National Consumer Disputes Redressal
M/S. Anamika Real Estate Pvt. Ltd. & 2 ... vs Tanuja S. Shetty & Anr. on 9 October, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 740 OF 2012 (Against the Order dated 25/01/2012 in Complaint No. 137/2008 of the State Commission Maharashtra) 1. M/S. ANAMIKA REAL ESTATE PVT. LTD. & 2 ORS. REGD. OFFICE AT 1, HOME STEAD, GROUND FLOOR, DATTATRAY ROAD, SANTACRUZ (W) MUMBAI-400054 2. MR. NITIN N MEHTA, NIRMAL BUNGLOW, PLOT NO. 42, J.V.P.D. SCHEME, VILE PARLE (WEST), MUMBAI-400049 3. M/S. BENZER TOWER CHS LTD., BENZER TOWER, NEAR SANSKRUTI ENCLAVE, 90, DP ROAD, BORIVALI (EAST), MUMBAI-400101 ...........Appellant(s) Versus 1. TANUJA S. SHETTY & ANR. THROUGH CA MR. M. JAYARAM SHETTY, R/O. 204, SPRINGLEAF CHS LTD., SEVEN BUNGLOWS,ANDHERI (WEST) MUMBAI-400061 2. MRS. MAMTA J SHETTY THROUGH CA MR. M. JAYARAM SHETTY,
R/O. 204, SPRINGLEAF CHS LTD
SEVAN BUNGLOWS
ANDHERI (WEST) MUMBAI 400 061 ...........Respondent(s)
BEFORE: HON'BLE MR. DR. S.M. KANTIKAR,PRESIDING MEMBER HON'BLE MR. DINESH SINGH,MEMBER
For the Appellant : Mr. Aditya Parolia, Advocate
Mr. Zahid Hussain, Advocate
Ms. Harshita Chauhan, Advocate For the Respondent : Mr. Madhurendra Kumar, Advocate
with Mr. M. Jayaram Shetty, POA Holder
Dated : 09 Oct 2019 ORDER
Hon'ble Mr. Dinesh Singh, Member
1. The grievance of the complainants / respondents no. 1 and no. 2 qua the builder co. / opposite party no. 1 / appellant no. 1 and its Director Nitin Mehta / opposite party no. 2 / appellant no. 2 principally relates to alleged 'deficiency in service'.
The opposite party no. 3 / appellant no. 3 is the society of flat buyers in the subject tower wherein the subject flats (two nos.) are situated.
2. On 04.07.2019, after hearing arguments of learned counsel for both sides, and after hearing the power of attorney holder of the complainants, and after perusing the material on record, and after the due consideration, we recorded the sum and substance of our considered view:
Dated: 04.07.2019
ORDER
Heard the learned counsel for both sides and the power of attorney holder of the complainants.
Perused the material on record.
In so far as the remedy sought by the complainants is concerned, after noting the entire material on record, and after noting the rival contentions, and after noting the facts and specificities of the matter, we are of the considered view that the case, for apt adjudication on merit, requires recording of extensive oral evidence and proving extensive documentary evidence as per the provisions of the Indian Evidence Act, 1872 and adherence to the substantive and procedural provisions of the Code of Civil Procedure, 1908, that is best undertaken in a civil court.
In other words, we do not find the case to be such as can be aptly adjudicated on merit in summary proceedings in quasi - judicial consumer protection tribunals established under the Act 1986.
The complaint is dismissed, with liberty to the complainants to seek remedy in a competent civil court as per the law.
It goes without saying that the rights of the complainants to agitate their case before any competent authority remain unaffected.
We make it explicit that this Commission has no comments or observations whatsoever on the merits in the case, of either side, i.e. of either the complainants or of the opposite parties (the builder co., its Director Nitin Mehta and the society).
It also goes without saying that the complainants, if they choose to bring action in a civil court, are free to file an application under section 5 of the Limitation Act, 1963, and, in such contingency, the chronological proceedings in the consumer protection fora would be material and relevant towards making such application.
Independent and separate of the afore, we determine unfair trade practice on the part of the builder co. and its Director Nitin Mehta within the meaning of section 2(1)(r) of the Act 1986.
