Shriram S. Kane vs Ujwala D. Andrews & Ors

This revision petition has been filed by the petitioner Shriram S.Kane who was opposite party No.2 in the original complaint filed by the respondents No.1 & 2. Respondent No.3 was opposite party No.1 in the original complaint case.

Brief facts of the case are that both the complainants had purchased 5 Gunthas of land at Kirti Castles, Lohegaon in the year 1999 from Kirti Developers and on their recommendation the complainants and the opposite party No.1 entered into an agreement for construction of a bungalow on the land purchased by the complainants vide agreement dated 27th June 2001. The total consideration for the construction was Rs.14,27,500/-. The complainants paid Rs.9,00,000/- to opposite party No.1 from 15.04.2001 to 10.01.2002. The opposite party No.1 entrusted the actual construction work to opposite party No.2 and the complainants later on paid Rs.4.50 lacs to opposite party No.2 from 22.2.2002 to 12.07.2002. However, opposite party No.2 suddenly left the work and when notice was given by the complainant he demanded Rs.2.5 lacs as arears of work done and Rs.5,00,000/- as compensation from the complainant. Aggrieved the complainants filed a consumer complaint bearing No.382 of 2002 before the District Forum demanding compensation of Rs.4.50 lacs which she had to spend on the unfinished works as per the agreement. Both the opposite parties did appear through the learned counsel but did not file the written statement and they were proceeded ex-parte by the District Forum. The District Forum finally disposed of the complaint by passing the following order dated 12th June, 2008:-

"The complaint is partly allowed.

The opposite parties are jointly & severally directed to pay to the complainants jointly, an amount of Rs.4,50,000/- together with interest thereon @9% p.a. as from the date of filing of the present complaint i.e. 28/Oct/2002 till realization of amounts by the complainants, within a period of two months from the date of receipt of this order.

No order as to costs."

Being aggrieved by the order of the District Forum both the opposite parties preferred an appeal before the State Commission being FA No.A/08/1228. State Commission however, dismissed the appeal vide its order dated 10th March, 2011:-

"1. Appeal stands dismissed.

No order as to costs."

Hence the present revision petition by the opposite party No.2.

Heard the learned counsel for both the parties and perused record. The learned counsel for the petitioner stated that when the learned counsel for the petitioner appeared before the District Forum and filed his vakalatnama the matter was adjourned sine-die on the same day and when the matter was taken out of the sine-die list no notice was received by the petitioner to contest the case or to file the written statement. The District Forum and the State Commission have wrongly recorded that the petitioner did not appear even after service of notice. Thus, the petitioner was deprived of filing his version before the District Forum and District Forum without examining the merits of the claim filed by the complainant allowed the claim of Rs.4.50 lacs. In appeal also the State Commission based its decision on the ground that the District Forum had allowed compensation of Rs.4.50 lacs for which no counter was filed by the petitioner. State Commission also did not examine the claim of the complainant and agreed with the order of the District Forum in a mechanical manner.

It was further pointed out by the learned counsel for the petitioner that the petitioner had no privity of contract with the complainant as no agreement has been signed between the petitioner and complainant. In fact the agreement was signed between the complainants and the opposite party No.1 who is respondent No.3 in the present revision petition and for any deficiency in construction it should be only opposite party No.1 who could be held responsible. Accordingly, any order passed against the petitioner is against the law and cannot be sustained.

It was further pointed out by the learned counsel for the petitioner that certain additional works were carried out by opposite party No.2 on the instructions of the complainant and an amount of Rs.2.50 lacs was payable originally by the complainant for the work done. As the money was neither given by the opposite party No.1 nor by the complainants, therefore, the opposite party No.2 had no choice but to abandon the work. The petitioner had submitted the total accounts of works done to the opposite party No.1 vide its letter dated 16.07.2002 wherein it was clearly stated that an amount of Rs.15,10,943.00 has already been spent on works and against this only Rs.12,85,000.00 has been received by the petitioner. Thus, in fact complainants are required to pay about Rs.2,25,943/- to the petitioner rather than any amount being payable by opposite party No.2 to the complainants.

