer has pointed many incomplete works in the construction of the flat as well as in the additional items of work agreed to be carried out by the Opposite Parties at the instance of the Complainant. We need not refer to that report in detail as neither in the counter nor in the submissions before us the Opposite Parties have challenged that report though it was filed by the Complainant along with the complaint. In such circumstances, we have no option but to hold that the flat bargained for by the Complainant was not in habitable condition as agreed upon between the parties upto the date the complaint was filed. There is no dispute upon the point that the builder who develops land and constructs flats is rendering service qua the prospective buyers. Thus, there is clearly deficiency in service as well as imperfection in the service rendered by the Opposite Parties to the Complainant who had hired those services by paying full price of the flat in advance on 22nd February, 1991.

ACCORDINGLY we order that the Opposite Parties shall pay to the Complainant interest at the amount of 15% per annum from 1st July, 1991 on the amount of Rs. 13,50,000/- till possession of the flat is delivered as according to the agreement the possession of the flat was to be delivered to him in the month of June, 1991. We make it clear that before taking possession the Complainant should pay to the Opposite Parties the costs of the extra work agreed upon by the parties at Rs. 73,555/- plus Rs. 25,000/- for car parking. The Complainant will be at liberty to give up the facility of car parking and in that case he will be not be liable to pay the sum of Rs. 25,000/-.

THE Complainant has also claimed damages for the delay in delivery of the possession and expenses for his travel, but we are of the opinion that he has been substantially compensated by allowing him the above rate of interest on the amount paid by him. The Complainant will be entitled Rs. 5,000/- as costs.