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This Case Comment on M/S Siddhyvinayak Infrastructure vs Kamalakar Jayant Srivastava is written by Sanjay Rawat

INTRODUCTION

Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government”                                                          Milton Friedman

In this era, Globalization has changed the scenario in the Indian market.  Various kinds of products and services are coming into being so are new ways of duping the Consumers.  A Consumer is the spine of the market. Due to consumers, businesses exist. To protect the rights and guard the welfare of consumers, the Consumer Protection Act, 1986 was enacted and brought into force.

In the present case an appeal is before the Supreme Court of India of consumer related matter. This case has all the way travelled from a district consumer forum to the state consumer forum then to national consumer redressal forum and then at last before the apex court.

FACTS OF M/S Siddhyvinayak Infrastructure  vs Kamalakar Jayant Srivastava

  • The Appellant before the Supreme Court of India is  M/S Siddhyvinayak Infrastructure, a real state developer around the Nagpur jurisdiction.
  • The Respondent No. 1 Mr. Kamalakar Jayant Srivastava before Supreme Court is the Original Complainant who had  lodged a complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum at Nagpur against the present appellant.
  • The original complainant who is a respondent NO. 1 in the present appeal entered into an agreement dated 08.06.2006 with the appellant for the purchase of   a   Twin   Bungalow admeasuring 900 sq. ft. of super built up area situated at the Plot No. 132 at Tahsil and District ­ Nagpur for   a   total   sale   consideration   of   Rs. 9,74,000/­ (Rupees Nine Lakh Seventy Four Thousand only).
  • The   understanding   between   the   parties   was   that   the original complainant (respondent no. 1 in present case)  would pay an amount of Rs. 4,23,520/­ (Rupees Four Lakh Twenty Three Thousand Five Hundred Twenty only) in cash to the appellant and the balance amount of Rs. 5,50,520/­ (Rupees Five Lakh Fifty Thousand Five Hundred Twenty only) would be paid to the appellant after the complainant would get the loan disbursed in his favour from the respondent no. 2, the bank.
  • Meanwhile  the   bank sanctioned   the   loan   of   Rs.   6,40,000/­   (Rupees   Six   Lakh   Forty Thousand only) in favour of the original complainant on 24.11.2006 but the same   never   came   to   be   actually   disbursed   in   favour   of   the complainant.
  • In the aforesaid context, disputes cropped up between the parties. Due to which the complainant (respondent no. 1 in present case) thought fit to file a complaint before the District consumer Forum at Nagpur.
  • The appellant in the present appeal also admitted in the district consumer forum  that the total sale consideration as fixed   was   at   Rs.   9,74,000/­   (Rupees   Nine   Lakh   Seventy   Four Thousand   only).   However,   the   appellant   herein   disputed   having received an amount of Rs. 4,23,520/­ (Rupees Four Lakh Twenty Three Thousand Five Hundred Twenty only) from the complainant.[1]
  • The stance of the bank before the District Forum was that the home loan of Rs. 6,40,000/­ (Rupees Six Lakh Forty Thousand only) was sanctioned in favour of the complainant and his wife on 24.11.2006. The bank called upon the complainant and his wife to submit the necessary documents regarding the property. However, the   relevant   documents   were   not   furnished   and,   in   such circumstances, the loan amount could not be actually disbursed in favour of the complainant and his wife.
  • The complaint was then adjudicated by district forum which then went before state consumer commission then to National consumer disputes redressal commission and finally as appeal before the Supreme Court in form of  present case.

PROCEDURAL HISTORY OF THE CASE

At first the Case originated in Nagpur district and placed before the district Consumer Forum wherein the court directed to the developer/ appellant herein was directed by the District Forum to complete the construction of the Twin Bungalow in accordance with the agreement and hand over its possession to the complainant upon execution of the sale deed in accordance with the terms of the contract.

The appellant herein being dissatisfied with the order passed by the District Forum, Nagpur  challenged the same before the state consumer forum and then  National Consumer Commission, New Delhi and ultimately before the Supreme court of India through an appeal.

