Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2998 OF 2010
THE MANAGING DIRECTOR (SHRI GRISH BATRA)
M/S.PADMINI INFRASTRUCTURE
DEVELOPERS (I) LTD. … APPELLANT(S)
VERSUS
THE GENERAL SECRETARY
(SHRI AMOL MAHAPATRA) ROYAL
GARDEN RESDIENTS WELFARE
ASSOCIATION … RESPONDENT(S)
WITH
CIVIL APPEAL NO. 4085 OF 2010
J U D G M E N T
V. Ramasubramanian, J.
1. Both the consumer (who was the complainant) as well as
the opposite party before the National Consumer Disputes
Redressal Commission, have come up with these appeals, the
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Date: 2021.09.28
16:36:46 IST
Reason:
former aggrieved by the rejection of some of the reliefs sought and
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the latter, challenging the reliefs granted in favour of the
consumer.
2. We have heard the learned counsel appearing on both sides.
3. A residential apartment complex was promoted by M/s
Padmini Infrastructure Developers (India) Ltd. ( hereinafter
referred to as ‘the opposite party’ ), on a land allotted by New
Okhla Development Authority (‘ NOIDA’ for short ). It appears that
the opposite party constructed about 282 apartments and offered
them for sale. The purchasers were put in possession during the
period from 19982001, but the completion certificate itself was
issued only in December, 2001.
4. The purchasers of flats formed themselves into an
association known as Royale Garden Residents Welfare
Association and got it registered on 30.09.2003 under the
Societies Registration Act, 1860.
5. The Residents Welfare Association entered into an
agreement on 15.11.2003 with the opposite party for taking over
the maintenance of the apartment complex. Thereafter, the
Residents Welfare Association ( (hereinafter referred to as the
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‘complainant’ ), filed a consumer complaint in Complaint No.9 of
2007 before the National Consumer Disputes Redressal
Commission.
6. The reliefs sought by the complainant before the National
Commission were as follows:
“1.to pay the monthly maintenance charges for unsold flats
amounting to Rs. 9,05,810/
2. to complete the water softening plant and make it
operational.
3. to complete fire fighting equipments and make the same
operational and to obtain safe working certificate from Fire
Safety Department of NOIDA and handover the same to the
Complainant.
4. to furnish and equip a second health club for which space
is available in half portion of basement of Tower Blue
Heaven2.
5. to complete a second swimming pool and get cement
plastered and white washed the stilts.
6. to provide furnished space for a, Club House in the
basement of Eden Tower which is existing but locked.
7. to get the rented portion of the terrace (roof) vacated meant
for the resident of Tower Eden of the Complainant rented
out by the Opposite Party to HUTCH (P) Limited and
earned rent after on 15.11.2003 to be returned to RWA
with 24% interest.
8. not to sell or rent out the remaining flats about 45 till the
facilities mentioned above are provided to the
Complainant.
9. to direct the OP not be sell stilt and open car parking to
future or present purchasers.
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10. to pay the cost to the Complaint and damages for
harassment mental torture, agony etc. caused to the
Complainant by the OP.
11. to pass any other or further orders which this August
Commission deems fit in the circumstances of the case to
meet the ends of justice.”
7. The complaint was resisted by the opposite party both on
merits and on the ground of limitation. The opposite party also
claimed that the Agreement dated 15.11.2003, entered into with
the complainant contained an arbitration clause and that
whatever facilities/amenities were promised at the time of
promotion of the complex, have been put in place.
8. The National Commission by its interim order dated
04.06.2008, appointed a local Commissioner, to inspect the
systems/facilities relatable to the reliefs claimed in prayer clause
nos. 2 to 6 of the complaint and to submit a report. The said
Commissioner submitted a report on 08.07.2008 after making a
local inspection, in the presence of the representatives of both the
parties.
