National Consumer Disputes Redressal
Patrick Gonsalves, Ms. Lina Consalves vs M/S. Haven Developers Pvt. Ltd, Albert ... on 6 February, 2006
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 820 OF 2003 (From the order dated 16th October, 2003 in Complaint No.30/1999 of the State Commission, Goa) 1. Patrick Gonsalves S/o Mr. A.J. Gonsalves 2. Alfred Gonsalves, S/o Mr. A.J. Gonsalves 3. Pasty Gonsalves D/o Mr. A.J. Gonsalves 4. Meena Gonsalves D/o Mr. A.J. Gonsalves All R/o 1/76, Shankar Road Old Rajinder Nagar, New Delhi-110 060. Appellants Versus 1. M/s. Haven Developers Pvt. Ltd. A Company Registered under the Indian Companies Act, 1956 With its Registered Office at 385-A, Jagmohandas Building, Ground Floor, Girgaon Road Mumbai-400 002 2. Albert J.D.Souza, Director, M/s. Haven Developers Pvt. Ltd. R/o 62, Flowers Nest, Sherley Road, Bandra Mumbai-400 050 3. M/s. Hede Consultancy Co. Ltd., Durga Bhawan, Hede Centre, Tonca, Panaji Goa-403001 Through: P.R. Hede, Director Second Address: D-53, Defence Colony, New Delhi-110 024. 4. M/s. Phoneix Township Ltd., Durga Bhawan, Hede Centre, Tonca, Panaji Goa-403001 Through:P.R. Hede, Director Respondents A N D FIRST APPEAL NO. 858 OF 2003 (From the order dated 16th October, 2003 in Complaint No.30/1999 of the State Commission, Goa) 1. M/s. Haven Developers Pvt. Ltd. A Company Registered under the Indian Companies Act, 1956 62, Flowers Nest, Sherly Road Bandra, Mumbai-400 002 2. Albert J.D.Souza, Director, M/s. Haven Developers Pvt. Ltd. R/o 62, Flowers Nest, Sherley Road, Bandra Mumbai-400 050 .. Appellants Versus 1. Patric Gonsalves, S/o Mr. A.J. Gonsalves, Residing at 1/76, Shankar Road, Old Rajinder Nagar, New Delhi-110 060 2. Alfred Gonsalves, S/o Mr. .A.J. Gonsalves, Residing at 1/76, Shankar Road, Old Rajinder Nagar, New Delhi-110 060 3. Pasty Gonsalves, D/o A.J. Gonsalves, Residing at 1/76, Shankar Road, Old Rajinder Nagar, New Delhi-110 060 4. Meena Gonsalves, D/o A.J. Gonsalves, Residing at 1/76, Shankar Road, Old Rajinder Nagar, New Delhi-110 060 5. Ms. Lina Gonsalves, Advocate Residing at 1/76, Shankar Road, Old Rajinder Nagar, New Delhi-110 060 6. M/s. Hede Consultancy Company Ltd., Durga Bha Bhavan, Hede Centre, Tonca Panaji-403 001. 7. M/s. Phoenix Township Ltd. Durga Bhavan, Hede Centre, Tonca Panaji-403 001. Respondents BEFORE : HONBLE MR. JUSTICE M.B.SHAH, PRESIDENT. DR. P.D. SHENOY, MEMBER. For the Appellants in FA : Ms. Lina Consalves, Advocate No.820/2003 Respondent Nos. 1 to 4 in FA 858/2003 For the Respondent Nos. : Albert J.D.Souza,Director, 1 & 2 in FA 820/2003 & . M/s. Haven Developers Pvt. Ltd. Appellants in FA 858/2003 For the Respondents Nos. 3 & 4 in FA 820/2003 & Appellant Nos. 3 & 4 Mr. Pramod Kumar, Advocate. Dated 6th February, 2006 O R D E R
M.B. SHAH, J., PRESIDENT:
In Complaint No.30 of 1999, the State Consumer Disputes Redressal Commission Panaji Goa, by its order dated 16.10.2003, partly allowing the complaint, directed Respondents No.1 and 2 (building developers) to refund a sum of Rs.14,12,500/- to the Complainants, with interest at the rate of 12% p.a. from 6.5.1997 till the date of payment and also to pay compensation of Rs.10,000/- for inconvenience and suffering caused to them, with costs assessed at Rs.5000/-. It was also ordered that if the amount was not paid within two months from the date of the communication of the order, Respondents No.1 and 2 would be liable to pay the sum with interest at the rate of 15% p.a. However, the State Commission dismissed the complaint against Respondents No.3 and 4, who were the subsequent purchasers of the flats from the developers, holding that they are not liable to refund the amount.
