ORDER
P.D. Shenoy, Member
1. Aggrieved and dissatisfied by the order of the State Consumer Disputes Redressal Commission, Chennai, in O.P. No. 220 of 1998, Mr. A. Jagannadhan, Proprietor of A.J. Builders has filed this appeal.
The case of the complainants:
2. The complainants purchased an undivided share of land to an extent of 655 sq. ft. and entered into a Builder’s Agreement with the opposite party for construction of a flat measuring 655 sq. ft. The value of the land was Rs. 2,50,350 whereas the cost of construction was Rs. 6,95,500 to be paid in instalments. The builder had agreed to complete the flat within 8 months measuring 910 sq. ft. including balcony and common area. The agreement is exhaustive. It is the case of the complainants that the opposite party did not carry out the work as per the agreed specifications between the parties, which are as under:
The bore well was not provided;
Sewerage and water connection not completed ;
Polishing of tiles and finishing work not done ;
Parapet wall on the terrace was not built to the required height;
3 phase electric connection with automatic phase changer not provided ;
The light and fan fittings, not provided.
3. Despite payment of all instalments totalling Rs.10,16,338 on 22.7.1998, the possession was not handed-over on the plea that Rs. 82,000 was still due from the complainants towards additional built up area of 46 sq. ft., interest on delayed payments, etc.
Case of Opposite Party:
4. The flat was completed on 15.2.1998 well before the stipulated time in the agreement. The complainants were never regular in payment. They paid a sum of Rs.1,50,000 only on 31.10.1997 and the Sale Deed was executed on 4.12.1997. They have provided additional bore well as the original bore well did not yield adequate water. The Municipality has not provided sewerage connection at Velachery. Hence, this facility could not be provided. They have denied the other allegations made in the complaint. They also stated that additional work has been carried out. Submissions of the learned Counsel for the appellant:
5. Learned Counsel for the appellant submitted that there is a detailed Builder’s Agreement. Clause-10 of this Agreement stipulates that flat owner shall be liable to pay to the builder an interest @ 24% p.a. on all amounts due and payable by the flat owners under this Agreement, if such amount remains to be unpaid 7 days after its becoming due. He explained this with the help of a table given below:
No. Stage Completed Amount Payments Received Total
payable made on
(Rs.) (Rs.)
1. Basement 15.10.97 2,50,000 10,000 1.10.87
70,000 22.10.97 80,000
2. Ground 31.12.97 2,00,000 70,000 31.10.97 70,000
Floor
3. First Floor 15.2.98 25,000 15.12.97
25,000 28.2.98
25,000 8.3.98
1,50,000 23.3.98
Adjusted 3,50,000 30.3.98
towards 1,75,000 12.6.98
supply of
sanitary 46,000 17.6.98
materials 2,45,000 70,000 28.7.98 8,66,000
(disputed)
Total
amount paid 10,16,000
6. He further submitted that additional works were carried out costing Rs. 22,390 as per the bill dated 25.6.1998. This was within the knowledge of the complainant. An amount of Rs. 15,000 is also payable towards the difference between the cost of fittings agreed to be provided and actually fitted. The Appellant had offered possession of the flat on 20.7.1998 to the respondents making balance payment to the tune of Rs. 1,92,000 which included costs towards extra work done, Registration expenses and interest on late payments. He admitted that out of this Rs. 70,000 was paid on 28.7.1998 and the balance payable would be Rs. 1,22,000.
7. Learned Counsel quoted the judgment of the Apex Court in the case of Ghaziabad Development Authority v. Union of India and Anr., the head-note extract of which is reproduced below:
Mental agony, damages for – Held, not payable in case of breach of ordinary commercial contract – Purpose of awarding damages is to put complainant monetarily in the same position he would have been in if contract had been performed – Therefore rule as to remoteness of damages would come into play – Complainant filing petition before MRTP Commission against appellant Development Authority on grounds of excessive delay and failure to hand over possession of plot – Commission awarding, inter alia, Rs.50,000 as damages for mental agony suffered by complainant – Held, Commission erred in awarding damages for mental agony.
8. In view of the above judgment the damages are not payable he said.
Submissions of the learned Counsel for the respondents:
9. The respondents have taken a loan from the L.I.C. and have paid all the instalments payable to the builder and whenever there was delay in release of the instalment by the L.I.C, there has been some delay in the payment of the same to the builder.
