KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C. No.139/2016

JUDGEMENT DATED: 19.06.2023

PRESENT:

COMPLAINANT:

(by Adv. Vijesh Kattakkalil)

Vs.

OPPOSITE PARTIES:

(by Adv. Dougles Linsby N.R.)

JUDGEMENT

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

This complaint filed under Section 17 of the Consumer Protection Act, 1986 (the Act for short) claiming compensation for alleged deficiency in service and unfair trade practice of the opposite party.  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.       According to the complainant, opposite parties 2 to 5 had approached him and informed him that they were intending to purchase 45cents of land in survey no.2260 abutting the T.K.D. Road, Muttada, Pattom, Thiruvananthapuram.  The plot was near to the office of M/s Samson and Sons Builders & Developers Pvt. Ltd.  They were proposing to build a fully residential apartment complex by name, “NOVA Castle” consisting of forty apartments, with three apartments on each floor.  A and B type having an area of 1700sq.ft. and C type having an area of 2100sq.ft. were proposed to be constructed.  According to them, they had entered into an agreement with the owners of the said property for purchase of the same.  The said property is more particularly described in Schedule A appended to the complaint.

3.       The opposite parties offered to sell one apartment in the project to the complainant for a total sale price of Rs.35,00,000/-(Rupees Thirty Five Lakhs).  The apartment offered was of A-type on the fifth floor of the proposed complex, provided the amount was paid in a lump. 

4.       The opposite parties also told the complainant that until registration of the A Schedule property and approval of the project plans, the complainant could book another apartment in another project of the opposite parties by name, Meridian Heights, Kuravankonam.  As and when the sale deed of the A Schedule property was executed, a new agreement would be executed in the said project in A Schedule property for an amount of Rs.35,00,000/-(Rupees Thirty Five Lakhs).  Accordingly, an agreement to the said effect was executed between the complainant, in the name of his wife Susy Johnson and the opposite parties on 06.10.2011. 

5.       As per the agreement, the complainant paid a total amount of Rs.35,00,000/-(Rupees Thirty Five Lakhs only) to the opposite parties.  An amount of Rs.7,00,000/-(Rupees Seven Lakhs only) as per cheque no.978159 drawn on the Indian Overseas Bank, Pattom Branch, Trivandrum.  The balance amount was paid by four cheques drawn on the State Bank of Travancore, KLCB Administration Branch, Trivandrum bearing nos.180095, 180096, 180097 and 180098 dated 06.10.2011 for Rs.7,00,000/-(Rupees Seven Lakhs) each.  The cheques were all encashed and the money was received by the opposite parties.  They have issued receipt no.1110 in favour of the complainant’s wife Susy Johnson acknowledging the said payment. 

6.       While so, the sale deed of the A Schedule property was registered in the year 2012 and the project was officially launched.  The opposite parties thereupon offered another apartment, type B on the same floor having almost the same area for an amount of Rs.58,00,000/-(Rupees Fifty Eight Lakhs) to be paid in instalments.  Thereafter, another agreement was executed by the opposite parties with the complainant on 26.12.2012.  As per the agreement the opposite parties agreed to sell apartments numbered as 5A and 5B on the fifth floor of the proposed building.  The complainant was informed by the opposite parties that the apartments were luxurious apartments having a total built up area of 1700sq.ft.   The complainant would also be entitled to 1.15cents of undivided interest in the land.  The apartments were agreed to be sold to the complainant for an amount of Rs.35,00,000/-(Rupees Thirty Five Lakhs) and Rs.58,00,000/-(Rupees Fifty Eight Lakhs) respectively.  The said apartments are more particularly described in B and C Schedules in the complaint. 

