R.K. AGRAWAL, J., PRESIDENT   

1.       This Appeal has been filed by M/s Rockline Construction Co. (hereinafter referred to as the Builder/Developer), Opposite Party No.2 in the Complaint, against the Order dated 10.10.2012, passed by the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (hereinafter referred to as the State Commission) in Consumer Complaint No. CC/11/91, whereby the State Commission had allowed the Complaint and directed the Complainants to make balance payment of Rs.49,68,250/- to the Builder/Developer, within a period of twelve weeks from the date of the said Order or to deposit the said amount in the State Commission if the Builder/Developer refuse to accept the said amount. Thereafter, the Builder/Developer was directed to deliver the vacant and peaceful possession of Flat No. 1509, having carpet area admeasuring 1036 sq. ft., Royal Heights, Lokhandwala, Off Link Road, Near Milat Nagar, Andheri (West), Mumbai-400058 and to execute the Agreement for Sale within a period of six weeks from the date of deposit of the amount by the Complainants.  Further, bearing in mind the fact that the Project was going on from the year 2005 and in case it was not complete, the Builder/Developer was directed to complete the construction in respect of the Flat in question within six months and deliver the habitable possession thereof alongwith execution of the documents, as directed above.  The Builder/Developer was also directed to pay the a sum of Rs.25,000/- by way of costs of the Complainants.    

2.       It may be mentioned here that vide Order dated 08.11.2017 passed by this Commission, RNA Builders (NG), Opposite Party No.1 in the Complaint and Respondent No.3 herein, stated to be a sister-concern of the Builder/Developer, was deleted from the Array of Parties on the request of learned Counsel for the Builder/Developer and, therefore, the present proceedings revolve around the Builder/Developer and the Complainants.

3.       The facts, in brief, are that the Complainants had booked a Flat in the aforesaid Project of the Builder/Developer on 22.07.2005.  While the total sale consideration of the Flat as stated in the Allotment Letter dated 01.02.2006 was Rs.58,45,000/-, the Complainants had paid an amount of Rs.8,76,750/- as part-consideration and the balance amount was to be paid as per progress of the Project.  Due to some reasons, the Project was delayed and on 07.02.2008 the Builder/Developer gave an option to the Complainants either to collect the part-consideration paid with statutory interest or to continue with the Project, in which case the Builder/Developer shall not be responsible to pay any interest on the amount paid towards part-consideration.  The Complainants decided to continue with the Project.  Vide their letter dated 17.01.2010 the Complainants enquired about the progress of the work, whereupon vide letter dated 02.02.2010 the Builder/Developer informed them that their provisional booking stood cancelled and denied that the Project work was stalled or was not in progress at any time.  In the said factual matrix, alleging deficiency in service and unfair trade practice on the part of the Builder/Developer, the afore-noted Complaint was filed by the Complainants before the State Commission, praying for the reliefs stated therein.  

4.       Upon notice by the State Commission, the Builder/Developer contested the Complaint by filing its Written Version.  While stating that RNA Builders (NG) is their sister-concern, it was contended on behalf of the Builder/Developer that the Complainants were investors and the allotment made in their favour was terminated on 07.02.2008 but they were taking wrongful advantage of the letter dated 02.02.2010, whereby they were informed that the provisional booking stood cancelled, denying that the work of the building was stalled or was not in progress at any time, and, therefore, the Complaint be dismissed with a direction to the Complainants to take back the amount of Rs.8,76,750/- paid as part-consideration with interest thereon @ 12% per annum from 23.07.2005 till 07.02.2008.

5.       On appreciation of the evidence adduced and appraisal of the documents filed by the Parties before it, the State Commission allowed the Complaint and issued the aforesaid directions.  Hence, the present Appeal by the Builder/Developer.

6.       Learned Counsel for the Builder/Developer stated that the State Commission erred in not appreciating that it did not have the jurisdiction as the Complaint filed by the Complainants was a Civil Suit, disguised as Consumer Complaint, seeking specific performance of alleged Agreement for Sale, which could be dealt only by the Civil Court and is nothing but a device to obtain specific performance under the Specific Relief Act, 1963 from the State Commission without undergoing trial and paying the requisite court fee.

6.1     The State Commission ought to have taken cognizance of the issues raised by the Builder/Developer whether the provisional and tentative booking stood cancelled or it creates any right, title and/or interest in favour of the Complainants whereas it was an inchoate arrangement between the Parties.