Being aggrieved and dissatisfied by the direction of the State Commission, the Complainants have filed Appeal No.820/2003 praying that : (i) Respondent Nos 3 and 4 shall also be made liable to pay compensation as awarded by the State Commission, along with Respondent Nos. 1 and 2; and
(ii) allow the appeal with costs.
The Respondent Nos. 1 and 2 (Builders) have also filed Appeal No.858/2003 with a prayer to set aside the order passed by the State Commission.
BRIEF FACTS :
There is no dispute that complainants, who are members of a family, agreed to purchase flats No.T-2, T-3 and T-4 from the developer [Respondents No.1 & 2 herein], in Appeal No. 820 of 2003. They paid in all a sum of Rs.14,12,500/- on 6.5.1997. The complainants were required to pay the remaining amount of Rs.2,68,000/- on completion of sewer works and at the time of delivery of possession of the flats on or before 6.7.1997. By letter dated 1.12.1997, Respondent No.2 informed the complainants that they were planning to complete and handover the Apartments by 15.1.1998. Thereafter, he started negotiating with the Complainants for operating a rent back facility of the flats in question. There was correspondence between the complainants and the Respondent No.2, and Respondent No.2 when asked to refund the money, he stated that he was prepared to refund only half of the amount invested.
As Respondents No.1 and 2 failed to pay the amount or deliver the possession of the flats, a complaint was filed for refund of the amount with interest at the rate of 18% p.a. and for compensation of Rs.75,000/-.
In defence, Respondents No.1 and 2 contended that the Complainants have filed a Civil Suit No.173/1999/B in the Court of Civil Judge at Mapusa on 30.9.1999 and the said Suit was pending before the Civil Court; and, Civil Court was the appropriate Forum for deciding the dispute between the parties.
It is also contended that they terminated the agreement with the complainants as they failed to pay the instalments and thereafter it entered into an agreement with M/s.Hede Consultancy Company and delivered the possession of the said flats to it by Agreement dated 28.9.1999. This transfer was known to the Complainants and yet they did not join them as party respondents. They have also contended that they have only received an amount of Rs.11,12,000/- and not Rs.14,12,500/-.
It is not disputed that on 25.1.1999, Respondent No.2 entered into a Deed of Assignment with Respondent No.4. It is the say of the complainant that the same was suppressed from them and they came to know of the same through Consumer Guidance Society of India vide letter dated 22.10.1999. By this Deed of Assignment, Respondent No.4 has taken over the obligation of Respondent No.2 towards the appellants/Complainants.
On 21.12.1999, Respondents No.1 and 2 filed written statement wherein it was disclosed that flats were in possession of Respondent No.3 vide Sale Agreement dated 28.9.1999 executed by him with Respondent No.3 and that the Agreement with the appellants was terminated vide letter dated 21.9.1999. It is contended that the fact of Assignment Deed dated 25.1.1999 was suppressed by Respondent No.4 On 17.1.2000, appellants moved an application for impleading Respondents No.3 and 4 as necessary parties. It is submitted that Mr.P.R.Hede is the Director of Respondents No.3 and 4, which are sister concerns. It is also pointed out that in a pending Civil Suit for injunction, Respondents No.3 and 4 have stated that additional alterations were made in the flats and were converted them into a hotel project.
