KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C. No.06/2017

JUDGEMENT DATED: 19.06.2023

PRESENT:

COMPLAINANTS:

(by Adv. R. Ram Mohan)

Vs.

OPPOSITE PARTIES:

(by Adv. Dougles Linsby N.R.)

JUDGEMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT

          This is a complaint filed under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act for short) claiming compensation for alleged deficiency in service and unfair trade practice of the opposite parties.  The 1^st opposite party is the Managing Director of a Private Limited Company by name M/s Samson & Sons Builders and Developers Pvt. Ltd.  The 2^nd opposite party is the Director of the Company while the other opposite parties are the Directors of the 1^st opposite party.  The opposite parties are engaged in the business of land development, construction and sale of apartments, villas and other residential structures.

          2.       The opposite parties had entered into a joint venture agreement dated 07.08.2014 with one Sri. Mohan Oommen, residing at Madavara, Medical College P.O., Kunnathumuri, Cheruvakkal Village, Thiruvananthapuram Taluk and District, who is the absolute owner in possession and enjoyment of an extent of 24.20ares of land comprised in resurvey no.350/24 of Kudappanakkunnu Village in Block No.22 with all easements and hereditaments, having obtained the same under settlement deed no.2080/1998 of the Sub Registry Office, Pattom.  As per the joint venture agreement, Sri. Mohan Oommen has authorised the opposite parties to construct a multi storied residential apartment complex “Angel Woods” in the said property.  For the said purpose, Sri. Mohan Oommen had executed a Power of Attorney in favour of the company of the opposite parties.  On the basis of the joint venture agreement and the Power of Attorney mentioned, the opposite parties were in the process of constructing a multi storied apartment complex with sixty units of residential apartments and ground floor car parking. 

          3.       The complainants visited the property where the apartment complex was proposed to be built and also verified the property documents. Having convinced themselves of the nature of the property and its documents the complainants wanted to purchase an apartment in the project.  Therefore, the complainants booked an apartment having an approximate super built up area of 1541.59sq.ft., type H on the fifth floor of the proposed apartment complex. 

          4.       Accordingly, an agreement was executed between the opposite parties and the complainants on 11.06.2016.  As per the said agreement, the complainants agreed to purchase 1cent of undivided share in the said 20.24ares (59.79cents) in resurvey no.354/24 of Kudappanakkunnu Village in Block No.22 with all easements together with one apartment having 1541.59sq.ft. super built up area, type H on the fifth floor of the Samson & Sons Residential Apartment Project, “Angel Woods” with one covered car parking area.  The sale consideration agreed upon was Rs.76,00,000/-(Rupees Seventy Six Lakhs).  On the date of agreement itself, the 1^st complainant paid an amount of Rs.16,52,000/-(Rupees Sixteen Lakhs Fifty Two Thousand).  On the same day the 2^nd complainant paid an amount of Rs.17,70,000/-(Rupees Seventeen Lakhs Seventy Thousand).  The 3^rd complainant paid an amount of Rs.36,000/-(Rupees Thirty Six Thousand) and 4^th complainant an amount of Rs.5,00,000/-(Rupees Five Lakhs).  The construction was agreed to be completed before December, 2017.  However, they have not honoured their commitments.

          5.       The complainants made enquiries and came to know that the opposite parties had not completed even the preliminary stage of the construction works.  After that, they got the shocking news that the opposite parties had been arrested by Police for cheating.  The complainants also learned that the opposite parties had collected huge amounts from many people promising them to provide residential apartments but that they had failed to honour the promise.  The opposite parties have also cheated the complainants of Rs.48,98,000/-(Rupees Forty Eight Lakhs Ninety Eight Thousand).  Therefore, the complainants are entitled to recover the said amounts from them.  The opposite parties are also liable to compensate the complainant for the mental agony and loss caused to them.  It is claiming the said reliefs that this complaint is filed.

          6.       During the pendency of the complaint, the 3^rd complainant passed away.  As per order in I.A.No.878/2021, his legal representatives, his mother, wife and two children have got themselves impleaded as additional complainants 5 to 8.

          7.       On receipt of notice, the opposite parties entered appearance through counsel.  A common version has been filed by all the respondents putting forward a number of contentions.  According to the version, the complaint itself was not maintainable.  It is contended that the dispute in this case falls outside the jurisdiction and powers of the redressal authorities constituted under the Act.

