National Consumer Disputes Redressal
Amit Agarwal vs Shree Vardhman Infrahome Pvt. Ltd. on 25 April, 2022
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI EXECUTION APPLICATION NO. 99 OF 2020 IN CC/1893/2017 1. AMIT AGARWAL ...........Appellants(s) Versus 1. SHREE VARDHMAN INFRAHOME PVT. LTD. ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT
For the Appellant : For the DHs/Complainants : Mr. Himanshu Pathak, Advocate
Ms. Priya Mishra, Advocate
Mr. Sahil Sethi, Advocate
Ms. Nikita Sharma, Advocate
Mr. Dipesh Sinha, Advocate For the Respondent : For the JD/Opposite Party : Mr. Tapesh Singh, Senior Advocate
Mr. Shalabh Singhal, Advocate
Mr. Yogendra S. Bhaskar, Advocate
Dated : 25 Apr 2022 ORDER
The present Execution Applications have been filed by the Complainants / Decree Holders against Shree Vardhman Infrahome Pvt. Ltd. (hereinafter referred to as the Opposite Party / JD Developer).
The Complainants/Decree Holders, being Members of the Flora Welfare Association, filed Consumer Case No. 1893/2017 titled Flora Welfare Association Vs. Shree Vardhman Infrahome Pvt. Ltd. before this Commission. In view of the Settlement Agreement between the Parties, the Complaint was disposed off vide Order dated 15.01.2019 in following terms:
"The matter has been settled between the parties.The learned counsel for the complainant, on instructions from Mr. Sangeet Bali, President of the complainant association who is present in the Court, seeks disposal of the complaint in terms of the written settlement dated 15.01.2019 which is annexed to the application IA No.894 of 2019 filed today in the Court for recording the settlement.The complaint is accordingly disposed of in terms of the settlement dated 15.01.2019 which shall form part of this order. It is also made clear that in case the OP offers to pay the balance payable in kind, such as through additional parking, additional power back-up etc. as per clause 4 and para 2 of the settlement, which shall be for the discretion of the concerned allottees whether to accept such balance in kind such as additional parking, additional power back-up etc. or not.In the event they are not agreeable to accept the said balance in kind, the OP shall pay the balance to them by way of Demand Drafts/bank transfers etc.It has also been agreed between the parties and is ordered accordingly that the aforesaid settlement would not be treated as a binding precedent"
As the Opposite Party/Judgment Debtor failed to satisfy the Decree dated 15.01.2019, all the Members of the Complainant Association had filed individual Execution Application seeking enforcement of the Decree dated 15.01.2019 as well as penalties to be imposed upon Judgment Debtor, Shree Vardhman Infrahome Private Limited and its directors for noncompliance with the Decree dated 15.01.2019.
Since the facts and question of law involved in all these Execution Applications are similar, these Execution Applications are being disposed off by this common Order.
The Opposite Party/Judgment Debtor has contested the Execution Applications by filing Replies/Objections, in which it was stated that the Complaint was filed by the Flora Welfare Association and the Settlement Agreement dated 15.01.2019 was executed between the said Association and the Opposite Party, therefore, the individual Member cannot be said to be a Decree holder and is not entitled for seeking execution of the Decree.
It was further submitted that some of the Execution Applications have been filed under the Consumer Protection Act, 2019 (for short the New Act) instead of Consumer Protection Act, 1986 (for short the Old Act). As the Complaint was decided under the Old Act as such all the subsequent proceedings related to such consumer Complaint including Execution Applications are to be filed under the Old Act. It was also stated that no proceedings under Section 27 of the Consumer Protection Act, 1986 can be initiated against the Opposite Party / JD Developer as the prayer which is necessarily required to be made for initiation of proceedings under Section 27 of the Act, has not been made in EA No. 99 and 100 of 2020. The Execution Application are not filed in accordance with mandatory provisions of law and as such same is liable to be dismissed.
