CA NO. ...... OF 2017 @ SLP (C) NO. 29919 OF 2016

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 19962  OF 2017

(Arising out of SLP(C) No. 29919 of 2016)

VINOD GOYAL & OTHERS               …Appellants

Versus

VISHRANTI CITY RESIDENTS WELFARE  SOCIETY & OTHERS         ....Respondents

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. This  appeal  arises  out  of  the  judgment  dated  22.07.2016

passed by the High Court of Punjab and Haryana in and by which the

High  Court  directed  auction  of  the  personal  properties  of  the

partners/ex-partners  of  the  developer  firm  and  also  directing  the

individual consumer/buyer/allottee to file complaint against the former

or present proprietors of the developer firm.   

3. The  appellants  are  partners  in  the  developer  firm-M/S  Sai

Apartments  and Infrastructure  Ltd. which has evolved the plan for

setting  up  residential  project  and  was  given  licence  by  the Page No. 1 of 8

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Government  of  Punjab  to  develop  the  said  plotted  colony.   The

developer firm was to provide the basic infrastructure in the colony as

per the terms of the allotment agreement executed by the developer

firm with its allottees.  Since basic amenities were not provided, some

of the flat  owners who had moved into their  flats filed writ  petition

before  the  High  Court.   In  the said  writ  petition,  vide order  dated

15.09.2015, the High Court directed Punjab State Power Corporation

Limited (PSPCL) to provide temporary electricity connections to thirty

flats and the corporation supplied electricity to thirty houses at  the

rate of Rs.13/- per unit as per the schedule of tariff notified by PSPCL

for temporary domestic connection. The developer applied to PSPCL

for getting NOC for permanent electricity connection.  The NOC was

granted by PSPCL to M/s Sai Apartments and Infrastructure  vide its

office memo No. 1392 dated 25.03.2014 directing the builder:- (i) to

pay an amount of Rs.1,53,89,250/- for developing Local Distribution

system; (ii) to deposit cost of Rs. 49,40,149/- which was the cost that

would be incurred for erecting separate 5 KM long 11 KV feeder with

the requisite cable from the Sub-station Dhakoli feeder.   

4. As the conditions for obtaining NOC were not complied with by

the developer, the flat owners filed other writ petition before the High

Court  seeking  direction  to  the  authorities  including  PSPCL  to Page No. 2 of 8

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regularize the electricity connections in  the said colony.  The High

Court  has  inter  alia issued  various  directions  -  (i)  directing  the

Principal Secretary, Department of Housing and Urban Development,

Punjab  to  constitute  a  Committee  of  three  officers to identify  the

immovable properties of all the partners/directors/proprietors (former

or present) of M/s Sai Apartments and Infrastructure and get value of

those properties evaluated with the assistance of revenue department

and to attach the same forthwith; (ii)  there shall be first charge on all

such assets and there shall be no instrument of transferring interest,

title etc. in those properties and any such transfer shall be deemed

null and void; (iii) the attached immovable assets to be sold and the

sale  proceeds  to  be  expropriated  against  the  expenditure  to  be

incurred  by  the  Government  Agency  on  completion  of  the

infrastructure  facilities/development  works.   The  High  Court  also

issued the following directions:-  

"........... (vi) Every complaint by a consumer/buyer/allottee, if it makes out a prima facie case under the Indian Penal Code and/or other penal laws of the land, shall be treated as a separate offence and prompt action shall be taken in accordance with law against the former or present proprietors/directors/proprietors of respondent No. 6. 3. Since  the  licence  of  respondent  No.  6  has  already  been cancelled, it is directed that the same shall not be renewed nor any fresh licence shall  be granted to its  former or present  Directors, Financiers, Partners or promoters without prior permission of this Court......"

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5. Being  aggrieved,  the  appellants  who  are  the  partners  of  the

developer firm have filed this appeal contending that the appellants

are individual partners of the developer firm and that they were never

made a party to the writ petition in their individual capacity nor were

they issued any show cause notice for attachment of their personal

properties.  It is the contention of the appellants that without hearing

them, the High Court ought not to have passed the order to sell the

individual  properties  of  the  partners  in  auction  and  directing

expropriation of the same for completion of the infrastructure facilities

in the Vishranti colony.   

6. During the course of hearing of the appeal, this Court vide order

dated 11.01.2017 directed the said Punjab State Power Corporation

Limited to verify the internal developments already undertaken by the

developer  and  file  a  report.   Accordingly,  PSPCL  has  filed  the

response stating that the requisite amount for grant of NOC that is

Rs.1,53,89,250/- was not deposited with PSPCL for developing Local

Distribution system.  Moreover, the developer has not deposited the

amount  of  Rs.49,40,149/-  for  erecting  separate  5  KM long  11 KV

feeder to provide the electricity connection.  The PSPCL averred that

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in the absence of required LD system, it is impossible for PSPCL to

provide domestic connection or any further temporary connection.  