Thereafter, Respondent No.3 moved the State Commission on 18.6.2000 to have their name deleted from the array of respondents to the proceedings. That application was allowed by the State Commission. Against that order, the appellants preferred Revision Petition No.1508 of 2002 before this Commission wherein it was held by this Commission that Respondent No.3 was a necessary party and, consequently, the order passed by the State Commission was set aside. Thereafter, Respondent No.3 moved an application offering the suit flats which were part of the hotel project. Finally, the impugned order was passed by the State Commission.
SUBMISSIONS:
Learned counsel for the appellant submitted that:
i) To refund of money, the builder created a third-party interest with Respondent No.3 in spite of the fact that a Public Notice dated 24.1.1999 was given by the flat purchasers warning the public at large not to deal with the said flats. The flat purchasers had also issued a letter dated 20.2.1999 to the builder and to Mr.P.R.Hede, Director of Respondent No.3.
ii) Respondents No.3 and 4 are both sister companies owned by Mr.Hede and Mr.P.R.Hede is the Director of both the companies.
Respondent No.2 is the owner of Respondent No.1 builder.
He submitted that by the Deed of Assignment executed in favour of Respondents No.3 and 4, it was specifically agreed that Respondents No.3 and 4 would be required to refund the amount paid by the complainants. It is his contention that in view of the Assignment Deed, Respondents No.3 and 4 cannot escape from their liability.
He has, at the time of hearing of the appeals, produced the indemnity bond dated 4.5.2000 executed by Mr.P.R.Hede, Vice Chairman of the Phoenix Township Ltd. The relevant part is as under:
KNOW ALL MEN by this presence that we PHOENIX TOWNSHIP LTD. (PTL) the Company incorporated under Companies Act, 1956, having registered office at Durga Bhavan, Hede Centre, Tonca, Panjim, Goa 403 001 represented by Dr. P.R.Hede, Vice-Chairman of the Company hereinafter called PTL DO hereby stated as follows:
(1). Wherein PTL entered into an agreement to assign dated 25th January, 1999 with Haven Developers Pvt. Ltd. wherein the entire project which was constructed by Haven Developers on the property situated at 220/9, Sequeira Vado situated at Village Canodlim Goa, was taken over by PTL.
(2). As a result of the taking over the said entire project the rights and liabilities of the said Haven Developers Pvt. Ltd. under their Agreement with the flat purchasers of various flats situated at Angeline Apartment Candolim Goa assigned to and taken over by PTL.
(3). Further PTL has entered into an agreement of cancellation with 31 out of 37 flat purchasers of Angeline Apartment Candolim Goa and PTL has settled with all the above 31 flat purchasers and there is no liability on Haven Developers Pvt. Ltd. should any liability arise on account of circumstances and damage of any nature relating to the said 7 flats is caused to either HDPL or any of its Directors, PTL shall keep HDPL and its Directors fully and completely indemnified With regard to the liability of Respondent Nos. 1 and 2, it has been clearly mentioned that:
Haven Developers has deposited Rs.11,12,000/- with Hede Consultancy Company Group Company of PTL towards the future liability arising out of the above litigation with the said flat Nos. T-2, T-3 and T-4.
With reference to the above flats T2, T3 & T4 PTL hereby indemnify Haven Developers Pvt. Ltd. and its Directors regarding any liability arises from the above said litigation either from the flat purchasers or from any Judicial order will be made good by PTL except Legal charges incurred by Haven Developers Pvt. Ltd.
The letter of termination of Agreement between the complainants dated 21.9.1999 sent by Respondent No.2 is the same document placed on record by the builder, but the same was not sent at all to the Complainants.
Learned counsel submitted that the Agreement between Respondents No.2 and 3 clearly shows that the flats are security for payment of money till the entire amount is refunded and the charge is created on the flats.
