Soumitra Kumar Shaw vs Lokhandwala Kataria Constructions Private Limited & Anr

Subhash Chandra, Presiding Member

This appeal under Section 19 of the Consumer Protection Act, 1986 (in short, the ‘Act’) challenges the order dated 20.06.2019 of the State Consumer Dispute Redressal Commission, Maharashtra, Mumbai (in short, the ‘State Commission’) in Case No. RBT/CC/19/326 in Consumer Complaint no. 162 of 2014 holding that the State Commission lacked pecuniary jurisdiction in the matter and that the complaint being a money suit did not lie before it.

The facts of the case, according to the appellant in brief, are that he had booked a flat in the residential project “Minerva” situated partly on Plot Nos. C.S. No. 1 & 2, Lower Parel Division, J.R. Boricha Marg, Mahalaxmi, Mumbai 400011 promoted by the respondent and made a payment of Rs 21,00,000/- by way of cheque dated 01.04.2012 on the basis of a verbal agreement. The respondent sent an email dated 23.05.2012 captioned as a “Reminder” to make the payment of Rs 2,30,65,000/- for Flat No. 5001A At Lokhandwala Minerva acknowledging the payment of Rs 21,00,000/- made earlier. The appellant issued a cheque dated 29.05.2012 for Rs 1,79,00,000/- to be handed over subject to the Agreement of Purchase incorporating the terms and conditions including specifications being provided. In view of the Agreement not being provided, the cheque though issued was not encashed due to the appellant issuing “Stop Payment” instructions. Thereafter, the respondent issued a ‘Notice for flat Cancellation’ by mail dated 12.07.2012 indicating that the amount of Rs 21,00,000/- paid would be forfeited if the amount demanded was not paid. Despite the appellant writing to the respondent on 23.07.2012 seeking the Agreement as a precondition to payment, the respondent on 09.08.2012 informed the cancellation of the booking and forfeiture of the amount of RS 21 lakhs deposited.

On 25.04.2014 a consumer complaint (No. CC/14/162) was filed by the appellant before the State Commission which was disposed of on contest by order dated 06.05.2016 on the ground that the Commission lacked jurisdiction to entertain the complaint as no possession had been sought and only refund of Rs 27,00,000/- claimed. In First Appeal No. 793 of 2016 filed before this Commission vide order dated 18.03.2019 held that the appellant was a ‘consumer’ under the Act and set aside the order of the State Commission while remanding the matter for fresh adjudication on merits. The State Commission, in case renumbered as RBT/CC/19/326 (in CC/14/162), vide order dated 20.06.2019, again held that the State Commission lacked jurisdiction and directed that the complaint be filed before the appropriate consumer forum. This order is impugned before us on the grounds that the State Commission’s order was erroneous since this Commission had already held that the appellant was a ‘consumer’ under the Act. It is also challenged on the ground that the respondent no. 1 had contended in FA 793 of 2016 that the State Commission lacked pecuniary jurisdiction in view of the total consideration of sale being Rs 7,19,00,000/-. The appellant is before this Commission on the grounds that the State Commission failed to appreciate the pleadings and documents filed before it and to adjudicate the main issue of whether the appellant was entitled to refund of the amount deposited by it with the respondent no. 1 and has prayed as under:

In the facts and circumstances it is prayed that this Hon’ble National Commission may kindly be pleased to allow the present appeal and set aside/quash/modify the impugned order of the Learned State Consumer Disputes Redressal Commission, Maharashtra or pass order/orders or further orders as your Lordships may deem fit and proper.

We have heard the learned council for both the parties and perused the material on record, including the written notes of arguments filed by both parties.

From the chequered history of this case it is evident that State Commission had initially considered the appellant to not be a ‘consumer’ under the ambit of section 2(1)(d) of the Consumer Protection Act, 1986 on the ground that there was no agreement between the parties and held that the dispute was a money suit which was beyond the ambit of the Act. It thereafter held that the pecuniary jurisdiction of the State Commission precluded it from adjudicating in the matter on the ground that the value of the flat was Rs 7,19,00,000/- which was beyond its pecuniary jurisdiction. The matter has therefore been hanging fire since 2014.

From the uncontroverted material on record it is evident that the appellant had deposited Rs 21,00,000/- towards a flat booked in the respondent’s project, “Minerva”. This is evident from the email dated 23.05.2012 acknowledging the receipt of Rs 21,00,000/- towards the flat in the project and requesting payment of the balance. The status of the appellant as a ‘consumer’ qua the respondent is therefore clearly evident and is in fact strengthened on the basis of further correspondences with regard to the forfeiture of this amount and cancellation of the allotment of the flat, even though there was no formal Agreement entered into between the parties. The view of the State Commission that the complaint before it was a money suit which could not be entertained under the Consumer Protection Act is therefore, erroneous and cannot be sustained. The appellant’s status as a consumer’ has also been upheld vide this Commission’s order dated 18.03.2019 in FA no.793 of 2016 which has not been challenged.

It is also evident that the sale consideration of the flat in question was Rs 7,19,00,000/- which is beyond the pecuniary jurisdiction of the State Commission. In Ambarish Kumar Shukla and 21 Ors vs Ferrous Infrastructure Pvt. Ltd., I 2017 CPJ 1 (NC)  this Commission had held as under:

pecuniary jurisdiction needs to be determined on the basis of the total value of goods and services in addition to the amount of compensation claimed.

[ Emphasis added ]

This position was affirmed in Renu Singh vs Experion Developers Pvt. Ltd., CC no.1703 of 2018 which reiterated the view with regard to pecuniary jurisdiction of Consumer fora being reckoned as an aggregate of the claim including the value of the product or service in question. Therefore, as regards the finding of the State Commission that it lacks pecuniary jurisdiction in the matter, no fault can be found.

From the foregoing, it is manifest that the appellant had paid Rs 21,00,000/- to the respondent no. 1 in order to book a flat in its project “Minerva”. Subsequent payment was withheld in view of the fact that the Agreement for Purchase was not executed between the parties. The appellant cannot be faulted for not making the payment and seeking refund in the absence of a document setting down the terms and conditions and specifications of the flat in question as per the industry norm. The contention of the respondent that the appellant was not a ‘consumer’ as per the Act since he was a resident of Kolkata and had invested in the flat for speculative purposes cannot be accepted in view of the fact that it is for the respondent to establish that the appellant was dealing in real estate as held in this Commission’s judgment in Kavita Ahuja vs Shipra Estate Ltd. and Jaikrishan Estate Developers Pvt. Ltd. and Ors., I (2016) CPJ 31 (NC). This onus of proof has not been discharged by the respondent. It is therefore evident that the respondent has been deficient in service under section 2 (1) (g) of the Act in not executing the Agreement for Purchase and of unfair trade practice under section 2 (1) (r )  in forfeiting the amount received by it.

In view of the discussion above, we find merit in the appeal. The appeal is accordingly allowed with the following directions:

(i) respondent no. 1 is directed to refund the entire amount of Rs 21,00,000/- received by it towards booking of the flat in its project “Minerva” without any deduction along with simple interest @ 9% p.a. from the date of deposit within 4 weeks of this order, failing which the rate of interest will be 12% p.a. till realization;

(ii)  respondent shall also pay the appellant litigation cost of Rs 1,00,000/-.

Pending IAs, if any, stand disposed of with this order.