State Consumer Disputes Redressal Commission
Sree Rama Apartments Welfare ... vs Sri Rama Builders on 12 July, 2010
BEFORE THE A
BEFORE THE A.P. STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
P. P. 35/2007 in C.D.
58/2002
Between:
Sree
Rama Apartments Welfare Association
Regd.
Office at 3-14-20
Srinivasapuram,
Street
No. 2, Ramanthapur
Hyderabad.
Rep.
by its President
G.
Ramachandra Rao. *** Petitioner/DHr
Complainant And
1.
Sri Rama Builders
(A
partnership firm)
Rep.
by its Managing Partner
J.
Koteswara Rao,
Street
No.2
Ramanthapur,
Hyderabad.
*** Respondent/
JDr/O.P. No. 1.
2.
Uppal Kalan Municipality
Uppal,
Ranga Reddy Dist.
Rep.
by its Commissioner. *** Respondent/
O.P.
No. 2.
Counsel
for the DHr: M/s. N. V. Jagannath.
Counsel
for the JDr: M/s. C. Subba Rao (R1)
M/s.
T. Bhaskara Rao (2)
HON'BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT.
M. SHREESHA, MEMBER
MONDAY, THIS THE TWELFTH DAY OF JULY TWO THOUSAND TEN Oral Order: (Per Hon'ble Justice D. Appa Rao, President) *****
1) The complainant by recoursing to the order of this commission Dt. 30.9.2004 wherein the respondent herein was directed to adhere to the conditions of the joint compromise agreement dt. 13.7.2001 and secure water connection from Hyderabad Metropolitan Water Works and Sewerage Board (herein after called the 'Board') besides compensation of Rs. 1,60,000/- and costs of Rs. 5,000/-, filed the above petition u/s 27 of the C.P. Act to punish R1 for non-implementation of the said order.
2) Questioning the proceedings initiated u/s 27 of the C.P. Act, the respondent filed W.P. No. 697/2008 before the Hon'ble High Court and which in turn directed that : "it would be open to the petitioner to raise all the contentions available to it, including the non-maintainability of the petition, while making reply to the show cause notice issued by the Commission."
3) Pursuant to the orders of High Court the respondent has submitted his explanation more or less reiterating that the procedure adopted by this Commission in conducting the proceedings u/s 27 is bad under law, neither sworn statement of the petitioner was taken nor referred to police u/s 156 (3) Cr.P.C. The complainant is neither owner nor occupant of the flat and that the complainant association was illegal cannot seek implementation of Ex. A8 settlement without approaching the civil court. He did not furnish the list of persons in order to recover Rs. 1, 60,000/-. The complainant association is not a registered association, yet another association by name "Sree Rama Apartments Flat Owners Association" is registered. Ex. A8 is not an agreement. He never entered into any agreement on 13.7.2001. It is purely a false and fabricated document. In fact, the flat owners have to bear extra amounts for providing municipal water vide Ex. A13. They never offered to contribute their share of 50% nor deposit to the Board. Therefore the order in C.D. is null and void. No proceedings could be taken up by virtue of such order u/s 27 of the C.P. Act. The complaint is vague and vexatious. The complainant in fact has been harassing him along with his relatives who are residing in the apartments and other association members. In fact there are 32 flats and a pent house. Out of 32 flats, he sold 27 flats; therefore the claim for 32 flats is not valid. The proceedings were initiated without the consent of the members. The complainant did not produce any document in order to show that he had collected Rs. 1, 60,000/-. The Hon'ble High Court in W.P. No. 5551/2000 directed him to collect the amounts from the flat owners. They did not co-operate in payment of the amount in order to get the water supply from the board. In fact he had challenged the order in W.P. No. 8846/2006 and the same is pending. He did not commit any violation of the orders and therefore prayed that the proceedings be dismissed.
4) The point that arises for consideration is whether the respondent failed or omitted to comply the orders of this Commission in C.C. No. 58/2002 dt. 30.9.2004?
5) It is an undisputed fact that on the complaint filed by the complainant welfare association u/s 17(a)(1) of the Consumer Protection Act against the respondent and the Municipality for certain reliefs and this commission on enquiry allowed the complaint by order dt. 30.9.2004 directing the respondent to adhere to the terms and conditions of the joint compromise agreement Dt. 13.7.2001 viz., The building i.e., pent house is constructed before the cut-off date and the BRS application was submitted within the stipulated time. The pent house can be regularized.
