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2021 Supreme(SC) 1029

SUPREME COURT OF INDIA
K.M. JOSEPH, PAMIDIGHANTAM SRI NARASIMHA, JJ.
M/s Janpriya Buildestate Pvt. Ltd. - Appellant
Versus
Amit Soni & Ors. - Respondent
Civil Appeal No. 1065 of 2021, 3768, 3770 OF 2020
Decided on : 07-12-2021

Headnote:

Constitution of India, 1950 – Article 3 – Consumer Protection Act, 1986 – Compensation – Payment of wages – Civil Appeal – Lead case – Appellant has purportedly entered into a collaboration agreement with Uppal Housing Private Limited and Umang Realtech Private Limited for development of a group housing project – Appellant owns land on which project was contemplated – Parties to tripartite agreement are apart from appellant, buyer and developer – It would appear that after agreement was entered into, a project commenced but it could not be completed as contemplated – This led to a complaint being filed before National Consumer Disputes Redressal Commission under Consumer Protection Act, 1986 – This complaint has been allowed by NCDRC – Held, Court have already scanned pleadings of parties – As fairly stated by learned counsel for complainants there is a complete lack of pleadings to support case of nature which is sought to be set up, viz., that this is a fit case for employing doctrine of lifting of corporate veil or that appellant would be liable being principal of developer – In this context learned senior counsel for appellant would also point out that apart from absence of pleadings, this is a matter which may go to jurisdiction of NCDRC having regard to limitations which have been carved out in law on nature of functions of forum – Having heard learned counsel for parties, while court are of view that court cannot uphold order of the NCDRC in manner in which it is being done, court should afford an opportunity to respondents to seek amendment of pleadings, if they are so advised, and to allow an opportunity to establish case which is being set up which is based on matters which go beyond scope of findings by NCDRC – At same time, court must leave it open to appellant to raise all contentions including contentions against such pleadings being introduced as also limitations on jurisdiction of NCDRC to make such an inquiry – Appeals allowed.

JUDGMENT :

K.M. JOSEPH, J.

1. These appeals are against the common judgment.

2. We take Civil Appeal No. 1065 of 2021 as the lead case.

3. On 09.04.2011, the appellant has purportedly entered into a collaboration agreement with Uppal Housing Private Limited and Umang Realtech Private Limited for development of a group housing project. The appellant owns the land on which the project was contemplated. Following the collaboration agreement, the appellant also figures as a party in agreement which is styled as a tripartite agreement. The parties to the tripartite agreement are apart from the appellant, the buyer and the developer. It would appear that after the agreement was entered into, a project commenced but it could not be completed as contemplated. This led to a complaint being filed before the National Consumer Disputes Redressal Commission (hereinafter referred to as ‘NCDRC’ for brevity) under the Consumer Protection Act, 1986 (hereinafter referred to as ‘Act’ for breavity). This complaint has been allowed by the NCDRC.

4. The complaint of the appellant is that the NCDRC has erred in visiting the appellant also with liability under the Act. It is the case of the appellant that under the collaboration agreement and the tripartite agreement, the appellant has not undertaken any liability qua the consumers viz., the flat buyers. It is the case of the appellant that a perusal of the collaboration agreement and the tripartite agreement would make the following position clear.

The appellant was to contribute the land on which the project was to come up. The developer, under the collaboration agreement and the tripartite agreement, was to undertake and complete the project. As between the appellant and the buyer, there is no other obligation which is undertaken, except, undoubtedly, such obligations as would be necessary for the purposes of conveying title in the land.

5. The contention of the buyers, on the other hand, would appear to be that being a confirming party and having regard to the terms of the agreement, the appellant was rightly made liable by the NCDRC.

6. We may notice the findings which have been entered into by the NCDRC in regard to the appellant which was the II opposite party:

    “23. Now we address ourselves to the liability of the second Opposite Party. Learned counsel for the second Opposite Party argued that the second Opposite Party is only the owner of the land and an Collaboration Agreement entered into between both the Opposite Parties according to terms of which the rights to sell, transfer and receive payments has been assigned to the first Opposite Party and therefore the second Opposite Party cannot be made liable to refund any amounts received. The contention of the learned counsel that the second Opposite Party should be deleted from the array of parties and no liability can be fastened upon them is totally unsustainable, keeping in view that the Apartment Buyers’ Agreement which is subsequent to the Collaboration Agreement is a Tripartite Agreement signed by the first Opposite Party, the second Opposite Party and the Complainant. It is pertinent to note that the second Opposite Party was defined as the ‘Confirming Party’ in the Apartment Buyer’s Agreement dated 17.08.2012, it is relevant to mention that a consideration of Rs.24,81,00,000/- towards non-refundable security deposit was paid by the first Opposite Party to the second Opposite Party towards the subject land. For better understanding of the revenue shared by both the Opposite Parties, Clauses 4.1 of the Collaboration Agreement are reproduced as hereunder:

    “4.1 In consideration of the contribution of the Project Land by the Land Owner for execution of the Project and granting the rights to the Developer for development of the Project Land and the Developer bearing the costs, expenses and responsibility of execution of the Project including discharge of the respective obligations by the Parties under this Agreement and UHPLand the Land Owner agreein

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