It was further submitted that in the Settlement Agreement the principle understanding between the Parties was completion of project and delivery of possession of the respective flats. However, in certain contingencies the option of refund alongwith interest, was given to the Allottees merely to deter the Opposite Party / JD Developer against any willful default or negligence and to ensure the completion of Project within time. It was further stated that conjoint reading of Clauses 3, 5 and 6 of the Settlement Agreement makes it clear that in normal prevailing conditions, the Developer had time till December 2020 to obtain occupancy certificate for offering possession of the Flats. It was submitted that as per terms of the Settlement Agreement, they have paid interest till December 2019 to all the Allottees. But due to the force majeure conditions, which were beyond their control and duly accepted in the Settlement Agreement, i.e., bans on construction activities by EPCA and Hon'ble Supreme Court, nationwide lock down and disruption of supply chains for construction materials due to Covid-19 pandemic and shortage of labour etc., the Occupancy Certificate could not be procured in time.
In support of his contention the Opposite Party / JD Developer relied upon Order dated 08.03.2021 passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3 / 2020, in which it has been held as under:-
"2. .......We deem it appropriate to issue the following directions: -
1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings...."
It was further submitted that they have completed the residential towers including the EWS flats and have applied for Occupancy Certificates for remaining towers on 16.04.2021 and 18.06.2021 and the Occupation Certificates have been received on 2nd Feb. 2022. It was further submitted that they have issued fit out letters to the Applicants/Complainants/Decree Holders but they have not accepted the physical possession of the flats but sought refund alongwith interest. It was prayed that the Execution Applications be dismissed.
In the Rejoinder, the Decree Holder/Complainants submitted that the Complaint was filed by the Association and the Complainants/Decree Holders/Applicants are part and parcel of the same. The Applicant has every right to protect its own interest despite the fact that the Complaint was filed through Association. It was submitted that Clause 6 (b) of the Settlement Agreement given specific right to the individual members to seek and execution of the Order and thus, the present Execution Applications filed by the individual members of the Complainant Association are maintainable. The relevant portion of Clause 6(b) of the Agreement reads as under:-
".......It is however agreed and understood between the parties that nothing in this settlement shall affects the FWA's as well as the members' right to seek an execution of the order passed in pursuance of this settlement. In event of any breach by First Party in honouring the commitments made in this settlement, FWA or the concerned member, as the case may be, will issue a written notice seeking rectification of the breach...."
Relying upon Judgment passed by the Hon'ble Supreme Court in Karnataka Housing Board vs. K.A. Nagamani (2019) 6 SCC 424, in which it has been held that Execution proceedings even though they are proceedings in a suit, cannot be considered to be a continuation of the original suit. Execution proceedings are separate and independent proceedings for execution of the decree, it was submitted that though the Complaint was disposed of under the Old Act, the Execution Proceedings being independent proceedings are filed under the Act which is operative on the date of filing of the Execution Applications. It was also stated that the EA Nos. 99 and 100 of 2020 have been filed clearly mentioning that 'Application under Section 25 read with Section 27 of the Consumer Protection Act, 1986". It was further submitted that if the Opposite Party / JD Developer failed to adhere the award then the Hon'ble Commission can invoke power under section 27 of the Act suo moto and there is no need to file specific and separate application for the said purpose.
It was further stated that even though there is a defect in filing of the Execution Application, the same can be cured or refilled on the direction of this Hon'ble Commission, but the Execution Application cannot be dismissed on the ground of defect.
It was further stated although as per terms of the Settlement Agreement, the possession of the flats was to be delivered by 31.12.2019 yet the Judgment Debtor Developer (hereinafter referred to as JD Developer) neither delivered the Possession of the Flats by 31.12.2019 nor did it pay the delay compensation upto 31.12.2019 in terms of the Settlement Agreement. The JD Developer also failed to pay the delay compensation @10% from 01.01.2020 to 31.03.2020.
It was also stated that as per Clause 5 of the Settlement Agreement if the JD Developer has applied for the Occupation Certificate prior to 31.03.2020, the concerned Applicant/Member shall not seek the refund. According to Clause 3 of the Settlement Agreement, the JD Developer was liable to (i) pay compensation @10% for Jan. 2020, Feb. 2020 and March 2020 for the delayed beyond 31.12.2019; (ii) pay amount as per Annexure A (due on 31.12.2019, the due date of handing over the Possession) and (iii) to apply for the Occupancy Certificate prior to 31.03.2020. As the JD Developer failed to comply with the obligations set out in Clause 3, the JD Developer is not entitled for further extension of time or completion of Project in terms of Clause 5 of the Settlement Agreement. Therefore, the Complainants/Decree Holders are entitled for refund of the amount alongwith interest.
