Rajiv Kashyap vs Varsha D. Joshi & Anr

Avm J. Rajendra, Avsm, Vsm (Retd.), Member

The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 02.08.2019 passed by the State Consumer Disputes Redressal Commission, Maharashtra (hereinafter referred as “the State Commission”), in Consumer Complaint No. 259 of 2014, wherein the Complaint filed by the Complainant (Respondent herein) was partly allowed.

There was a delay of 43 days in filing in the present Appeal. The Appellant filed IA/16315/2019 seeking condonation of delay. For the reason stated thereat, the delay is condoned.

At the stage of admission on 12.03.2020, Shri Prabhat Kumar Chaurasia, learned Advocate appeared on behalf of the Respondents. The matter was heard and the operation of the impugned order dated 02.08.2019 passed by the learned State Commission was stayed, subject to deposit of Rs.10,00,000/- with the State Commission, within a period of six weeks. Thereafter, continuously for 8 occasions, none represented the Respondents. As a consequence, vide Order dated 10.08.2023, the Respondents were proceeded ex-parte.

Brief facts of the case are that the Respondents/ Complainants booked a Flat bearing No. 5 on the Ground Floor, admeasuring 240 sq. ft., situated in Krishna Vihar building behind Tata Compound, S.V. Road, Andheri (W), Mumbai in the project of Appellant/OP. The total consideration was Rs.35,00,000. An Agreement for Sale was executed on 24.07.2012 and was duly registered. It was agreed between the parties that out of the total sum of Rs.35,00,000/-, they were to initially pay Rs.8,51,000/-, and the remaining Rs. 26,49,000/- was to be paid within a month thereafter. Accordingly, on OPs demand, the Complainants paid Rs.19,51,000/- by cheque and Rs. 3,00,000/- in cash. However, it was alleged that the OPs did not furnish receipt for Rs.3,00,000 cash payment received by them. It was further alleged that the building was almost completed, yet the Occupancy Certificate had not been obtained, and the OP was using the flat as a Godown. Additionally, in spite of the commitment to deliver its possession within 12 months’, the OP dispatched a letter on 17.06.2014 to the Complainants, notifying them of termination of the agreement and expressing intent to create third-party interest in respect of the said property.

Being aggrieved, the Respondents filed a Consumer Complaint before the State Commission, Maharashtra praying for directions to OPs to complete the construction and handover possession of the subject Flat and not to create 3rd party interest. Complainants have also prayed for directions to opponent to pay Rs.10,50,000/- towards costs and expenses incurred by them for pursuing with opponent, financial inconvenience and anxiety; Rs.1,00,000/- towards legal and other expenses and Rs.2,50,000/- towards advocate fees and other legal expenses.

The Appellants/OPs denied the claims of Complainants. However, there was no affidavit of evidence in support of it and thus the pleadings of the OP in the written statement were not considered as they were not proved by adducing evidence on affidavit to substantiate their stand, except what has been admitted by the OP. As a result, the Complainants' pleadings and evidence stand unchallenged. The Appellants did not submit written arguments or present oral counter arguments before this Commission.

On due consideration of the facts of the case, the learned State Commission in its Order dated 02.08.2019 observed that:-

“6) Thus, complainants had paid Rs.19,51,000/- which is more than 50% of the amount of consideration, although, as per agreement payment of Rs.8,51,000/- only was required to be made by complainants to opponent before 2nd floor slab and balance amount of Rs.26,49,000/- was required to be paid at the lime of handing over possession or before it. Hence, we hold that complainants are entitled for possession of the subject fiat on payment of balance amount to opponent. As regards compensation of Rs. 10,50,000/- claimed by complainants Rs.5,00,000/- claimed by complaints towards compensation (or mental torture to be excessive. We find it reasonable to grant Rs. 1,00,000/- on this count. The amount of Rs.2,00,000/- claimed towards actual expenses suffered are not supported by any document or evidence and therefore, we do not find the Complainants entitled to get the same from opponent. In respect of legal and other expenses of Rs. 1,00,000/- and Rs.2,50,000/- claimed by complainants, we find it reasonable to grant an amount of Rs.50,000/- towards legal expenses and other expenses including advocate fees and other legal expenses. We therefore, pass the following Order:-

“ORDER

(i) Consumer Complaint No.CC/14/259 is partly allowed.

