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Sri Sastha Constructions Rep. by its Proprietor V. Sreekrishnan v/s K.K. Ravi & Another

    F.A.NO.742 of 2010 (Against order in C.C.NO.82/2008 on the file of the DCDRF, Tiruvellore)

    Decided On, 30 January 2012

    At, Tamil Nadu State Consumer Disputes Redressal Commission Chennai

    By, M.A.
    By, M.L.
    By, M.PHIL.
    By, MEMBER

    For the Appellant : K. Ganesan, Advocate. For the Respondents : M/s. Balachandar, M/s. V. Balaji, Advocates.

Judgment Text

(The 1st Respondent as Complainant filed a complaint before the District Forum against the opposite party, praying for a direction to handover the flat alongwith approved plan, to pay Rs.135000/- towards advance amount, to pay 18% interest on Rs.135000/- paid, alongwith compensation of Rs.3 lakhs, and cost of RS.10000/-. Against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.08.07.2010 in CC.No.82/2008.

This petition coming before us for hearing finally on 18.01.2012. Upon hearing the arguments of the counsel for the appellant, perusing the material papers on record, lower court records, as well as the order passed by the District Forum, this commission made the following order)


1. The 1st opposite party is the appellant.

2. The 1st respondent/ complainant, approached the District Forum, alleging negligence and deficiency, against the opposite parties /builders, claiming the following reliefs:

1. To direct the opposite parties to handover the flat alongwith approved plan obtained from the competent authority after collecting the balance amount as per the agreement, failing which

2. To pay the advance amount of Rs.135000/-

3. To pay the interest for the amount of Rs.135000/- paid at 18% per annum till realization

4. To pay Rs.150000/- for the deficiency in serve of opposite parties for having filed to fulfill their contractual obligations

5. To pay Rs.150000/- for the mental agony and hardship caused by the deficiency in service of the opposite parties

6. To pay the cost of Rs.10000/- for this complaint

3. The 1st opposite party/ appellant, resisted the case, contending that the claim is barred by limitation, that the complainant alone had cancelled the agreement, unable to pay the balance of sale consideration, and as such since they have not committed any deficiency in service, the complainant is not entitled to any relief, denying further averments also in the detailed written version, praying for the dismissal of the case.

4. The District Forum, as per the order dt.8.7.2010, has come to the conclusion that the complaint is not barred by limitation, that the 1st opposite party was unable to complete the construction as agreed, because of his deviation of the plan, not approved by the authorities, that should be construed as deficiency in service. In this view, a direction was issued, against the 1st opposite party alone, originally to refund a sum of Rs.135000/- with interest thereon at 12% p.a, from the date on which the agreement was cancelled by the complainant till payment, in addition to payment of compensation of RS.10000/- towards mental agony. The order was communicated to the 1st opposite party. Subsequently a notice was issued, requesting the 1st opposite party to appear on 4.11.2010, alongwith copies of the order, since the order has to be corrected, regarding the liability as well as compensation, correcting the same as Rs.1 lakh, instead of Rs.10000/-. By that time, the 1st opposite party preferred an appeal before this commission, and therefore he has not approached the District Forum to correct the order dt.8.7.2010, as requested. Thereafter, suomoto, when the District Forum is not conferred with the power of review, or to correct the order, changing the compensation, as seen from the original records, from Rs.10000/- to Rs.1 lakh, fixing the liability upon the 1st opposite party, which may be germane, since that is not going to change the position, since even as per the original order, there was a direction against the 1st opposite party alone. When this was brought to the notice of this commission, notice issued, remarks called for, wherein the President justified his stand, illegally, and we feel to leave the matter as such, since the change of compensation, is not going to be the matter very much, for the reasons we are going to record hereunder, whether it is Rs.10000/- or Rs.1 lakh as the case may be.

