NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
R.K. Agrawal, President and Dr. S.M. Kantikar, Member
C.P. Kukreja Associates (P) Ltd. and Ors. —Appellants
versus
Lt. Udhay Bhan Singh and Ors. —Respondents
First Appeal No.424 of 2011, First Appeal No.444 of 2011 and First Appeal No.451 of 2011
Decided on 31.1.2022

IMPORTANT POINT
Privity of Contract – Absence of privity of contract is not a bar for maintaining a Complaint against a service provider.

Headnote:

(A) Consumer Protection Act, 1986 – S.19 [Consumer Protection Act, 2019 – S.51] – Services – Real Estate – Appeal against order of State Commission whereby State Commission while partly allowing the Complaint, has directed the Opposite Parties to carry out repairs/renovation and to pay Rs.25,000/- to each of the Complainants towards compensation and costs of Rs.50,000/- – Whether OP’s can escape their liability on the premise that there is no privity of contract qua the Complainants – Absence of privity of contract is not a bar for maintaining a Complaint against a service provider – Therefore, an insured could be a person who hires or avails of the services of the Insurance Company but there could be many other persons who could be the beneficiaries of the services. It is not necessary that those beneficiaries should be parties to the contract of insurance. They are the consumers not because they are parties to the contract of insurance but because they are the beneficiaries of the policy taken out by the insured – Complainants are Consumers and the Opposite Parties are under an obligation to indemnify them for any loss suffered by them even in the absence of any privity of contract. [Paras 18 to 19].

(B) Consumer Protection Act, 1986 – S.19 [Consumer Protection Act, 2019 – S.51] – Services – Real Estate – Whether Architect/ OP No.2, having provided only consultancy services to the Housing Board as per Agreement executed on 10.04.1996 can absolve form its liability for and loss or damage – As per Clause 3.4 (i) of the Agreement dated 10.04.1996, the Opposite Party No.2 was responsible to provide correct drawings, designs and specifications and to ensure that work is being done in accordance with approved drawings, designs and specifications and no sub-standard material is being used in the Project – Hence, were also liable for the quality control of the material used in the construction of the Building as well as the supervision of the work at the site for the entire duration of the Project – Thus, Opposite Party No.2 Architect cannot be absolved from its liability for and loss or damage suffered by the Complainants due to defects in the construction work. [Para 21].

(C) Consumer Protection Act, 1986 – S.19 [Consumer Protection Act, 2019 – S.51] – Services – Real Estate – Whether the Complaint filed was barred by Limitation – Period of default liability – There was continuing cause of action as the complaints regarding cracks, seepage and leakage were continuing even after repairing work by the Opposite Parties – The construction of the Building was completed in the year 2000 and accordingly Virtual Completion Certificate was handed over to it on 10.11.2000. As per the Defect Liability Period for two years from the date of Virtual Completion Certificate i.e. 10.11.2000, the Builder was under an obligation to rectify/removed all the defects pointed out by the Complainants free of costs till 13.09.2002 – Further, it is not disputed that the complaints regarding leakage/seepage/cracks were immediately pointed out to the Housing Board after the completion of the Project. The defects were rectified/cured by the Maintenance Team of the Builder during the Defect Liability Period but still the defects persisted in the building and numbers of complaints were made by the Complainants to the Maintenance Team of the Builder. In its letter dated 30.06.2004 addressed to Project Director, Builder has admitted that as per the discussion with him and the Complaints would not be entertained after 24.05.2004 which means the Default Liability Period was extended till 24.05.2004 as there were lots of complaints from the Complainants regarding seepage/ leakage/cracks in the Building even after expiry of the said period and making the rectification of the defects by the Builders – Therefore, complaint filed in the year 2005 was not barred by limitation. [Para 22].

(D) Consumer Protection Act, 1986 – S.19 [Consumer Protection Act, 2019 – S.51] – Services – Real Estate – Whether Opposite Parties are responsible for the defects of leakage/seepage/cracks in the Building Units provided to the Complainants – The defects in the building as noticed during the Joint Inspection are due to ill maintenance of the building by the Complainants and not on account of any deficiency in service on their part – During the Defect Liability Period, the aforesaid complaints were rectified but the same still subsisted despite the repairs done by the Builder and due to the structural deficiencies the strength and condition of the Building had badly deteriorated just in a span of 10 years of the construction – Thus, three Appeals filed by the Opposite Parties are dismissed leaving the parties to bear their respective costs. [Para 26].

Result: Appeals dismissed.