Full Judgment Text
‘REPORTABLE’
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1065 OF 2021
M/S JANPRIYA BUILDESTATE PVT. LTD. Appellant(s)
VERSUS
AMIT SONI & ORS. Respondent(s)
WITH
CIVIL APPEAL NO. 3768 OF 2020
CIVIL APPEAL NO. 3770 OF 2020
J U D G M E N T
K. M. JOSEPH, J.
1. These appeals are against the common judgment.
2. We take Civil Appeal No. 1065 of 2021 as the lead
case.
3. On 09.04.2011, the appellant has purportedly entered
into a collaboration agreement with Uppal Housing Private
Limited and Umang Realtech Private Limited for development
Signature Not Verified
Digitally signed by
Nidhi Ahuja
Date: 2021.12.18
11:16:58 IST
Reason:
of a group housing project. The appellant owns the land on
which the project was contemplated. Following the
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collaboration agreement, the appellant also figures as a
party in agreement which is styled as a tripartite
agreement. The parties to the tripartite agreement are
apart from the appellant, the buyer and the developer. It
would appear that after the agreement was entered into, a
project commenced but it could not be completed as
contemplated. This led to a complaint being filed before
the National Consumer Disputes Redressal Commission
(hereinafter referred to as ‘NCDRC’ for brevity) under the
Consumer Protection Act, 1986 (hereinafter referred to as
‘Act’ for breavity). This complaint has been allowed by the
NCDRC.
4. The complaint of the appellant is that the NCDRC has
erred in visiting the appellant also with liability under
the Act. It is the case of the appellant that under the
collaboration agreement and the tripartite agreement, the
appellant has not undertaken any liability qua the consumers
viz., the flat buyers. It is the case of the appellant that
a perusal of the collaboration agreement and the tripartite
agreement would make the following position clear.
The appellant was to contribute the land on which the
project was to come up. The developer, under the
collaboration agreement and the tripartite agreement, was to
undertake and complete the project. As between the
appellant and the buyer, there is no other obligation which
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is undertaken, except, undoubtedly, such obligations as
would be necessary for the purposes of conveying title in
the land.
5. The contention of the buyers, on the other hand, would
appear to be that being a confirming party and having regard
to the terms of the agreement, the appellant was rightly
made liable by the NCDRC.
6. We may notice the findings which have been entered
into by the NCDRC in regard to the appellant which was the
II opposite party:
“23. Now we address ourselves to the liability of the
second Opposite Party. Learned counsel for the second
Opposite Party argued that the second Opposite Party
is only the owner of the land and an Collaboration
Agreement entered into between both the Opposite
Parties according to terms of which the rights to
sell, transfer and receive payments has been assigned
to the first Opposite Party and therefore the second
Opposite Party cannot be made liable to refund any
amounts received. The contention of the learned
counsel that the second Opposite Party should be
deleted from the array of parties and no liability can
be fastened upon them is totally unsustainable,
keeping in view that the Apartment Buyers’ Agreement
which is subsequent to the Collaboration Agreement is
a Tripartite Agreement signed by the first Opposite
Party, the second Opposite Party and the Complainant.
It is pertinent to note that the second Opposite Party
was defined as the ‘Confirming Party’ in the Apartment
Buyer’s Agreement dated 17.08.2012, it is relevant to
mention that a consideration of Rs.24,81,00,000/-
towards non-refundable security deposit was paid by
the first Opposite Party to the second Opposite Party
towards the subject land. For better understanding of
the revenue shared by both the Opposite Parties,
Clauses 4.1 of the Collaboration Agreement are
reproduced as hereunder:
“4.1 In consideration of the contribution of the
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Project Land by the Land Owner for execution of
the Project and granting the rights to the
Developer for development of the Project Land
and the Developer bearing the costs, expenses
and responsibility of execution of the Project
including discharge of the respective
obligations by the Parties under this Agreement
and UHPLand the Land Owner agreeing to the
suppression of the Original Agreement, the Gross
Revenue received/realized shall be shared
between the Parties in the ratio mentioned
herein below:
1. Land Onwer: 12.5%
2.<><>
At the cost of repetition, having signed the
Tripartite Agreement as a Confirming Party and when
the Collaboration Agreement is mentioned in the
Apartment Buyers’ Agreement, we are of the considered
view that both the Opposite Parties are jointly and
severally liable to pay the amounts received. Any
other arrangement is only inter se between the
Opposite Parties and shall not bind the Complainants.”
