K. Revathi vs Gayatri Singh & Ors

This revision petition has been filed by the petitioner K.Revathi against the order dated 23.2.2010 of the State Consumer Disputes Redressal Commission, Andhra Pradesh, (in short 'the State Commission') passed in FA No.723 of 2007.

The brief facts of the case are that the respondent No.1/complainant and the opposite party/respondent No.2 entered into an agreement of development and as per this agreement the opposite party was entitled to 65% of the developed area. The complainant submits that the opposite party offered to sell to the complainant residential flat no.G-2 on the ground floor with a built up area of 772 sq. feet with undivided share of land to an extent of 22 sq. yards for a total sale consideration of Rs.3,47,400/- and the complainant submits that opposite party entered into an agreement of sale on 7.3.1996 with the complainant according to which the opposite party received a sum of Rs.1,50,000/- from the complainant by way of cash and the balance out of the total sale consideration of Rs.3,47,400/- was to be paid by way of part payments spread over a period of one year. The complainant subsequently paid an advance amount of Rs.80,000/- on 7.3.1996 and Rs.29,000/- on 31.8.1997 and the opposite party acknowledged the receipt of the total sum of Rs.2,59,000/-. Thereafter the complainant submits that the opposite party offered flat no.T-2 instead of flat no.G-2 for a sale consideration of Rs.3,80,000/- and the complainant agreed for this proposal and executed a fresh agreement of sale on 16.9.1998 and paid the full sale consideration of Rs.3,80,000/- to the opposite party for an area of 850 sq.ft. with undivided share of land admeasuring 37.80sq. yards.

The opposite party informed the complainant that the said land belongs to Smt. K. Padmavathi and (respondent No.3) Smt. K. Mangamma (respondent No.4) and the opposite party entered into Development Agreement with them on 14.10.1997. The Complainant submits that the opposite party has been putting off some of the final works like the electrical wiring, final finishing of flooring, bathroom toilets, kitchen and other miscellaneous jobs inspite of collecting the entire sale consideration of Rs.3,80,000/- and the flat was also not delivered to the complainant. Therefore, the complainant issued a legal notice on 25.11.2002. Later, a consumer complaint was filed by the complainant seeking direction to the opposite party to complete the unfinished works and deliver possession of flat no.T-2 on the third floor, to pay Rs.1 lakhs towards damages together with 12% interest on the total sale consideration paid by the complainant and other reliefs. Opposite parties 2 and 3 (respondents No.3 and 4 herein) filed written version stating that the complainant was not a consumer and that the said flat was in possession and enjoyment of Smt. K.Revathi who was a necessary party but she was not impleaded and that the agreement entered into by the complainant was of a different party and the first opposite party (respondent No.2 herein) committed breach of agreement with respect to development of property and the second and third opposite parties had revoked the powers given to opposite party No.1 by a registered deed of cancellation bearing document No.129 of 1999. Hence there was no deficiency in service on their behalf. The District Consumer Disputes Redressal Forum , Hyderabad, (in short 'the District Forum') based on the evidence adduced allowed the complaint directing the opposite parties 1 to 3 to pay to the complainant a sum of Rs.3,80,000/- along with interest of 9% p.a. from 16.10.1998 untill date of realization along with cost of Rs.2000/-.

Aggrieved by the order dated 30.3.2007 of the District Forum, complainant preferred FA No.202 of 2008 and opposite parties Nos.2 & 3 preferred FA No.723 of 2007 before the State Commission. Opposite party No.1, M/s. Soubhagya Constructions did not prefer any appeal. The State Commission vide its order dated 23.2.2010 disposed of the appeals by a common order, which reads as under:-

" In the result FA No.723/ 2007 is allowed and the order of the District Forum is modified directing opposite party No.1 to execute the sale deed in respect of flat no.T-2 in third floor in Sri Sainadha apartments in plot No.39/1 & 2 in Sy. No.32 to 35 in Mahamoodguda, Srinviasa Nagar, Secunderabad on behalf of himself and also on behalf of the opposite parties 2 and 3 and on such execution Smt. K.Revathi and opposite party no.1 to handover the peaceful possession of flat no.T-2 to the complainant hence within one month from the date of receipt of this order.