(ii) Opposite Party is declared to be guilty of deficiency in service.

(iii) Opposite Party is directed to complete the construction and handover the possession of Flat No.5, admeasuring 240 sq. ft. in Krishna Vihar building, behind Tata Compound. S.V. Road, Andheri (W), Mumbai as described in the registered Agreement to Sale dtd.24/07/ 2012 between complainants and opponent.

(iv) Opponent is also directed to pay an amount of Rs.1,00,000/- (Rs. One Lakh Only) towards compensation for mental torture and an amount of Rs.50,000/- (Rs. Fifty Thousand Only) towards legal and other expenses including the costs of this complaint to the complainants.

(v) Copies of this order be furnished to the parties free of cost.”

Aggrieved by the Order of the State Commission, the Appellant/OPs filed the Instant Appeal No. 1989 of 2019 before this Commission with the following prayer:

(a) The Appeal may kindly be allowed.

(b) Call for the record and proceedings of Complaint no. CC/14/259 decided by the Ld. Maharashtra State Consumer Disputes Redressal Commission, Mumbai, and after examining the legality, validity and propriety of the impugned order dated 02.08.2019 passed therein, the same be quashed & set aside and the Complaint no. CC/14/259 filed by the Respondents be dismissed.

(c) Pass such further order/s as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case and in the interest of justice.

In the present Appeal, the Appellant mainly raised the following grounds:-

(a)   The construction of ‘Krishna Vihar’ was completed by 2000-2001 itself and the Respondents were already residing in flats 703 & 703A in the same complex.

(b)   The Respondents approached them to purchase Flat No. 5 at Ground Floor at total consideration of Rs.35,00,000. The initial payment of Rs. 8,51,000 was made at the time of Agreement on 24.07.2012, which was duly registered. It was mutually agreed that the remaining Rs. 26,49,000 is to be paid within one month. However, the Respondents failed to make the payment by 24.08.2012 as per the Agreement.

(c)  The State Commission overlooked the fact that the flat was ready for possession and attributed the non-possession to the Respondents' contractual non-compliance.

d)  The State Commission failed to consider the Appellant’s communication to the Respondents regarding non-compliance leading to contract cancellation. Appellants repeated reminders and non-payment by the Respondents leading to cancel the contract were not considered. In addition, the cheques issued by the Respondents bounced.

e)    The State Commission failed to consider that the Respondents obtained a loan against the flat and did not repay during the ongoing complaint process. This fact was not brought to the notice of the State Commission.

The learned Counsel for the Appellant vehemently argued that the construction of the building was already completed and the Respondents were staying in the same complex in the 7th Floor. The specific flat in question i.e. Flat No. 5 was in fact located in the ground floor of the same building and was ready for occupation. Thus, the condition of completion of construction was already fulfilled and thus there is no basis whatsoever for claiming any deficiency in service on the part of the Appellant. He asserted that the Respondents failed to fulfil their contractual obligations of making necessary timely payments. He pointed to Clause 44 of the agreement specifying a one month timeframe for contract performance. Emphasizing the importance of adhering to this stipulated time frame, he argued that the Respondents failed to fulfil their obligations within the time prescribed, thereby forfeiting any right to make any claim against the Appellant. He highlighted that the cheques issued by the Respondents were not honored due to insufficient funds. In addition, it was brought out that the Respondents mortgaged Flat No. 5 with the Greater Bombay Co-operative Bank to secure a loan, which was not informed to the State Commission. The learned counsel contended that the Respondents cannot seek equitable relief for their own failures.

We have examined the pleadings and the associated documents on record and carefully heard the arguments of learned counsel for both the Appellant.

It is a matter of record that a contract was entered into between the parties on 24.07.2012 as regards the property in dispute, a flat, located in the ground floor of the same ‘Krishna Vihar’ where the Respondents already own two Flats in the 7th Floor. In addition, the Respondents/Complainants themselves have notified their address in the Complaint as residents of Flat No. 703 of the same complex. Further, in the Complaint No. 2 Shri Dinesh C Joshi has admitted that he was the President of the RWA of the same complex.