9. Accepting the report of the local Commissioner and
overruling the contention of the opposite party regarding
limitation, the National Commission allowed the complaint partly
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by an order dated 05.01.2010. The operative part of the order of
the Consumer Commission reads as follows:
“Consequently, complaint is partly allowed with cost of
Rs. 25,000/ with direction to the opposite party to make the
systems/facilities as at Sl. Nos. 2,3,4,5 and 6 of the prayer
clause of the complaint operational/complete and to obtain
and supply fire safety certificate of the complex to the
complainant association within ten weeks from today. The
opposite party will submit a report within two weeks thereafter
from an independent Architect certifying that the
systems/facilities in question have been fully made
operational/complete by the opposite party. In the event of not
making operational/complete the systems/facilities referred to
above within the time allowed, the opposite party will pay
through a demand draft the costs thereof as mentioned in
aforesaid report dated 8.07.2008 within two weeks from after
the expiry of 12 weeks time to the complainant association.”
10. Aggrieved by the order of the National Commission, the
opposite party (builder) , has come up with one appeal in
C.A.No.2998 of 2010. Aggrieved by the refusal of the National
Commission to grant the reliefs as per prayer clause nos. 1, 7, 8,
9 & 10, the consumercomplainant has come up with another
appeal in C.A.No.4085 of 2010.
11. As observed earlier, the consumer complaint was contested
by the opposite party both on merits and on the ground of
limitation. Since it is easy to deal with the objection relating to
limitation without much ado, we shall take it up first.
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12. Section 24A(1) of the Consumer Protection Act, 1986
prescribes a period of limitation of two years from the date on
which the cause of action has arisen for the admission of a
complaint, by the District Forum, State Commission or the
National Commission. In the case on hand, the opposite party
handed over the work of maintenance of the complex to the
complainant, under an Agreement dated 15.11.2003. As seen
from the preamble to the Agreement, the Agreement covered
common essential services such as generators, lifts, tubewell,
water softening plant, electric substation, cabling, fire fighting
system, pipelines, swimming pool, health and fitness centre,
parking, clubhouse, water supply, drainage/sewerage system,
horticulture, water tanks/pumps and lawns/parks.
13. But different timelines were prescribed under the said
Agreement for different obligations still remaining to be
performed by the opposite party, towards the purchasers of flats.
The last of such timeline was indicated to be 31.03.2004.
14. There were specific obligations to be performed by the
opposite party under the said Agreement, in relation to certain
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services. It may be useful in this regard to extract clauses 13, 14
and 19 of the Agreement as follows:
“ 13. The FIRST PARTY shall bear the contractual
obligations of lift, generator, health club and equipments fitted
at swimming pool. FIRST PARTY shall also bear the
maintenance of these equipments till these contracts are
concluded. FIRST PARTY shall bear any/all expenses on
maintenance/repair/replacement of these equipments.
14. To FIRST PARTY shall make the softening plant and
tube will in working condition and hand it over to SECOND
PARTY separately on or before 31.1.2004. The FIRST PARTY
shall also bring the fire fighting Equipments/generators in
working condition and hand it over to the SECOND PARTY
separately on or before 31.12.2003.
… … …
19. The FIRST PARTY shall construct the second Health
Club and second swimming pool on or before 31.3.2004 and
provide space for Club house in one of the basements for the
residents as promised and assured at the time of selling the
apartments on or before 31.12.2003.”
15. Therefore, the cause of action for the complaint, as per the
above clauses continued even after the date of the Agreement
namely 15.11.2003.
16. In the affidavit filed by the local Manager of the opposite
party by way of evidence, it was admitted that certain works in
relation to firefighting equipment continued up to the year 2005.
In fact, the opposite party filed certain bills, which were dated
27.02.2005, 22.04.2005, 01.05.2005, 19.07.2005, 29.10.2005
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and 12.12.2005, to show that the opposite party was honest and
diligent in carrying out their obligations.
17. The affidavit in evidence filed by the opposite party and the
aforesaid bills establish that the cause of action continued at
least till December, 2005. The complaint before the National
Commission was filed in February, 2007. Therefore, the National
Commission was right in rejecting the objection relating to
limitation.