The NCDRC allowed the complaint and directed the
developer and the appellant to return the amount deposited
by the complainants with interest.
7. Now the time has arrived for a closer look at the
Collaboration Agreement. The relevant clauses would appear
to us to be the following:
“2.1 The Developer shall develop the Project on the
Project Land at its own costs and expense, comprising
of residential units/flats/group housing, etc., as may
be decided by the Developer, duly supported with
parking areas and Common Amenities and for services
like power supply, water supply, drainage and
sanitation, fire fighting facilities, security
systems, etc. in accordance with the sanctioned
layout/Building plans and compliance of Applicable
Laws.
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3.1 The parties have agreed to develop the Project on
the Project Land in collaboration where under:
(i) the Land Owner shall provide the vacant
physical possession of the Project Land free from
all encroachments to the Developer.
(ii) The Land Owner shall obtain the letter of
intent and license from the DTCP for development
of the Project on the Project Land at the
earliest;
(iii) The Developer, at its own cost and
arrangements, shall obtain all the Approvals
required after the license from the concerned
Departments/Authorities, for development of the
Project on the Project Land, including the
Additional Land, if applicable;
(iv) upon receipt of the requisite sanctions and
approvals, as may be required to commence the
construction work of the Project, the Developer
shall undertake construction and development of
the Project at its own cost and expenses and
development related risks on the Project Land in
accordance therewith and as per the terms and
conditions of this Agreement; and
(v) The Land Owner, UHPL and the Developer shall
share the Gross Revenue realized from the Project
in the ratio as provided hereinafter in this
Agreement.
3.8 Within 30 days from the date of execution of this
Agreement, the Land Owner shall execute the GPA in
favour of the Developer and its Representatives which
shall be in the form set forth in Annexure II hereto,
authorizing the Developer and its Representatives to
do all lawful acts and deeds necessary on their behalf
for the development of the Project, deal with the
Project Land in accordance with this Agreement and to
give effect to this Agreement. It is also agreed that
the Land Owner shall sign, execute and deliver all
papers, documents, deeds, letters, affidavits, no-
objection certificates, authorizations, undertaking
and take such other actions as may be required for
purposes of construction, development, marketing,
transfer and/or sale of the Project and as may be
requested by the Developer to consummate more
effectively the purposes of subject matter of this
Agreement.
5.1 In consideration of the Land Owner granting to the
Developer the rights to develop the Project Land
alongwith the rights to sell, lease, assign, alienate,
transfer, deal with or dispose off the Saleable Area
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constructed thereon under this Agreement, the
Developer shall pay a sum of Rs.1,50,00,000/- (Rupees
One Crore and Fifty Lakhs Only) per acre, which works
out to a total of Rs.24,81,00,000/- (Rupees Twenty
Four Crores Eighty One Lac only), to the Land Owner as
non refundable security deposit (“Security Deposit”).
The said Security Deposit shall be paid by the
Developer to the Land Owner on or before the receipt
of the License from the office of the DTCP.
6.1 The Developer agrees and undertakes to obtain all
the Approvals, including but not limited to Sanctioned
Building Plans, NOC from Ministry of Environment and
Forests, NOC from State Pollution Board, NOC from
Airport Authority required to develop the Project and
to develop the project on the Project Land in
accordance with the Approvals, the Applicable Laws and
in accordance with the terms hereof in a manner that
maximizes value for both Parties.
