State Consumer Disputes Redressal Commission
Sri Kamal Mitra vs M/S. K.G. Developers Pvt. Ltd. on 12 September, 2019
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 First Appeal No. A/1103/2017 ( Date of Filing : 16 Oct 2017 ) (Arisen out of Order Dated 07/09/2017 in Case No. Complaint Case No. CC/49/2017 of District Kolkata-II(Central)) 1. Sri Kamal Mitra S/o Lt. Sripati Mitra, 13A/1M, Samar Sarani, P.S. - Sinthi, Kolkata - 700 050. ...........Appellant(s) Versus 1. M/s. K.G. Developers Pvt. Ltd. Regd. office at 48, Biplabi Rash Behari Road, 5th Floor, Kolkata -700 001, rep. by its Director, Mr. Krishna Kr. Kajaria. 2. Chandra Bhan Kajaria 80B, Jatindra Mohan Avenue, Kolkata - 700 005. 3. Deoki Nandan Kajaria 80B, Jatindra Mohan Avenue, Kolkata - 700 005. 4. Manish Kajaria 80B, Jatindra Mohan Avenue, Kolkata - 700 005. 5. M/s. Sushila Steel Complex Pvt. Ltd. 3, Madge Lane, Kolkata - 700 016. 6. M/s. Jalan Brothers Pvt. Ltd. 178, M.G. Road, Kolkata -700 007. 7. M/s. Sunrise Engineering Pvt. Ltd. 3, Madge Lane, Kolkata -700 016. 8. M/s. Dataware Pvt. Ltd. 26, Shakespeare Sarani, Kolkata - 700 071. ...........Respondent(s) BEFORE: HON'BLE MR. SAMARESH PRASAD CHOWDHURY PRESIDING MEMBER HON'BLE MRS. Dipa Sen ( Maity ) MEMBER For the Appellant: Mr. Suvendu Das, Advocate For the Respondent: K. K. Sabarwal, Advocate K. K. Sabarwal, Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Mr. Jitendra Singh Boyed, Advocate Dated : 12 Sep 2019 Final Order / Judgement PER: HON'BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDING MEMBER
The challenge in this appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act') is to the Final Order/Judgement being Order No. 17 dated 07.09.2017 passed by the District Consumer Disputes Redressal Forum, Kolkata, Unit-II (in short, Ld. District Forum) in Consumer Complaint No. 49/2017 whereby the complaint lodged by the Appellant Sri Kamal Mitra under Section 12 of the Act was dismissed on contest.
The Appellant herein being Complainant lodged the complaint before the Ld. District Forum asserting that on 10.08.2012 he entered into an agreement with the Opposite Party No.1/developer to purchase of a residential flat measuring about 776 sq. ft. super built up area on the 2nd floor in Block- F, Type-A and a car parking space on the ground floor in a building christened 'Surya Kiran' lying and situated at Premises No.136,North Station Road, Agarpara, P.S. Khardah, Kolkata- 700109, Dist- North 24 Parganas within the local limits of Ward No. 10 of Panihati Municipality at a total consideration of Rs. 12,41,600/- for the flat and Rs. 2,50.000/- for the car parking space at a total consideration Rs. 14,91,600/-. The Complainant has stated that he has already paid Rs. 6,00,000/- as part consideration amount towards the said total consideration amount on diverse dates. The complainant has stated that as per terms of the agreement, the OP No. 1 was under obligation to deliver possession of the schedule flat and car parking space within 30.08.2013. The complainant has alleged that after expiry of the schedule date, the OP No. 1 did not take any steps to complete the construction of the building and to hand over the flat in question and a car parking space and in this regard all the requests and persuasions including the letter dated 23.06.2016 went in vain. Hence, the appellant approached the Ld. District Forum with prayer for following reliefs, viz.-(a) to direct the OP No. 1 to refund the money paid by the complainant ; (b) to direct OP No. 1 to pay compensation of Rs. 3,00,000/- for harassment and mental agony; (c) to direct OP No. 1 to pay a sum of Rs. 1,00,000/- as costs of litigation etc. The Respondent No.1/builder being OP No.1 by filing written version has admitted the existence of the agreement for sale dated 10.08.2012 and acceptance of Rs. 6,00,000/- from the complainant as part consideration amount but has stated that he has been prevented by circumstance beyond their control to complete construction of the building and the flat in question. The OP No. 1 has categorically stated that OP Nos. 2 to 8 (landowners) for illegal gains created wrongful obstruction in completion of work and obtained an order from the court of Ld. Additional District Judge, 1st court, Barasaat restraining him (OP No. 1) from carrying out any further construction of the property for which they preferred an appeal being Appeal No. 2343 of 2014 in the Hon'ble High Court at Calcutta. Therefore, the complaint should be dismissed.
