National Consumer Disputes Redressal
Pradeep Agarwal & Anr. vs Ravi Foundation & 2 Ors. on 21 January, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 72 OF 2014 (Against the Order dated 23/12/2013 in Complaint No. 186/2010 of the State Commission Maharashtra) 1. RAVI FOUNDATION & ANR. A PARTNERSHIP FIRM, HAVING ITS OFFICE AT, LAXMI PALACE, 76, MATHURADAS ROAD, KANDIVALLI (WEST) MUMBAI-400067 2. MR. JAYESH T. SHAH, PARTNER, M/S. RAVI FOUNDATION, LAXMI PALACE, 76, MATHURADAS ROAD, KNADIVALLI (WEST), MUMBAI-400067 ...........Appellant(s) Versus 1. PRADEEP AGARWAL & 2 ORS. RESIDING AT, B-9, EDEN GARDENS, OPP. SHAH & ANCHOR KUTCHHI COLLEGE, PANJRAPOLE, CHEMBUR, MUMBAI-4000088 2. SANDEEP AGARWAL - 3. MANGESH TUKARAM SAWANT Proprietor of MANGESH CONSTRUCTIONS,A/004, PRATHANMESH HORIZON, NEW M.H.B. COLONY, BORIVALI [WEST] MUMBAI-400091 ...........Respondent(s) FIRST APPEAL NO. 270 OF 2014 (Against the Order dated 23/12/2013 in Complaint No. 186/2010 of the State Commission Maharashtra) 1. PRADEEP AGARWAL & ANR. MR. PRADEEEP AGARWAL, B-9, EDEN GARDENS, OPP. SHAH & ANCHOR KUTCHHI COLLEGE, CHEMPUR, MUMBAI-400088 2. MR. SANDEEP AGARWAL B-9, EDEN GARDENS, OPP. SHAH & ANCHOR KUTCHHI COLLEGE, CHEMBUR, MUMBAI-400088 ...........Appellant(s) Versus 1. RAVI FOUNDATION & 2 ORS. LAXMI PALACE, 76, MATHURADAS ROAD, KANDIVALI (WEST) MUMBAI-400067 MAHARASHTRA 2. MR. JAYESH T. SHAH. PARTNER, M/S. RAVI FOUNDATION, LAXMI PALACE, 76, MATHURADAS ROAD, KANDIVLI (WEST) MUMBAI-400067 3. MR. MANGESH TUKARAM SAWANT, PROPRIETOR, MNGESH CONSTRUCTION, A/004, PRATHAMESH HORIZON, NEW M.H.B. COLONY, BORIVALI (WEST) MUMBAI-400091 ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER
For the Appellant : FA/72/2014
For the Appellants : Mr. Amit Kumar, Sr. Advocate
: Ms. Vendana Sehgal, Advocate
For the Respondents-1 &2 :Mr. Arun Panickar, Advocate
For the Respondent3- : Mr. Viraj Kadam, Advocate For the Respondent : FA/270/2014
For the Appellants : Mr. Arun Panikar, Advocate
For the Respondents-1 &2 : Mr. Amit Kumar, Sr. Advocate
: Ms. Vendana Sehgal, Advocate
For the Respondent3- : Mr. Viraj Kadam, Advocate
Dated : 21 Jan 2022 ORDER
1. Heard Mr. Amit Kumar, Senior Advocate, assisted by Ms. Vandana Sehgal, for M/s. Ravi Foundation and Jayesh T. Shah and Mr. Arun Panikar, Advocate, for Pradeep Agarwal and Sandeep Agarwal and Mr. Viraj Kadam, Advocate, for Mangesh Tukaram Sawant, in both the appeals.
