DR.INDER JIT SINGH, MEMBER

1.   The present Consumer Complaint (CC) has been filed by the Complainant against the opposite party as detailed above, inter aila praying for:-

(i)     to direct the OPs to obtain Occupation Certificate and Completion  Certificate  within time bound period and also provide proper regular water connection, failing which the OPs be ordered and directed to pay an amount of Rs.1,000/- per day of delay from the time limit.

(ii)     to direct the OPs to pay an amount of Rs.15,15,61,090/- towards rent compensation, corpus fund of existing members and other dues as per statement exhibited prepared as per clause 6(iv) of the redevelopment agreement dated 16.05.2010 along with interest @12% from December 2017 till realization.

(iii)    to direct the OPs jointly and severally to pay an amount of Rs.1,95,00,000/- towards liquidated damages as per clause 6(iv) (e) of the redevelopment agreement dated 16.05.2010 along with interest @ 12% from December 2017 till realization.

(iv)    to direct the OPs to pay an amount of Rs.72,76,876/- towards property tax to the concerned Municipal Authority or reimburse the same if paid by the complainant society and also directed to pay the property tax till they obtain OC from the concerned authority.

(v)    to direct the OPs to reimburse an amount of Rs.94,891/- towards water charges which the complainant society has to to pay extra in absence of the OC.

(vi)    to direct the OPs to pay Rs.1,46,896/- towards outstanding maintenance dues for unsold flats.

(vii)   to pay an amount of Rs.1,50,000/- towards the corpus fund for three unsold flats.

(viii)  to direct the OPs to clear the bill dated 24.05.2017, issued by Project Manager S.B. Associates for an amount of Rs.5,00,000/-.

(ix)    to direct the OPs to complete the Fire Fighting Installations and procure the fire department NOC.

(x)    to direct the OPs to reimburse amount of Rs.93,29,055.00 towards TDS deducted by the OPs and not paid to the concerned authority.

(xi)    to pay compensation of Rs.20,000/- to each member for incessant mental and physical harassment.

(xii)   to pay Rs.5,00,000/- towards legal cost and also some other prayers.

2.       Notice was issued to the opposite party on 29.08.2018 giving them 30 days’ time to file their written statement.

3.       It is averred/stated in the complaint that:-

i)        That the Complainant is a Co-operative Housing Society, registered as “Housing Society” under the Maharashtra Co-operative Societies  Act, 1960 for itself and in common interest of its 126 members. The complaint is filed at the hands of It’s Chairman  Mr. Gev. R. Vaid and the Hon.Secretary, Mr. Ravindra N. Shetty, who are duly authorised and being personally aware of the facts, are authorised to file the present complaint and to make submissions on behalf of the complainant society.

ii)       OP-1 is a Partnership firm registered under the Indian Partnership Act, 1932.  The OPs -2 & 3 are the Partners, who are conducting the business of the OP-1 firm and are therefore, responsible and liable for the business activities and for the financial and administrative and management decisions and are made a party jointly with the OP-1 firm.  The complainant society is situated at City Survey No. 33/12, Chinchavli, Taluka Borivali, in Bombay suburban district, admeasuring about 5937 sq. mtrs.  and on the said  property there are seven buildings known as R1 to R7 consisting of 126 flats which were in use and occupation of the members of the complainant society. Since the said seven buildings were in dilapidated condition, hence the complainant society decided to redevelop the said property and accordingly called for tenders through advertisement in newspaper. As the Complainant society being situated on the prime location, the OPs would be able to utilise the FSI as well as load TDR and exploit the plot  by selling the additional flats that could be constructed and thus make huge profits. Keeping an eye on the huge profits, after selecting the OP-1’s offer, the complainant society entered into Redevelopment Agreement dated 16.05.2010 with OP-1. The OPs agreed to redevelop the property of the complainant society and to handover possession of the flats to the members on ownership basis and other benefits as per the agreement. As agreed in the redevelopment agreement, the OPs agreed and promised to handover possession of the new constructed flats to the members of the complainant society within a period of 30 months with grace period of 6 months from the date of handing over vacant possession of the building alongwith other promises like to provide oneself contained flat having area equivalent to the existing carpet area of their old flat plus 20%extra with additional 8 to 10% and along with amenities and facilities as per Redevelopment Agreement. It was also agreed to pay an amount of Rs.40/- per sq. ft. of existing carpet area per month as rent for temporary accommodation for first 12 months and thereafter Rs.44/- per sq. f. for next 12 month and thereafter Rs.48.40 per sq. ft. of existing area which is to be paid till the completion of construction of the new building and till the date the OP apply for Occupancy Certificate to the appropriate authority. To pay an amount of Rs.5,00,000/- per month as liquidated damage for delay in completing the construction of the said building within agreed time.

