ADWAVE TOWERS FLAT OWNERS WELFARE ASSOCIATION Vs ADWAVE ADVERTISING (P) LTD

1. THIS is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.

2. THE complainant is an Association of the Flat Owners of Adwave Towers promoted by the opposite parties and is registered under the Tamilnadu Societies Registration Act. THE complainant has filed this complaint alleging various deficiencies in the construction of the Flat and claimed Rs. 3,24,080/- towards the cost of the rectification of the defects and deficiencies of service and another sum of Rs. 3 lakhs as damages for hardship and loss suffered by the members of the complainant association.

The Opposite Parties have filed identical counters questioning the locus-standi of the complainant to file this complaint and denying the deficiencies. It is also contended that the claim is beyond the pecuniary jurisdiction of this Commission.

The second Opposite Party has filed a writ before the Hon''ble High Court in W.P. 4971/ 94 and in W.P. No. 4881, 7872,11915 & 11916 of 1994. The Court has been pleased to pass the following order:-

"By an interim order made earlier on 22.3.94 this Court permitted the State Consumer Disputes Redressal Commission to decide the question relating to the preliminary issue as to the jurisdiction raised by the petitioner. Respondent may approach this Court after the issue is decided. The question as to whether the stay should be continued after the decision of the preliminary issue, will be considered then."

3. IN view of this order of the Hon''ble High Court, we have taken up for consideration, the premliminary objection raised by the learned Counsel for the Opposite Parties.

It is first contended by the Learned Counsel for the opposite parties, though not subsequently raised in the counter, that the complainant association has not been validly registered under the Tamilnadu Societies Registration Act and the complaint is not maintainable. Under Section 2(1)(b)(i) the complainant means a consumer. Under Section 2(1)(d)(ii) a consumer means any person who hires or avails of any services for consideration. Under Section 2(1)(m)(iv) ''Person'' includes every other association of persons whether registered under the Societies Registration Act or not. Even assuming therefore that the complainant association has not validly registered under the Tamilnadu Societies Registration Act. it is a person as defined in the Consumer Protection Act and is entitled to maintain this complaint as a consumer.

4. IT is then argued that the complainant association has come into existence only after the construction and allotment of flats and after they were handed over to the respective owners, that there is no agreement between the Association and Opposite Parties and the complainant is not a consumer and has no locus-standi to file this complaint. IT is. true that the Opposite Parties have entered into agreements with the members of the association and allotted flats to them. The members are therefore consumers who had hired the services of the opposite parties for consideration in the matter of construction of building and allotment of flats to them. After the allotment and after taking possession, they have formed themselves into an association for the maintenance of and to look into the common affairs of the complex. This is what is happening in respect of every building complex. The Association therefore represents its members who are consumers and as an association it is a person entitled to maintain this complaint to ventilate the common grievances of its members. This contention of the Opposite Parties has no force.

It is then urged that the agreement entered into with each allottee is one for sale of the undivided interest in the land and another for the construction of flat, the agreement for sale of immovable property is outside the purview of the Act and the agreement for construction of the flat constitutes a works contract and does not fall within the definition of ''service'' under the Consumer Protection Act. The first point that the agreement for the sale of undivided share in the land, (immovable property) is outside the scope of this Act is well founded and does not admit of any doubt. But the complainant association has not come forward with any claim of deficiency in respect of the agreement for sale of the undivided share of the land and this agreement is not the subject matter of this complaint. The other point raised by the opposite parties that the agreement for construction of flat is a works contract and does not come within the definition of service has no basis whatsoever. Section 2(1)(o) of the Consumer Protection Act as amended by the Consumer Protection Amendment Act of 1993 runs thus: "Service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service. The question whether housing construction comes within the ambit of the aforesaid definition has been the subject matter of the recent land-mark decision of the Supreme Court in Lucknow Development Authority v. M.K. Gupta III (1993) CPJ 7 (SC)=1994 (1) LW (SC) the Supreme Court has observed as follows:-

"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 of 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 such 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 and delay so caused is denial of service. Such disputes or claims are not in respect of immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in Sub-clause (II) of Clause (r)of Sec. 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 then 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 a cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, in while performing statutory duty, renders service to the society in general and individual in particular."

The next objection raised by the Opposite Parties is that the claim filed by the complainant association is beyond the pecuniary jurisdiction of this Commission. Section 17 of the Consumer Protection Act, as amended lays, down that the State Commission shall have jurisdiction;

(i) to entertain; (ii) complaints where the value of the goods or services and compensation, if any, claimed exceeds Rupees five lakhs but does not exceed Rupees twenty lakhs.

(1) Open Well (2) Two Bore Wells (3) Meter Rooms (4) Room for security at the Gates (5) Intercom facilities to the security (6) Playpen (7) Adequate parking facilities.

5. THE contention of the learned Counsel for the opposite parties that where a particular deficiency is alleged in a construction, the entire construction must be valued for the purpose of jurisdiction, will lead to absurd result. A consumer may avail of the services of builder for the construction of a house worth about Rs. 30 lakhs but he may find deficiency only in the putting up of the front door costing not more than Rs. 10,000/-. His complaint will relate only to that particular deficiency which he is likely to value at Rs.10,000/-. It would be monstrous to direct the consumer to file the complaint before the National Commission instead of before the District Forum for securing this relief for deficiency in sevice valued at Rs. 10,000/-. This could never have been the intendment of the legislature. We have little hesitation in rejecting this contention of the opposite party.

6. IN the result, all these preliminary objections are over-ruled. All Preliminary objections overruled.