9.1 The land owner hereby confirm that:
(i) The Developer shall have the sole right to market,
allot, assign, transfer, let, lease or license the
entire or any part of the project to the prospective
buyers/transferees. The Land Owner shall provide full
co-operation and assistance in this regard and
undertake not to cause any interruption in the same.
(ii) The Land Owner hereby authorize the developer to
sign/execute sign register the tripartite/other
agreements on behalf of the Land Owners and the land
owners shall execute/register appropriate GPA in
favour of the developer providing such authorization
in respect hereof.
(iii) The Developer shall have the right to collect
and receive the gross revenues in the Project Account.
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1.1 The Parties hereby agree that the entire marketing
and sale of the Project shall be done by the
Developer. The Developer shall, in its sole and
absolute discretion, decide the name and branding of
the Project.
14.3 Development and sale of Project being
responsibility of the Developer, the Developer shall
be liable to indemnify and hold harmless the Land
Owner from and against any and/or all losses,
liabilities, claims, costs, charges, actions,
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proceedings or third party claims, damages, including
but not limited to, interest, penalties with respect
thereto and out-of-pocket expenses (including
reasonable attorneys’ and accountants’ fees and
disbursements) that have arisen against the Land Owner
due to any non-compliance of relevant statutes, laws,
bye-laws by the Developer in the course of development
of the Project. Further, the Developer alone shall be
responsible and liable for payment of all dues to its
workers/employees and statutory compliance of labour
law, rules and regulations as are in force or
introduced from time to time with respect to the
employment of personnel, payment of wages,
compensations, welfare, etc. and/or for any accident
or lack of safety resulting in injury or damage to
workmen, plant and machinery or third party. All such
claims and demands shall be settled and cleared by the
Developer only and no liability on this account shall
fall on the Land Owner.
17.1 No Partnership: The Parties have entered into
this Agreement on principal to principal basis and
that nothing stated herein shall be deemed to
construed as a partnership between them nor shall it
be construed as association of persons in any manner,
nor will the same bind them except to the extent
specifically stipulated herein.”
8. The obligations of the developer have been set out in
clauses 6.1 to 6.6. Thereafter, the obligations of the land
owner viz., the appellant, have been clearly articulated in
clauses 7.1 to 7.7. Clause 8.1 contemplates that subject to
Force Majeure conditions and due performance of their
obligations by the land owners, the Developer shall complete
the development of the project on the project land inter
alia within a period of four years from the date of receipt
of the sanctioned building plans with respect to the
project, subject to the grace period indicated. Article 11
provides for various representations and warranties which
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have been made by the appellant in its capacity as the land
owner.
9. Article 3 of the collaboration agreement provides for
the nature of the project broadly, viz., that the land owner
has to provide vacant physical possession of the land free
from all encroachments to the developer. The land owner
shall obtain the letter of intent and license from the DTCP
for development of the project at the earliest. The
obligations of both parties are broadly dealt with in clause
3 and we need not dwell deeper into it for reasons which
shall follow.
10. It is after this collaboration agreement is entered
into that the tripartite agreement, admittedly, has been
entered into between the appellant, the developer and the
home buyer. A glance of certain relevant clauses of the
tripartite agreement would be apposite.
It will be relevant also to bear in mind that in the
tripartite agreement the appellant is described as the
confirming party or owner.
We may notice that the tripartite agreement reveals
that the home buyer is put on notice of the collaboration
agreement. There is reference to general power of attorney
which has been executed by the appellant in favour of the
developer. The tripartite agreement further refers to the
fact that the buyer has inspected the collaboration
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agreement and has understood the limitations and obligations
of the owner inter alia . Under clause 1.1, the developer
has agreed to sell to the buyer and the buyer has agreed to
purchase the apartment at the prices indicated in clause 3.
