National Consumer Disputes Redressal
Consumers Walfare Association & Anr. vs M/S. Vasundhara Builders & Developers on 12 January, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 725 OF 2016 (Against the Order dated 05/04/2016 in Complaint No. 323/2013 of the State Commission Maharashtra) 1. CONSUMERS WALFARE ASSOCIATION & ANR. PRAMUL K. KHIVESARA, 3503 VENEZIE B TOWER, G.D AMBEKAR MARG KALE CHOWKY
MUMBAI - 400033 2. SHRI PRAMOD K. LHIVESARA S/O SHRI KAPOORCHAND H.KHIVESARA, 703,SUMER NO.3, LOVE LANE,MAZGAON, MUMBAI-400010 ...........Appellant(s) Versus 1. M/S. VASUNDHARA BUILDERS & DEVELOPERS THROUGH ITS SOLE PROPRIETOR, SH. PRAVIN S. DAVE SHOP NO.1, SONI HOUSE CHANDAVARKAR LANE NEAR SURESH RESTAURANT BORIVALI [WEST] MUMBAI-400092 ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER HON'BLE AVM J. RAJENDRA, AVSM VSM (Retd.),MEMBER
FOR THE APPELLANT : FOR THE APPELLANTS : MS. AMITA SINGH KALKAL, ADVOCATE
MS. ADITI GUPTA ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENT : MR. DEVANSH SRIVASTAVA, ADVOCATE
MR. AMIT DAVE, ADVOCATE
Dated : 12 January 2024 ORDER
AVM J. RAJENDRA, AVSM, VSM (RETD.) MEMBER
1. The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 ("the Act") against the Order dated 05.04.2016 passed by the State Consumer Disputes Redressal Commission, Maharashtra ("the State Commission"), in Consumer Complaint No.323 of 2013, wherein the Complaint filed by the Complainants (Appellants herein) was partly allowed.
2. For convenience, the parties in the present matter are being referred to as mentioned in the Complaint before the learned State Commission. The Complainant/Appellant No. 1 is a registered Consumer Welfare Association, and the Complainant/ Appellant No. 2 Shri Pramod K. Khivesara availed housing services of the Respondent/ OP. While "M/s. Vasundhra Builders & Developers" through its sole proprietor-Shri Pravin S. Dave is referred to as the Opposite Parties/OP or Builder (Respondent herein) in this matter.
3. Brief facts of the case, as per the Complainant, are that the Complainant No.2 had booked a flat admeasuring 880 sq. ft. built up area on 6th floor of proposed 'A' wing of building on plot No.51, Hissa No.5/A, C.T.S.No.324(Pt.) Village Eksar, Borivali (West), for Rs.8,80,000/- vide allotment letter dated 20.06.1995. The allotment letter outlined payment schedule as per progress of construction. Accordingly, the Complainant made initial payment of Rs.1,00,000/- which was acknowledged by the OP. The allotment letter also stated that the formal agreement would be executed in due course.
4. Between 1995 and 1998, Complainant No. 2 made multiple visits to OP's office for updates. During the visits, the OP presented a commencement certificate dated 03.07.1981 (revalidated up to 17.05.1983), indicating delay in construction needing revalidation. Despite his willingness to pay, OP failed to demand any payments. The Complainant, vide letter dated 27.04.1998, expressed his readiness to pay the installments for the flat. He was surprised on receipt of an undated and unsigned demand letter from Kandur Corporation, and he chose to ignore. Subsequently, on 10.10.2000, he received another demand letter from Kandur Corporation for payment of Rs.87,500/-. Distressed by this, he contacted OP seeking clarification. The OP explained that Kandur Corporation was given rights to develop a part of the plot for constructing the 'B' Wing of building, while the OP would construct 'A' Wing. Further, the commencement certificate dated 23.09.1999 was endorsed only up to plinth level, as per the approved plan dated 03.01.2000, in OP's name. OP advised him to disregard the said demand letter.
5. The OP continued to provide vague assurances and excuses for delay in handing over. In February 2006, he sent another letter seeking clarification. From 2007 to 2011, the OP avoided meetings and discussions regarding the construction timeline and continued to make false promises, leading the Complainant to believe he would soon take possession of the flat on payment of the remaining balance of Rs. 7,80,000/- due in one installment. In a shocking turn of events, the OP informed the Complainant during a meeting that the allotted flat had been sold to another individual. The OP then offered to refund the booking amount. In response, he through his advocate sent a notice dated 31.11.2012, demanding possession of the flat. The OP's advocate replied on 29.12.2012, citing alleged letters dated 30.09.1999, 17.12.1999, and 19.04.2000 demanding installment payments and a letter dated 12.08.2000 canceling and terminating the allotment, forfeiting the booking amount of Rs. 1 Lakh. The Complainant, through a letter dated 08.03.2013, denied receiving these letters and expressed willingness to pay the remaining amount. The OP, in a reply dated 22.03.2013, claimed to have terminated the agreement, closing the matter.