iii)      The members of the complainant society vacated their old flats for handing over to the OP in June 2010, however, the said property was taken by the OP on 26.09.2010 on submitting Bank Guarantee to the complainant society. As per agreement, the OP-1 agreed to allot flats to the members of the complainant society having carpet area equivalent to area of their existing flats plus 20% more carpet area of the flat.  The OP further agreed to give additional carpet area of 8 to 10% of usable area of the existing carpet area as dry balcony/flower bed, but finally the OPs agreed to give 7% carpet area. Thus, the complainant society members were entitled for the flat having carpet area equivalent to the existing area of their old flat plus 27% of the said existing area.   As per clause 16(1)(a) of the agreement, option was also given to the members of the complainant society to buy additional area in addition to the right of carpet area by surrendering the rent amount and corpus and some of the members opted for the same.

iv)      The OPs insisted to execute supplementary redevelopment agreement so as to get benefit of changed D.C. Regulations for making profit out of it by using the said additional FSI available due to the change in DC Regulations.  Since the members of the complainant society were in need of the possession of their ownership flats at the earliest, the Society agreed to execute the said supplementary redevelopment agreement, which was executed on 31.12.2014.

v)       The OPs failed to complete the construction of the said project and handover possession of the flats to the members of the complainant society in time as agreed in the agreement.  The OPs informed the Complainant society in September 2014 that the construction work will be completed by December 2014 and possession with all the agreed amenities and facilities may be given in December 2014.  The complainant society visited the site building and found that many things remained to be done to even make the flats habitable, besides the promised and agreed amenities were not provided nor had the OPs even applied for OC.

vi)      On 17.06.2015, the OP wrote a letter to the complainant society threatening the members of the complainant society to take possession of the flats and that the rent compensation would not be paid.  In the said letter the OPs also agreed to settle the claim of every member towards rent and corpus, which was due from long time, but till date failed to do so.  The construction work of the flats was not complete and there was also lack of basic amenities like drainage, BMC regular water supply, individual electricity connection meter, Fire NOC as also OC etc., the OPs stopped paying rent to some of the members from March, 2014 and thus started pressuring, coercing and forcing the members of the Complainant society by stopping the rent for the temporary accommodation.  As the members could not get accommodation for short period and without the rent could not afford to get accommodation for 11 months, some of the members having no alternative were forced to take possession of incomplete flats as OPs stopped payment of rent and accordingly from July, 2015, some of the members were forced to accept the possession of their respective flats which they accepted under duress.  Thus the OPs forced the members of the complainant society to accept the possession of the flats in the project which was incomplete and without the OC, thus forcing illegal occupation.  However, some three members have refused to take possession and have not yet occupied their respective flats.

vii)     Inspite of several requests to the OPs to execute and register the permanent alternate accommodation agreement with individual members, but except for promises, till date the OPs failed and neglected to execute and register the same.  Till date (filing of complaint) the OPs have executed only 2 agreements with 2 members and rest of the agreements have not been executed and registered by the OPs.  Since there was no positive response from the OPs, despite their promises, the complainant society (95 members) sent a representation to the OPs on 03.07.2016, again requesting the OPs to execute and register the agreements with the members of the complainant society as was finalised by the solicitors of both the parties.  As there was no response to the said representation, the complainant society by another letter dated 21.12.2016, requested the OPs to comply with the registration of individual agreements and not to make any unilateral changes in the said finalised draft, but no response was received. Hence, the complainant society , vide its letter dated 08.05.2017, forwarded the representation dated 21.04.2017, signed by 100 members of the complainant society again made grievances about the payment dues to the members of the complainant society as also non-execution and non-registration of the permanent alternate accommodation agreement. On 25.05.2017, a letter through Advocate was sent by the Opposite Parties admitting that the agreement is not executed with the members of the complainant society and tried to blame the Secretary and the Chairman for the delay in execution of agreement, when the fact remains that the OPs failed to pay the stamp duty which is a pre-condition to execute and register the agreement with the members of the complainant society.  The said letter of OPs was replied by the complainant society on 08.09.2017. 

