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Shivalik Vihar Sites Pvt. Ltd. v. Gurcharan Singh

National Consumer Disputes Redressal Commission
Jul 9, 2012
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Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

Two revision petitions with similar facts and a common question of law were heard together. The underlying dispute arises from consumer complaints in which the respondents/complainants alleged that the petitioners (builders/developers) launched a scheme to sell apartments (Chivalik Apartments). The complainants deposited Rs. 9,78,129/- for allotment of a flat pursuant to an allotment letter dated 7.1.2006 that promised possession on or before 7.2.2007. Possession was not handed over by that date, and the complainants later learned that the petitioners did not have required permission from the Punjab Government for building residential apartments.

The complainants alleged deficiency of service and unfair trade practice, sought relief before the District Consumer Disputes Redressal Forum-I, Chandigarh (District Forum). The District Forum allowed the complaints by an order dated 28.7.2010, directing either delivery of possession within ten months (or refund of the deposited amount) and awarding interest and costs; penal interest was prescribed for non-compliance.

The petitioners appealed to the State Consumer Disputes Redressal Commission, Chandigarh (State Commission) which dismissed the appeals on 21.7.2011. Execution applications under Section 27-A of the Consumer Protection Act, 1986 were filed and allowed by the District Forum by order dated 11.1.2012. Appeals from that execution order were filed before the State Commission under Section 27-A and were dismissed by the impugned order. The petitioners, however, filed revision petitions under Section 21-B of the Act, which are the subject of this common order.

Legal Issues Presented

  1. Whether revision petitions under Section 21-B of the Consumer Protection Act, 1986 are maintainable in respect of orders passed in execution proceedings where a specific appellate remedy under Section 27A exists.
  2. On the merits, whether the petitioners' contentions (including that they are ready to refund but are restrained by a civil suit/status quo and that financial constraints or force majeure prevented performance) justify non-compliance with the consumer fora's orders, and whether punitive costs should be imposed for frivolous or abusive litigation conduct.

Arguments of the Parties

Petitioners' (Appellants') Arguments

  • The petitioners admitted possession had not been handed over but invoked force majeure, stating construction stopped (allegedly due to recession) and that construction had restarted; they proposed to hand over possession within ten months from the decision in the complaints.
  • They submitted they were ready to refund the amount as ordered, but pointed out that the complainant had filed a civil suit in the Court of Civil Judge at Kharar in which a status quo regarding alienation of the flat had been ordered; they contended that after sale of the flat they would be in a position to refund, implying the civil suit's status quo limited their ability to comply immediately.
  • They (implicitly) raised financial constraint as a reason for inability to refund at once.

Respondents' (Complainants') Arguments

  • The complainants alleged that they paid Rs. 9,78,129/- for allotment of a flat but the petitioners failed to hand over possession as per the allotment letter and also lacked required governmental permissions; they characterized the petitioners' acts as deficiency in service and unfair trade practice.
  • After non-compliance with orders of the District Forum and the State Commission, the respondents filed execution applications under Section 27-A which were allowed; they sought enforcement of the consumer fora orders (possession or refund with interest and costs).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ravinder Kaur Vs. Ashok Kumar, AIR 2004 SC 904 Courts should be careful to see through judgment-debtors' diabolical plans to deny decree-holders the fruit of decrees; such conduct encourages frivolous litigation and delays. The State Commission's approach rejecting appellants' plea that civil suit/status quo prevented compliance was supported by this principle; the order cited Ravinder Kaur to justify refusing to allow the petitioners to defeat enforcement of the consumer orders.
Ramrameshwari Devi and Ors. Vs. Nirmala Devi and Ors., Civil Appeal Nos.4912-4913 of 2011 (decided July 4, 2011) Courts must deny profit or undue benefit to wrongdoers who use frivolous litigation; caution in granting ex-parte injunctions; deter frivolous litigation by ordering restitution, realistic costs, and by curbing misuse of interim orders. The decision was applied to justify punitive costs and to emphasize that frivolous or abusive litigation tactics (including misuse of fora to delay) should attract heavy sanctions so that wrongdoers do not benefit from procrastination and litigation tactics.
Swaran Singh Vs. State of Punjab, (2000) 5 SCC 668 (cited within Ramrameshwari Devi) Observation that perjury has become frequent in courts; used within Ramrameshwari to illustrate misuse of judicial process. Referenced indirectly through the Ramrameshwari judgment as part of the Court's discussion on the prevalence of false averments/forged documents and the need to deter such conduct; supported the Court's decision to impose punitive costs and to condemn unscrupulous litigation tactics.

