Unilateral changes to the terms of an agreement leading to delay in possession of a residential house constitute deficiency in service under the Consumer Protection Act.

Mr. B.K. Taimni, Presiding Member—Appellant was the opposite party before the State Commission where the respondent/complainant had filed a complaint alleging deficiency in service on the part of the appellant.

2. Undisputed facts of the case are that the respondent who was an NRI, with a view to buy an apartment, entered into an agreement with the appellant on 26.9.1996. This contract envisaged payment of price of land as also for the flat. There was a schedule of instalment fixed as the part of the contract which envisaged the delivery of apartment by August, 1998. It was the case of the complainant that having paid 8 instalments to the tune of Rs. 13,14,780, which included 7 instalments to the flat as also undivided interest in land, the flat was found to be nowhere ready for delivery. They were shocked to receive a letter dated 2.11.1997 (page 208 of the paper book) wherein payment of instalments were re-scheduled and so was the date of delivery going upto February 1999. Since this change of terms and rescheduling was not acceptable and when complainant asked for refund of money with interest and when the appellant indicated readiness to refund the money but without any interest and when matter could not be solved with regard to the interest/damages, a complaint was filed before the State Commission, who after hearing the parties through an exhaustive order directed the appellant to refund the deposited amount of Rs. 13,14,780 along with interest @18% p.a. from the date of respective deposits till the time of payment along with cost of Rs. 5,000. Aggrieved by this order, this appeal has been filed before us.

3. We heard the learned Counsel for the parties at considerable length and perused the material on record. Plea of the appellant is three-fold. One that the time is not the essence of the contract; second that deficiency, if any, lies with the respondent/complainant as he was not regular in paying the instalments on schedule — in fact he had not paid the last 3 instalments and thirdly, additional/extended period for delivery was also justified/required to complete the flat for delivery, after making the necessary additional construction/modifications, suggested by the complainant.

4. Dealing with the first point first, the learned Counsel for the appellant has relied upon the judgment of the Hon’ble Supreme Court in the case of M/s. Hind Constructions Contractors v. State of Maharashtra, (1979) 2 SCC 70. The same judgment was also relied upon by the appellant before the State Commission. In our view the State Commission not only taking into consideration the judgment (supra) relied upon by the appellant but also the other judgments of Hon’ble Supreme Court especially in the case of Lucknow Development Authority v. M.K. Gupta, III (1993) CPJ 7 (SC)=(1994) 1 SCC 243, has clinched this issue. It needs to be appreciated that in the judgment of Hon’ble Supreme Court in the case of Lucknow Development Authority v. M.K. Gupta (supra), the Hon’ble Supreme Court was dealing with residential houses, which is the issue before us as well, whereas in the case of M/s. Hind Constructions Contractors v. State of Maharashtra (supra), the Supreme Court was dealing with the question of construction of an ‘aqueduct’. The Consumer Courts are designed to attend to the question of ‘deficiency’ in service. The word deficiency has been defined under Section 2(i)(g) of the Consumer Protection Act, 1986, which reads as under:

“deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service”.

(Emphasis supplied)

5. After going through the facts as enumerated earlier, we are left in no doubt that when the appellant in view of the certain compulsions or market conditions or for any other reasons, uni