Case Title:
AKSHAY & ANR VERSUS ADITYA & ORS.
Date Of Order:
29th August 2024
Bench:
Justice Bela M. Trivedi, Justice Satish Chandra Sharma
Parties:
Appellants- AKSHAY & ANR
Respondents: ADITYA & ORS.
Subject:
The National Consumer Disputes Redressal Commission, New Delhi (referred to as the "NCDRC") issued a unified judgment and decision in First Appeal Nos. 1664-1668 of 2017 on November 28, 2017, which serves as the foundation for this set of five appeals. The appeals lodged by the present appellants challenging the judgment and order issued by the Maharashtra State Consumer Disputes Redressal Commission, Circuit Bench, Nagpur (referred to as the "State Commission") in Consumer Complaint No. 85 of 2015 were dismissed by the NCDRC on 10-7-2017.
Important Provisions
Section 17 Consumer Protection Act
Subject to the other provisions of this Act, the State Commission shall have jurisdiction—
(a)to entertain—
(i)complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore; and
(ii)appeals against the orders of any District Forum within the State; and
(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State, where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.
(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction,—
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or
(c)the cause of action, wholly or in part, arises.
Facts
The case concerns a land development project including a Joint Venture Agreement (JVA) between the appellants (landowners) and Respondent No. 2 (Glandstone Mahaveer Infrastructure Pvt. Ltd.) for the purpose of developing and constructing apartments on the designated land.
Furthermore, on 6-7-2013, the appellants obtained an Irrevocable Power of Attorney (IPA) in favour of Respondent No. 2, therefore conferring upon the latter the power to sell the built apartments.
Respondent No. 2 engaged in sales agreements with the respondents (complainants) for the apartments, in accordance with this Agreement.
The complainants then filed complaints with the Circuit Bench of the Maharashtra State Consumer Disputes Redressal Commission in Nagpur, in accordance with Section 17 of the Consumer Protection Act enacted in 1986.
They contended that Respondent No. 2 and the appellants shared joint and multiple culpability for unfair business practices and failure to provide acceptable service. The complaining parties requested a court order instructing Respondent No. 2 and the appellants to complete the building of the apartments, transfer ownership, and finalize the sale paperwork.
In its decision, the State Commission held the appellants and Respondent No. 2 accountable for the completion of the building and ruled in favor of the complainants.
Dissatisfied with this ruling, the appellants submitted First Appeals to the National Consumer Disputes Redressal Commission, which rejected the appeals and affirmed the determination made by the State Commission.
Arguments Of Appellant
The appellants insisted that they had revoked the Power of Attorney granted to Respondent No. 2 by submitting a letter of revocation and a public notification on August 12, 2014, accompanied by their knowledgeable senior counsel.
Their argument was that Respondent No. 2 could not be held accountable for any agreements or actions that were executed after the Power of Attorney was revoked, as the Power of Attorney had been revoked.
The appellants also argued that they were not reasonably liable for the putative lack of service because they were unaware of the agreements between Respondent No. 2 and the complainants.
The appellants argued that the complaints filed against them were unenforceable under the Consumer Protection Act because they had not engaged in any direct transactions with the complainants.
Additionally, they argued that the Supreme Court's prior judgments in the cases of Faqir Chand Gulati vs. Uppal Agencies Pvt. Ltd. and Sunga Daniel Babu vs. Sri Vasudeva Constructions had strengthened their position.
Arguments of Respondent
The complainants, who were represented by senior counsel, contended that the appellants could not escape culpability by revoking the Power of Attorney since the agreements between Respondent No. 2 and the complainants were signed while both the JVA and the Power of Attorney were in force.
The respondents asserted that the appellants' letter of revocation dated 12-8-2014 meant that the appellants would not be held liable for Respondent No. 2's activities "henceforth," meaning that the appellants were responsible for actions committed previous to the revocation.
Respondent No. 2 also stated that it was prepared to fulfill the provisions of the JVA and complete the construction work, provided that the appellants cooperate. This was conveyed through its legal representative.
Respondent No. 2 also contended that the Power of Attorney was executed after the appellants received a sum of Rs. 1.51 Crores as consideration. He further argued that the complainants entered into the sale agreements with the company upon the basis of this agreement.
The respondents contended that the appellants were still obligated by the agreement and could not disavow their culpability for the actions of Respondent No. 2 performed under the provisions of the JVA and the Power of Attorney as long as the JVA remained in effect.
Court’s Analysis
The appellants' demand for the revocation of the Power of Attorney was dismissed by both the State Commission and the NCDRC after careful deliberation. The Commissions noted that the revocation took place after the agreements between Respondent No. 2 and the complainants had been formed.
The courts determined that the JVA and IPA were still in effect at the time the settlements with the complainants were reached. Consequently, the appellants were compelled to adhere to the procedures of Respondent No. 2 throughout this period.
In addition, the NCDRC observed that the appellants had not taken Respondent No. 2 to court over their alleged violations of the JVA. The appellants' inaction suggested that they had no legitimate grievances over Respondent No. 2's actions throughout the relevant period.
Despite having joined the effort with good intentions, the appellants were unable to back out of it, and the court decided that permitting them to do so would lead to unjust treatment of the complainants.
Furthermore, the NCDRC distinguished the rulings cited by the appellants from the actual circumstances of the current case. Faqir Chand Gulati and Sunga Daniel Babu's case was primarily concerned with the rights of landowners as consumers in commerce with contractors.
However, in this case, the complainants were the consumers who submitted complaints against both the constructor and the proprietors, who are the appellants. Therefore, the appellants' references to Supreme Court rulings were irrelevant.
In conclusion, the court determined that the State Commission's order was free of any illegality, irregularity, or jurisdictional error. The NCDRC has affirmed that the appellants, along with Respondent No. 2, may be jointly and severally held accountable for the finalization of the construction and the transfer of ownership of the flats as scheduled in the agreement with the complainants.
Moreover, the court affirmed the compensation granted to the complainants for the psychological and bodily suffering caused by the delay.
