State Consumer Disputes Redressal Commission
Vernon Anthony Fernandes vs Bharat Developers And Realtors Pvt. ... on 6 February, 2015
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BEFORE THE GOA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
PANAJI - GOA
C.C.No.25/14
Vernon Anthony Fernandes,
s/o Mr. Anthony Fernandes,
r/o H. No.191 L, 1st Floor, Cavel Cross,
Lane No.9, Dr. Viegas Street,
Mumbai 400 002 .........Complainant
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers
Proprietor Mr. Vishwas Dessai
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C. No.26/14
Nascimento Savio Moraes,
s/o Mr. Joseph Francis Louis Moraes,
r/o B-601, 602, Raja Tower, Asha Nagar-I CHS,
Off P. K. Road, Mulund (W),
Mumbai 400 080
And
2
Mrs. Belinda Savio Moraes
w/o Nascimento Savio Moraes,
r/o B-601, 602, Raja Tower, Asha Nagar-I CHS,
Off P. K. Road, Mulund (W),
Mumbai 400 080 .........Complainants
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.27/14
1.Renato Xavier Menino Jesus Gonsalo Lourenco
S/o Mr. Alvaro Agnelo Lourenco
Represented through his constituted attorney
and wife Mrs. Sherlie Carol Lourenco
2.Mrs. Sherlie Carol Lourenco
w/o Mr.Renato Xavier Menino Jesus Gonsalo Lourenco
R/o - P.O. Caranzalem, Martins Morod,
Ilhas, Goa 403 002. .........Complainants
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V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.29/14
Hemant Vasudeva,
s/o Mr. Inder Pal Vasudeva,
r/o Flat No.105, Plot No.2,
Mahavir Sargam, Sector 5,
Ghansoli, Navi Mumbai,
Maharashtra 400 701. .........Complainant
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
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2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers
Proprietor Mr. Vishwas Dessai
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.30/14
Manish Umesh Honavar,
s/o Umesh Datta Honavar,
r/o D 2/2, Hari Ratan Co-op. Hsg. Society Ltd.,
Bangur Nagar, Goregaon (west),
Mumbai 400 090
And
Mrs. Shweta Manish Honavar,
w/o Mr. Manish Umesh Honavar,
r/o D 2/2, Hari Ratan Co-op. Hsg. Society Ltd.,
Bangur Nagar, Goregaon (west),
Mumbai 400 090 .........Complainants
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
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2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.31/14
Rajesh Nawagekar,
s/o Mr. Ashok Nawagekar,
r/o Gajanan Complex, Flat No.1, Fariabhat,
Opp. Lane Mid on Super Market,
Near Housing Board Colony,
Mapusa, Goa 403 507. .........Complainant
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
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4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.32/14
Rajesh Nawagekar,
s/o Mr. Ashok Nawagekar,
r/o Gajanan Complex, Flat No.1, Fariabhat,
Opp. Lane Mid on Super Market,
Near Housing Board Colony,
Mapusa, Goa 403 507. ..........Complainant
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
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6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
C.C.No.33/14
1.Smt. Sadhana Prasad Pagi,
w/o Mr. Prasad Suresh Pagi,
r/o H. No.786, Mahalwada,
Paingin, Canacona, Goa 403 702.
2.Shri Prasad Suresh Pagi,
s/o Mr. Suresh Kust Pagi,
r/o H. No.786, Mahalwada,
Paingin, Canacona, Goa 403 702 .........Complainants
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
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C.C.No.37/14
1.Leonard D'Souza,
s/o Mr. Jose D'Souza,
r/o H. No.719, Katebag, Poinginim,
Canacona, Goa 403 702.
2.Mrs. Yvette Armin D'sa
w/o Mr. Leonard D'Souza
r/o H. No.719, Katebag, Poinginim,
Canacona, Goa 403 702.
Both are represented herein by their
constituted attorney namely
Mr. Armin Anton D'Sa,
s/o Shri Anton D'Sa,
r/o 806/A, Mahalwada,
Poinguinim, Canacona, Goa .........Complainants
V/s.
1. Bharat Developers and Realtors Pvt. Ltd.,
C-002, Ruby Residency, Behind Bhagayat Bazaar,
Chawdi, Canacona 403 702, Goa.
Mumbai Office: 269, Satra Plaza, Sector - 19D,
Vashi, Navi Mumbai 400 706
2. Mr. Pardip Singh Birring
H. No.398/1, Val Agonda, Canacona, Goa
3. Mr. Jugdeep Kumar Sehgal,
H. No.398/1, Val Agonda, Canacona, Goa
4. M/s. Coastal Builders and Engineers,
Proprietor Mr. Vishwas Dessai,
s/o Bhicaro Dessai,
H. No.169/A, Char - Rasta, Canacona, Goa
5. State Bank of India,
Canacona Branch, Rukmini Niwas,
Chaudi, Canacona, South Goa 403 702.
