Jaina Properties (P) Ltd. vs Union Of India And Ors.
1994 Latest Caselaw 175 Del

JUDGMENT

Gokal Chand Mital, C.J.

(1) The writ petitioner before us is a builder and respondent No. 5, is a consumer who agreed to take a flat from the petitioner builder. Since he was aggrieved by the services of the builder he filed a petition before the State Commission (Consumer Disputes Redressal Commission, Delhi) seeking damages and die State Commission allowed the Consumer's complaint with costs and directed the builder to refund the amount of Rs.69,340.00 deposited by the comnplainant, with interest @ 15% per annum from the date of deposit of Installment as shown in Annexure 'A' till the date of the order and further to pay an amount of Rs.10,000.00 to him. Future interest was also allowed @ 15% per annum besides costs, by order dated 21.8.1991. Feeling aggrieved the builder took the matter in appeal before the National Consumer Disputes Redressal Commission. The Chairman with two members of the Commission ordered the dismissal of the appeal since they did not find any fault with the order of the State Commission and allowed costs to the consumer. But the third member did not agree with the decision of the Chairman and two members and ordered that the appeal beallowed. The decision of the majority prevailed. Still feeling aggrieved the builder has come to this Court under Article 226 of the Constitution of India.

(2) In the writ petition.challenge is made to the impugned order on merits, as well as, on the ground that the Consumer Protection Act, 1986, if it is extended to immoveable properties, it would be ultra vires the Constitution of India.

(3) Adverting to the second point first, the matter is not res integra and is covered against the petitioner by a decision of the Supreme Court in Lucknow Development Authority vs. M.K.Gupta- 1993(6) Judgment Today 307. the relevant passage is as follows :- 6.What remains to be examined is it housing construction or building activity carried on .MB 1.33 " by a private or statutory body was service within meaning of clauses (o) of Section 2 of the Act as it stood prior to inclusion of the expression housing construction' in the definition of "service" by Ordinance No 24 of 1993. As pointed out earlier the entire purpose of widening the definition is to include in it not only day to day buying and selling activity undertaken by a common man but even to such activities which are otherwise not commercial in nature yet they partake of a character in which some benefit is conferred on the consumer. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service, If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property as argued but deficiency in rendering of service of particular standard, quality or trade. Such deficiencies or omissions are defined in sub-clause (ii) of clause (r) of Section 2 as unfair trade practice. If a builder of a house uses sub-standard material in construction of a building or makes false or misleading representation about the condition of the house than it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular. The entire approach of the learned counsel for the development authority in emphasising that power exercised under a Statute could not he stretched to mean service proceeded on misconception. It is incorrect understanding of the statutory functions under a social legislation. A development authority while developing the land or framing a scheme for housing discharges statutory duty the purpose and objective of which is service to the citizens. As pointed out earlier the entire purpose of widening the definitions is to include in it not only day to day buying of goods by a common man but even to such activities which are otherwise not commercial but professional or service oriented in nature. the provisions in the Acts, namely, Lucknow Development Act, Delhi Development Act or Bangalore Development Act clearly provide for preparing plan , development of land and framing of scheme etc. Therefore, if such authority undertakes to construct building or allot houses or building sites to citizens of the State either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression 'service' made available to potential users. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression 'service of any description'. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening 'its scope hut not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993."

(4) It is clearly narrated above that when possession of the property is not delivered within the stipulated period, the delay so caused is denial of service. Such disputes or claims are not in respect of immoveable property. Similarly, if inspite of contract to deliver possession, possession is not delivered at all, the aggrieved person would be entitled to compensation and such a dispute or claim will not be in respect of immoveable property. Accordingly, we reject the contention regarding the vires of the Act.

(5) On merits also, the petitioner has no case. the complainant deposited Rs. 69340.00 with the builder on the promise that if the construction is raised, he would be given the built portion. The builder did not comply with his promise with the result, the complainant had no option but to knock the door of the Forum under the Act for damages. The damage awarded in this case are just meagre and cannot be said to be disproportionate to the amount of damage or injury sustained by the claimant.

(6) Accordingly, we find no merit in the writ petition and the same is dismissed with costs which are quantified at Rs. 2,500.00 .