M/S. PYRAMID ARCADES PVT. LTD. & ORS. vs NANDLAL KRISHNANI

In these appeals, there is challenge to common order dated 22.1.2015, passed by State Consumer Disputes Redressal Commission, Maharashtra, Circuit Bench Nagpur (for short, ''State Commission in Complaint Cases No.12 and 13 of 2013.

Case of Respondents/Complainants is, that Appellant No.1/Opposite Party No.1 is a company engaged in development of property and making construction, whereas Appellants No.2 to 6/Opposite Parties Nos. 2 to 6, are its directors. Acting upon the representation of the appellants, respondents booked Flat Nos.601 and 602 on sixth floor of the building in their scheme named as "Pyramid City". Each respondent, paid Rs.4,40,000/- in instalments for which receipts were issued by the appellants.

Thereafter, respondents learnt from other prospective purchasers, that appellants have got revised the plan from the sanctioning authority. However, no sanction has been granted for construction of 6 th floor. Respondents also learnt that appellants have abandoned the construction of 6 th floor, but gave no intimation to them. Respondents approached appellants for payment of balance consideration. Ultimately, appellants said that they have cancelled booking of the flats, as revised sanction plan was only upto 5 th floor. Thus, appellants have cheated the respondents by accepting the aforesaid amount. Respondents, served legal notice dated 14/11/2012, to the appellants to which they gave false reply on 13/12/2012. The respondents'' advocate then sent rejoinder to the said reply and cheques were also returned which were sent by the appellants to them, towards refund of the aforesaid amounts.

Alleging deficiency in service on the part of appellants, respondents filed separate complaints, praying that appellants be directed to accommodate them in the said scheme on any other floor at the same rate, which was agreed upon at the time of booking of flats No.C-601 & C-602 or accommodate them in an adjacent scheme by allotting the same area of the flat at the same rate or in alternative reimburse them the amount of Rs.4,40,000/- each, alongwith interest @ 18% p.a. from the date of booking till actual payment. It was further prayed to pay to each of them compensation of Rs.10 lacs on account of mental agony and harassment. In addition to pay, to each of them Rs.25 lacs on account of escalation/ enhancement of the market price / loss to the respondents and to pay to each of them, cost of Rs. 50,000/-.

Appellants in their written version took the plea, that as there is no agreement between them and the respondents, so respondents are not the consumers and they are not the service providers. Appellants further alleged, that as it was a contingent contract. The sanctioning authority i.e. Nagpur Improvement Trust (for short NIT) has not granted sanction for 6 th floor of the building, So, the said contract cannot be enforced in law. Appellants admit that they received from each of the respondents Rs.4,40,000/-. However, respondents paid the said amounts at their own risk, subject to sanction to be granted by NIT, about 6 th floor construction. The appellants have refunded the said amount to the respondents, after NIT did not grant the said sanction. But the said amounts, were returned by respondents. It is further stated that appellants had offered alternate accommodation at the prevailing market price to the respondents but they did not accept the same. There is no deficiency on their part.

Respondents filed rejoinder stating, that the aforesaid defence of the appellants is an afterthought. Respondents denied that it was contingent contract between the parties. They also denied, that any alternate accommodation was offered to them. It was also denied that they had paid money to the appellants at their own risk, subject to grant of sanction of the 6 th floor by NIT. There is no question of making payment for alternate flats, at prevalent price. Appellants have accepted the amount for the flats, which were shown on 6 th floor.

Appellants filed reply to the rejoinder and denied the allegations made therein.

The State Commission vide its impugned order, partly allowed both complaints and passed following directions; " 4 . Both the complaints bearing Nos. CC/13/12 & CC/13/13 are partly allowed as under.

5 . The OP Nos. 1 to 6 jointly and severally shall refund to each of the complainant Rs.4,40,000/- with interest @9% p.a. from the date of each complaint i.e. 4.3.2013 till their full realization by each of the complainant.

6 . The OP Nos. 1 to 6 jointly and severally shall pay to each of the complainant compensation of Rs.10,00,000/- towards loss sustained by them, within a period of one month from the date of this order and in case of default, the said amount shall carry interest @9% pa. from the date of this order i.e. 22/1/2015 till realization of that amounts by the complainants.

