1.       The present First Appeal (FA) has been filed by the Appellant against Respondents as detailed above, under section 19 of Consumer Protection Act 1986, against the order dated 03.04.2017 of the State Consumer Disputes Redressal Commission Maharashtra (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) no. 111 of 2009 inter alia praying for setting aside the order dated 03.04.2017 of the State Commission.   The Appellant was Opposite Party ( OP) No.2 before the State Commission and the respondents were Complainants before the State Commission.    The respondents appeared as Caveators on 17.08.2017, therefore no notice was issued to the Respondents.  Parties filed Written Arguments / Synopsis on 05.01.2023 (Appellant) and 28.10.2022 (respondents) respectively,   Compilation of Case laws have also been filed by the parties on 16.04.2024 and 12.04.2024 respectively.  Delay in filing the FA is condoned after considering the reasons stated in IA No. 9049 of 2017 and those adduced during the hearing.

2.       Brief facts of the case, as emerged from the FA, Order of the State Commission and other case records are that Original Complainant Smt. G..Sivayogam ( since deceased ) booked a flat No.501, admeasuring 895 sq. ft., built up area, 5^th Floor, I wing situated at Raheja Estate, Off. WE. Highway ,Borivali ( East), Mumbai at a consideration of Rs.2501/- per sq. ft. with M/s Bhoomi Construction (OP No.1 before the State Commission), a partnership Firm in their project ‘Bhoomi  Breeze’, of which OP No.2 and OP No.3 (before the State Commission), namely Akshay Doshi and Ramesh Mehta respectively are the partners. However, name of OP No.3 ( Ramesh Mehta) before the State Commission was deleted vide order dated 20.07.2011 passed by the State Commission.  During the pendency of the Complaint before the State Commission, the original  Complainant Smt. G.Sivayogam expired and she was substituted by her legal heirs, who were impleaded in the proceedings.  It is the case of the Complainants that receipt was issued by OP(s) in respect of said flat and receiving of Rs.51,000/- but even after receiving the said amount, no agreement was executed by the OP(s).   The possession of the flat was not given by the OP(s).  Being aggrieved, the original complainant filed a CC before the State Commission claiming possession of said flat or in any other building in the nearby vicinity for the promised area by accepting remaining consideration and to execute agreement for sale and register it.  The Complainant in the alternative also prayed for compensation of Rs.23.00 lacs. 

3.       The State Commission vide order dated 03.04.2017 partly allowed the complaint with following directions :

“1.        Consumer complaint is partly allowed with costs quantified at Rs.15,000/- ( Rupees Fifteen Thousand only) payable to the complainants by the opponents.

2.         Opponents are directed to  hand over possession of flat bearing No. 501, admeasuring 895 sq.ft. built up area, 5^th floor, ‘I’ Wing of proposed Bhoomi Breeze Building situated at Raheja Estate, Off. W.E. Highway, Borivali (East), Mumbai to the complainants within four months from the date of payment of remaining consideration i.e. R s.23,95,995/- ( Rupees Twenty Three Lakhs Ninety Five Thousand Nine Hundred Ninety Five only).  If the opponents refused to accept the amount, then complainants should deposit the amount in this Commission under intimation to the opponents and from that date within four months possession should be handed over to the Complainants.

Alternatively at the option of Complainants

            Opponents are directed to hand over possession of any other flat of the same area in the same building or in the nearby vicinity to the complainants within four months from the date of payment or deposit of remaining consideration i.e. Rs.23,95,995/- ( Rupees Twenty Three Lakhs Ninety Five Thousand Nine Hundred Ninety Five only)

Alternatively at the option of Complainants

            Opponents are directed to refund the amount of Rs.51,000/- ( Rupees Fifty One Thousand only) alongwith interest @ 12% p.a. to the complainants from the date of payment i.e. 16.06.2005 till realization.

3.         Opponents are also directed to pay Rs.1,00,000/- ( Rupees One Lakh only) as compensation on account of mental agony suffered by the Complainants.

4.         Copies of this order be furnished to the parties.”

            Therefore, the Appellant ( OP No.2) is before us now in the present FA.

6.       OP No.1, the partnership firm M/s Bhoomi Construction, was ex-parte before the State Commission.  OP no.2 / Appellant herein admitted before the State Commission that OP no.1 was a partnership firm engaged in the business of developers and builder and OP No.2 was one of the partners of OP No.1 firm. Receipt of Rs.51000/- for booking of a unit in the project of OPs and issuance of a receipt for the same is also admitted, but contending that it was a provisional booking, price of the flat was not fixed yet, and payment terms and other costs were not fixed, although in the year 2005, project ‘Bhoomi Fields’ was planned, due to unavoidable circumstances, the said project was not carried out and fact was orally conveyed to the Complainant.  It was further contended that since there was no written agreement between the Complainant and OPs, the Complainant was only a prospective buyer.  OP No.2 further contended before the State Commission that there was no ‘I’ Wing, so far as project ‘Bhoomi Freeze’ is concerned, therefore, entire claim made by the Complainant is a concocted story.  OP No.2 also submitted that OP no.1 ( Partnership Firm ) is not in existence. 

