National Consumer Disputes Redressal
Amrita Rosha vs Devinder Kumar Lamba & 2 Ors. on 17 January, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 804 OF 2018 (Against the Order dated 10/03/2017 in Complaint No. 171/2016 of the State Commission Punjab) 1. AMRITA ROSHA W/O. SHRI. ABHISHEK JAIN. R/O. W-62, GREATER KAILASH-1. NEW DELHI-110048 ...........Appellant(s) Versus 1. PREM KUMAR MEHTA & 2 ORS. S/O. LT. COL. GIRDHARI LAL MEHTA. R/O. HOUSE NO-631, SECTOR-33 B. CHANDIGARH. 2. MARINERS BUILDCON INDIA LTD. THROUGH ITS DIRECTOR, H.S. ANAND, DIRECTOR. C/10, KAILASH COLONY. NEW DELHI-110048 3. MARINERS BUILDCON INDIA LTD. THROUGH ITS DIRECTOR, HARJAS KAUR ANAND. C/10, KAILASH COLONY. NEW DELHI-110048 ...........Respondent(s) FIRST APPEAL NO. 805 OF 2018 (Against the Order dated 10/10/2016 in Complaint No. 3/2016 of the State Commission Punjab) WITH
IA/9382/2018(Stay),IA/9383/2018(Condonation of delay),IA/9384/2018(Exemption from filing the Certified Copy) 1. AMRITA ROSHA W/O. SHRI. ABHISHEK JAIN.
R/O. W-62, GREATER KAILASH-1. NEW DELHI-110048 ...........Appellant(s) Versus 1. DEVINDER KUMAR LAMBA & 2 ORS. S/O. SH. JAI RAM LAMBA.
R/O. HOUSE NO.18 SECTOR-33A. CHANDIGARH. 2. MARINERS BUILDCON INDIA LIMITED. THROUGH ITS DIRECTOR, H.S. ANAND.
C/10, KAILASH COLONY. NEW DELHI-110048 3. MARINERS BUILDCON INDIA LIMITED. THROUGH ITS DIRECTOR, HARJAS KAUR.
C/10, GROUND FLOOR, KAILASH COLONY. NEW DELHI-110048. ...........Respondent(s) FIRST APPEAL NO. 806 OF 2018 (Against the Order dated 19/01/2017 in Complaint No. 97/2016 of the State Commission Punjab) WITH IA/9385/2018(Stay),IA/9386/2018(Condonation of delay),IA/9387/2018(Exemption from filing the Certified Copy) 1. AMRITA ROSHA W/O. SHRI. ABHISHEK JAIN.
R/O. W-62, GREATER KAILASH-1. NEW DELHI-110048 ...........Appellant(s) Versus 1. BHARATDEEP HANDA & 2 ORS. S/O. SH. B.K. HANDA.
R/O. HOUSE NO.3350, SECTOR-37 D. CHANDIGARH. 2. MARINERS BUILDCON. THROUGH ITS DIRECTOR, H.S. ANAND, DIRECTOR.
C/10, GROUND FLOOR, KAILASH COLONY. NEW DELHI-110048 3. MARINERS BUILDCON. THROUGH ITS DIRECTOR, HARJAS KAUR, DIRECTOR.
MARINERS BUILDCON INDIA LIMITED.
C/10, GROUND FLOOR, KAILASH COLONY. NEW DELHI-110048 ...........Respondent(s) FIRST APPEAL NO. 807 OF 2018 (Against the Order dated 19/01/2017 in Complaint No. 98/2016 of the State Commission Punjab) WITH IA/9388/2018(Stay),IA/9389/2018(Condonation of delay),IA/9390/2018(Exemption from filing the Certified Copy) 1. AMRITA ROSHA W/O. SHRI. ABHISHEK JAIN.
R/O. W-62, GREATER KAILASH-1. NEW DELHI-110048 ...........Appellant(s) Versus 1. AJAY RATTAN LAMBA & 2 ORS. S/O. SH. AGIA RAM LAMBA.
R/O. HOUSE NO.274, SECTOR-15A. CHANDIGARH. 2. H.S. ANAND, DIRECTOR, MARINERS BUILDCON INDIA LIMITED. C/10, GROUND FLOOR, KAILASH COLONY. NEW DELHI-110048 3. HARJAS KAUR, DIRECTOR, MARINERS BUILDCON INDIA LIMITED. C/10, GROUND FLOOR, KAILASH COLONY. NEW DELHI-110048 ...........Respondent(s) BEFORE: HON'BLE MR. DR. S.M. KANTIKAR,PRESIDING MEMBER HON'BLE MR. DINESH SINGH,MEMBER For the Appellant : Mr. Sukumar Pattjoshi, Sr. Advocate with Mr. Sunil Mund, Advocate Mr. Somesh Dubey, Advocate Mr. Manvendra Singh, Advocate Mr. Siddharth Bhatli, Advocate Mr. Rakshith Srivastava, Advocate For the Respondent :
Dated : 17 Jan 2019 ORDER
1. The instant matter relates to 4 f. a. s filed by the appellant (one director of the builder co.) under section 19 of the Consumer Protection Act, 1986 against the State Commission's Orders (3 nos.) dated 10.03.2017, 10.10.2016 and 19.01.2017 whereby the State Commission directed the three opposite parties [the builder co. through its three directors (one being the appellant herein)] to refund the deposited amount (Rs.29,44,725/-; Rs.29,25,000/-; Rs.50,00,000/-; Rs.18,50,000/-) to the respondents - complainants; with interest (@11% p.a.; @11% p.a.; @11% p.a.; @11% p.a.) from the respective dates of deposit till realization; compensation (Rs.2,00,000/-; Rs.2,00,000/-; Rs.2,00,000/-; Rs.2,00,000/-); and litigation expenses (Rs.21,000/-; Rs.21,000/-; Rs.21,000/-; Rs.21,000/-).
