State Consumer Disputes Redressal Commission
M/S Ravalnath Builders, vs Shri Jawahar Haridas Champsi, on 13 January, 2010
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 Appeal No.11/2005 M/s Ravalnath Builders, A partnership concern, Having their address at F-1, Excelsior Chambers, M.G. Road, Panaji, Goa. Represented herein by their Partner Shri Sanjay Vasant Harmalkar, major, married, Businessman r/o Panaji, Goa. Appellant (Original Opposite Party) v/s Shri Jawahar Haridas Champsi, major, married having address at 47, Haridas Champsi, Opp. Udipi Coffee House, Near Azad Maidan, Panaji-Goa. Respondent (Original Complainant) For the Appellant Shri A. Kantak, Advocate For the RespondentShri D.D. Zaveri, Advocate Dated:13-01-2010 ORDER
[Per Smt. Caroline Collasso, Member]
1. This appeal challenges judgment and order of the District Forum, North Goa, dated 25-01-2005 in complaint No.95/2003.
2. The parties will be described as arraigned before the District Forum for matter of convenience.
3. The case of the Complainant is that he is owner in possession of a property situated at Panaji. The Opposite Party is a Builder cum Developer. On 24-01-1997, the Complainant and the Opposite Party executed an Agreement for Sale-cum-Development whereby the Opposite Party had agreed to purchase the property of the Complainant and develop the same.
Opposite Party was to construct a multi-storeyed building keeping the Complainant in possession as owner of a 60 sq.mtr shop with an open space of 55 sq.mtrs. Under the Agreement, the Opposite Party was to negotiate with tenants who were on the property and obtain permission for demolition of the portions in occupation of the tenants and they were to vacate their present areas in order to construct the said building. The Opposite Party was to hand over possession of the ready and finished shop to the Complainant in the said building within ten months from the actual possession of the vacant plot, provided Occupancy Certificate was obtained from the Municipality. Failure of this, the Opposite Party was to pay Rs.5,000/- p.m. as compensation till actual possession was given. The consideration for the sale/exchange was Rs.19 lakhs which was to be paid in the following manner:
(a) On signing the agreement - Rs.4 lakhs.
(b) On possession of the shop Rs.10 lakhs
(c) On or before completing 6 months from the date of actual possession of the shop.
4. The Complainant states that he is in possession of a shop admeasuring 27 sq.mts. which is a part of the above mentioned property and is running the business therein, since the last 20 years.
5. The Complainant also executed a Power of Attorney in favour of the Opposite Party authorizing him to obtain various permissions, licences, etc. from competent authorities for the purpose of the above mentioned construction.
6. The Complainant states that till the time of filing of the complaint, Opposite Party did not take any steps to develop the property and has thus put the Complainant at loss and mental tension. The complainant states that after the execution of the Sale cum Development Agreement with the Opposite Party, the Complainant could not alter, renovate or start any other business activities for handing out the possession of the said shop along with the said property.
7. Complainant therefore, prayed that he is entitled from the Opposite Party Rs.5000/- every month till they complete the work and give the Complainant the possession of the said shop. The compensation of Rs.5000/- shall start from the date of execution of the Agreement till the shop is given in possession. The Complainant is entitled for the completion of the entire work mentioned in the said agreement or cancel the agreement by giving compensation.
8. The complainant received Rs.7 lakhs by three separate cheques drawn on Canara Bank. The complainant further stated that the Opposite Party had never stated that they were not able to give possession of the said shop, nor did they ask for refund of Rs.7 lakhs given to him. The Complainant further stated that he was entitled to Rs.2,40,000/- as compensation, since he could not do any other activities in the said property, in addition to the Rs.5,000/- p.m. as per Clause 16 of the Agreement till possession of the shop is given. The Complainant also prayed for compensation of Rs.13 lakhs for mental agony for not developing the property, since 24-01-1997 and putting him at a loss.
9. The Complainant had also issued notice dated 10-03-2003 sent to the Opposite Party which was replied to by Advocate for the Opposite Party on 26-03-2003.
