M/S. Shree Ostwal Builders Ltd. & Ors. vs Subhash G. Master & Anr

This first appeal has been filed by the appellants M/s. Shree Ostwal Builder Ltd. & Ors. against the order dated 29.11.2016 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short ‘the State Commission’) passed in Consumer Complaint No.CC/13/99.

Brief facts of the case are that the respondents/complainants had booked a house with the appellants/opposite parties and the total consideration of the flat was Rs.32,66,250/- and the respondents had paid Rs.9,45,000/-. It is the case of the appellants that the appellants sent many demand notices, but instalments were not paid and ultimately the appellants terminated the allotment vide its letter dated 12.07.2012. The complainants filed a complaint before the State Commission with the following prayers:-

“(a) Hon’ble Commission be please issue notice to all opposite parties and complaint be allowed with cost.

(b) Pending hearing and final disposal of the complaint, the Respondent Builder their agents, servants or anyone claiming through or under them be restrained by an order of injunction of this Hon’ble Commission, restraining them from creating any third party interest in the said flat and/or restraining them to resale the said flat to third party and/or restraining them from executing and registering agreement for sale of the said flat in favour of any third party.

(c) The Respondent Builder be directed to handover the copy of agreement for sale having clauses as per MOFA for purpose of paying stamp duty and registration of agreement for sale of the said flat.

(d) The Respondent Builder be directed to execute agreement for sale of the said flat and available at Registration office as per token issue by Sub-Registrar of Assurance, Bhayander (W) & after completing the building & internal work of the said flat, handover the possession of the said flat.

(e) The Respondent Builder be directed to handover all documents and co-operate for sanction of housing loan in respect of the said flat.

(f) The Respondent Builder be directed to accept balance payment as per agreed sale consideration.

(g) The Respondent Builder be directed to pay compensation as per particular of claim (Rs.5,50,000/-).

(h) The cost of proceedings be granted.

(i) Any other just and equitable relief be granted as Hon’ble Commission deem fit.”

The complaint was resisted by the appellants/opposite parties by filing a written statement wherein it was stated that the complainants did not pay the instalments and therefore, the allotment was cancelled and the house in question was already with 3 rd party with whom the appellants had already entered into an agreement.

After considering the submissions of both the parties, the State Commission allowed the complaint as under on 29.11.2016:-

“ORDER

(i) Complaint is partly allowed with costs quantified at Rs.25,000/- (Rupees Twenty Five Thousand only) payable by the opponents to the complainants.

(ii) Opponents 1 to 6 are hereby jointly and severally directed to execute registered agreement for sale of flat no.805 on 8 th floor, in the Building Ostwal Height-2, situated on Kanakia Road, Mir Bhayander Road, Mira Road (East), admeasuring 804 sq.ft. built-up area (74.72 sq.mtrs) in the project and handover vacant and peaceful possession of the said flat upon accepting balance consideration of Rs.23,21,250/- (Rupees Twenty Three Lacs Twenty One Thousand Two Hundred Fifty only) (Rs.32,66,250-Rs.9,45,000/-) within a period of 90 days from the date of this order.

OR

Alternatively, opponents 1 to 6 are hereby jointly and severally directed to handover vacant and peaceful possession of alternate flat of the same size in the project in the same locality or nearby locality by executing registered agreement for sale upon accepting balance consideration of Rs.23,21,250/- (Rupees Twenty Three Lacs Twenty One Thousand Two Hundred Fifty Only) (Rs.32,66,250- Rs.9,45,000/-) within a period of 90 days from the date of this order.

(iii) Complainants are directed to pay balance consideration of Rs.23,21,250/- (Rupees Twenty Three Lacs Twenty One thousand Two Hindered fifty only) to the opponents within a period of 45 days and obtain the receipt.

(iv) In case of refusal to accept the balance payment by the opponents, liberty is granted to the complainants to deposit the said amount in the office of the State Commission, Mumbai, within a period of eight days from the date of refusal, if any.

(v) Opponents 1 to 6 are hereby jointly and severally directed to pay Rs.1,00,000/- (Rupees One Lac only) towards mental agony and harassment of the complainants.

(vi) One set of complaint compilation be retained for our record and rest of the sets be retuned to the complainants.”

Heard the learned counsel for the appellants and the complainant No.1 who is the husband of the complainant No.2 and has filed authorization given by the complainant No.2.

The learned counsel for the appellants stated that the termination was not challenged in the complaint and therefore, the termination had become final, but, even then the State Commission has ordered to allot house in question or in the alternative allot a similar house in the vicinity. The State Commission was well aware that the allotment of the complainants was already terminated and the same unit was already settled with the 3 rd party. This fact was given in the written statement filed by the appellants/opposite parties. The State Commission has wrongly recorded that the complainant was willing to pay the remaining amount without any evidence from the complainants in this regard. If the complainant was having the money with him, why did he not deposit the amounts against the demand sent by the appellants through various letters. The learned counsel further stated that the two letters dated 26.10.2012 and 07.01.2013 were sent by the complainants. They were sent after the termination was affected.

