1

DISTRICT
CONSUMERDatedDISPUTES
this
REDRESSAL COMMISSION ERNAKULAM
the 30" day of October 2023
Filed on: 17/12/2020
PRESENT
Shri.D.B.Binu
President
Shri.V.Ramachandran Member
Smt.Sreevidhia.T.N Member

G.C. No. 421/2020

COMPLAINANTS
1. Captain [Indian Navy] K.K Nair Slo Late .K.Govindan kutty Nair, A3.
Brighton Court, Near Ulsoor Lake .
2. Mrs. Geetha Nair, W/o KK Nair A3.Pin-560042
Brighton Court, Near Ulsoor Lake.
Bangalore, Pin-60042.
(By Adv.T.J.Lakshmanan, 2nd Floor, Megha Arcade, Power House Road,
Kochi-18)
Vs.

OPPOSITE PARTY
1 M/s Holy faith builders &Developers Pvt Ltd. Rep by its Managing
Director Mr. Sany Francis House No. 48/2005C, Kattarukudiyil House.
RMV Road, Elamakkara, Cochin-682026.
2 State Bank of India, Vankarath Towers, 1" floor, Palarivattom Bye
pass RACPC branch, Palarivattom, Kochi-682025. Rep. by its Manager.
(Op2 rep. by Adv.P.Gopalakrishnan Menon, M.Jithesh Menon, Indu K.. Mahesh
Kumar P.G., Brijesh R., No.79, DD Oceano Mall, Marine Drive,
Ernakulam, Kochi-682 011)
(As per lLA.637/2022 the 2nd opposite party is deleted from the opposite party array)
FINAL ORDER
D.B. Binu, President
A brief statement of facts of this COmplaint is as stated below:

The complaint was filed under section 35of the Consumer Protection
Act 2019. The brief facts, as Stated n the complaint are that the first
complainant served in the detenCe aid Tetired as a capta1n from the Indian
Navy after rendering relentless service to the country for more than 25 years
 of the first complainant. The
wife
the
is
The second complainant apartmentin the Holy Faith H20 apartment
an
Complainants purchasedconstructed
bythe first opposite party. They availed a
complex in Kochi, India,
second
opposite party to purchase the apartment. The
housing loan from the provided false assurances regarding the
parties
first and second opposite construction off the apartment complex.
the
legality and approvals for
later revealedthrough Hon'ble Supreme judgment that
However, it was
complex was in violation of the law, and the
the construction of the apartment
the Court's direction. This resulted in the
Complex was demolished as per
they had invested in the
complainants losing their shelter and tne money
engaged in unfair trade
apartment. The first and second oppostte parties
complainants and failing
practices and deficiency in service by misleading the
before providing the loan. The
to properly scrutinize the project's legal status
opposite party to
complaint details various actions taken by the second
the apartment complex,
recover the loan amount, even after the demolition of
including halting
which is unfair. The complainants demand several actions,
refunding all
the recovery of the housing loan by the second opposite party,
amounts taken post-apartment demolition, compensation totalling
distress, Rs. 2,00,000/
Rs. 25,00,000/- for service deficiencies and mental
party for
for legal costs, and a refund of Rs. 17 87.437 from the first opposite
the apartment's balance.

2) Notice
The commission sent notices to both the opposite parties. The
second
first opposite
opposite party responded by TIling their version. However, the
party, despite receiving the notice, did not file their version As a
proceedings
consequence, the first opposite party is set ex-parteinthe

3) The Version Of The Second Onposite Party

housing loan as per their
GvOpialnants are oblioeted to repay the
loan agreement
agreement and that non"payment would be a violation of the
on
They argue that the not due to any action
demolition of the building was
 3

their part but rather the fault of the local authority. Therefore, the
compensation, if any, should be sought against the local authority and not
against them. The
second opposite party maintains that the loan was
sanctioned when there was an aapproved plan by the local authority, which
made the construction legal. They assert that they cannot be held responsible
for events that led to the demol:a:an a this was caused by the actions O We
local authority.

