National Consumer Disputes Redressal
Amrita Rosha Jain vs Tirlochan Singh & 2 Ors. on 17 January, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 2275 OF 2017 (Against the Order dated 02/03/2017 in Complaint No. 314/2015 of the State Commission Punjab) 1. AMRITA ROSHA JAIN W/O. SHRI. ABHISHEK JAIN. R/O. W-62, GREATER KAILASH-1. NEW DELHI-110048 ...........Appellant(s) Versus 1. TIRLOCHAN SINGH & 2 ORS. S/O. LATE S. JASWANT SINGH. R/O. HOUSE NO.2068/1, SECTOR-47 C. CHANDIGARH. 2. H.S. ANAND, DIRECTOR, MARINERS BUILDCON INDIA LIMITED. C10, KAILASH COLONY. NEW DELHI-110048 3. MRS. HARJAS KAUR ANAND, DIRECTOR, MARINERS BUILDCON INDIA LIMITED. C-10, KAILASH COLONY. NEW DELHI-110048 ...........Respondent(s)
BEFORE: HON'BLE MR. DR. S.M. KANTIKAR,PRESIDING MEMBER HON'BLE MR. DINESH SINGH,MEMBER For the Appellant : Mr. Sukumar Pattjoshi, Sr. Advocate with Mr. Sunil Mund, Advocate Mr. Somesh Dubey, Advocate Mr. Manvendra Singh, Advocate Mr. Siddharth Bhatli, Advocate Mr. Rakshith Srivastava, Advocate For the Respondent :
Dated : 17 Jan 2019 ORDER
1. The instant matter relates to 3 f. a. s filed by the appellant - one director of the builder co. under section 19 of the Consumer Protection Act, 1986 against the State Commission's Orders (3 nos.) dated 21.03.2017, 23.02.2017 and 02.03.2017 whereby the State Commission directed the opposite parties - three directors of the builder co. to refund the deposited amount (Rs.24,00,000/-; Rs. 25,00,000/-; Rs. 25,00,000/-) to the respondents - complainants; with interest (@ 12% p.a.; @ 12% p.a.; @ 12% p.a.) from the respective dates of deposit till realization; compensation (Rs.2,00,000/-; Rs.2,00,000/-; Rs.2,00,000/-); and litigation expenses (Rs.20,000/-; Rs.20,000/-; Rs.25,000/-).
2. We heard the learned counsel for the appellant - director of the builder co. and perused the material on record.
3. First appeals no. 2273 of 2017, 2274 of 2017 and 2275 of 2017 have arisen from consumer complaints no. 155 of 2015, 287 of 2015 and 314 of 2015 before the State Commission. In the said c.c.s (3 nos.), the parties were:
Bhavendra Kumar
- complainant in c.c. no. 155 of 2015 Munish Kanwar
- complainant in c.c. no. 287 of 2015 Tirlochan Singh
- complainant in c.c. no. 314 of 2015 versus
1. Sh. H. S. Anand, Director, Mariners Buildcon India Ltd.
C-10, Kailash Colony, New Delhi-110048
- opposite party no.1
2. Mrs. Harjas Kaur Anand, Director, Mariners Buildcon India Ltd.
C-10, Kailash Colony, New Delhi-110048
- opposite party no.2
3. Amrita Rosha D/o Rajinder Singh Rosha, Director, Mariners Buildcon India Ltd., M-131, Greater Kailash Part-I, New Delhi-110048
- opposite party no.3 The opposite party no. 3, Amrita Rosha, Director, Mariners Buildcon India Ltd., is the appellant herein in the instant f.a.s no. 2273 of 2017, 2274 of 2017 and 2275 of 2017.
