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2009 DIGILAW 437 (MP)

Union of India v. Municipality of Itarsi

2009-04-04

NEERJA SINGH, S.K.KULSHRESTHA

body2009
JUDGMENT : Asper S.K. Kulshrestha , J. (President ): - Thiscomplaint has been filed by the Union of India against the Municipality of Itarsi for refund of the amount paid to the Municipality Itarsi for construction of office and residential building. A sum of Rs . 20 ,10,000 /- was deposited on 13-4-1999 of which receipt wasobtained. The opposite party gave on lease plots with specification in SchemeNo. 1 of Priyadarshini Nagar of Itarsi Improvement Trust to interested parties forthe purpose of construction of office-cum-residential building. The Itarsi Improvement Trust after abolition of the M.P. TrustAct merged in the Municipality and the work of the trust was thereafterundertaken by the Municipality. 2.Subsequently an agreement dated 16-1-1999 was executed between the parties. As per Clause 13 of the agreement the plotwas given on lease by the opposite party to the complainant for the purpose ofgetting a house/building constructed by the lessee through the agency of the Itarsi Improvement Trust under the Self Financing HousingScheme. It had further been stipulated in the clause that the plot will be handedover to the lessee after the completion of the house/building under the schemeby the Itarsi Improvement Trust. Thus, it was clearthat as per the agreement between the parties, it was the duty of the Itarsi Improvement Trust under the control and direction ofthe opposite party to construct the building of standard quality on the plotand deliver the possession thereof. 3.The complainant waited for a reasonable time for getting possession of thebuilding and the complainant addressed a number of letters to the oppositeparty for handing over the possession of the building, but till date of filingof the complaint the possession was not delivered despite letters, Annexure C-4to C-13. By Annexures C-9 and C-10, the complainanthad given notice of legal action, if necessary, against the opposite party andin the event of the latter failing to handover the possession of the buildingwithout further delay. The Municipality sent a letter dated 9-10-2002 in which they offered togive possession of the building notwithstanding the defects which could beremedied later. It was mentioned that the pipes which were provided to drainthe water from the terrace had been broken by anti-social elements with theresult the water got clogged and there was seepage in the walls. The properarrangements had been made to drain the water andthus, this defect had been cured. It was mentioned that the pipes which were provided to drainthe water from the terrace had been broken by anti-social elements with theresult the water got clogged and there was seepage in the walls. The properarrangements had been made to drain the water andthus, this defect had been cured. It was also mentioned that for providingwater, steps had already been taken by sinking a tube well and immediately whenthe Electricity Board puts a three phase line, the tube-well will start and,thus, this problem will also get solved. They also stated that there werehair-cracks in the wall. Window panes were provided by the contractor, but theywere broken by the miscreants. After the possession is taken the panes will befixed. It was also mentioned in this letter that in August, 2002 when thebuilding was inspected, the possession was not handed-over by the contractor.On 4-10-2002 the contractorhad given keys and, therefore, the possession will now be handed-over. As peragreement whatever defects are existing in thebuilding will be remedied after possession is taken. It was in thesecircumstances and on promise that defects will be removed, the offer to take possession was made. 4.In view of the fact that the complainant was expressing that the defects weremuch more than admitted by the Municipality of Itarsi ,a Commission was appointed and report dated 13-6-2008 was submitted by theCommissioner-Executive Engineer, Central Public Works Department, BhopalCentral Division-I. He visited the site along with the Superintendent, Central Excise Range , Counsel for the complainant, AE and Sub-EngineerMunicipality of Itarsi and gave report pointing outthe defects. It was pointed out that (a) Cantilever portion of RCC beams aswell as slab in balconies has deflected and serious cracks have developed inbrick walls above it; (b) Cement concrete of RCC columns at their base (i.e.,at plinth level) has fallen out/deteriorated resulting in reduction of crosssectional area of concrete in that portion. It was pointed out that (a) Cantilever portion of RCC beams aswell as slab in balconies has deflected and serious cracks have developed inbrick walls above it; (b) Cement concrete