A builder's failure to complete construction and deliver possession of a flat within the stipulated time amounts to deficiency in service and the builder is liable to pay compensation to the complainant.

Mr. Justice Dr. Eurico Da Silva, President—The complainant entered into an Agreement with the opposite party No. 1, on 16.7.1996, under which the said opposite party agreed to construct for and sell to him, for a price of Rs. 4,46,600/-, flat No. G-3 having two bedrooms to be erected on the ground floor of the building C-3 in the project known as “Budget Homes” at Chimbel village. The flat was supposed to have super built-up area of 77 sq. mtrs. and the construction was to be done as per the specifications as set out in the Agreement. Pursuant to the said Agreement the complainant made payments to the opposite party No. 1 on a total sum of Rs. 3,46,350/-. The construction was to be completed in all respects within 12 months from the date of the Agreement, that is, by 15.7.1997. The payment of the price amount was to be made in instalments on the basis of stages of the work done. The opposite party started the construction but failed to proceed with the work as promised by and despite the fact that more than 2 years have passed from the date of the execution of the Agreement neither the construction has been completed nor has it even reached the stage of completion. In fact, only the external framework of the building has been constructed in which the flat was to be located and, at present, the work on the site has been abandoned for the last more than one year. The complainant approached the opposite party and questioned them about the undue delay in completion of the construction but they gave evasive replies and, therefore, he wrote a letter, dated 21.10.1997, to the opposite party to complete the construction and deliver the possession of the flat. The opposite party agreed and undertook to complete the construction of the flat, latest by 15.1.1998, but again failed to keep the promise. The complainant is a Bank employee and had made payments to the opposite party by raising private loans and also from his personal savings. He is loosing interest on the amount paid to the opposite party and has to pay interest on the private loans raised by him. He suffers a loss of 24% per month on interest. The complainant agreed to purchase the flat with the intention to shift his residence to Chimbel since he is presently posted in Panaji. As a result of non-completion of the flat he is incurring huge losses and has to spend on transport, food and other heads. On this count the losses are on average to the tune of Rs. 4,000/- per month. Further, if he now attempts to purchase a similar flat in the area he will have to pay atleast Rs. 1,00,000/- more than what was agreed as price for the flat. The complainant is ready and willing to pay the balance price amount of Rs. 1,00,250/-, as per the Agreement, to get possession of the flat, besides he had also to suffer great inconvenience and mental agony due to undue delay, which are all assessed at Rs. 50,000/-. The action of the opposite party amounts to deficiency in service and the complainant is entitled to seek for relief. He therefore prayed that the opposite party be directed to complete and deliver possession of the flat as per the specifications of the Agreement within such time as stipulated by the Commission on payment of Rs. 1,00,250/-. A further prayer was made that the opposite party be directed to pay compensation of Rs. 4,000/- per month for the expenses incurred, to be calculated from August, 1997 till the delivery of possession of flat and one more payment that the opposite party be ordered to refund to him is a sum of Rs. 3,46,350/- with interest at the rate of 24% per annum from 16.7.1996 till the payment. In addition to that two additional prayers were also made for ordering the opposite party to pay a sum of Rs. 50,000/- towards mental torture and agony and a sum of Rs. 1,00,000/- towards losses suffered due to increase in the value of a similar flat in the locality.

2. The opposite party although duly served with the notice to give their version in defence chose to r