6.2     The State Commission failed to appreciate that construction of building and execution of conveyance, if any, claimed by the Complainants, does not amount to deficiency in service as defined under Section 2(1)(o) of the Consumer Protection Act, 1986.  The insertion of ‘housing construction’ in the definition of service impliedly suggests that there has to be some dispute relating to some defect or deficiency in construction of a house and cannot be used to seek specific performance of an Agreement. The Complaint is, therefore, not maintainable.

6.3     On the strength of averments made by the Complainants in the correspondence exchanged between the Parties, wherein they had referred themselves as “investors”, learned Counsel for the Builder/Developer stated that the Complainants are not “consumers” within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 and have availed their services to make profit out of resale of the Flat in question. Learned Counsel further stated that this plea was taken before the State Commission and the State Commission had put a query to the Complainants why had they sold larger flat of 1280 sq. ft. to purchase smaller flat of 1036 sq. ft. but the learned Counsel for the Complainants could not clarify the same and, therefore, though the State Commission ought to have inferred that the Complainants were investors but it did not give any finding on the said issue.

6.4     After passing of the Impugned Order, a fact has come to the knowledge of the Builder/Developer that the Complainants had filed a Civil Suit, bearing S.C. Suit No. 2488 of 2012, before the Civil Court at Mumbai against one Poonam Builders and Sheth Developers Pvt. Ltd., seeking a declaration that the allotment letter dated 08.08.2009 issued by Poonam Builders in their favour in respect of a flat booked by them in the year 2006 at Yamuna Nagar in the Project known as “La Citadel” is valid, which shows that the Complainants have several flats in Mumbai and they have not disclosed the same in the Complaint.   

6.5     The State Commission did not appreciate the contention raised by the Builder/Developer that there was 3 years’ inordinate delay in filing the Complaint, inasmuch as vide letter dated 07.02.2008 the Complainants were requested to take back their money with interest but they did not do so and approached the State Commission only in March, 2011.  The Complainants had also not made any inquiries in order to know the progress in the Project and were opportunistic and waiting for the price to increase and then approached the State Commission without explaining the said delay.  Neither any application, seeking condonation of delay, had been filed by the Complainants. The State Commission committed error by not dealing with the issue of limitation and observing that the letter dated 02.02.2010 actually terminated the provisional booking and not the letter dated 07.02.2008. 

6.6     The State Commission failed to appreciate that the Complainants vide their letter dated 17.02.2008, which was written in reply to the Builder/Developer’s letter dated 07.02.2008, never expressed their intention to continue with the Project. 

6.7     The State Commission erred in not appreciating that as per the norms prevailing in Mumbai, if a Project cannot be continued for a long duration, then Developers refund the money back to the investors.  In the present case also, the Project could not see the light of the day and the Builder/Developer itself agreed to pay the money back to the Complainants with statutory interest and, therefore, the Order passed by the State Commission deserves to be set aside.

7.       On the other hand, learned Counsel for the Complainants reiterated their stand that there was deficiency in service and unfair trade practice on the part of the Builder/Developer and the State Commission has passed a well-reasoned Order, which is based on material available before it.  It needs no interference and the Appeal preferred by the Builder/Developer deserves to be dismissed.

8.       We have heard learned Counsel for the Parties and gone through the Order passed by the State Commission, the grounds taken in the Memo of Appeal and the documents filed by them.    

9.       The contention of the Builder/Developer that the State Commission did not have the jurisdiction as the Consumer Complaint filed by the Complainants was a Civil Suit, disguised as Consumer Complaint, seeking specific performance of the Agreement for Sale and that it could be tried by the Civil Court, is misconceived.  The Consumer Protection Act, 1986 is a beneficial legislation, which has been enacted to protect the interest of consumers against deficiencies and defects in goods or services and provide a simpler and quicker redressal to consumer grievance on different issues, including those relating to housing matters, wherein right and title of immovable property besides its possession gets transferred to the purchaser upon execution of agreement to sale/conveyance deed in his/her favour. If this contention of the Builder/Developer is accepted, then all the housing matters, wherein neither the possession has been handed over nor the sale deed/conveyance deed has been executed in favour of the purchaser and the purchaser by approaching a Court of law seeks a direction to the seller to do the needful in the matter, will be outside the purview and scope of the Consumer Protection Act, 1986.  Merely stating that the State Commission did not have the jurisdiction to entertain the Consumer Complaint on the aforesaid ground is not sufficient to hold so.  In the case at hand, the Complainants had booked a Flat in the Project of the Builder/Developer and had also paid a part-consideration for the same but the Builder/Developer was not ready to handover the possession of the same and execute the sale deed/conveyance deed on one ground or the other despite lapse of a considerable period over and above the agreed period of three years.  In such a situation, certainly the Consumer Complaint preferred by the Complainants before the State Commission on the grounds taken therein was maintainable and the State Commission had the jurisdiction to try the same.  