7 . The OP Nos. 1 to 6 jointly and severally shall pay to each of the complainant Rs.25,000/- as compensation towards mental harassment and Rs.5000/- towards cost of each of the complaint."

9 Aggrieved by the order of the State Commission, above appeals have been filed by the Appellants.

We have heard the learned counsel for the appellants and gone through the record.

It is submitted by learned counsel, that respondents are not consumer and there was no defect or deficiency in the services of the appellants. It is stated that respondents have booked the flats on the 6 th Floor, with express understanding that flats would be constructed subject to the approval of ''NIT''. Though, not reduced into writing, all the terms and conditions had been fully explained to them. In these circumstances, inability and helplessness of appellants to construct the flats does not smack of any ulterior motives on their part. The appellants returned the money taken from the respondents, in part payment of the sale consideration immediately, after they came to know that ''NIT'' had rejected their plan for construction of 6 th floor. The appellant''s sincerity and honesty is reflected in their conduct in not keeping the money of the buyers. Appellants offer of alternative accommodation, was not accepted by the respondents, so question of deficiency of service does not arise. 12. The State Commission in the impugned order observed; "11 . We find that both the complainants are the consumers as defined under section 2(1)(d) of the C.P. Act since each of them paid Rs.4,40,000/- to the Ops who are the builders and the Ops had agreed to provide them respective flat after making full construction of the building. We find no substance in the contention of the Ops that complainants are not covered under the definition of consumers given U/s 2(1)(d) of the C.P. Act.

12 . Admittedly, each of the complainants paid Rs.4,40,000/- in instalments to the Ops and they had also issued separate receipts for the same. The perusal of the said receipts shows that those payments were made against part of price of two flats bearing Nos.C-601 & C-602 on the 6 th floor of the apartment called Pyramid City. None of those receipts shows that those payments were received by the Ops subject to grant of sanction by the NIT for making construction of those flats on 6 th floor of the said apartment. No explanation is given by the Ops why no such specific endorsement about conditional acceptance of the amount was made on those receipts.

13 . The Ops have also not explained as to why the agreement was not entered into between both the parties showing that it was contingent contract depending on the grant of sanction of 6 th floor construction by the competent authority i.e. NIT. In our view, when such huge amount of Rs.4,40,000/- was received from each of the complainant and when the receipts issued for the same by the OPs specifically show that they were relating to two flats bearing Nos.C-601 & C-602 of the building, it was incumbent on the Ops to reduce into writing the said contract to show that it was a contingent contract. In our view, when alleged contingent contract was not reduced into writing, we are not inclined to accept the oral submission made by the Ops to that effect.

14 . It also appears to be highly improbable that any person would pay such huge amount under any such contingent contract. Had the Ops informed the complainants that there is no sanction for constructions of the flat on the 6 th floor of the building, they would have waited for grant of sanction and they definitely would have not paid any such huge amount to the Ops in such a case till such sanction is granted. Therefore, we are of the considered view that the defence taken by the Ops about contingent contract is an afterthought and it is made only to avoid their responsibility. Therefore, we hold that the complainants have proved that they paid Rs.4,40,000/- each to the Ops towards part of price of the flat Nos. C-601 & C-602 only and the Ops had agreed to make construction of both the said flats on the 6 th floor of the building and, subsequently, those flats could not be constructed for want of sanction from the NIT. It is not disputed that the Ops wanted to refund the said amount to the complainants but the complainants refused to accept the same. However, we find that since no sanction of the construction of 6 th floor was granted by the competent authority, the direction cannot be given to the Ops to make construction thereof. Therefore it is necessary that direction be given to refund said part of consideration to the respective complainants with the proper rate of interest.

