State Consumer Disputes Redressal Commission
Dr. Jatin Ishwarbhai Patel, vs M/S. Kayjay Construction Co. Pvt. Ltd., on 4 June, 2013
THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA C.C. No. 07/2011 1. Dr. Jatin Ishwarbhai Patel, aged 52 years, son of Ishwarbhai Patel, married and his wife 2. Mrs. Sandya Jatin Patel, aged 47 years, both from India at present at 40, Allington Road, Hendon, London both represented herein through their attorney Mr. Nandu Asrani, son of Purushottam Asrani, married, aged 49 years, businessman, resident of Spencer Cross Road, Bloomsburry Apts, Frazer Town, Bangalore 560 042 ..Complainants V/s. 1. M/s. Kayjay Construction Co. Pvt. Ltd., a limited Company, incorporated under Indian Companies Act, 1956, having its registered office at No. 5, National House, 27, Raghunath Dadajee Street, Fort, Mumbai 400 001. 2. Mr. Haresh Dayaram Kotwani, Director of Opposite Party No. 1, 3. Mr. Kush Haresh Kotwani, Director of Opposite Party No. 1, both major of age, businessmen, with address at B-1, 4/49, Joia do Mar, Porba waddo, Calangute, Bardez, Goa O.Ps C.C. No. 08/2011 Mr. Chandrakant Khakhria, Aged 74 years, son of Mr. Gordhandas Khakhria, resident of Kenya-mbuyuni Street, Gokul Apts, 3rd floor, Kizingo, Mombassa, represented herein through his attorney Mr. Nandu Asrani, son of Purushottam Asrani, married aged 49 years, businessman, resident of Spencer Cross Road, Bloomsbury Apts, Frazer Town, Bangalore 560 042 ..Complainants V/s. 1. M/s. Kayjay Construction Co. Pvt. Ltd., a limited Company, incorporated under Indian Companies Act, 1956, having its registered office at No. 5, National House, 27, Raghunath Dadajee Street, Fort, Mumbai 400 001. 2. Mr. Haresh Dayaram Kotwani, Director of Opposite Party No. 1, 3. Mr. Kush Haresh Kotwani, Director of Opposite Party No. 1, both major of age, businessmen, with address at B-1, 4/49, Joia do Mar, Porba waddo, Calangute, Bardez, Goa O.Ps Complainants are represented by Adv. Shri. V. Daniel. O.Ps. are represented by Adv. Shri. C.F. DSouza. Coram: Shri Justice N. A. Britto, President Smt. Vidhya R. Gurav, Member Dated: 04/06/2013 ORDER
[Per Shri. N. A. Britto, President] These complaints can be conveniently disposed off by this common order. The facts are common; so also the law applicable thereto.
2. By these complaints, the complainants seek an order from this Commission directing the O.Ps to complete the suit apartments, namely C-23 and A-22 respectively and deliver their possession to the complainants with occupancy certificates and electricity connections and to execute sale deeds with proportionate undivided right in the land/project of Joia Do Mar which is constructed in the property bearing survey no. 362/12 of village Calangute and for damages for delay in delivery of possession of the said apartments by way of interest at the rate of 20% p.a. on the amounts paid and any other further reliefs that this Commission may deemed fit and proper.
3. The complainants are foreign nationals but hold PIO cards.
O.P. No. 1 is a Company incorporated under the Indian Companies At, 1956 of which O.P. No. 2 Shri. Haresh D. Kotwani is the Managing Director and his son O.P. No. 3 Shri. Kush H. Kotwani is a Director. One Shri. Nandu P. Asrani is related to them and belongs to the same sindhi community through whom the complainants have now filed these complaints.
4. By allotment letters dated 13/12/06 the O.Ps. agreed to construct, allot and sell to the complainants the said two apartments in the said building complex known as Joia Do Mar constructed in land admeasuring 3325 sq.mtrs in survey No. 362/12 of Calangute. According to the complainants, the O.Ps had agreed to construct and allot the said flats in the said complex alongwith proportionate share in land and with common amenities like swimming pool, parking lot, etc. for a total consideration of Rs. 34,19,291/- and Rs. 25,05,083/- respectively. The other details can be seen from the table below:
No. of C.C. No. of flat/villa Dates of Letter of allotment Price Dates of receipt Dates of notices Dates of Powers of Attorney Dates of Complaints CC 07/11 C 23 13/12/06 Rs. 34,19,292/-
Rs. 10,25,788/-
paid earlier 19/03/09 Rs.34,19,292/-
15/05/10 16/05/11 01/08/11 CC 08/11 A 22 13/12/06 Rs. 25,05,883/-
Rs. 7,51,765/-
paid earlier 19/03/09 Rs. 25,05,883/-
15/05/10 29/11/10 01/08/11 4.1.
