Case title:
Kaushik Narsinhbhai Patel & Ors Versus M/s. S.J.R. Prime Corporation Private Limited & Ors.
Date of Order:
July 22, 2024
Bench:
C.T. RAVIKUMAR, J.
Parties:
Appellant’s
Kaushik Narsinhbhai Patel & Ors
Respondent(s)
M/s. S.J.R. Prime Corporation Private Limited & Ors
SUBJECT
The Supreme Court has ruled that a party that has lost the right to file a written statement cannot present its case indirectly through evidence.
IMPORTANT PROVISIONS
- Section 38 of the Consumer Protection Act, 2019
- Rule 7 of Order VI, CPC: mandates that ‘no pleading shall, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading the same’
OVERVIEW:
- A consumer complaint was instituted by 46 appellants against a builder, Respondent No. 1, for deficiency in service. The appellants had booked the flats in the builder's project 'Fiesta Homes by SJR Prime'.
- As per the Construction Agreement possession was to be handed over by March 2014 with a grace period of 6 months for handing over possession. There was a long delay in handing over possession, which was made almost four years after the promised date.
ISSUES RAISED
- Whether the NCDRC has erred in computing the compensation for delayed possession.
- Impact of the builder having forfeited the right to file written statement.
- How the due date of possession for calculation of compensation should be calculated.
ARGUMENTS BY APPELLANTS
- Violation of Supreme Court's Previous Order: It was contended that by allowing the builder to file the written statement, NCDRC ignored the order passed by the Supreme Court Annexure P-18 declaring that the builder had forfeited its right to file a written statement. They also mentioned that such permission permitted the introduction of new facts and defenses by the builder. This, they submitted, would amount to permitting the builder to do indirectly what it could not do directly. It would violative of the principle of law which forbids that, they argued.
- Misinterpretation of Construction Agreement: The appellants pointedly brought out the omission on the part of NCDRC in not considering Clause 6.1 of the Construction Agreement, which clearly mentioned the due date for possession as March 2014 and a 6-month grace period. They contended that in the instant case as this contractual stipulation had been overlooked, NCDRC had worked out the period of compensation wrongly, and consequently reduced the quantum of compensation which was to be awarded to them. Inconsistency with Precedent The appellants drew attention to the fact that NCDRC's approach was in variance with the precedent laid down in R.V. Prasannakumaar case where, the date for handing over the possession was fixed in accordance with the stipulation in the agreement. It was the appellants' case that in the absence of any extraordinary circumstances, this binding precedent should have been followed by NCDRC.
- Misconstruing Construction-Linked Payment Plan: The appellants submitted that the Construction-Linked Payment Plan (Schedule E to the agreement) was misconstrued by NCDRC as a reason for making the due date of possession dependent on the payment of installments. They further submitted that this project information report was intended to bind the builder to construction stages' completion timelines and not to offer an excuse for delayed possession.
ARGUMENTS BY RESPONDENT
- Reasonable Approach by NCDRC: It was submitted by the builder that in the given case, the approach adopted by NCDRC in quantifying compensation was just and reasonable in light of the realities of the construction process. They, therefore, submitted that making the completion/due date contingent upon the payment of installments was reasonable and took into account reciprocity between the progress of construction and payments by buyers.
- No Evidence Furnished by Appellants: The builder stated that appellants had furnished no datewise payment schedule, which justified NCDRC's alternate approach for ascertaining the due date. They further submitted that in the absence of any such vital information, NCDRC was compelled to take support from other factors to evolve a just compensation scheme. Adherence to R.V. Prasannakumaar Case: The builder submitted that NCDRC had followed the spirit of the R.V. Prasannakumaar case by providing compensation at the rate of 6% per annum, which was found just and reasonable by the Supreme Court in that case. They, however, argued that even though the methodology for arriving at the due date may differ, the approach to valuation was in accordance with principles laid down by previous judgments.
- Practical Difficulties: The builder argued that a rigid application of the possession date mentioned in the agreement was not possible in view of practical difficulties inherent in large-scale construction projects. They, therefore, contended that it is the NCDRC approach that did, as against the real-world challenges, did strike a balance between buyer rights and realities on the ground commonly faced by developers.
COURT ANALYSIS
- The court held that the builder had introduced new facts by way of written submissions, which was not permissible as he had forfeited the right to file a written statement.
- But it is not on the basis of such impermissible submissions that the NCDRC has based its final order. The court held that it is only the method adopted in the case of R.V. Prasannakumaar that NCDRC should have adopted to determine the due date of possession under the Construction Agreement.
- The court confirmed the findings of NCDRC on the rate for compensation at 6% per annum but modified the period from which it would run.
CONCLUSION
While deciding the case of Kaushik Narsinhbhai Patel & Ors vs. M/s. S.J.R. Prime Corporation Private Limited & Ors., the Supreme Court decided that the right of a party to file a written statement, once forfeited, cannot indirectly plead its case through evidence. The point was cardinal because it was found out that the builder had pleaded new facts through written submissions, which was not permitted. Though these submissions were placed before the NCDRC, it has not relied on them while passing the final order. Though the apex court modified compensation formula by incorporating contractual terms and precedents, the builder was directed to pay 6% per annum interest from September 2014 till possession date, with the NCDRC directed to verify possession dates in each complaint.
