KERALA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION VAZHUTHACADU THIRUVANANTHAPURAM
OP.NO.140/2000
JUDGMENT DATED:28-10-2010
PRESENT
SMT. VALSALA SARANGADHARAN : MEMBER
SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER
SHRI.M.K. ABDULLA SONA : MEMBER
Mohammed Iqbal,
Kundurummal, Nellisseri Desom,
Kuttipala Amsom, Ponnani Taluk, : COMPLAINANT
Malappuram District.
(By Adv.Sri.S.Reghukumar)
Vs.
1. Abdul Rehman,
Karuppam Veedu, Thalamunda Desom,
Edappal Amsom, Ponnani Taluk,
Malappuram District.
2. Ibrahim, S/o Kunjappa,
Karuppam Veedu, Thalamunda Desom,
Edappal Amsom, Ponnani Taluk,
Malappuram District.
Addl. Ops 3 to 6:
3. Smt. Jameela, W/o Abdul Rehman,
Edayil Pedkayil, Panampadu,
Purangu.P.O, Via Marancheri, : OPPOSITE PARTIES
Malappuram Dist.
4. Smt. Nishita, D/o Abdul Rehman,
-do- -do-
5. Sri.Noushad, S/o Abdul Rehman,
-do- -do-
6. Sri.Nishad, S/o Abdul Rehman,
-do- -do-
(By Adv. Sri.K.G.Mohandas Pai)
JUDGMENT
SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER
Complaint filed under section 17 of the Consumer Protection Act, 1986.
2. The case of the complainant is as follows:-
On 22/3/1997, the complainant approached the 1st opposite party, Abdul Rehman for the purpose of constructing a commercial building and thereby the complainant availed the service of the 1st opposite party for construction of a commercial building. An agreement for construction of the building was entered into between the complainant and the 1st opposite party on 22/3/1997. As per the terms of the said agreement, construction of the building was to be completed within a period of 12 months. Time was an essence of the said agreement. The plinth area of the said building was 12185 Sq. ft. and that the 1st opposite party agreed to construct the said building at the rate of Rs.287/- per Sq.ft. An advance amount of Rs.5.lakhs was paid to the 1st opposite party on 22/3/1997 and the balance amount was to be paid in instalments as the work progresses. The 1st opposite party did not complete construction of the building as agreed. Construction of the building could not be completed due to the negligence and deficiency of service on the part of the 1st opposite party. Thereafter at the request of the 1st opposite party, the 2nd opposite party, Ibrahim was also made a party to the agreement. The 2nd opposite party is the brother of the 1st opposite party. On additional/supplemental agreement was also executed between the complainant and the opposite parties 1 and 2. The said agreement was executed on 13/7/1998. In the modified agreement it was admitted that the construction could not be completed due to the fault of the 1st opposite party. The negligence on the part of the 1st opposite party has been admitted in the said modified agreement. As per the terms of the modified agreement, the 2nd opposite party was also made responsible for construction work along with the 1st opposite party. Time was made an essence of the said contract and the construction was to be completed by 11/7/1999. The 2nd opposite party was made responsible for the advance amount accepted by the 1st opposite party. The opposite parties commenced the construction work and they accepted a total of Rs.15,66,542.50 by way of 12 instalments. They also acknowledged receipt of the said amount. But the opposite parties failed to complete the construction of the building on or before 11/7/1999. They could not even complete 25% of the construction work and that the opposite parties abandoned the work. The opposite parties have done the work in an unscientific manner. On examination of the work it could be understood that the work was done in an unscientific manner and the strength of the structure was weak. The opposite parties used poor quality materials for the construction work. Shortage of cement in mortar was also caused cracks, shrinkage etc. The floor and roof slabs are also seen leaking at several places. The value of construction so far done is estimated to be Rs.7 lakhs only. As the present structure is weak, further construction is possible only if the present structure is strengthened. The cost of strengthening the present structure would come to Rs.3.lakhs. The failure of the opposite parties to construct the building properly and to complete the construction within the agreed time amounts to deficiency of service and unfair trade practice on their part. The cost of building materials, labour charges etc have been escalated. The complainant will have to spend additional amount to complete the construction by incurring substantial amount. Therefore the complainant claimed refund of the excess amount of Rs.8,66,542.50 collected by the opposite parties with interest at the rate of 18% per annum from 11/7/1999 till the date of realization. The complainant has also claimed Rs.3.lakhs for strengthening the existing structure with compensation of Rs.2.lakhs towards the escalation of cost of materials and labour charges. The complainant has also claimed Rs.2.lakhs as compensation for deficiency in service and unfair trade practice adopted by opposite parties and Rs.10,000/- towards the cost of the proceedings.
