National Consumer Disputes Redressal
Sangeeta B Agarwal W/O. Shri Banshidhar ... vs F.S. Housing Private Limited on 9 September, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 269 OF 2024 (Against the Order dated 09/02/2024 in Complaint No. CC/8/2023 of the State Commission Rajasthan) 1. SANGEETA B AGARWAL W/O. SHRI BANSHIDHAR D AGARWAL REP. THROUGH ATTORNEY, MR. B.D. AGARWAL R/O. SP-2, RICCO INDUSTRIAL AREA, SHIVDASPURA, TONK ROAD, JAIPUR-303903, RAJASTHAN, R/O. 307, PUSHP ENCLAVE, SECTOR-5, PRATAP NAGAR, JAIPUR-302033, RAJASTHAN 2. BANSIDHAR AGARWAL SP-2, RICCO INDUSTRIAL AREA, SHIVDASPURA, TONK ROAD, JAIPUR-303903. JAIPUR RAJASTHAN ...........Appellant(s) Versus 1. F.S. HOUSING PRIVATE LIMITED THROUGH ITS DIRECTOR, REG. OFFICE AT: PLOT NO. A-4, AIRPORT ENCLAVE SCHEME, TONK ROAD, JAIPUR-302018, RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT HON'BLE DR. INDER JIT SINGH,MEMBER FOR THE APPELLANT : FOR THE APPELLANT : MR. SHASHANK DEO SUDHI, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENT : MR. PUNIT PARIHAR, ADVOCATE MR. BHRIGU SHARMA, ADVOCATE Dated : 09 September 2024 ORDER PER A.P. SAHI, J., PRESIDENT This appeal has been heard at the admission stage as notices had been issued earlier on 01.05.2024.
Learned counsel for the opposite party/respondent has appeared and has contested the appeal urging that the impugned order dated 09.02.2024 passed by the SCDRC Rajasthan (hereinafter referred to as the State Commission) does not require any interference for entertaining of this appeal in the background of the case.
Learned counsel for the complainant/appellant has advanced his submissions contending that the State Commission has committed an error by nonsuiting the complainant/appellant on the ground that she is not a 'consumer' and secondly has erroneously applied the principles of res judicata that are not applicable on the facts of the present case.
On merits, learned counsel contends that as agreed, the refund in respect of the property booked by the complainant/appellant was made as per the terms of the settlement before the National Company Law Tribunal (NCLT) but it was not honoured timely, and on account of such delay, a sum of Rs.80,48,425/- is liable to be paid as interest. The complaint has therefore been filed for realization of this interest part as claimed in the complaint as there was a deficiency in service by the opposite party/respondent in not handing over the premises and causing consequential loss to the complainant/appellant. The claim of interest therefore arises out of the aforesaid deficiency in service by not refunding the amount timely, hence, any intervention at the level of NCLT does not take away the right of the complainant/appellant to file a consumer complaint under the Consumer Protection Act, 2019 (hereinafter referred to as the 2019 Act). The contention therefore is that the impugned order is manifestly erroneous as it is based on an incorrect appreciation of law and facts and hence the appeal deserves to be entertained and allowed and the impugned order deserves to be set aside. It is further submitted that the claim should be allowed and the interest on the amount as claimed should be directed to be paid to the complainant/appellant.
Learned counsel for the complainant/appellant has read Clause-5 of the Agreement for Sale in respect of the property that had been booked by the complainant/appellant which was a flat, against which a sum of Rs.2,33,42,700/- was the consideration for the flat measuring built-up area 2506 sq. ft.
The premises had to be handed over on or before 31.03.2018 but the Builder defaulted and consequently a Petition being IB No. 274/7/JPR/2019 was instituted before the NCLT at Jaipur by the complainant/appellant as a financial creditor/applicant, where orders were passed on 21.11.2019 noting the fact that the complainant/appellant and the opposite party/respondent were interested to settle the matter.
