Nanda Dulal Mitra & Anr vs Ashit Mukherjee @ Keshab Mukherjee

This appeal has been filed by the appellant Nanda Dulal Mitra & anr. against the order dated 10.04.2017 of the State Consumer Disputes Redressal Commission, West Bengal, (in short 'the State Commission') passed in CC No.150 of 2015.

Brief facts of the case are that the complainants are absolute owners of 'A' and 'B' schedule properties numbered 118/842 and 118/841. Complainants executed two Development agreements no. 15275 and 15274 dated 12.12.2012 with M/s Shibham Construction to develop A and B schedule properties by constructing a multistoried building (G+3) as per the sanctioned plan which has been duly approved by the Panihati Municipality on certain terms and conditions. Complainants also executed two registered Power of Attorney vide deed no. 07392 and 07391 to empower the OP/Developer to act as per the agreements and to do things as per instruction mentioned there in for making construction of the multistoried building. According to the terms and conditions of the above two agreements, the complainants are entitled to get 35% proportionate shares of the A and B schedule properties which should be the first preference to the complainants. Multistoried building was constructed by the OP but the OP has not yet handed over the possession of allocated 35% of proportionate shares of the properties. On 15.7.2014, a legal notice was sent to the OP. As per the development agreement, OP had to deposit a cheque of Rs.5,00,000/- as security deposit with the appellants which would be returned to the OP as soon as completion certificate is handed over to the complainants but OP did not deposit the said cheque as security. It is also mentioned in the said agreement that the amount of Rs.5,00, 000/- will not be refunded if the developer failed to complete the project of multistoried building within two years from the date of agreement. The OP did not hand over the articles such as wooden beams, Roof supporting, iron plates etc. valued at Rs. 5 lakhs which is also a deficiency in service and gross negligence and breach of development agreements. Complainants alleged that there was illegal transfer of flats and shop rooms without their consent and without giving appellants 1st choice of 35% proportionate share of the constructed building. Complainants prayed for an order for directing the OP to provide 35% 1st choice of proportionate shares to the appellants described in the agreements; Rs.5,00,000 as security deposit and Rs.10, 00, 000 as compensation for not providing owners allocation during the tenure of Development Agreements; an order for injunction; an order appointing Commissioner for overall verification and specification of constructed building. OP filed MA/124/2017 whereby the maintainability of proceeding has been challenged. The application was allowed on contest. State Commission dismissed the complaint for lack of pecuniary jurisdiction to entertain the complaint on the principles laid down in the case Consumer case no 97of 2016 Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. decided on 7.10.2016 (NC). State Commission held that the complainants being land owners are entitled to 35% of the allocated share which includes 8 flats measuring 4800 sq.ft. The value of this property exceeds 1 crore rupees, hence, the State Commission lacked pecuniary jurisdiction.

Aggrieved by the order of the State Commission, appellants have preferred this first appeal before this Commission.

Heard the learned counsel for both the parties and perused the record. It was stated by the learned counsel for the appellants that the consideration for the Development agreement was the land that was given by the appellants who are the owners of the land and they availed the services of the opposite party developer for the development over that land. The value of land at the time of signing of the development agreement was only Rs.47,27,945/- and if the compensation of Rs.10,00,000/- and demand for the security deposit of Rs.5,00,000/- is also added to this amount, the total figure does not cross rupees one crore and hence the State Commission had the pecuniary jurisdiction to decide the present complaint case. However, the State Commission wrongly accepted the argument of the opposite party that the development agreement envisaged 35% of the total built up area to be given to the land owner and therefore, the value of 35% of the total built up area should be taken as the consideration for the services of the opposite party as having been availed by the complainants. The State Commission has calculated the value of 35% of the total built up area to be Rs.1,05,60,000/- and therefore, the State Commission has decided that the State Commission does not have the pecuniary jurisdiction to consider the present complaint. It was further argued by the learned counsel for the appellants that as per the judgment of the larger bench of this Commission in the matter of Consumer case no 97of 2016 Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. decided on 7.10.2016 (NC), the total consideration for the services availed along with the compensation claimed is only to be considered for deciding the pecuniary jurisdiction of a consumer forum. Thus, there is no question to consider the value of 35% of the built up area of flats which were non-existent at the time of signing of the development agreement. The decision of the larger bench of this Commission in Ambrish Kumar Shukla (supra) is also clear that the consideration is to be taken at the time of agreement and not the current value.

It was further stated by the learned counsel for the appellants that the appellants had submitted the judgment of the Hon'ble Supreme Court in Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. & anr. reported in 2008 (4) ICC 895, but the State Commission has not relied upon this judgment. This judgement clearly establishes that the consideration for the development agreement is the land and it is the value of the land that should only be taken for deciding the pecuniary jurisdiction of the consumer forum.

