State Consumer Disputes Redressal Commission
Mr. Domingos Estevam Menezes, vs M/S. Haven Developers Pvt. Ltd. on 27 August, 2013
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA C.C. No. 23/2012 1. Mr. Domingos Estevam Menezes, Son of Mr. A.J. B. Menezes, aged 57 yrs., Married, Indian National, residing at House No.698, Palmar, Cupa, St. Estevam, Ilhas, Goa Complainant V/s 1. M/s. Haven Developers Pvt. Ltd. a Company registered under the Companies Act, 1956 Through its Director Albert J. DSouza with registered office at 385, Jagmodas Building, Ground Floor, Girgaon, Mumbai 400 002. 3. M/s. Hede Consultancy Co. Ltd., Durga Bhavan, Hede Centre, Tonca, Panaji Goa 403 001. 4. M/s Hede Consultancy Co. Ltd., D-53, Defence Colony, New Delhi 110 024. 5. M/s. Phoenix Township Ltd. Durga Bhavan, Hede Centre, Tonca, Panaji Goa 403 001. .Opposite Parties represented through their director Shri Prafulla R. Hede Complainant is represented by Adv. Shri. A. Monteiro O.P. No. 1 is represented by Shri. Albert J. DSouza O.P. Nos. 3 to 5 are represented by Adv. Shri S. N. Singbal with Adv. Ms. S. Mukhadam. Intervener in person Coram: Shri Justice N.A. Britto, President Smt. Vidhya R. Gurav, Member Dated: 27/08/2013 ORDER
[Per Shri. Justice N. A. Britto, President] By complaint filed on 16/11/12, the Complainant has sought, amongst others, the following reliefs:
a) an order handing over the possession of the flat to the complainant,
b) Rs.5,000/- per day from 06/04/1997 till the date of handing over of possession,
c) Interest on Rs.5.35 lacs @ 18% from the date of payment of the said amount.
2. The Opposite Parties are companies incorporated under the Companies Act, 1956. OP No.1 is a builder and developer having S/Shri Albert J. DSouza, Joseph Dsouza and Cecil Fernandes as its directors.
The latter is a non-resident director and has filed an application dated 18/06/2013 for his intervention in the complaint.
3. OP No.1 is represented by Shri Albert J. DSouza, a full time director, as he calls himself. Initially, the Complainant had shown his name in the cause title as OP No.2 but no notice was issued to him separately in view of the order of this Commission dated 29/11/12 as OP No.1 has its own separate legal identity, apart from its director. Though the cause title was changed, the Complainant failed to renumber OP Nos. 3 to 5 and the cause title has remained as it is.
4. OP Nos. 3, 4 & 5 are sister concerns or group companies managed by Dr. Prafulla R. Hede. OP Nos.3 & 4 appear to be one and the same company having its address at two different places .
5. By agreement dated 07/04/1995, the Complainant agreed to purchase from OP No.1, the builder, a flat identified as S-5 on the 2nd floor in building no.2, in their project under construction known as `Angeline Apartments situated in the property surveyed under no. 226/9 of Candolim Village, Bardez, for a sum of Rs.3,72,000/- and later paid a sum of Rs.5,35,500/- to OP No.1, the developer, on account of increase of area by two balconies of the said flat.
The said flat was to be delivered to the Complainant on 06/04/1997.
6. By agreement to assign dated 25/01/99 OP No.1, the developer, assigned to OP No.5 M/s. Phoenix Township Ltd., the property rights in various flats/studios in the said project and including their obligations to sell the flats/studios. By another agreement dated 22/05/1999 styled as an agreement to lease, the Complainant agreed to grant a lease of the suit flat for a period of 15 years commencing from 01/10/1999 at an annual lease rent of Rs.22,000/- payable in two equal installments for 5 years and thereafter for every block of 5 years with an increase of 5% per such block.
