National Consumer Disputes Redressal
M/S. Madhu Builders & Developers & Anr. vs Ashok, Hind Co-Op Housing Society Ltd. on 8 September, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 295 OF 2011 (Against the Order dated 13/06/2011 in Complaint No. 144/2009 of the State Commission Maharastra) 1. M/S. MADHU BUILDERS & DEVELOPERS & ANR. 617,ISHKRIPA, 14TH ROAD, KHAR (WEST) MUMBAI-400052 MAHARASTRA 2. MR. PREM PUNJABI M/S MADHU BUILDERS & DEVELOPERS, 617, ISHKRIPA, 14TH ROAD, KHAR (WEST), MUMBAI-400052 ...........Appellant(s) Versus 1. ASHOK, HIND CO-OP HOUSING SOCIETY LTD. THROUGH ITS SECRETARY/CHAIRMAN, PLOT NO. 430, 15TH ROAD, KHAR (WEST) MUMBAI-400052 MAHARASTRA ...........Respondent(s) FIRST APPEAL NO. 323 OF 2011 (Against the Order dated 13/06/2011 in Complaint No. 144/2009 of the State Commission Maharastra) 1. ASHOKA HIND CO-OP. HSG. SOCIETY LTD. Plot No. 430, 15th Road, Khar (West),
Mumbai-400052 Maharastra ...........Appellant(s) Versus 1. M/S. MADHU BUILDERS & DEVELOPERS & ANR. 617, Ishkripa, 14th Road, Khar (West) Mumbai-400052 Maharastra 2. MR. PREM PUNJABI M/s. Madhu Builders & Devlopers, 617, Ishkripa, 14th Road, Khar (West) Mumbai-400052 Maharstra ...........Respondent(s) BEFORE: HON'BLE MRS. M. SHREESHA,PRESIDING MEMBER HON'BLE MR. ANUP K THAKUR,MEMBER For the Appellant : For M/s. Madhu Builders : Mr. S.K. Sharma, Advocate With Mr. Uday Wavikar & Mr. Vikas Nautiyal, Advocates For the Respondent : For Ashok Hind Co-op. Hsg. Society : Mr. S.B. Prabhavalkar, Advocate Dated : 08 Sep 2016 ORDER M. SHREESHA, PRESIDING MEMBER
1. For the reasons stated in the Affidavit, delay of two days in filing the First Appeal No. 295/2011 is hereby condoned. Aggrieved by the order of the State Consumer Disputes Redressal Commission, Maharashtra (in short, the 'State Commission'), in Consumer Complaint No.09/144, both the Opposite Parties and the Complainant preferred these Cross-Appeals under Section 19 of the Consumer Protection Act, 1986 (in short, 'the Act').
By the impugned order, dated 13.06.2011, the State Commission partly allowed the Complaint directing the Opposite Parties, jointly and severally to handover to the Complainant Society, original Deed of Conveyance, property card, original IOD, Commencement Certificate, Occupancy Certificate, Building Completion Certificate, Draft Plan, along with all other necessary documents and Certificates in possession of the Opposite Parties relating to the re-development work carried out by the Opposite Parties and were also directed to submit to the Complainant Society, a Certificate issued either by a competent Government approved Architect or by a concerned officer of Municipal Corporation of Greater Mumbai, regarding actual FSI consumed by the Opposite Parties while carrying out the re-development work of the Complainant Society Building; together with compensation of ₹ 50,000/- and costs of ₹ 25,000/-; failure to comply with this order within a period of two months, would attract default interest @ 9% p.a., the other claims of the Complainant Society were dismissed.
2. Succinctly put, the facts in brief are that the Building of the Complainant Society was constructed in the year 1964, but subsequently, in the year 2001, they came to know that there was unutilized FSI available on the subject plot and some additional TDR could be purchased from the Open Market for additional construction. By a unanimous decision of the Members of the Society, taken on 15.07.2001, it was decided to entrust the job to M/s. Madhu Builders & Developers and accordingly, a Development Agreement dated 29.08.2001 was executed between both the parties. A Monetary consideration of ₹1,76,000/- was to be paid to the Complainant Society and renovation of the building was to be completed as per the terms of the Agreement. The first installment of ₹ 51,000/- was paid on execution of the Agreement and the second installment of ₹ 51,000/- was payable at the time the developer applies for Occupancy Certificate, which was not paid and the third installment of ₹ 74,000/- payable after receipt of Occupancy Certificate was also not paid. The Complainant, under RTI learnt that the Occupancy Certificate was granted to the Builder on 14.11.2006, but despite repeated demands, the amounts were not paid. It is stipulated under the Agreement that the Builder was supposed to complete the re-development, within a period of 24 months from the date of issuance of Commencement Certificate. It is averred that the Opposite Parties did not handover the Commencement Certificate and also did not carry out the re-development work within the stipulated time which amounts to deficiency of service and, therefore, seek direction for providing them with all the necessary documents, sanction plan, commencement certificate, occupancy certificate, building plan certificate, etc.