2. Aforementioned appeals have been filed from the order of State Consumer Disputes Redressal Commission Maharashtra, Mumbai, dated 23.12.2013, passed in Consumer Complaint No. 186 of 2010, partly allowing the complaint and directing the opposite parties, jointly or severally to furnish a copy 'Occupancy Certificate" and hand over vacant and peaceful possession of the Flat no. 802, on the 8th Floor of "Gaurav Palace", constructed on C.T.S. No.100, S. No.96, Hissa No.3, Malad, situated at Kandivali, Taluka Borivali, district Mumbai to the complainants, to pay Rs.50000/- as the compensation for mental tension and agony and Rs.25000/- as the litigation cost to them. The complainants and the developer, both, have filed their separate appeals. As both the appeals arise out of the same order in one complaint, as such, it were consolidated and heard together.
3. First Appeal No. 270 of 2014 has been filed with the delay of 96 days. The appellants have filed I.A. No. 2912 of 2014, for condoning the delay in filing the appeal. It has been stated that the appellants had received certified copy of the impugned order dated 23.12.2013 on 09.01.2014. Pradeep Agarwal (appellant-1) was transferred and posted in South Africa at that time. He left India on 04.01.2014 for South Africa and returned to India on 15.04.2014. Then, he approached his counsel, the appeal was drafted thereafter and the papers of the appeal were sent through post on 19.04.2014. Due to posting of appellant-1 in abroad, the appeal could not be filed in time. Cause shown is sufficient. Delay in filing the appeal is condoned.
4. Pradeep Agarwal and Sandeep Agarwal (the complainants) filed Consumer Complaint No. 186 of 2010 for directing M/s. Ravi Foundation, Jayesh T. Shah and Mangesh Tukaram Sawant (the opposite parties), jointly and severally (i) to furnish a copy of the "Occupation Certificate" and hand over vacant and peaceful possession of flat no.802, in "Gaurav Palace" at Kandivali (West) in Mumbai in good and habitable condition; or in alternative, to purchase another flat with balcony of similar construction and with similar amenities, having equivalent carpet area of 1690 sq.ft, in the same locality and handover it to the complainants, (ii) to pay an interest @9% per annum from the date of each deposit till handing over possession, (iii) to pay Rs.50000/- as compensation for mental agony and physical harassment, (iv) cost of the litigation and (v) any other relief which may be deemed fit and proper, in the circumstances of the case, be passed.
5. The facts, as stated in the complaint and emerged from the documents attached with it, are that M/s. Ravi Foundation, a partnership firm, was engaged in the business of development and construction of residential and commercial buildings and selling its unit to the prospective buyers. M/s. Ravi Foundation launched a project of residential complex in the name of "Gaurav Palace", at C.T.S. No. 100, S.N. No.96, Hissa No.3 of village Malad, Kandivali, Taluka Borivali, district Mumbai. Later on, they realized that they would not be able to complete the project timely. Therefore, M/s. Ravi Foundation through its partner Jayesh T. Shah entered into an agreement with Mangesh Tukaram Sawant to complete the said project in joint venture, according to the sanctioned layout plan. Jayesh T. Shah, as a partner of M/s. Ravi Foundation executed an Irrevocable Power of Attorney dated 10.04.2002, authorising Mangesh Tukaram Sawant, proprietor of M/s. Mangesh Construction, to do construction works, to obtain necessary approvals from the authorities, to deposit tax/fee etc., to obtain connections of the amenities, to get vacated the tenants of the property, to enter into ownership agreement for sale of flats/units/row houses/shop/open space/garage/parking space in the building, to open account in the name of the firm with any bank and operate the same and other incidental works, for completion of the project and selling its units as a joint venture with the firm. Pradeep Agarwal and Sandeep Agarwal (the complainants) are real brothers. They were looking for a residential flat, in that locality. On coming to know about the project, they