IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated, the 28th day of June, 2024
Present: Sri. Manulal V.S. President
Sri. K.M. Anto, Member
C C No. 275/2021 (Filed on 16/11/2021)
Complainant : Rahul Raj,
S/o Rajan,
Puthenveettil,
Karinilam P.O,
Edakkunnam kara,
Erumeli North Village,
Kanjirappally,
Kottayam.
(By Adv. K.S.Asif )
Vs.
Opposite parties : Shaji,
Age 40,
S/o Muhammed,
Plammoottil House,
Karinilam P.O,
Ekakkunnam Kara,
Erumeli North Village
Kanjirappally,
Kottayam.
(By Adv. Santhosh Abraham)
O R D E R
Sri. Manulal V.S. President
Complaint filed under section 35 of the Consumer Protection Act, 2019
The opposite party is involved in the real estate business, purchasing large plots, dividing them into smaller plots, constructing houses on them, and selling them. The opposite party purchased 3 Acres and 24 cents of land in Erumeli North Village, Idakkunnam Kara, in Re-survey numbers 302/2/3/1 and 302/2/6. On this land, the opposite party built a house, which was numbered as 13/157 A in the 13th ward of the Mundakayam Grama Panchayat, and installed an electrical connection and fittings, including the meter deposit and other appurtenances. The complainant bought this property, including the house and all associated rights, for a price of Rs.33,00,000. Out of this amount, the complainant took a loan of Rs.25,00,000 from Axis Bank and paid the opposite party. As per the sale deed number 1020/1/19 of the Erumeli Sub-Registrar Office, the property and the house were registered in the complainant's name. The house, was constructed in 105 square meters including three bedrooms, a kitchen, a sit-out, a living room, a dining hall, and a car porch.
The opposite party assured the complainant that the construction was done using high-quality materials and skilled labour. On 12th July 2019, the deed for the property and house was executed, and on 17th August 2019, the complainant moved in with their parents. The house was bought with all the painting and finishing work completed. Within two to three months of moving in, the complainant noticed minor cracks in the walls. When informed, the opposite party claimed these were minor cracks due to using M sand and could be fixed with putty and paint. However, the cracks grew larger over time. Upon informing the opposite party again, he distanced himself from the issue. The cracks have become extensive, threatening the house's structural integrity. Additionally, the door frames have decayed due to termite attack, and the frames were found to be made of low-quality wood that was deceptively painted to appear thicker and of better quality.
The opposite party falsely convinced the complainant that the house was constructed using high-quality materials. However, the materials used were substandard, the wood was insufficiently thick, and the foundation of the house was not properly constructed. Due to the weak foundation, the house has settled down and the walls have developed large cracks, making it uninhabitable. To make the house liveable, the foundation must be strengthened, the cracked walls must be rebuilt, and the decayed door frames need to be replaced. An estimate from engineers suggested that repairs would cost around Rs.7,00,000. If the foundation is not strengthened, the cracks reappear, and the house become completely uninhabitable.
The opposite party's act of selling the complainant a house with the assurance of high-quality construction while using substandard materials constitutes an unfair trade practice and a deficiency in service. As a result of the opposite party's actions, the complainant has suffered significant mental and financial distress. The opposite party is engaged in such unfair trade practices and service deficiencies solely for excessive profit. Consequently, the complainant has incurred substantial losses and is burdened with repaying the loan taken from Axis Bank, including interest. Despite repeated requests, including the final one on 30th July 2021, to repair the house by strengthening the foundation, fixing the cracks, and replacing the decayed door frames, the opposite party has refused to comply. The cost of these repairs amounts to Rs.7,00,000, which the opposite party is liable to pay to the complainant. Hence, the complainant filed this complaint, praying for an order to direct the opposite party to pay Rs. Seven lakhs and to pay the interest of the loan availed by the complainant for purchasing the house. It is further prayed to direct the opposite parties to pay Rs. 25,000 as compensation and Rs. 10,000 as the cost of this litigation.
Upon notice from this commission, the opposite party appeared before the commission and filed a version contending as follows:
The complaint is not sustainable under the law. The complaint does not fall under the purview of the Consumer Protection Act. The complainant is not a consumer under the Consumer Protection Act. The complaint is time-barred.
