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1994 DIGILAW 595 (BOM)

N. Bhaskara Rao v. Nagpur Beghar Mitra Griha Nirman Sahakari Sanstha Ltd. and others

1994-10-06

G.G.LONEY, M.G.GAVAI

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JUDGMENT- G.G. LONEY, President :---Since the aforesaid thirty complaints are against the same opposite party and since there is a common grievance in all these complaints, all these complaints are disposed off by this common order. All the thirty complainants except three in number are Railway employees. They are members of Deepaknagar Housing Society which was organised by opposite party No. 1 viz. Nagpur Beghar Mitra Gruhanirman Sahakari Sanstha Ltd., for short, hereinafter referred as Society. The opposite party No. 1, the opposite party No. 2, New Nagpur Builders Pvt. Ltd., represented by M/s. Nanda Tikle is the Builder. O.P. Nos. 3 to 6 are the owners of the land admeasuring 7.20 acres bearing identification of Khasara No. 166/3/4 at Borgaon, District Nagpur. They inherited the aforesaid land from their late father. They all executed a power of attorney in favour of the O.P. No. 1 in October, 1989. The aforesaid land being covered under the provisions of Urban Land Ceiling on Holdings Regulation Act, 1976, they had obtained an exception from the Government of Maharashtra under an order dated 28-2-1989 and 5-9-1989 for purposes of construction of houses. The opposite parties orally advertised among the public in general that the aforesaid land is being utilised for public purpose i.e. for construction of low income group and middle income group tenements. It was also advertised that the Railway Employees would be included in the scheme of houses. 2. A separate agreement dated 22-11-1989 came to be executed between each complainant and opposite party No. 1, which are marked as Anx. I and II. Anx. I is an agreement for providing additional amenities in favour of complainants. Out of 30 tenements, some tenements were admeasuring 60 sq. meters at a consideration of Rs. 1,53,525/- and some tenements were for an area of 27 sq. meters for a consideration of Rs. 65,000/-. Each complainant paid to O.P. No. 1 his share of consideration from his own funds and from the funds obtained by way of loan from Railway Department. The opposite parties by the aforesaid agreements had agreed to place the complainants in possession of their respective tenements on or before 30-6-1990 as shown in the Chart. 3. All the complainants in their respective complaints alleged that till the date of filing of these complaints i.e. on 15-4-1993, the construction work has not been completed by the opposite party Nos. 3. All the complainants in their respective complaints alleged that till the date of filing of these complaints i.e. on 15-4-1993, the construction work has not been completed by the opposite party Nos. 1 and 2 and thus they failed to render the promised service in terms of the agreements resulting in deficiencies in their service. It is alleged by the complainants that even the plinth level construction is not made in respect of some tenements and whatever the plinth level construction is made in respect of some tenements is now deteriorating. It is also alleged that at some places, the walls are broken and bricks are lying scattered. It is further alleged that builder not only used poor quality building material for the construction made but has been hopelessly deficient in performance of the agreement for construction of the tenements. It is also alleged that abruptly and illegally, the builder stopped the work of construction. The complainants further alleged that when they approached the opposite parties about their grievance of delay and incomplete construction of houses and poor quality of building material; the opposite parties Nos. 1 and 2 gave them evasive and false assurances stating that they would change the plan sanctioned by the authorities. But ultimately failed to do so till the filing of these complaints. The complainants therefore, alleged that due to the negligence in the performance of promised service, it has resulted in the deficiencies in the promised service. The complainants, therefore, filed these complaints and claimed compensation on various counts. 4. A chart showing the details about the name of the complainant, tenament number, consumer complaint number, agreed cost, amount paid to the opposite parties, the date of possession and progress of work etc., is shown and forms the part of this order. 5. All the 30 complainants were represented by Mrs. Mudaliyar, Advocate. The opposite parties Nos. 1 and 2 were represented by Shri S.D. Deshpande, Advocate and Mrs. Padolay, Advocate. O.P. Nos. 3 to 6 were represented by Shri D.M. Nilajkar, Advocate. O.P. Nos. 1 and 2 filed their written version and O.Ps. Nos. 3 to 6 filed their respective separate written versions. The O.P. Nos. 1 and 2 admitted that thirty complainants have entered into agreements with them for the construction of tenements as alleged by the complainants. O.P. Nos. 3 to 6 were represented by Shri D.M. Nilajkar, Advocate. O.P. Nos. 1 and 2 filed their written version and O.Ps. Nos. 3 to 6 filed their respective separate written versions. The O.P. Nos. 1 and 2 admitted that thirty complainants have entered into agreements with them for the construction of tenements as alleged by the complainants. It is also admitted that the scheme was notified by giving publication in the local newspaper and offers were invited. It is also admitted that the surplus land in question was allotted by the State of Maharashtra to the O.P. No. 1 for construction of tenements. It is also admitted that complainants paid the amounts towards the consideration of their flats as shown in chart and receipts have been passed by the opposite party No. 1 for the respective payments made by the complainants. In short, the opposite parties Nos. 1 and 2 admitted all the facts except that there is no deficiency on their part in delaying the construction. It is the grievance of the opposite parties 1 and 2 that they are not responsible for delay in construction of tenements within the stipulated time since some of the complainants failed to remit the full consideration and also did not pay the amount for the completion of the tenements. On the basis of these premises, they denied their liability to compensate the complainants. It is also contended by the opposite party 1 and 2 that the complainants made changes in the agreement to enable them to obtain the loan. It is also contended that some portion of the plot was encroached by encroachers. Thus, it is submitted by the opposite party Nos. 1 and 2 that they are not liable for the payment of compensation to the complainants. 