It was also submitted that delay in completion of Project was attributable to the JD Developer as it was in continuing default from 31.12.2015 till date. As per Builder Buyer Agreement, the proposed date of delivery of possession was 31.12.2015 and as per Settlement Agreement the expected date of delivery of possession was 31.12.2019. Therefore, the extension sought by the JD Developer under the excuse of lockdown period due to Covid-19 is not applicable as it was obligated to deliver the Possession much before broke down of Covid-19. As per Clause 3 of the Settlement Agreement, the First Party's claim for extension of compensation free period for completion of construction due to force majeure circumstances has been settled for 3 months, and considering the effect of this clause the JD Developer was given time to handover the flat with Occupancy Certificate by 31.12.2019. But the JD Developer miserably failed to obtain the same within prescribed time.
It was further submitted that the JD Developer cannot take the defence of force majeure for extension of time for completion of Project before the Executing Court because seeking extension of agreed timelines in the Settlement Agreement is beyond the jurisdiction of an executing court as the Settlement Agreement has become a decree as the Consumer Complaint was disposed off in terms of the said Settlement Agreement vide Order dated 15.01.2019. The Executing Court cannot go behind the decree. In support of their contention, the Execution Applicants relied upon Judgment passed by the Hon'ble Supreme Court in Vasudev Dhanjibhai Modi vs. Rajabhai Abdul Rehman (1970) 1 SCC 670. The JD Developer has already admitted that on 31.03.2020 the construction was not completed and the Occupancy Certificate was also not received till 31.03.2020. Therefore, the Decree Holders/Applicants are entitled for refund of the amount alongwith compensation as set out in the Settlement Agreement. It was prayed that the Execution Applications be allowed.
In support of their contention, the Decree Holders relied upon Judgment passed by the Hon'ble Delhi High Court in OMP (1) (COMM.) No. 88/2020 dated 29.05.2020 in "M/s. Halliburton Offshore Service Inc. vs. Vedanta Limited & Anr." , in which it has been held as under:-
"60. As per the above clause, the performance by the Contractor would be excused if it is "prevented or hindered or delayed by any natural event including a pandemic or plague". The question is whether the Contractor, in this case, was prevented, hindered or delayed by COVID-19 in the punctual performance of its obligations. Admittedly, the Force Majeure clause was invoked by Contractor only on 18th March, 2020 and not before that. Thus, the Contractor did not itself feel that COVID-19 had, previously, hindered the performance of its contract.
67. Finally, as a last resort, parties arrived at 31st March, 2020 as the date of completion. The lockdown came into effect on 23th March, 2020. Even going by the 31st March, 2020 agreed deadline, the works of all the three oil fields ought to have been almost complete as the invocation of the Force Majeure clause was merely 12 days before the deadline, on 18th March, 2020.
68. The Contractor in the present case was cautioned repeatedly since September, 2019 by the Company that it was in breach. There was hardly any work done in the months of November 2019, December 2019, January 2020, February 2020 and March 2020. There was clear non-performance and lack of alacrity in completing the work on the various fields forming part of the Project. The reasons for the same are not to be gone into in this petition.
69. The past non-performance of the Contractor cannot be condoned due to the COVID-19 lockdown in March 2020 in India. The Contractor was in breach since September 2019. Opportunities were given to the Contractor to cure the same repeatedly. Despite the same, the Contractor could not complete the Project. The outbreak of a pandemic cannot be used as an excuse for nonperformance of a contract for which the deadlines were much before the outbreak itself."
I have heard Mr. Himanshu Pathak, learned Counsel appearing on behalf of the Complainants/Decree Holders, Mr. Tapesh Singh, learned Senior Counsel appearing on behalf of the Judgment Debtors, perused the material available on record and have given thoughtful consideration to the various pleas raised by them.