It seems that the matter was settled and the terms of settlement were drawn up in a Cancellation Agreement dated 18.12.2019 which is on record. Learned counsel for the complainant/appellant has invited the attention of the Bench to the different clauses of the said Cancellation Agreement which is extracted hereunder:
The said Cancellation Agreement was also simultaneously followed by the presentation of the terms of a settlement before the NCLT and the same is extracted hereunder:
On the filing of the same, the NCLT passed an order on 19.12.2019 which is extracted hereunder:
"Heard the submissions made by the counsel for both the parties. The petition filed under Section 7 of the IBC by the Financial Creditor is now sought to be withdrawn in terms of Rule 8 of IBC (Application to Adjudicating Authority) Rules, 2016. The Application filed in this regard by the Financial Creditor is taken on record. The said application contains a settlement agreement which in the relevant Annexure shows the quantum of principal and interest to be paid in six instalments. The counsels have also made a mention that the last instalment is due on 20th May, 2020. In case if the Corporate Debtor fails to meet the commitment or the cheques get dishonoured for any reason whatsoever the Financial Creditor will have right to revive the matter. The matter is disposed off and the petition stands withdrawn."
It may be pointed out that IA/232/JPR/2023 was filed in the same proceedings for withdrawal of the proceedings unconditionally, with a further recital that the complainant/financial creditor would not press the proceedings under the Negotiable Instruments Act or the FIR during this period, i.e. during the period within which the six cheques were to be encashed. The IA was also allowed and the proceedings were dismissed as withdrawn with the aforesaid terms. The order dated 26.05.2022 is extracted hereunder:-
" IA No. 232/JPR/2022:
Heard Mr. Prabhansh Sharma, Adv. For the Petitioner/Financial Creditor and Mr. Pradeep Kumar Choudhary, Adv. For the Respondent/Corporate Debtor.
This IA has been filed by the Applicant for withdrawal of CP No. (IB)-274/7/JPR/2019. Mr. Prabhansh Sharma, Adv. appearing for the Applicant seeks to withdraw this petitioner unconditionally. Permission is granted.
It has been submitted that a sum of Rs.2,45,00,000/- has been handed over by the Corporate Debtor to the Financial Creditor by way of 6 cheques on different dates that is mentioned in para 5 of the application. Mr. Pradeep Kumar Choudhary, Adv. submits that in the order dated 15.11.2021, it is submitted that Financial Creditor would not press with the NI Act / FIR proceedings in respect of this matter during this period.
IA is allowed and CP No. (IB)-274/7/JPR/2019 is dismissed as withdrawn.
CP No. (IB)-274/7/JPR/2019:
In view of the order passed in IA No. 232/JPR/2022, the instant CP is dismissed as withdrawn."
The complaint was filed thereafter on 17.04.2023 raising the dispute as mentioned above and it came to be dismissed on 09.02.2024 against which the present appeal has been filed.
Learned counsel for the complainant/appellant has urged that the State Commission has erroneously proceeded to dismiss the complaint, which has been vehemently opposed by the learned counsel for the opposite party/respondent contending that the impugned order does not suffer from any infirmity as pointed out by the learned counsel for the complainant/appellant and hence the appeal deserves to be dismissed.
We have considered the submissions raised and the first issue that deserves to be mentioned at the outset is that in view of Section 100 of the 2019 Act, the jurisdiction of the Commission is available as the 2019 Act is not in derogation but is in addition to other laws of the country. Section 100 is quoted hereunder:
"100. Act not in derogation of any other law. - 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."
A consumer complaint therefore can be maintained in respect of any deficiency in service, and so far as the present case is concerned, the dispute did arise out of a Builder Buyer Agreement regarding purchase of a flat that was not delivered. Hence such a deficiency is recognized as a deficiency in service of housing construction services that are within the purview of the 2019 Act subject to other terms and conditions to be fulfilled therein.
The present case, to begin with, was a dispute pertaining to deficiency in service of non-delivery of a flat for which consideration had been paid, which was a housing construction dispute, and was therefore covered under the provisions of the 2019 Act but the complainant/appellant did not file any such complaint regarding such deficiency as alleged. To the contrary, the complainant/appellant approached the NCLT as an applicant/financial creditor invoking the jurisdiction under the IB Code 2016. The said application was entertained and it is during the said proceedings that the settlement was arrived at between the parties. The documents of settlement quoted above are undisputed and are on record.
Learned counsel for the complainant/appellant urged that in view of Clause-5 of the agreement the source of deficiency arises out of the breach of the said agreement and hence a consumer complaint is maintainable.
