State Consumer Disputes Redressal Commission
M/S. Renuka Builders,Visakhapatnam vs Renuka Residency Flat Owners ... on 23 January, 2012
A. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION : AT HYDERABAD FA 1260/09 against CC 214/2004 on the file of the District Consumer Forum I, Visakhapatnam. Between : M/s. Renuka Builders, Rep. by its Managing Partner, Sri Gunji Adiseshu, S/o Venkata subbaiah, Hindu, aged 46 years, Residing at D. No. 53-19-2-1/14, Renuka Niwas, Chaitanya Nagar, Maddilapalem, Visakhapatnam Appellant/Opp. Party And Renuka Residency Flat Owners association, Society Registered under the Societies Registration Act, Rep. by its Secretary, D. No. 53-17-48/2, Krishna college Road, Maddilapalem, Visakhapatnam .. Respondent/complainant Counsel for the Appellant : M/s. Ch. R. Vasantha Kumar. Counsel for the Respondent : Mr. D. V. S. S. Raju Coram ; Sri R. Lakshminarasimha Rao Honble Member
And Sri T. Ashok Kumar .. Honble Member Monday, the Twenty Third Day of January Two Thousand Twelve Oral Order : ( As per Sri T. Ashok Kumar , Honble Member ) ****
1. This is an appeal preferred by the opposite party against the order dated 06.11.2009 in CC214/2004 on the file of the District Consumer Forum I, Visakhapatnam.
For convenience sake, the parties as arrayed in the complaint are referred to as under :
2. The brief facts of the complaint are as under :
The complainant is an association of Flat owners registered in the name and style, Renuka Residency Flat owners Association. All the members of the said Association purchased undivided extent of land measuring about 40 sq. yards out of total extent of 857 sq. yards from the OP and GPA holders of other owners of the site.
Altogether 17 flats were constructed in the said land by the OP as per the approved plan permit. All the members of the said association entered into separate construction agreement with the OP builder. Then the OP apart from delay in completing the construction also deviated from the approved plan and made constructions violating the said plan. The constructions undertaken by the OP was not as to the specifications mentioned in the agreement. Substandard material was used in the said construction. The flats were handed over to the members of Complainant association in the month of November, 2002, then the deficiency was observed by the complainants association and the said observation revealed that two quotings of the painting of the apartment was not done and that proper arrangements for telephone connection post boxes were not made. Names of the flat owners on the board in the cellar floor were not written.
So also in front of the flats. OP also failed to provide car parkings as per the agreement. The bore wells were digged only up to 115 feet depth which was insufficient to cater to the needs of the intimates and they also arranged. only 4 inches diameter pipelines was laid in stead of 6 inches as promised. OP failed to undertake soil test and pest control measures. Tort -lot area was illegally occupied and unauthorized construction was made therein. OP withheld link documents, electrical diagrams lift documents pest control certificate etc. and facilitated their close relatives to use the passage and failed to transfer the meter for common area in the name of the association. OP also failed to remove the temporary construction made in the cellar and failed to provide fire extinguisher in the common area, air cracks were developed in the walls and there was leakage from over head tank. Temporary structure raised at the time of construction was concerted into two rooms and a permanent structure was made in the tort-lot area without approval of the corporation, since substandard material was used the construction became weak and its life was reduced. The rectification of the said deficiency would cost in total sum of Rs.5,25,550/-. Hence the complaint for a direction to OP to pay Rs.5,25,550/- with interest @ 12% pa and also Rs. one lakh towards damages for mental agony due to deficiency in service to the members of the complainants association.