18. Coming to the merits, let us first take up the challenge to
correctness of the reliefs granted by the National Commission in
favour of the complainant, as the appeal filed by the opposite
party appears to be first in point of time.
19. The reliefs granted by the National Consumer Commission
related to water softening plant, firefighting, second health club
equipment, second swimming pool and space for club house in
Eden Tower. These reliefs were granted by the National
Commission on the basis of the Report of the local
Commissioner.
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20. It appears that opposite party filed objections to the report
of the local Commissioner, contending inter alia , (i) that the water
softening plant was fully functional when the complex was taken
over by the complainant association; (ii) that any deficiency or
defect relating to the firefighting equipment is wholly
attributable to the lack of maintenance and wrongful practices
adopted by the complainant association; that they are not
(iii)
contractually liable to provide a second health club and the
finding of the local Commissioner that one of the health clubs is
fully functional and in good condition has to be accepted; and
(iv)
that the second swimming pool was completed and made
operational by the opposite party, but what remained was the
filling up of water after filtration, which was the job of the
maintenance agency.
21. Interestingly the affidavit of objections to the Report of the
local Commissioner, filed on behalf of the opposite party on
06.08.2008, covered only the findings relating to, water
(i)
softening plant; (ii) firefighting equipment; (iii) second health
club; and second swimming pool, but did not cover the
(iv)
finding relating to the liability of the opposite party to provide
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furnished space for a club house in the basement of Eden Tower
(relatable to relief no.6 of the complaint) . However, the affidavit
covered the claim of the complainant for maintenance charges,
though the local Commissioner had nothing to do with the same.
22. The Commissioner appointed by the National Commission
was an architect by name Amit Bahl. When he carried out the
inspection, 4 persons representing the opposite party, which
included the advocate of the opposite party and the deponent to
the affidavit of objections were present. The architect examined
each one of the items and not only found that they were not
operational on date but also found, (i) that the equipment for the
water softening plant was incomplete, ineffective and inadequate;
that the firefighting equipments were not in operation due to
(ii)
incomplete commissioning of the system as a whole and that
even the fire safety certificate dated 05.11.2001 noted down the
same; that while the first health club in the basement of the
(iii)
Tower Blue Heaven2 was fully furnished and functional, the
second health club was not adequately furnished though the civil
works are complete; (iv) that the second swimming pool was not
complete and operational, as the filtration plant was non
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functional and the pump was removed after installation and that
even the change rooms and showers have not been provided for;
and that in so far as the club house in the basement of Eden
(v)
tower is concerned it was kept under lock and key by the
opposite party and found to have been used as a store for
keeping various building materials.
23. In the light of the aforesaid findings by an independent
architect appointed by the National Commission it is not open to
the opposite party to create a façade as though all essential
services and amenities were handed over in a fully functional
state. If all the aforesaid services had been handed over in a fully
functional state, the opposite party should have taken an
acknowledgment in writing from the complainant. In the
alternative, the opposite party should have insisted upon an
appropriate provision in the Agreement dated 15.11.2003.
24. As noted by the Commissioner, even the fire safety
certificate dated 05.11.2001 states that though the majority of
the equipment have been satisfactorily installed, some equipment
have been removed and stored for security purposes and that the
inference therefore is that the system never got commissioned.
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25. It is not impossible for an experienced architect to find out
whether the condition in which the aforesaid amenities and
services were found on the date of the inspection, was entirely
due to lack of maintenance or due to noncommissioning or
incomplete commissioning.
26. As noted by the National Commission, the affidavit of
objections filed on behalf of the opposite party to the Report of
the local Commissioner does not deal with the cost of estimates
indicated by the Commissioner in his Report. In addition, the
affidavit of objections does not even deal with the finding relating
to the club house at Eden Tower, said to have been kept under
lock and key by the opposite party for storing building materials.
The very fact that at the time of inspection by the local
Commissioner, the possession of the club house in Eden Tower
was with the opposite party, goes to show that the opposite party
was still retaining control of at least some part or certain services
in the complex, perhaps due to the fact that there were about 45
unsold flats.