The Respondent Nos. 2 to 8/landowners being OP Nos. 2 to 8 by filing a separate written version have stated that the Power of Attorney executed by them on 15.07.2003 for the construction of building was cancelled and terminated in May, 2011 and the public notice for such cancellation of POA and the termination of the development was published in different National Dailies- English, Bengali and Hindi on 13.05.2011 and 25.05.2011 respectively.
After assessing the materials on record, the Ld. District Forum by the impugned order dismissed the complaint. To assail the said order, the complainant has come up in this Commission with the instant appeal.
We have scrutinised the materials on record and considered the submission advanced by the Ld. Advocates for the appellant, respondent no.1 and respondent nos. 2 to 8 respectively.
Undisputedly, Respondent Nos. 2 to 8 being owners of a piece of land measuring about 100 cottahs 3 chittaks and 6 sq.ft. more or less lying and situated at Premises Premises No.136,North Station Road Agarpara, P.S. Khardah, Kolkata- 700109, Dist- North 24 Parganas within the local limits of Ward No. 10 of Panihati Municipality entered into an agreement with respondent no.1 for raising multi-storied buildings over the said property on 10.08.2012. On 02.12.2002 the Panihati Municipality sanctioned the building plan for construction of block of buildings at the said premises by building sanction plan No. 70- SPL dated 02.12.2002. The landowners ( respondent Nos. 2 to 8 have also executed Power of Attorney in favour of the developer on 15.07.2003 authorising respondent No. 1/ developer to deal with intending buyers for sell of flat or flats to be constructed on the 2nd floor. It was also agreed that the respondent no.1 being developer shall have the absolute authority with developer's own allocation, subject to fulfilment of obligation towards the owner.
By dint of the agreement which bears the signature of all the landowners as well as the developer, the developer had entered into an agreement for sale with the appellant on 10.08.2012 to sell one self-contained flat measuring about 776 sq. ft. super built up area on the 2nd floor in Block- F, Type-A and a car parking space on the ground floor in a building christened 'Surya Kiran' lying and situated at Premises No.136,North Station Road Agarpara, P.S. Khardah, Kolkata- 700109, Dist- North 24 Parganas within the local limits of Ward No. 10 of Panihati Municipality at a total consideration of Rs. 12,41,600/- for the flat and Rs. 2,50.000/- for the car parking space at a total consideration Rs. 14,91,600/-. It is not in dispute that the appellant has already paid Rs. 6,00,000/- as part consideration amount towards the said total consideration amount on diverse dates in favour of the respondent no. 1.
Undisputedly, the respondent No. 1 was under obligation to hand over the subject flat and car parking space in favour of the appellant within 30.08.2013. However, the appellant has failed to keep his promise and in this regard the request and persuasions including the letter given by the appellant to the respondent No. 1 on 23.06.2016 could not alter the situation and in fact respondent No. 1 did not care to give any reply of the said letter.
