Per:- Mr. Deshpande, President Place : BANDRA JUDGMENT The Opposite Party No.1, is a Builder & Developer, whereas the Opposite Party No.2 is the Chairman of the Opposite Party No.1, whereas the Opposite Party No.3 is referred to as the partner of the firm (hereinafter the Opposite Parties are referred to as the ‘Opposite Party’ only). [2] The Opposite Party started construction of a building styled as ‘Milestone’ at land property bearing Survey No.154(1) & 162(3) at Village Shridhan, Taluka – Panvel, District – Raigad. Row houses were to be constructed on the said land. The Complainants booked a row house bearing No.33, which was subsequently changed by the Opposite Party to row house bearing No.10 and finally, the Opposite Party agreed to allot the Complainants a row house bearing No.22. The price of the row house was initially fixed at Rs.12,15,000/-, which was subsequently reduced to Rs.11,25,000/-. According to the Complainants, they paid sum of Rs.8,55,500/- to the Opposite Party towards the part-consideration for the row-house and the Opposite Party had agreed to complete the construction and hand-over the possession thereof to the Complainants on or before 15/8/1997. The Opposite Party also issued allotment letter to the Complainants, a copy of which is annexed to the complaint as Exhibit-C. [3] According to the Complainants, the Opposite Party, by a letter dtd.17/5/1999, represented that the row-house shall be completed within a period of next thirty days and by the same letter, the Opposite Party had asked the Complainants to pay the balance consideration. Then, by a letter dtd.29/6/2000, the Opposite Party represented the Complainants that it would hand over the possession of the row-house to the Complainants on completing various minor aspects. The Complainants, vide their fax message dtd.4/7/2000, informed the Opposite Party that since the row-house was not completed on the promised date and since the construction was still incomplete, the balance consideration amount would be paid only at the time of taking delivery of possession. Thereupon, the Opposite Party, by its letter dtd.6/7/2000, promised the Complainants that possession shall be delivered latest by the month of August-2000. According to the Complainants, the Opposite Party kept on making promises about completion of construction and delivery of possession, but the Opposite Party could not fulfill any of its promises. On 15/8/2000, the Complainants visited the row-house and found that external & internal plaster was not as per standard; quality of doors, windows, electrical work and plumbing was poor; amenities were not provided and in general, work was not as per standard and as promised by the Opposite Party. Thereupon, the Opposite Party, vide its letter dtd.1/2/2001, informed the Complainants that the row-house would be ready for possession on 18/2/2001 or 20/2/2001. That promise was also not kept by the Opposite Party. According to the Complainants, by a letter dtd.22/8/2002, they asked the Opposite Party as regards the exact date & time of delivery of possession to which, the Opposite Party, by its letter dtd.3/9/2002, sought more time to convey the exact date for delivery of possession. After waiting for some period, the Complainants again wrote back to the Opposite Party on 16/9/2002 that the possession was not delivered and they would take legal steps. Thus, the letter dtd.16/9/2002, by the Complainants to the Opposite Party, was a legal notice. Ultimately, the Complainants filed the present complaint before this Forum on 31/5/2003; seeking refund of sum of Rs.8,55,500/- together with interest thereon @ 24% p.a., from the date of respective payments, as also, claimed sum of Rs.1,53,000/- towards the amount of rent, which they were compelled to pay during the intervening period and also sought compensation in sum of Rs.5,00,000/- towards mental agony and hardship caused to the Complainants. [4] The Opposite Parties filed their common written version and contested the complaint. In the written version as filed, there is an admission on the part of the Opposite Party as regards the fact that the project – ‘Milestone’; is divided into two phases and the first phase includes buildings bearing Nos. ‘A’, ‘B’ & ‘C’ and row houses bearing Nos.11 to 29; while the second phase includes building bearing Nos.