KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C.No.176/2017 & C.C.No.177/2017

COMMON JUDGEMENT DATED: 28.11.2024

PRESENT:

C.C.No.177/2017

COMPLAINANTS:

(by Adv. Sreevaraham G. Satheesh)

Vs.

OPPOSITE PARTIES:

(by Adv. A. Santhosh Kumar)

C.C.No.176/2017

COMPLAINANT:

(by Adv. Sreevaraham G. Satheesh)

Vs.

OPPOSITE PARTIES:

(by Adv. A. Santhosh Kumar)

COMMON JUDGEMENT

SRI. AJITH KUMAR  D.  :  JUDICIAL MEMBER

          Both these complaints were ordered to be tried together on an application filed by the complainant for by treating CC No.177/2017 as the leading case.

          2. The averments contained in both complaints are identical and hence discussed together.

          The 1^st opposite party is a company registered under the Companies Act and engaged in the business of developing residential township scheme and selling to intending purchasers, the undivided share of land and to construct apartments for and on behalf of the intending purchasers.

          3.       The 2^nd opposite party is the Registered Office of the 1^st opposite party and the 3^rd opposite party is the Managing Director of the 1^st opposite party.

          4.       The complainants with an intention to purchase the undivided share of the land and apartment entered into an agreement for sale and construction with the opposite parties on 18.11.2009 with respect to the purchase of 0.903cents of undivided share and construction of 1328sq.ft., Type-C, three bedroom apartment on the eighth floor  and Type-D, Tower-1, three bedroom apartment on the sixteenth floor in the proposed multi-storied building “Heera Dreams” in 359.09 cents comprised in re-survey No.121/4-1, 121/5, 121/4-2, 121/4, 122/7, 121/12-1, 121/10, 121/15, 121/9, 121/7, 121/12 and 121/8 in Cheruvakkal Village, Trivandrum.

          5.       The opposite parties had agreed to transfer the title of 0.903cents of undivided share and also to construct the apartment by fixing a total consideration of Rs.26,56,000/-(Rupees Twenty Six Lakhs Fifty Six Thousand only) in C.C.No.176/2017 and Rs.25,89,600/-(Rupees Twenty Five Lakhs Eighty Nine Thousand Six Hundred only) with a covered car parking facility with an extra cost of Rs.2,00,000/-(Rupees Two Lakhs only).  It was agreed by the opposite parties to complete the construction within a period of 48 months, provided the payments are made as per the schedule.  Both complainants had remitted Rs.15,51,352/-(Rupees Fifteen Lakhs Fifty One Thousand Three Hundred and Fifty Two only) each as per the schedule till March 2011.  But the opposite parties had failed to complete the construction and hand over the same within the agreed period of 48 months.  They were unable to proceed with the construction on account of their failure in observing the statutory formalities.

          6.       While entering into the contract, the opposite parties made the complainants believe that all the required statutory formalities are observed and permission from the local bodies, Civil Aviation, Fire Force obtained.  Subsequently, the complainants understood that the opposite parties had to stop the construction as clearance from Civil Aviation was not obtained.  Clearance from the Civil Aviation is a statutory requirement when a construction is made within the visibility of the airport.  It is the duty and the responsibility of the opposite parties to obtain the clearance from the authorities before entering into the agreements and collecting money.  There is deficiency in service and unfair trade practice on the part of the opposite parties in entering into an agreement and collecting money by knowing that the construction cannot be proceeded ahead.

          7.       On 24.02.2014 the opposite parties had sent a communication to the complainants undertaking to complete the construction on the same rates and terms as agreed irrespective of the delay caused.  The complainants had also agreed to wait till obtaining the clearance and informed their willingness to continue the agreement on the earlier agreed terms.  The opposite parties had sent two more communications that the laches on their side is rectified and the project is on its move again.  But an illegal request was made to renew the agreement on new terms and rates.  Such a request is not in consonance with the undertaking dated 24.02.2014 and clause 7 of the agreement.  Clause 7 of the agreement does not cover the wilful failure of the existing building rules formulated by the Government for safety measures.  So the complainants had informed the opposite parties that they are not willing to enter into a new agreement with a new rate.  They also informed the complainant that they are not willing to continue their earlier agreement with a new schedule for payment of balance amount as agreed.  A notice to that effect was also issued to the opposite parties.

          8.       Complainants had already paid Rs.15,51,352/-(Rupees Fifteen Lakhs Fifty One Thousand Three Hundred and Fifty Two only) each.  The conduct of the opposite parties had caused mental agony and financial loss to the complainants.  Hence, the complainants would seek for a direction to the opposite parties to complete the construction of the apartment along with the common amenities as per the terms and conditions of the agreement dated 18.11.2009 and the undertaking dated 24.02.2014 within a time frame and a further direction to transfer the title of the undivided share of the land and to hand over three bed room apartment along with a covered car parking facility to the complainants.  They had also sought for refund of the amount paid along with interest @18% if the opposite parties do not comply with the direction to execute the assignment deed and to hand over possession of the apartment.

