BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 29^th DAY OF DECEMBER 2021

O R D E R

SRI.S.L.PATIL, PRESIDENT

All these complaints have been filed by different complainants against one and the same Opposite Party (herein after referred as OP).  Hence, with a consent of learned counsels for complainants and OP, the case Nos.579 to 584/2020 are clubbed with CC No.578/2020.

2. These complaints have been filed by all complainants under Section 34 of C.P.Act, 2019 against the Opposite party (herein after referred as OP) with a prayer to direct the OP to hand over the possession of the flats and to provide completion certificate to the complainants, to award damages, costs etc.,  By way of filing the amendment application under Order 6 Rule 17 CPC R/w Section 151 CPC sought for additional relief to direct the OP to execute the sale deed.  The said application was came to be allowed.  Thereafter, complainants have filed the amendment complaints under Section 34 of the C.P.Act, 2019 but it ought to have been filed under Section 35 of the C.P.Act, 2019. The relief sought by the complainants attract the provisions of Section 35, hence, it is treated as filed under Section 35 of the C.P.Act, 2019. 

3. The brief facts of the complaints are as under:-

In all cases complainants submit that OP has issued notification on 19.11.2016 inviting public to get affordable ready built flats around Bengaluru on first come first serve basis in respect of 3512 flats.  The last date for applying was 21.01.2017.  Further OP issued another notification for changes in respect of 2705 flats including row duplex houses at Alur Village.  Further complainants submit that in the earlier notification 252 flats were available but in the subsequent notification, 221 flats and 31 houses were allotted with a condition that GST should be paid separately further a sum of Rs.2,00,000/- for car parking.  The same was not mentioned in none of the earlier notifications stated whether the proposed allotment rates were inclusive of VAT/GST or not at the time of fixing the selling rate.  Thus it is clear the selling rate was inclusive of VAT that was in force at the time of fixing of sale price.  Further complainants submit that OP has collected the tender for the work on 07.02.2014 with last date 04.04.2014 under the very first condition to complete the said project within 24 months from the date of agreement, but till today the OP has not been issued with completion certificate and has thus defaulted. The OP issued no objection certificates for mortgaging the allotted flats. The OP issued allotment letter bearing flat No.B9-73-2BHK, Aluru Phase 2 Type 3 for total consideration of Rs.42,00,000/.

In all cases, the complainants have paid the following amounts:-

Further complainants submits that on 27.02.2020 OP has issued endorsement to pay GST charges Rs.4,75,175/- in CC 578/2020, Rs.4,39,688/- in CC 579/2020, Rs.4,40,344/- in CC 580/2020, Rs.4,34,175/- in CC 581/2020, Rs.5,04,000/- in CC 582/2020, Rs.2,10,002/- in CC 583/2020 and Rs.5,04,000/- in CC 584/2020.  The OP has issued endorsement to pay GST charges. 

Further complainants submit that OP demanding the GST which was not there at the time of the notification or is there in any clause since the work was not completed as on 30.06.2017 because of OP’s default.  Further submits that OP now asking to pay additional amount of Rs.2,00,000/- towards the car parking of the respective flats which is against its own notification and conditions and also against the guidelines laid down in Nahal Chand case of Apex Court. Further submits that act of no-issue of execution sale deed over completion certificate and possession of the flats by the OP to the complainants amounts to deficiency of service.  In this regard complainants have issued legal notice to OP for which OP did not reply nor heard the request of the complainants.  The cause of action for the complainants to file these complaints have arisen in the month of May, 2020 when the complainants requested for possession and completion certificate of the flats and when notice was issued to OP.  Hence, these complaints are filed.   

4. After admitting the complaints, notices were issued to OP duly served called out absent.  Thereafter, on 18.11.2020 advocate for OP appeared before this Commission and filed I.A.1/2020 under Order 9 Rule 7 R/w Section 151 CPC to set aside the exparte order and permit him to file the version.  The said I.A.1/2020 is allowed and OP is permitted to file the version. OP filed the version.  

