BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE DR. SADHNA SHANKER, MEMBER

For the Appellant                Mr Sanjoy K Ghosh, Advocate (VC) 

For the Respondent              Mr Bharat Swaroop Sharma, Advocates

ORDER

PER SUBHASH CHANDRA

1.      This appeal under Section 19 the Consumer Protection Act, 1986 (in short, the “Act”) is directed against the order dated 15.03.2018 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata in Complaint no. 419 of 2014 allowing the complaint and directing the appellants to jointly and severally pay the respondent Rs 13,87,645/- with interest @ 8% p.a. from 15.06.2008 till realization and to handover possession letter, authenticated copy of the sanctioned plan and Completion Certificate of the subject premises within 30 days along with litigation expenses of Rs 10,000/- within 30 days failing which with interest @ 8% p.a. till date of payment.   

2.     We have heard the learned counsel for the parties and perused the records. IA 10852 of 2023 dated 29.08.2023 seeking to bring on record the legal heirs of the respondent, Smt Rama Devi, who had since expired, was allowed on 13.09.2023 and the amended Memo of Parties taken on record.

3.     The relevant facts of the case, in brief, are that the late respondent was the owner of premises at 133, New Santoshpur, PS Purba Jadavpur, Kolkata 700075 (District South 24 Parganas) within the local limits of Kolkata Municipal Corporation (KMC). On 05.07.2006 a Development Agreement was entered into by her with the appellants regarding construction of a ground plus 3 storied residential building comprising 8 flats with car parking spaces to be executed by the appellant who is a builder. Flat No. F3 admeasuring 710.90 sq ft along with one car parking space was allotted to the respondent. The respondent was entitled to 40% of the sanctioned area or 2436.60 sq ft inclusive of Flat F3 and the balance of 1742.70 sq ft to be monetized at the average sale price of the other flats and to be provided the Completion and Occupancy Certificates from KMC. In the event of failure to do so, the respondent was entitled to Rs 10,000/- per month. The respondent executed a General Power of Attorney (GPA) in favour of the appellants to enter into an Agreement for Sale in respect of 1742 sq ft and to deposit the sale proceeds in her bank account. Construction was to be completed within 18 months from the date of the sanctioned plan which was obtained on 16.12.2006, i.e. by 15.06.2008. According to the respondent the project was delayed by the appellants and therefore a consumer complaint was filed before the State Commission on 27.11.2008 alleging deficiency in service and unfair trade practice. This complaint came to be decided on contest in favour of the respondent as per the impugned order which is the subject of this first appeal filed by the appellants.

4.      On behalf of the appellant it was submitted that a Development Agreement was entered into between the parties and a sum of Rs 1,25,000/- was paid to the respondent by cheque and cash (Rs 25,000/-) on 04.11.2005 and 0.07.2006 when a Memorandum of Understanding was signed. Thereafter Rs 10,00,000/- on 17.12.2008 and Rs 5,00,000/- on 31.03.2009 was paid by the appellants to the respondent. A GPA was executed in favour of Susanta Mondal, a partner of the appellants. The appellants obtained a sanctioned building plan from the KMC vide BP No. 572/XII/06-07 dated 16.12.2006 and executed the project for which the KMC issued a Completion Certificate dated 27.11.2008. Appellants sent the same with a Possession letter dated 01.12.2008 in respect of Flat F3 to the respondent who requested for some additional works as ‘up-gradation’ and thereafter took possession on 26.07.2009. As the payment for the additional works was not made by the respondents, appellants issued a letter dated 01.10.2009 for the same which was replied to by respondent incorporating various allegations vide letter dated 27.10.2009. These were replied to by appellants on 16.11.2009. However, respondents demanded a copy of the Completion Certificate on 05.01.2012. One of the purchasers, Ganesh Chandra Paul, filed a consumer case (No. 179 of 2010) against the respondent which was ordered against the respondent and thereafter an Execution Application (No. 1 of 2013) was also filed which was compiled with by the respondent. It is contended that the respondent concealed all these facts before the State Commission.