Court's Reasoning and Analysis

The court's analysis proceeded in two principal stages: first on maintainability, then on merits and conduct.

Maintainability:

  1. The court observed that the impugned orders arose in execution proceedings. It referred to the text of Section 27-A of the Consumer Protection Act, 1986, which prescribes the appellate route for orders made in execution proceedings: an appeal under section 27 lies from the District Forum to the State Commission, from the State Commission to the National Commission, and from the National Commission to the Supreme Court, and further restricts other appeals to courts.
  2. Given that Section 27A provides a specific statutory remedy by way of appeal against orders passed in execution proceedings, the court held that revision petitions filed under Section 21-B are on the face of it not maintainable. Thus, on this short ground alone the revision petitions were to be dismissed.

Merits and conduct:

  1. Despite dismissing the revisions on maintainability, the court examined merits to address petitioners' substantive contentions and conduct. The State Commission had examined the petitioners' contention that they were willing to refund but a civil suit with a status quo order prevented them from doing so. The State Commission rejected that argument, reasoning that the executing court/tribunal must enforce the consumer fora's order and that remedies in the civil suit did not affect the obligation to comply with the consumer order.
  2. The court noted the admitted fact that possession had not been handed over despite the contractual date of 7.2.2007. The petitioners had accepted the entire consideration and were using the money since deposit; therefore, the petitioners could not legitimately claim financial inability to refund or rely on procedural hurdles in other fora to avoid performance.
  3. The court condemned the petitioners' conduct as an example of unscrupulous behavior by builders who take purchasers' money and delay or avoid handing over possession, causing the purchasers prolonged hardship. The court emphasized the need to deter such conduct and to deprive wrongdoers of any benefit from frivolous or dilatory litigation.
  4. The court relied on the precedents cited (Ravinder Kaur; Ramrameshwari Devi) to support the imposition of punitive costs and strong measures to dissuade frivolous litigation and misuse of interim orders. The Ramrameshwari Devi observations about curbing frivolous litigation and denying profit to wrongdoers were highlighted as directly applicable.
  5. Applying these principles, the court concluded that the revision petitions were meritless and frivolous and deserved dismissal with punitive costs. It then specified the quantum and distribution of costs and set compliance and payment directions, including interest in the event of non-payment and a condition that costs awarded to respondents be paid only after the expiry of the period for filing an appeal or revision, if any.

Holding and Implications

Holding:

The revision petitions are DISMISSED as not maintainable; on the merits they are also held to be frivolous and are dismissed with punitive costs of Rs. 50,000/- (Rupees Fifty Thousand Only) each.

Implications and direct consequences (as stated in the opinion):

  • Out of the total costs imposed upon the petitioners, Rs. 30,000/- each shall be paid to the respondents by way of demand draft drawn in their respective names.
  • The remaining costs of Rs. 40,000/- shall be deposited by way of demand draft in the name of the Consumer Legal Aid account within four weeks from the date of the order.
  • If the petitioners fail to deposit the aforesaid costs within the prescribed period, they shall be liable to pay interest @ 9% p.a. until realization.
  • Costs awarded to the respondents shall be paid only after the expiry of the period of appeal or revision, if any, preferred.
  • Pending application stands disposed of and the matter was listed for compliance on 31.8.2012.