          9.       An additional prayer for awarding an amount to be spent in excess for the purchase of the similar apartment in a similar area.  The complainants had also sought for Rs.10,00,000/-(Rupees Ten Lakhs only) as compensation and Rs.50,000/-(Rupees Fifty Thousand only) as litigation expenses.

          10.     The 3^rd opposite party filed a version in both complaints for and on behalf of all the opposite parties with the following contentions: -

          The complaint is not maintainable as the complaint does not come within the definition of ‘complaint’ as defined under the Consumer Protection Act, 1986.  The main relief in both complaints is for a direction to complete the construction of the apartment and to hand over the same to the complainants within a stipulated time or the refund of the amount along with interest.  According to the opposite parties, the complaint is the subject matter of a contract.  For the breach of a contract, the complainants have to approach a competent Civil Court by paying the requisite court fee.  The present complaints were filed on an experimental basis. 

11.     According to them the opposite party who is the Managing Director of the company is in the real estate development and building construction for the past thirty years.  More than ten thousand families became the clients of the company and the opposite parties have won so many awards for their excellent performance.  The opposite parties would admit the execution of the agreement with the complainants.  The opposite parties had obtained building permit from the Thiruvananthapuram Corporation and started the construction.  But they have received a communication from the Corporation authorities that they have to obtain no objection from the Airport Authority based on a demand made by the Airport Authority before the Corporation. 

12.     As per Section 32 of the Kerala Municipality Building Rules, the Corporation has accorded sanction.  But later, the Airport authorities had approached the Corporation and ultimately the opposite party had applied for NOC and obtained sanction from the Airport Authority by restricting the height of the building as 53 metres subject to production of revised section elevation drawing.  The opposite parties had filed an appeal before an appellant authority by spending an amount of Rs.2,27,720/-(Rupees Two Lakhs Twenty Seven Thousand Seven Hundred and Twenty only).  The appellate authority had decided to inform the opposite parties that their request for aeronautical study was allowed and accordingly an amount of Rs.22,47,200/-(Rupees Twenty Two Lakhs Forty Seven Thousand Two Hundred only) was deposited for the said study.  Clause 7 of the agreement stipulates that in the event of Government restraint on construction the promoter is entitled for additional charges.  The opposite party had already spent crores of rupees on account of the governmental restraint.  There is no deficiency in service as alleged.  None of the reliefs claimed are allowable.  The complainants have suppressed the real facts with a view to cause financial loss to the opposite parties.  Hence, they would seek for dismissal of the complaint.

          13.     The Power of Attorney Holder of the complainants in both matters were examined as PW1 and PW2.  Exhibits A1 to A10 were marked in the main case C.C.No.177/17.  In the other case, nine documents were marked through PW2 and markings were given as A1 to A9.  This marking would cause confusion.  So in C.C.No.176/17 the documents are given fresh marking Exhibits A11 to A19 instead of A1 to A9.

14.     Now the points that arise for determination in both matters are as follows: -

1. Whether the complaint is maintainable?
2. Whether the complainants are entitled to get an order directing the opposite parties to complete the construction and to transfer undivided share of the land and the apartment in view of the terms and conditions contained in the agreement dated 18.11.2009?
3. Whether the complainants are entitled to get the refund of the amount paid along with interest as claimed?
4. Whether the complainants are entitled to get compensation and if so, what is the quantum?
5. Reliefs and costs?

