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Supreme Court of India
The Managing Director (Shri Grish … vs The General Secretary (Shri Amol … on 28 September, 2021Author: V. Ramasubramanian

Bench: Hemant Gupta, V. Ramasubramanian

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REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2998 OF 2010

THE MANAGING DIRECTOR (SHRI GRISH BATRA)
M/S.PADMINI INFRASTRUCTURE
DEVELOPERS (I) LTD. … APPELLANT(S)

VERSUS

THE GENERAL SECRETARY
(SHRI AMOL MAHAPATRA) ROYAL
GARDEN RESDIENTS WELFARE
ASSOCIATION … RESPONDENT(S)

WITH

CIVIL APPEAL NO. 4085 OF 2010

JUDGMENT

V. Ramasubramanian, J.

1. Both the consumer (who was the complainant) as well as

the opposite party before the National Consumer Disputes

Redressal Commission, have come up with these appeals, the
Signature Not Verified

Digitally signed by
Jayant Kumar Arora
Date: 2021.09.28

former aggrieved by the rejection of some of the reliefs sought and
16:36:46 IST
Reason:
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the latter, challenging the reliefs granted in favour of the

consumer.

2. We have heard the learned counsel appearing on both sides.

3. A residential apartment complex was promoted by M/s

Padmini Infrastructure Developers (India) Ltd. (hereinafter

referred to as ‘the opposite party’), on a land allotted by New

Okhla Development Authority (‘NOIDA’ for short). It appears that

the opposite party constructed about 282 apartments and offered

them for sale. The purchasers were put in possession during the

period from 1998­2001, but the completion certificate itself was

issued only in December, 2001.

4. The purchasers of flats formed themselves into an

association known as Royale Garden Residents Welfare

Association and got it registered on 30.09.2003 under the

Societies Registration Act, 1860.

5. The Residents Welfare Association entered into an

agreement on 15.11.2003 with the opposite party for taking over

the maintenance of the apartment complex. Thereafter, the

Residents Welfare Association ((hereinafter referred to as the
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‘complainant’), filed a consumer complaint in Complaint No.9 of

2007 before the National Consumer Disputes Redressal

Commission.

6. The reliefs sought by the complainant before the National

Commission were as follows:­

“1. to pay the monthly maintenance charges for unsold flats
amounting to Rs. 9,05,810/­
2. to complete the water softening plant and make it
operational.
3. to complete fire fighting equipments and make the same
operational and to obtain safe working certificate from Fire
Safety Department of NOIDA and handover the same to the
Complainant.

4. to furnish and equip a second health club for which space
is available in half portion of basement of Tower Blue
Heaven­2.
5. to complete a second swimming pool and get cement
plastered and white washed the stilts.

6. to provide furnished space for a, Club House in the
basement of Eden Tower which is existing but locked.

7. to get the rented portion of the terrace (roof) vacated meant
for the resident of Tower Eden of the Complainant rented
out by the Opposite Party to HUTCH (P) Limited and
earned rent after on 15.11.2003 to be returned to RWA
with 24% interest.

8. not to sell or rent out the remaining flats about 45 till the
facilities mentioned above are provided to the
Complainant.

9. to direct the OP not be sell stilt and open car parking to
future or present purchasers.
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10. to pay the cost to the Complaint and damages for
harassment mental torture, agony etc. caused to the
Complainant by the OP.
11. to pass any other or further orders which this August
Commission deems fit in the circumstances of the case to
meet the ends of justice.”

7. The complaint was resisted by the opposite party both on

merits and on the ground of limitation. The opposite party also

claimed that the Agreement dated 15.11.2003, entered into with

the complainant contained an arbitration clause and that

whatever facilities/amenities were promised at the time of

promotion of the complex, have been put in place.

8. The National Commission by its interim order dated

04.06.2008, appointed a local Commissioner, to inspect the

systems/facilities relatable to the reliefs claimed in prayer clause

nos. 2 to 6 of the complaint and to submit a report. The said

Commissioner submitted a report on 08.07.2008 after making a

local inspection, in the presence of the representatives of both the

parties.

