IA/13581/2024.

This is a delay condonation application praying for condoning the delay of 90 days in filing of the Appeal. We have considered the submissions raised. The explanation given is that the delay was caused due to logistical difficulties in arranging certain necessary documents and the Counsel was suffering from bad health. The explanation is not very convincing and has been made in a casual fashion without giving a day to day explanation but keeping in view the submissions raised we propose to condone the delay and hear the Appeal itself on merits. The Application is therefore allowed and the delay is condoned.

APPEAL

1. The Respondent/Complainant filed CC/183/2017 alleging deficiency against the Appellant builder arising out of a dispute of a development agreement dated 18.09.2010. According to this agreement, the predecessors of the Respondent, were his parents and owners of 470 sq.yd with a house thereon, agreed to get the property developed through the Appellant developer on a share-sharing-basis in the ratio of 39.5% to the land owner and 60.50% to the Developer. The development was to be concluded within 18 months. And according to the share agreed, four flats/ units were to be handed over to the Complainants within the stipulated period of 18 months plus 6 months of grace period. A supplementary agreement is also stated to have been entered into providing for an extended completion period of the project.  The occupancy certificate was issued by the Greater Hyderabad Municipal Corporation on 09.02.2016. There was a delay in the handing over of the possession which was alleged by the Complainant to be beyond the stipulated period.
2. According to the Agreement, the following condition was also stipulated.

“The second party shall pay a sum of Rs.8500 (Rupees eight thousand five hundred only) per month till completion of the share of first party.”

3. The original land owners Mr. D Rajeshwara Rao and Smt. D. Kamla (husband and wife) died on 26.06.2014 and 08.02.2016 respectively. The Complainant is the son who filed the Complainant alleging the deficiencies and claiming a compensation of Rs.30,00,000/- together with 24% interest. It was alleged that on account of the deficiency and the delay, the Complainant had suffered immense loss and payments had not been made in terms of the agreement as such the said breach also deserves to be compensated. After having discussed the entire material on record, the State Commission came to the conclusion that in the absence of any evidence with regard to non-completion of pending works that was wanting, therefore nothing could be awarded under the said head. However, the State Commission came to the conclusion that in view of the deficiencies alleged, a sum of Rs.4 lakhs could be reasonably awarded as compensation for which reference was also made to the payment of Rs.8,500/- per month till completion of the share of the first party. The conclusion drawn after appreciation of evidence in paragraph 12 of the impugned judgment as follows:

“12. In the evidence affidavit at para No.11, RW1 stated that so far as payment of Rs.8,500/- per month is concerned he paid said amounts to the land lords appropriately till the date of delivery of physical possession of the flats. In para No. 4 of the written version a tabular form was given to show the dates of payments made by opposite party, to PW1 by way of bank transfer on different dates in total for a sum of Rs.1,10,000/-. On one hand RW1 is stating that the monthly rental was Rs.8,500/-, but the amounts paid were @Rs.10,000/- per month. There is no clarification of this aspect from either side to this lis. To establish the payments, RW1 relied upon Ex.B12 bank statement of the opposite party showing the payments made to father of PW1. By comparing the schedule of payments given under Ex.B11 with the help of Ex.B12 bank statement, we could found out only Rs.90,000/- was paid and two transactions for Rs.10,000/- each dt.25.01.2014 and 10.06.2014 are dearly missing. In the mail correspondence also opposite party several times demanded PW1 to refund security deposit of Rs.2,00,000/-, and there is no acceptance from PW1 about the receipt of Rs.2,00,000/- by his parents. We are unable to figure out how much amount is to be paid by RW1 to PW1, and vice versa. One thing is clear that there is a delay of one year in the completion of flats. When construction of four flats. That are to be given to the original complainants, and to their legal representatives, the payment of Rs.8,500/- or Rs. 10,000/- towards rentals per month is dearly on low side. Failure on the part of RW1 to prove the quantum of amount paid towards rents would certainly cause mental agony to PW1 and other legal heirs. The complaint is filed within one and half year from the date of the occupancy certificate. Therefore, it is certainly within time. Taking all these aspects into consideration, the opposite party is liable to pay compensation of Rs.4,00,000/-, which includes the rentals to be paid by RW1. The unfortunate aspects in this case are that no focus is made by the complainant to establish how much rents were existed during the year 2014 to 2016 in the area, where the complex was constructed. If the rent for flat is taken @Rs.8,500/- per month at an average, the four flats would fetch rent of Rs.34,000/- per month and per annum Rs.4,08,000/-. So, by deducting Rs.90,000/- that was paid by RW1 the balance + the mental agony is taken into consideration as compensation, as stated supra is arrived at. "