Point Nos. 1 to 5 in both cases: -

          15.     The Power of Attorney Holder in C.C.No.177/2017 has given evidence as PW1.  Exhibit A1 is the copy of Power of Attorney executed by the original complainant, Rajiv Shah Abdul Azeez authorising PW1 to do all the lawful acts with respect to the proper conduct of the case.  Exhibit A2 is the copy of the agreement for sale and construction executed by the complainant and 3^rd opposite party.  As per Exhibit A2 the builder had agreed to construct a residential apartment having three bed rooms designated as Core D with super built up area of 1328sq.ft. on the sixteenth floor of the proposed multi storied building along with the undivided share of the land to the complainant for a total sum of Rs.29,89,600/-(Rupees Twenty Nine Lakhs Eighty Nine Thousand Six Hundred only).  The apartment No.16D with a stipulation that the construction will be completed within 48 months.  Exhibit A3 is an e-mail sent by the opposite parties stating that sanction from the Airport Authority is required and hence they would take shelter in clause 7 of the agreement wherein government restraints on construction the time during which such contingency exists shall be excluded in calculating the period of completion and according to them they are also entitled to get additional charges in the cost after adjusting the amount invested with due interest @8%.  Exhibit A4 is another letter issued by the opposite party informing the complainant that they had obtained NOC from the Airport Authority to construct a building with 26 floors.  It is also informed that the old agreement will be declared as null and void and requested the complainant to return the old agreement and to prepare a new one with sufficient modifications.  The complainant had sent a reply on 10.01.2016 that he is not ready to agree with the unreasonable demand for the new rate.  It is also requested by the complainant to complete the construction and hand over the premises without any revision.  it is the general rule that the building within 7 kms radius of the airport should obtain clearance from the Aviation authorities before commencement of the construction.  So violation of existing law in obtaining NOC from Aviation authorities cannot be used for invoking clause 7 of the sale and construction agreement.  Exhibit A6 is the copy of another e-mail sent by the opposite party on 15.01.2016 requesting the complainant to renew the agreement by January 2016 at a new rate of Rs.3,750/-(Rupees Three Thousand Seven Hundred and Fifty only) failing which the allotment of apartment will be cancelled.  Exhibit A7 is the copy of the lawyer notice issued by the complainant.  Exhibits A8 and A9 are the copies of postal receipts and acknowledgement cards.  Exhibit A10 is the reply notice issued by the opposite parties.

          16.     The Power of Attorney Holder of the complainant in C.C.No.176/2017 was examined as PW2.  Exhibit A11 is the copy of the Power of Attorney executed by the original complainant in favour of PW2.  The copy of the agreement is marked as Exhibit A12.  The copies of the e-mails dated 24.02.2014, 15.01.2016 and 20.01.2016 are marked as Exhibit A13 to A15.  The postal receipts and acknowledgment cards are marked as Exhibits A16 and A17.  Exhibit A18 is the reply notice.  Copy of the e-mail dated 20.08.2014 is exhibited as Exhibit A19.

          17.     Basing upon the testimonies of PW1 and PW2 and Exhibits A1 to A19, the complainants would seek for a direction to the opposite parties to complete the construction and hand over possession of the apartment as per the terms and conditions in the original karar. 

18.     The initial objection is that the complaints are not maintainable as the subject matter is nothing but breach of a contract and hence the only option for the complainants is to approach an ordinary Civil Court.  Section 3 of the Consumer Protection Act 1986 stipulates that the provisions of this act shall be in addition to the existing laws in force. So the complainants have got a legal right to approach this Commission.  Admittedly service is sought to be availed in the construction of the apartment.  So the complainants are entitled to maintain a complaint before this Commission.  Point No.1 regarding the maintainability of the complaint is answered in favour of the complainant.

19.     The opposite parties would contend that clause 7 contained in the karar stipulates authority to the opposite parties to extend the period for completion of the construction and to claim additional charges in the event if any delay occurred on account of the governmental restraint on construction.  According to them, the objection raised by the Airport Authority is a governmental objection and hence the opposite parties had to suffer delay and additional expenses in completing the work.  

20.     In Exhibits P2 and P12, the opposite parties had agreed to complete the construction within a period of 48 months for the completion of the construction work.  It is the duty of the opposite parties to observe the statutory formalities.  Since the spot in question is lying near to the airport, clearance from the Airport Authority is required for constructing a multi storied building.  The materials on record would go to show that the opposite parties did not avail NOC from the Airport Authority of India and such a failure cannot be construed as an unforeseen circumstance.   On account of the failure on the part of the opposite parties from getting statutory clearance from the Airport Authority, the construction had to be stopped and thereafter an arbitrary decision was taken by the opposite parties to renew the terms and conditions in the karar by crediting the amount paid by the complainants with interest @8%.

21.     The complainants had sent letters that they are not willing to enter into a new agreement with a change in the rate.  It is the duty of the builder to obtain statutory clearance from the authorities.  The opposite parties had failed to obtain NOC from the Airport Authority though they had proposed the construction of a multi storied building.  When fault is on the opposite parties, they have no authority to change the terms and conditions of the agreement and ask the complainants to pay an enhanced rate than the rate agreed at the time of entering into the contract.  So there is deficiency in service and unfair trade practice on the part of the opposite parties.  After entering into a contract by fixing the rate by assuring the completion of the construction of the apartment within 48 months and received the payments as shown in the schedule, the complainants are entitled to get the apartment at the original rate agreed in Exhibits A2 and A12 respectively.  Though several contentions were raised by the opposite parties, they did not adduce any evidence to substantiate their contentions. Whereas the complainants had complied with the stipulations in effecting payments So the complainants are entitled to get an order directing the opposite parties to complete the construction of the apartment along with the common amenities as per the terms and conditions in the agreement dated 18.11.2009 and the subsequent undertaking dated 24.02.2014 within a period of three months from the date of order.  The opposite parties are also bound to transfer the tile of 0.903 cents of undivided share of land and to hand over the apartments as agreed in A2&A12 to the complainants in both cases.

