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REPORTABLE  IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO(S). 259 OF 2019

ASSOCIATION FOR CONSUMER WELFARE AND AID          Appellant(s)

                               VERSUS

GRANITE GATE PROPERTIES PRIVATE LIMITED & ANR.    Respondent(s)

WITH

CIVIL APPEAL NO(S). 1501 OF 2019

JUDGMENT

Dr. Dhananjaya Y. Chandrachud, J.

Civil Appeal No. 259 of 2019

Admitted.

By the impugned order dated 31 July 2018, the National

Consumer Disputes Redressal Commission1 directed that the second

respondent (Three C Universal Developers Private Limited) be

deleted  from  the  array  of  parties.  The  complaint  has  been

admitted only against Granite Gate Properties Private Limited,

the first respondent to the present appeal.  

The only ground on which the above directions have been

issued are spelt out thus:

“The consumers on whose behalf this complaint is instituted did not hire or avail the services of opposite party No. 1 and therefore, they cannot be said to its consumers.”

Notice was issued in these proceedings on 7 January 2019.

1 “NCDRC”

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A counter affidavit has been filed by the second respondent

which was ordered to be deleted by the NCDRC from the array of

parties.

The consumer complaint filed by the appellant, which is

an association representing the buyers, seeks diverse reliefs

including the grant of possession of flats to the allottees of

the  real  estate  project  together  with  common  amenities  and

restraining the respondents from charging additional amounts

for alleged increases in the area of the flats otherwise than

in  accordance  with  the  allotment  letters.  The  averments  in

paragraphs 5 and 13 of the complaint before the NCDRC read as

follows:

“5. That  the  Allotment  Letters  clearly  provide that  the  projects  are  being  undertaken  by Opposite  Part  2  (which  is  formed  by  Opposite Party  1  specifically  for  the  purpose  of construction  of  Lotus  Panache).    The  entire consideration amount for the project was required to be paid to Opposite Party 2 by the allottees, although  the  project  was  marketed  by  Opposite Party 1 and the parties marketed themselves as “The 3C Company” which is also evident from the letterhead of the Company on which the Allotment Letters were printed.”

13.    The  Companies  registered  project  Lotus Panache  under  Uttar  Pradesh  Real  Estate Regulatory  Authority  and  M/s  Granite  Gate Properties  Pvt.  Ltd.  was  declared  by  the Companies  as  the  Promoter  of  the  project. However  clearly  as  per  the  agreement,  Three  C Universal Developers Private Limited was the main company  as  it  has  formed  the  SPC  (which  was formed  specifically  for  development  of  the project Lotus Panache and was the one which was marketing  and  executing  the  agreements), therefore  having  been  vested  the  primary responsibility  of  the  entire  project  together with all the other opposite parties who also are jointly  and  severally  responsible  for  all  the obligations contained herein.

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Further, the details of Project Lotus Panache as obtained from the website of Uttar Pradesh Real Estate  Regulation  Authority  clearly  shows  the proposed date of completion of the project as 31.12.2022.   Surprisingly, the original start date  has  been  specified  as  11.5.2010  and  the modified  start  date  for  the  project  has  been specified as 10.8.2017.”

In  sum  and  substance  therefore,  the  case  of  the

appellants  before  the  NCDRC  is  that  the  second  respondent,

Three C Universal Developers Private Limited, is in fact the

main promoter of the project and that it is vested with the

primary responsibility of completing the project.   Para 17.1

of the complaint reads as follows:

“17.1   The  Opposite  Parties  state  that  the Allottees had entered into Agreements with only Opposite Party 2 and no one else.   However, clearly Opposite Party 1 and Opposite Party 2 have been acting as one and the same Company. Opposite  Party  1  has  admittedly  marketed  the Project  and  the  Companies  have  represented themselves together as “The 3C Company”.   The allotment letter names Opposite Party 1 as one of the  Parties  and  the  Builder  Buyer  Agreement specifically recognises that Opposite Party 2 is only  a  Special  Purpose  Company  formed  by  the Opposite Party 1 for a particular purpose.“

  In  the  complaint  before  the  NCDRC,  Three  C  Universal

Developers  Pvt.  Ltd.  (the  second  respondent  to  the  present

appeal) is arrayed as opposite party No. 1, while Granite Gate

Properties  Pvt.  Ltd.  (the  first  respondent  to  the  present

appeal) is opposite party No. 2.

In the counter affidavit which has been filed in these

proceedings, the second respondent has stated that the first

respondent  was  set  up  as  a  special  purpose  vehicle  by  a

consortium of which the second respondent is a part.  Moreover,

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it has been stated that a construction agreement was entered

into between the first and second respondents on 15 December

2009.    