3. It is pleaded that the Builder was under an obligation to demolish the existing garages and provide adequate quantum of parking space to old members as well as to new members but the Builder erected one parking shed and allotted it to the new purchasers for exclusive right of parking space, thereby depriving the original members of the parking space. It is averred that open parking space as well as stilt parking space cannot be sold or allotted by a Builder and, therefore, a direction ought to be issued to the Builder to remove the illegal shed and handover the parking space to the Complainant Society. It is further pleaded by the Complainant Society that as per the terms of the Agreement, the Builder agreed to conduct repairs of the exterior portion of the building and promised to provide gas connection, internet connection, TV connection, inter-com connection and other amenities. The Complainant Society had appointed an Architect, who submitted his report on 12.05.2008 furnishing a list of 12 items which needed to be provided, the estimated cost of which was ₹ 11,32,000/-. It is stated that the Builder was obligated to give them the documents under the provisions of Maharashtra State Flat Owners Association Act, 1963. However, the Opposite Parties have not provided a copy of the sanction plan, copy of the Completion Certificate, Commencement Certificate, Copy of the amended Plan, Occupancy Certificate, Certificate issued by the Chief Fire Officer of the Fire Brigade, etc. As the Opposite Parties did not pay the adequate stamp duty on the TDR purchased from the open market, consequently, the amount was required to be borne by the Complainant Society, amounting to ₹ 1,65,892/-. It is specifically pleaded that it is totally in the dark as to how much FSI & TDR had been consumed by the Opposite Parties; that the construction was not completed within 24 months; Clause 13 of the Development Agreement stipulating penalty of ₹ 5,000/- per day, was not adhered to; Opposite Parties did not obtain Occupancy Certificate and Commencement Certificate, for which act, the following reliefs were sought :
"a) To hold that the Opposite Parties are guilty of deficiency in service and unfair trade practice as per the provisions of the Consumer Protection act, 1986.
b) To direct the Opposite Parties No.1 & 2 jointly and severally to pay to the complainants a sum of Rs.1,25,000/- (Rupees One Lakh, Twenty Five Thousand) together with interest at 21% p.a., with effect from 15.11.2006 till the date of realization being the amount due and payable as per clause no. 5.2 and 5.3 of the development agreement.
c) To direct the Opposite Parties No. 1 & 2 jointly and severally to pay to the Complainant an amount of Rs.47,90,000/- (Rupees Forty Seven Lakhs Ninety Thousand) as damages for delay in construction along with interest at 21% p.a., with effect from 15.11.2006 till realization.
d) To direct the Opposite Parties jointly and severally to carry out the repairs as per Architects report dated 12.05.2008 or alternatively to pay to the complainant the cost of the said repairs estimated at Rs.11,32,000/-.
e) To direct the Opposite Parties jointly and severally to regularize, replace and to restore the various irregularities committed by them as mentioned under point no. 1 to 8 on page no. 18 of the Architects' Report dated 12.05.2008.
f) To direct the Opposite Parties jointly and severally to arrange for Building Completion Certificate from the Municipal Corporation of Greater Bombay within a time bound schedule of two months.
g) To direct the Opposite parties to disclose all liabilities on Affidavit arising out of the development work carried out by them and to submit the original receipts for having fully paid all such dues/liabilities to the respective authorities.
h) To direct the Opposite Parties to submit a Certificate issued by a Qualified/competent, BMC & Government approved Architect the actual FSI/consumed by the Opposite Parties and further to direct the Opposite Parties to pay compensation for the excess FSI, if any, consumed by them at the prevailing market rate.
i) To direct the Opposite Parties to return the original deed of Conveyance & Property Card given by the Complainant and to hand over the original IOD, Commencement Certificate , Occupancy Certificate, Building Completion Certificate, approved completion plans along with all other necessary documents & certificates in the possession of the Opposite Parties relating to the said construction work.
j) To direct the Opposite Parties to demolish the illegal shed/garage and hand over the stilt parking and open space parking to the Complainant society free from encumbrances.
k) To condone the delay, if any, in filling this complaint for which an application is filed herewith.
l) To direct the Opposite Parties no. 1 & 2 jointly & severally to pay to the complainant a sum of Rs.2,00,000/- (Rupees two Lakhs) towards compensation for the inconvenience and mental agony caused to the members of the Complainant Society due to the negligence and deficiency in service of the Opposite Parties no. 1 & 2.
m) To direct the opposite parties no. 1 & 2 to pay to the Complainant the sum of Rs.50,000/- (Rupees Fifty Thousand only) being the Legal and other incidental expenses incurred by the Complainant.
n) For such other and further reliefs as this Hon'ble Commission may deem fit and proper in the nature and circumstances of the above mentioned complaint".