The complainants claim that they had paid the said amounts in advance in various installments in full and final settlement. The complainants also say that they were required to pay to the O.Ps an amount of Rs. 98,000/- towards maintenance, Rs. 40,000/- towards electricity charges and Rs. 25,000/- for legal fees which have been paid.
Complainant Dr. Patel claims that he has also paid Rs. 1.4 lacs for stamp duty and registration charges. The complainants claim that the O.Ps did not issue any receipts for these payments. The complainants say that although no time limit was mentioned in the allotment letters, the O.Ps were required to deliver the possession of the said apartments to the complainants within a period of 12 months from the date of the allotment letters but the O.Ps neglected to complete the apartments and deliver their possession to the complainants. The complainants also say that the O.Ps forwarded a draft sale deed to the complainants with various restrictions and excluding proportionate share in land to the said apartments which otherwise was not agreed nor stipulated in the said allotment letters.
They say that they addressed a legal notices dated 15/05/10 to the O.Ps to complete and deliver the possession of the said apartments and to execute sale deeds within 15 days which notices the O.Ps received but did not reply nor comply.
4.2.
The complainants have also stated that the O.Ps had represented that Joia Do Mar building complex would be a residential complex which is clear from the brochure but the O.Ps have now started using major part of the said complex as a holiday resort without obtaining permissions/licences/NOCs from the concerned authorities.
5. The O.Ps contested the claim of the complainants and stated that their project was complete in all respects on 20/02/08 as can be seen from the occupancy certificate issued by the concerned authorities. The O.Ps say that the possession of the apartments was handed over to the attorney of the complainants, the said Asrani, in the month of June 2008, in good faith, without receiving full payment and that the payments received through various installments were delayed and not as per the dates mentioned in the said allotment letters. The O.Ps say that they sent the draft copy of the sale deed to the said attorney for registration of the said apartments and that they are willing to complete the sale deed but after receiving all dues which the O.Ps are entitled to including further maintenance charges from the year 2011 to 2014 and other charges alongwith interest thereon and as such there has been no deficiency in service on their part, and the complainants have filed false complaints with a view to disrepute the O.Ps. The O.Ps say that at no stage they had agreed to sell proportionate share in the land to the complainants and the allegation in that regard is false and misleading. The O.Ps claim that they are entitled to interest at the rate of 18% because of delayed payment of all installments and the last installment which was due on 20/09/07 was paid only on 15/12/08 after a delay of almost 15 months.
6. The complainants have filed applications for amendment and both parties have sought leave to produce additional documents. The applications for amendment is in conformity with the pleadings. We deem it fit and proper to allow the applications for amendment filed by the complainants and grant leave to both the parties to produce additional documents. Let amendment to the complaint/s be carried out forthwith.
7. The case of the O.Ps.
that possession of the apartments was handed over to the complainants through Shri. Asrani, has been rejected by virtue of this Commissions order dated 15/02/13 against which revision No. 791/2013 was filed before the National Commission and then was dismissed as withdrawn. The said prima facie finding can now be confirmed on the basis of the evidence on affidavit given by the said Shri. Asrani, now the attorney of the complainants, and which is further corroborated by email letters dated 03/10/2008, 19/11/08 and 13/12/10, as stated by him, more particularly in para 14 of his affidavit-in-evidence dated 28/02/13.
8. The O.Ps. in these cases had written letters to the complainants dated 12/11/06 acknowledging part payment of Rs. 1 lac each, and if that be so, we fail to understand as to why the O.Ps. did not write directly to the complainants letters dated 19/11/08 stating that the project was complete and ready for possession and calling upon them to make final payments. The main bone of contention between the parties appears to be that the O.Ps. are not willing to convey to the complainants proportionate undivided share in the property while executing the sale deeds though they have no objection to execute the same. The contention of the O.Ps. is that conveyance of proportionate undivided right was not agreed to between the parties. The submission of lr. advocate of the O.Ps. is that the letters of allotment dated 13/12/06 represent the agreement between the parties where such a stipulation was not contemplated.