3. Opposite parties 1 and 2 entered appearance and filed a joint written version contending as follows:
The joint written version was filed by the opposite parties through their power of attorney holder Yousuf Ali:- The complaint is not maintainable either in law or on facts. The complainant is not a consumer. The disputes involved in the complaint are not covered by the provisions of the Consumer Protection Act. The allegations in the complaint required elaborate and voluminous evidence and the disputes cannot be adjudicated in a summary proceedings as contemplated in the Consumer Protection Act. The subject matter is purely of a civil nature. The allegation in the complaint is arising out of a Civil contract stated to be entered into between the parties herein and consequent breach of contract. The complainant has to resort to civil remedy by approaching a competent civil court. The allegations in the complaint require intervention of engineering experts. As such this Hon’ble commission cannot entertain the present complaint. The terms of the contract entered into between the parties do not confer a contract of service. There is no hiring of service and therefore, question of deficiency of service does not arise at all. The maintainability of the complaint is a primary question to be considered in this case. The complainant entered into a contract based on a tender/bidding for construction of a mutistoried commercial complex having an area of around 14000 Sq.Ft. The rates quoted had no bearing with the market rate/local rates and the complainant was making unlawful enrichment. There was laxity in making payments and no payments were made in time. Delay in construction was caused due to the delay in payment by the complainant. The payments were made in piecemeal. Costs of materials were shooted up. The complainant and his engineers, architects and site engineers were present always. Work was carried out under their strict direction and supervision. The building was designed by the complainant. There were lot of defects in the design. Execution of work was delayed due to the defects in design and site conditions. Defects in design also caused additional extra works. There was variance in contract, design and execution. The 3 engineers who were assisting the complainant for execution of the work had never co-operated. The complainant’s father was supervising the work. There was substantial change in design/work after the agreement. Payments were made only after execution of work, that too inordinately delayed. No advance amount was lying in the hands of the opposite parties. More than Rs.8,26,000/- is due to the opposite parties for the work carried out including extra works. Materials worth Rs.72,000/- was lying unused in the site at the time of stoppage of work. The opposite parties could not continue the work due to the delay in payments and also due to non co-operation of the complainant. There was change in the ratio of reinforced cement. The number and size of steel rods were increased. Proportion of reinforced cement was also changed. There are about 74 columns. Hence, there was substantial difference and consequent extra work. The area of the building was also increased. The area was water logged; substantial amount was spent for bailing out water. The complainant later found that there are no prospective buyers for the commercial complex and thereby the complainant was delaying payment on one pretext or another. The steep increase in price of materials and wages were not met with by the complainant. The payment for increased price was not honoured. In the circumstances, the opposite parties were compelled to stop the work with notice. Time was not the essence of the contract due to variance in design. Opposite parties were employed in the Middle East. They are not engaged in the construction business. Complainant and his father invited bids for carrying out construction of commercial complex. The 1st opposite party also submitted tender. The tender submitted by the 1st opposite party was accepted. After negotiations, finally the contract work was awarded to the 1st opposite party. Tender documents are with the complainant. The 1st opposite party had not executed many works as contractor. It is not true to say that the service was availed of. The agreement for construction of building was executed. Unilateral terms were agreed on the understanding that complainant will bear the cost of extra work or excessive work. There was understanding that payment will be made in advance. The site conditions were different from what was demonstrated. The approved plan lay out and design were changed later, considering the site conditions. Complainant is deliberately suppressing these facts. The contract between the complainant and the opposite parties was a pure bidding contract, extension of time was permissible, new contract was entered into, the initial payment of Rs.5.lakhs used as mobilization advance. No amount was paid during the next 15 months. The non completion/progress of work during the first year was totally on the negligence of complainant and his father. New contract was entered into altering/varying the terms. New contract was entered into only at the instance of the complainant as he wanted the 2nd opposite party also to be made responsible for completion of work. The agreement was drafted by the complainant and his father. The terms were framed unilaterally by the complainant, his father and advisors. Opposite parties were compelled to enter into the agreement. The recitals in the agreement were made by the complainant deliberately and intentionally to trap the opposite parties. The payment of money in lumpsum was not honoured. The complainant ignored the demand of the opposite parties for payments. Only Rs.15,59,000/- was paid during the period as against the actual cost of work of Rs.22,13,392/- and extra work of Rs.1,71,000/-. The complainant is liable to pay an amount of Rs.8,26,000/- towards the cost of work with the cost of materials amounting to Rs.72,000/-. Complainant has made unlawful gain and enrichment. Appointment of an expert engineer in the presence of opposite parties would reveal these facts. The opposite parties carryout the work as per design/changed design and strict supervision of the complainant, his engineers and designers. No single brick was laid without the concurrence and approval. The entire materials/men were under scrutiny by the complainant and his engineers. The observation that the structure was weak is absolutely false and denied. Everything was done scientifically as per design, specification and supervision of the complainant and his engineers. In any new construction, there could be little wetting on slabs and the same can be rectified at no cost by pouring grout. The complainant has not suffered any financial loss or mental agony. Completion of construction at the rate of Rs.287/- per Sq.Ft. is impossible. There is no deficiency of service or unfair trade practice as alleged. Delay in completion of work is not caused due to negligence of opposite parties. The complainant is not entitled to get any compensation from the opposite parties. On the other hand, the opposite parties are entitled to Rs.8,98,000/- from the complainant. Thus, the opposite parties prayed for dismissal of the complaint with cost of Rs.10,000/-.