7.       We have carefully seen receipt dated 16.06.2005 issued by OP No1 Bhoomi Constructions vide which an amount of Rs.51000/- has been received by OP no.1 from the Complainant towards part payment on account of Flat No. 501 on 5^th Floor in ‘I’ Wing in ‘Bhoomi Breeze’.   In this regard, State Commission in its order has observed as follows :

6. Point No.1 (Deficiency) :- It is admitted position that amount of Rs.51,000/- was paid by the original complainant to opponent No.1 for booking said flat as specific flat number is mentioned in the receipt issued by opponent No.1 in favour of complainant respect of receipt of Rs.51,000/-. Learned Advocate for the opponents has submitted that it was a provisional booking. However, we find that said argument cannot be accepted for the reason that there cannot be any provisional booking.

Apart from the fact that in a receipt dated 16/06/2005 there is no such recital that it was a provisional booking.

7. It was tried to argue that the complainant is not sure whether the complainant booked a flat in Bhoomi Breeze or in Bhoomi Fields. Learned Advocate for the opponents has drawn our attention to recital in the complaint in Para 3 where Bhoomi Breeze/Bhoomi Fields are mentioned. Learned Advocate has also drawn our attention to letter given by the complainant (at page-13 of complaint compilation) to the opponents on 07/06/2007 wherein Bhoomi Fields is mentioned. It was further pointed out to us that in a notice issued by the complainant through Advocate on 25/03/2008 there is mention of Bhoomi Breeze. However, in Para 2 it is mentioned as Bhoomi Breeze / Bhoomi Fields. Said notice is at page-14to20 of complaint compilation. Learned Advocate has drawn our attention to the reply give to said notice by the opponents. That reply is at page-21to22 of complaint compilation and in that reply it is mentioned that the complainant approached the opponents showing her interest in purchase of a flat in project 'Bhoomi Fields' and not 'Bhoomi Breeze'. We find that the said argument of Learned Advocate of the opponents cannot be accepted. The reason is that the receipt issued by the opponents in favour of complainant on 16/06/2005 while accepting Rs.51,000/- there is specific mention of flat No.501 and location in Bhoomi Breeze, Raheja Estate, Off. W.E. Highway, Borivali (E), Mumbai. Thus, it is very clear that said booking was in Bhoomi Breeze.

8. Admittedly, no agreement was executed by the opponents in favour of the complainant though amount of Rs.51,000/- was accepted for the said flat. That itself is a deficiency on the part of opponents as it is a statutory duty of the builder to execute agreement when the builder is accepting any money for booking any flat. Admittedly, possession of the flat is not given by the opponents to the complainant. That is also a deficiency on the part of opponents. Learned Advocate for the opponents has argued that there is no concluded contract as price of the flat was not fixed and rate for purchasing flat is not fixed. Only document executed by the opponents in favour of the complainant is receipt dated 16/06/2005. In that receipt flat number, floor number, building name, building location and the amount accepted are mentioned. However, total consideration of the flat is not mentioned. Total area of the flat is also not mentioned. We find that those details are necessary. Not mentioning those details while issuing a receipt while accepting booking amount for particular flat is itself a deficiency on the part of opponents and opponents cannot be taken benefit of its own wrong.

9. Learned Advocate for the complainant has submitted that one chart was given by the opponents to the complainant showing scheduled of payment and that is at page-10 of complaint compilation. Opponents have denied about issuing such chart to the complainant. It was contended that in the said chart, Bhoomi Fields is mentioned and not Bhoomi Breeze. That chart is not on the letterhead of the opponents and it does not bear signature or stamp of opponents. However, it is material to note that the complainant in the notice issued through Advocate on 25/03/2008 has specifically mentioned the total consideration of the flat, area of the flat as represented to the complainant on behalf of the opponents at the time of accepting Rs.51,000/-. We find that contention of the complainant is to be accepted as complainant has paid Rs.51,000/- for booking the flat and obtained the receipt from the opponents. It is admitted by the opponents. We have already referred above said receipt dated 16/06/2005 wherein the flat number, floor number, building name and building location are mentioned in the said receipt and amount of Rs.51,000/- is also mentioned. When person is parting with amount of Rs.51,000/- for booking said flat, the opponents must have informed him about area of the flat, about total consideration of the flat. It is only thereafter complainant must have parted with amount of Rs.51,000/-. Generally, all details about area and consideration are to be mentioned in the receipt. However, that was not mentioned. It appears that the complainant has not insisted for mentioning those details in the said receipt or complainant might not have noticed that those details are not mentioned in the said receipt. However, fact remained that said receipt was issued by the opponent for accepting Rs.51,000/- for booking particular flat on particular floor in particular building. Hence, we are inclined to accept the contention of the complainant that total consideration was told as Rs.24,46,995/- as mentioned in the legal notice and area 895 sq.ft as mentioned in the legal notice. In view of above discussion, we find that the opponents have not executed the agreement though accepted Rs.51,000/- towards booking of the flat and as required under the Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale, management and Transfer) Act, 1963 ('MOFA' in short). Thus, there is deficiency on the part of opponents.

10. Opponents have not mentioned area and total consideration of the flat in the receipt of Rs.51,000/- while accepting booking of the said flat and that is also a deficiency on the part of opponents. Opponents have not handed over possession of the said flat by accepting remaining consideration from the complainant and that is also a deficiency on the part of opponents. Hence, we answer Point No.1 in affirmative.