4. The present Appeal has been filed assailing the said order and the method of calculation by the State Commission contending that firstly the conclusion that the legal heir, namely the son who had filed the complaint had not arrayed his sisters, the three daughters of the land owners who were also the legal heirs who ought to have sued jointly along with the Complainant as such non-joinder of all the legal heirs by the Complainant disentitles him from any relief.
5. Learned Counsel then urged that the Complainant had not disclosed this fact nor did he file any evidence to establish that he was the sole legal heir or had succeeded to the property nor any succession certificate had been filed to establish the entitlement of the Complainant to institute the Complaint. Learned Counsel then urged that the Complainant was not a consumer inasmuch as the property was negotiated under a Development agreement which was for a commercial purpose, and the different clauses under the development agreement indicate that the project had to be developed jointly by the land owners and virtually as co-promoters for monetary profit sharing. Reference has been made to the following clauses of the agreement to substantiate the submissions.

“The Second party has examined the title deeds. The Second party agreed to undertake to get any work done related to T.S.L.R. NOC from Collector, clearance from urban land ceiling authorities. Expenses shall be borne by land lord for the same. These expenses shall be paid by builder as deposit by builder and returned as described above.

Both the parties hereby undertake to sign all such documents as per and when called upon by such other party to strengthen the title to the purchasers or any person at the cost of the respective parties as per their requirement. The second party shall sign the necessary applications, affidavits, declarations and all relevant papers for getting sanction/approval./ relaxations as may be required from time to time. Both the parties also agree to do and perform all such acts and deeds that are required to more fully effect the transaction entered into herein and to secure the title and rights of each other and their successors-in- interest. The first party shall join the execution of sale deed in favor of purchasers if required.

TERMS, STIPULATIONS AND RESTRICTIONS:

It is agreed between the parties that both the parties shall have proportionate and joint right in respect of the complete project area like open /terrace of the buildings multistoried complexes, after completion of all constructions and also the open land left over in the entire project if any.

Both the parties herein have agreed to enter into a memorandum of the understandings/supplementary agreement for identifying their respective share of lands, units in the apartments, independent, duplex houses, commercial complexes and any other areas according to their agreed shares after obtaining sanction plan of the proposed Project, from the competent authority.

It is agreed between the parties that unit's selection preference will have proportionate choice i.e. 39.50: 60.50 the first party will select one unit then”

6. The other clauses of the agreement have also been read to urge that this development agreement if read in its entirety is clearly a profit venturing commercial transaction and therefore there were no services involved as defined under the 1986 Act enabling the Complainant to institute the Complaint. In short it is submitted that since the venture was for a commercial purpose, it stands excluded from the definition of services as contained under Section 2(o) of the 1986 Act. The complaint was therefore not maintainable.
7. Learned Counsel urged that if the property had been succeeded to by all the legal heirs, the institution of the complaint by only one of the legal heirs was not maintainable. This argument has to be noted for being rejected inasmuch as there is no dispute that the Complainant was the son of his parents who were the owners of the property. The development agreement nowhere excludes the Complainant or any of the legal heirs from succeeding to the property and the Complainant being one of the natural heirs admittedly has a right to sue in his own capacity. The definition clause in the agreement describes the land owners as the first party and defines the first party as follows:

"First Party: means and include all the above said persons, owners, their respective heirs, successors, legal representative, executors, assignees, etc."