approached Jayesh T. Shah and Mangesh Tukaram Sawant and discussed about the project. After being satisfied, they booked Flat No.802 (carpet area 1690 sq.ft.), total sale price Rs.25/- lacs, on the 8th floor, in Gaurav Palace. Initially, Jayesh T. Shah and Mangesh Tukaram Sawant asked for payment of Rs.12/- lacs at the time of agreement but on the date of agreement, they asked the complainants for making full payment of Rs.25/- lacs. Mangesh Tukaram Sawant, in the capacity of Power of Attorney Holder of M/s. Ravi Foundation, executed a registered Agreement for Sale on 19.07.2002, in favour of the complainants. A copy of Power of Attorney dated 10.04.2002 and other documents relating to the title of the firm and approval of layout plan were attached with Agreement for Sale dated 19.07.2002. The complainants gave cheque No.499579 of Rs.500000/-, cheque No. 531712 of Rs.200000/- and cheque No.531715 of Rs.500000/- all dated 17.07.2002 and cheque No.531716 of Rs.50000/- cheque No. 531151 of Rs.300000/- and cheque No.531158 of Rs.500000/-, all dated 19.07.2002. Out of which, payment of Rs.10/- lacs through cheque Nos.531151, 531712 and 499579 were acknowledged in the agreement. Separate receipts were given by Mangesh Tukaram Sawant, Power of Attorney Holder for all the cheques, who also gave a Possession Letter dated 19.07.2002. The Agreement for Sale was on a printed proforma of Ravi Foundation. It contained a "Construction Linked Payment Plan" as Annexure-F but as stated above, Jayesh T. Shah and Mangesh Tukaram Sawant demanded entire sale consideration, as such, other cheques dated 19.07.2002 were given at the time of execution of the agreement. Out of the aforesaid cheques, cheque Nos. 531712, 499579 and 531151 (total amount of Rs.10/- lacs) were deposited in the account of Ravi Foundation in Maratha Mandir Cooperative Bank, Kandivali West Branch and cash payments were received of the remaining cheques. It has been alleged that the complainants used to inquire the progress of the constructions, time to time and all the times, they were given some assurance, for completion of the construction as early as possible and for obtaining "Occupation Certificate". Ultimately the complainants gave a letter dated 20.04.2010, for possession. Opposite Party-2, vide his reply dated 24.04.2010, denied any agreement for sale in favour of the complainants and stated that his negotiation with Mangesh Tukaram Sawant could not be materialised, as such, he had revoked Power of Attorney dated 10.04.2002 and the agreement dated 19.07.2002 was not binding upon him nor had he received any consideration. Then the complaint was filed on 21.10.2010.
6. Opposite Parties-1 and 2 filed their written reply and contested the complaint, in which, material facts have been denied. It has been stated that the cause of action had arisen on 19.07.2002 and the complaint was filed on 21.10.2010, as such, it is liable to be dismissed as time barred. The facts mentioned in the complaint do not amount to deficiency in service on the part of opposite parties-1 and 2. Opposite Parties-1 and 2 did not execute the alleged agreement for sale dated 19.07.2002 or any other document in favour of the complainants, as such, the complaint was liable to be dismissed against them. Opposite Party-3 was given Power of Attorney dated 10.04.2002, for raising construction of "Gaurav Palace" from his own fund but he neglected to carry out the construction as such Power of Attorney was cancelled and agreement for sale dated 19.07.2002 was not binding upon them. The alleged agreement for sale dated 19.07.2002, receipts relating to payment and possession letter were executed by opposite party-3, who had no concerned with opposite parties-1 and 2 as such no relief can be granted against them. Due to serious slack in the real estate market since more than 3-4 years, the developer Ravi Foundation was facing acute financial crunch relating to slow progress of construction of "Gaurav Palace" as such delay in completing construction was beyond the control of the developer. Opposit parties-1 and 2 have neither committed any unfair trade practice nor there was any deficiency in service on their part.