11. Point No.2 (Possession) :- Learned Advocate for the complainants (L.Rs. of deceased complainant) has argued that the complainants are ready to pay remaining consideration of Rs.23,95,995/- (Rs.24,46,995/- minus Rs.51,000/- = Rs.23,95,995/-) and asked for possession of the flat. Learned Advocate for the opponents has contended that opponent No.1 is not in existence as partnership firm is dissolved. However, there is nothing on record to support said contention. Even otherwise opponent No.2 being partner of opponent No.1 is liable for agreement or any transaction done by the opponent No.1-partnership firm. As the complainants are ready to pay remaining consideration of Rs.23,95,995/-, complainants are entitled for possession of the said flat on payment of remaining consideration. Hence, complainants are entitled for registered agreement of said flat. Learned Advocate for the complainants has submitted that complainants are ready to accept alternative flat in the same building or in adjoining building or in nearby vicinity of the same area by paying remaining consideration. Thus, we find that if the opponents are not in a position to hand over possession of said flat; then complainants are entitled for any other flat of the same area in the same building or in the nearby vicinity. Hence, we answer Point No.2&3 accordingly.

12. Point No.3 (Compensation) :- Complainants claimed amount of Rs.23 Lakhs as compensation towards differential amount required for fresh booking of a flat in the nearby vicinity and mental agony suffered by the complainants. We find that if the opponents are not in a position to hand over possession of the said flat or alternative flat in the same building of same area or in the nearby vicinity at the option of the complainants are entitled for refund of the amount of Rs.51,000/- along with interest @ 12% p.a. from the date of payment i.e. 16/06/2005 till realisation. Complainants are entitled for some amount on account of mental agony suffered by the complainants. We quantify said amount at Rs.1 Lakh. Hence, we answer Point No.3 accordingly.

13. Point No.4 :- In view of answers of Point Nos.1to3, complaint deserves to be allowed partly. Hence, we pass the following order :-

 ORDER :-

1. Consumer complaint is partly allowed with costs quantified at Rs.15,000/- (Rupees Fifteen Thousand only) payable to the complainants by the opponents.

2. Opponents are directed to hand over possession of flat bearing No.501, admeasuring 895 sq.fdt. built-up area, 5th floor, 'I' wing of proposed Bhoomi Breeze Building situated at Raheja Estate, Off. W.E. Highway, Borivali (East), Mumbai to the complainants within four months from the date of payment of remaining consideration i.e. Rs.23,95,995/- (Rupees Twenty Three Lakhs Ninety Five Thousand Nine Hundred Ninety Five only). If the opponents refused to accept the amount, then complainants should deposit the amount in this Commission under intimation to the opponents and from that date within four months possession should be handed over to the complainants.

ALTERNATIVELY AT THE OPTION OF COMPLAINANTS

Opponents are directed to hand over possession of any other flat of the same area in the same building or in the nearby vicinity to the complainants within four months from the date of payment or deposit of remaining consideration i.e. Rs.23,95,995/- (Rupees Twenty Three Lakhs Ninety Five Thousand Nine Hundred Ninety Five only).

ALTERNATIVELY AT THE OPTION OF COMPLAINANTS

Opponents are directed to refund amount of Rs.51,000/- (Rupees Fifty One Thousand only) along with interest @ 12% p.a. to the complainants from the date of payment i.e. 16/06/2005 till realisation.

3. Opponents are also directed to pay Rs.1,00,000/- (Rupees One Lakh only) as compensation on account of mental agony suffered by the complainants.

8.       It is to be noted that initially, the complaint was filed against 3 OPs, OP No.1 M/s Bhoomi Constructions, a partnership firm and OP No.2 Mr. Akshay Doshi (Appellant herein ) and OP No.3 Mr. Ramesh Mehta, both shown as partners of OP no.1.  In the written statement, OP No.2 stated that no body by the name of OP no.3 is partner of OP No.1 firm.  Later on, at the request of the Complainant, name of OP No.3 was deleted.  OP No.2 (Appellant herein ) did not object to the deletion of OP No.2 from the array of parties  before the State Commission.  Perusal of deed of Partnership Firm dated 01.09.2022 shows that the partnership created by the name Bhoomi Constructions as per this deed was having following four partners :

1. Mr. Ajay Champaklal Mehta
2. Mr. Bhushan Champaklal Mehta
3. Mr. Akshay Jayantilal Joshi (Appellant herein / OP No.2 before the State Commission)

4. Mr. Prabhat Chandra Jain, Karta of HUF of P.C.Jain.

9.       Hence, as per above deed of Partnership, Mr. Ramesh Mehta was not a partner of OP No.1 partnership Firm.  Even the deed of Dissolution dated 01.04.2009 is between these four persons only.

10.     In reply dated 05.04.2008 to the legal notice dated 25.03.2008 issued by the Complainants, OP No.1 has interalia stated as follows :

1. The true and correct facts are that your client had approached us showing her interest in purchasing a flat in our project "Bhoomi Fields" which was at that time in planning stage, at that point of time we had not yet decided as regards whether to carry out the development of the said building "Bhoomi Fields" and not "Bhoomi Breeze" as alleged in your letter under reply.

2.  Thereafter due to unavoidable circumstances we decided not to carryout development of the said building "Bhoomi Fields", the said fact was on various occasions conveyed to your client but your client for reasons best known to her ignored and did not respond to the same.