6. In their written version, opposite parties Nos. 3, 4, 5 and 6 denied that the complainants are the purchasers and members of the society of the open plot in question. They denied knowledge about the booking of tenements by the complainants. However, it is admitted that the opposite party Nos. 1 and 2 are the builders and contractors had agreed to construct some work for the complainants as per the letter mentioned in para 3 of the complaint. Thus, opposite party Nos. 3 to 6 denied the execution of the agreement at Anx. I and II. However, it is admitted that the opposite party Nos. 1 and 2 are the builders and contractors had agreed to construct some work for the complainants as per the letter mentioned in para 3 of the complaint. Thus, opposite party Nos. 3 to 6 denied the execution of the agreement at Anx. I and II. These opposite parties also denied that they are responsible for the suffering of the complainants and denied their liability to pay the compensation to the complainants. 7. Parties have filed their affidavits, document and written notes of arguments. We have heard the argument of both the sides and also perused the record of this complaint. 8. The main issue of this consumer dispute is as to whether there has been deficiency in the promised services of opposite parties. Admittedly the agreements having executed on 28-12-1983 and the possession of the constructed tenements were to be handed over to the complainants on or before 28-6-1990 and whereas till the filing of this complaint on 15-4-1993, there has been incomplete construction of the tenements there is the deficiency in the promised service. There may be variety of reasons for the opposite party not to complete the construction and there may be justification from builders side to justify the delay but the fact remains that the entire scheme of construction of low-income and middle income group tenements by O.P. 1 had not been carried out in terms of the agreement. In its reply, the builder O.P. No. 1 and 2 inter alia contended that the delay to complete the tenements is because the complainants did not make regular payments and, therefore, the work of construction has been stopped since 1991. It is submitted that the construction work is incomplete. In some cases, even the plinth level work has not been constructed. It is also contended that the plan has been changed by the complainants without consulting the builder. On the basis of these pleading, Shri Deshpande, the learned Advocate for O.P. No. 1 and 2 contended that the complainants contravened the condition No. 8 of the agreement. condition No. 8 prescribes the manner of payment of consideration by the complainants to the builder. Shri Deshpande, therefore, contended that inspite of the letters sent to the complainants, no payments were made by them within the stipulated time and, therefore, this is the reason for the delay in construction work. condition No. 8 prescribes the manner of payment of consideration by the complainants to the builder. Shri Deshpande, therefore, contended that inspite of the letters sent to the complainants, no payments were made by them within the stipulated time and, therefore, this is the reason for the delay in construction work. Assuming for the moment for the sake of arguments that complainants did not make the regular payment of the instalments in terms of agreement, yet, the fact remains that despite substantial payment made by the complainants from their own funds and from the loan obtained by them from Railway Department, the opposite parties 1 and 2 totally failed to complete the work equal to worth the admitted payments made to opposite parties 1 and 2. From record, we find that O.P. Nos. 1 and 2 were totally inactive and negligent in completing the project of construction of tenements in question. But what we find in this complaint is that even whatever the payments are made by the complainants, the opposite party Nos. 1 and 2 did not spend that much amount which was paid to them by the complainants. On their own admission the construction work has been stopped since 1991. In fact, opposite parties had agreed to deliver the possession of the tenements in question on 30-6-1990. But even the plinth level construction in some flats have not been completed. It is undisputed that in some cases the construction upto plinth level has been completed as shown in chart but then, the complainants have alleged that the already constructed plinths are in deteriorating condition. The opposite parties 1 and 2 do not have any reasonable, satisfactory and plausible answer about their total inaction about the progress in the construction of tenements. We find from the record that O.P. Nos 1 and 2 were totally negligent and callous towards the complainants. Thus, the inaction is writ large at every action by the opposite party. The complainants have made a grievance that they obtained the loan from Railway Department for construction of houses and are paying interest and since the opposite parties have failed to complete the construction, they have to live in tenanted houses or in railway quarters for which they are required to incur substantial expenses. To top their difficulties the banks who advanced the loan to some of the complainants are demanding the recovery of the loan. To top their difficulties the banks who advanced the loan to some of the complainants are demanding the recovery of the loan. Under these circumstances, the complainants alleged that the deficiency in the service of the opposite parties Nos. 1 and 2 has been fully established. In their contentions, the complainants have denied that they have defaulted in making the payment of instalments. Therefore, the complainants alleged that the deficiency in the services of O.Ps. 1 and 2 being very clear and obvious, they should be granted the compensation from the opposite parties 1 and 2 because they were forced to approach the Consumer Court for serious deficiencies in the service of the O.P. 1 and 2. 