The instant complaint under the Consumer Protection Act, 1986 is at the instance of a landowner against the developer/builder (Opposite Party No.1) and another landowner (Opposite Party Nos. 2) on the allegation of deficiency in services on the part of the Opposite Party no 1 in a consumer dispute of development of property and construction.

The gist of the case as averred by the complainant in a capsulated form is that one Shri Apurba Kumar Saha,  S/O late Gurupada Saha,  280 S.K. Deb Road, Lakshmi Apartment, 4^th Floor, Flat No. D, Lake Town, Kolkata – 700048 is that by virtue of purchase deed dated 22.06.1977 for 1 Cottah 1 Chittack land and a 3-storied building at Mouza – Ultadanga, J.L. No. 26, R.S. No. 5, Touzi No. 1298/2833, Khatian No. 75, Dag No. 97, South Dum Dum Municipality, 230/1, Dakshindari Road, Lake Town, Kolkata – 700048. The complainant was enjoying the possession of the suit premises, who went through a development agreement dated 19.11.2004 with the developer (OP1) for erecting a multi storied building by amalgamating the adjacent land of OP2 against allocation of 1 no. flat of 500 Sft. carpet area along with receivable payment of Rs. 4,00,000/-. The OP1 agreed to complete the construction within 3 years from the date of building sanction plan along with an agreement that the said sanction plan would be obtained within 6 months from the date of development agreement vide Clause No. 7, 8 & 9 of the said agreement. It was also agreed by the OP that an alternative accommodation would be arranged at the cost of the developer till delivery of the promised flat as per Clause 23 of the said development agreement. Further, one Dilip Kumar Saha (since deceased) and father of the OP 2 also entered into an agreement with OP1 (developer) for developing his part of land ad-measuring 1 Cottah 10 Chittack as an adjacent land owner situated at Mouza – Ultadanga, J.L. No. 26, R.S. No. 5, Touzi No. 1298/2833, Khatian No. 75, Dag No. 97, South Dum Dum Municipality, Holding No. 317 Dakshindari Road, Premises No. 230/1, Dakshindari Road, Lake Town, Kolkata - 700048. The developer amalgamated both the lands into one unit ad-measuring 4 Cottahs 10 Chittacks 37 Sq.ft. land, more or less which was renumbered by the local municipality as Holding No. 531 Dakshindari Road. Accordingly, the complainant became the co-sharer of the amalgamated property and delivered possession of his part of share of the property to the developer cum OP1 and handed over the original title deed on 07.03.2006 to the developer for obtaining sanctioned building plan. Before sanction of the said plan the developer requested to execute and register a general power of attorney by the complainant in favour of the developer which was executed on 14.02.2008 at A.D.S.R., Bidhannagar, Salt Lake. The complainant thereafter started to live at the alternative accommodation by paying monthly rental of Rs. 7,000/- from October, 2008 till date from the own fund of the complainant. The developer completed the construction and development of the building on the said amalgamated land and entered into several agreements with intending purchasers and transferred developer’s allocation to them but neglected to hand over the allocation of the complainant on various pleas, inspite of several representation from the complainant. The complainant in his petition makes it a point that according to the development agreement dated 19.11.2004, vide Clause No. 7 - the developer agreed to deliver the owner’s allocation of the complainant within 3 years from the date of sanctioned building plan. A legal notice of the Ld. Advocate of the complainant was sent to the developer on 26.07.2017 which was not complied with. Hence the complainant has filed this complaint against the developer for deficiency in services and adopting unfair trade practices and for which the complainant has prayed for giving a direction on the developer cum OP1 to pay (i) accommodation charges @ Rs. 7,000/- per month from October, 2008 till filing of the petition during January, 2019 i.e. for 110 months totaling to Rs. 7,70,000/- and a (ii) compensation from October, 2011 @ Rs. 200/- daily for 2250 days (75 months) i.e. Rs. 4,50,000/- and Rs. 1,00,000/-, both as compensation for harassment and mental agony.