5. In the version, the OP submits that complaints are not maintainable either under law or on facts.  Further submits that Op has issued notification on 19.11.2016 inviting the public to apply for allotment of flats on first cum first serve basis, subsequently another notification of near issues making some changes.  The terms of allotment of flats included that GST should be paid separately and also a sum of Rs.2,00,000/- should be paid for car parking as per paper publication issued.  It is not correct to say that the selling rate was inclusive of VAT that was in force at the time of fixing the sale price.  The OP has also issued no objection certificate for mortgaging the allotted flats.  The payment made by the complainants as per para 10 of the complaints are admitted, however the payment did not include the GST charges and car parking.  Further submits that OP has been demanding the GST charges and further sum of Rs.2,00,000/- towards car parking charges as per the terms of allotment.  The flats for ready to occupy and the possession of the same shall be handed over to the allottees, on receipt of the sale price in full.  The OP has not been deficient in rendering the service, hence is not liable to pay damages, compensation etc.,  Hence, OP pray for dismissal of the complaint with costs.

6. The complainants to substantiate their case filed affidavit evidence and got marked the documents Ex.A.1 to Ex.A.16 in CC 578/2020, Ex.A.1 to Ex.A.16 in CC 579/2020, Ex.A.1 to Ex.A.19 in CC 580/2020, Ex.A.1 to Ex.A.14 in CC 581/2020, Ex.A.1 to Ex.A.22 in CC 582/2020, Ex.A.1 to Ex.A.11 in 583/2020 and Ex.A.1 to Ex.A.25 in CC 584/2020.     The OP has also filed the affidavit evidence in all cases and produced some documents.

7. Both parties have filed their written arguments. Heard the learned counsels for both sides.

8. The points that arise for our consideration are:

1. Whether the complainants prove the deficiency of service on the part of OP, if so, whether the Complainants entitled for the relief sought for? 
2. What order?

9.  Our answers to the above points are as under:

Point No.1: Partly in the Affirmative 

Point No.2:As per the final order for the following

REASONS

10.Point No.1: The undisputed facts which reveals from the pleadings of the parties goes to show that the complainants in all cases have paid the entire consideration amount as stated in para No.10 of the complaints. The main grievance of the complainants are that OP has issued an endorsement to pay the GST charges as mentioned in para No.11 of the complaints at the time of registration of the sale deed.  These facts are denied by the complainants stating that at time of entering into agreement, there was no GST prevailing.  The stand taken by the OP is that GST is the condition precident, hence it is payable.  In this context, OP submits that similar matter has been challenged before the Hon’ble High Court of Karnataka in W.P.No.51001/2019 (BDA) wherein it was observed that “On payment of said GST component, the respondent BDA to take appropriate steps at the earliest to execute sale deed in favour of the petitioner within a period of six weeks after all formalities are fulfilled and payment of GST as ordered is made by the petitioner.  It is made clear that in the event if the writ petition is allowed, the Central Government or the State Government, as the case may be would be required to refund the amount that has been paid by way of GST by the petitioner”.  For which, the learned counsel for complainants fairly submits that the complainants are ready to pay the GST at the time of registration of the flat with a liberty to seek the refund in the event of order passed by the Hon’ble High Court of Karnataka in W.P.51001/2019 (BDA).  In this context, this Commisison has no any legal impediment to direct the OP to execute the sale deed in favour of the complainants on paying GST amount and also the registration charges.

11. The another question that crops up for our consideration is in respect of the allotment of the car parking area.  In this context, complainants in their written brief stated that car parking is comes within the undivided share, and additional amount of Rs.2,00,000/- from each of the complainants cannot be charged.  In this context, placed the reliance on the judgement of the Hon’ble Supreme Court of India in case of Nahalchand Laloochand Pvt. Ltd., Vs Panchali Co-operative Housing Society Ltd., in Civil Appeal No.2544/2010.  In the said judgement, the Hon’ble Supreme Court of India has observed that, the order passed by the High Court and its findings for dismissal of the Appeal filed by the said Nahalchand.  In this context, we place the on para No.7 of the above said judgement reads thus:-

The carpet area of any of the 56 flats/tenements in Panchali building is not less than 35 sq. mtrs.

The parking space either enclosed or unenclosed, covered or open cannot be a building.

It is compulsory requirement to provide for parking spaces under DCR.

It is obligatory on the part of the promoter to follow the DCR. The agreement signed under MOFA between the developer and the flat purchaser must be in conformity with the model form of agreement (Form V) prescribed by the State Government.

