Garden Estate Resident Welfare Association vs Gulmohar Estate Ltd

THIS complaint under Section 21 (a) of the Consumer Protection Act, 1986 has been filed by Garden Estates Resident Welfare Association through its President and Vice President besides 14 other individuals who have been added as joint complainants. This order will dispose of the grievance of Mr. Ajit Singh, complainant No. 5.

THE complainant No. 1 is an Association of Residents/Purchasers of the dwelling units situated in the Garden Estate, a residential colony promoted, developed, built and maintained by M/s. Gulmohar Estates Ltd., first opposite party. The Garden Estate has 375 dwelling units out of which about 250 are occupied. These dwelling units have been sold by the 1st opposite party. Possession in respect of those villas and flats have been given but the registration deeds in respect of these dwelling units have not been executed by the first opposite party. It is further alleged in the complaint that the first and second opposite parties have failed to render many other services promised by them while inviting applications for purchase of these dwelling units and there have been deficiency in service on the part of the first and second opposite parties. The value of the services and compensation claimed is far in excess of Rs. 20.00 lakhs for the purpose of pecuniary jurisdiction of this Commission. On being noticed first and second opposite parties have filed their written version as well as counter affidavits and rejoinder affidavits have been filed. The matter was taken up and adjourned by this Commission on several dates. During the hearing on 9th October, 1996, Shri Ajit Singh made a request that his prayer in the complaint be confined to the deficiency in service on the part of the first and second opposite parties in their negligence and failure to execute the sale deed in his favour. This Commission directed that by 31st of October, 1996, the first opposite party namely M/s. Gulmohar Estates Ltd., New Delhi shall take all steps necessary to have the sale deed in favour of Mr. Ajit Singh, complainant No. 5 prepared and made ready for registration and that the required Income Tax clearance certificate etc. would be obtained by first opposite party in the meantime so that when the matter came before this Commission on 31st October, 1996, the first opposite party would be in a position to tell this Commission that the sale deed would be registered within one month thereafter. The time frame was fixed as Shri Ajit Singh wanted to go abroad for his heart by -pass surgery. When the case came up for hearing before this Commission on 31st October, 1996 Mr. M.N. Krishnamani, the learned Counsel for the first and second opposite parties stated that no steps have been taken for execution of the sale deed. We heard the Counsel for the parties of the limited relief claimed by Mr. Ajit Singh in respect of the deficiency in service of the opposite party Nos. 1 and 2 relating to the non -execution of the sale deed.

ACCORDING to the complainant the first opposite party is bound both under law and the contract to execute sale deed of the property in favour of the purchaser of the dwelling unit who has paid full consideration and that in the agreement (Annexure -II with the complaint) on the basis of which the licence was issued to the first opposite party, the first opposite party undertook to the following: "That the owner (the opposite party No. 1) shall abide by the provision of the Haryana Apartment and Ownership Act, 1983".

ON the basis of the said agreement it is. urged that the provisions of the said 1983 Act (even though not brought into force at that time) became part of the terms and conditions of the licence granted to the opposite party No. 1. Section 5(2) of the Haryana Apartment and Ownership Act, 1983 enjoins that: "Each apartment owner shall execute a deed of apartment in relation to his apartment in the manner prescribed." Besides the opposite party No. 1 also undertook under the purchase agreements (Annexure IV) between opposite party No. 1 and the purchasers of the dwelling units to give notice to the purchaser requiring the purchaser to execute and register sale deed pursuant thereto after the full consideration had been paid by the purchaser to the first opposite party. Mr. Ajit Singh alleges to have paid the entire sale consideration as agreed between the parties. Mr. Ajit Singh by his letter dated 12th September, 1994 called upon the first opposite party to execute the sale deed in pursuance of the purchase agreement dated 15th October, 1992 executed between complainant and M/s. Gulmohar Estates Ltd. and the complainant agreed to pay necessary stamp duty, registration charges on demand and requested the first opposite party for registration of the agreement at the earliest. It is admitted by the first opposite party in the counter version that "residents/purchasers can seek registration of sale deed only if they have remitted the full sale consideration inclusive of all charges as sought by the opposite party No. I". It is conceded by Mr. Krishnamani at the time of hearing that Mr. Ajit Singh has paid the entire contractual consideration but what he urged was that all the purchasers/residents have not paid the full amount of sale consideration and certain disputes are pending adjudication about the amounts/ charges which residents/ purchasers have to pay to the first opposite party in lieu of additions/alterations in the dwelling units before the learned Arbitrator appointed by the Hon''ble High Court of Delhi. In our view, the mere pendency of the disputes before the Arbitrator in respect of other residents/purchasers is no ground for non -execution of the sale deed and its registration by the opposite party No. 1 in favour of Mr. Ajit Singh. The Purchase Agreement between the parties clearly stipulate the execution of sale deed: "15. The sale pursuant to this Agreement shall be made after the receipt of all requisite Government and statutory approvals and satisfaction of all conditions and terms including but not be limited to the clearance/approvals under the Income Tax Act and Approvals, if any, required under the provisions of the Urban Land (Ceiling) & Regulation Act and/or from any Central, State or local authority or agency. 16. The Stamp Duty and registration and other charges and levies on and in respect of this Agreement shall be payable by the purchaser within fifteen days of the date of demand in this behalf from the vendor."

