P.Q. Barkathali : President
In both these original petitions complainants are brothers and opposite parties are the same. Complainants have filed the complaint claiming refund of the amount paid by them to opposite parties for the construction of the flats which opposite parties did not construct and for compensation.
2. The case of the complainants as detailed in the complaint in brief is this:-
The complainants are working in Gulf countries. The complainants entered into separate agreements with opposite parties on February 29, 1996 for the purchase of a flat proposed to be constructed by opposite parties in Survey No.587/1 in Kanyakumari in Tamilnadu and each complainant paid a total amount of Rs.7,50,000/- to opposite parties. The last payment was made on February 29, 1996. Second opposite party executed separate deeds in favour of the complainants on August 1, 1996 in respect of undivided and indivisible fractional property right, executed at S.R.O, Kottaram in Kanyakumari District. On 11.10.1997 agreements of possession was executed by which symbolic possession of the property was given by opposite parties for obtaining door number, assessment number and to complete the documentation work with the Town Panchayath of Kanyakumari. Actual possession was never given to the complainants. But till now the opposite parties did not complete the construction of the flat. The amenities promised in the brochure were not provided. Structural cracks have developed in the building. Therefore second opposite party filed writ petition as OP.23632/1998 before the High Court of Kerala which was disposed of. When the complainant went to the village office to remit the tax the village officer has informed the complainant that one Latha Menon had filed a complaint to Thahasildar, Agastheeswaram Taluk,Nagercoil on 5.12.1998 claiming right over the property. On the basis of report given by the Revenue Divisional Officer, Nagercoil the patta issued in respect of this land was cancelled. It is found that second opposite party has no title over the property. On enquiry it is revealed that opposite parties have obtained loan from IDBI, SBT and Nedungadi Bank mortgaging the property. Building permit issued in respect of this building expired on 27.2.1996 itself. Thus, there is clear deficiency of service on the part of opposite parties. Thus complainants filed this complaint claiming refund of Rs.7,50,000/- paid by each of them with interest. They claimed a compensation of Rs.4,lakhs and a cost of Rs.50,000/- in each complainants.
3. The first opposite party is M/s Sai Homes and Resorts, Ambalamukku, Trivandrum. Second opposite party is S. Srikant the sole proprietor of first opposite party. Supplemental 3rd opposite party is the wife of second opposite party who is also a partner of first opposite party firm. The 4th opposite party is M/s Punjab National Bank, Station Road Branch, Thampanoor, Trivandrum. Opposite parties 1 to 3 in their version contended thus:-
4. This Commission has no territorial jurisdiction to entertain the complaint as the entire transaction took place in Kanyakumari District in Tamilnadu. As there is an arbitration clause is in the agreement this Commission cannot entertain the complaint. The agreement was for the construction of two condominiums in Ootty and one single bed room corner flat in Kanyakumari for a consideration of Rs.18.lakhs. The sale deed was executed at Kottaram S.R.O in Kanyakumari District by second opposite party and his wife, the supplemental 3rd opposite party. The condominiums and flat covered by the agreement were handed over to the complainants on 1.10.1997 as per agreement dated:11.10.1997. The allegation that only symbolic possession was handed over is false. It is not correct to say that the construction was found incomplete and cracks were found in the walls. For about 3 years complainants were in possession of the same. They have leased out the apartments to third parties and enjoyed proceeds there from. The allegation that complainants visited the property only on 23.11.1998 and the construction was found incomplete and that cracks had developed in the building are all false. The intention of the complainant was to let out the condominiums and flat to tourists. As the real estate and tourism business became dull, complainants approached the second opposite party to buy back the flat which the second opposite party could not comply. It was because of that enmity the complainants filed these complaints. The opposite parties filed OP.23595/98 before the High Court when the complainants threatened him while he was residing with his relatives at Thiruvananthapuram. These opposite parties have no connection with the lady, Latha Menon. Second opposite party and his wife have valid marketable title over the property. The building has to be constructed by the complainant through first opposite party. sanction was given for construction of additional flats up to 7th floor. Therefore complaints have to be dismissed.