2. We heard the learned counsel for the appellant and perused the material on record.
3. First appeals no. 804 of 2018, 805 of 2018, 806 of 2018 and 807 of 2018 have arisen from consumer complaints no. 171 of 2016, 03 of 2016, 97 of 2016 and 98 of 2016 before the State Commission. In the said c.c.s (4 nos.), the parties were:
Prem Kumar Mehta
- complainant in c.c. no. 171 of 2016 Devinder Kumar Lamba
- complainant in c.c. co. 03 of 2016 Bharatdeep Handa
- complainant in c.c. co. 97 of 2016 Ajay Rattan Lamba
- complainant in c.c. co. 98 of 2016 versus
1. Mariners Buildcon India Ltd.
C-10, Kailash Colony, New Delhi-110048 Through its Director H.S. Anand, Director
- opposite party no.1
2. Mariners Buildcon India Ltd.
C-10, Kailash Colony, New Delhi-110048 Through its Director Mrs. Harjas Kaur Anand
- opposite party no.2
3. Mariners Buildcon India Ltd.
Through its Director Amrita Rosha D/o Rajwinder Singh Rosha M-131, Greater Kailash Colony, Part-I New Delhi - 110048
- opposite party no.3 [The c.c. no. 171 of 2016 was decided vide Order dated 10.03.2017; the c.c. no. 03 of 2016 was decided vide Order dated 10.10.2016; the c. c. s no. 97 of 2016 and 98 of 2016 were decided vide Order dated 19.01.2017.] Amrita Rosha, Director, is the appellant herein in the instant f. a. s no. 804 of 2018, 805 of 2018, 806 of 2018 and 807 of 2018.
4. The salient material facts and the specific awards made in the 4 c.c.s are depicted in tabular form below:
C.C. No. (F.A. No.) Amount deposited by the Complainant with the builder co. / its functionaries Dates of deposits Date of Institution of Complaint Date of State Commission's Order Assured Date of Delivery Newspaper in which Publication made for effecting service Award Refund the deposited amount with interest Compensation Litigation expenses 171 of 2016 (f.a. 804 of 2018) Rs.29,44,725/-
17.11.2005, 25.02.2010, 02.03.2010, 06.04.2011, 02.09.2011, 15.07.2013 02.06.2016 10.03.2017 end of 2012 Daily Tribune Rs.29,44,725/-
+ @11% p.a. from the date of deposit till payment Rs. 2,00,000/-
Rs. 21,000/-
03 of 2016 (f.a. 805 of 2018) Rs.29,25,000/-
09.06.2010, 01.10.2010, 03.03.2011, 10.09.2012, 15.07.2013 05.01.2016 10.10.2016 end of 2012 The Times of India Rs.29,25,000/-
+ @11% p.a. from the date of deposit till payment Rs. 2,00,000/-
Rs. 21,000/-
97 of 2016 (f.a. 806 of 2018) Rs.50,00,000/-
02.11.2010, 08.11.2010, 14.02.2011, 21.02.2011, 01.08.2011, 15.07.2013 30.03.2016 19.01.2017 end of 2012 Daily Tribune Rs.50,00,000/-
+ @11% p.a. from the date of deposit till payment Rs. 2,00,000/-
Rs. 21,000/-
98 of 2016 (f.a. 807 of 2018) Rs.18,50,000/-
21.05.2010, 08.02.2011, 10.09.2012 30.03.2016 19.01.2017 end of 2012 Daily Tribune Rs.18,50,000/-
+ @11% p.a. from the date of deposit till payment Rs. 2,00,000/-
Rs. 21,000/-
5. After hearing arguments on 29.10.2018, and after perusing the material on record, and after thoughtful consideration, we recorded the gist of our considered view in the daily Order of 29.10.2018:
The forenoon session extended upto 1.10 p.m. As learned senior counsel for the appellant Mr. S. Pattjoshi had a case before Hon'ble High Court at 2.30 p.m., the afternoon session was started at 1.45 p.m. Learned senior counsel for the appellant Mr. S. Pattjoshi was not ready to argue the matters on merit.
The father and mother of the appellant were present. The mother of the appellant made a request to hear arguments.
