Full Judgment
S.R. Khanzode, Presiding Judicial Member
(1) This complaint is filed against the builder alleging deficiency in service on the part of the builder for not handing over possession of the flat agreed to be purchased and for not executing the conveyance of the property.
(2) Undisputed facts are that, Complainant Mr.Bala K. Iyer, agreed to purchase a flat bearing No.1802 situated on 18th Floor in âB Wing of the building known as âFountain Heights being constructed at Kandivali (E), Mumbai, by Opponent No.1 M/s.Lokhandwala Construction Industries P. Ltd. (referred as âthe Builder) for a total consideration of Rs.74,16,080/- as quoted in the application for allotment. Complainant has paid Rs.3,70,804/- at the time of making such application for allotment on 22.09.2007, paid further amount of Rs.30,00,000/- on 25.12.2007 and Rs.10,00,000/- on 05.05.2008, total amounting to Rs.43,70,804/- towards the part consideration.
(3) It is the case of the Complainant that in spite of making payment of substantial part of consideration the builder neither handed over copy of the alleged agreement dated 24.10.2007 to him nor get it registered. Since the agreement was not registered his financial institution viz.C.K.P. Co-operative Bank Ltd., Mahim (referred as âthe Bank) could not extend him the home loan which was necessary for the Complainant to make payment of balance consideration. In spite of this, the builder sent letter dated 29.04.2008 to the Complainant demanding part of remaining consideration of Rs.32,14,633/- as per terms of the agreement but since the registered agreement never supplied to the Complainant, he could not obtain the necessary loan to fulfil said demand. In these conditions, Complainant received another letter from the builder dated 25.02.2010 and following letter dated 17th March, 2010 whereby it was intimated that the builder cancelled the agreement and intended to refund the consideration paid after taking 20% amount i.e. Rs.2,18,540/- towards processing fees. This action on the part of the builder as against the Complainant is alleged to be an unfair trade practice. Complainant by its Advocates notice dated 31.03.2010 informed to the Builder that he was ready and willing to pay the balance consideration and categorically stated that he did not agree with the termination of the agreement which is without any justification. Thereafter, the consumer complaint came to be filed on 05.04.2010.
(4) The Opponent No.1 resisted the complaint as per its written version dated 29.06.2010. On the disputed facts it is submitted on behalf of the Opponent that Opponent No.2 Mr.Siraj T. Lokhandwala was expired on 08.02.2008 and hence, the Builder Company is functioning under the directorship of Mr.D.P. Badani. It is further submitted that the balance of consideration Rs.51,91,256/- was required to be paid by the Complainant as agreed by him on or before 21.10.2007, the commitment which the Complainant failed to entertain, after the said date, Complainant had paid Rs.30,00,000/- on 25.02.2008 and further Rs.10,00,000/- on 05.05.2008 (for the payments of Rs.30,00,000/- which are not in dispute as per letter dated 28.12.2007). After issuing first notice that the Complainant is not paying the balance consideration, the builder after giving warning to the Complainant as per its letter dated 25.02.2010, cancelled the provisional booking of the Complainant by its letter dated 17.03.2010 and asked the Complainant to visit its office to collect the cheque of refund. Since the Complainant failed to collect the cheque on his visit dated 22.03.2010, the cheque of refund of Rs.41,52,264//- was thereafter sent by registered post to him on 22.03.2010. Therefore, it is further submitted on behalf of the builder that there is no deficiency in service on its part and the consumer complaint deserves to be dismissed.
(5) When the complaint was fixed for arguments, as reflected in the roznama dated 22.03.2011, the builder was directed to produce the agreement entered into between the builder and the Complainant in respect of the disputed flat and the matter was adjourned to 08.06.2011. Roznama of that particular date i.e. 08.06.2011 further reflects that on the request of the Complainant the matter was adjourned to 25.07.2011. There is no reference about any document filed in compliance to the direction dated 22.03.2011. However, on record it is found that as per the letter dated 08.06.2011 (compilation page no.142), the copy of the agreement and documents relied by the builder and the affidavit of Mr.Mustafa H. Rangwala dated 07.06.2011 are introduced on the record. In the course of arguments when the matter was finally heard, parties, particularly the builder made a reference to this affidavit and the documents filed along with it.