4. Initially, a Consumer Complaint bearing No.140/2007 was filed on 12.09.2007 before the State Commission, within a period of two years from the date of Occupancy Certificate, i.e., 14.11.2006, but the said Consumer Complaint was rejected by the State Commission on technical grounds, vide order dated 07.05.2009 with a liberty to file a fresh Complaint. A new Consumer Complaint bearing CC No. 144/2009 was filed by the newly formed Society, on 24.07.2009, with an application for condonation of delay which was allowed by the State Commission vide order dated 02.03.2010. A Revision Petition was preferred by the Opposite Parties bearing No.2918/2010 before this Commission, which, was dismissed vide order dated 14.12.2010. Thereafter, the Opposite Parties filed their Written Version before the State Commission.
5. The Opposite Parties in their Written Version submitted that the issue of non-maintainability of the Complaint which was decided by the this Commission at the admission stage was kept open by this Commission while disposing of RP No.2918/2010. It was further averred that the Complaint is barred by limitation as the Agreement was executed on 29.08.2001 and under Clause 13 of the said Agreement, the Opposite Parties were to procure the Commencement Certificate within six months from the date of execution of the said agreement and to apply for Occupancy Certificate within 24 months from the issuance of the Commencement Certificate. As such, the Opposite Parties were to procure the Commencement Certificate on or before 29.02.2002 and Occupancy Certificate on or before 29.02.2004, whereas, the present case was filed on 24.07.2009 and hence, the Complaint is hopelessly barred by time. The earlier Complaint filed by the Complainant was rejected on technical grounds on 07.05.2009 with the liberty to file fresh Complaint. It is averred that the pre-amount claim, i.e., ₹1,25,000/- and ₹ 47,90,000/- was calculated by the Complainant from 29.02.2004, and therefore, even the earlier Complaint bearing CC No. 140/2007 was hopelessly barred by time.
6. It is further pleaded that the Complaint is not maintainable under Section 2(1) (d) (ii) of the Act, as the Complainant Society has not engaged or availed the services of the Opposite Parties for consideration which is a pre-requisite for filing a consumer dispute. On the strength of its ownership, in respect of the said property, the Complainant Society executed an Agreement dated 29.08.2001 in favour of the Opposite Parties to consume the available FSI on the said plot of land by way of TDR and also to procure the TDR from outside to construct additional floors on the existing building belonging to the Complainant Society for an agreed consideration mentioned in the re-development agreement. It is pleaded that the said Agreement cannot be construed as a Joint Venture Agreement, but only as an Agreement to Sell unconsumed FSI available on the said plot of land for valuable consideration payable to the said Society and enough compensation to the Members of the Society to procure their individual consent for construction of additional floors on the said building. The present Complaint is indirectly seeking specific performance of the Agreement dated 29.08.2001 without approaching the Civil Court and without paying the Court fees; since the Complainant has not engaged or availed the services of the Opposite Parties for consideration, it is averred that the Complainant Society is not a consumer and, therefore, it is not maintainable.
7. It is further pleaded that the claim of the Complainant for ₹ 90,49,400/- is not based on any actual proof of alleged damages suffered by the Complainant, and that, without prejudice, the claim of the Complainant should not exceed ₹ 1,34,000/-.
8. As one of the Members of the Complainant Society deliberately withheld his consent, which was finally procured on 18.05.2002, the Opposite Parties could not apply for the Commencement Certificate before 18.05.2002. As per the Rules of Municipal Corporation of Greater Mumbai, the consent of all the Members of the Complainant Society was necessary to proceed with the development and to get the plan sanction and procure the Commencement Certificate, However, the Commencement Certificate was issued on 25.09.2002. As per Clause 13 of the Agreement, the Opposite Parties had to apply for Occupancy Certificate within two years from the date of Commencement Certificate subject to 'Force Majeure' clause. It is pleaded that the application was made for procuring the Occupancy Certificate on 07.10.2004, and, as such, there was a delay of only 12 days and there is no provision in the said Agreement for payment of interest. Besides this, as per the Agreement, ₹ 76,000/- was due and payable. Vide letter dated 12.08.2005, the Income Tax Authorities called upon the Opposite Parties to make payment due to the Complainant Society, directly under Section 226 (3)(x) of the Income Tax Act and there was no specific communication, therefore, the installment amount of ₹ 74,000/- payable, was not paid. Hence, the total claim of the Complainant cannot be beyond ₹ 1,34,000/- and this Commission does not have pecuniary jurisdiction to entertain the Complaint.