6. SBI General Insurance Company Ltd.,
2nd Floor, Myles High Corporate Hub,
201, EDC Complex Patto,
Panjim Head Post Office,
Panjim, Goa 403 001. ..........Opposite Parties
9
Complainants are represented by Adv. Ms. Richa Sharma with Adv. Shri. N.
Sawant.
OP No.1 is represented by Adv. Shri. A. A. Apte.
OP No.5 is represented by Adv. Shri. Vijay Gaycar with Adv. Ms. P. Velip
OP No.6 is represented by Adv. Ms. S. Gad with Ms. M. Chodankar.
Other OPs not noticed.
Coram: Shri Justice N. A. Britto, President
Smt. Vidhya R. Gurav, Member
Dated: 06/02/2015
ORDER
[Per Shri. N. A. Britto, President] These consumer complaints can be conveniently disposed off by this common order, as the facts are common, and so also the law applicable to it.
2. The OP No.1 is a registered company primarily engaged in the business of property development. OP No.1 projected itself as a company formed by two dynamic personalities, OP No.2 and OP No.3, who were its directors, one claiming experience in european quality standards and the other 16 years experience in the real estate market at Mumbai. OP No.1 has completed a project known as `Ruby Residency' at Canacona, in South Goa. Six buildings A to G Wings, consisting of about 91 flats were completed, under Phase I and Phase II, and OP No.1 through OP No.4 was in the process of completing Phase III of the said project, namely `H Wing', in Plot D pursuant to licence dated 18/06/10 from the Canacona Municipal Council.
3. The Complainants entered into agreements with the OP No.1 styled as `Agreements of Construction and Sale' on different dates for various sums, for purchase of flats. The payments were to be made as per schedule `B' of the said agreements in installments. The last two installments of 2% each of the total consideration were 10 to be made at the stage of plumbing and electricity, and, at the time of handing over the possession of the flats. The flats were to be completed, in terms of clause 11 of the agreement within a period of 24 months subject to Force Majeure. Clause 11 reads as follows:
"Subject to the prospective purchaser making the full payment of all the amounts due by him/her/them under this agreement and subject to `force majeure' the said premises shall be delivered by the vendors to the prospective purchaser on or before expiry of 24 months (twenty four months) from the date of execution of this agreement. The vendors shall not incur any liability if they are unable to deliver the said premises by the date aforesaid, if the completion of the said premises is delayed by reason of non-availability of Vital construction materials or electric power or water supply or by reason or war, civil commotion or any act of God or if non-delivery of same as a result of any notice, order rule or notification of the Government or Municipality or a Court of law or Tribunal on account of the Government not granting any permissions, licenses, certificates, NOC'S and other requirements or for any reason whatsoever or on account of any circumstances beyond the control of the vendors or for any other unavoidable, unforeseen or inevitable circumstances."
4. The dates of the agreements, the numbers of the flats to be constructed and sold to the Complainants and the amount of the sale price are reflected in the table given below:
11 1 2 3 4 5 6 7 8 Date of Loan Amount paid Claim
C.C. Date of Sale Price Date of
Flat No. Agreement & to OP No.1 Repudia
Nos. Agreement (in Rs.) Policy
amount of loan (in Rs.) ted on
25 18/09/12 H 8611 27,17,000.00 12.11.12 26,62,660/-
(3rd Floor) Rs.21,70,000/- + 74,619/- 16.03.13 23.09.14
26 23/02/11 H 8502 18,29,440.00 28.04.11 17,37,868/-
(2nd Floor) Rs.14,00,000/- + 43,577/- 25.10.11 23.09.14
27 13/01/11 H 8602 17,04,440.00 30.12.10 20,46,050/-
(3rd Floor) Rs.14,28,000/- + 45,662/- 25.10.11 23.09.14
29 15/03/13 H 8705 24,00,000.00 29.11.13 23,52,000/-
(4th Floor) Rs.19,00,000/- + 72,677/- 04.06.13 30.09.14
30 06/12/10 H 8607 16,00,000.00 30.12.10 15,20,000/-
(3rd Floor) Rs.13,39,000/- + 45,330/- 25.10.11 30.09.14
31 28/02/11 H 8407 18,29,440.00 29.04.11 18,24,326/- No
(1st Floor) Rs.15,00,000/- + 43,358/- Insurance -----
32 28/02/11 H 8406 18,29,440.00 10.03.11 18,24,326/- No -----
(1st Floor) Rs.15,00,000/- + 43,358/- Insurance
33 24/09/12 H 8408 23,55,000.00 07.11.12 25,07,900/- 16.03.13
(1st Floor) Rs.18,80,000/- + 69,855/- 30.09.14
37 22/06/11 8306 (Gr. 21,16,320.00 30.06.11 23,85,287/- No -----
Floor) Rs.16,93,052/- + 60,846/- Insurance
