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Judgment
Heard Mr. Sanjoy Kumar Ghosh, Advocate, for the complainants, Mr. Manish Paratap Singh, Advocate, for opposite party-1 and Mr. Uday B. Wavikar, Advocate, for opposite parties-2 to 4.
Nari Gulabani and Deepak Gulabani have filed above complaint for directing the opposite parties to (a) handover possession of Flat No.702, admeasuring 550 sq. ft. carpet area, 7th Floor, in “Devi Kakad Solitaire”, Plot No.124, CTS No.213, Village Chembur, after accepting the balance consideration of Rs.20/- lacs; or in alternative (b) refund the amount of Rs.14000000/- with interest @ 18% p.a. from the date of filing of the complaint till actual payment; (c) award compensation of Rs.10/- lacs for mental torture and hardships caused to the complainants; (d) award cost of Rs.200000/-; and (e) any other relief deems fit in the facts of the case.
The complainants stated that opposite party-5 was the owner of the project land Plot No.124, CTS No.213, 213/1, 213/2 and 213/3 Village Chembur, Taluka Kurla, Mumbai Suburban District and opposite parties-2 to 4 were share-holders in opposite party-5 and lessees of the land. Opposite parties-2 to 5 obtained Intimation of Disapproval (IOD) dated 13.12.2010, revised IOD dated 21.11.2013 and commencement certificate (CC) dated 03.05.2014, for raising construction over the land. Opposite party-1 was a developer. Opposite parties-2 to 5 executed a Development Agreement dated 19.08.2013 and Power of Attorney dated 30.12.2013, authoring opposite party-1 to construct new building “Devi Kakad Solitaire” over the project land. Under the Development Agreement, entire development had to carried out by the own expenses of opposite party-1, who was required to give 58% of the built up area to opposite parties 2 to 4, in which, 16 flats were allotted to the original lessees and opposite party-1 was entitled for 42% of the total built up area and authorised to sell it. The complainants are real brothers and booked Flat No.702, carpet area 550 sq.ft. with one car parking for a consideration of Rs.16000000/- in their joint names in “Devi Kakad Solitaire” vide allotment letter dated 16.12.2015 and agreement for sale dated 04.04.2016 executed by opposite party-1. The complainants made payment of Rs.10/- lakhs on 16.12.2015, Rs.10/- lakhs on 18.12.2015, Rs.10/- lakhs on 28.12.2015, Rs.10/- lakhs on 20.01.2016, Rs.10/- lakhs on 03.02.2016, Rs.10/- lakhs on 04.02.2016, Rs.10/- lakhs on 22.02.2016, Rs.13.40/- lakhs on 17.03.2016 and Rs.1.60/- lakhs on 17.03.2016 (Rs.85/- lakhs). As per clause 6 of the agreement, Rs.55/- lakhs was to be paid on or before execution of agreement and Rs.20/- lakhs at the time of possession. After execution of the agreement, opposite party-1 informed the complainants that OP-1 has taken loan from Capital First Limited who has created charge on part of the property. Opposite party-1 orally asked the complainants to pay Rs.55/- lakhs to Capital First Limited, which was paid by the complainants on 16.04.2016 and intimated to OP-1, vide letter dated 16.04.2016. The complainants paid total amount of Rs.1.40 crores and the balance amount of Rs.20/- was to be paid at the time of possession. As per clause 8 of the agreement, possession of the flat had to be delivered by December, 2016. Opposite parties-1 to 4, vide public notice dated 05.12.2016 cancelled the development agreement dated 19.08.2013 which was executed in favour of OP-1. On 17.12.2016, the complainants replied to the public notice dated 05.12.216 informing opposite parties-2 to 4 that the complainants have claim, right, title and interest in the property in question which was not replied by them. Then the complainants filed this consumer complaint on 22.02.2017.
In spite of service of the notice, no one appeared on behalf of opposite party-5, its right to file the written statement was closed, vide order dated 02.07.2018 and right OP-1 to file the written statement was closed, vide order dated 03.11.2022. The complaint was contested by opposite parties-2 to 4 by filing the written version on 17.04.2018. In the meantime, OP-2 died and her heirs were substituted vide order dated 10.05.2022. Opposite partis-2 to 4 stated that the complainants have not made specific allegation against them but they have sought relief against them, which is not permissible under law. Opposite parties-2 to 5 entered into a development agreement dated 19.08.2013 with opposite party-1 and handed over possession the land to opposite party-1 for the purpose of development. As per clause 5 of the agreement, OP-1 was required to obtain Revised Plans, Transferable Development Rights (TDR), Additional FSI and Fungible FSI etc. within 180 days from the date of the agreement and till then OP-1 was not entitled to sell any flat in the proposed building. However, OP-1 has violated the terms and conditions of the agreement and created third party right without permission of OP-2 to 4, which was a pre-condition under clause-9 of the agreement. OP-1 has stopped the construction of the building from last one and half years for which OP-2 to 4 sent emails dated 03.06.2016 and 17.08.2016 but OP-1 did not respond to the said emails. Therefore, OP-2 to 4 terminated the development agreement vide legal notice dated 01.12.2016. OP-2 to 4 also published the notice dated 01.12.2016 in Navshakti, Marathi and Times of India on 03.12.2016, giving public notice of cancellation of the development agreement executed with OP-1 and also on 05.12.2016. OP-1 gave an undertaking to develop the property within a period of 36 months with a grace period of six months. Said period was expired on 17.02.2017 but the construction was not completed. OP-2 to 4 filed Arbitration Petition No.39 of 2017 and sought interim orders against OP-1, which was dismissed on 08.08.2017 with liberty of appointment of an arbitrator. They are not responsible for any booking made by the complainants with OP-1. There is no deficiency in service on the part of OP-2 to 4 and the complaint is liable to be dismissed.