5.     The grounds taken for this appeal are that (i) the State Commission failed to appreciate the terms of the Development Agreement as per which the appellants had complied with the obligations imposed on them since the flat allocated to the share of the respondent stood handed over to her (with additional items of work requested for) and as such there was no deficiency in service on part of the appellants; (ii) the State Commission also erred in incorrectly interpreting the Development Agreement under “The Owners Allocation” which was stated to be 40% of the total sanctioned residential area 2453.6 sq ft and one flat (No. F3) admeasuring 710.90 sq ft together with undivided proportionate share and interest in land and common areas with one car park (194.162 sq ft) apart from which the appellant was required to pay the owner the average of the sale proceeds of the price of the flats within 7 days of the Occupancy/Completion Certificate from the KMC, apart from the part payment of the consideration of Rs 1,25,000/- partly by cheque and cash; (iii) according to the appellant, it had complied with these obligations and had also paid Rs 16,25,000/- in full compliance and the State Commission had erred in adjudicating in favour of the respondent who had no cause of action and the complaint had been filed on 19.12.2014 whereas  respondent’s claim dated 27.10.2009 had been rejected on 16.11.2009 by the appellant and was therefore much after the prescribed period of limitation under Section 24A of the Act.

6.      Per contra, the contention of the respondent is that she has a continuing cause of action as neither the completion/occupation certificate had been provided to her by the appellant. It was also contended that the appellant was required, under the Development Agreement, to pay the average price at which the flats had been sold for 1742.7 sq ft and that while a sum of Rs 1,25,000/- had been received, it was not part of the sales proceeds as per the Development Agreement. It was contended that she was entitled to payment @ Rs 1656.90 per sq ft which was the average of the sale price of the flats which worked out to Rs 28,87,645/-. In addition, the appellants were liable to pay a demurrage @ Rs 5,000/- per month for the delay in the construction which, for the delay of 15 months, amounted to Rs 75,000/-. It was also contended that the appellants were liable to pay @ Rs 10,000/- per month for the delay in obtaining the Completion Certificate from the KMC which worked out to Rs 6,10,000/-. It was also stated that the appellants had made part payment of Rs 15,00,000/- towards sale proceeds of flats. It was submitted that the cause of action arose on 05.07.2006 when the Development Agreement was entered into and thereafter on various dates when requests and representations were made to the appellants to comply with the Agreement and is continuing as the Occupancy Certificate has not been handed over. The contention of the appellants that the complaint was barred by limitation is opposed in light of this Commission’s order in Manoranjan Singh Kanak Vs. Baba Builder & Anr., (2018) (4) CPR 614 NC. It was also argued, on the basis of Kiran Joshi Vs. SMV Agencies Pvt. Ltd., 2018 (3) CPR 21 (NC) that cause of action will continue till possession was complete in all respects, which includes handing over of Completion Certificate, and is delivered to the purchaser. Reliance was placed on the judgment of the Hon’ble Supreme Court in Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd., (2008) 10 SCC 345 wherein it was held that a builder is required under the law to hand over a copy of the Completion Certificate along with facilities like water, electricity and drainage and merely applying for a certificate does not absolve it of its liabilities. In the instant case, it was also contended that facilities of Water Supply and House Drainage connection had also not been completed.  

7.      The State Commission in Complaint No. 419 of 2014 has held that:

As per terms of agreement the OPs were supposed to give letter of possession and Completion Certificate within 7 days from the date of obtaining Completion Certificate. The OPs have obtained the Completion Certificate on 27.11.2008. Therefore, to overcome the situation OPs have manufactured the letter dated 01.12.2008 (Annexure A to WV).

The OP have adopted an unfair means by not producing the sale deeds in respect of seven flats to the buyers as per authority given by the complainant. The OPs by their letter dated 01.10.2009 have mentioned the sale proceeds calculated at the rate Rs 1227/- per sq ft and the same comes to a total of Rs 21,38,438/-. The OPs have claimed additional expenses of Rs 26,06,396/- but miserably failed to show any authority given by the complainant for any extra work. Even by that letter, the OP have admitted that the complainants are entitled to Rs 2,47,042/- but the same has also not been paid.

The OP developer may have several allegations against the landowner but he cannot be the Judge of his own cause and stall the payments with transparent manner. The OP have tried to convince that they have paid Rs 16,25,000/- to the complainant but on perusal of the agreement it would reveal the amount of Rs 1,25,000/- was paid prior to execution of Development Agreement and it has no bearing with the sale proceeds of seven flats.