5. The Complainants with a view to finance the purchase of the said flats, approached OP No.5 , Canacona Branch of SBI, for loans. The Complainants filed applications for loans, executed arrangement letters, memorandum of agreements and guarantee agreements. The loans were to be repaid in equated monthly instalments, and in C.C. No.25/14, the monthly EMI was fixed at Rs. 20,941/-. The repayment would commence two months after completion of construction of the flats or after 18 months from disbursement of the first instalment, where the loans were released in instalments, whichever is earlier. Clause 10 of the arrangement letters, provided that the house/flat would be insured comprehensively for the market value covering fire, flood, etc. in the joint names of the Bank and the borrower, and the cost of the same was to be borne by the borrower. The Complainants as borrowers, also undertook to arrange for the payment of EMIs 12 from their monthly salary or in whatever manner deemed fit or by debit on due dates from their current/ savings Bank accounts with their branch or any other branch where they may hold the accounts singly or jointly and to appropriate the same in repayment in the said loans and interest (clause(e)). Clause `O' of the Loan Agreement also provided that the Complainants/borrowers would at their cost insure and keep insured in joint names of themselves and the Bank their flats at all times against fire, flood, cyclone, typhoon, lightning, explosion, riot, strike, earthquake, risks and other acts of God for such other risks for its full market value as desired by the Bank from time to time, etc.
6. The dates of agreements entered into by the Complainants with OP No.5 State Bank of India and the amount of the loans are shown in column 5 of the table hereinabove.
7. The Complainants (except in C.C. Nos. 31, 32 and 37/14) also obtained from OP No.6 what is known as `Long Term Home Insurance Policies.' The effective dates of the said policies is shown in column no.7 of the table hereinabove. For obtaining the said policies, the Complainants filed proposal forms which can be seen from page 67 in C.C. No.25/14 and paid respective premiums. The policies were then forwarded to the Complainants by letters of different dates, and, the letter dated 16/03/13 in C.C. No.25/14 would show that the Complainant in that case was sent the policy schedule, policy clauses and wordings, premium receipt and grievance Redressal letter. The Complainants were welcomed to SBI General (OP No.6) and thanked for choosing "SBI Generals Long Term Home Policy"
and were further informed that they were delighted to have them as their esteemed customers. The policies had clause 5 in them which provided that the insurance could be terminated at any time at the request of the insured in which case the Company would retain the premium at customary short period rate for the time the policy was 13 in force. Option was retained by OP No. 6 the Insurer Company to terminate the policies on 15 days notice.
8. OP No.6 SBI General Insurance Co. Ltd. is a joint venture between the SBI and the Insurance Australia Group (IAG) with the former holding 74% of capital and the latter remaining 26%, as pleaded by the Complainants and shown on the website, copy of which has been produced by the Complainants. The OP No.6 has denied that theirs is a joint venture company. This fact is hardly of any relevance for the purpose of deciding these complaints.
9. By virtue of the said long term home insurance policies, OP No.6 agreed to indemnify the Complainants in respect of loss of or damage to the building specified in the Schedule against perils under the heading "covered accidents". "Covered accidents"
included loss or damage due to (1) fire, (2) lightning, (3) explosion/implosion, (4) aircraft damage, (5) riot, strike and malicious damage, etc. (6) storm, cyclone, typhoon tempest, hurricane tornado, flood and inundation (7) impact damages, (8) Subsidence and landslide including rock side. The policies had what is known as general exclusions and also specific exclusions. It is important to reproduce clause 8, which reads as follows:
"8) Subsidence and landslide including rockslide. Loss, destruction or damage directly caused by subsidence of part of the site on which the property stands or Land slide/ Rock slide excluding:
a. the normal cracking, settlement or bedding down of new structures b. the settlement or movement of made up ground c. coastal or river erosion d. defective design or workmanship or use of defective materials e. demolition, construction, structural alterations or repair of any property or groundwork or excavations" (emphasis supplied) 14
10. On 4/01/14 at about 2.30 p.m. two parts of the 5 storeyed building Wing H came crushing down, killing 14 persons and injuring several others (see Times of India, copy at page 72). As per the Goan dated 31/1/15, 31 workers were killed. The army was called in and 28 others were rescued. Unofficial figures put the death toll much higher.