3. We deny that we had informed you as regards the availability of specific flat being Flat no.501, Wing I in Bhoomi Breeze situate at Raheja Estate, Off E.E. Highway, Borivali (east), Mumbai 400066, as alleged.

4. We would like to draw your attention towards the receipt dated 16-06-2005, it is categorically stated that the amount is towards "Provisional Booking" which itself implies that the same is temporary, conditional, for short term and that the actual amount to be paid, the details of the relevant flat its area, etc. shall be as agreed

between the parties.

5. At the outset we deny that at any point of time Rs.24,46,995/- (Rupees Twenty four Lakhs Fortysix Thousand Nine Hundred and Ninety Five Only), was payable by you as alleged by you in your letter under reply.

11.     However, we find that the plea of OP No.1 in the above stated reply dated 05.04.2008 that the proposed project was ‘Bhoomi Fields’ and not ‘Bhoomi Breeze’ is not correct as receipt dated 16.06.2005 clearly states the name of project as ‘Bhoomi Breeze’.  Plea of OP no.1 in para 3 of their reply cited above is also not correct as the said receipt clearly mentions the Flat No. 501 in ‘I’ Wing on 5^th Floor in ‘Bhoomi Breeze’.  Further, the statement in para 4 of reply that amount received vide receipt dated 16.06.2005 was towards ‘Provisional Booking’ is also not correct as this receipt no where states so, rather it stated that this amount of Rs.51000/- was ‘in part payment on account of Flat No. I/501’.  Complainant in response to above stated reply of 05.04.2008 in her reply dated 26.05.2008 through her Advocate inter alia stated as follows :

1.         My client still reiterates, repeats, confirms, adhere to, refers, insists and relies upon the contents made and contentions raised by her in notice dated 25.03.2008 and she, my client, denies specifically what has been stated contrary to the contentions raised in the notice dated 25.03.2007 and puts your client to the strict proof of the same.

2. You have canvassed a concocted and scandalous story, in respect of Flat in question, as alleged in the impunged reply. It is denied that my client approached for the purchase of flat in your project “Bhoomi Fields”. It is denied that you ever conveyed that you have decided not to carry out development of Building viz.Bhoomi Fileds and/or “Bhoomi Breeze” due to unavoidable circumstances, and my client ignored the same, as alleged. It is specifically put on record and my client maintains that the flat in “Bhoomi Breeze” have been agreed to be purchased by her vide Booking under reference and that you with an ulterior intention and come out with evasive tactics of depriving of her right accrued to her by reason the booking under reference,

3. It is denied that receipt dated 16.06.2005 was towards provisional booking which implies that the same was temporary, conditional, for short term, as alleged. An entirely strange and novel concept is being tried to be introduced by you in complete disregard to the legal concept of a valid contract and ingredients thereof. It is necessary for you to obtain a legal advice in this regard.

4. The manner in which the booking was accepted by you from my client clarifies the position that since inception of the transaction there has been the instinct of cheating on your part against my client, particularly in the circumstances that the booking was signed by you through "Authorised Signatory" without specifying the status of Bhoomi Constructions as to whether it is a Partnership, Proprietory concern and / or a company. You are hereby called upon and required by my client to clarify the position with regard to the status of Bhoomi Constructions and to supply to my client or to me on her behalf the names, addresses and designations of the persons responsible for the day to day management and affairs of Bhoomi Constructions.

5. In these premises and the circumstances that have happened my client calls upon and requires you to withdraw the impugned reply under reference unconditionally and to comply with the requisitions so made by her in her notice dated 25.03.2008.

12.     Initially, the Complaint was rejected by the State Commission under its order dated 09.07.2009 on the ground that there is no written agreement that had taken place.  Since the project was yet to start, the Complainant was only a prospective buyer, hence dispute is not a consumer dispute and Complainants have a remedy before Civil or Criminal Court.  The said order of the State Commission was set aside in Appeal No. 353 of 2010 filed by the Complainant vide order dated 12.11.2010 and Complaint was remanded back to the State Commission for deciding the same afresh in accordance with law, which has since been decided vide impugned order dated 03.04.2017.

13.     In the written statement filed before the State Commission, OP no.2 had contended that there is neither any agreement nor there exist any privity of contract between the Complainant and Opposite Party, complaint is time barred and not maintainable.  OP no.2 admitted that OP no.1 was a partnership firm engaged in the business of Developers and Builders and OP No.2 was one of the partner of OP No.1. It is the case of OP no.2 that in the year 2005, the project ‘Bhoomi Field’ was to be planned, but due to unavoidable circumstances, the said project was not carried out and said fact was conveyed to the Complainant orally.  OP No.2 further submitted in his written version that the project ‘Bhoomi Breeze’ was at the end of completion in the year 2005 and that there was no ‘I’ wing in so far as ‘Bhoomi Breeze’ is concerned. 

14.     In pursuance to order dated 03.04.2017 of the State Commission, OP No.2 (Appellant herein ) wrote to the legal heirs of Complainant vide letter dated Nil, offering to pay a total of Rs.2,39,038/-.  This letter was signed by someone showing himself to be Secretary to OP No.2.  Contents of this letter is reproduced below :

We refer to the Order dated 03^rd April, 2017 received by us on 1^st May, 2017 passed in the above mentioned matter by the Hon’ble State Consumer Disputes Redressal Commission, Maharasthra, Mumbai.

