DR. SADHNA SHANKER, MEMBER

1.       The present appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) by M/s Hede Consultancy Co. Ltd. and M/s Phoenix Township, assailing the Order dated 27.08.2013 passed by the State Consumer Disputes Redressal Commission, Goa (hereinafter referred to as the ‘State Commission’) in complaint no. 23 of 2012 whereby the complaint was partly allowed.

2.       We have heard the learned counsel for the appellants and the learned counsel for the legal heirs of respondent No. 1 (hereinafter referred to as the ‘complainants’) and perused the record, including inter alia the impugned order dated 27.08.2013 and the memorandum of appeal.

          None is present for respondent no. 2, M/s Haven Developers Pvt. Ltd. (hereinafter referred to as the ‘developer’)

3.       The facts, in brief, are that the original complainant, Mr. Domingos Estevam Menezes, vide an agreement dated 07.04.1995, agreed to purchase a flat identified as S-5 on the second floor in the building no.2, in the project under construction known as 'Angeline Apartments' situated in the property surveyed under No.226/9 of Candolim Village, Barde, from the developer. The total consideration of the subject flat initially was Rs. 3,72,000/- and later the complainant paid a sum of Rs. 5,35,500/- on account of increase of area by two balconies of the said flat to the developer. As per the agreement, the said flat was to be delivered to the complainant on 06.04.1997. It is further stated that the developer vide an agreement dated 25.01.1999 assigned to M/s. Phoenix Township Ltd., the appellant no. 3, the property rights in various flats/studios in the said project and including their obligations to sell the flats/studios. It is further stated that by another agreement dated 22.05.1999 styled as an agreement to lease, the complainant agreed to grant a lease of the flat for a period of 15 years, commencing from 01.01.1999 at an annual lease rent of Rs.22,000/- payable in two equal installments for 5 years and thereafter for every block of 5 years with an increase of 5%.

      It is the case of the complainant that the developer and M/s Hede Consultancy Co. Ltd. and M/s Phoenix Township Ltd. were fully aware of the fact that the complainant was employed in Dubai and ever since 06.04.1997 the complainant has been constantly reminding all of them and they assured that the flat would be handed over as soon as it was ready. It is stated by the complainant that the flat has been fraudulently transferred between the developer and M/s Phoenix Township Ltd. and the flat in question is being operated as an international hotel. It is further stated that the said flat has not been handed over to the complainant despite the assurances and promises made. It is further alleged that the complainant has been cheated by making use of his flat as an international hotel.

It is the case of the complainant, that by legal notice dated 16/07/2012, the complainant demanded from the opposite party physical possession of the flat but appellant no.3 replied to the said notice and disputed the liability by trying to push the same on Respondent No.4 herein and Respondent No.2 failed and neglected to acknowledge the receipt of the said notice dated 16/07/2012.

4.   Being aggrieved, the complainant filed a complaint before the State Commission seeking a direction to the developer, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. to jointly and severally hand over the possession of the said flat to the complainant along with payment at the rate of Rs.5,000/- per day from 06.04.1997 till the date of handing over the said flat to the complainant and interest at the rate of 18% per annum on amount of Rs.5,35,000/- from respective dates of receipt by the developer, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. till full and final payment to the complainant. It is also prayed that the developer, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. be restrained from using / interfering with the flat in any manner.

5.       M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. has filed the written statement raising the preliminary objection that the complaint is hopelessly barred by time and there is no privity of contract between the complainant and M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. therefore, the complainant has no locus to file the complaint against them. It is further stated that the complainant had not paid the total sum for the flat in question and M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. are not liable for handing over the possession of the said flat to the complainant.

6.       The State Commission, vide its order dated 27.08.2013, partly allowed the complaint and directed the developer, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. to hand over the possession to the complainant of the suit flat within 30 days. It also directed M/s Hede Consultancy Co. Ltd. and M/s Phoenix Township Ltd. to pay compensation of Rs.22,000/- per year from 06.04.1997 for the first 5 years and Rs.23,100/- per year for next 5 years and Rs.24,255/- per year for the next  5 years till the possession of the suit flat is handed over to the complainant with costs of Rs.5,000/- payable by the M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. to the complainant. The State Commission also awarded compensation of Rs. 1 lakh towards disappointment, frustration, mental stress etc.

7.       M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. have filed the present appeal before this Commission seeking setting aside the impugned order dated 27.08.2013 of the State Commission.

8.       Before us, learned counsel for the appellants, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. argued that in terms of Clause 5 of the agreement dated 07.04.1995, the possession was to be handed over by 06.04.1997 but the same was not handed over till that date. Therefore, the cause of action for filing the complaint had arisen on 06.04.1997 and the complaint ought to have been filed within after 2 years from the promised date of possession whereas the complaint was filed in the year 2012 i.e. after about 15 years and by any yardstick, the huge delay could not be condoned under the prescribed legal parameters. The date of delivery of possession of the flat was fixed on 06.04.1997 and being so the period of limitation of two years fixed by Section 24A of Consumer Protection Act, 1986 has to be reckoned from the said date. Accordingly, the complaint is clearly barred by limitation. He further argued that the complainant has not come up with sufficient cause for not filing the complaint within the period of two years from the date on which the possession ought to have handed over by the developer, M/s Hede Consultancy Co. Ltd. and Phoenix Phoenix Township Ltd. In these circumstances, the complaint ought to have been dismissed as barred by limitation by the State Commission. It is also submitted that despite the alleged cause of action of 1997, or at the highest 1999, the complaint came to be filed in the year 2012 and no documentary or other evidence has been placed on record by the complainant indicating the activity on his part in the intervening period to show that these was continuing cause of action. In support of their contentions, the appellant has placed reliance on following decisions:

(a).    SBI vs. B.S. Agricultural Industries AIR 2009 SC 2210.