11. A criminal case being Cr. No.1/14 u/s 304, 338, etc. IPC came to be registered against OP No.2 and 3, the said directors of OP No.1, and against Vishwas Dessai, the proprietor of OP No.4, who was doing the said construction for OP No.1, as per agreement entered between the two, dated 29/11/10. OP Nos. 2 & 3 could be arrested only in the last week of January '15 and have been released on bail. The Chief Minister of the State who visited the site promised that the District Administration would look into all aspects of the case and submit a report to the Government. The President of Canacona Municipal Council, Shri Mahadev Dessai, also promised to conduct an enquiry. A preliminary report dated 08/01/14 has been submitted by the Government Engineering College. The District Collector/Chairman of South Goa Disaster Management Authority has passed an order cordoning the entire area as unsafe and unstable. OP No.2 challenged the said order in Writ Petition No.18/24 before the High Court of Bombay at Goa. The said writ petition was disposed off by Order dated 30/06/14 as the Government has appointed Shri V. K. Jha to inquire into the incident u/s 3 of the Commission of Inquiries Act, 1952. The Collector (South) is its Member Secretary. Occupancy Certificate granted to the collapsed building has been revoked by the Chief Officer of C.M.C by Order dated 10/01/11. The Government has appointed Shri P.L.N. Mandrekar to submit a stability report. Though the Jha Commission has submitted its report to the Government, the same is kept under wraps. None of the parties have made any efforts to obtain a copy of the said report or for that matter seek the assistance of this Commission to obtain a copy of the 15 same. OP No.6 as well as the Surveyor appointed by them appear to have made lot of efforts, as can be seen from the correspondence produced, to get relevant information about the collapse of the building but without any success.
12. The above would be uncontested position in the cases, as reflected from the documents produced.
13. The Complainants having approached OP No. 6 for settlement of their claims, OP No. 6 appointed Murlidhar Shenvi, surveyors and loss assessors who visited the site on 9/05/2014 along with K. L. Savla, structural engineer, and submitted the report dated 1/09/2014 and on the basis of the same OP No.6 has repudiated their claims on dates shown in column 8 of the table hereinabove, relying on sub clauses (b) and (d) of Clause 8 of the Policies. The sum and substance of the conclusion arrived at by the Surveyor, as we understand it, is that the building was required to be constructed on pile foundation, as it was constructed on wetcatchman area, paddy fields and reclaimed areas, which was not done; quality of construction was also not upto the mark; and the retaining wall tilted as it was not designed properly and as such the foundation failed leading to the collapse of the building.
Submissions and Findings
14. Ms. Richa Sharma, the lr. advocate of the complainants, would submit that the complainants agreed to purchase the flats, being lured by the promotion material publicized by OP No. 1, and approached OP No. 5 for a home loan, as OP Nos. 1, 2 and 3 represented to the complainants that the project was approved by OP No. 5, SBI, and on meeting the Manager of SBI, the Manager of OP No. 5, SBI told the complainants that the home loan was tied up with OP No. 6, SBI general Insurance Company Ltd., to ensure the safety of the flats and accordingly obtained insurance policies, the terms of which were never explained to the complainants. Lr.
16advocate submits that Wing-H of Ruby Residency collapsed causing death and serious injury to many workers as a result of which the Government has also sealed the other parts of the building and declared them unsafe structure not fit for human habitation. Lr. advocate would submit that the complainants are being penalized by OP Nos. 1, 5 and 6 for no fault of the complainants. The lr. advocate submits that OP No. 5 has engaged in unfair trade practices by tying the home loans insurance with its associated group company namely OP No. 6 and by acting as an agent of OP No. 6 for the purpose of cross selling the product of its group company. Lr. advocate would submit that the plea taken by OP No. 1, that the building collapsed due to force majeure or an act of god is not at all established and on the contrary it can be said that the building collapsed due to an act of devil. Lr. advocate submits that OP No. 1 does not say why the collapsed portion is to be treated differently from the portion standing on marshy land. Lr. advocate submits that OP No. 1 cannot run away from its liability towards the complainants by stating that OP No. 1 had entrusted the actual construction of the building to OP No. 4 and it is he who will have to explain the aspect of the quality of construction. Lr. advocate submits that OP No. 1 has produced no evidence as regards the nature of land on which the building was constructed in as much as no technical reports have also been produced on behalf of OP No. 1.