7. The complainants filed Agreement for Sale dated 19.07.2002, along with which, Title Certificate, Sanctioned Map, No Objection, Commencement Certificate, Property Registration Card and Power of Attorney dated 10.04.2002 were attached. Receipts relating to the cheques given by the complainants, Certificates of the Banker of the complainants that the amount of three cheques were transferred in the account of Ravi Foundation and remaining three cheques were en-cashed on the cash counter on behalf of Ravi Foundation, Possession letter dated 19.07.2002, copies of the letter dated 20.04.2010 and reply dated 24.04.2010, along with postal receipt and acknowledgement were filed. The complainants along with Affidavit of Pradeep Agarwal, (filed on 11.11.2011) filed the certificates of the Banks, relating to payment of the cheques gave by them and his Statement of account. The complainants filed an interrogatory on 11.10.2011, requiring Jayesh T. Shah to answer the questions put in it. Jayesh T. Shap, vide his reply dated 08.09.2012, admitted that out of the cheques given by the complainants Rs.10/- lacs were transferred in Current Account No.1171 of Ravi Foundation, with The Maratha Mandir Cooperative Bank, Kandivali West but stated that these amounts were transferred in the Current Account No.358 of Mangesh Sawant. Jayesh T. Shah filed a letter of Saraswat Bank dated 09.11.2011 (as The Maratha Mandir Cooperative Bank was merged with Saraswat Bank), showing that Current Account No.358 was opened by Jayesh T. Shah, Ketan T. Shah and Mrs. Geeta R. Shah and all of them had authority to operate it. On 08.01.2013, the complainants filed Copy of registered Deed of Confirmation dated 17.07.2009, executed by Ravi Foundation, by which an unregistered agreement for sale executed by Mangesh Tukaram Sawant dated 23.06.2003, in favour of Haresh N. Singhavi and Mrs. Veena Haresh Singhavi of Flat No.502 in "Gaurav Palace" was acknowledged and confirmed. Jayesh T. Shah filed his affidavit dated 11.09.2013, in which, he admitted execution of Deed of Confirmation dated 17.07.2009.
8. State Commission by the impugned order dated 23.12.2013 found that on the basis of Power of Attorney executed by Jayesh T. Shah, dated 10.04.2002, Mangesh Tukaram Sawant was authorised to do entire development works of "Gaurav Palace" and to enter into ownership agreement for sale of its units as a joint venture of the firm Ravi Foundation. The opposite parties took Rs.25/- lacs, from the complainants out of which Rs.10/- lacs were deposited in the account of Ravi Foundation. Mangesh Tukaram Sawant executed Agreement for Sale dated 19.07.2002, as such the agreement was binding upon opposite parties-1 and 2. Power of Attorney dated 10.04.2002 was a registered document and it could not be revoked on the basis of a letter dated 17.06.2002. Jayesh T. Shah admitted execution of registered Deed of Confirmation dated 17.07.2009, by which an unregistered agreement for sale executed by Mangesh Tukaram Sawant dated 23.06.2003, in favour of Haresh N. Singhavi and Mrs. Veena Haresh Singhavi of Flat No.502 in "Gaurav Palace" was acknowledged and confirmed. On these findings, the complaint was partly allowed as mentioned above.
9. The counsel for the builder argued that Mangesh Tukaram Sawant had not complied with the terms and conditions of the agreement between them and not started the construction work of "Gaurav Palace", after 10.04.2002, as such, the builder revoked Power of Attorney vide letter dated 17.06.2002. Under Power of Attorney, the flats of the share of Mangesh Tukaram Sawant were not specified, as such, he had no authority to execute the agreement 19.07.2002, in respect of Flat No.902. Payment of total consideration and execution of Possession Letter on 19.07.2002 although the flat was not in existence, shows that it was collusive transaction between the complainants and Mangesh Tukaram Sawant, in order to defraud the builder. Three cheques of total amount of Rs.10/- lacs are allegedly paid in the account and remaining three cheques of the amount Rs.15/- lacs were withdrawn from cash counter. Even the amount of Rs.10/- lacs was unilaterally transferred to the account of M/s. Mangesh Construction. Even under agreement dated 19.07.2002, the builder had exclusive right to execute sale deed in respect of the flat. No time for delivery of possession has been mentioned in the agreement dated 19.07.2002. State Commission, illegally assumed that Power of Attorney dated 10.04.2002 was a registered document, although it was an unregistered document. There is no privity of contract between the complainants and the builder. The complainants remained silent for more than 7 years and filed the complaint on 21.10.2010, which was liable to be dismissed as time barred. The complaint was wrongly allowed against the builder.
