DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

 

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                                  .…. PRESIDENT

                 THIRU. J.JAYASHANKAR, B.A, B.L.                                                                            ..… MEMBER-I

                 THIRU.P.MURUGAN,M.Com.,ICWA (Inter),B.L.,                                                    ....MEMBER-II

CC. No.100/2022

THIS MONDAY, THE 09th DAY OF JANUARY 2023

 

Mr.R.Sathyanarayana Murthy,

Flat No.1031, 

TVH Lumbini Square, 127-A, Brick Kiln Road,

Purasaiwalkam, Chennai 600 007.                                                ……Complainant.

                                                                            //Vs//

The President,

TVH Lumbini Square Owners Association,

Ground Floor, 2nd Block , 127-A, Brick Kiln Road,

Purasaiwalkam, Chennai 600 007.                                               …..opposite party. 

 

Counsel for the complainant                                        :   party in person.

Counsel for the opposite party                                    : Mr.Anil Relwani, Advocate. 

 

This complaint is coming before us on various dates and finally on 05.12.2022 in the presence of  complainant who appeared in person and upon perusing the documents and evidences produced by both parties this Commission delivered the following: 

ORDER

PRONOUNCED BY TMT.Dr.S.M LATHA MAHESWARI, PRESIDENT.

 

This complaint has been filed by the complainant u/s 12 of the Consumer Protection Act, 1986 alleging deficiency in service against the opposite party/Apartment Owner Association alleging deficiency in service on the part of opposite party in not rendering proper accounts along with a prayer to direct the opposite party to pay a sum of Rs.2,00,000/- towards compensation for the mental agony caused to the complainant due to the deficiency in service on the part of the opposite party along with cost of the proceedings to the complainant.

Sum and substance of the complaint:-

 

It was the case of the complainant that the opposite party/the society registered on 21.09.2011 with Registrar of Societies Chennai with registration No.204/2011, under Tamil Nadu Societies Registration Act, 1975, to act as on association of TVH Lumbini Square Complex owners of 435 apartments. The opposite party took over the maintenance of the complex with effect from 01.02.2014 and started collecting maintenance charges from the residents and the society bylaw 7.1 applies for the collection of maintenance charges.  The complainant was a regular payer of the maintenance charges.  The opposite party served a notice on 22.07.2017 to its members to conduct Annual General Body meeting on 13.08.2017. Agenda for consideration by the general body, among other issue includes increase of maintenance charges from 2.75 to Rs.3.00 and approval of annual expenditure budget for the next financial year 2017-18.  Though requested by the complainant, opposite party did not provide any details of expenditure made done earlier and also did not provide any details of expenditure to be incurred under each head, like salaries, wages, electricity charges, purchase of diesel, purchase of water for usage by residents, amounts payable to maintenance contractor, purchase of consumables etc.  The complainant wrote a letter to the opposite party on 22.07.2017 listing out the violation, though requested to inform about the owner of office complex who are members of the association and about payment of share of maintenance charges no reply was given by the opposite party.  Details of lawfully assessed charges or actual expenses were not made available to the members.  Moreover opposite party allows 4% discount to those members who pay yearly fixed charges in advance.  This was mentioned in all invoices raised by the opposite party while raising quarterly demand.  Subsequently this was reduced to 3%.  When a statutory provision stipulate for recovery of actual expenses, opposite party recovers them on fixed rate basis and allows discount for some people which is not in accordance with the statutory provisions and can be termed as unfair practice.  Opposite party did not provide the reasons for allowing such discount even after repeated requests.  This adequately establishes that the opposite party runs the association on arbitrary lines violating all statutory provisions, to harass its members. Income tax paid for the financial year 2017 was Rs.14,84,131/- as against Rs.85,888/- for the previous year.  For the year ending 31.03.2016 actual tax was not paid and hence the income tax authorities levied a huge penalty and collected Rs.14,20,892/- during the year 2017.  There is no proper explanation in the accounts submitted to the members.  Though requested several times the opposite party did not provide the details of penalty imposed by the income tax authorities. The opposite party issued another notice dated 02.06.2018 for holding a general body meeting to be held on 22.07.2018.  This notice also includes increase of maintenance charges from Rs.3.00 to Rs.3.50 and reduction of cash discount to 3% from 4% for annual payment by residents and approval of annual expenditure budget for the next financial year 2018-2019.  The opposite party once again choose not to provide further details except making a mention of these points in the agenda.  The minutes circulated by the opposite party after conclusion of the meeting did not contain any break up details of the actual expenses incurred.  Detail letter was sent to opposite party on 02.08.2018 and on 06.09.2018 which was not replied at all. Though the complainant was in regular payment of all the charges the opposite party disclosed the name of the complainant as defaulter to harass the the complainant.  Thus it was submitted that the following deficiency in service was committed by the opposite party;