The sale consideration is set out in clause 3. There is
elaboration of the consideration in various sub clauses of
clause 3. The payment is governed by clause 4 and the
various sub clauses thereunder. Clause 5 deals with the
basic concept of the proposed complex. Clause 6 deals with
maintenance charges. It is stated in clause 7 that the
company, subject to force majeure, undertakes to complete
the construction. The meaning of the word company is not
exactly clear and for reasons which shall follow, we do not
intend to pronounce on the same.
11. The conveyance deed is to be executed after the grant
of the completion certificate in terms of clause 8.1. The
rights and obligations of the buyer are set out in clause 10
onwards till 10.22. The buyers representations, assurances,
covenants and confirmations are captured in clause 11.1(i)
to 11.1(ix). The representations and obligations of the
developer are articulated in clauses 12, 12.1 and 12.2.
Among other terms to be found in clause 14, 14.1.1 is
relevant . We notice the same:
“14.1.1 Any delay or indulgence by the Developer in
enforcing the terms of this Agreement or any
forbearing giving of time to the Buyers shall not be
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construed as a waiver on the part of the Developer of
any area non-compliance of any of the terms and
conditions of this Agreement by the Buyer nor shall be
same in any manner prejudice the rights of the
Developer.”
12. The time is ripe now also to look at the law which has
been invoked by the complainant. A complaint is lodged
under the provisions of the Act. The Act provides for
succour and relief to consumers. As is self-evident from
the very title, it is intended to provide succour and relief
to the consumer. The word ‘consumer’ stands defined in
section 2(d):
“(d) “consumer” means any person who,—
(i) buys any goods for a consideration which has
been paid or promised or partly paid and partly
promised, or under any system of deferred payment
and includes any user of such goods other than the
person who buys such goods for consideration paid
or promised or partly paid or partly promised, or
under any system of deferred payment when such use
is made with the approval of such person, but does
not include a person who obtains such goods for
resale or for any commercial purpose; or
(ii) hires or avails of any services for a
consideration which has been paid or promised or
partly paid and partly promised, or under any
system of deferred payment and includes any
beneficiary of such services other than the person
who hires or avails of the services for
consideration paid or promised, or partly paid and
partly promised, or under any system of deferred
payment, when such services are availed of with
the approval of the first mentioned person but
does not include a person who avails of such
services for any commercial purpose.
Explanation.—For the purposes of this
clause,“commecial purpose” does not include use by a
person of goods bought and used by him and services
availed by him exclusively for the purposes of
earning his livelihood by means of self-employment.”
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‘Consumer dispute’ is defined in section 2(e):
“(e) “consumer dispute”means a dispute where the
person against whom a complaint has been made, denies
or disputes the allegations contained in the
complaint.”
Most importantly, we must notice the definition of the
word ‘deficiency’ in Section 2(g):
(g) “deficiency” means any fault, imperfection,
shortcoming or inadequacy in the quality, nature and
manner of performance which is required to be
maintained by or under any law for the time being in
force or has been undertaken to be performed by a
person in pursuance of a contract or otherwise in
relation to any service;
Section 2(c) defines the ‘complaint’:
(c) “complaint”means any allegation in writing made
by a complainant that—
(i) an unfair trade practice or a restrictive
trade practice has been adopted by any trader or
service provider;
(ii) the goods bought by him or agreed to be
bought by him suffer from one or more defects;
(iii) the services hired or availed of or agreed
to be hired or availed of by him suffer from
deficiency in any respect;
(iv) a trader or the service provider, as the case
may be, has charged for the goods or for the
services mentioned in the complaint, a price in
excess of the price—
(a) fixed by or under any law for the time being
in force;
(b) displayed on the goods or any package
containing such goods;
(c) displayed on the price list exhibited by him
by or under any law for the time being in force;
(d) agreed between the parties;
(v) goods which will be hazardous to life and
safety when used are being offered for sale to the
public,—
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(a) in contravention of any standards relating to
safety of such goods as required to be complied
with, by or under any law for the time being in
force;
(b) if the trader could have known with due
diligence that the goods so offered are unsafe to
the public;
(vi) services which are hazardous or likely to be
hazardous to life and safety of the public when
used, are being offered by the service provider
which such person could have known with due
diligence to be injurious to life and safety;
with a view to obtaining any relief provided by or
under this Act.”