On behalf of Respondents No.3 and 4, it was contended that the Civil Suit between the parties is pending. Respondents No.3 and 4 are not bound to refund the amount and that as the hotel project is completed, there is no question of delivering the possession of the flats to the complainants.
For appreciating the evidence, we would refer to the agreement between Respondents No.2 and 3.
Admittedly, by agreement dated 25.1.1999 Respondent Nos. 1 and 2, M/s.Haven Developers Pvt. Ltd. assigned their rights to M/s. Hede Consultancy Co. Ltd., Respondent Nos. 3 and 4.
On 28th May 1997, Respondent No.2 wrote a letter to the Complainant stating that there was an offer from Phoenix Township Ltd. (Respondent No.3) for operating rent back facility for the apartments. The Hede Group was well established in business and if the Complainants are interested in rent back units, they might inform him. To that the Complainants have written a letter dated 5.6.1998 to Mr.Albert J.D'Souza, that they were not interested in rent back facility for the purchased premises which they have agreed to purchase and that they were interested to take vacant peaceful possession of the flats at the earliest.
Thereafter, a public notice, as stated above, was issued in a newspaper to the effect that they were the first-purchasers with M/s. Haven Developers Pvt. Ltd. represented by its Directors, Shri Albert J.D'Souza of flats bearing Nos. T-2, T-3 and T-4, and, therefore, whoever deals with or enters into any lease agreement concerning the flats/property in question, they may do so, at their own risk, cost and peril.
In the reply dated 27th September, 1999 to the Consumer Guidance Society of India, Mumbai, Respondent No.2 has specifically stated that he has entered into an agreement with the flat purchasers and the flats were near completion at the time of entering into the agreement. He has also mentioned the total amount paid and due by the purchasers as under:
Payment Recd Balance Payment due Payment due on possession Flat No. T-2 Rs.3,58,000/-
Rs.1,00,000/-
Rs.11,200/-
Flat No. T-3 Rs.3,78,500/-
Rs.84,000/-
Rs.11,200/-
Flat No. T-4 Rs.3,78,500/-
Rs.84,000/-
Rs.11,200/-
It is also mentioned that M/s.Havens Developers have assigned their rights to M/s. Phoenix Township Ltd., and in the deed of assignment rights of subsequent flat purchasers have been specifically recognised. They have taken over the obligation of Haven Developers toward the flat purchasers. It is also pointed out that the Vice-Chairman of Ms.Phoenix Township Ltd. has offered various options to Ms.Lina Gonsalves, which have been availed of by other 31 flat purchasers of the same building, but she has not accepted.
TERMS & CONDITIONS OF ASSIGNMENT DEED:
Now, we would refer to the terms and conditions of the assignment deed executed in favour of the Respondent Nos. 3 and 4, which are as under:
(c). By an Agreement of Sale and Development dated 22.9.1994 entered between ten of the Confirming (except the person named at item (11) and two other persons who have since deceased being Mrs. Julia Maria Fernandes, widow of Antonio Mario Fernandes and Mr. Antonio Sebastiao D'silva (all together named as Sellers therein ) and the Assignors (named as Purchasers /Developers therein) the said Confirming Parties as the owners of the said Landed Property agreed to sell the said Landed Property to the Assignors and/or their successors, legal representatives and assigns for consideration and upon the terms and conditions incorporated therein (hereinafter also referred to as the said Agreement). The confirming party named at item (11) subsequently ratified the said Agreement by an Agreement of Ratification and Acceptance of Agreement of Sale and Development dated 30.4.1996 with retrospective effect from 22.9.1994.
(d). Pursuant to the said Agreement, the Assignors have been put in possession of the said Landed Property and permitted recess to the said Landed Property for the purpose of developing the same and construction thereon in accordance with the plans approved by the Town & Country Planning Department, Village Panchayat of Candolim and/or any other local body or Government or such other authority.
