NATIONAL CONSUMER
DISPUTES REDRESSAL COMMISSION
NEW DELHI
FIRST APPEAL NO.128 of
2009
(From the order dated
24.02.2009 in Complaint No. 07/0/2007 of the West Bengal State Consumer Disputes
Redressal Commission.)
1. Merlin Projects Ltd.,
Merlin House,
79, Sambhunath Pandit Street,
P.S. Bhowanipore,
Kolkata – 700 020.
2. Mr. Vikas Mimani,
Manager, Merlin Projects Ltd.,
79, Sambhunath Pandit Street,
P.S. Bhowanipore,
Kolkata – 700 020.
…..Appellants
Vs.
1. Mr. Pandav Roy,
T-C/3, 2nd floor, Golf Green
Phase-I,
Uday Shankar Sarani,
Near T.V. Station,
P.O. Golf Green, Kolkata
– 700095.
West
Bengal.
2. Mr. Partha Roy,
T-C/3, 2nd floor, Golf Green
Phase-I,
Uday Shankar Sarani,
Near T.V. Station,
P.O. Golf Green, Kolkata
– 700095.
West
Bengal.
…..Respondents
BEFORE: -
HON’BLE
MR. JUSTICE D.K. JAIN, PRESIDENT
HON’BLE MRS.
VINEETA RAI, MEMBER
HON’BLE MR.
VINAY KUMAR, MEMBER
For the Appellants: Mr. Nakul Dewan, Advocate with
Mr. Abhijeet Sinha, Mr.
Shiv Ramakrishnan, & Ms. Azal Khan, Advocates.
For Respondents: Mr. Prasanta Banerjee, Advocate with
Mr.
Partha Roy, R-2 in person.
O R D E R
(Pronounced on 23rd day of May, 2014)
D.K.
JAIN, J. PRESIDENT
This First Appeal under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”), has been preferred by the Colonizer, a Company incorporated under the Companies Act, 1956 and their Manager, questioning the correctness and legality of order, dated 24.02.2009, passed by the State Consumer Disputes Redressal Commission, West Bengal (for short “the State Commission”) in SC Case No. 07/0/2007. By the impugned order the State Commission has directed the Appellants, who were arrayed in the Complaint as Opposite Parties No. 1 and 2 respectively, to execute and register the Deed of Conveyance in respect of the subject flat in favour of the Complainants upon payment of the costs of registration as agreed to between the parties. The State Commission has also awarded a compensation of `50,000/- to the Complainants as also `5000/- towards costs.
2. Briefly stated, the
material facts giving rise to the present Appeal are that on being approached
by the Respondents / Complainants, the Appellants allotted to them Row House
No. B-15, Merlin Gardens, South 24 Parganas, Kolkata by
way of an Agreement of Allotment on 01.05.2003. The total sale
consideration for the said house was settled at `14,25,000/-. The Respondents paid a
sum of `50,000/- as earnest money by cheque dated
01.05.2003. A supplementary agreement was executed on the
same day incorporating certain new clauses, not relevant for the present case. The Respondents
applied for housing loan of`15,00,000/- from Union Bank of India and on
sanction thereof, on 21.01.2004, a Tripartite Agreement was executed between
the Appellant Company, the Bank and the Respondents. The Complainants paid a
further sum of `1,93,750/- towards the balance
earnest money to the Appellant Company. The receipt of`2,43,750/-, by the Appellant
Company from the Respondents, was acknowledged in the said Tripartite
Agreement. Out of the sanctioned loan of `15,00,000/-, the Bank
released to the Appellant Company a sum of `13,81,250/-, by pay
order dated 25.02.2004 leaving a balance of `1,18,750/- for the
purpose of registration of Deed of Conveyance in favour of the Respondents. Thus, the
Appellant Company received a total sum of `16,25,000/- towards
full consideration of `14,25,000/- for the said property and an
additional sum of `2,00,000/- as contribution to the Corpus Fund
for facilities as defined in Article I of Agreement dated 01.05.2003.
