Jitendra Bajaranglal Sharma vs Classic Developers Pvt. Ltd. & Anr

Subhash Chandra, Presiding Member

This appeal under section 51 of the Consumer Protection Act, 2019 (in short, the ‘Act’) seeks a review of the order dated 05.12.2022 of the State Consumer Dispute Redressal Commission, Maharashtra, Mumbai (in short, the ‘State Commission’) in complaint case no 15/221 dismissing the complaint in default.

According to the appellant, the facts of the case, in brief, are that he had booked flat number 704, Wing A, Classic Apartments, Shiva Shakti CHS Ltd., Vaishet Pada, Kurar village, Malad (E), Mumbai 400097 for a sale consideration of Rs 28,00,000/- by way of payment of RS 5,00,000/- on 28.04.2011, 26.05.2011 and 11.06.2011. A registered Agreement dated 14.07.2011 was executed between the parties. However, as the Society delayed providing the NOC for a loan till 12.01.2012 and the Bank required verification of the respondent no. 1’s status from the Registrar of Companies, the appellant’s efforts to get a housing loan sanctioned was delayed. He had to seek a fresh demand letter from the respondent no.1 in order to get the loan processed. As the loan was refused by the Bank, the appellant arranged the amount of Rs.23,00,000/- through cheque which was paid to respondent no. 2 but was not encashed by them. Respondents issued demand letter on 05.06.2014 for next instalment along with interest of Rs 11,01,600/- which is stated to be unjustified. Two legal notices were issued on 22.07.2014 and 01.12.2014 to the respondents which were not replied to. Hence, consumer complaint no.CC/15/221 was filed on 16.03.2015 seeking possession with damages for deficiency in service of Rs 19,00,000/- and Rs 1,00,000/- as litigation costs. Pleadings were completed by the parties and the matter listed for final hearing when the counsel for the appellant failed to appear and the State Commission proceeded to dismiss the complaint for non-prosecution.

This order is impugned before us on the grounds that (i) the appellant had appointed a new counsel in October 2019 who misguided him regarding the status of the case(ii) and the counsel failed to appear before the Commission. It is contended that the appellant has a strong case and it is prayed that the impugned order of the State Commission dated 05.12.2022 be set aside and the case be restored and heard on merits by this Commission and orders as deemed fit in the matter passed.

We have heard the learned counsel for the respondent and given thoughtful consideration to the material on record.

The appellant would have us believe that the delay on his part in making the payments of the requisite instalments towards the flat booked with the respondents was on account of the delay in the issue of NOC by the Society and the respondents themselves as a result of which the demand of instalment was made with penal interest. He would also have us believe that the proceedings before the State Commission were necessitated on account of the respondent continuing to charge him penal interest for delayed payments and that the State Commission’s order dismissing his complaint for default is erroneous as the counsel appearing before it on his behalf had been changed and that the counsel had failed to represent him properly.

Per contra, the learned counsel for the respondent argued that the appeal was devoid of merits since the appellant had defaulted on the payment of various instalments under the Agreement and had chosen to remain absent in the proceedings before the State Commission as was evident from the daily orders/roznama. It was also argued that the appellant was not a ‘consumer’ under the Act as he had admitted in the appeal that he had purchased the flat for investment being residents of Nairobi and being owners of several movable and immovable properties in Mumbai. The respondent contended that the Allotment Letter dated 11.05.2011 specifically mentioned that 20% of the sale consideration , i.e., Rs 5,60,000/- was to be paid prior to the execution of the Agreement and thereafter as per stages linked to casting of slabs. Despite payment of Rs 5,00,000/- only, the Agreement was executed by the respondent no. 1 on 14.07.2011 but thereafter payments were defaulted by the appellant. It is admitted that in March 2014 appellant handed over cheques dated 24.01.2014 for Rs 23,00,000/- through respondent no. 2 which was not encashed as the amount due was more. Thereafter, he failed to comply with further demands to make payments. Respondent no 1 obtained Occupation Certificate in 2014 and offered possession to respective purchasers.

The counsel for the respondent submitted that in proceedings before the State Commission in CC/15/221 the appellant failed to written notes of arguments for an entire year in 2018 and was permitted to engage a new counsel on costs of Rs 2,000/- on 25.02.2019 but as he again failed to appear on 12.10.2022, another opportunity was granted to do so on 05.12.2022 subject to costs of Rs 2,000/- when he again failed to appear. It is therefore argued that the State Commission’s order on 05.12.2022 to dismiss the complaint for default was justified.

From the facts of this case and the submissions made, it is evident that the appellant has been seriously remiss in not appearing before the State Commission and presenting his case despite opportunities, even after imposition of costs on three occasions. The appellant has admitted that his counsel had not appeared on the dates of the hearings and that he had changed the counsel also once. Admittedly, the appellant had handed over cheques dated 24.01.2014 for Rs 23,00,000/- through respondent no. 2 towards the sale consideration which were not encashed by the respondents.  The ground for not doing so is stated to be that the amount was less than the amount due. When the payments were permitted to be made with penal interest under the Agreement, and the allotment had not been cancelled by the respondents, the reason for not encashing the cheques is arbitrary and perverse. The appellant cannot be faulted for not having made efforts to pay the sale consideration. The Consumer Protection Act, 2019 is a beneficial legislation to safeguard the interest of bona fide investors. It would therefore be unfair to non-suit him on grounds of default in appearance and to present his case when he had made efforts to pay the instalment albeit delayed.

In view of the foregoing discussion, we are inclined to partly allow the appeal. However, at this stage we do not wish to express any opinion on the issue of whether the appellant is a ‘consumer’ so as to not influence any conclusion. The matter is remanded back to the State Commission with the direction to hear the matter afresh within a fixed period of 4 months.

Both parties are directed to appear before the State Commission on 31st May 2024 with due opportunity to both parties.

Pending IAs, if any, also stand disposed of with this order.