1. FOR reasons cited in the affidavit seeking condonation of delay of 77 days, the same is hereby condoned.
2. IN this first Appeal under Section 19 of the Consumer Protection Act (for short the ""Act""), the Appellants question the correctness and legality
of the order dated 14.5.2009 passed by the Maharashtra State Consumer Disputes Redressal Commission, Mumbai (for short ""State
Commission"") in Complaint No. 442 of 2002. By the impugned order, the State Commission partly allowed the complaint directing the Appellants
jointly and severally to pay to the Complainant a sum of Rs.6,33,000/ - with interest at the rate of 9% per annum from the respective dates of
payments, compensation of Rs. 50,000/ - and costs of Rs.10,000/ -.
3. BRIEFLY stated, the material facts are that the Complainant booked a flat with the Opposite Parties in ''NIKUNJ'' Project, Borivali (E),
Mumbai and made the payments in the following manner:
a) Rs. 5,13,000/ - Paid at the time of Execution of the agreement of Sale dated 13.7.1994
b) Rs. 20,000/ - Vide Cheque No. 39615 dated 21.3.96 towards Stamp duty.
c) Rs. 1,00,000/ - Vide Cheque No. 316479 dated 2.7.96
d) Rs. 50,000/ - By cash
Rs. 6,83,000/ -
An agreement dated 13.7.1994 was entered into for flat No. 504 admeasuring 440 sq. ft. for a total consideration of Rs.6,60,000/ -. Even after
six years of persistent requests, the Opposite Party did not deliver possession of the said flat and therefore, the Complainant issued a legal notice
on 5.2.2001 requesting for cancellation of the flat and refund of the money paid together with interest. The Complainant pleaded that the Opposite
Parties have also collected maintenance charges of the un -delivered flat which amounts to unfair trade practice. The basic prayer of the
Complainant is for the refund of the entire amount paid with interest, compensation and costs.
4. THE first Opposite Party, the proprietor of M/s. K.C. Developers, did not file his written version before the State Commission.
5. THE second Opposite Party, who is the Chartered Accountant of the first Opposite Party, filed his written version before the State
Commission. He pleaded that the subject property bearing CTS No. 2132, 2132(I) to 2132(6) admeasuring about 721.3 sq. mts. of village
Dahisar, Taluka Borivali, MSD(hereinafter referred to as the said Property) was owned by Manik Marya Kharpade and was sold to M/s. Datta
Developers under Agreement for sale dated 16.10.1990 and further Agreement dated 04.05.1991. The said Datta Developers under Agreement
for Development dated 16.11.1992, entrusted the development rights to M/s. K.C. Developers Sole Proprietor firm through Mr. Kirti Kumar
Shah (the first Opposite Party), in respect of the Said Property. The original owner Datta Developers executed Irrevocable Power of Attorney to
the nominees of K.C. Developers. The said K.C. Developers executed Irrevocable Power of Attorney by substituting Mr. Praful K. Patel (the
second Opposite Party) in their place as mutually agreed upon between Mr. K.C. Shah and Mr. Praful K. Patel, with full right to receive payments
for sale of flats and other premises to be constructed on the said Property in the building to be known as NIKUNJ (hereinafter referred to as the
said Building) as per the building plans sanctioned and approved by the concerned authorities.
6. THE second Opposite Party averred that he had taken a loan of Rs.2,00,000/ - @ 24% from the Complainant for completion of his projects.
Accordingly, the second Opposite Party paid interest upto December 1997 and thereafter the interest rate was reduced to 12% per annum by
mutual consent. During this transaction, at the Complainant''s request, the second Opposite Party signed a blank agreement for Rs.6,60,000/ - and
showed Rs.5,13,000/ - as received. The second Opposite Party pleaded that this agreement was signed purely for security purpose only. An
amount of Rs.3,70,000/ - was paid out of the total amount of Rs.4,20,000/ - and, therefore, only a balance of Rs.50,000/ - is due and payable by
him towards the said loan Account.
7. DUE to financial crisis the second Opposite Party could not pay the principal and interest amounts and, therefore, the Complainant is demanding
flat No. 504, which was sold recently to a third party with the Complainant''s consent. The second Opposite Party averred that the Complainant
ought to have given the breakup of the alleged payment of Rs.5,13,000/ - and should have given reasons for paying Rs.6,83,000/ -, if the total sale
consideration of the subject flat is only Rs.6,60,000/ -. The Complainant should also justify the payment of Rs.1,00,000/ - by cheque dated
2.7.1996 which was paid towards the loan Account and not the Builder''s account. The alleged agreement for sale was also not registered. There
are also no reasons given by the Complainant for not having paid the stamp duty. The second Opposite Party reiterated that the flat was never sold
to the Complainant, but that the blank agreement was given only for security purpose. Hence, the Complainant at the most can file suit for recovery
of amount before the Civil Court and pleaded that this Commission does not have jurisdiction to entertain this complaint.