4. The salient material facts and the specific awards made in the 3 c.c.s are depicted in tabular form below:
C.C. No. (F.A. No.) Amount deposited by the Complainant with the builder co. / its functionaries Dates of deposits Date of Institution of Complaint Date of State Commission's Order Assured Date of Delivery Newspaper in which Publication made for effecting service Award Refund the deposited amount with interest Compensation Litigation expenses 155 of 2015 (f.a. 2273 of 2017) Rs.24,00,000/-
31.12.2009, 20.05.2010, 20.01.2011, 10.09.2012, 15.07.2013 02.07.2015 21.03.2017 end of 2012 The Times of India Rs.24,00,000/-
+ @12% p.a. from the respective dates of deposits till realization Rs.2,00,000/-
Rs.20,000/-
287 of 2015 (f.a. 2274 of 2017) Rs.25,00,000/-
11.10.2010, 29.01.2011, 10.09.2012, 15.07.2013 02.11.2015 23.02.2017 end of 2012 Daily Tribune Rs.25,00,000/-
+ @12% p.a. from the respective dates of deposits till realization Rs.2,00,000/-
Rs.20,000/-
314 of 2015 (f.a. 2275 of 2017) Rs.25,00,000/-
02.02.2008, 11.08.2010, 12.02.2011, 10.09.2012, 15.07.2013 07.12.2015 02.03.2017 end of 2012 The Times of India Rs.25,00,000/-
+ @12% p.a. from the respective dates of deposits till realization Rs.2,00,000/-
Rs.25,000/-
5. We note that these 3 f. a. s have similar facts and same questions of law involved.
We are taking f. a. no. 2273 of 2017, arising from the Order dated 21.03.2017 of the State Commission in c.c. no. 155 of 2015, Amrita Rosha Jain vs. Bhavendra Kumar & Ors., as the lead-case.
6. The facts, as taken from the lead-case, first appeal no. 2273 of 2017, and as recorded in para 2 of the Order dated 21.03.2017 of the State Commission in c.c. no. 155 of 2015, are as below:
2. The relevant brief facts of the case as averred in the complaint are that the complainant, namely Bhavendra Kumar S/o Sh. Piush Kumar has filed his complaint. The complainant was induced by the opposite parties in the year 2008 whereby it launched a project 'Mohali Oceanic, in Sector 123, Mohali. This project was to have 75% sea-farers and would have plots on which the constructed area would be of 1850 square feet with possibility of expansion to the extent of 3300 square feet. The project was to comprise with a dedicated club with all the facilities including a Mini Golf Club as well as a small commercial complex for daily needs. This project was launched in November, 2009 and the project was to be developed in 25 acres comprising around 200 families having all the necessities of daily life within its periphery. At the time of launching of this project, the complainant booked a residential expandable villa having size of 300 square yards approximately where it would have an approximate constructed area of 1850 square feet. He paid Rs.50,000/- vide receipt No.158 dated 31.12.2009 towards booking amount of the plot in question. He paid the first instalment of Rs. 4,50,000/- vide cheque No.127931 dated 18.05.2010 in favour of Mariners Buildcon India Ltd. drawn on HDFC Bank, Bokaro. As per the terms and conditions of the opposite parties the above said Villa was to be delivered by 2012 end of year. Effective price of the Villa was Rs.53,00,000/-. He further alleged that the copy of the proposed location of Mohali Oceanic Project was provided by the opposite parties to him. He made the payment of Rs.7,00,000/- in the name of Mariners Buildcon India Ltd. vide cheques No.725250 and 370478 dated 17.01.2011 drawn on HDFC & Standard Chartered Bank. Accordingly, the receipt was issued by the opposite parties vide Serial No.320 dated 20.01.2011 stating therein mentioning the amount received with regard to the plot money and construction money and as well as EDC charges. He received a letter dated 04.07.2011 vide reference No.MBIL/MOEVM/V-42/2011 wherein they made another request to make the further instalment of Rs. 7,00,000/-. As per this demand he paid the amount of Rs. 7,00,000/- vide his cheques No.044092 & 044093 dated 13.01.2012. Thereafter, he received another letter dated 02.05.2013 vide reference No.MBIL/MOEVM/V-42/2013 and was advised to send the next instalment of Rs. 5,00,000/-. As per this demand, he issued two cheques in favour of the opposite parties vide cheque No.044109 & 114934 drawn on HDFC Bank & SBI Bank respectively dated 01.07.2013. On 14.06.2013, he was given allotment letter vide reference No.MBIL/MOEVM/V-42/2013 and it confirmed for allotment of one expandable Villa in their project having 300 square yard as a whole, out of which 1850 square feet would be constructed area of this plot at a BSP of Rs. 53,00,000/-. He received another letter dated 05.03.2014, whereby he was informed that the factual layout plan for the project was sanctioned and has been received by them. He was informed vide an e-mail dated 05.03.2014 by the opposite parties that Bhumi Pujan will commence in early May for which actual date will be forwarded to the investors and further allotment of individual villa would be done by 15.04.2014. It is pertinent to mention here that at the time of launching their project known as 'Mohali Oceanic' was an exclusive colony for Indian Mariners and the