YOGESH M. DESAI vs M/S. SHREE SHUBH ENTERPRISE & 3 ORS.

The complainant in these matters who has a large joint family entered into separate agreements with the opposite party no.1, which is a partnership firm for purchase of residential flats for the use of the membership of the family in the building namely Amrakunj, at Azadnagar, Building No.1, behind Apna Bazar, Off J.P. Road, Andheri (West), Mumbai. Four residential flats were separately allotted to the complainant in the above referred project. As per the allotment letter, the possession of the flats were to be delivered to the purchaser on or before 31.01.2009. The aforesaid allotments were following by execution of the formal agreements to sell between the complainant on one hand and the builder on the other hand, at Mumbai on 15.12.2009. The opposite parties no.2 to 4 were the partners of opposite party no.1 at the time the allotments were

made as well as at the time the said agreements were executed. The case of the complainant is that the entire agreed sale considerations already stand paid by him to the opposite parties. The possession of the flats however were not delivered to him by the date stipulated in the allotment letters. Vide letter dated 07.02.2014, the opposite parties demanded additional payments from the complainant, on the ground that due to recent amendments in the DCR of MCGM, there had been a few changes were to be incorporated in the approvals and accordingly the plans were amended, which reflected on the areas. It was also stated that due to additional financial expenses have to be incurred due to increase in the premiums. It was also claimed that since the project was trailing for more than four years due to government rules and no clarity in Mhada and MCGM policy, the cost of construction and premium had increased by not less than 100% in the project. The complainant was therefore required to make additional payments within 7 days of the aforesaid letter failing which an interest @ 15% p.a. was chargeable from him. Being aggrieved from the aforesaid payment, the complainant is before this Commission by way of these separate complaints seeking following identical reliefs:

(i) Hold the Opposite Parties jointly and severally deficient in service and indulging in unfair trade practices by demanding extra amount and not handing over possession of the flats no. 804, 703, 702 & 704, despite having received the entire agreed consideration;

(ii) Director the Opposite Parties jointly and severally to hand over the peaceful and vacant possession of the flats no. 804, 703, 702 & 704, admeasuring approx. 844 sq. ft., 641 Sq. Ft., 656 sq. ft. & 844 sq. ft. respectively usable area, in the building known as Shubh Amrakunj, at Azadnagar, Building No.1, Behind Apna Bazar, Off J.P. Road, Andheri (West), Mumbai 400053 bearing Survey No.106-A (Part), City Survey No.821 complete in all respects with the Occupancy/Completion Certificate to the Complainant immediately and execute all the necessary and required documents in respect of the said flat;

(iii) To further direct the Opposite Parties jointly and severally to pay interest @ 18% p.a. on the amount of Rs.47,25,000/- in C.C. No.254/2014, Rs. 40,60,000/- in C.C. No.255/2014, Rs.30,90,000/- in C.C. No.256/2014 and Rs.47,25,000/- in C.C. No.257/2014 w.e.f. 30.09.2009 till the date of handing over of the vacant, peaceful and actual possession of the flats as per the Agreement of Sale dated 15.12.2009;

(iv) In case the Opposite Party are unable to hand over possession then to order and direct the Opposite Parties to jointly and severally to make available another flat of the same size in the same building or in the building in the near vicinity such that the same is as per the configuration of the total area and bed rooms that the flats 702, 703, 704 and 804 would combine or in the alternative to pay the fair market value of the flat as on the date of payment;

(v) Order and direct the Opposite Parties severally and jointly to pay a sum of Rs.15,00,000/- towards damages for the physical and mental torture, agony, discomfort and undue hardship caused to the complainant and the complainant''s family as a result of the above acts of omissions on the part of the opposite parties;

(vi) Order and direct the opposite parties severally and jointly to pay a sum of Rs.200,000/- to the complainant towards the cost of the litigation.

The complaints have been resisted only by the opposite party no.2-Mr. Govind T. Samani. In his written version, he inter-alia alleged that he had retired from the partnership firm w.e.f. 24.10.2013 and public notice of the said retirement was also given in the newspaper on 2.4.2014. The said opposite party however has not disputed the agreements between opposite party no.1 and the complainant.

I have heard the learned counsel for the complainant and opposite party no.2.

As noted earlier, as per allotment letter the possession of the flat was to be delivered to the complainant by 31.01.2009. Admittedly, the possession was not even offered by that date. The possession had not been offered by the date on which the formal agreement between the complainant and the opposite party no.1 was executed on 15.12.2009. The parties later entered into a confirmation agreement dated 25.08.2011. The possession had not been offered to the complainant even by that date though it was noted in the said confirmation agreement that there was a building on the plot. The contention of the complainants is that the construction was not complete and in fact is not complete in all respects as on today. Though the opposite parties had failed to offer possession by 31.01.2009, no revised date for offering possession was stipulated either in the Buyer''s Agreement or in the confirmation agreement dated 25.08.2011.

