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2025 (5) TMI 933 - SC - Indian LawsCancellation of allotment of the apartment - determination of the amount due and payable by the parties - consequences of non-compliance with procedural directions - complaint filled before the National Consumer Disputes Redressal Commission ( NCDRC) - stay granted by the NCDRC during the execution proceedings - application for modification rejected - HELD THAT - This Court by order dated 20.03.2018 was of the view that the application for modification ought to have been allowed by the NCDRC as no contempt petition had been filed and accordingly allowed the appeal and set aside the impugned order. This Court further directed that whatever amount was payable for the original apartment the same would be payable for the alternate apartment offered and consequently stipulated a period of two weeks to execute the agreement between the parties within two weeks as directed by the NCDRC in accordance with the Maharashtra Ownership of Flats Act 1963 MOFA . Having considered the submissions the following facts govern the quantification of amount which we are crystallising in order to put a quietus to this matter (i). The appellant has not provided the relevant documents asked by the respondent relating to the building map carpet area relevant NOCs right from the beginning. Neither in any of the communications to the respondent nor in the submissions before us the appellant has ever stated that it actually provided the documents required by the respondent. (ii). The appellant being well aware of the stay order dated 19.11.2013 passed by the NCDRC restraining it from creating any third-party rights in gross violation of the same proceeded to alienate the original allotted apartment no. 6403 on 24.11.2014 during the pendency of the proceedings before the NCDRC. This alienation has created further complication in the proceedings and has also caused considerable delay in the matter preventing it from attaining finality. (iii). Even after the orders passed by this Court the appellant has not come forward with the specific carpet area of the original allotted apartment and the alternate offered apartment i.e. 6403 and 6503. (iv). The respondent undoubtedly could not enjoy the possession of the apartment but the fact also remains that the balance consideration of Rs. 3, 72, 35, 401/- remained with the respondent. Simultaneously we cannot lose sight of the fact that during this period the appellant has been maintaining the said apartment and paying the essential charges to respective bodies/ associations. As such there needs to be some adjustment of equities between the parties. In the peculiar facts and circumstances of the case we direct that the respondent shall pay the following amounts i) Admitted amount of Rs. 2, 15, 884/- ii) Amount that the respondent is ready to pay on the direction of the Court Rs. 15, 37, 126/- iii) Taxes on consideration value Rs. 23, 17, 990/- iv) Amount of Rs. 1 crore over and above the abovementioned amounts. We make it clear that whatever charges and dues may accrue with respect to the use and occupation of the apartment post the handover of possession the respondent would be liable to pay such amounts in addition to the above-decided amount. The parties are further directed to get the agreement to sale/sale deed executed within two months after the aforesaid payment is made. The expenses for the stamp duty registration etc. would be borne by the respondent in accordance with law. The restriction imposed vide order dated 10.12.2024 regarding structural changes stands discharged. The Miscellaneous Application No. 2426 of 2018 stands disposed of accordingly.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court include:
2. ISSUE-WISE DETAILED ANALYSIS Validity of Cancellation of Allotment The appellant cancelled the allotment of the apartment vide letter dated 28.06.2013, citing non-payment of the balance amount. The respondent had paid an advance amount but was requesting the appellant to provide necessary documents to execute the registered agreement. The appellant, however, insisted on payment of the balance and threatened cancellation. The National Consumer Disputes Redressal Commission (NCDRC) considered this issue and set aside the cancellation order, directing the appellant to execute and register the agreement for sale in conformity with MOFA provisions. The Court upheld this direction, emphasizing the protection of the consumer's rights under MOFA, which mandates execution of agreement and prohibits arbitrary cancellation without due cause. Alienation of Apartment Despite Stay Order The appellant was restrained by an ad interim order dated 19.11.2013 from creating third-party rights in respect of the apartment. Despite this, the appellant alienated the original apartment on 24.11.2014. The NCDRC condemned this conduct as contemptuous and refused modification of its order to substitute an alternate apartment. The Supreme Court, however, observed that no contempt petition was filed and allowed modification to substitute an identical apartment on the next higher floor. The Court's reasoning acknowledged procedural propriety and the absence of formal contempt proceedings, balancing strict adherence to orders with practical resolution of the dispute. Entitlement to Specific Performance under MOFA The NCDRC directed execution