Debashis Sinha vs M/S R.N.R Enterprise

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3343 OF 2020

DEBASHIS SINHA & ORS. …..APPELLANTS

VS.

M/S R.N.R. ENTERPRISE REP. BY ITS PROPRIETOR/CHAIRMAN,KOLKATA & ORS. RESPONDENTS

ORDER

1. This appeal under section 23 of the Consumer Protection Act,

1986 (hereafter ‘the C.P. Act’, for short) calls in question the order

dated 21st August, 2020 passed by the National Consumer Disputes

Redressal Commission, New Delhi, (hereafter ‘NCDRC’, for short). By

the impugned order, the NCDRC has dismissed the consumer

complaint lodged by the appellants.

2. The multiple appellants are owners of flats in different blocks

of a housing complex at 1, Kailash Ghosh Road, Kolkata – 700008 Signature Not Verified

(hereafter ‘housing complex’, for short).

Digitally signed by Harshita Uppal Date: 2023.02.09 15:49:20 IST Reason: 2

3. Aggrieved by the failure of the respondents - the developers of

the housing complex - to provide services as promised, the

jurisdiction of the NCRDC was invoked by the appellants in 2008.

They alleged that despite paying full consideration amount as per

market rate and despite execution and registration of deeds of

conveyance in their favour, the respondents had failed, inter alia, to

provide the ‘Completion Certificate’, which is their statutory

obligation as per the rules of the Kolkata Municipal Corporation

(hereafter ‘KMC’, for short); and, in the absence of such a certificate,

their occupation of the respective flats has been rendered

precarious. According to the appellants, the respondents also failed

to provide them common amenities and facilities viz., playground,

community hall-cum-office room, 33-feet wide concrete road, and

supply of water from the KMC. It was their further complaint that

the respondents had adopted unfair trade practices by promising a

playground on a land which actually belonged to a local club as well

as attracted buyers by showing in the brochure/ advertisement a

‘beautified lake’, which never came into existence. Also, finding that

there were constructional defects, a valuer from the list of approved

valuers maintained by the Calcutta High Court had been engaged by

the appellants. The report of such valuer revealed constructional

defects of the nature delineated therein. Based on the complaint

that was lodged before the NCDRC, the appellants sought direction 3

to the respondents to provide the completion certificate of the

project and to set right the constructional defects as pointed out by

the valuer. Further, they claimed that direction be issued for

providing other facilities such as community hall, landscape

gardening, generator, multi-gymnasium, water filtration plant, and

gas pipeline. Additionally, compensation of Rs.1,80,00,000/- (Rupees

one crore eighty lakh only) together with litigation cost of

Rs.50,000/- (Rupees fifty thousand only) was claimed.

4. The complaint lodged by the appellants was contested by the

respondents by filing a written statement. Apart from objecting to

the maintainability of the complaint on the grounds that the same

was time barred and that a joint complaint could not have been

lodged by 36 (thirty-six) flat owners, it was contended that the

appellants have not paid the full consideration amounts, that

certain common facilities/amenities could be provided only if all the

members of the housing complex contribute for the same and that

the compensation claimed was vague and imaginary. It was also

contended in the written statement that most of the appellants had

taken possession of the flats in 2006 without raising any objection at

the material time; hence, lodging of a complaint after 2 (two) years

of possession being delivered is motivated. Insofar as the issue of

obtaining the completion certificate is concerned, it was contended

that the flats having already stood transferred to the appellants by 4

way of conveyance/sale deed(s), it was for the appellants to apply

before the KMC for obtaining such certificate. The respondents also

contended that since KMC had completed assessment of the flats of

the appellants, it was not possible for the respondents to now apply

and obtain completion certificate for the flats.

5. Considering the pleadings before it as well as upon hearing the

parties, the NCDRC returned findings that the respondents had

shown a very casual approach and were guilty of unfair trade

practice as well; yet, it was observed that the appellants had not

been able to establish their claim. It also appears from the

impugned order that the NCDRC suspected that the purpose of the

complaint was to pressurize the respondents into paying some

compensation and/or not insisting upon extra payment for the extra

facilities and amenities. Also, it was held that the respondents had

been able to successfully urge that the fault for not obtaining the

completion certificate of the project could not be attributed to them.

In this regard, the NCDRC returned a finding that reading of section

403 of the Kolkata Municipal Corporation Act, 1980 (hereafter ‘KMC

Act’, for short) makes it clear that it was incumbent on both the

respondents as well as the appellants to not occupy the premises in

the absence of the completion certificate. As a result thereof, a

finding was further returned that both the parties had violated the

law; as such, no deficiency could be attributed to the respondents 5

on this account. Based on broadly these findings, the complaint of

the appellants failed before the NCDRC.