The first question which arises for consideration in these cases is as to whether the opposite parties were justified in demanding additional price from the complainant for the flats booked by him. The letter dated 07.02.2014, did not indicate when the amendments in DCR of MCGM policy took place and how the said amendments necessitated amendment of the plan which the opposite had already got approved. There is no averment in the said letter that the amendment had taken place before 31.01.2009 which was the date stipulated in the allotment letter for delivering possession to the complainants. If there was an amendment post 31.01.2009, the opposite parties cannot demand any additional payment from the complainant even if it is presumed that the alleged amendment in the DCR of MCGM necessitated the submission of amended plans. Moreover the said letter dated 07.02.2014 does not show how the alleged amendment entailed additional financial expenses. The onus was upon the opposite parties to prove that (1) there was amendment in the DCR of MCGM which policy took place before 31.01.2009, (2) the amendment in DCR of MCGM necessitated the amendment of the plans which had already been got approved and (3) the amendment of the plans entailed additional expenses. Moreover, the alleged additional financial expenses due to alleged amendment also had to be specified and substantiated by the opposite parties. That has not been done.

It is stated in the aforesaid letter dated 07.02.2014 that since the project was trailing for more four years due to government rules and no clarity on Mhada and MCGM policy, the cost of construction and premium had increased by not less than 100% in the project. The said letter does not show what the lack of clarity in the Mahada and MCGM policy was and how the lack of clarity necessarily resulted in delay in construction of flats sold to the complainant. If the cost of construction increased on account of the project trailing by more than four years, the complainant cannot be asked to bear the burden of the said additional cost. The opposite parties being responsible for dragging the project must necessarily bear the alleged increase in the cost of construction and premium if any. Therefore I have no hesitation in holding that the opposite parties were not justified in demanding revised sale price from the complainant.

The learned counsel for the complainants maintains on instructions that there was no increase in the area allotted to the complainant while raising the additional demand. He also maintains that in all the complaints the entire 100% agreed sale consideration already stand paid to the opposite parties. Therefore, the opposite parties are liable to complete the construction of the flats sold to the complainants in all respects, obtain the requisite completion

certificate/occupancy certificate and then offer possession of the flats to the complainant, without demanding any additional payment from him.

The next question which arises for consideration in these cases is as to what compensation the complainant is entitled on account of delay in completion of the flats and offering their possession to him. In the allotment letter issued in C.C. No.255 of 2014, the opposite party had agreed to pay interest @ 18% p.a. in case of delay in delivering the possession but in other cases, there is no such agreement. The learned counsel for the complainant states on instructions that he is pressing for compensation only w.e.f. date on which the confirmation agreements were executed i.e. 25.08.2011 and in order avoid any further litigation in this regard, they are also restricting the demand for compensation to simple interest @ 12% p.a. In my view, considering the cost of financing the purchase/construction of flats during relevant period, payment of compensation in the form of simple interest @ 12% p.a. from the date on which the confirmation agreements were executed is eminently justified.

The next question which arises for consideration in these cases is as to in addition to opposite party no.1, which other opposite parties are responsible for the deficiency in rendering services to the complainant. The opposite party no.1, being a partnership firm, the persons, who were partners in the said firm are deemed to be deficient in rendering services to the complainants by not completing the construction and delivering the possession on or before the last date stipulated in this regard. Therefore, all the partners are necessary and proper parties to these complaints. As far as the opposite party no.2 Mr. Govind T Samani is concerned, though he retired from the partnership w.e.f. 24.10.2013, he is also equally deficient in rendering services to the complainant by not delivering possession of the flats sold to him, on or before the last date stipulated in this regard. As noted earlier, the possession of the flats was to be delivered by 31.01.2009, but even if the date of execution of the confirmation agreement is taken as the last date later agreed by the parties for delivering possession of the flats, the opposite party no.2 would be equally liable since he was still partner on that date. Section 32 of Indian Partnership Act, which to the extent it is relevant read as under:

"(2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.

(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before retirement, until public notice is given of the retirement:

Provided that a retired partner is not liable to any third who deals with the firm without knowing that he was a partner."

Admittedly, there was no agreement between the complainant and the opposite party no.2 discharging the opposite part no.2 from his liability as a partner of the firm to deliver possession of the flats sold to the complainant. The default on the part of the firm took place much before he retired from the firm not to talk of the date on which the public notice of retirement was given. Therefore he cannot escape his liability to deliver possession of the flats to the complainant and

also compensate him for the loss suffered by him on account of delay in completing construction of the said flats and offering their possession to him.

The learned counsel for the opposite party no.2 has drawn my attention to the consent terms dated 24.10.2013 executed between the then partners of opposite party no.1. Under clause 5 of the said terms, all the liabilities of the firm till the date of his retirement, were taken over by the continuing partners of the firm i.e. the opposite parties no.3 and 4. Since the complainant was not party to the consent terms, they are not binding upon him. If the opposite party no.2 is made to pay compensation and deliver possession to the complainant in terms of the order passed by this Commission, he can avail such remedy as may be open to him in accordance with law against the continuing partners, his liability towards third party such as the complainant did not extinguish merely on execution of the aforesaid terms between him and continuing partners of the firm.

For the reasons stated hereinabove, the complaints are disposed of with the following directions:- a. The opposite parties shall complete the construction of the flats sold to the complainant in all respects and obtain the requisite completion certificate/occupancy certificate within six months from the date of receipt of a copy of this order.

b. The opposite parties shall offer possession of the flats, sold to the complainant, to him, within 9 months from the date of receipt of a copy of this order.

c. The opposite parties shall pay compensation in the form of simple interest @ 12% p.a. to the complainant w.e.f. 25.08.2011 till the possession is delivered to him in compliance of this order. The said payment will be made at the time of offering possession of the flats to the complainant.

d. The opposite parties shall also pay Rs.10,000/- as the cost of litigation in each complaint.