8.       The dispute in this case comes within the scope of the Real Estate (Regulation and Development) Act 2016, a specific enactment made for the purpose of resolving the disputes between a builder and an allottee.   The Real Estate Regulatory Authority (RERA for short) is specially constituted to look into the complaints as in the present case.  Section 79 of the said Act specifically bars the jurisdiction of all other Courts and Tribunals over matters that come within the adjudicatory powers of the Regulatory Authority or its Appellate Tribunal.  Therefore, it is submitted that this Commission has no jurisdiction to entertain this complaint. 

          9.       It is further contended that the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2016 (Commercial Courts Act for short) also enacts a specific bar of jurisdiction over commercial disputes including issues relating to construction and infrastructure contracts.  Chapter II of the Act deals with Commercial Courts and Chapter V specifically require transfer of all claims pending before other Courts and Tribunals to the Special Courts.  Therefore, according to the opposite parties this complaint is not maintainable in view of the provisions of the Real Estate (Regulation & Development) Act, 2016 and the Commercial Courts Act.

10.     Apart from the above, the complaint is barred by limitation.  All the transactions took place in the year 2013.  But, this complaint has been filed only in 2016.  The averments in the complaint are also in the nature of settlement of accounts and refund of money.  In view of all the above objections, it is contended that the complaint is not maintainable.

11.     On the merits, it is contended that the 1^st opposite party is a reputed and professionally managed builder at Thiruvananthapuram.  The Company has pioneered a number of high-rise constructions and apartments built to its exacting standards with a continually improving Quality Control System to ensure uniform quality in every aspect of its construction.  It is admitted that, the complainant had entered into an agreement with the 1^st opposite party for development of the land and construction of an apartment.  As per the agreement, it was expected that the construction would be completed within the extended periods subject to force majeure conditions.  The terms of the agreement would reveal that time was never the essence of the contract.  The complainant was informed by the opposite parties that the finishing date of the work was extended up to June 2018 due to unforeseen circumstances.  There has been no wilful delay on the part of the opposite parties in completing the construction.  The work was not delayed due to any laches on the part of the opposite parties.   The delay was on account of labour issues, escalation of price of construction materials due to global recession, changes in building rules and statutes, etc.  The said intervening factors were unforeseen circumstances beyond the control of opposite parties.  The construction agreement provides for such circumstances and such periods have to be specifically excluded while calculating the time for completion. 

12.     It was further contended that there were no regular enquiries by the complainant as required.  But, the opposite parties used to keep the complainant addressed of all the happenings at the site.  The complainant was also not                    regular in making timely payments to the opposite parties and that too affected the pace of construction.  As per the agreement executed between the parties, the date of completion was subject to the complainant fulfilling his obligations as per the agreement and the other terms and conditions therein.  The complainant has wilfully hidden the above aspects and is making allegations without any bonafides.   The complainant has come to this Commission with unclean hands.  The original of the agreement is not produced.  The date of completion of the project was extended to June 2018. 

13.     The complainant has not produced the original agreement before this Commission.  He has also not produced any original documents.  The documents produced along with the complaint are not genuine and cannot be admitted in evidence without testing the veracity of the documents.  Several Police cases were registered against the opposite parties at the instance of some complainants.  Almost all documents were taken away by the Police in connection with the investigation.  The opposite parties were also in judicial custody for more than 21 days.  During this period most of the office records were taken away by some interested persons.  It is apprehended that some forged documents might have been created to raise false claims against the opposite parties.  Therefore, the documents relied upon by the complainant are disputed documents and cannot be admitted in evidence. 

14.     According to the version, the delay in completing the construction of the apartment is attributable to several factors including lorry labour strike, hike in the price of sand, shortage of construction materials like sand, scarcity of stone etc.  In the year 2012, there was stone quarry strike which continued for days together.  Scarcity of cement also resulted in stopping of construction activities.  The opposite parties did not opt for purchase of low quality sand or low grade cement and did not wish to compromise on the structural strength and durability of the building.  In the year 2013, sand labourer’s strike had become violent.  Again in the year 2014, construction industry had gone into stagnancy as a result of rising cement price.  There was complete restriction for quarrying and excavations at environmentally fragile places.  These factors were beyond the control of the opposite parties.  The true state of affairs had been communicated to the complainant at all relevant times.  The complainant is trying to wriggle out of the consequences provided for such situations.  There was no unfair trade practice, deficiency in service or undue delay on the part of the opposite parties.   Therefore, the complainant is not entitled to any compensation as claimed.  The opposite parties are taking all necessary steps to complete the construction of the apartment in a time bound manner. 

