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Elevator company fined Rs.6.5 lakh for 10-year project delay

New Delhi,Immigration/Law/Rights, Wed, 26 Jun 2013 IANS

New Delhi, June 26 (IANS) A delay of about a decade in installing elevators has cost a private company Rs.6.5 lakh, with the national consumer commission fining it for deficiency in service and harassing members of a cooperative group housing society here.

OTIS Elevators was also told by the National Consumer Disputes Redressal Commission to pay nine percent interest from February 12, 2000, when the Talaganj Cooperative Group Housing Society in north Delhi's Rohini area filed a suit against the company for installing just about half of the 22 elevators for which advance payment had been made in 1998.

"It must be borne in mind that the amount of entire elevators has already been paid (to the company). They are enjoying the amount, for the last more than a decade. The case of the society stands fully established," said the commission's Presiding Member, J. M. Malik, and member Vinay Kumar in a recent judgment.

"We direct OTIS Elevators to install the remaining elevators and make them in working condition...otherwise they will be liable to pay penal costs of Rs.10,000 per day," Malik said.

"The deficiency on the part of the company stands proved," Malik added, giving the company time till Aug 31 to comply with its directions.

Offerng relief to the society, he said: "Litigation charges, compensation for harassment and mental agony, is awarded at the rate of Rs.50,000 per year, from the date of filing of this complaint before this commission Feb 12, 2000, till the needful is done, and it will carry interest at the rate of nine percent per year, from Feb 12, 2000, till the elevators are installed."

The society said the company did not take up the installation work till June 2000. And when it did, it took four months to install only 11 elevators. Thereafter, it abandoned the work despite receiving the full payment.

The society also complained of frequent breakdowns in the 11 operational elevators, putting residents to "tremendous difficulties and health hazards".

Some of the residents had undergone operations like knee replacement, by-pass heart surgery and several others were suffering from other health problems, the complaint said.

The elevator company said that the delay in the installation was due to the society's laxity in paying the advance payment.

Counsel for the company said an advance payment of 30 percent of the contract price was to be paid by Oct 7, 1996, but the society released the money only Feb 4, 1998 - a delay of 16 months.

Counsel referred to the contract with the society which said that the company had agreed to complete the 22 elevators' installation in 52 weeks from the date of receipt of order, advance payment, layout approval, and settlement of all technical details, whichever was later.

He said the completion period was subject to the society handing over to "us for uninterrupted use a clear dry elevator pit, shaft and machine room complete in all respects, as per approved layout drawing along with preparatory work and power supply 24 weeks before the completion date".

The commission agreed partly with the company and said in the initial stages, it appeared to be a case of contributory negligence.

The complainant could not pay the 10 percent of the payment and provide the proper place with the requisite requirements, it said.

"However, the ball was in the court of the company. They could have condoned the delay or cancelled the agreement. Till then, the complainant (society) was the defaulter and the company were calling the shots," said Malik.

The national commission said the company's written statement indicated it did not exercise its right to cancel the contract.

"The company received the money along with escalation charges paid under protest. The receipt of the entire amount was not denied. The company should have honoured their commitments," said Malik, upholding the society's plea against company.

The company can now challenge the national consumer commission's decision in the Supreme Court.

(Rahul Chhabra can be contacted at

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