National Consumer Disputes Redressal
Marathon Realty Limited vs M/S. The Monte Vista Residence Welfare ... on 27 August, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 205 OF 2016 (Against the Order dated 10/02/2016 in Complaint No. 207/2015 of the State Commission Maharashtra) 1. MARATHON REALTY LIMITED HAVING ITS OFFICE AT 702, MARATHON MAX, MULUND, GOREGAON LINK ROAD, MULUND, (W), MUMBAI-400080 MAHARASHTRA ...........Appellant(s) Versus 1. M/S. THE MONTE VISTA RESIDENCE WELFARE ASSOCIATION & 4 ORS. THROUGH ITS SECRETARY, MR. CHANDULAL S. THAKKAR, HAVING ITS ADDRESS AT 2802, MONTE VISTA, MADAN MOHAN, MALVIYA ROAD, MULUND (W) MUMBAI-400080 2. MONTE VISTA CO-OPERATIVE HOUSING SOCIETY LIMITED, (PROPOSED) THROUGH ITS SECRETARY, MR. CHANDULAL S. THAKKAR, HAVING ITS ADDRESS AT 2802, MONTE VISTA, MADAN MOHAN MALVIYA ROAD, MULUND (W) MUMBAI-400080 MAHARASHTRA 3. THE EXECUTIVE ENGINEER, BUILDING PROPOSAL (EASTERN SUBURBS) MUNICIPAL CORPORATION OF GREATER MUMBAI, PAPER MILLS COMPOUND, L.B.S. MARG, VIKHROLI, MUMBAI-400083 MAHARASHTRA 4. MR. MAYUR SHAH INDIAN INHABITANT, MANAGING DIRECTOR OF MARATHON REALITY LIMITED, HAVING ITS OFFICE AT 702, MARATHON MAX, MULUND-GOREGAON LINK ROAD, MULUND (W) MUMBAI-400080 5. MR. CHETAN SHAH INDIAN INHABITANT, MANAGING DIRECTOR OF MARATHON REALITY LIMITED, HAVING ITS OFFICE AT 702, MARATHON MAX, MULUND-GOREGAON LINK ROAD, MULUND (W) MUMBAI-400080 ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Appellant : Mr. Kunal Vajani, Advocate
Mr. Paranay Goyal, Advocate
Ms.Harsha Satyakam, Advocate For the Respondent : For the Respondent No.1 & 2: Mr. Ritesh Khare, Advocate
Mr. Rajesh V. Sipahimalani Advocate
Ms. Meenakshi Iyer, Advocate
For the Respondent Nos.3: Nemo
For the Respondent No.4 & 5: Mr. Tishampati Sen, Advocate
Ms. Mehak Huria, Advocate
Dated : 27 Aug 2020 ORDER
The First Appeal No.530 of 2016 has been filed by the complainants against the order dated 10.02.2016 and First Appeal No.205 of 2016 has been filed by the opposite party No.1 against the same impugned order dated 10.02.2016 passed by the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') in Complaint Case No.CC/15/207. As these are cross appeals, the parties will be referred to as mentioned in the order of the State Commission.
2. Brief facts of both the appeals are that the complainants filed a consumer complaint against OP 1-4 wherein OP1 is a builder & developer company, OP2-3 are directors of OP1 & OP4 is Municipal Corporation (MCGM) which has sanctioned the construction plans. The complainant 1 is registered welfare Association of the flat owners and complainant 2 is proposed society of flat purchasers who have purchased flats from OP1. OP No.1 advertised for sale of flats in five buildings as per draft plan made on land formed out of property situated at Madan Mohan Malviya Road, Mulund (W), Mumbai. Some members of Complainant No.1 purchased flats in the month of March 2009 in one of the building called 'Monte Vista' and OP1 executed agreements with individual flat purchasers. OP No.1 agreed to provide parking space in the basement of the building by taking 4-6 lakhs from each member of complainant No.1. It was further submitted that OP 1 did not hand over possession of flat as promised but in September, 2013 allowed to few members of the complainants to carry out fit out & interior work in their flats. On 29-03-2014 full occupancy certificate was received by OP No.1. Complainants alleged that OP No.1 created third party interest in basements by constructing public parking lots to be handed over to MCGM under the public parking scheme. Flat owners appointed consulting architect who visited the site on 7.8.2014 for inspection. Complainants through architect's report dated 19.8.2014 came to know that OP No.1 has mislead MCGM while obtaining occupancy certificate without completing the construction work with promised amenities. OP No.1 started illegal construction against the lay out plan approved by BMC and contrary to site kept for open garden as shown at the time of booking of the flats. OP No.1 has not taken any consent/permission from flat purchasers for changing lay out plan which is mandatory under Section 7 of Maharashtra Ownership Flats Act, 1963 (MOFA) which will affect light and air of the flat owners and open garden/playground of the members of flat owners. Alleging deficiency on the part of OPs, complainants filed complaint before State Commission with a prayer to provide all facilities as agreed and to pay compensation & costs. State Commission partly allowed the complaint against OP1-3 whereas no direction was given against OP4 as being a formal party. State Commission directed OP 1-3 to provide car parking spaces in the basement & recreational ground at ground floor as per disclosure. State Commission further directed OP1-3 to form housing society & to pay Rs.5 lakh as compensation & Rs.50,000/- towards litigation cost.