of RCC columns at their base (i.e.,at plinth level) has fallen out/deteriorated resulting in reduction of crosssectional area of concrete in that portion. Also, the reinforcement in thatportion has rusted and as such strength and load carrying capacity of RCCcolumns have reduced; (c) It is also observed that RCC structural beams havealso deflected at some locations and cracks appeared in the bottom of the RCCbeams; (d) Large and wide cracks have appeared through brick filler wallsalmost everywhere; (e) The water proofing treatment on the roof has completelyfailed thereby causing heavy seepage and dampness in whole building resultingin progressive and cumulative deterioration of structure as well as otherfittings and fixtures provided in the building; (f) Services like water supply,sanitary and rainwater disposal has not been provided properly. No properarrangement was made at roof for disposal of rain water; (g) The mosaic tile flooring and kota stone flooring has not been grinded properly and not fixed in a workmanshiplike manner. Cuddapah stone shelf provided in opencupboard have almost no bearings; (h) The flush doorshutters are without fittings and fixtures and doors are broken at manylocations. The hinges has also rusted; ( i ) The glasspanes in the windows and ventilators either not provided or broken; (j) Theline and level of inside plastering is not proper at many locations; (k) Therain water pipes are also broken; (1) Sanitary and door window fittings werefound missing and (m) Due to heavy seepage and leakage the painting of all thebuilding is in a bad shape. 5.In view of the defects pointed by the Commissioner, it is luculent that theclaim of the Excise Department that the building was not complete for the use foroffice and for residential purposes is strengthened. 6.None has entered appearance today on behalf of the respondents. The oppositeparties in their written statement have taken various preliminary objectionsand have submitted that Municipality should have been impleaded through CMO and not Chief Executive Officer. They have traversed theallegations and mainly stated that they could not get possession from thecontractor as he had gone to the Court time and again. It was also stated thatthere was clause for arbitration with the result the complaint to theCommission was misconceived. They have traversed theallegations and mainly stated that they could not get possession from thecontractor as he had gone to the Court time and again. It was also stated thatthere was clause for arbitration with the result the complaint to theCommission was misconceived. In the affidavit filed by the Chief CMO, it hasbeen pointed out that the contractor Gulabchand Agrawal who was entrusted with thework to construct the building, did not complete the work and handed over thepossession thereof. This fact was in the knowledge of the complainant. It hasalso been pointed out that Gulabchand Agrawal filed number of cases in different Courts andobtained stay with the result it was not possible to give possession to thecomplainant. It was further pointed out that the complaint was frivolous andthe opposite party, therefore, deserves Rs . 10,000/-as special costs. 7.From the pleadings of the parties stated hereinabove the following issues arisefor our determination : - (1)Whether the Commission has jurisdiction to entertain this complaint? (2)Whether in view of the M.P. Madhyastham Adhikaran Adhiniyam the complaintwas not maintainable ? (3)Whether the building was fit for the purpose for which the amount of Rs . 20 ,10,000 /- was paid ? (4)Relief and costs? 8.It is stated that the Municipality has been made party not through the ChiefMunicipal Officer, but through the Chief Executive Officer. This is not adefect that goes to the root of the matter. The Chief Municipal Officer hasentered appearance and, therefore, the objection otherwise also looses itssignificance. Besides no prejudice has been caused to theopposite party. It is trite that proceedings before the Commission haveto adhere to the principles of natural justice and since right of audience andparticipation was provided to the Municipality, it has participated in theproceedings and filed its written statement, no harm has been suffered by theMunicipality and the principles of natural justice shall prevail. Initially thematter was dealt with the Town Improvement Trust which has a Chief ExecutiveOfficer. Similarly, the provisions of Madhyastham Adhikaran Adhiniyam are notattracted as between the complainant and opposite party there was no workscontract. As per Section 3 of the Consumer Protection Act, 1986 the Act is notin derogation of any other law, but in addition. It is, therefore, obvious thatif the remedy is provided in the Act, the complaint can be filed before theCommission under the provisions of