The admitted total consideration for the purchase of the said flat on the Ground Floor was Rs.35,00,000/-. On the date of agreement i.e. 24.07.2012, the Respondents paid Rs.8,51,000/-. As the Respondents were already living in the 7th floor of ther same building complex, evidently the construction was almost complete and thus, the construction of Flat No.5 located in the Ground Floor was evidently completed. As alleged by the Complainants/ Respondent, the OP was already using it as a Godown.

In terms of para 44 at page 11 of the contract between the parties dated 24.07.2012, the Complainants/Respondents were to make the full balance payment within one month of the said agreement registered on 24.07.2012. Thereafter, as stated the Complainants/ Respondents paid Rs. 11 Lakhs, making the total payment of Rs.19,51,000/-. While they had also issued two cheques for Rs.2 Lakhs each dated 07.03.2013 and 17.05.2013, both were dishonoured. As a sequel, the Appellant, vide email dated 09.08.2013 notified the Complainants/Respondents that, as per the agreement dated 24.07.2012, the Complainants/ Respondents were to pay the full consideration amount within one month. The same was continuously defaulted. Even the Post Dated Cheques bounced and they are avoiding their notices and calls. Thus, the Appellant canceled the agreement.

In addition, the Appellant had also notified vide letter dated 09.01.2013 to the Complainants/ Respondents inter-alia stating that, as per clause 44 of the said agreement between the parties, full payment was to be paid within one month of registering the subject agreement, failing which the agreement will come to an end automatically and their investment will be refunded. The Complainant/ Respondent agreed to this condition and also not to object anywhere to the resale after their payment is received back from the builder. Thus, the particular Flat No. 5 is free and the Complainants/ Respondents do not have any title rights on it. They were also requested by the OP to collect their investment. Further, the OP published the cancellation of the sale agreement in the newspaper dated 28.11.2013.

In terms of para 2 at page 3 of the contract between the parties dated 24.07.2012, certain payment of installments basis on progress of construction is indicated. However, this stipulation is of limited relevance as the construction of Krishna Vihar Complex was already completed by then and the Complainants/ Respondents were in-fact residing at Flat No. 703 of the same complex. Therefore, this is a case where the Complainants/ Respondents had not paid the dues to the Appellant/OP as per the agreement between the parties and the cheques issued by them were dishonoured due to lack of sufficient funds. This fact has also been admitted by the Complainants/ Respondents themselves in the Complaint that the cheques were dishonoured due to money crunch. In the absence of payment of the entire amount due within the time prescribed as well as bouncing of two cheques, the Appellant terminated the said sale agreement.

Therefore, it cannot be stated that there has been any deficiency of service on the part of the Appellant/OP. It is the admitted position of the Complainants/Respondents that complete payment was not made and that two cheques have in-fact bounced. Therefore, the OP was well within its right to cancel the booking of the unit so allotted on account of their failure to abide to the payment. The OP admitted its liability refunding the amount paid.

In view of the foregoing, this is a case wherein the Complainants/Respondents have not complied with the terms of the agreement. Consequently, the same was cancelled by the Appellant/Opposite Party and duly notified. Therefore, the order of the learned State Commission dated 02.08.2019 is not sustainable and the same is, therefore, set aside.

Considering the facts and circumstances of the case, including the fact that the Complainants/Respondents have paid Rs.19,51,000/- to the Appellant/Opposite Party, the following directions are issued:

ORDER

The Appellant/Opposite Party shall refund the amount of Rs.19,51,000/-(Rs. Nineteen Lakhs Fifty One Thousand Only) to the Respondents/Complainants, along with simple interest @ 9% per annum from the respective dates of deposit till the date of payment, within a period of one month from the date of this order. In the event of default, the amount payable shall carry interest @ 12% per annum from the date of expiry of one month till the realization of the entire amount.

Consequently, the instant First Appeal No. FA/1989/2019 stands disposed of. All the pending Applications, if any, also stand disposed of. There is no order as to costs. The statutory amount deposited by the Appellant, if any, may be refunded after due compliance of this Order.