In light of the findings in the said Order which reads as follows :

“We find that if the opponents are not in a position to hand over possession of the said flat or alternative flat in the same building of same area or in the nearby vicinity at the option of the complainants are entitled for refund of amount of Rs.51,000/- alongwith interest @ 12% p.a. from the date of payment i.e. 16.06.2005 till realization.  Complainants are entitled for some amount on account of mental agony suffered by the complainants.  We quantify said amount at Rs.1 lakh.

We offer to pay to you the following “

I  hereby request you to kindly intimate to us the Name and Address in whose favour you wish to receive the aforesaid amount directed to be paid by the Opponent for putting an end to the dispute raised.

15.       This letter was responded to by one of the Legal Heir of the Complainant on 22.05.2017, contents of which are reproduced below “

To

Mr. Akshay Doshi

HDIL, Kaledonia, ‘A’ Wing, 8^th Floor

Opp. Vijay Nagar, Sahar Road, Andheri (East )

Mumbai -400059

Dear Sir,

            We are in receipt of a letter dated Nil received by us on 12^th May, 2017 and with reference to the same on behalf of and under instruction of all the addresses, I have to reply to you as under :-

1. That in your letter under reply you have partly reproduced the findings of the Hon’ble State Consumer Dispute Redressal Commission Maharasthra Mumbal on Point no 3 i.e. Compensation as enumerated in para 12 and offered to pay us an amount of Rs. 2,39,088/-.   Your said offer is not acceptable to us.

2. That the Order dated 3 April, 2007, passed by The Hon'ble State Consumer Dispute Redressal Commission, Maharashtra, Mumbai which is self explanatory is enclosed herewith for your kind

3. We draw your attention to the operative part of the said order wherein you are directed to :

1. Hand over possession of Flat bearing No. 501, admeasuring 895 sq. built-up area,  5^th  Floor, I Wing of Bhoomi Breeze Building situated at Raheja Estate, off. W.E. Highway, Borivili (East), Mumbal within four months from the date of payment of remaining consideration of 23.95,995/-;

2. Pay us an aggregate amount of Rs. 115000/-(Rupees One Lakh Fifteen Thousand only) i.e amount of Rs 15000/- (Rupees Fifteen Thousand only) towards the cost and an amount of Rs. 1,00,000/-(Rupees Lakh only) as compensation amount towards mental agony.

4. Under the aforesaid circumstances within 15 days of receipt of this communication, we request you to :

1. Intimate to us date & time to enable us to carry out inspection of the said Flat No 501, admeasuring 895 sq.ft. built up area, 5^th Floor, ‘I’ Wing Bhoomi Breeze Building situated at Raheja Estate, Off.W.E. Highway, Borivilli ( East) Mumbai.

2. Send us the draft sale deed for the said Flat and carry out the necessary changes if any in the said draft after due discussion with us.

c.   Inform us the date, time and venue for completing the execution & registration formalities for the said Flat;

d.   Inform us the date as to when you shall  hand over possession of the said flat;

e.   Pay us an aggregate amount of Rs.115000/- ( Rupees One Lakh Fifteen Thousand only) by drawing a cheque in favour of G.Sundar towards cost and compensation towards mental agony, as per the order. 

5.         Also please find enclosed cheque bearing no.000324 dated 22^nd May, 2017, drawn on HDFC Bank Ltd. favouring ‘Bhoomi Construction’ for Rs.23,95,995/-

            Lastly we call upon you to comply our request at para 4 above and also hand over the possession of the Flat No. 501, admeasuring 895 sq. ft. built-up area, 5^th Floor, ‘I’ Wing, Bhoomi Breeze Building situated at Raheja Estate, Off. W.E. Highway, Borivilli ( East ) , Mumbai within 4 months from the date of receipt of payment as stipulated in the order dated 3^rd April, 2017, passed by the Hon’ble State Consumer Disputes Redressal Commission, Maharashtra, Mumbai failing which we shall be constrained to initiate appropriate legal action against you before the appropriate authority at your own risk as to cost and consequences.

Thanking you in anticipation.

Yours truly

Sd/-

G.Sundar

711-C, National Park View-2

Raheja Estate, Borivalli East

Mumbai-400066

Enclosures as above

Cc : M/s Bhoomi Construction

106, Shripal Industrial Estate

Oshiwara, S.V.Road, Jogeshwari ( West)

Mumbai 400102

16.     OP No.2 wrote further to Legal Heir of Complainant in response to above said letter dated 22.05.2017, contents of which are also reproduced bellow:

To

Mr. G.Sundar

Legal Heir of Late Smt. G. Sivayogam

711-C, National Park, View-2,

 Raheja Estate, Borivali,

Mumbai-400 066.

Sub :   In the matter

Before the Hon'ble State Consumer Disputes Redressal Commission, Maharashtra, Mumbai

Complaint Case No.CC/09/111

Smt. G. Sivayogam through Legal Heirs Vs. M/s. Bhoomi Construction & Anr.