9. Accepting the report of the local Commissioner and

overruling the contention of the opposite party regarding

limitation, the National Commission allowed the complaint partly
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by an order dated 05.01.2010. The operative part of the order of

the Consumer Commission reads as follows:

“Consequently, complaint is partly allowed with cost of
Rs. 25,000/­ with direction to the opposite party to make the
systems/facilities as at Sl. Nos. 2,3,4,5 and 6 of the prayer
clause of the complaint operational/complete and to obtain
and supply fire safety certificate of the complex to the
complainant association within ten weeks from today. The
opposite party will submit a report within two weeks thereafter
from an independent Architect certifying that the
systems/facilities in question have been fully made
operational/complete by the opposite party. In the event of not
making operational/complete the systems/facilities referred to
above within the time allowed, the opposite party will pay
through a demand draft the costs thereof as mentioned in
aforesaid report dated 8.07.2008 within two weeks from after
the expiry of 12 weeks time to the complainant association.”

10. Aggrieved by the order of the National Commission, the

opposite party (builder), has come up with one appeal in

C.A.No.2998 of 2010. Aggrieved by the refusal of the National

Commission to grant the reliefs as per prayer clause nos. 1, 7, 8,

9 & 10, the consumer­complainant has come up with another

appeal in C.A.No.4085 of 2010.

11. As observed earlier, the consumer complaint was contested

by the opposite party both on merits and on the ground of

limitation. Since it is easy to deal with the objection relating to

limitation without much ado, we shall take it up first.
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12. Section 24A(1) of the Consumer Protection Act, 1986

prescribes a period of limitation of two years from the date on

which the cause of action has arisen for the admission of a

complaint, by the District Forum, State Commission or the

National Commission. In the case on hand, the opposite party

handed over the work of maintenance of the complex to the

complainant, under an Agreement dated 15.11.2003. As seen

from the preamble to the Agreement, the Agreement covered

common essential services such as generators, lifts, tube­well,

water softening plant, electric substation, cabling, fire fighting

system, pipelines, swimming pool, health and fitness centre,

parking, club­house, water supply, drainage/sewerage system,

horticulture, water tanks/pumps and lawns/parks.

13. But different timelines were prescribed under the said

Agreement for different obligations still remaining to be

performed by the opposite party, towards the purchasers of flats.

The last of such timeline was indicated to be 31.03.2004.

14. There were specific obligations to be performed by the

opposite party under the said Agreement, in relation to certain
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services. It may be useful in this regard to extract clauses 13, 14

and 19 of the Agreement as follows:­

“13. The FIRST PARTY shall bear the contractual
obligations of lift, generator, health club and equipments fitted
at swimming pool. FIRST PARTY shall also bear the
maintenance of these equipments till these contracts are
concluded. FIRST PARTY shall bear any/all expenses on
maintenance/repair/replacement of these equipments.

14. To FIRST PARTY shall make the softening plant and
tube will in working condition and hand it over to SECOND
PARTY separately on or before 31.1.2004. The FIRST PARTY
shall also bring the fire fighting Equipments/generators in
working condition and hand it over to the SECOND PARTY
separately on or before 31.12.2003.

… … …

19. The FIRST PARTY shall construct the second Health
Club and second swimming pool on or before 31.3.2004 and
provide space for Club house in one of the basements for the
residents as promised and assured at the time of selling the
apartments on or before 31.12.2003.”

15. Therefore, the cause of action for the complaint, as per the

above clauses continued even after the date of the Agreement

namely 15.11.2003.

16. In the affidavit filed by the local Manager of the opposite

party by way of evidence, it was admitted that certain works in

relation to fire­fighting equipment continued up to the year 2005.

In fact, the opposite party filed certain bills, which were dated

27.02.2005, 22.04.2005, 01.05.2005, 19.07.2005, 29.10.2005
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and 12.12.2005, to show that the opposite party was honest and

diligent in carrying out their obligations.

17. The affidavit in evidence filed by the opposite party and the

aforesaid bills establish that the cause of action continued at

least till December, 2005. The complaint before the National

Commission was filed in February, 2007. Therefore, the National

Commission was right in rejecting the objection relating to

limitation.