15. Shri. Atul A. Apte, the lr. advocate of OP No. 1, on the other hand, would submit that the filing of the complaints is premature as the cause of collapse is yet to be known as the Jha Commission is yet to submit its report and as such it cannot be known as to why the building had collapsed. Lr. advocate would submit that if at all, part/s of the building collapsed, the collapse was due to "force majeure" or an act of god and this was contemplated by the parties and stipulated in clause 11 of the agreements signed by the complainants with OP No. 1 for construction and sale of their respective apartments. Lr. advocate would submit, in the 17 alternative, that OP No. 1 would reconstruct the collapsed flats and hand over the possession to the complainants at the same price which was fixed in the agreements for construction and sale without charging anything more. He further submits that the complaints C.C. Nos. 25, 26 and 27 pertains to the part of the building which has not collapsed and OP No. 1 will hand over the possession of the said flats to the complainants no longer the seals are removed by the government. Lr. advocate also submits that the complainants have not paid all the amount due under the said agreements in as much as have also not shown their willingness to pay the balance amounts. Lr. advocate submits that the complainants, after the collapse of the part/s of the building, did not even approach the OP No. 1 by a legal notice or otherwise for refund of the amounts paid by them but on the contrary rushed to this Commission with the complaints. Lr. advocate submits that the complainants have also not insisted that OP No. 4, who was made a party, should be noticed in the complaints to know the exact cause of collapse. Lr. advocate would submit that in the absence of any technical report it cannot be said that OP No. 1 has been guilty of inferior quality of construction and as such the complaints deserve to be dismissed.
16. Shri. Vijay J. Gaycar, the lr. advocate of OP No. 5, would submit that the complainants have produced no evidence that OP No. 5, SBI had marketed the project of OP No. 1. Lr. advocate submits that the liability of OP No. 5 with the complainants is a contractual liability, written in black and white, by way of terms of the agreements executed between the parties. Referring to the prayers of the complaints, Lr. advocate points out that the complainants have sought double compensation both from OP No. 1 as well as OP Nos. 5 and 6. Lr. advocate submits that loans were granted to the complainants repayable in equated monthly instalments and the repayment was to begin in terms of clause 5 of the respective agreements, and, although that was the repayment schedule, some of the complainants like the complainant in CC No. 18 25/14 started repaying the loan immediately after the same was disbursed. Lr. advocate submits that the complainants have even signed the agreements acknowledging that they have received the original of the agreements and as such it is not open to them now to say that copy of the loan agreements were not furnished to them. Lr. advocate would submit that OP No. 5, SBI, released payment to OP No. 1 as per the request of the complainants. Lr. advocate submits that they have no concern with OP No. 6 and that as per the requirement of the loan agreements the flats had to be insured, and the choice of the insurer was with the complainants and it is they who approached OP No. 6 and obtained insurance from OP No. 6. Lr. advocate submits that the terms and conditions between the complainants on one hand, and OP No. 5, SBI, on the other hand, are strictly governed by the terms of the agreement and as such there is no question of granting prayer (c) of the complaints. Lr. advocate submits that the complainants had no grievance of any deficiency in service until the collapse of the building and it is not the case of the complainants that OP No. 5 has otherwise breached any of the terms of the loan agreements. Referring to some of the information produced on behalf of the complainants, obtained under RTI., lr. advocate submits that the expression "tied up with housing loan account" only meant that the flats booked by the complainants were tied up with the housing loan account and nothing more. Lr. advocate submits that there is no deficiency of service on the part of OP No. 5 Bank and as such the complaints be dismissed against them.
17. Ms. S. Gad, the lr. advocate of OP No. 6 would submit that OP No. 6 has their agents everywhere to sell their policies. She submits that the complainants filed their proposals and accordingly obtained the policies which were issued to the complainants except to the complainants in CC Nos. 31, 32 and 37 of 2014. Lr. advocate submits that the complainants have approached the Commission with unclean hands and that the policies which were issued did not cover 19 the risk pertaining to the collapse of the building due to defective design and workmanship or use of defective material and as such OP No.6 is not liable to pay any compensation to the complainants. Lr. advocate submits that OP No. 6 undertook to indemnify the complainants only against the perils covered under the policies and that after the claims were lodged by the complainants, OP No. 6 appointed Murlidhar Shenvi, Insurance Surveyor, and Loss Assessor, who opined that the foundation was not on stone, but on loosely filled mud and that after the building was fully constructed the soil below the building started settling thereby giving pressure onside, etc, and that the surveyor as well as the structural engineer, opined that the building had collapsed due to reasons mentioned by them in their report. Lr. advocate submits that the complainants are literate and sound minded persons and the terms and conditions of the policies were read over and explained to the complainants and the complainants are bound by the terms and conditions mentioned in the policy of insurance. Lr. advocate submits that the case of OP No. 6 is that the building collapsed due to defective design or workmanship or use of defective materials and these circumstances were not covered under the policy terms and conditions. Lr. advocate submits that it is the complainants who approached OP No. 6, with proposals to cover the risk pertaining to their flats and only after satisfying with the documentation of the complainants, that the policies were issued. Lr. advocate also submits that OP No. 6 is involved in the business of insurance and OP No. 5 is involved in banking business and both are distinct and separate concerns and do not act as agents of one another. It is also submitted that in case the complainants were not comfortable with the policy they had a freedom to cancel the same within 15 days but chose not to do the same. She has relied upon United India Insurance Co. Ltd., vs. 20 Harchand Rai Chandan Lal (C.A. No. 6277/04 decided by S.C. on 24/09/04)