‘D’ to ‘L’ and row houses bearing Nos.30 to 44. Further, the Opposite Party admits that by an allotment letter dtd.9/2/1996, row-house bearing No.33 was allotted to the Complainants and the Complainants were called upon to pay balance consideration in sum of Rs.3,65,000/-. This was followed by another letter dtd.26/6/1997, calling upon the Complainants to pay the balance amount. In the meantime, the allotment was changed from row-house bearing No.33 to row-house No.22 and the price was reduced on the representation of the Complainants to Rs.11,25,000/- out of which, the Complainants paid sum of Rs.8,50,000/-, leaving balance consideration in sum of Rs.2,74,500/-. According to the Opposite Party, row-house No.22 was ready in all respects sometime in the month of Oct-1997 and the Complainants could have taken possession on making payment of balance consideration amount, but the Complainants failed to make payment of balance amount and thus, the Complainants are guilty of breach of contract. According to the Opposite Party, despite repeated requests, the Complainants did not pay water charges and the balance amount was in sum of Rs.11,35,251/- and the Complainants paid only sum of Rs.8,50,000/-. The Opposite Party has thus, alleged that the Complainants are guilty of withholding of payment of consideration. The Opposite Party invoked clause No.3 of the standard agreement, which entitles the builder to rescind the contract. Thus, according to the Opposite Party, admittedly payment of the installments was essence of contract and the Complainants themselves are guilty of breach of contract. As per the averments in the written version, balance consideration of the outstanding amount under different heads has gone up to Rs.12,94,428/-. Thus, the Opposite Party has denied its liability to refund the amount; to pay the compensation as well as to pay amount of rent allegedly paid by the Complainants. [5] The Complainants have filed their rejoinder to the written version filed by the Opposite Party. In the meantime, the Opposite Party filed an application praying for appointment of a Court Commissioner for the purpose of inspection of row house No.22. On the basis of orders passed by this Forum, a Court Commissioner was appointed, who submitted his report. The Complainants filed their reply to the Court Commissioner’s report. Both the sides filed their respective affidavits of evidence, documents as well as written notes of arguments. [6] We have gone through the pleadings, affidavits, documents, Court Commissioner’s report as well as written notes of arguments filed by the parties. [7] We take the points that arise for our consideration and record our findings there-against as below:- Sr. No. | Points for consideration | Findings | 1. | Whether the Complainants have proved that the Opposite Party is guilty of deficiency in service by not handing over the possession of row-house to the Complainants on the promised day/date? | YES | 2. | Whether the Complainants are entitled to claim refund of amount paid by them to the Opposite Party, together with interest thereon? | YES | 3. | Whether the Complainants are entitled to recover compensation? | NO | 4. | What order? | The complaint is partly allowed. |
REASONS FOR FINDINGS [8] Alongwith the complaint, the Complainants have produced on the record copies of correspondence between the Complainants and the Opposite Party. At Exhibit-A, there is letter dtd.9/2/1996, on the letterhead of the Opposite Party, addressed to the Complainants; whereby the Opposite Party admitted booking of row-house No.33 by the Complainants for sum of Rs.12,15,000/- and receipt of sum of Rs.3,64,500/- towards the part-consideration/ booking amount. Below that letter there are photocopies of the payment receipts passed by the Opposite Party on its letterhead. We have compared those receipts with the payments details furnished by the Complainants in paragraph No.(02) of the complaint. It is seen that all the payments were made by the Complainants to the Opposite Party through cheques. Those cheque numbers also appear in the receipts issued by the Opposite Party to the Complainant from time to time. Last receipt is dtd.11/12/2001 for sum of Rs.5,000/- and before that there is a receipt dtd.1/1/1997 for sum of Rs.1,21,500/-. Thus, during the period 10/2/1996 to 1/1/1997, almost within a period of eleven months, the Complainants had paid sum of Rs.8,50,500/- and thereafter, came the payment of Rs.5,000/- in the year 2001. The Opposite Party, in the written version, has admitted receipt of Rs.8,50,500/- from the Complainants. Thus, there is a dispute of Rs.5,000/-, which payment has been evidenced by a receipt referred to above. [9] Now, the question is whether the Opposite Party had made the row-house ready for delivery of possession to the Complainant, as assured by the Opposite Party from time to time. In the first letter dtd.9/2/1996 (Exhibit-A), no date is mentioned, but in the letter dtd.15/7/1998 (Exhibit-C), there was an assurance from the Opposite Party that the buildings would be ready before 31/12/1998. Not only that but the Opposite Party admitted by that letter that it would be an injustice to those who have made the payment of more than 80% of the total cost. By the same letter, the Opposite Party explained certain difficulties, which the Opposite Party was facing in completing the project. This was followed by assurance in the letter dtd.22/2/1997 (Exhibit-D), by which the Opposite Party gave assurance to the Complainants that Row House No.33 would be completed before 31/5/1997. From there