Furthermore, they araue that the complainants did not raise any
grievances regarding deficiency of service until after the Supreme Court's
order to demolish the building They believe that the real issue is the
demolition itself, and the blame should be directed at the Maradu Municipality
and the State Government. The second opposite party states that they had
conducted a title investigation before sanctioning the loan and had
ascertained the authenticity and marketability of the property's title. They
maintain that they cannot be faulted for approving the loan based on the
documents available to them at the time.

Regarding the debits made in September and October 2020,they assert

that these debits were in accordance with the Standing Instruction provided by

the complainants and that the complainants had deactivated the Standing
Instruction themnselves. The second opposite party denies that they attached a
Sum from the pension account of the first complainant without consent and
they
argues that the complainants are bound by the Standing Instruction
provided.

Theyclarify that they issued a lawyer notice but did not initiate recovery
proceedings during the COVID period.
and hardship due
Regarding the complainants' claims of mental agony
opposite party contends that the
to the loss of shelter, the Second
the demolished apartment and that their
Complainants are not residents of
claims are misleading.
 complainants have
that the
repaid a portion of the
They acknowledge
amount of Rs.
6.20,189/-remains
due as of February 1b,
loan but state that an
2021.
party arguesthat the complainants are still liable
The second opposite their
amount as per agreement, even though the
to repay the balance loan
apartment) no longer exists.
subject matter of Contract (the
the
security for the loan (the mortgage of the
They assert that the
non-existent, which has compelled them to
demolished apartment) now
IS
the outStanding amount.
recall the loan and seek payment of
contends that the complaint
In conclusion, the second opposite party
deficiency of service. They
lacks merit, and they have not Committed any
costs.
request the complaint to be dismissed with

4) Evidence
5document that was
The complainant had filed aproof affidavit and
marked as Exhibits A1 to A5.

EXHIBIT A1: Copy of Tripartite Agreement.

EXHIBIT A2: Copy of Home Loan accounts statement of the complainants.
EXHIB!T A3: Copy of E-mail dated2.41-2020. 29-10-2020, 26-10-2020.
opposite party
EXHIBIT A4: Copy of lawyer notice dated 4-05-2020 issued by the 2
Menon
EXHIBIT A5: Copy of Email dated 10/6/2020 addressed to Adv.Jithesh
case are as follows:
5) The main points to be analysed in this
i) Whether the complaint is maintainable or not?
unfairtrade practice
ii) Whether there is any in service or
deficiency
from the side of he opposite party tothe complainant?
relief from the
i)If so, whether the is entitled to get any
side of the oppositeComplainant
party?
iv) Costs of the
proceedings if any?
 5

6) The issues mentioned above are considered together rand are

answered as follows:
In the present case in hand, as per Section 35 of the Consumer
Protection Act, 2019. aconsumer is a'person' who buys any goods or hires or
avails of any services for a Consideration that has been paid or promised or
partly paid and partly promised, payment. A
or under any system of deferred
cOpy or Tripartite Agreement (Eyhibits A-) Hence. the complainant S d
Consumer as defined under the Consumer Protection ACt, Z0
The complainant initiated the aforementioned case to claim
Compensation due to the deficiency in service resulting from the opposite
party's failure. The complaint revolves around allegations of negligence and
misrepresentation by the opposite parties, which resulted in substantial
financial losses and hardships for the complainant, ultimately leading to a
shortfall in the service received by the complainant. VWe have considered the
submissions made bySri. T.J. Lakshmanan, the learned counsel appearing for
the complainants. It has been brought to our attention that during the course
of this case, the dispute between the complainants and the 2nd opposite party
bank has been resolved, resulting in the exoneration of the 2d opposite party
bank fronm liability. Furthermore, it has been noted that the 1st opposite party
builder received and acknowledged the notice issued by this Commission
pertaining to the case. Despite this acknowledgment, the1st opposite party
builder did not appear before this Commission and failed to present any
opposing arguments. The non-appearance of the 1st opposite party coupled
with their failure to contest the complainants' claims, suggests that the 1
opposite party acknowledges the deticiency in service and unfair trade
practices alleged against them.