(e). Pursuant to the said Agreement the Assignors have been developing the said Landed Property and have constructed thereon three multistoried buildings consisting of residential flats/studios in accordance with plans approved by the Authorities. The Assignors have represented that the title of the said Landed Property is clear, marketable and free from all encumbrances and the Assignors have got the plans of construction in the said property duly approved from the Town & Country Planning Department, Mapusa vide its NOC No. ----------- and also form the Village Panchayat of Candolim as per its License No. --------- dated ----------.
(f). Under the terms of the said Agreement, the Assignors are authorized to sell the premises in the said multistoreyed buildings to any person of their choice without reference to or consent of the Confirming Parties. Pursuant thereto the Assignors have from time to time entered into various agreements to sell flats/studios in the said developments/ buildings the details whereof are contained in Schedule II Annexed hereto. The details of the amounts outstanding and received from the said flat/studio purchasers are also given in the said Schedule II. All the total thirty seven (37) flats/studio constructed by the Assignors have been agreed to be sold to the various purchasers as aforesaid and there are no flats/studios which are not yet agreed to be sold by the Assignors.
(h). The Assignors have represented that giving of possession of the flats/studios to the various purchasers is pending because of the said unfinished interior/exterior work/landscaping as a consequence of failure of some purchasers to make due stage payments.
(j). The Assignors are desirous of selling the said Property Rights to the Assignees and to give effective title to the Assignees, the Assignors are agreeable to assigning all their right, title and interest in the said Agreement of Sale and Development dated 22.9.1994 and in the said various agreements with the flat/studio purchasers, concomitant with the Assignees taking due cognisance of the pre-existing right, title and interest of the various purchasers to whom the Assignors have agreed to sell the said flats/studios under the various agreements to sell entered into by the Assignors with the respective purchasers as detailed in the said Schedule-II.
3. It is agreed that the Assignors shall do the following within 60 days:
(a) the Assignors shall give an irrevocable power of attorney to the Assignees giving powers to do all the acts and deeds that the Assignors can do in respect of the said landed property and/or the said property rights, if required by the assignees.
(f). The Assignors shall assign the Assignors obligations/rights under the said various agreements to sell entered into with the flat/studio purchasers and inform the various flat/studio purchasers and obtain their consent to the assignment thereof.
6. It is agreed that the Assignors shall bear and be liable for all the liabilities and claims in respect of the said Landed Property and all developments/constructions there on till the date of assignment; the said flats/studios agreed to be sold to the various purchasers. It is specifically agreed that all such liabilities or claims shall be borne, settled and paid directly by the Assignors and that the Assignees shall not be liable to pay/settle/bear any such liability. It is further agreed that the Assignors shall indemnify and shall always keep indemnified the Assignees in respect of any such liability/claim.
.7. It is agreed that the Assignees shall be liable for the performance obligations (but not the liabilities as per clause 6 above) which the Assignors have undertaken in respect of the said property rights and more particularly the Assignees shall be liable to complete the unfinished interior / exterior work and fulfil the performance obligations of the Assignors under the various agreements entered into by the Assignors with the said flat/studio purchasers. It is agreed that the Assignees shall be entitled to all benefits accruing or arising out of the said agreement to sell with the flat/studio purchasers, except that the Assignors alone shall be entitled to the benefits of the amount outstanding and receivable from the said flat/studio purchasers. . Any amount that may be payable back towards the cancelled flat(s) shall be borne and paid by the assignees and if any amount is paid / undertaken by the assignors or any other person then the same shall be forthwith indemnified by the assignees.
Schedule-II to the said Agreement specifically mentions the names of the Complainants Mr. Patrick Gonsalves; Mr. Alfred Gonsalves;
and Ms. Meena Gonsalves, with the endorsement that possession not given. I also mentions the amount recoverable as Rs.99,500/-; Rs.84,000/-; and Rs.84,000/- respectively.