Note: The court emphasized that no leniency should be shown to litigants who use meritless petitions and multiple fora to defeat enforcement of valid orders; the decision does not purport to set new law beyond applying established principles to the facts before it, but it sends a firm message about deterrence and the proper route of statutory appeals under Section 27A.

Signed by: V.B. GUPTA, Presiding Member; VINAY KUMAR, Member.

Show all summary ...

Present Revision Petitions are being disposed by this common order, since facts in these petitions are similar and common question of law is involved. Vide two separate orders dated 2.4.2012, State Consumer Disputes Redressal Commission, Chandigarh (short as tate Commission) disposed of two appeals filed under Section 27-A of the Consumer Protection Act, 1986 (short as ct) by the petitioners, against order dated 11.1.2012, passed by District Consumer Disputes Redressal Forum-I, Chandigarh (short as istrict Forum. 2. Brief facts are that Consumer Complaints were filed by respondents/complainants on the grounds that petitioners/OPs launched a scheme for selling their apartments, under the name and style of hivalik Apartments On being convinced by the OP No. 6(in the original Consumer Complaint) respondents deposited a sum of Rs. 9,78,129/- for allotment of a flat. As per Clause 4 of the allotment letter dated 7.1.2006, petitioners were to hand over the possession on or before 7.2.2007 but they failed to do so. Later on, respondents came to know that petitioners were not having the permission from Punjab Govt. for building residential apartments. Respondents approached petitioners a number of times but they flatly refused, either to hand over possession of the flat or refund the amount. The aforesaid acts of the petitioners amount to deficiency in rendering service and indulgence into unfair trade practice. 3. Petitioners in their written statement admitted that till date, possession of flats has not been handed over to the respondents. Petitioners tried to take shelter under orce Majeureclause stating that they are unable to hand over the possession as the construction has been stopped. Since, recession has ceased, now the construction is in full swing and they will hand over the possession within ten months from the date of decision of present complaints. 4. District Forum, vide its order dated 28.7.2010, allowed the complainants and passed the following directions ; (a) The OPs shall hand over the possession of the flat in question to the complainant within a period of 10 months from the date of filing of the present complaint i.e. by 18.09.2010 along with litigation costs of Rs. 5,500/-. OR (b) The OPs shall refund the deposited amount of Rs. 9,78,129/- along with Rs. 5,500/- as costs of litigation within thirty days from the date of receipt of copy of the order. (c ) The OPs shall pay within thirty days from the receipt of copy of the order interest as damages @ 9 % per annum on the amount of Rs. 9,78,129/- w.e.f. the date of deposit till the possession is delivered or the amount of Rs. 9,78,129/- is refunded to the complainant. In case the OPs fails to comply with the directions (a) or (b), they shall be liable to refund the entire amount with penal interest @ 12% per annum from the date of deposit i.e.22.11.2005 till payment is actually made to the complainant. In case direction (c) is not complied within thirty days, the OPs shall be liable to pay the same with penal interest @ 12% per annum w.e.f. the date the monthly payments became due till the date of actual payment to the complainant 5. Aggrieved by above order of the District Forum, Petitioners filed appeals before the State Commission, which dismissed the same with costs, vide its order dated 21.7.2011. 6. Since, orders passed by the Foras below were not complied by the petitioners, execution applications under Section 27-A of the Act, were filed by the respondents which were allowed by the District Forum, vide its order dated 11.1.2012. 7. Aggrieved by this order of the District Forum, petitioners filed appeals under Section 27-A of the Act, before the State Commission which dismissed the same, vide its impugned order. 8. We have heard the learned counsel for the parties and have gone through the record. 9. Impugned orders have been passed in execution proceedings. As per Section 27 of the Act, only appeal lies against any order passed in the execution proceedings. However, petitioners have filed revision petitions against the impugned orders, which on the face of it are not maintainable. 