4. During the pendency of the complaint in OP.140/2000, the 1st opposite party Abdul Rehman died and his legal representatives are impleaded as additional opposite parties 3 to 6 vide order in I.A.628/02 dated:28/2/2004. But the additional opposite parties 3 to 6 remained absent throughout the proceedings.
5. The points that arise for consideration are:
1. Whether the complainant is a consumer coming within the ambit of the Consumer Protection Act, 1986?
2. Whether the disputes involved in this complaint can be entertained by this State Commission as a consumer dispute coming within the purview of the Consumer Protection Act, 1986?
3. Whether there was any deficiency of service or unfair trade practice on the part of the opposite parties 1 and 2 in executing the construction work for constructing a commercial complex for the complainant?
4. Whether the opposite parties can be made liable to pay Rs.3.lakhs to the complainant towards the cost for strengthening the existing structure which was constructed by the opposite parties?
5. Whether the opposite parties had received excess amount of Rs.8,66,542.50 as alleged by the complainant?
6. Whether the opposite parties 1 and 2 can be made liable to pay Rs.2.lakhs to the complainant by way of escalation cost of materials and labour charges?
7. Whether the complainant is entitled to get Rs.2.lakhs by way of compensation for deficiency of service and unfair trade practice on the part of the opposite parties 1 and 2?
8. What order as to cost?
6. No oral evidence was adduced by the complainant and opposite parties other than the proof affidavit by the complainant and also the proof affidavit by the 2nd opposite party. Exts.P1 to P3 is marked on the side of the complainant. No documentary evidence was adduced from the side of the opposite parties. Ext.P1 is copy of the agreement dated:22/3/1997 entered into between the complainant and the 1st opposite party. Ext.P2 is Photostat copy of the plan of the proposed building covered by P1 agreement. P3 is copy of the agreement dated:13/7/1998 entered into between the complainant and opposite parties 1 and 2.
7. The complainant filed IA.1404/2000 for appointment of an expert commissioner. This State Commission vide order dated:20th April 2001 allowed I.A.1404/2000 and thereby Sri.N.S. Appukkuttan Pillai, M.Tech, MIE; Superintending Engineer (Retd.) TC.10/331, Peroorkkada.P.O, Thiruvananthapuram was appointed as expert commissioner. The expert commissioner conducted site inspection on 28/5/2001 with due notice to both the parties and submitted the expert report dated:5th July 2001 along with photographs of the worksite and the construction works. Copies of the plan and the agreements and specifications are also produced with the report. He also produced copy of the notice of site inspection issued to the parties.
8. It is reported that at the time of the site inspection the complainant and his engineer and that the person who was the site man of the opposite party were present. The expert has also submitted the mahazar prepared by him at the time of the site inspection with the signature of the complainant and two witnesses. It is also stated that Sri.Hamsa, the agent of the opposite party who was supervising the work on behalf of the opposite parties refused to sign the mahazar.
9. At the time of arguments the learned counsel for the complainant requested for marking of the said expert report as C1. The aforesaid expert report is marked as Ext.C1 for convenience. The complainant and the 2nd opposite party filed objection to the expert commission report.
10. We heard the learned counsel for the complainant and also the learned counsel for the 2nd opposite party. There was no representation for additional opposite parties 3 to 6. The counsel for the complainant has also filed argument notes in support of his oral submissions.
11. Point Nos:1 &2:
There is no dispute that the complainant entered into a contract with the opposite parties 1 and 2 for construction of a commercial building complex. The aforesaid contract entered into between the complainant and opposite parties is evidenced by Ext.P1 and P3 agreements. There is also no dispute regarding execution of Exts.P1 to P3 agreements between the complainant and opposite parties. Recitals in Ext.P1 agreement dated:22/3/1997 would make it clear that the complainant invited tenders from the builders like the opposite parties for entering into a building contract. Thus, the 1st opposite party Abdul Rehman submitted tender for the aforesaid purpose and that the complainant accepted the tender submitted by the 1st opposite party, Abdul Rehman. It is on acceptance of the aforesaid tender the complainant and the 1st opposite party entered into Ext.P1 contract dated:22/3/1997 for constructing commercial building complex. Ext.P1 agreement would make it clear that the complainant and 1st opposite party entered into the said agreement incorporating the terms and conditions for constructing the commercial complex with specification of the building and approved plan affixed to the said agreement. The mere fact that tender was called for and on accepting the tender submitted by the 1st opposite party, a contract was entered into between the complainant and 1st opposite party would not make the transaction out of the purview of the Consumer Protection Act, 1986.