viii)   As per clause 15(b) of the redevelopment agreement, the OP is liable to pay liquidated damages in the sum of Rs. 1,95,000/- on account of not completing the building in all respect in agreed time along with Occupancy Certificate.  As per the provisions of Section 6 of MOFA 1963, it is the duty of the Developers to pay all the taxes including charges for water and electricity till the developer obtains OC.  In the present case the OPs failed to obtain OC and hand over the legal possession of the flats to the members of the society, the OPs are liable and responsible to pay all taxes including the property tax to the concerned authority till the OC is obtained, till 31.03.2018, which comes to Rs.72,76,876/- as per the bills issued by the concerned authority of MCGM.

ix)      The OPs are also liable to pay the maintenance charges of the unsold flats which are in the custody of OPs. There are other charges which are not paid by the OPs to the concerned authorities, which the OPs are liable to pay.  The OPs also deducted an amount of Rs.35,000/- to Rs.42,000/- depending on the size of the flat from the amounts due to the members towards maintenance charges from February 2015 till December 2015. However, as per redevelopment agreement, these same was to be borne by the OPs. The OPs are under obligations to pay Project Management Charges of Rs.10,00,000/- to the Project Manager appointed by the complainant society.  Out of which, the OPs have not yet paid Rs.5,00,000/-.

x)       As per the provisions of the MOFA 1963, the OPs are under obligations to handover all original plans and certificates including building completion certificate, lift certificate, drainage certificate etc. to the complainant society.  Further the OPs are also liable to give the list of allotment of parking spaces to the members of the complainant society which despite of several  demands the OPs failed to give to the complainant society.  The OPs are also under obligation to give Bank Guarantee of an amount of Rs.8,00,00,000/- to the complainant society to secure the redevelopment of the property of the complainant society.  The said bank guarantee was to be released by the complainant society as per Annexure J, to the said redevelopment agreement.  The OPs were also under obligation to renew the said bank guarantee from time to time till the OC is obtained.  Even after the competition of the building of the complainant society, the society is entitled to retain the Bank Guarantee for Rs.2,00,00,000/- till the OPs obtain OC. 

4.       OPs in their written statement/reply stated that :-

1. It is contended by the OPs that the dispute arose between the OP firm and the Chairman as well as the Secretary of the complainant society as they refused to make payment for the extra area they purchased as per Deed of Redevelopment.  SC Suit Nos. 2477/2016 and 2478/2016 was filed by the respondent firm against them before the Ld. City Civil Court, Dindoshi, Mumbai.  The OPs contended that filing of the above referred suits was the cause of action of friction between the chairman/secretary of the society and the OP firm.  It was the personal dispute between the parties in which they roped in the members of the society as well.  During the said time a dispute arose within the society wherein the secretary/chairman of the society took decision with respect to realignment of water connections due to alleged shortage of water for which they spent Rs.40 lacs (approx.) even though it was not required as there was general shortage of water at that point of time as announced by the BMC.

2. It is contended by the OPs that as far as execution of deed of allotment is concerned, more than 65 to 70 agreements are ready but the chairman/secretary of the society had refused to sign the tripartite agreement.  It also clarified that the liquidated damages have already been waived off by the members. Vide letter dated 15.03.2017, the society admitted of receiving corpus of new members.

3. It is further contended by the OPs that vide letter dated 17.04.2017, the solicitors of the OP firm explained the legal advisor of the society the entire sequence of events.  This letter was in continuation of the earlier letters dated 04.01.2017 and 01.03.2017.  It contained the proof for the payment of bills raised by the society.  Vide letter dated 25.05.2017, the solicitor of the OP firm informed the society regarding the conduct of its chairman/secretary as well as other issues including non-receipt of corpus.  On 27.05.2017, the solicitor of the OP wrote to the managing committee of the society pointing out the negligence in which the society is handling the issues including renewal/grant of AMC in respect of majority of the equipments.