10.     The plea taken by the Builder/Developer that the provisional and tentative booking made by the Complainants stood cancelled in terms of their letter dated 07.02.2008, as it was an inchoate arrangement between the Parties, and did not confer any right or title in favour of the Complainants, has been duly considered by the State Commission. On appreciation of the evidence/material on record, including the letters dated 07.02.2008 and 02.02.2010, written by the Builder/Developer to the Complainants, the State Commission had recorded a finding of fact that “it cannot be said that after communication dated 7/2/2008 the agreement in question came to be cancelled”, observing thus:

“[9]    The Opponents/Builders come with a case that they have cancelled the provisional allotment of the flat in question.  According to the Opponents/Builders though such cancellation is witnessed by a letter dated 2/2/2010, in fact, said cancellation was effected on 7/2/2008.  We find such submission of the Opponents/Builders is devoid of any substance.  The communicated dated 7/2/2008 of the Opponents/Builders reads as under:

“Ref:- Flat No. 1509, Wing C, in the Building known as ‘N.G. royal Height’, situated at Near Oakland Park, Opp. Milat Nagar, Yamuna Nagar, Lokhandwala Complex, Andheri (West), Mumbai – 400052.

This has reference with your provisional booking of the above mentioned flat.

As you are aware that the work of the building as mentioned above is stopped for a long time on account of disputes between M/s Poonam Builders and Others.

M/s Poonam Builders are facing legal disputes and are unable to procure the relevant permission, as a result of which, we are facing inordinate delay to commence the work of our project.

As we cannot commence the construction of the building in near future, and also we are not in a position to estimate when and whether the project will commence.

We therefore under the circumstances request you to come and collect the amounts paid by you together with statutory interest after seeking prior appointment.  In the event if you decide to continue with us we shall not be responsible to pay any interest on such amounts, nor shall we be liable and also we shall not entertain any claims or demands made by you on such behalf.”

[10]    The communication dated 2/2/2010 of the Opponents/Builders reads as under:-

“We refer to your Letter Dated 17.01.2010, regarding provisional booking of your Flat.

Please note, the provisional booking stands cancelled, and as falsely stated by you, our work was not stopped for 4 years, except for a small period.  However, the said work is being carried out in full swing for last several years.

It is surprising to hear at your convenience after a lapse of 5 years.

Please note the flat stands cancelled.”

[11]    Upon reading of these communications together, the stand taken by the Opponents/Builders that earlier communication dated 7/2/2008 itself terminated the agreement, cannot be accepted.  There is no termination at all as per letter dated 7/2/2008 but said letter in fact gave an option to the Complainants either to collect back their consideration paid together with interest or to continue with the agreement.  The Complainants by their communication dated 17/2/2008 categorically informed their intention to continue with the agreement and, therefore, it cannot be said that after communication dated 7/2/2008 the agreement in question came to be cancelled.”

10.1   We do not see any reason to differ with the said finding of fact recorded by the State Commission.  Further, it also cannot be accepted that the booking made by the Complainants was a provisional/tentative booking and was an inchoate arrangement between the Parties and, therefore, did not confer any right or interest in favour of the Complainants.  It is not the case of the Builder/Developer that the Complainants were doubtful ab initio about the fate of the Project and, therefore, taking it to be an inchoate arrangement, made the said booking and paid part-consideration in the hope of getting handsome return.  Had it been so, there would have been no objection to the Complainants in accepting the return of the amount offered but it is not so.  After payment of part-consideration by the Complainants at the time of booking, it does not lie in the mouth of the Builder/Developer to state that it was an inchoate arrangement between the Parties. 

11.     Further, in case of failure on the part of the Builder/Developer in executing the conveyance deed/sale deed and handing over the possession of the Flat booked, a vested right accrues in favour of the Complainants and they become an interested party as far as the said Flat is concerned.  By filing a Complaint under the Consumer Protection Act, 1986, they can rightfully claim construction of the building where the Flat in question is situated and execution of the conveyance deed/sale deed.  The same has been done by the Complainants in the present case and, therefore, the submission of the Builder/Developer that the Complaint is not maintainable as there was no deficiency in construction of a house under Section 2(1)(o) of the Consumer Protection Act, 1986 does not hold water.  In any case, the said provision does not state that a Complaint relating to housing construction can only be filed if there is some defect or deficiency in construction of a house. 