The fact remains that the appellant being a 'consumer' within the meaning of Section 2(1)(d) of the Act hired the services on consideration and despite payment of Rs. 6,00,000/- as part consideration amount and agreed to pay the balance consideration, when the respondent No. 1 has failed to fulfil their part of obligations in handing over the flat in question within the time frame, certainly, the respondent No. 1/OP No. 1 is negligent and deficient in rendering services within the definition of Section 2(1)(g) read with Section 2(1)(o) of the Act.
The Ld. Advocate for the appellant has submitted that owing to dispute between the landowner and developer, a Consumer must not suffer and if litigation is pending between the landowner and the developer in a Civil Court, the same cannot be a ground to defeat the claim of the appellant/purchaser to get refund of money. In support of his submission he has placed reliance to a decision of Hon'ble Supreme Court reported in 2015 (12) SCC 709 (Sanjay Kumar Joshi vs. Municipal Board, Laxmangarh and another) and also a decision of the Hon'ble National commission reported in 2012 (4) CPR 191 ( Arun Khanna vs. Shashi Sharma and others).wherein it has been held that a litigation pending in Civil Court cannot restrain a purchaser to refund the sale consideration and pendency of a Civil Suit is not a bar to file a complaint under the Act.
From the written versions filed by the respondent No. 1 (developer) and the respondent Nos. 2 to 8 it is quite clear that over the development agreement a Civil litigation is pending. However, what is noticeable is that the land owners have cancelled the Power of Attorney in May, 2011and public notice for the cancellation of POA was published in several Newspapers like - The Statesman (English), Pratidin (Bengali) and Viswamitra (Hindi) on 13.05.2011 and 25.05.2-011 respectively. However, suppressing the relevant and material fact the developer (respondent No. 1) had entered into agreement for sale with the appellant/ complainant on 10.08.2012 which simply indicates unfair trade practice on the part of respondent No. 1 under Section 2 (1) (r) of the Act.
It is well settled that after accepting the consideration amount, it is bounden duty on the part of the developer - (a) to deliver possession, (b) to execute Sale Deed and (c) to obtain Completion Certificate from the local authority and until and unless it is done, the developer/respondent no.1 cannot shirk off his responsibility. In this regard, the landowners have no locus standi to raise any objection in getting the flat in favour of the appellant from the allocation of the developer. The landowner may have genuine grievances against the developer but for which they may take action against the developer. In a decision reported in (2008) 10 SCC 345 [Faqir Chand Gulati - Vs. - Uppal Agencies Pvt. Ltd. & Anr.] the Hon'ble Supreme Court in Paragrah-23 has observed thus -
" We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a Civil Court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages. On the other hand, where the builder commits breach of his obligations, the owner has two options. He has the right to enforce specific performance and/or claim damages by approaching the Civil Court or he can approach the Forum under Consumer Protection Act, for relief as consumer against the builder and as a service provider".
In a decision reported in 2014 (3) CPR 91 [Smt. V. Kamala & Ors. - Vs. - K. Rajiv] the Hon'ble National Commission has observed that an inter-se dispute between owner and builder cannot be permitted to be used as a ploy to wriggle out of obligations under agreement and leave the buyer in lurch.
Whatever dispute be there between the landowners and the developer, the same can be settled in an independent proceeding. As per agreement, the landowners had given consent to the developer to transfer the property falling to its share. Therefore, the rights of a bonafide purchaser cannot be defeated only on the ground that the landowners were not a party to the Agreement for Sale executed between the developer and the buyer.
Therefore, it is palpably clear that the Ld. District Forum has failed to appreciate the proposition of Law and dismissed the complaint on the ground that the landowners have filed one application under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award passed by the Arbitrator which has been registered as Misc. Case No. 291 of 2011. To assail the said order passed in the said Case, the developer preferred an appeal being FMAT 2472/2012 in the Hon'ble High Court which is still pending and as a Civil Suit is pending, a Consumer Forum cannot resolve the dispute. The reason assigned by the Ld. District Forum is contrary to the provisions of Law and the principles of law laid down by the Hon'ble Supreme Court in the Case of Faqir Chand Gulati (supra).