6. We have heard Mr. Sharma, learned counsel for the appellants.

None appeared before us on behalf of the respondents on the

previous 2 (two) occasions the appeal was heard and even today.

7. We have also perused the impugned order of the NCDRC and

considered the materials on record.

8. What has struck us first is the time taken by the NCDRC to

decide the complaint after it reserved the same for passing orders. It

took the NCDRC in excess of 10 (ten) months to dismiss the

complaint. As our discussion hereafter would unfold, we are of the

clear view that the long delay in passing the order on the complaint

did have its own effect on the ultimate decision of the NCDRC.

9. The complaint of the appellants was that the respondents have

not provided playground, community hall, beautified lake, landscape

gardening, generator backup, multi-gymnasium, etc. as mentioned

in the brochure/advertisement pursuant to which they expressed

interest to purchase flats in the project and, thus, defaulted in

providing services in relation to housing construction.

10. One entire paragraph in the order has been devoted by the

NCDRC to highlight that the project was not that huge and talk of

common areas and facilities on a grand scale was quite misplaced. 6

An admission made by the appellants themselves in the complaint

has been referred to but we have not been able to trace any

admission of the complainants that the respondents promised not to

deliver substantial common areas and common facilities. Be that as

it may, what the NCDRC omitted to bear in mind was that the

appellants were allured to purchase flats of the nature and kind

together with facilities and amenities as attractively published in the

brochure/advertisement; hence, whether the project was huge or

otherwise was absolutely beside the point. It was the duty of the

NCDRC to ascertain, based on the materials on record, whether if at

all and to what extent facilities and amenities as promised were

offered and/or whether there was any deficiency of service. We

have not found any categorical findings in this regard, although

there are unambiguous findings that the NCDRC disapproved the

conduct of the respondents.

11. The conduct of the respondents, the NCDRC recorded in the

impugned order, was far too casual and on the face of it, the

respondents are guilty of “unfair trade practice” within the meaning

of section 2(1)(r) of the C.P. Act. After so recording, the NCDRC held

that this does little to rescue the complainants. The reason assigned

therefor defies logic. We have failed to comprehend as to what the

NCDRC meant when it observed that the appellants “ought to have

known what they were purchasing”. More often than not, the 7

jurisdiction of the consumer fora under the C.P. Act is invoked post-

purchase. If complaints were to be spurned on the specious ground

that the consumers knew what they were purchasing, the object and

purpose of the enactment would be defeated. Any deficiency

detected post-purchase opens up an avenue for the aggrieved

consumer to seek relief before the consumer fora. The reasoning of

the NCDRC is, thus, indefensible. Indeed, the appellants had

purchased their respective flats on payment of consideration

amounts as per market rate and there was due execution and

registration of the deeds of conveyance preceded by agreements for

sale and these instruments did indicate, inter alia, what formed part

of the common facilities/amenities; however, the matter obviously

could not have ended there. Whether the appellants had been

provided what the respondents had promised did survive for

consideration, which does not get reflected in the impugned order.

12. NCDRC, in our opinion, might have missed to appreciate the

present day realities of life. Now-a-days, flat owners seldom

purchase flats with liquid cash. Flats are purchased on the basis of

finances being advanced by banks and other financial institutions.

Once a flat is booked and the prospective flat owner enters into an

agreement for loan, instalments fall due to be paid to clear the debt

irrespective of whether the flat is ready for being delivered

possession. The usual delays that are associated with construction 8

activities result in undue anxiety, stress, and harassment for which

many a prospective flat owner, it is common knowledge, even

without the project/flat being wholly complete is left with no other

option but to take possession. Whether, upon taking possession, a

flat owner forfeits his/her right to claim such services which had

been promised but are not provided resulting in deficiency in

services is a question that the NCDRC ought to have adverted to.

Once the NCDRC arrived at a finding that the respondents were

casual in their approach and had even resorted to unfair trade

practice, it was its obligation to consider the appellants’ grievance

objectively and upon application of mind and thereafter give its

reasoned decision. If at all, the appellants had not forfeited any

right by registration of the sale deeds and if indeed the respondents

were remiss in providing any of the facilities/amenities as promised

in the brochure/advertisement, it was the duty of the NCDRC to set

things right.

13. That the appellants had genuine reasons to feel aggrieved was

clearly documented in the report of the valuer dated 11 th July, 2008

which was even acknowledged by the NCDRC, yet, a peculiar

approach was adopted and the respondents absolved of their

obligations by an order which appears to us to be unjustified on

facts and in the circumstances.