The claim has been filed after the settlement and after having received the settlement amount with interest that was agreed to be paid in terms of the settlement. The delay is alleged on late payment by the opposite party/respondent. We are afraid that such a claim will not fall within the definition of deficiency in service, inasmuch as the entire dispute pertaining to deficiency in service of the flat stood concluded with the final settlement between the parties and the ultimate withdrawal of the application before the NCLT in terms of the orders quoted hereinabove. In our considered opinion, nothing remained to be disputed or adjudicated through any further litigation about the allegations of deficiency in service or unfair trade practice which is now sought to be raised through the complaint giving rise to the present appeal. The orders passed by the NCLT became final.
The complaint is purely for recovery of money claiming interest on delayed payment of the settlement amount which the complainant/appellant alleges to be an amount of interest that the opposite party/respondent is liable to pay. This is a pure accounting/money suit which in the garb of a complaint cannot be entertained once the entire dispute has been settled before the NCLT voluntarily by the complainant/appellant and the opposite party/respondent. No further dispute therefore can be raised for deficiency in service as a sequel to the aforesaid transactions which have become final.
The complainant/appellant having elected the Fora herself, a consumer complaint would therefore not be maintainable keeping in view the ratio of the judgment of the Apex Court in the case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors (2021) 3 SCC 241, Paragraph 37.5 , which is extracted hereunder:
"37.5. An allottee may elect or opt for one out of the remedies provided by law for redressal of its injury or grievance. An election of remedies arises when two concurrent remedies are available, and the aggrieved party chooses to exercise one, in which event he loses the right to simultaneously exercise the other for the same cause of action."
Thus, even assuming that Section 100 of the 2019 Act allows such a grievance to be raised, the same does not come to the aid of the complainant/appellant, inasmuch as the original dispute of deficiency in service stood settled and any payment or claim of interest thereafter could not have been raised separately before the Consumer Forum, even if the complainant/appellant has a right to claim any such interest that can be done by adopting an appropriate remedy before the Civil Court provided such a remedy is available.
A complaint cannot be therefore instituted for such a claim.
Apart from this, the principles of 'forum shopping' as explained by the Apex Court in the case of Union of India and Ors. Vs. Cipla Ltd. and Anr. (2017) 5 SCC 262, Paragraphs 146 to 155, do not permit the entertaining of any such litigation and that would also be against public policy. The aforesaid paragraphs are extracted hereunder:
"146. The learned Solicitor General submitted that Cipla was guilty of forum shopping inasmuch as it had filed petitions in the Bombay High Court, the Karnataka High Court and also an affidavit in the Delhi High Court as a member of the Bulk Drug Manufacturers Association and had eventually approached the Allahabad High Court for relief resulting in the impugned judgment and order dated 3-3-2004 [Cipla Ltd. v. Union of India, 2004 SCC OnLine All 1836 : 2004 All LJ 1994] . It was submitted that since Cipla had approached several constitutional courts for relief, the proceedings initiated in the Allahabad High Court clearly amount to forum shopping.
147. We are not at all in agreement with the learned Solicitor General. Forum shopping takes several hues and shades and Cipla's petitions do not fall under any category of forum shopping.
148. A classic example of forum shopping is when a litigant approaches one Court for relief but does not get the desired relief and then approaches another Court for the same relief. This occurred in Rajiv Bhatia v. Govt. (NCT of Delhi) [Rajiv Bhatia v. Govt. (NCT of Delhi), (1999) 8 SCC 525] . The respondent mother of a young child had filed a petition for a writ of habeas corpus in the Rajasthan High Court and apparently did not get the required relief from that Court. She then filed a petition in the Delhi High Court also for a writ of habeas corpus and obtained the necessary relief. Notwithstanding this, this Court did not interfere with the order passed by the Delhi High Court for the reason that this Court ascertained the views of the child and found that she did not want to even talk to her adoptive parents and therefore the custody of the child granted by the Delhi High Court to the respondent mother was not interfered with. The decision of this Court is on its own facts, even though it is a classic case of forum shopping.
149. In Arathi Bandi v. Bandi Jagadrakshaka Rao [Arathi Bandi v. Bandi Jagadrakshaka Rao, (2013) 15 SCC 790 : (2014) 5 SCC (Civ) 475] this Court noted that jurisdiction in a court is not attracted by the operation or creation of fortuitous circumstances. In that case, circumstances were created by one of the parties to the dispute to confer jurisdiction on a particular High Court. This was frowned upon by this Court by observing that to allow the assumption of jurisdiction in created circumstances would only result in encouraging forum shopping.