The Complainant relied on the Agreement for Sale cum Development dated 24-01-1997 as well as the legal notice which was annexed to the complaint.
10. The Opposite Party in its written version raised preliminary objections that the complaint was not maintainable in as much as it did not disclose any cause of action, nor spelt out any deficiency in service against the Opposite Party; that the complaint was hopelessly barred by the Law of Limitation; the Complainant was not a consumer as defined under the Consumer Protection Act; the complaint involved disputed questions of fact and law, which could not be decided summarily and appropriate Forum would be a Civil Court; that the Complainant had suppressed facts and had approached the Forum with unclean hands.
11. On the factual aspects, Opposite Party denied that the Complainant had hired the services of the Opposite Party. Opposite Party had agreed to purchase the property on certain terms and conditions as mentioned in the Agreement. The development and construction was the independent activity of the Opposite Party after the purchase and which development was not for the complainant.
12. The Opposite Party stated that till date, he had paid an amount of Rs.7 lakhs to the Complainant, who has been enjoying the benefit of the amount and was still carrying on the business in his own shop, which he was entitled to hand over as per the Agreement. The Opposite Party further stated that he had performed every part of his obligation and made every effort to negotiate with the tenants and due to the exorbitant demands from them a settlement could not be arrived at for purpose of demolition of the said shop. Opposite Party denied that he did not negotiate with the tenants and stated that such negotiations did not yield any results because of the adamant attitude of the tenants.
13. Opposite Party stated that handing over possession of the said shop to the Complainant was subject to the Complainant handing over possession of the plot in which the building was to be constructed and after obtaining Occupancy Certificate from the Municipality. Opposite Party stated that vacant possession of the plot was not given and hence there was no question for payment of Rs.5,000/- or any other amount as alleged. Opposite Party stated that the Complainant was still in possession of his shop which was part and parcel of the property and was carrying on business for the last 20 years till date in the said shop. Opposite Party further stated that he had drawn up plans and obtained permission from some authorities but was still unable to execute the said project.
He thus denied that he did not take any steps to develop the property or obtain No Objection from the Municipality.
Opposite Party denied that Complainant was put to any loss/mental tension and contended that hardship and loss in fact has been caused to him. Opposite Party had paid to the Complainant more than what he was entitled to under the Agreement. Opposite Party denied that payment of the compensation would start from the execution of the Agreement till possession of the shop was given, since the Complainant was entitled only if he performs his part of the contract. The Complainant was not entitled to cancel the Agreement unilaterally. However, in reply to the notice, Opposite Party offered to the Complainant to revoke the Agreement. Opposite Party stated that he was entitled for refund of the entire amount paid to the Complainant along with 24% interest p.a. Opposite Party denied that he had never asked for the refund of Rs.7 lakhs and stated that vide his reply dated 26/03/2003 to the legal notice sent by the Complainant, the Opposite Party had offered to revoke the Agreement and refund of the amount of Rs.7 lakhs at 24% interest p.a. Opposite Party stated that he had suffered great loss for having invested in such a project and that too when the Opposite Party had not performed his part of the obligation. Finally the Opposite Party stated that since vacant possession of the plot was not given to him, and which vacant possession was a pre-condition, which condition the Complainant failed to discharge, hence construction could not be done. Opposite Party prayed that the complaint be dismissed with heavy costs.
14. Affidavit in reply was filed by both the parties and written arguments placed on record. On hearing arguments, the District Forum directed as under:
1. Opposite Party is directed to immediately hand over legal/physical possession of the said plot back to the Complainant with immediate effect.
2. Though the quantum of monetary loss suffered by the Complainant as per todays market prices if quantified will amount to a large sum of money, it will be justifiable that the amount received by the Complainant from Opposite Party till date is treated as compensation to the Complainant for the delay, hardship and monetary loss caused to the Complainant by the Opposite Party and the Complainant is not required to return the same to the Opposite Party as we treat the same as compensation to be paid by Opposite Party to the Complainant.
