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Judgment
IA/6939/2023 (Delay Condonation Application) in FA/580/2023
IA/6942/2023 (Delay Condonation Application) in FA/581/2023
These applications have been moved seeking condonation of delay of 22 days in the filing of the appeals.
Having heard learned counsel for the parties, the cause shown is sufficient. The delay is condoned. The applications are allowed and the appeals are treated to be filed within time.
Appeals
Heard Mr. Vivek Kohli, learned Senior Counsel for the appellant, and the learned counsel for the respondents/complainants in both the appeals.
These appeals have been filed by M/s GRJ Distributors & Developers Pvt. Ltd. assailing two orders dated 28.03.2023 of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the State Commission) whereby the complaints being Complaint Cases No. 1051 of 2017 (Vicky Lakhima Vs. Avalon Infrastructures Pvt. Ltd. & Ors.) and 1052 of 2017 (Sonic Dhiman Vs. Avalon Infrastructures Pvt. Ltd. & Ors.) filed by the respondents complainants have been allowed.
The opposite party no.1 M/s Avalon Infrastructures Pvt. Ltd. filed its written version/reply before the State Commission in both the complaints that are on record supported by an affidavit of Mr. Jasvir Singh, the Authorized Representative of M/s Avalon Group.
The said written statement was on record and a rejoinder to the same was also filed.
According to the certified copy of the orders, the complaints were heard on 21.02.2023 and the impugned orders were delivered on 28.03.2023, holding the opposite parties liable for the deficiency and directed the refund of the amount as claimed together with interest and other directions.
The appellant was neither a party to the said proceedings nor any relief was claimed in the complaints against the appellant. More or less the averments made in both the appeals are similar and for reference the averments referred to and quoted hereinafter are taken from First Appeal No.580 of 2023. Both the appeals have made the following disclosure in paragraph-4:
“4. The Respondent No.2 i.e., Avalon Infrastructure Private Limited is a Company duly incorporated and registered under the provisions of the Companies Act, situated at 9th Floor, SAS Tower, Near Medicity, Sector – 38, Gurgaon, Haryana. The Respondent No.2 has no relation whatsoever with the said Project and/or Respondent No.1. The Respondent No.2 is neither the developer nor the promoter of the said Project. Respondent Nos. 3 and 4 are the Directors of Respondent No.2. The Appellant Company and Respondent No.2 are separate legal entities.”
The allegations made in paragraph-6 of the appeals are as follows:
“6. The Hon’ble State Commission vide Impugned Judgment inter alia directed Respondent Nos. 2 to 4 to refund Rs.6,56,000/- (Rupees Six Lakhs Fifty-Six Thousand Only) along with interest @6% per annum. The Hon’ble State Commission vide Impugned Judgment held that there was deficiency in service on the part of Respondent Nos. 2 to 4. It is humbly submitted that the said Project is being developed by the Appellant Company. The Respondent Nos. 2 to 4 are neither the developer nor the promoter of the said Project. Thus, there cannot be any deficiency on part of Respondent Nos. 2 to 4. The Hon’ble State Commission erred in not appreciating that the Complaint filed by the Respondent No.1 against Respondent Nos. 2 to 4 was not maintainable on account of non-joinder of necessary parties. The Hon’ble State Commission has also failed to appreciate that the said Project was developed by the Appellant herein and hence, the Respondent No.1 had no privity of contract with Respondent Nos.2 to 4 herein. Furthermore, the Hon’ble National Company Law Tribunal, New Delhi (“NCLT, hereinafter) vide Order dated 16.02.2023 in Company Petition No. IB-477(ND)/2021, whilst admitting the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by 104 home buyers of the said Project, initiated Corporate Insolvency Process against the said Project of the Appellant company. In view of Section 14 of the Insolvency and Bankruptcy Code, 2016, a moratorium has been imposed with respect to the said Project and thus, no order of refund in relation to the said Project can be executed and/or proceeded with.
……”
Further, while giving the brief background of the matter, the appellant in paragraph-4, 5 and 6 has stated as under:
“4. Recently, the Appellant Company came to know that the Impugned Judgment has been passed in relation to one unit of the said Project which is developed by the Appellant Company. Upon further enquiries, it was found that the Respondent No.1 had filed a Complaint against Respondent Nos.2 to 4 without arraying Appellant Company as a party seeking refund of the amount paid by him towards booking of the said Unit.
The Complaint filed by Respondent No.1 was not maintainable as the same was bad for non-joinder of necessary parties. It is stated that the Appellant Company is the developer as well as promoter of the said Project and the Appellant Company was not even arrayed as a party to the said Complaint.
The Advocate appearing for Respondent Nos.2 to 4 before the Hon’ble State Commission failed to bring to the knowledge of the Hon’ble State Commission that the Respondent No.1 has no relation whatsoever with Respondent Nos.2 to 4. The said Project is not developed by Respondent Nos.2 to 4.