  1. The appellant herein was directed by the District Forum to complete the construction of the Twin Bungalow in accordance with the agreement and hand over its possession to the complainant upon execution of the sale deed in accordance with the terms of the contract.

After being dissatisfied by the decision of the district forum the appellant herein appealed in Maharashtra State Consumer Disputes Redressal Commission, Circuit Bench at Nagpur (in short, ‘the State Commission’), the State Commission partly allowed the Appeal with the following directions:

  1. The Developer/appellant herein to provide all documents including Agreement to Sell to the Complainant in the span of one month from the date of the order to complete all formalities of the loan application;
  2. The Complainant  to deposit the remaining cost of the house of Rs.6,49,220/- with cost for sale documents, VAT, Service Tax, etc., in the Forum and give its information to the Developer;
  3. the Developer, thereafter, to get the Sale Deed registered in respect of Complainant and provide possession of the house complete in all respects to Complainant in the span of one month and submit compliance report to Forum and get release of the deposited amount.

Again the appellant herein preferred an appeal before National consumer forum wherein the court held that:

  1. The Petitioner shall provide the peaceful and vacant possession of the house complete in all respects to the Complainant/Respondent No.1 within one month and execute the Sale Deed after getting the Occupation Certificate for which he will take immediate steps;
  2. the Complainant shall pay the balance sale consideration of Rs.6,49,220/- within four weeks from the date of receipt of a copy of this order directly to the Developer. Needless to add, the stamp duty and taxes due and payable shall be borne by the Complainant.

Now lastly, an appeal has been preferred against the order of the national consumer commission by the present appellant before the Supreme Court of India.

CONTENTION OF PARTIES

The Learned Counsel appearing for the Developer submitted that the Agreement to Sell was entered into on 08-06-2006 but the loan was sanctioned only on 24-11-2007 and for the fault of the Complainant, the Developer cannot be made to wait indefinitely and that the State Commission has erred in coming to the conclusion that there was deficiency in service on behalf of the Developer.

The respondents, although served with the notice issued by this Court, yet have chosen not to remain present before this Court either in person or through an advocate and oppose this appeal.

However, in the national consumer forum the original complainant had pleaded on instructions received, that the Complainant/Respondent is prepared to take possession of the apartment in question and the Sale Deed, etc., be registered only after the Occupation Certificate is issued by the competent authority.

ISSUES BEFORE THE SUPREME COURT:

  1. Whether the National consumer disputes redressal commission erred in giving the judgement against the appellant herein?
  2. Whether the  appellant can be asked to fulfil his part of promise in the absence of the will to perform his part by the original complainant?

OBSERVATION AND JUDGMENT BY SUPREME COURT

In the light of facts and circumstances the Supreme Court had to deliver an ex-parte decree. The two  judge bench of Aniruddha Bose, J.B. Pardiwala which was authored by J.B Pardiwala and unanimously held that they  are of the view that it is not necessary for us to adjudicate the legality or validity of the impugned order passed by the National Consumer Commission having regard to the peculiar facts and circumstances of the present litigation.

They laid that, It is not in dispute that the Agreement for Sale was entered into on 08.06.2006. The loan came to be sanctioned by the bank on 24.11.2006. It appears from the materials on record and also as pointed out by the learned Senior Counsel appearing for the appellant that the complainant did not even bother to go to the bank and get the loan amount disbursed in his favour. Of course, the case of the complainant as it appears from the materials on record is that he was not able to get the loan amount disbursed in his favour in the absence of documents which the appellant herein failed to supply to the complainant.

They took the notice that the National Consumer Commission had stayed the order passed by the District Forum from its operation pending the final disposal of the Revision Application on the condition that the appellant herein deposits the sum of Rs. 3,24,780/­ (Rupees Three Lakh Twenty Four Thousand Seven Hundred Eighty only) with interest at the rate of 12 per cent per annum from the respective dates of deposit.

More important they unanimously said in paragraph 17 of judgement that[2]

“We are of the view that the ends of justice would be met if we direct the appellant herein to refund the amount of Rs. 3,24,780/­ (Rupees Three Lakh Twenty Four Thousand Seven Hundred Eighty only) with interest at the rate of 12 per cent per annum to the original complainant and put an end to the entire litigation.”