4. It is also contended by the OPs that vide letter dated 12.06.2017, the complainant society was requested to execute/register the deed of allotment in favour of owner of Flat Nos.  301 and 801 of Wing-A of the society. But the owner of flat no. 801, who is one of the members of the managing committee of the society, he did not come forward to get the deed of allotment registered.  On 15.07.2017, once again clarified the repeated objects raised by the complainant society.  It was categorically pointed out that the entire dispute between the parties arose when the OP firm pointed out exorbitant amount spent on getting a new pipeline by the complainant.  It may be noted that even otherwise the Chairman/Secretary of the society had bias against the OPs firm for filing civil suit against them.  Vide letter dated 17.07.2017, once again it was pointed out the illegalities committed by the Chairman/Secretary of the society and while accepting certain requests it was pointed out that the Chairman and Secretary should unlock the common open terrace adjacent to flat No. 1601A and 1602A as well as 1601B. On 04.01.2018, the complainant society informed that the officials of MCGM visited the site for the purpose of issuing occupation certificate and directed to reconstruct RCC wall from bottom of the nalla which would cost a sum of Rs.50 lakhs to the OP firm.  Vide letter dated 10.01.2018 the maintenance/corpus of the three unsold flats was cleared. 

5. The OC was obtained on 26.02.2018.  On 05.03.2018, the solicitors of the OP firm intimated the complainant society regarding the payment of property taxes on their behalf by the OP firm as well as issuance of the OC.  A request was made to issue NOC to the concerned bank to return the original bank guarantee to the OP firm by revoking/cancelling the same qua their claim.  The complainant society issued NOC and accordingly the entire bank guarantee was released.  Releasing NOC by the society indicates that the society consented that there was no deficiency in service etc. on the part of the OP firm viz.a.viz. the agreement dated 16.05.2010. Vide letter dated 21.05.2018, the OP firm provided the certified copy of complete set of building completion plan (containing 21 plans) to the society.  It may be noted that these plans are already on the website of MCGM. 

6. It is further contended by the OPs that vide letter dated 22.06.2018, the OP firm pointed out to the Chairman and Secretary of the society that entire works as per deed of redevelopment dated 16.05.2010   and supplementary agreement dated 31.12.2014 have been done and OC was also obtained.  It was informed that even though the members are in exclusive possession of the respective flats and deed of allotment was already handed over to them, the Chairman and Secretary refused to sign objecting to clause 12 & 16 of the same.  In response to letter dated 14.06.2018 of the complainant society, the OP vide letter dated 28.06.2018, intimated that all the requisites laid down by the CFO department have been completed and final CFO NOC was obtained.  Request for service of equipments were also made.  Vide 22.08.2016, the solicitors of OP firm responded letter dated 14.08.2018 to the legal advisor the complainant society and stated that possession of the flats was taken by the members from September 2014 onwards and the water charges were being paid at normal rate.  Over and above the said rate of water charges were being paid by the OP firm till 26.02.2018 viz date of OC was obtained.  Similarly issue of property tax was also clarified and it was pointed out that it is the Chairman/Secretary of the society who are coming in the way of execution of deed of allotment. Vide letter dated 31.08.2018, the Project Management Consultant of the complainant society informed the society that his full and final professional fee was received from the OP firm and there were no dues. 

7. It is denied that the complaint is filed for common interest of all its 126 members. It is also contended that the OP-3 is no longer partner of OP-1.

8. Other allegations by the complainant society are denied by the OPs.

5.       Evidence by way of affidavit was filed by the complainant and affidavit of evidence was filed by the OPs broadly on the lines of averments made in the complaint.

6.       Heard Counsels of both sides.  It was stated by the counsel for the complainant society during the hearing/in their written arguments dated 25.10.2021 that since the filing of the complaint, certain claims have been settled.  Hence, these were not pressed these include issues relating to renewal of bank guarantee, clearance of bill of project management services, completion of firefighting installations and procurement Fire Department N.O.C., payment of property tax, maintenance dues for unsold flats, removal of all internal and external leakages in the building, reimbursement of amount towards water charges etc.  The issues remaining unsettled and for which relief has been sought include demand for payment towards rent compensation and corpus to the members of the society, payment of liquidated damages, payment on account of double water charges, non-deduction of amount towards maintenance till the O.C. was obtained, execution and registration of Permanent Alternate Accommodation Agreement with members of the Society at OP’s cost,  payment of stamp duty and registration charges by OP, reimbursement of TDS amount deducted but not paid to concerned authorities, handing over of original plans/documents etc.

7.       OPs during the hearing/in their written arguments stated that O.C. has been obtained on 26.02.2018, OPs are entitled to recover property tax of Rs.72.76 lakh  paid by them.  The OPs were always agreeable for execution and registration of permanent alternate accommodation agreement.  Till date only 15 members have come forward and got the agreement registered, there is no deficiency or unfair trade practices on the part of OPs, they have followed the development agreement and even took care of the liability of complainant from its own pocket, OPs have suffered a loss of approx. Rs.40 crore in the project and the complainant society gained out of said loss.