3. OP filed counter denying the allegations made in the complaint and disputing the claim of the complainant. The brief facts of the counter are as under :
The OP constructed 17 flats without deviating the plan granted by Visakhapatnam Municipal corporation and did not violate any building rules. While constructing the said 17 flats OP allotted 5% of total site towards tort-lot area and sold away the balance 125 sq. yards to third parties. Owners of flats 1 and 3 of ground floor, flat no. 4 of 2nd and 3rd floors planned to take over the said 125 sq.yards and filed a civil suit on the file of IV addl. Civil Judge, Visakhapatnam for permanent injunction and obtained exparte orders from the Court. Subsequently OP filed CMA and the same is pending. As a counter blast of the said case, the complainant filed the present complaint. Since the OP demanded the members of the complainant association to clear off the dues, the complainant association started creating problems. While the construction was going on the complainants have personally supervised the building and did not raise any objections. There is no deficiency in service as alleged as no such substandard material was used in undertaking the construction of the flats and thus prayed to dismiss the complaint.
4. Having heard both side and considering the material available on record including Ex. A1 to A3, the District Forum vide orders dt. 26.2.2004 allowed the complaint in part and directed the OP to pay Rs.3,94,162/- to the complainants association as against the said orders , the unsuccessful OP filed FA 792/2004 and the said appeal was allowed by this Commission vide orders dt.17.06.2007 and set aside the said orders passed by the District Forum and remanded the case for fresh disposal. further directing the District Forum to appoint an advocate commissioner, Civil Engineer, to assess the defects and amount for rectification of the said defects. After such a remand of the case, fresh affidavits were filed by both side in respect of the respective contentions. The complainant further marked Ex. A4 besides Ex. A1 to A3 marked already, whereas OP marked Ex. B1 and B2.
5. As per the directions of this Commission, a commissioner was also appointed by the District Forum and he inspected the schedule premises along with chartered Engineer, verified the deficiency in construction complained of. He estimated the cost of rectification of deficiencies at Rs.3,41,632/- as against the original estimation Rs.2,25,550/- made by the complainant/ However, the said estimation does not include the compensation for car parking. OP filed objections to the said estimation of the said Commissioner pointing out certain lapses on the part of the commissioner in making the estimate and also pleaded that the commissioner did not take into consideration of the cost of the work done by the OP. further, one Udayashanker who claimed to be a qualified Civil Engineer filed Evidence Affidavit on behalf of the OP and he was cross examined by the complainant.
6. Having heard both sides and considering the written arguments filed by the complainant the District Forum vide orders dt. 6.11.2009 partly allowed the complaint directing the Op to pay Rs.2,70,632/- to the complainant together with interest @ 9% pa from 5.12.003 till realization, and also, Rs.10,000/- towards costs and the said Forum directed the parties to the proceedings to approach competent Civil Court with regard to the dispute relating to the car parking and Tort-lot area.
7. Feeling aggrieved with the said finding,. the unsuccessful OP filed this appeal on several grounds and mainly contended that the District Forum erroneously misinterpreted the clear cut evidence of second Engineer and gave unnecessary credence to first Engineer and arrived at a wrong conclusion and that if there is any deficiency in service the District Forum should have directed the OP to rectify the same but in stead of doing it simply directed the OP to pay certain amount together with interest there on which is much against the settled law and that absolutely there was no negligence or deficiency in service on the part of the Op in constructing the flats and that orders under appeal are not sustainable either in law or on facts and thus prayed to allow the appeal.
8. Heard the counsel for the appellant and no arguments were advanced by the respondent.
9. Now the point for consideration is, whether the order of the District Forum is sustainable ?
10. The contention of the complainant association is that the OP builder failed certain amenities to its members as described in the construction agreement and also used inferior quality of material in constructing the flats, whereas, contention of the OP is that there was no deficiency in service on its part in constructing the apartments that they sticked on to the specifications described in the construction agreement. Since there was no expert opinion in the said context this Commission vide orders in FA 792/2004 remanded the matter for fresh disposal with a direction to appoint Advocate Commissioner/civil Engineer to assess the defects and the amount required rectification of the said defects and accordingly Mr. G. Vijayamohan, Advocate was appointed as commissioner to assess the defects pointed out by the Complainants Association, Renuka Residency Flat Owners association constructed by OP and to estimate the amount required for rectification of the defects. He was entrusted with the said work with a direction that he shall execute the warrant with the assistance of a qualified Engineer and accordingly he took the assistance of Mr. N. V. Ramanandasagar, Chartered Engineer, Visakhapatnam.
