The complainant which is the appellant in FA/161/2011 and respondent in FA/266/2010 is a cooperative society. The society awarded a work for water proofing of the terrace of the society complex to M/s B & B Growing which is the respondent in FA/161/2011 and appellant in FA/266/2010. A written agreement was executed between the parties by way of a letter dated 29.4.2001. The opposite party provided a defect liability period of 05 years from the date of completion of the work. Subsequently, additional work of lifting 5000 litre water tanks and placing them on the terrace was also awarded to the opposite party. The society paid a total sum of Rs.1351761/- to the opposite party for the work executed by them. The case of the complainant is that quality of the work executed by the opposite party was poor and as a result, seepage took place in a number of residential flats occupied by its members. The matter was brought by the society to the notice of the opposite party and a meeting was also convened wherein the matter was discussed. The Minutes of the Meeting to the extent it is relevant, reads as under:-
“1) It was mutually decided by the rep. of MBT, their applicator Mr. Balbir S. Chawla and Capital CGHS Ltd. respectively that rectification work of the Building shall be taken in order to (K.L. Baveja) eradicate the problem of seepage/leakage of the roof-top.
2) The MBT representative, Mr. Patel and Mr. Balbir S. Chawla agreed on the below mentioned schedule:
1. Block C-2 of the Building will be rectified, tested (by PONDING as per the agreed specification in the contract) and handed over to the society.
2. Society after conducting bye test alongwith PONDING.
3. On satisfactory results of the Block C-2 (i.e. no seepage/leakage in observed), other balance area/blocks of the building shall be taken up for similar PONDING TEST) and subsequent rectification.
4. The above work on C-2 Block shall starts from 23 Oct., 02 and finish latest by 31 Oct., 02.
5. For other areas, work shall be commenced by mutual consent of Capital CGHS and M/s. B&B Growing alongwith MBT, Should the PONDING TEST of C-2 Block be to the satisfaction of Capital CGHS, other areas will then be taken up. However, the total period allowed for the total completion of job including rectification will not more than 60 days from 23 Oct., 02
The defect liability period was discussed. As per Mr. Chawla, the period starts from 09.12.2001 instead of form the date of completion of rectification work as pointed out by Capital CGHS Ltd. This point could not be resolved, and it was agreed by both the parties that it will be taken up after completion of the rectification work based on the award letter interpretation which would be acceptable to both the parties.
The above jobs will be done by M/s. B&B Growing / MBT at their own cost.
As M/s. B&B Growing is authorized applicator of M/s. MBT India Pvt. Ltd.,
MBTs rep. (Mr. Upan Patel) confirms that the company (MBT) backs up the waterproofing with done by the authorized application i.e. M/s. B&B Growing.”
2. The case of the complainant is that the defects in the work were not removed by the opposite party despite repeated requests made to it. The complainant, therefore, approached the concerned State Commission by way a consumer complaint seeking refund of the amount which it had paid to the opposite party alongwith interest or in the alternative, execution of the entire water proofing to its satisfaction with damages.
3. The complaint was resisted by the opposite party which took two preliminary objections. The first preliminary objection taken in the written version was that the complaint was barred by limitation since the work was executed in the year 2001. The second objection was that the complaint was bad for non-joinder of M/s Master Builders Technology Pvt. Ltd. which supplied the material required to be used for the purpose of executing the water proofing work. It was also alleged by the opposite party that the complainant did not get the RCC tank removed before placing the PVC tanks on the terrace which resulted in extra load being put on the terrace since the PVC tanks were placed above the partly demolished RCC tanks and that overload resulted in seepage.
4. The State Commission vide its order 31.5.2010 directed the opposite party to pay a sum of Rs.7 lakhs to the complainant within 30 days failing which interest @ 9% p.a. was payable on the said amount.
5. Being aggrieved from the order passed by the State Commission, both the parties are before this Commission by way these cross appeals.
6. Admittedly, there is no privity of contract between the complainant and M/s Master Builders Technology Pvt. Ltd. The material required for water proofing was purchased directly by the opposite party and was not purchased by the complainant society. Therefore, the complainant society could not have sought any compensation from M/s Master Builders Technology Pvt. Ltd. even if the material supplied by them was substandard. It is only the opposite party which could have claimed damages from the material supplier for the substandard material supplied to it. If the seepage in the flats happened solely on account of the quality of the material, as is the case of the opposite party and not due to any deficiency in execution of the work , the opposite party has to pay compensation to the society for the work executed by it. Nothing prevents the opposite party from claiming that amount from the material supplier, alongwith interest on the sale consideration paid by it. In fact, even the compensation which the opposite party has to pay to the society can be recovered by it from the material supplied if the seepage occurred solely on account of substandard and was not attributable to any defects in the workmanship.
7. As far as the limitation is concerned, the period of limitation would start only when the defects surface and it would give a continuous cause of action to the society unless the defects are removed or the agency which executes the work flatly refuses to rectify the said defects. In the present case, the opposite party had also provided a 05 years defect liability period in the agreement executed by it. As rightly noted by the State Commission, the consumer complaint was well within limitation if the limitation starts from the end of the defect liability period. Therefore, I find no merit in the preliminary objections taken by the opposite party.