10. Section 27A of the Act reads as under; Appeal against order passed under section 27. (1) Notwithstanding anything contained in the Code of Criminal Procedure 1973(2 of 1974), an appeal under section 27, both on facts and on law, shall lie from--- (a) the order made by the District Forum to the State Commission (b) the order made by the State Commission to the National Commission; and ( c ) the order made by the National Commission to the Supreme Court . (2) Except as aforesaid, no appeal shall lie to any court from any order of a District Forum or a State Commission or the National Commission. (3) Every appeal under this section shall be preferred within a period of thirty days from the date of an order of a District Forum or a State Commission or, as the case may be, the National Commission: Provided that the State Commission or the National Commission or the Supreme Court, as the case may be, may entertain an appeal after the expiry of the said period of thirty days, if, it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of thirty days.) 11. Since, specific remedy by way of an appeal under Section 27-A of the Act has been provided, present revision petitions under Section 21-B of the Act, are not maintainable 12. Thus, on this short ground alone, these revision petitions are not maintainable. 13. Now, coming to the merits, the State Commission in its impugned order has observed ; It was next submitted by the Counsel for the appellants, that the appellants are ready to refund the amount as ordered by the District Forum, and upheld by the State Commission, but the complainant has already filed a Civil Suit in the Court of Civil Judge at Kharar, in which status quo regarding alienation of the flat, in question, has been order to be maintained. It was further submitted that after the sale of this flat, the appellants would be able to refund the amount deposited by the complainant, with a view to comply with the order passed by the District Forum, and upheld by this Commission. The Executing Court/Tribunal was to execute the order passed by the District Forum and upheld by this Commission. The order was passed, by the District Forum, in Consumer Complaint No. 1500/2009 on 28.07.2010. First Appeal against that order was dismissed by this Commission vide order dated 21.7.2011. The hard earned money, deposited by the complainant, is being continuously used by the Opposite Parties(now appellants) since the date of deposit of the same. Now the appellants cannot take up the plea, that they being in financial constraints, are unable to refund the same. Once they accepted the deposit from the complainant, for the allotment of a flat, but they failed to deliver possession thereof, by the stipulated date, they are bound to comply with the order passed by the District Forum, which was upheld by this Commission, in the First Appeal. Whatever remedy the Opposite Parties(now appellants) have in the Civil Suit, they can resort to the same, but it has no effect, whatsoever, so far as the order impugned is concerned. In this view of the matter, the submission of the Counsel for the appellants, being devoid of merit, must fail, and the same is accordingly rejected 14. Admittedly, possession of the flats in question have not been handed over to the respondents, till date. The same were to be handed over by 7.2.2007. Thus, petitioners/builders in the present case wants to have the cake and eat it tooas they received the entire consideration amount long ago and are also having the flats with them. 15. On the other hand, respondents after having paid the entire consideration amount many years ago are still without any roof. Under these circumstances, petitioners cannot deprive the respondents of their legal rights to have the possession of the flats in question. Thus, there is no illegality or infirmity in the impugned order passed by the State Commission. 16. Such type of unscrupulous act on the part of petitioners/builders should be dealt with heavy hands, who after grabbing the money from the purchasers enjoy and utilize their money but does not hand over the flat, on one pretext or the other. Petitioners have made the respondents run from one Fora to other Fora during last three years so that respondents cannot have any roof over his head and they (petitioners) can go on enjoying respondents money, without any hindrance. 17. In Ravinder Kaur Vs. Ashok Kumar, AIR 2004 SC 904, Apex Court observed ; ourts of law should be careful enough to see through such diabolical plans of the judgment debtor to deny the decree holders the fruits of the decree obtained by them. These type of errors on the part of the judicial forum only encourage frivolous and cantankerous litigations causing law delay and bringing bad name to the judicial system. 18. It is well settled that no leniency should be shown to such type of litigants who in order to cover up their own fault and negligence, goes on filing meritless petitions in different foras. Equity demands that such unscrupulous litigants whose only aim and object is to deprive the opposite party the fruits of the decree, must be dealt with heavy hands. Unscrupulous builders like petitioners should not be spared who after taking entire costs of the flats do not perform their part of obligations. A strong message is required to be sent to such type of builders that this Commission is not helpless in these type of matters. 19. Now question which arises for consideration is as to what should be the quantum of costs which should be imposed upon the petitioners for dragging the respondents upto this fora. It is not that every order passed by the judicial fora is to be challenged by the litigants even if the same are based on sound reasonings.