18. Do we need to wait for the Jha Commission report?
19. No. The expected economic life of a RCC framed construction, under normal occupancy and maintenance conditions, is 75 years (see page 51 Nabhi's Practical Handbook of Building Maintenance). Here we have a case where part of the building collapsed, even before it was occupied, and the only inference which can be drawn is that the building collapsed because it lacked good foundation or was otherwise structurally unsound. Res ipsa loquitur, (the thing speaks for itself) we would say. This is the first aspect. The second aspect is that we have sufficient evidence on record, given by the surveyor in consultation with the structural consultant, appointed by OP No. 6, who have opined that the building collapsed because it was not constructed on pile foundation which was required to be done as the building was constructed on reclaimed marshy, paddy land and due to the construction of structurally unsafe retaining wall. OP No. 1 has not examined, their building architect or engineer to rebut the opinion given by the surveyor in consultation with the structural engineer. It is to be noted that "a licensed surveyor occupies an important position under the scheme of section 64 UM of the Act of 1938 and the Regulations of 2002 framed thereunder. No claim of more than Rs.20,000/- can be settled by an insurer unless a report is obtained from him or otherwise directed by the Regulatory Authority. In giving a report, a surveyor performs a statutory function and as such a report submitted by him carries great evidentiary value unless proved otherwise." (see order dated 8/10/13 in CC No. 2/13 in case of Rajkumar Tomar).
We, therefore, need not wait for the report of Jha Commission. The submission that the complaints are premature, therefore, needs to 21 be rejected. As rightly pointed out on behalf of the complainants, OP No. 1, has not explained as to why the tilted portion where the complainants in CC Nos. 25, 26 and 27 have their flats should be treated differently when that part of the building also stands on same type of land without pile foundation. If one part is fallen, the structure being of concrete, the other parts would be pulled in that direction, and, after all which of the complainants would risk their lives by taking possession of the flats in the said tilted part of the building? As regards this aspect reference to the affidavit of the Collector filed in the Writ Petition will not be out of context. He says:
"I state that the search and rescue operation team faced great hardship with task at hand as the condition at the site was extremely dangerous and precarious. I state that there was no way/access available to the Rescue Team to reach the demolished portion of the said building. I state that access to the site was possible only from one side as the other sides were completely blocked by the other standing structures. I state that as per expert advice and consultation the only access area available for search and rescue operation was located on the retaining wall of the said collapsed building. I state that the team of experts which was procured to obtain expert advice with regard to the search and rescue operation was a team headed by Dr. K.G. Gupta, HOD Goa Engineering College and other Professors which in turn had also opined that the retaining wall is damaged and may give-way at any time which would in every likelihood cause the other standing structures to collapse and come down, thereby putting the lives of all above mentioned officials which were engaged in the search and rescue operation in grave danger."
It is not known when the Jha Commission report will be accepted by the Government and when the collapsed building alongwith tilted 22 parts would be reconstructed. There has been gross deficiency in service on the part of the OP No. 1 in not providing the flats within the stipulated time on account of collapse of the building. At present the future of the Commission report is very uncertain. One does not know what action will be taken on it and when or whether any action will be taken at all. It will be just and proper, therefore, that OP No. 1 is directed to refund to the complainants the amounts paid by them, with interest, the quantum of which, will be discussed a little later, so that they book some other flats elsewhere.