The opposite party is a mason who works with workers of similar nature to build houses. The opposite party does not have a real estate business or license.
The opposite party bought 3.24 Ares of land and built a house on it. It is not true that this was part of a real estate business. The opposite party built the house for personal use. The complainant bought the house and land, including the value of the 3.24 Ares. The house was built for the opposite party's use.
The complainant and the opposite party are acquainted. In February 2019, during the construction of the opposite party's house, the complainant's father, Rajan, approached the opposite party and expressed a desire to buy a house for his son, who had secured a job in the IT sector. He mentioned that he had some money and intended to take a loan for the rest. The opposite party borrowed some money from the complainant's father. The complainant and his father were regular visitors to the construction site and were aware of the daily progress. After completing the house, the opposite party faced financial difficulties and decided to sell the house. The complainant expressed interest, stating he would get Rs.25,00,000 as a loan and add Rs.6,00,000 owed to his father, totalling Rs.31,00,000 for the house. The opposite party agreed due to financial difficulties and sold the house and land to the complainant. There were no disputes between the complainant and his father regarding the house during this time.
The opposite party built the house for personal use, using materials and workers appropriate to the opposite party's financial status. The opposite party never had any conversation with the complainant, as alleged.
The allegation that the complainant noticed minor cracks in the walls within two to three months of occupancy and informed the opposite party, who then said it was due to the use of M-sand and could be fixed with putty and paint, is false. The allegation that the cracks have worsened over time, becoming a threat to the house, is false. The allegation about the doors being made of inferior wood and painted to appear thicker is also denied as false.
The claims that the house was built with substandard materials and a weak foundation are false. The allegations about the house being uninhabitable due to foundation issues and large cracks in the walls are denied as false. The opposite party is willing to buy back the house and land, after deducting for depreciation since the purchase in 2010.
The allegation that the opposite party's actions constituted unfair trade practice by misleading the complainant into buying the house is false. There was no deficiency in service on the part of the opposite party. Therefore, the opposite party has no liability towards the complainant.
The complainant filed proof affidavit in lieu of chief examination and marked exhibits A1 to A6. The report of the expert commissioner is marked as C1. The opposite party filed proof affidavit in lieu of chief examination. There is no documentary evidence from the side of the opposite party.
We would like to consider the following points in evaluating the complaint, version, and the evidence on record.
- Is the complaint maintainable before this commission or not?
- Whether the complainant had succeeded to prove deficiency in service or unfair trade practice on the part of the opposite parties?
- If so, what are the reliefs and costs?
Point No. 1
There is no dispute on the fact that on 12-7- 2019, the complainant had purchased 3 Ares, 24 square meters of property, and the residential building therein from the opposite party as per sale deed number 1020 /1/ 90 of Erumeli SRO for an amount of Rs.33,00,000.
The complaint was resisted by the opposite parties, contending that the complainant is not a consumer and that the opposite party is not a service provider under the proportions of the Consumer Protection Act. 2019.
Exhibit A1 is the sale deed Number 1020/ 1/90 of Erumely SRO, which the opposite party executed in favour of the complainant. Exhibit A2 is another sale deed executed by the opposite party in the name of Mr Sibi Koshy. It is proved by exhibit A5, which is the sale deed 931/1/20 of Erumely Sub registry, that the opposite party had sold 2.8 Ares of property and the residential building therein to one Jyothish Rajendra on 9-9-2020.
It is further proved by exhibit A6 sale deed that the opposite party had sold 2 acres 83 square meters of property and the residential building therein to one Mr. Jayaprakash on 28-3- 2017. Therefore, we are of the opinion that the opposite party is engaged in the business of construction and sale of the residential building.
Section 2(7) of the Consumer Protection Act 2019 defines a consumer as any person who buys goods or services in exchange for consideration and utilizes such goods and services for personal use and the purpose of resale or commercial use. In the explanation of the definition of consumer, it has been distinctly stated that the terms 'buys any goods' and 'hires or avails any services' also include all online transactions conducted through electronic means or direct selling or, teleshopping or multi-level marketing.