the said Act. As per Section 3 of the Consumer Protection Act, 1986 the Act is notin derogation of any other law, but in addition. It is, therefore, obvious thatif the remedy is provided in the Act, the complaint can be filed before theCommission under the provisions of the said Act. Section 20 of the MadhyaPradesh Madhyastham Adhikaran Adhiniyam bars the jurisdiction of Civil Court . In the case of Telegraph Act thisCommission had taken the view in Bharat Sanchar Nigam Lid. Vs. Jagdish Prasad Thakur , II (2008) CPJ 151, that the clause does not take away the jurisdiction of Fora .We are fortified by the decision of the National Consumer Disputes Redressal Commission in National Seeds Corpn .Ltd. Vs. P. V. Krishna Reddy, 2009 NCJ 260 (NC), inwhich Para Nos. 15 and 16 read as under:- "15.Insofar as existence of Arbitration Clause is concerned, learned Counsel forthe petitioner relied upon a number of judgments of Supreme Court including thejudgment reported in Agri Gold Exims Ltd. Vs. Shri Laxmi Knits& Wovens and others, reported in (2007) 3 SCC686, wherein the Supreme Court has taken the view that the existence ofArbitration Clause makes it mandatory for the Court to refer the parties toarbitration as Section 8 of the Arbitration and Conciliation Act, 1996 isperemptory in nature. That the failure of the Court to referthe case of arbitration would amount to failure of justice as also causingirreparable injury to person requesting for arbitration. 16.None of these judgments would be applicable with reference to the ConsumerProtection Act, 1986. No reliance can be placed under either of these judgmentsbecause the Supreme Court, with reference to Section 3 of the ConsumerProtection Act, 1986 in Fair Air Engineers Pvt. Ltd. and another case (supra), Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. etc. etc., reported in (2000) 5 SCC 294 ; and Secretary, Thinimurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) through LRs .and others, reported in (2004) 1 SCC 305 , has held that the existence ofArbitration Clause in agreement is no bar to the entertainment of the complaintby the Consumer Forum, which is an additional remedy under the Consumer ProtectionAct, 1986. The remedy provided under the Consumer Protection Act, 1986 is inaddition to the provisions of any other law." Therefore,there is no substance in the objection of the opposite party that the mattershould have been referred to arbitration. The remedy provided under the Consumer Protection Act, 1986 is inaddition to the provisions of any other law." Therefore,there is no substance in the objection of the opposite party that the mattershould have been referred to arbitration. 9.From the pleading of the parties it is clear that even the Municipality hasadmitted that there were several defects in the building and so also theCommissioner appointed by the Commission has also pointed out several defects.From the defects pointed out by the Commissioner in his report from (a) to (m),it is manifest that there was no point in taking possession of the building asit would have been futile to use the building with the existing defects such asseepage and leakage. Even the RCC structure had damaged and walls had developedinterstices. We are, therefore, of the view that since the building constructedby the Municipality was not of the quality as represented and admittedly wasfull of cracks, seepage and water logging, the complainant was right in nottaking possession when requested. The deficiency in service of the oppositeparty is writ large. The complainant has asked for the relief of refund of Rs . 20,10,000/- with interest thereon @ 12% from the dateof payment till realization; for a direction to make payment of Rs . 15 lacs as compensation tothe complainant for the loss suffered by it in the form of payment of rent foroffice building, payment of HRA to the employees and also loss of licence fee and that the opposite party may also bedirected to make payment of a reasonable amount to compensate the damagessuffered by the complainant in the form of inconvenience. 10.Since admittedly a sum of Rs . 20 ,10,000 /-was paid before the construction started we direct the opposite party to refundthis amount along with 6% interest. We further direct that the complainantshall be paid a sum of Rs . 5 ,00,000 /-to compensate the complainant in the form of payment of rent of the officebuilding, payment of HRA to the employees and loss of licence fee causing great inconvenience. We also direct that the opposite party shallpay a sum of Rs . 1 ,00,000 /-to compensate for the mental agony and physical inconvenience suffered by thecomplainant and its staff. 11.The opposite party-Municipality shall pay the above amount within 60 days fromthe date of this order. The complaint is accordingly allowed to the extentstated above.