8.       It is argued by the OPs that as per clause 6(vi) of the Development Agreement dated 16.05.2020, they had to submit a bank guarantee of Rs.8.00 crore in order to secure the complainant and existing members of the re-development of the property and payment of the rental compensation to each existing members.  The bank guarantee was to be released on the basis of work completed by the developer.  The O.C. was granted on 26.02.2018 and thereafter, bank guarantee was released on 05.03.2018.  Therefore, the remaining claims as made in the complaint do not survive.  The last bank guarantee of Rs.2.00 crore was to be released after O.C. was obtained. 

9.       OPs further contend that complaint is barred by limitation, disputed questions of fact are involved in the matter which cannot be decided in a summary proceedings, the issues qua each member of complainant society are different and therefore, instant complaint is not maintainable, the delay in completing the project was occasioned due to change in DCR in 2012 which helped the complainant in getting 7% more area free of cost and for the same OP had to pay a huge sum of Rs.5 crore towards fungible premium, as the area increased, environment clearance was to be taken over, which OPs had no control, environment clearance was granted on 04.09.2014, for which OPs paid Rs.2.74 crore. Last member vacated the building on 29.09.2010, accordingly the period of 36 months completed on 28.09.2013, the possession was offered on 22.09.2014 and even prior to that a number of members had shifted to their respective flats.  The extra period of approximately one year was taken due to change in the Government policy as well as environmental issues.

10.     Vide order dated 23.03.2022, this Commission recorded the submission of the complainant that they were pressing and limiting their case to five issues only viz:

1. Registration of Permanent Alternate Accommodation Agreement to be executed between Developer, Society and each individual member at the cost of the Developer.

2. Payment of regular rent for alternate temporary accommodation from the period the Developer has stopped paying till the date of Occupancy Certificate.

3. Payment of compensation @ Rs.5 lacs per month to the society for delay of every month to the society, till obtaining of OC.

4. Developer to refund the amount deducted towards TDS but not paid, on the rent paid to the Complainants.

5. Payment of Rs.1 lakh towards corpus fund to the society. 

All these issues are part of Re-development Agreement dated 16.05.2010 and Supplementary Agreement dated 31.12.2014.

11.     OPs have contended that between period of offer of possession and till O.C. was obtained, OP was supposed to pay all the additional charges that could accrue because of non-availability of OC, admittedly all such charges were paid by the OP.

12.   After going through the various provisions of the Re-development Agreement/Supplemental Agreement, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -

1. OP shall get the Permanent Alternate Accommodation Agreement executed in respect of all the remaining members, by completing all the required formalities, within four months of date of this order.  The Complainant Society and the concerned members shall come forward and co-operate with the Developer/OP in this regard.  The liability to bear expenses in this regard shall be strictly as per the terms and conditions of the Re-development Agreement dated 16.05.2010 read with Supplementary Agreement dated 31.12.2014.  The charges levied by the concerned authorities at the time of registration/execution of such Agreement shall be paid by the party who is obligated to pay such charges in terms of the agreement(s) cited.

2. OPs shall pay the rent for alternate temporary accommodation till the date of handing over the possession in cases where possession has been handed over before the date of OC, and in other cases till the date of OC, at the rates agreed to in the agreement(s) cited.

3. Considering that there were valid reasons for some delay in completing the project, the Complainant Society is not entitled to any compensation as mentioned vide para (iii) of order dated 23.03.2022 of this Commission.

4. As regards TDS, OPs shall furnish member-wise details of TDS deducted and paid to the concerned authorities within two months of date of this order.  If any TDS deducted still remains unpaid to the concerned authorities, it shall be deposited within one month of this order, failing which, it shall be refunded to the concerned members with interest @6% from the date of expiry one month of this order till the date of refund.  Further, the OP shall furnish TDS certificate for the amount deducted from each member to the respective member within two months from the date of this order.

5. As regards payment of Rs.1 lakh towards corpus fund to the society, OP and Complainant Society shall jointly re-verify the records and payments in respect of three unsold flats and resolve the issue mutually in good faith within two months of date of this order.

13.     The liability of the OPs shall be joint as well as several.

14.     The pending IAs, if any, also stand disposed off.