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14. We have found from the impugned order that it speaks of

certain facilities to be made available by the respondents on

payment of extra money. However, there is no such clear-cut

description of facilities/amenities which the respondents asserted

would be provided on payment of extra money by the appellants.

NCDRC would have done well to indicate the same with clarity.

15. Finally, we cannot resist but comment on the perfunctory

approach of the NCDRC while dealing with the appellants’ contention

that it was the duty of the respondents to apply for and obtain the

completion certificate from the KMC and that the respondents ought

to have been directed to act in accordance with law. The observation

made by the NCDRC of the respondents having successfully argued

that it was not their fault, that no completion certificate of the

project could be obtained, is clearly contrary to the statutory

provisions.

16. Sub-section (2) of section 403 of the KMC Act was referred to

by the NCDRC in the impugned order. Sub-section (1) thereof, which

finds no reference therein, requires every person giving notice

under section 393 or section 394 or every owner of a building or a

work to which the notice relates to send or cause to be delivered or

sent to the Municipal Commissioner a notice in writing of completion

of erection of building or execution of work within one month of such

completion/erection, accompanied by a certificate in the form 10

specified in the rules made in this behalf as well as to give to the

Municipal Commissioner all necessary facilities for inspection of such

building or work.

17. Section 393 mandates every person, who intends to erect a

building, to apply for sanction by giving notice in writing of his

intention to the Municipal Commissioner in such form and containing

such information as may be prescribed together with such

documents and plans. Similarly, section 394 also mandates every

person who intends to execute any of the works specified in clause

(b) to clause (m) of sub-section (1) of section 390 to apply for

sanction by giving notice in writing of his intention to the Municipal

Commissioner in such form and containing such information as may

be prescribed.

18. It is, therefore, evident on a conjoint reading of sections 403,

390, and 394 of the KMC Act that it is the obligation of the person

intending to erect a building or to execute works to apply for

completion certificate in terms of the rules framed thereunder. It is

no part of the flat owner’s duty to apply for a completion certificate.

When the respondents had applied for permission/sanction to erect,

the Calcutta Municipal Corporation Buildings Rules, 1990 (hereafter

‘1990 Rules’, for short) were in force. Rule 26 of the 1990 Rules

happens to be the relevant rule. In terms of sub-rules (1) to (3) of

rule 26 thereof, the obligation as cast was required to be discharged 11

by the respondents. Evidently, the respondents observed the

statutory provisions in the breach.

19. Curiously enough, the NCDRC referred to sub-section (2) of

section 403 of the KMC Act only to permit the respondents to

wriggle out of such obligation and arrived at a completely erroneous

finding that no deficiency in service could be attributed to the

respondents since both the respondents and the appellants had

acted in violation of law. True it is, the appellants ought not to have

taken possession without the completion certificate; however, that

was not a valid ground not to direct the respondents to apply for and

obtain the completion certificate as required by law. The mere fact

that the flat owners were being assessed by the KMC affords no

reason to the respondents for breaching section 403(1) read with

rule 26 of the 1990 Rules. Of course, once a completion certificate is

issued by the KMC upon conducting appropriate inspection and tests

of the building that has since been erected, it would stand to reason

that the same amounts to a certification that the building does not

suffer from any violation of the building plan sanctioned for the

purpose under section 390 of the KMC Act or that its constructional

quality is not of the desired level for which it is unsafe for human

habitation. We are constrained to observe that the respondents have

been let off by the NCDRC in a manner contrary to law. 12

20. For such infirmities, as noticed above, this is an appropriate

case where the complaint of the appellants ought to be remitted to

the NCDRC for taking a relook into the complaint in accordance with

law. It is ordered accordingly.

21. Since it is found that the appellants while praying for monetary

compensation of Rs.1,80,00,000.00 have failed to give detailed

particulars and/or provide the basis therefor, and undoubtedly, they

have also been on the wrong side of law by taking possession of

their respective flats without the completion certificate, whatever

might be the compulsion, we are not inclined to direct the NCDRC to

decide on the compensation component. That chapter stands

closed. The remand is directed only with a view to secure adherence

to the promises that the respondents had made in the brochure

and/or advertisement, as the case may be, and thereby cover up

deficiency in service, if any, as well as the mandatory statutory

provisions.

22. The appeal stands disposed of on terms as aforesaid, with no

orders as to costs.

23. Since the complaint is more than 15 (fifteen) years old, it

would be desirable if the NCDRC decides the same as early as

possible and preferably within a year of service of an authenticated

copy of this order.

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………………………………J (S. RAVINDRA BHAT)

………………………………J (DIPANKAR DATTA)

NEW DELHI;

FEBRUARY 9, 2023.