JUSTICE SUDIP AHLUWALIA, MEMBER

2. The factual background, in brief, is that in July 2010, Mr. Sampat Raj Chaplot introduced the Complainant No. 1 to the Opposite Parties, presenting them as emerging builders with an excellent upcoming residential project called "Astoria-I" in Borivali, Mumbai. He recommended purchasing a spacious Flat in this project, located at Jai Maharashtra Nagar, opposite Tata Power Centre, Borivali (East), Mumbai-400066. After several discussions, the Complainants agreed to purchase Flat No. 2504 on the 25th floor, measuring about 1766 sq. ft., for a total consideration of Rs. 1,05,96,000/-. The Opposite Parties required an Ernest amount of Rs. 30,00,000/- for the Flat's allotment. Trusting these representations, the Complainants paid the amount. On 23rd February 2011, the Opposite Parties issued an Allotment Letter cum Receipt, confirming the purchase and receipt of the Ernest money. The letter, signed by Opposite Party No. 2, assured that construction would begin within three months and stipulated a 21% p.a. interest on delayed commencement beyond this period. Despite considerable time passing, the Opposite Parties failed to start the construction. The Complainants made numerous follow-ups through phone calls and personal visits, but the Opposite Parties consistently offered vague excuses, citing financial issues and departmental problems with authorities like MCGM and MHADA. In a letter dated 28th April 2015, signed by Opposite Party No. 3, the Opposite Parties reiterated these excuses but assured the Complainants that their money was safe and they would be informed of the construction schedule within three months. Due to the repeated failures of the Opposite Parties to honor their commitments, the Complainants decided to pursue legal action.  On 18th February 2017, through their Advocates, the Complainants issued a Legal Notice to the Opposite Parties, demanding Rs. 93,75,291/- due by 17th February 2017. The notice was sent to the last known addresses of the Opposite Parties but was returned unserved. These addresses were provided by the Opposite Parties. In a final attempt to resolve the issue, the Complainants' Advocate published a public Notice in two newspapers, "Free Press Journal" and "Lokshakti," on 17th March 2017. Despite this, the Opposite Parties did not respond or comply with the Notice. The Opposite Parties' failure to deliver the Flat led the Complainants to file this Consumer Complaint, asserting that the cause of action is continuous and thus within the limitation period.

3. In view of the aforesaid facts, the Complainants have prayed as following - 

“a) To Declare that the Opposite Parties are guilty of deficiency in service and adopting unfair trade practices against the Complainants as defined under the Consumer Protection Act, 1986;

 

b) To Direct the Opposite Parties jointly and severally to construct the agreed Flat and deliver the same to the Complainants and hand over peaceful possession of the same to the Complainants immediately;

 

c) In the alternative to prayer clauses (b) and (d), direct the Opposite Parties jointly and severally to provide to the Complainants another Flat of same measurement in the nearby vicinity;

 

d) In the alternative to prayer clauses (b) and (c) above. Direct the Opposite Parties to jointly and severally pay an amount of Rs. 1,56,60,382/- to the Complainants as per the statement of claim (being Annexure P/6annexed hereto) with further interest @ 24% from the date of filing this complaint, till the receipt of the amount by the Complainants;

 

e) That this Hon'ble Commission be pleased to direct the Opposite parties jointly and severally to Rs. 2 lakhs to the Complainants towards legal

fees.”

 