The flat owners are alleging that the builder is claiming the rights on terrace. This is not correct as per rules. The terrace area, parking area are subject to purchase and all open spaces are to be equally enjoyed by all the flat owners including the pent house owner i.e., 33 portions.
The builder and other flat owners are agreeing to enjoy the entire open plot in equal shares.
Regarding undivided share area, the builder has agreed to execute the rectification deeds of all earlier documents pertaining to the flat owners within one month from the date of this meeting.
Regarding the water connection donation, both builder and flat owners have agreed to share 50/50 ratio. The amount will be deposited with municipality to regularize the connection within one month from the date of this meeting. The builder has also agreed to withdraw the W.P. filed in respect of water connection against the municipality.
Apart from that, it had directed the respondent to secure water connection from the Board within a period of 8 weeks from the date of receipt of the order besides compensation of Rs. 1,60,000/- and costs of Rs. 5,000/-. The complaint against R2 municipality is dismissed.
6) The respondent questioning the order moved the High Court by way of W.P. No. 5839/2005. It was dismissed on 16.9.2005 giving four weeks time to prefer an appeal before the National Commission. An appeal has been preferred by R1 before the National Commission; however the same was dismissed on 22.2.2006. Again R1 preferred W.P. No. 8846/2006 challenging the order of the National Commission and also W.P No. 19211/2009 for quashing the proceedings in P.P. No. 35/2007 in C.D No. 58/2002. Ultimately it was dismissed by the Division Bench of the Hon'ble High Court by order dt. 27.11.2009.
7) Learned counsel for the respondent raised a number of contentions, right from initiation of original proceedings in C.D. No. 58/2002, orders passed thereon, subsequent complaint u/s 27 of the C.P. Act, and the legality of the said proceedings. In fact all these contentions were already raised before the Hon'ble High Court in W.P. No. 8846/2006 and W.P No. 19211/2009, and were answered. The contentions raised were repetitive. Yet another contention was that the complainant association was not a registered association and that the complainant has no locus standi to file the complaint. The respondent is evidently oblivious to the provision Section 2 (m)(iv) of the Consumer Protection Act. It stipulates that 'person' includes "every other association of persons whether registered under the Societies Registration Act, 1860 or not who could sue" . Since they are apartment owners and there is commonality of interests, and rightly the complaint was entertained, enquired into, and orders were passed. They were challenged and all of them were negatived upholding the orders of this Commission. In the circumstances, we excerpt the judgement in-extenso as it would answer each and every contention raised by the respondent in this regard :
"It is contended by the counsel for the petitioners that the order passed by the State Commission is one in the nature of granting relief of enforcement of joint memo and that it is nothing but in the nature of granting relief of Specific Performance in respect of Ex.A-8 joint memo marked in C.D.No.58 of 2002. It is further contended that Ex.A-8 joint memo is not proved by the 3rd respondent before the State Commission. It is further contended that even Civil Court cannot grant the relief which was granted by the Forum in view of exception contained in Section 14 of the Specific Relief Act. It is further contended that the 3rd respondent prayed for rectification of deficiencies in service mentioned in the annexure appended to the complaint before the State Commission and the 3rd respondent did not pray for relief in respect of Ex.A-8 joint memo dated 13.07.2001 and that the State Commission should not have granted relief over and above the prayer contained in the complaint and that the relief granted by the State Commission is out side the scope of prayer contained in the complaint. It is argued that there are self contradictions between contents of memo appended to the complaint and Ex.A-8 joint memo and that the 3rd respondent is blowing hot and cold and that order passed by the State Commission which was confirmed by the National Commission is perfunctory and it was passed without application of mind and that there is error apparent on face of the order and that therefore, this Court in exercise of powers under Section 226 of the Constitution of India can interfere and quash the said order. The petitioner further contends that the relief granted by the State Commission is barred by limitation having regard to provisions of Section 24A of the Consumer Protection Act.
