State Consumer Disputes Redressal Commission
P A Jose vs Samson & Sons Builders on 19 June, 2023
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION THIRUVANANTHAPURAM Complaint Case No. CC/16/142 ( Date of Filing : 13 Dec 2016 ) 1. P A Jose Puthen Veettil KP3/157,Nalanchira P O,Trivandrum. ...........Complainant(s) Versus 1. Samson & Sons Builders TKD Road,Muttada P O Trivandrum-695025 2. John Jacob TC 3/678. Kannimattom TKD Road,Muttada P O Trivandrum-695025 3. Jacob Samson TC 3/678. Kannimattom TKD Road,Muttada P O Trivandrum-695025 4. Dhanya Mary Varghees TC 3/678. Kannimattom TKD Road,Muttada P O Trivandrum-695025 5. Samuel Jacob TC 3/678. Kannimattom TKD Road,Muttada P O Trivandrum-695025 ............Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE SRI.K.SURENDRA MOHAN PRESIDENT HON'BLE MR. SRI.AJITH KUMAR.D JUDICIAL MEMBER SMT.BEENAKUMARI.A MEMBER SRI.RADHAKRISHNAN.K.R MEMBER PRESENT: Dated : 19 Jun 2023 Final Order / Judgement KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM C.C. No.142/2016 JUDGEMENT DATED: 19.06.2023 PRESENT: HON'BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT SMT. BEENA KUMARY A. : MEMBER SRI. K.R. RADHAKRISHNAN : MEMBER COMPLAINANT: P.A. Jose, S/o Late T.S. Abrahim, Jodhadih Jacob Mammen residing at Puthen Veettil, KP3/157, Nalanchira P.O., Trivandrum represented by Power of Attorney Holder, Mini Alex, W/o Alex Varghese residing at Samson & Sons Apartments (Green View), TKD Road, Muttada P.O., Trivandrum (by Adv. Vijesh Kattakkalil) Vs. OPPOSITE PARTIES: 1. Samson and Sons Builders & Developers (P) Ltd., T.C.3/679, Kaliveena Building, Muttada P.O., Thiruvananthapuram represented by its Managing Director, John Jacob, S/o Jacob Samson, T.C.3/678, Kannimattom, TKD Road, Muttada P.O., Thiruvananthapuram - 695 025 2. John Jacob, S/o Jacob Samson, T.C.3/678, Kannimattom, TKD Road, Muttada P.O., Thiruvananthapuram - 695 025 3. Jacob Samson, T.C.3/678, Kannimattom, TKD Road, Muttada P.O., Thiruvananthapuram - 695 025 4. Dhannya Mary Varghese, W/o John Jacob, T.C.3/678, Kannimattom, TKD Road, Muttada P.O., Thiruvananthapuram - 695 025 5. Samuel Jacob, S/o Jacob Samson, T.C.3/678, Kannimattom, TKD Road, Muttada P.O., Thiruvananthapuram - 695 025 (by Adv. Dougles Linsby N.R.) JUDGEMENT
HON'BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT This is a complaint filed under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act for short) claiming compensation for alleged deficiency in service and unfair trade practice of the opposite parties. The 1st 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 2nd opposite party is the Managing Director of the Company while the other opposite parties are the Directors of the 1st opposite party.
2. The complainant is a person working abroad. Therefore, he is represented in these proceedings through his relative and Power of Attorney Holder, Smt. Mini Alex.
3. In the year 2011, opposite parties 2 to 5 approached the complainant and informed him that they were in the process of constructing an apartment complex by name "Samson & Sons NOVA Castle" in a property admeasuring 45cents comprised in Survey No.2762 of Kowdiar Village located at TKD Road, Pattom. The property is described more particularly in 'A' Schedule appended to the complaint. The complainant agreed to purchase and the opposite parties agreed to construct and give possession of an apartment on the second floor of the building numbered as 2-A(Type A). According to them, the apartment was a luxurious one having a built-up area of 1700sq.ft. He was also offered 1.15cents of undivided interest in the land. The total cost of the apartment was Rs.40,00,000/-(Rupees Forty Lakhs). The apartment is described more particularly in 'B' Schedule appended to the complaint. Accordingly, an amount of Rs.20,00,000/-(Rupees Twenty Lakhs) was paid in cash to the opposite party. For the said payment, the 1st opposite party issued two receipts nos.1120 and 1121 dated 14.10.2011 in the name of the complainant's son. The balance amount of Rs.20,00,000/-(Rupees Twenty Lakhs) was paid to the 1st opposite party on 21.10.2011. Out of the said amount, Rs.18,00,000(Rupees Eighteen Lakhs) was paid in cash and the balance amount of Rs.2,00,000/-(Rupees Two Lakhs) by cheque. For the said payments, a receipt, no.1127 dated 21.10.2011 was issued by the 1st opposite party in the name of complainant's son. Opposite parties 2 to 5 had persuaded the complainant to pay the said amount of Rs.40,00,000/-(Rupees Forty Lakhs) in advance, making him believe that the apartment, the value of which was Rs.50,00,000/-(Rupees Fifty Lakhs) would be sold to him for Rs.40,00,000/-(Rupees Forty Lakhs). The complainant was further made to believe that the completed apartment would be delivered to him on 20.06.2013. But later on, the relative of the complainant who had initially interacted with the opposite parties found that no construction had been made by the opposite parties in accordance with the oral agreement referred to above. Therefore, they demanded that a proper agreement should be executed, not being satisfied with the promises made by the opposite parties.
