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S. Rajagopalan - Appellant
Versus
A. Velankanni - Respondent
Decided On : 09/07/1994
O.P No 112/93 to 117/93
Advocates Appeared :
G. Thangapandian,N.M. Mohammed Khan
Held: Construction of a house or a flat is a service done by the builder or contractor and the dispute arising between the purchaser and the builder are not in respect of immovable property but deficiency in rendering service of particular quality or standard. The term deficiency has been defined in Section 2(1) (g) of the Consumer Protection Act ‘deficiency’ means any fault, imperfection, short coming 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 by us) - Section 2(1) (O) of the Consumer Protection Act as amended by the Amendment Act of 1993 specifically includes housing construction as a service. It follows therefore that the deficiency in the construction of a building in pursuance of a contract comes within the ambit of the Consumer Protection Act and these complaints which allege deficiency on the part of the opposite party who has undertaken to contract the flats are perfectly maintainable. (Para 16)
(ii) Consumer Protection Act, 1986Sections 2 & 14 - Housing - Failure to complete construction of flats within specified period - Delay and default in construction entirely due to builders financial constraints - Diffidence-in-service - Complainants not interested in having remaining work completed by the builder-opposite party - They want to complete construction themselves - Complainant entitled to access amount with interest @ 18% - Surveyor appointed to calculate excess amount paid.
Held: The complainants who want to complete the construction will necessarily have to face the escalation in the building materials and in the cost of labour. Infact, the opposite party has himself admitted in his letter dated 2/9/1992 (vide Exh. A4 in O.P. 112/93) that the cost of escalation has gone up to the tune of around 80%. The excess amount has also been utilised by the opposite party. In the circumstances the complainants are entitled to interest at 18% as claimed by them on the excess amount from 1/2/1992 by which date the construction ought to have been completed and delivered, till payment and compensation in the sum of Rs. 25,000/- to each of the complainants towards mental agony. The complainants are not entitled to another claim by way of loss of rental income. (Para 34)
Result: Complaint allowed. Opposite party to hand over possession of complex to complainants ‘as is where is’ condition.
S.A. Kader, President - These complaints are filed under Section 17 read with Section 12 of the Consumer Protection Act.
As the subject matter of these claims namely the construction of flats for these complainants in the residential complex at door No.5, Bajanai Koil Cross Street, Choolaimedu by the opposite party building promoter is the same and as the /- opposite party is also the same in ail these O.P.s, /- they are taken up together for hearing.
2. O.P. 112/93: The complainant has purchased an undivided 11.63% share of vacant land in No.5, Bajanai Koil I cross St., Choolaimedu. He and the other complainants in other O.P.s. who have also purchased undivided shares in the said land entered into a memorandum of agreement separately with the opposite party for the /- purposed constructing flats in the said land on e 26/11/1989. The consideration for the construction payable by the complainant for his flat is s Rs.1,59,700/- As per the terms of the agreement the opposite party ought to have completed f the flat in or about 10 to 12 months from the date of commencement of the construction i.e. before .; May 1991. But the opposite party failed to - complete the construction even several months thereafter. By letter dated 2/9/1992 the opposite party claimed payment of additional 15% towards the cost of the escalation of building and labour materials. And the complainant sent a reply denying the claim as the delay was only due to the fault of the opposite party and as there was no escalation clause in the memorandum of• agreement. The complainant has so far paid Rs. 1,09,600/- but the opposite party has not completed even 50% of the work. A surveyor was appointed by the complainant and he assessed the cost of construction so far done at Rs. 48,310/- only in respect of this complainant's flat. The complainant has paid Rs. 1,09,600/- and there was an excess of Rs. 61,2990/- with the opposite party. Had the opposite party completed the work and handed over the flat in May 1991, the complainant could have saved the rental payment at the rate of Rs. 1,134/- per month. He has therefore claimed.
1) refund of the excess payment of Rs. 61,290/- with interest at 18% p.a.
2) Rs. 20,412/- towards loss of rental income.
3) Rs. 50,000/- towards loss of money and mental agony
3. It is contended by the opposite party that the claim raised by the complainant is in the realm of alleged breach of contract and it is outside the purview of the Consumer Protection Act. The cost of the site purchased by the complainant is Rs. 26,750/- and it is payable to the opposite sc party. The period of 12 months for completing the construction has to be reckoned from the date of the commencement of the construction as far as possible. The revised plan was sanctioned by the statutory authorities only December 1990 and the opposite party commenced construction in January 1991. The opposite party had to stop construction as the road leading to the construction site was completely blocked by the Corporation and the Water Works Department which had 2 dug the road for laying giant pipes. The opposite party could not take building materials to the site as there was no fordable road. The road block was lifted only in January 1992 and the construction work was continued immediately thereafter. No construction work could be done from April 1991 to December 1991 on account of the above road block. It is denied that the complainant has paid Rs.1,09,600/-. He has paid only Rs. 98,000/-. The complainant is attempting to exclude his liability for the cost of the land. It is denied that the complainant has completed the work only to the extent of 50%. The construction has been done for more than 65%. The assessment of the cost of the work done so far at Rs. 48,310/- by the complainant's surveyor is arbitrary and imaginary. According to the opposite party the value of the work so far done is not less than Rs. 95,055/- The delay in the construction was due to act of God and the co
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