In the interest of justice another opportunity was provided to argue the matters at the end of the Board.
At the end of the Board, at 4.15 p.m., learned counsel Mr. Siddhartha Bhatli argued the matters for the appellant. The father and mother of the appellant were (again) present.
We perused the material on record.
The appeals are dismissed.
Reasoned judgment to follow.
Till the pronouncement of the reasoned judgment execution proceedings shall remain stayed.
We are giving our reasons hereinafter.
6. To begin with, the applications for condonation of delay in filing the first appeals were considered.
7. The f. a. no. 804 of 2018 has been filed with a prayer for condoning the "delay, if any" in filing the appeal. (The Registry has reported a delay of 394 days.) The stated reasons for delay, as mentioned in paras 3 to 5 of the application for condonation of delay, are as below:
3. That the appellant was completely unaware of any such proceedings against her. That the appellant came to know through internet about the impugned order against her before the State Commission, Punjab on 20th April 2018. That immediately upon learning of the above, the appellant trying to obtain a certified copy of the impugned order.
4. The appellant for the first time came to know about the impugned order on 20-04-2018 through internet and since the appellant is yet to obtain with a certified copy of the impugned order, this appeal is within limitation. However, as a matter of abundant precaution, the appellant is filing an application for condonation of delay along with this appeal.
5. That delay, if any, in filing the appeal is neither intentional or deliberate and due to the above reasons beyond the control of the Appellant.
(paras 3, 4 and 5 of the application for condonation of delay) The f. a. no. 805 of 2018 has been filed with self-admitted delay of "about 27 days".
The stated reasons for delay, as mentioned in paras 3 to 5 of the application for condonation of delay, are as below:
3. That the appellant was completely unaware of any such proceedings against her. That the appellant came to know through internet about an execution proceeding pending against her before the State Commission, Punjab in March 2018. That immediately upon learning of the above, the appellant got a certified copy of the order passed in execution petition applied and for and challenged the same before this Hon'ble Commission in AE No. 50 of 2018 and this Hon'ble Commission appreciating that the appellant herein was not even a director at the time of institution of the complaint has been pleased to grant a stay of execution proceedings qua the appellant herein.
4. The appellant for the first time came to know about the impugned order on 12-03-2018 through internet and since the appellant came to know about the impugned order for the first time on 12-03-2018, limitation for filing this appeal expires on 11-04-2018. This appeal is filed on 08-05-2018, hence there is a delay of 27 days in filing this appeal.
5. That in view of the coercive order passed in the execution proceedings, the appellant herein was advised to challenge the execution proceedings immediately and the same was done. However, since a substantive order fastening liability still stands against the appellant, the appellant is challenging the same through the present appeal.
5. That delay, if any, in filing the appeal is neither intentional or deliberate and due to the above reasons beyond the control of the Appellant.
(paras 3, 4, 5 and 5 of the application for condonation of delay) The f. a. no. 806 of 2018 has been filed with a prayer for condoning the delay of "about ___ days" in filing the appeal. (The number of days has been left blank.) The stated reasons for delay, as mentioned in paras 3 to 6 of the application for condonation of delay, are as below:
3. That the appellant was completely unaware of any such proceedings against her. That the appellant came to know through internet about the impugned order against her before the State Commission, Punjab on 20th April 2018. That immediately upon learning of the above, the appellant has been trying to obtain a certified copy of the impugned order passed.
4. The appellant for the first time came to know about the impugned order on 20-04-2018 through internet and since the appellant is yet to be provide with a certified copy of the impugned order, this appeal is within limitation. However, as a matter of abundant precaution, the appellant is filing an application for condonation of delay along with this appeal.
5. That delay, if any, in filing the appeal is neither intentional or deliberate and due to the above reasons beyond the control of the Appellant.
6. It is submitted that grave prejudice, irreparable loss and hardship will be caused to the Appellant if this Application for Condonation of Delay is not allowed and no prejudice will be caused to the Respondents if this Application for Condonation of Delay is allowed, as the balance of convenience is in favour of the Appellant.
(paras 3, 4, 5 and 6 of the application for condonation of delay) The f. a. no. 807 of 2018 has been filed with self-admitted delay of "about 27 days".
The stated reasons for delay, as mentioned in paras 3 to 6 of the application for condonation of delay, are as below:
3. That the appellant was completely unaware of any such proceedings against her. That the appellant came to know through internet about an execution proceeding pending against her before the State Commission, Punjab in March 2018. That immediately upon learning of the above, the appellant got a certified copy of the order passed in execution petition applied and for and challenged the same before this Hon'ble Commission in AE No. 48 of 2018 and this Hon'ble Commission appreciating that the appellant herein was not even a director at the time of institution of the complaint has been pleased to grant a stay of execution proceedings qua the appellant herein.
4. The appellant for the first time came to know about the impugned order on 12-03-2018 through internet and since the appellant came to know about the impugned order for the first time on 12-03-2018, limitation for filing this appeal expires on 11-04-2018. This appeal is filed on 08-05-2018, hence there is a delay of 27 days in filing this appeal.