27. In view of the above, we are not convinced that the reliefs
granted by the National commission in favour of the complainant
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warrant any interference. Therefore, the appeal in C.A. No.2998
of 2010 is liable to be dismissed.
28. But before we do that, we should take note of the fact that
as per the operative portion of the order of the National
Commission (which we have extracted elsewhere) the opposite
party is obliged to make the systems/facilities at prayer clauses
2, 3, 4, 5 & 6 of the complaint, fully operational/complete and
they are also obliged to obtain a certificate of completion from an
independent architect. If the opposite party failed to do so within
the time stipulated by the National Commission, the opposite
party was obliged to pay the cost as estimated by the
Commissioner in his Report dated 08.07.2008.
29. The costs estimated by the local Commissioner in his Report
dated 08.07.2008 are as follows :
| 1<br>. | Water softening plant | Rs. 20,29,962 |
|---|---|---|
| 2<br>. | Fire fighting equipment | Rs. 83,00,000 |
| 3<br>. | Second health club | Rs. 7,60,000 |
| 4<br>. | Second swimming pool | Rs. 2,70,000 |
| 5<br>. | Furnishing the club house in Eden<br>Tower | Rs. 2,75,000 |
| Total | Rs.1,16,34,962 |
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30. While ordering notice in C.A.No.2998 of 2010, on
29.03.2010, this Court granted stay of operation of the impugned
order on condition that the opposite party–builder deposit
Rs.60,00,000/ within 8 weeks. Subsequently, the order was
modified on 14.05.2010, permitting the opposite party to deposit
the sum in two equal instalments, the first instalment before
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22.05.2010 and 2 instalment before 15.07.2010. It appears that
the amount has been accordingly deposited and the amount has
been invested in a Fixed Deposit which is renewed from time to
time by the orders of this Court.
31. In view of the fact that the possession of the common
amenities were handed over by the opposite party to the
complainant Association 18 years ago (under the Agreement
dated 15.11.2003), it may not be possible at this distance of time
to compel the opposite party to make those facilities/systems at
relief clauses 2, 3, 4, 5 and 6, fully operational now. The cost of
estimate which works out to approximately Rs.1.16 crores,
includes within itself the cost of fire fighting equipment and this
constitutes the major component (it works out to Rs. 83 lakhs).
As seen from the Commissioner’s Report, the mistake committed
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by the opposite party was in removing a part of the equipment
but not putting them back. This finding is as per the fire safety
certificate. Therefore, it may not be appropriate to ask the
opposite party to bear the entire burden.
32. Therefore, taking into account the overall picture, we are of
the considered view that interests of justice will be met if the
order of the National Commission is modified in such a manner
(i) that the complainant Association shall receive in full and final
settlement, the deposit now lying in the Registry of this court,
towards adequate compensation for the reliefs that they are held
entitled to by the National Commission; and (ii) that the opposite
party is directed to remove all building material stored in the
club house in the basement of Tower Eden and hand over
possession of the club house to the complainant.
33. Now coming to the appeal CA No.4085 of 2010 filed by the
complainant against the refusal of the reliefs in prayer clause
nos.1, 7, 8, 9 and 10, we think that the National Commission
was justified in rejecting those reliefs. The claim for monthly
maintenance charges for the unsold flats, amounting to
Rs.9,05,810/ sought as per prayer clause no.1, was made by
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the complainant on the basis of clause 10 of the Agreement dated
15.11.2003 which reads as follows:
“10. The FIRST PARTY agrees to pay to the SECOND PARTY
the monthly maintenance charges @ 50 paise per
square feet for the unsold flats w.e.f. 16.11.2003.
FIRST PARTY shall make the advance payment for 6
months within 7 days of signing of the agreement.
Subsequently these charges will be paid yearly in
advance.”