On the other hand, the 3rd respondent's counsel contended that relief granted by the State Commission though based on Ex.A-8 joint memo, is covered by prayer in the complaint and that deficiency in service is a continuous cause of action and in that view of the matter, the complaint before the State Commission is not barred by limitation.
There is no dispute that the petitioner constructed 32 residential flats in 4 floors (ground and 3 floors) in 783 sq. yards of site in Plot No.14-20/1 in S.No.203 and 204 of Ramanthapur, Hayathnagar Mandal and sold those 32 flats to different persons. All those purchasers of flats from the petitioner formed themselves into Welfare Association in the name of the 3rd respondent. According to the 3rd respondent, the petitioner is guilty of deficiency in service in respect of 1 to 21 items mentioned in the Annexure appended to the complaint. Alleging that the petitioner did not carry out necessary works as per agreement between the petitioner and the purchasers, the 3rd respondent association lodged a complaint with Uppal Kalan Municipality against the petitioner in respect of the petitioner's deficiencies and also un-authorised constructions intended to be made by the petitioner. According to the 3rd respondent, authorities of Uppal Kalan Municipality convened a meeting between the 3rd respondent and the petitioner on 13.07.2001 wherein all points in issue were discussed and a joint compromise memo was signed by the flat owners who have attended the meeting and the petitioner-builder as per Ex.A-8 dated 13.07.2001. It is on the basis of this joint memo Ex.A-8, the State Commission granted relief. The petitioner became exparte before the State Commission and did not deny the joint memo. Ex.A-8 joint memo was proved by the 3rd respondent before the State Commission by filing affidavit in support thereof as per procedure adopted during enquiry in District Fora as well as the State Commission provided by Section 13 (4) (iii) of the Consumer Protection Act.
Direction of the State Commission with regard to providing water connection to the complex is based on clause-(5) of Ex.A-8 which reads as follows:
"Regarding the water connection/donation, both builder and flat owners have agreed to share 50/50 ratio. The amount will be deposited with municipality to regularise the connection within one month from the date of this meeting. The builder has also agreed to withdraw the W.P. filed in respect of water connection against the municipality."
It is not correct to contend that relief granted by the State Commission is not permissible under the Consumer Protection Act as it is in the nature of Specific Performance of Ex.A-8 joint memo. Deficiency in service arises only when any contract involving service is violated by one of the parties thereto. It is only when one of the parties to the contract is aggrieved by action or in action of the other party in performing the contract, the question of deficiency in service arises. The Consumer Protection Act and various authorities under the Act (i.e.,) District Forum, State Commission and National Commission are expected to give directions to the erring party to the contract for rectification of deficiencies in service arising out of breach of the contract which involves performance of service by one party to the other. Therefore, direction given by the State Commission in this case to the builder for providing water connection to the complex constructed by the builder as per contract between the parties as well as joint memo Ex.A-8 is well within jurisdiction of the State Commission.
Section 14 of the Specific Relief Act gives list of four contracts which cannot be specifically enforced. They are:-
a) a contract for the non-performance of which compensation is an adequate relief;
b). a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;
c) a contract which is in its nature determinable;
d. a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.
Providing water connection to the apartments located in the complex constructed by the builder does not fall within any of the above four exceptions contained in Section 14 of the Specific Relief Act. There is no dispute that all 32 flat owners have paid to the builder 50% of expenses for obtaining water connection as well as donation. Therefore, it is for the builder to obtain water connection to the complex from Hyderabad Metropolitan Water Works and Sewerage Board. Failure to provide metro water connection to the complex is a grave deficiency in service. Without metro water connection, life of 32 families living in the complex becomes miserable.
It is not correct to contend that relief of providing water connection granted by the State Commission is outside the scope of prayer contained in the complaint of the 3rd respondent Association. In the complaint, the 3rd respondent prayed for compliance by the petitioner of deficiencies shown in Annexure to the complaint. Item 14 of the Annexure giving details of deficiencies to be attended by the builder reads as follows:
"Due to lack of proper Municipal water supply, flat owners collected water from outside with great difficulty."
Relief granted by the State Commission is well within the scope of the above deficiency No.14 pointed out by the 3rd respondent in the complaint before the State Commission. Therefore, there is no grant of relief by the State Commission over and above the relief prayed for by the 3rd respondent- Association in the complaint. There is absolutely no blowing of hot and cold or self contradiction by the 3rd respondent between Annexure attached to the complaint and Ex.A-8 joint memo, particularly in so far as the relief granted by the State Commission is concerned."