9. The State Commission, based on the evidence adduced, observed as under :-
[9] Many objections have been taken by the Opposite Parties in their written version. However, we propose to deal some of them. As regards tenability of the complaint is concerned, we are of the strong view that in terms of the agreement dated 29/8/2001, there was an agreement between the Complainant Society, on one hand and the Opposite Parties, as the Builder/ Developer, on the other. As per that agreement, services of the Opposite Parties were availed of by the Complainant Society and since there has been defects/ deficiencies in service or lacunae in performance of the contract or in completion of the contract, we are of the considered view that the Complainant Society, who had given contract or who had availed services of the Opposite Parties, could file a consumer complaint within Section-2(1)(d) of the Consumer Protection Act, 1986. The definition of the term - 'person', as defined under Section-2(1)(m) of the Consumer Protection Act, 1986; includes a firm, whether registered or not, Hindu Undivided Family or a Co-operative Society or every other association of persons, whether registered under the Societies Registration Act or not. Definition of 'person' under Section-2(1)(m) of the said Act and definition of 'consumer' under Section-2(1)(d) of the said Act, if read with definition of 'Complainant', as defined under Section-2(1)(b) of the Consumer Protection Act, 1986; would clearly mean that the Complainant Society herein can file a consumer complaint since it was a 'consumer' with reference to the services hired from the Opposite Parties. In these circumstances, we hold that the present consumer complaint as filed by the Complainant Society is tenable before this State Commission under the Consumer Protection Act, 1986; and an objection raised about tenability of consumer complaint at the behest of the Complainant Society must be held to be not sustainable in law.
[10] Secondly, question of limitation is also pressed into service by the Learned Counsel for the Opposite Parties. In fact, when this complaint was filed, it was so filed since we had permitted the Complainant Society to file a fresh consumer complaint after they were duly authorized by the Managing Committee of the Society and as and when elected. Initially, when the Complainant Society was under an administrator, a consumer complaint came to be filed by the Members of the Managing Committee of the Complainant Society. At that time, we had passed an order of rejecting the complaint since it was filed by the members of the Managing Committee when the Complainant Society was superseded by the Government and was being administered by an Administrator. That was the order passed by this State Commission itself on 7/5/2009 in Consumer Complaint No.140 of 2007. Acting upon this order, wherein we had permitted the Complainant Society to file a consumer complaint after new Chairman or Honorary Secretary is newly elected and they are authorized to do so by a resolution passed to that effect in the meeting of the Managing Committee. It is in the light of this order, present consumer complaint came to be filed and it was so filed with an application for condonation of delay and we had allowed that application for condonation of delay. It was so allowed on 2/3/2010 in the present consumer complaint, which is registered as Consumer Complaint No.144 of 2009. We had condoned the delay by observing that monetary claim shall be decided with reference to law of limitation and the complaint was admitted since some prayers are such that they disclose continuous cause of action. This order was challenged by the Opposite Parties before the Hon'ble National Consumer Disputes Redressal Commission by preferring a Revision Petition bearing No.2918 of 2010. However, the Hon'ble National Consumer Disputes Redressal Commission confirmed the order passed by this State Commission and dismissed the revision petition on 14/12/2010. As such, now we are required to see which prayer of the Complainant Society can be allowed and which prayer is required to be turned down, since barred by limitation.
[11] So far as monetary claim is concerned, Learned Counsel for the Opposite Parties has rightly pointed out that the agreement dated 29/8/2001 contained Clause (13), which mandated the Opposite Parties to procure Commencement Certificate within a period of six months from the date of execution of the said agreement and to apply for Occupancy Certificate within a period of 24 months from the issuance of the Commencement Certificate. Commencement Certificate was required to be procured on or before 29/2/2002 and the Occupancy Certificate had to be procured on or before 29/2/2004 and since the complaint is filed amongst many things to get Occupancy Certificate or Completion Certificate and since it is the case of the Complainant Society that for delay in completing construction, there was a penalty clause in the agreement and as per penalty clause, the Complainant Society was seeking compensation of ₹47,90,000/- together with interest thereon @ 21% p.a., as from 15/11/2006. Likewise, the Complainant Society was also claiming unpaid monetary consideration of ₹1,25,000/- together with interest thereon @ 21% p.a., with effect from 15/11/2006. This consumer complaint has been filed in the year 2009 and since, the amount of interest is claimed from 15/11/2006, that can be said to be a cause of action for claiming original amount as well as interest thereon and the complaint has been filed on 21/7/2009, which is clearly after a period of two years so far as monetary claim is concerned. Thus, we are of the strong view that the complaint as filed by the Complainant Society in respect of monetary claim, basically claim of ₹1,25,000/- together with interest thereon @ 21% p.a., and another claim of ₹47,90,000/- together with interest thereon @ 21% p.a., must be held to be barred by limitation and though we have allowed an application for condonation of delay, we had specifically mentioned thereon (in our order passed on delay condonation application) that we will be deciding monetary claim with reference to law of limitation and since these amounts are claimed in the year 2009, for which cause of action accrued much prior to the year 2006, we are of the view that these monetary claims are specifically barred by limitation and they are not saved despite our order of condoning the delay as mentioned supra. So, these two claims are held to be barred by limitation.