3. The Respondents were put
in possession of the suit property on 20.04.2004 and were provided with water,
electricity and other allied facilities. It seems that on certain issues,
relations between the Respondents and Appellant No.1 turned sour and exchange
of unpleasant letters ensued. Ultimately, vide letter dated 23.10.2006,
Appellant No. 2 informed the Respondents that since they had failed to fulfil
their financial obligation, in as much as the cheque in the sum of`1,93,750/- issued by them on
22.09.2003 had been dishonoured twice and they had also defaulted in payment of
instalments to the Bank, Agreement dated 01.05.2003 had been cancelled and they were being
treated as trespassers. They were informed that the security and management
staff had been instructed to desist from rendering any of the common services
and/or facilities including disconnection of generator service. The Respondents
were asked to immediately vacate the said premises and handover the same to
them.
4. The Respondents
responded to the said letter on the same day, inter-alia stating that the amount
of `1,93,750 had already been paid and accounted for and having
accepted payment for Life Time Maintenance Charges – Corpus Fund (in terms of
the Supplementary Agreement), they were contractually obliged to provide all
essential services. The Appellants were requested to leave the issue of
payments to the Bank, to be dealt by them directly with the Bank. It was
alleged that the Appellant Company was avoiding execution of Conveyance Deed
with a view to sell the same at a higher price.
5. However, all the basic
facilities having been withdrawn, the Respondents shifted from the house on
23.10.2006. Having failed to get the Conveyance Deed
executed in their favour, on 01.03.2007, they filed Complaint under Section 17
of the Act in the State Commission, inter-alia, praying for directions
to the Appellants to deliver possession of the suit property; restore essential
services and execute and register Conveyance Deed, etc. A compensation of`14,00,000/- was also demanded
from the Appellants. It appears that during the pendency of the
Complaint, the Bank initiated proceedings against the Respondents under the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (for short “the SARFAESI Act”). The
Respondents amended the Complaint praying for, in the alternative, a
compensation of a sum of `19,44,000/- as computed therein.
6. The Complaint was
resisted by the Appellants on several grounds. It was pleaded that the
Complaint was bad for non-joinder of necessary party in as much as the Bank,
which was one of the parties to the Tripartite agreement dated
21.01.2004, had not been impleaded. Justifying their action
in cancelling the said agreement it was stated that the Respondents were also
under obligation to pay `10,00,000/- and `3,00,000/- plus `2,00,000/- by
20.05.2003 and 30.05.2003 respectively, besides they were liable to pay a
further sum of `75,000/- at the time of taking possession of
the suit property, which amounts were not paid despite demand. It was also alleged that
cheque in the sum of `1,93,750/- issued by the
Respondents as earnest money was dishonoured twice and the said amount was
never paid. The receipt of a sum of `13,81,250/- directly from the
Bank was however, not denied. It was asserted that
since the Respondents were not willing to pay the amount against the
dishonoured cheque for `1,93,750/-, Agreement dated
01.05.2003 was cancelled.
7. On consideration of the
pleadings and evidence adduced by the parties by way of Affidavits, the State
Commission has held that since the Tripartite Agreement, dated 21.01.2004
itself records payment of `2,43,750/- by the Respondents
and payment of a sum of `13,84,250/- by the Bank
to them was not disputed, no portion of the total
consideration of `14,25,000/- for the flat remained unpaid. Rejecting the stand of
the Appellants that the amounts mentioned in para 6 supra, were due from the
Respondents, the State Commission has come to the conclusion
that the Schedule of payment, in para 2.1 of Agreement of Allotment dated
01.05.2003, stood modified on payment of `13,81,250/- by the Bank and the
Respondents were entitled to the relief of possession, execution and
registration of Conveyance Deed, as also compensation for illegal withholding
of the flat. Accordingly, the State Commission has directed the Appellants to
execute and register the Deed of Conveyance in the respect of the aforesaid
flat in favour of the Respondents within 60 days from the date of the order,
upon payment of cost of registration, as agreed to by the parties, along with
compensation of `50,000/- and `5,000/- as costs. In the event of default,
the Respondents have been allowed to get the Deed registered through the State
Commission and recover the said amounts along with interest @ 9% p.a. for the
period of default. Hence, the present appeal.
8. Mr. Nakul Dewan, Ld.
Counsel appearing for the Appellants, in his oral submissions, questioned the
legality of the impugned order mainly on three grounds, viz. (i) the bank being
party to the Tripartite agreement dated 21.01.2004, having a charge on the said
property, it was a necessary party and, therefore, the complaint should have
been dismissed on the ground of non-joinder of necessary parties; (ii) Being
defaulters themselves for not paying a sum of `1,93,750/- against the
dishonoured cheque, the Respondents were estopped from accusing the
Appellants of deficiency in service for not executing
Conveyance Deed in their favour and (iii) Since the possession of the flat had
already been delivered to the bank in proceedings under SARFAESI Act, the same
had been auctioned, the auction purchaser was put in possession after execution
of Conveyance Deed in their favour, the impugned directions are incapable of
being implemented.