12. A perusal of Ext.P3 agreement dated:13/7/1998 entered into between the complainant and opposite parties 1 and 2 would make it crystal clear that Ext.P3 agreement was executed between the complainant and opposite parties 1 and 2 as a supplemental agreement to the original P1 agreement dated:22/3/1997. As per P3 agreement, the 2nd opposite party, Ibrahim, the brother of the 1st opposite party Abdul Rehman was also made a party to the aforesaid building contract and thereby both the opposite parties 1 and 2 had undertaken to construct the commercial building complex for the complainant. It is also to be noted that as per P3 agreement the 2nd opposite party, Ibrahim acknowledged, accepted and approved the advance amount of Rs.5.lakhs received by the 1st opposite party, Abdul Rehman. It is to be noted that P3 agreement was executed not solely based on the tender submitted by the 1st opposite party Abdul Rehman but based on the original P1 agreement dated 22/3/1997 and by treating P3 agreement as supplemental agreement to the original P1 agreement dated:22/3/1997. Thus, by virtue of P3 agreement both the opposite parties agreed for construction of the commercial building complex for the complainant with the same rate of Rs.287/- per sq.ft, and by treating the acceptance of Rs.5.lakhs by the 1st opposite party towards the consideration for the aforesaid building contract. In Ext.P3 agreement it was also agreed that the construction of the building is to be completed within a period of 12 months ie; it was agreed to complete the construction by 11/7/1999. It is also stated in P3 agreement that the time is essence of the said contract. It is further admitted that the construction of the building could not be completed as per Ext.P1 agreement because of the negligence, lapse and omission on the part of the 1st opposite party, Abdul Rehman.
13. The case of the opposite parties is that the complainant is not a consumer as the agreement entered into between the parties was to construct a commercial building complex. It is the definite case of the opposite parties that the complainant availed the service of the opposite parties for commercial purpose and so the complainant cannot be considered as a consumer as defined under section 2(1)d of the Consumer Protection Act, 1986. There can be no doubt that by entering into P3 building contract the complainant availed the services of the opposite parties 1 and 2 for constructing a commercial building. P1 agreement was executed on 22/3/1997 and P3 agreement was executed on 13/7/1998. The aforesaid P1 and P3 agreements were executed prior to the amendment of Section 2(1)d(ii) of the Consumer Protection Act, 1986. The aforesaid amendment was made by Act 62/02 with effect from 15/3/2003. Prior to the said amendment by Act 62/02, service availed for commercial purpose was also included within the purview of the Consumer Protection Act, 1986. In other words; by the aforesaid amendment by Act 62/02 a person who avails any service for consideration for any commercial purpose was excluded from the purview of the Consumer Protection Act, ie; a person who avails services for any commercial purpose cannot be considered as a consumer as defined under section 2(1)d(ii) of the Consumer Protection Act. Therefore, prior to 15/3/2003 a person who avails service for consideration for commercial purpose was treated as a consumer as defined under section 2(1)d(ii) of the Consumer Protection Act. If that be so, the complainant herein availed the services of the opposite parties 1 and 2 during the years 1997 and 1998 can be considered as a consumer as defined under Sec.2(1)d(ii) of the Consumer Protection Act, 1986. Hence, the case of the opposite parties that the complainant is not a consumer as defined under the Consumer Protection Act cannot be upheld
14. Admittedly the complainant availed services of opposite parties 1 and2 for the purpose of constructing a commercial building. It is to be noted by availing the aforesaid services of the opposite parties; the complainant has not been earning or deriving any profit. There was no direct nexus between the services availed and the process of profit making. It may be correct to say that in future, after the completion of the aforesaid commercial building, the complainant may let out the building and its premises for commercial purpose of getting rent resulting in making of profit or that the complainant himself may use the building for the commencement of commercial activities for the purpose of earning profit. There can be no doubt that generating profit or making profit is the main ingredient of a commercial activity. It is held by the Hon’ble National Commission in M/s Harsolia Motors Vs. M/s National Insurance Company Ltd. And others reported in 2005 (1) CPR 1 (NC) that “goods purchased or services hired should be used in any activity directly intended to generate profit.” In the aforesaid reported case a commercial establishment availed the services of the opposite party/insurance company by taking insurance policy for its commercial units. In that case it was held by the Hon’ble Natioanl Commission that insurance policy taken by commercial units cannot be held to be hiring of service for commercial purposes so as to exclude it from the purview of Consumer Protection Act. The aforesaid principle enunciated by the Hon’ble National Commission in the aforesaid reported case (supra) can be made applicable in the present case also. It is to be noted that the complainant availed the services of the opposite parties only for the purpose of getting a commercial building constructed. But the aforesaid services availed by the complainant had no direct link with the process of profit making. It cannot be held that the services availed for constructing the building is intended to generate profit. The aforesaid services hired by the complainant from the opposite parties were not intended for generating profit. On this ground also, it can be held that the complainant has not availed the services of the opposite parties for any commercial purpose. Thus, the contention of the opposite parties that the complainant is not a consumer coming within the ambit of the Consumer Protection Act cannot be upheld.