Ref : Your letter dated 22.05.2017 received by me 25.05.2017

Apropos your letter, at the outset, I return berewith your cheque dated 22.05.2017 bearing No.000324 drawn on HDFC Bank, Andheri East Branch, Mumbai-93 in favour of "Bhoomi Construction" for the sum of Rs. 23,95,995 as you a very aware of the fact that "Bhoomi Construction is not in existence.

Nevertheless, I have earlier also, in good faith and in the bonafide interest of mitigating litigation offered the legal heirs of Late Mrs. G. Sivayogam the refund of monies along with the interest as well as compensation and cost as directed by the under the said Order dated 03.04.2017 passed against Bhoomi Construction. The refund of the amount so quantified is the only practical solution that could be offered by me as the party to the complaint.

However, in light of the fact that you refuse to accept the amount so offered, Please be informed I seek to take legal recourse for having the said Order passed in the abovementioned matter set aside against me at the earliest.

Further without prejudice and in the event, you wish to settle the matter, I request you to kindly get in touch with the undersigned for reaching a amicable settlement in the matter.

Best Wishes

Sd/-

Akshay Doshi

17.     In support of their case, both sides have relied  upon various judgments of this Commission / Hon’ble Supreme Court, which are briefly listed below along with the issue being highlighted from these judgments :

          Judgments relied upon by the Appellant

1.       Courts can only enforce existing contracts; they can’t compel parties to enter into agreements that don’t already exist.

a.       Mayawanti Vs. Kaushalya Devi (1990) 3 SCC 1

b.       Satish Kumar Vs. Karan Singh (2016) 4 SCC 352

2.       Without clarity on the terms and conditions, contract cannot be specifically enforced

a.       Jamnadas Mathuradas Vs. Baf Hira Builders (P) Ltd. 2011 SCC Online Bom 1629

b.       Hansa V Gandhi Vs. Deepa Shankar Roy (2013) 12 SCC 776

c.       Anil Kumar Vs. Seema Thakur 2010 SCC Online Del 106

d.       Coffee Board, Bangalore Vs. Janab Dada Haji Ibrahim Halari 1964 SCC Online Kar 61

3.       If the contract for specific performance isn’t concluded, relief can’t be granted based on another alleged contract

          Mirahul Enterprises Vs. Vijaya Sirivastava 2002 SCC Online Del 542

            Judgments relied upon by the Respondents

1.       Essential Ingredients for an Agreement to Sale

                    Anil Kumar Vs. Seema Thakur and Ors. C.S. (OS) 953/2009

2.       Receipt of Provisional Booking of Flat shows intentions to sell

Mohan Lal Ahuja and Ors. Vs. Tarun Chandra and Ors. CS ( OS) No. 571 and 633 of 1999

3.       For a person to be an allottee under RERA, it is not necessary that an agreement to sell has to be executed and a booking receipt is enough

Mukesh Agarwal and Ors. Vs. SNG Real Estate Pvt. Ltd. and  Ors., Complaint No. Raj-RERA-C-020-3597.

4.       The Promoter is legally required to enter into an agreement to sell

a.       Maharashtra Ownership Flats Act, 1963

b.       Vashdev Malkani Vs. Kunal Builders and Developers 2016 SCC Online NCDRC 77

5.       Consumer has the freedom to choose its reliefs

Experion Developer Pvt. Ltd. Vs. Sushma Ashok Shiroor 2022 SCC Online 426

6.       Duty of builder to execute agreement under MOFA, consumer is entitled to get the possession of the flat

a.       Afcons Developers Pvt. Ltd.and Ors. Vs. Brijlal Menghraj Ahuja and Ors. II (2023) CPJ 147 ( NC)

b.       Dilipkumar Bhupatlal Doshi Vs. Vastu Shilp Developers and Ors. 2022 (3) CPR 54

7.       Non-delivery of flats after receipt of consideration is deficiency of service

Alan Querobius Fernandes Vs. Vastu Developer and Ors. CC No. 17/377

8.       Duty of Builder to execute agreement under MOFA, Consumer is entitled to get the possession of the flat

          Sudhakar Kondaji Jadhav Vs. Pavan Patil 2022 (3) CPR 100

9.       If any litigant approaches the Court of Equity with unclean hands, suppress the material facts, tries to mislead / hoodwink the judicial forum, then their defence should be thrown away. Unscrupulous builder who after taking the cost of the flat do not perform their part of the obligations should not be spared

Ansal Properties and Infrastructure Ltd. Vs. Nidhi Jain 2013 SCC Online NCDRC 590

10.     Concealment of Facts

Pavel Garg Vs. The New India Assurance Company Ltd. 2014 (2) CPC 431

18.     Some of the case laws relied upon by the parties are discussed in more details in the following paras. 

18.1.  Respondents have relied upon an order dated 20.09.2021 of Real Estate Regulatory Authority ( RERA) Rajasthan in Mukesh Agarwal ( supra) wherein RERA observed as follows:

56.  In so defining the term 'allottee', RERA Act has given a wide meaning to it. For a person to be an allottee under RERA Act, it is not necessary that an agreement for sale must have been executed in his favour or that such agreement must have been registered Accordingly, a homebuyer who has not executed any agreement for sale but has merely booked a particular flat by paying the booking advance and to whom only a booking receipt or allotment letter has been issued, is also an allottee for the purposes of RERA Act. The promoter cannot be allowed to disregard such an allottee; and, therefore, an assignee of the promoter (the respondent Bank, in the present case) can also not be allowed to disregard such allottees. Thus, this Authority is expected to protect the interest of even those allottees in whose favour no agreement for sale has been executed……… 

18.2.  In Mohan Lal Ahuja ( supra), relied upon by the Respondents, Hon’ble High Court of Delhi has observed as follows :

1. The two suits for specific performance are result of relationships which have gone sour………while in respect of suit No.633/1990 (second ‘suit’ for short) only a receipt for the money was executed.  The receipt of money in both the cases is undisputed……….while the receipt in the second suit dated 31.01.1998 is once again for a flat of 1866 sq.ft. on the 4^th floor of the said property.  The phraseology used in the receipt is ‘provisional booking’. 