The said advocate Commissioner after giving notice to both side counsel visited spot on 1.2.2009, noted down the physical features there of and the alleged defects. It appears that after due exercise the said Chartered Engineer prepared latest estimate keeping in view of the old estimate and escalation of prices. According to the said Chartered Engineer, total cost for rectification of defects to be carried out was made at Rs.3, 41, 632/- as against old estimate of Rs.2,25,550/- shown by the complainant. Accordingly the commissioner submitted his report dt. 30.03.2009 enclosing the said latest estimated prepared by the said Chartered Engineer after due memos and work memos. The OP filed objections dated 6.4.2009 to the said Commissioners report alleging that Advocate Commissioner failed to answer the work memo filed on behalf of the Op and that the Commissioner and Engineer exceeded the scope of the warrant and did not choose to work done by the OP and failed to obtain the expert report for assessing the exterior painting in a scientific manner and that released the Commissioner report after 55 days without filing notes and therefore Commissioner report cannot be accepted. The said objections are not in the shape of affidavit and therefore no importance need to be given for it. The said Chartered Engineer who has about 15 years experience in the field so also the Advocate commissioner has absolutely no reason to submit a false report favouring the complainants association. OP did not impeach credit of the said report of the Commissioner and estimates submitted by the chartered Engineer by any convincing means. In detail, the Consumer Forum discussed item wise with reference to second quoting of painting to the apartment, improper arrangements of telephone connections, post boxes and also painting of the names of the owners of the apartments not done by the builder, so also soil testing, structural defects, sanitary and plumbing defects etc. With reference to the estimates submitted by the said Chartered Engineer in the order under appeal. Absolutely there are no reasons to find fault in the said appreciation. The OP submitted an application vide IA 251/2009 to permit the OP to inspect the plots and common areas along with an expert to show the alleged defects made in order to enable the OP to file his report in the said context. But the said IA was dismissed on 7.5.2009.holding that earlier the Commissioner was appointed who took assistance of chartered Engineer and made observations as to physical features and other details to the knowledge of the OP and in his presence. Thereafter, it appears that One Kolapalli Udayashankar ( DW.2) filed his evidence affidavit in support of the OP describing certain aspects. He was cross examined by the Complainant ,. He did not file the notes, so also, sketch. He did not obtain signatures of residents of any flats to show that he visited the premises on such and such date and noted down the physical features. According to him, he applied for renewal of the licence but it was not yet received. He did not submit any documents evidencing that he applied for such renewal. Evidence of DW. 2 discloses that certain defects were rectified by the time of his visit possibility of getting the same rectified by the Complainant after the Commissioners visit and before DW. 2s alleged visit cannot be ruled out. No efforts were made to summon the commissioner for cross examination. In such circumstances, there is acceptable force in the contention of the complainant that the affidavit of DW.2 was got prepared by OP to support his contentions and that simply he subscribed his signature there on. Thus we are satisfied to hold that DW.2 was pressed into service by OP and hence no credence is need to be given to his affidavit evidence In view of the expert evidence no much importance need to be given to the evidence affidavit of the parties to the proceedings as it amounts to oath against oath.
However, in spite of repeated requests made by the complainants association OP did not rectify the defects in such circumstances no useful purpose will be served in again giving direction to OP to rectify the defects. In order to put a full stop to the litigation rightly District Forum directed the OP to pay the amount described below in stead of giving directions to OP to rectify the defects and in the said aspect also we did not find any fault.
11. The estimation given by the Chartered Engineer for rectification of the defects pointed out by the complainant is Rs.3,42,632/- and the District Forum excluded Rs.71,000/- from it which were estimated for improvement of bore well holding that it was not the duty of the builder and thus came to a conclusion that the cost of the rectification comes to Rs.2,70,632/-. The facts of the case on hand disclose that 9% interest was awarded from 2003 on the amounts spent in 2009 and therefore it requires correction and in such circumstances it would be just and reasonable to award such interest from the date of respective expenditure of the amount. After summing up the entire evidence on record the District Forum rightly came to a conclusion to direct OP to pay Rs.2,70,632/- towards costs of rectification of defects in the building to the Complainants association together with costs of Rs.10,000/-.