4. The Opposite Party filed its Reply and resisted the Complaint by contending, inter alia, that the Complaint presented to this Ld. Forum is based on distorted and incomplete facts with the malafide intention of misleading the Forum. The Complaint suffers from suggestio falsi and suppressio veri and thus deserves no indulgence from this Hon'ble Forum and is liable to be rejected at the threshold; That there is no deficiency in service on the part of the Opposite Party, as explained in subsequent pleadings. Therefore, no case is made out against the Opposite Party under the Consumer Protection Act, 1986. Consequently, the Complaint should be dismissed in limine with exemplary costs under Section 26 of the Act for dragging a well-reputed partnership firm into unnecessary, unwanted, and speculative litigation; That the Complainant must prove the loss suffered due to the acts and/or omissions of the Opposite Party to allege and receive monetary compensation. That the Complainant has not quantified the loss in the complaint and has not provided any supporting proof of damages or loss suffered due to the acts and/or omissions of the Opposite Party. Therefore, the Complainant is not entitled to claim any damages or relief as prayed in the Complaint; That the present Complaint is barred by limitation. The limitation to file the present suit is two years from the cause of action, which accrued on 23rd February 2011, when the Allotment Letter-cum-Receipt was issued and signed by Opposite Party No.2, acknowledging the receipt of Rs. 30.00 Lakh as Ernest money. The Complaint is based on multiple causes of action, and the period of limitation begins from the date when the right to sue first accrues, which is 23rd February 2011. The Complaint is therefore barred by limitation as it was filed beyond the two-year period prescribed under Section 24A of the Consumer Protection Act, 1986, since mere exchanging of representations or sending Legal Notices does not extend the limitation period; That the present Complaint is bad in law due to the non-joinder of necessary and proper parties, specifically the Federation of Jai Maharashtra Nagar Co-operative Housing Society, which is enjoying the benefits of the amount invested by the Complainant and Opposite Party No.1. The Federation is a necessary party as it has terminated the redevelopment agreement with Opposite Party No.1, and the Opposite Party No.1 does not have the right to recommence the redevelopment of the Federation’s project. Therefore, the Complaint should be dismissed for non-joinder of necessary parties; That the Opposite Party denies that the Complainants were searching for a Flat for residential purposes, stating that they were investors seeking to invest in the project of the Federation. The Complainants were allotted a Flat for security purposes to secure their investment. The Opposite Parties did not assure the Complainants that all necessary permissions and approvals had been obtained. The Opposite Parties informed the Complainants that they were still in talks with the Federation for redevelopment and that permissions would be applied for only after entering into a redevelopment agreement, which occurred in 2012. Therefore, the Complaint is based on false and misleading representations and merits dismissal; That the Opposite Party No.1 is a partnership Firm engaged in the construction business with diversified expertise in developing projects around Mumbai. The Opposite Party No.3 is one of the partners and is filing the written version on behalf of Opposite Party No.1. The allegations made by the Complainant are false, baseless, and intended to extort money from the Opposite Parties. The Complaint is filed with malafide intention and ulterior motive to damage the reputation of M/s. Shubh Enterprises; That the Complaint is without cause of action against the Opposite Parties and is a gross abuse of the process of this Commission. The Complainant has intentionally concealed material facts and cannot shift the burden to the Opposite Parties by camouflaging the allegations as a deficiency of services. The Complaint is false, frivolous, and an attempt to harass and damage the reputation of M/s. Shubh Enterprises. Therefore, the Complaint should be rejected outright as per Order VII, Rule 11(a) of the Code of Civil Procedure, 1908.

5. Evidence by way of Affidavit has been filed by the Complainants Mr. Dinesh Jain and Mrs. Kiran Jain; Evidence by way of Affdiavit has been filed on behalf of Opposite Party No. 1 and 3 by Mr. Uday Suresh Surve, Partner in M/s Shubh Enterprises.

6. This Commission has heard both the Ld. Counsel for Complainants and the Opposite Party, and perused the material available on record.

7. The contention raised on behalf of the Opposite Parties that the Complaint is barred by limitation since the cause of action had accrued as far back as on 23.2.2011 is not tenable in view of the decision of the Hon’ble Supreme Court in “Samrudhi Co-operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd., Civil Appeal No. 4000 of 2019 decided on 11.1.2022”.  In that case, the Complaint seeking refund filed by the Appellant Society had been similarly dismissed by this Commission on the ground that it was barred by limitation.  After being challenged, the Order of this Commission was set aside by the Hon’ble Supreme Court with the following observations inter alia –

 

 

“18. Based on these provisions, it is evident that there was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided. The respondent has time and again failed to provide the occupancy certificate to the appellant society. For this reason, a complaint was instituted in 1998 by the appellant against the respondent. The NCDRC on 20 August 2014 directed the respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the respondent has failed to provide the occupancy certificate. Owing to the failure of the respondent to obtain the certificate, there has been a direct impact on the members of the appellant in terms of the payment of higher taxes and water charges to the municipal authority. This continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the respondent under the MOFA and amounts to a continuing wrong. The appellants therefore, are entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation.”