basic price is Rs.53,00,000/- and had promised to deliver villas in April, 2012 for which he had made the payment as and when demanded by opposite parties for instalment/payment. He had made the request to the opposite parties at the time of making the payment to provide him details of exact going on position of the Mohali Oceanic project. It was averred that at the end of year 2012, when he did not get the possession of his villa as committed by the opposite parties in their document, he contacted the opposite parties and asked them to give factual position of the project. It was averred that till date of filing the complaint, he had given the payments of Rs. 24,00,000/- to the opposite parties towards the instalments of the project situated at 'Mohali Oceanic' Mohali. It was averred that there is no body to answer his queries or to provide him the details/status of the project on behalf of the opposite parties as all the offices which were once functional are closed now. The possession of villas was to be given by April, 2012 and the possession was further extended to September, 2015 vide their letter dated 05.03.2014. He is running from pillar to post to get the factual position of the project for more than 2 years and he came to know that the office of the opposite parties situated at Chandigarh and Delhi were closed. He further enquired and found out that the opposite parties were not having any land in Sector 123, Mohali, nor he could locate the Board of Mohali Oceanic Project. It was pleaded that the opposite parties has mislead him that they would give him possession by April, 2012 and have taken away Rs. 24,00,000/- in deceitful way from him on the pretext to provide him an explandable villa. On failure to get any relief from the opposite parties he was left with no option but to file his complaint in this Commission and sought directions to issued against the opposite parties.
(underlining supplied)
7. To succinctly bring the rival contentions into focus, it may be stated, in brief, that the contention of the complainant (lead-case) was that as per the terms and conditions of the allotment, the possession of the subject villa was to be delivered by the end of 2012. Despite depositing (on 31.12.2009, 20.05.2010, 20.01.2011, 10.09.2012 and 15.07.2013) almost close to 50% of the total cost of the subject villa (deposited: Rs.24,00,000/-; total cost: Rs.53,00,000/-), the builder co. / its functionaries failed to deliver physical possession of the subject villa till the date of filing of the complaint in the State Commission (02.07.2015) [as well as till the date of decision of the State Commission (21.03.2017), as also till the date of arguments (29.10.2018) in the first appeal before this Commission]. No construction or other activity was initiated at the indicated site by the builder co. / its functionaries. Requisite approvals to execute the project in question were not taken from the concerned authorities by the builder co. / its functionaries. Consequently the builder co. / its functionaries were not in a position to deliver the physical possession of the subject villa to the complainant.
The opposite parties, three directors of the builder co. (including the appellant herein), did not appear before the State Commission, and were proceeded against ex-parte. The directors of the builder co. were served through publication in a leading widely-read daily newspaper (The Times of India). Despite the due service through publication, they did not appear before the State Commission. Therefore the appellant (as well as the other two directors of the builder co.) were proceeded against ex-parte by the State Commission.
8. The State Commission vide its Order dated 21.03.2017 had allowed the complaint with directions as recorded in para 15 of its Order (lead-case):
15. In view of the above discussion, the complaint is allowed and the following directions are issued to the opposite parties:-
i) to refund the amount of Rs.24,00,000/- along with interest at the rate of 12% per annum from the respective dates of deposit till realization;
ii) to pay Rs.2,00,000/-, as compensation for harassment and mental agony suffered by him; and
iii) to pay Rs.20,000/-, as litigation expenses
9. After hearing arguments on 29.10.2018, and after perusing the material on record, and after thoughtful consideration, we recorded the gist of our considered view in the daily Order of 29.10.2018:
The forenoon session extended upto 1.10 p.m. As learned senior counsel for the appellant Mr. S. Pattjoshi had a case before Hon'ble High Court at 2.30 p.m., the afternoon session was started at 1.45 p.m. Learned senior counsel for the appellant Mr. S. Pattjoshi was not ready to argue the matters on merit.
The father and mother of the appellant were present. The mother of the appellant made a request to hear arguments.
In the interest of justice another opportunity was provided to argue the matters at the end of the Board.
At the end of the Board, at 4.15 p.m., learned counsel Mr. Siddhartha Bhatli argued the matters for the appellant. The father and mother of the appellant were (again) present.