Moreover, it is seen that the Ops had also offered flat Nos.A-503 & B/502 on the 5 th floor instead of flat Nos. C-601 & C-602 at the prevailing market price but the complainants did not accept the said offer of the Ops. In our view, as there is no breach of contract on the part of complainants, they cannot be compelled to accept the offer given by the Ops particularly when the Ops wanted the price of the alternative flats at the prevalent market rate and not the price which was initially agreed while accepting the aforesaid part of consideration in the year 2010. It was incumbent on the Ops to offer the other flats of same specification on the 6 th floor of the same building at the same price which was fixed in the year 2010. Therefore, the complainants have rightly refused to accept the said offer given to them by the OP."

It is an admitted fact that respondents have paid Rs.4,40,000/- each, to the appellants. This amount was paid during the year 2010. The case of appellants as per their written statement is that there was no agreement between the parties or any contract for sale of flats on the 6 th floor of the building. It is further case of the appellants that they specifically disclosed to the respondents, that ''NIT'' has not sanctioned or approved 6 th floor. Therefore, there is no contract between the parties.

This plea of appellants, that they did not book any flat on the 6 th floor of the building, is absolutely false on the face of it. It is also contrary to the stand taken by them in their written statement as well as in reply to the legal notice, sent on behalf of the appellants to the respondents.

Advocate of appellants in its reply dated 13.12.2012, sent to the respondents'' Advocate states; "It is not disputed that my client issued a receipt of C-602. The payment was made by you notice as already alleged in the earlier para and the receipt also have been issued."

Appellants'' Advocate reply further states; "That, my client also have given a reminder and the reminder in question when an agreement has taken place by virtue of the agreement first reminder was given on 19.07.2010 in respect of outstanding installment and another reminder was given on 24.09.2010, third reminder given on 10.05.2011, 4 th reminder given on 10.06.2011 and also presented an account of the amount which has been paid by you notice."

Whereas in the written statement appellants have taken the following defence ; "That, there is no agreement between the parties or any contract to sale a flat and to effect a construction on the 6 th floor and to allot a flat to the complainant."

Thus as per appellants'' own case, it is clearly established, that there has been an agreement between the parties and respondents have booked the flats on the 6 th floor, for which receipt was also issued by the appellants. Now, it does not lie in the mouth of the appellants, to turn turtle and introduce new story to the effect, that respondents never booked any flat on the 6 th floor. Therefore, this stand of the respondents as per their written statement, that there was no sanction from ''NIT'' for construction of the flats No.601 and 602 on the 6 th floor falls to the ground, since appellants have issued receipts for flats No.601 and 602.

Thus, appellants have indulged in the "Deceptive Practice" which falls within the meaning of "Unfair Trade Practice". The appellants, allured the respondents with false premise to book flats No.601 and 602 on the 6 th floor of the building. Accordingly, respondents deposited the requisite amount with the appellants. Later on, appellants have came up with the new story, that ''NIT'' has not given permission for constructing construction on the 6 th floor. Again, this plea of the appellants, that they had informed the respondents, about sanction not been granted by ''NIT'', is purely concocted and is an after-thought story. This fact was never conveyed to the respondents at the time, when they had deposited Rs.4,40,000/- each. The State Commission has rightly observed in this regard in the impugned order.

Thus, we have no hesitation in holding that the deficiency on the part of the appellants is writ large in this case. Moreover, they have indulged in "Unfair Trade Practice" by adopting "Deceptive Practice" at the time of booking of the flats for 6 th floor. In this manner, they allured the respondents to part with the hard earned money for a project which was not in existence at all. Thus, keeping in view the facts and circumstances of the case, respondents were fully justified in not accepting the refund of money, as offered by the appellants.

We find no reasons to disagree with the well-reasoned order passed by the State Commission. The State Commission, while passing the impugned order has not committed any illegality nor there is any jurisdictional error.

The present appeals being most bogus and frivolous one, are hereby dismissed with punitive damage of Rs.50,000/- (Rupees Fifty Thousand only) each. Appellants are directed to deposit the aforesaid amount by way of demand draft in the name of ''Consume Legal Aid Account'', of this Commission, within a period of six weeks from today.

In case, appellants fail to deposit the punitive damages within the prescribed period, then shall also be liable to pay interest @ 9% p.a. till realization.

List for compliance on 7.8.2015.