KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C. No. 100/2016

JUDGMENT DATED: 16.02.2024

PRESENT:

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

SRI. AJITH KUMAR D.                                                    : JUDICIAL MEMBER

SRI. RADHAKRISHNAN K.R.                                        : MEMBER

COMPLAINANT:

Preethy Nayar Seetha Devi, W/o Santhosh Ramakrishnan Pillai, Sithara, Sankara Bhavan-3, Sankar Lane, Sasthamangalam, Thiruvananthapuram-695 010.

                                 (By Adv. Ravikrishnan N.R.)

                                                Vs.

OPPOSITE PARTIES:

1. Samson and Sons Builders & Developers (P) Ltd., represented by its Managing Director, Kaliveena Building, T.C. 3/679, TKD Road, Muttada P.O., Thiruvananthapuram.

2. John Jacob, Managing Director, Samson and Sons Builders & Developers (P) Ltd., T.C. 3/678, Kannimattom, Muttada P.O., Thiruvananthapuram – 695 025.

3. Jacob Samson, Chairman, Samson and Sons Builders & Developers (P) Ltd., T.C. 3/678, Kannimattom, Muttada P.O., Thiruvananthapuram – 695 025.

4. Dhanya Mary John, Director, Samson and Sons Builders & Developers (P) Ltd., T.C. 3/678, Kannimattom, Muttada P.O., Thiruvananthapuram – 695 025.

5. Samuel Jacob, Director, Samson and Sons Builders & Developers (P) Ltd., T.C.3/678, Kannimattom, Muttada P.O., Thiruvananthapuram – 695 025.

(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 a Private Limited Company engaged in the business of land development, construction and sale of apartments, villas and other residential structures.  The 2^nd opposite party is the Managing Director of the Company while the other opposite parties are the Directors of the 1^st opposite party.

2.  The complainant is residing with her family at Dubai.  She wanted to settle permanently at Thiruvananthapuram for the purpose of giving quality education to her children who studied in Dubai.  With the said idea she planned to purchase an Apartment at Thiruvananthapuram in 2015 so that she could settle at Thiruvananthapuram since their elder child joined the plus one course here.  On enquiry she came to know that a big apartment project by name ‘Samson & Sons Sanctuary Skylark’ was proposed to be constructed at Tharangini Junction, Vazhayila, Thiruvananthapuram.  The 1^st opposite party is a company conducting the business of property development and building apartments and the opposite parties 2 to 5 are the Directors including its Chairman.  The said project was one in which the opposite parties claimed that they would provide all amenities including helipads on the roof top.  The opposite parties provided the complainant with a computer generated picture which depicted a finished apartment complex having more than twenty floors. 

3.  The complainant met opposite parties 2 to 5 and they convinced her that they were reliable and trustworthy builders and assured that they would deliver the apartment to the customers within the time specified in the agreement.  The complainant informed the opposite parties that she was planning to settle at Thiruvananthapuram for the education of her children in the year 2015 and that was why she was planning to purchase the apartment by availing loan from the bank at Dubai.  The opposite parties assured that they would deliver the apartment on time as per the agreement, if she pays the entire sale price thereof. 

4.  Thus the complainant entered into an agreement for sale and construction of an apartment on 14.09.2012 with the opposite parties in their project by name ‘Samson & Sons Sanctuary Skylark’, Block -1 Vazhayila, Karakulam, Thiruvananthapuram.  The apartment agreed to be provided was bearing No. D15 on the fifteenth floor.  As per the terms of the agreement the opposite parties collected the entire sale consideration of Rs. 35,00,000/- (Rupees Thirty Five Lakhs only) on the date of execution of the agreement itself.  Therefore, no amount is remaining to be paid by the complainant to the opposite parties. 

5.  As per the terms of the agreement the opposite parties had assured that they would hand over the apartment after construction to the complainant on 31.05.2015 and she had made full payment of the purchase price believing the said assurance of the opposite parties.  However, they have not completed the construction or delivered the apartment to the complainant till date. 

6.  The complainant had approached the opposite parties on many occasions enquiring about the progress of the construction and execution of the sale deed as well as handing over of the possession of the completed apartment.  They failed to give a proper answer to her enquiries.  There was neither any reply nor any information or updates from the opposite parties regarding the progress of the construction. 