[12] So far as other reliefs are concerned, in terms of the architect's report for defects and deficiencies in service, the Complainant Society has claimed an amount of ₹11,32,000/-. Architect's report is dated 12/5/2008 and as per the architect, by name - Mr. Shrikant Hadke; there had been some defects/ deficiencies in completion of the construction for which, he had assessed the cost of repairs at ₹11,32,000/-. However, Occupancy Certificate was issued by the concerned municipal authorities on 14/11/2006. This is an admitted position. Once Occupancy Certificate is issued, from that date within a period of two years one has to complain of deficiency in service or defects in construction or any other grievance by filing a consumer complaint. But this complaint as has been filed in the year 2009 is complaining of defects and deficiencies noted by the architect in his report dated 12/5/2008. We cannot rely upon this report of the architect for the simple reason that this architect was appointed by the Complainant Society on 22/4/2008, whereas earlier consumer complaint filed by the Complainant Society, which was rejected on technical grounds, was filed in the year 2007 being Consumer Complaint No.140 of 2007. In that complaint, report of this architect was not relied upon because at that time, this architect was not at all appointed. It means that to file a consumer complaint, the Complainant Society appointed Mr. Shrikant Hadke on 22/4/2008 and he submitted report about deficiencies on the part of the Opposite Parties on 12/5/2008. This is nothing but an afterthought. This report cannot be looked into or taken into account because within two years from the date of Occupancy Certificate this report was not got procured by the Complainant Society. After a period of four years since the date of Occupancy Certificate, this report was procured to claim additional amount of ₹11,00,000/- by way of deficiencies and defects in construction carried out by the Opposite Parties. It is for this reason, we hold that what-ever recommendations have been made by the architect Mr. Hadke will have to be turned down or overlooked for the reason that within two years from the Occupancy Certificate these defects were not pointed out by filing any consumer complaint. Prescribed period for making out grievance in respect of deficiencies or defects on the part of the 'service provider' is two years from the date of Occupancy Certificate because on that date one is entitled to occupy the premises and before occupying the tenement one has to inspect the premises and one may come to know on inspecting the premises what are the lacunae, defects or deficiencies left in the construction made by the 'service provider'. So in our considered view, no relief can be granted in favour of the Complainant Society relying upon the architect's report dated 12/5/2008.
[13] Grievance of the Complainant Society is further that the Opposite Parties have not given them building completion certificate, by procuring it from the Municipal Corporation of Greater Mumbai. The Complainant Society also prayed in paragraph (f) and in paragraph (i) of the complaint, as also, mentioned in prayer clause that the Opposite Parties may be directed to return original deed of conveyance, property card given by the Complainant Society to them and to hand-over original IOD, Commencement Certificate, Occupancy Certificate, approved plans and other necessary documents and certificates in possession of the Opposite Parties relating to the said construction work. The Complainant Society has also prayed in paragraph (g) of the prayer clause that the Opposite Parties should be directed to disclose all liabilities on an affidavit, arising out of development work carried out by them and to submit original receipts for having paid fully all such dues & liabilities to the respective authorities. The Complainant Society has also sought for a direction from the State Commission to the Opposite Parties to submit a certificate issued by the competent Government approved architect or from Municipal Corporation of Greater Mumbai about the actual FSI consumed by the Opposite Parties and to further direct the Opposite Parties to pay compensation towards excess FSI, if any, consumed by the Opposite Parties at the prevailing market rate. So far as first limb of this prayer is concerned, we are of the view that this request of the Complainant Society can be acceded to, but so far as latter part of this prayer is concerned, we cannot direct the Opposite Parties on the assumption or hypothesis that the Opposite Parties must have consumed excess FSI and if, they have so consumed excess FSI, they should pay compensation to the Complainant Society for excess consumption of FSI. This latter portion of the prayer in prayer clause (h) cannot be granted because it is simply hypothetical proposition or it is based on contingency not well demonstrated so as to pass any award in that behalf.
[14] In the prayer clause (j), the Complainant Society has prayed that the Opposite Parties should be directed to demolish illegal shade or garage and the Complainant Society should be put in possession of said demolished portion, as also, stilt parking space and open parking space to the Complainant Society free from encumbrances. This sort of prayer, as it is a composite one, cannot be granted by the State Commission under the Consumer Protection Act, 1986; because demolition of any illegal shade is a matter which is required to be taken to Civil Court and not before the Consumer Protection Act, 1986. With a limited summary jurisdiction we are having, we cannot pass such an order of demolition of illegal shade or garage, and therefore, this prayer cannot be allowed.
[15] In the light of discussions made hereinabove, we are inclined to direct the Opposite Parties to arrange for building Completion Certificate from the Municipal Corporation of Greater Mumbai, so also, to give all the documents as mentioned in paragraph (i) of the prayer clause of the complaint. We also can direct the Opposite Parties to submit a certificate issued any competent Government approved architect or from Municipal Corporation of Greater Mumbai about the consumption of actual FSI by the Opposite Parties in carrying out the construction or redevelopment of the Complainant Society's building. We are also inclined to grant some compensation for the inconvenience caused to the Complainant Society by the acts or omission on the part of the Opposite Parties and to that extent we are inclined to grant reasonable compensation of ₹50,000/- to the Complainant Society. Likewise, we are also inclined to grant an amount of ₹25,000/- to the Complainant Society from the Opposite Parties towards costs of litigation. No other relief can be granted while allowing this complaint".