8.1.
It may be so. But the question is under which agreement did the O.P. accept Rs. 10,25,788/- and 7,51,765/- from the respective complainants? It is not the case of the O.Ps. that in the said letters of allotment dated 13/12/06 they had conveyed to the complainants that the allotment of the said apartments would be without the allotment of corresponding proportionate right in the property. Shri. Asrani in his letter dated 27/02/10 had conveyed to O.P. No. 2 that all developers in Goa convey proportionate share in land alongwith the apartment and had requested him to incorporate the same in the deed of sale stating that they had bought apartments in other projects in Goa and in all the agreements proportionate right in land was conveyed.
8.2.
Lr. advocate on behalf of the complainants, has placed reliance on the decision of Jharkhand High Court dated 03/03/08 reported in 2008 (2) JCR 73 in the case of Anil C. Biswas vs. State of Jharkhand & ors. wherein it is stated that: in the case of sale of flat, the proportionate share of the land with common area to be transferred.
8.3.
We are unable to accept the submissions made by the lr. adv. on behalf of the O.P. Unless proportionate undivided right in land is conveyed, to the complainants the complainants purchase of flats or apartments will be incomplete and will not have much commercial value. Shri. Asrani, as a broker should know better that all developers convey proportionate share in land while executing the sale deed.
That is business practice. That apart it is also a well known practice amongst all the developers, in case of purchase of flats, to convey undivided proportionate share in the land and that can be taken as an implied agreement between the parties whenever the flats or apartments are purchased. The O.Ps do not say that there is no such practice. In our view, the complainants would be entitled to proportionate undivided right in the land of the said project wherein they have been allotted the said apartments or flats, to be conveyed to them. Selling flats without proportionate undivided right in the property will also amount to unfair trade practice. It is to be noted that the complainants are not parties to the said allotment letters which have been unilaterally issued by the O.Ps.
9. The complainants in para 6 of their respective complaints stated that the complainants were required to pay to the O.Ps an amount of Rs. 98,000/- towards the maintenance, Rs. 40,000/- towards electricity charges and deposits and Rs. 25,000/- for legal fees which have been paid but the O.Ps did not issue any receipts for the said payments. In answer to the said avernments, the O.Ps claimed interest on delayed payments of installments and further maintenance charges from June 2011 to May 2014.
10. Admittedly, the O.Ps issued receipts to the complainants dated 19/03/09 for the entire amount due and paid by the complainants without any murmur or demur or without raising the issue of delayed payment of instalments. The O.Ps received the legal notices from the complainants but chose not to reply to the same or raise a debit note in answer to the same. In terms of letters of allotment, the complainants were required to pay maintenance charges for three years in the sum of Rs. 98,000/- each at the time of possession. No developer would have parted with possession unless the said charges were paid and in fact they have been paid by the complainants. The O.Ps have stated that the apartments were ready and complete more than three years back and therefore they are not liable to maintain the same, and, if that be so, we fail to understand as to how the O.Ps can claim maintenance charges from June 2011 to May 2014. The complainants have stated that the entire project (including the apartment of complainants) is used as a hotel resort and for that reason the possession is not handed over to them. There appears to be truth in the said allegation. The O.Ps cannot make use of the apartments and expect the complainants to pay for their maintenance. The O.Ps would be entited to payment of maintenance charges only for three years in the sum of Rs. 98,000/- as agreed upon in terms of letters of allotment dated 13/12/06 and other payments stipulated therein.
11. The O.Ps., rightly or wrongly, obtained completion certificate on or about 20/02/08 and it would not be in the interest of the complainants to question the validity or legality of the said completion certificate. It is only by letter dated 19/11/08 that the O.Ps. brought to the notice of the said Asrani that the project was ready for possession. This letter could have been written by the O.Ps. to the complainants with whom they had corresponded earlier. By another letter dated 03/10/08, the O.P. conveyed to the said Shri. Asrani about the balance amounts which were required to be paid. This letter also could have been addressed to the complainants.
The said balance amounts have already been paid as stated by the complainants.