Maintenance charges not collected accordingly to the size of the apartment;

Without apportioning the actual expenses the maintenance charges are collected on fixed rate basis;

Not providing details as to the collection of charges from all members;

Discount was given for members who pay annual charges.  There is no statutory provision to allow such discount;

Annual expenditure budget details are not placed mentioning the members;

Proper income tax details are not filed before Income Tax Authorities resulting in imposition of huge penalty;

Account was audited by an auditor who was not appointed by the General Body Meeting. Thus aggrieved the present complaint was filed by complainant for the following reliefs as mentioned below;

To direct the opposite party to pay a sum of Rs.2,00,000/- towards compensation for the mental agony caused to the complainant due to the deficiency in service on the part of the opposite party along with cost of the proceedings to the complainant.

 Defence of the opposite party:

The opposite party filed version denying the complaint allegation contending inter alia that the complaint itself is not maintainable as the complainant himself is a member of the association.  Further the Consumer Commission cannot interfere with the functioning of the opposite party’s association and the opposite party Association functions as per its bylaws and all the members including the complainant were bound by the bylaws of the opposite party.  Further the opposite party collects the maintenance charges from its members as per its bylaws and the maintenance charges decided by the opposite party was binding on all of its members.  The opposite party does not engage in any trade any makes any profit for itself.  It was a voluntary association.  In case the complainant has any grievances, he could raise the same in various meetings conducted by the opposite party and the complainant cannot come to consumer commission and complain about the levying of enhanced maintenance.  Thus stating that the complainant is not a consumer and the opposite party is not a service provider, the opposite party sought for the dismissal of the complaint. 

On the side of complainant proof affidavit was filed and documents Ex.A1 to Ex.A35 were marked on their side.  Though the opposite party had filed written version they did not come forward to file the proof affidavit and also failed to file any documents and hence the evidence on their side was closed on 23.09.2022. Later they did not appear for filing Proof affidavit and written arguments and adduce oral arguments.

 Points for consideration:-

Whether the alleged deficiency in service against the opposite party’s association has been successfully proved by the complainant by admissible evidence?

If so to what reliefs the complainant is entitled?

Point No.1

On the side of the complainant following documents were filed in support of his allegations; 

Certificate of registration dated 21.09.2011 was marked as Ex.A1;

Registration with change of name dated 29.10.2013 was marked as Ex.A2;

Memorandum to byelaws dated 19.09.2011 was marked as Ex.A3;

Byelaws page 17 & 18 clause 3.8 (i) was marked as Ex.A4;

Byelaws page 32 clause 7.1 maintenance charges was marked as Ex.A5; 

Payment of membership feet Rs.1000/- dated 29.11.2011 was marked as Ex.A6;

Opposite party communication for taking over maintenance of the complex was marked as Ex.A7;

Show cause notice issued by District Registrar of Societies dated 30.06.2017 was marked as Ex.A8;

English translation of show cause notice was marked as Ex.A9;

General body notice with agenda dated 22.07.2017 was marked as Ex.A10;

Auditors report and balance sheet & receipts and payment account for year ending 31.03.2017 was marked as Ex.A11;

Letters sent to opposite party were marked as Ex.A12 to Ex.A14;

