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Sri Dharmapuri Venkateswar Rao v/s M/s Srinivasa Constructions & Another

    F.A.No.1176 Of 2009 Against C.C.No.653 Of 2008 District Forum-I Hyderabad

    Decided On, 18 November 2011

    At, Andhra Pradesh State Consumer Disputes Redressal Commission Hyderabad

    By, MR. R. LAKSHMINARASIMHA RAO
    By, HONOURABLE MEMBER & MR. THOTA ASHOK KUMAR
    By, HONOURABLE MEMBER

    For the Appellant : K.Visweswara Rao, Advocate. For the Respondents : D. Jawahar Lal, Advocate.



Judgment Text

Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)

1. The complainant is the appellant. The District Forum has dismissed the complaint of the complainant hold that the complainant is not a consumer within the provisions of the C.P.Act.

2. The factual matrix of the case is that the appellant is the owner of premises bearing Dr.No.7-1-237/4 admeasuring 40 sq.yards situated at Balkampet Hyderabad and he had entered into development agreement for construction of a building on the site and as per the terms of the development agreement the respondents agreed to construct building and deliver the share of the land owners who include the appellant herein and three other owners of neighbouring premises. It was agreed that incase the respondents failed to complete the construction of the building within 18 months, the respondents would pay monthly rent to the appellant. As per the memorandum of understanding dated 5.11.2005 the appellant is entitled to 45% of the total constructed area in the ground floor, 45% of the constructed area in the third floor. The appellant has filed the complaint complaining of non-allotment and non-delivery of his share of the apartments. It is also complained that the respondent had not completed the construction of the building by 5.5.2007 which is the cut off date mentioned in the development agreement.

3. On behalf of the respondents it was contended that the stipulated period of 18 months for handing over possession of the appellant’s share would expire on 17.1.2009 and not on 5.5.2007. It is stated that the complaint is premature as the date of expiry for delivery of possession of the apartment has not been over and that the construction of the building has been completed except few minor attending works which could not be completed due to legal impediments created by one of the co-owners BV Arunajyothi who filed suit O.S.No.6393 of 2007 before the Court of Junior Civil Judge, Hyderabad and C.C.No.34 of 2008 before the District Forum, Hyderabad.

4. The appellant has filed his affidavit and the documents Exs.A1 to A3. On behalf of the respondents, Exs.B1 to B3 had been marked.

5. Aggrieved by the order of the District Forum, the complainant has filed the appeal contending that the builder is a service provider and the builder’s failure in constructing the building withint he stipulated period amounts to deficiency in service as defined u/s 2(1)(o) and the appellant is a consumer within the meaning of Sec.2(1)(d) of the C.P.Act.

6. The point for consideration is whether the order under appeal is liable to be set aside?

7. The ownership of the appellant to the extent of 40 sq.yards at Balkpampet, Hyderabad and his entering into development agreement-cum-general power of attorney dated 5.11.2005 along with the owners of three neighbouring premises with the respondents is not disputed. The District Forum had erroneously held that the appellant who is the land lord and who had given his site for development and construction of the building thereon is not a consumer and the services availed by him from the respondents does not fall within the ambit of Sec.2(1)(o) of the C.P.Act.

8. Sec.2(1)(d) of the C.P. Act defines and prescribes the limitations for a person to be a consumer within the provisions of the C.P.Act.

(d)"consumer" means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;

Explanation.- For the purposes of this clause, 'commercial purpose' does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;9. Sec.2(1)(o) of the C.P. Act envisages the provisions whereof the service provider can be proceeded against and it reads as under:

"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

10. A combined reading of Sections 2(1)(d) and 2(1)(o) of the C.P.Act regarding the consumer availing service provides for the entitlement of a person availed service not for any commercial purpose and if meant for any commercial purpose subject to intendment of eking out his livelihood relating to any of the provisions such as 'banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information'.

11. The Hon’ble Supreme Court in 'Fakir Chand Gulati Vs Uppal Agencies' held that the owner of the site who had given his land for construction of a building is a consumer of the builder and the builder is the service provider within the meaning of Sec.2(1)(d) and Sec.2(1)(o) of the C.P.Act. The Supreme Court held

12. The terms 'consumer', 'deficiency', and 'service' defined in Clauses (d), (g) and (o) of Section 2(1) of the Act as it stood at the time when the appellant approached the District Forum in 1994 are extracted below:

"(d) ‘Consumer' means any person who-

(i) xxxxxx

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.*

[*The above definition was amended by Consumer Protection (Amendment) Act, 62 of 2002 by adding the words 'but does not include a person who avails of such services for any commercial purpose', at the end].

(g) 'Deficiency' means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service."

(o) 'Service' means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service."x

[xThe words 'the provision of' are substituted by the words 'but not limited to, the provision of' by the Consumer Protection (Amendment) Act, 2002 (62 of 2002) with effect from 15.3.2003].

13. The apex Court laid down the principle that the owner of the site is the consumer and held :

Under the agreement, the builder is required to construct the ground floor in accordance with the sanctioned plan, and specifications and the terms in the agreement and deliver the same to the owner. If the construction is part of a building which in law requires a completion certificate or C&D forms (relating to assessment), the builder is bound to provide the completion certificate or C&D forms. He is also bound to provide amenities and facilities like water, electricity and drainage in terms of the agreement. If the completion certificate and C&D forms are not being issued by the Corporation because the builder has made deviations/violations in construction, it is his duty to rectify those deviations or bring the deviations within permissible limits and secure a completion certificate and C&D forms from MCD. The builder cannot say that he has constructed a ground floor and delivered it and therefore fulfilled his obligations. Nor can the builder contend that he is not bound to produce the completion certificate, but only bound to apply for completion certificate. He cannot say that he is not concerned whether the building is in accordance with the sanction plan or not, whether it fulfills the requirements of the municipal bye-laws or not, or

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whether there are violations or deviations. The builder cannot be permitted to avoid or escape the consequences of his illegal acts. The obligation on the part of the builder to secure a sanctioned plan and construct a building, carries with it an implied obligation to comply with the requirements of municipal and building laws and secure the mandatory permissions/certificates. 14. In the light of the decision of the Supreme Court the appellant is a consumer vis--vis respondent. The findings recorded by the District Forum are not sustainable in law and are liable to be set aside. 15. In the result the appeal is allowed. The order of the District Forum is set aside. The matter remanded to the District Forum for denova enquiry giving opportunity to both the parties for adducing evidence. As the case pertains to the year 2008, the District Forum is directed to dispose of the matter within the a period of 3 months. The parties shall appear before the District Forum on 1.12.2011. In the circumstances of the case the parties shall bear their own costs.
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