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Judgment
Subhash Chandra, Member
This complaint has been filed under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in service and unfair trade practice by opposite parties 2 to 5 in delay in handing over a re-constructed flat of a reduced floor area in the building of opposite party no.1.
The brief facts of the case, as stated by the complainants, are that the complainants are owners of a flat in the Pantnagar Ganesh Darshan Cooperative Housing Cooperative Society, Ghatkopar, Mumbai who is opposite party 1 along with 31 other flat owners. Due to the building becoming dilapidated, opposite party 1 entered into a development agreement with opposite parties 2 to 5 to reconstruct the building after demolition in a period of 18 months. The terms of the agreement included providing rent of Rs.7000/- per month to each of the 32 owners per month. Opposite party 1 resolved through its proceedings of the Managing Committee on 30.09.2005 accordingly and the project was executed between 02.02.2006 to 02.08.2007. While 31 members accepted the terms and have also occupied the re-constructed flats in January 2010, the complainants have not done so and alleged that the additional 52 sq ft and elevation features was missing, the floor area of 323 sq feet offered was less than the prescribed norms for floor area of economically weaker sections (EWS) housing. They have approached this Commission and prayed that the complaint be allowed and orders be issued to:
I. Declare that the opposite parties nos. 1 to 5 jointly and severally guilty of “deficiency of services” and “unfair trade practices” as per the provisions of the Consumer Protection Act 1986
II. Declare the opposite parties/respondents jointly and severally to complete all the pending work in re-development of Society and handing over peaceful physical possession of the flat along with all other facilities amenities as agreed by the opposite parties in the Development Agreement to complainants
III. Direct the opposite parties/respondents jointly and severally to pay an amount of Rs 2,08,86,000/- to the complainants along with interest @ 21% from the date of Development Agreement till realization
IV. Direct the opposite parties jointly and severally to pay an amount of Rs 10,00,000/- towards the mental pain, harassment and agony, legal charges and miscellaneous expenses to the complainants
V. Award the cost of the complaint in favour of the complainants
VI. Pass any other order or further order(s) which this Hon’ble Commission deems fit and proper under the facts and circumstances of the case and in the interest of justice.
The complaint was resisted by opposite parties 2 to 5 by way of reply. It was contended that the complaint was mischievous with ulterior motives since there was no privity of contract between the complainants and them. A Development Contract had been executed between opposite party 1 and the opposite parties 2 to 5 for the re-development of the Society which was demolished and re-constructed with better and additional features. The complainants had been provided a floor area of 42.25 sq mtrs., which was in addition to the prescribed floor area as claimed and much greater than the floor area that was available prior to the re-development. The non-payment of the rent to the complainants has been denied and evidence has been submitted in support of the contention that the cheque of Rs 81,000/- had been encashed by them.
Complainant filed their rejoinder and parties filed their written statements. Opposite parties 1 and 4 remained unrepresented despite a final opportunity to them to be present and argue. I have heard the learned counsel for complainants and for opposite parties 2, 3 and 5 who submitted that their written submissions be taken as their final arguments.
It is argued on behalf of the complainants that the complainants are the members of the opposite party no.1 and own a ground floor residential unit. It is submitted by the complainants that the unit/ flat was purchased by them from Shri R Balakrishna Pillai and the said flat was transferred in favour of the complainants on 14.12.2000. The complainant has further stated that they have mutually agreed between MHADA and MCGM, the MCGM had allowed the tenements to enclose the balcony which was free of FSI, since the cost was already recovered by MHADA when the original allotment of tenement was made. It was further mutually agreed between MHADA and MCGM, that the MHADA had allowed 100 sq ft general FSI to each tenements to be extended at their own cost. The total carpet area for each tenement before it went for redevelopment was 42.25 sq mtrs equal to 454.61 sq ft.
In pursuance of the Development Agreement a tripartite agreement was executed and registered on 16.03.2006 between the Society – OP No.1, Developers – OP nos. 2 to 5 and the individual members including the complainants. The said agreement was known as Consent Agreement. The complainants have further stated that before the execution, the members of the society were not taken into confidence and never given any opportunity to go through the said consent agreement draft prior to its execution. They further stated that under protest the members, including the complainants signed the Consent Agreement. After lot of persuasion the opposite party handed over the copy of the Consent Agreement to the complainants. While going through this Agreement, the complainants discovered that the agreement had been amended. It is also stated in the agreement that the redevelopment of the building shall be completed within 18 months from the date of handing over the possession of the old premises. The agreement also indicates that the opposite party nos. 2, 3, 4 and 5 will inform the opposite party no.1 about the possession of the flats in the reconstructed building and the opposite party nos. 2, 3, 4 and 5 shall hand over the possession of the reconstructed flats only after obtaining the occupation certificate from the concerned authority. In the development agreement it has also been stated that if P nos. 2, 3, 4 and 5 were unable to hand over the possession within 18 months, in that scenario the OP nos. 2 to 5 shall pay an additional rent of Rs.5000/- per month (i.e., Rs.8000/- + Rs.5000/- till the time the possession of the reconstructed premises is handed over to the members of the opposite party no.1 till occupation certificate is received. It is also noted that the development agreement signed between OP nos. 1 to 5 was in contravention of the offer letter dated 16.10.2005 given by OP nos. 2 to 5 and agreed by 32 members of the Society.