20. We have already concluded that the building collapsed because it was structurally unsound, with improper foundation. OP No. 1 cannot point out its fingers to OP No. 4 stating that the actual construction was done by OP No. 4. OP No. 1 as principal, is bound by the acts of its agent, OP No. 4. We are unable to accept that the building collapsed due to an act of god. The expression "force majeure", referred to in the first part of the clause 11 of the agreements has been explained in the second part of the same clause and OP No. 1 could have been justified in not handing over the possession of the flats within twenty four months, in case of contingencies such as non availability of vital construction material or electric power or water supply or by reason of war, civil commotion or any act of god, or if any non delivery of the same was as a result of any notice, order, rule or notification issued by the government or the municipality or court of law or tribunal, etc. "Force majeure" means irresistible force or compulsion i.e. circumstances beyond one's control. Act of God, and "vis major"
are the two other expressions used, and, refer to events or accidents due directly and exclusively to natural causes without human intervention, which by no amount of foresight, pains or care reasonably to have been expected, could have been prevented (see P. Ramanatha Aiyer's the Law Lexicon). This is a case of negligence on 23 the part of OP No. 1/OP No. 4 in constructing the building with improper foundation.
21. The table given hereinabove shows the respective dates of the construction agreements with OP No. 1, the dates of loan agreements with OP No. 5, and the dates of insurance policies issued by OP No. 6. The complainants say that the project was approved by OP No. 5, SBI. Complainants also say that the Manager of OP No. 5 informed the complainants that the SBI home loans were tied up with SBI home insurance products. These are but self serving statements made by the complainants without any corroboration. The complainants have not produced any direct evidence to substantiate the said averments but have tried to substantiate the same by obtaining information under R.T.I. If the project was at all approved by OP No. 5, SBI it was approved for sanction of individual housing loan without insisting on individual title verification and search report, as mentioned in letter dated 22/04/09, as conveyed to one Renato Lourenco, in reply to the queries raised by him under RTI Act, 2005, and nothing more. The complainants say that Manager of OP No. 5, SBI informed the complainants that the SBI loan is tied up with SBI home loan insurance product. The complainants do not even mention the name of the Manager who gave them the said information. The complainants do not even say that the proposal forms of OP No. 6 were given to them by the said Manager. The agreements executed by the complainants with OP No. 5 do not also say that the house/flat should be insured with OP No. 6. All that the agreements say is that the house/flat should be insured comprehensively for the market value covering fire, flood, etc. The Chief Manager Shri. Ganesh D. Gaonkar of OP No. 5 is on affidavit to say that in order to obtain the home loan it was necessary to 24 insure the premises and it was at the option and choice of complainants to obtain such a policy which the complainants obtained from OP No. 6. The said Chief Manager has also stated that the complainants' allegations that OP No. 5 has indulged in unfair trade practice or that they cross sold the product of OP No. 6, are fabricated. The said Manager has also denied having cross sold the products of OP No. 6. Suffice it to observe that the complainants had transactions with OP Nos. 1, 5 and 6 under different agreements on different dates and the said agreements have no connection whatsoever, except that the loans were given by OP No. 5 to finance the flats to be purchased by the complainants and the insurance policies were issued by OP No. 6 to insure the said flats. The complainants do not even say that the proposal forms to obtain the policies from OP No. 6, were handed over to them by the said Manager of OP No. 5, who has not even been named. The allegations that the complainants obtained a policy from OP No. 6 because they were told by the Manager of OP No. 5 that the loan was tied up with OP No. 6 is nothing but self serving statements bereft of any corroboration and as stated on behalf of OP No. 6, on affidavit, is a got up story, and as such cannot be accepted. We, therefore, accept the submission of Shri. Gaycar that their relations with the complainants are governed by the terms and conditions of the loan agreements and as far as these agreements are concerned it is not the case of the complainants that OP No. 5 has committed any breach of the terms of the agreements. The complainants had no problems either with OP No. 5 or OP No. 6 until the collapse of the building. It appears that the complainants have dragged OP No. 5 only to avoid their liability to make repayment of the loan because the flats booked by them have now come down alongwith the building or otherwise rendered unsafe. Shri. Gaycar, would, therefore be right in contending that there is no deficiency alleged 25 by the complainants as far as the terms and conditions of the loan agreements are concerned.
22. Admittedly, the complainants filed their proposals with OP No. 6, as can be seen from terms and conditions of the long term home insurance policy obtained by the complainants as well as from the proposal forms produced on behalf of OP No. 6. Complainants in CC Nos. 25/14 and 33/14 had the policies dispatched to them on 16/3/13. Complainants in CC Nos. 26/14 and 27/14 had policies dispatched to them on 25/10/11, etc. In other words, the complainants had with them the policies for sufficiently long period of time and they could have got them cancelled in case they were not satisfied with the same in terms of clause 5 of the said policies. The complainants now cannot be heard to say that the terms of the policies were not explained to the complainants. These are but self serving statements. OP No. 6 has filed an affidavit of Shri. Laxman Kerkar stating that the complainants are literate and sound minded persons and each and every terms and conditions were explained to them and only after that they have signed the contract of insurance and they are bound by the terms and conditions mention in the said contract of insurance.