3. Aggrieved with the order of the State Commission, the opposite party No.1 has preferred appeal No.205 of 2016 before this Commission. Similarly, complainants have preferred appeal No.530 of 2016 against the same impugned order of the State Commission.
4. Heard the learned counsel for the parties and perused the record. Learned counsel for the opposite party No.1 stated that the second complainant Monte Vista Co-op. Hsg. Soc. Ltd. was a non-existent entity and cannot be covered under the definition of a person for becoming a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986 (in short the "Act"). An imaginary entity cannot file a consumer complaint. A proposed society cannot file any consumer complaint. Learned counsel further stated that it is not clear as to on whose behalf these complainants had filed the complaint. Under Section 12(1)(b) of the Consumer Protection Act, 1986, a complaint can only be filed by a voluntary consumer organisation on behalf of any complainant, who may or may not be a member of the association. The complainant No.1 has not disclosed in its complaint that the complaint was being filed for such and such members. The counsel for opposite party No.1 stated that the objects of the complainant No.1 do not reflect the welfare of its members as is required by the decision of the larger bench of this Commission in Moulivakkam Trust Heights Flats Vs. M/s. Prime Sristi Housing Pvt. Ltd & 29 Ors. CC No.560 of 2014, decided on 05.05.2017 (NC) which reads as under:-
"8. 'Consumer Association' in essence would be an association which has the watching, protecting or safeguarding etc., the cause (s) of the consumers as either its sole objective or one of or as one of its main objectives."
5. There is no object of safeguarding and protecting the interest of the consumers in the object of complainant No.1. The association has been formed of only 7 members and if the association does not clearly state as to on whose behalf the complaint has been filed, at the most, the relief prayed for can be accepted for the seven members only as the complaint may be deemed to have been filed by these members.
6. It was further stated by the learned counsel for the opposite party No.1 that though the complaint was filed only on behalf of seven members, the State Commission has mentioned 114 members. Learned counsel for the opposite party No.1 stated that it is pertinent to note that the complainant No.1 has been formed by seven individuals who have purchased apartments in Monte Vista. Learned counsel for the opposite party No.1 further stated that each of the said 7(seven) individuals who were instrumental in formation of complainant No.1 are in default of their obligation(s) towards either payment of the balance consideration under Clause 4 and/or other taxes/charges under Clause 44/Clause 45(A) and /or the maintenance charges under Clause 45(D), of their respective agreements with Opposite party No.1.
7. Learned counsel for the opposite party No.1 further stated that issue of pecuniary jurisdiction, though was not raised before the State Commission, however, being a legal issue, can be raised at any stage. The complainants have alleged that only the amount charged for the parking amounted to about Rs.10 crores, therefore, clearly the State Commission did not have the pecuniary jurisdiction to decide the present complaint. It is to be noted that the complainants have stated in their complaint in the prayer clause that as monetary claim is more than Rs.20 lacs and less than Rs.1 crore, therefore, the pecuniary jurisdiction of the State Commission has been availed. It was pointed out that as per the decision of the larger bench of this Commission in Ambrish Shukla and Ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016 decided on 07.10.2016 (NC), the total consideration along with the compensation demanded shall determine the pecuniary jurisdiction of the consumer forum. From this aspect, the State Commission did not have the pecuniary jurisdiction as the total consideration of even the seven flats was more than rupees one crore.
8. Learned counsel further stated that the complaint was also highly time barred as the complaint has been filed by the complainants on 8th February 2015 whereas the cause of action arose when the agreements were signed in the year 2012.
9. Though no rejoinder was filed by the complainants, however, the State Commission has stated that there would be no question of crossing the limitation as the possession has been taken by the complainants only in the year 2014. Learned counsel argued that in fact, the cause of action may be different for different reliefs sought and therefore, the general order passed by the State Commission holding that the complaint would be within time cannot be sustained. In this regard, the learned counsel argued that the complainants have alleged that the agreement violates different provisions of Maharashtra Ownership of Flats Act, 1963 (MOFA) and if this is the case, then the cause of action arose in the year 2012 when the agreements were executed. From this date of cause of action, the complaint is highly barred by limitation.
10. Learned counsel for the respondents in FA No.530 of 2016 and appellant in 205 of 2016 stated that it is not necessary to condone the delay in a cross appeal and FA No.530 of 2016 has been filed by the complainants with a huge delay of 64 days. No sufficient cause for such delay has been given. Hence the appeal No.530 of 2016 should be dismissed on the ground of delay alone. In this regard, learned counsel referred to a judgment of Hon'ble Supreme Court in Rajiv Kochar Vs. R.S.Sharma and another, (2002) 9 SCC 624, wherein the Hon'ble Supreme Court has observed:
"6. This appeal is a cross-appeal. It was filed 560 days beyond the period of limitation. In the application seeking condonation of delay, the explanation for delay is neither reasonable nor satisfactory. We, accordingly, do not condone the delay and dismiss the application seeking condonation of delay. Consequently, this appeal stands dismissed as barred by time. No costs."
11. Learned counsel for opposite party No.1 further stated that everything was informed in the agreement and the complainants were fully aware of the future plans of the opposite party. Clause xii and xiii read as under:-
"(xii) the promoter have informed the Purchaser/s and the Purchaser/s is/are aware that the said building MONTE VISTA and MONTE CARLO are being constructed utilizing FSI of the said larger property on layout approval basis and the Promoters intent to utilise the TDR available in the open market and/or incentive FSI available on account of public parking scheme or a joint Venture scheme with MMRDA and/or M.H.A.D.A under DCR 33 or any other BMC/Government scheme to be developed by the promoter in the said larger property and to receive FSI/TDR/incentive FSI in lieu thereof in the said buildings and construct further floors and the purchaser/s has/have no objection or dispute regards the same.