For the unfair trade practice, the builder co. and its Director Nitin Mehta are put to stern advice of caution through imposition of cost, jointly and severally, of Rs.25,00,000/- (rupees twenty five lakh), out of which Rs. 15,00,000/- (rupees fifteen lakh) shall be deposited with the Consumer Legal Aid Account of the State Commission and Rs. 10,00,000/- (rupees ten lakh) shall be paid to the complainants (equally) within four weeks of pronouncement of the reasoned judgment. The payment to the complainants, made specifically and only for the unfair trade practice under the Act 1986, shall be independent and separate of and without prejudice to seek remedy in a civil court and / or to agitate their case before any competent authority.
Reasoned judgment to follow.
Execution shall remain stayed till the pronouncement of reasoned judgment.
3. We are giving our reasoned judgment hereinafter.
4. Allegations of 'deficiency in service' and 'unfair trade practice' were made by the complainants in their complaint before the State Commission:
1. The Complainants state that the Complainants are flat purchasers and opposite party No. 1 is Private Limited Company, Registered under the Companies Act, 1956 and doing the business of Development of the property. The Opposite Party No. 2 is Director of Opposite Party No. 1 and Opposite Party No. 3 is a Co-operative Housing Society, Registered under the Maharashtra Co-operative Housing Societies Act, 1960.
2. The Complainants submit that they are consumer within the meaning and definition of Sec. 2 (1) (d) (ii) of the Consumer Protection Act, 1986. The Opposite Parties who are guilty of deficiency in service and unfair trade practice within the meaning and definition of Sec. 2 (1) (g) (o) and 2(1)(r) of the C.P. Act.
3. The Complainants state that some time in the year 1994 they were looking for residential flat for themselves. They had come to know that Opposite Party No. 1 was in the business of developing the properties and constructing the flats in the locality where Complainants wanted to buy the flats for their own residence. Upon contacting Opposite Party No. 1, Opposite Party No. 2 who was in charge of management of affair of the Opposite Party No. 1 company has represented to the Complainants that Opposite Party No. 1 had got plans for the construction of buildings under the name and style of Benzer Tower, comprising of 'A' & 'B' wing, (hereinafter referred to as "the said building") sanctioned by the Municipal Corporation of Greater Mumbai. The Opposite Party No. 1 and 2 also represented that they have complied with requirement of I.O.D. and they have already started construction of building at village Magothane, Borivali bearing CTS No. 167A/167B and 166, Taluka Borivali.
4. The Complainants state that Complainants agreed to book two adjoining flats in the building known as Benzer Tower marked on the plan as 'A' Wing bearing flat No. 1102 and 1103 on the 11th floor, admeasuring 450 and 590 sq. ft. carpet area respectively. The Complainants paid the token amount of Rs. 51,000/- to the opposite party no.1 by cheque No. 433378 dated 10.5.1994 drawn on Central Bank of India, Versova Branch, Andheri, Bombay, in favour of Opposite Party No. 1.
5. The Complainants state that on behalf of Complainants the Complainant's C.A. Shri M. Jayaram Shetty was visiting the site of building regularly and found that construction work of building was progressing. Upon contacting Opposite Party No. 2, he had demanded to pay the call money due so that allotment letters could be issued. The Complainants therefore made a further payment of Rs. 4,00,000/- by cheque No. 146526 dated 1.3.1996 drawn on Bank of Baroda, M.S. Marg Branch, Mumbai towards both the flats. Thereafter the Opposite Party No. 2 has issued two allotment letters dated 4.3.1996 in favour of Complainants in respect of flat No. A-1102 and A-1103 of the building known as "Benzer Tower". The copies of the said letter annexed hereto and marked as Annexure "A" colly.
6. The Complainants state that their C.A. Shri M. Jayaram Shetty was approaching Opposite Party No. 2 from time to time since the allotment letters issued and requested Opposite party No. 2 to execute and register the agreements in respect of Flat No. A-1102 and A-1103. The Complainants further state that Opposite Party No. 1 and 2 delayed the execution of agreements and assured that as soon as the draft agreement for sale being prepared by their advocates Kanga & Co., the Agreements will be executed and registered. Thereafter the Opposite Party No. 2 called upon the Complainant to make further payments of Rs. 2,23,975/- and Complainants as per the demand have paid further payment of Rs. 2,23,975/- by cheque No. 625595 dated 28.11.1997 drawn on Bank of Baroda, M.S. Marg Branch, Mumbai towards both the flats. Thereafter the Complainants made balance payment of consideration of Rs. 5,28,775/- in cash on 3.1.2002 and thereby Complainants have paid full consideration amount to both the above flats and remaining amount of Rs. 25,000/- for each flat as per the agreement payable at the time of handing over of the possession of the flat to the Complainants. The Complainants say that Opposite Party No. 2 by his letters dated 3.1.2002 confirmed the receipt of payments and called upon the Complainants to execute and register the agreement for sale. The copies of the said letters annexed hereto and marked Annexure "B" colly.