7.       As per the agreed terms the complainant had to pay an additional amount of Rs.58,00,000/-(Rupees Fifty Eight Lakhs), since he had already paid Rs.35,00,000/-(Rupees Thirty Five Lakhs), as already stated above.  Towards the amount remaining unpaid, the complainant paid an amount of Rs.46,00,000/-(Rupees Forty Six Lakhs) through eighteen instalments.  The payments were made from the UCO Bank, Jubilee Hills Branch, Hyderabad to current account no.67104147133 of Samson & Sons Builders at the State Bank of Travancore, Medical College Branch, Trivandrum.  An amount of Rs.1,00,000/-(Rupees One Lakh) was paid on 04.06.2012, Rs.2,00,000/- (Rupees Two Lakhs) on 17.11.2012, Rs.3,00,000/-(Rupees Three Lakhs) on 04.02.2013, Rs.1,00,000/-(Rupees One Lakh) on 05.03.2013, Rs.1,00,000/-(Rupees One Lakh) on 07.03.2013, Rs.2,00,000/-(Rupees Two Lakhs) on 05.04.2013, Rs.5,00,000/-(Rupees Five Lakhs) on 24.05.2013, Rs.3,00,000/- on 20.07.2013, Rs.2,00,000/-(Rupees Two Lakhs) on 27.09.2013, Rs.2,00,000/-(Rupees Two Lakhs) on 11.10.2013, Rs.3,00,000/-(Rupees Forty Six Lakhs) on 09.12.2013, Rs.2,00,000/-(Rupees Two Lakhs) on 17.02.2014, Rs.2,00,000/-(Rupees Two Lakhs) on 09.04.2014, Rs.2,00,000/-(Rupees Two Lakhs) on 11.07.2014, Rs.5,00,000/-(Rupees Five Lakhs) on 15.10.2014, Rs.5,00,000/-(Rupees Five Lakhs) on 21.04.2015, Rs.4,00,000/-(Rupees Four Lakhs) on
15.01.2016.  Apart from the above an amount of Rs.1,00,000/-(Rupees One Lakh) was paid on 18.10.2013 through the Federal Bank, Pattom, Trivandrum.  For the said payment, the opposite parties had issued receipt no.2020.  An amount of Rs.4,00,000/-(Rupees Four Lakhs) was paid in cash on 15.01.2016, which payment has been acknowledged receipt of as per receipt no.2600.  Similar receipts have been issued for all the payments made by the complainant.  The balance sale price of Rs.12,00,000/-(Rupees Twelve Lakhs) was to be paid at the time of handing over the keys of the apartments, according to the terms of the agreement.

8.       The opposite parties had agreed to hand over possession of the fully constructed apartments to the complainant on or before 31.12.2014.  But they have not made any progress in the construction, so far.  Moreover, the opposite parties have pledged the A Schedule property to the Kerala Financial Corporation (KFC) in July 2015 and have obtained a loan on the security of the said property.  Payment of interest on the loan is remaining in default and it has been learnt on enquiry with the KFC officials that the liability outstanding was Rs.13,75,00,000/-(Rupees Thirteen Crore Seventy Five Lakhs).  The above transaction has not been brought to the notice of the complainant.  It is clear that the opposite parties have cheated the complainant of an amount of Rs.81,00,000/-(Rupees Eighty One Lakhs). 

9.       The complainant had approached the opposite parties several times and requested them to settle his claim.  On 22.11.2016 the complainant approached the opposite parties personally and through mediators.  But the opposite parties did not respond.  Therefore, the complainant caused the issue of a notice through his lawyer dated 23.11.2016 demanding return of the amount paid by him together with compensation for the loss and mental agony suffered by him.  On coming to know that the complainant was about to initiate legal proceedings against them, the opposite parties have been taking hasty steps to dispose of the property to strangers and to leave the jurisdiction of this Commission. 

10.     The complainant has therefore sought for recovery of the amount of Rs.81,00,000/-(Rupees Eighty Lakhs) paid by him with interest thereon @12% per annum, along with an amount of Rs.15,00,000/-(Rupees Fifteen Lakhs) as compensation for the loss and mental agony.  According to the complainant, he is a consumer of the opposite parties.  The conduct of the opposite parties amounts to unfair trade practice and deficiency in service. 

11.     The complaint was admitted by this Commission and notice was issued to the opposite parties.  On receipt of notice the opposite parties have entered appearance through counsel and contested the complaint. 

12.     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.

13.     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. 

14.     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. 

15.     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. 

16.     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. 

17.     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.

