BHATIA SEHGAL CONSTRUCTION CORPORATION vs A.S. FILMS

THIS is an appeal against the order dated 16th December, 1991 passed by the State Consumer Disputes Redressal Commission, Delhi in Case No. C-135/91. The complaint was filed by the present respondent. The case of the complainant was that the present appellants who are engaged in the construction of multistoreyed complexes/buildings and selling the flats therein, in 1979 proposed to construct a multi-storeyed commercial complex consisting of commercial flats, shops and basement on plot No. 22 at Rajindra Place, Pusa Road, New Delhi known as Padma Tower No. 2 (hereinafter referred to as the Tower). It invited applications through advertisement in newspapers and property brokers for sale of the flats etc. in the Tower. The complainant applied on 19.1.1979 for allotment of an area of 500 sq.ft. in basement of the Tower and deposited a sum of Rs. 10,875/- towards application money. It was alleged that at that time the respondent assured the complainant that the possession of the basement would be delivered within a period of three years. In pursuance of the said application, the respondents allotted a covered area of 550 sq.ft. in the basement and the same was accepted by the complainant. In terms of the contract the payment was to be made in 15 instalments at various stages of the construction. 15th instalments was of 5% of the total cost of the flat and it was to be paid at the time of delivery of possession. The complainant made payment of 14 instalments as per demand of appellants from time to time.

IT was further alleged that after receipt of almost whole of the amount the appellants did not hand over the possession of the flat to the complainant and diverted the funds so collected for their personal use and benefit. Afterwards the complainants demanded in the years 1983-84 to 1987-88 money towards the electric charges, fire fighting charges, MCD charges, registration charges etc. and the same were paid immediately by the complainant. However, the appellants have not been delivered possession of the area purchased by the complainant till date despite repeated demands. Consequently it was prayed that the respondents be directed to hand over the possession of the basement along with the interest @24% p.a. on Rs. 1,65,670/- amounting to Rs. 2,10,765/- and to pay Rs. 7.5 lacs on account of damages/compensation. In the counter filed by the appellants the pleas taken were that they had never assured the complainant that the construction would be completed and the possession would be handed over within a period of three years. In the allotment letter it was stated that if for any reason the whole project in abandoned or abnormally delayed, no claim will be preferred except that money deposited by the complainant will be refunded without interest. It was further pleaded that in the present case there was no delay. The appellants however, admitted that the complainant was allotted an area measuring 550 sq.ft. in terms of the letter of allotment. The work of constructing the tower was delayed which was due to various problems created by the Local Authorities with regard to fire safety and completion certificate. The building was completed in 1989 and possession of other floors was handed over to the purchasers in that year. However, there was seepage of water in the basement and the appellants were taking extra precautions in rectifying the defect. The basement has not been handed over to any of the prospective buyers as it is not yet in usable condition.

A preliminary objection was also taken by the appellants challenging the jurisdiction of the Forums constituted under the Consumer Protection Act, 1986 (for short the Act) to decide the complaint. Placing reliance upon the earlier orders of this Commission, the State Commission overruled that objection and held that the complaint falls within the definition of ''consumer'' as defined in Section 2(1)(d) of the Act.

THE appellants have given a satisfactory explanation for not delivering the flats in the basement sold to the prospective buyers. THEre was seepage in the basement. In the affidavit before the Commission, the appellants pointed out in detail the nature of water-proofing work which had been carried out in the basement and also filed a letter dated 10th February, 1986 written by Impex International Inc. giving in detail the nature of the work done for the purpose of water-proofing in the basement. It was stated that the appellants have not been negligent or provided any deficient services and that they had acted in the most diligent and hon''ble manner in getting a special water-proofing work done, without charging any thing extra money from the complainant. It is pleaded that the floor of the basement consists of RCC which is more than 4 ft. thick and guniting work has been done. THE side walls are also made of RCC and are more than 18" thick and guniting work has been done. Thus the circumstances are entirely beyond the control of the appellants who have taken reasonable precautions to control the seepage and they cannot be blamed for the same. It is further the plea of the appellant that they are ready and willing to hand over the possession of the basement to the complainant. During the arguments before the State Commission the complainant stated that they were no longer interested in purchasing the area on account of delay. In the reply filed to the memo of appeal the complainant has not denied the contention of the respondents that there was water seepage in the basement. The plea taken is that due to their own negligence and architectural defects and lapses on the part of the appellants this defect in the basement has appeared. The complainant has not let any evidence to show that the water seepage was on account of any error or omission on the part of the appellants. Therefore, it is difficult to hold that the appellants have been negligent or deficient in the rendering of services.

IN fact the appellant is not now interested in taking possession of the space purchased by him. Therefore, at the most they are only entitled to the refund of amount paid by them with interest. The State Commission held that the complainant had deposited Rs. 1,65,670/- with the respondent. It was further held that the rate of price of basement area at present should be Rs. 800/-per sq.ft. The Commission, therefore, concluded that the present price of the area purchased by the complainant at the above said rate comes to Rs. 4,40,000/- out of which he has deposited Rs. 1,65,670/-. Thus he was entitled to Rs. 2,74,033/- as damages. Consequently, the State Commission directed the appellants to pay Rs. 4,40,000/- to the complainant with interest @ 15% p.a. from the date of the complaint till the date of payment within a period of three months. No interest was allowed to the complainant by way of damages as damages in lumpsum have been determined. We are of the opinion that the State Commission had no data before it to hold that the rate of price of basement area is Rs. 800/-per sq. ft. According to the appellants the price of the basement at present is Rs. 300 to Rs. 400/- per sq. ft. As noticed earlier, there is no data to assess the damages caused to the complainant. They can, of course, be awarded compensation in the shape of interest on the amount paid by them. For the foregoing reasons, we partly accept the present appeal and modify the order of the State Commission. The appellants shall refund Rs. 1,65,670/- to the complainant with interest @ 15% p.a. from the date of the various deposits till the date of payment. The dates of various deposits have been given in the order of the State Commission. These payments should be made within three months from the date of receipt of a copy of this order. In the circumstances of this case, we make no order as to costs. Complaint partly allowed.