Section 2 (42) Defines "service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service
In Aloke Anand (s) M/S Ireo Pvt Ltd &Ors, (Civil Appeal No 268 of 2022)
The National Consumer Disputes Redressal Commission has held that a home buyer can be defined as a consumer under Section 2(1)(d) of The Consumer Protection Act, 1986, unless he intervenes in the act of buying or selling the properties or purchase such property for this specific purpose. Thus, the complainant is a consumer under the provisions of the Consumer Protection Act, and the complaint is maintainable before this commission. Point No.1 is answered accordingly.
POINT NOS. 2&3
The specific case of the complainant is that after three months from the date of purchase, there are certain cracks seen on the walls of the building, termites attack on the door frames, and the doors were also constructed with low-quality wood. The complainant further states that the foundation was not constructed correctly. Thereby, the building has settled down. According to the complainant, the construction was carried out using substandard materials.
In order to prove his case, the complainant applied for an appointment of an expert commissioner. Accordingly, this commission appointed Tariq VQ as an expert commissioner to inspect the subject matter building. The report of the expert commissioner is marked as exhibit C1. In C1, the expert commissioner reported that there were cracks on almost all the walls of the building. He further noted that the lintel beam between the work area and kitchen has some significant defects. It is further reported by the Expert Commissioner that the cracks in the wall have appeared because of weaknesses in the foundation at the back of the house. The soil was improperly filled on an inclined surface without conducting a soil test or making any strength improvements. Isolated footings and beams were provided in an unscientific manner. When it rained, the foundation settled downward. To address the wall cracks, the foundation needs to be strengthened.
The door frames in the house have been eaten by termites and deteriorated. The frames of three bedroom doors and two kitchen doors need immediate repair. The deterioration is due to the poor quality of the wood and the lack of anti-termite treatment.
On the evaluation of the evidence, we are of the opinion that the opposite party committed a deficiency in service and unfair trade practice by selling a residential building that had been constructed with low-quality materials, which was against the assurance given by him to the complainant. It is further evolved from the available evidence and the report of the expert commission that due to the substandard materials and the improper and unskilled construction there are many defects and damages, caused to the house, which was sold by the opposite party to the complainant, who made the complainant believe that the house was constructed by using high-quality materials and laboring by professional workers.
The complainant bought the house from the opposite party using hard-earned money with the hope that the house would be of good quality and free from defects. However, when it is discovered that the house was constructed using substandard materials and has construction defects, contrary to what was promised, it causes severe mental agony and financial hardships to the complainant. By selling a house built with low-quality materials and defects, the opposite party must bear the costs necessary to rectify the house's defects.
According to the expert commissioner, the cost to replace five door frames in the house is Rs.44,000, at a rate of Rs.8,500 per frame. Strengthening the foundation by removing soil to the same depth as the previous footing along the length of the rear wall and providing permanent vertical support will cost Rs.2,00,000. Repairing wall cracks by removing the plaster and replastering will cost Rs.35,000. In total, an estimated Rs.2,79,000 is required to address the defects of the house.
Considering the nature and circumstances of the case and keeping in mind the salutary principles of the Consumer Production Act, we allow the complaint in part and pass the following order;
We hereby direct the opposite party to pay Rs.2,79,000/- to the complainant.
We hereby direct the opposite party to pay 25,000/- as compensation to the complainant for the deficiency in service and unfair trade practice on the part of the opposite party along with the Rs.3500/- as the cost of this litigation.
The order shall be complied with within 30 days from the date of receipt of the copy of this order, failing which the award amounts will carry interest @9% from the date of this order till realization.
Pronounced in the Open Commission on this the 28th day of June, 2024
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
APPENDIX :
Exhibits from the side of the Complainant :
A1 - Sale deed Number 1020/ 1/19
A2 - Tax receipt dtd. 08/08/2019
A3 - Non objection Letter dtd. 23/07/2019
A4 - Sale deed Number 279/ 1/19
A5 - Sale deed dtd. 931/I/20
A6 - Sale deed dtd. 510/2017
Exhibits from the side of Opposite parties :
Nil
Exhibit from the side of Commission :
C1 : Copy issued Thariq. V.K Expert Commissioner
By Order,
ASSISTANT REGISTRAR