We perused the material on record.
The appeals are dismissed.
Reasoned judgment to follow.
Till the pronouncement of the reasoned judgment execution proceedings shall remain stayed.
We are giving our reasons hereinafter.
10. To begin with, the application for condonation of delay in filing the first appeal (lead-case) was considered. The f. a. has been filed with self-admitted delay of "about 25 days". (The Registry has reported a delay of 26 days.) [The position in the other two f.a.s is similar.]
11. The stated reasons for delay, as mentioned in paras 3 to 9 of the application for condonation of delay (lead-case), are as below:
3. That the appellant's address was wrongly given in the complaint.
4. That no free copy of the order has been served on the appellant herein and immediately upon learning of the award, the appellant herein got a certified copy of the impugned order applied for on 07.09.2017 and received the same on 07.09.2017. Hence, this appeal is within limitation.
5. That unfortunately she suffered a miscarriage on 06th May, 2017 and she stayed hospitalized in Fortis Hospital, Greater Kailash-II, New Delhi. She is under severe trauma and mental depression. Copies of medical documents substantiating the foregoing is attached herewith as Annexure A-3.
6. That the appellant is a house wife and has been facing series of litigations for no fault of her own. It is a matter of record that she has already filed several appeals before this Hon'ble Commission by arranging resources.
7. That the entire family is in a financial distress and she is being supported by her parents in contesting these cases. That despite her best efforts, she could arrange resources towards statutory deposit and litigation cost only on 31st October, 2017 and got the Demand Drafts towards statutory deposit immediately prepared.
8. That delay, if any, in filing the appeal is neither intentional or deliberate and due to the above reasons beyond the control of the Appellant.
9. It is submitted that grave prejudice, irreparable loss and hardship will be caused to the Appellant if this Application for Condonation of Delay is not allowed and no prejudice will be caused to the Respondents if this Application for Condonation of Delay is allowed, as the balance of convenience is in favour of the Appellant.
(paras 3, 4, 5, 6 ,7 ,8 and 9 of the application for condonation of delay) [The stated reasons for delay in the other two f. a. s are similar.]
12. The Act 1986 is to provide speedy and simple redressal to consumer disputes (Statement of Objects and Reasons). The normative ideal period for disposing of an appeal is 90 days (section 19A of the Act). The period of limitation to file appeal is 30 days (section 19 of the Act). This appeal has been filed with (further) admitted delay of 25 days.
13. The stated reasons for delay, as reproduced, verbatim, in toto, in para 11 above, point towards a perfunctory and casual attitude to the law of limitation, and are illogical and absurd in explaining convincingly and cogently the day-to-day delay in filing the appeal.
14. Furthermore, the stated reasons for delay have, on the face of it, a ring of untruth, as the appellant, who was opposite party no. 3 in the consumer complaint before the State Commission, was duly served through publication in a leading widely-read daily newspaper. Despite the due service through publication, the appellant, who was one opposite party in the consumer complaint, did not appear in person or through her authorized representative / agent / advocate to present her case before the State Commission.
The plea of the appellant that her address was wrongly given in the complaint does not hold good because, one, she has failed to adduce any documentary or other evidence to establish that the address mentioned in the complaint was wrong and that she was not residing there during the period of pendency of the complaint before the State Commission, and, two, the address, in any case, becomes materially irrelevant when the service was (ultimately) effected through publication (in a leading widely-read daily newspaper).
15. No just or sufficient cause to explain the delay is visible.
16. The application for condonation of delay being unconvincing and devoid of merit deserves to be dismissed. Resultantly the appeal also deserves to be dismissed on limitation.
17. We however want to also satisfy ourselves that there would be no miscarriage of justice if the delay is not condoned. Therefore we have examined the matter on merit also.
18. We may first note that the Act 1986 is for better protection of the interests of consumers, to provide speedy and simple redressal to consumer disputes, in recognizedly a fight amongst unequals.
19. We may also note that the consumer - complainant is not seeking specific performance of a contract in a civil court; he is seeking consumer justice from a quasi-judicial machinery for redressal of consumer disputes under the provisions of the Consumer Protection Act, 1986.
20. Section 3 of the Act 1986 specifically provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. That is, the remedy provided under the Act is in addition to the provisions of any other law for the time being in force; the provisions of this Act give the consumers an additional remedy besides those that may be available under other existing laws.