The model agreement does not contemplate the flat purchasers to separately purchase the stilt parking spaces.

The rights arising from the agreement signed under the MOFA between the promoter and the flat purchasers cannot be diluted by any contract or an undertaking to the contrary. The undertakings contrary to DCR will not be binding either on the flat purchasers or the Society.

The stilt parking space is a common parking area available and the developer is obliged to provide the same under the DCR when the carpet area of the flat is 350 sq. meters It is not an additional premises/area that he is authorized to sell either to flat purchaser or any outsider. It is part and parcel of the Society building and it cannot be a separate premises available for sale. As soon as the Corporation issues the occupation certificate and the Society is registered, the building as well as the stilt parking spaces, open spaces and all common amenities become the property of the Society.

The stilt parking spaces cannot be put on sale by the developer as he ceases to have any title on the same as soon as the occupation certificate is issued by the Corporation and it becomes the property of the society on its registration.

The stilt parking spaces cannot be termed as open/covered garages and Clause 2 of the Model Agreement

Form V provides for sale of covered/open garage in addition to the flat/shop.

It is immaterial if the purchase agreement does not include stilt car parking spaces in the common area of amenities. The stilt car parking spaces is part of the common amenities and it cannot be treated to be a separate premises/garage which could be sold by the developer to any of the members of the society or an outsider.

Under MOFA, the developers right is restricted to the extent of disposal of flats, shops and/or garages, which means that any premises which is included in the Flat Space Index (FSI) can be sold by the developer/promoter. The stilt parking space is not included in the FSI nor it is assessable for the Corporation taxes.

12.  With reference to the contents of para No.7 i.e. what are the rights of a promoter  v/s society in respect of stilt parking spaces?  For which, the Hon’ble Supreme Court answered in para Nos.39 and 40 reads thus:- 

39. We have now come to the last question namely - what are the rights of a promoter vis-vis society (of flat purchasers) in respect of stilt parking space/s. It was argued that the right of the promoter to dispose of the stilt parking space is a matter falling within the domain of the promoters contractual, legal and fundamental right and such right is not affected. This argument is founded on the premise, firstly, that stilt parking space is a flat by itself within the meaning of Section 2(a-1) and in the alternative that it is not part of common areas. But we have already held that stilt parking space' is not covered by the term garage much less a flat and that it is part of common areas. As a necessary corollary to the answers given by us to question nos. (i) to (iii), it must be held that stilt parking space/s being part of common areas of the building developed by the promoter, the only right that the promoter has, is to charge the cost thereof in proportion to the carpet area of the flat from each flat purchaser. Such stilt parking space being neither flat under Section 2(a-1) nor garage within the meaning of that provision is not sellable at all.

40. MOFA was enacted by the Maharashtra Legislature as it was found that builders/developers/promoters were indulging in malpractices in the sale and transfer of flats and the flat purchasers were being exploited. The effect of MOFA may be summarized as follows. First, every promoter who constructs or intends to construct block or building of flats in the area to which MOFA applies has to strictly adhere to the provisions contained therein, i.e., inter alia, he has to make full and true disclosure of the nature of his title to the land on which the flats are constructed and also make disclosure in respect of the extent of the carpet area of the flat and the nature, extent and description of the common areas and facilities when the flats are advertised for sale. Secondly, the particulars which are set out in Section 4(1A) (a) (i) to (x) have to be incorporated in the agreement with the flat purchaser. Thirdly, the promoter has to apply to the Registrar for registration of the organization (co-operative society or company or condominium) as soon as minimum number of persons required to form such organization have taken flats. As regards unsold flats, the promoter has to join such organization although his right to dispose of unsold flats remains unaffected. Fourthly, and more importantly, the promoter has to take all necessary steps to complete his title and convey to the organization his right, title and interest in the land and building and execute all relevant documents accordingly. It was argued by Mr. Tanmaya Mehta, learned counsel for the promoter that in view of the provisions of MOFA, Section 6 of T.P. Act and Article 300A of the Constitution, the right of the promoter to transfer parking spaces is not at all restricted. Relying upon the decisions of this Court in ICICI Bank Ltd. v. SIDCO Leathers Ltd. & Ors..4, Karnataka State Financial Corporation v. N. Narasimahaiah & Ors.5 and Bhikhubhai Vithlabhai Patel & Ors., (2006) 10 SCC 452 (2008) 5 SCC 176  v. State of Gujarat & Anr.6, he submitted that the provisions contained in MOFA must be construed strictly and there is no provision either express or by necessary implication in MOFA restricting the sale of stilt or open parking spaces. Mr. Sunil Gupta also argued that promoter continues to have contractual, legal and fundamental right to dispose of the stilt/open parking space in the manner in which he proposes and his consumers accept. We think this argument does not bear detailed examination. Suffice it to say that if the argument of learned senior counsel and counsel for promoter is accepted, the mischief with which MOFA is obviously intended to deal with would remain unabated and flat purchasers would continue to be exploited indirectly by the promoters. In our opinion, MOFA does restrict the rights of the promoter in the block or building constructed for flats or to be constructed for flats to which that Act applies. The promoter has no right to sell any portion of such building which is not flat within the meaning of Section 2(a-1) and the entire land and building has to be conveyed to the organisation; the only right remains with the (2008) 4 SCC 144 promoter is to sell unsold flats. It is, thus, clear that the promoter has no right to sell stilt parking spaces as these are neither flat nor appurtenant or attachment to a flat.