The MHADA vide its letter dated 25.09.2009 granted NOC for reconstruction. It is also stated that OP nos. 2 to 5 obtained the commencement certificate for carrying out the development/ construction of the building of opposite party no.1 on 18.01.2008 from MCGM. However, the OP Nos. 2 to 5 admittedly delivered the possession without obtaining the occupation certificate which is against the terms and condition of the commencement certificate. Complainants have further stated that the complainants have received a letter dated 24.03.2012 from MCGM conveying that complete occupation certificate for the reconstructed building is not given. The complainants have stated that the OPs have stated in their reply that they have received the occupancy certificate on 18.07.2012 but the OPs have failed to provide the copy of the completion certificate and occupation certificate to the owners of the flats. The complainants have relied upon the judgment of the Hon’ble High Court of Bombay in the matter of M/s Sion Kamgar Cooperative Housing Society Ltd., vs Municipal Corporation for Greater Mumbai in writ petition no. 829 of 2013 and Twin Tower Co-op., Housing Society vs M/s Manish Vijay Enterprise an Ors decided on 09.04.2013 by the National Commission, wherein it was held that without occupation certificate, possession of flat considered illegal and directed to Bombay Municipal Corporation may charge double the water tax and other taxes and same be recovered from the builder. Further, the Hon’ble Court have held that the Corporation can also initiate action against the flat owners/ developers, as the law says no person can move into a building without OC. The complainants have also stated in their written submissions that OP Nos. 2 to 5 have admitted that they have received the occupation certification on 18.07.2012.
Per contra the learned counsel for OP nos. 2, 3 and 5 have stated in their written submissions that the complainants have filed a consumer complaint seeking recovery of Rs.2,08,86,000/- as compensation for causing mental pain, harassment and agony and legal and miscellaneous expenses from the opposite parties. OPs have stated that the complaint is hopelessly time barred as the complainants themselves admitted that the cause of action arose in the year 2007 and the complaint was filed in the year 2015 which is beyond the period of limitation. Further they have stated that there is no application seeking condonation of delay in filing the above complaint. They further state that as the Development Agreement and Consent Agreement was executed between the parties they are bound by the terms of these agreements. He further states that the complaint is liable to be dismissed for want of pecuniary jurisdiction. Learned Counsel for opposite party no.4 have also stated that the OP no.4 have filed a criminal revision application before the Hon’ble Sessions Court challenging the order of issuance of process under Sections, 406, 415, 430 of Indian Penal Code. The said application was allowed and the criminal complaint was dismissed against OP No.4. He further stated that there are no pleadings or any justification for quantification of damages to the tune of Rs.2,08,86,000/-. Counsel for OP No.4 states that he has retired from the partnership firm much prior to the alleged cause of action arose in favour of the complainants and that there is no dispute between OP no.1 and OP No.4.
I have heard the learned counsel for both the parties and perused the records carefully.
The complainants are residents of a low income cooperative housing society in Pantnagar, Ghatkopar (East) Mumbai which was registered on 31.10.1992 between Maharashtra Housing and Area Development Authority (MHADA) (in short, ‘the Board’). There were 32 flats owned by the owners in the Society. As the building was in a dilapidated condition the members desired to have the same demolished and reconstructed. The Board had obtained the approval from the MCGM for reconstruction with additional floors based upon the floor space index (FSI) available under the Development Control (Regulation). Redevelopment of the Society building involving the construction of two buildings after demolishing the existing building was approved. The development agreement between opposite party no.1 and opposite party nos.2 to 5 dated 02.02.2006 agreed upon the construction of 32 flats, ad-measuring 323 sq ft carpet area along with amenities listed in Annexure ‘C’.
The members of the Society agreed to hand over the vacant possession of their respective flats to the developers and the developer undertook to pay each member a sum of Rs.7000/- per month as fixed allowed and also Rs. 81,000/- to each members apart from Rs.50,000/- to be handed over to the Society. The Society distributed the same amongst the members after the outstanding dues had been settled with it. The developer agreed that the sum of Rs.7000/- would be continued to be paid beyond the period of 18 months in case of delay in execution of the project along with additional amount of Rs.5000/- per month by way of compensation till the possession of the flat is handed over.
Accordingly, vacant possession was handed over to opposite party no.2 and the project was completed by January 2010 when the possession was handed over to the members of the Society except the complainants who refused to accept the possession.
It is evident that the Development Agreement was between opposite party 1 and opposite parties 2 to 5. There was no privity of contract between complainants and opposite parties. No consideration was paid for by the complainants for any services promised. The contention of the complainants that there has been deficiency in service and unfair trade practice is, therefore, difficult to be sustained. The terms of the Development Agreement in so far as they relate to the re-construction of the Society require the opposite parties 2 to 5 to execute the works within a period of 18 months and for them to pay the residents rent at the rate of Rs.7000/- per month. This amount has been accepted by the complainants and the cheque encashed.
In view of the above, the complaint is found to be without merits and is accordingly dismissed. No order as to costs.