The evidence on record clearly indicates that the OP tried to suppress the truth. The OP did not take any step to produce the authenticated copy of deed of conveyance in respect of flats and car parking spaces of the said premises to ascertain the aggregate average rate of the sanctioned area all the seven flats according to which complainant is entitled for sale proceeds of 1742.7 sq ft. of the sanctioned area. On the contrary, in order to show her bonafide, complainant has filed all the deeds of conveyance executed by the OP in favour of different buyers of the flat and has been able to substantiate that she is entitled to Rs 28,87,645/ @ Rs 1656.90 per sq ft for 1742.7 sq ft of the total sanctioned area. However, when complainant is already in possession of her flat number F3 on the second floor and she has not made it clear in her complaint when she took possession of her allocated flat, beside the amount of Rs 28,87,645/- minus Rs 15,00,000/- already paid, she is entitled to Rs 13,87,645/- along with interest thereon as per prevalent bank interest i.e. @ 8% from the stipulated date of delivery of possession i.e. from 15.06.2008 (expiry of 18 months from the date of obtaining sanction letter) till its realisation.

The evidence on record clearly indicates that on 05.07.2006 the development agreement was executed and sanctioned building plan was obtained from the KMC on 16.12.2006. As per terms of agreement, the developer was under obligation to complete the construction within 18 months but the developer could obtain completion certificate on 27.11.2008 which indicates that the OPs were deficient in rendering services within the meaning of section 2(1)(g) read with section 2(1)(o) of the Act.

In view of the above, the complainant is entitled to some relief. In my view, an order directing the OPs to pay a sum of Rs 28,87,645/- calculated @ Rs 1656.90 per sq ft X 1742.7 sq ft minus Rs 15,00,000/- = Rs 13,87,645/- along with simple interest thereon @ 8% p.a. from 15.06.2008 till its realisation will meet the ends of justice. As the situation compelled the complainant to lodge complaint, complainant is also entitled to litigation cost which I quantify at Rs 10,000/-. The complainant is also entitled to an order of possession letter, authenticated copy of the sanctioned plan and completion certificate in respect of the subject premises.

8.      From the foregoing it is manifest that the Development Agreement was clear in providing that the appellants would share 40% of the project area with the respondent and that apart from Flat No. F3 admeasuring 710.90 sq ft, the balance area of 1742.7 sq ft would be monetized at the averaged rate of sale of the other flats for which a GPA was granted to the appellants by the respondent. According to the evidence brought on record before the State Commission, the average rate of sale proceeds was Rs 1656.90 per sq ft and therefore the respondent claims Rs 28,87,645/- on this account. The State Commission has held that Rs 15,00,000/- of this amount stands paid and has calculated Rs 13,87,645/- as the amount payable. The appellants contend that the average rate per sq ft of sale is Rs 1227/- but have not led evidence to justify the same. The State Commission has therefore rightly concluded that the rate of Rs 1656.90 per sq ft contended by the respondent, which is based on the registered sale deeds of the flats sold, is justified. However, the Agreement, under “Owner’s Allocation”, had clearly recorded that Rs 1,25,000/- as part payment of the consideration was being paid, in cheque and cash. The respondent has not denied receiving this although her contention is that it was not related to the payment against the 1742.7 sq ft that was to be paid for after monetization at the averaged rate of sale of flats. Since, however, there is no other consideration agreed to under the Development Agreement, the contention of the respondent in this regard cannot be considered. The State Commission has erred in considering only Rs 15,00,000/- as the amount received. It should rather be Rs 16,25,000/-.  

9.      Further, as is evident from the record, the execution of the project was delayed beyond the stipulated date of completion by nearly 15 months. However, it is also manifest that the respondent accepted possession of his flat on 26.07.2009 after the appellant completed certain additional features to the flat at the request of the respondent. Therefore, while compensation for the delay in handing over of possession is claimed by the respondent, it is now not open to him to contend that the completion certificate was delayed and that he should be compensated for the same @ Rs 10,000/- per month. The appellant has also brought the Completion Certificate dated 27.11.2008 on record. It is therefore not an issue that the same has not been issued by the KMC. In fact, it was also available prior to the taking over of possession of the flat by the respondent.

10.    In view of the foregoing, the order of the State Commission under challenge is liable to be partially upheld. Accordingly, the appeal is allowed and the order of the State Commission is upheld with the following modifications:

(i)     Appellants are directed jointly and severally to pay the respondent an amount of Rs 12,62,645/- with interest @ 8% p.a. from 15.06.2008 within 8 weeks of this order, failing which with interest @ 10% p.a.;

(ii)    Appellants are also directed to hand over the relevant documents, viz., copy of the building sanction plan, completion and occupation certificates and possession letter within 30 days of this order;

(iii)    Litigation cost of Rs 10,000/- awarded by the State Commission is enhanced to Rs 25,000/- and directed to be paid along with the amount directed at (i) above.

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