F.A. No.202/2008 filed by the complainant is allowed with the aforementioned direction. We also award compensation of Rs.1 lakh to the complainant for not having enjoyed possession of the flat since 1998 though the entire sale consideration was paid in the year 1998 itself. We also award costs of Rs.5000/-. Order of the District Forum is modified as above. Time for compliance four weeks from the date of receipt of the order."

Hence the present revision petition by K. Revathi petitioner herein.

Learned counsel for the petitioner stated that an agreement for sale was executed by opposite party No.1/respondent No.2 with the petitioner on 26.7.2000 wherein it is clearly recorded in Clause 4 of the agreement that first party has handed over the vacant possession of the flat No.T-2 to the second party i.e. the petitioner on the same day. Since then the petitioner is in possession of the said property. Learned counsel for the petitioner stated that as per Section 53 A of Transfer of Property Act, if the transferee has got possession, then other party will be debarred from enforcing any right for the said property. Moreover, the sale agreement in respect of the petitioner has not been cancelled so far and a consumer forum does not have any power to cancel the same. Power to cancel a sale agreement rests only with a civil court. Thus, on this ground, the order of the State Commission is totally against the law. Without cancellation of the sale agreement in favour of the petitioner, no new sale agreement can be given effect to in favour of any other person. To support his argument learned counsel for the petitioner relied upon the judgment of Hon'ble Supreme Court in Rambhau Namdeo Gajre Vs. Narayan Bapuji Dhotra (dead) thought LRs. , (2004) 8SCC 614 and the gist of the finding of the Hon'ble Supreme Court is given as below:-

"A. Transfer of Property Act, 1882- S. 53-A- Protection under- who can claim and against whom available- Held, can be availed of by the transferee or any person claiming under him against his transferor or any person claiming under him but not against a third person with whom he does not have privity of contract- One P purchasing the suit land from the respondent, and on payment of entire consideration amount, was put in possession thereof- P thereupon executed agreement of sale of said land in favour of appellant, and on payment of entire consideration amount, appellant was put in possession thereof- Respondent filing suit for possession of said land against appellant-Whether appellant could protect his possession in terms of the doctrine of part-performance as enshrined in S.53-A against respondent-Held, there was no privity of contract between the appellant and respondent- Appellant not being a transferee within the meaning of S.53-A could not invoke the protection of the said doctrine.

B. Transfer of Property Act, 1882- S.53-A- Doctrine of part performance enshrined under- Nature and history of- Conditions that must be fulfilled for attraction of- Held, protection provided under S.53-A is a shield only against the transferor- It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance of such an agreement- However, it has nothing to do with the ownership of the transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee- Registration Act, 1908-S.17

C. Transfer of Property Act, 1882- S.54- Agreement to sell immovable property of value greater than Rs.100- Interest in property- Held, does not create an interest or charge in favour of the proposed vendee in the suit property."

On the other hand learned counsel for the respondent No.1/complainant stated that the sale agreement in favour of the respondent No.1/complainant was signed between the complainant and opposite party No.1/respondent No.2 on 7.3.1996 for flat No.G-2. However, later on opposite party No.1 promised to give another flat No.T-2 much earlier and therefore, another sale agreement dated 10.10.1998 was signed between the complainant and opposite party No.1 for flat No.T-2. Without cancelling this sale agreement, the opposite party No.1 entered into another agreement with the petitioner herein in respect of the same flat on 26.07.2000. The fact is that by that time, the general power of attorney (GPA) in favour of the opposite party No.1 was cancelled by registered deed of cancellation No.129 of 1999. Thus, the opposite party No.1 did not have any authority to enter into sale agreement with the petitioner on 26.7.2000.

It was further stated by the learned counsel for the complainant that petitioner is not an independent allottee/ purchaser of the flat rather she is a business partner of the opposite party No.1. In this regard, the learned counsel stated that an MOU dated 9.9.97 was entered between the petitioner and opposite party No.1 wherein the following Clauses were agreed:-

"C. That the first party herein accepted and offered to give the 50% share in profit in the above said development business after deducting the expenditure to the Second party and the second party herein agree to receive 50% profit share in the above business.

