State Consumer Disputes Redressal Commission
Shri Ahmed Khan Kassim Khan, vs 1. Modern Educational Trust, on 12 December, 2008
THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA Present: Smt. Sandra Vaz e Correia .. Presiding Member Smt. Caroline Collasso .. Member. Complaint No. 6/2006 Shri Ahmed Khan Kassim Khan, son of Kassim Khan, aged 60 years, Married, businessman, resident of House no.2730, Murida, Fatorda, Salcete Goa. Complainant v/s 1. Modern Educational Trust, a registered Trust constituted under the Indian Trust Act, having its registered office at UG/I, Sehra Apartments, Dr. Dada Vaidya Road, Panaji-Goa. 2. Shri Sheikh Jaffar Hussain, son of Haji Ummar Sheikh, major in age, businessman, resident of Taleigao, Ilhas, Goa. 3. Shri Iqbal Sattar Naroo, Son of Haji Abdul Sattar Naroo, major in age, businessman, Resident of Ramakant Apartment, St. Inez, Panaji-Goa. and 4. Shri Sheikh Jamaluddin, son of late Sheikh Abdullah Jamal, major in age, residing at House No.E-8, P.A. Road, Near the Church, Panaji-Goa. Opposite Parties. For the Complainant Shri F. M. Reis, Advocate. For the Opposite PartiesShri N. Costa Frias, Advocate and none present at the time of order. Dated: 12-12-2008 ORDER
[Per Smt Sandra Vaz e Correia, Presiding Member]
1. The Complainant has filed this complaint alleging deficiency in service rendered by the Opposite Party no. 1 in construction of the premises purchased by him and on account of delay in completion of the building. He seeks a direction to the Opposite Party no. 1 to rectify the defects with regard to the said premises and the building and for payment of compensation of Rs.82,83,140/-. The Opposite Party no.1 is a Trust constituted under the Indian Trust Act and the Opposite Party nos. 2, 3 & 4 are the trustees duly empowered to execute agreements of sale of premises in the said building.
2. In brief, the case of the Complainant is that he executed an agreement with the Opposite Party no. 1 represented by the Opposite Party nos. 2, 3 & 4 for construction and sale of seven shops admeasuring 185 sq. meters by an agreement dated 24-07-2003 and another two shops admeasuring 48.88 sq. meters by two agreements dated 25-12-2003; the said premises were in a multi-storied commercial building under construction in property known as Santo Agostinho at Panaji Goa. The total consideration agreed was Rs.60,00,000/-. The Complainant paid to the Opposite Party no. 1 an aggregate sum of Rs.70,53,000/- as on 25-12-2003. Though the shops proposed to be purchased under the agreement dated 24-07-2003 were agreed to be delivered by the Opposite Party no. 1 on 30-01-2004, the Opposite Party no. 1 failed and neglected to honor its commitments. Likewise, the Opposite Party no. 1 also failed to keep to its commitments in so far as the shops agreed to be purchased under the agreement dated 25-12-2003 was concerned, possession of which was also agreed to be delivered in January 2004. There was no reason or justification for delay in completion of the shops moreover in view of the Complainant observing his part of the contract on time. There was dilly dallying by the Opposite Party no. 1 in the matter of obtaining Occupancy certificate from the Municipality and this was ultimately done by the Complainant himself by moving the concerned authorities and paying their amounts. On 28-05-2004 the Opposite Party no. 1 informed the Complainant that the first four shops were already completed and enclosed a completion certificate issued by their Architect; the Complainant was also called upon to pay a sum of Rs.10,00,000/- payable at the time of completion. However, the Complainant found that the work in the said shops had not been completed and so also the building where the shops were located were also not completed. The purported completion certificate issued by the Architect was false. In view of the initiatives taken by the Complainant the Town Planning Department issued completion certificate on 08-07-2005 and the Municipal Corporation issued occupancy certificate on 15-07-2005. The Complainant spent about Rs.1,06,000/- towards payment of fees to the various authorities. The Complainant finally took possession of the said shops on 15-11-2005 though the work was not completed. The Opposite Party no. 1 issued a letter to the Complainant dated 15-11-2005 admitting that the shops were handed over in an incomplete manner and assuring that they would be completed within 15 days. However, the Opposite Party no. 1 failed and neglected to honor this commitment inspite of several requests by the Complainant.