The other side i.e. OP 1 cum developer advanced the argument along with filing BNA, gist of which states that the complainant made false and concocted story for ulterior gain along with failure to produce documentary evidence in support of his contentions as below which states inter-alia :-

The complaint is time barred being filed after 14 years as per para 17 of the petition as the cause of action admittedly arose firstly on 19.11.2004 i.e. date of development agreement, date of delivery of possession of the land of the complainant on 30.09.2008 and notice from the advocate of the complainant dated 26.07.2017, thereby a span of 14 years between development agreement and advocate’s notice. There is also 10 years gap between delivery of possession and advocate’s notice thereby barred by law under limitation act as per Section 69 of the CP Act, 2019.The complainant allegedly sold out his allocation of flat to a third party after cancellation of power of attorney thereby contending to make illegal monetary gain. Having the power of attorney cancelled, the developer has no right on the said property to deal with anymore. The complainant failed to submit any documentary evidence to prove that the complainant raised any objection before filing this case and advocate’s notice dated 26.07.2017.The power of attorney was executed in favour of OP 1 on 14.02.2008 which was cancelled on 11.04.2012 and hence OP 1 lost all powers over the said property and not liable for any claim. The complainant executed power of attorney on 14.02.2008 only after complainant delivered the vacant possession of the land to OP 1 after four years of the agreement dated 19.11.2004.The power of attorney was cancelled on 11.04.2012 by the complainant as a result of which OP 1 could not complete registration process towards the other 10 numbers of purchaser from developer’s allocation. The purchasers from the developer’s allocation completed the registration process from their part of flats through the land owner as because after cancellation of power of attorney on 11.04.2012 the developer ceased to have any right over the property and accordingly the said ten numbers of other flat owners/purchasers of the developer’s allocation got their properties registered in their favour after 2012.The complainant in the reply to the questionnaire of OP 1 (question no. 9) states that he made the deed in favour of the purchasers, to which the complainant refrained from giving reply. The complainant sold out ten numbers of flat belonging to the OP 1’s allocation being the developer of the property and placing the cancellation of power of attorney dated 11.04.2012 but could not show any reason for his silence for fourteen years towards OP 1.There is no agreement persisting between the complainant and the developer for paying monthly rental of Rs. 7,000/- for alternate accommodation. Moreover after cancellation of Power of attorney dated 11.04.2012, the OP 1 is no way liable. Being the complainant and the OP entered a JV as per agreement dated 19.11.2004 therefore the complainant is not coming under the purview of CP Act.The complainant does not remain a consumer after cancellation of the power of attorney in 2012, anymore.

The case has been transferred from Barasat Commission to this Commission as per order of the Ld. State Commission which was contested through questionnaires, replies, evidence on affidavit from both the sides between the complainant and the OP 1. The OP 2 i.e. the pro-forma OP did not adduce evidence and as the scope remained unutilised, the evidence of the OP2 stood closed. BNA was filed by both complainant and OP 1 when arguments were advanced. At this stage after hearing both sides it came to light that value of the flat has not been given in the complaint petition and therefore the Ld. Advocate of the complainant was directed to procure the same which was complied with from the Directorate of Registrar of Stamp and Revenue on 22.07.2022 which depicts the property value as Rs. 18,18,995/- as on 22.07.2022.

The document of this case was scrutinised with materials on record and the submissions advanced by the Ld. Advocates for the Complainant and OP1 were considered. The exhibits namely development agreement dated 19.11.2004, Municipal tax receipt no 770/76918 (date illegible) and complainant’s lawyer’s letter dated 26.07.2017 were only filed. No other document was produced by either party. As per terms and conditions of the development agreement between landowner cum complainant and developer (OP1), the OP1 was under obligation to complete the said flat under owner’s allocation and handover the same, but no fixed timeframe was decided as per Cl (5) of the dated 19.11.2004.