8. The next question which arises for consideration is as to whether the complainant is entitled to any compensation from the opposite party or not. The answer to this question would depend upon the quality of the work executed by the opposite party. It is an admitted positon that there was seepage in several flats after the water proofing on the terrace of the society complex was done by the opposite party. The Minutes of the Meeting extracted hereinabove, leave no doubt that there were problems of seepage/leakage from the roof top and, therefore, the opposite party was required to remove those seepages/leakages. The opposite party cannot avoid its responsibility to rectify the defects even if the said defects had happened solely on account of substandard nature of the material supplied to it by MBT. As noted earlier, nothing prevents the opposite party from claiming the compensation which it will pay to the complainant from MBT if it is able to prove that seepage/leakage had happened solely on account of substandard quality of the material supplied to it by MBT.
9. The Minutes extracted hereinabove clearly shows that the rectification work was joint responsibility of the M/s MBT as well as of the opposite party. Mr. Balbir S. Chawla representative of the opposite party alongwith the representative of MBT had specifically agreed for testing and rectification of the work to the satisfaction of the society. That obviously has not been done. Therefore, the complainant society would be entitled to recover from the opposite party the amount which was actually spent on the rectification of work or which could reasonably be said to be the cost of rectification of the defective work after deducting therefrom the amount received by it from MBT.
10. No evidence was led by either party to prove the estimated cost of rectification of the seepage/leakage which had happened in several flats on account of the work executed by the opposite party. Though the complainant claimed refund of the entire amount which it had paid to the opposite party alongwith interest, such a prayer, in my opinion, could not have been granted since the complainant was entitled only to the reasonable cost of rectification of the defective work and not to the amount actually paid by it to the opposite party. If the reasonable cost of rectification of the work was less than the amount paid by the complainant to the opposite party, the society was entitled to only that much amount. If the cost of rectification was more than the amount paid by the society to the opposite party, it could recover even more than the amount which it had paid to the opposite party. However, no evidence was led to prove the reasonable or actual cost of rectification of the defects found in the work. Neither the complainant society nor the opposite party examined any expert to prove the estimated cost of rectification of the seepage/leakage found in the flats.
11. The next question which arises for consideration is as to what should be the appropriate order in the facts and circumstances of this case. The learned counsel for the complainant states on instructions that since the rectification work was got done by individual allottees, it is not possible for the society to produce evidence to prove the said expenditure. Since the defects in the work have already been rectified, it is not possible to estimate the cost of rectification in the year 2020 when the work was executed way back in the year 2002. It is also an admitted positon that the complainant has already received a sum of Rs.4 lakhs from M/s MBT. A perusal of the agreement executed between M/s MBT and the complainant would show that while paying Rs.4 lakhs to the society, M/s MBT maintained that there was no defect in the material which it had supplied to the opposite party and that the payment was being made only as a gesture of goodwill. However, it is extremely difficult to accept that M/s MBT wold have paid a sum of Rs.4 lakhs to the society without there being any defect in the material. This is more so when considered in the light of the fact that the material was purchased by the opposite party and not by the society and, therefore, there was no privity of contract between M/s MBT and the complainant society. The inevitable inference therefore would be that there was some issue with respect to the quality of the material supplied by M/s MBT and that was the reason it agreed to pay a sum of Rs.4 lakhs to the society.
12. The case of the opposite party is that the seepage / leakage had happened on account of the quality of the material purchased from M/s MBT and not on account of any deficiency in the execution of the work. However, no expert evidence was led by the opposite party to prove that the leakage/seepage had occurred solely on account of the quality of the material supplied by M/s MBT and there was no defect in the quality of the work executed by the opposite party. It was obligatory for the opposite party to produce such an expert evidence when the leakage/seepage in the flats was an admitted positon and it had taken a stand that the said leakage/seepage had happened solely on account of the poor quality of material supplied by M/s MBT. In these circumstances, I am of the view that the leakage/seepage had happened not only on account of the quality of the material supplied by M/s MBT but also on account of defect in the quality of the work executed by the opposite party. Therefore, the opposite party in my opinion, should also partly compensate the complainant society for the said leakage/seepage found in the flats allotted by the society. In any case, nothing will prev
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ent the opposite party from recovering that amount from M/s MBT if it is able to prove that the seepage/leakage had happened solely on account of the poor quality of the material supplied by M/s MBT and there was no deficiency in the quality of the work executed by it. 13. Considering all the facts and circumstances of the case, it is directed that opposite party M/s B & B Growing shall pay a sum of Rs.4 lakhs to the complainant within three months from today alongwith interest on that amount @ 9% p.a. from the date of institution of the consumer complaint. The said amount on receipt from the opposite party alongwith the amount which it has already received from M/s MBT shall be disbursed by the society to the members who had got the seepage/leakage rectified in their respective flats. In other words, the said amount will go to the individual allottees who had to suffer on account of the seepage/leakage that happened in their flats and will not be retained by the society. The amount which the opposite party had deposited with the State Commission shall be released to the complainant along with interest, which may have accrued on that amount, to the extent the said amounts payable to the complainant in terms of this order. The balance amount, if any, shall be refunded to the opposite party. 14. Both the appeals stand disposed of.