7.  In the above circumstances, the husband of the complainant who availed a loan to pay the consideration visited the office of the opposite parties along with the mother of the complainant for seeing the proposed flat.  He was surprised that nothing was done on the site for fulfillment of the agreement in spite of receiving the entire sale consideration.  The opposite parties were not able to give proper explanation to the queries of the complainant and her husband. 

8.  After the above visit to the office of the opposite parties, they issued a mail to the complainant wherein no proper explanations were given for the delay in performing their part of the agreement.  The complainant then realized that the opposite parties had deceived her after collecting the entire sale consideration from her.  Giving false assurance with malafide intention to enrich themselves with her hard earned money, they do not have any intention to perform their part of the agreement.  Complainant has been paying interest on the amount raised by her for payment of the sale consideration of the apartment without getting any benefit for the same and the complainant realized that the opposite parties do not have any intention to perform their part of the agreement.  She issued an e-mail to them on 12.04.2015 explaining her difficulties and losses that she had sustained which included interest on the loan amount that she had paid.  But the opposite parties did not care to send a reply to her which convinced her of their malafide and deceitful intention.  On 07.08.2015 the complainant along with her mother and husband met the opposite parties at their office and on that occasion they assured that the project could be completed in 2018, without giving any reason for the delay.  The said assurance was in violation of the terms of the agreement with the complainant.  The 5^th opposite party informed the complainant that they would convene a meeting and give a proper reply to the e-mail sent by her on 12.04.2015.  But, no reply has been sent by him, till date.

9.  Left with no other alternative, the complainant caused the issue of a registered notice through her lawyer on 07.09.2015 demanding the opposite parties to pay to her an amount of Rs. 56,00,000/- (Rupees Fifty Six Lakhs) as per the current exchange rate and prevailing bank interest rates applicable to NRIs, within 15 days of receipt of the said notice.  But, the opposite parties did not issue any reply. 

10.  The complainant is now paying interest for the loan availed by her for paying the sale consideration to the opposite parties, without any returns.  Had the amount been invested in NRI fixed deposit scheme she would have generated income from the same with NRI bank interest and she could have purchased an independent villa with such accumulated amount.  As a result of the delay in handing over of the apartment she was forced to continue the studies of her children in Dubai. The complainant had availed a loan of Rs. 35,00,000/- in the month of September 2012.  By May 2015, the principal amount with accrued interest had become Rs. 51,11,192/- .  But the opposite parties have changed the date of delivery to October 2018. 

11.  In the above circumstances, the complainant has sought for the issue of an order directing the opposite parties to pay an amount of Rs. 51,11,192/- being the principal amount with accrued interest from the date of payment till the agreed date of delivery.  She has also claimed interest thereon @ 18% per annum.  An amount of Rs. 10,00,000/- is claimed for the mental agony and losses caused to the complainant and a further amount of Rs. 50,000/- as costs of the litigation.    

12.     The complaint was admitted and notice was issued to the opposite parties by this Commission.  On receipt of notice the opposite parties entered appearance through counsel and contested the complaint.  According to the common written version filed by the opposite parties, the complaint itself was not maintainable.  According to them, the dispute falls outside the jurisdiction and powers of the Redressal Authorities constituted under the Act.  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. 

13.     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.

14.     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.

15.     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. 

16.     It was further contended that there were no regular enquiries by the complainant as required.  But, the opposite parties used to keep the complainant abreast 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. 

17.     The complainant has not produced the original agreement before this Commission.  She 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. 

18.     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. 

19.     The 1^st opposite party is a Private Limited Company with only three Directors.  The entire dealings of the company are managed by the Managing Director, the Chairman and the Director.  But, other persons having no interest are also made opposite parties.  Therefore the complaint is liable to be dismissed for misjoinder of parties.  The complainant has 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.

20.     On the above pleadings, both sides went to trial.  Both sides have not adduced any oral evidence.  The complainant filed proof affidavit in lieu of chief examination.  Exhibits A1 to A5 documents are marked by the complainant in her affidavit.  At the instance of the complainant, an Advocate Commissioner was appointed by this Commission.  The Advocate Commissioner visited the site where the apartment complexes were proposed to be constructed and has submitted a report.  The report of the Advocate Commissioner dated 20.12.2021 is marked as Ext. C1 and the photographs of the site produced by the Advocate Commissioner is marked as Ext. C1(a).  All the above documents have been marked without any objection on the part of the opposite parties.  A proof affidavit has been filed on behalf of the opposite parties producing one document as Ext. B1.  After close of evidence both the parties were heard. 