7. The case of the Complainant is that the OPs were fully aware that the Complainant was employed in Dubai and ever since 06/04/1997 the Complainant has been constantly reminding all the OPs and they assured that the flat would be handed over as soon as it was ready. According to him, he made several trips to the office of OP Nos.1 to 5 including by travelling to Mumbai on several occasions to meet the said Albert J. DSouza but only received assurances and not the suit flat till date. According to him, the suit flat has been fraudulently transferred between OP No.1 to OP No.5 and now is being operated as an international hotel and the same has not been handed over to the Complainant despite the assurances and promises made by OP Nos.1 to 5 and the Complainant has been cheated by making use of his flat as an international hotel. It is the case of the complainant, that by legal notice dated 16/07/2012, the Complainant demanded from the OPs handing over the possession of the suit flat but OP Nos. 3 to 5 replied to the said notice and disputed the liability by trying to push the same on OP No.1 and OP No.1 failed and neglected to acknowledge the receipt of the said notice dated 16/07/2012.
8. Before we proceed to deal with the objections taken to the complaint by OP Nos.3 to 5 , it is necessary for us to deal with the application for intervention filed by the said Cecil Fernandes, the non-resident director of OP No.1 M/s. Haven Developers.
8.1 According to him, he has not been made a party to the present complaint although he was promoter member of OP No.1 which was established somewhere in the year 1994-95 and he held more than 40% of share capital of OP No.1. According to him, he also has an agreement dated 03/01/1996 with OP No.1 for purchase of a flat identified as G-8 for a sum of Rs.3.16 lacs in the said Angeline Apartments and he has made the said payment. According to him, 98% of the flats have been sold by OP No.1 to various prospective purchasers but he was not kept informed by the other two directors of OP No.1. As per him, he came to know of the present complaint when he met the said Albert J. DSouza at Junta House (State Commission functions in Junta House, Panaji) after he had attended the hearing of this complaint and after he was informed that the Complainant had filed the complaint to claim his flat premises. He has stated that he requested the said Albert J. DSouza for articles of association of OP No.1 and for share certificate but he refused to give and walked away. According to him, the agreement to assign dated 25/01/1999 executed by OP No.1 with OP No.5 is also not within his knowledge and was executed behind his back. He has therefore contended that he is a necessary party to this complaint and he will be affected by the final outcome of the proceedings.
8.2 The application for intervention has been contested by OP No.1 through the said Albert J. Dsouza and who has admitted that the intervener had advanced money for the purchase of the flat but had not signed any agreement. According to him, the intervener Shri Cecil Fernandes was a non-resident Indian and later migrated to Canada and notices sent to him were returned unopened but he was a party to the negotiations between the flat purchasers and OP No.5 Phoenix Township Ltd. but due to his absence he was not present for the signing of the agreement to assign dated 25/01/1999. According to him, the intervener failed to press his claim for the flat for which he advanced money, from the assignee OP No.5 Phoenix Township Ltd. but he is willing to assist him in getting his dues from the said Phoenix Township Ltd.
as per the agreement to assign and the indemnity bond dated 04/05/2000 given by OP No.5 to OP No.1. OP No.1 has also alleged that on 12/11/2001 the intervener Mr. Cecil Fernandes broke into the office of OP No.1 and carried away all the documents and records of OP No.1 Company including the office furniture and he has requested him to return the same.
8.3 OP Nos.3, 4 & 5 have also contested the application stating that the intervener is not a proper or necessary party as he has no right or interest in the complaint and to the reliefs. According to them, OP No.1 M/s.
Haven Developers Pvt. Ltd. is a separate legal entity and all the directors need not be parties in individual capacities and that they are making application to delete OP No.2 as he is not a necessary and proper party to the present proceedings and can be impleaded at the time of execution.
8.4 In our view, the intervener cannot succeed in his application. We have made it clear that no separate notice was issued to Shri Albert J. DSouza. He only represents OP No.1 as its full time working director.