3. The Complainant got the premises inspected by his engineer Shri Mahendra S. Kakule who inspected the premises on 20-06-2006 and submitted his report giving details of the deficient and incomplete work in the Complainants premises and in the building.
4. The Complainant addressed a notice to the Opposite Party no. 1 on 10-05-2006 inter-alia calling upon them to complete the works immediately and for payment of compensation.
5. The Complainant claimed compensation to the tune of Rs.82,83,140/- from the Opposite Party no. 1 on various counts. He also prayed for a direction to the Opposite Party no. 1 to rectify the defects and deficiencies in the construction.
6. The complaint was contested by the Opposite Party no. 1 who entered its written version. In brief it is their case that the complaint does not disclose any cause of action and that the Complainant is not a consumer as defined under the Consumer Protection Act. Execution of the agreements with the Complainant and receipt of amount of Rs.70,53,000/- was admitted. The Complainant was an active member of the Opposite Party no .1-Trust and had agreed to finance the construction and hence was allotted the premises at subsidized rates. The fact that possession of the shops was to be delivered on or before 30-01-2004 was admitted. As regards the agreement dated 25-12-2003, it was alleged that the Complainant had delayed in payment of the amount by a month from the due date. Obtaining of completion/occupancy certificate was delayed on account of two public interest petitions filed before the Bombay High Court at Goa alleging breach of various planning regulations. Likewise there was political instability in the state of Goa in January 2005 which contributed to the delay. The Complainant was well aware of the circumstances that lead to the delay in grant of occupancy certificate. Completion of the Complainants shops was also delaed on account of delay on the part of the Complainant in selecting his flooring tiles; he had also not intimated the Opposite Party no. 1 the location of the electricity meters and electricity points in his shops so that the work of electrification could be completed. The Opposite Party nos. 2 to 4 are mere trustees of the Opposite Party no. 1 rendering services on honorary basis and they do not have any monetary or business interest in any of the properties of the Trust.
7. The Complainant was a financier of the Trust and hence it could not be said that he had availed any services from the Opposite Party no. 1. The Complainants claims that he obtained the Completion and occupancy certificate and paid the requisite amounts were denied. It was submitted that the Complainant agreed to pay the requisite fees to the competent authorities to be adjusted against the balance amount payable by him.
8. The Opposite Party no. 1 stated that the Complainants shops were fully complete as on 28-05-2004 as per certificate issued by the architect. The letter dated 15-11-2005 was issued by the Opposite Party no. 1 bonafidely believing the representation of the Complainant that he intended to lease some of the shops to prospective clients, however none of the works were required to be carried out internally in the shops of the Complainant and they pertained to external works. These were also completed by 30-11-2005. All the works referred in the letter dated 15-11-2005 had been completed except execution of sale deed which was delayed on account of the Complainant not depositing the requisite amount and not making payment of balance amount of Rs.10,00,000/-. Likewise, water and electricity connections were to be obtained by the respective purchasers in terms of the agreement. Immediately after taking possession of the shop, the Complainant leased them to various business organizations. All the premises in the building had been sold and handed over to their respective purchasers without any objections or controversy. The statements made in the Complainants expert report were factually incorrect. The averments made in the complaint regarding incomplete work were denied.
9. Receipt of letter dated 10-05-2006 purportedly written by the Complainant was denied. Under the various agreements, the Complainant had agreed that he would have no claim against the Opposite Party no. 1 in respect of any item of work in the said shops once possession of the same was handed over to him. The Complainants claims for compensation were denied.
10. Parties filed their affidavits in evidence alongwith documents in support and reiterated their stand taken in the pleadings. The Opposite Party no. 1 entered the affidavit in evidence of its trustee, the Opposite Party no. 3.
