Classic Kudumbam & 2 Ors vs Kamakshi Pant

Dr. B.C. Gupta, J.

These two first appeals have been filed under section 19, read with section 21(a)(ii) of the Consumer Protection Act, 1986 challenging the legality and correctness of the impugned order dated 17.02.2012, passed by the Tamil Nadu State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission') in consumer complaint No. 46/2010, filed before them by the complainant Kamakshi Pant.

The facts of the case are that Mrs. Lakshmi Chander, the sister of the complainant Mrs. Kamakshi Pant and a widow, got herself admitted in an apartment made by a Retirement Community called the Classic Kudumbam.She visited the said place on 14.11.2008, accompanied by her sister (complainant) and her brother-in-law and met the Manager and the representatives of the Rajakalyani Charitable Trust, managing the said Retirement Community.She stayed for four days on trial basis, in apartment No. 102 from 13.12.2008 on payment of ₹8,000/-. The opposite party (OP) allotted apartment No. 211 to her on 24.12.2008, for which she made payment of ₹10 lakh in the name of Classic Kudumbam and payment of another ₹50,000/- in favour of Rajakalyani Trust as caution deposit. It has been stated in the consumer complaint that the said deposits were made on the understanding that the same will be refunded at the time of surrendering the premises in question. It is also stated that the caution deposit of ₹50,000/- was meant for meeting the cost of medical emergencies. For her stay at the premises, she was made to pay a fee every month towards accommodation, food and other expenses and her monthly bill, on the average, came to be ₹11,000/-.

It has been alleged in the consumer complaint that the OPs had given the assurance that a qualified doctor would visit the Retirement Community every day, but there were no such regular visits by the doctor. It is further stated that Mrs. Lakshmi Chander became unwell on 26.11.2009 and that she consulted Dr. Augustine on that day, but the said Doctor made wrong diagnosis upon her and prescribed medicines which were not suitable. After two days, the complainant had to take Mrs. Lakshmi Chander to a hospital for treatment of internal bleeding and then, she was admitted to the critical care unit of the Apollo Hospital, but Mrs. Lakshmi Chander could not survive and died on 17.02.2010. It is alleged that there was lack of basic medical care at the Classic Kudumbam, which showed deficiency in service on their part. After Mrs. Lakshmi Chander moved out of Classic Kudumbam, it was conveyed to the OPs that she would be surrendering her apartment from 17.12.2009.

The OPs sent reply dated 18.12.2009 that the surrender would be effective by the end of December 2009. The said apartment was surrendered on 28.12.2009, but the deposits of ₹10 lakh and ₹50,000/- were not refunded to her. Subsequently, the complainant received a cheque of ₹11,500/- from the OPs on 25.06.2010, stating that a sum of ₹39,500/- out of the caution deposit of ₹50,000/-, had been spent by them in the repair work etc. for the apartment. However, the complainant returned the said cheque to the OPs, stating that the full amount of deposit should be refunded to them. Regarding the deposit of ₹10 lakh, it was stated by the OPs that the said sum would be refunded, after the said premises was occupied by next person. The complainants filed the consumer complaint in question, seeking directions to the OPs to pay a sum of ₹10 lakh and ₹50,000/- as deposits having been made at the time of occupying the premises and also to pay a compensation of ₹10 lakh for mental agony etc.

The consumer complaint was resisted by the OPs by filing a written version before the State Commission, in which they stated that in accordance with an agreement entered by them with Mrs. Lakshmi Chander, called the "Deed of Licence", only 70% of the amount of ₹10 lakh deposited with them was refundable without interest, on the termination of the agreement and handing over the premises back to the OPs.Moreover any damage, repairs, wear and tear of the furniture items and fixtures provided by the OPs, was to be made at the cost of the user.The OPs stated that the amount spent on the repair and rectification of Room No. 211 was ₹39,500/- and after deducting the said amount from the caution money, the balance amount of ₹11,500/- was refunded to the complainant as nominee of Mrs. Lakshmi Chander.Since she returned the said cheque through letter dated 06.07.2010, they sent the cheque again, but the same was returned once more.The OPs further stated that 70% of the deposit of ₹10 lakh was to be refunded without interest only, after the room vacated by the previous occupant was booked by another person.Since the said room No. 211 was booked by an occupant on 14.10.2010, they refunded a sum of ₹7 lakh to the complainant vide cheque dated 20.10.2010, which was accepted by the complainant vide her letter dated 04.11.2010 without prejudice.The OPs stated that there was no deficiency in service on their part.