Further, the OP1 has contended that being a Joint Venture, the landowner cum complainant is not covered under the provisions of The Consumer Protection Act 1986. Upon examination, we find that the instant case in hand is a matter of Joint development agreement (JDA). A JDA sets the terms for two or more parties working together to develop a particular project. The JDA is typically negotiated before or during the working relationship. If landowners of a residential land is approached by a builder or the landowner approaches builder to construct flats on his land, the arrangement is beneficial for both parties. However, regarding whether landowner be considered as a consumer or a party to a JV, let us refer to the case of Bunga Daniel Babu vs M/s Sri Vasudeva Constructions to answer this issue. In the said case a stand was taken by the respondent that the agreement was a Joint Venture (collaboration) agreement, though it was not so titled. OP1 laid emphasis on the fact that the agreement showed the intention to collaborate and, therefore, it was a joint venture. However, Hon’ble Supreme Court ruled that the title or caption or nomenclature of the instrument/document was not determinative of the nature and character of the instrument/document, though the name usually gave some indication of the nature of the document and, therefore, the use of the words joint venture or collaboration in the title of an agreement or even in the body of the agreement would not make the transaction a joint venture, if there were no provisions for shared control of interest or enterprise and shared liability for losses. The SC proceeded to observe that if there was a breach by the land owner of his obligations, the builder would have to approach a civil court as the land owner was not providing any service to the builder but merely undertook certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages. It was also stated that while the builder committed breach of his obligations, the owner had the option to enforce specific performance and/or claim damages by approaching civil court or he could approach consumer forum under the Act. To that extent, the landowner was a consumer, the builder was a service provider and if there was deficiency in service in regard to construction, the dispute raised by the landowner would be a consumer dispute. The principle would be the same and the contract will be considered as one for house construction for consideration. It was clear as day that the complainant was neither a partner nor a co-adventurer. He had no say or control over the construction. He did not participate in the business. He was only entitled to, as per the MOU, a certain constructed area. Therefore, the conclusion was that the complainant is a consumer under the Act. Consequently, the appeal was allowed, the judgments and orders passed by the National Commission and the State Commission were set aside and the matter was remitted to the State Commission to re-adjudicate the matter treating the appellant as a consumer. So, in simple words, Land Owners are “Consumers” under JDA Contract, if they have no say or control over the construction and if they did not participate in the business.

Undisputedly, Complainant cum landlord being owner of suit property entered into a development agreement with OP1 for raising a multi-storied building over the said property on 19.11.2004 for the purpose of raising construction and to enable the OP1 cum developer to enter into Agreement for Sale with the intending buyers from the developer's allocation. The Complainant handed over title deed on 07.03.2006 to OP1 and executed one registered General Power of Attorney in favour of OP1 on 14.02.2008. The sanction of building plan was obtained by OP1 on 13.02.2006. All the above are the admitted positions of both the sides as per records and unchallenged positions.

For the sake of brevity and clarity, all the above points are taken up together. First of all, as there is a continuous cause of action, hence the complaint can’t be considered as time barred under the scopes and meaning of limitation act u/s 69 of the CP Act, 2019. The developer is liable for all the omission and commissions as a service provider even after cancellation of the power of attorney. The complainant in his Reply to the Questionnaire of OP 1 (No. 9) refrained from answering about executing deed in favour of the purchasers. The OP1 also could not substantiate his claim that the complainant sold out his allocation of flat to third parties after cancellation of POA by any single document. It is admitted fact that the general POA was cancelled by the complainant cum landowner that was executed on 14.02.2008 in favour of the developer, which was cancelled on 11.04.2012. There is also no documentary evidence about any terms for paying monthly rental for alternate accommodation to the complainant by the OP1. The Ld. Advocate for OP1/developer has submitted that the developer could not execute the Deed of Conveyance as the Power of Attorney executed by the landowner on 19.11.2004 was revoked by the complainant as landowner on 11.04.2012. Such cancellation of the said General POA was not disputed during Question & replies or filing BNA by complainant. By dint of the power conferred upon him, the landowner had entered into a development agreement with OP1. The evidence on record speaks that, it is not in dispute that as per Clause 7,8 and 9 of the Agreement, that the developer was under obligation to handover the subject flat within 6 months from the date of sanctioned plan on 13.02.2006 i.e. by 12.08.2006. However, the same was not complied by OP1 certainly as because the complainant cum landowner did not execute the general power of attorney in favour of builder before 14.02.2008.