In regard to limitation finally it has been observed :
"It may be noted that at no point of time the petitioner refused to obtain metro water connection to the complex. But, the petitioner was simply not obtaining the same by indulging in filing one writ petition or the other with regard to regularisation of pent house and other unauthorised portion of construction in the complex. Finally the petitioner kept the contract of providing metro water connection in writing in Ex.A-8 joint memo on 13.07.2001. Even thereafter, the petitioner was taking no steps to provide metro water connection to the complex. Therefore, the 3rd respondent association as chosen to file the present complaint before the Sate Commission on 22.04.2002, which is well within the period of limitation of two years from the date of cause of action, as contemplated under Section 24A of the Consumer Protection Act, 1986."
In regard to the maintainability of the complaint filed by the complainant the High Court had discussed and held that :
"There is no dispute that the 3rd respondent Association is a registered society bearing No.703/2000 of Registrar of Societies, Hyderabad. By filing letter dated 30.10.2009 addressed by the Registrar of Societies to the petitioner in reply to his query, it is contended by the petitioner's counsel in W.P.No.19211 of 2009 that the Association did not file Annual list of the society and also did not file list of members and audit reports of the society before the Registrar of Societies. It is an irrelevant factor in this writ petition. It is not the petitioner's case that the Registrar of Societies cancelled registration of the 3rd respondent as a registered society. If any annual list or audit report or list of members is not filed by the 3rd respondent, it is a matter between the 3rd respondent and the Registrar of Societies and the petitioner has nothing to do with it and it cannot be a ground of attack in this writ petition as well as in the Penalty Petition or Punishment petition pending before the State Commission."
Finally the petitioner contended that the procedure followed by this Commission is against the provisions of Cr.P.C. The High Court opined that "The petitioner contends that the State Commission should have followed the procedure under Sections 200 and 204 of the Code of Criminal Procedure while entertaining P.P.No.35 of 2007. It is also contended that the said P.P is barred by limitation in view of rule 14 of the Consumer Protection Rules. The petitioner should have urged these aspects before the State Commission where P.P. is pending. Even though the State Commission has got powers of issuing arrest warrants and committing the non-complying persons to prison like a Magistrate, the State Commission need not follow Sections 200 and 204 of the Code of Criminal Procedure while entertaining P.P and issuing non-bailable warrants against the petitioner. P.P. is not a private complaint. It is only a petition filed for disobedience of orders issued by the State Commission. Secondly, order of the State Commission in CD No.58 of 2002 is merged in order passed by the National Commission in FA No.435 of 2002. Therefore, period of limitation, if any has to be computed from the date of order of the State Commission."
When the respondent questioned the procedure adopted by this Commission contrary to Section 27 of C.P. Act and procedure under Sections 200 of the Code of Criminal Procedure was not followed while entertaining the P.P. 35/2007. The High Court observed:
"Even though the State Commission has got powers of issuing arrest warrants and committing the non-complying persons to prison like a Magistrate, the State Commission need not follow Sections 200 and 204 of the Code of Criminal Procedure while entertaining P.P and issuing non-bailable warrants against the petitioner. P.P. is not a private complaint. It is only a petition filed for disobedience of orders issued by the State Commission."
It was further clarified that :
"The petitioner has got remedy by way of appeal under Section 27A of the Act before the National Commission, New Delhi, in case any order is passed by the State Commission against him under Section 27 of the Consumer Protection Act, 1986. As against any order passed by the National Commission, the petitioner has got further remedy to approach the Supreme Court of India by way of Special Leave Petition. Thus, there are equally efficacious alternative remedies available for the petitioner. In that view of the matter the petitioner cannot invoke jurisdiction of this Court under Section 226 of the Constitution of India."
8) Since he did not prefer any appeal against the said writ order and it has become final and in the circumstances, it is not open for the respondent again to raise the very same questions before this Commission. It had already become final.