15. The opposite parties have got a case that the disputes involved in this complaint are of a civil nature based on breach of contract and the remedy sought for is a civil remedy. It is further contended that the disputes cannot be adjudicated in a summary proceedings as contemplated in the Consumer Protection Act as the disputes require elaborate and voluminous evidence including the intervention of engineering experts. It is to be noted that in every consumer disputes there will be some sort of breach of contract. It is also to be born in mind that the consumer disputes are also disputes of civil nature and the remedy or remedies that can be claimed are also civil remedies. But the pertinent aspect is as to whether the breach of contract has resulted in causing deficiency of service or unfair trade practice. The definite case of the complainant herein is that due to the breach of contract on the part of the opposite parties, the complainant suffered mental agony, inconvenience and financial loss on account of deficiency of service and unfair trade practice. The complainant has claimed compensation for the deficiency of service and unfair trade practice on the part of the opposite parties. It is true that deficiency of service and tortuous acts, are to be distinguished and differentiated. By distinguishing the case of deficiency of service from the tortuous acts it can be concluded that the case of the complainant is based on deficiency of service and unfair trade practice on the part of the opposite parties in executing the work based on P1 and P3 agreements. The mere fact that there occurred breach of contract on the part of the parties to the agreement cannot be taken as a ground to hold that there was no deficiency of service or unfair trade practice as alleged by the complainant. No doubt, that the complainant will succeed in getting the reliefs sought for only on establishing the alleged deficiency of service and unfair trade practice. The complaint as framed can be held maintainable under the Consumer Protection Act, 1986. Hence these points are answered accordingly.
16. Point No.3:
Execution of P1 and P3 agreements is admitted by the parties to the present complaint. P1 agreement dated:22/3/1997 was entered into between the complainant and the 1st opposite party. As per P1 agreement the 1st opposite party accepted Rs.5.lakhs by way of advance for construction of the commercial building complex for the complainant. As per P1 agreement time was treated as essence of the said contract. Thereby the 1st opposite party agreed to complete the construction of the said building more specified in the specification and in the plan. Admittedly the 1st opposite party failed to complete the construction of the building on or before 22/3/1998. There occurred failure on the part of the 1st opposite party to execute the construction work as agreed in P1 agreement.
17. Thereafter, the complainant and opposite parties 1 and 2 entered into P3 agreement dated:13/7/1998 for completion of the aforesaid construction of the commercial building with the same specifications and approved plan. In P3 agreement it has been categorically admitted that the construction of the commercial building could not be completed as stipulated in P1 agreement and that the failure occurred only due to the negligence and lapses on the part of the 1st opposite party Abdul Rehman. The recitals in P3 agreement would make it abundantly clear that the terms and conditions and stipulations in P1 agreement cold not be carried out because of the negligence and lapses on the part of the 1st opposite party, Abdul Rehman. No contra evidence is forthcoming from the side of the opposite parties to disprove the aforesaid recitals in P3 agreement regarding the failure, omission and negligence on the part of the 1st opposite party in executing the works as stipulated in P1 agreement.
18. The opposite parties in their joint written version have stated that the recitals or the terms and conditions in P3 agreement were incorporated unilaterally and without the consent or junction of the opposite party. But the aforesaid contention regarding the recitals in P3 agreement have not been proved or established by the opposite parties. At the same time, execution of P3 agreement is admitted by the opposite parties in clear terms. The other contention of the opposite parties that they were compelled to enter into P3 agreement and the recitals in P3 agreement were made by the complainant deliberately and intentionally to trap the opposite parties cannot be believed for a moment. No evidence is forthcoming from the side of the opposite parties to substantiate the aforesaid contentions adopted in paragraph 17 of their written version. On the other hand, execution of P3 agreement is admitted by the opposite parties. Then, it is for the opposite parties to substantiate the aforesaid contention that it was a unilateral agreement or that it was executed under compellusion etc. The burden of proof was on the opposite parties by adducing independent and impartial cogent evidence. In the absence of any such evidence, it can very safely be concluded that everything stated in P3 agreement are true and correct and the parties to the said agreement executed the same with their free will and volition. So, the aforesaid contentions adopted by the opposite parties are negatived.
19. As per P3 agreement, the opposite parties agreed to complete the construction of the commercial building more specified in the specification attached to P1 agreement. It can be seen that the opposite parties agreed for construction of the commercial building as per P2 approved plan. The opposite parties have no case that they were not served with P2 approved plan or the specifications for construction of the building. It is specified in P3 agreement that the construction of the said building is to be completed by 11/7/1999. Admittedly the opposite parties failed to complete construction of the said building. On the other hand, the opposite parties abandoned the aforesaid construction work. Thus, the materials on record would show that there occurred failure on the part of the opposite parties 1 and 2 in doing the construction work as agreed by them in P1 and P3 agreements.