(xiii) the promoter have informed the purchaser/s and the Purchaser/s is/ are aware that the Promoters intend to hand over part or whole of the Basement-1, Basement-2 and Basement-3 constructed in the said larger property (which basements are under each building i) MONTE VISTA, ii) MONTE CARLO, iii) MONTE SERENA (as and when constructed), iv) MARATHON HOUSE (as and when constructed) iv) CLUB NEXTGEN, (as and when constructed) to M.M.R.D.A. and/or M.C.G.M. with along with other facilities for electricity, water, sewer sanitation W.C. Block and Purchaser/s is/have no objection or dispute regards the same.
12. Thus, it was proposed right from the very beginning that underground parking space will be utilised for public parking to get additional FSI from the concerned authorities. Thus, nothing was suppressed from the complainants and nothing was misrepresented to the complainants in respect to the car parking spaces. Learned counsel emphasised that the agreement provides for the sale of car parking space to each purchaser of flat and the cost is included in the cost of the flat. The relevant clause reads as under:-
"3. The purchaser have requested to provide one car parking spaces as facility in the complex and agreed to pay for the costs of such car parking and the Promoters have agreed to construct by incurring additional costs for such car parking. Cost of such parking is included in the Flat consideration herein. Such car parking spaces shall form part of the said premises defined here under."
13. Thus, there is no impropriety if the cost of car parking space has been taken from the complainants because it is as per the agreement and is part of the cost of the flat.
14. It was argued by the learned counsel for opposite party No.1 that the State Commission has not discussed unfair trade practices on the part of the opposite parties in the body of the judgment, however, the same has been reflected in the operative portion of the judgment. Even with these specific clauses in the agreement, the State Commission has observed that the opposite parties should provide the services as per the brochure. Learned counsel submitted that the complainants are entitled only to the promises made by the opposite parties in the agreement as the agreements have been signed by the complainants with their eyes open. There is already disclaimer mentioned in the brochure. Hence the brochure cannot give rise to any enforceable right.
15. Learned counsel for the opposite party no.2 and 3 in the original complaint case stated that they are the directors of the opposite party No.1. Learned counsel referred to the following observations of the State Commission:-
"Now the crucial question is whether the opponents are guilty of deficiency in service and unfair trade practice. It is vehemently urged on behalf of the complainants that amenities as represented, promised and assured to be provided to the flat purchasers are not provided till date. As per representations made, the opponents failed to give parking space at basement, failed to leave recreation ground besides the building Monte Vista. The recreation ground as per new plan is shifted to podium level. Area of recreation ground is reduced. The flat purchasers have invested huge amount for purchase of their dream houses but the acts of opponent no.1 are contradictory to the disclosure, promises and the representations made by them.
Learned counsel for the complainants has taken us to the brochures of the building, plan submitted to opponent no.2, occupation certificate and other documents. Now we will consider the documents placed before us by the complainants. The brochure filed by the complainants is not disputed by the opponents. It was published at the time of sale of flats of building Monte Vista and other buildings from the project of opponent no.1. In brochure, admittedly, parking place is shown in the basement."
16. Learned counsel further stated that the State Commission has relied on various other things beyond the main agreement, which cannot be permitted. The State Commission has further observed the following:-
"Subsequently, opponent no.1 submitted latest plan to opponent no.4 in which recreation ground is not shown on ground floor, so also, parking space for residents of building was changed. The latest plan with reference to letter dated 14/11/2014 issued by opponent no.4 is not disputed by the opponent. As per latest plan permission was obtained to make construction of new building i.e. 6th building. In the said plan, recreation ground is not shown on ground floor but it was shown at podium level. According to complainants not providing recreational space at ground level is a contravention of the directions given by Hon'ble Apex Court. It is against the law of land."
17. Learned counsel further stated that judgment of the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr., (2014) 4 SCC 538 is of later date 17.12.2013 and would not be applicable in the present matter. The State Commission has wrongly interpreted this judgment of the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr. (supra). It is stated that the original sanction was in the year 2009.
18. Learned counsel for the opposite parties 2 & 3 further mentioned that complainant is not a natural person and therefore, the complainant is not entitled to any compensation as per the decision of the Hon'ble Supreme Court in Sikka Papers Limited Vs. National Insurance Company Limited and Ors., (2009) 7 SCC 777, where the Apex Court has observed the following:-
"19. By way of footnote, we may observe that claim of Rs.10,00,000/- made by the complainant for mental harassment is wholly misconceived and untenable. The complainant is a company and, therefore, claim for mental harassment is not legally permissible. It is only the natural person who can claim damages for mental harassment and not the corporate entity."
19. Refuting the contentions of the learned counsel for the opposite party No.1 and opposite party Nos.2 & 3, learned counsel for complainants Nos.1 and 2 stated that the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr., (supra) has interpreted the rules and has given a guideline that the recreation ground would only be on the ground floor.