18.     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.  Exhibits A1 to A5 documents are marked by the complainant in his affidavit.  Though the counsel for the opposite parties wanted to cross examine the complainant, the attempt was later on given up.  Therefore, complainant’s evidence was closed.  A proof affidavit has been filed on behalf of all the opposite parties producing one document marked as Exhibit B1.  After close of evidence both the parties were heard. 

19.     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 2014.  Instead, they have pledged the property to the Kerala Financial Corporation (KFC) without the knowledge of the complainant and have obtained a loan, encumbering the property.  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.

20.     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.

21.     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

          22.     The question of maintainability was raised by the opposite parties by filing I.A.No.1140/2017 in this case itself.  The same was considered as a preliminary issue and as per order dated 21.02.2019 it was held that the complaint was maintainable.   Accordingly, the petition filed by the opposite party was 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

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

          24.     The case of the complainant is that, as per an agreement dated 06.10.2011, executed between the 2^nd opposite party and Mrs. Susy Johnson, wife of the complainant, the opposite parties had agreed to construct and hand over possession of an apartment for a total consideration of Rs.35,00,000/-(Rupees Thirty Five Lakhs) in an apartment complex proposed to be constructed by them in the A Schedule property.  Since the sale deed in respect of that property had not been registered in their favour, they offered an apartment in another project by name “Meridian Heights”.  They promised to execute another agreement as and when the sale of A Schedule was completed.  Accordingly, an amount of Rs.35,00,000/-(Rupees Thirty Five Lakhs) is alleged to have been paid to the opposite parties as per Exhibit A1 agreement.  the payment has been acknowledged receipt of in receipt no.1110 which has been marked along with the other receipts produced, as Exhibits A5 series.  Subsequently, after registration of the sale deed in respect of the A Schedule property during June 2012 and after the project was formally launched, two agreements, Exhibit A2 and A3 were executed between the complainant and the 1^st opposite party on 26.12.2012.  as per the said agreement the opposite parties agreed to convey to the complainant, two apartments numbered as 5A and 5B on the fifth floor.  The apartments were to have a built up area of 1700sq.ft. and with respect to each apartment 1.15cents of undivided interest in the A Schedule property.  The sale price agreed upon for one apartment was Rs.35,00,000/-(Rupees Thirty Five Lakhs) Rs.58,00,000/-(Rupees Fifty Eight Lakhs).  The apartments were agreed to be given possession of and registered in the name of the complainant on or before 31.12.2013.  

          25.     A common version has been filed by all the opposite parties in which they have admitted the execution of the agreements, Exhibits A1, A2 and A3.  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. 

          26.     Though the opposite parties have pleaded force majeure conditions as the reason for not completing the construction as agreed, 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 has not been pursued during the trial.  The complainant has also not been cross examined on any of the disputed aspects.  Exhibits A4 tabulated payment receipts supported by Exhibits A5 series issued by the Managing Director of the 1^st opposite party evidence the payments made by the complainant.  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 receipts account for payment of an amount of Rs.81,00,000/-(Rupees Eighty One Lakhs).  According to the complainant, the balance amount of Rs.12,00,000/-(Rupees Twelve Lakhs) was agreed to be paid at the time of handing over the keys of the apartments. 

          27.     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.

          28.     It is not in dispute that, the apartment complex has not been constructed yet.  As per agreements Exhibit A1 to A3 possession of the apartment were to have been given on or before 31.12.2013.  Though more than eight years have elapsed the opposite parties have not honoured their commitments.  Instead, they have pledged the property with the Kerala Financial Corporation and encumbered the same.  The total liability on the said property is alleged to be more than Rs.13,00,00,000/-(Rupees Thirteen Crores) by the complainant.  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.

          29.     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, raising part thereof through a bank loan also.  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.81,00,000/-(Rupees Eighty One Lakhs) received from the complainant, with interest thereon @8% per annum from 31.12.2014, 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 09.12.2016, the date of filing of 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.139/2016

APPENDIX

1. COMPLAINANT’S WITNESS

2. COMPLAINANT’S DOCUMENTS

3. OPPOSITE PARTY’S WITNESS

4. OPPOSITE PARTY’S DOCUMENTS

                    PRESIDENT