Supreme Court of India
ASSOCIATION FOR CONSUMER WELFARE AND AID versus GRANITE GATE PROPERTIES PRIVATE LIMITED & ANR. on 25 March 2019
[2019] 5 S.C.R. 897
ASSOCIATION FOR CONSUMER WELFARE AND AID
v.
GRANITE GATE PROPERTIES PRIVATE LIMITED & ANR.
(Civil Appeal No. 259 of 2019)
MARCH 25, 2019
[DR. DHANANJAYA Y. CHANDRACHUD ANDHEMANT GUPTA, JJ.]
Party: Deletion of name from array of parties – In the instantcase, the appellant-Association representing the buyers filedconsumer complaint seeking diverse reliefs including the grant ofpossession of flats to the allottees of the real estate project andrestraining the respondents from charging additional amount foralleged increase in the area of the flats otherwise than in accordancewith the allotment letters – The case of the appellant before theNational Commission was that the second respondent was in factthe main promoter of the project and that it was vested with theprimary responsibility of completing the project – In the complaint,the second respondent was arrayed as opposite party No. 1, whilethe first respondent was opposite party No. 2 – National Commissiondirected deletion of second respondent from array of parties andadmitted complaint only against the first respondent on the groundthat the consumers in the complaint did not hire or avail the servicesof the said party and therefore were not its consumers – Whether adirection for the deletion of the second respondent was warranted– In the counter affidavit which was filed in these proceedings, thesecond respondent stated that the first respondent was set up as aspecial purpose vehicle by a consortium of which the secondrespondent was a part and that a construction agreement wasentered into between the first and second respondents – Held: It isnot possible for the Court to conclude at this stage that the secondrespondent was unconnected with the project or was impleaded asa party to the proceeding without any reason or basis – The issueas to whether, and if so, what relief can be ultimately granted in theconsumer complaint is a matter which has to be determined duringthe course of the hearing of the complaint – Consequently, on thebasis of the averments contained in the complaint as well as on the
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Amaterial placed on the record by the second respondent, an orderfor deletion was not warranted at this stage – The second respondentis restored as a party to the proceedings before the NationalCommission – Consumer Protection Act, 1986.
Disposing of the appeals, the Court
BHELD: At the present stage, the limited issue with whichthis Court is concerned is whether a direction for the deletion ofthe second respondent was warranted. On the basis of thematerial on record, it is not possible for the Court to conclude atthis stage that the second respondent was unconnected with theproject or was impleaded as a party to the proceeding withoutCany reason or basis. The second respondent is accordinglyrestored as a party to the proceedings before the NCDRC. Thecomplaint shall stand admitted against both the first and secondrespondents for final disposal. [Paras 9, 11, 13][900-G; 902-B;D-E]
DCIVIL APPELLATE JURISDICTION: Civil Appeal No. 259 of2019
With
Civil Appeal No. 1501 of 2019.
From the Judgment and Order dated 31.07.2018 of the NationalEConsumer Disputes Redressal Commission, New Delhi in ConsumerComplaint No.1616 of 2018
Avi Tandon, Anish Agarwal, Omar Waziri, Ms. Vanshika Gupta,Ms. Meghna Tandon, Ms. Vibhooti Malhotra Advs. for the Appellant.
Dhananjai Jain, George Thomas, Dhananjay, Nakul Dewan, ArushKhanna, Ms. Nooreen Sarna, Lakshay Mehta, Advs. for theFRespondents.
The Judgment of the Court was delivered by DR. DHANANJAYA Y. CHANDRACHUD, J.
Civil Appeal No. 259 of 2019
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1. Admitted.G
2, By the impugned order dated 31 July 2018, the NationalConsumer Disputes Redressal Commission[1] directed that the secondrespondent (Three C Universal Developers Private Limited) be deletedfrom the array of parties. The complaint has been admitted only againstGranite Gate Properties Private Limited, the first respondent to the presentHappeal.
ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATE899PROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]
3. The only ground on which the above directions have been issuedare spelt out thus:
“The consumers on whose behalf this complaint is instituted didnot hire or avail the services of opposite party No. 1 and therefore,they cannot be said to its consumers.”
4. Notice was issued in these proceedings on 7 January 2019. Acounter affidavit has been filed by the second respondent which wasordered to be deleted by the NCDRC from the array of parties.
5. The consumer complaint filed by the appellant, which is anassociation representing the buyers, seeks diverse reliefs including thegrant of possession of flats to the allottees of the real estate projecttogether with common amenities and restraining the respondents fromcharging additional amounts for alleged increases in the area of the flatsotherwise than in accordance with the allotment letters. The avermentsin paragraphs 5 and 13 of the complaint before the NCDRC read asfollows:
“5. That the Allotment Letters clearly provide that the projectsare being undertaken by Opposite Part 2 (which is formed byOpposite Party 1 specifically for the purpose of construction ofLotus Panache). The entire consideration amount for the projectwas required to be paid to Opposite Party 2 by the allottees, althoughthe project was marketed by Opposite Party 1 and the partiesmarketed themselves as “The 3C Company” which is also evidentfrom the letterhead of the Company on which the Allotment Letterswere printed.”
13. The Companies registered project Lotus Panache under UttarPradesh Real Estate Regulatory Authority and M/s Granite GateProperties Pvt. Ltd. was declared by the Companies as thePromoter of the project. However clearly as per the agreement,Three C Universal Developers Private Limited was the maincompany as it has formed the SPC (which was formed specificallyfor development of the project Lotus Panache and was the onewhich was marketing and executing the agreements), thereforehaving been vested the primary responsibility of the entire projecttogether with all the other opposite parties who also are jointlyand severally responsible for all the obligations contained herein.