13. Having said so, the Hon’ble Supreme Court is of the opinion that it is compulsory requirement to provide the parking space.  Further observed that model agreement does not contemplate the flat purchasers to separately purchase the stilt parking spaces.  In this context, we place the reliance on one of the documents filed by the complainants with common memo dated 11.02.2021 in this case and other complaints.  The said document is the format/proforma of the sale deed of the OP i.e. BDA.  On going through the said draft format/proforma of the sale deed, wherein there is no separate clause in respect of the flat purchasers to separately purchase the stilt parking/car parking areas.  When such being the facts, the parking area is also comes in the undivided share for which no extra amount of Rs.2,00,000/- is payable by each of the complainants.  In this context, we come to the conclusion that the complainants have proved their cases in respect of deficiency of service on the part of OP.  Accordingly, we come to conclusion that the OP is duty bound to get registered the sale deed in favour of the complainants in respect of their individual flats allotted to them as described in para No.8 of the complaints including car parking area and also hand over the possession with possession certificate.  Further the complainants are liable to pay the GST under protest with liberty to get refund on the out come of the final order of the Hon’ble High Court of Karnataka in W.P. No.51001/2019.  Accordingly, Point No.1 is answered Partly in Affirmative.

             14.Point No.2:  In the result, we pass the following:

COMMON ORDER

1. The complaints in CC 578 to 584/2020 filed by the complainants are allowed in part. 
2. The OP is directed to execute the registered sale deed in favour of the complainants in respect of their individual flats allotted to them as described in para No.8 of the complaints including the car parking area and also hand over the possession of the said flats with possession certificates.  All the complainants are directed to bear the registration charges of the said flats.
3. The complainants are further directed to pay the GST under protest subject to the out come of the final order of the Hon’ble High Court of Karnataka in W.P.No.51001/2019 for refund of the same.
4. The above said order is to be comply within six weeks from the date of receipt of this order, failing which the complainants are at liberty to take steps as per Law.
5. Looking to the circumstances of the case, parties are directed to bear their own costs.
6. This original order shall be kept in complaint No.578/2020 and the copy of the same shall be kept in other complaint Nos.579 to 584/2020.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 29^th December, 2021).

ANNEXURE

In CC No.578/2020 the complainant produced the following documents are marked as Ex.A.1 to 16:-

In CC No.579/2020 the complainant produced the following documents are marked as Ex.A.1 to 16:-

In CC No.580/2020 the complainant produced the following documents are marked as Ex.A.1 to 19:-

In CC No.581/2020 the complainants produced the following documents are marked as Ex.A.1 to 14:-

In CC No.582/2020 the complainant produced the following documents are marked as Ex.A.1 to 22:-

In CC No.583/2020 the complainant produced the following documents are marked as Ex.A.1 to 11:-

In CC No.584/2020 the complainant produced the following documents are marked as Ex.A.1 to 25:-