8. There is no doubt that the Complainant had individually filed the complaint but going further it is evident that this issue was dealt with by the State Commission as issue no.1. It is correct that the complainant had disclosed himself to be the sole male child of his parents but the share of the property under the agreement came to be negotiated by the Complainant along with his sisters which stands recorded in paragraph 9 of the impugned order. There is no inter se dispute between the legal heirs whatsoever to demonstrate that the Complainant had no right to sue the Appellant. In the above circumstances the argument about the correct legal heirs not having filed the complaint is without any substance. The Appellant has absolutely failed to demonstrate as to how the litigation can get impacted on this score in these summary proceedings.
9. The second argument  advanced is with regard to the Complainant not being a consumer in the light of the development agreement which the learned Counsel alleges to be of a commercial venture. This argument seems to have been innovated after having contested the matter on merits before the State Commission. Nonetheless, the nature of the agreement clearly demonstrates that the owners had given up their land for development and in return had availed of construction services. They had given up 60.50% of the share of the developed property which was obviously a consideration for the said development and the retention of 39.5% for themselves. It is also obvious that there were four units and there were four children of the landowners. The burden lay on the developer to demonstrate that the property had been negotiated originally by the owners, namely the parents of the Complainant, for any trading or commercial purpose. The sale of the flats by the daughters later on after the death of the parents is of no consequence. The original owners seem to have negotiated the property to have the four units as promised under the agreement for themselves and for their children. There is not even an iota of evidence to establish that the constructions of the units, the share whereof fell to the land owners was intended to be negotiated or traded as a real estate business. The burden lay on the Appellants to demonstrate the same. There is no averment in the written statement filed by the Appellant regarding the venture being a commercial venture. It is nowhere alleged that the project is for a commercial purpose nor any evidence seems to have been led to that effect. The failure to discharge such a burden therefore disentitles the Appellant to raise this plea. The burden lies on the builder/developer as has been held in the decision of Shriram Chits (India) Private Limited Earlier Known As Shriram Chits (K) Pvt. Ltd. V. Raghachand Associates, 2024 SCC OnLine SC 851, Lilavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developers and Ors., (2020) 5 SCC 265 and in the case of Paramount Digital Colour Lab v. AGFA India (P) Ltd., (2018) 14 SCC 81.
10. In the absence of any such material, the contention raised that the complainant was not a consumer as the project was for a commercial purpose is therefore without any foundation and is accordingly rejected.
11. There is one more reason namely the various clauses that have been relied on in the development agreement are terms and conditions regarding the share of the property which belonged to the parents of the Complainant. The purpose was to get the property developed for themselves by giving up the major share to the Developer as indicated above. Merely because certain expenses had to be shared for carrying out official work or getting sanctions and approvals or even executing deeds in favour of the prospective buyers of the share of the builder, does not amount to a profit sharing venture but are acts that are contemplated to be undertaken in order to convey and negotiate the property. These clauses nowhere therefore indicate that the property was developed for a commercial purpose in so far as the land owners or their heirs are concerned.
12. The third issue is with regard to the relief granted by the State Commission. It is evident that the impugned order proceeds to award a compensation of Rs.4 lakhs for which a justification has been indicated about Rs.8,500/- being paid per month at an average for the four units that fell into the share of the owners/complainant. Learned Counsel contends that it was only Rs.8,500/- which is a consolidated amount for the entire share and was not to be calculated per unit. On a perusal of the said clause, it is evident that the amount payable is in relation to the share of the first party which is 39.5% constituting of four units. The State Commission has reasonably construed the said provision to treat the amount payable at the rate of Rs.8,500/- per unit and not for only one unit. For this the State Commission has relied on the evidence on record and the statements that have been elaborately discussed in several paragraphs of the impugned order that has been extracted hereinabove. The rate appears to have been fixed as a compensatory provision as, if completed and handed over within time, each of the units would separately yield rentals or otherwise protect the owners from spending money for having four separate rented accommodations. The builder therefore cannot be permitted to construe the terms only to his advantage. In these circumstances the findings of facts by the State commission based on the material on record does not require to be interfered with  as there is no infirmity or perversity, and therefore we do not find any merit in this argument as well. The Appeal therefore lacks merit and is accordingly rejected.