onwards, the Opposite Party started making demand of certain amounts from the Complainants. This could be seen from the letter dtd.26/6/1997, by which the Opposite Party admitted to have received an amount of Rs.8,50,500/- from the Complainants and explained that the said amount was against total price of Rs.10,12,500/- and the balance amount payable was of Rs.1,62,000/-. By the same letter, the Opposite Party requested the Complainants to release the cheque for sum of Rs.40,500/-. Not only that by the same letter, the Opposite Party had given assurance that they intend to hand-over the possession of row-house before 15/8/1997 and balance amount of Rs.1,21,500/- would be payable at the time of possession. [10] However, the Opposite Party backed out and vide a letter dtd.17/5/1999, asked the Complainants to pay sum of Rs.3,65,000/- towards the balance consideration and Rs.3,000/- towards water connection and also claimed amount on certain other items and made a demand in total sum of Rs.3,75,000/- to be paid before 7/6/1999. The Complainants replied this letter, by their letter dtd.29/6/2000 and reminded the Opposite Party of its statement by which, it was admitted by the Opposite Party that sum of Rs.1,62,000/- only was the balance. It was followed by another letter from the Complainants, by which she reminded the Opposite Party of the promises given under different letters. Then, comes the letter dtd.6/7/2000, by which the Opposite Party gave promise that probably by the end of August-2000; the Complainants may get possession of row-house against balance payment of Rs.1,62,000/-. However, that promise was not kept and vide a letter dtd.10/8/2000, the Opposite Party demanded balance amount in sum of Rs.3,74,751/- and gave threat to invoke clause No.36 of the agreement for sale, which confers a right upon the Opposite Party to cancel the agreement in the event of default in payment of any installments. As pointed out earlier, the Opposite Party itself, vide a letter dtd.26/6/1997 as well as 6/7/2000, had admitted that the balance amount was of Rs.1,62,000/- only and the Opposite Party conveniently overlooked the fact that vide a letter dtd.26/6/1997, the Opposite Party had represented to the Complainants that they can make payment of that amount while taking over the possession of row-house. Despite this, the Opposite Party tried to invoke clause No.36 of the agreement by giving threat to the Complainants to cancel the agreement. [11] The Complainants, by a letter dtd.18/8/2000, replied the letter dtd.10/8/2000 issued by the Opposite Party and submitted that on visiting the site on 15/8/2000, they found certain shortcomings in the construction and they enumerated those shortcomings in the said letter and informed the Opposite Party that the row-house was not ready for delivery of possession despite the fact that the possession was promised to be delivered in the month of June-1997. It appears from the letter dtd.1/2/2001, written by the Opposite Party to the Complainants that meeting was arranged of the purchasers of the row-houses on 18/2/2001 at the site. From the minutes of the meeting recorded on 19/2/2001, it is seen that the meeting had actually taken place and the members had taken inspection. On that day also, the row-house in question was not ready for delivery of possession. This is well articulated by last paragraph of the minutes of the meeting, which is produced on the record at page (29) of the compilation of the complaint, which reads as follows:- “On the point of poor quality being raised by some members, Mr. Timbadia accepted that in some aspects the quality was short of desired lever, but La Tim has tried to rectify to the extent possible, by changing the Contractor after taking charge of the project 3 months ago. eg. Bldg., A now has good quality ceramic tiles in all rooms instead of mosaic galicha tiles as in Bldgs., B & C. Similarly quality of bathroom wall tiles is far better in Bldg., A compared to B & C.” [12] On 22/8/2002, the Complainants as well as other row-house purchasers sent a joint letter to the Opposite Party, pointing out certain deficiencies in the project and gave threat that on failure on the part of the Opposite Party to complete the project within a period of seven days, signatories of the letter, including the Complainants; would file a complaint before the Consumer Forum. Reply to that letter by the Opposite Party is eloquent, which is at page (33) of the compilation of the complaint. Last paragraph, quoted below, is virtually an admission on the part of the Opposite Party that despites its assurance, even on the date of sending of that letter dtd.3/9/2002, the Opposite Party was not in a position to give a proper time frame for delivery of possession of row-house to the Complainants. “As I am expected to give the exact date and time frame for the completion of the work mentioned in your letter, I need 10 more days to gather certain vital information. Please