(ORDER)

(Judgment Dt. 07/10/2024)

Per: Hon’ble Mr.Mukesh V.Sharma, Presiding Member.

1. The complainants, Mr. Ajit Ganpat Kurlye and Mrs. Anagha Ajit Kurley, have filed this complaint under Section 12 of the Consumer Protection Act, 1986 against M/s Saraswati Builders and Mr. Pradeep Nandlal Gupta, a partner of the firm. Complainants alleged that the Opposite Parties have committed deficiencies in service and engaged in unfair trade practices regarding the booking of Flat No. 104 in the "C" Building of the Prem-Nagar complex at Kharegaon, Kalwa. Despite fulfilling their financial obligations, the Opposite Parties failed to register the agreement for sale and deliver possession of the flat within the promised timeframe.
2. The complainants, both retired and residing in Thane, Maharashtra, sought to secure a peaceful home for their remaining years. In August 1993, they discovered the "Prem-Nagar" project developed by M/s Saraswati Builders, a reputed construction firm in the Thane-Kalwa area. Attracted by the calm environment and reasonable pricing, they decided to purchase a flat in this project.
3. The complainants booked Flat No. 104, which measures 525 square feet, by making a token payment of Rs. 500 at the residence of Mr. Pradeep Nandlal Gupta. This initial payment was accepted, and they were informed that the flat was available at a rate between Rs. 400 and Rs. 600 per square foot, which seemed fair at the time.
4. After the token payment, the complainants issued a cheque for Rs. 42,000 on 12th November 1993, for which they received a receipt. Additionally, they paid an advance of Rs. 1,05,000 in cash but complainants did not receive a receipt for this amount despite multiple requests to Opposite Parties. Their total payment amounted to Rs. 1,47,000. The Opposite Parties entered into a formal agreement on 26th January 1994, promising possession by March 1995.
5. However, the Opposite Parties failed to register the agreement for sale and deliver possession by the promised date. The complainants repeatedly approached the builders for updates, the Opposite Parties presented themselves as experienced builders and continually assured the complainants that the delays were temporary and it is due to litigation which will be sorted. Trusting these assurances, the complainants patiently waited for possession.
6. The complainants argued that the actions of the Opposite Parties constitute a breach of the agreement made on 26th January 1994. They fulfilled their financial obligations, while the Opposite Parties failed to honor their commitment to provide possession by the specified date without justifiable reasons. Further builders did not acknowledge the cash payment of Rs. 1,05,000 and has not provided any formal documentation for this significant portion of their payment.
7. The complainants claimed that they exhausted all reasonable avenues to resolve the situation amicably, and on failure approached this commission and have sought relief through this complaint.
8. We also perused the earlier daily orders. Initially notices were issued before admission of complaint, later on the consumer complaint was admitted on 12th April 2018. On 11th May 2018, the complainants filed an application seeking interim relief. Subsequently, on 14th February 2019, the opposite parties submitted an application for condonation of delay in filing the written statement (W.S.). On 27th February 2020, it was recorded in the Roznama that the delay amounted to 263 days. Consequently, the delay application was rejected, and the W.S. of the opposite parties were not taken on record. On 24th August 2022, the complainants submitted written notes of arguments. The matter was then heard by a earlier bench on 9th March 2023, and it was reserved for order on 24th March 2023. However, the order was not pronounced. On 19th April 2023, the opposite parties appeared and submitted written notes of arguments, which were accepted, and a copy was provided to the complainant.
9. On 1st August 2023, the complainants filed a rejoinder to the written notes of the opposite parties. On 13th October 2023, the matter was reheard by a different bench. At the complainant’s request, the case was adjourned for the submission of relevant citations and a ready reckoner. The complainants subsequently tendered both documents in support of their case.
10. On 4th October 2024, the matter was reheard afresh and subsequently reserved for judgment. As the complainants are senior citizen, the advocate requested a short date for judgment, and the matter was accordingly prioritized for an expedited judgment.