Undoubtedly, the word ‘complaint’ as defined, is not
confined to mere deficiency of service but it comprehends
other aspects including unfair trade practices or
restrictive trade practices among other elements.
Therefore, the Act contemplates the consumer as
defined being enabled to move a complaint as defined,
setting the ball rolling for the Body under the Act to
consider the complaint on its merits and to decide to grant
appropriate relief or refuse relief. A crucial provision in
the context of this case would appear to us to be the word
‘deficiency’. The word ‘deficiency’ has been widely worded
to capture any fault, imperfection, shortcoming or
inadequacy in the quality, nature and manner of performance.
The law giver has not stopped with this requirement. The
law giver has infused clarity by indicating that the
blemishes which have been specifically articulated must be
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ones which must be measured or understood with reference to
any law for the time being in force. The deficiency may
also arise out of a contract. We must understand it to be
that the fault, imperfection, shortcoming or inadequacy must
arise from an obligation undertaken to be performed in
pursuance of a contract. The matter does not end there.
The subject matter of the deficiency viz., any fault,
imperfection, shortcoming or inadequacy in the quality,
nature and manner of performance can also arise ‘otherwise’.
At this juncture, we may also notice the fact that the law
giver has also defined ‘service’ in section 2(o) of the Act
and it is as follows:
(o) “service” means service of any description which
is made available to potential users and includes,
but not limited to, the provision of facilities in
connection with banking, financing, insurance,
transport, processing, supply of electrical or other
energy, board or lodging or both, housing
construction, entertainment, amusement or the
purveying of news or other information, but does not
include the rendering of any service free of charge
or under a contract of personal service;
13. Apposite in the context of this case is the inclusion
of the word ‘housing construction’ inserted by Act 50 of
1993 with retrospective effect from 18.06.1993. The only
services which are exempted are services rendered free of
cost for contract of personal service. The word ‘service’
is very widely worded. However, it is indispensable to the
granting of relief for a complainant to establish the
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existence of a deficiency in terms of any law or in
pursuance of an obligation arising from a contract or
otherwise.
14. No doubt, it is next relevant to notice the exact case
in the complaint.
A perusal of the complaint does not reveal any
specific complaint lodged against the appellant. The
appellant is made respondent No. 2. The complaint, in
short, was that the possession of the flat was not made over
by 31.12.2015. Substantial amounts were paid as
consideration. The complainant suffered financial losses
without getting benefit of the use due to the sole conduct
of the opposite party for not building within the promised
time. Act and omission of the opposite party fall within
the definition of unfair trade practices and restrictive
trade practices it is averred. There is even allegation
that there are malpractices on the part of the opposite
party to take money from the buyers who purchased apartments
/ flats in Umang Realtech group housing project and to use
it elsewhere and delay the project unreasonably for their
wrongful gains causing wrongful losses and injuries to the
complainant.
The final prayer was to direct the opposite party to
refund the entire amount collected from the complainants
with 18 per cent interest from date of the collection of the
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amount. The appellant filed a reply therein. It is
contended that there is no cause of action against the
appellant. It was indicated that the appellant was a land
owner. It had given vacant possession to the developer.
There is no liability incurred by the appellant also.
Clause 14.3 of the collaboration agreement was extracted in
reply. Clause 14.3 indicated that the development and sale
of project being the responsibility of the developer, the
developer shall be liable to indemnify the land owner.
15. We have heard learned counsel for the parties.
16. Though the NCDRC did note the contention of the
appellant, the matter came to be dealt with in the manner
which we have indicated, namely, by directing the appellant
and the developer to refund the amounts with interest.