20. The judgment of the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr., (supra) was delivered on 17.12.2013 and since then judgment is operative whereas in the present case, the proposal to shift the recreation ground was mooted in the year 2014, which is clear violation of the directions given in this judgment of the Hon'ble Supreme Court. Learned counsel for complainants further stated that the argument of the learned counsel for the opposite party No.1 that this judgment is not applicable is not correct. The argument of the opposite party No.1 that the matter involved complicated questions of facts and law and therefore, the consumer forum cannot decide these questions and the matter be relegated to the civil court cannot be sustained because the issues involved are straight forward and can be decided on the basis of legal documents and the evidence provided by both the parties. Learned counsel further stated that the State Commission has referred the judgment of Hon'ble Supreme Court in CCI Chambers Co-op. Hsg. Society Vs. Development Credit Bank Ltd., 2003, 7 SCC, 233, wherein the Hon'ble Supreme Court clearly observed that:
".....The anvil on which entertainability of a complaint by a forum under the Act is to be determined is whether the questions, though complicated they may be, are capable of being determined by summary enquiry i.e. by doing away with the need of a detailed and complicated method of recording evidence..."
21. The State Commission has considered the issue of the second complainant in connection with Section 12(1)(b) of the Consumer Protection Act, 1986. Learned counsel stated that the State Commission has already mentioned this issue in the following manner:-
"2. The Complainants state that the flat purchasers of the proposed society has now been duly registered with the Assistant Charity Commissioner, Mumbai vide Registration Number BOM/2248/2014 dated 10/12/2014 and hence a legal entity, competent to institute the present complaint. The complainants further state that they have been constrained to register their society due to the non cooperation of the O.Ps and also with a view to avoid any financial irregularities. It has also enabled them to open a bank account in its registered name for the purpose of regular functioning. The complainants state that although they have registered their society under the provisions of Societies Registration Act, 1860, the O.Ps are under the continuous obligation to register the society under the provisions of MCS Act with the DDR as per the statutory requirements of MOF Act."
22. Learned counsel stated that the following promises were made to the flat owners:
"ii. The entire space on ground level between the said building MV and all the above proposed buildings in the entire project would be kept open for recreational purposes for the use and enjoyment of the flat owners and their respective families.
iii. The parking spaces for purchaser of every flat in the said building MV would be provided in the basements below the said building MV and that there would be ample parking spaces in the basements below the said building MV to accommodate the vehicles of the residents and their visitors in the said basements. Each flat would have a corresponding parking space to overcome any hardship or confusion regarding the issue of parking spaces."
23. Learned counsel further argued that it is incorrect to say that the information given in the brochure cannot be considered as part of promises. In fact, the information given in the brochure will be considered as discloser by the builder. Learned counsel stated that the State Commission has considered the issue of 'consumer' and has found that the complainant is a consumer within the meaning of the Consumer Protection Act, 1986. The complainant is covered under Section 2(1)(b)(ii) as a complainant and under Section 2(m) as a person. Under Section 2(1)(d), a person has been defined as a consumer if the person avails the services of the opposite party for consideration. Thus, clearly, the complainant is a consumer. The learned counsel stated that the complainant is a registered society under the provisions of Societies Registration Act, 1860. Seven members have signed to be incorporated as society. In a meeting held on 27.7.2014 a resolution was passed that the minimum of any three members can sign a legal document. The meeting was attended by 43 persons. Thus, it cannot be said that the complaint was filed on behalf of seven members, rather, it was on behalf of all the members of the society. Learned counsel stated that the judgment of the larger bench in Moulivakkam Trust Heights Flats Vs. M/s. Prime Sristi Housing Pvt. Ltd & 29 Ors. (supra) was not there when the State Commission passed its order, however, this Commission in Amrapali Saphire Flat buyers Welfare Vs. Amrapali Saphire Developers Pvt. Ltd., CC 916 of 2016, along with connected matters decided on 30.08.2016 has observed certain essential ingredients of a voluntary consumer association which can file a consumer complaint and the complainants No.1 and 2 clearly satisfy these yardsticks and therefore, there should be no doubt that the complainants were not authorised to file the consumer complaint. Learned counsel for the complainants further stated that even the larger bench of this Commission in Moulivakkam Trust Heights Flats Vs. M/s. Prime Sristi Housing Pvt. Ltd & 29 Ors. (supra) has observed the following which strengthens the case of the complainant as a voluntary consumer association:-
"15. Shri Krishnan Venugopal, senior counsel for an opposite party drew our attention to Section 8 of the Companies Act, 2013 which provides for registration of a person or an association of persons as a limited company without addition of the word 'limited' or 'private limited' to its name, with the permission of the Central Government, if the proposed company (a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity protection of environment or any such other object; (b) intends to apply its profits, if any, or other income in promoting its objects; and (c) intends to prohibit the payment of any dividend to its members, and contended that it is only such a company whether formed under the Companies Act or under some other law, providing for such an incorporation which would qualify as a voluntary consumer association in terms of Section 12 of the Consumer Protection Act. We however, find no merit in this contention. Though, a company with the aforesaid objects may qualify as a voluntary consumer association if one of its main objectives is to promote, safeguard, propagate and pursue the rights and interests of the consumers or seek redressal of their grievances in connection with the goods purchased or agreed to be purchased or the services hired or availed or agreed to be hired or availed by them, there is nothing in Section 12 of the Act to restrict the ambit and scope of a voluntary consumer association to such a company, even the formation of which would depend upon whether the requisite permission in terms of Section 8(5) of the Companies Act, 2013 is granted by the Central Government or not.