10. I have considered the arguments of the counsel for the parties and examined the record. So far as the argument that the complaint was time barred is concerned, admittedly the construction was neither completed nor "Occupation Certificate" was obtained till the date of filing of the complainant. The builder was neither in position of offering possession nor possession was offered. According to the complainants, as and when they inquired about the possession they were given some assurance. For the first time, the builder denied right of the complainants through their reply letter dated 24.04.2010. The complaint was filed on 21.10.2010 as such it was not time barred. So long as the right is not disputed, cause of action for filing suit/complaint does not arise as held by Supreme Court in Inder Singh Rekhi Vs. D.D.A., (1988) 2 SCC 338 and Transport Corporation of India Vs. Veljan Hydrair Ltd., (2007) 3 SCC 142.
11. Jayesh T. Shah (opposite party-2) does not dispute execution of Power of Attorney dated 10.04.2002, authorising Mangesh Tukaram Sawant to do entire development works of "Gaurav Palace" and to enter into ownership agreement for sale of its units as a joint venture. On page-13 of Power of Attorney dated 10.04.2002, it has been mentioned that some flats were also allotted to M/s. Mangesh Construction. Section-1-A of The Power of Attorney Act, 1872, defines "Power of Attorney" as "Power of Attorney includes any instrument empowering a specified person to act for and in the name of the person executing it". Section-2 of this Act authorises the Power of Attorney holder to execute any instrument or to do anything in his own name and signature and the instrument so executed or thing so done shall be effectual in law. Supreme Court in Syed Abdul Khader Vs. Rami Reddy (1979) 2 SCC 601 and State of Rajasthan Vs. Basant Nahata, (2005) 12 SCC 77, held that grant of Power of Attorney is essentially governed by Chapter X of Indian Contract Act, 1872. By reason of a deed of Power of Attorney, an agent is formally appointed to act for the principal in one transaction or in a series of transactions or to manage the affairs of the principal, generally conferring necessary authority upon another person. A deed of Power of Attorney is executed by the principal in favour of the agent. The agent derives right to use his name and all acts, deeds and things done by him and subject to the limitation contained in the said deed, same shall be read as if done by the donor. Under Power of Attorney Act, 1872, execution of a deed of Power of Attorney is valid in law and subject to the provisions of the Act, it is not a compulsorily registrable document. The counsel for the builder pointed out the amendment under Section 17 of Registration Act, 1908, by State of Maharashtra but this amendment was done in the year 2012 and cannot be given retrospective effect.
12. Although State Commission proceeded on the premises that Power of Attorney dated 10.04.2002 was a registered document, but it does not make any difference as Power of Attorney is not required to be registered under the law. The counsel of the builder relied upon the judgment of Supreme Court in Suraj Lamp & Industries (P) Ltds. Vs. State of Haryana, (2012) 1 SCC 656 and submitted that Power of Attorney is a revocable. In this case, the Supreme Court was considering the validity of unregistered sale deed of immovable property, on the basis of Power of Attorney. Supreme Court held that immovable property can only be transferred by way of registered sale deed. In paragraph-27 of this judgment, it has been specifically held that a person can enter into a development agreement with a land developer for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale in regard to individual plot or flat, by way of Power of Attorney. Supreme Court in Loon Karan Sethiya Vs. Ivan E. John, AIR 1969 SC 73, held that if power of attorney is coupled with an interest, then it is irrevocable under Section 202 of Contract Act, 1872. In the present case, last portion of Power of Attorney dated 10.04.2002, shows that some flats were given in the share of M/s. Mangesh Construction as such interest was created in his favour. As such Power of Attorney dated 10.04.2002 was irrevocable.