9) This is not for the first time the respondent had raised these contentions. They have been in fact covered by one decision or the other. The learned counsel for the respondent contended that the complainant had to clutch Section 25 of the Consumer Protection Act rather than Section
27. In fact there is no basis for such contention. The Hon'ble Supreme Court in State of Karnataka vs. Vishwabarathi House Building Coop. Society, 2003 (2) SCC 578 opined that that the power under Section 27 is the in the nature of an additional power for execution of the order. However, the Supreme Court had an occasion to consider Section 27 of the Consumer Protection Act in Vishwabarathi House Building Coop. Society, (Supra).
"58.
Furthermore, Section 27 of the Act also confers an additional power upon the Forum and the Commission to execute its order. The said provision is akin to Order 39 Rule 2A of the Code of Civil Procedure or the provisions of the Contempt of Courts Act or Section 51 read with Order 21 Rule 37 of the Code of Civil Procedure. Section 25 should be read in conjunction with Section 27. A Parliamentary statute indisputably can create a tribunal and might say that non compliance of its order would be punishable by way of imprisonment of fine, which can be in addition to any other mode or recovery.
59. It is well settled that the cardinal principle of interpretation of statute is that courts or tribunals must be held to possess power to execute their own order.
60. It is also well settled that a statutory Tribunal which has been conferred with the power to adjudicate a dispute and pass necessary order has also the power to implement its order. Further, the Act which is a self-contained Code, even if it has not been specifically spelt out, must be deemed to have conferred upon the Tribunal all powers in order to make its order effective.
Section 27 of the Consumer Protection Act was on statute books since inspection of the Act. Subsequent to the amendments to the Consumer Protection Act under Act 62/2002 there could not be any difficulty for invocation of penalty against any order. Section 27 on the other hand is a penal provision which provides for penal consequences for breach or failure to comply with the provisions of any order passed under the Act. In other words apart from conferring powers on the Tribunal to make its orders effective the power to punish is to uphold the rule of law or the Majesty of law. This aspect will have to be borne in mind while considering the expression "any order" in Section 27. The two Sections, therefore, operate in two different fields, one for enforcement of the order and the second a penal provision for failure to comply with the order.
We reiterate that Section 27 is an additional remedy to ensure that orders passed are not breached and the party who fails to obey the order has to suffer the penal consequences. It is in the nature of deterrence, to ensure that orders, interim or final are complied and that the consumer is entitled to specific relief. As the Supreme Court has observed in Vishwabarathi House Building Coop. Society (supra), Section 27 is another mode of execution of orders. It is no doubt true that the consequences being penal, the provisions must be strictly construed. At the same time Courts normally consider the literal interpretation of the language of the provisions unless that interpretation results in an absurdity or does not reflect the intent of the Legislature. If the object is to penalise for failure to comply with any order, we find no absurdity in applying the literal rule of construction. In Babaji Kondaji Garad vs. Nasik Merchants Coop. Bank Ltd. & Ors., (1984) 2 SCC 50:
"10. Before going in search of any external aids of construction, let us look at the language employed by the Legislature because no canon of construction can be said to be more firmly established than this that the Legislature uses appropriate language to manifest its intention."
The law pertaining to Consumer Protection Act, 1986 as its object and reasons clause would show is meant for better protection of the interest of the consumers and as the statement of objects and reasons to the Amendment Act 2002 would show, that it is meant to provide a simple, inexpensive and speedy justice to the consumers, on complaints against defective goods, deficiency in service and unfair trade practice or the restrictive trade practice and conferring power of the Judicial Magistrate, First Class on the Consumer Dispute Redressal Agencies with a view to try the offences under the Act. It is a benevolent piece of legislation providing for an alternative system of consumer justice by a summary trial, See Charan Singh v. Healing Touch Hospital (2000) 7 SCC 668."
10) In Rajendra Properties & Industries Vs. K. S. Nandwani, II (1999) CPJ 31 (NC). it was held that the proceedings u/s 27 of the Act are in the nature of execution proceedings of the basic order. It is settled law that the executing court cannot go behind the decree. The jurisdiction of the court executing a decree must be determined with reference to and is circumscribed by the directions contained in the decree. It has no power to go behind it or question its legality or correctness. The executing court must execute the decree as it stands and according to its terms. It is not permissible under law to go behind the basic order in the proceedings u/s 27 of the Act. The basic order cannot be amended, modified or varied in the proceedings u/s 27 of the Act.