(6) Heard both the parties. The question which arises before us is to consider the fact of alleged termination of the contract as per letter dated 17.03.2010 and further whether the Complainant would be entitled to reliefs claimed. We find that the alleged termination has no legal impact since it is an arbitrary action on the part of Opponent. As far as the reliefs which can be granted, for the reasons mentioned hereinafter, we find that the Complainant is entitled to compensation as per the final order.
(7) In support of the case, the Complainant has filed his own affidavit dated 27.08.2010. On behalf of the builder, Affidavit of Mustafa Rangwalla, who has signed and verified the written version of the builder and also sworn an affidavit by way of verification to the written version filed on 29.06.2010 and another affidavit dated 07.06.2011 is filed. Said Mustafa Rangwalla, described himself as an heir (legal) and authorized signatory of the builder. The earlier affidavit is just in confirmation with the averments made in the written version. However, the subsequent affidavit which in the circumstances purported to be filed in the circumstances referred earlier as per direction of the Commission on 08.06.2011 and sworn on previous day, i.e. on 07.06.2011, the builder introduced certain facts, particularly, about execution of deed of confirmation which endorsed the date of stamp franking as 31.08.2009. This averment is an improvement on behalf of the builder. Therefore, such piece of evidence and the story is to be rejected, particularly, in respect of deed of confirmation etc. Apart from that, said Mustafa Rangwalla did not disclose what is the source of his knowledge of the facts stated by him in the affidavit. He never mentioned that he was personally present while executing those agreements. He was not the director of the builder Company at the relevant time. Even referring to the resolution dated 02.02.2007 which is tendered on behalf of the builder, the Director â D.P. Badani, Shivrao U. Prabhu and P.R. Merchant are the authorized persons to sign on behalf of the Company. Mr.Mustafa Rangwalla is not the one who is the authorized signatory on behalf of the Builder Company. Therefore, his affidavit, particularly, affidavit dated 07.06.2011 loses his evidentiary value.
(8) The circumstances as revealed from the Complainant and even as admitted by the builder in its communication dated 25.02.2010 (Exhibit âF of affidavit of Complainant â Bala K. Iyer dated 27.08.2010) and which is an undisputed document, the builder submitted that amount of Rs.30,40,276/- towards balance consideration, an amount of Rs.1,40,850/- towards Society deposit etc. were due from the Complainant and in case the Complainant wanted to go ahead with the transaction, he was required to pay those amounts immediately and over and above these payments, the Complainant would be required to pay interest @18% per annum as per agreed terms on delayed payment. It is also mentioned that in his recent visit prior to the communication, the Complainant agitated over the demand for interest and refused to pay the same.
(9) As per the written version of the builder the Construction of the building in which the flat in question is situated was completed in the month of May, 2009. In his written version it is further submitted that the builder has sent letter dated 13.05.2009 informing the Complainant about the completion of the building, getting the occupation certificate and that the possession formalities are required to be completed subject to payment of balance of consideration of Rs.31,81,126/- and the Society deposit etc. In the written version, said letter is referred as âExhibit-C but we do not find any annexure to the written version to that effect. Such letter is also not on record.