51.       The Findings have been given on the issues in respect of the first suit.  The position is really no different for the second suit except on the aspect of absence of an agreement to sell and there being only a receipt.

54.       A reading of the aforesaid receipt shows that there is a description of the flat by area, floor and the price.  Thus all the ingredients are specified making it certain where the flat is located.  No doubt the expression used is ‘provisional booking of a flat’ but use of these words does not defeat the intent with which the receipt was executed especially taking into consideration the understanding between the parties as reflected in the agreement executed in respect of the first suit……..

55.       The question arises whether the execution of merely this receipt in the absence of an agreement makes the agreement incapable of being performed on account of uncertainty.  In my considered view, the answer to the same is in the negative.  The plaintiff has made a total payment of Rs.2 lakh.

18.3.   In Experion Developer Pvt. Ltd. ( supra ), Hon’ble Supreme Court observed as follows :

26.       A consumer invoking the jurisdiction of the Commission can seek such reliefs as he/she considers appropriate. A consumer can pray for refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative. If a consumer prays for refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands. This position is similar to the mandate under Section 18 of the RERA Act with respect to which the Court clarified the position in Para 25 of Imperia case referred to herein above.

27.       We have referred to the legal regime under the Consumer Protection Act, only to show that the Commission has the power and jurisdiction to direct return of money under Section 14 of the Consumer Protection Act, if a consumer so chooses. The freedom to choose the necessary relief is of the Consumer and it is the duty of the Courts to honour it.

18.4.  In Mayawanti ( supra), Hon’ble Supreme Court observed as under :

8.          In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts. Where a valid and enforceable contract has not been made, the court will not make a con-tract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract. It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligation arising out of it. The contract being the foundation of the obligation the order of specific performance is to enforce that obligation.

18.        The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all. Where there are negotiations, the court has to determine at what point, if at all, the parties have reached agreement. Negotiations thereafter would also be material if the agreement is rescinded.

18.5.  In Jamnadas Mathuradas ( supra ), the Hon’ble Supreme Court observed as follows:

8.         Importantly, the specific performance can be granted of immovable property based upon the clear terms and conditions along with the description of the property. In the present case, there was no specific agreement between the parties except the alleged acknowledgment of receipt of the earnest money. There was no specific agreement executed at any point of time. There is sufficient material on record to show that the Respondent never commenced the construction immediately. Therefore, there was no occasion to fix further price of flat and/or its installment, if any. Therefore, there was no final agreement for consideration of the flat. The construction never took place within a span of two years. As noted, the Appellant even failed to agree for modified terms and conditions including the payment so proposed. The building no.5 was never constructed at any point of time. As noted, the acknowledgment refers to flat in building no.5. In view of this matter, as there is clear lacking of terms and conditions as well as description of the property and as there exists no such building no.5, apart from delay, and as there was no interim order or protection operating in favour of the Appellant, at any point of time and Respondent no.4 being subsequent purchaser, completed the construction and third party rights have already been created and there exists no such flat no.20 in building no.5, "A" Wing as claimed and if the specific performance as claimed, even if any just cannot be granted and as the leaned Judge has exercised the discretion, we also see no reason to interfere with the judgment and order so passed.

9. The Court cannot pass a judgment or decree which is unexecutable specially in a Suit for specific performance. Therefore, whether there was valid and/or binding contract as the Appellant based upon the offer/brochures made the payment through the exclusive agent, which is also not proved, is also looses its importance in the present facts and circumstances of the case. The readiness and willingness which is also basic element of such Suit for specific performance, as rightly observed by the leaned Single Judge, by giving reason and we also confirm, after going through the material and documents on record that the Appellant failed to prove that he was ready and willing continuously before filing of the Suit and even thereafter. The leaned Judge has rightly relied on N.P. Thirugnanam (D) by L.Rs., Vs. Dr. R. Jagan Mohan Rao and others, . The issue with regard to readiness and willingness is always on the foundation of valid and clear executable agreement. If there is no clear terms agreed with regard to description of the property and also of consideration, the submission with regard to the willingness and readiness is also unacceptable.

18.6.   In Anil Kumar (supra), the Hon’ble Supreme Court observed as follows :

11. The averments in the suit would show that the plaintiff is claiming title to the suit properties, on the basis of an Agreement to Sell. The precise terms of such Agreement to Sell, allegedly entered into with the first defendant, are unknown. A contract to sell immovable property is one species of contract. No provision of law obliges such contracts to be in writing. The judgments of the Supreme Court have repeatedly emphasized that there can be binding oral agreements to sell immovable property (Ref. V.R Sudhakara Rao v. T.V. Kameshwari, 2007 (6) SCC 650; Kollipara Sriramulu v. T. Aswathanarayana, AIR 1968 SC 1028; etc). The question is not whether the plaintiff has proved existence of an agreement to sell, with the plaintiff, but if the materials and pleadings on record show that such contract had come into existence.