7. The Complainants state that Opposite Party No. 1 and 2 executed two separate agreements for sale on 27.09.2002 in respect of flat No. A-1102 and A-1103 in the building known as "Benzer Tower", at Village Magothane, Borivali, Mumbai. The Complainants further state that both the above agreements for sale were duly registered on 19.10.2002 before the Sub Registrar Boriwali No. 3, Mumbai Suburban District, Bandra, bearing document No. 8215/2002 and 8216/2002. The copies of said agreement for sale annexed hereto and marked as annexure "C" colly.
8. The Complainants state that their C.A. Shri Jayaram Shetty continued to visit the site to ascertain the progress of construction and at one such visit he noticed that construction work was abandoned by the Opposite party No. 1 and 2. Thereafter flat purchasers held series of meetings amongst themselves in which Complainants' C.A. Shri Jayaram Shetty attended. As the flat purchasers found that the Opposite Party No.1 and 2 were avoiding to give any positive response to their queries and therefore they approached the Opposite Party No.1 and 2 for taking over possession of said flats. The Complainants further state that till date the Opposite Party No. 1 and 2 have not handed over the possession of both the flats to the Complainants. The Complainants repeatedly requested the Opposite Party No. 1 and 2 to hand over the peaceful possession of both the flats to the Complainants.
9. The Complainants state that Opposite Party No. 1 and 2 thereafter did not give any positive response as to handing over possession of flat to the Complainants. The Complainants further state that contrary to the promises and assurances apart from the terms and conditions of the agreement executed between them the Opposite Party No. 1 and 2 have not rendered the service required of them and there is grave deficiency of service committed by Opposite Party No. 1 & 2.
10. The Complainants state that in view of the Opposite Party No. 1 and 2 having not rendered service as required of them the Complainants as also other flat purchasers aggrieved by the acts of omission committed by the Opposite Party No. 1 and 2 decided to form the Co-op. Housing Society of the flat purchasers. Pursuant to that three of the flat purchasers namely Shri Narendra C. Bansali, Shri Chandrakant C. Joshi & Shri Laxmanbhai Patel took the initiative and approached the Complainants and other flat purchasers and thereafter formed the Co-op. Housing Society in the name and style Benzer Tower CHS (proposed). The said Narendra C. Bansali, Chandrakant C. Joshi and Laxmanbhai Patel hereinafter for the sake of brevity referred to as promoters. The promoters verified the genuineness of the agreement of sale of the Complainants on the basis of search report dated 30.4.2005 submitted by recognized title investigators Shri Ashish Javeri. The said promoters thereafter demanded from the Complainants Rs. 2,000/- for each Flat as and by way of their contribution for the formation and registering Co-op. Hsng. Society as founder member. The Complainants in response to the demand so made, they paid Rs. 2,000/- each by Cash to the promoters. Thereafter, the Complainants C.A. Shri M. Jayaram Shetty received registered envelope from Shri Narendra C. Bansali containing two cheques bearing nos. 395669 and 395640 both dated 24.2.2006 drawn on HDFC Bank for Rs. 2,000/- each. The copy of the said cheque is annexed and marked as Annexure 'D'. On enquiry with said Shri Narendra C. Bansali the Complainants were informed that the said cheques were sent as and by way of refund of membership fees which Complainants paid to the proposed Co-op. Hsng. Society collected in cash and he also intimated that the Complainants should contact Opposite Party No. 2. The Complainants have protested against unilateral act of proposed CHS society virtually terminating the right of the Complainants as the members of the proposed CHS society by letter dated 4.3.2006 addressed to Shri Narendra C. Bansali which was duly received by him and not replied. Copy of the said letter is annexed hereto and marked as Annexure 'E'.
11. The Complainants state that it appears there was a collusion among opposite parties to illegally and unauthorisedly discontinue the membership of the Complainants and admit third party as member of said Co-op. Hsng. Society Ltd. in place of Complainants in respect of flat No. A-1102 and A-1103.