5. The learned counsel for the appellant argued, that the order of the District Forum, awarding compensation, when they have ordered interest for the non-payment of the amount, is incorrect, and that should be rectified. It is the further submission of the learned counsel for the appellant, that the complainant had purchased the undivided share of the plot, and incase of refund of the amount, that undivided share in the plot should be reconveyed. Though question of limitation was seriously raised, as seen from the written version, as well as, as seen from the grounds of appeal, no argument was advanced, and therefore we refrain from giving any finding, on this point.

6. The learned counsel for the complainant / respondent would contend that for the deficiency committed, the 1st opposite party is liable to pay compensation, in addition to interest also, which was properly considered by the District Forum, and therefore compensation ordered cannot be set aside, conceding that on payment of the amount received from the 1st opposite party, the complainant is willing to redeliver the undivided share, as ordered in CC.No.48/2008 by the same District Forum. Therefore, the only point now advanced before us, required for consideration is, whether the complainant is entitled to interest, as well as compensation.

7. As evidenced by Ex.A4, the complainant had agreed to purchase an apartment, which was constructed by the 1st opposite party, in the undivided share purchased by the complainant under Ex.A5. Though several stipulations were made in the agreement, it appears they were not strictly followed, or there was deviation resulting an order from CMDA under Ex.A19, to stop the work, thereafter as if the 1st opposite party completed the work, issued a notice probably suppressing the deviation, and when the complainant came to know he cancelled the agreement, by issuing a notice, in which there cannot any violation of the agreement also, since as proved 1st opposite party has committed default. Till the date of cancellation, admittedly as per the construction agreement, viz. Ex.A4, the complainant has paid a total sum of Rs.135000/-, which is admitted by the opposite party also. Therefore, when the 1st opposite party has committed deficiency, in not constructing the flat as agreed, without violation of the approved plan, failed to do so, the complainant was at liberty to cancel and ask for refund of the amount, which had happened in this case, and the amount includes the payment made for undivided share also. The opposite party had the benefit of Rs.135000/- upto the date of cancellation unquestionably, and when the agreement was cancelled by the deficiency committed by the 1st opposite party, we are of the view, that the complainant is entitled to claim interest, which was properly considered by the District Forum awarding at 12% p.a., from the date on which the agreement was cancelled, till payment, in which finding we are unable to disagree. However that part of the relief also should be modified, adding that on payment, the complainant should redeliver the undivided share of the plot, from whom he had purchased, probably the 2nd opposite party. Then comes the controversial question of compensation.

8. The Apex Court of this land, had an occasion to consider the grant of compensation, as well as interest, in Ghaziabad Development Authority Vs. Balbir Singh, reported in 2004 CTJ 605 (Supreme Court) (CP), wherein also the transfer of plot was involved. While considering the term interest, as well as compensation, it is observed, based upon previous decision 'Interest in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, interest’ is understood to mean the amount which one has contracted to pay for use of borrowed money…. In whatever category nterest’ in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus it is a charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable'. It is also observed that ' The general idea is that he is entitled to compensation for the deprivation; the money due to the creditor was not paid, or, in other words, was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation whether the compensation was liquidated under an agreement or statute'. On the above basis, it is held, the money must be returned with interest, equating compensation, which is the dictum of the National Commission also in Lakshmi Vilas Bank Ltd., Vs. P.R.Krishnan and another in 1995 CPJ 43 NC. Based upon the above two decisions, since District Forum has ordered interest from the date of consideration, till paymen

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t, that will take care of the compensation amount also, for deficiency, and therefore it may not be proper to penalize the first opposite party doubly, which is not permissible under law, as held by the National Commission. In this view of the matter, whether the award of compensation in this case is Rs.10000/- or Rs.1 lakh, as the case may be, as corrected, copy not served, as urged before us, the same is liable to be upset, concluding the complainant is not, entitled to both compensation and we detain interest alone, setting aside compensation part. 9. In the result, the appeal is allowed in part, confirming the order of the District Forum in CC.No.82/2008 dt.8.7.2010, regarding the refund of the amount with interest alone, further adding a condition, that on payment, the complainant shall reconvey the undivided share to the party from whom he had purchased under Ex.A5, setting aside the order of compensation, confirming the cost. The parties are directed to bear their respective cost in the appeal.