24. In respect of limitation, the learned counsel for the complainant argued that the occupation certificate for the original plan was received on 29.03.2014 and thus till then the cause of action continued as rightly held by the State Commission. It was further stated that the revised plan was approved on 14.11.2014 and the complainant became aggrieved by the revised plan. The complaint has been filed in the year 2015, therefore, the complaint is well within time. Learned counsel for the complainant further mentioned that the State Commission has relied on the judgment of the Hon'ble Bombay High Court in Eternia Co-op. Hsg. Soc. Ltd. and ors. vs. Lakeview Developers and ors., 2015 (5) Bom CR 680 to observe that the brochure and promotional materials are part of the disclosure. Thus, if any facility is provided in the brochure, the opposite party is bound to create that facility. As against the original plan where the parking in the basement was provided and the recreational ground was on the ground floor, the opposite party only started revising the plan after getting the occupation certificate for the original plan. The State Commission has asked to provide 2009 plan, but opposite party did not file the same before the State Commission. It was further argued by the learned counsel for the complainant that the objection in respect of the pecuniary jurisdiction was not before the State Commission and therefore, the same cannot be raised before this Commission when State Commission has passed the final order. Learned counsel for the complainant further stated that the opposite party had disclosed construction of only five buildings in the brochure and the 6th building was never shown. The planning and construction of 6th building is against the occupancy certificate dated 29.03.2014 and the same is also against the Section 7 and 7A of the MOFA.
25. In respect of delay of 64 days in filing the present appeal by the complainant, learned counsel stated that the certified copy was received on 16.2.2016 and then time was taken to consult all the members of the association and their view sought. It was decided that the appeal should be preferred against the order of the State Commission for enhancement of the compensation and thus, delay of 64 days has happened in this process. Clearly, the delay is not intentional or deliberate and therefore, the same be condoned.
26. Learned counsel further mentioned that the present appeal has been filed by the complainant on the ground that the State Commission erroneously only partly allowed the complaint even though it declared opposite parties No.1 to 3 to be guilty of deficiency in service and unfair trade practices. The State Commission erred in not directing opposite parties to provide all the amenities as set out in detail in the complaint, to execute the conveyance deed, to award compensation more than Rs.10 lakh towards mental torture and to grant Rs.1 lakh towards the cost of the complaint.
27. Learned counsel for the complainants stated that the complainants have filed appeal requesting that all the reliefs that were sought in the complaint and have not been provided by the State Commission be granted by this Commission. The main prayers include creation of all facilities and amenities provided in the agreement and the brochure.
28. Learned counsel for the complainants stated that the State Commission despite coming to the conclusion that OP Nos.1 to 3 were duty bound to form society of residents in respect of the building Monte Vista and despite directing the OP Nos.1 to 3 to form the co-operative housing society under the Maharashtra Co-operative Societies Act, and the provisions of MOFA, omitted to set out a time frame within which OP Nos. 1 to 3 ought to take steps for formation of the society.
29. Learned counsel for the complainants stated that the State Commission ought to have exercised its discretion in favour of the hundreds of innocent and unwary flat purchasers who have suffered tremendously and in fact should have awarded compensation more than INR 10,00,000/- (rupees ten lakhs only) as prayed for by the complainants towards mental torture, harassment etc. There is no justification for not granting the appropriate compensatory relief though the State Commission has rightly accepted the contentions of the complainants and correctly held the OP Nos.1 to 3 guilty of deficiency in service and unfair trade practice. The State Commission erred in granting compensation of only INR 5,00,000/- (Rupees Five lakhs only).
30. It was stated that since the impugned order does not set out any timeframe for the OP Nos.1 to 3 to comply with the directions set out therein, the impugned order loses its intent of ensuring that the rights of the flat purchasers under the MOFA are protected and that OP Nos.1 to 3 comply with their statutory obligations promptly and within a specific timeframe. The impugned order also ought to have set out the consequences on account of failure on the part of OP Nos.1 to 3 to comply with the directions given to them under the impugned order.
31. I have carefully considered the arguments advanced by the learned counsel for the parties and examined the record. The first technical question raised by the opposite party No.1 is in respect of limitation in filing the complaint. It is seen that the occupancy certificate has been obtained on 29.03.2014 and any legal possession could be only given after obtaining the occupation certificate. Thus, the complaint has been filed within two years from the date of occupation certificate or date of legal possession. Moreover, the main objections of the complainants are in respect of revised plan which has been approved on 14th November, 2014 wherein the positions of car parking spaces and recreation ground have been changed which gave rise to the cause of action for filing the complaint. The complaint has been filed in the year 2015 and thus it is within two years from the date of cause of action. Hence, I find no merit in the argument of the learned counsel for OP No.1 that the complaint was time barred.
32. Coming to the another technical question raised by the learned counsel for the opposite parties in respect of the pecuniary jurisdiction, it is seen and the same is admitted by the appellants/opposite parties that this issue was not raised in the written statement filed by the opposite parties before the State Commission. Though the learned counsel for the opposite parties has claimed that the issue of jurisdiction can be raised at any stage, Hon'ble Supreme Court in Harshad Chiman Lal Modi Vs. DLF Universal and Anr., AIR 2005 SC 4446, has held as follows:-
"So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage".
33. From the above, it is clear that the issue of pecuniary jurisdiction cannot now be raised after the decision of the State Commission.