The State Commission vide impugned order allowed the consumer complaint holding the OPs liable for deficiency in service and directed them to refund the balance amount of ₹3 lakh to the complainants and ₹40,000/- towards caution deposit, after deducting a sum of ₹10,000/- towards pillows and mattresses.A compensation of ₹10,000/- and a litigation cost of ₹5,000/- was also allowed.

Being aggrieved against the above order of the State Commission, both the parties have challenged the same by way of the present appeals.The OPs Classic Kudumbam and Ors. vide their appeal FA No. 218/2012, have sought to set aside the impugned order of the State Commission, whereas the complainants vide FA No. 586 of 2012, have sought enhancement of compensation for deficiency in service to ₹10 lakh and have also sought the refund of the entire amount of ₹50,000/- as caution money.

During arguments before us, the learned counsel for the Classic Kudumbam and Ors., the appellants in FA 218 of 2012 has drawn attention to a copy of "Deed of Licence" placed on record, stated to have been executed on 24.12.2008 between Mrs. Lakshmi Chander and the representative of the OPs.The said document bears the signatures of Mrs. Lakshmi Chander and the proprietrix of Classic Kudumbam.It has been stated in the said document that the premises in question had been licenced by the OPs to Mrs. Lakshmi Chander for a period of 20 years.She had paid a sum of ₹10 lakh as deposit with them, out of which 70% of the amount was refundable on termination of the agreement and subject to allotment of the apartment to the next person.It was also stated that a refundable caution deposit of ₹50,000/- had been paid by the complainants to the OPs.The learned counsel stated that they had refunded the amount of ₹7 lakh in accordance with the terms and conditions of the "Deed of Licence".The complainant had not furnished any evidence to disprove the said document.Moreover, the contention made in the order of the State Commission that the document could not be relied upon, as there were no witnesses etc. on the same, was without any basis.It was not mandatory to have witnesses, when two parties wanted to enter into a contract.The learned counsel stated that Mrs. Lakshmi Chander had occupied the apartment, being fully aware of the terms and conditions of the allotment.There was no deficiency in service on their part and hence, the impugned order of the State Commission should be set aside.

The learned counsel for the complainant Kamakshi Pant argued on the other hand that a copy of the terms and conditions placed on record by the OPs itself indicated that the refundable deposit/caution deposit was to be refunded to the respondent, after deductions, if any.However, there was no mention in the said terms and conditions that only 70&% of the refundable deposit of ₹10 lakh shall be given back.The learned counsel argued that the document called "Deed of Licence" was not in existence at all.The learned counsel further argued that if there was a clause of deduction of 30% of the deposit in the agreement, the said stipulation amounted to unconscionable contract which could not be enforced in the eyes of law.The learned counsel has drawn attention to an order dated 10.01.2014 passed by this Commission in RP No. 4695/2013 "Classic Kudumbam vs. S.P. Sundaram & Anr." in which, it was held that the refusal to refund the deposit made by the OPs amounted to an unconscionable contract, which could not be enforced.The Commission directed the payment of the amount deposited alongwith interest.The learned counsel further stated that since no medical facility had been provided to the occupant, they should be given adequate compensation, rather interest should also be awarded on the said compensation.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

In FA No. 218/2012, the appellants/OPs Classic Kudumbam have placed on record a document with the caption "Deed of Licence" which has been signed by the occupant of the building Mrs. Lakshmi Chander and Mrs. S. Bhanumathi, the proprietrex of Classic Kudumbam.Clause 2 & 3 of the said document says as follows:-

"2. The Licensee has paid a sum of ₹10,00,000/- (Rupees Ten Lakhs only) by Cheque No. 319936 dated 24.12.2008, drawn on ICICI Bank, Besant Nagar Branch, Chennai towards Refundable Licence amount to the Licensor.

The details of the payments made by the Licencee and accepted by the licensor is as follows:-

Payment for license for 20 years out of which 70% is refundable without interest on termination of agreement as per agreement, terms & conditions (subject to allotment of the apartment to next person.)"