6. Being aggrieved the Appellants/Complainants filed Consumer Complaint No. 323/20113 before the State Commission and prayed as under: -
"A. The Opponent be directed to pay to the Complainant compensation of Rs.58,35,840/- (Rs. 66,15,840/- being current market value of booked flat Less balance amount payable Rs.7,80,000/- against agreed price of Rs.8,80,000/- for the deficiency in service and unfair business practice of the Opponent for denying the Complainant booked flat of 880 sq. ft. built up area which is currently valued at the said amount of Rs. 66,15,840/- as per the Stamp Duty Ready I Reckoner'2013 (Ex.H).
B. Cost of this complaint Rs.20,000/-
7. In the reply, the OP contested the complaint and stated that the complaint lacked essential details and did not establish a valid cause of action. The allegations are purely hypothetical, false, and baseless. The Complainant's claim was time-barred. The allotment letter dated 20.06.1995, on which the Complainant based the case, did not constitute a definitive contract until an agreement under the Maharashtra Ownership Flats Act (MOFA) was executed. In terms of the allotment letter, the Complainant was required to make payment of Rs. 2,55,000/- within seven days. Despite several demand letters dated 17.12.1999 and 19.04.1999, the Complainant failed to make the payments. Consequently, the OP terminated the allotment letter on 12.08.2000. As the allotment letter was terminated, there was no ongoing relationship between the complainant and the OP as a consumer and service provider. Therefore, the OP requested the dismissal of the complaint.
8. The State Commission on 05.04.2016 passed the following Order:
"[13] The complainant has produced development agreement along with his affidavit and information he received under the Right to Information Act. However, in our opinion, this is not relevant in the present matter. As regards prayer of the complainant no.2 that he is entitled for compensation as per ready reckoner, we find that in the facts and circumstances of the case, it will not be just and fair to allow the prayer of the complainant. The complainant relied on the decision delivered by the Commission in Appeal No.489/10 dated 17/09/2012. However, the same is not relevant in the facts and circumstances of the case.
[14] Though the opponent has terminated the allotment vide his letter dated 12/08/2000, however, he has not returned the booking amount to the complainant no.2. Hence, the complainant no.2 is entitled to booking amount of Rs.1 lac with interest @12% p.a. and same will meet the ends of justice. We hold accordingly and pass the following order.
ORDER
The consumer complaint is partly allowed.
The opponent is directed to pay an amount of Rs. 1 lacs [Rs. One Lac only] to the complainant along with interest @12% p.a. within a period of two months from the date of the order. If the amount is not paid within a period of two months, the amount will carry an additional interest @3% p.a. till its realization.
The opponent shall bear his own costs and pay costs of Rs.30,000/- [Rs. Thirty Thousand only] to the complainant.
Certified copies of the order be furnished to both the parties forthwith.
9. Aggrieved by the Order of the State Commission, the Appellant / Complainant filed the Appeal No. 725 of 2016 seeking the following:
i) admit, accept and allow the appeal by setting aside the Order dated 5th April, 2016 passed by the Learned State Consumer Disputes Redressal Commission, Maharashtra, Mumbai In Consumer Complaint No. CC/13/323 and grant damages and compensation as per claimed In complaint being Compensation of Rs.58,35,840/- (Rs.66,15,840/- being the current market value of the booked flat less balance amount payable being Rs.7,80,000/- against the agreed price of Rs.8,80,000/-) for deficiency In service and unfair business practice of the Respondent while denying to the complainant the booked flat of 880 sq.ft. built up area which Is currently valued as above In accordance with Ready Reckoner Index 2013 for calculation of stamp duty;
ii) And pass such other or further order(s) as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case.
10. In the Appeal, the Appellants mainly raised following issues:-
(a) The State Commission failed to recognize the sequence of events from allotment letter on 20.06.1995, dissolution of the respondent firm on 04.11.1996, their unanswered registered letter on 27.04.1998 seeking progress on construction, transfer of construction rights and property title to Kandur Corporation on 21.10.1999 without informing Appellants and permission to construct up to plinth level granted on 28.03.2000. Given these facts, the alleged demand letters dated 17.12.1999, 19.4.2000, and the cancellation letter dated 12.8.2000 had no grounds.
(b) The respondent abandoned construction, possession and delivery to Appellants, who paid dues as per allotment letter.
(c) The State Commission overlooked the deficiency in service by denying the flat despite having paid a substantial amount. He is entitled to compensation under Section 14 of the Act for the losses incurred due to denial of the flat since 1995.
(d) The State Commission erroneously relied on termination letter dated 12.8.2000. The simple interest @ 12% per annum provided no real compensation to the Appellants, who locked their funds in and lost opportunities for an extensive period.
11. On being served notice on memo of Appeal, the OP has not submitted any reply. However, written submissions are filed.