On the other hand, the learned counsel for the respondents No.1 & 2 stated that the District Forum has clearly recorded in its order that when the matter was taken out from the sine-die list for judgement, notice was served on both the opposite parties however they did not appear to contest the case. Similarly, the State Commission has also recorded that the opposite parties chose not to appear before the Forum even after service of notice. Thus, both the fora below have given concurrent finding so far as the service of notice is concerned on the opposite party and therefore, there can be no doubt that the petitioner or respondent No.3 deliberately did not appear to contest the case before the District Forum. The petitioner definitely got chance to put up all his arguments before the State Commission, and the petitioner raised all these points which are being raised here before the State Commission, however, the State Commission after examining all the facts dismissed the appeal and upheld the order of the District Forum. Though the agreement was signed only with the opposite party No.1 but the complainants have paid Rs.4.50 lacs to opposite party No.2 who did not complete the works and left the work suddenly and therefore, as he stepped into the shoes of opposite party No.1 so far as construction of the villa was concerned, it cannot be said that petitioner did not have any privity of contract with the complainants. It was further submitted by the learned counsel for the complainants that when the matter proceeded ex-parte before the District Forum against the opposite parties and there was no opposition for the claim of the complainant the District Forum has rightly allowed the complaint and has allowed a compensation of Rs.4.50 lacs to be paid to the complainant by the opposite parties jointly and severally. The State Commission has also agreed with the claim of the complainants and has therefore, upheld the order of the District forum. Thus, even on merits both the fora below have given the concurrent finding of facts and the scope under the revision petition in such cases is quite limited as facts cannot be reassessed by this Commission in the revision petition.

I have carefully considered the arguments advanced by both the learned counsel for the parties and have examined the material on record. A perusal of the agreement dated 27th June, 2001 entered between the complainant and the opposite party No.1 shows that the total construction was to be carried out for Rs.14,27,500/- and the parking garage and the boundary wall were not included in this valuation and they were separately valued for Rs.60,000/- each. The complainants in a letter dated 30.07.2002 addressed to the opposite party no.1 have stated that the works relating to interior of the wall paintings, glass fittings, exterior cement paintings, granite slab for kitchen otta as per agreement, tiles of the drawing room (kota), all wooden doors and French doors along with the glass fixing, parking work of tiling, compound wall of east and west (the compound wall of north and south has been left incomplete without paintings), sanitary wares, sinks, and commode, pots etc., storage planks and staircase tilling have been left incomplete by opposite party No.2. Also, the complainant asked OP-1 not to undertake any additional work without the consent of the complainants.

It has been stated by the complainants that they had to spend Rs.4.50 lacs to complete the works which were left incomplete by OP-1 and OP-2. It is very surprising that the complainants have not given any details about such completed works nor any details in respect of the contractor who carried out these works in the complaint.

It is also seen from the judgment of the District Forum that the District Forum has not examined the claim of the complainants on the touchstone of the evidence. At least the District Forum has not mentioned any such examination in its judgment and order dated 12/06/2008. As the opposite parties who were the appellants before the State Commission were proceeded ex-parte before the District Forum, it was all the more necessary for the State Commission to examine the claim of the complainants directly or atleast it should have examined whether the District Forum has found the claim payable on the basis of the evidence. State Commission agreed with the order of the District Forum on the ground that the claim of the complainants was not countered by the opposite parties. Thus, in a way neither the complainants have given details of the expenditure of Rs.4.50 lacs for completion of the uncompleted works in the complaint nor the District Forum nor the State Commission have properly examined the claim of the complainant before allowing the same. Accordingly, this seems to be a fit case for remanding the matter to the District Forum. However, as the matter is under litigation since 2003, I do not think it proper to remand the matter to the District Forum for adjudication afresh as it would take more time and cause hardship to the parties. Consequently, the matter is being decided by this Commission on the basis of the available record.