9. Per contra, Mr. Prasanta
Banerjee, Ld. Counsel for the Respondents and Respondent No. 2, who appeared in
person, submitted that the Appellants having received full amount of
consideration for the flat, in terms of Tripartite agreement dated
21.01.2004, they could not demand any amount over and above the consideration
mentioned in the said agreement. It was argued that it was only on
confirmation of receipt of earnest money of `2,43,750/- from
the Respondents, as noted in the Tripartite agreement dated 21.01.2004,
that the Appellant company had collected from the
Bank the balance sale consideration of `13,81,250/-, otherwise
the Bank would not have released the balance amount. It was strenuously urged
that had the Appellants executed the Conveyance Deed in respect of the subject
property on time, having already paid 18 EMIs (`2,32,654 in addition to `2,43,750/- as earnest
money), the Respondents would not have stopped paying further EMIs, inviting
unwarranted harassment, besides being deprived of the property. It was argued that the
Appellants were not concerned with the issue of recovery of balance of loan
amount by the Bank from the Respondents, yet they delivered the possession of
the flat to the Bank unilaterally and even executed Conveyance Deed in favour
of a third party (the Auction Purchaser), during the pendency of the complaint
before the State Commission. It was contended that although entire proceedings under
the SARFAESI Act were illegal, as admittedly no equitable mortgage by deposit
of title deeds of the flat was created in favour of the Bank, still the
Respondents have settled their account with the Bank.
10. Having bestowed our
anxious consideration to the material on record, we are of the opinion that
there is no substance in the contentions urged on behalf of the Appellants and
the Appeal is devoid of any merit.
11. There is no dispute that
the total agreed consideration for the subject flat was `14,25,000/-, which was payable in
installments as mentioned in Article II of the Agreement of Allotment dated
01.05.2003. Stamp duty and registration charges were also to
be borne by the Respondents. By a supplementary agreement of even date, the Respondents
had agreed to pay an additional sum of `2,00,000/- to the Appellants for
providing infra-structural maintenance, etc. facilities. The Appellants were to
receive from the Respondents a total sum of `16,25,000/-. Thus, the short
controversy is whether the Appellants were justified in refusing to execute
Conveyance Deed in favour of the Respondents and forcing them to shift from the
flat, on the allegation that the Respondents had failed to pay the agreed
consideration for the flat and had defaulted in discharging their debt towards
the Bank.
12. In order to adjudicate
upon the issue, it would be necessary to refer to a few documents on
record. As noted above, after the booking of the flat
and the Bank agreeing to finance the same on 21.01.2004, a Tripartite Agreement
was entered into between the Respondents, the Appellant Company and the
Bank. The material recitals in the agreement read as under:
“Whereas the Builder
agreed to sell a Row House to the Borrowers under an Agreement of Sale dated
May 01, 2003, entered into between the builder and the Borrowers, which
contains the terms and conditions for sale of the Row house in favour of the
Borrowers and in furtherance thereof has already paid the Builder a sum of `2,43,750/- as and by way of
earnest money. The balance of sale consideration is payable by the borrower
based on stages of construction, which are detailed in the said agreements.
Whereas the Bank on the
written application and request of the Borrowers has already sanctioned a loan
of `15,00,000/- to the Borrower (vide Sanction dated 22.01.2004) and
has agreed to disburse/release the loan soon after the Borrowers creates an
equitable mortgage by deposit of title deeds relating the Row House to be
purchased by them from the Builder.
Whereas the Borrowers
requested the Bank for release/ disbursement of installments directly to the
Builder and the Bank has agreed to release the loan amount provided the Builder
agrees to stand as guarantor for the payment effected to them.”
13. Clause (3) of the terms
of covenants stipulated that the Appellant Company shall deliver possession of
the flat to the Respondents only after obtaining No Objection Certificate to
that effect from the Bank and further, the Appellant shall create equitable
mortgage in favour of the Bank by deposit of title deeds of the flat, agreed to
be sold vide Agreement of Allotment dated 01.05.2003.