15.     The 1^st opposite party is a Private Limited Company. The 2^nd opposite party is only one of its Directors.  The entire dealings of the Company are managed by the Managing Director, the 1^st opposite party.  The 2^nd opposite party is an unnecessary party.  The complainants have no cause of action to institute the present complaint. None of the reliefs sought for can be allowed or granted.  The interest claimed is exorbitant.   Therefore, the complaint is liable to be dismissed with costs. 

16.     On the above pleadings, both sides went to trial.  Both sides have not adduced any oral evidence.  The complainant filed affidavit in lieu of chief examination.  The agreement dated 11.06.2016 executed between the 1^st opposite party and the complainants is marked as Exhibit A1 in the affidavit in lieu of chief examination.  A proof affidavit has been filed by the 1^st opposite party, erroneously describing himself as the 2^nd opposite party, affirming the statements in the common version and producing one document marked as Exhibit B1.  The documents in this case have been marked on consent, without disputing the genuineness thereon.  After close of evidence, both parties were heard.  

17.     According to the counsel for the complainant, substantial amounts had been handed over to the opposite parties under Exhibit A1 agreement with the object of satisfying the cherished dream of the complainant to acquire a residential apartment of his own.  However, after having received the amount, the opposite parties have neither completed the construction nor handed over the apartment that was agreed to be delivered possession of in the year 2017.  It is clear that they have no intention of completing the construction.  Therefore, it is only appropriate that the complainant is permitted to recover the amounts paid by him from the opposite party.  The counsel prays that a decree may be granted as prayed for in the complaint. 

18.     According to the counsel for the opposite parties, as per orders of the National Company Law Tribunal, proceedings before all Courts and Tribunals have been stayed and for the said reason, this Commission lacks jurisdiction to pass orders against them.  It is contended that the opposite parties have been divested of their authority in respect of the company and they are no longer in management thereof.  Therefore, passing of any orders against them would serve no purpose.  On the above grounds, the counsel seeks dismissal of the complaint.

19.     The following points arise for consideration in this complaint:

1. Is the complaint maintainable?
2. Is there any deficiency in service or unfair trade practice on the part of the opposite parties as alleged in the complaint?
3. Reliefs and costs?

Point No.1

          20.     The question of maintainability was raised in a number of petitions filed by the opposite parties in the connected cases that are pending against them seeking return of the amounts paid by various consumers as per similar agreements as in the present case.  All the petitions referred to above were heard together and as per common order dated 21.02.2019, by this Commission.  The said order not having been challenged by the opposite parties before any higher Forum has become final.  The said position has been reiterated by this Commission in two subsequent orders dated 12.06.2019 and 14.06.2019 holding that similar complaints were maintainable before this Commission.  The said orders have also become final and binding on the opposite parties.  Therefore, it is not necessary for us to consider the question of maintainability here.  For the above reason, it is not open to them to raise the question of maintainability again. 

Point Nos. 2 & 3

          21.     Both the above points are considered together for the sake of convenience. 

          22.     The case of the complainant is that, as per an agreement dated 11.06.2016, marked as Exhibit A1 in these proceedings, entered into between the 1^st opposite party and the complainant, the opposite parties had agreed to construct and hand over possession of an apartment in the project by name SAMSON & SONS, “Angel Woods” Apartment Projects, T.K.D. Road, Pattom.  The apartment agreed to be purchased by the complainant was to be located on the fifth floor of the building complex and has been described as Apartment No.H5, (type H).  The apartment after completion of construction was to be registered and conveyed to the complainant along with 1cent of undivided interest in 59.79cents of land, along with the apartment.   The total sale consideration agreed to be paid by the complainant was Rs.76,00,000/-(Rupees Seventy Six Lakhs).  The immovable property is described in detail in ‘B’ Schedule to the agreement, Exhibit A1.  The apartment is described in ‘B’ Schedule to the agreement, Exhibit A1.  Though the complainants have paid the Rs.48,98,000/(Rupees Forty Eight Lakhs and Ninety Eight Thousand), to the opposite parties they have not completed the construction or conveyed the apartment to the complainant as agreed. 