5. That in view of the coercive order passed in the execution proceedings, the appellant herein was advised to challenge the execution proceedings immediately and the same was done. However, since a substantive order fastening liability still stands against the appellant, the appellant is challenging the same through the present appeal.
6. That delay, if any, in filing the appeal is neither intentional or deliberate and due to the above reasons beyond the control of the Appellant.
(paras 3, 4, 5 and 6 of the application for condonation of delay)
8. The Act 1986 is to provide speedy and simple redressal to consumer disputes (Statement of Objects and Reasons). The normative ideal period for disposing of an appeal is 90 days (section 19A of the Act). The period of limitation to file appeal is 30 days (section 19 of the Act). The appeals have been filed with clear evident delay.
9. The stated reasons for delay, as reproduced, verbatim, in toto, in para 7 above, point towards a perfunctory and casual attitude to the law of limitation, and are illogical and absurd in explaining convincingly and cogently the day-to-day delay in filing the appeal.
The appellant has made two types of averments, one, that she "came to know" "through internet" about the impugned Order (f. a. no. 804 of 2018 and f. a. no. 806 of 2018), and, two, she "came to know" "through internet" about execution proceedings pending against her before the State Commission (f. a. no. 805 of 2018 and f. a. no. 807 of 2018). The stated reasons for delay, and specifically the two stereotyped averments, to the effect that she "came to know" "through internet" of the impugned Order / execution proceedings, are, on the face on it, bland, unconvincing, and have a ring of untruth, moreso when the appellant, who was opposite party no. 3 in the consumer complaint before the State Commission, was duly served through publication in leading widely-read daily newspapers (Daily Tribune, The Times of India). Despite the due service through publication, the appellant, who was one opposite party in the consumer complaint, did not appear in person or through her authorized representative / agent / advocate to present her case before the State Commission. The plea of the appellant that she was unaware of the proceedings against her before the State Commission does not hold good, when the service was duly effected through publication (in leading widely-read daily newspapers).
10. No just or sufficient cause to explain the delay is visible.
11. The applications for condonation of delay being unconvincing and devoid of merit deserve to be dismissed. Resultantly the appeals also deserve to be dismissed on limitation.
12. We however want to also satisfy ourselves that there would be no miscarriage of justice if the delay is not condoned. Therefore we have examined the matter on merit also.
13. We note that these 4 f.a.s have similar facts and same questions of law involved.
We are taking f. a. no. 804 of 2018, arising from the Order dated 10.03.2017 of the State Commission in c.c. no. 171 of 2016, Amrita Rosha vs. Prem Kumar Mehta & Ors., as the lead-case.
14. The facts, as taken from the lead-case, first appeal no. 804 of 2018, and as recorded in para 1 of the Order dated 10.03.2017 of the State Commission in c.c. no. 171 of 2016, are as below:
1. Complainant has filed this complaint against Opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short 'the Act') on the averments that in the year 2008 Ops launched their project by the name of Mohali Oceanic in Sector 123, Mohali. Complainant booked one residential expandable villa on 300 sq. yard with approximate covered area of 1850 sq. feet and deposited the initial booking amount of Rs. 2,00,000/- with cheque dated 25.02.2010 and another cheque No. 193410 drawn on Citi Bank dated 25.02.2010 for a sum of Rs. 1,94,725/- and Ops issued receipt No. 130 dated 2.3.2010. Complainant made another payment of Rs. 7,00,000/- vide cheque No. 022044 on 1.8.2011 of HDFC Bank and Ops issued receipt No. 364 dated 2.9.2011. The complainant received a demand letter dated 2.5.2013 and informed that they got CLU and shortly they will issue provisional / tentative layout and raised the demand of Rs. 5,00,000/-, which was deposited vide demand draft No. 000243 dated 16.5.2013 of HDFC Bank. Thereafter, confirmation letter was issued and the price of the Villa was fixed as Rs. 53,00,000/-. On 5.3.2014, Op sent email and stated that the factual layout plan of the project has been sanctioned and received by Ops and very soon Ops will supply the layout plan to all its investors and that allotment of individual Villa would be done by 15.4.2014. Ops promised to deliver the Villa upto May, 2012 and issued a payment plan i.e. construction linked plan. Complainant also made a payment of Rs. 50,000/- on 17.11.2005. Till date, the complainant has already paid a sum of Rs. 29,44,725/- to the Ops but it is very unfortunate that there is no one to communicate in this regard on behalf of Ops as all their offices are closed. The possession of the Villa was to be given in April, 2010, which was further extended to September, 2015. Till date, no possession has been handed over and they are not sure as to when the Ops will deliver the possession. This act on the part of Ops is unfair trade practice/ deceptive practice as well as deficiency in their services. Accordingly, this complaint has been filed against Ops with a direction to Ops to refund a sum of Rs. 29,44,725/- paid by the complainant alongwith interest @ 18%, compensation of Rs. 5 lacs and litigation expenses as Rs. 50,000/-.