18. Coming to the merits, let us first take up the challenge to

correctness of the reliefs granted by the National Commission in

favour of the complainant, as the appeal filed by the opposite

party appears to be first in point of time.

19. The reliefs granted by the National Consumer Commission

related to water softening plant, fire­fighting, second health club

equipment, second swimming pool and space for club house in

Eden Tower. These reliefs were granted by the National

Commission on the basis of the Report of the local

Commissioner.
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20. It appears that opposite party filed objections to the report

of the local Commissioner, contending inter alia, (i) that the water

softening plant was fully functional when the complex was taken

over by the complainant association; (ii) that any deficiency or

defect relating to the fire­fighting equipment is wholly

attributable to the lack of maintenance and wrongful practices

adopted by the complainant association; (iii) that they are not

contractually liable to provide a second health club and the

finding of the local Commissioner that one of the health clubs is

fully functional and in good condition has to be accepted; and (iv)

that the second swimming pool was completed and made

operational by the opposite party, but what remained was the

filling up of water after filtration, which was the job of the

maintenance agency.

21. Interestingly the affidavit of objections to the Report of the

local Commissioner, filed on behalf of the opposite party on

06.08.2008, covered only the findings relating to, (i) water

softening plant; (ii) fire­fighting equipment; (iii) second health

club; and (iv) second swimming pool, but did not cover the

finding relating to the liability of the opposite party to provide
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furnished space for a club house in the basement of Eden Tower

(relatable to relief no.6 of the complaint). However, the affidavit

covered the claim of the complainant for maintenance charges,

though the local Commissioner had nothing to do with the same.

22. The Commissioner appointed by the National Commission

was an architect by name Amit Bahl. When he carried out the

inspection, 4 persons representing the opposite party, which

included the advocate of the opposite party and the deponent to

the affidavit of objections were present. The architect examined

each one of the items and not only found that they were not

operational on date but also found, (i) that the equipment for the

water softening plant was incomplete, ineffective and inadequate;

(ii) that the fire­fighting equipments were not in operation due to

incomplete commissioning of the system as a whole and that

even the fire safety certificate dated 05.11.2001 noted down the

same; (iii) that while the first health club in the basement of the

Tower Blue Heaven­2 was fully furnished and functional, the

second health club was not adequately furnished though the civil

works are complete; (iv) that the second swimming pool was not

complete and operational, as the filtration plant was non­
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functional and the pump was removed after installation and that

even the change rooms and showers have not been provided for;

and (v) that in so far as the club house in the basement of Eden

tower is concerned it was kept under lock and key by the

opposite party and found to have been used as a store for

keeping various building materials.

23. In the light of the aforesaid findings by an independent

architect appointed by the National Commission it is not open to

the opposite party to create a façade as though all essential

services and amenities were handed over in a fully functional

state. If all the aforesaid services had been handed over in a fully

functional state, the opposite party should have taken an

acknowledgment in writing from the complainant. In the

alternative, the opposite party should have insisted upon an

appropriate provision in the Agreement dated 15.11.2003.

24. As noted by the Commissioner, even the fire safety

certificate dated 05.11.2001 states that though the majority of

the equipment have been satisfactorily installed, some equipment

have been removed and stored for security purposes and that the

inference therefore is that the system never got commissioned.
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25. It is not impossible for an experienced architect to find out

whether the condition in which the aforesaid amenities and

services were found on the date of the inspection, was entirely

due to lack of maintenance or due to non­commissioning or

incomplete commissioning.

26. As noted by the National Commission, the affidavit of

objections filed on behalf of the opposite party to the Report of

the local Commissioner does not deal with the cost of estimates

indicated by the Commissioner in his Report. In addition, the

affidavit of objections does not even deal with the finding relating

to the club house at Eden Tower, said to have been kept under

lock and key by the opposite party for storing building materials.