12. The apartments in question were sold to the complainants by the O.P. through the said Shri. Asrani on commission basis. The said Shri. Asrani belongs to the same sindhi community to which O.P. no. 2 and his son O.P. No. 3 belong to and Shri. Asrani is also related to them. In para 5 of the affidavit-in-evidence the said Shri. Asrani has referred to himself as power of attorney holder of the complainants but in para 13 of the same affidavit he has categorically stated that in the year 2008 he was not the power of attorney of the complainants or for that matter of any of the purchasers in the said project of the O.Ps. The O.Ps on affidavit do not say that Shri. Asrani is the attorney of the complainants but they make use of para 5 of affidavit to say that Shri. Asrani is the attorney of the complainants to whom, interalia, possession of the apartments was handed over, etc. 12.1.
The written version filed by the Managing Director of the O.P. Shri. Haresh Kotwani would show that the said Asrani received brokerage from the O.Ps. which was paid to him in the names of his family members, as demanded by him. If at all any facilities were given to him, these must have been the said facilities given to him. The O.Ps would not have given any facilities to the complainants because the broker was related to the O.Ps. The written version would further show that the said Asrani was representing the O.P. as booking agent on commission as can be seen on the basis of invoices. It is nobodys case that the said Asrani was paid any commission by any of the complainants.
We do not know why the complainants have not corrected the avernments of para 5 of the affidavit of the said Asrani, although they had sufficient time to do so. The fact that the said Asrani sold various apartments/villas to the complainants on commission received from the O.P. would make him the agent or attorney of the O.P. and not of the complainants. On the basis of averments of para 13 of the affidavit of Shri. Asrani (in C.C. No. 7/11) duly corroborated by the dates of powers of attorney on record, and the averments in para 1 of written version (in C.C. No. 16/12) and in the absence of any affidavit in that respect from the O.Ps, it can be safely concluded that Shri. Asrani acted as an agent or attorney of the O.P. in selling the apartments or villas to the complainants.
There is no dispute that the payments were made by the complainants directly to the O.P.s. Shri. Asrani has become the attorney of the complainants only from the date of execution of power of attorney in his favour. Earleir he was a broker or a agent of the O.Ps.
13. The complainants have stated that the O.Ps represented that the project would be in a residential complex which is clear from the brochure but the O.Ps have now started using major part of the said project as a hotel/resort after obtaining permissions or licences from the concerned authorities and have advertised the same on the internet. The complainants say that the conversion sanad was obtained for a residential area and the same was taken later in point of time then the occupancy certificate. The answer of the O.P. to this is that they did not represent that the building complex would be residential complex. O.Ps say that they are the lawful and exclusive owners of the said property and have constructed many apartments at their own cost and are entitled to use the same exclusively in any lawful manner without any objection from the complainants.
13.1.
The brochure as well as the conversion sanad show that the project is residential. The O.P. contends that the brochure is not of this project. If that be so, it was their duty to have produced the brochure of this project. They have not done so. Adverse inference needs to be drawn against them.
13.2.
The complainants therefore would be entitled to the facilities as mentioned in the brochure as well as the letter of allotment without any further payments. Not providing the same would amount to an unfair trade practice. The complainants therefore would be entitled to enjoy the facilities of a swimming pool and health club without any further payments as promised and as set out in the brochure. That some purchasers have executed the sale deeds as per draft submitted by the O.Ps. does not mean that the complainants would also be required to agree to the same. The complainants are entitled to proportionate undivided share in the property of survey No. 362/12 wherein their apartments and buildings stand and such a right needs to be conveyed to them at the time of execution of sale deed.
14. Complainants have not been able to point out which of the clauses of the draft sale deed are onerous or restrict the rights agreed to be conferred on them. We also have not been able to find any. If at all the sale deeds have remained without being executed it is due to the conduct of the O.Ps. in their refusal to convey to the complainants the proportionate undivided right in the land. The complainants have not been given possession of the apartments nor a sale deed has been executed in their favour. To make matter worse the complainants have been compelled to have their apartments in a project which is commercially exploited. For all this the complainants are certainly required to be compensated.
15. On behalf of the O.Ps, a faint attempt has been made to say that the complainants are not consumers as they have obtained the apartments for commercial purpose and to support this agreement reliance is placed on two emails sent by the said Asrani. The first email letter is dated 28/02/08 and is written by him to one Victor Albuquerque, Managing Director of Alcon Victor Group. The other was written by the said Asrani to O.P. No. 2.
