Compensation for delay in flat construction

Source: THE NEW INDIAN EXPRESS, 22-April-2002

In a recent judgment, the Hyderabad District Consumer Disputes Redressal Forum-II directed the apartment contractors of a flat to pay a buyer compensation for the delay in handing over the flat to him.

Sumit Puri filed a complaint against Y.Rajan and Raviraj Mathur, partner contractors and builders, and the owner of the land Usha Mathur. He alleged that they agreed to sell him a semi finished flat in Santosh Bhavan, admeasuring 900 square feet, together with an undivided share of 29 square yards land, for a total consideration of Rs 6,60,000. A sale deed was executed dated 11.11.1999 in his favour. The builders promised to complete the unfinished work and provide all the common amenities, parking space etc within two months, on 12.11.1999, they executed a promissory note agreeing to complete the work by 8.2.2000; they also agreed to pay Rs 5,000 per month as damages, in case of any delay. The complainant paid a total of Rs 6,85,000, which they acknowledged in a letter dated 18.6.2000. He charged that they collected more money for the extra work but did not complete it.

Vexed with their attitude, Summit Puri demanded that they pay him damages. Then they promised to complete certain jobs within 10 days from 29.9.2000. He charges that sufficient car parking space was not provided and also that the builders had constructed a 4 thick wall, while promising to construct a 9-thick brick compound wall.

He approached the Forum seeking Rs 6,518 towards floor polishing and Rs 50,000 damages at Rs 500 per month for the delay of 10 months, from 18.2.2000 till the date of filing. He also sought Rs 50,000 compensation for mental agony and inconvenience and a direction to the builders to complete the work or pay him Rs 60,000, towards its value. He further demanded payment of Rs 5,000 per month from 8.1.2001 till the completion of the pending works and costs.

The contractors said that he paid Rs 6,60,000, and made an agreement for completing the remaining works for Rs 2,10,000. But he paid the amount only by 19.6.2000, the delay in execution of the works was due to this non payment. They denied their liability to pay Rs 5,000 per month. They said adequate car parking space had been provided. They denied the promise to construct a nine inch wall, as it would add weight on the structure. Sumit Puri said the sale consideration was Rs 4,50,000 for the semi finished flat and Rs 2,10,000 for completing the work; the builders said it was Rs 6,60,000 for the semi-finished flat. plus an additional Rs 2,10,000 for completing the work; the builders said it was Rs 6,60,000 for the semi finished flat, plus an additional Rs 2,10,000 for the extra work. In the sale deed, the sale consideration is shown as Rs 4,50,000. They said that to reduce their stamp duty and registration charges, a lesser amount was mentioned.

This case falls to ground under the Evidence Act. Oral evidence, contrary to the recitals of a written document, can not be admitted. If the  sale consideration was falsely mentioned as Rs 4,50,000 the amount received by them would also have been falsely stated as Rs 4,50,000. What ever the actual sale price, they would have definitely received the full amount before executing the sale deed, or stated the balance payable. It is unlikely that they would have delivered the flat without receiving full consideration.

The builder's letter dated 18.6.2000 says that they have received Rs 6,50,000, asking for an additional Rs 60,000 towards miscellaneous work, including water and electricity and car parking. They asked for Rs 35,000 at that time, and the balance at the time of taking possession of the flat. They have not demanded any amount towards sale consideration. The letter also acknowledges receipt for Rs 35,000. Further, no notice was issued demanding the balance sale consideration. However, the complainant too did not pay the full amount till June 2000. Hence the delay in delivery was from June 2000 till September 2001. The compensation of Rs 5,000 per month for the delay is not unreasonable and he is entitled to 14 months compensation, i.e., Rs 70,000.

The amount paid towards car parking is also liable to be refunded. Regarding the compound wall of 9", the builder has justified his stand. Admittedly, the specifications do not mention the thickness of the compound wall. Hence, the Forum directed the contractors to pay a compensation of Rs 70,000 and refund him Rs 63, with 12 per cent interest per annum, from 2.1.2001 till the date of filing the complaint, and thereafter with interest at 18 per cent per annum till payment. He was also awarded costs of Rs 1000.

The judgment was delivered by Y.Venkateswara Rao, president, and M.R.Naik and Bela Sumanth, both members.