The very fact that at the time of inspection by the local

Commissioner, the possession of the club house in Eden Tower

was with the opposite party, goes to show that the opposite party

was still retaining control of at least some part or certain services

in the complex, perhaps due to the fact that there were about 45

unsold flats.

27. In view of the above, we are not convinced that the reliefs

granted by the National commission in favour of the complainant
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warrant any interference. Therefore, the appeal in C.A. No.2998

of 2010 is liable to be dismissed.

28. But before we do that, we should take note of the fact that

as per the operative portion of the order of the National

Commission (which we have extracted elsewhere) the opposite

party is obliged to make the systems/facilities at prayer clauses

2, 3, 4, 5 & 6 of the complaint, fully operational/complete and

they are also obliged to obtain a certificate of completion from an

independent architect. If the opposite party failed to do so within

the time stipulated by the National Commission, the opposite

party was obliged to pay the cost as estimated by the

Commissioner in his Report dated 08.07.2008.

29. The costs estimated by the local Commissioner in his Report

dated 08.07.2008 are as follows :­

1 Water softening plant Rs. 20,29,962
.
2 Fire fighting equipment Rs. 83,00,000
.
3 Second health club Rs. 7,60,000
.
4 Second swimming pool Rs. 2,70,000
.
5 Furnishing the club house in Eden Rs. 2,75,000
. Tower

Total Rs.1,16,34,962
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30. While ordering notice in C.A.No.2998 of 2010, on

29.03.2010, this Court granted stay of operation of the impugned

order on condition that the opposite party–builder deposit

Rs.60,00,000/­ within 8 weeks. Subsequently, the order was

modified on 14.05.2010, permitting the opposite party to deposit

the sum in two equal instalments, the first instalment before

22.05.2010 and 2nd instalment before 15.07.2010. It appears that

the amount has been accordingly deposited and the amount has

been invested in a Fixed Deposit which is renewed from time to

time by the orders of this Court.

31. In view of the fact that the possession of the common

amenities were handed over by the opposite party to the

complainant Association 18 years ago (under the Agreement

dated 15.11.2003), it may not be possible at this distance of time

to compel the opposite party to make those facilities/systems at

relief clauses 2, 3, 4, 5 and 6, fully operational now. The cost of

estimate which works out to approximately Rs.1.16 crores,

includes within itself the cost of fire fighting equipment and this

constitutes the major component (it works out to Rs. 83 lakhs).

As seen from the Commissioner’s Report, the mistake committed
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by the opposite party was in removing a part of the equipment

but not putting them back. This finding is as per the fire safety

certificate. Therefore, it may not be appropriate to ask the

opposite party to bear the entire burden.

32. Therefore, taking into account the overall picture, we are of

the considered view that interests of justice will be met if the

order of the National Commission is modified in such a manner

(i) that the complainant Association shall receive in full and final

settlement, the deposit now lying in the Registry of this court,

towards adequate compensation for the reliefs that they are held

entitled to by the National Commission; and (ii) that the opposite

party is directed to remove all building material stored in the

club house in the basement of Tower Eden and hand over

possession of the club house to the complainant.

33. Now coming to the appeal CA No.4085 of 2010 filed by the

complainant against the refusal of the reliefs in prayer clause

nos.1, 7, 8, 9 and 10, we think that the National Commission

was justified in rejecting those reliefs. The claim for monthly

maintenance charges for the unsold flats, amounting to

Rs.9,05,810/­ sought as per prayer clause no.1, was made by
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the complainant on the basis of clause 10 of the Agreement dated

15.11.2003 which reads as follows:

“10. The FIRST PARTY agrees to pay to the SECOND PARTY
the monthly maintenance charges @ 50 paise per
square feet for the unsold flats w.e.f. 16.11.2003.
FIRST PARTY shall make the advance payment for 6
months within 7 days of signing of the agreement.
Subsequently these charges will be paid yearly in
advance.”

34. The averments relating to the relief claimed at prayer clause

no.1 are found in paragraph 16 of the complaint which reads as

follows:­

“16. That the amount of such advance payment upto
31.12.2006 is Rs.619568/­ approx. an advance for the
year 2007 comes to Rs.286242/­. Thus the OP has to
make the total payment amounting to Rs. 905810/­
approx. with interest @ 24% for the delayed period for
which OP had agreed vide agreement dated
15.11.2003 Clause No.6 last two lines.”