21. The State Commission had the jurisdiction to entertain these complaints, and to adjudicate apropos deficiency in service [section 2(1) (g) & (o)] and unfair trade practice [section 2(1) (r)] under the additional (alternative) remedy provided for consumers (section 3).
22. The State Commission examined the matter, appraised the evidence before it, and passed a reasoned Order, with findings that:
(a) the act and conduct of the builder co. is a clear case of misrepresentation and deception, and
(b) the builder co. is guilty of deficiency in service and unfair trade practice:
7. Undisputedly, in the year 2008, the opposite parties launched their project named "Mohali Oceanic" in Sector 123, Mohali wherein the complainant booked one Villa of 300 sq. yards approximately and when developed, having constructed area of 1850 sq.ft. for the basic sale price of Rs.53,00,000/-. He deposited Rs. 50,000/- as first booking amount, as is clear from the receipt dated 31.12.2009 Ex.C-1. Thereafter, the complainant paid Rs.4,50,000/- to the opposite parties vide receipt No.179 dated 20.05.2010 Ex.C-5. He further deposited Rs. 7,00,000/- vide receipt No.320 dated 20.01.2011 Ex.C-7. He further deposited Rs.7,00,000/- vide receipt No.379 dated 10.09.2012 Ex.C 9 and Rs. 5,00,000/- vide receipts No.MBIL/MOH/1314/32 & MBIL/MOH/1314/33 dated 15.07.2013 Ex.C-11 & Ex.C-12. Thus, in all he deposited Rs. 24,00,000/- with the opposite parties. As per the terms and conditions of the allotment Ex.C-2, the project was to be completed by the end of 2012, but the opposite parties have failed to complete the project by that period. The opposite parties, vide letter dated 14.06.2013 Ex.C-13 confirmed the allotment of the Villa in question in favour of the complainant and sent e-mail Ex.C-14 stating that the allotment of individual Villa would be done by 15.04.2014 and the possession would be handed over by September, 2015. However, even thereafter they failed to deliver possession of the allotted villa to the complainant even by this agreed period. A person namely Saurav Aggarwal sought the information under the Right to Information Act, 2005 from GMADA, Mohali; who vide letter dated 22.10.2014 Ex.C18 informed that no permission has been given to the opposite parties to launch the project "Mohali Oceanic" in Sector 123, Mohali. Further the complainant produced on record the information sought by him from Town and Country Planning, Department of Punjab, Ex.C-19, as per which the CLU has not been issued for the project in question to the opposite parties. Letter dated 03.11.2014, Ex.C-20 further proves that no licence has been granted to the opposite parties for developing any colony in Sector 123, Mohali.
11. Admittedly, the amount of Rs.24,00,000/- has been paid by the complainant to the opposite parties towards the price of the Villa. As per the terms and conditions of allotment Ex.C-2, the project was to be completed by the end of 2012, but the opposite parties have failed to complete the project by that period. The opposite parties, vide letter dated 14.06.2013 Ex.C-13 confirmed the allotment of the Villa and even sent e-mail Ex.C-14 stating that the allotment of individual villa would be done by 15.04.2014 and the possession would be handed over by September, 2015. However, even thereafter they failed to deliver possession of the allotted Villa to the complainant even by this agreed period. The present complaint was filed on 02.07.2015. However, till then the opposite parties failed to deliver the possession of the fully furnished Villa to the complainant. The complainant cannot be made to wait for indefinite period for delivery of possession of the Villa. Moreover, the opposite parties are not in a position to deliver the physical possession of the Villa in dispute to the complainant in near future.
12. The opposite parties had been collecting huge amounts from the buyers for the development of the Project. The amount received from the complainant-buyer was required to be deposited in the schedule Bank, as per Section 9 of PAPRA and we wonder where that amount had been going. They are not to play the game at the cost of others. When they insist upon the performance of the promise by the consumers, it is to be bound by the reciprocal promises of performing their part of the Agreement. The opposite parties have failed to comply the aforementioned provisions of PAPRA, while launching and promising to develop their project, as they have no licence, CLU or permission to launch the project in question. Thus, the act and conduct of the opposite parties in launching the project without getting any permission or CLU amounts to deficiency in service and unfair trade practice.