20. Apex Court in Ramrameshwari Devi and Ors. Vs. Nirmala Devi and Ors., Civil Appeal Nos.4912-4913 of 2011 decided on July 4, 2011 has observed ; 5. We are clearly of the view that unless we ensure that wrong oers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the Courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that court otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases. 46. Usually the court should be cautious and extremely careful while granting ex-parte ad interim injunctions. The better course for the court is to give a short notice and in some cases even dasti notice, hear both the parties and then pass suitable biparte orders. Experience reveals that ex-parte interim injunction orders in some cases can create havoc and getting them vacated or modified in our existing judicial system is a nightmare. Therefore, as a rule, the court should grant interim injunction or stay order only after hearing the defendants or the respondents and in case the court has to grant ex-parte injunction in exceptional cases then while granting injunction it must record in the order that if the suit is eventually dismissed, the plaintiff or the petitioner will have to pay full restitution, actual or realistic costs and mesne profits. 47. If an ex-parte injunction order is granted, then in that case an endeavour should be made to dispose of the application for injunction as expeditiously as may be possible, preferably as soon as the defendant appears in the court. 48. It is also a matter of common experience that once an ad interim injunction is granted, the plaintiff or the petitioner would make all efforts to ensure that injunction continues indefinitely. The other appropriate order can be to limit the life of the ex-parte injunction or stay order for a week or so because in such cases the usual tendency of unnecessarily prolonging the matters by the plaintiffs or the petitioners after obtaining ex-parte injunction orders or stay orders may not find encouragement. We have to dispel the common impression that a party by obtaining an injunction based on even false averments and forged documents will tire out the true owner and ultimately the true owner will have to give up to the wrongdoer his legitimate profit. It is also a matter of common experience that to achieve clandestine objects, false pleas are often taken and forged documents are filed indiscriminately in our courts because they have heardly any apprehension of being prosecuted for perjury by the courts or even pay heavy costs. In Swaran Singh Vs. State of Punjab (2000) 5 SCC 668 this court was constrained to observe that perjury has become a way of life in our courts. 49. It is a typical example how a litigation proceeds and continues and in the end there is a profit for the wrongdoers. 50. Learned Amicus articulated common man general impression about litigation in following words : ake any false averment, conceal any fact, raise any plea, produce any false document, deny any genuine document, it will successfully stall the litigation, and in any case, delay the matter endlessly. The other party will be coerced into a settlement which will be profitable for me and the probability of the court ordering prosecution for perjury is less than that of meeting with an accident while crossing the road. 21. In our opinion, present Revision Petitions are nothing but gross abuse of law and same are meritless and frivolous, which are required to be dismissed with punitive costs of Rs. 50,000/- (Rupees Fifty Thousand Only)each. 22. Accordingly, we dismiss these petitions with punitive costs of Rs. 50,000/- (Rupees Fifty Thousand only) each. 23. Out of total costs imposed upon the petitioners, Rs. 30,000/- (Rupees Thirteen Thousand Only) each be paid to the respondents, by way of demand draft drawn in their respective names. Remaining Costs of Rs. 40,000/-( Rupees Forty Thousand only) be deposited by way of demand draft in the name of onsumer Legal Aidaccount, within four weeks from today. 24. In case, petitioners fail to deposit the aforesaid costs, within the prescribed period, then they shall also be liable to pay interest @ 9% p.a., till realization. Costs awarded to the respondents, be paid only after expiry of period of appeal or revision, preferred, if any. 25. Pending application stands disposed of. 26. List on 31.8.2012 for compliance. ......................J

V.B. GUPTA PRESIDING MEMBER ...................... VINAY KUMAR MEMBER