12. The Complainants states that the Co-operative Housing Society was registered in the name and style of Benzer Tower Co-operative Housing Society Ltd. under Registration Certificate No. MUM WR/HSG/TC/13468/2006-07 on 15.7.2006. The copies of the Registration Certificate is annexed hereto and marked as Annexure 'F'. The Complainants say that Index-II obtained from Sub Registrar Mumbai at the relevant time shows the names of the Complainants. The copies of the Index - II annexed hereto and marked as Annexure 'G' colly. The Complainants further state that the Complainants have obtained copy of the commencement certificate from the Municipal Corporation of Greater Mumbai. The copy of the said certificate is annexed hereto and marked as Annexure 'H'.
13. The Complainants state that Opposite Party No. 1 have issued a letter dated 4.1.2006 through their advocate Rajkumar S. Mishra to Complainants inter-alia calling upon them to take back the amounts paid by them in respect of abovesaid Flats. The Complainants have replied to the said letter through their Advocate reply dated 17.1.2006. The copy of both the letters are annexed hereto and marked as Annexure 'I' colly '. The Complainants have appointed Shri M. Jayaram Shetty as their C.A. who is father of the Complainant No. 1 and husband of the Complainant No. 2. The copy of both the Power of Attorney annexed hereto and marked as Annexure "J" colly.
14. The Complainants state that Opposite Party No. 1 and 2 is guilty of deficiency in service and unfair trade practice by not complying with statutory and contractual obligation of the agreement and Opposite Party No. 3 is also guilty of deficiency in service.
(extracts from the complaint filed before the State Commission) (emphasis supplied by us)
5. The State Commission vide its Order dated 25.01.2012 had partly allowed the complaint, holding 'deficiency in service' (alone) on the part of the builder co. and its Director Nitin Mehta:
10. We heard both the parties.
On behalf of the complainants, they relied on the documents including agreements to which a reference is made earlier while recounting the facts and these documents, particularly, the agreements and other correspondence referred above are not in dispute. The builder relied upon the affidavit of Mr.Rohan Nitin Mehta. Obviously Mr.Rohan Mehta is speaking on the basis of record and his affidavit is nothing but the verification affidavit filed by the builder. Said affidavit does not specify which of the facts mentioned therein are true to his own knowledge and which he believed to be true on the basis of information received. It affects the probative value of the so called affidavit. A useful reference on the point can be made to decision of the Apex Court in the matter of A.K. Nambiar V/s. Union of India & Anr. AIR 1970 SC 652.
11. From the clauses Nos. 11 and 12 of the agreements, supra, to which builder referred in its termination letter dated 04/01/2006, it could be seen that clause No.11 speaks for handing over possession before May 1999 and it also stipulates that such commitment to hand over possession is subject to the circumstances which may not be in control of the builder and in these events the possession may be delayed. In the instant case, as admitted, from November 2002 to March 2007, the entire project was in a standstill position since there was an operating stay for further construction and development work and therefore, there arise no question to hand over the possession as stipulated by May 1999. The complainants themselves being fully aware of the circumstances, submitted in their reply dated 17/01/2006 that they have no grievance about delayed possession, even though they had parted with entire consideration except `25,000/- in respect of each of the flats which was payable at the time of receiving possession only. Therefore, clause No. 11 has nothing to do, particularly, giving right to the builder to terminate the contract. Referring to clause No. 12, it could be seen that right of termination in case of delayed possession is given to the purchasers, namely, complainants and not to the builder. Therefore, relying upon those clauses to terminate the contracts when no such circumstances arose or exists, rather, action of alleged termination of contracts on the part of builder is arbitrary, capricious, having no sanction of law and thus, has no legal effect of termination of the contracts.