10. Since both the Complainant and the Opposite Parties have preferred Cross-Appeals, for the sake of convenience, they are referred to as the Complainant and the Opposite Parties hereinafter.
11. The Learned counsel for the Opposite Parties vehemently argued that the State Commission had erroneously held that that the Complainant Society is a 'Consumer', without taking into consideration that an amount of ₹ 1,76,000/- was payable by them to the Complainant Society as per the terms of the re-development Agreement. He vehemently contended that the Builder was not hired for any consideration and, therefore, the Complainant Society does not fall within the ambit of definition of consumer under Section 2(1)(d) of the Act. Learned Counsel further submitted that the decision of the Hon'ble Apex Court in Fakir Chand Gulati vs. Uppal Agencies Pvt. Ltd. & Anr. (2008) 10 SCC 345 does not apply to the instant case as it is not a case of joint venture development case nor it is a case of where the landowner has given his plot for development, but instead, it is a matter of redevelopment wherein an existing building has been given for renovation and for building an additional floor. Briefly put, his other contentions are as follows:-
* The Architect's report cannot be relied upon as it was after the filing of the Original Consumer Complaint ;
* The amounts were received by the individual consumers from the developers as per Clauses 5, 6 & 7 of the Development Agreement ;
* The Building Agreement was terminated in 2007 and, therefore, the question of Completion Certificate does not arise;
* There was no finding of deficiency of service and, therefore, the direction of the State Commission to pay compensation and costs is erroneous;
* Occupancy Certificate is conditional. * Apart from the Complaint, even the monetary claims are completely barred by limitation.
12. Learned Counsel for the Complainant contended that the decision of the Hon'ble Apex Court in Fakir Chand Gulati (supra) squarely applies to this case and that existing building with three floors was given to the Builder entering into re-development agreement for additional eight floors, the Development Right was given as a consideration, for which the Society is the Beneficiary. He further submitted that irrevocable Power of Attorney was never cancelled and that as per Clause 13 of the Development Agreement, the Commencement Certificate ought to have been obtained within six months from the date of the Agreement and the new construction shall be completed by the Developer within 24 months from the date of obtaining the Commencement Certificate subject to delays on account of 'Force Majeure' clauses. He submitted that the Occupancy Certificate was applied for on 07.10.2004, for which, they are liable to pay ₹5,000/- per day, as stipulated in Clause 13.
13. The brief points which fall for consideration in these Appeals are :-
"1) Whether, the Complainant Society falls within the definition of 'consumer' and Whether the Complaint is maintainable?
2) Whether, the monetary claims prayed for by the Complainant is within the period of limitation ;
3) Whether, there is any deficiency of service on behalf of Opposite Parties vis-à-vis the terms of the Development Agreement;
4) Whether, the Complainant Society is entitled to any enhancement of the compensation?. If so, to what extent?".
14. (i) At the outset, we address ourselves to the maintainability of the Complaint. The Hon'ble Apex Court in Special Leave to Appeal (Civil) No.944 of 2016, decided on 22.07.2016, titled Bunga Daniel Babu Vs. M/s. Sri Vasudeva Constructions & Ors., at paras 20 & 21 of its judgment, held as under :
"20. ..... What is required to be scrutinized is, whether, there is any joint venture agreement between the appellant and the respondent. The MOU that was entered into between the parties even remotely does not indicate that it is a joint venture, as has been explained in Faqir Chand Gulati (supra).
21. On a studied scrutiny of the aforesaid clauses, it is clear as day that the appellant is neither a partner nor a co-adventurer. He has no say or control over the construction.
He does not participate in the business. He is only entitled to, as per the MOU, a certain constructed area. The extent of area, as has been held in Faqir Chand Gulati (supra) does not make a difference. Therefore, the irresistible conclusion is that the appellant is a consumer under the Act".
(ii) Hence, we hold that the Complainant Society which has entered into a re-development agreement with the Builder herein - the Society, has no control on the construction and is not a partner or a co-operative adventurer. The Society does not participate in the business for having given the 'Development Right' as a consideration. Both the parties are bound by the terms of the contract and the Appellant Society who hired the services, is a 'Consumer', as laid down by the Hon'ble Apex Court in the aforementioned judgment.