14. The Consumer Protection Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The opposite parties absented from the proceedings of this Commission and were proceeded against ex parte and the evidence led by the complainant has gone unrebutted. The complainant has made payment of substantial amount to the opposite parties with the hope to get the possession of the Villa in a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of villa and construction in a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to the complainant. Had the complainant not invested his money with the opposite parties, he would have invested the same elsewhere. There is escalation in the price of construction also. The complainant has suffered loss, as discussed above. The builder is under obligation to deliver the possession of the developed villa/unit/flat within a reasonable period. The complainant cannot be made to wait indefinitely to get possession of the villa booked. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties i.e. builder knew from the very beginning that they had not complied with the provisions of the PAPRA and Rules and would not be able to deliver the possession within the stipulated period, thus by misrepresenting induced the complainant to book the Villa, due to which the complainant has suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The amount paid by the complainant is a deposit held by the opposite parties in trust of complainant and it should be used for the purpose of building the villas/flats, as mentioned in Section 9 of PAPRA. The builder is bound to compensate for the loss and injury suffered by the complainant for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainant has to wage a long drawn and tedious legal battle. As such, the complainant was at loss of opportunities. In such circumstances, ever increasing cost of construction and the damages for loss of opportunities caused which resulted in injury to the complainant, are also required to be taken into consideration for awarding compensation. In addition to that he is also entitled to the compensation for the harassment, mental agony and wasting of time and money in litigation for redressal of grievance suffered by him on account of the betrayal by the opposite parties in shattering his hope of getting the Villa by waiting for all this period. In these circumstances, the complainant deserves suitable compensation.
[paras 7, 11, 12, 14 of the State Commission's Order (lead-case)] (underlining supplied)
23. We specifically note that:
(i) the appellant - one director of the builder co. (as also two other directors of the builder co.) were duly served through publication in a leading widely-read daily newspaper.
(ii) the appellant - one director of the builder co. (as also two other directors of the builder co.) did not present their case before the State Commission.
(iii) the State Commission while (rightly) proceeding ex-parte against the appellant - director of the builder co. (as also against two other directors of the builder co.) had but also duly appraised the evidence and given reasoned findings.
(iv) salient material facts, one, that an amount of Rs. 24,00,000/- was deposited (on 31.12.2009, 20.05.2010, 20.01.2011, 10.09.2012, 15.07.2013) by the complainant with the builder co. / its functionaries, two, the amount deposited was not refunded by the builder co. / its functionaries to the complainant, three, the assured date of completion and handing over possession was end of 2012, four, the housing project in question was promoted in 2008 but had not been initiated at all, five, there was no construction or other activity on the indicated site, six, the requisite approvals from the concerned authorities had not been taken, seven, the offices of the builder co. were then shut down, etc. have not been disputed or refuted by the appellant in her memo of appeal.
24. We are broadly in agreement with the findings of the State Commission.
25. The issues raised by the appellant in her appeal relate to (a) the role and responsibilities and liability of 'company' / 'director' / 'independent director' and (b) an averment that she has since resigned as director of the builder co. (paras 2 and 3B and Grounds in the memo of appeal specifically refer).
26. Learned counsel for the appellant - director of the builder co. handed over some judgments and citations to support her contentions:
1. Dr. V.P. Mainra v. Dawsons Leasing Limited, 114 (2004) DLT 457, decided by Delhi High Court on 24.09.2004;
2. Rajesh J. Aeren v. Mukhtiar Singh Bal & Anr., F.A. No. 2403 of 2017, decided by National Commission on 16.01.2018;
3. Inderpreet Singh v. Mariners Buildcon India Ltd., Company Petition No. (IB)-185(PB)/2017, decided by NCLT on 24.08.2017.
27. The judgements and citations handed over by learned counsel for the appellant - director builder co. have been perused by us. We find that they are not relevant or applicable on the facts and specificities of this case, they are not relevant or applicable here in the manner and for the purpose their relevance and applicability was sought to be argued by learned counsel for the appellant - director of the builder co.