[para 1 of the State Commission's Order (lead-case)] (underlining supplied)
15. To succinctly bring the rival contentions into focus, it may be stated, in brief, that the contention of the complainant (lead-case) was that as per the terms and conditions of the allotment, the possession of the subject villa was to be delivered by the end of 2012. Despite depositing (on 17.11.2005, 25.02.2010, 02.03.2010, 06.04.2011, 02.09.2011 and 15.07.2013) more than 50% of the total cost of the subject villa (deposited: Rs. 29,44,725/-; total cost: Rs. 53,00,000/-), the builder co. / its functionaries failed to deliver physical possession of the subject villa till the date of filing of the complaint in the State Commission (02.06.2016) [as well as till the date of decision of the State Commission (10.03.2017), as also till the date of arguments (29.10.2018) in the first appeal before this Commission]. No construction or other activity was initiated at the indicated site by the builder co. / its functionaries. Requisite approvals to execute the project in question were not taken from the concerned authorities by the builder co. / its functionaries. Consequently the builder co. / its functionaries were not in a position to deliver the physical possession of the subject villa to the complainant.
The opposite parties, the builder co. through its three directors (including the appellant herein), did not appear before the State Commission, and were proceeded against ex-parte. The directors of the builder co. were served through publication in a leading widely-read daily newspaper (Daily Tribune). Despite the due service through publication, they did not appear before the State Commission. Therefore the opposite parties (including the appellant herein) were proceeded against ex-parte by the State Commission.
16. The State Commission vide its Order dated 10.03.2017 had allowed the complaint with directions as recorded in para 7 of its Order (lead-case):
7. In view of the above, we accept the complaint and direct Ops as under:-
(i) refund a sum of Rs. 29,44,725/- alongwith interest @11% from the date of deposit till payment;
(ii) pay Rs. 2 lacs on account of unfair trade practice and deficiency in service to receive the payment and launch the project without proper approvals from the competent authority i.e CLU from the PUDA and Town and Gram Planning Department, Punjab or license from the GMADA, layout plans or other certificates as provided under the PAPRA, compelling the complainant to approach the Commission alongwith physical and mental harassment;
(iii) Rs. 21,000/- as litigation expenses.
17. We may first note that the Act 1986 is for better protection of the interests of consumers, to provide speedy and simple redressal to consumer disputes, in recognizedly a fight amongst unequals.
18. We may also note that the consumer - complainant is not seeking specific performance of a contract in a civil court; he is seeking consumer justice from a quasi-judicial machinery for redressal of consumer disputes under the provisions of the Consumer Protection Act, 1986.
19. 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.
20. The State Commission had the jurisdiction to entertain these complaints, and to adjudicate apropos deficiency in service [section 2(1) (g) & (o)] and unfair trade practice [section 2(1) (r)] under the additional (alternative) remedy provided for consumers (section 3).
21. The State Commission examined the matter, appraised the evidence before it, and passed a reasoned Order, with clear findings of deficiency in service and unfair trade practice:
5. Complainant has filed his affidavit, which is as per the averments made in the complaint as Ex. C-A, cheque copies dated 25.2.2010 Ex. C-1, receipts Exs. C-2 to C-4, updates of the project vide letter dated 2.5.2013 Ex. C-5, demand draft copy Ex. C-6, confirmation letter for allotment issued by Ops dated 14.6.2013 Ex. C-7 mentioning expendable Villa to be 300 sq. yards with 1850 Sq. Ft. covered area on the plot at BSP of Rs. 53 lacs. Receipt of Rs. 5 lacs dated 15.7.2013 Ex. C-8, receipt dated 17.11.05 of Rs. 50,000/- Ex. C-13. In this way, the Ops have received a sum of Rs. 29,44,725/- from the complainant. Ops issued email dated 5.3.2014 vide which it was intimated to all the Members of allotment of individual villa will be done by 15.4.2014 and they will start handing over the completed Villa to the allottees by September, 2015 but nothing happened. Counsel for the complainant has further placed on the record the email dated 18.7.2016 (Ex. C-14) vide which it was intimated that CLU was received. Further vide letter dated 22.10.2014 Ex. C-15 issued by PUDA that project 'Mohali Oceanic at Sector 123, Mohali was nor approved by them. Ex. C-16 is the letter dated 28.10.2014 issued by Chief Town Planner, Punjab, Chandigarh vide which it was intimated on RTI application that no CLU was approved for Mariners Buildcon India Ltd., Mohali Oceanic, Sector 123, Mohali. Ex. C-17 is the letter dated 3.11.2014 issued by GMADA that no licence was issued in favour of Marinders Buildcon India Ltd., Sector 123, SAS Nagar (Mohali) to establish any colony. Ex. C-18 is letter dated 5.11.2014 issued by Town and Gram Planning Department, Punjab stating that no CLU was deposited by Mariners Buildcon India Ltd. in their office. In fact the Ops have not taken any CLU licence or got approved any layout plan before inviting the application, which was required under Section 3 of the PAPRA. According to Section 3 of the Act, a Promoter who develops a colony shall make full and true disclosure of the nature of the title of the land. Apart from other things, specify in writing the date by which the