11) In HSEB Vs. Pirthi Singh, II (1993) CPJ 715; Mahabir Singh Deswal Vs. Arora Handloom Store, III (1995) CPJ 71 (NC), R.B. Padhya Vs. Kabir Automobiles, II (1995) CPJ 169; Improvement Trust Vs. S. N. Bindal Engineer & Contractor, 1996 (1) CPR 618. it was held that Section 27 was thus the king-pin of the consumer jurisdiction which stands proudly apart from the ordinary and now notoriously the tardy civil process. Without the sanction of Sec. 27 perhaps the consumer jurisdiction would only be a paper-tiger lacking teeth altogether. That was one of the rare provisions in the civil jurisdiction where the penal sanction of imprisonment and fine in terms was provided for compliance with the orders of the consumer courts. The language employed was pre-emptory and the imposition of imprisonment and fine have nuances of criminal punishment for an offence. It was, however, plain that Sec. 27 did not create an offence strictosensu, but was only a methodology of stringent penalty on pain of which the orders of the redressal agencies were to be complied with expeditiously. It appeared from the tenor of the section that the obligation of compliance with the orders of the redressal agencies lies immediately and squarely on the traders or a person against whom the same has been passed. The intent of the section was plain that the moment he slips in that mandatory duty, he automatically invites the rigour of the penalty under that provision. Consequently, the primal mode of enforcement and execution of orders by the redressal agencies was enforcing a mandatory compliance therewith by invoking the virtually automatic attraction of the penalty u/s 27 of the Act. Therefore a total compliance with substantive order of the redressal agency would be an extenuating factor for modifying the penal order passed u/s 27 of the Act.
12) In Union of India Vs. Chairman, Madras Provincial Consumer Association II (1992) CPJ 524 it was held that the question of punishment arises only when there has been a disobedience of an order already passed and it was not open for the forum to anticipate disobedience and to pass orders. If action was to be taken u/s 27 of the Act, the natural justice requires that the person sought to be proceeded against should be heard.
13) Be that as it may, we may state that this Commission as per the directions of the High Court issued show cause notice for which he has filed explanation to each and every contention that was raised. Even otherwise this Commission after examining the accused as contemplated u/s 200 Cr.P.C questioned the respondent as to whether he pleads guilty u/s 27 of C.P. Act or claims to be tried for which he pleaded the complaint was bogus, vexatious and 'not guilty' and claims to be tried. On that the complainant was examined. He was cross-examined. Examination u/s 313 Cr.P.C was made. When the respondent intended to examine the defence witnesses to lead evidence contrary to the order the same was rejected u/s 233 Cr.P.C. by a detailed order. Finally arguments were heard. As we could see the procedure contemplated u/s 200 was followed in terms and spirit as contemplated u/s 27 of C.P. Act. There is neither infraction of law nor procedural flaw while conducting the entire trial of the matter.
14) The respondent could not state as to why he did not or could not comply the order of this Commission Dt. 30.9.2004 which was up-held not only by National Commission in F.A. 435/2005 but also by the High Court repeatedly in the writ petitions filed by the respondent. Therefore, we hold that the accused is guilty of non-compliance of orders of this Commission punishable u/s 27 of the Consumer Protection Act. The fact remains that the respondent omitted to comply order without any lawful excuse. He did not even try to explain the circumstances under which he could not comply the order. Non-compliance constitutes offence punishable with imprisonment or fine or both. Considering the fact that all the flat owners have been denied benefits, various amenities right from 2001 which he himself had agreed to comply under a compromise, besides a direction to pay the amount vide order Dt. 30.9.2004 for the last 7 years or so, it calls for deterrent punishment. The respondent has deliberately omitted to comply the said order and thus guilty of non-compliance and punishable as contemplated u/s 27 of the Consumer Protection Act.
15) In the result we convict the respondent u/s 27(3) of C.P. Act and sentence him to undergo simple imprisonment for one year together with fine of Rs. 10,000/- and in default to undergo further simple imprisonment for three months.
1) _______________________________ PRESIDENT
2) ________________________________ MEMBER Dt.
12/07/2010.
*pnr