Relevant Clauses 3 and 5 of the Settlement Agreement dated 15.01.2019, are reproduced as under:-
"3. Compensation to FWA Members The First Party agrees to pay to each member the amount reflected against their respective allotment in Annexure Aherein at time of handing over possession. The amount reflected in Annexure A has been arrived at after taking into account all monetary claims of the members including compensation for delay till 31st December,2019, on the amount paid (after deducting the taxes paid and amount paid by members towards EDC/IDC charges). The claim of the First Party towards increase in super area was @5.5% and for escalation in cost of construction was @9%, however, for arriving at the amounts mentioned in Annexure A, FWA after detailed analysis agreed to factor in the same @4% each. Further, the First Party's claim for extension of compensation free period for completion due to force majeure circumstances has been settled for 3 months. It is further understood that the members have agreed to accept the amount mentioned in Annexure A as full and final settlement of account. The First Party agrees that in even of any delay beyond 31st December 2019, the First Party shall be liable to pay compensation @10 % per annum for every month of delay beyond 31st December 2019 on the amount paid( after deducting the taxes paid and amount paid by members towards EDC/IDCcharges), which will be payable after every month of delay beyond the 31st December 2019 byway of a cheque on or before 10th of the succeeding month. The First Party acknowledges that payment of compensation @ 10% per annum for every month of delay beyond 31st December 2019 is not a license to further delay possession of the apartments inordinately and indefinitely. The acceptance of compensation @ 10% per annum for delay beyond 31st December 2019, shall be without prejudice to the right of the members to seek refund of the amount with interest @12% per annum from the respective date of payment by the members till the date of ealization, in event that the First Party fails to reach the milestone as per Annexure C on or before 31st March 2020. The aggregate amount of the post-dated cheques tendered and cleared in terms of this settlement shall be deducted from the interest payable to such member exercising his/her optionrefund. It is clarified that in event that a member chooses not to seek refund in terms of this clause, despite the First Party not achieving milestone as per Annexure C on or before March, 2020, the First Party shall continue to be liable to pay compensation @10 % per annum for every month of delay beyond 31st December 2019, which will be payable after every month of delay beyond 31st December 2019, by way of cheque on or before 10th of the succeeding month That in the interest of the early completion of the project, it is agreed that in event of handing over possession prior to 31st December 2019, the member(s) shall surrender the post-dated cheque which are yet to be presented, tendered to him/her under this term sheet. It is further agreed in such an event an amount equivalent to the aggregate amount of the post-dated cheque which are yet to be presented shall be deducted from the amount shown to the payable in Annexure A. It is agreed and understood between the parties that for purposes of this settlement, handing over possession' would mean the date when the actual physical possession of the apartment is offered to a member after competing it in respect of Annexure C as well as pursuant to procuring appropriate occupancy/completion certificate.
The First Party agree and undertake to complete the club and facilities within on or before June, 2020. In case of any delay in completion of the club, a compensation of INR 1,00,000/- (Rupees One Lakh Only) per month shall be payable to FWA, thisamount of money shall be utilized by FEA for the betterment of the entire project.
It is however agreed between the parties that in event that the First party has achieved the milestone provided in Annexure C, prior to 31st March, 2020, but is unable to handover possession of apartment(s) on account of absence of occupancy certificate (duly compliant application for occupation certificate being filed prior to 31st March, 2020), the concerned member(s) shall not seek refund in terms of this settlement. However, it is clarified that in the event that the First Party is unable to procure the occupancy certificate by 31st August, 2020, the member(s) may exercise his/her option to seek refund as provided in this settlement. Notwithstanding anything stated herein above. It is clarified that in event that a member continues with his/her allotment he/she shall have the right to claim compensation for delay @10% per annum till the handing over of possession."
(underlined by me) So far as the contention of the JD Developer that the Individual Members cannot file the Execution Application, is concerned, a perusal of Clause 6(b) of the Settlement Agreement (reproduced earlier) makes it amply clear that the Individual Members have right to seek execution of the Decree/Order passed in pursuance of the Settlement Agreement, in view of which I do not find any merit in the said contention and the same is rejected.
The Hon'ble Supreme Court in 'Karnataka Housing Board vs. K.A. Nagamani (2019) 6 SCC 424, has held that Execution proceedings are separate and independent proceedings for execution of the decree, by observing as under:-
"7.6. A Full Bench of the Patna High Court in Narmada Devi v. Ram Nandan Singh [Narmada Devi v. Ram Nandan Singh, 1985 SCC OnLine Pat 128 : AIR 1987 Pat 33], has similarly held that execution proceedings cannot be regarded as a continuation of the suit.