4. Accordingly, an agreement was executed by the 2nd opposite party for and on behalf of the other opposite parties, with the complainant on 27.08.2013. The opposite parties promised to hand over possession of the fully constructed flat on or before 31.12.2014. But the opposite parties have not made any progress in the construction thereafter. Moreover, the opposite parties have pledged A schedule property with the Kerala Financial Corporation (KFC) and have obtained a loan, without informing the complainant. Since the A schedule property itself has been pledged to the KFC it is clear that the opposite parties have no intention to complete the flat in terms of the agreement with the complainant. The opposite parties have thus cheated the complainant of the amount of Rs.40,00,000/-(Rupees Forty Lakhs) paid by him, as stated above.
5. Though the complainant has approached the opposite parties several times and requested them to settle the complainant's claim, they have not responded. On 20.11.2016 the relative of the complainant had personally and through mediators approached the opposite parties, requesting them to settle the complainant's claim. However, they did not respond. In the above circumstances, the complainant caused the issue of two notices through the complainant's lawyer demanding the return of money paid by him, with interest and costs. The notices were issued on his behalf by his Power of Attorney Holder. However, the legal notices also did not evoke any response from the opposite parties. While so, the complainant obtained reliable information that the opposite parties were taking hasty steps to dispose of the scheduled properties to strangers and leave the jurisdiction of this Commission. Therefore, he has filed this complaint.
6. According to the complainant, he is a consumer of the opposite parties. The opposite parties are guilty of deficiency in service and unfair trade practice. The complainant is therefore entitled to return of the amount paid by him with interest, together with compensation and costs.
7. The complaint was admitted and notice was issued to the opposite parties by this Commission. On receipt of notice, the opposite parties entered appearance through counsel and contested the complaint. According to the common written version filed by the opposite parties the complaint itself was not maintainable. According to them, the dispute falls outside the jurisdiction and powers of the Redressal Authorities constituted under the Act. The dispute in this case comes within the scope of the Real Estate (Regulation and Development) Act 2016, a specific enactment made for the purpose of resolving the disputes between a builder and an allottee. The Real Estate Regulatory Authority (RERA for short) is specially constituted to look into the complaints as in the present case. Section 79 of the said Act specifically bars the jurisdiction of all other Courts and Tribunals over matters that come within the adjudicatory powers of the Regulatory Authority or its Appellate Tribunal. Therefore, it is submitted that this Commission has no jurisdiction to entertain this complaint.
8. It is further contended that the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2016 (Commercial Courts Act for short) also enacts a specific bar of jurisdiction over commercial disputes including issues relating to construction and infrastructure contracts. Chapter II of the Act deals with Commercial Courts and Chapter V specifically require transfer of all claims pending before other Courts and Tribunals to the Special Courts. Therefore, according to the opposite parties this complaint is not maintainable in view of the provisions of the Real Estate (Regulation & Development) Act, 2016 and the Commercial Courts Act.
9. 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.
10. On the merits, it is contended that the 1st 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 1st 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.
11. It was further contended that there were no regular enquiries by the complainant as required. But, the opposite parties used to keep the complainant abreast 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.
12. 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.
13. 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.
14. The 1st 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.
15. 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 A9 documents are marked by the complainant in his affidavit. 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.
