Construction Work Done For Consideration That Benefits Another Party Should Be Compensated: NCDRC

The National Consumer Disputes Redressal Commission, presided by Subhash Chandra and Sadhna Shanker(member), in an appeal against Unique Construction, held that if a party carries out additional construction not intended to be free of charge, and the other party benefits from it, the former is entitled to compensation. Brief Facts of the Case The complainant had entered into an agreement with Unique Construction/builder to purchase a flat for a sale consideration of Rs. 41,28,000. The complainant paid the entire consideration of ₹60,00,000 by cheque and also paid Rs. 4,00,000 in cash as full and final consideration for the purchase of the flat and car parking space. Additionally, the complainant paid Rs. 2,00,000 to the builder for extra work in the flat against a money receipt. Despite receiving the entire consideration, the builder failed to execute the Agreement for Sale for the car parking space. Consequently, the complainant filed a complaint before the State Commission seeking a directive to register the Deed of Conveyance for the property and to order the builder to allot and deliver possession of the car parking space along with ₹5,00,000/- in compensation for harassment and mental agony, and litigation costs. The State Commission partly allowed the complaint. Subsequently, the complainant appealed to the National Commission. Contentions of the Opposite Party The builder cited the Supreme Court judgment in Food Corporation of India vs. Vikas Majdoor Kamdar Sehkari Mandali Ltd., which held that if a party performs additional construction not intended as gratuitous and the other party benefits, the former is entitled to compensation. If an oral agreement is not proved, compensation claim under Section 70 of the Consumer Protection Act can be made for work done beyond the contract terms if the benefit has been availed by the defendant. The builder contended that there was nothing inequitable or unjust about the additional amounts paid for extra work beyond what was originally contemplated in the written contract by the complainant. The prayer in the amended complaint before the State Commission requested the builder to allot and deliver possession of the car parking space as per the sanctioned plan or to refund Rs. 4,00,000 paid for the car parking space with interest from the payment date until the refund. The complainant did not seek a refund for any amount allegedly paid for extra work in the original or amended complaint. Hence, the State Commission had correctly held that the complainant did not seek a refund of the extra amounts of ₹2,97,850 plus ₹3,02,500/- for additional work or enhanced saleable area, and thus, no such relief could be granted. Observations by the Commission The Commission observed that the state commission's order had held that the complainant claimed a car parking space and had paid Rs. 4,00,000 in cash for it but failed to show any receipt or document to that effect. Upon reviewing the Agreement for Sale, it was evident that the primary intention was to enter into a binding contract for the sale of the flat only, not including the car parking space. Hence, the builder had no reason to receive an amount of ₹3,02,500 for interior decoration done in the flat, as Clause 7 of the agreement specified that extra charges for additional works and decorations required written permission from the purchaser, which was not provided. The commission further observed that no document showed that the complainant had authorized the builder to perform any extra work. Annexure 'A' (the extra work bill amounting to ₹2,97,850) lacked the complainant's signature and did not indicate that the complainant had requested any extra work. The commission further highlighted that it was apparent that the agreement between the parties did not include the conveyance of any area for a car parking space. No subsequent arrangement for the car parking space was evidenced by any documentary proof. Thus, there was no basis for the complainant to claim the car parking space or an alternative payment of ₹6 Lakh with interest. Regarding the additional work, Clause 7 of the agreement required written consent, which was not on record. Therefore, as argued by the builder based on Majdoor Kamdar Sehkari Mandli Ltd, it was held that if a party undertakes additional construction without intending it to be free and the other party benefits from it, the former is entitled to compensation. The complainant also chose not to press any claim regarding the additional area constructed, as confirmed by the Engineer Commissioner's report. The commission concluded that there was a delay in handing over possession of the flat beyond the stipulated 24 months. The State Commission directed a compensation payment of Rs. 1 Lakh for this deficiency in service, and there was no reason to interfere with this order. The litigation cost of Rs. 10,000...

Construction Work Done For Consideration That Benefits Another Party Should Be Compensated: NCDRC

Ayushi Rani

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Ayushi Rani

Construction Work Done For Consideration That Benefits Another Party Should Be Compensated: NCDRC

Ayushi Rani

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

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Ayushi Rani

This is a premium content
Available exclusively to
Our subscribers