The complainant filed the Rejoinder and Affidavit of Evidence of Nari Gulabani. Opposite parties-2 to 4 filed Affidavit of Evidence of Tulsibai Sunderdas Jagasia, Kishore Vasdev Jagasia and Suresh Vasdev Jagasia. Along with the Affidavit of Evidence, the opposite parties filed copy of the arbitration award dated 26.04.2019 by the Arbitrator, appointed by Bombay High Court, vide order dated 01.10.2018 passed in Arbitration Application No.332 of 2018, whereby termination of the development agreement dated 19.08.2013 executed between OP-2 to 5 and OP1 was held to be valid. Both the parties have filed their written arguments.
We have considered the arguments of the counsel for the parties and examined the record. Opposite parties-2 to 5 executed the development agreement dated 19.08.2013, authorising opposite party-1 to construct new building “Devi Kakad Solitaire” over their land. Under the development agreement, entire development had to carried out on the own expenses by opposite party-1, who was required to give 58% of the built up area to opposite parties 2 to 4, in which, 16 flats were allotted to the original lessees and opposite party-1 was entitled for 42% of the total built up area and authorised to sell it. On the basis of the development agreement, opposite party-1 allotted Flat No.702 vide allotment letter dated 16.12.2015 and agreement for sale dated 04.04.2016 to the complainants and realized Rs.1.40 crore from them. Clause-8 of the agreement for sale dated 04.04.2016 provides for delivery of possession on or before 2016. However, Opposite Parties-2 to 4 cancelled the development agreement on 01.12.2016, which has been upheld by the Arbitrator in its award dated 26.04.2019 and opposite party-1 has been directed to handover possession of the building to opposite parties-2 to 4 in its existing position. In the changed circumstances the complainants now pressed for refund of the money deposited by them.
Opposite parties-2 to 4 relied upon clause-5 of the development agreement dated 19.08.2013 and submitted that as opposite party-1 did not obtain Revised Plans, Transferable Development Rights (TDR), Additional FSI and Fungible FSI etc. within 180 days with grace period of 90 days from the date of the agreement as such OP-1 was not entitled to sell any flat in the proposed building. This period expired in May, 2014. A perusal of Arbitrator’s Award dated 26.04.2019 shows that opposite party-1 purchased TDR on 21.11.2014. It is not open to opposite parties-2 to 5 to cancel the development agreement after 21.11.2014. Clause-5 of the development agreement imposes a restriction upon opposite party-1 from selling any flat in the proposed building till obtaining Revised Plans, Transferable Development Rights (TDR), Additional FSI and Fungible FSI, while allotment was made in favour of the complainants on 16.12.2015, i.e. long after purchasing TDR as such allotment of the complainants is not invalid.
On the basis of the development agreement dated 19.08.2013, opposite party-1 raised construction and sold the flats, falling in its share. Now opposite parties-2 to 5 terminated the agreement on 01.12.2016 and grabbed all the construction raised by opposite party-1. Relation of principal and agent between opposite parties-2 to 5 and opposite party-1 is established. A principal is vicariously liable for the act of the agent as held in Canara Bank Vs. Canara Sales Corporation (1987) 2 SCC 666, Achutrao Haribhan Khodwa Vs. State of Maharashtra (1996) 2 SCC 634, Savita Garg Vs. National Heart Institute (2004) 8 SCC 56 and Pradeep Kumar Vs. Post Master General (2022) 6 SCC 351.
Opposite Parties-2 to 5 are also co-promoter within the meaning of Section 2(c) of Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963. Under Section 19 of Real Estate (Regulation and Development) Act, 2016, the promoter is liable to refund the amount. As Opposite parties-2 to 5 have taken possession of the entire construction of “Devi Kakad Solitaire”, raised by opposite party-1 in which, money of the complainants had also been incurred, it is appropriate that opposite parties-2 to 5 be refund entire amount of the complainants with interest.
ORDER
In view of the aforesaid discussions, the complaint is partly allowed with cost of Rs.50000/- and opposite parties-2 to 5 are directed to refund entire amount deposited by the complainants with interest @9% per annum from the date of respective deposit till the date of refund, including the cost, within a period of two months from the date of this judgment.