21.     According to the counsel for the complainant, entire sale consideration of the apartment had been paid by the complainant with the object of satisfying the cherished dream of the complainant to acquire a residential apartment of her own at Thiruvananthapuram.  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 2015.  A copy of the agreement has been produced and marked as Ext. A3 without any objection from the opposite parties.  Ext. A4 is the copy of the receipt for payment of the entire sale consideration of the apartment agreed to be purchased by the complainant.  The said document was also not disputed by the opposite parties.  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 her from the opposite parties.  The counsel prays that a decree may be granted as prayed for in the complaint. 

22.     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 also 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.

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

          23.     The question of maintainability was raised by the opposite parties by filing a separate petition.  The same was considered as a preliminary issue and it was held that the complaint was maintainable.   Accordingly, as per order dated 21.02.2019 the petition filed by the opposite parties has been dismissed.   The said order, not having been challenged before any higher Forum, has become final.  Therefore, it is not necessary for us to consider the question of maintainability here. 

Point Nos. 2 & 3

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

          25.     The case of the complainant is that, as per an agreement dated 14.09.2012, marked as Exhibit A3 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 Sanctuary-Skylark”.  The apartment agreed to be purchased by the complainant was to be located on the 15^th floor of the building complex and has been described as Apartment No. D-15 (Type D).  The apartment after completion of construction was to be registered and conveyed to the complainant along with .988 cents of undivided interest in 178 cents of land, along with the apartment.   The total sale consideration agreed to be paid by the complainant was Rs. 35,00,000/-.  The immovable property is described in detail in ‘A’ Schedule to the complaint.  The apartment is described in ‘B’ Schedule to the complaint.  Though the complainant has paid the entire sale consideration, to the opposite parties they have not completed the construction or conveyed the apartment to the complainant as agreed. 

26.     A common version has been filed by all the opposite parties in which they have admitted the execution of Exhibit A3 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. 

          27.     Though the opposite parties have pleaded force majeure conditions as the reason for not completing the construction as agreed in Exhibit A3, 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 A4 is the receipt issued by the Managing Director of the 1^st opposite party.  The opposite parties have no case that the said documents were not issued by them.  In fact, the said documents were all marked without any objection from their counsel, on consent.  The said receipt account for payment of the entire sale consideration agreed to be paid by the complainant for purchase of the apartment.  Therefore, it has to be found that the case of the complainant that she has paid the entire sale consideration as per Ext. A1 agreement, stands proved.

28.     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 to 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.   

29.     It is not in dispute that, the apartment complex has not been constructed yet.  As per Exhibit A3 agreement possession of the apartment was to have been given before 31.05.2015.  Though more than eight 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 she is entitled to recover the amount paid by her, with interest is fully justified.  The complainant is also entitled to interest on the said amount till the date of payment. 

30.     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 she had parted with such a huge amount.  The mental agony at losing her hard earned money and at the same time being unable to acquire her dream house cannot be trivialised.  Therefore, the complainant shall be entitled to compensation for her suffering, which is fixed at Rs.7,00,000/-.

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

1. The opposite parties are directed to pay the complainant the amount of      Rs. 35,00,000/- (Rupees Thirty Five Lakhs only) being the amount paid by the complainant with interest thereon @ 8% per annum from 14.09.2012, the date on which the payment was made, till the date of realisation.
2. The opposite parties are directed to pay Rs.7,00,000/- (Rupees Seven Lakhs only) as compensation towards the mental agony and hardships suffered by the complainant, with interest thereon @ 8% per annum from 17.08.2016, 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 only) 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 the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Court, on this the 16^th day of February 2024.

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                               AJITH KUMAR  D. : JUDICIAL MEMBER     

            jb                                                                               RADHAKRISHNAN K.R.  : MEMBER

C.C.No.100/2016

APPENDIX

1. COMPLAINANT’S WITNESS

2. COMPLAINANT’S DOCUMENTS

3. OPPOSITE PARTY’S WITNESS

4. OPPOSITE PARTY’S DOCUMENTS

5. COURT EXHIBIT

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                               AJITH KUMAR  D. : JUDICIAL MEMBER     

jb                                                                                           RADHAKRISHNAN K.R.  : MEMBER