20. The opposite parties have admitted the fact that they abandoned the work. The case of the opposite parties is that they were compelled to abandon the work because of the delay in making payment by the complainant. But, the opposite parties have not adduced any evidence to show that there occurred failure on the part of the complainant to effect payments for construction of the commercial building. The opposite parties have no case that they issued any notice to the complainant demanding payments or complaining about the delay in making payments. P1 agreement would show as to how the payments are to be made. It is specified that the payments as stipulated in the agreement are to be made based on the progress in the construction work. It is also specified how the progress in the construction work is to be attained. The very fact that the opposite parties failed to complete the construction work by 11/7/1999 itself would show there occurred failure on the part of the opposite parties in attaining the required progress in the construction work. The recitals in P3 agreement would also make it clear that the payments are to be made by the complainant to the opposite parties based on the progress of the work. The aforesaid recitals would also show that the payment is to be effected only after effecting that portion of the construction work. The decision incorporated in P3 agreement viz, decision No.5 would make it clear that the complainant need pay 7 ½ % of the cost of construction only after completion of the entire construction. So, the case of the opposite parties that they abandoned the work because of the negligence or failure on the part of the complainant in making payments or in causing delay in making payments cannot be believed or accepted. No evidence is forthcoming to substantiate the aforesaid contention of the opposite parties.
21. The opposite parties have got a case that time was not the essence of the contract due to variance in design. But the opposite parties could not establish the alleged variance in design. The recitals in P1 and P3 agreements would make it clear that time was essence for the contract. The opposite parties do not adduce any evidence to substantiate their contention that there occurred deficiency of service in design or that time was not the essence of the contract. On the other hand, the available circumstances and evidence of the case would show that time was the essence of the contract and there was no variance caused.
22. The opposite parties much relied on Ext.C1 expert report submitted by the expert Engineer. The expert has reported about the design defects. It is true that the expert has reported that some defects have occurred due to design defects. But that does not mean that there was variance in design. The opposite parties could not establish their case that due to design defects they have done any extra work. It is to be noted that the expert has reported that due to the design defects there occurred some defects in the construction of the foundation and basement. He also reported about the supporting condition of the soil, whereupon the building has been partly constructed. So, the aforesaid C1 report would not support the case of the opposite parties that there occurred variance in design or that the opposite parties could not complete construction of the building because of the defects in design. No independent evidence has been adduced on the side of the opposite parties to substantiate their case regarding the additional work they have done due to the so called defects in design. So, the failure on the part of the opposite parties in constructing the building would amount to negligence and deficiency of service on their part.
23. The opposite parties have got a case that the engineers appointed by the complainant and the father of the complainant did not co-operate with the opposite parties in executing the construction of the building. It is to be noted that the opposite parties could not even point out the engineer or engineers who failed to co-operate with the opposite parties in executing the construction work. There is no mention about the engineer or the person who interfered in the construction of the building or the nature of interference by the engineers or the complainant or his father. There is only a vague statement that the engineers appointed by the complainant and also the complainant and his father did not co-operate with the opposite parties. But the aforesaid vague contentions have not been proved or established. It is also to be noted at no point of time, the opposite parties had raised any such complaint to the complainant. They have not issued any written objection or complaint about the non cooperation of the engineers of the complainant. So, those vague contentions can be treated as the contentions adopted to avoid liability and negligence of the opposite parties.
24. The expert engineer who was appointed by this State Commission by virtue of the order passed on I.A.1404/00 filed C1 expert report. The expert engineer inspected the in-completed construction work only after giving notices to the complainant and opposite parties. The aforesaid inspection was made on 28/5/2001 in the presence of the complainant and his engineer and the person who was the site man of the opposite parties. C1 expert report would also show that a mahazar was prepared by the expert at the time of site inspection and that the agent of the opposite parties was not ready to sign the aforesaid mahazar. The opposite parties in their objection to the expert report have not denied the fact that their agent was present at the time of inspection of the in-completed construction by the expert engineer. It is true that at the time of appointment of the expert, the opposite parties were set exparte in the proceedings. It is only subsequently, the opposite parties entered appearance by filing a petition to get the exparte set aside. It is to be noted that at the time when the expert engineer inspected the site, notice was served on the opposite parties and that the opposite parties were represented through their representative.
25. A perusal of C1 expert report would show that the opposite parties failed to complete the construction of the commercial building as agreed by them. The expert commissioner has reported in detail about the construction works carried out and also about the construction works which are to be carried out in future. Thus, in all respects it can very safely be concluded that there occurred failure on the part of the opposite parties in completing the construction of the commercial building as agreed by them. There occurred failure on the part of the opposite parties in executing the work as stipulated in P1 and P3 agreements. The aforesaid failure on the part of the opposite parties in completing the construction of the commercial building would amount to deficiency of service.