5. The 4th opposite party is Punjab National Bank represented by its Branch Manager, Station Road Branch, Thampanoor, Thiruvananthapuram. He in his version contended thus:-
Complainants are not consumers as defined under section 2(1)(d) of the Act. They have not hired any service from this opposite party. The first opposite party company represented by second opposite party availed a loan of Rs.78,00,000/- on January 12, 1995 for the construction of residential apartments in the property of 21.128 cents in survey No.587/1-1 in Kanyakumari village. As the opposite parties 1 to 3 defaulted the repayment of loan Bank filed OA.106/2000 before DRT and a decree was obtained for Rs.271.80 lakhs. In execution of that decree the property was sold to third party and the sale was confirmed on January 30, 2008. The sale deed allegedly executed in favour of complainants is in August 1, 1996 which are void abinitio. Complainants have no right over the property.
6. Opposite parties 1 and 2 filed additional version contending that they have not taken any loan from 4th opposite party pledging the properties.
7. The following points arise for consideration:-
Whether complainants are consumers as defined under 2(1)(d) of Consumer Protection Act?
Whether the complaint is maintainable?
Whether there is any deficiency of service on the part of opposite parties 1 to 3?
What are the reliefs the complainants are entitled to?
8. As opposite parties are the same and similar questions arise for consideration, both these complaints are jointly tried.
9. On the side of the complainants PWs 1 to 4 were examined and Exts.P1 to P13 were marked. On the side of opposite parties DW1 was examined in chief Exts.R1 to R12 were marked but he did not make himself available for cross-examination. Therefore it is taken as no evidence for opposite parties 1 to 3. No relief is claimed against fourth opposite party bank.
The counsel for opposite parties argued that complainants are not consumers as defined under sec.2(1)(d) of the Act. There is no merit in the above contention. Complainants have booked flats in the project of opposite parties 1 to 3 and paid the amount but they failed to complete the construction of the flat. Housing construction is a service as provided under Sec.2(1)(O) of the Consumer Protection Act as amended by Act 55 of 1993. That being so complainants have to be considered as consumers as defined under sec.2(1)(d) of the Act.
It was next argued by the counsel for opposite parties 1 to 3 that this Commission has no territorial jurisdiction to entertain the complaint as the entire transaction took place in Kanyakumari District, Tamilnadu. There is no merit in the above contention. It is true that Ext.P7(a) is notarized copy of articles of agreement dated:29..2.1996. Ext.P10 notarized copy of the letter dated:25.7.1998 sent by the complainant to the 2nd opposite party. Ext.B15 (a) notarized copy of the application dated:13.6.2000 submitted by the complainant to the RDO. But the first opposite party has office at Ambalamukku, Trivandrum. Though opposite parties 1 to 3 contended that they have closed that office and shifted, no evidence is adduced by them to prove the same.
10. That apart, in 1998 second opposite party and one Madhusoodhanan Nair filed OP.23632/98 before High Court seeking police protection against the complainants wherein Thiruvananthapuram address of second opposite party is given. Ext.P12 is the certified copy of Hon’ble High Court of Kerala dated:6.1.1999 in OP.No.23632 of 1998. Ext.P6(a) is the notarized copy of the demand draft dated 7.9.1999 issued by the complainant to the opposite party. Ext.P6(b) is the notarized copy of the certificate issued by Manager, SBT main branch, Thiruvananthapuram showing that the said DD is encashed by first opposite party through his account therein. Ext.P7(a) is the notarized copy of receipt for having taken DD for Rs.5,50,000/- in favour of first opposite party. Ext.P7(b) is copy of another receipt for having made payment to first opposite party. It is clear from the above that first opposite party had account in the Thiruvananthapuram Main Branch of SBT.
11. Further, PW1, Sri. G. Ashokan, Marketing Manager of first opposite party firm testified that main office of first opposite party was at Peroorkada, Thiruvananthapuram and had branch office at Jawahar Nagar. It is evident from above that first opposite party was carrying on business at Thiruvananthapuram. Therefore we hold that this Commission has jurisdiction to entertain the complaint and that the complaint is maintainable.
