The instant complaint Under Section 17 (inadvertently mentioned u/s 12) of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act “) is at the instance of a registered residents Association against the developer/promoter on the allegation of deficiency in services on the part of them to handover the amount of Rs. 78,05,510/- with interest thereon being the sinking fund of the complex lying with the developer/promoter.
Succinctly put, complainant’s Association’s case is that at the time of development and sale of the property i.e. flats agreement for sale was executed between the developer and the flat owners by which the OP/developer has mentioned that the buyer shall deposit with the developer/seller an amount of sinking fund as may be determined by the developer towards the management and maintenance, repairs and upkeep of the residential building and all other forcible contingency involving common expense for lawful management of the housing complex, i.e. Dum Dum Club Town Estates lying and situated at Premises no. 87, Dum Dum Road, P.S.- Dum Dum, Kolkata – 700 074, District North 24 Parganas within the local limits of Ward No.15 of South Dum Dum Municipality at the rate of
Rs. 30/- per sq.ft. After completion of the entire buildings/flats, the developer handed over the flats to the flat owners and ultimately Dum Dum Club Town Residents’ Association was formed and maintenance of the flats were handed over to the Association in the month of October, 2012. After handing over the management of the flats, the OP/developer failed and neglected to hand over the sinking fund of Rs. 78,05,510/-. The Complainant Association has stated the developer/promoter has got no right whatsoever to hold the said fund i.e. the sinking fund amounting to Rs.78,05,510/-. In this regard, all the letters and correspondences made by the Complainant Association turned a deaf ear. Hence, the complaint with prayer for a direction upon the Opposite Party to make payment of Rs. 78,05,510/- with interest being the sinking fund lying with them, compensation of Rs. 1,50,000/- etc.
The Opposite Party by filing written version in the form of ‘Affidavit –in-Opposition’ has raised a preliminary point that the complaint is barred by limitation as they handed over the management and maintenance in July, 2009 and the complaint was lodged in July, 2010 after a lapse of 4 years. On merits, it has been stated that the accounts for the said sum of Rs.78,65,000/- are being withheld since the complainant forcefully and illegally occupied one flat measuring about 1000 sq.ft. on the ground floor adjacent to the Community Hall, one small room under Block - 4, one 350 sq.ft. space with toilet beneath Block – 5 and one open car park behind Block – 1. The OP has categorically stated that they shall furnish account of the said sum on returning the properties by the complainant which they are holding forcefully and illegally.
On behalf of complainant Shri Debabrata Guha, Secretary of the Complainant Association has tendered evidence on affidavit. He has also given reply against the questionnaire set forth by OP.
On behalf of OP Shri Sukdeb Saha, Authorised Representative of OP has adduced evidence through affidavit. However, no reply has been filed against the questionnaire put forward by the complainant.
Besides the statement made by the parties, they have also relied upon some documentary evidence. At the time of final hearing, a Brief Notes of Argument has been filed by the complainant.
Undisputedly, the Complainant Association i.e. Dum Dum Club Town Residents’ Association, an Association of Residents/Flat Owners formed u/s. 25 of the Company’s Act, 1956 having its Registered Office at Club Town Estates situated at Premises no. 87, Dum Dum Road, P. S.- Dum Dum, Kolkata – 700074, District – North 24 Parganas within the local limits of Ward No.15 of South Dum Dum Municipality. The OP is the developer/promoter who constructed the buildings/flats of the said complex. After construction of the building, the developer/promoter, handed over the flats to the buyers and the buyers after purchase of the same are in possession thereof.
It is also not in dispute that the flat owners of the Complex formed an Association named ‘Dum Dum Club Town Residents’ Association ‘ and the said Association was incorporated by the Registered of Companies, West Bengal on 12.10.2012. Accordingly, the OP handed over the maintenance of the building to the Association. After formation of such registered Association, the OP has lost all his control in the affairs of management of the complex. However, it has been admitted by OP that they did not hand over the sinking fund to the tune of Rs. 78,05,510/- .
The OP took a plea that the Complainant Association has forcibly occupying one flat measuring about 1000 sq.ft. on the ground floor adjacent to the Community Hall, one small room under Block - 4, one 350 sq.ft. space with toilet beneath Block – 5 and one open car park behind Block – 1. It has also been canvassed that unless they return the same, they will not refund the sinking amount.
It is well settled that a person or an Association or any other Authority cannot take the law in his own hand. If there is any illegal occupation or possession, the OP being developer/promoter may set the law in motion by instituting a suit before a competent Civil Court but he has no authority to keep the money of the complex in their own hand. In the case reported in (2008) 10 SCC 345 ( Faqir chand Gulati –vs. – Uppal Agencies Pvt. Ltd. ) the Hon’ble Supreme Court has observed that if the developer has any grievances against the land owner(in the present case Complainant Association) the developer/promoter may seek remedy by instituting a suit before a competent Civil Court. In the case beforehand, it is evident that the OP has not yet initiate any civil action against the Complainant Association.
Evidently, the OP is enjoying Rs.78,05,510/- of sinking fund of the flat owners which they have collected at Rs. 30/- per sq.ft. of super built up area from the flat owners in terms of Clause 5 of Agreement for Sale. Therefore, immediately after obtaining registration on 10.10.2012 the OP should have handed over the said amount to the Complainant Association. The negligence or apathy on the part of OP in handing over the said amount amounts to deficiency in services within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. Therefore, the Complainant Association is entitled to the amount of Rs. 78,05,510/- along with interest thereon and as per prevalent bank interest, the Complainant Association is entitled to an interest @9% p.a. from 10.10.2012 ( the date of registration ) till its realisation.
So far as limitation is concerned, as per provision of Section 24A of the Act a complaint is required to be filed within two years from the date of accrual of cause of action. In the instant case the Complainant Association has obtained Certificate of Incorporation on 10.10.2012 and therefore, prior to that date the Association had no authority or capacity to claim amount lying with sinking fund. After getting the Association registered, the Complainant Association of several occasions wrote letters, particularly on 01.07.2013, 17.09.2013, 26.09.2013, 01.09.2014, 26.12.2013, 13.11.2013 and 01.09.2014 but the aforesaid letters yielded no response. Immediately after getting registration, in all fairness, the OP should have made over the amount of sinking fund to the Complainant Association. The non-payment of the same amounts to continuous cause of action and therefore, the complaint cannot be said to be barred by limitation.
On evaluation of materials on record, I am of the view that the Complainant Association has been able to substantiate their case. As a result, they are entitled to some reliefs. Considering the facts and circumstances and the sufferance of the Complainant Association, I think the Complainant Association is entitled to get the amount of sinking fund to the tune of Rs. 78,05,510/- and compensation in the form of interest @ 9% p.a. from the date of registration i.e. 10.10.2012 till its realisation. As the situation compelled the Complainant Association to lodge the complaint for which they have to incur expenses, they are entitled to litigation cost which I quantify at Rs.25,000/-.
With the above discussion, I dispose of the complaint with the following directions :
- The Opposite Party is directed to handover the amount of sinking fund to the tune of Rs. 78,05,510/- to the Complainant Association;
- The Opposite Party is directed to pay compensation in the form of simple interest @9% p.a. over the amount of Rs.78,05,510/- from 10.10.2012 till its realisation;
- The Opposite Party is directed to pay Rs. 25,000/- to the Complainant Association as costs of litigation;
- The above payments must be made within 60 days from date positively.