12.     As regards the plea taken by the Builder/Developer that the Complainants were not “consumers” within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 as they were investors and had availed their services to make profit out of resale of the Flat in question, we find that in support of the said plea no evidence/document has been filed by the Builder/Developer.  If a person owns more than one flat, it cannot be said that he is necessarily an investor, interested in making profit out of resale of the said flats.  He may have more than one flat on many grounds and still it cannot be said that he is not a “consumer”.  In the present case also, in the absence of any evidence/document, showing that the Complainants were indulged into any business of sale and purchase of the immovable properties and had also purchased the Flat in question in order to make profit out of its resale, it cannot be accepted that they were “investors” and not “consumers”.  The reference made by the Complainants to themselves in their letter dated 17.02.2008 as “investors” has been made in general terms and cannot be construed to mean that in fact they were investors.  Further, as regards the submission of the Builder/Developer that a query had been put by the State Commission in this behalf to the learned Counsel for the Complainants but he did not give any reply to the same, we find that the Impugned Order does not record so and, therefore, we don’t know what prevailed before the State Commission and under what circumstances.

13.     Once we have reached to the conclusion that the Complainants were not “investors”, it is not necessary for us to comment anything on the submission of the Builder/Developer that the Complainants had filed a Civil Suit in connection with a booking of a flat made by them in the year 2006 in the Project known as “La Citadel” of another Builder/Developer and had not disclosed about the same in the Complaint.

14.     In view of discussion made in Para-10 above, the contention of the Builder/Developer that the Complaint was barred by 3 years’ inordinate delay in filing the Complaint is not tenable.  As observed by the State Commission in the Impugned Order, from a perusal of the letters dated 07.02.2008 and 02.02.2010 (reproduced above), which had been written by the Builder/Developer to the Complainants, it cannot be inferred that the booking made by the Complainants stood cancelled by the letter dated 07.02.2008.  By the said letter, clearly two options had been given to the Complainants either to take back the money paid with statutory interest or to continue with the Project, in which case there shall be no liability of the Builder/Developer to pay any interest.  It does not state in unequivocal terms that the booking stands cancelled.  The Builder/Developer had stated so in the letter dated 02.02.2010 and, therefore, the State Commission has rightly observed that the letter dated 02.02.2010 actually terminated the booking and not the letter dated 07.02.2008.

15.     The sum and substance of the letter dated 17.02.2008 (page 98-99 of the paper-book), which had been written by the Complainants to the Builder/Developer in reply to their letter dated 07.02.2008, is not that the Complainants were not willing to continue with the Project in question.  A perusal of the said letter shows that the Complainants were fed up with the attitude of the Building/Developer in asking them to take back the money after expiry of 3 years and had raised some queries, inter alia, stating the Builder/Developer to give in writing that the Project in question was cancelled by the State Government and would not see the light of day in the near future, in which case they might think over taking refund with interest. The said letter nowhere states that the Complainants had discontinued with the Project in question and, therefore, the submission of the Builder/Developer that the Complainants never expressed their intention to continue with the Project cannot be accepted.

16.     The Complainants had booked the flat in the year 2005 and had paid a part-consideration therefor in the hope that one day they would get the same.  To their utter surprise, they received the letter dated 07.02.2008 from the Builder/Developer, asking them to take back the money paid with interest on the ground that they were not likely to commence the construction of the Building in near future.  In the said letter, nowhere it had been stated that the Project in question had been abandoned or cancelled by the Builder/Developer on any ground whatsoever.  In such a situation, the Complainants could not have been expected that they would accept the refund with interest.  The practice prevalent in Mumbai to refund the money in case of discontinuation of the Project launched cannot be equated with a compulsion for the Complainants to accept the refund.

17.     In view of the aforesaid discussion, we are of the considered opinion that there is deficiency in service on the part of the Builder/Developer in not handing over the possession of the Flat booked by the Complainants and not executing the sale deed/conveyance deed in their favour.  The State Commission is justified in passing the Impugned Order, which is based on correct and proper appreciation of evidence adduced and documents filed by the Parties.   

18.     In the result, the Appeal filed by the Builder/Developer fails and is dismissed accordingly.