 

8. In “Vijay Shrinivas & Anr.  Vs. Sylvanus Builders & Developers Limited & Anr., CC No. 1682 of 2018, decided by National Commission on 14.3.2022”, a similar challenge to maintainability of the concerned Complaint on account of the same being barred by limitation was rejected by this Commission with the following observations inter alia –

“14. Regarding the contention of the OP Builder that CC No. 234 / 2019 is barred by limitation as the CC No. 234 / 2019 has been filed after more than 2 years from the receipt of Completion Certificate, it is observed that till the date of filing of the Complaint neither the OP Builder refunded the amount nor had it handed over the Possession of the Villa to the Complainant in CC No. 234 / 2019, therefore, there was continuous cause of action and the CC No. 234 / 2019 is treated to have been filed within limitation.”

 

9. In the present case also, the Opposite Party which had accepted the payments from the Complainant has been unable to proceed with/complete its construction or deliver possession of the promised Apartment to the Complaint which therefore constitutes a continuous cause of action, on account of which it cannot be said that the Complaint is barred by limitation.

10. The contention of the Opposite Party to the effect that the Complainants are not ‘Consumers’ as they had invested for purchasing the Apartment in question for commercial purpose, is similarly unconvincing.

11. In “Kavita Ahuja  Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd. ; CC No. 137 of 2010, decided on 12.2.2015”, it has been laid down that the onus of establishing that the Complainants were dealing in real estate i.e. in the purchase and sale of plots in the normal course of business to earn profits, shifts upon the Opposite Party, which in the instant case the Opposite Party had failed to discharge by any documentary evidence in this regard.  Therefore, the Complainants would certainly be ‘Consumers’ as defined under Section 2(1)(d) of the Act.

12. Again, the Complaint cannot be treated as not maintainable on account of the failure to joint any necessary party in the present case.  This is so because admittedly the Complainants have not privity of contract with the “Jai Maharashtra Nagar Cooperative Housing Society” who according to the Opposite Party ought to have been impleaded.  The Complainants from their side have neither any communication with nor any grievance against the said third party, and therefore it cannot be held that such third party would have to be necessarily impleaded in the present case.  The decision of this Commission in “K.A. Nagamani V. Karnataka Housing Board, 2012 (1) CPJ 129”, relied upon by the Opposite Parties is therefore found inapplicable to the facts and circumstances of the present case.

13. From the material on record, it transpires that the Ernest money was initially paid by the Complainants as far back as on 23.2.2011, and in their letter of the same date (Annexure-P2), the Opposite Parties had committed to commencing construction within three months from that date, and had also undertaken to pay interest @ 21% p.a. in the event of their failure to do so.  But the construction could not commence for a very long time, while the Opposite Parties falsely kept on assuring the Complainants even as late as on 24.4.2015 that the construction schedule would be intimated within three months. The Hon’ble Supreme Court in “C.A No.3182 of 2019 dated 25.03.2019- Kolkata West International City Pvt. Ltd. Versus Devasis Rudra, and in C.A.          No. 12238 of 2018 dated 02.04.2019-Pioneer Urban Land & Infra Ltd. versus Govindham Raghavan, has observed that a Purchaser/allottee cannot be made to wait for an indefinite time.        

14. In the present case now, the Complainants have waited for more than 13 years for their promised Apartment.  The Complaint was filed by them way back in the year 2019, which itself was more than 6 years after the initial payment made by them.  In such circumstances, they cannot be made to wait indefinitely in view of the aforesaid decision of the Hon’ble Apex Court in “Kolkata West International City Pvt. Ltd. Versus Devasis Rudra” (supra).

15. The Complainants are therefore entitled to refund of the amount paid by them to the Opposite Parties alongwith compensation in the form of interest @ 9% p.a in view of the decision of the Hon’ble Supreme Court in "Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, (2022) 15 SCC 286". The relevant extracts of the said Order are set out as below –

“32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318] and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.

 

33. At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.”

16. In view of the discussion above, the Complaint is allowed with the following directions-

(a)  The Opposite Party shall refund to the Complainants the entire amount paid by them to the Opposite Party along with interest @ 9% from the respective dates of respective deposits till realisation, within three months from the date of this Order;

(b) The Opposite Party shall also pay Rs.1.00 lakh to the Complainants towards litigation costs;

 (c) In the event of non-compliance of this Order within the time specified, the outstanding amounts to be paid shall attract an interest at the rate of 12% p.a. till the time of final realization. 

17. Pending application(s), if any, also stand disposed off as having been rendered infructuous.