12. There was a complaint made in the Police of the fraud practiced by the builder. In the information submitted to the Investigation Agency by the Registrar of the Co-operative Societies shows that the names of the complainants as purchasers of flat Nos.A-1102 and A-1103 were already communicated to the concerned authorities. The Registrar also informed to the Investigation Agency that it is the builder who is playing mischief since he had transferred the flats against the initial agreements. From the written version of the builder, it tried to shield himself saying that consequent to the termination of the contracts by its letter dated 04/01/2006, he had sold those two flats to Mr. Kamal K. Khabia and Smt. Saroj K. Khabia on 18/12/1997. The Society though initially accepted the complainants as their members and even received their membership fee, subsequently rescind from its commitment, tried to refund the membership fee and i nforming the complainants about alleged cancellation of their membership in the proposed Society. Such action on the part of the Society is also cannot be looked favourably. Under the circumstances, we find that the deficiency in service on the part of the builder not to hand over the possession of the flats, as agreed, is well established. We further find that to remove the deficiency, possession is to be handed over to the complainants, and it is for the builder to take necessary steps to secure possession of these flats and to hand over the same to the complainants. But, by introduction of subsequent purchasers, it may not be possible now for the builder to hand over the possession. In those circumstances, by way of alternate relief, the complainants need to be suitably compensated for said deficiency in service on the part of builder in terms of Section 14 (1) (d) of Consumer Protection Act, 1986 ('the Act' for brevity). The complainants, who are not at fault, should not suffer. The flats which they intend to occupy for their residence, now if they had to search for any new flats, they will have to pay as per the current market rate. Thus, while fixing the quantum of compensation, the prevailing market rate at Borivali (East), need to be taken into consideration. There is no evidence as such made available by both the parties, but we can take due notice of the information relating to the prevailing market rates published in the prestigious newspaper like 'Times of India', in its Saturday Property Supplement and in its Issue dated 21/01/2012, the market rate for Borivali (East) for the flat per sq. ft. is quoted in between the range `9,500/- to `10,800/-. In the Daily 'Loksatta', Marathi newspaper in their 'Vasturang' dated 21/01/2012 these rates are quoted as falling in a range `8,000/ to `12,000/-. Considering this information and since the complainants need to be compensated, we further find that while fixing the compensation, the criteria of prevailing market rate would be relevant. We hold accordingly and pass the following order :-
-: ORDER :-
1. Complaint is partly allowed.
2. Opponent No.1-Anamika Real Estate Pvt. Ltd. and opponent No.2-Mr.Nitin N. Mehta, jointly and severally held liable and directed to hand over vacant and peaceful possession of disputed flat Nos.1102 & 1103 of 'A' wing from Benzer Tower (of which opponent No.3-Society is formed) and at the time of receipt of the possession, the complainants shall pay balance of consideration of `25,000/- for each flat i.e. total `50,000/- to opponent Nos. 1&2 or their nominees.
ALTERNATIVELY Opponent No.1-Anamika Real Estate Pvt. Ltd. and opponent No.2- Mr.Nitin N. Mehta, jointly and severally held liable and directed to pay compensation of `83,20,000/- (Rupees Eighty Three Lakhs Twenty Thousand only) to the complainants. This compensation be paid within 45 days from today and failing which, it shall carry further interest @ 18% p.a. till its realization.
3. Opponents to bear their own costs and Opponent No.1-Anamika Real Estate Pvt. Ltd. and opponent No.2- Mr.Nitin N. Mehta, shall jointly and severally pay `25,000/- as costs to the complainants.
(paras 10, 11 and 12 of the State Commission's Order) (emphasis supplied by us)
6. The chronological salient fundamental and material facts of the case are as below:
Event Date i.
Booking and allotment by the builder co. of the two subject flats no. A/1102 and no. A/1103 to one Manoj J Shetty (father of complainant no. 1) (Ref No:- AREPL/MR/2AF/56/94-95).
10.05.1994 ii.
Allotment (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) by the builder co. to the one Manoj J Shetty (father of complainant no. 1) in respect of flat no. A/1102.
Allotment (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) by the builder co. to one Tanuja S. Shetty (complainant no. 1) in respect of flat no. A/1102.
Allotment (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) by the builder co. to the one Tanuja S. Shetty (complainant no. 1) in respect of flat no. A/1103.
04.03.1996 04.03.1996 04.03.1996 iii.
Deposits by the one Manoj J Shetty with the builder co. in respect of flats no. A/1102 and no. A/1103 and the amount/s of the deposit/s.
Total deposited in respect of flat no. A/1102 = Rs. 5,48,750/-; total cost of flat no. A/1102 = Rs. 5,73,750/-
and Total deposited in respect of flat no. A/1103 = Rs. 6,55,000/-; total cost of flat no. A/1103 = Rs. 6,80,000/-
10.05.1994 Rs. 51,000/-
(earnest money in respect of flats no. A/1102 and no. A/1103) 01.03.1996 Rs. 4,00,000/-
(Rs. 2,00,000/- each in respect of flats no. A/1102 and no. A/1103) 28.11.1997 Rs. 2,23,975/-
(Rs. 57,725/- in respect of flat no. A/1102 + Rs. 1,66,250/- in respect of flat no. A/1103) 03.01.2002 Rs. 5,28,775/-
(Rs. 2,40,025/- in respect of flat no. A/1102 + Rs. 2,88,750/- in respect of flat no. A/1103) iv.
Sale of the said two flats to one Kamal K. Khabia and one Saroj K. Khabia by the builder co.