On the other hand, the learned counsel for the respondent stated that the valuation of the consideration is to be done on the basis of the prayers made in the complaint. The complainants have requested in the complaint to direct the opposite party to handover possession of the 35% of the total area of the building along with Rs.5,00,000/- as deposit for security and Rs.10,00,000/- as compensation. If the valuation of all these prayers is taken together the total value of the complaint comes to more than rupees one crore. According to Section 17 of the Consumer Protection Act, 1986 the value of services along with the compensation claimed is to be taken for considering the pecuniary jurisdiction of the State Commission.

Ld. Advocate for the OP/developer has submitted that the value of 35% of the building i.e. 8 flats would be around 4800 sq.ft. x 2200/- per sq.ft. = Rs.1,1,05,60,000/- which itself is more than Rs.1 crores, hence the State Commission clearly did not have the pecuniary jurisdiction to decide the present complaint.

I have given a thoughtful consideration to the arguments advanced by both the learned counsel as well as examined the record.

The State Commission has arrived on the decision by observing the following:-

"The observation of Three -Member Bench of the Hon'ble National Commission in the case of Ambrish Kumar Shukla and Ors. (Supra) appears to be relevant for ascertaining the dispute where it has been held- "In view the answer to the issue nos.(ii) and (iii) of the reference order dated 24.05.2016, it is the aggregate value of the goods purchased or the services hired or availed of by all the Consumers on whose behalf or for whose benefit the complaint is filled which, added to the total amount of compensation, if any, claimed for all such consumers determines the pecuniary jurisdiction of the Consumer forum. The value of the goods purchased or the services of hire or availed by an individual consumer and the compensation claimed in respect of individual consumer would have no bearing on such determination.

Ld. Advocate for the complainant has given emphasis to issue no.(iii) (v) of the said decision and submitted that the consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered along with the compensation, if any, claimed in the complaint, to determine the pecuniary jurisdiction of a Consumer Forum.

The referred issue has no apparent conflict with the observation as quoted above. The said decision clearly postulates that it is the value of the goods or services, as the case may be and not the value or cost of removing the deficiency in the service which is to be considered for the purpose of determining the pecuniary jurisdiction.

Admittedly, the complainants being land owners entitled to 35% of the allocated share which includes 8 flats measuring 4800 sq.ft. in the allocation of the complainants. The document placed on behalf of the OP/developer indicate that the market value of apartment of Mouza-Panihati under Khardah Municipality particularly the disputed plots is Rs.4800/- per sq. ft. super built up area. Ld. Advocate for the complainant tried to impress that the such assessment of market value is for the purpose of determining revenue of the government. It is true that the said report cannot be considered as sacrosanct, yet it is profitable to work out an idea as to the valuation in the locality.

After giving due consideration to the submission advanced by the Ld. Advocates appearing for the parties I am of the view that in view of the provisions of Section 17 (1) (a) (i) of the Act and the principles of law laid down by the Hon'ble National Consumer Commission in the case of Ambrish Kumar Shukla and 21 Ors. (supra) this Commission lacks pecuniary jurisdiction to entertain the complaint.

In view of the above the MA/124/2017 is, thus, allowed on contest.

Consequently, the instant complaint stands dismissed being not maintainable for want of pecuniary jurisdiction of this Commission."

From the above, it is clear that on the one hand the State Commission has not totally agreed with the valuation given by the opposite party and it has observed that the said report cannot be considered as sacrosanct yet it is profitable to work out an idea as to the valuation in the locality and on the other hand, it has finally decided that on the basis of the arguments of both the learned counsel as well as on the principles laid down by the National Commission in the case of Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. (supra), it was not having the required pecuniary jurisdiction. In my view, the State Commission should have clearly calculated the value of the services having been availed by the complainants at the time of signing of the Development agreement either on the basis of the judgment of this Commission in Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. (supra) or independently to arrive at some conclusion. However, the same does not seem to have been done. Moreover, the above observation of the State Commission gives an impression that the State Commission has relied upon the answers given by the National Commission in the case of Ambrish Kumar Shukla and others vs. Ferrous Infrastructure Pvt Ltd. (supra) on the issues Nos.2 & 3 which are clearly in respect of the complaints filed under Section 12 (1) (C) of the Consumer Protection Act, 1986. Clearly, these answers are not directly relevant in respect of the individual complaints, though the principle remains more or less the same. For individual complaints, the answers given by this Commission for issues No.(iii) and (v) are relevant that the total consideration for purchasing the goods or availing the services is to be considered for deciding the pecuniary jurisdiction. A conjoint reading of all these answers will indicate that the main principle on which these answers are based is that the goods purchased or services availed will be commensurate to the consideration paid or promised to be paid. As it is difficult to find out the value of a Development agreement, it is to be derived from this principle and it will be deemed to be equal to the consideration paid or promised to be paid. In the present case clearly the consideration paid by the complainants was only the value of the land owned by them. Complainants have stated this value along with compensation claimed to be about Rs.63 lacs which is well within the pecuniary jurisdiction of the State Commission.

Based on the above discussion, the appeal is allowed and the order of the State Commission dated 10.4.2017 is set aside. The matter is remanded to the State Commission for deciding the complaint on merits. Parties to appear before the State Commission on 30.04.2019.