possession of the plot or apartment is to be handed over, state in writing, the precise nature of and the terms and conditions governing the association to be constituted of persons, who have taken or are to take the apartments. According to Section 4 of the Act, no promoter shall issue advertisement or prospectus offered for sale of any apartment or plot, or inviting persons who intend to take such apartments or plots to make advances or deposits, unless the Promoter holds a certificate of registration under sub-section (2) of Section 21 and it is in force and has not been suspended or revoked, and its number is mentioned in the advertisement or prospectus. However, Ops did not have all these things before initiating the project. Therefore, Ops have indulged in unfair trade practice by inviting applications and receiving huge amounts from its Customers without getting any licence, any registration certificate as a Builder, without getting any layout plan, depositing any CLU etc. with the Competent Authorities. The version given by the complainant alongwith the documentary evidence is unrebutted, therefore, there is no reason to believe the evidence of the complainant. To support this plea, counsel for the complainant has referred to the judgment III (2007) CPJ 7 (NC) "Kamal Sood versus DLF Universal Ltd." and para No. 24 of the judgment, it has been mentioned that it was the duty of the DLF to plan in advance, obtain necessary permission and thereafter promise to deliver the possession of the flat / apartment within the stipulated time. It was further observed that delay in obtaining the permission would hardly be a ground for directing the consumer to suffer. He has referred to another judgment I(2009) CPJ 136 (NC) "Prasad Homes Private Limited versus E. Mahender Reddy & Ors." In that case, approved layout plan was not supplied. No development work was carried at the site. Payment of further instalment was stopped by the complainant. It was observed that developer cannot be allowed to take shelter under agreement clause to usurp money deposited. Agreement clause heavily loaded in favour of builder and against purchasers. Such agreement clearly amounts to unfair trade practice. State Commission ordered refund alongwith interest and revision petition before the Hon'ble National Commission was dismissed. He has also referred to Consumer Complaint No. 225 of 2014 "Sh. Kesar Singh versus M/s Bajwa Developers Ltd. & Anr." decided by the Hon'ble Principal Bench of this State Commission on 23.2.2016 in para No. 7 of the order, it was observed that evidence produced on the record by Ops proves that they never got approved the project and without getting approval of the project, they collected the money from the complainant and others. It amounts to unfair trade practice on the part of Ops. He has also referred to Consumer Complaint No. 33 of 2014 "Smt. Anju Mittal versus M/s Bajwa Developers Ltd." decided by this Bench on 1.4.2015. In that case also Ops called application without getting the project approved and after that he had written to the Chief Town Planner for approval of the layout plan. He had not placed any CLU from GMADA, NOC from Punjab State Pollution Control Board as required under Section 32 or in the alternative no exemption certificate under Section 44 of the PAPRA Act. Under Section 4(1) of the Act, it has been provided that no Promoter shall issue any advertisement offering for sale of any apartment or plot or to make advances or deposit unless the Promoters holds a certificate of registration as required under Sub Section 2 of Section 21 of the Act. In this case also, no provision of the PAPRA has been complied with by Ops before calling for the application and accepting the huge amount of Rs. 29,44,725/- from the complainant, certainly, it amounts to unfair trade practice on the part of Ops.
[para 5 of the State Commission's Order (lead-case)] (underlining supplied)
22. We specifically note that:
(i) the appellant - one director of the builder co. (as also two other directors of the builder co.) were duly served through publication in a leading widely-read daily newspaper.
(ii) the appellant - one director of the builder co. (as also two other directors of the builder co.) did not present their case before the State Commission.
(iii) the State Commission while (rightly) proceeding ex-parte against the builder co. through its three directors (including the appellant herein) had but also duly appraised the evidence and given reasoned findings.
(iv) salient material facts, one, that an amount of Rs. 29,44,725/- was deposited (on 17.11.2005, 25.02.2010, 02.03.2010, 06.04.2011, 02.09.2011, 15.07.2013) by the complainant with the builder co. / its functionaries, two, the amount deposited was not refunded by the builder co. / its functionaries to the complainant, three, the assured date of completion and handing over possession was end of 2012, four, the housing project in question was promoted in 2008 but had not been initiated at all, five, there was no construction or other activity on the indicated site, six, the requisite approvals from the concerned authorities had not been taken, seven, the offices of the builder co. were then shut down, etc. have not been disputed or refuted by the appellant in her memo of appeal.
23. We are broadly in agreement with the findings of the State Commission.
24. The issues raised by the appellant in her appeal relate to (a) the role and responsibilities and liability of 'company' / 'director' / 'independent director' and (b) an averment that she has since resigned as director of the builder co. (paras 2, 3B, 3C and Grounds in the memo of appeal specifically refer).