28. As noted from the State Commission's appraisal made in its Order 21.03.2017, the project in question was promoted in 2008; the complainant made deposits between 2009 to 2013; till the filing of the complaint (02.07.2015) before the State Commission [as well as till the date of decision of the State Commission (21.03.2017), as also till the date of arguments (29.10.2018) in the first appeal before this Commission], the project in question had not been initiated at all; the complainant's deposit had not been refunded to the complainant; the requisite approvals from the concerned authorities had not been taken; the offices of the builder co. were then shut down. And, as noted from this Commission's interim Order 04.10.2018, the appellant (Amrita Rosha Jain) is one of the opposite parties - judgment debtors and other opposite parties - judgment debtors are informed to be absconding (this was also categorically admitted during arguments on 29.10.2018). And furthermore, as noted from the memo of appeal, a range and variety of issues relating to the role and responsibilities and liability of a 'company' / 'director' / 'independent director' etc. have been raised in appeal, with many ( / most) of them being irrelevant and immaterial in the present facts and specificities of the instant case; an averment has been made that she has since resigned as director; no reference to or refutation of the substantive and material facts of the case has been made.
29. We may note that the ordinary common consumer was attracted towards the housing project in question by the standing of both, the company as well as its directors. The position of the directors, and also so of the independent director / s, becomes crucial and significant. Their position (inter alia) attracted the consumer [It is not without significance that the State Commission has used the word "induced" in para 2 of its Order dated 21.03.2017 (The complainant was induced by the opposite parties in the year 2008...).]
30. In the present case the three opposite parties, the three directors of the builder co., were instrumental in attracting the consumer - complainant towards the housing project in question, they were active in promoting the project in question. The deposits were made with the builder co. (juristic person) / its functionaries (persons); the functioning, management and promotion was effected by the directors (persons).
31. The case is simple, and serious. The project in question was promoted in 2008 by the directors of the builder co. The consumer - complainant was attracted to the project inter alia by the position of the directors of the builder co. The consumer - complainant made deposits with the builder co. / its functionaries during 2009 to 2013. The directors effected the functioning, management and promotion. The amount deposited by the consumer - complainant was not kept in a scheduled bank, in violation section 9 of the Punjab Apartment and Property Regulation Act, 1995. The amount was not refunded to the consumer - complainant. The project in question was not initiated at all. The builder co. had no land at the indicated site. Its offices in Chandigarh and Delhi were then shut down. The concerned authority [Greater Mohali Area Development Authority (GMADA)] informed that no permission had been given to launch the project in question. The Town and Country Planning Department informed that Change of Land Use (CLU) had not been issued for the project. In the execution proceedings before the State Commission the other two opposite parties - judgement debtors - directors are informed to be absconding. [The third opposite party - judgement debtor - director, the appellant herein, has come in appeal (and arrayed the other two directors as respondents, along with the complainant)].
32. In a nutshell, the three directors promoted a project, collected / got collected deposits from consumers, and disappeared, along with the monies, with no sign of any construction or other activity on the indicated site, with no approvals from the concerned authorities, and with the offices of the builder co. then shut down.
33. In the present facts and specificities of the instant case, the company (juristic person) as well as its directors (persons) are squarely liable, individually, jointly, and severally. And the liability qua the consumer - complainant initiated the day the consumer - complainant made his first deposit with the builder co. / its functionaries, and continues.
34. We may also specifically note that the liability of the directors is individual, joint and several.
35. We are refraining from writing a critique on the role and responsibilities and liability of a 'company' / 'director' / 'independent director'; it would be misplaced in the present facts and context.
We are limiting ourselves to the salient and material issues re the role and responsibilities and liability of the appellant in the light of her averment that (a) she was an "independent and non-executive director" and (b) she has since resigned as director on 14.12.2015.
36. Here, for ready convenience, we may quote the following from the Companies Act, 2013:
Section 149. Company to have Board of Directors - (1) Every company shall have a Board of Directors consisting of individuals as directors and shall have--
(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
(b) a maximum of fifteen directors:
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(6) An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director,--
(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;
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(7) Every independent director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his status as an independent director, give a declaration that he meets the criteria of independence as provided in sub-section (6).
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(8) The company and independent directors shall abide by the provisions specified in Schedule IV.
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(12) Notwithstanding anything contained in this Act,--
(i) an independent director;
(ii) a non-executive director not being promoter or key managerial personnel, shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently.