It is crucial to highlight that the EX. A1tripartite agreement explic1tly

states that the 1 opposite party builder shall indemnify the purchase
(complainants) in the event of any wrongdoing associated with the
construction of the apartment. In tnis Case, the order issued by the Hon ble
Supreme Court unequivocally establishes that the 1s opposite party builder
 6

of the law. Consequently the

complexin violation
apartment undeniably amount to deficiency in
constructed the party
builder
the 1st opposite their part.
actions of
practices on
service and unfair
trade
opposite
complainant urges actions against the 1
The counsel for the the derICiency in service and unfair
trade
Compensation for
party to provide
for meental agony and hardships, bear the cost
compensation
practices, grant the
the amount paid for their apartment, as
refund
of proceedings, and malpractices.
complainants lost their dwelling due
to tne party's
by the
presented included a proof affidavit filed
The evidence
was unchallenged by the first opposite party. Therefore.
complainant, and it
were the party's malpractices The evidence
the complainants' claims
by the complainant, and it was
presented included a proof affidavit filed
Therefore, the complainants' claim
unchallenged by the first opposite party.
the
supported by the evidence. Therefore.
were considered credible and
the relief sought. including
complainant requests the commission to grant
compensation for mental agony and unfair trade practices
their written version in
The opposite parties' conscious failure to file
to that effect amounts to
spite of having received the Commission's notice
of the
admission of the allegations levelled against them. Here, the case
no
complainant stands unchallenged by the first opposite party VWe have
tirst
reason to disbelieve the words of the complainants as against the
in Its
opposite party. The Hon'ble National Commission held a similar stance
order dated 2017 (4) CPRpage 590 (NC).

In light of the amicable settlement reached between the 2

opposite party bank and the comnlainonte during the pendency ot the casSe
where no further relief is Sought against the 2 opposite party the

Commission duly acknowledges this settlement

As such, the case against the 2" opposite party bank S Consdered
with the
necessary in connection
resolved, and no
further orders or reliefs are
 2nd opposite
party. The case shall proceed solely against the 1s
party (the builder),. opposite

The
Faith H20 complainantsMaradu,
complex in
bought 14A1, 14th floor) in the Holy
an apartment(No.
built by the 1st opposite party (builder).
for a sum of
Rs. Kochi,
61,87,471-, They
opposite party (bank).
availeda loan of Rs..20.00.000/- from the 2d

had al the The builder had claimed that the apartment complex
necessary approvals
project in its approved list,
and clearances, and the bank, having the
the loan after allegedly verifying the
documents. sanctioned
However, the Supreme Court later ruled that the
apartment
Complex violated legal norms and directed its
demolition. The complainants
lost their apartment due to this judament. They
allege that the builder misled
them about the project's legal status.
constituting unfair trade practices. They
also claim the bank did not adequately verify the
documents and misled them
into believing the construction was lawful.

The complainants
had to vacate in August 2019 and by the time they
vacated, they repaid Rs. 24,89,396/- of their loan. Despite their situation, the
bank debited amounts from the first complainant's pension
account, further
aggravating their plight.
During the case's proceedings, the complainants and the bank resolved
their issues amicably. The focus then Shifted solely to the builder, who failed
to appear before the Commission. Tne Justice Balakrishnan committee
appointed by the Supreme Court, awarded the complainants
Rs. 44 lakhs as compensation, but the builder has not complied with this
order.

The complainants' current Cialin against the builder includes

compensation of Rs. 15,00,000/- tor deicency in service and unfair practices.
Rs 10 00 000/- for mental distress. hs 2,00,000/- for the cost of the
 proceedings, and a refund of Rs. 17.87,47|- which represents the balance
they paid for the apartment they paid for the apartment.

