Shailendrakumar vs Arun & Anr

This appeal has been filed by the appellant against the order dated 19.09.2016 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') passed in CC No.25 of 2015.

The brief facts of the respondents/complainants' case are that they decided to construct the Patel building on their plot situated at village Fardapur Tq. Soygaon Dist. Aurangabad. It is submitted that, the opponent being in the field of construction activities and having adequate manpower and resources of civil construction, they approached him and entered into an agreement for construction of Patel building on 26.09.2013. As per the said agreement the cost of construction including cost of material was decided at Rs.31,00,000/- and the construction was agreed to be completed within a period of three (3) months from the date of said agreement. Following the said agreement, the complainants paid an amount of advance of Rs.5,50,000/- till 30.09.2013. It is further submitted that, they paid Rs.15,00,000/- (Rs.8,50,000/- on 26.09.2013 & Rs.6,50,000/- on 04.10.2013) to the opponent towards cost of flat in a proposed apartment building at Bhusawal. However, later on as per the mutual agreement in the month of March, 2014, the amount of Rs.15,00,000/- was diverted towards the cost of construction of hotel (Patel building) and it was further decided to give additional credit of Rs.1,00,000/- to the complainant on failure to construct the flat. Thereafter, the complainant paid Rs.7,50,000/- on different dates by way of cheques.

Thus, the total amount paid towards the construction of hotel amounted to Rs.29,10,000/-. The appellant/opponent executed agreement and undertaking on 17.04.2014 and thereby admitted to have received the amount of Rs.29,10,000/- from the complainant & also undertook to complete the construction work of hotel within a period of two months from the date of undertaking and on failure to complete the work within the prescribed period, the opponent further agreed to make the payment @ Rs.1,500/- per day to the complainant for the delayed period. However, the opponent could not show any progress in the construction work and therefore the complainant demanded refund of the amount of Rs.29,10,000/- paid by him. Accordingly the opponent as a part payment issued a cheque No.152672 dated 10.10.2014 amounting to Rs.7,00,000/- to the complainant. But the said cheque came to be dishonoured due to insufficient funds. Therefore the complainant filed criminal complaint bearing No.CCS-11175/2014 under Section 138 of the Negotiable Instrument Act, and further issued legal notice dated 27.05.2015 to the opponent claiming Rs.29,10,000/- with interest @18% p.a. and also compensation @ Rs.1500/- per day. But there was no response from the opponent.

Hence, the complainants filed complaint before the State Commission seeking directions to the opponent to pay total amount of Rs.41,57,404/- which included the amount of Rs.29,10,000/- paid by him and the interest at 18% p.a. from the date of undertaking to the date of complaint which is worked out to Rs.6,09,904/- and the amount of compensation @1500/- per day from 17.04.2014 till the date of complaint. The opponent was served with the notice. Accordingly he appeared and contested the complaint by way of his written version. He did not dispute that, the contract of construction dated 26.09.2013 and undertaking dated 17.04.2014. He has denied other adverse averments made by the complainant. It was submitted by the complainant that, as per the terms of the agreement the complainant was responsible to provide water and electricity for the construction work. However, the complainant failed to fulfil the said terms of the agreement and hence the construction could not be completed. It was further submitted that, the amount of Rs.15,00,000/- as paid by the complainant was towards the cost of flat booked by the complainant and it was never agreed to divert this amount towards the construction of Patel building. Therefore it was his contention that, the complaint be dismissed with cost. The State Commission allowed the complaint vide its order dated 19.09.2016 as under:-

"1. The complaint is partly allowed.

The opponent is directed to return to the complainant an amount of Rs.24,00,000/- (Rupees Twenty Four Lakh) along with interest @9% p.a. from 01.07.2014 till the date of this order within a period of 30 days, failing which he shall pay enhance rate of interest at 12% p.a. on the unpaid amount till the entire amount is paid to the complainant.

The opponent is also directed to pay to the complainant a compensation of Rs.5,94,000/- within a period of 30 days, failing which the opponent shall pay interest @12% p.a. on the unpaid amount till entire amount is paid.

No order as to cost."

Hence the present appeal.

Heard the learned counsel for the parties and perused the record. Learned counsel for the appellant stated that the State Commission has accepted the assertion of the complainants/respondents that Rs.15,00,000/- was diverted for the construction of the hotel i.e. Patel Building at Aurangabad without any evidence. The fact is that Rs.15,00,000/- was given as booking amount for the flat in a building coming up at Bhusawal. The complainant did not provide water and electricity for construction of the Patel Building as per the agreement dated 26.09.2013 and therefore, there was delay in construction of this building. Consequently, the appellant is not bound to honour undertaking given on 17.04.2014.

The learned counsel for the appellant further stated that the order of the State Commission is without jurisdiction because the complainants had combined two agreements in one complaint and the State Commission at Aurangabad was not empowered to decide this complaint as two agreements relate to different places and for different subject matter. One is the agreement for Patel Building at Aurangabad and second agreement is for a flat at Bhusawal. In fact, the jurisdiction for two different agreements was with the District Forum at Aurangabad and District Forum at Jalgaon. It was further argued by the learned counsel for the appellant that the State Commission had no pecuniary jurisdiction in the light of the judgement of the larger bench of this Commission in the matter of Consumer case no 97 of 2016 Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. decided on 7.10.2016 (NC). The complainants have clubbed two causes of action in one complaint and that too relating to two different agreements.