14. In furtherance of the
Tripartite agreement, the Bank sent to the Appellant Company a pay order in the
sum of `13,81,250/- with a covering letter dated
25.02.2004, which reads as follows:-
“Re: P.O. no. 003142 for `13,81,250/- dated 25.02.2004 fvg. yourself in respect of Housing
loan of S/Shri Pandav Roy and Partha Roy.
Enclosed please find the
captioned pay order issued towards your payment in respect of purchase of Row
House No.315 in the complex The Terrace Marlin Green, Kriparampur 24 Parganas
(s) pertaining to S/Sri Pandav Roy and Partha Roy.
Kindly acknowledge
receipt and formally hand over the property to the purchaser. We take this
opportunity to thank you for entering into a Tripartite Agreement with our Bank
alongwith the Borrower. It has really marked the beginning of new relationship
which (illegible) will grow more and more in near future.”
15. It is manifest from the
afore-extracted recitals of the Agreement that the Tripartite Agreement dated
21.01.2004, did not contemplate possession first and payment later. While noting sanction of
bank loan of `15,00,000/-, it records that a
sum of `2,43,750/- has already been paid to the
Appellants /Builder. Later, the Bank released a sum of `13,81,250/- on 25.02.2004 and
possession of the flat was handed over to the Respondents on 20.04.2004. The
afore-extracted covering letter dated 25.02.2004 also lends support to the
stand of the Respondents that possession of the flat was delivered to them on
the asking of the Bank. This clearly shows that possession was given
after receipt of the agreed consideration in full. The explanation of Mr. Shiv
Kishan Mohata, deposing on behalf of the Appellants, that at the time of
signing the Tripartite Agreement, the matter of non-payment of `1,93,750/- “was taken lightly,
on the basis of assurances and the gentlemanly behavior of the Complainants as
a result of which the documents were not preserved and same is presently not
available with Merlin Projects Ltd.” carries no conviction at all. It does not
sound well even as a prudent business proposition. No colonizer such as the
Appellant Company, would quietly wait for two and a half
years for payment of a hitherto unpaid sale consideration. We are convinced that
the claim of `1,93,750 raised by the Appellants
in 2006, in lieu of a cheque dishonoured in the year 2003 was a ruse to avoid
execution of Conveyance Deed in favour of the Respondents and sell the subject
flat at a higher price. Furthermore, no evidence is brought on record to
show that any demand was raised on the Respondents, or a request was sent to
the Bank, in this behalf between the period when Tripartite Agreement dated 21.01.2004
was entered into and the delivery of possession of the flat three months later,
on 20.04.2004 for directing the Respondents to pay any outstanding amount. In
fact, the question of outstanding balance of a sum of`1,93,750/- was raised for the
first time on 15.09.2006, i.e. two and a half years after delivery of
possession. This completely destroys the credibility of the claim that failure
to register the Conveyance Deed stems from incomplete payment of
consideration.
16. In view of the above, we
are in complete agreement with the State Commission that there was no evidence
to show that any part of the consideration had remained unpaid and therefore,
Appellants’ failure to execute the Conveyance Deed in favour of the Respondents
was a clear deficiency in service on their part.
17. As regards the objection
of the Appellants that the Complaint was bad for non-joinder of necessary party
i.e. the Bank, in our opinion, this plea also deserves to be rejected. Apart from the fact that
clause (3) of the covenant (Tripartite Agreement) lends support to the stand of
the Respondents that on 20.04.2004 they were put in possession of the flat on
the direction of the Bank and as such there was no occasion for them to allege
deficiency in service on the part of the Bank, it is not even the case of the
Appellants that the Bank had initiated any proceedings against them as
guarantor of the loan. It is also not their case that any obligation was cast
upon them to recover the loan on behalf of the Bank. Therefore, the alleged
default in repayment of the loan by the Respondents to the Bank, relied upon as
one of the grounds for cancellation of the Agreement on 07.11.2006, was wholly
unjustified. In their letter dated 23.10.2006 to the Appellants, the Respondents
had requested them to let them sort out the issue of default in EMI payments
directly with the Bank. In the absence of any evidence that the Bank had
sought the intervention of the Appellants for recovery of their dues, or that
there was any threat of adverse action against them by the Bank, in our view,
the Appellants not only deprived the Respondents of the pleasure of owning a
flat for residence, they made an unholy attempt to justify their illegal action
of cancelling the allotment on the ground that the Respondents were defaulters
to the Bank on a technical ground, which cannot be accepted. Instead of remedying the
wrong done to the Respondents, the Appellants are still trying to brazen out
the illegal act by putting forth technical contentions.