At the present stage, the limited issue with which this

Court is concerned is whether a direction for the deletion of

the second respondent was warranted.

We may note the submission which has been urged on behalf

of the appellants to the effect that under Section 2(zk) of the

Real  Estate  (Regulation  and  Development)  Act,  2016,  the

definition  of  the  expression  “promoter”  would  include  the

entity which is constructing the building as well 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  causes  to  be  constructed  an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling  all  or  some  of  the  apartments  to  other persons and includes his assignees; or  

(ii) a person who develops land into a project, whether  or  not  the  person  also  constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in  the  said  project,  whether  with  or  without structures thereon; or

(iii)  any  development  authority  or  any  other public body in respect of allottees of—

(a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or  

(b)  plots  owned  by  such  authority  or  body  or placed at their disposal by the Government, for the  purpose  of  selling  all  or  some  of  the apartments or plots; or

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(iv)  an  apex  State  level  co-operative  housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of 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 or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or

(vi) such other person who constructs any building or apartment for sale to the general public.

Explanation.—  For  the  purposes  of  this  clause, where  the  person  who  constructs  or  converts  a building into apartments or develops a plot for sale and the persons who sells apartments or plots are  different  persons,  both  of  them  shall  be deemed to be the promoters and shall be jointly liable  as  such  for  the  functions  and responsibilities specified, under this Act or the rules and regulations made thereunder;”

On the basis of the material which is on record, it is

not possible for the Court to conclude at the present stage

that the second respondent is unconnected with the project or

has been impleaded as a party to the proceeding without any

reason or basis. The issue as to whether, and if so, what

relief can be ultimately granted in the consumer complaint is a

matter  which  will  be  determined  during  the  course  of  the

hearing of the complaint.

Consequently, we are of the view that on the basis of the

averments contained in the complaint as well as on the material

which has been placed on the record by the second respondent,

an order for deletion was not warranted at this stage.

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We  accordingly,  allow  the  appeal  and  set  aside  the

impugned order of the NCDRC dated 31 July 2018. The second

respondent  is  accordingly  restored  as  a  party  to  the

proceedings  before  the  NCDRC.  The  complaint  shall  stand

admitted  against  both  the  first  and  second  respondents  for

final disposal.

We however, clarify that all the rights and contentions

of the parties are kept open to be urged before the NCDRC.

The appeal is, accordingly, disposed of.  There shall be

no order as to costs.

Pending application(s), if any, shall also stand disposed of.

Civil Appeal No. 1501 of 2019

Admitted.

For the reasons indicated by this Court while disposing

of the companion civil appeal (Civil Appeal No. 259 of 2019),

the  order  of  the  NCDRC  dated  20  July  2018  directing  the

deletion of Three C Universal Developer Pvt. Ltd. is set aside.

The appeal shall stand disposed of in similar terms as

the order passed in the companion appeal. There shall be no

order as to costs.

Pending application(s), if any, shall stand disposed of.

.............................J.       (DR. DHANANJAYA Y. CHANDRACHUD)

..............................J.       (HEMANT GUPTA)

NEW DELHI  MARCH 25, 2019

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ITEM NO.44               COURT NO.8               SECTION XVII

              S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

Civil Appeal  No(s).  259/2019

ASSOCIATION FOR CONSUMER WELFARE AND AID           Appellant(s)

                               VERSUS

GRANITE GATE PROPERTIES PRIVATE LIMITED & ANR.     Respondent(s)

(IA 183287/2018, IA 183289/2018)  WITH C.A. No. 1501/2019 (XVII) (IA 620/2019)   Date : 25-03-2019 These matters were called on for hearing today.

CORAM :  HON'BLE DR. JUSTICE D.Y. CHANDRACHUD          HON'BLE MR. JUSTICE HEMANT GUPTA

For Appellant(s) Mr. Avi Tandon, Adv. Mr. Anish Agarwal, Adv. Mr. Omar Waziri, Adv. Ms. Vanshika Gupta, Adv. Ms. Meghna Tandon, Adv.

                   Ms. Vibhooti Malhotra, AOR                    For Respondent(s)                     Mr. Dhananjai Jain, AOR

Mr. George Thomas, Adv. Mr. Dhananjay, Adv.

Mr. Nakul Dewan, Adv. Mr. Arush Khanna, Adv. Ms. Nooreen Sarna, Adv. Mr. Lakshay Mehta, Adv.                    

         UPON hearing the counsel the Court made the following                              O R D E R

Admitted.

The appeals are disposed of in terms of the signed order.

Pending application(s), if any, shall stand disposed of.

(MANISH SETHI)                                  (SAROJ KUMARI GAUR) COURT MASTER (SH)                                  BRANCH OFFICER

(Signed reportable judgment is placed on the file)