8.5 The Complainant has filed the complaint to recover the flat agreed to be purchased by him by virtue of agreement with OP No.1 dated 07/04/1995 and the agreement of assignment dated 25/01/1999. In case the intervener also wishes to recover his flat G-8 either from OP No.1 or OP No.5 he is always free to do so by filing a complaint against one or the other or both of them or by taking appropriate proceedings before appropriate Forum. He certainly cannot get the relief of recovery of his flat G-8 in a complaint filed by the Complainant. Moreover, In case the intervener has any dispute with the management of OP No.1, he is free to take appropriate proceedings in appropriate Forum and he cannot raise such grievances in complaint filed by the Complainant and complicate the issues involved in the complaint. Similarly, Shri Albert J. DSouza, in case he has any grievance against the intervener Cecil, he is free to settle the same by taking appropriate proceedings in appropriate Forum. Suffice it to observe, that the intervener is neither a proper or a necessary party and infact his presence is not at all necessary in this complaint filed by the Complainant for the recovery of his own flat.
We therefore proceed to dismiss the application for intervention filed by the said Cecil Fernandes.
9. The first objection taken by Shri S. M. Singbal, the lr. adv. of OP Nos. 3 to 5 is regarding limitation. Shri Singbal, the lr. adv. would submit that the date of delivery of possession of the suit flat was fixed on 06/04/1997 and being so the period of limitation of two years fixed by section 24A of Consumer Protection Act, 1986 has to be reckoned from the said date and if so reckoned, the complaint which has been filed on 16/11/2012 is clearly time barred. Lr.
adv. next submits that the two years period has atleast to be reckoned from the date of cancellation of agreement dated 14/05/1999, as mentioned on letter dated 15/03/2000 written by OP No.5 to OP No.1. Lr. advocate further submits that the Complainant was aware of the agreement for assignment as well as the result of first appeal no.820/2003 decided by the National Commission on 06/02/2006 and therefore ought to have filed the complaint soon thereafter. Lr. adv. further submits that the Complainant atleast ought to have filed the complaint within two years from 01/10/1999, that being the date on which the lease was to start in favour of OP No.5, as per agreement dated 22/05/1999.
9.1 Shri A. Monteiro, the lr. adv. on behalf of the Complainant would submit that the case at hand is one of a continuous cause of action and as long as the delivery of the flat is not given the cause of action would subsist.
9.2 At the outset, we must observe that none of the parties have produced cancellation agreement dated 14/05/1999 as reflected in letter dated 15/03/2000 .
Shri DSouza, on behalf of OP No.1, would submit that there was no such agreement. We are inclined to believe the said statement because no such agreement has been produced.
OP No.5 have written several letters to OP No.1, by keeping the Complainant in the dark and the Complainant would not be bound by any of such letters. It is difficult to fathom why such letters were being written by OP No.5 to OP No.1.
9.3 There is no doubt that section 24A of the C.P. Act, 1986 requires a complaint to be filed within two years from the date of which the cause of action has arisen and in case it is not filed within the said period, sufficient cause is to be shown for not filing the same within the said period of two years. This section has been held to be preemptory in nature which requires the Forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action, as held by the Apex Court in S.B.I. vs. B. S. Agricultural Industries AIR 2009 SC 2210, a decision relied upon by lr. adv. Shri Singbal.
9.4 The complaint has been filed with an allegation that ever since the promised date of delivery, the Complainant has been constantly reminding all the OPs that the flat is to be delivered to the Complainant and they have always assured the Complainant that possession would be handed over as soon as the flat was ready but till date the flat has not been handed over to the Complainant despite the said assurances.
The cause of action to file the complaint has been pleaded as having arisen on or about 28/08/2012 when OP Nos. 3 to 5 replied to the legal notice dated 16/07/2012.
We are unable to accept the submission of lr. adv. Shri Singbal that the period of two years has to be reckoned from any of the dates given by him.
In our view, the cause of action in favour of the Complainant has got to be construed as continuous in that the Complainant would be able to maintain the complaint as long as possession of the flat is not given to the Complainant as stipulated or refused to be given by the OPs. We are fortified in our view from the observation of the National Commission in Hashmukh Lal Patil & ors, 2012 (4) CPR 362 wherein relying on an earlier decision the National Commission has held that the cause of action would remain continuous till allotment of site or till refusal and the same ratio would be applicable to the facts of that case.