3. Orders to be complied within 30 days from the date of this order.
15. Aggrieved by the order, the Opposite Party filed the present appeal inter alia on the following grounds: that the District Forum had erred in arriving at an opinion that the Respondent was a consumer as defined under the Consumer Protection Act; that the District Forum ought to have appreciated that the terms as set out in the agreement were not complied with; that the District Forum failed to appreciate that the construction of the building was specifically dependent on the tenants vacating the areas occupied and handing over the vacant possession of the said property; that no prejudice whatsoever has been caused to the Respondent in as much as he continued to occupy and do business in the premises and in addition, was paid by the Appellant the amount payable in terms of the Agreement; that the District Forum has failed to appreciate that the Respondent also did not vacate and hand over vacant possession of the said area; that the District Forum has erred in granting Rs.7 lakhs received by the Respondent as compensation which was not at all contemplated or set out in the Agreement; that the District Forum has not appreciated the contents of reply of Opposite Party dated 26-03-2003; that the impugned order has caused unjust enrichment of the Respondent.
16. The Appellant, therefore, prayed that the order dated 25-01-2005 passed by the District Forum, North Goa, be quashed and set aside. An application for stay of the order was also made and for keeping the appeal in abeyance pending disposal of the Special Civil Suit No.16/2005/B before the Civil Judge, Sr. Division at Panaji. Vide order dated 18-11-2005, this Commission held that there was no question of keeping this appeal in abeyance, due to the filing of the subsequent suit on the same subject matter and the application was dismissed.
17. We have perused the documents on record in detail. At the onset, there is no dispute that Opposite Party till date has not handed over the shop in the building to be constructed to the complainant. Also not disputed is that Rs.7 lakhs has been received by the Complainant from the Opposite Party vide cheques drawn on Canara Bank. A perusal of the Agreement for Sale cum Development dated 24-01-1997 entered into between the parties, clearly states at para 4 that the vendors (i.e. the Complainant herein ) shall not have to pay anything for the construction of the said shop, which would be given duly built up by the purchaser to the vendor as consideration for the sale of the said property. Further, at para 13 the vendor granted permission to the purchaser to start construction in the property with the permission of the three tenants who were having two houses on the said property.
18. It is not dispute that in terms of the Agreement, the Opposite Party was required to settle with the tenants, obtain permission from concerned authorities and then construct the building, after the vacant possession of the plot was obtained by them. Thus we see that the obtaining of the vacant possession of the plot for construction to be started required that the occupied compartments of the three tenants had to be vacated prior to construction. Needless to say, without obtaining vacant possession, construction on the said plot could not be started.
19. Clause 16 of the said Agreement clearly stipulates that the Purchaser (the Opposite Party herein) shall hand over possession of the ready and finished built up shop, measuring 60 sq.mts. which is to be allotted to the owner in the building proposed to be constructed in the said property within 10 months from actual possession of vacant plot (emphasis added).
20. Thus we see that vacation of the premises by the tenants was a condition precedent in the said agreement and hence, in view of the uncertainty as regards the vacation, the agreement had stipulated that the shop would be handed over within 10 months from actual possession of the vacant plot.
21. We are inclined to believe the contention of the Opposite Party that there was no breach of any of the terms of the agreement, as handing over of the shop was clearly subject to obtaining vacant possession. The Opposite party contends right at the onset in their written version, that he had performed every part of his obligation and had made every effort to negotiate with the tenants, but the tenants were of adamant nature and demanding exorbitant amounts for settlement. The negotiations did not yield any positive results for settlement.
On this aspect, the Complainant contended that there was no evidence whatsoever on record adduced by the Opposite Party to the effect that they had at any point of time, made efforts to negotiate with the three tenants. It is obvious that the Opposite Party did not make attempts to go ahead with the construction, which can be seen from the fact that he has paid the Rs.4 lakhs stipulated in the Agreement, at the time of signing and has gone further by paying an additional amount of Rs.3 lakhs to the Complainant, which amount is in excess than what was due to him. If the Opposite Party was not interested in going ahead with the construction, he would not have parted with such huge sums of money. We also see that the Opposite Party had engaged the services of the Architects and Engineers and gone to the extent of obtaining permission from different authorities in an attempt to execute the project. Copies of such permissions were annexed for our perusal.