The OP1 has made many counter allegations upon the landowner about selling out the developers portion to third parties as detailed in aforesaid para(s). It is noticed here that even if there is a breach by the landowner of his obligations, the builder is free to approach a Civil Court, as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages.  It is undisputed proposition of law that the parties are bound by the terms of agreement. When either of the parties did not pick up any quarrel with the terms and conditions of the agreement, they are certainly bound to follow the terms and conditions as contained in the agreement. In a case reported in AIR 1996 SC 2508 (Bharti Knitting Co. - vs. - DHL World Wide Express Courier Division of Airfreight Ltd.) that the Hon'ble Supreme Court has vetted. On the other hand, where the builder commits breach of his obligations, the owner has two options i.e. right to enforce specific performance and/or claim damages by approaching the Civil Court or can approach the Forum under Consumer Protection Act for relief as consumer against the builder and as a service provider. But the inter-se dispute between the landowners and the developer cannot be permitted to be used as a ploy to wriggle out of obligations under the agreement.

The fact remains that the Landowner being a 'consumer' within the meaning of Section 2(1)(d) of the Act hired the services of the Developer. It is well settled that after accepting executing an agreement for joint development, it is bounden duty on the part of developer  to fulfil basic obligations, viz. - to deliver possession and to obtain Completion Certificate from the competent authority and until and unless these conditions are fulfilled, the developer cannot shirk off his responsibility. Therefore, the appellants and the respondent no.2 are negligent and deficient in rendering services to the respondent no.1/complainant within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act. But on the other side, regarding the case in hand, the Landowner cum complainant has while filed complaint petition alleging that there was a delay on the part of the OP1 to for not giving possession certificate, but on the other hand has not denied the allegation of OP1, in specific, that the general POA dated 19.11.2004 was cancelled by himself on 11.04.2012 making the scope to get possession infructuous. The Landowner cum complainant has also faulted while claiming that the OP1 cum builder failed to give possession within 3 years of building sanction plan dated 13.02.2006 i.e. 12.02.2009, when he himself executed the general POA only on 14.02.2008, thereby impairing the developer cum OP1 to complete the construction, technically, within stipulated period.

Therefore it is a failure on both the sides of the parties leading to ‘contributory negligence’. It is a defence under torts. As the complainant has also contributed to the damages by being negligent, then he is also guilty of contributory negligence alongwith the opposite party. The complainant is entitled to some relief. But the complainant has failed to produce any cogent document showing that the rent is paid by him towards the accommodation provided to him and the claim of the developer that accommodation was provided to complainant in his flat was not contested by complainant and also there is reflection in the Cl no (23) of the agreement dated 19.11.2004 between the parties and during question and reply between parties, to that effect. It has become quite difficult to assess the alternative accommodation of claim of rental part in want of cogent evidence either from the developer or the landowner from their claim and counter claims. In the facts and circumstances stated above the following order will meet the ends of justice.

The complaint is allowed in part on contest.  

Hence it is Ordered that :-

OP1 is directed to make a payment of Rs.80,000/- to the complainant of the case as compensation for mental pain and harassment  for the period of 14.02.2011 to 11.04.2012 for 14 months i.e. 3 years after execution of power of attorney till cancellation of the same on  proportionate basis read with rate as prayed in complaint petition. The OP1 is also directed to make payment of Rs.10,000/- to the complainant as partial litigation cost, due to contributory negligence, within 60 days from the date of this order, in default of which the amount shall carry simple interest @ 9% p.a. from date of order till its realisation.

The Registrar of this Commission is directed to provide a copy of this order to the parties as per CPR.