9. In view of the facts and circumstances of the case, we find that the opposite party Nos. 1 and 2 who have undertaken the construction of the tenements for the complainants have completely failed to discharge their part of agreement. It is obviously the deficiency in the service of the opposite party. The Supreme Court of India, in the case of M.K. Gupta (C.P.J.-1994 P. 83) has ruled that for any deficiency in the service of a builder/promoter complaint is maintainable under the Consumer Protection Act. For any shortcoming in the promised service, the complainant is entitled to claim the reliefs of compensation. In view of the legal position, in our view the complainants have proved the deficiency in the service of the opposite party Nos. 1 and 2. The O.P. Nos. 3, 4, 5 and 6 are the owners of the land and the deficiency in the service is not referable to them since they have not undertaken to construct the tenements. However, the allegations made by the complainants as regards the deficiency in the service of the construction of tenements by the opposite parties 1 and 2 having been proved, the complainants are entitled to the reliefs as permissible under section 14 of the Consumer Protection Act, 1986. 10. The complainants have claimed the house rent allowance and house rent which they have paid during the delayed period of construction. However, these reliefs cannot be granted to the complainants since it is not permissible under section 14 of the C.P. Act. The complainants have also claimed the interest at the rate of 24% p.a. on the amount paid by each complainant to the O.Ps. 1 2. However, these reliefs cannot be granted to the complainants since it is not permissible under section 14 of the C.P. Act. The complainants have also claimed the interest at the rate of 24% p.a. on the amount paid by each complainant to the O.Ps. 1 2. It is provide that due to the delay in construction of tenements, the amounts paid by individual complainant are lying with the opposite party without being utilised for the construction work. In our view, therefore, the complainants are entitled to claim the compensation on account of the delay in construction of the tenements. The complainants also claimed the difference in booking price and the market price which has not been proved by any satisfactory evidence. Although there is appreciation of prices and the construction price have gone high, but there is no evidence before us to grant such a relief to the complainants in absence of evidence. of escalation price. The complainants also claimed Rs. 50,000/- each on account of mental stress and harassment. Although it is proved that there has been harassment to the complainants, therefore, instead of considering the amount of compensation on this amount, we would like to quantify the claim of compensation in each case separately. Lastly, each complainant has claimed the refund of his respective amount paid to the opposite party. It is clearly found that the opposite party Nos. 1 and 2 have completely failed to carry out the construction commensurate with the amounts of payments made by the complainants. Considering the past history of apathy on the part of O.P. Nos. 1 and 2, we do not see that the opposite parties can undertake the construction of tenaments in future and place them in possession. Under these circumstances, in our view, it would meet the ends of justice if the opposite party Nos. 1 and 2 are directed to refund the amount paid by each complainant to them with 18% p.a. from the date of payments till realisation towards compensation. Similarly, the opposite parties are also liable to pay to each complainant compensation on account of the delay in the construction work and the sufferings they have received due to the negligence in the service of the opposite parties amounting to Rs. 25,000 to each complainant. We, therefore, pass the following order :--- 11. All the 30 complaints are allowed. The opposite parties Nos. 25,000 to each complainant. We, therefore, pass the following order :--- 11. All the 30 complaints are allowed. The opposite parties Nos. 1 and 2 are hereby directed to refund to each complainant the amount shown in Column No. 6 of the statement attached with this order against their names along with 18% interest from the date of payment of the aforesaid amount till realisation. Each of the complainant be paid Rs. 25,000/- to cover the loss of escalation of price of land and mental tension suffered by each of the complainants. Each complainant also be paid Rs. 500/- towards the costs of his complaint. The opposite parties Nos. 1 and 2 are directed to make the payment of the aforesaid amounts to each of the complainants within 30 days from the receipt of this order failing which the opposite parties Nos. 1 and 2 are liable to pay interest at the rate of 18% p.a. on the aggregate amount till realisation. The claim of complainants against rest of the opposite parties is rejected. 12. The chart annexed herewith shall form the part of this order. Complaints allowed. *****