22. We also note that the Opposite Party besides signing the agreement, has not parted with any money and continues to be in possession of the shop un-interrupted throughout the proceedings. Besides, the complainant has been in enjoyment of Rs.4 lakhs since 24-01-1997 and Rs.3 lakhs paid in the year 1999. The Opposite Party was well aware vide reply to his legal notice, way back on 26-03-2003, that the demands of the tenants could not be settled due to their aggressive/exuberant attitude and has offered to revoke the agreement and advised refund of the amount of R.7 lakhs with interest. Thus we see that it was open to the Respondent at that time way back in 2003 to have terminated the agreement if he had any grievance of the construction being delayed as against the Opposite Party. Hence, we are of the opinion that there was no breach of any of the terms of the agreement as handing over of the constructed shop was a priori subject to obtaining vacant possession of the said plot which was dependent on the tenants on the said plot, and the complainant himself vacating the same. Further the Complainant himself in para 4 of his complaint, has clarified that the shop proposed to be constructed was to be handed over within ten months from the actual possession of the vacant plot given to the Opposite Party/Builders.
We also note that the Complainant himself has not handed over his own premises to the Opposite Party/Builders and continue to be in possession of his shop on the said property. It would have been a different matter if the Complainant had handed over his portion of the shop to the Opposite Party/Builders as this would have shown his intention to hand over vacant possession. The Complainant obviously wants to have his cake and have it too and this cannot be permitted.
23. On the issue of compensation of Rs.7 lakhs that has been granted by the District Forum to the Complainant for delay, hardship and monetary loss caused to him, we are not in agreement with the same. Firstly, we note that the Complainant continued to be in possession of his business premises uninterrupted and there is nothing to show that any loss was occasioned to him due to the signing of the agreement. Further, a perusal of the agreement entered into, clearly stipulates at para 16 that if possession of the said shop was not given within 10 months from taking possession of the vacant plot, then purchaser shall pay Rs.10,000/- p.m. as compensation to the owner till actual possession was given. Hence, the agreement clearly stipulates when and what amount of compensation is to be granted.
24. A bare reading of the terms clearly indicates that if the opposite party had not granted possession within 10 months of receiving vacant possession of the said plot, then he would be liable to payment of Rs.10,000/- a month as compensation. We are in agreement with the opposite party that the agreement does not mention any clause for forfeiture of the amounts paid. Thus without vacant possession of the said plot being given to the opposite party, there is no question at all of the commencement for payment of compensation at Rs.10,000/- p.m. Thus the order of the District Forum which stated that the quantum of monetary loss suffered by the Complainant as per todays market price, if quantified, will amount to a large sum of money, is unreasonable and unjustified.
25. The complainant has also stated that as a result of the negligence, deficiency and breach they have suffered enormous prejudice and were thus entitled to be compensated. We are of the opinion that besides mere words such as enormous prejudice, there is no evidence brought on record as to in what way the Complainant has been prejudiced and/or what losses, if any, were suffered by him. As stated earlier, the Complainant was well aware in March of 2003 that the demands of the tenants would not be settled.
26. The Opposite Party has raised the issue of whether the Complainant/Vendor is a consumer as defined under the Consumer Protection Act and whether the Opposite Party had to render any services to the Complainant as part of the agreement. However, in view of our discussions above, and our opinion that the complaint itself is premature, we need not go into this aspect.
27. In view of our discussions above, we hold that vacant possession not having been given to the Opposite Party/Builder in terms of Para 16 of the Agreement, the complaint is premature and cannot be sustained.
ORDER Appeal allowed.
The Judgment and order of the District Forum dated 25-01-2005 is quashed and set aside. Parties to bear their own costs.
Pronounced.
[Sandra Vaz e Correia] Member [Caroline Collasso] Member