17. We have indicated the scheme of the Act. A claim can
succeed in a case of this nature if the consumer establishes
deficiency of service. No doubt, the law giver contemplates
other elements as contemplated in the definition of the word
‘complaint’. The word ‘deficiency’ has been widely worded.
Equally so, is the word ‘service’. A statute of this nature
must, indeed, if possible, be construed in favour of the
consumer. However, that is a far cry from holding that if
deficiency is not established, yet the opposite party must
bear the liability which cannot be thrust on its shoulders.
We would clarify that by making it clear that what we intend
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to say is that when there is no privity between the
complainant and the opposite party, the opposite party could
not become liable under the Act. In other words, if there
is no law under which a person is to provide a service and
if it does not fall within the residuary clause, namely,
‘otherwise’ as defined under the word ‘deficiency’, it is
necessary for a consumer to succeed, that there must be a
contract. It is in that context, we indicated that the
existence of an obligation under a contract is a sine qua
non for a consumer to successfully prosecute a case under
the Act.
18. The NCDRC has despite the stand taken specifically by
the appellant, proceeded to premise its finding on a
particular clause. The clause in question which has
persuaded the NCDRC to hold against the appellant, in our
view, cannot by itself result in the appellant being held
liable under the Act. We have noticed the scheme of the
dealings between the parties. Apparently it originated with
the collaboration agreement between the appellant and the
developer. The home buyer comes in, undoubtedly, through
the tripartite agreement. It is no doubt true that there is
a power of attorney which is executed by the appellant in
favour of the developer. We will not say anything on the
power of attorney as there is an argument by the learned
counsel for the complainant that the power of attorney
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clinchingly establishes that the appellant was the principal
and the developer was a mere agent. We say that we are not
reflecting anything more about this for the reason that this
is not the case which was set up before the NCDRC. There
are no pleadings in this regard. Very fairly, the learned
counsel for the complainant has stated that there is no
foundation for such a case and such a case is even not
reflected in the order. The only aspect which appealed to
the NCDRC was clause 4.1.
19. Clause 4.1 contemplates revenue sharing and this
clause is part of the collaboration agreement. The buyer in
terms of the tripartite agreement must be understood to have
familiarised itself with the terms of the collaboration
agreement. The NCDRC has proceeded to hold that it is
pertinent to note that the appellant was the signing and
confirming party. Thereafter, reference is made to the
consideration towards non-refundable security deposit paid
by the developer to the appellant. And finally, the NCDRC
has seized upon the terms of clause 4.1. Clause 4.1 deals
with the revenue sharing between the appellant and the
developer. Thereafter, NCDRC reiterates the fact that the
appellant has signed the tripartite agreement as a
confirming party. On this basis, NCDRC found that both
parties are jointly and severely liable to pay the amount.
Lastly it is found that any other arrangement is only inter
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se between the opposite parties and shall not bind the
complainant.
20. We take up the last finding first, namely, that any
other arrangement is only inter se between the opposite
parties and shall not bind the complainant. Apparently,
this is the answer to clause 14.1 set up by the appellant.
Clause 14.1 deals with the arrangement entered between the
developer and the owner because it speaks about
reimbursement and protecting the owner from any loss it may
be visited with. The fact that developer has agreed to
reimburse the land owner would not detract from any
liability which the land owner may incur under the law and
under the contract. While that may be so, the substratum of
the finding of the NCDRC is clause 4.1 and the fact that the
appellant is a confirming party. We are of the view that in
the contracts in question, the NCDRC has not correctly
appreciated the nature of the obligations and requirement
under the Act to make a party liable. The NCDRC has not
adverted to the relevant provisions, the collaboration
agreement and the tripartite agreement which would spell out
the nature of the obligations incurred by the developer and
the appellant. The appellant, as the owner of the land on
which the project was contemplated, has indeed undertaken
certain obligations. So did the developer. It is, at this
stage, that the consumer appears in the form of a party in
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the tripartite agreement. The learned counsel for the
complainants has a case that the complainants were not
aware of the terms of the collaboration agreement as such.