26. The complainant filed proof affidavit stating the inconveniences, mental agony and financial loss suffered by the complainant due to the deficiency of service and unfair trade practice adopted by the opposite parties. It is categorically averred in the affidavit that the complainant suffered mental agony and financial loss due to the failure of the opposite parties to construct the building as agreed by them. It is also averred that the aforesaid failure would amount to deficiency of service and unfair trade practice. The opposite parties have not taken any steps to cross-examine the complainant based on his proof affidavit. It is true that the 2nd opposite party has also filed proof affidavit in lieu of examination in chief. The complainant has also failed to take necessary steps to cross examine the 2nd opposite party based on the proof affidavit filed by them. Thus, in effect there is oath against oath. In such a situation, the documentary evidence available on record would speak volumes about the deficiency of service on the part of the opposite parties 1 and 2. This State Commission have no hesitation in finding the opposite parties 1 and 2 as guilty of deficiency of service in executing construction of the work as agreed by the opposite parties by virtue of P1 and P3 agreements. This point is answered accordingly.
27. Points. 4 to 8:
The complainant has claimed refund of Rs.8,66,542.50 by way of excess amount collected by the opposite parties 1 and 2 from the complainant. The case of the complainant is that the opposite parties have done the work costing Rs.7.lakhs and that the opposite parties received a total of Rs.15,66,542.50 from the complainant by way of 12 instalments. On the other hand, the opposite parties 1 and 2 contended that the complainant has only paid a total of Rs.15,59,000/- and that the opposite parties have spent Rs.22,13,392/- towards the cost of construction. It is also contended that at the time when the opposite parties abandoned the work, the materials worth Rs.72,000/- was left at the worksite. Thus, the opposite parties contended that a total of Rs.8,98,000/- is due to the opposite parties from the complainant towards the construction cost.
28. The complainant has alleged that a total of Rs.15,66,542.50 was paid to the opposite parties in 12 instalments and evidencing the said payment receipts were obtained. But the complainant has not produced any such receipt to substantiate his case that a total of Rs.15,66,542.50 was paid to the opposite parties. It is to be noted that payment of Rs.14,56,542.50 has been effected by way of 10 instalments and those payments are endorsed on the reverse side of P1 agreement dated:22/3/1997. Those payments are endorsed by the signature of the 2nd opposite party for acceptance of 9 payments and by the endorsement with the signature of the 1st opposite party for acceptance of Rs.5.lakhs on 25/3/1997. The aforesaid endorsements regarding acceptance of a total of Rs.14,56,542.50 are not disputed by the opposite parties. Thus, the complainant could not establish his case in the complaint that he paid a total of Rs.15,66,542.50. On the other hand, the opposite parties in their written version as well as in the affidavit filed by the 2nd opposite party categorically admitted acceptance of Rs.15,59,000/- towards the cost of construction. Thus, it can be concluded that the complainant had only effected payment of Rs.15,59,000/-.
29. The case of the complainant is that the opposite parties have done the work amounting to Rs.7.lakhs only and that a balance of Rs.8,66,542.50 has been collected by the opposite parties in excess and that the complainant is entitled to get refund of the aforesaid excess amount of Rs.8,66,542.50. On the other hand, the definite case of the opposite parties is that they incurred a total of Rs.22,13,392/- for the construction of the said building. There is no evidence on record to substantiate the aforesaid pleadings of the complainant and opposite parties regarding the actual amount spent for construction of the building in the present stage.
30. The only evidence available on record is the C1 expert report filed by the expert engineer Mr.N.Appukuttan Pillai, M.Tech, MIE. The expert commissioner assessed the cost of the work done by the opposite parties. He has also given the details of the calculation made by him for assessing the cost of work executed by the opposite parties. As per c1 expert report the cost of work executed by the opposite parties would come to Rs.14,99,978/-. The aforesaid calculation of the cost of the work done by the opposite parties is to be accepted. There is no reason or ground to doubt the impartiality of the expert engineer who conducted the inspection of the work done by the opposite parties. So, for the purpose of resolving the dispute among the complainant and the opposite parties the assessment made by the expert engineer is accepted. This State Commission is pleased to accept the aforesaid cost of work assessed by the expert engineer at Rs.14,99,978/- If that be so, the excess amount collected by the opposite parties would come to Rs.59,022/-. So, the claim of the complainant for refund of Rs.8,66,542.50 cannot be allowed. The aforesaid claim is disallowed and the complainant is entitled to get refund of Rs.59,022/- from the opposite parties. Thus, the excess amount collected by the opposite parties is arrived at Rs.59,022/-.
31. The complainant has claimed Rs.3.lakhs by way of cost for strengthening the existing structure which was constructed by the opposite parties. The expert commissioner has also reported about the defects in the construction of the building by the opposite parties. It is reported by the expert commissioner that as far as the main structure which consists of the columns, beams and slabs are concerned, the construction is satisfactory. It is also reported at paragraph 4.4 of the C1 report that the main structures are found to be strong and without any defects. It is also reported that there are leaks at 2 points in the ground floor and one point in the first floor portion. It is also noted that dripping of water is seen in a junction of beams and column in ground floor and it is due to scouting of reinforcement pairs of beams and columns and on account of the failure to penetrate the concrete into the interior for filling the voids. It is further reported that those leaking can be cured by pouring cement grout having rich content of cement. It can be concluded that in effect there was no defect in the construction of the main structure.