Minutes of general body meeting held on 13.08.2017 was marked as Ex.A15;

Letter sent to opposite party dated 07.10.2017 was marked as Ex.A16;

Reply from opposite party was marked as Ex.A17;

Letters sent to opposite party were marked as Ex.A18 to Ex.A20;

Reply from the opposite party dated 26.04.2018 was marked as Ex.A21;

Letter sent to opposite party dated 03.05.2018 was marked as Ex.A22;

Invoice raised for Rs.18032/- dated 01.01.2018 was marked as Ex.A23;

Invoice raised for Rs.15282/- dated 01.04.2018 was marked as Ex.A24;

Letter sent to opposite party dated 30.04.2018 was marked as Ex.A25;

General Body Meeting notice and Agenda dated 29.06.2018 was marked as Ex.A26;

Auditors report, Balance sheet and receipts and payment account for year ending 31.03.2018 dated 21.06.2018 was marked as Ex.A27;

Letter to opposite party dated 02.08.2018 was marked as Ex.A28;

Minutes of general body meeting held on 22.07.2018 was marked as Ex.A29;

Letter delivered to opposite party dated 06.09.2018 was marked as Ex.A30;

Letter sent to opposite party dated 07.10.2018 was marked as Ex.A31;

Defaulters list displayed on notice board dated 05.02.2019 was marked as Ex.A32;

Letter sent to opposite party dated 04.03.2019 was marked as Ex.A33;

Statement of maintenance charges dated 30.04.2019 was marked as Ex.A34;

List of outstanding (default) displayed dated 06.05.2019 was marked as Ex.A35;

Heard the oral arguments adduced by the party in person/complainant and perused the written arguments filed by him.  

The crux of the arguments raised by the complainant is that the opposite party’s association having the responsibility of administering the apartment approving the annual budget, establishing and collecting all monthly assessments and arranging for management of the apartment in an efficient manner. However, the opposite party failed to provide the details as to the expenditure made, the amounts collected from the members, the amounts approved under each head of the expenditure. The opposite party was also collecting the maintenance charges at fixed rate basis in violation of the statuary provision and also had increased the maintenance charges from Rs.2.75 to 3.00.  It was further alleged that the opposite party was not maintaining the Book of the Accounts properly and not audited by an Auditor appointed by the Registered Society.  Thus he sought for the complaint to be allowed as prayed for.

On appreciation of the available pleadings and materials we could see that the main submission made by the opposite party was that the complainant being a member of the association was not a consumer of the association and there is no customer and service provider relationship between them and hence the complaint is not maintainable before this commission.  The said issue was taken already as preliminary issue and the maintainability of the complaint had been decided vide RP.No.12/2016 wherein the Appellate Authority had rejected the contention of the opposite party that the complainant is not a consumer and the complaint is not maintainable.  It has been confirmed that the order passed by the District Commission that the Association as the sole custodian and to administer all the common areas and facilities and services at the expenses of the members, was certainly deemed to be a service provider and hence the complainant was a consumer.  Thus the only objection made by the opposite party that the complaint is not maintainable has to be brushed aside as already decided.

Further the opposite party had not come forward to file any proof affidavit and also had not denied any of the allegations made by the complainant.  In such circumstances on perusal of the documents filed by the complainant we are of the view that the opposite party had failed to answer the queries raised by the complainant. The show cause notice issued by the District Registrar of societies Ex.A8 shows that the District Registrar has questioned the opposite party’s association as to why action should not be taken against the association under section 37(c) of the Society’s Registration Act for violation of the society bylaws.  The Registrar has stated various violations such as the opposite party failed to give details about the Members of the association and details of amount received from the members etc.  Thus taking into consideration of the said document we answer the point accordingly holding that the opposite party had failed to rebut or disprove the complaint allegations and hence they had committed deficiency in service in running the Association which was successfully proved by the complainant. This point is answered in favour of the complainant and as against the opposite party. 