18. At this juncture, it is
also pertinent to note that during the pendency of this Appeal, an application
(MA No.1090 of 2011) was filed by the Appellants, seeking leave to urge
additional grounds, including the ground that the State Commission had failed to
consider the question of impleadment of the Bank, though it was so urged. The said application was
dismissed vide order dated 29.05.2012. The Special Leave
Petition filed by the Appellants against the said order was dismissed as
withdrawn.
19. Accordingly, we affirm
the finding recorded by the State
Commission that no
balance amount was due to be paid by the Respondents when they were put in
possession of the subject flat and therefore, the Appellants were not justified
in refusing to execute Conveyance Deed in favour of the Respondents in terms of
Agreement to Allotment dated 01.05.2003.
20. Having come to the above
conclusion, the next question requiring consideration is as to what relief can
be granted to the Respondents as during the pendency of the Complaint, the flat
in question has been auctioned by the Bank in proceedings under the SARFAESI
Act; possession has been delivered to the auction purchaser and even Conveyance
Deed in their favour has been executed by the Appellants. In this behalf, it is
pertinent to note that on receipt of re-possession notice, dated 28.07.2007,
from the Bank under the provisions of the SARFAESI Act, the Respondents had
filed an application in the State Commission for amendment of the Complaint, inter-alia stating thus:
“Complainants now pray that in view of
all that is stated above and taking into consideration the changed situation
the complainants may be granted alternative relief of `19,44,000/- (Rupees
Nineteen Lakhs Forty Four Thousand only).”
Under the stated
circumstances, the Respondents prayed for the following alternative relief:
“Alternative a sum of `19,44,000/- (Rupees Nineteen
Lakhs Forty Four Thousand only) as mentioned in paragraph No. 1 hereinabove may
be awarded as Compensation to the complainants.”
21. The application was
opposed by the Appellants, inter-alia, on the plea that it was
a ploy to mislead the State Commission by incorporating subsequent events and
that enhancement of compensation was not permissible under the Act. However, the specific
plea regarding the booking price of similar projects in Merlin Gardens at `31,68,000/- in the year
2007, when the said application was filed, as against the booking price of `16,25,000/- in the year
2003, was not specifically denied by the Appellants. In the absence of any
other material in regard to the market value of the subject flat on the date
(24.02.2009) when the impugned order, directing registration of Conveyance Deed
and delivery of possession of the flat, was made, we feel that instead of
remitting the matter back to the State Commission at this stage, for
determination of compensation in lieu of the flat, the ends of justice would be
sub-served if keeping in view the comparative Housing Price Index issued by the
National Housing Board for the year 2007 and 2009 (100 : 162), the value of the
flat, as in February 2009, is taken at `50,00,000/-.
22. Resultantly, the appeal
is allowed in part to the extent that in lieu of the flat in question, the
Appellants shall pay to the Respondents a sum of `50,00,000/- with
interest @ 9% p.a. from the expiry of sixty days (the time granted for
compliance) of the date of the impugned order till the date of actual
realization. Other directions regarding compensation etc. are maintained. We are
convinced that the Appellants have engaged the Respondents in unwarranted
litigation and, therefore, it is a fit case for imposition of exemplary costs
on them. Accordingly, we direct that the Appellants shall
pay to the Respondents a sum of Rs.50,000/- as costs. All the said amounts
shall be paid to the Respondents within 30 days of the receipt of a copy of
this order. The appeal stands disposed of accordingly.
23. It will be open to the
Appellants to withdraw the statutory amount of Rs.35,000/- deposited by them
with this Commission at the time of filing of appeal along with interest
accrued thereon.
I.A. No. 8034 of 2013
24. In view of order in the
main appeal, no orders in this application seeking permission to bring on
record documents/orders pertaining to Writ Petition No. 18936/07 (Sri Pandav
Roy & Anr. Vs. Reserve Bank of India &
Ors.) and CS (OS) No. 271/10 (Merlin Projects Ltd. & Anr. Vs.
Nilmani Dutta & Anr.) are called for. The application is
disposed of accordingly.
………………….
(D.K.
JAIN, J.)
PRESIDENT
…………………… (VINEETA RAI)
MEMBER
…………………… (VINAY
KUMAR)
MEMBER
Ar/yd