7. When  the  matter  came  up  before  this  Court,  insofar  as  the

amount payable to the Electricity Board, the appellant came forward

to sell one property measuring 938.75 sq. yds in Khasra No. 39/16/1

etc. and the same has been sold for Rs. 70 lakhs.   By order dated

06.03.2017,  this  Court  permitted  the  appellants  to  raise  a  loan  of

Rs.  70  lakhs  and  to  pay  to  PSPCL to  enable  the  Corporation  to

complete the work.   By order dated 13.04.2017, the developer was

directed to pay an amount of Rs. 50 lakhs to PSPCL towards external

development charges for electricity. By the same order, the developer

was  also  directed  to  utilize  the  balance  amount  for  other

miscellaneous  works  for  the  purpose  of  facilitating  the  electricity

supply. This Court vide order dated 06.10.2017 directed the Secretary

to  the  Government  of  Punjab,  Housing  and  Urban  Development

Department,  to  facilitate  a  joint  inspection,  with  notice  to  the

appellants as well as the respondents and submit a report on various

aspects viz:- (i)  What are the works remaining to be done as far as

the external development and internal development is concerned; and

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(ii)   What  is  the  approximate  cost  required  for  carrying  out  such

incomplete external and internal development?

8. In  compliance  with  the  said  order  dated  06.10.2017,  the

Additional  Chief  Secretary,  Government  of  Punjab,  Department  of

Housing and Urban Development has submitted status report as to

the work completed and the external and internal work that are yet to

be  completed.   The  abstract  of  total  cost  of  development  works

required to be undertaken in Vishranti City, Zirakpur is estimated as

under:-

A. Civil Works Rs. 134.35 lakhs B. Public Health Services Rs. 122.50 lakhs C. Electrical Works Rs. 76.45 lakhs

Grand Total Rs. 333.30 lakhs

9. According to the appellants, in terms of the agreement, it is the

obligation of the allottees to pay the external development charges

including the charges for providing electricity connections and in this

regard,  our  attention  was  drawn  to  clause  2(d)  of  the  allotment

agreement which reads as under:- "2. (d) External Development Charges: The  external  development  charges,  for  external  services  to  be provided by the  Punjab Government  as  on the  date  of  grant  of license, shall be payable by the Purchaser.  In case of any further increase in the external development charges prior to the execution of the sale deed, same shall be also payable by the Purchaser to the DEVELOPERS on demand.  However, in the event, external development charges, if Increase  after  execution  of  the  sale  deed,  the  same  shall  be payable by the Purchaser directly to Government authorities as and

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when  required.   However,  if  such  charges  are  raised  on  the DEVELOPERS  by  the  Government  then  such  charges  shall  be payable by the Purchaser to the DEVELOPERS on pro-rata basis."

10. Further  contention  of  the  appellants  is  that  the  internal

development to the extent of almost 70% is complete and 30% only

remains to be completed.  It is the contention of the appellants that

personal  electricity  connections  do  not  constitute  part  of  internal

development work and due to the conduct on the part of the allottees

in not depositing charges with the developer firm, it could not deposit

money with PSPCL and in this regard, our attention was drawn to

clause 8(c) of the allotment agreement.   11. Per  contra,  Mr.  J.P.  Dhanda,  learned  counsel  for  the  first

respondent-Society  submitted  that  the  allottees  have  paid  all  the

charges as per the terms of the agreement and in spite of several

orders passed by the High Court, the developer firm has not taken

steps  to  complete  the  internal  development  work  and  make

arrangement for the external development work.  12. There is dispute between the parties as to who has to bear the

charges of external development and the charges for electricity, water

and sewerage and as contended by the first respondent whether the

said charges have already been paid by the purchasers.   

13. We do not propose to go into the dispute between the parties.

We are conscious that in spite of many orders passed by the High Page No. 7 of 8

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Court for one reason or other, efforts were not taken by the developer

to complete the remaining external and internal development work or

even if efforts taken, they did not fructify.  The High Court, therefore,

had to come down heavily upon the developer firm.  When the matter

was pending before this Court, as pointed out earlier, the developer

has taken certain steps to ensure supply of electricity by selling one

of the properties.  In our view, further opportunity has to be afforded

to the parties to resolve the dispute between the parties and facilitate

completion of the project.

14. Hence, without going into the merits of the dispute between the

parties, we set aside the impugned order and remit the matter to the

High  Court  for  consideration  of  the  matter  afresh  after  affording

sufficient opportunity to both the parties.  This appeal is accordingly

allowed.  We express no opinion on the merits of the matter.  No

order as to costs.

     …….…………...………J.        [KURIAN JOSEPH]

…………….……………J.        [R. BANUMATHI]

New Delhi; November 29, 2017  

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