34. Learned counsel for the appellants/opposite parties has contended that second complainant Monte Vista Co-operative Housing Society Ltd.(Proposed) was a non-entity when the complaint was filed. In respect of the first complainant, it has been stated that the complainant No.1 society was formed by seven persons and the association has not mentioned in the complainant as to on whose behalf the complaint has been filed. It is view of the appellants/opposite parties that a society/association can file a complaint under Section 12(1)(b) of the Consumer Protection Act, 1986 on behalf of any person whether that person is a member of the society/association or not. In the present case, the position is not clear, therefore, learned counsel for the opposite parties has argued that, at the most, the reliefs may be extended to those seven persons only who originally formed the association. This view has been contended by the learned counsel for the complainants who has stated that the complaint was filed after a resolution was passed by 43 members and therefore, this complaint was for all the members or at least the 43 members. I agree with the assertion of the learned counsel for the opposite parties that it should have been clarified by the complainants as to on behalf of how many members the complaint was filed. However, from the content of the complaint, it seems that the complaint has been filed for the members of the association. This Commission in Consumer Case No.120 of 2015, Lotus Panache Welfare Association Vs. M/s. Granite Gate Properties Pvt. Ltd. & Ors. decided on 28.08.2015 (NC) has observed the following:-
"6. We however, make it clear that the scope of this complaint would be restricted to those flat buyers who were members of the complainant association on the date of filing of this complaint, and file either an affidavit or a written declaration in this regard. We also make it clear that the opposite party shall be entitled to take all such plea as are open to them in law, including that one or more members of the complainant association are not consumers, within the meaning of Section 2(1)(d) of the Consumer Protection Act, on account of their having purchased the flat for a commercial purpose or have defaulted in making timely payments."
35. From the above, it is clear that the case could be considered to have been filed in respect of members of the association at the time of filing of the complaint. From this aspect, in my view, it would be deemed that the complaint was filed for the members of the association who passed the resolution at the time of filing of the complaint.
36. In respect of the complainant No.1 association, another objection has been raised by the learned counsel for the opposite parties that there is no object of safeguarding and protecting the interest of the consumers in the objectives of complainant no.1 association and therefore, as per the judgment of the larger Bench of this Commission in Moulivakkam Trust Heights Flats Vs. M/s. Prime Sristi Housing Pvt. Ltd & 29 Ors. (supra), the complainant no.1 association cannot be considered as a voluntary association entitled to file complaint on behalf of the consumers. The objects of the complainant No.1 association as mentioned in the Memorandum of Association are as follows:
"3. OBJECT OF SOCIETY:
A. To create unity, brotherhood etc. amongst the general public. B. To open, conduct, maintain and manage Computer Classes & educational institutions including all courses. C. To give Scholarships, free ships, charitable help and educational and in cash or kind to the needy and deserving students without making distinction of caste and creed. D. To arrange and organize different types of Sports Competitions & promotion of Sports. E. To celebrate Program for the member of the society. F. To work for the welfare of the Society through various programs, lecturers, demonstration and other activities. G. To give educational help to the poor and needy students of the society member. H. To establish, conduct, maintain and manage Old Agee Homes, Bal Kalyan Kendra etc. for society member. I. To run conduct, maintain and manage Hospital Nursing Home etc. J. To give Medical help to the Tribe peoples and to arrange Medical Camp for society members. K. To Organize the Medical Camp & free eye Check-up Camp. L. To provide relief to the people who affected by Natural Calamities. M. To implement the Scheme of Government, Semi Government, Municipal Corporation about education subjects to their conditions. N. To run and organize social activities and programs for the benefit of the society. O. To create Social, Cultural, Educational awakening amongst the society Members and General public. P. To perform social, educational welfare and cultural activities. To do such other things which are incidental conducive to attainment of above objects?"
37. It is clear that there is no object of safeguarding or protecting the interests of the consumers in general or even of members of the association in general, however, in some specific fields, the promotion of interests of its members has been mentioned in the list of objects of the association. As the complaint has been filed on behalf of the members of the association and not for any outside consumer, it is required to be seen whether the reliefs claimed in the complaint correspond to any objective of the association. From this aspect, it is seen that the last object i.e. object No. (P) mentions an object to do such other things which are incidental conducive to attainment of above objects. Object (D) relates to organizing different sports and to work for promotion of sports. The complainant association has claimed relief in respect of the recreation ground which is a space to organize sports and for other cultural activities and thus, the relief demanded in respect of the recreation ground is definitely linked to the object of the association. Hence, for this relief, the complainant association would be considered as a voluntary association competent to file the complaint in respect of this relief. For other reliefs sought in the complaint, the complainant No.1 association cannot be considered as a voluntary association competent to file the complaint in respect of these reliefs because the objects of the complainant association do not have any clause relating to safeguarding or protecting the interests of the consumers in general or of its members in general or even in respect of the reliefs claimed in the complaint except the relief in respect of recreation ground.