18.12.1997 v.
Joint request letter of the one Manoj J Shetty (father of complainant no. 1) and the one Tanuja S Shetty (complainant no. 1) requesting the builder co. to substitute the one Tanuja S Shetty daughter of the one Manoj J Shetty (complainant no. 1) and one Mamta J Shetty wife of the one Manoj J Shetty (complainant no. 2) as the buyers since the original allottee the one Manoj J Shetty has transferred his interests in the two subject flats no. A/1102 and no. A/1103 jointly in favour of the said Tanuja S Shetty and Mamta J Shetty (complainants no. 1 and no. 2).
01.02.2000 vi.
Execution of agreements for sale (two nos.) between the builder co. and the complainants no. 1 and no. 2 (in respect of flats no. A/1102 and no. A/1103).
27.09.2002 vii.
Registration of agreements for sale (two nos.) before the Sub-Registrar (in respect of flats no. A/1102 and no. A/1103).
19.10.2002 viii.
Termination of the said two agreements for sale by the builder co. (in respect of flats no. A/1102 and no. A/1103).
04.01.2006 ix.
Refunding of the membership fee by the society to the complainants.
03.03.2006 x.
Registration of the society ('Benzer Tower Co-operative Housing Society Ltd.').
15.07.2006 xi.
Filing of complaint before the State Commission (C.C. no. 137 of 2008).
16.09.2008 xii.
Dismissal in default of C.C. no. 137 of 2008 by the State Commission.
17.07.2009 xiii.
Restoration of C.C. no. 137 of 2008 by the State Commission.
06.05.2010 xiv.
State Commission's impugned Order:
25.01.2012 xv.
Filing of execution before the State Commission by the complainants (EA no. 12 of 2012 in C.C. no. 137 of 2008).
28.08.2012 xvi.
Filing of first appeal by the appellants - builder co., its Director Nitin Mehta and the society before this Commission (F.A no. 740 of 2012).
04.12.2012 xvii.
Admission of first appeal (F.A. no. 740 of 2012) by this Commission and stay of the operation of the impugned Order dated 25.01.2012 of the State Commission subject to deposit of Rs. 50 lakh with this Commission within 6 weeks.
16.01.2013 xviii.
Expiry of 6 weeks from the date of stay of the operation of the impugned Order dated 25.01.2012 of the State Commission.
27.02.2013 (the appellants failed to deposit Rs. 50 lakh with this Commission, that is to say, the condition attached with the grant of stay of the operation of the impugned Order dated 25.01.2012 of the State Commission was not complied with by the appellants) xix.
Issue of bailable warrant against Director Nitin Mehta and summon to builder co. by the State Commission in EA no. 12 of 2012 in C.C. no. 137 of 2008.
04.03.2013 xx.
Filing of the writ petition (criminal) by the builder co., its Director Nitin Mehta and the society, the appellants no. 1, no. 2 and no. 3 herein, before Hon'ble High Court [WP (Criminal) no. 2875 of 2014] challenging the Order dated 07.07.2014 of the State Commission passed in EA no. 12 of 2012 in C.C. no. 137 of 2008.
(The Members of the State Commission, the complainants and the State of Maharashtra were made the respondents while filing the said writ petition).
The said writ petition is pending before Hon'ble High Court. The next date of hearing is 20.03.2020.
31.07.2014 xxi.
Stay on prosecution by Hon'ble High Court under section 27 of The Consumer Protection Act 1986 before the State Commission in EA no. 12 of 2012 in C.C. no. 137 of 2008.
21.08.2014 xxii.
Final arguments in the first appeal before this Commission.
04.07.2019
7. The Consumer Protection Act, 1986 is a comprehensive legislation "to provide for better protection of the interests of consumers".
Section 3 of the Act 1986 specifically provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. That is, the remedy provided under the Act is in addition to the provisions of any other law for the time being in force; the provisions of this Act give the consumers an additional remedy besides those that may be available under other existing laws.
The Act 1986 inter alia specifically deals with:
[a] 'deficiency in service' within the meaning of the section 2(1) (g) and (o);
[b] 'restrictive trade practice' within the meaning of section 2(1) (nnn); and [c] 'unfair trade practice' within the meaning of section 2(1) (r) of the Act.
'restrictive trade practice' is not relevant in this case.