35. Though the National Commission did not deal with the relief

claimed at prayer clause No.1 in sufficient detail and the

National Commission did not also provide cogent reasons for

rejecting the relief, we find that the complainant may not be

entitled to the said relief. There are two reasons as to why we say

so. The first reason is that the complainant did not provide

detailed calculations about the plinth area of the unsold flats, the
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period during which they remained unsold and the manner in

which the amount indicated in para 16 of the complaint was

arrived at. In any case the payments were to be made under

clause 10 of the agreement, first within seven days of the

agreement in respect of the advance payment for six months and

thereafter by way of annual payments in advance. Therefore, a

major portion of the claim for money was obviously barred by

limitation when the complaint was filed. Moreover, the opposite

party raised a dispute about the quantum and asserted in para

16 of their reply before the National Commission that what was

due was only Rs.232750/­. Thus, the question became a

disputed question of fact on which both parties did not lead

sufficient evidence. Therefore, the rejection of the claim at prayer

clause No.1 was legally correct.

36. The relief claimed at prayer clause no.8 is to direct the

opposite party not to sell or rent out the unsold flats till the

facilities mentioned in prayer clause nos.2 to 6 are provided. By

its very nature, this relief is in the nature of an interim relief and,

hence, was rightly rejected by the National Commission in the

final judgment.
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37. The relief claimed in prayer clause no.9 relates to stilt and

open car parking. There was no evidence before the National

Commission to grant such a relief and, hence, the refusal to

grant the relief mentioned in prayer clause no.9 is in order.

38. The claim for costs and damages for harassment, mental

torture, agony etc., made in prayer clause no.10 was not granted

by the National Commission, and rightly so, in view of the fact

that after handing over the common amenities under the

Agreement dated 15.11.2003, the opposite party continued to

carry out at least some works. This is why the complaint was

lodged in 2007. Therefore, we find no reason to grant the relief

prayed for in prayer clause no.10.

39. That leaves us with the relief claimed in prayer clause no.7.

This was for a direction to the opposite party to vacate the tenant

occupying the terrace of Tower Eden. According to the

complainant, the terrace of Tower Eden was let out by the

opposite party to a company, leaving the residents of Tower Eden

without a terrace for common use. But the relief of eviction

involves a third party and hence the National commission rightly
19

left it to the complainant to pursue the remedy in an appropriate

Forum.

40. Thus, we find that the refusal of the National Commission

to grant the reliefs mentioned in prayer clause nos.1, 7, 8, 9 and

10 warrant no interference. Therefore, the appeal of the

complainant in CA No.4085 of 2010 is liable to be dismissed.

41. Accordingly the appeal of the consumer­complainant in C.A.

No. 4085 of 2010 is dismissed. The appeal of the builder­opposite

party in C.A. No. 2998 of 2010 is partly allowed, modifying and

substituting the judgment of the National Consumer Disputes

Redressal Commission dated 05.01.2010 in Consumer Complaint

No. 9 of 2007, to the following effect:

The complainant shall be entitled to all told monetary
compensation in a sum of Rs. 60 lakhs, now lying in deposit with
the Registry of this court, together with the interest accrued
thereon, in lieu of the reliefs sought in prayer clauses 2, 3, 4, 5
and 6 of the complaint. The opposite party shall, within two
weeks, remove all building material stored by them in the club
house in the basement of Tower Eden and hand over possession
of the club house to the complainant. The complaint shall stand
dismissed in all other respects. No costs.

42. The parties are to bear their respective costs in these

appeals. The Registry shall liquidate the fixed deposit standing to

the credit of the above appeal and make payment of the proceeds
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to the complainant namely, Royal Garden Residents welfare

Association. All interlocutory applications if any are closed.

……………………………..J.
(Hemant Gupta)

……………………………..J.
(V. Ramasubramanian)

New Delhi
September 28, 2021

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