It was further contended by the learned counsel for the appellant that State Commission has wrongly accepted the report of the expert valuer who has found the construction at the Patel Building only for Rs.4,38,940/- whereas, the construction was worth Rs.12,00,000/- and material of about Rs.2,00,000/- was also lying for construction of Patel Building. The appellant has also spent Rs.3,25,000/- in respect of basement construction, which was done on the instruction of the complainants. Thus, all the money given by the complainants was already spent and appellant cannot be asked to refund any further amount. Thus, prima facie the order of the State Commission is erroneous as the same has not taken into account these facts. The learned counsel further objected that apart from the refund order of Rs.24,00,000/-, the State Commission has also asked to pay Rs.5,94,000/- @ Rs.1500/- per day from 01.07.2014 to 2.06.2015 (date of filing complaint). The State Commission has awarded this amount on the basis of the commitment given by the appellant that if the work is not completed within two months, he will pay Rs.1500/- per day till competition of the work. It was argued by the learned counsel when the State Commission has ordered refund of the amount paid by the complainant then the presumption would be that the agreements between the parties stand cancelled and consequently the undertaking also stands cancelled. If the undertaking stood cancelled, the State Commission was not justified in ordering this compensation as per undertaking dated 17.04.2014 given by the appellant.

On the other hand, learned counsel for the respondent/complainant stated that Rs.15,00,000/-, which was paid as booking amount for the flat was later on diverted for use in the construction of Patel Building with the consent of the appellant/opposite party and that is why the appellant in its undertaking dated 17.04.2014 has agreed with the payment of Rs.29.10 lakh including the amount of Rs.1,00,000/- which was credited in favour of the complainants by the opposite party as per the agreement. Thus, the objection of the appellant in respect of the diversion of Rs.15,00,000/- for construction of the Patel Building is not substantiated on evidence.

Learned counsel for the respondent further argued that expert valuer has valued the construction at Patel Building at Rs.4,38,940/- and the State Commission has allowed 10% appreciation over this amount on the basis of schedule of rates. Further the State Commission has rounded of the value to be Rs.5,10,000/- and thus after taking this amount from the paid amount of Rs.29.10 lakhs, the State Commission has ordered payment of only Rs.24,00,000/- to the complainants. As per the undertaking given by the opposite party for paying Rs.1500/- per day if the construction work was not completed in two months, the State Commission has only allowed the payment of Rs.1500/- per day from 01.07.2014 till 02.06.2015 which is the date of filing the complaint. As the construction was not completed, the State Commission has allowed the payment of this amount as per the undertaking given by the appellant. The appellant has himself admitted that construction work was for Rs.12,00,000/- at Patel Building and therefore, it implied that the construction was not completed as the total value of construction was Rs.31,00,000/-. The appellant cannot now go back on his commitment.

I have carefully considered the arguments advanced by both the learned counsel for the parties and have examined the record. As per undertaking dated 17.04.2014 given by the opposite party/appellant, the appellant has accepted payment of Rs.29.10 lakhs from the complainants. Therefore, it is evident that amount of Rs.15,00,000/- was diverted to the construction of the Patel Building.

So far as the question of jurisdiction of the State Commission is concerned, it is seen that the consideration for Patel Building was Rs.31,00,000/- and therefore, clearly the State Commission had the jurisdiction to decide the complaint in respect of construction of the Patel Building. As Rs.15,00,000/- was diverted for the construction of the Patel Building, the issue of flat was not considered in the present complaint by the State Commission and rightly so. Moreover, the State Commission has a jurisdiction over the whole State, therefore, it cannot be said that the State Commission did not have the territorial jurisdiction for two different agreements, one being for Patel Building at Aurangabad and second being for the flat at Bhusawal.

In respect of combining of the two causes of action in respect of two agreements, the complainant was authorised to do so in the light of the Order II Rule 2 (1) of the CPC, which mandate that plaintiff has to file his total claim against the opposite party in the plaint/complaint. Order II Rule 2 (1) reads as follows:-

2(1). Suit to include the whole claim -(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court."

Learned counsel for the appellant has not shown any shortcoming in the report of the expert valuer and the State Commission has accepted the report of the expert valuer, therefore, at this stage this Commission would hesitate to dispute the report of the expert valuer. Once the report of the expert valuer is accepted, the order dated 19.09.2016 of the State Commission seems justified for refund of Rs.24,00,000/-. However, in respect of order of the State Commission for payment of Rs.5,94,000/- @ Rs.1500/- per day from 17.04.2014 to 02.06.2015, I am of the view that once the refund of paid amount has been ordered, the agreements between the parties come to a close having effect of their cancellation. In this light, I am of the view that the order of the State Commission for allowing payment of Rs.1500/- per day based on the undertaking given by the appellant for completing the construction is not justified. However, it is also true that the complainant had suffered delay in construction of the Patel Building and also suffered harassment and mental agony and therefore, the respondents/complainants are entitled for some compensation. In the facts and circumstances of the case, I feel that the compensation of Rs.1,00,000/- would be reasonable and sufficient.

Based on the above discussion, appeal is partly allowed and the order dated 19.09.2016 of the State Commission in respect of payment of Rs.5,94,000/- is modified to the extent that compensation of only Rs.1,00,000/- shall be payable by the appellant to the complainants instead of Rs.5,94,000/-. Rest of the order of the State Commission i.e. in respect of the refund of Rs.24,00,000/- with interest @ 9% p.a. is upheld. No order as to costs for this appeal.