21. The mere fact without anything more that the appellant
was a confirming party also would not advance the case of
the complainant. We are unable to divine as to on what
basis it could be said in a contract of this nature that
merely because the appellant has confirmed terms of the
agreement which is styled as a tripartite agreement, it
would by itself make the appellant liable. This is a matter
which should have been dealt with, with reference to the
various other provisions in both the collaboration agreement
and the tripartite agreement. Such an exercise was not
undertaken by NCDRC.
22. There is another aspect which is perhaps determinative
of the course of action which has appealed to us. Learned
counsel for the complainants would point out that this Court
must bear in mind that this is a case where the management
of both the developer and the land owner have actually been
carried out by the same group. Learned counsel would point
out that understanding the pattern of the composition of the
Board of Management would successfully show that in essence,
a single entity is running the whole show.
23. The present scenario is that the developer has gone
into a state of insolvency. Proceedings under the
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Insolvency and Bankruptcy Code (IBC) has been lodged. It
is, no doubt, in such a scenario, that the home buyers, who
despite an order which they have obtained, are left high and
dry as they cannot proceed against the developer after
having obtained relief which consist of refund with interest
as already observed. This brings on the scene the IRP
represented by Mr. Sai Deepak, learned counsel, who would
point out that not only has the IRP been appointed but an
order has been passed by the National Company Law Appellate
Tribunal (NCLAT) in appeal against an order under Section 7
of the IBC. Learned counsel points out that there is an
opportunity available to the home buyers made available by
the order of the NCLAT which may be availed of by the home
buyers.
24. The contention raised by the learned counsel for the
complainant is that, in short, this is a fit case where the
NCDRC should be asked to look into the complaint that both
parties being a single entity, a case for lifting of the
corporate veil is made out. As already noticed, it is also
their case that the developer is nothing but a mere agent of
the appellant.
25. Having regard to the Act being a beneficial piece of
legislation, the Court should lean in favour of the hapless
consumer so that any such manoeuvring by corporate entities
if any does not succeed.
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26. We have already scanned the pleadings of the parties.
As fairly stated by the learned counsel for the complainants
there is a complete lack of pleadings to support the case of
the nature which is sought to be set up, viz., that this is
a fit case for employing the doctrine of lifting of the
corporate veil or that the appellant would be liable being
the principal of the the developer.
27. In this context learned senior counsel for the
appellant would also point out that apart from absence of
pleadings, this is a matter which may go to the jurisdiction
of the NCDRC having regard to limitations which have been
carved out in law on the nature of the functions of the
forum.
28. Having heard learned counsel for the parties, while we
are of the view that we cannot uphold the order of the NCDRC
in the manner in which it is being done, we should afford an
opportunity to the respondents to seek amendment of the
pleadings, if they are so advised, and to allow an
opportunity to establish the case which is being set up
which is based on matters which go beyond the scope of the
findings by the NCDRC. At the same time, we must leave it
open to the appellant to raise all contentions including the
contentions against such pleadings being introduced as also
the limitations on the jurisdiction of the NCDRC to make
such an inquiry.
21
CA No. 1065/ 2021 etc.
29. Accordingly, the upshot of the above discussion is
that the appeals are to be allowed and the matter remanded
back. The appeals are allowed. The impugned order will
stand set aside. However, we leave it open to the
respondents to seek amendment of the pleadings and adduce
material in support of their contentions.
However, we make it clear that as already found by us
on the clause and on the findings alone the order of the
NCDRC is clearly insupportable. But it will be open to the
NCDRC, if the pleadings are amended and new materials come
to light to take note of this clause also to hold the
appellant liable. We leave open all the contentions
available to the appellant before the NCDRC.
No orders as to costs.
……………………………………………………………………., J.
[ K.M. JOSEPH ]
……………………………………………………………………., J.
[ PAMIDIGHANTAM SRI NARASIMHA ]
New Delhi;
December 07, 2021.
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