11. Advocate for the Opposite Parties argued on law points stating that the complaint is not maintainable due to an excessive and unjustifiable delay of 22 years in it’s filing. Under the Consumer Protection Act, the statutory limitation period is two years from the date on which the cause of action arises. The Complainants have failed to file any separate application to condone this significant delay, and no order has been passed by this Hon'ble Commission to condone such a long delay. This omission raises serious concerns about the maintainability of the complaint, as it constitutes a grave procedural irregularity. Therefore, the complaint should be rejected in limine on the grounds of limitation alone.
12. The Opposite Parties contend that the Agreement dated 26th January 1994 between the parties was provisional and did not culminate in a legally enforceable contract. The Complainants themselves have admitted in their pleadings that the Opposite Parties had only assured them that a final agreement would be executed upon obtaining possession. This assurance, coupled with the absence of full payment by the Complainants (only 20% of the total consideration was paid), indicates that the transaction was never finalized. As such, the Opposite Parties argued that there was no concluded contract, and therefore, the complaint lacks legal basis.
13. The Opposite Parties further submitted that the writing dated 26th January 1994 was neither stamped nor registered as required under law. For an agreement to be legally enforceable, especially in matters concerning immovable property, it must be stamped and registered in accordance with the provisions of the Registration Act, 1908, and the Indian Stamp Act, 1899. The absence of these formalities renders the document not only unenforceable but also inadmissible in evidence. Consequently, the Opposite Parties argued that the complaint based on such a flawed and unenforceable document should be dismissed.
14. The Opposite Parties further argued that they did not made any further demands for payment, signifying that both parties treated the transaction as incomplete. Thus, the Opposite Parties argued that the complaint is based on an intended, but unfulfilled, transaction and should be dismissed on this ground as well.
15. We heard advocate for both parties, perused the complaint, evidence affidavit of complainant, written notes of argument of complainants and written notes of argument of Opposite Parties (on law points) and other relevant documents and following issues arose for our determination :

REASONING :

Issue No. 1: Whether the complainants are consumers under the Consumer Protection Act, 1986?

16. The complainants, Mr. Ajit Ganpat Kurlye and Mrs. Anagha Ajit Kurlye, entered into an agreement with M/s Saraswati Builders to purchase Flat No. 104 in the "C" Building of Prem-Nagar, Kharegaon, Kalwa. The flat was booked for their personal use, and they paid Rs. 42,000 via cheque, which constitutes 20% of the consideration amount. Since the transaction involves the purchase of a residential flat for personal use, the complainants fall within the definition of "consumer" under Section 2(d) of the Consumer Protection Act, 1986. Hence answered this issue affirmative.

Issue No. 2: Whether the complaint is within limitation as per the Consumer Protection Act, 1986?

17. Under Section 24A of the Consumer Protection Act, 1986, a complaint must be filed within two years from the date when the cause of action arises. In this case, the agreement for the sale of the flat was signed on 26/01/1994, and the possession of the flat was promised by March 1995. However, the Opposite Parties failed to register the agreement or hand over possession, which are statutory obligations under Section 4 of the Maharashtra Ownership Flats Act (MOFA), 1963.
18. The non-registration of the agreement and the failure to hand over possession constitutes a continuing cause of action, as these obligations have not been fulfilled. The continuous violation of the statutory duty under MOFA keeps the cause of action alive, rendering the complaint within the period of limitation. Hence answered this issue affirmative.

Issue No. 3 :Whether the agreement dated 26th January 1994, being unregistered and unstamped, renders the complaint untenable and unenforceable under law?

19. The Opposite Parties Advocate in it’s argument contended that the agreement dated 26th January 1994 was neither stamped nor registered as required by law, making it unenforceable and inadmissible in evidence under the provisions of the Registration Act, 1908, and the Indian Stamp Act, 1899. They argued that this failure to comply with statutory requirements renders the complaint untenable, and the agreement should not be considered for any legal claim.
20. However, this argument overlooks the provisions of Section 4A of the Maharashtra Ownership Flats Act, 1963 (MOFA), which was introduced by Maharashtra Act 5 of 1984. Section 4A specifically addresses the effect of non-registration of agreements required to be registered under Section 4 of MOFA. It states:

"Where an agreement for sale entered into under sub-section (1) of section 4, whether entered into before or after the commencement of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) (Amendment and Validating Provisions) Act, 1983, remains unregistered for any reason, then notwithstanding anything contained in any law for the time being in force, or in any judgment, decree or order of any Court, it may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1963, or as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument."