7.7. We affirm the view taken by the Full Bench of the Andhra Pradesh High Court and the Patna High Court. Execution proceedings even though they are proceedings in a suit, cannot be considered to be a continuation of the original suit. Execution proceedings are separate and independent proceedings for execution of the decree. The merits of the claim or dispute cannot be considered during execution proceedings. They are independent proceedings initiated by the decree-holder to enforce the decree passed in the substantive dispute."
The Execution Proceedings being separate proceedings, as has been held by the Hon'ble Supreme Court in 'Karnataka Housing Board vs. K.A. Nagamani (supra), should be filed under the Act which has been prevalent at the time of filing of the Execution Proceedings. In the present cases, the Execution Applications are filed under the Act, whether Old Act of 1986 or New Act of 2019, which was prevalent at the time of filing of the said Execution Applications. Therefore, the plea of the JD Developer that as the Complaint was decided under the Old Act, all the subsequent proceedings related to such Consumer Complaint including Execution Applications are to be filed under the Old Act, is rejected.
A bare perusal of the EA No. 99 of 2020 and EA No. 100 of 2020 makes it crystal clear that both the EAs have been filed under Section 25 read with Section 27 of the Consumer Protection Act, 1986 and vide Prayer clause (f) the Decree Holders have sought 'Any other relief as may have deemed to be granted in favour of the petitioner and against the respondent'. In case the Opposite Party / JD Developer failed to adhere the Decree dated 15.01.2019, this Commission can invoke Section 27 of the Consumer Protection Act, 1986, suo moto. Therefore, I do not find any force in the contention of the Opposite Party / JD Developer that no proceedings under Section 27 of the CPA, 1986 can be initiated against the Opposite Party / JD Developer in EA No. 99 and 100 of 2020.
The next contention of the learned Counsel for the JD Developer is that due to force majeure circumstances due to Covid-19, it could not procure the Occupancy Certificate in time. For which JD Developer relied upon Order dated 08.03.2021 passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3 / 2020.
From a bare perusal of the Order dated 08.03.2021 passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3 / 2020, it is crystal clear that there was direction with regard to computation of the period of limitation in filing of the Petitions/ applications/ suits/appeals/all other proceedings before any Court/Tribunal across the Country. There was no specific direction in the said Order for extension of compliance of any Order passed by any Court/Tribunal meaning thereby the Judgment Debtor cannot take the advantage of this Order in relation to their obligation in terms of the Settlement Agreement dated 15.01.2019.
The Executing Court cannot go behind the decree even if it be erroneous is still binding between the Parties, as has been held by the Hon'ble Supreme Court in 'Vasudev Dhanjibhai Modi vs. Rajabhai Abdul Rehman (1970) 1 SCC 670' by observing as under:
"A court executing a decree cannot go behind the decree: between the parties or their representatives it must take the decree according to its tenor, and cannot entertain any objection that the decree was incorrect in law or on facts. Until it is set aside by an appropriate proceeding in appeal or revision, a decree even if it be erroneous is still binding between the parties"
In the present cases, the Complaint was disposed off in view of the Settlement Agreement arrived at between the Parties vide Order dated 15.01.2019 and the Settlement Agreement is part and parcel of the Decree dated 15.01.2019. Undisputedly, the Opposite Party / JD Developer has miserably failed to comply with the terms of the Settlement Agreement by not achieving the milestone mentioned in Annexure C of the Settlement Agreement by 31.03.2020 and even failed to receive the O.C. by 31.08.2020, in view of which as per terms of the Settlement Agreement, the Decree Holders are entitled for refund of the amount with interest @12% p.a. For the reasons stated hereinabove, the Opposite Party / JD Developer is directed to refund the respective amount deposited by the Members/Decree Holders alongwith interest @12% p.a. with effect from the respective date of deposit till the date of realisation after deducting the compensation already paid, within four weeks from today.
The Execution Applications stand disposed off in above terms. All the pending applications, if any, also stand disposed off.
......................J R.K. AGRAWAL PRESIDENT