10. The builders have claimed that they have provided 42 sq. ft. of additional built-up area. There is no agreement to this effect. The doors have not been fitted. The Advocate Commissioner, who was appointed by the learned State Commission, has given all the details. The Commissioner appointed has clearly noted that-
The balcony area is an unauthorized construction and deviation ;
The total plinth area of the flat is 934 sq. ft., i.e., 24 sq. ft. in excess as against the claim of 42 sq. ft. claimed by the builder;
There is no agreement for building additional plinth area. Therefore, the claim of the builder for a sum of Rs. 48,300 towards difference of floor space is invalid ;
Sewerage and water connections are not provided but only a sump and septic tank have been fitted ;
Parapet wall on the terrace is only 1’4″ high whereas it should have been at least 2 1/2 ft. in height;
No automatic phase changer has been provided ;
In none of the rooms, holders have been provided for fitting bulbs and fans.
11. As against the claim of Rs. 2 lakh towards damages and Rs. 4 lakh towards mental agony and torture, the State Commission has awarded a sum of Rs. 50,000 as compensation and Rs. 5,000 as costs with the direction to the opposite party builder to hand-over the possession of the flat to the complainant.
12. Findings:
(1) There is no Agreement/Supplementary Agreement between the parties to provide additional floor space. The Advocate Commissioner inspected the premises on 20.2.1999 in the presence of the Counsel for the complainants, the builder and an independent engineer. They have confirmed the additional floor space wets a deviation to the approved plan. The engineer has further stated that it is an unauthorized construction. As there is no agreement between the parties, the claim of the builder for Rs. 48,300 towards the additional floor space is devoid of any merit.
(2) As Velachery has not been provided sewerage and water connection by the Municipality, the builder has provided, as an alternative, a Septic Tank and a Sump.
(3) The engineer has opined that to raise the height of the parapet wall to 21/2 ft. in four corners, it will cost approx. Rs. 4,000.
(4) Though the builder has not provided three phase electric connection and the holders for fans and light fittings, these are not covered by the agreement.
(5) The builder has claimed Rs. 15,000 towards excess value of the material supplied by the complainants. The original value of the sanitary fittings and tiles, etc. worked out to Rs. 31,000. These are supplied by the complainants by spending Rs. 46,000. As the complainants have spent this additional Rs. 15,000, this cannot be debited to the complainants account.
(6) The builder is only entitled to an interest on delayed payments to the tune of Rs. 54,000. He has claimed that complainants are liable to pay Rs. 80,000. As against this following amount is due from the builder:
Rs. 15,000 wrongly debited towards
sanitary fittings.
Rs. 48,300 towards the difference
of floor space.
Rs. 4,000 towards the cost of
rectification of the
parapet wall.
Therefore, Rs. 67,300 is deductable from Rs. 80,000. The builder is entitled only to a sum of Rs. 12,700. For this petty amount, he has delayed handing over possession of the flat to the complainants till today. This he has done despite a clear-cut report of the Advocate Commissioner who has inspected the building in his presence and in the presence of the learned Counsel for the complainants and an independent engineer.
13 Learned Counsel for the appellant has quoted the judgment of the Apex Court in the case of Ghaziabad Development Authority v. Union of India and Anr. (supra). He has quoted only the head-note pertaining to damages for mental agony, etc. He has failed to quote the head-note relating to interest on equitable grounds, the extract of which is reproduced below:
Reasonable interest on equitable grounds may be awarded in appropriate cases where there is no express or implied contract for its payment nor any applicable statutory provision – Various complainants filing petitions before MRTP Commission or Consumer Disputes Redressal Forum against appellant Development Authority on grounds of unreasonable delay or complete failure in carrying out relevant schemes – Commission and Forum both finding appellant Authority guilty of unreasonable delay or failure to fulfil commitments made to complainants, and directing amounts paid or deposited by respective complainants to be returned along with 18% interest – Award of interest, held, justified in principle but rate of interest reduced to 12% per annum as being sufficient to meet the ends of justice – Civil Procedure Code, 1908, Section 34 – Monopolies and Restrictive Trade Practices Act,1969, Section 36A – Consumer Protection Act, 1986,
Section 14.
14. In this case, learned State Commission has not awarded any interest. The complainants who have waited so long for securing possession of their flat despite the fact of having paid more than Rs.10 lakh by borrowing from L.I.C. and other resources, and having to pay interest and instalments even before securing possession of the flat, are definitely entitled to compensation in the form of interest or a lump sum amount. Learned State Commission has felt it desirable to award a lump sum compensation instead of interest.
15. Accordingly, we do not see any legal infirmity in the order passed by the learned State Commission. As the complainants have to pay Rs. 12,700, this amount may be deducted from the amount payable as per the order of the State Commission. The appellant is directed to pay Rs. 37,300 as compensation with costs of Rs. 5,000. The order of the State Commission is modified accordingly.