22.     The complainants have also sought for a direction to refund the amount received along with interest @18% per annum from 18.11.2009.  The rate of interest claimed by the opposite parties in the event of default in remitting the instalment is 18% as per clause 32.  In view of the law as laid down by the Hon’ble Apex Court in M/S. Ashoka Investment Co. vs M/S United Towers India (Pvt.) Ltd. reported in 2022 (4) CPR 178 the interest rate must be equal to both the parties to the contract.  So the complainants are entitled to get 18% of interest in the event of the failure on the part of the opposite parties in not handing over the possession of the apartment as per the conditions contained in the contract.  So the opposite parties are bound to pay Rs.15,51,352/-(Rupees Fifteen Lakhs Fifty One Thousand Three Hundred and Fifty Two only) to the complainants in both cases along with interest @18% per annum from the proposed date of completion i.e. 48 months from the date of agreements i.e. 18.11.2011 till the payment of the whole amount.  Complainants are also entitled to get compensation since they had suffered mental agony and hardships on account of the deficiency in service in not giving title and possession of the apartment though a substantial amount was received by the opposite party.  Having due regard to the inconvenience and hardship caused to the complainants, we find that the complainants are entitled to get a sum of Rs.2,00,000/-(Rupees Two Lakhs only)each as compensation.  Complainants are also entitled to get Rs.20,000/-(Rupees Twenty Thousand only) as costs of the proceedings.  Hence points are found accordingly.

In the result, C.C.No.177/2017 is allowed as follows: -

1. Opposite parties are directed jointly and severally to complete the construction of 1328 sq.ft, type -D, tower-1, three bed room apartment on the 16^th floor of 'Heera Dreams' in 359.09 cents in resurvey: 121/4-1, 121/5, 121/4-2, 121/4, 122/7, 121/12-1, 121/10, 121/15, 121/9 and 121/8 of Cheruvakkal Village with a covered car parking facility and transfer the title of undivided share of the land in favour of the Complainant as per the terms and conditions in the agreement dated 18.11.2009 and undertaking dated 24.02.2014 within 3 months from the date of this judgement;
2. Opposite parties shall jointly and severally pay the complainants a sum of Rs.2,00,000/-(Rupees Two Lakhs only) as compensation;
3. If the opposite parties fail to comply with the direction contained in clause (a) they shall jointly and severally refund the complainant Rs.15,51,352/-(Rupees Fifteen Lakhs Fifty One Thousand Three Hundred and Fifty Two only) along with interest @18% per annum from 18.11.2011, the agreed date for completion of the construction till the refund of the amount in full;
4. The opposite parties shall pay Rs.20,000/-(Rupees Twenty Thousand only) as costs of the proceedings.

C.C.No.176/2017 is allowed as follows: -

1. Opposite parties are directed jointly and severally to complete the construction of 1328 sq.ft, type -C, three bed room apartment on the 8^th floor of 'Heera Dreams' in 359.09 cents in resurvey: 121/4-1, 121/5, 121/4-2, 121/4, 122/7, 121/12-1, 121/10, 121/15, 121/9, 121/6, 121/7, 121/12 and 121/8 of Cheruvakkal Village with a covered car parking facility and transfer the title of undivided share of the land in favour of the Complainant as per the terms and conditions in the agreement dated 18.11.2009 and undertaking dated 24.02.2014 within 3 months from the date of this judgement;
2. Opposite parties shall jointly and severally pay the complainants a sum of Rs.2,00,000/-(Rupees Two Lakhs only) as compensation;
3. If the opposite parties fail to comply with the direction contained in clause (a) they shall jointly and severally refund the complainant Rs.15,51,352/-(Rupees Fifteen Lakhs Fifty One Thousand Three Hundred and Fifty Two only) along with interest @18% per annum till the refund of the amount in full;
4. The opposite parties shall pay Rs.20,000/-(Rupees Twenty Thousand only) as costs of the proceedings.

Dictated to Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Court, on this the 28^th day of November, 2024.

SL

C.C.No.177/2017 & C.C.No.176/2017

APPENDIX

1. COMPLAINANT’S WITNESS

2. COMPLAINANT’S DOCUMENTS

3. OPPOSITE PARTY’S WITNESS

4. OPPOSITE PARTY’S DOCUMENTS

5. COURT EXHIBITS

  JUDICIAL MEMBER