12. The learned Counsel for the Appellants reiterated the issues raised in the complaint and Appeal and asserted that the Appellant No. 2 had paid booking amount of Rs. 1,00,000/- and repeatedly enquired about the stage of construction and installment payments. In response to legal notices of the Complainant, the Respondent's advocate alleged sending letters under Postal Certificate, which he never received. The OP terminated the allotment and confiscated the booking amount, claiming that the alleged letters sent by them were duly served. The learned Counsel argued that the complaint was decided based on the premise that the Appellant was not in communication with Respondent and that the alleged letters sent by the Respondent were served. However, the State Commission failed to consider the evidence obtained by the Appellants through RTI. These, when examined alongside the fictitious demand letters, proved the Respondent's deficiency in service, unfair business practices, and fraud. The Respondent failed to construct the flat, abandoned the project, and transferred construction rights and property title to Kandur Corporation while misleadingly demanding installments for alleged construction activities. To evade liability and with malicious intent, the Respondent fabricated evidence of alleged letters demanding installments for construction that never occurred. These fictitious letters were neither served nor received by him. He argued that the letters were false and fabricated, as evidenced by the RTI information indicating transfer of construction rights and property title to Kandur Corporation only on 21.10.1999 without any actual construction by the Respondent. Therefore, the Appellants demanded compensation of Rs. 58,38,840/-, calculated as per stamp duty, and other relevant reliefs.
13. The learned counsels for the Respondent/OP reiterated the facts of the case and argued that the OP had repeatedly requested Appellant No. 2 to adhere to the payment plan through demand letters dated 30.09.1999, 17.12.1999, and 19.04.2000. Despite these, Appellant No. 2 violated the payment plan, leading to the termination of the allotment letter on 12.08.2000 and forfeiture of the booking amount. He emphasized that Appellant No. 2 failed to provide any evidence supporting their claims of contacting the OP and inquiring about the possession date after the issuance of the allotment letter dated 27.04.1998. The entire appeal was based on frivolous and false allegations. He falsely contended that the Commencement Certificate for project construction was obtained in 2000, and rights to construct were granted to Kandur Corporation. Contrary to these claims, the Commencement Certificate was acquired by the Respondent on 03.07.1981. The allegations of letters being forged and fabricated are baseless. The State Commission justly directed the OP to refund the booking amount of Rs. 1,00,000/- with interest @ 12% per annum. As per established legal principles, in case of deficiency against a builder, homebuyers are entitled to only refund with interest. The OP had already complied with the State Commission's order by sending letter dated 28.04.2016, along with cheque for Rs. 1,31,000/-, which he refused to accept. Therefore, in view of the abovementioned facts and circumstances the present Appeal ought to be dismissed.
14. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned Counsels for both the Parties.
15. The primary issue in this case revolves around the validity of the termination of allotment letter letter dated 20.06.1995 for the flat purchased by Complainant No. 2 from the Respondent/OP. Towards this, the main issues are communication between them, adherence to the payment plan, progress of the construction and the validity of demand letters sent by the Respondent. The Appellants contend that the termination and subsequent actions by the Respondent were illegal, while OP asserted that their actions were lawful due to the non-compliance of the payment plan by the Appellant No. 2.
16. It is an admitted position that Complainant No. 2 had booked a flat on the 6th floor of proposed 'A' wing for Rs.8,80,000/-. The flat was to be constructed on plot No.51, Hissa No. 5/A, C.T.S.No.324 (Pt.) Village Eksar, Borivali (West) vide allotment letter dated 20.05.1995. Accordingly, he made initial payment of Rs.1,00,000/-. The allotment letter gives the schedule for payments as per progress of construction and that the agreement will be executed in due course. While the said allotment letter has no reference to the flat allotted, the OP had admitted receipt of Rs. 1 Lakh. Complainant No. 2 had produced a letter by him dated 27.04.1998 to the OP showing readiness to pay the installment. He has also produced two demand notices from one Kandur Corporation. In this regard, he had contended that, after receiving the said demand notices from Kandur Corporation, he reached out to the OP and the OP informed him that Kandur Corporation was given right to develop part of the plot for constructing B Wing of building Aroma while OP was to construct A Wing. He has also stated that the OP gave vague assurances and excuses for delay in construction with no demand for installments. In the legal notice dated 08.03.2013 issued by him, while it was stated that several letters were addressed by him to the OP and the same were received back with remarks intimation posted and unclaimed, not even single such letter was produced by him. Thus, other than allotment letter dated 20.06.1995 and letter dated 11.04.1998, he has not placed any evidence of communication with the OP on record. On the other hand, the OP placed on record, the letter dated 30.09.1999 to Complainant No.2 along with a copy certificate of posting. OP has also produced a demand notice dated 17.12.1999 giving a reference of earlier demand letter dated 30.09.1999 and further letter of 19.04.2000 along with certificates of posting. Thus, Complainant No.2 was not in communication with OP, after the letter dated 27.04.1998. He admitted to have demanded a meeting to clarify with the OP and at the meeting he was shocked to hear from OP that the said flat has been sold to other purchaser and the OP was willing to refund the amount with interest. However, no date of such meeting was stated by the Complainant No.2.
17. In view of the foregoing, we see no reason to interfere with the Order of the learned State Commission dated 05.04.2016 in Consumer Complaint No. 323 of 2013. The FA No. 725 of 2016 is accordingly, dismissed.
18. There shall be no orders as to costs. All pending Applications, if any, also stand disposed of accordingly.
...................................... SUBHASH CHANDRA PRESIDING MEMBER ................................................................................... AVM J. RAJENDRA, AVSM VSM (Retd.) MEMBER