          23.     A common version has been filed by all the opposite parties in which they have admitted the execution of Exhibit A1 agreement.  Their case is that, due to unforeseen circumstances the construction could not be completed.  According to them the delay was on account of labour issues, escalation of price of construction materials due to global recession, changes in building rules and statutes, all of which according to them, constitute force majeure conditions.  They have a further case that omission on the part of the complainant to make timely payments has also contributed to the delay.  According to them, the opposite parties are taking all necessary steps to complete the construction of the apartment in a time bound manner. 

          24.     Though the opposite parties have pleaded force majeure conditions as the reason for not completing the construction as agreed in Exhibit A1, absolutely no evidence has been adduced by the opposite parties in support of the said contentions.  Though some sweeping allegations have been made disputing the genuineness of the documents produced by the complainant, the contentions have not been pursued during the trial.  The complainant has also not been cross examined on any of the disputed aspects.  Exhibit A1 agreement which is not disputed acknowledges receipt of the amount of Rs.48,98,000/-(Rupees Forty Eight Lakhs Ninety Eight Thousand) paid by the complainants.  Therefore, it is held that payment of the amount of Rs.48,98,000/-(Rupees Forty Eight Lakhs Ninety Eight Thousand) as claimed in the complaint stands proved.

          25.     The opposite parties have questioned the jurisdiction of this court to try this complaint and to go ahead with these proceedings contending inter-alia that these proceedings are not maintainable in view of the provisions of the Insolvency and Bankruptcy Code, 2016 (I & B Code for short), the provisions of the Real Estate Regulation and Development Act, 2016 (RERA) and the provisions of the Commercial Division and Commercial Appellate Division of High Court Acts, 2016 (Commercial Courts Act for short).  The impact of the various provisions of the Acts referred to above have been considered by the Apex Court in Pioneer Urban Land and Infrastructure Limited Vs Union of India and others (2019)8 SCC 416.   It has been held by the Supreme Court that, the remedies referred to above are all concurrent remedies operating in different fields and therefore, such remedies are available to be taken recourse of by a litigant at his discretion.  Since the complainant before us has chosen his remedy under the Consumer Protection Act, his complaint before this Commission is perfectly maintainable and there is no embargo in proceeding with this complaint.  Therefore, the said contentions of the opposite parties are rejected.

          26.     It is not in dispute that, the apartment complex has not been constructed yet.  As per Exhibit A1 agreement possession of the apartment was have to been given before December, 2017.  Though more than six years have elapsed the opposite parties have not honoured their commitments.  According to their version, they are taking necessary steps to complete the construction in a time bound manner.  Therefore, it is clear that the construction of the apartment remains incomplete even as on today.  In view of the above, the contention of the complainant that he is entitled to recover the amount paid by him, with interest is fully justified.  The complainant is also entitled to interest on the said amount till the date of payment. 

          27.     The desire of a person to own a house of his own is sacred and sacrosanct.  It was to satisfy the said desire of the complainant that he had parted with such a huge amount.  The mental agony at losing his hard-earned money and at the same time being unable to acquire his dream house cannot be trivialised.  Therefore, the complainant shall be entitled to compensation for his suffering, which is fixed at Rs.7,00,000/-(Rupees Seven Lakhs).

          In the result, this complaint is allowed as follows: -

1. The opposite parties are directed to pay the complainant the amount of Rs.48,98,000/-(Rupees Ninety Lakhs) received from the complainant, with interest thereon @8% per annum from 31.12.2017, the date on which possession of the apartment was agreed to be handed over, till the date of realisation;
2. The opposite parties are directed to pay Rs.7,00,000/-(Rupees Seven Lakhs) as compensation towards the mental agony and hardships suffered by the complainant, with interest thereon @8% per annum from 06.01.2017, the date of filing this complaint, till date of payment.
3. The opposite parties shall further pay an amount of Rs.50,000/-(Rupees Fifty Thousand) as costs of this litigation. 
4. All the above amounts shall be paid within a period of one month from the date of receipt of a copy of this judgement, failing which all the amounts shall carry interest @9% per annum.

Dictated to my Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Court, on this the 19^th day of June, 2023.

SL

C.C.No.06/2017

APPENDIX

1. COMPLAINANT’S WITNESS

2. COMPLAINANT’S DOCUMENTS

3. OPPOSITE PARTY’S WITNESS

4. OPPOSITE PARTY’S DOCUMENTS

                    PRESIDENT