accept my reply before 15.9.02 with the proper time frame, which we intend to fulfill under any circumstance.” [13] Ultimately, by a letter dtd.16/9/2002, the Complainants and other flat-purchasers informed as follows:- “We have now run out of patience and are seriously contemplating other measures, like for instance, moving the offices of the various Consumer interest Fora, as we do not have any confidence in the legal system.” [14] All the above-referred correspondence show that the Complainant had paid sum of Rs.8,55,500/- to the Opposite Party, which the Opposite Party had admitted to have received. The Opposite Party had extended the date of delivery of possession by making various promises and even in the month of September-2002, the Opposite Party was not in a position to give proper time frame for delivery of possession of row-house. All these facts show that despite receiving about 90% of the agreed consideration from the Complainants, the Opposite Party failed to construct the row-house and deliver the possession thereof to the Complainants. [15] In the meantime, the Opposite Party tried to regale out of this situation by making an application to this Forum for appointment of a Court Commissioner for inspection of row-house bearing No.22. Obviously, that inspection was sought to establish that the row-house was ready for delivery of possession and the Complainants were not interested in taking over the possession of the same by making payment of the balance amount. Be it noted that the application for appointment of a Court Commissioner was filed by the Opposite Party on 5/11/2005 i.e. more than 2 ½ years of filing of the complaint. The application came to be allowed by this Forum, vide an order dtd.12/1/2006. Pursuant to that order, Mr. Hitendra K. Mehta, an architect on the panel prepared by the Hon’ble Maharashtra State Commission; visited the site on 5/4/2006. His report contains observations regarding the complaint made by the Complainants about the leakages, cracks to the plaster, quality of doors, windows and general quality of the work. It also refers to quality of electrical work, plumbing work etc. We have gone through the report. The Opposite Party has tried to pretend that it is in favour of the Opposite Party, but the Complainants, by filing their say, have challenged the said report. The Complainants, in their say, have pointed out various discrepancies in the report as well as contradictory statements to show that overall quality of the work was poor. In any case, this entire exercise of appointment of a Court Commissioner and bringing the report on the record appears to be an effort on the part of the Opposite Party to show that at-least during the pendency of the complaint, the row-house was ready for delivery of possession and the Complainants should take over the possession of the row-house and withdraw the complaint. However, as the long drawn correspondence between the parties reveals, the Opposite Party from time to time had given assurances/promises to the Complainants about completion of construction of row-house and delivery of possession. We do not find any statement in any of the communication sent by the Opposite Party to the Complainants that row-house was ready for delivery of possession and the Complainants should take over the possession on making payment of balance amount. On the contrary, what we find are the vague & omnibus assurances from the Opposite Party putting up number of excuses. The Opposite Party, though relied upon Clause No.36 of the agreement, has not produced original or copy of the agreement before this Forum. Therefore, reliance on clause No.36 of the so-called agreement is not of any assistance to the Opposite Party. We, therefore, hold that on receipt of 90% of the total consideration, the Opposite Party failed to hand-over the possession of row-house to the Complainants, which led the Complainants to file the present complaint. [16] It appears from the rejoinder filed by the Complainants to the written version filed by the Opposite Party that the project – ‘Milestone’, has been handed over by the Opposite Party to a college of biotechnology and the Building ‘C’ has been converted into a girls hostel and Building ‘B’ has been converted into a boys hostel and Row House No.19 has been converted into Crop Science Department. The Complainants have produced photographs to that effect. To neutralize the effect of these statements made by the Complainants, the Opposite Party has filed on the record a copy of an affidavit of Mr. Jitendra Lathia, who is a purchaser of Row House No.19, to show that he has taken over the possession of the said row-house. However, what is produced on the record by the Opposite Party is a photocopy of the affidavit and the original affidavit has not been produced. It is not known in which connection said Mr. Lathia had affirmed that affidavit, and therefore, no weight could be attached to the said