21. Hence, in light of this statutory provision, even if the agreement for sale remains unregistered, it can still be admitted as valid evidence in legal proceedings, including suits for specific performance and matters concerning part performance under the Transfer of Property Act which are generally conducted before Civil Courts where Civil Procedure Code, 1908 and Indian Evidence Act, 1872 / The Bharatiya Sakshya Adhiniyam, 2023 are applicable, whereas in Consumer Commissions  such strict provisions are not applicable. Therefore, the absence of registration or stamping does not invalidate the agreement in the present case. The complainants are entitled to rely on the unregistered agreement as valid evidence to prove the deficiency in service and unfair trade practice of opposite parties. Thus, the Opposite Parties' argument that the complaint should be dismissed on the grounds of non-registration is without merit and does not stand under the provisions of MOFA and other relevant laws. Hence answered this issue in negative.

Issue No. 4: Whether the Opposite Parties are guilty of deficiency in service and unfair trade practice under MOFA and the Consumer Protection Act, 1986?

22. Section 4 of the Maharashtra Ownership Flats Act (MOFA), 1963, imposes a statutory obligation on builders to execute a registered agreement for sale upon receiving 20% of the consideration amount and to hand over possession as per the terms of the agreement. In this case, the Opposite Parties received Rs. 42,000 (20% of the consideration) via cheque but failed to register the agreement for sale. Moreover, the Opposite Parties did not hand over possession of the flat as promised by March 1995.
23. The failure to register the agreement and deliver possession constitutes a clear violation of the statutory duties imposed on the Opposite Parties under MOFA, amounting to a deficiency in service under the Consumer Protection Act, 1986. This non-compliance also qualifies as an unfair trade practice since the complainants were induced to believe that possession would be given promptly, yet they were kept waiting for over two decades. Further complainants alleged regarding the cash payment of Rs. 1,05,000 but no any documentary evidence such as a receipt has been provided by the complainants, therefore, it cannot be considered, however the payment of Rs. 42,000 via cheque, is uncontested. Hence answered this issue affirmative.

Issue No. 5: Whether the complainants are entitled to compensation and other reliefs as claimed?

24. The Opposite Parties’ failure to register the agreement and deliver possession of the flat has resulted in significant financial losses, mental anguish, and prolonged inconvenience for the complainants. Considering the circumstances of the case, the complainants are justifiably entitled to certain reliefs, which include either the possession of the flat or to avoid further litigation an alternative accommodation, as well as compensation for their distress and legal costs incurred. Therefore, this issue is answered in the affirmative. In light of this conclusion, we now proceed to address Issue No. 6 and pass the following order.

Final Order:

1. The consumer complaint CC/486/2017 is partly allowed.
2. The Opposite Parties are jointly and severally directed to:

a) Register the agreement for sale within 45 days and hand over vacant and peaceful possession of Flat No. 104, admeasuring 525 sq. ft., located on the 1st Floor, Building "C" in the Prem-Nagar Complex, Kharegaon, Kalwa, Thane (W), Maharashtra, to the complainants.

b) Alternatively, to avoid any further litigation, if Flat No. 104 is unavailable, Opposite Parties to jointly or severally to execute and register agreement in an alternative flat of similar area to 525 sq. ft. in the same vicinity at same agreed rate of Flat No. 104 and to hand over the vacant and peaceful possession within the same timeframe.

c) Or, at the option of the complainants, if they choose, they may opt for a refund of the 20% amount paid, i.e., Rs. 42,000, calculated at the current ready reckoner rate, with a refund of 20% of the current value based on that rate.

3. The Opposite Parties are further directed to pay Rs. 1,50,000/- as compensation for mental harassment and agony to the complainants.
4. The Opposite Parties are further directed to Rs. 50,000 towards the costs of the complaint.
5. The cost and compensation shall first be applied towards the balance consideration of the flat or the alternative flat (at the same agreed rate). Any remaining amount, resulting from an increase in area in the event of opting for an alternative flat, along with any statutory charges, to be paid by the complainants.
6. Above order be complied within 45 days from the date of order.
7. Order copy be provided to both the parties.