18.7.   In Hansa V Gandhi ( supra), Hon’ble Supreme Court observed as follows :

18.   It is not in dispute that the letter of intent was issued by the Developer to the plaintiffs wherein certain conditions had been incorporated and upon fulfillment of those conditions, agreements for sale of the flats were to be executed. Upon perusal of the letter of intent closely, one would find that certain conditions had been incorporated in the letter of intent. The said conditions clearly imposed a duty on the part of the intended purchasers to make payment of all the installments payable in respect of the purchase price of the flat. It is also not in dispute that it was open to the Developer to vary the price or the area to be covered by a flat in certain cases. It is not in dispute that the Developer had raised the price because of the delay caused on account of the litigation faced by the Society. On account of the delay caused in construction of the flats, the cost had gone up and therefore, the Developer had asked for a rise in the price which was approved by the majority of the intended purchasers of the flats. Accordingly, all the other purchasers had started paying the increased price of installments but the plaintiffs had refused to the same and in fact they had stopped paying the installments which were becoming due and payable after the price had been increased. It is also worth noticing that the plaintiffs did not make payment even as per the rate prescribed under the letter of intent and the terms and conditions agreed upon by them with the Developer.

19. It is a fact that the plaintiffs had not entered into any formal agreement with regard to the purchase of the flats with the Developer. The mere letter of intent, which was subject to several conditions, would not give any right to the plaintiffs for purchase of the flats in question till all the conditions incorporated in the letter of intent were fulfilled by the plaintiffs i.e. the proposed purchasers. It is also a fact that all the conditions, which were to be fulfilled, had not been fulfilled by the plaintiffs.

20. According to the provisions of Section 4 (1) of the Act, the agreement, if any, executed between the plaintiffs on one hand and the developer on the another, ought to have been registered with the sub- Registrar. In absence of such a registered document, the plaintiffs would not get any right in respect of the flats, which they intended to purchase. Moreover, in absence of the registration, the Subsequent Buyers could not have got an opportunity to inspect the agreement and there could not be any presumption that the Subsequent Buyers knew about the agreement.

21. The letter of intent cannot be said to be an agreement to sell for the simple reason that according to the contents of the letter of intent, only upon payment of the entire purchase price, the Developer and the plaintiffs were to enter into an agreement with regard to sale of the flats. This fact clearly denotes that no agreement to sell had been entered into between the plaintiffs and the Developer and in absence of such agreements, in our opinion, there cannot be any right in favour of the plaintiffs with regard to specific performance of any contract. Thus, in our opinion, the High Court did not commit any error while coming to the conclusion that there was no binding contract or agreement in existence between the plaintiffs and the Developer and therefore, the trial court could not have decreed the suit for specific performance.

19.     Section 4 of the Maharashtra Ownership Flats Act, 1963 states as follows:

4. [(1)] Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building of flats all or some of which are to be taken or are taken on ownership basis, shall, before, he accepts any sum of money as advance payment or deposit, which shall not be more than 20 per cent, of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under  [the Registration Act, 1908 (hereinafter in this section referred to as "the Registration Act, 1908"]  [and such agreement shall be in the prescribed form.]

20.     It is to be noted that in the present case what Consumer Fora are looking into is not the enforceability of a Contract or specific performance of a contract but the deficiency in service on the part of builder under the provisions of Consumer Protection Act.  Hence, in the given facts and circumstances of the case, where only a receipt has been issued towards booking of a flat specified therein but no subsequent allotment letter was issued or any agreement to sell or sale agreement was signed, we have to see whether failure of the builder to honour his commitment to allot the flat promised under the said receipt of advance amount constitute a deficiency in service. 

21.     The dissolution of a  partnership  firm    does  not   absolve   its partners from   obligations   under   the    Maharashtra    Ownership   Flats Act, 1963. Partnership firms, while not considered distinct legal entities under general law, consist of individuals collectively engaging in business activities. Even post-dissolution, partners remain liable for obligations incurred during the firm's existence, as prescribed by Section 45 of the Indian Partnership Act, 1932. Agreements made by one partner on behalf of the firm are binding on all partners, as per the provisions of the Indian Partnership Act, 1932. The Consumer Protection Act, 1986, defines 'person' to encompass firms, regardless of registration status, enabling legal recourse against unregistered partnership firms. An agreement executed by one partner on behalf of the firm carries legal validity for all partners.

22.     In view of the foregoing, we are of the considered  view that vide receipt dated 16.06.2005, the OP No.1 firm having accepted advance money towards allotment of a specific flat to the Complainants, was under an obligation to sign the agreement to sell under the provisions of MOFA and allot the unit in question.  Failure to do so constitute a deficiency in service on the part of OP No.1, partnership firm and OP no.2 being its partner, is liable for the acts of OP-Partnership Firm, which has since been dissolved. State Commission has given a well reasoned order and we find no reason to interfere with its findings.  There is no illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the same is upheld.  Accordingly, FA is dismissed.

23.     The pending IAs in the case, if any, also stand disposed off.