It was further pointed out by the learned counsel for the appellants that there was no prayer in the complaint for providing any alternate accommodation. The State Commission has also ordered that if the original house could not be given to the complainants an alternate house be given in the same area. Under Section 14 of the Consumer Protection Act 1986, it is clearly stated as to what reliefs can be granted by a consumer forum. It was stated that the replacement of goods is allowed, but this was not a goods as per the definition of goods in the Sales of Goods Act, 1930 and this was a service. He also stated that he has instructions that no alternative flat is available to be given to the complainants.

Thus, it was argued that first of all, the order relating to allotment of an alternate house is beyond the jurisdiction of the State Commission and that even this order cannot be complied with because there is no available house. On the basis of the above arguments, the learned counsel for the appellants stated that it was not possible to comply with the orders of the State Commission and the only remedy is that the money will be refunded along with the appropriate interest to the complainant. He further stated that the appellants do not claim to forfeit any amount and the appellants are ready to refund the total amount along with interest.

On the other hand, respondent No.1 on behalf of complainants stated that the complainants did not deposit against the demand of the opposite parties because these demands were against the provisions of MOFA. It is provided in MOFA that no builder can receive more than 20% of the consideration amount without entering into a builder-buyer agreement. After paying Rs.9,45,000/-, the complainants requested the builder to enter into builder-buyer agreement. However, the same was not sent to the complainants. Thus, no deficiency can be attached on the part of the respondents for non-payment of the instalments on time. He stated that the complainants are ready to take alternate accommodation and there are few houses available and the same have been advertised in the website magic.com. He further emphasises that it is not correct to say that there are no alternate houses available to be given to the complainants.

It was further stated by the respondent No.1 that he has sent e-mails asking for entering into the builder-buyer agreement. However, opposite parties did not care to enter into the builder-buyer agreement. The complainants are not interested to get the refund as they have already sold their accommodation and have deposited remaining amount of consideration with the State Commission as ordered by the State Commission.

I have given a thoughtful consideration to the arguments advanced by both the parties and have examined the material on record. The State Commission in its order dated 29.11.2016 has observed the following:-

“5. When the substantive amount of Rs.9,45,000/- was received, it was obligatory for the opponents to execute registered agreement with the complainants under the provisions of Section 4 of MOFA 1963. No justification for not discharging the statutory obligation by the opponents is coming forward. Moreover, termination of the allotment did not follow refund of the deposit. Under no provision the opponents are authorized to forfeit the entire advance amount of Rs.9,45,000/-. Not executing registered agreement even though substantial amount of consideration (exceeding 20%) received, per se, amounts to deficiency in service on the part of the opponents.

Opponents are heavily relied upon the lengthy correspondence between the complainants and themselves. Through it is stated that flat in question is not available for possession, yet, the opponents will not be in a position to file escape route for their failure to discharge the statutory obligations. Complainants are ready and willing to pay balance amount of Rs.23,21,250/-(Rs.32,66,250- Rs.9,45,000/-). We are aware that said flat is not available, however, alternate flat of the same size in the nearby locality or in the same locality in the project of the opponents shall be considered for handing over possession upon accepting the balance consideration. Complainants have not prayed for refund of the amount in case of the failure of the opponents to deliver the possession of the flat.”

In this para, State Commission has observed that the State Commission was aware that flat in question was not available. So, State Commission should not have allowed for possession of that flat as its main order. Obviously, no prayer for allotment of alternate accommodation was there, but State Commission has granted the relief which was not sought for, without ascertaining that there was any alternate flat available or not. As State Commission has recorded that there is no prayer for refund and perhaps due to absence of such prayer, State Commission has not ordered refund and instead ordered alternate flat which was also not prayed. There is also a prayer in the complaint that any just order may be passed in favour of the complainant. State Commission may have ordered refund under this prayer clause.

As State Commission has already observed that flat in question is not available, the first portion of the State Commission order cannot be implemented. So far as the allotment of alternate flat is concerned, State Commission has not indicated any such flat in its order, nor it has referred to any proof that the alternate flat was available. The appellants/opposite parties have denied that there is any alternate flat available for allotment. The complainants have also not placed any specific flat that is available. In these circumstances, I am of the view that in the circumstances, the ends of justice would meet if an order of refund is passed.

Based on the above discussion, it is clearly proved that the appellants have been deficient in not executing the builder-buyers agreement and thus violating the provision of MOFA. Even after receiving more than 20% of the consideration amount the appellants kept on sending fresh demands without first entering into the builder-buyer agreement. They are also found deficient for not refunding the amount when they cancelled the allotment as they were not entitled to retain or forfeit any amount in the absence of any builder –buyer agreement between the parties to this effect. Moreover, it has also been seen that the order passed by the State Commission for giving possession to the complainants of the booked unit or of the alternate unit is not tenable. Hence, the complainants are entitled to get the refund along with interest and compensation for deficiency on the part of the opposite parties/appellants.

On the basis of the above discussion, the order dated 29.11.2016 of the State Commission is modified and opposite parties/appellants are directed as a third alternative to refund Rs.9,45,000/-along with 12% p.a. interest from the date of respective deposits till actual payment to the complainants. The appellants/opposites parties are also directed to pay a compensation of Rs.4,00,000/- (rupees four lakhs only) to the complainants on account of deficiency as observed above. The appellants/opposite parties are also directed to pay cost of Rs.50,000/- (rupees fifty thousand only) to the complainants as litigation costs. The order be complied with by the appellants/opposite parties within a period of 45 days from the date of this order.