In respect of 'deficiency in service' and 'unfair trade practice', it may be seen that the two are independently and separately defined in the Act, the one in section 2(1)(g) and (o) ['deficiency' and 'service'], and the other in section 2(1)(r) ['unfair trade practice']. The two are distinctively different from each other. Ingredients of 'deficiency in service' and 'unfair trade practice' could exist on the same facts, or on different facts, depending upon the specificities of the case. Ingredients of the two could exist independent and separate of each other, or exist together and co-extensive, depending upon the specificities of the case.
8. The State Commission vide its impugned Order dated 25.01.2012 had determined 'deficiency in service' against the builder co. and its Director Nitin Mehta.
9. We note that the essential remedy sought by the complainants is to enforce a civil right. The remedy sought is performance of its obligation i.e. duty enforceable by law by the builder co. and its Director Nitin Mehta to hand over possession of the subject flat(s) on receipt of the consideration amount(s) as per the contract(s) between the parties. This is akin to the relief apropos 'deficiency in service' under the provisions of the Act 1986.
10. The impugned Order dated 25.01.2012 of the State Commission suffers from the following legal infirmities:
[a] The State Commission had categorically dismissed the complaint in default vide its Order dated 17.07.2009, and then in effect restored it vide its Order dated 06.05.2010. The power to review its Order does not vest with the State Commission. The State Commission transgressed its jurisdiction in reviewing its own Order of dismissing the complaint in default and then proceeding further to adjudicate it and passing its impugned Order dated 25.01.2012.
[b] It was evident on record before the State Commission that in- between the transactions by the builder co. and its Director Nitin Mehta with the one Manoj J Shetty and the one Tanuja S Shetty and the one Mamta J Shetty, the said two subject flats were sold to one Kamal K. Khabia and one Saroj K. Khabia by the builder co. and its Director Nitin Mehta and accordingly third party interest had been created on the two subject flats before the complainants went to the State Commission. Neither the complainants, and nor the opposite parties, took any steps to implead the said interested parties the one Kamal K. Khabia and the one Saroj K. Khabia in the case. Nor did the State Commission, suo moto, on this fact being evident on the record before it, take steps to afford opportunity to the said one Kamal K. Khabia and one Saroj K. Khabia.
As such, the State Commission's Order cannot sustain.
11. We have noted the contents of the complaint, including inter alia its extracts and emphasized portions quoted in para 4 above, extracts of the State Commission's impugned Order and its emphasized portions quoted in para 5 above, as also the chronological salient fundamental and material facts of the case stated in para 6 above.
12. We do not deem it appropriate to remand the case back to the State Commission for adjudication afresh apropos 'deficiency in service'.
In our considered opinion, in so far as the remedy sought by the complainants, to enforce a civil right, is concerned, after noting the entire material on record, and after noting the rival contentions, and after noting the facts and specificities of the matter, the case, for apt adjudication on merit, requires recording of extensive oral evidence and proving extensive documentary evidence as per the provisions of the Indian Evidence Act, 1872 and adherence to the substantive and procedural provisions of the Code of Civil Procedure, 1908, that is best undertaken in a civil court.
In other words, we do not find the case to be such as can be aptly adjudicated on merit in summary proceedings in quasi - judicial consumer protection tribunals established under the Act 1986.
13. The impugned Order dated 25.01.2012 of the State Commission, which is in respect of 'deficiency in service', is set aside and the complaint is dismissed, with liberty to the complainants to seek remedy apropos their civil right in a competent civil court as per the law.
It goes without saying that the rights of the complainants to agitate their case before any competent authority remain unaffected.
It also goes without saying that the complainants, if they choose to bring action in a civil court, are free to file an application under section 5 of the Limitation Act, 1963, and, in such contingency, the chronological proceedings in the consumer protection fora would be material and relevant towards making such application.
14. We make it explicit that we have consciously refrained from critiquing the allegation of 'deficiency in service' since the rights of the complainants to seek remedy to enforce a civil right in a competent civil court or to agitate their case before any competent authority survives.
And we also make it explicit that this Commission has no comments or observations whatsoever on the merits in the case, apropos 'deficiency in service', of either side, i.e. of either the complainants or of the opposite parties (the builder co., its Director Nitin Mehta and the society), under the provisions of the Act 1986.
15. We, but, also note that 'unfair trade practice' is a specific provision, unique to the Act 1986.
Section 2(1)(r) says of "a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-".
The list provided under section 2(1)(r) is illustrative and not comprehensive.
That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on facts and reasons, on fair and objective appraisal of the evidence and material on record, would qualify as 'unfair trade practice' within the meaning of section 2(1)(r).