(10) Referring to the letters of the bank, first one dated 16.07.2008 and another one dated 18.02.2008 which was received directly by the builder on fax from the Bank, it is submitted on behalf of the builder in its written version that all the documents requested by the CKP Co-op. Bank were handed over to the Opponent No.1 except the sale agreement. Particularly to note that notice letter dated 18.02.2008, the Bank categorically informed that the proposal of the Complainant seeking the loan of Rs.35,00,000/- to purchase the flat in question was sanctioned. In the background of this particular statement by the bank, the excuse tried to be put forward on behalf of the builder that the sale agreement could not be completed or registered since the Complainant failed to supply to it the âprincipal sanctioned letter, cannot be accepted. Obviously, therefore, on failure of the builder to supply the requisite documents the Complainant could not get released a loan and pay the balance of consideration as was due at that time. In spite of this, as revealed further and even admitted by the Builder, the Complainant paid another Rs.15,00,000/- towards the balance of consideration as per the cheque dated 18.02.2010 and also deposited Rs.5,000/- by another cheque of the even date towards the parking deposit. The builder did not retain those cheques with him but by letter dated 25.02.2010, supra, directed itself to return those cheques and further to cancel the agreement as per its letter dated 17.03.2010. Since the builder never placed before the Commission on its own alleged agreement dated 24.10.2007, admittedly, never supplied copies thereof to the Complainant; the case of the builder that the Complainant failed to pay the remaining consideration as per completion of the particular work, i.e. brick work etc., cannot be accepted. Considering the totality of the circumstances, we find alleged action on the part of the builder to terminate the contract by its letter dated 17.03.2010 is arbitrary and unjustified and therefore, such termination cannot be acted upon in the eyes of law. In spite of the lawyers notice on behalf of the Complainant dated 31.03.2010 whereby the Complainant has communicated his intention to go with the agreement showed his willingness to pay the balance of the consideration, the builder preferred to stick to his earlier stand of termination of the agreement and also further pleaded that he entered into an agreement with one Mr.Mukesh Kumar and Another, which appears to be subsequently registered in the month of April, 2010. In its written version the builder alleged that this fact was informed to the Complainant by its letter dated 14.04.2010. He referred the same communication as Exhibit âO in his written version, but like other exhibits, this is also not annexed to the written version or affidavit sworn in support thereof. However, by its list of documents dated 30.08.2010, the builder placed on record the copy of the agreement dated 12.04.2010 which it had entered with said Mukesh Kumar and Ms.Arunima Kumar in respect of flat in question.
(11) Obviously, as matter stands as on today, the builder has disposed of the flat in question in the month of April, 2010 in favour of Mukesh Kumar and another. In view of such development, to remove deficiency on the part of the builder, it may not be proper and just to give direction to handover the possession of the flat to the Complainant. Certainly, the Complainant can be compensated suitably for such deficiency in service on the part of the builder. We find just and proper in the given circumstances to adopt this course.
(12) In the statement of claim filed along with the complaint it is submitted on behalf of the Complainant that he had agreed to purchase the flat @Rs.5,576/- per sq.ft. and when the consumer complaint was filed, the market rate was accelerated to Rs.7,500/- per sq.ft. and on this basis, he claimed compensation of Rs.25,58,920/- as a difference of price. There is no evidence in rebuttal to this particular fact about the prevailing rates. Further, considering the property value or the rate prevailing in the particular locality, in the instant case at Kandivali, which are published in the Saturday Edition of the Times of India, we find the rate as quoted by the Complainant is just and there is no reason to disbelieve the Complainant on this issue. Therefore, besides refund of consideration paid along with interest 18% per annum payable from the date of complaint subject to adjustment of the consideration, if refunded earlier (as worded in the final order); in addition to it, the Complainant is also entitled to compensation of Rs.25,00,000/-, which, according to us is just and proper to award to cover the loss and the legal injury suffered by the Complainant in not receiving the flat. We hold accordingly.
(13) For the reasons stated above, we further hold accordingly and pass the following order: ORDER
(i) The complaint is partly allowed.
(ii) Opponent No.1 â M/s.Lokhandwala Construction Industries P. Ltd., do pay to the Complainant compensation of Rs.25,00,000/- within a period of 45 days from today and failing which, shall pay interest over it @18% per annum till its realization.
(iii) In addition to the above referred compensation, Opponent No.1 - M/s.Lokhandwala Construction Industries P. Ltd., shall pay Rs.43,70,804/- to the Complainant along with interest @18% per annum with effect from the date of consumer complaint i.e. 05/04/2010 till its realization. However, from this amount the amount paid by Cheque No.463930 drawn on Vijaya Bank dated 17/03/2010 for Rs.41,52,264/-, if said cheque is encashed, be adjusted as on the date of dispatch of the said Cheque i.e.22/03/2010.
(iv) As earlier observed proceeding as against Opponent No.2 â Mr.Siraj Lokhandwala, Managing Director of M/s.Lokhandwala Construction Industries P. Ltd., stands abated.
(v) Opponent No.1 â M/s.Lokhandwala Construction Industries P. Ltd., to bear its own costs and pay Rs.10,000/- as costs to the Complainant.