D. That the first party herein agreed for the supervision of the construction, checking of the accounts and supply of the materials and manpower by the second party or and her administrators and assignees.

H. The parties herein agreed to receive the 50% of the share in the business profit or ½ of the houses/flats after fulfilling the conditions of the first party with Smt. K. Mangamma and Smt. K.Padmavathi in the construction business."

It was contended by the learned counsel for the complainant that above Clauses of MOU clearly show that the petitioner was a business partner of the opposite party No.1 and the sale agreement may be only a security for the amounts given by the petitioner to opposite party No.1 for financing the project and the same may not be a real sale agreement. No independent purchaser could have entered into sale agreement with the opposite party No.1 as opposite party No.1 did not have any right to enter into the sale agreement after cancellation of GPA in 1999.

Learned counsel for respondent No.2/builder stated that he was not served either before the District Forum or before the State Commission and therefore, he could not file his written version and could not plead his case. Though the notice was published in Newspaper, however the papers were not widely circulated, therefore, he could not get any notice of the complaint or appeal against him. The learned counsel stated that there was a civil suit in Hyderabad, which was compromised between the parties. Learned counsel further stated that the sale agreement was only a security for the amount that was taken from the petitioner and it was not a real sale.

I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on record.

Section 54 of the Transfer of Property Act, 1882 mentions:

"Contract for sale- A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.

It does not, of itself, create any interest in or charge on such property."

From the above provision, it is clear that there has to be only one contract for sale and the second contract of sale can only be valid if there is some provision in the first contract for sale that a second contract of sale can be made under certain conditions. As no such condition is mentioned in the sale agreement entered with the complainant on 16.10.1998, hence, the second sale agreement entered with the petitioner by the opposite party No.1 on 26.7.2000 was against this provision. Moreover, the GPA in favour of the opposite party No.1 was registered GPA No.959/93, which was cancelled by registered deed of cancellation No.129 of 1999. Clearly the sale agreement in favour of the petitioner has been executed on 26.7.2000 when the opposite party No.1 did not clearly have the general power of attorney in his favour to execute the sale agreement. Hence, this was a sale by an unauthorised party/ seller. So far as the arguments raised by the learned counsel for the petitioner in respect of Section 53A of the Transfer of Property Act, 1882 is concerned, this Section also mentions a proviso. The Section reads as under:-

"53A. Part performance - Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."

From the above, it is clear that Section 53A basically gives right to enjoy possession to a transferee as against any action on the part of transferor. However, the proviso attached to the Section clarifies that this section will not operate against another transferee who did not have knowledge of either the contract or the part performance. Thus, no advantage of this section can be taken by the petitioner qua the complainant who is a transferee for consideration.

Based on the above discussion, I do not find any illegality, material irregularity or jurisdictional error in the order dated 23.2.2010 passed by the State Commission so far as it relates to giving the possession of the said flat to the complainant. However, the grievance of the petitioner is also real, though, the sale agreement of opposite party No.1 with the petitioner may be an agreement for security of the amount given by the petitioner to opposite party No.1 for financing the project. The fact remains that the agreement states that an amount of Rs.4,00,000/- has been paid by the petitioner to opposite party No.1 for getting the flat in question. Though opposite party had stated that there was some civil suit, which was compromised, however, no copy of either the suit or the order has been filed by the opposite party No.1/respondent No.2 inspite of giving opportunity for the same. Moreover, the opposite party No.1/respondent No.2 was not authorised to execute the sale agreement with the petitioner in the year 2000 when GPA in his favour was already cancelled in 1999. So transfer in favour of the petitioner was itself not proper. Hence, in the interest of justice, it is ordered that the opposite party No.1/respondent No.2 shall refund amount of Rs.4,00,000/- to the petitioner. No interest is being ordered on the amount of refund as the petitioner has enjoyed the flat for the intervening period.

Based on the above discussion, the impugned order of the State Commission is upheld. However, additional order is passed that opposite party No.1/respondent No.2 shall refund Rs.4,00,000/-(rupees four lakhs only) to the petitioner. Order of the State Commission as well as additional order passed by this Commission be complied with by all the parties within a period of three months from the date of this order.