34. The averments relating to the relief claimed at prayer clause
no.1 are found in paragraph 16 of the complaint which reads as
follows:
“16. That the amount of such advance payment upto
31.12.2006 is Rs.619568/ approx. an advance for the
year 2007 comes to Rs.286242/. Thus the OP has to
make the total payment amounting to Rs. 905810/
approx. with interest @ 24% for the delayed period for
which OP had agreed vide agreement dated
15.11.2003 Clause No.6 last two lines.”
35. Though the National Commission did not deal with the relief
claimed at prayer clause No.1 in sufficient detail and the
National Commission did not also provide cogent reasons for
rejecting the relief, we find that the complainant may not be
entitled to the said relief. There are two reasons as to why we say
so. The first reason is that the complainant did not provide
detailed calculations about the plinth area of the unsold flats, the
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period during which they remained unsold and the manner in
which the amount indicated in para 16 of the complaint was
arrived at. In any case the payments were to be made under
clause 10 of the agreement, first within seven days of the
agreement in respect of the advance payment for six months and
thereafter by way of annual payments in advance. Therefore, a
major portion of the claim for money was obviously barred by
limitation when the complaint was filed. Moreover, the opposite
party raised a dispute about the quantum and asserted in para
16 of their reply before the National Commission that what was
due was only Rs.232750/. Thus, the question became a
disputed question of fact on which both parties did not lead
sufficient evidence. Therefore, the rejection of the claim at prayer
clause No.1 was legally correct.
36. The relief claimed at prayer clause no.8 is to direct the
opposite party not to sell or rent out the unsold flats till the
facilities mentioned in prayer clause nos.2 to 6 are provided. By
its very nature, this relief is in the nature of an interim relief and,
hence, was rightly rejected by the National Commission in the
final judgment.
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37. The relief claimed in prayer clause no.9 relates to stilt and
open car parking. There was no evidence before the National
Commission to grant such a relief and, hence, the refusal to
grant the relief mentioned in prayer clause no.9 is in order.
38. The claim for costs and damages for harassment, mental
torture, agony etc., made in prayer clause no.10 was not granted
by the National Commission, and rightly so, in view of the fact
that after handing over the common amenities under the
Agreement dated 15.11.2003, the opposite party continued to
carry out at least some works. This is why the complaint was
lodged in 2007. Therefore, we find no reason to grant the relief
prayed for in prayer clause no.10.
39. That leaves us with the relief claimed in prayer clause no.7.
This was for a direction to the opposite party to vacate the tenant
occupying the terrace of Tower Eden. According to the
complainant, the terrace of Tower Eden was let out by the
opposite party to a company, leaving the residents of Tower Eden
without a terrace for common use. But the relief of eviction
involves a third party and hence the National commission rightly
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left it to the complainant to pursue the remedy in an appropriate
Forum.
40. Thus, we find that the refusal of the National Commission
to grant the reliefs mentioned in prayer clause nos.1, 7, 8, 9 and
10 warrant no interference. Therefore, the appeal of the
complainant in CA No.4085 of 2010 is liable to be dismissed.
41. Accordingly the appeal of the consumercomplainant in C.A.
No. 4085 of 2010 is dismissed. The appeal of the builderopposite
party in C.A. No. 2998 of 2010 is partly allowed, modifying and
substituting the judgment of the National Consumer Disputes
Redressal Commission dated 05.01.2010 in Consumer Complaint
No. 9 of 2007, to the following effect:
The complainant shall be entitled to all told monetary
compensation in a sum of Rs. 60 lakhs, now lying in deposit with
the Registry of this court, together with the interest accrued
thereon, in lieu of the reliefs sought in prayer clauses 2, 3, 4, 5
and 6 of the complaint. The opposite party shall, within two
weeks, remove all building material stored by them in the club
house in the basement of Tower Eden and hand over possession
of the club house to the complainant. The complaint shall stand
dismissed in all other respects. No costs.
42. The parties are to bear their respective costs in these
appeals. The Registry shall liquidate the fixed deposit standing to
the credit of the above appeal and make payment of the proceeds
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to the complainant namely, Royal Garden Residents welfare
Association. All interlocutory applications if any are closed.
...................................J.
(Hemant Gupta)
...................................J.
(V. Ramasubramanian)
New Delhi
September 28, 2021