Vinod Kumar Thareja Vs.
M/s Alpha Construction & Ors.
ORDER
R. V. Raveendran J.
1.
Leave
granted.
2.
The
appellant, the owner of a plot measuring about 11000 sq.ft. situated at Bhopal,
entered into a Joint Venture Agreement dated 2.7.2004with the first respondent
for development of the said plot by construction and sale of nine duplex flats.
Under the said agreement, the appellant was to provide his land to the first
respondent for construction of flats; the first respondent was responsible for
the construction and sale of the duplex flats; and out of the sale proceeds
realized by sale of the flats, the appellant was entitled to 45% and the first
respondent was entitled to the balance of 55%.The first respondent was
authorized to enter into agreements of sale with prospective purchasers of
flats even at the stage of construction and receive the price either in a lump
sum or in installments. The first respondent was solely responsible for
completion of construction and the quality of construction. According to the
appellant, his obligation under the joint venture agreement was only to
contribute the land and in consideration there of receive 45% of sale proceeds.
3.
In
pursuance of it, the appellant and first respondent entered into an agreement
dated 18.9.2004 with respondents 2 and 3, who were interested in purchasing one
of the nine duplex flats to be constructed in the property. The said agreement
clearly stated that the first respondent was to construct the duplex flat and
receive the consideration from respondents 2 and 3. In pursuance of it, the
first respondent's proprietor (Rajbir Singh), as Attorney holder of the
appellant, executed a sale deed dated 14.1.2005 in favour of respondents 2
& 3, conveying an extent of 968 sq.ft., of land with a skeletal structure
thereon for Rs.6 lakhs.
4.
Respondents
2 and 3 filed a complaint dated 22.6.2006 before the District Consumer
Redressal Forum, Bhopal (`District Forum' for short)against the first
respondent alleging deficiency in service. In the said complaint they alleged
that they had paid Rs.11,80,000/- to the first respondent out of a total
consideration of Rs.13,50,000/- for the purchase of a duplex flat; that on
25.6.2005, the Municipal Corporation demolished the structure constructed by
the first respondent; and that the first respondent committed an unfair trade
practice by not disclosing the true facts and by not delivering the constructed
flat. The complainants also alleged that thereafter the first respondent failed
to construct the flat and was guilty of gross negligence and deficiency in
service. The complainants consequently demanded from the first respondent,
refund of the sum of Rs.11,80,000/-paid by them with interest of Rs.3,35,000/-,
compensation of Rs.2,00,000/-and punitive damages of Rs.2,00,000/- in all
Rs.19,15,000/-.
5.
The
said petition was contested by the first respondent who was the sole
respondent. The appellant was not impleaded as a party before the District
Forum, by the complainants. Even the first respondent did not make any
application before the District Forum for impleading the appellant as a co-respondent.
Nor did he contend that the appellant should be made liable for payment of any
amount that may be directed by the commission. He merely contended that the
complainants ought to have made the appellant also a party and in his absence
the complaint was liable to be dismissed.
6.
The
District Forum allowed the complaint by order dated 11.1.2007and directed the
first respondent to refund the sum of Rs.11,80,000/- paid by the respondents 2
and 3 to the first respondent, with interest at 18% per annum from the date of
deposit till date of payment.
7.
Feeling
aggrieved, the first respondent filed an appeal before the Madhya Pradesh
Consumer Dispute Redressal Commission (`the State Commission' for short)
challenging the order of the district forum. In the said appeal, the first
respondent made an application for impleading the appellant herein as the third
respondent. That application was allowed on28.4.2008 and the State Commission
impleaded the appellant as third respondent in the appeal and directed the
appellant to file its response to the complaint filed by the complainants under
section 12 of the Act.
8.
The
appellant therefore filed a counter to the main complaint before the State
Commission pointing out that neither in the complaint by the complainant nor in
the appeal by the first respondent anything adverse has been pleaded against
them nor any claim made against him; and therefore, the question of fastening
any liability against him did not arise. The appellant also filed objections to
the appeal by contending that he was not a necessary party to the appeal. He
pointed out that the complainants had not alleged or proved any wrong doing on
his part or any deficiency in service on his part, nor made any claim against
him and therefore he could not be impleaded as a party in the appeal.
9.
The
State Commission allowed the appeal of the first respondent in part by a brief
order dated 19.9.2008. It held that as the flats were constructed by the first
respondent in the land belonging to the appellant in pursuance of a joint
venture agreement between them and as the agreement for sale in favour of
respondents 2 and 3 had been executed jointly by the appellant and first
respondent and as the subsequent sale deed in favour of respondents 2 and 3 was
executed by the proprietor of first respondent as attorney holder of the
appellant, and as obtaining of building permission for construction was the
joint responsibility of the appellant and the first respondent, the appellant
herein was also responsible to compensate the complainants for any loss
suffered by them on account of the demolition by the Municipal Corporation. As
a consequence, the State Commission, while upholding the direction of the
District Forum for refund of Rs.11,80,000/-paid by the complainants, made the
following modifications :
(a) Respondents 2 and 3
shall re-convey the property in favour of appellant;(b) The interest shall be
reduced to 9% per annum; and(c) The first respondent as also the appellant
were liable for the amount payable to respondents 2 and 3.