In our view, the same ratio is also applicable to the facts of the case at hand as the possession of the flat has not been given and the same was denied only by reply dated 28/08/2012. Two years are required to be reckoned from this date. Earlier, this Commission had taken a view which reads as follows:
Since no possession has been handed over to the Complainants of the apartments booked by them on 13/12/2006 although the Complainants claim that they have paid the entire amount due to the Opposite Parties, nor a sale deed executed, these would be cases of recurring cause of action. In other words, the causes of action would continue till such time the possession is handed over to the Complainants and sale deed is executed. In this context we may refer to Meerut Development Authority, 2012 (4) CPR 220, wherein the National Commission followed the view expressed by the Apex Court in Meerut Development Authority vs. M. K. Gupta, stating as follows:
In our view the complaint filed by the respondent who had patiently waited for 27 years with the hope that he will get the plot was rightly not dismissed by the District Forum as barred by limitation because he had a recurring cause for filing a complaint in the matter of non-delivery of possession of the plot.
9.5 In Lata Construction and ors. vs. Dr. R. R. Shah and anr., 2000 (1) CPR 81, the Apex Court has held: since the rights under the agreement of 1987 had not been given up and the appellants were constantly under an obligation to provide a flat to the respondents and deliver possession thereof to them, the Commission rightly treated `cause of action to be continuing cause of action and came to the right conclusion that the claim was not beyond time.
9.6. The plea of OP Nos.3 to 5 that the complaint is barred by limitation, therefore, needs to be rejected.
10. The next objection taken by Shri Singbal on behalf of OP Nos. 3, 4 & 5 is that there is no privity of contract between the Complainant and the said OPs as the said OPs have not received any amount from the Complainant. Lr. advocate would submit that the agreement to assign dated 25/01/1999 was restricted to the 11 flat purchasers mentioned therein and not to the Complainant as the Complainants name does not figure therein. Lr.
advocate therefore submits that the order of the National Commission in F.A. No.820/2003 is not applicable to the facts of the case. Regarding the lease agreement dated 22/05/1999, lr. advocate submits that it was not to be acted upon and as such it was torn immediately and therefore the rent as stipulated therein was not paid any time to the Complainant.
10.1 On the other hand, Shri Monteiro, the lr. adv.
of the Complainant would submit that OP Nos. 3 to 5 in their reply dated 24/08/2012 have admitted that they had completed the development and had taken over the possession of the property/ building in issue as per agreement dated 20/04/1999 (or is it 25/01/1999?). Lr. advocate places strong reliance on the order of the National Commission in F.A. No.820/2003 and further submits that in terms of the said order the OPs are required to hand over the flat to the Complainant and pay compensation. Referring to letter dated 03/03/1999 addressed by OP No.5 to OP No.1, lr. advocate submits that the Complainant was not one of the flat purchasers who was to be settled and again referring to letter dated 15/03/2000 lr. adv. Shri Monteiro submits that name of the Complainant is not mentioned therein.
10.2 Shri Albert J. Dsouza, on behalf of OP No.1, would submit that all the rights and liabilities of OP No.1 were taken over by OP No.5 pursuant to agreement of assignment dated 25/01/1999 including that of the flat of the Complainant and OP Nos. 3 to 5 have stepped into the shoes of the assignors i.e. OP No.1 qua the Complainant and are bound to perform the legal obligations to complete the building and hand over the flat to the Complainant. Referring to letter dated 03/03/1999 Shri Dsouza would submit that the name of the Complainant in relation to flat no.S-5 is not mentioned in the said letter indicating that they have not settled the claim of the Complainant. He then refers to the indemnity bond dated 04/05/2000 given by OP No.5 wherein they have admitted having taken over the rights and liabilities of OP No.1 and to para 3 thereof wherein they have admitted having entered into an agreement of cancellation with 31 out of 37 flat purchasers and as such there was no liability of OP No.1. He has referred to the order dated 06/02/2006 of the National Commission in F.A. No.820/2003 and has submitted that a special leave petition having been filed against the same, the same has been dismissed by the Honble Supreme Court. It is his submission that the liability towards the Complainant has to be made good by OP Nos. 3 to 5. As regards the lease agreement dated 22/05/1999, produced by him on behalf of OP No.1, Shri DSouza submits that the same was executed between the three parties but the Complainant was not given a copy of the same thus committing an act of treachery towards the Complainant.