The total contract for construction was for Rs.14,27,500/- and the payment of Rs.13.5 lacs was made to the opposite parties. The incomplete works as communicated by the complainant to the opposite party No.1 vide their letter dated 30.07.2002 include the work relating to boundary wall and parking garage for which Rs.60,000/- each i.e. Rs.1,20,000/- was to be paid separately by the complainants. Thus the opposite parties were to get Rs.15,47,500/- for completion of these works as per the agreement. Thus, the complainants were to pay the balance amount of Rs.1,97,500/- to the opposite parties for completion of works. Even if the complainants have paid Rs.4.50 lacs for completion of unfinished works, finished through the other contractors, they had paid only Rs.2,52,500/- extra for completion of works due to deficiency of the opposite parties. Thus, the complainants are entitled to get an amount of Rs.2,52,500/- instead of Rs.4.50 lacs from the opposite parties.

Now coming to the question of liability of the petitioner, it has been claimed by the petitioner that there was no privity of contract between the petitioner and the complainants. Prima facie this argument seems plausible but the fact is that complainants agreed to pay certain amounts to the petitioner and the petitioner accepted these amounts and carried out the construction work. This clearly shows the consent of both the parties to carry out the work on payment basis. Thus, it can be treated as an oral implied contract in the light of Section 9 of the Indian Contract Act. Otherwise also as the petitioner provided service of construction and received payments from the complainants he will come under the category of service provider and therefore, he cannot claim immunity on the basis of the fact that the agreement was signed between the complainant and the opposite party No.1 only.

The complainants vide his letter dated 13.09.2002 written to OP-1 has clearly stated that he has given Rs.4.50 lacs to OP-2 and that after taking last instalment of Rs.50,000/- OP-2 left the scene and did not complete the works. It is clear that the claim of the petitioner for having done some additional extra works beyond the agreement cannot be accepted because the complainants have written to the OP-1 vide letter dated 30.7.2002 for not taking up any additional work without discussing the same with the complainants. It is also clear from the contents of the letter written by the complainants to the Opposite party No.1 dated 13.09.2002 that the opposite party No.2 had received the last instalment of Rs.50,000/- and has gone away without doing any work. Clearly, it implies that complainants were monitoring the progress of construction and were giving money to OP-2 accordingly. It seems that the opposite party No.2 had more or less completed the works for the payments made before this last instalment, however, he did not do any work after getting the last instalment of Rs.50,000/-. In a way the opposite party No.2 has not done the work from this instalment of Rs.50,000/- and therefore, his liability is definitely for this amount of Rs.50,000/-. As contractors demand money in advance before the earlier money is actually exhausted, I would deem it appropriate to fix the liability of the petitioner to the extent of Rs.75,000/- only in the circumstances of the case. As the total additional expenditure that was done by the complainants due to deficiency of opposite parties has been calculated to Rs.2,52,500/-, consequently the liability of opposite party No.1 shall be for Rs.1,77,500/- only.

Based on the above discussion, the Revision Petition No.3127 of 2011 is partly allowed and the order of the District Forum is modified to the extent that the total amount payable by the opposite parties to the complainants shall be Rs.2,52,500/- instead of Rs.4,50,000/- and out of Rs.2,52,500/- the opposite party No.1 who is respondent No.3 in the present case shall be liable to pay Rs.1,77,500/- and the opposite party No.2 who is the petitioner in the present case will be liable to pay Rs.75,000/- to the complainants. These amounts shall be paid along with 6% p.a. interest instead of 9% p.a. interest as ordered by the District forum. Apart from these changes, rest of the order of the District Forum remains unchanged. The order of the State Commission also stands modified accordingly. No order as to costs for this revision petition.