38. On merits, the appellants/opposite parties are aggrieved by the decision of the State Commission in respect of the parking spaces and the recreation ground. The recreation ground was originally proposed on the ground floor in the plan and accordingly the occupation certificate has also been issued. However, in the revised plan, it has been shifted to the podium level. The learned counsel for opposite party No.1 has claimed that the permission was given by the Executive Engineer for shifting of the recreation ground from ground level to podium level. The question is whether this is the approval of the competent authority and whether the revised plan was approved. The revised plan has been approved only in the year 2014 and by that time the law in this regard was propounded by the Hon'ble Supreme Court and the Hon'ble Supreme Court has laid down guidelines in respect of the recreation ground in its judgment Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr. (supra), wherein the following has been held:-
"32. Therefore, after reflecting upon the legal position, we are clearly of the opinion that having 15%, 20% or 25% of the area (depending upon the size of the lay-out) as the recreational/amenity area at the ground level is a minimum requirement, and it will have to be read as such. We therefore, answer the issue no. 1 by holding that it is not permissible to reduce the minimum recreational area provided under DCR 23 by relying upon DCR 38(34). However, if the developers wish to provide recreational area on the podium, over and above the minimum area mandated by DCR 23 at the ground level, they can certainly provide such additional recreational area."
39. This judgment is dated 17.12.2013, which means that this judgment is prior to the approval of the revised plan. Thus, the revised plan in respect of the recreation ground is in violation of the above guidelines given by the Hon'ble Supreme Court. Thus, whether the complaint is treated as filed by seven members or 43 members, recreation ground has to be on the ground floor and it cannot be shifted to podium level.
40. Now coming to the position of parking spaces, it is, first of all, seen that the complainant No.1 is not entitled to file complaint for this relief as examined earlier. Complainant No.2 was non-existent at the time of filing of the complaint, so its case as complainant cannot be considered. On merits, it is seen that the brochure provided for the parking at the basement of the building in question, however, the agreement provides for parking spaces as under:-
"22. the Promoters have informed the Purchaser/s and Purchaser/s is/are aware that car parking facility/car parking provided on the ground to Podium level on west side of MONTE CARLO has access and egress only from mechanical car lift and there is no drive way or approach road or podium level from ground floor to 5th floor in the building MONTE CARLO and Purchaser/s do hereby confirm with the Promoters that the Purchaser/s of flats and the said premises in the said building MONTE CARLO will be responsible for maintenance/upkeep and replacement of the said mechanical car life including but not limited to comprehensive maintenance contract, electricity charges, insurance charges and all other costs, charges expenses for attendances etc. and Purchaser/s hereby agree and confirm not to raise any objection on dispute regards the same."
41. It is also true that the opposite parties had given their intention and plan of acquiring additional FSI by giving the basement for the public car parking to the MCGM in the agreement itself. Moreover, the agreement also does not provide for the car parking spaces at the basement rather, the car parking spaces are provided as mentioned in section 22 of the agreement above. The brochure, however, indicated that the car parking will be provided at the basement. It is true that the brochure also reflects the promises and plans of the opposite party however, the agreement is the real contract between the allottee and the builder and in my view, in case of any conflict between the two, the provision in the agreement should prevail. This Commission in Tirumala Garden Flat Owners Vs. Tirumala Homes Pvt. Ltd. & anr., RP No.3998 of 2012, has observed the following:
"11. We have gone through the agreement for sale. It is a contract between petitioner and the respondents. We are of the view that the petitioner cannot hold the respondents liable for what is not included in the agreement for sale. The brochure is not in the nature of a contract. Further, the petitioner entered into the individual agreements of sale with open eyes. We agree with the findings of the State Commission that "there is no agreement between the complainant and the OP to provide such facilities as agitated by the complainant, the said Commissioner report is not helpful for the complainant." As observed by the State Commission, the complainant has failed to file any agreement between the members of association and the builder to prove that the said works referred to in the complaint were agreed to be done by the respondents/opposite parties."
42. The judgment of the Hon'ble High Court relied upon by the learned counsel for the complainants does not deal with the conflict between the provisions of the brochure and those of the agreement. Thus, as per the agreement, there was no promise to give car parking at the basement rather, it was indicated that the basement will be given to the MCGM for public parking to get additional FSI.
43. Thus, based on the above examination, the complainant association, first of all, is not entitled to file the complaint in respect of the car parking spaces and secondly, even on merits, the complaint cannot be accepted.
44. The complainants in their appeal have raised the issue that the State Commission has not passed any order for completing all the amenities/facilities by the opposite parties. The State Commission has also not given any time frame for implementation of the order particularly for formation of the society for residents. The question of conveyance deed has also been raised by the complainants. However, before taking the issues raised by the complainant, it is seen that the appeal filed by the complainant being FA No.530 of 2016 has been filed with a delay of 67 days. The complainant has stated that the delay has happened in discussing the impugned judgment with all the members of the association and then to take a decision for filing of the appeal. The delay is not deliberate or intentional. Moreover, when the cross appeal is being considered by this Commission, the appeal of the complainant should also be considered. Learned counsel for the opposite party has relied upon the Judgment of the Hon'ble Supreme Court in Rajiv Kochar Vs. R.S.Sharma and another, (2002) 9 SCC 624, (supra) where the Hon'ble Supreme Court has not accepted the delay in a cross appeal. However, it is seen that in the case mentioned by the learned counsel for the opposite party, the delay in filing the cross appeal was 560 days, whereas in the present case the delay is only 67 days. Moreover, no prejudice will be caused to the other party if both the cross appeals are decided on merits. The Hon'ble Supreme Court in Manoharan Vs. Sivarajan & Ors, Civil Appeal No.10581 of 2013, decided on 25.11.2013 (SC) has observed:-
"9. In the case of State of Bihar & Ors. v. Kameshwar Prasad Singh & Anr., it was held that power to condone the delay in approaching the Court has been conferred upon the Courts to enable them to do substantial justice to parties by disposing the cases on merit. The relevant paragraphs of the case read as under:
"11. Power to condone the delay in approaching the Court has been conferred upon the Courts to enable them to do substantial justice to parties by disposing of matters on merits. This Court in Collector, Land Acquisition, Anantnag v. Mst. Katiji (1987)ILLJ 500 SC held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life purpose for the existence of the institution of Courts. It was further observed that a liberal approach is adopted on principle as it is realised that:
1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
3. 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
45. Esha Bhattacharjee vs. Managing Committee of RaghunathpurNafar Academy and Others., (2013) 12 SCC 649, has laid down:-
21. "From the aforesaid authorities (case laws referred) the principles that can broadly be culled out are:
21.1. (i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.