A copy of another document with the title, 'Application for admission and terms and conditions' has also been placed on record, clause 11 of which states as follows:-

"11. The Refundable Deposit/Caution Deposit after deduction, if any, shall be refunded to the resident subject to the next occupant (selected by Kudumbam) occupying the premises."

It would be seen from above that in the document, "Deed of Licence," 70% of the refundable deposit of ₹10 lakh is stated to be refundable without interest on termination of agreement, subject to allotment of apartment to next person.In the terms and conditions, however, it has been stated that the said deposit shall be refunded after deduction, if any, but the quantum of such deduction has not been specified.

The complainant has denied the existence of any such document, called the "Deed of Licence".However, they have not stated anywhere whether the signatures of Mrs. Lakshmi Chander on the said document were not genuine.In case, they doubted the validity of such document, they could have produced evidence in the shape of opinion of an handwriting expert etc., who could have compared the signatures of Mrs. Lakshmi Chander on some standard document.It cannot be stated, therefore, that the document "Deed of Licence" is a forged or invalid document.In the impugned order, the State Commission observed that since the OPs had failed to get the signatures of the nominee at least, as witness, the document was not enforceable.However, we do not agree with the view expressed by the State Commission, as there is no mandatory requirement that the document signed by the two parties to the agreement, should have been signed by any third person as a witness or by the nominee of the occupant of the premises in question.

The next point that arises for our consideration is whether the said document could be stated to be an unconscionable contract, given the facts and circumstances of the case.The learned counsel has drawn attention to an order passed by this Commission on 10.01.2014, "Classic Kudumbam vs. S.P. Sundaram & Anr." (supra), in which the contract was held to be unconscionable, because the OPs refused to refund any part of the deposit made with them.However, the facts in the present case are different, because there is a stipulation that 70% of the amount shall be refunded, although it is stated that the said amount shall be refunded without interest and that also, when the premises is occupied by some other person.The amount of ₹7 lakh as 70% of the deposit already stands refunded to the complainant. Considering the factual position on record that the complainant chose to stay in the premises on a trial basis for 4 days and that she was accompanied by her sister and brother-in-law, when she visited the premises for the first time, it cannot be stated that the OPs were in a position to dominate the will of the occupant at the time of entering into contract, due to which the contract would be called unconscionable in accordance with section 16(3) of the Indian Contract Act, 1872. Moreover, since the complainant and her husband were in regular contact with the occupant Mrs. Lakshmi Chander, it cannot be stated that she signed the "Deed of Licence", under any undue influence of the OPs.

It may be stated, however, that the stipulation in the said document that the refundable amount, i.e., 70% of the total deposit, shall be given only when the premises was occupied by the next occupant, seems to be an act of unfair trade practice on the part of the OPs.As per facts on record, the premises in question had been surrendered on 28.12.2009, but the refund of ₹7 lakh was made on 20.10.2010 by the OPs.In their written version filed before the State Commission, the OPs stated that Room No. 211 previously occupied by Mrs. Lakshmi Chander was booked by another occupant on 14.10.2010 and hence, they were returning the 70% of the amount of ₹10 lakh paid by Mrs. Lakshmi Chander.This kind of stipulation in the agreement between the parties leads to the conclusion that if the OPs are not able to get hold of another occupant for the premises, the amount refundable to the previous occupant shall never be refunded.Such a proposition would be wholly unjust and unfair in the eyes of law.It is held, therefore, that the OPs are liable to pay interest on the refundable amount of ₹7 lakh to the complainants for the period 28.12.2009 to 20.10.2010 and such interest shall be paid @9% p.a. within a period of 4 weeks from today.

In the light of the discussion above, FA No. 586/2012 filed by the complainants is ordered to be dismissed, as there is no basis for the increase in compensation on any ground.FA No. 218/2012 is partly allowed and the direction to refund ₹3 lakh to the complainant, out of the refundable deposit is set aside, subject to the condition that interest @9% p.a. on the amount of ₹7 lakh for the period 28.12.2009 to 20.10.2010 shall be paid by the OPs to the Complainants.The rest of the directions given by the State Commission are held to be valid.There shall be no order as to costs.