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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
D.K. Jain, President; Mrs. Vineeta Rai & Vinay Kumar, Members
Smt. V. Kamala & Ors. —Appellants
versus
K. Rajiv, Rep. by his GPA Holder, K.V. Babji, & Ors. — Respondents
First Appeal No. 70 of 2012
(From the order dated 05.12.2008 in Consumer Dispute No. 32/06 of the State Consumer Disputes Redressal Commission, Andhra Pradesh at Hyderabad)
Decided on 3.7.2014
Held: In our opinion, the afore-extracted order of the Hon’ble Supreme Court is on all fours on facts at hand. Highlighted portions of the afore-extracted covenants in the Development Agreement clearly show that on development of the land, Respondent No.2 was to hold 60% of the super built up area in the building. In terms of Clause 11 of the said agreement they could enter into sale agreements and collect advance money in respect of their share during the course of construction or after the completion of the construction. Further, in terms of clause 15 of the said agreement, the Appellants were required to execute a General Power of Attorney and get it registered in favour of Respondent No.2 or their nominee to enable them to take all necessary actions for development of the property in terms of the Development Agreement, which they failed to do. It is pertinent to note that in reply to paragraph III (I) of the Complaint, wherein the factum of execution of Development Agreement, dated 05.07.1997, between the Appellants and Respondent No. 2 and its various clauses were specifically referred to, except for general denial of all the stipulations in the Agreement, its execution, as such, was not disputed. An inter-se dispute between the owners and the builder, if any, cannot be permitted to be used as a ploy to wriggle out of obligations under the Agreements and leave the buyer in the lurch. Admittedly, the built up area sold by Respondent No. 2 did not exceed his share under the Development Agreement dated 05.07.1997 and, therefore, the judicial discipline demands that we follow the aforenoted order dated 10.05.2013 passed by the Hon’ble Supreme Court. Since the Agreement of Sale for the subject property was entered into way back in the year 2004, following the order of the Supreme Court, we are not inclined to examine the question whether Respondent No. 1 was a “Consumer” vis-a-vis the Owners, falling within the purview of the Act. For the aforegoing reasons, the Appeal is dismissed but with no order as to costs. (Paras 13 and 14)
Result: Appeal dismissed.
D.K. Jain, President—For the reasons stated in the application seeking condonation of delay, the delay of 1131 days in filing the present Appeal is condoned.
2. Challenge in this appeal under Section 19 of the Consumer Protection Act, 1986 (for short, “the Act”) is to the order dated 5.12.2008, made by the State Consumer Disputes Redressal Commission, Andhra Pradesh at Hyderabad (for short “the State Commission”) in Consumer Dispute No. 32/2006, whereby a direction has been issued to the Appellants, and to Respondents No. 2 to 4, to execute the Sale Deed in favour of Respondent No. 1, and also pay to him a compensation of Rs.1,00,000/-.
3. Briefly stated, the background facts leading to the present appeal are as follows:
Appellants along with Respondents No. 3 and 4 are the owners of a piece of land admeasuring 790 sq. yards, situated in Balanagar Mandal, Ranga Reddy District, Andhra Pradesh. On 05.07.1997, they entered into an agreement with Respondent No.2 for development of the said land. The relevant covenants in the Development Agreement, (the owners and the Developer, referred to as the First and Second party respectively in the Development Agreement) are as under:-
“8. In consideration of the first party having entrusted irrevocable rights to second party, the second party agrees to construct in the following manner:-
(i) The second party has today paid a sum of Rs.4,00,000/-(Rs four lakhs only) as earnest money deposit to the first party the receipt of which the first party hereby admit and acknowledge. The said amount shall be returned by the first party to the second party at the time of handing over the built up area i.e. 40% of built up area entitled by the first party. The said amount shall bear no interest.
(ii) Further the second party has (sic) agreed to construct with its own funds and deliver 40% super built up area inclusive of all common areas, balance areas circulation areas to the first party in lieu of the development rights granted by the first party. The second party shall be entitled for the remaining built up area i.e. 60% of super built up area and has right to alienate, the same to the prospective purchasers.
10. The first party hereby authorizes the second party to procure the customers for flats/shops and garages and other spaces and to enter into agreement of sale with such customer, collect advances and to issue valid receipts to such purchasers of flats.
11. After completion of the said residential/ commercial complex, the second party shall deliver the possession to the first party the entire area which the first party is entitled under this agreement after obtaining acknowledgment in writing from them and shall retain their share of constructed area as per this agreement. But however the second party either during the course of construction or after the completion of the construction, shall be entitled to enter into the agreement of sale and obtain advances from the customers on the purchase of flats and other spaces falling to the share of the second party.
15. The first party shall execute a GPA and get it registered in favour of second party or its nominee to enable the second party to make application and obtain permissions and sanction from MCH Electricity Department, Drainage, Water Supply Departments and any other department and also to enable him to commence the construction expeditiously and authorizing the second party to enter into agreement of sale or execute registered sale deed in respect of undivided share of land and flats proposed to be constructed on the schedule property excluding portion reserves to the owners together with the corresponding land.” (Emphasis supplied)
4. In exercise of their right to sell and collect advances from the customers in respect of their share of 60% in the super built up area in the building, on 13.02.2004, Respondent No.2 entered into an Agreement of Sale for their entire share in favour of the Complainant, Respondent No. 1 in this A
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