Consumer Protection Act, 1860: Apartment Buyers’ Agreement – Delayed Possession Compensation – Builder under obligation to deliver the possession of the certain flats to the allottee – Handing over possession delayed since builder could not get certain regulatory clearance – Later, builder raised additional demands under different heads, which as per the allottee added upto Rs 9 lakhs (approx) – As per the allottee, they had cleared the requisite installments – The allottee did not take the possession in protest of additional demand – The allottee was further aggrieved by the fact that he had been denied certain payment related benefits on beings offered possession of the flat – Per contra the builder supported such denial on the ground that there was default in payment by the allottee within due date of the installments – The allottee supported the fact of delayed payment on the premise that they did not receive notice of such demand on 29 December 2011, as alleged by builder – Further, dispute also revolved around payment of maintenance charges, as such charges, as per builder, were due to be paid by allottee – Thereafter, allottee took up the entire matter before the State Consumer Disputes Redressal Commission, which held in favour of the allottee except on the question of maintenance charges – Aggrieved on the question of the maintenance charges, the allottee preferred appeal before National Commission – National Commission partly allowed the appeal while making modification in the direction of the State Commission as to the delayed compensation – Aggrieved by such modification, the allottee filed instanat appeals – Held: The allottee were justified in not taking of possession since the demand of the sum of 9 lakhs was illegal, as per facts, and such possession was conditional on payment of the aforesaid amount – Upon considering the entire material on record the builder failed to establish the fact that it was on 29 December 2011 that the notice for the payment of the installment was issued by them – The builder did not bring any material on record to show that it was the builder who was carrying out maintenance work which could have brought them within the definition of “maintenance agency” under Apartment Buyers’ Agreement - The entity entitled to such payment was not impleaded as party to the proceeding – The builder, since unable to get requisite regulatory clearance modified the terms of agreement thereby amending the starting date of computing delayed payment of compensation hence National Commission erred in making modification in such date and State Commission was right in its direction as to date of commencement of the payment of delayed compensation.
Disposing of the appeals, the Court
HELD: 1. The definition of Maintenance Agency means “DHDL (the builder) or association of allottees or such other agency but the conjunction “or” as has been applied in the definition clause ought to mean in the alternative and this definition cannot be construed to infer that even after handing over the maintenance work to an association, the builder shall continue to remain as a maintenance agency entitled to collect maintenance charges. The clause relating to fixation of total maintenance charges only specifies the obligation of an allottee to pay such charges and the substantive Agreement specifies again that the maintenance charges would be payable to the maintenance agency. In so far as the subject dispute is concerned, the builder’s case, as stated above, is that the maintenance agency is to receive the maintenance charges but no specific case has been made out that the builder themselves are carrying on the maintenance work, which could have brought them within the definition of maintenance agency under the main Agreement. In such circumstances, it cannot be appreciated as to how, in dealing with the allotees’ complaint against the builder, the two statutory fora passed orders which effectively required the allotee to make over payment as maintenance charges to a third party, the association in this case. No principal-agent relationship has been established between the builder and the association as regards the Maintenance Agreement entitling the builder to claim and receive maintenance charges. The builder, at best, is facilitator in organising a maintenance agency. The overall obligation of a flat buyer to pay maintenance charges may be derived from interpretation of clause 20 of the main Agreement. But without any claim from the entity, who are to render maintenance services and charge for the same, the two statutory fora ought not to have directed the allottee to make payment of maintenance charges. The National and the State Commissions, have committed error in directing the allottee to make payment of maintenance charges, which ought to have been paid to the association when there was no claim from the association in the first place. Secondly, nothing has been brought to the notice of the Court from which it could be inferred that the builder had the authority to represent the association for collecting maintenance charges. On the other hand, the builder’s own case is that the maintenance charges ought to be paid to the association. The latter (i.e., the association) has not been impleaded as a party at any stage of these proceedings. Nor they have prosecuted any claim. [Para 17 and 18][471-E-H; 472-A-E]
2. So far as start of the running time for quantifying delayed payment of compensation from March 2013 is concerned, the builder themselves had modified the relevant clause by their letter dated 26th March 2009, amending the starting date for computing delayed payment of compensation from end of three years from the date of Agreement to three years from the date of booking. Thus, the date of booking in the case of the allottee being March 2008, the State Commission had rightly directed payment of delayed compensation from March 2011. [Para 23][475-G-H; 476-A-B]
3. The dispute between the parties primarily arose as the builder denied substantial benefits to the allottee for nine days’ delay in clearing instalment. This allegation of delay has been rejected by the Consumer Fora and their concurrent finding is that no proper demand was made for payment of such instalment. On a plain reading of this letter, it cannot be said that the builder offered physical possession only on remitting of payments as per statement of accounts, which was for a sum of Rs.9,00,382/- and on furnishing an undertaking. The National Commission found that the statement of account dated 10th June 2013 and demand on that basis was illegal. As the offer for possession was conditional on settling of accounts and, as the accounts reflected illegal demand, the builder cannot argue that there was a valid offer for possession under the letter dated 10 th June 2013. In this background, in the event the allottee wanted proper adjudication of his rights and liabilities before asking for interim possession of the flat which would have had carried with it unspecified obligations, no fault can be found in such conduct of the allotee. [Para 24][476-C-F]
DLF Homes Panchkula Pvt. Ltd. vs D.S. Dhanda and Ors. [(2020) 16 SCC 318 : [2019] 7 SCR 1061; DLF Home Developers Ltd. And Another vs Capital Greens Flat Buyers Association & Ors. (2020] SCC Online SC 1125 – distinguished.
Wing Commander Arifur Rahman Khan and Aleya
Sultana and Others vs DLF Southern Homes Pvt. Ltd. and Others (2020) 16 SCC 512 : [2020] 9 SCR 136 – held in-applicable.
4. The State Commission found deficiency of service on the part of the builder by sending wrong statement of accounts along with the letter of possession and as per the finding of the State Commission, the allottee was deprived in taking possession of the flat, which was offered, because of these factors. The National Commission did not take a contrary view and in fact came to a finding that the statement of account dated 10th June 2013 and demand on that basis was illegal. These findings arrived by the two fora were on appreciation of evidence and there is no perversity in such finding. So, the letter of 10th June 2013 cannot be treated as a valid offer letter. [Para 28][479-C-D]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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