16. According to the counsel for the complainant, substantial amounts had been handed over to the opposite parties under Exhibit A5 agreement with the object of satisfying the cherished dream of the complainant to acquire a residential apartment of his own. Exhibits A2, A3 and A4 receipts issued by the 1st opposite party evidence the payment of the said amounts. However, after having received the amounts, the opposite parties have neither completed the construction nor handed over possession of the apartment that was agreed to be given on 31.12.2014. Instead, they have pledged the property with the KFC and encumbered the same. It is clear from their conduct 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 parties. The counsel prays that a decree may be granted as prayed for in the complaint.
17. 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.
18. The following points arise for consideration in this complaint:
Is the complaint maintainable?
Is there any deficiency in service or unfair trade practice on the part of the opposite parties as alleged in the complaint? Reliefs and costs?
Point No.1
19. The question of maintainability was raised by the opposite parties by filing I.A.No.1143/2017. The same was considered as a preliminary issue and it was held that the complaint was maintainable. Accordingly, as per order dated 21.02.2019 the petition filed by the opposite party has been 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 & 320. Both the above points are considered together for the sake of convenience.
21. The case of the complainant is that, as per an agreement dated 05.12.2014, marked as Exhibit A5 in these proceedings, entered into between the 1st opposite party and the complainant, the opposite parties had agreed to construct and hand over possession of an apartment in the project by name "SAMSON & SONS, NOVA Castle Apartment Projects, T.K.D. Road, Pattom". The apartment agreed to be purchased by the complainant was to be located on the third floor of the building complex and has been described as Apartment No. 2-A(Type A). The apartment after completion of construction was to be registered and conveyed to the complainant along with 1.15 cents of undivided interest in 45 cents of land, along with the apartment. The total sale consideration agreed to be paid by the complainant was Rs.40,00,000/-(Rupees Forty Lakhs). The immovable property is described in detail in 'A' Schedule to the complaint. The apartment is described in 'B' Schedule to the complaint. Though the complainant has paid the entire sale consideration, to the opposite parties they have not completed the construction or conveyed the apartment to the complainant as agreed.
22. A common version has been filed by all the opposite parties in which they have admitted the execution of Exhibit A1 agreement. 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.
23. Though the opposite parties have pleaded force majeure conditions as the reason for not completing the construction as agreed in Exhibit A1, 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 have not been pursued during the trial. The complainant has also not been cross examined on any of the disputed aspects. Exhibits A2, A3, and A4 are receipts issued by the Managing Director of the 1st opposite party. 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.40,00,000/-(Rupees Forty Lakhs). Therefore, payment of the full sale consideration of Rs.40,00,000/- agreed to be paid as per Exhibit A5 agreement stands proved.
24. 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.
25. It is not in dispute that, the apartment complex has not been constructed yet. As per Exhibit A5 agreement possession of the apartment was to be given before 31.12.2014. Though more than eight years have elapsed the opposite parties have not honoured their commitments. 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.
26. 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:-
The opposite parties are directed to pay the complainant the amount of Rs.40,00,000/-/-(Rupees Forty Lakhs) received from the complainant, with interest thereon @8% per annum from 21.10.2011, the date of Exhibit A4 receipt evidencing the last payment, till the date of realisation. 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 13.12.2016, the date of filing this complaint, till date of payment. The opposite parties shall further pay an amount of Rs.50,000/-(Rupees Fifty Thousand) as costs of this litigation. 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 19th day of June, 2023.
JUSTICE K. SURENDRA MOHAN :
PRESIDENT BEENA KUMARY A. :
MEMBER K.R. RADHAKRISHNAN :
MEMBER SL C.C.No.142/2016 APPENDIX COMPLAINANT'S WITNESS NIL COMPLAINANT'S DOCUMENTS A1 Original Power of Attorney dated 18.11.2016 A2 Copy of the receipt issued by the opposite parties dated 14.10.2011 A3 Copy of the receipt issued by the opposite parties dated 14.10.2011 A4 Copy of the receipt issued by the opposite parties dated 21.10.2011 A5 Copy of the agreement dated 27.08.2013 A6 Copy of lawyer's notice dated 26.11.2016 A7 Copy of postal receipts (6 nos.) A8 Copy of acknowledgement card OPPOSITE PARTY'S WITNESS NIL OPPOSITE PARTY'S DOCUMENTS B1 Copy of the order of NCLT PRESIDENT [HON'BLE MR. JUSTICE SRI.K.SURENDRA MOHAN] PRESIDENT [HON'BLE MR. SRI.AJITH KUMAR.D] JUDICIAL MEMBER [ SMT.BEENAKUMARI.A] MEMBER [ SRI.RADHAKRISHNAN.K.R] MEMBER