23. The Apex Court in United Insurance Co. Ltd. vs. Harchand Rai Lal took note of what the Constitution Bench stated in General Assurance Society Ltd. vs. Chandumul Jain (AIR 1966 SC 1644) in the following words:
"In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the 26 cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being."
and held that the terms of the contract have to be strictly read and natural meaning given to it.
24. The Apex Court has also held that:
"... since upon issuance of the insurance policy, the insurer undertakes to the indemnify loss suffered by the insured on account of the risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer."
" the endeavor of the Court must always be to interpret the words in which the contract is expressed by the parties. The Court while construing the terms of policy is not expected to venture into extra liberalism that may result in rewriting the contract or substituting the terms which were not intended by the parties. The insured cannot claimed anything more than what is covered by the insurance policy (see Vikram Green Tech (I) Ltd., & anr. vs. New India Assurance Company Ltd., 2009 (1) CCC 176. "
25. The OP No. 6 has repudiated the policy based on the opinion given by the surveyor alongwith the structural engineer, who have opined that the building was constructed without a pile foundation on marshy and reclaimed land and with a structurally unsafe retaining wall which led to its collapse. Therefore, in our view, this is clear case which is covered by exclusion of sub clause (b) and (d) of clause 8 of the policy. The repudiation of the policy, based on the report of the surveyor and the structural consultant, cannot be faulted.
26. As regards interest, lr. advocate Ms. Richa Sharma referring to clause 7 of the agreements has submitted that the OPs be ordered to pay interest at the rate of 24%. We are unable to accept this submission. The parties agreed in terms of clause 7 that the 27 prospective purchasers should pay interest at the rate of 24% in case the instalments due remaining unpaid for 15 days or more. The parties did not agree that in case there was a delay of handing over possession, that OP No. 1 would be liable to pay interest at the rate of 24%. The stipulation to pay interest by the prospective purchasers at the rate of 24% was made with a view to ensure that the instalments are paid in time and so also the construction is not delayed and is completed in time. Some Fora reverse such a stipulation in favour of purchasers and do order that the same interest should be paid by a developer to the prospective purchasers in case there is a default on the part of the Developer, but we do not agree with such an approach. In our view, the complainants would be entitled in case of refund, to a reasonable interest on the amounts paid by the complainants to OP No. 1, and, it is almost a matter of thumb rule that the said interest is awarded at the rate of 18%. In this Commission's unreported order dated 11/09/14 in CC No. 10/14 filed by Joseph Justin Gonsalves we had taken note of two cases decided by the National Commission namely Akhilesh Kumar Verma vs. Skipper Builders Pvt. Ltd., I (1996) CPJ 51, and Ghaziabad Development Authority vs. Col. R. N. Kalra, (S.C. & N.C. Law cases, 2005 - 2008, page 34) wherein the National Commission had taken the view that refund of the amount paid with interest at 18% would be in order. We had also taken note of Brij Pal Sharma vs. GDA, 2005 (7) SCC 106 and GDA vs. Balbir Singh, (2004) 5 SCC 65, wherein the Apex Court had held that the grant of interest at 18% by the National Commission by way of damages and compensation was in order. We propose to go by the beaten track, so to say, and follow the same ratio, and, order the OP No. 1 to refund/pay to the complainants interest on the amounts paid by the 28 complainants at 18% from the day the instalments were paid by the Complainants to OP No.1
27. We have scrutinized the payments made by the complainants to OP No. 1 on the basis of documents produced and in the light of admissions made and have included the same in Col. No. 7, of the table, as proved. The so called payments by cash without acknowledgements have been excluded, as not proved. Complainants have chosen not to claim from the OP No. 1 the service tax. It is their choice.
28. Complainant in C.C. Nos. 31 & 32 of 2014 has placed material on record to say that the marriage between him and his wife is dissolved and that he had written to OP No.1 to convert both the flats into one.
29. In view of the above discussion, we allow the complaints partly against OP No. 1 only and order OP No. 1 to refund to the complainants the amounts paid by them as shown in Col. No. 7 of the table (service tax excluded, as not claimed) with pending and future interest at the rate of 18% from the date of payment of respective instalments, within a period of 30 days. Complainants shall also be paid in each case a compensation of Rs. 50,000/- for mental tension and harassment and costs of Rs. 10,000/-. In the facts of the cases, the complaints shall stand dismissed as against OP No. 5 with costs of Rs. 2500/- in each case to be paid by the Complainants and against OP No. 6 with no order as to costs.
[ Smt. Vidhya R. Gurav ] [Shri. Justice N. A. Britto ]
Member President
/lm
/sp
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