15. The instant Complaint has been filed on 21.07.2009 with an application for condonation of delay, which, the State Commission had allowed on 02.03.2010, after condoning the delay and with an observation that the monetary claims shall be decided with reference to law of limitation. This Commission, vide order dated 14.12.2010 confirmed the order passed by the State Commission, observing as under :-
"Aforesaid application of condonation of delay has been allowed in following terms by the order under challenge by the State Commission: - This prayer 8(i) is also sort of continuous cause of action and, therefore, we are of the view that this complaint can be admitted by condoning delay as it has been properly explained in condonation of delay application filed along with the complaint with supporting affidavit. As regards the money claim, it shall be decided with reference to the law of limitation. At this stage we are of the view that this complaint should be admitted since some prayers are such that disclose continuous cause of action. During the course of argument Mr. Prabhavalkar has admitted that the cause of action in respect of some of the reliefs claimed in complaint case No.144/2009 is continuous in nature. As may be seen from the impugned order what State Commission has done is that it has admitted the complaint with respect to the reliefs the cause of action whereof is continuing, leaving the issue in regard to money claim as made in the complaint to be decided with reference to law of limitation. Also having heard Mr. Sharma we do not find any illegality or jurisdictional error in the order of State Commission warranting interference in revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. Since the issue of respondent not being consumer qua the petitioners was not considered by the State Commission in the impugned order, we need not touch it in this revision. Accordingly, the revision petition is dismissed with no order as to costs".
16. Now, we address ourselves to the relief regarding monetary claims prayed for by the Complainant. The main grievance of the Complainant Society is that the cause of action for payment of ₹1,25,000/- was continuous and has arisen again on 29.09.2008 and on 31.07.2009 and was not barred by limitation. It is the case of the Complainant that the claims are inter-related to each-other as there is only one agreement dated 29.08.2001 and the monetary claim has arisen on non-payment of the said amount and on non-performance of the obligations as per the said agreement. Clauses 5.2 & 5.3 of the Agreement read, as under :-
"5.2 Rs. 51,000/- (Rupees Fifty one thousand only) shall be paid on at the time that the Developers apply for the Occupation Certificate of the new construction;
5.3. Rs. 74,000/- (Rupees Seventy four thousand only) shall be paid on receipt of the Occupation certificate of the new construction.
17. From the aforesaid clauses, it is clear that the last two installments were to be paid on the developer at the time of applying for and obtaining the Occupancy Certificate. The Builder has failed to pay the balance amounts even after obtaining the Occupancy Certificate and, therefore, we hold that the Complaint filed on 17.08.2007, was within two years from the date of receipt of Occupancy Certificate.
18. Clause 13 of the Development Agreement attains importance as the damages to be paid for incomplete works stated therein, reads as under :-
"13. It is hereby agreed that the Developers shall obtain the Commencement Certificate within six months from the date of this Agreement. The new construction shall be completed by the Developers within a period of 24 months from obtaining the Commencement Certificate from the Municipal Corporation of Greater Mumbai, subject to delays on account of Force Majeure any other reasons beyond the control of the Developers. The construction will be deemed as complete on the Developers forwarding the application for obtaining the Occupation Certificate".
19. The Complainant has claimed damages @ ₹ 5,000/- per day, for the delay, under the following Heads :-
Date of Development Agreement 29/08/2001 Commencement Certificate to be procured by the builder -within 6 months thereof ... 28/02/2002 Deadline to complete the work (within 24 months from the date of commencement certificate) 27/02/2004 Date of Occupancy Certificate14/11/2006 No. of days delay i.e. 01/03/2004 to 14/11/2006 958 days delay Therefore damages payable at Rs.5,000/- per day for 958 days (958x5000) ... ... ... Rs.47,90,000/-
20. Learned counsel appearing for the Builder has submitted that Clause 13 of the Agreement is to be construed in the sense that the application for Occupation Certificate was made on 07.10.2004 and the Agreement was executed on 29.08.2001 and as such, the Commencement Certificate was to be obtained within 30 months from the execution of the said agreement, which expired on 29.02.2004, as such, delay, if any, is only 200 days in applying for the Occupation Certificate. Clause 13 stipulates that the construction will be deemed as complete on the Developers forwarding of the application for obtaining the Occupation Certificate of the new construction and in the event of the construction not being completed, the Builder was liable to pay damages @ ₹ 5,000/- per day. He has referred to the Occupation Certificate which is reproduced here as under :
"The full development work of add/alt to the existing Residential building No. 1 comprising of existing Ground floor converted into Stilt + 3rd and proposed 4th to 8th floor on Plot No. 430, bearing C.T.S. No. E/322, of village Bandra, situated at 15th Road, Khar (West), Mumbai, has completed under the supervision of Shri Kinner Nayak Licensed Architect bearing License No. CA/90/13298 may be occupied on the following conditions:
1] That the Certificate under section 270-A of B.M.C. Act shall be obtained from H.E. and a certified true copy of the same shall be submitted to this office within three months from the date of issue of occupation certificate".