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AFurther, the details of Project Lotus Panache as obtained fromthe website of Uttar Pradesh Real Estate Regulation Authority clearlyshows the proposed date of completion of the project as 31.12.2022.Surprisingly, the original start date has been specified as 11.5.2010 andthe modified start date for the project has been specified as 10.8.2017.”
BIn sum and substance therefore, the case of the appellants beforethe NCDRC is that the second respondent, Three C Universal DevelopersPrivate Limited, is in fact the main promoter of the project and that it isvested with the primary responsibility of completing the project. Para17.1 of the complaint reads as follows:
C“17.1 The Opposite Parties state that the Allottees had enteredinto Agreements with only Opposite Party 2 and no one else.However, clearly Opposite Party 1 and Opposite Party 2 havebeen acting as one and the same Company. Opposite Party 1has admittedly marketed the Project and the Companies haverepresented themselves together as “The 3C Company”. TheDallotment letter names Opposite Party 1 as one of the Parties andthe Builder Buyer Agreement specifically recognises that OppositeParty 2 is only a Special Purpose Company formed by the OppositeParty 1 for a particular purpose.”
7. In the complaint before the NCDRC, Three C UniversalEDevelopers Pvt. Ltd. (the second respondent to the present appeal) isarrayed as opposite party No. 1, while Granite Gate Properties Pvt. Ltd.(the first respondent to the present appeal) is opposite party No. 2.
8. In the counter affidavit which has been filed in theseproceedings, the second respondent has stated that the first respondentFwas set up as a special purpose vehicle by a consortium of which thesecond respondent is a part. Moreover, it has been stated that aconstruction agreement was entered into between the first and secondrespondents on 15 December 2009.
9. At the present stage, the limited issue with which this Court isGconcerned is whether a direction for the deletion of the second respondentwas warranted.
10. We may note the submission which has been urged on behalfof the appellants to the effect that under Section 2(zk) of the Real Estate H
ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATEPROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]
(Regulation and Development) Act, 2016, the definition of the expression“promoter” would include the entity which is constructing the building aswell as the entity which is selling the apartments or plots.
Section 2(zk) reads as follows:-
“(zk) “promoter” means,— (i) a person who constructs or causesto be constructed an independent building or a building consistingof apartments, or converts an existing building or a part thereofinto apartments, for the purpose of selling all or some of theapartments to other persons and includes his assignees; or
(ii) a person who develops land into a project, whether or not theperson also constructs structures on any of the plots, for thepurpose of selling to other persons all or some of the plots in thesaid project, whether with or without structures thereon; or
(iii) any development authority or any other public body in respectof allottees of—
(a) buildings or apartments, as the case may be, constructed bysuch authority or body on lands owned by them or placed at theirdisposal by the Government; or (b) plots owned by such authority or body or placed at their disposalby the Government, for the purpose of selling all or some of theapartments or plots; or
(iv) an apex State level co-operative housing finance society anda primary co-operative housing society which constructsapartments or buildings for its Members or in respect of the allotteesof such apartments or buildings; or
(v) any other person who acts himself as a builder, coloniser,contractor, developer, estate developer or by any other name orclaims to be acting as the holder of a power of attorney from theowner of the land on which the building or apartment is constructedor plot is developed for sale; or
(vi) such other person who constructs any building or apartmentfor sale to the general public.
Explanation.— For the purposes of this clause, where the personwho constructs or converts a building into apartments or develops
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Aa plot for sale and the persons who sells apartments or plots aredifferent persons, both of them shall be deemed to be the promotersand shall be jointly liable as such for the functions andresponsibilities specified, under this Act or the rules and regulationsmade thereunder;”
B11. On the basis of the material which is on record, it is not possiblefor the Court to conclude at the present stage that the second respondentis unconnected with the project or has been impleaded as a party to theproceeding without any reason or basis. The issue as to whether, and ifso, what relief can be ultimately granted in the consumer complaint is amatter which will be determined during the course of the hearing of theCcomplaint.
12. Consequently, we are of the view that on the basis of theaverments contained in the complaint as well as on the material whichhas been placed on the record by the second respondent, an order fordeletion was not warranted at this stage.D
13. We accordingly, allow the appeal and set aside the impugnedorder of the NCDRC dated 31 July 2018. The second respondent isaccordingly restored as a party to the proceedings before the NCDRC.The complaint shall stand admitted against both the first and secondrespondents for final disposal.E
14. We however, clarify that all the rights and contentions of theparties are kept open to be urged before the NCDRC.
15. The appeal is, accordingly, disposed of. There shall be noorder as to costs.
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16. Pending application(s), if any, shall also stand disposed of.
Civil Appeal No. 1501 of 2019
17. Admitted.
18. For the reasons indicated by this Court while disposing of theGcompanion civil appeal (Civil Appeal No. 259 of 2019), the order of theNCDRC dated 20 July 2018 directing the deletion of Three C UniversalDeveloper Pvt. Ltd. is set aside.
ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATEPROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]
19. The appeal shall stand disposed of in similar terms as theorder passed in the companion appeal. There shall be no order as tocosts.
20. Pending application(s), if any, shall stand disposed of.
Devika Gujral
Appeals disposed of.
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