16. As such, independent and separate of the afore discussion apropos 'deficiency in service', and limiting ourselves only and only to the scope of 'unfair trade practice' as provided under The Consumer Protection Act, 1986 and specifically its section 2(1)(r), we note that the builder co. and its Director Nitin Mehta:
i.
Made booking and allotment of the two subject flats no. A/1102 and no. A/1103 to one Manoj J Shetty (father of complainant no. 1) (Ref No:- AREPL/MR/2AF/56/94-95) on 10.05.1994.
ii.
Allotted (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) flat no. A/1102 to the one Manoj J Shetty (father of complainant no. 1) on 04.03.1996.
Allotted (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) flat no. A/1102 to one Tanuja S. Shetty (complainant no. 1) on 04.03.1996.
Allotted (having same reference no. Ref No:- AREPL/MR/2AF/56/94-95) flat no. A/1103 to the one Tanuja S. Shetty (complainant no. 1) on 04.03.1996.
iii.
Took deposits from the one Manoj J Shetty in respect of flats no. A/1102 and no. A/1103 on 10.05.1994, 01.03.1996, 28.11.1997 and 03.01.2002, totaling Rs.5,48,750/- in respect of flat no. A/1102 against its total cost of Rs.5,73,750/- and totaling Rs.6,55,000/- in respect of flat no. A/1103 against its total costs of Rs.6,80,000/-.
iv.
Sold the said two flats to one Kamal K. Khabia and one Saroj K. Khabia on 18.12.1997.
v.
Accepted the joint request of the one Manoj J Shetty (father of complainant no. 1) and the one Tanuja S Shetty (complainant no. 1) to substitute the one Tanuja S Shetty daughter of the one Manoj J Shetty (complainant no. 1) and one Mamta J Shetty wife of one Manoj J Shetty (complainant no. 2) as the buyers on 01.02.2000.
vi.
Executed agreements for sale (two nos.) with the complainants no. 1 and no. 2 (in respect of flat nos. A/1102 and A/1103) on 27.09.2002.
vii.
Registered the said agreements for sale (two nos.) before the Sub-Registrar (in respect of flat nos. A/1102 and A/1103) on 19.10.2002.
viii.
Terminated the said two agreements for sale (in respect of flat nos. A/1102 and A/1103) on 04.01.2006.
17. Arbitrary and anyhow highhanded acts are well and truly evident on the part of the builder co. and its Director Nitin Mehta, unfairness and deception are writ large.
As such, independent and separate of 'deficiency in service', we determine 'unfair trade practice' on the part of the builder co. and its Director Nitin Mehta within the meaning of section 2(1)(r) of the Act 1986.
18. For the unfair trade practice (alone) [and not for 'deficiency in service'], the builder co. and its Director Nitin Mehta are put to stern advice of caution through imposition of cost, jointly and severally, of Rs.25,00,000/- (rupees twenty five lakh), out of which Rs. 15,00,000/- (rupees fifteen lakh) shall be deposited with the Consumer Legal Aid Account of the State Commission and Rs. 10,00,000/- (rupees ten lakh) shall be paid to the complainants (equally) within four weeks of pronouncement of the reasoned judgment. The payment to the complainants, made specifically and only for the 'unfair trade practice' under the Act 1986, shall be independent and separate of and without prejudice to seek remedy (refer paras 12, 13 and 14 above) in a civil court and / or to agitate their case before any competent authority.
19. We may add, in specific reference to the Director Nitin Mehta, that the duties / responsibilities of Director of a Company are laid-down in The Companies Act, 2013.
And we make it explicit that the builder co. (juristic person) as well as its Director Nitin Mehta (person) are liable for the 'unfair trade practice', jointly and severally. And the liability initiated the day the unfair and deceptive acts were done by the builder co. and its Director Nitin Mehta, and it continues.
We are making this observation inter alia in reference to 'enforcement' under section 25 (3) and 'penalties' under section 27(1) of the Act 1986.
20. The State Commission shall undertake execution, both for 'enforcement' under section 25 and for 'penalties' under section 27 of the Act 1986, as per the law, in case of failure or omission to comply with the direction contained in para 18 of this Order.
21. A copy each of this Order be sent by the Registry to the State Commission, to the builder co., to its Director Nitin Mehta, to the society, and to the complainants, within seven days of its pronouncement.
...................... DR. S.M. KANTIKAR PRESIDING MEMBER ...................... DINESH SINGH MEMBER