32. The expert commissioner had detected defects in the construction of foundation and basement. He also reported that there is defect in the construction of brick walls in between the columns and beams. He has reported that the aforesaid defects in the foundation, basement and brick walls occurred because of settlement of soil. It is further reported that the aforesaid settlement occurred due to design defects. He has suggested the methods ought to have been adopted for avoiding such settlement defects. It is to be noted that the opposite parties were directed to construct the building as per the plan and design provided by the complainant. The specifications and the approved plan were also provided. Ext.P1 and P3 agreements would also show that the construction works executed by the opposite parties were supervised by the engineers appointed by the complainant. It was also stipulated that the opposite parties are bound to follow the instructions of the engineer appointed by the complainant for supervising the construction works and the opposite parties were bound to do the construction work with the approval and concurrence of the site engineer who was appointed by the complainant. So, there is no basis for alleging defective construction by the opposite parties.
33. All constructions were effected by the opposite parties with the approval and concurrence of the site engineer. Even if there occurred any defective construction the opposite parties could not be found fault with. The aforesaid fault can only be due to the improper instruction or supervision done by the site engineer who was appointed by the complainant. So, the report of the expert commissioner that there were defective constructions cannot be accepted as such. The so called defective constructions can only be due to the defective supervision and approval given by the site engineer. It is also to be noted that the complainant has no case that the opposite parties neglected the instruction given by the site engineer. There is also no case for the complainant that he failed to appoint site engineer to supervise the work as stipulated in the agreement. It is also to be noted that the opposite parties used the materials which were approved by the site engineer. At no point of time the complainant raised any objection regarding use of low quality materials or improper use of any material. It can be concluded that the defective construction of the foundation, basement and brick walls are only due to the defective design and also due to the soil condition. It was the bounden duty of the complainant to take care of the soil condition and to have the foundation, basement, super structure to suit the soil condition. The opposite parties cannot be made answerable or liable for the aforesaid defects in the construction of foundation, basement and brick walls. So, the claim for Rs.3.lakhs by way of cost for strengthening the structure namely the foundation, basement and brick walls cannot be allowed. The aforesaid claim for Rs.3.lakhs is disallowed.
34. The complainant has claimed a sum of Rs.2.lakhs by way of compensation for the deficiency of service and unfair trade practice adopted by the opposite parties. There can be no doubt that there was deficiency of service and unfair trade practice on the part of the opposite parties on account of their failure to complete the construction of the building as stipulated in P1 and P3 agreements. As per P3 agreement, the opposite parties were bound to complete the construction of the commercial building on or before 11/7/1999. There can be no doubt that by the lapse of time the cost of construction would get enhanced. Due to the escalation in the price of the building materials the complainant has suffered financial loss. The complainant has also claimed Rs.2.lakhs towards escalation cost of materials and labour charges. Thus, the total compensation claimed would come to Rs.4.lakhs. Considering the nature of the deficiency of service on the part of the opposite parties and the resultant financial loss suffered by the opposite parties, we are of the view that a total of Rs.3.lakhs is to be awarded by way of compensation to the complainant. Thus, the opposite parties are made liable to pay a sum of Rs.3.lakhs by way of compensation for the deficiency of service resulting financial loss.
35. The complainant has also claimed Rs.10,000/- by way of cost of the proceedings in this OP.140/00. It is to be noted that the complainant has incurred expenses for getting the worksite examined by an expert engineer. It is also to be noted that no witness was examined from the side of the parties to this complaint. Considering the nature and volume of evidence adduced, this commission is of the view that a sum of Rs.5000/- can be awarded by way of cost to the complainant. These points are answered accordingly.
In the result the complaint in OP.140/00 is allowed in part. The opposite parties are directed to refund the excess amount of Rs.59,022/- which was collected by the opposite parties from the complainant. The opposite parties are also directed to pay compensation of Rs.3.lakhs to the complainant for the deficiency of service resulting mental agony and financial loss to the complainant. Complainant is awarded cost of Rs.5000/-.
M.V. VISWANATHAN : JUDICIAL MEMBER
VALSALA SARANGADHARAN: MEMBER
M.K. ABDULLA SONA : MEMBER
VL.
APPENDIX
COMPLAINANT’S EXHIBITS
Ext.P1 : Copy of the agreement dated:22/3/1997 entered into between the complainant and the 1st opposite party.
Ext.P2 : Photostat copy of the plan of the proposed building covered by P1 agreement.
Ext.P3 : Copy of the agreement dated:13/7/1998 entered into between the complainant and opposite parties 1 and 2.
COMPLAINANT’S WITNESS
NIL
Ext.C1 : Expert Commission Report.
M.V. VISWANATHAN : JUDICIAL MEMBER
VALSALA SARANGADHARAN: MEMBER
M.K. ABDULLA SONA : MEMBER
VL.