13. The builder took the plea that Power of Attorney dated 10.04.2002 was revoked through letter dated 17.06.2002. The counsel for the complainants submitted that this letter was ante-dated. The complainants have filed information obtained from MTNL Mumbai dated 05.09.2014 (Annexure-R-1/4) to his reply in First Appeal No.72 of 2014, showing that eight digit landline phone numbers were introduced from September, 2002, for the first time in Mumbai. The revocation letter dated 17.06.2002 was typed on the Letter Pad, which contained eight digit landline phone number. Further the letter dated 17.06.2002 was send 'Under Certificate of Posting'. There is manipulation in the stamp put by Postal Department in the year, which is apparent. The portion where year is stamped, has been blurred, to show as '2'. The builder has not given any plausible explanation of these arguments. No public notice was ever published, in newspaper relating to revocation. There is one more circumstance to show that Power of Attorney dated 10.04.2002 was not cancelled on 17.06.2002, i.e. Jayesh T. Shah (opposite party-2) admitted execution of registered Deed of Confirmation dated 17.07.2009, by which, an unregistered agreement for sale executed by Mangesh Tukaram Sawant dated 23.06.2003, in favour of Haresh N. Singhavi and Mrs. Veena Haresh Singhavi of Flat No.502 in "Gaurav Palace" was acknowledged and confirmed.
14. In view of the aforesaid discussions, it is held that Power of Attorney dated 10.04.2002 was neither revoked on 10.04.2002 as alleged nor it was revocable. Mangesh Tukaram Sawant (opposite party-3) had full authority to execute registered agreement for sale dated 19.07.2002, in favour of the complainants in respect of Flat No.902 in "Gaurav Palace", which is binding upon the builder.
15. The builder, in paragraph-11 of the written reply filed in the complaint has denied that they had received any money from the complainants. The complainants filed papers to prove that the amount of Rs.10/- lacs of cheque Nos.531712, 499579 and 531151 were transferred through the Bank in Current Account No.1171 of Ravi Foundation, with The Maratha Mandir Cooperative Bank, Kandivali West, which was being operated by Jayesh T. Shah, Ketan T. Shah and Mrs. Geeta R. Shah. Then Jayesh T. Shah in his affidavit dated 08.09.2012 admitted this fact but stated that these amounts were transferred in Current Account No.358 of M/s. Mangesh Construction. Jayesh T. Shah filed a letter of Saraswat Bank dated 09.11.2011 (as The Maratha Mandir Cooperative Bank was merged with Saraswat Bank), showing that Current Account No.358 was opened by Jayesh T. Shah, Ketan T. Shah and Mrs. Geeta R. Shah and all of them had authority to operate it. If Jayesh T. Shah transferred this amount to M/s. Mangesh Construction, it shows business relation between them. Had he revoked Power of Attorney on 17.06.2002, then instead of transferring this amount to M/s. Mangesh Construction, he would have refunded it to the complainants. Other three cheques were en-cashed from the cash counter of the bank. Mangesh Tukaram Sawant did not dispute payment of these amounts. As such payment of full consideration of Rs.25/- lacs on 19.07.2002, at the time of execution of the agreement, is proved.
16. As per the provisions of Maharashtra Ownership of Flats Act, 1964, if possession date was not clear in the agreement, in that case, the builder would be liable to handover possession within 2 years of the agreement. The Agreement for Sale was executed on 19.07.2002 as such due date of possession would be 19.07.2004. State Commission ought to have awarded compensation for delay in offering possession to the complainants. Supreme Court, in Wg.Cdr. Arifur Rahman Khan Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512, held that the buyer is entitled to delayed compensation for delay in possession, in the shape of interest @ 6% per annum. The complainants are entitled for delayed compensation on their deposit, from the 19.07.2004 till the possession of the Unit, complete in all respect, is delivered to them.
O R D E R
In view of aforementioned discussions First Appeal No.72 of 2014 is dismissed. First Appeal No.270 of 2014, is allowed with cost of Rs.one lac. The builder is directed to pay delayed compensation in the shape of interest @6% per annum on the deposit of the complainants, from 19.07.2004 till the possession of the Unit, complete in all respect, is delivered to them. The order of State Commission and this Commission will be complied with within two months from today. Failing which, the builder shall be liable to pay delayed compensation in the shape of interest @9% per annum, on the deposit of the complainants, after two months.
......................J RAM SURAT RAM MAURYA PRESIDING MEMBER