8. THE State Commission, based on the material on record and the evidence adduced concluded that there was deficiency of service on behalf of
the Appellants herein and allowed the complaint partly directing the Appellants to pay Rs.6,33,000/ - with interest at the rate of 9% per annum;
Rs.50,000/ - compensation and costs of Rs.10,000/ -.
9. AGGRIEVED by this order, Opposite Parties 1,2 and 3 preferred this Appeal.
10. IT is the main case of the Appellants herein that the said agreement dated 13.07.1994 was entered into only as a security for refund of the
principle amount and was meant for a loan transaction and not meant for the purpose of purchase of flat No. 504. The learned counsel for the
Appellants submitted that the Respondent/Complainant did not give any details of the mode of payment of Rs.5,13,000/ -. The Appellants denied
that they had assured the Complainant of giving possession of flat No. 504 on or before 13.12.1994. The learned counsel submitted that since the
first and third Appellants are not parties to the alleged agreement, they are not bound by it and that the Complainant is not entitled to any relief
sought for in the Complaint. The learned counsel for the second Appellant contended that the loan was given by the Complainant to the second
Appellant in cash and by cheque from time to time and that the second Appellant paid the Complainant interest on these loan amounts from time to
time and only the last instalment in the settlement of loan repayment was returned, for which the Respondent filed a Criminal Complaint on
8.3.2001 u/s 138 of the Negotiable Instruments Act, 1881. It is contended that the dishonoured cheque was issued towards refund of the loan
given by the Respondent to the second Appellant.
11. WE observe from the record that the Respondent/Complainant had paid Rs.5,13,000/ - at the time of execution of agreement for sale on
13.7.1994 and Rs.20,000/ - by cheque towards stamp duty on 2.7.1996, but was not given the possession of the flat which is in violation of
clause 13 of the said agreement. The initial amount of Rs.5,30,000/ - is mentioned in the agreement of sale and amounts of Rs.20,000/ - and
Rs.1,00,000/ - have been paid by cheque. Therefore, it can be safely concluded that an amount of Rs.6,33,000/ - was paid by the Complainant to
the Appellants herein towards consideration of flat which she had booked in NIKUNJ Building.
12. THE acknowledgment receipt dated 7.3.2005, which the Appellants are relying on states as under:
Received from M/s. K.C. Developers a Pay Order being No. 640596 dated 4th March 2005 for Rs. 50,000/ - drawn on State Bank of
Hyderabad towards full and final payment against the dishonoured cheque bearing No. 002557 dated 10.11.2000 for Rs. 50,000/ - drawn on the
State Bank of Hyderabad, Andheri (W) Branch. The above cheque was given on A/c of full and final payment for the flat No. 504 in NIKUNJ
Building at Borivali (E), Mumbai 400 066"".
13. THE learned counsel for the Appellants contended that in view of the afore -mentioned receipt given in full and final payment towards the flat in
question, the transaction is completed and that there is no deficiency of service on their behalf. The learned counsel for the
Respondent/Complainant vehemently contended that the last two lines ''the above cheque was given on account of full and final payment for flat
No. 504 in NIKUNJ Building at Borivali (East) Mumbai -400 066'' has been inserted by the Appellants herein.
14. A brief perusal of the said receipt shows that it is for full and final payment against the dishonoured cheque of Rs. 50,000/ -. If the Appellants
herein had truly completed the transaction and the amount of Rs. 50,000/ - was given in full and final payment for flat No. 504, on 7.3.2005, there
are no substantial and cogent reasons given by the Appellants herein, for not having brought this ''full and final payment'' to the notice of the State
Commission when the complaint was still pending before the Commission and was disposed of only on 14.5.2009, around four years subsequent
to the passing of the receipt.
15. IT is also pertinent to note that the Appellants herein sold the flat to a third party and submitted that it was done on the request of the
Complainant, but the Appellants have not filed any evidence to substantiate that the Complainant has given her consent for the sale of the subject
flat. When it is the Appellants'' case that the agreement was not meant for purchase of a flat, there are no reasons given as to why they had pleaded
that the Complainant''s consent was taken prior to the sale of the subject flat. The onus is on the Appellants to prove that the said agreement dated
13.7.1994 was executed as security for a loan transaction, which they have failed to establish by adducing any evidence on their behalf. It is
pertinent to note that the first and third Appellants did not file their written version before the State Commission. Having executed an agreement of
sale and having accepted an amount of Rs.6,33,000/ -, it is the contractual duty of the Appellants herein to deliver the subject flat. Failing to do so,
amounts to deficiency of service, and therefore, we see no reason to interfere with the well -considered order of the State Commission. Hence, this
Appeal must fail. It is dismissed accordingly. The statutory deposit of Rs.35,000/ - shall be transferred to the Consumer Welfare Fund. No order
as to costs.