25. Learned counsel for the appellant handed over some judgments and citations to support her contentions:
1. Dr. V.P. Mainra v. Dawsons Leasing Limited, 114 (2004) DLT 457, decided by Delhi High Court on 24.09.2004;
2. Rajesh J. Aeren v. Mukhtiar Singh Bal & Anr., F.A. No. 2403 of 2017, decided by National Commission on 16.01.2018;
3. Inderpreet Singh v. Mariners Buildcon India Ltd., Company Petition No. (IB)-185(PB)/2017, decided by NCLT on 24.08.2017.
26. The judgements and citations handed over by learned counsel for the appellant have been perused by us. We find that they are not relevant or applicable on the facts and specificities of this case, they are not relevant or applicable here in the manner and for the purpose their relevance and applicability was sought to be argued by learned counsel for the appellant.
27. As noted from the State Commission's appraisal made in its Order 10.03.2017 (lead-case), the project in question was promoted in 2008; the complainant made deposits between 2005 to 2013; till the filing of the complaint (02.06.2016) before the State Commission [as well as till the date of decision of the State Commission (10.03.2017), as also till the date of arguments (29.10.2018) in the first appeal before this Commission], the project in question had not been initiated at all; the complainant's deposit had not been refunded to the complainant; the requisite approvals from the concerned authorities had not been taken; the offices of the builder co. were then shut down.
And, as noted from the applications for condonation of delay in f. a. no. 805 of 2018 and f. a. no. 807 of 2018, execution proceedings are being undertaken by the State Commission. During arguments on 29.10.2018 it was categorically admitted that execution proceedings are being undertaken in the other two f. a. nos. 804 of 2018 and 806 of 2018 also; and that the appellant (Amrita Rosha) is one of the judgment debtors; and that the other two judgement debtors, two other directors of the builder co., are in fact absconding.
And furthermore, as noted from the memos of appeal, a range and variety of issues relating to the role and responsibilities and liability of a 'company' / 'director' / 'independent director' etc. have been raised in appeal, with many ( / most) of them being irrelevant and immaterial in the present facts and specificities of the instant case; an averment has been made that she has since resigned as director; no reference to or refutation of the substantive and material facts of the case has been made.
28. We may note that the ordinary common consumer was attracted towards the housing project in question by the standing of both, the company as well as its directors. The position of the directors, and also so of the independent director / s, becomes crucial and significant. Their position (inter alia) attracted the consumer.
29. In the present case the three directors of the builder co. were instrumental in attracting the consumer - complainant towards the housing project in question, they were active in promoting the project in question. The deposits were made with the builder co. (juristic person) / its functionaries (persons); the functioning, management and promotion was effected by the directors (persons).
30. The case is simple, and serious. The project in question was promoted in 2008 by the directors of the builder co. The consumer - complainant was attracted to the project inter alia by the position of the directors of the builder co. The consumer - complainant made deposits with the builder co. / its functionaries during 2005 to 2013. The directors effected the functioning, management and promotion. There were clear infringements of various provisions of the Punjab Apartment and Property Regulation Act, 1995. The amount was not refunded to the consumer - complainant. The project in question was not initiated at all. The builder co. had no land at the indicated site. Its offices in Chandigarh and Delhi were then shut down. The concerned authority [Greater Mohali Area Development Authority (GMADA)] informed that no license was issued in favour of the builder co. to establish any colony at the indicated site. The Chief Town Planner, Chandigarh, Punjab informed that no Change of Land Use (CLU) was approved for the builder co. The Town and Gram Planning Department, Punjab informed that no CLU was deposited by the builder co. with their office. The Punjab Urban Planning and Development Authority (PUDA) informed that the project in question was not approved by them. In the execution proceedings before the State Commission the other two judgement debtors - directors are informed to be absconding. [The third judgement debtor - director, the appellant herein, has come in appeal.]
31. In a nutshell, the three directors promoted a project, collected / got collected deposits from consumers, and disappeared, along with the monies, with no sign of any construction or other activity on the indicated site, with no approvals from the concerned authorities, and with the offices of the builder co. then shut down.
32. In the present facts and specificities of the instant case, the company (juristic person) as well as its directors (persons) are squarely liable, individually, jointly, and severally. And the liability qua the consumer - complainant initiated the day the consumer - complainant made his first deposit with the builder co. / its functionaries, and continues.
33. We may also specifically note that the liability of the directors is individual, joint and several.
34. We are refraining from writing a critique on the role and responsibilities and liability of a 'company' / 'director' / 'independent director'; it would be misplaced in the present facts and context.
We are limiting ourselves to the salient and material issues re the role and responsibilities and liability of the appellant in the light of her averment that (a) she was an "independent and non-executive director" and (b) she has since resigned as director on 14.12.2015.
35. Here, for ready convenience, we may quote the following from the Companies Act, 2013:
Section 149. Company to have Board of Directors - (1) Every company shall have a Board of Directors consisting of individuals as directors and shall have--
(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
(b) a maximum of fifteen directors:
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(6) An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director,--
(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(7) Every independent director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his status as an independent director, give a declaration that he meets the criteria of independence as provided in sub-section (6).