The appellant has then stated in paragraphs-8, 9 and 10 as follows:
“8. In 2021, 104 home buyers of the said Project filed an Application against the Appellant Company under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 bearing Company Petition No. IB-477(ND)/2021 titled “Umesh Chander & Ors. V GRJ Distributors & Developers Pvt. Ltd.”. The Hon’ble NCLT vide Order dated 16.02.2022 admitted the aforesaid Application for the said Project and appointed Mr. Piyush Garg as Interim Resolution Professional for the said Project.
As corporate insolvency process has already been initiated against the said Project vide Order dated 16.02.2023 and a moratorium has been imposed under Section 14 of IBC, 2016 against the said Project and thus, no proceedings can be proceeded with and/or executed in relation to the said Project.
It is pertinent to mention here that the Order dated 16.02.2023 is operative and applicable only against the said Project. Mr. Piyush Garg has been appointed as Interim Resolution Professional only for the said Project and not for the entire Appellant Company. All other projects of the Appellate Company are not subjected to the Order dated 16.02.2023 and/or moratorium under Section 14 of IBC, 2016.”
The aforesaid disclosures are therefore very interesting, inasmuch as the appellant, who was not a party to the proceedings, has challenged the impugned orders on the ground that it is the appellant company who is the developer and promoter of the project. The picture painted is as if the appellant who had carried out the entire negotiations with the respondents and consequently the impugned orders directly impact the appellant.
A sequel to this argument is that the appellant company is now subject matter of Insolvency proceedings under Section 7 of the IB Code, 2016 where NCLT, New Delhi has passed an order on 16.02.2023 imposing a moratorium. By this logic, the appellant has come up contending that in view of the said moratorium order, the State Commission could not have proceeded to pass any order nor could the complainants have obtained any such order in the background above. It may be pointed out that the order of moratorium in respect of the appellant company is dated 16.02.2023 which is just 5 days before the date on which the matter was heard before the State Commission i.e. 21.02.2023. The appellant as noted above has alleged that the said order was not brought to the notice of the State Commission. Nonetheless, in view of the order having been passed, the orders of the State Commission are invalid.
A copy of the order passed by the NCLT is on record. There is nothing indicated as to who were the home buyers who had moved the said application and as to which part of the project, namely Avalon Rosewood Project, was the said order applicable.
It has been argued by Mr. Kohli that in terms of Section 51(1) of the Consumer Protection Act, 2019 an appeal can be filed by any person aggrieved by an order passed by the State Commission.
The impugned orders where the appellant is not a party at all do not impose any liability on the appellant and the orders therefore do not impact the appellant. There is a catch which needs to be mentioned, and namely, if it was Avalon Infrastructures Pvt. Ltd. who had filed the written statement and reply for contesting the matter before the State Commission, then nothing has been explained herein as to why the appellant’s status as is being claimed herein, was not disclosed before the State Commission.
Apart from this, the documents which have been filed by the appellant include the registration and booking form which is categorically addressed to Avalon Projects and not the appellant. This booking form annexure-4 in both the appeals is at page-53 and 52 respectively. What is more clinching is that all the payments are to be made and drawn in favour of Avalon Projects account ‘Avalon Rosewood’ payable at Delhi. There is no mention of the appellant’s name either as the developer or the company entitled to receive the consideration. The request for cancellation by the applicants has also been addressed to M/s Avalon Projects which claims itself to be a unit of GRJ Distributors & Developers. The entire transaction therefore is clearly with M/s Avalon Projects and not with the appellant.
The order passed by the NCLT nowhere mentions the moratorium in respect of M/s Avalon Infrastructures Pvt. Ltd. As indicated above, the reply and the written statement filed before the State Commission was also by M/s Avalon Infrastructures Pvt. Ltd. without indicating any relationship or it being a unit of the appellant.
The impugned orders were passed after contest and it is therefore evident that the appellant that now claims itself to be an interested party had apparently acted behind the scene. If at all it had any connection with M/s Avalon Infrastructures, it could have joined the litigation and it is for this reason that M/s Avalon Infrastructures Pvt. Ltd. deliberately withheld this relationship of the appellant, for some ulterior reason, as is being claimed now as an aggrieved person entitled to question the impugned orders.
There is one more feature which deserves notice, namely, that M/s Avalon Infrastructures Pvt. Ltd. do not appear to have filed any appeal and to the contrary they have been conveniently made respondents in these appeals. This is yet another factor which demonstrates that the appellant has instituted these appeals with something up its sleeves. The appellant if it claims that M/s Avalon Projects was its unit, then it certainly had knowledge of the proceedings and they could have got themselves impleaded in the proceedings before the State Commission which they did not do for reasons best known to them.
As noted above, the appellant itself has categorically stated that it is a separate legal entity. In view of this admission, all the arguments advanced by the learned Senior Counsel to sustain these appeals on behalf of the appellant as an aggrieved person is unacceptable and untenable. This would be putting a premium to permit a litigation that would amount to a misuse of process of the Consumer Forum by a party sitting on the fence.
The appeals therefore are held to be not maintainable in the above background, without prejudice to the rights of the appellant to stake its claim before any other appropriate forum. The appeals are accordingly dismissed as not maintainable. Interim order stands discharged.