21. It is the case of the Complainant Society that the Occupancy Certificate was a conditional one subject to the Builder demolishing the existing garages within three months from the date of issuance of the Occupancy Certificate and that a letter dated 11.12.2009 was issued by the Executive Engineer, GMC, to the Builder as a reminder with respect to the subject demolition. A brief perusal of the record does not show whether, the conditions contained in the Occupancy Certificate dated 14.11.2006 were complied with or not. In fact, a specific direction has been prayed for by the Complainant Society to get the garages demolished. With respect to this prayer, the State Commission had recorded a finding that demolition of any illegal shed/garage is a matter which is outside the scope of the Consumer Protection Act, 1986 and is required to be taken up before the Civil Court. Having observed that the Occupancy Certificate was issued conditionally on 14.11.2006 and also that the claim of the Complainant was within limitation, monetary claims with respect to the amounts payable to the Complainant Society, i.e., ₹ 1,25,000/- and also the relief prayed for under Section 13 of the Development Agreement cannot be said to be barred by limitation. The cause of action for payment of ₹ 1,25,000/- was continuous and had once again arisen on 29.09.2008 and further as afore-noted in para 16 as per Clauses 5.2 & 5.3 of the Agreement, the said installments were to be paid by the Builder which have admittedly not been paid. To reiterate, the Builder has failed to pay these amounts, even after obtaining the Occupancy Certificate and the Complaint bearing CC No.140/2007 filed by the Complainant Society on 12.09.2007 which is, two years from the date of issuance of the Occupancy Certificate cannot be said to be barred by limitation. All these monetary claims are inter-related inasmuch one cannot be ascertained unless the other condition has been complied with. For all the aforementioned reasons, we conclude that the monetary claims prayed for by the Complainant Society are not barred by limitation.
22. We find force in the submission of the counsel for the Complainant Society that there is a delay of 958 days calculated from 01.03.2004 to 14.11.2006 in obtaining the Occupancy Certificate and as per Clause 13 of the Agreement, an amount of ₹ 5,000/- per day shall be paid as damages, in the event of the construction not being completed, within the stipulated time-frame. Taking into consideration that the deadline to complete the work falls on 27.02.2004, i.e., within 24 months from the date of Commencement Certificate and the date of Occupancy Certificate is 14.11.2006, as per Clause 13, damages at ₹ 5,000/- per day for 958 days, i.e., ₹ 47,90,000/- is payable by the Respondents to the Complainant Society.
23. As per Clauses 29 & 30 of the Development Agreement, the Builder was obligated to register the said Agreement and pay the necessary stamp duty and registration charges. The service provider is directed to pay the expenses of registration and stamp duty and get the development agreement registered, within eight weeks from the date of receipt of copy of this order.
24. We find force in the contention of the learned counsel for the Respondents that the claim made by the Complainant Society with respect to the deficiencies pointed out by the Architect were not part of the prayer in the first Complaint. We do not find any illegality in the finding of the State Commission that as the original Complaint was filed on 12.09.2007, the report of the Architect dated 12.05.2008 was not relied upon since as on that date, the Architect was not appointed at all.
25. With respect to the prayer regarding demolition of illegal construction / garage, we do not find any infirmity in the order of the State Commission in holding that the issuance of such a specific direction is outside the purview of the Consumer Protection Act, 1986. The Complainant Society is at liberty to approach the appropriate Authority /Court to seek redressal of the same.
26. In the result, the Appeal preferred by the Builders, i.e., FA No. 295/2011 is dismissed and the Appeal preferred by the Complainant Society, i.e., FA No. 323/2011 is allowed in part, modifying the directions of the State Commission, as follows :
i) The Respondents/ Builders are jointly and severally directed to hand-over to the Complainant Society, original Deed of Conveyance & Property Card, Original IOD, Commencement Certificate, Occupancy Certificate, Building Completion Certificate, approved plans along with all other necessary documents and certificate in possession of the Respondents relating to the redevelopment work carried out by the Respondents of the Complainant's building;
ii) The Respondents shall also submit to the Complainant Society, a Certificate issued either by a competent Government approved Architect or by concerned officer of Municipal Corporation of Greater Mumbai; as regards FSI consumed by the Respondents while carrying out the redevelopment work of the Complainant Society's building;
iii) Apart from the aforementioned directions given by the State Commission, we are of the considered view that the Complainant Society is entitled to ₹ 47,90,000/- to be paid by the Respondents towards the delay in obtaining the Occupancy Certificate, which damages are being awarded as per the contractual obligation specified in Clause 13 of the Development Agreement;
iv) An amount of ₹ 1,25,000/- due to be paid by the Respondents as stipulated under Clauses 5.2 & 5.3 of the Agreement;
v) The Respondents are also directed to register the Development Agreement and pay the necessary stamp duty and registration charges;
vi) The State Commission had also awarded an amount of ₹50,000/- by way of compensation for the act of omission on the part of the Respondents and for the inconvenience caused to the Complainant Society, we do not see any illegality in this direction and is retained; and
vii) We are of the considered view that costs of ₹ 25,000/- awarded by the State Commission, is to be retained. No further costs are being imposed.
27. Needless to add, the amounts deposited by the Builders before the State Commission, shall be adjusted in the amounts to be paid by them.
The afore - mentioned directions are to be complied with by both the Respondents, jointly and severally, within eight weeks from the date of receipt of copy of this order, failing which, the amounts shall attract interest @ 9% p.a., from the date of filing of the Complaint, till the date of realization.
...................... M. SHREESHA PRESIDING MEMBER ......................J ANUP K THAKUR MEMBER