In Lucknow Development Authority v. M.K. GuptaLucknow

Development Authority Vs M.K. Gupta Air 1994 Sc787 (AIR 1994 SC 787),

the Honourable Supreme Court helo uiat wien a person hires the services of
a builder, or acontractor, for the consirdoton of a house or a flat and the
same is for a consideration, it is a Serviee as defined by Section 2 (0) of the
Consumer Protection Act, 1986. Tne inordinate delay in handing over
possession of the flat clearly amounts to deficiency of service
A. Deficiency in Service and Unfair Trade Practices
The
Complainants have alleged that the first opposite party engaged in unfair trade
practices and deficiency in service. The tirst opposite party. the builder. was
found to have constructed the apartment complex in violation of the law. as
per the Hon'ble Supreme Court's judgment. This
unequivocally establishes
that the first opposite party's actions amount to a deficiency in
service and
unfair trade practices.

B Failure of the First Opposite Party to Contest The first

opposite party, the builder, received notice but did not file a response or
Contest the complainants' claims. Their non-appearance in these
proceed1ngs.
despite acknowledging the Commission's notice. implies their
acknowledgment of the allegations against them.
In the Contemporary context the concerns of home buyers have
intensified due to the grOwing instances of deceitful practices by builders This
unfortunate trend has resulted in an untick in cases involving cheating and
fraud. Home buyers often grapple with uncertainty. not only Concernng the
timely allocation of their properties ht olso the quality of construCtion Te
builder misrepresented the home buyer as an approved project I! s
imperative for savvy buyers to dcquaint themselves withava1ilable avenues of
redressal to navigate such challenging situations
 9

Recognizing the Dredicame's faced by home buyers especialy those

with limited
aimed at
safe
means, the government bas proactively implemented measures
that not allguardi
buyers
ng their
interests. However, it is essential to acknowledge
the dream of may be fully informed about their legal rights For many
can be owning beautiful home eis acherished aspiration but this dream
a
shattered by unscrupulous
Inthis context, it is
builders
active role rather inncumbent upon the commission to assume an
who
than being passive spectators when confronted with builders
undermine the trust and dreams of innocent home buyers.
In
are
conclusion, the
complainants have successfully established that they
consumers defined under the Consumer Protection Act.
as
2019. and that
they have suffered from a
the part of the first deficiency in service and unfair trade practices on
opposite party The Commission awards the
mentioned reliefs in favour of the comolainants and above
party to comply with these directs the first opposite
orders promptly. The first
inadequately performed the service as contracted with theopposite party had
hence there is a deficiency in service, complainant and
negligence, and failure on the part of
the first opposite party in failing to
provide the Complainants desired service
which in turn has caused mental agony
and hardship, and financial loss, to
the
Complainants.
We find the issues Nos. (0) to (\V)
are in favour of the
the serious deficiency in service that complainants for
happened on the side of the first oppos1te
party. Naturally, the complainant had
sunered a lot of inconvenience mental
agony. hardships, financial loss, etc. due to the
first opposite party. In view of the
negligence on the part of the
above tdcts and circumstances of the case
we are of the opinion that the firSt
oppose party is liable to compensate the
complainant.
Hence the prayer is partly allowed as follows
The first opposite party shall refund Rs.
17.87 437/- as the
balance consideration for the
apartment to the
complainants
 10

shall pay the

II) The first opposite party complainants Rs 5 00 000/-
compensation for service deficiency. unfair trade practices
as
and failing to deliver services after receiving an advance
resulting in mental distress, agony, and hardship

The first opposite Party shall also pay the complainant Rs

25.000/- towards the cost OT tne proceedings

The first opposite party is liable for the aforementioned

directives and must comply witnirn 0 days of receiving a copy of this
order. If they fail to do so, the amounts specified in () and (ü) will accrue
interest at 9% from the date the cO:iplaint was filed until realization.

Pronounced in the Open Commission on this 31 day of October 2023

D.B.Binu. President

V.Ramachandran. Member

Srevidhia T.N. Member