Next question for consideration is whether there is any deficiency in service on the part of the opposite parties 1 to 3. Booking of the flats, execution of agreements Ext.P7(a) notarized copy of the receipt dated, March 21, 1995. Ext.P10 notarized copy of the letter dated:25.7.1998 sent by the complainant to the 2nd opposite party. The specific case of opposite parties 1 to 3 is that by the agreement dated, October 11, 1997 the apartments were handed over to the complainants and that they leased out the apartments to many persons through brokers and enjoyed the profit for three years and that therefore complainants are not entitled to refund of the amount paid by them. There is no force in the above contention. There is no evidence adduced by OPs 1 to 3 to show they have completed the construction of apartments and handed over the same to complainants. The photographs produced by the complainants and the report of expert commissioner Ext.C1 and Advocate commissioner Ext.C2 clearly show that construction of the apartment is not completed. It is impossible to believe that without completing the construction complainants would have taken possession of the apartments. Therefore we are inclined to believe the version of PW1 the complainant in OP.64/2000 that only symbolic possession was given under Ext.P7 agreement and that OPs 1 to 3 did not complete the construction of apartments or handed over the same to complainants. It follows that there is clear deficiency in service on the part of OPs 1 to 3.
12. There is another aspect in this case. Evidence adduced on the side of the complainants show that the opposite parties have no right over the land in which proposed flat has to be constructed. Case of the complainant is that when he went to the village office to remit the tax he was informed that one Latha Menon have filed a complaint to Thahsildar, Agastheeswaram, Nagercoil on December1998 on right over the property. On the basis of the report filed by Revenue Divisional Officer, Nagercoil the patta issued to that property is cancelled. Ext.X1 is the copy of the said order dated, December 14, 1999. PW2 is Mrs. Lilly. R, RDO, Nagercoil who issued the order cancelling the said patta. Thus opposite parties 1 to 3 have actually cheated the complainants.
13. RW1 the 2nd opposite party did not make himself available for cross-examination. Therefore except Exts.R2 and R3 there is no other evidence on the part of OPs 1 to 3 to show that they have completed the construction of the flat and handed over the same to the complainants. The report of the Commissioner’s Ext.C1 and C2 and photographs Ext.P11 series and Ext.P16 series show that the construction of the building is not completed. It is difficult to believe that the version of RW1 that they have completed the construction of the apartments and handed over the same to complainants and that the complainant have leased out the same to third parties. Thus there is clear deficiency of service on the part of opposite parties 1 to 3.
14. The 4th opposite party in both the complaints, M/s Punjab National Bank, Thampanoor, Thiruvananthapuram represented by its Senior Manager. He in his version contended that opposite parties 1 to 3 availed loan of Rs.78.00,000/- on January 12, 1995 for construction of residential apartments in this property that security for that loan was this property and that valid equ
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itable mortgage was erected over this property by depositing the original title deeds and revenue records. It is further stated in the version that as opposite parties 1 to 3 defaulted the Bank was forced to file OA.106/2000 before DRT, Ernakulam a decree was obtained on 5.6.2002 of Rs.271,80 lakhs and in execution of that decree the said property was sold to Rs.32.30 lakhs. All the above facts are also proved by Ext.P50 the copy of the order in OA.106/2000 of DRT Ernakulam. Suppressing the above fact opposite parties entered into an agreement with complainants with respect to this property and executed the sale deed. Opposite parties 1 to 3 have also availed loan for IDBI Bank by mortgaging this property as evidenced by Ext.P48 copy of the order of DRT, Ernakulam in OP.81/2000. Thus there is clear deficiency in service on the part of opposite parties. 15. In the light of the above findings opposite parties 1 to 3 are bound to refund Rs.7,50,000/- to the complainants in each case. As regards compensation we feel that interest at the rate of 12% per annum from the date of payment ie February 29, 1996 till realization would be reasonable. In the result complaint is allowed in part. Opposite parties 1 to 3 are directed to refund to the complainants Rs.7,50,000/- each with interest at the rate of 12% per annum from February 29, 1996 till realization. In this the complainants are entitled to a cost of Rs.10,000/- in each of the complaints.