The aforesaid deed and the letter of indemnity dated 4.5.2000 leave no doubt that Respondent Nos. 3 and 4 have undertaken all rights and liabilities of Respondent Nos. 1 and 2;
by the aforesaid agreement they have stepped into the shoes of the builders, i.e. Respondent Nos. 1 and 2, and without any reservation they have agreed to indemnify Respondent Nos. 1 and 2 against any liability that might arise from out of any litigation either from the flat purchasers or from any Judicial Order. It is also specifically agreed that in case the agreement between the flat purchasers is cancelled, the assignees undertook to indemnify the assignors if the assignors are required to pay any amount. However, as stated in the letter dated 27th September, 1999, the Vice-Chairman of PTL had met the Complainant and offered her various options which have been availed of by the other flat purchasers of the same building. This leaves no doubt that the PTL has accepted its liability with regard to the flats agreed to have been purchased by the Complainants.
In this view of the matter, there cannot be any iota of doubt that the assignees are liable to reimburse the loss caused to the Complainants who have paid large amounts to get the possession of the flats in 1997. Their dream is frustrated by Respondent Nos. 1 to 4 in collusion with one another by ignoring the public notice issued by the Complainants. After having agreed to deliver the possession of flats, they have converted the flat premises into an international hotel, as stated by them.
In our view, the State Commission has rightly arrived at the conclusion that the permanent injunction suit filed before the civil court would not bar the complaint filed before it as the cause of action and reliefs claimed in the suit and the complaint were quite different.
However, the State Commission held that as Opposite Party Nos.3 and 4 are subsequent assignees or parties who cannot be stated to be liable for the claim of the Complainants as there is no agreement between them. Hence, they are not liable to refund the amount. The aforesaid finding cannot be justified in view of the agreement and the indemnity bond. Opposite Party Nos. 1 and 2 were developers. They assigned the right of developing the flats to the Opposite Party Nos. 3 and 4. There is a specific agreement between the Opposite Party Nos. 1 & 2 and Opposite Party Nos. 3 & 4 that the assignees have taken over the entire liability qua the flat purchasers, as they wanted to have the building converted into an international hotel.
In such cases, the law on this subject is settled by the Apex Court in Khardah Co. Ltd. Vs. Raymon & Co. ( India) (P) Ltd., as under:
The law on the subject is well settled and might be stated in simple terms. An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand rights under a contract are assignable unless the contract is personal in its nature or the rights are incapable of assignment either under the law or under an agreement between the parties.
Apart from the law stated above, on behalf of the Respondent Nos. 3 and 4 Mr.P.R.Hede has given a specific indemnity bond dated 4.5.2005 as quoted above which would establish beyond reasonable doubt that the Respondent Nos. 3 and 4 are solely liable to indemnify the Complainants.
In the result, the Appeal No.820 of 2003 filed by the Complainant is allowed. The Respondent Nos. 3 and 4 are held liable jointly along with Respondent Nos. 1 and 2 to reimburse the Complainants the sum of Rs.14,12,500/- with interest at the rate of 12% p.a. from 6.5.1997 till the date of payment and also pay compensation of Rs.50,000/- to each of the Complainants for the deficiency in (i) not delivering the possession of the flats; and, (ii) for not refunding the amount despite the undertaking. However, because of the agreement and the indemnity bond the Respondent Nos. 3 and 4 are directed to pay the said amount within a period of eight weeks from today.
It is to be stated that by interim order, this Commission directed the respondent Nos. 3 and 4 to pay the said amount. Against that order Special Leave Petitions was filed in the Supreme Court. In the SLP stay was declined. Yet, they have intentionally not deposited the aforesaid amount. Hence, it is directed that if there is failure on their part in complying with the aforesaid directions, they will be liable to pay the amount with interest at the rate of 15% p.a. from a date after eight weeks from the date of this order. In addition, the Respondent Nos. 3 and 4 would pay costs assessed at Rs.10,000/- to each of the complainants.
Consequently, Appeal Nos. 820/2003 and 858/2003 are disposed of accordingly.
Sd/-
J (M.B.SHAH) PRESIDENT Sd/-
..
(P.D.SHENOY) MEMBER