(b).    Union Of India and Anr. vs. British India Corporation Ltd. and Ors.

(2003) 9 SCC 50.

(c).    Haryana Urban Development Authority Vs. B.K. Sood (2006) 1

SCC 164.

(d).    Gannami Anasuya and Ors. vs. Parvatini Amarendra Chowdhary

and Ors. (2007) 10 SCC 296.

9.   Further, it was submitted that there is no privity of contract between the complainant and the appellants as the appellants have not received any amount from the complainant. It was further submitted that the agreement to assign dated 25.01.1999 was restricted to only 11 flat purchasers mentioned therein and not to the complainant as the complainant’s name does not figure therein. Hence, the deed of indemnity does not apply to the complainant’s case at all and it was the developer (M/s Haven Developers Pvt. Ltd.) who is alone liable for fulfillment of specific performance of contract  with the complainant. It is further submitted that the State Commission failed to consider that as on date there was no flat available at the project site and the flat in question has been converted into a hotel property and in fact in contemporaneous proceedings before this Commission in terms of Appeal No. 820 of 2003 decided on 06.02.2006, this Commission has directed that the complainant be given principal amount with interest and not flats. It was also submitted that apart from that State Commission has traversed beyond the relief claimed by granting compensation for disappointment, frustration and mental stress etc., without any such claim.

10.     The counsel for the complainant countered the appellants’ claim and argued that the only submission of the appellants is that the complaint is barred by limitation. Despite being party to the previous litigation which came to be finally decided through F.A. No. 820 of 2003 and F.A. 858 of 2003 which came to be decided by this Commission, the appellants here are trying to wriggle out the obligations undertaken by them. All decisions including that from the Hon'ble Apex Court have till date confirmed that the cause of action continues till the delivery of the premises by the developer/builder.

11.  Further, it was argued that on 08.3.2019, on account of the offer from the appellants to make payments to the complainant to settle the present appeal, this Commission took pains to calculate the amount that would be due to the complainant and the amount arrived at was Rs.58,84,000/- while what was suggested was that the entire controversy could be settled at Rs.50,00,000/-. However, that settlement did not come through.

12.     The question which falls for our consideration is whether there is deficiency in service on the part of the appellants.

13.     It is not in dispute that the complainant and the developer entered into an agreement and the possession of the flat in question was to be handed over by 06.04.1997. It is also not in dispute that the developer has received the amount of Rs.5,35,500/- against the flat and has not been able to hand over the physical possession of the flat to the complainant. It is stated by the complainant that the flat has been fraudulently transferred between the developer and M/s Phoenix Township Ltd. and the flat in question is being operated as an international hotel. It is seen in the written submissions of the complainant which reads as follows:

8. “In the meantime, by agreement dated 25.1.1999, M/s Haven Developers assigned the rights of the various flats to M/s Phoenix Townships Ltd.

9. By discharge letter dated 15.3.2000, M/s Hede Consultancy Ltd confirmed having received a sum Rs.10,00,000/- from M/s Haven Developers Ltd for payment to the Complainant herein and another two purchasers.

10. By another discharge letter dated 15.3.2000, M/s Hede Consultancy Ltd confirmed having received a sum Rs.2,70,000/- from M/s Haven Developers Ltd for payment to the Complainant herein

11. By letter of Indemnity dated 4.5.2000 M/s Phoenix Townships Ltd., confirmed that by agreement dated 25.1.1999, the entire project Angeline Apartments constructed by M/s Haven Developers has been taken over by M/s Phoenix Townships Ltd., along with all the rights and liability of M/s Haven Developers.

12. All these documents executed by Haven Developers with the M/s Hede Consultancy Ltd., and Phoenix Townships Ltd., were executed clandestinely and fraudulently without any knowledge to the complainant herein.”

14.  It is also seen that the State Commission has given a finding that “the complainant was taken for a ride by the said Dr.Prafulla R. Hede by not providing to him a copy of the said agreement dated 22.05.1999.” It is also seen that the assignment agreement only deals with 11 flat holders and does not mention the complainant at all. The alleged deed of cancellation mentioned in the discharge letters as quoted above were not produced either before the State Commission or this Commission. The orders of the National Commission referred to by the State commission deal with only the 11 flat holders who are mentioned in the assignment agreement.

15. In case of City Union Bank Ltd. v. R. Chandramohan, (2023) 7 SCC 775 decided on 27.03.2023, it was held that complaint involving highly disputed facts cannot be decided by Consumer Commission. The relevant portion of the Order reads as under:

“14. The proceedings before the Commission being summary in nature, the complaints involving highly disputed questions of facts or the cases involving tortious acts or criminality like fraud or cheating, could not be decided by the Forum/Commission under the said Act. The “deficiency in service”, as well settled, has to be distinguished from the criminal acts or tortious acts. There could not be any presumption with regard to the wilful fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance in service, as contemplated in Section 2(1)(g) of the Act. The burden of proving the deficiency in service would always be upon the person alleging it.”

16.  In view of the above, from the facts and circumstances it is seen that the allegations in the complaint are of fraud and cheating, which cannot be adjudicated in  summary proceedings under the Consumer Protection Act, 1986 as they require indepth investigation, deeper probe, requiring parties to adduce elaborate evidence and cross examination of each others witnesses and can be adjudicated only in civil suit by following the exhaustive and fair trial procedure.

17.     In the result, the appeal is allowed and the Order dated 27.08.2013 of the State Commission is set aside. Consequently, the complaint is dismissed. The complainants are at liberty to avail their remedy for redressal of their grievances before the court of competent jurisdiction, in accordance with law. All pending I.A.s, if any, shall stand disposed of.