12. In the circumstances of the case rightly the parties were directed to approach competent civil court for redressal of the disputes for car parking and tort lot area by the District Forum as the said aspects require a detailed enquiry as complex questions of law and fact are involved. and it was so done relying upon the decisions reported in Honorary Secretary, EMA Vs. Prardhana Constructions 2 (2002) CPJ 119 (NC), D. P. Verma VS. R P Mishra 1 (2001) CPJ 98 ( Maharashtra( (SC), Anil Babu Rao Khandegal III 1993 CPJ 1285 ( Maharashtra) (SC) and in the said aspect also we did not find any irregularity on the part of the District Forum. Absolutely there are no reasons much less valid reasons to set aside the order under appeal. The appeal is devoid of merit and is liable to be set aside.
13. In the result, the appeal is partly allowed and the order of the District Forum is modified directing the Opposite party to refund Rs.2,70,632/- paid by the complainant to OP towards costs of rectification of defects in the building with interest @9% P.A. from the date of respective expenditure till the date of realization. Costs of Rs.10,000/- awarded by District Forum remained unchanged. No costs of the appeal. . Time for compliance four weeks.
MEMBER MEMBER DATED : 23. 01.2012.
Court Judgements To Quote Courts and consumer commissions have ruled in favour of the buyer in many disputes with developers. Go through the list to figure out where your case fits in. It is easier to convince a court or commission if you can cite a precedence.
Supreme Court
1. Housing construction is a service under the Consumer Protection Act.
In 1993, the Supreme Court ruled in favour of MK Gupta in his case against the Lucknow Development Authority for not delivering his flat on time. This landmark judgement brought housing construction under the purview of the Consumer Protection Act, 1986.
The court observed: "When a statutory authority develops land or allots a site, or constructs a house for the benefit of a common man, it is 'service' by a builder or contractor... When possession of the property is not delivered within the stipulated period, the delay so caused is denial of 'service'. Such disputes or claims are not with respect to the immovable property but 'deficiency in rendering of service' of a particular standard, quality or grade... A person who applies for allotment of a building site or for a flat constructed by the Development Authority or enters into an agreement with a builder or a contractor, is a potential user and the nature of construction is covered under the expression 'service' of any description."
2. Interest has to be paid for delay.
In the Ghaziabad Development Authority vs Balbir Singh, 2005 CTJ 124, the apex court, observed: "Normally, a case of delivery of possession, though belatedly, stands on a different footing from non-delivery of possession because in case of delivery of possession, though belatedly, the allottee also enjoys the benefit of a plot/flat. Generally, in such a situation, the rate of interest should not exceed 12%. However, no hard and fast rules can be laid down. In a specific case, where it is found that the delay was culpable and there is no contributory negligence by the allottee resulting in harassment/injury, both mental and physical, the forum would not be precluded from making an award in excess of 12% interest per annum."
National Consumer Commission
1. Buyer is entitled to opt out of a project if there is a delay in delivery.
A buyer is entitled to opt out of a housing project if there is delay in delivery of possession of the house by the real estate developers, the commission has held. It has also said that the buyer is entitled to a refund of the entire money with reasonable interest and any deduction on the said amount is unjustified. The commission passed the order on a petition of anAgra resident, Indira Gupta, seeking the quashing of UP State Commission's direction to deduct 20% from the amount to be refunded to the complainant.
2. Buyer is entitled to withhold payment if the construction does not proceed with payment.
In theAnsal Housing vs Renu Mahendr case (revision petition 1218 of 2006), the commission has held: "If company has not apprised the respondent about the status of the project, which was associated with payments, the respondent withholding the payment was not at fault. The company, while making these communications, had been insisting on the respondent to release the payment, and did not adhere to the terms of the allotment letter, letting the respondent know about the progress of the construction."