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Morzaria Products LLP v/s Marvel Omega Builders Pvt. Ltd.

    Consumer Case No. 598 of 2017

    Decided On, 17 January 2020

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE R.K. AGRAWAL
    By, PRESIDENT & THE HONOURABLE MRS. M. SHREESHA
    By, MEMBER

    For the Complainant: Reeva Gujral, Shweta Vashist, Advocates, AditMorzaria, In Person. For the Opposite Parties: Vijay Kumar, Advocate.



Judgment Text


R.K. Agrawal, President, (J).

1. For the purpose of residence of its Director and his family, the Complainant had entered into an Agreement to Sell (Annexure-A) and a Construction Agreement (Annexure-B), both dated 1.5.2014, with one Marvel Ultra Realtors and Developers (Pune) Pvt. Ltd. (hereinafter referred to as Marvel Ultra Realtors & Developers), which, along with two other Companies (i) Zony Realtors & Developers Pvt. Ltd. and (ii) Windshield Developers Pvt. Ltd., was amalgamated with Marvel Omega Builders Pvt. Ltd., i.e. Opposite Party No. 1 herein, vide an order dated 4.3.2016 passed by the Hon’ble High Court of Bombay. While Opposite Party No. 1 is the absolute owner of Plot No. 7 (Old Plot No. 5B), situated at Primrose Road, Bangalore, admeasuring 888.52 sq. meters, Opposite Party No. 2 is the Chief Executive Officer of Marvel Ultra Realtors & Developers.

2. As per the Agreement to Sell, an undivided interest admeasuring 1261.95 sq. ft. (hereinafter referred to as Schedule-B Property), along with Apartment bearing No. 001, having a total built up area of 4,280 sq. ft. (hereinafter referred to as Schedule-C Property) in the building known as “Marvel Orial”, was to be transferred to the Complainant for an agreed sale consideration of Rs. 6,79,95,255. The Construction Agreement entered into between the Complainant and Opposite Party No. 1 specifies the terms and conditions in respect of the construction of the scheduled property, including the stipulation that the Complainant was required to pay a sum of Rs. 1,71,20,000 towards the cost of construction. Though as per Clause 5.1 of the Construction Agreement, Opposite Party No. 1 was required to complete the construction of the Apartment and deliver possession of the same to the Complainant on or before 30.12.2016, or within a penalty free grace period of six months, in view of requirement of the Complainant, it was an oral understanding between the parties that the possession would be delivered to the Complainant within a year from the date of execution of the aforesaid Agreements.

3. The Complainant paid a total amount of Rs. 5,76,00,000 towards the sale and cost of construction of the Apartment, between the period 12.7.2014 and 4.3.2015, in support of which the Complainant has placed on record the bank statement (Annexure-C colly). As the pace of construction was very slow, the Complainant made repeated requests to Opposite Party No. 1 to expedite the process of construction but the progress was unsatisfactory. The correspondence exchanged between the parties in this behalf is annexed as Annexure-D. As there was inordinate delay in the completion of the construction work and Opposite Party No. 1 was not able to adhere to the promised deadline to deliver possession of the Apartment booked, the Complainant vide letter dated 3.8.2015 (Annexure-E) sought refund of the amount of Rs. 5,76,00,000, to which it was replied to by Opposite Party No. 1 vide letter dated 4.8.2015 (Annexure-F) that the booking stood cancelled and the amount would be refunded to the Complainant. While Clause 7.4.1 of the Agreement to Sell provides that there will be no forfeiture of any amount of the sale consideration or any money payable under the Construction Agreement and that the Complainant will be entitled to refund of the entire amount paid under both the Agreements, Clause 7.4.2 provides that the refund will be made by the Seller only after it has resold the scheduled property.

4. While this was so and the Complainant had converted from a Private Limited Company to an LLP and Marvel Ultra Realtors & Developers with two other companies, referred to above, had amalgamated with Opposite Party No. 1 herein, Opposite Party No. 1 vide RTGS dated 1.10.2016 made part-payment of Rs. 1,00,00,000 and the remaining amount of Rs. 4,76,00,000 is still unpaid. Despite several reminders, including legal notice dated 15.10.2016, the remaining amount has not been paid to the Complainant.

5. Hence, the present Complaint by the Complainant, praying for (i) refund of the amount of Rs. 4,76,00,000, along with interest @ 18% p.a., (ii) Rs. 25,00,000 towards deficiency in service; (iii) Rs. 2,30,00,000 in lieu of mental harassment and agony caused to the Complainant; and (iv) Rs. 25,00,000 as legal expenses.