Point No.2:

With regard to the relief to be granted to the complainant though the complainant had sought for Rs.2,00,000/- as compensation for the deficiency in service committed by opposite party.  However, we feel the same is not proper when the opposite party was an association being formed by the members and functions with the funds received from them for the administration of the residential complex. In such circumstances we direct the association to pay a nominal compensation of Rs.10,000/- to the complainant.  With respect to other reliefs sought for by the complainant as the same could not be decided without sufficient evidence, we direct the opposite party to provide proper reply to the queries raised by the complainant within a reasonable time.  Further we order Rs.2,000/- towards cost of the litigation expenses to the complainant.

In the result, the complaint is partly allowed against the opposite party directing him; 

a) To pay a sum of Rs.10,000/- (Rupees ten thousand only) towards compensation for the mental agony caused to the complainant;

b)  To pay a sum of Rs.2,000/- (Rupees two thousand only) towards litigation expenses to the complainant. 

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 09th day of January 2023.

 

   Sd/-                                                     Sd/-                                                         Sd/- 

 MEMBER-II                                     MEMBER-I                                          PRESIDENT

 

 

List of document filed by the complainant:-

 

 

Ex.A1 21.09.2011 Certificate of Registration of Societies. Xerox

Ex.A2 29.10.2013 Certificate of Registration of change of name of society. Xerox

Ex.A3 19.09.2011 Memorandum to byelaws. Xerox

Ex.A4 ............. Byelaws page 17&18 clause 3.8(i). Xerox

Ex.A5 .............. Byelaws page 32 clause 7.1 maintenance charges. Xerox

Ex.A6 29.11.2011 Payment of membership fee Rs.1,000/- Xerox

Ex.A7 03.01.2014 Opposite party communication for taking over maintenance of the compled from 01.02.2014. Xerox

Ex.A8 30.06.2017 District Registrar of societies- show cause notice. Xerox

Ex.A9 ............. English translation of show cause notice. Xerox

Ex.A10 22.07.2017 General body notice with agenda. Xerox

Ex.A11 15.07.2017 Auditors report and balance sheet & receipts and payment account for year ending 31.03.2017. Xerox

Ex.A12 22.07.2017 Letter to opposite party. Xerox

Ex.A13 26.07.2017 Letter sent to opposite party. Xerox

Ex.A14 27.07.2017 Letter sent to opposite party. Xerox

Ex.A15 ............. Minutes of the general body meeting on 13.08.2017. Xerox

Ex.A16 07.10.2017 Letter sent to opposite party. Xerox

Ex.A17 ............. Reply from opposite party. Xerox

Ex.A18 27.10.2017 Letter sent to opposite party. Xerox

Ex.A19 04.01.2018 Letter sent to opposite party. Xerox

Ex.A20 17.04.2018 Letter sent to opposite party. Xerox

Ex.A21 26.04.2018 Reply from opposite party. Xerox

Ex.A22 03.05.2018 Letter sent to opposite party. Xerox

Ex.A23 01.01.2018 Invoice raised for Rs.18032/- Xerox

Ex.A24 01.04.2018 Invoice raised for Rs.15282/- Xerox

Ex.A25 30.04.2018 Letter sent to opposite party. Xerox

Ex.A26 29.06.2018 General body meeting notice and agenda. Xerox

Ex.A27 21.06.2018 Auditors report, Balance sheet and Receipts and payment account for year ending 31.03.2018. Xerox

Ex.A28 02.08.2018 Letter sent to opposite party. Xerox

Ex.A29 ................ Minutes of general body meeting held on 22.07.2018. Xerox

Ex.A30 06.09.2018 Letter delivered to opposite party. Xerox

Ex.A31 07.10.2018 Letter sent to opposite party. Xerox

Ex.A32 05.02.2019 Defaulers list displayed on notice board. Xerox

Ex.A33 04.03.2019 Letter sent to opposite party. Xerox

Ex.A34 30.04.2019 Statement of maintenance charges paid. Xerox

Ex.A35 06.05.2019 List of outstanding(default) displayed. Xerox

 

  Sd/-                                                       Sd/-                                                      Sd/-

MEMBER-II                                     MEMBER-I                                          PRESIDENT