In the first letter, the project is introduced to the said Victor Albuquerque stating that the complex is of apartment blocks and villas with pool; and it is mentioned that they wished to run the same i.e. three blocks and a villa total 60 units rooms and suites as a service apartment hotel; and that buyers of other apartments in other blocks will also give their apartments for rent and management so that the total could be 80 plus units. By the second letter the said Asrani informed O.P. No. 2 that the rates quoted by one Mr. Lutria of Sun City Resorts were low. In this regard it must be observed that at the time when the said Shri. Asrani wrote the said letters to the said Victor Albuquerque or O.P. No. 2, the said Asrani did not hold any power of attorney on behalf of the complainants. Secondly, it is not the case of the O.Ps. that the complainants were the owners of the three blocks and a villa total 60 units which they wanted to run as a serviced apartments hotel. In our view, the said letters, by no stretch of imagination can be said to have been written at the behest of the complainants, and if at all they were written, they were written by the said Asrani on behalf of himself as a broker or on behalf of the O.P. Company since the second letter is addressed to its Managing Director. A conjoint reading of both the letter shows that it is they and not the complainants who were interested in running the residential units as a resort. Moreover, the O.Ps. have not produced any communication from the complainants written either to the O.Ps. or for that matter to the said Asrani to say that the complainants were interested in giving the apartments, booked by them, on rent and management. On facts of this case, we are of the view that the complainants are consumers and are entitled to invoke the jurisdiction of this Commission.
16. The complainants have claimed that they were promised to deliver possession of the flats within a period of 12 months from the date of the allotment letters. The O.Ps claim that the apartments were ready in all respects on or about 13/03/08 when they obtained the occupancy certificate but the fact remains that till date neither the possession has been handed over to the complainants nor a sale deed has been executed in their favour. In the absence of any stipulation in the allotment letters, as regards the date of possession, we are inclined to believe that possession was to be given within one year from 13/12/06. The O.Ps did not inform the complainants to take possession, though a letter dated 07/05/08 was addressed on behalf of the O.P. to the said Asrani informing that phase-I consisting of A,B & C blocks and K,L, G & H villas were completed and were ready for possession and the house tax was paid for the year 2007-08 on behalf of all the clients and that the testing of the swimming pool and completion of walkways was in progress. Admittedly, at the relevant time, the said Shri. Asrani was commission agent of the O.P. and one does not know whether the said message was conveyed by the said Shri. Asrani to the complainants, but the fact remains that the payments called for by virtue of the said letter have already been paid by the complainants to the O.Ps. Considering the facts of the case we are of the view that the complainants ought to be compensated for delay in handing over possession of the apartments and execution of the sale deeds atleast from the date legal notices were sent on their behalf to the O.Ps and also for not disclosing to the complainants that the apartments booked by them would be in a commercial project.
17. The Apex Court in Lucknow Development Authority (AIR 1994 SC 787) has held that:
It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant form the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries.
18. Again the Apex Court in Ghaziabad Development Authority, AIR 2004 SC 2141, has held that:
The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law.
19. In view of the above discussion, we allow the complaints and direct the O.Ps to deliver the possession of the apartments to the respective complainants alongwith occupancy certificate, electricity connection, water connection and also to execute the sale deeds in respect of the said apartments alongwith proportionate undivided right in the said property surveyed under No. 362/12, the O.Ps shall pay to the complainants compensation calculated at 18% yearly interest on Rs. 34,19,292/- and Rs. 25,05,883/- respectively, from 15/05/10 till the date the possession is handed over and sale deeds are executed in favour of complainants. The O.Ps shall pay to each of the complainants additional compensation of Rs. 2 lacs as the complainants are being compelled to occupy residential premises in a commercial complex. Each of the complainants would also be entitled to Rs. one lac of compensation for mental agony, oppression. Each of the complainants shall also be paid costs of this complaint of Rs. 5000/-. This order shall be complied with within a period of 30 days failing which the amount of Rs. 3 lacs five thousand, ordered to be paid, shall carry interest at the rate of 9% untill it is paid.
[ Smt. Vidhya R. Gurav ] [ Justice N. A. Britto ] Member President