11. We are not impressed with the submissions made by Shri Singbal, the lr. advocate of OP Nos. 3 to 5.
11.1 The Complainant in para 7 of the complaint stated that the OP No.3 took over the entire project from OP No.1 & 2 and thereafter OP Nos. 3 & 4 discretely and clandestinely executed documents with respect to the said project interse. The Complainant further stated that the OP Nos. 3 to 5 also took over all the rights and liabilities of OP Nos.1 & 2 with respect to the said project. All liabilities created by OP No.1 & 2 with respect to the said project towards third parties were taken over by OP Nos. 3 to 5.
11.2 OP Nos. 3 to 5 have not at all denied the above averments and they can be taken to be admitted by applying the rule of non-traverse. OP Nos. 3 to 5 in answer to the complaint, and particularly with reference to para 7, stated that the contents of the said para are matters of record and requires no comments. In other words, OP Nos. 3 to 5 have not denied the said averments made by the Complainant about all liabilities of OP nos. 1 & 2 being taken over by them and therefore by implication the said allegations are deemed to have been admitted by the said OPs. In other words, it can be said that OP Nos. 3 to 5 have admitted that they have taken over the liabilities created by OP Nos. 1 & 2 towards the third parties.
11.3 Clause 7 of agreement dated 25/01/1999 read as follows:
It is agreed that the Assignees shall be liable for the performance obligations (but not the liabilities as per clause 6 above) which the Assignors have undertaken in respect of the said property Rights and more particularly the Assignees shall be liable to complete the unfinished interior/ exterior work and fulfill the performance obligations of the Assignors under the various agreements entered into by the Assignors with the said flat/studio purchasers. It is agreed that the Assignees shall be entitled to all benefits accruing or arising out of the said agreement to sell with the flat/studio purchasers, except that the Assignors alone shall be entitled to the benefits of the amount outstanding and receivable from the said flat/studio purchasers.
It is agreed that upon transfer and assignment of the said Property rights the Assignees shall be the rightful owners of and shall have all right title and interest in the said landed property and all developments and construction thereon subject only to giving of possession to other obligation towards the various flat studio purchasers as aforesaid. In the event of cancellation of the agreement to sell with any of the studio purchasers the assignees shall have full and absolute ownership right title and interest over the cancelled flat/studio and the proportionate common areas to exclusion of the assignors or any other and that the assignees shall have all right title interest as absolute owners thereof to self use or to lease mortgage or to sell the cancelled flats/ studios as it may deem fit in its sole discretion(emphasis supplied) 11.4 In para 2 of reply dated 24/08/2012 sent on behalf of OP Nos. 3 & 5 it is stated as follows:
without prejudice my client submits that they have completed development and has taken over the possession of properties/ buildings in issue as per agreement dated 20/04/1999.
11.5 Again in Para 3 of the written version, OP Nos.3, 4 & 5 stated that:
on 20/04/1999 on which date the development has been completed and these OPs took over the possession of the property. The Complainant is aware of the same since 1999 as per clause 16 of the contract.
11.6 In letter of indemnity dated 04/04/2000 on behalf of OP No.5 it was stated as follows:
wherein PTL entered into an agreement to assign dated 25th January, 1999 with Haven Developers Pvt. Ltd. wherein the entire project which was constructed by Haven Developers on the property situated at 226/9, Sequeira Vado situated at Village Candolim, Goa was taken over by PTL.
As a result of taking over the said entire project the rights and liabilities of the said Haven Developers Pvt. Ltd. under their Agreement with the flat purchasers of various flats situated at Angeline Apartment, Candolim, Goa assigned to and taken over by PTL.
11.7 In lease agreement dated 22/05/1999, vide clause 2, OP No.1 and OP No.5 represented to the Complainant that the flat would be ready for possession within six months.