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(8) The company and independent directors shall abide by the provisions specified in Schedule IV.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(12) Notwithstanding anything contained in this Act,--
(i) an independent director; (ii) a non-executive director not being promoter or key managerial personnel,
shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently.
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Schedule IV [See section 149(8)] Code for Independent Directors II. Role and functions:
The independent directors shall:
(1) help in bringing an independent judgment to bear on the Board's deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct;
(2) bring an objective view in the evaluation of the performance of board and management;
(3) scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
(4) satisfy themselves on the integrity of financial information and that financial controls and the systems of risk management are robust and defensible;
(5) safeguard the interests of all stakeholders, particularly the minority shareholders;
(6) balance the conflicting interest of the stakeholders;
(7) determine appropriate levels of remuneration of executive directors, key managerial personnel and senior management and have a prime role in appointing and where necessary recommend removal of executive directors, key managerial personnel and senior management;
(8) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder's interest.
III. Duties:
The independent directors shall--
(1) undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the company;
(2) seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the company;
(3) strive to attend all meetings of the Board of Directors and of the Board committees of which he is a member;
(4) participate constructively and actively in the committees of the Board in which they are chairpersons or members;
(5) strive to attend the general meetings of the company;
(6) where they have concerns about the running of the company or a proposed action, ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in the minutes of the Board meeting;
(7) keep themselves well informed about the company and the external environment in which it operates;
(8) not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;
(9) pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the company;
(10) ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;
(11) report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy;
(12) acting within his authority, assist in protecting the legitimate interests of the company, shareholders and its employees;
(13) not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law.
VII. Separate meetings:
(1) The independent directors of the company shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management;
(2) All the independent directors of the company shall strive to be present at such meeting;
(3) The meeting shall:
(a) review the performance of non-independent directors and the Board as a whole;
(b) review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
(c) assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
166. Duties of directors (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company.
(2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.
(3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.
(4) A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
(5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.
(6) A director of a company shall not assign his office and any assignment so made shall be void.
(7) If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
(underlining supplied)
36. In respect of the appellant's averment that she has since resigned as director of the builder co., it is material and significant that it is admitted that the appellant was appointed as a director of the builder co. - Mariners Buildcon India Ltd. on 08.04.2008. The complainant made deposits towards the cost of the subject villa on 17.11.2005, 25.02.2010, 02.03.2010, 06.04.2011, 02.09.2011 and 15.07.2013. The assured date of completion was end of 2012. The appellant avers to have resigned from the position of director of the builder co. on 14.12.2015. It is admitted that the appellant was a director of the builder co. on (a) the date the project in question was promoted (2008), (b) the period in which the deposits were made by the complainant (2010 - 2013) and (c) the assured date of completion (end of 2012). [The deposit of Rs. 50,000/- made in 2005 was with the builder co. / its functionaries when the appellant was (admittedly) appointed as a director in 2008; the other deposits from 2010 to 2013 totalling Rs. 28,94,725/- were made when she was (admittedly) a director. The facts and position in the other three f. a. s are similar (the table in para 4 refers).] In respect of the appellant's averment that she was an "independent and non-executive director" of the builder co., it is material and significant that the onus was on the appellant to conclusively establish that (a) she was not liable within the meaning of the exception provided in sub-section 12 of section 149 of the Companies Act, 2013 i.e. she had no knowledge of the acts of omission and commission of the company and that the acts of the company were without her consent or connivance and that it was not the case that she did not act diligently and (b) she was diligent and dutiful in exercising the role and functions and duties of an independent director as provided in Schedule IV of the Act 2013. (This also in particular included the onus to specifically establish that she was not aware of the acts of omission and commission apropos the project in question, or of the deposits made by the complainant, or of the assured date of completion of the project, or of the the requisite approvals not having been taken from the concerned authorities, or of no construction or other activity having been initiated at the indicated site, or of the deposited amount not being refunded to the complainant, or of the offices of the builder co. being then shut down, etc.) Mere aversion in appeal that (a) she was an "independent and non-executive director" and (b) as such she is not liable, (c) she has since resigned as director and (d) as such she is not liable, is not sufficient.
37. We do not find any reason on fact or law to interfere with the findings of the State Commission to the effect that the opposite party no. 3 [as well as the opposite parties no.1 and 2] are [individually, jointly and severally] liable to refund the amount deposited by the respondent - complainant with interest and with compensation and litigation expenses.
38. The case has a bad air. Not to uphold and sustain the award made by the State Commission would, in our considered view, be a travesty of justice.
39. The 4 f. a. s no. 804 of 2018, 805 of 2018, 806 of 2018 and 807 of 2018, are dismissed, on limitation and on merit, both.
40. Needless to add, the State Commission shall undertake execution as per the law.
41. Let a copy each of the Order be sent to the State Commission and to the respondents - complainants in the four f. a. s within ten days by the Registry.
...................... DR. S.M. KANTIKAR PRESIDING MEMBER ...................... DINESH SINGH MEMBER