150. Another case of creating circumstances for the purposes of forum shopping was World Tanker Carrier Corpn. v. SNP Shipping Services (P) Ltd. [World Tanker Carrier Corpn. v. SNP Shipping Services (P) Ltd., (1998) 5 SCC 310] wherein it was observed that the respondent/plaintiff had made a deliberate attempt to bring the cause of action, namely, a collision between two vessels on the high seas within the jurisdiction of the Bombay High Court. Bringing one of the vessels to Bombay in order to confer jurisdiction on the Bombay High Court had the character of forum shopping rather than anything else.
151. Another form of forum shopping is taking advantage of a view held by a particular High Court in contrast to a different view held by another High Court. In Ambica Industries v. CCE [Ambica Industries v. CCE, (2007) 6 SCC 769] the assessee was from Lucknow. It challenged an order passed by the Customs, Excise and Service Tax Appellate Tribunal ("Cestat") located in Delhi before the Delhi High Court. Cestat had jurisdiction over the State of Uttar Pradesh, NCT of Delhi and the State of Maharashtra. The Delhi High Court did not entertain the proceedings initiated by the assessee for want of territorial jurisdiction. Dismissing the assessee's appeal this Court gave the example of an assessee affected by an assessment order in Bombay invoking the jurisdiction of the Delhi High Court to take advantage of the law laid down by the Delhi High Court or an assessee affected by an order of assessment made at Bombay invoking the jurisdiction of the Allahabad High Court to take advantage of the law laid down by it and consequently evade the law laid down by the Bombay High Court. It was said that this could not be allowed and circumstances such as this would lead to some sort of judicial anarchy.
152. Yet another form of forum shopping was noticed in Jagmohan Bahl v. State (NCT of Delhi) [Jagmohan Bahl v. State (NCT of Delhi), (2014) 16 SCC 501 : (2015) 3 SCC (Cri) 521] wherein it was held that successive bail applications filed by a litigant ought to be heard by the same learned Judge, otherwise an unscrupulous litigant would go on filing bail applications before different Judges until a favourable order is obtained. Unless this practice was nipped in the bud, it would encourage unscrupulous litigants and encourage them to entertain the idea that they can indulge in forum shopping, which has no sanction in law and certainly no sanctity.
153. Another category of forum shopping is approaching different courts for the same relief by making a minor change in the prayer clause of the petition. In Udyami Evam Khadi Gramodyog Welfare Sanstha v. State of U.P. [Udyami Evam Khadi Gramodyog Welfare Sanstha v. State of U.P., (2008) 1 SCC 560 : (2008) 1 SCC (Civ) 359] it was noticed by this Court that four writ applications were filed by a litigant and although the prayers were apparently different, the core issue in each petition centred round the recovery of the amount advanced by the bank. Similarly, substituting some petitioners for others with a view to confer jurisdiction on a particular court would also amount to forum shopping by that group of petitioners.
154. Finally and more recently, in Supreme Court Advocates-on-Record Assn. v. Union of India (Recusal Matter) [Supreme Court Advocates-on-Record Assn. (Recusal Matter) v. Union of India, (2016) 5 SCC 808 : (2016) 3 SCC (Civ) 492 : (2016) 3 SCC (Cri) 173 : (2016) 2 SCC (L&S) 253] Khehar, J. noticed yet another form of forum shopping where a litigant makes allegations of a perceived conflict of interest against a Judge requiring the Judge to recuse from the proceedings so that the matter could be transferred to another Judge.
155. The decisions referred to clearly lay down the principle that the Court is required to adopt a functional test vis-à-vis the litigation and the litigant. What has to be seen is whether there is any functional similarity in the proceedings between one court and another or whether there is some sort of subterfuge on the part of a litigant. It is this functional test that will determine whether a litigant is indulging in forum shopping or not."
This ratio therefore is yet another reason for not entertaining the complaint.
Even otherwise, such a claim regarding claim of interest on account of alleged default would be a matter involving a seriously disputed question of fact that would require leading of evidence and hence the Consumer Fora is not available for entertaining such litigation.
Apart from the reasons given by the State Commission for rejecting the complaint, this appeal is dismissed for the additional reasons given hereinabove and is accordingly consigned.
.........................J A. P. SAHI PRESIDENT ................................................ DR. INDER JIT SINGH MEMBER