11.8 The National Commission in F.A. No.820/2003 vide Order dated 06/02/2006 did not agree with the view held by this Commission that OP Nos. 4 & 5 (referred to as OP Nos. 3 & 4) were not liable for the claim of the Complainants as there was no agreement between them. The National Commission held that the said final order could not be justified in view of the agreement (dated 25/01/1999) and the indemnity bond (dated 04/05/2000). The National Commission observed that OP Nos.1 & 2 were developers. They had assigned the right of developing the flats to the OP Nos. 3 & 4 (OP Nos. 4 & 5 in this case). There was a specific agreement between OP nos. 1 & 2 and OP Nos. 3 & 4 (OP Nos. 4 & 5 in this case) that the assignees had taken over the entire liability qua the flat purchasers as they wanted to have the building converted into an international hotel and therefore OP Nos. 3 & 4 (OP Nos. 4 & 5 in this case) were solely liable to indemnify the Complainants.
11.9 In agreement to lease dated 22/05/1999 OP Nos. 1 & 5 have acknowledged that the possession of the suit flat has not been given to the Complainant and have further represented that the same would be ready for possession within 6 months.
It is not the case of either of them that the possession of the suit flat has ever been delivered to the Complainant.
12. We are unable to accept the submission of Shri Singbal that there is no privity of contract between the Complainant and OP Nos. 3 to 5. As seen, clause 7 of the agreement is in general terms and cannot be restricted as applying to eleven flat purchasers mentioned therein, and shown as confirming parties. It applies to all flat/studio purchasers. OP No.5 by virture of the said deed of assignment had undertaken to fulfill the obligations of the assignors (OP No.1) under various agreements entered into by the assignors. Complainant was one of them and therefore OP No.5 was bound to fulfill the obligations of OP No.1 under agreement dated 07/04/1995 . Likewise, we are unable to agree that the findings of the National Commission are inapplicable to the facts of this case. They are very much applicable as they are rendered with reference to deed of assignment dated 25/01/1999 and letter of indemnity dated 04/05/2000. In this case we have an admission as well, as already indicated. The complainant, therefore, would be entitled to the relief in terms of prayer clause (a).
13. Reverting to the agreement for lease dated 22/05/1999 it needs to be observed that Dr. Prafulla R. Hede has not filed any affidavit to say that the same was not meant to be acted upon and was torn/or destroyed. The said agreement was prepared and executed in three copies, as stated therein. OP No.1 has produced their copy by application dated 14/06/2013. An agreement entered into does not get effaced by tearing one of the copies. It can be replaced by another agreement having equal force. Shri DSouza therefore would be right in submitting that the Complainant was taken for a ride by the said Dr. Prafulla R. Hede by not providing to him a copy of the said agreement dated 22/05/1999.
14. The Complainant has sought compensation @ Rs.5,000/- per month from 06/04/1997. In our view, the agreement dated 22/05/1999, can be used as a guide to determine the compensation payable to the Complainant. We therefore hereby order in terms of prayer (b) that the Complainant ought to be paid Rs.22,000/- per year from 06/04/1997 for the first 5 years and Rs.23,100/- per year for the next 5 years and Rs.24,255/- per year for the next 5 years till the possession of the suit flat is handed over to the Complainant.
15. The Complainant has also sought interest @ 18% on the amount of Rs.5,35,000/- from the date it was paid. Complainant has not sought for any compensation for disappointment, frustration, mental stress, etc. for not having been provided with the possession of the suit flat in time. In our view, the Complainant would not be entitled to interest as claimed by him on the said amount of Rs.5.35 lacs in view of the relief granted to him in terms of prayer (b) but we are inclined to mould the relief and award to the Complainant in terms of prayer (c) read with prayer (f), a sum of Rs. 1 lac to be paid to the Complainant for disappointment, frustration, mental stress, etc.
16. In view of the discussion supra, we allow the complaint partly and direct all the OPs to hand over to the Complainant the possession of the suit flat within a period of 30 days. We direct OP Nos. 3 to 5 to pay to the Complainant the compensation ordered to be paid hereinabove and costs of this complaint of Rs.5,000/-. In case the compensation and costs are not paid within 30 days, they shall carry interest at the rate of 9% per year until they are paid.
(Smt. Vidhya R. Gurav) (Justice Shri. N. A. Britto) MEMBER PRESIDENT /lm