affidavit. [17] In view of the aforesaid facts, we are not inclined to uphold the contention of the Opposite Party that in fact, the Complainants failed to pay the balance consideration and there had been breach of agreement on the part of the Complainants. As pointed out above, two letters written by the Opposite Party show that balance amount was of Rs.1,62,000/- only and by a letter, a copy of which is produced on the record at page (21) of the compilation of the complaint, the Opposite Party had allowed the Complainants to pay the same at the time of delivery of possession, and therefore, we find that the Opposite Party received 90% of the amount without execution of an agreement. The Opposite Party thus, committed breach of a statutory obligation under Section-9 of the Maharashtra Ownership Flats Act, 1963; and therefore, is guilty of deficiency in service. [18] As pointed out above, the payments allegedly made by the Complainants to the Opposite Party, incorporated at page (02) of the complaint, are supported by receipts. The Complainants made total payment in sum of Rs.8,55,500/- on various dates starting from 10/2/1996 to 1/1/1997, besides Rs.5,000/- on 5/12/2001. The Opposite Party kept on promising delivery of possession till the year 2002, but failed to perform its promise, which ultimately led the Complainants to file the present complaint. In a similar situation, the Hon’ble Maharashtra State Consumer Disputes Redressal Commission directed the builder to refund the price money together with interest thereon @ 9% p.a., as also, directed the builder to pay compensation in sum of Rs.10,00,000/-. A copy of that judgment in First Appeal No.374 of 2007 (In the matters of Mr. Girish Meghraj Jain Vs. M/s. Ajit Rawetkar & Company and Anr.) decided on 22/10/2007 is produced on the record by the Complainants. [19] The Hon’ble Maharashtra State Consumer Disputes Redressal Commission in Consumer Complaint No.126/2003 (In the matters of Mr. Muljimal Kalinani & Ors. Vs. Proviso Construction Co. Pvt. Ltd.) decided on 13/5/2008, directed the builder to refund all the amounts, which he had received from the Complainants therein, together with interest thereon @ 18% p.a., as from the date of respective payments. In the case of Gopal Oak Vs. Paranjape Builders Ltd. ~ (2003)-3-CLD-134; the Hon’ble Maharashtra State Commission, directed the Builder to refund sum of Rs.5,00,000/- received from the Complainant therein, together with interest thereon @ 18% p.a., from the date of respective payments. In all these decisions, the Hon’ble Maharashtra State Commission observed that on acceptance of substantial part of consideration, the builder is bound to deliver the possession of the tenement to the purchaser on purchaser making payment of balance consideration to the builder and in the event of failure on the part of the builder to hand-over the possession of tenement to the prospective purchaser, the builder is guilty of deficiency in service and liable to refund the amount together with interest or compensation. [20] On taking overall view of the matter, we find that it would be appropriate to direct the Opposite Party to refund an amount in sum of Rs.8,55,500/- to the Complainants; together with interest thereon @ 18% p.a., as from the date of respective payments, as per the details furnished at page (02) of the complaint. [21] The Complainants have also sought compensation towards mental torture, harassment, hardship etc., as well as compensation towards rent. Since, we are inclined to direct the Opposite Party to make the payment of principal sum together with interest thereon @ 18% p.a., we find that interest component shall take care of amount of compensation as well as the amount of rent claimed by the Complainant from the Opposite Party. We find that ends of justice would be met, if the Opposite Party is directed to pay the principal sum together with interest thereon @ 18% p.a. Since the interest would be calculated from the year 1996-97 onwards, obviously the interest component would be substantial and that would take care of other grievances of the Complainants. Hence, we proceed to pass the following order:- ORDER The complaint is partly allowed. The Opposite Parties No.1, 2 & 3 are jointly & severally directed to pay to the Complainants jointly, a sum of Rs.8,55,500/- together with interest thereon @ 18% p.a., as from the date of respective payments, as detailed in a table in paragraph No.(02) of the complaint. That table in paragraph No.(02) of the complaint shall be treated as part of the award. The Opposite Parties shall also pay costs of Rs.5,000/- to the Complainants. The Opposite Parties shall comply with the foregoing order, within a period of eight weeks from the date of receipt of this order. Inform the parties accordingly, by sending certified copies of this order.
| | [HONABLE MRS. Mrs.DEEPA BIDNURKAR] Member[HONABLE MR. Mr. J. L. Deshpande] PRESIDENT[HONABLE MR. MR.V.G.JOSHI] Member | |