The Ld. District Forum has also dismissed the complaint on the ground that it has no pecuniary jurisdiction to entertain the same. In coming to such conclusion, the Ld. District Forum has relied upon a subsequent agreement between the parties dated 20.08.2012 whereby the appellant had agreed to pay an amount of Rs.700/- per sq. ft. in respect of 776 sq. ft. = Rs.5,43,200/- for the expenses to be incurred by the developer to finish all the works of the flat meaning thereby the said amount of Rs. 5,43,200/- to be paid is not a supplementary agreement to the agreement for sale between the parties dated 10.08.2012 rather the said amount of Rs.5,43,200/- had been agreed by the appellant to pay respondent No. 1 for the purpose of finishing works of the flat.
In this backdrop, it has to be seen whether the Ld. District Forum had pecuniary jurisdiction to entertain the complaint. For appreciation of the matter, it would be pertinent to have a look to the provisions of section 11 (1) of the Act which provides -
"11. Jurisdiction of the District Forum. -
Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and compensation, if any, claimed 'does not exceed rupees twenty lakhs'.
In the case of Ambrish Kumar Shukla & 21 Ors. - Vs. - Ferrous Infrastructure Pvt. Ltd. reported in I (2017) CPJ 1 the Larger Bench of the Hon'ble National Commission while discussing on the point has observed thus-
" We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a Civil Court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages. On the other hand, where the builder commits breach of his obligations, the owner has two options. He has the right to enforce specific performance and/or claim damages by approaching the Civil Court or he can approach the Forum under Consumer Protection Act, for relief as consumer against the builder and as a service provider".
In the instant Case, the value of the flat and car parking space was Rs. 14,91,600/- and the appellant has claimed compensation of Rs. 3,00,000/- and, therefore, the value of the complaint does not exceed Rs. 17,91,600/- which falls within the pecuniary jurisdiction of the Ld. District Forum as embodied in Section 11(1) of the Act.
Therefore, relying upon the materials on record, we have no hesitation to hold that the Ld. District Forum proceeded the matter in a wrong way without keeping in mind the avowed object behind the legislation of the Act. In other words, the impugned judgement/final order being not tenable in the eye of law, is liable to be set aside. On the contrary, the complaint being a meritorious one should be allowed. In an of late decision reported in (2018) CPJ 1 (Fortune Infrastructure vs. Trevor D'Lima and others) the Hon'ble Supreme Court has observed that in cases where monies are being simply returned them the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat. He is being deprived of the benefit of escalation of the price of that flat. Therefore, the compensation in such cases would necessarily have to be higher.
After giving due consideration to the submission made by the Ld. Advocate appearing for the parties and on perusal of the materials on record we are of the view that the Ld. District Forum has proceeded in a wrong direction in adjudicating the dispute ignoring the aims and objective behind the legislation of the Act and the authorities referred above. As a result, the appeal being meritorious one should be allowed.
For the reasons aforesaid, the appeal is allowed on contest.
The impugned Judgement/Final Order is hereby set aside.
Consequently, complaint being CC/49/2017 is allowed on contest with the following directions:
(I) the Respondent No. 1/ Opposite Party No. 1 shall refund the amount of Rs.6,00,000/- received from the complainant along with compensation in the form of simple interest @ 12% p.a. from the date of each payment till the date on which the entire amount along with compensation in terms of this order is paid;
(II) the Respondent No. 1/ Opposite Party No. 1 shall pay Rs. 10,000/- as costs of litigation to the appellant/ complainant.
(III) the payment in terms of this order shall be made within 60 days from date, in default the appellant / complainant shall have liberty to get the order executed through the Ld. District Forum.
The Registrar of this Commission is directed to send a copy of this order to the Ld. District Consumer Disputes Redressal Forum, Kolkata, Unit-II (South) for information.
[HON'BLE MR. SAMARESH PRASAD CHOWDHURY] PRESIDING MEMBER [HON'BLE MRS. Dipa Sen ( Maity )] MEMBER