11. At the request of the parties, this Commission inspected the site on 27-06-2008 and our observations are recorded on the proceeding sheet.
12. Heard Shri F. M. Reis and Shri N. Costa Frias on behalf of the parties. Counsel also filed synopsis of arguments.
13. We examined the pleadings and evidence adduced by the parties in detail and gave due consideration to the submissions of the Ld. Counsel.
14. Execution of the three agreements, one dated 24-07-2003 and the other two dated 25-12-2003 are admitted. Likewise receipt of the consideration claimed to be paid by the Complainant is admitted. Under the agreement dated 24-07-2003, the Complainant agreed to purchase seven shops bearing nos. S1 to S7 on the first floor of the building admeasuring 185 sq. meters super built up area. The Opposite Party no. 1 agreed to deliver the said shops for use and occupation of the Complainant on or before 30-01-2004. The consideration fixed was Rs.60,00,000/- out of which an amount of Rs.10,00,000/- was to be paid at the time of handing over possession. Schedule IV spelt out the specifications. The first of the two agreements dated 25-12-2003 was for the purchase of shop S7 on the ground floor admeasuring 24.47 sq. meters. The consideration fixed was Rs.10,88,000/- which was paid in full at the time of execution of the agreement. Possession was to be delivered on or before 15-01-2004. The second agreement of 25-12-2003 was for the purchase of shop no. S6 on the ground floor admeasuring 24.41 sq. meters for a total consideration of Rs.9,65,000/- payable in full at the time of execution of the agreement. Here again, possession was to be delivered on or before 15-01-2004. It is an admitted fact that the Opposite Party no. 1 did not comply with their commitments towards the Complainant in so far as possession of the premises in January 2004 is concerned. The Opposite Party no. 1 issued a letter to the Complainant on 28-05-2004 informing that his premises are completed and calling upon him to take possession after clearing the balance amounts; a completion certificate from the Architect was annexed. A certificate issued by an Architect purporting to certify completion of any construction and its fitness for occupation has no value. Under the Town Planning and Municipal laws, it is for the competent authorities to issue completion and occupancy certificates for any construction. The Complainant could not have been expected to take possession of his premises merely on the basis of such Architects certificate. It is evident that completion and occupancy certificates had not been issued for the premises by the competent authorities on 28-05-2004. The Complainant claimed that in view of the failure and neglect of the Opposite Party no. 1 to obtain requisite clearances, he personally initiated the necessary formalities and obtained the clearances upon paying the fees to the concerned authorities. There is substance in this claim of the Complainant. He has produced the relevant documents on record. Other than bare denials in the written version and attribution of motives to the Complainant, the Opposite Party no. 1 has not brought anything on record to indicate that they processed the applications for completion and occupancy certificates. As regards the electricity and water connection to the premises, the agreements stipulate that they shall be obtained by the purchaser but test reports would be furnished by the developers. There is not a whisper in the case of the Opposite Party no. 1 that such test reports were furnished by them to the Complainant. The Opposite Party no. 1 attributed the delay in delivery of possession to the Complainants failure to inform the type of flooring tiles proposed to be used in the shops; but we did not find any communication from the Opposite Party no. 1 to the Complainant in this respect in the records.
15. Filing of public interest litigations in the Bombay High Court by two persons who alleged flouting of development regulations is sought to be made by the Opposite Party no. 1 as another ground for delay in handing over possession. But there is nothing brought on record to indicate any stay or injunction granted by the High Court on the construction or in what manner the construction work was delayed on account of this litigation. The Opposite Party no. 1 also sought to blame the delay on political instability in the State of Goa in January 2005 onwards. We find this rather intriguing as possession of the shop premises was delivered to the Complainant in November 2004 and any development thereafter would have no relevance.
16. The Opposite Party no. 1 have attempted to make out a case that the Complainant was actively involved in the day to day function of the Trust and used to attend most of the meetings as a well wisher and it was in this context that he pursued the matter of obtaining completion and occupancy certificates. Such a specious argument does not hold any water; firstly there is nothing on record to substantiate the claim of the Complainants active involvement in trust affairs, and even otherwise there was a clear contractual relationship between the parties and the three agreements speak for themselves.