The observation of the Court : keeping in mind, the following relevant aspects of the matter the court laid the observations:

  1. The original agreement between the parties is of the year 2006.
  2. In accordance with the terms of the agreement for sale, both the parties were obliged to perform their part of the contract.
  3. It is not in dispute that the complainant failed to make the entire payment towards the purchase of the bungalow to the appellant herein in accordance with the terms of the contract.
  4. Although, the loan came to be sanctioned by the bank in November, 2006 yet no further steps were taken by the complainant to ensure that the amount sanctioned by the bank is directly paid to the appellant herein.
  5. Almost 16 years have elapsed since the parties entered into the contract.
  6. We are of the view that it will be too much at this point of time i.e. after a period of almost 16 years to ask the appellant herein to execute the sale deed by accepting the balance consideration of Rs. 6,49,220/­ (Rupees Six Lakh Forty Nine Thousand Two Hundred Twenty only).
  7. It appears that the complainant is also not interested in abid­ ing by the directions issued by the National Consumer Com­ mission.
  8. The impugned order passed by the National Consumer Com­ mission is dated 12th December, 2019. Till this date, the com­ plainant has not come forward to pay the balance sale consid­ eration of Rs. 6,49,220/­ (Rupees Six Lakh Forty Nine Thou­ sand Two Hundred Twenty only) to the appellant.
  9. The complainant thought fit not to even appear before this Court and oppose this Appeal.

Therefore keeping in mind all the facts and observation  the Court laid the Judgement  that as:

  1. The impugned order passed by the National Consumer Commission dated 12th December, 2019 is hereby modified to the extent that the appellant herein shall pay the amount of Rs. 3,24,780/­ (Rupees Three Lakh Twenty Four Thousand Seven Hundred Eighty only) to the original complainant with interest at the rate of 12 per cent per annum from the date of the Agreement for Sale i.e 08.06.2006
  2. Once the aforesaid amount is paid, there shall be no further liability of the appellant herein in any respect so far as the property in question is concerned.
  3. The amount of Rs. 3,24,780/­ (Rupees Three Lakh Twenty Four Thousand Seven Hundred Eighty only) with interest at the rate of 12 per cent per annum from the date of the agreement shall be paid to the complainant within the period of four weeks from today.
  4. As the amount of Rs. 3,24,780/­ (Rupees Three Lakh Twenty Four Thousand Seven Hundred Eighty only) with interest at the rate of 12 per cent per annum has been deposited by the appellant with the National Consumer Commission with interest, it shall be open to the appellant to seek refund of the same so as to pay the entire amount to the complainant with the interest accrued upon it.

CONCLUSION: M/S Siddhyvinayak Infrastructure  vs Kamalakar Jayant Srivastava

This case gives a through understanding of the litigation in consumer redressal in India. From approaching to the district forum the case gets settled in the supreme court of India. The supreme court of India to do the compete justice and to put an end the litigation which was going on for around last 16 years looked beyond just law and understood what the parties needed and what was best for them .

The original complainant was reluctant to perform his part of the contract therefore it was in the best interest of both the parties to end the litigation by rendering whatsoever is due against each other by the parties. The bank was well within its right to ask for all documents from the complainant to provide them load and the appellant was also right in his own contention that he cannot be forced to perform his part of the contract and give a house for the complainants possession when the complainant was himself not interested to keep his part of the contract. Therefore, it was best in the interest of justice to end the litigation by rendering whatever is due against each other between the part. A lean compromise is Always better than a fat Law suit


[1] Judgement E-Copy: M/S. siddhyvinayak infrastructure vs. kamalakar jayant srivastava (2022) available at https://main.sci.gov.in/supremecourt/2021/8965/8965_2021_16_1501_37259_Judgement_12-Aug-2022.pdf last visited on 04 September 2022

[2] Paragraph 17 Judgement: M/S. siddhyvinayak infrastructure vs. kamalakar jayant srivastava (2022) available at https://main.sci.gov.in/supremecourt/2021/8965/8965_2021_16_1501_37259_Judgement_12-Aug-2022.pdf last visited on 04 September 2022

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