CONSTRUCTION of a house or flat is for the benefit of a person for whom it is constructed. He may do so himself or hire the services of a builder. The arrangement being for consideration is a service as defined in the Consumer Protection Act, 1986. If the service is defective then it is consumer dispute. Mr. Ajit Singh is a purchaser of the dwelling unit as per the terms of the purchase agreement and on payment of the full consideration as per the purchase agreement, the first opposite party is bound to take steps for execution and registration of the sale deed. There is a shortcoming in the service agreed to be rendered by the first opposite party who is bound to perform his obligations as agreed to. The passing of the complete and effective title to the purchaser is the service agreed to be performed by the first opposite party.

ANOTHER argument advanced by the learned Counsel for the first opposite party is that the licence granted by Director, Town and Country Planning, Government of Haryana under the Haryana Development and Regulation of Urban Areas Act, 1975 had been revoked and the matter is sub judice before the Hon''ble High Court. This cannot stand close scrutiny as the provisions of Section 8 of the Haryana Development and Regulation of Urban Areas Act, 1975 envisages the transfer of possession and title to the land to the plot holders/flat holders even if there is a cancellation of licence. Section 8(4) reads as under: "Notwithstanding anything contained in this Act after the colony has been fully developed under Sub -section (2) the Director may, with a view to enabling the colonizer, to transfer the possession of and the title to the land to the plot -holders within a specified time, authorise the colonizer by an order to receive the balance amount, if any, due from the plot -holders, after adjustment of the amount which may have been recovered by the Director towards the cost of the development works and also transfer the possession of or the title to the land to the plot holder within aforesaid time. If the colonizer fails to do so, the Director shall on behalf of the colonizer transfer the possession of and the title to the land to the plot holders on receipt of the amount which was due from them." The colonizer is bound to transfer the title of the land to the plot holder and if the colonizer fails to do so the Director is empowered for and on behalf of the colonizer to transfer the possession of and title of the land to the plot holders. Mr. Ajit Singh categorically stated that he is willing to accept the title being conveyed to him by the first opposite party, even if there is some defect in the title alleged by the first opposite party. We therefore, see no reason not to grant the relief to Mr. Ajit Singh as there has been deficiency in service on the part of the first opposite party in conveying the title as agreed between the parties and as is enjoined both by contract and by law.

THE complaint of complainant No. 5 is allowed. The first and second opposite parties shall draft the sale deed in terms of the purchase agreement between the parties and submit the draft to Mr. Ajit Singh within two weeks and simultaneously make a demand for the requisite stamp duty and registration and other charges. Mr. Ajit Singh shall pay the amounts demanded within 15 days. The first and second opposite parties shall obtain clearance/approval under the Income Tax Act within two months from the date of the order and execute and get registered the sale deed within three months from the date of this order. Opposite party Nos. 1 and 2 shall pay costs to complainant No. 5 assessed at Rs. 2,000/ -. Complaint of complainant No. 5 allowed with costs. ===========================================================================