10.
Feeling
aggrieved, the appellant filed a revision before the National Consumer Dispute
Redressal Commission (`National Commission' for short) which dismissed the
revision by the impugned order with the following observations : "It is
not in dispute that the owner of the property as well as the builder had
entered into joint agreement to build the flats and though the responsibility
of visiting the office of the corporation frequently to obtain sanctioning the
plan/building licence. Commencement certificate and completion certificate
etc., was delegated to the builder. The building permission is obtained in the
name of owner and builder. Therefore, the builder and owner both are jointly
responsible for all commission and omission. Even while collecting money from
the consumers/complainants, an agreement was signed by the owner also. Further
the Municipal Corporation had demolished the building because of dispute in the
title of the property. Therefore, the liability of the petitioner, who claims
to be the owner of the property of which title is unclear and still had entered
into an 7 agreement and sold the plot to the gullible consumers is proved and
the deficiency is writ large." (Emphasis supplied) The said order is
challenged by the appellant in this appeal by special leave.
11.
On
the contentions urged, the following question arises for consideration in this
appeal : Whether a respondent against whom an order for payment has been made
in a complaint under the Consumer Protection Act, 1986, can in an appeal filed
by him, seek impleadment of a third party by contending that such third party
is also liable either partly or wholly, even if the complainant has not sought
any relief against such third party?
12.
Respondents
2 and 3 filed the complaint against the first respondent as they had made the
payments to the first respondent and first respondent had agreed to construct
and deliver them the duplex flat and that the flat constructed by the first
respondent was demolished by the municipal authorities. The complainants had no
grievance against the appellant nor did they seek any relief against the
appellant. The first respondent herein who was the sole respondent before the
District Forum did not seek impleadment of the appellant as a respondent in the
complaint before the District Forum. The District Forum allowed the complaint
and held that the first respondent, as the service provider, was guilty of
deficiency of service and directed the first respondent to pay to the
complainants, a sum of Rs.11,80,000/- with interest. That order was not
challenged by the complainants (respondents 2and 3). The only question that
can, therefore, be considered in an appeal by the first respondent was whether
it was liable to pay any amount to respondents 2 and 3 and, if so the extent
thereof.
13.
The
scheme of the Act does not permit a service provider, who has been made liable
to refund the amount paid towards price under the order of the District Forum,
to file an appeal and pass on a part of the liability to some third party, on
the ground that the contract between them enabled him to do so. In an appeal by
a respondent in a complaint, aggrieved by the order made in favour of the
complainant, the only issue is whether the liability of the respondent should
be upheld, modified or rejected. The question whether anyone else should be
made liable along with the respondent in the complaint, does not arise. The
appeal by a respondent in a complaint has to be dismissed, if the respondent is
liable for the claim. If he has been wrongly made liable, the appeal will be
allowed. The issue in the appeal and the relief that can be granted in the
appeal can be only qua the complainant and not qua some third party. If a service
provider who has been made liable to a complainant wants contribution from
anyone else, on the ground that such third party had also contributed to the
deficiency in service, it is for the service provider to take independent
action against such third party, in respect of the liability. As the
complainants neither impleaded nor sought any relief against the appellant,
neither the State Commission nor the National Commission could make the
appellant liable along with the first respondent.
14.
The
first respondent contended that when the appellant was impleaded as the third
respondent in its appeal, the appellant did not protest, nor challenged the
order of the State Commission impleading him as a party, but filed objections
to the complaint before the State Commission on merits and participated in the
appeal proceedings and therefore he was estopped from challenging his
impleadment. Being impleaded as a party in an appeal is different from being
made liable by an order in the appeal. A person may not have any grievance if
he is merely impleaded as a party, but may have a grievance in regard to the
impleading, if such impleading led to making him liable for any payment. When a
non-party is impleaded as a respondent in an appeal, he can either challenge
the impleadment itself or challenge his impleadment, while challenging the
final decision in the appeal. The fact that the impleaded non-party filed
objections to the complaint during the pendency of the appeal, on the specific
direction of the State Commission, will not deny his right to challenge the
impleadment.
15.
This
appeal is, therefore, allowed and the order of the National Commission
affirming the order of the State Commission making the appellant liable jointly
with first respondent is set aside. It is, however, made clear that :
i.
if
the first respondent has any claim or cause of action against the appellant, it
is at liberty to seek redressal of its grievances against the appellant;
ii.
the
order of the State Commission affirmed by the National Commission to the extent
it reduces the interest from 18% to 9% per an numand requiring the respondents
2 and 3 herein to re-convey the flat to theirvendor under the sale deed dated
14.1.2005 is not disturbed; and
iii.
respondents
2 and 3 may draw any amount deposited by the first respondent towards the
amount due under the order of the District Forum as modified by the State
Commission.
............................J.
(R.V. Raveendran)
.............................J.
(A.K. Patnaik)
New
Delhi;
February
08, 2011.
Back