6. Upon notice, the Opposite Parties have filed the Written Version and denied the allegations levelled in the Complaint. It is, inter alia, stated therein that the Complaint is not maintainable and the Complainant ought to have filed a suit for specific performance for recovery or suit for recovery. Further, the Complainant is a defaulter and has not made the final payment as per the agreement entered into. When the Complainant itself has failed to make the entire payment, the delay, if any, cannot be attributed to the Opposite Parties. The construction of the flat in question is complete and the Opposite Parties are ready and willing to handover the possession of the flat within a short span of time, subject to full and final payment and Other necessary formalities. As per Clause 5.3 of the Construction Agreement, the date for delivering possession could have been extended and, therefore, it is not permissible for the Purchaser to terminate the Agreement. As per Clause 7.4.2 of the Agreement to Sell, the Opposite Parties are ready and willing to refund the amount to the Complainant only after selling out the property to the prospective buyer.

7. Heard the learned Counsel for the parties and perused the material on record. We are of the considered view that the Complaint deserves to be partly allowed.

8. By virtue of two Agreements entered into between the parties in the year 2014, viz. Agreement to Sell and Construction Agreement, stipulating therein that the possession would be delivered to the Complainant on or before 30.12.2016, the Complainant had purchased the scheduled property for the purpose of residence of its Director and his family. Admittedly, the possession of the scheduled property has not been delivered by the Opposite Parties, despite receiving a huge amount of Rs. 5,76,00,000 from the Complainant. In this view of the matter, we hold that the Complaint is maintainable under the Consumer Protection Act, 1986, as it is for the Complainant to decide whether it wants to file a Complaint under the Consumer Protection Act, 1986 or file a suit for specific performance of recovery or any other remedy, as available to it under law.

9. The payment made by the Complainant to the Opposite Parties comes to about 84% of the total sale consideration and the Opposite Parties have not indicated in their reply the stage, when the remaining amount of Rs. 1,03,95,255, which comes to about 16% of the total sale consideration, was to be made by the Complainant. Further, the averments made in the reply, filed by the Opposite Parties, show that they require some more time to handover the possession of the scheduled property, meaning thereby that the construction work is still not complete and there is no justification by the Opposite Parties for the delay so caused in the construction work and handing over possession of the scheduled property. In such a situation, if the remaining sale consideration was not paid by the Complainant, it cannot be said that it was a defaulter. In any case, it is common practice that before handing and taking possession, the seller and the purchaser ensure that all the dues are cleared, which stage has not come in the present case.

10. As per Clause 5.3 of the Construction Agreement, the date of delivering possession could have been extended by the Opposite Parties but there is no indication as to whether the said clause was resorted to by the Opposite Parties and, therefore, in view of incomplete construction work prevailing then, the Complainant was within its right to terminate the Agreements and seek refund of the amount paid.

11. Coming to Clause 7.4.2 of the Agreement to sell, we find that the Opposite Parties were obliged to make refund of the amount to the Complainant only after selling out the property in question to the prospective buyer but the interregnum period, between the date when the prayer for refund is made and the date when the refund is actually made, cannot be indefinite. There must be some sense of reasonability. The Complainant had sought for refund on 3.8.2015 and still the refund has not been made. This period of over four years is certainly unreasonable and there is no indication in the reply filed by the Opposite Parties that they had tried their best to sell the property in question to the prospective buyer in order to make the refund to the Complainant.

12. In view of the above and having glanced through the photographs placed on record by the Complainant, as on 20.2.2019, it is apparent that the construction work is still incomplete and till date the Opposite Parties have not been able to deliver possession of the scheduled property. In view of the decisions of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. v. DevasisRudra, II

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(2019) CPJ 29 (SC)=III (2019) SLT 631 and Pioneer Urban Land & Infrastructure Ltd. v. GovindanRaghavan, II (2019) CPJ 34 (SC)=III (2019) SLT 435, which are somewhat similar matters inter alia relating to non-delivery of possession of the flat/house, the Complainant cannot be made to wait for a long period and, therefore, the Complainant is entitled for refund of the deposited amount with some reasonable interest. In our considered opinion, the interest @ 18% p.a., sought for by the Complainant, is on higher side and simple interest @ 10% p.a. would meet the ends of justice. 13. Accordingly, the present Complaint is partly allowed with the direction to the Opposite Parties to refund the amount deposited by the Complainant, i.e. Rs. 4,76,00,000, with interest @ 10% p.a. from the date of respective payments till realization, as also a sum of Rs. 25,000 as litigation expenses, within two months from the date a certified copy of this order is produced before them. Complaint partly allowed.
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