and registration of the agreement for sale under MOFA, which governs ownership of flats and protects buyers by mandating proper documentation, timely execution, and payment schedules. The Court reiterated the statutory framework, including Sections 4 and 6 of MOFA, which regulate sale agreements and payments. The appellant's failure to provide relevant documents such as building maps, carpet area, and no-objection certificates was noted as a breach of statutory obligations, justifying the respondent's reluctance to pay the balance consideration earlier. The Court emphasized that the appellant's obligations under MOFA were not fulfilled, affecting the contractual relationship. Substitution of Alternate Apartment The appellant's request to substitute apartment no. 6503 in place of the originally allotted apartment no. 6403 was initially rejected by the NCDRC due to alienation in violation of stay. The Supreme Court allowed the substitution, directing that the amount payable for the original apartment would apply to the alternate apartment, and stipulated timelines for execution of the agreement. This reflects the Court's pragmatic approach to resolve the dispute by allowing substitution where the original allotment was alienated in breach of stay, balancing equitable considerations and consumer protection. Determination of Amount Payable by Respondent The appellant claimed Rs. 4,96,52,565/- including:
The respondent admitted liability for Rs. 2,15,884/- (legal, utility, society formation charges) and was willing to pay Rs. 15,37,126/- (infrastructure and club membership charges) if directed by the Court. The respondent denied liability for the remaining amounts relying on Sections 4 and 6 of MOFA, which regulate payment obligations and consumer protections. The Court found that the appellant had failed to provide necessary documents and had alienated the original apartment in violation of stay, causing delay and complications. The respondent had deposited the balance sale consideration of Rs. 3,72,35,401/- but could not enjoy possession until recently. The appellant maintained the apartment and paid charges during this period. Considering equities, the Court directed the respondent to pay a total of Rs. 1,40,71,000/- comprising admitted amounts, taxes, and an additional sum in lieu of outstanding interest and other charges up to the date possession was handed over (05.02.2025). The Court clarified that charges accruing post-possession would be the respondent's liability. Execution, Registration, and Possession The Court ordered execution and registration of the agreement for sale within two months after payment, with stamp duty and registration expenses borne by the respondent. The appellant was directed to hand over peaceful and vacant possession of the alternate apartment within a week of the Court's order. Structural changes were initially restrained but later permitted after payment and possession. Procedural Compliance and Forfeiture of Rights The appellant forfeited its right to file a written statement before the NCDRC due to non-compliance with procedural timelines and failure to pay costs. This procedural default adversely affected the appellant's defense and was noted by the Court in assessing conduct and claims. Treatment of Competing Arguments The appellant's repeated demands for payment without providing requisite documents were contrasted with the respondent's repeated requests for documentation and clearances. The Court found the appellant's conduct lacking in transparency and procedural propriety, impacting the respondent's ability to comply fully. The Court balanced the equities by adjusting the amount payable, considering the appellant's maintenance of the property and the respondent's payment of substantial sums despite delay in possession. 3. SIGNIFICANT HOLDINGS The Court held: "Keeping in view all these facts and circumstances, we hereby set aside the cancellation order of allotment dated 28.6.2013 in respect of the premises in dispute." "The appellant, being well aware of the stay order dated 19.11.2013 passed by the NCDRC restraining it from creating any third-party rights, in gross violation of the same, proceeded to alienate the original allotted apartment no. 6403 on 24.11.2014 during the pendency of the proceedings before the NCDRC. This alienation has created further complication in the proceedings and has also caused considerable delay in the matter preventing it from attaining finality." "The respondent is directed to pay the total amount of Rs. 1,40,71,000/- (Rupees One crore forty lakhs seventy-one thousand only) to the appellant within 8 weeks from the receipt of this order. The payment of above amount is being provided in lieu of clearance of all the outstanding dues of interest/taxes and other charges etc. upon the respondent up to 05.02.2025, i.e. the date on which possession has been handed over to the respondent." Core principles established include the strict enforcement of MOFA provisions protecting flat buyers, the inadmissibility of alienation in violation of stay orders, and the equitable adjustment of dues considering parties' conduct and delay in possession. The Court emphasized the need for timely execution and registration of agreements and fair quantification of amounts payable, balancing consumer protection with developer rights.
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