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Schedule IV [See section 149(8)] Code for Independent Directors II. Role and functions:
The independent directors shall:
(1) help in bringing an independent judgment to bear on the Board's deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct;
(2) bring an objective view in the evaluation of the performance of board and management;
(3) scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
(4) satisfy themselves on the integrity of financial information and that financial controls and the systems of risk management are robust and defensible;
(5) safeguard the interests of all stakeholders, particularly the minority shareholders;
(6) balance the conflicting interest of the stakeholders;
(7) determine appropriate levels of remuneration of executive directors, key managerial personnel and senior management and have a prime role in appointing and where necessary recommend removal of executive directors, key managerial personnel and senior management;
(8) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder's interest.
III. Duties:
The independent directors shall--
(1) undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the company;
(2) seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the company;
(3) strive to attend all meetings of the Board of Directors and of the Board committees of which he is a member;
(4) participate constructively and actively in the committees of the Board in which they are chairpersons or members;
(5) strive to attend the general meetings of the company;
(6) where they have concerns about the running of the company or a proposed action, ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in the minutes of the Board meeting;
(7) keep themselves well informed about the company and the external environment in which it operates;
(8) not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;
(9) pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the company;
(10) ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
(11) report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy;
(12) acting within his authority, assist in protecting the legitimate interests of the company, shareholders and its employees;
(13) not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.
VII. Separate meetings:
(1) The independent directors of the company shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management;
(2) All the independent directors of the company shall strive to be present at such meeting;
(3) The meeting shall:
(a) review the performance of non-independent directors and the Board as a whole;
(b) review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
(c) assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
166. Duties of directors (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company.
(2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.
(3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.
(4) A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
(5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.
(6) A director of a company shall not assign his office and any assignment so made shall be void.
(7) If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
(underlining supplied)
37. In respect of the appellant's averment that she has since resigned as director of the builder co., it is material and significant that it is admitted that the appellant was appointed as a director of the builder co. - Mariners Buildcon India Ltd. on 08.04.2008. The complainant made deposits towards the cost of the subject villa on 31.12.2009, 20.05.2010, 20.01.2011, 10.09.2012 and 15.07.2013. The assured date of completion was end of 2012. The complaint was filed before the State Commission on 02.07.2015. The appellant avers to have resigned from the position of director of the builder co. on 14.12.2015. It is admitted that the appellant was a director of the builder co. on (a) the date the project in question was promoted (2008), (b) the dates the deposits were made by the complainant (2009 - 2013), (c) the assured date of completion (end of 2012), (d) the date on which the complaint was filed in the State Commission (02.07.2015) and (e) when the case was in litigation before the State Commission.
In respect of the appellant's averment that she was an "independent and non-executive director" of the builder co., it is material and significant that the onus was on the appellant to conclusively establish that (a) she was not liable within the meaning of the exception provided in sub-section 12 of section 149 of the Companies Act, 2013 i.e. she had no knowledge of the acts of omission and commission of the company and that the acts of the company were without her consent or connivance and that it was not the case that she did not act diligently and (b) she was diligent and dutiful in exercising the role and functions and duties of an independent director as provided in Schedule IV of the Act 2013. (This also in particular included the onus to specifically establish that she was not aware of the acts of omission and commission apropos the project in question, or of the deposits made by the complainant, or of the assured date of completion of the project, or of the the requisite approvals not having been taken from the concerned authorities, or of no construction or other activity having been initiated at the indicated site, or of the deposited amount not being refunded to the complainant, or of the offices of the builder co. being then shut down, etc.) Mere aversion in appeal that (a) she was an "independent and non-executive" director and (b) as such she is not liable, (c) she has since resigned as director and (d) as such she is not liable, is not sufficient.
38. We do not find any reason on fact or law to interfere with the findings of the State Commission to the effect that the appellant - one director (Amrita Rosha Jain, opposite party no. 3) [as well as the other two directors of the builder co. (opposite parties no.1 and 2)] are [individually, jointly and severally] liable to refund the amount deposited by the respondent - complainant with interest and with compensation and litigation expenses.
39. The case has a bad air. Not to uphold and sustain the award made by the State Commission would, in our considered view, be a travesty of justice.
40. The 3 f. a. s no. 2273 of 2017, 2274 of 2017 and 2275 of 2017, are dismissed, on limitation and on merit, both.
41. Needless to add, the State Commission shall undertake execution as per the law.
42. Let a copy each of the Order be sent to the State Commission and to the respondents- complainants in the three f. a. s within ten days by the Registry.
...................... DR. S.M. KANTIKAR PRESIDING MEMBER ...................... DINESH SINGH MEMBER