17. The Opposite Party no. 1s letter to the Complainant dated 15-11-2004 elucidates the situation prevailing when the Complainant took possession of his premises. Whatever spin the Opposite Party no. 1 may have given to the contents of this letter, it is a clear admission on the part of the Opposite Party no. 1 that the Complainants premises and the building were incomplete in many respects on that date. As stated earlier, this Commission inspected the site on 27-06-2008 and observed that many of the deficient and incomplete works still exists. The Opposite Party no. 1 claims to the contrary are out of sync with the reality.
18. All in all, we find a clear case of deficiency in services rendered by the Opposite Party no. 1 in delay of delivery of possession and in deficient and incomplete construction work, more so when the Complainant consumer fulfilled his commitments and obligations under the contract in letter and spirit.
19. In the aforesaid facts and circumstances and in view of our findings above, the Complainant is entitled to a consolidated amount of Rs. 7,00,000/- as compensation for the delay in delivery of possession by about 10 months and considering that the Complainant had paid a sum of Rs.70,53,000/- as on the contracted date of delivery of possession. Construction work in the Complainants shop premises and common area and amenities of the building remains incomplete as on date, thus depriving the Complainant of the proper use and enjoyment. In our opinion, the Complainant would be entitled to a nominal compensation of Rs.50,000/- on this account. In addition, the Complainant is entitled for a direction to the Opposite Party no. 1 to complete/rectify the incomplete and defective construction work in the said premises and the building as also for conveyance of his shop premises in his favour alongwith proportionate share in land.
20. The Opposite Party nos. 2, 3 & 4 have contended that there are mere trustees of the Opposite Party no. 1 discharging the functions on honorary basis and without any share in the income generated by the Trust and hence they cannot be held personally liable. There is merit in this submission of the said Opposite Party no. 1. In our view, it would be inappropriate to hold them personally liable towards the Complainant for the acts of the Opposite Party no. 1 in the aforesaid facts and circumstances.
21. In the result, we pass the following order: -
(i) This complaint is partly allowed.
(ii) The Opposite Party no. 1 is directed to pay to the Complainant a sum of Rs.7,50,000/-
as compensation/ damages for delay in delivery of possession of the premises and for defective and incomplete construction work within 30 days from receipt of this order, failing which the amount shall be paid along with interest @ 10% p.a. thereafter.
(iii) The Opposite Party no. 1 is directed to complete/rectify the various items of work listed in our site inspection report of 27-06-2008 in all respects within 60 days from receipt of this order.
(iv) The Opposite Party no. 1 is directed to execute suitable conveyance of the said shop premises in favour of the Complainant alongwith proportionate share in the land within 60 days from receipt of this order.
(v) The Opposite Party no. 1 is directed to pay to the Complainant a sum of Rs.6,000/- as costs of the litigation. Order accordingly.
Pronounced.
[Sandra Vaz e Correia] Member [Caroline Collasso] Member 12-12-2008 ORDER We pass the following order: -
(i) This complaint is partly allowed.
(ii) The Opposite Party no. 1 is directed to pay to the Complainant a sum of Rs.7,50,000/- as compensation/ damages for delay in delivery of possession of the premises and for defective and incomplete construction work within 30 days from receipt of this order, failing which the amount shall be paid along with interest @ 10% p.a. thereafter.
(iii) The Opposite Party no. 1 is directed to complete/rectify the various items of work listed in our site inspection report of 27-06-2008 in all respects within 60 days from receipt of this order.
(iv) The Opposite Party no. 1 is directed to execute suitable conveyance of the said shop premises in favour of the Complainant alongwith proportionate share in the land within 60 days from receipt of this order.
(v) The Opposite Party no. 1 is directed to pay to the Complainant a sum of Rs.6,000/-
as costs of the litigation. Order accordingly.
Pronounced.
[Sandra Vaz e Correia] Member [Caroline Collasso] Member