21.2. (ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.
21.3 (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.
21.4 (iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.
21.5 (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.
21.6. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.
21.7 (vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.
21.8 (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.
21.9 (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.
21.10 (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.
21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.
21.12. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.
21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.
22. To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are:
22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.
22.2. (b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.
22.3. (c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.
22.4. (d) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters."
46. The Hon'ble Supreme Court in another case N. Balakrishnan Vs. M.Krishnamurthy, (1998) Supp. 1 SCR 403, has laid down the following:-
"11. Rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis Mum (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.
12. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" Under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi Jain V. KuntalKumari, MANU/SC/0335/1968: [AIR 1969 SCR1006 and State of West Bengal Vs. The Administrator, Howrah Municipality, MANU/SC/0534/1971: [1972]2SCR874a.
13. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Court should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
47. On the basis of the above judgments, I am inclined to condone the delay in filing the First Appeal No.530 of 2016 at the cost of Rs.20,000/- to be deposited with the Consumer Legal account of this Commission.
48. The transfer of the land and maintenance to the society of the residents is a statutory requirement under MOFA and a time frame is also given in MOFA. However, it is a general trend that builder/developer try to either obtain additional FSI or on any other reason, try to extend the period of development. In the present case also, the conversion of the parking spaces at basement originally meant for resident of the building are being provided to the Municipal Corporation of Greater Mumbai for public parking in lieu of additional FSI. Obviously, this additional FSI still benefit the builder/developer and the project life will extent to 5-6 years more. The area will not be free from the nuisance value of the construction activity and the generated pollution. These concerns have also been raised by the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai and Ors. Vs. Kohinoor CTNL Infrastructure Company Private Limited & anr. (supra). However, so long as the rule permits revision of plan due to additional FSI or any other reasons, the normal provisions of MOFA or similar provisions in other State Acts will continue to suffer to the detriment of the consumers. It is for the Central Government and the State Governments to counter these possibilities by amending their respective Acts. Once a project is complete, it should only be allowed to avail additional FSI or any such incentive being available during or after the completion, only at the time when its redevelopment is taken after some 30-50 years with consent of the residents and not before that, otherwise the people living in these projects will face the hardships due to continuous construction activity as well as continuing pollution for a long time.
49. In spite of these observations, it is not possible for me to pass any order in this regard because first of all, the complainant is non-suited to file complaint in respect of car parking spaces under section 12(1)B of the Consumer Protection Act 1986 and secondly, the existing rules provide for these incentives to the detriment of the consumers and that the agreement in question has not been violated.
50. As the complainant No.1 association is not entitled to file the complaint in respect of other points except the recreation ground raised in the complaint under section 12(1)B of the Consumer Protection Act 1986, the other points raised in the complaint cannot be considered.
51. It is true that the State Commission has awarded a compensation of Rs.5 lakhs to the complainant for mental harassment and inconvenience. I agree with the assertion of the learned counsel for the opposite parties that this type of compensation for mental agony cannot be provided to a corporate entity as held by the Hon'ble Supreme Court in Sikka Papers Limited Vs. National Insurance Company Limited and Ors. (supra). Clearly the complainant No.1 is a corporate entity and not a natural person. Thus, the order of the State Commission in respect of the award of Rs.5 lakhs as compensation for mental harassment to the complainant cannot be sustained. However, it is seen that the opposite parties have definitely adopted unfair trade practice in respect of the disclosures made to the members of the complainant. In the brochure, disclosure was made that the recreation ground will be on the ground floor, however, later it was shifted it to the podium level. This is clearly an unfair trade practice and the complainant society is entitled to get compensation for this unfair trade practice. Accordingly, a compensation of rupees 7.5 lakhs is awarded to the complainant No.1 association to be paid by the opposite parties 1-3.
52. Based on the above discussion:
(a) The following portions of the order dated 10.02.2016 of the State Commission are set aside.
"3. The Opponent nos.1 to 3 are hereby directed to provide car parking space at basement as per disclosure to the complainants.
6. The opponent nos.1 to 3 do pay jointly and severally an amount of Rs.5,00,000/- by way of compensation towards mental torture, harassment and inconvenience caused to the complainants."
(b) Remaining order of the State Commission is upheld. It is further ordered that the opposite parties 1-3 jointly and severely will pay a compensation of Rs.7.50 lakhs (rupees seven lakh fifty thousand only) to the complainant No.1 for unfair trade practice.
(c) The complainant no.1 association will deposit Rs.20,000/- (rupees twenty thousand only) with the Consumer Legal Aid Account of this Commission within a period of 45 days as cost for condoning the delay in filing appeal.
(d) Both the appeals No. 205 of 2016 and No. 530 of 2016 stand disposed of in terms of the above order.
...................... PREM NARAIN PRESIDING MEMBER