ASSOCIATION FOR CONSUMER WELFARE AND AIDversusGRANITE GATE PROPERTIES PRIVATE LIMITED & ANR.

                        [2019] 5 S.C.R. 897                              897


    ASSOCIATION FOR CONSUMER WELFARE AND AID                             A
                                  v.
  GRANITE GATE PROPERTIES PRIVATE LIMITED & ANR.
                   (Civil Appeal No. 259 of 2019)
                         MARCH 25, 2019                                  B
        [DR. DHANANJAYA Y. CHANDRACHUD AND
                 HEMANT GUPTA, JJ.]
       Party: Deletion of name from array of parties – In the instant
case, the appellant-Association representing the buyers filed
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consumer complaint seeking diverse reliefs including the grant of
possession of flats to the allottees of the real estate project and
restraining the respondents from charging additional amount for
alleged increase in the area of the flats otherwise than in accordance
with the allotment letters – The case of the appellant before the
National Commission was that the second respondent was in fact           D
the main promoter of the project and that it was vested with the
primary responsibility of completing the project – In the complaint,
the second respondent was arrayed as opposite party No. 1, while
the first respondent was opposite party No. 2 – National Commission
directed deletion of second respondent from array of parties and
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admitted complaint only against the first respondent on the ground
that the consumers in the complaint did not hire or avail the services
of the said party and therefore were not its consumers – Whether a
direction for the deletion of the second respondent was warranted
– In the counter affidavit which was filed in these proceedings, the
second respondent stated that the first respondent was set up as a       F
special purpose vehicle by a consortium of which the second
respondent was a part and that a construction agreement was
entered into between the first and second respondents – Held: It is
not possible for the Court to conclude at this stage that the second
respondent was unconnected with the project or was impleaded as
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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 has to be determined during
the course of the hearing of the complaint – Consequently, on the
basis of the averments contained in the complaint as well as on the
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                                 897
898             SUPREME COURT REPORTS                          [2019] 5 S.C.R.


A     material placed on the record by the second respondent, an order
      for deletion was not warranted at this stage – The second respondent
      is restored as a party to the proceedings before the National
      Commission – Consumer Protection Act, 1986.
             Disposing of the appeals, the Court
B            HELD: 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. On the basis of the
      material on record, it is not possible for the Court to conclude at
      this stage that the second respondent was unconnected with the
      project or was impleaded as a party to the proceeding without
C     any reason or basis. 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. [Paras 9, 11, 13][900-G; 902-B;
      D-E]
D            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 259 of
      2019
             With
             Civil Appeal No. 1501 of 2019.
             From the Judgment and Order dated 31.07.2018 of the National
E     Consumer Disputes Redressal Commission, New Delhi in Consumer
      Complaint No.1616 of 2018
             Avi Tandon, Anish Agarwal, Omar Waziri, Ms. Vanshika Gupta,
      Ms. Meghna Tandon, Ms. Vibhooti Malhotra Advs. for the Appellant.
             Dhananjai Jain, George Thomas, Dhananjay, Nakul Dewan, Arush
      Khanna, Ms. Nooreen Sarna, Lakshay Mehta, Advs. for the
F
      Respondents.
             The Judgment of the Court was delivered by
             DR. DHANANJAYA Y. CHANDRACHUD, J.
             Civil Appeal No. 259 of 2019
G            1. Admitted.
             2, 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
H     appeal.
ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATE                               899
PROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]

      3. The only ground on which the above directions have been issued        A
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.”
      4. Notice was issued in these proceedings on 7 January 2019. A           B
counter affidavit has been filed by the second respondent which was
ordered to be deleted by the NCDRC from the array of parties.
      5. 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       C
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:                                                                       D
      “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   E
      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           F
      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             G
      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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900            SUPREME COURT REPORTS                          [2019] 5 S.C.R.


A           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.”
B           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:
C           “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
D           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.”
             7. In the complaint before the NCDRC, Three C Universal
E     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.
            8. In the counter affidavit which has been filed in these
      proceedings, the second respondent has stated that the first respondent
F     was set up as a special purpose vehicle by a consortium of which the
      second respondent is a part. Moreover, it has been stated that a
      construction agreement was entered into between the first and second
      respondents on 15 December 2009.
            9. At the present stage, the limited issue with which this Court is
G     concerned is whether a direction for the deletion of the second respondent
      was warranted.
             10. 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

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ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATE 901
PROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]

(Regulation and Development) Act, 2016, the definition of the expression       A
“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       B
      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           C
      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—
                                                                               D
      (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
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      apartments or plots; or
      (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
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      (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
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      (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
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902             SUPREME COURT REPORTS                            [2019] 5 S.C.R.


A            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;”
B            11. 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
C     complaint.
             12. 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.
D
            13. 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.
E
             14. We however, clarify that all the rights and contentions of the
      parties are kept open to be urged before the NCDRC.
            15. The appeal is, accordingly, disposed of. There shall be no
      order as to costs.
F            16. Pending application(s), if any, shall also stand disposed of.
             Civil Appeal No. 1501 of 2019
             17. Admitted.
           18. For the reasons indicated by this Court while disposing of the
G     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.



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ASSN. FOR CONSUMER WELFARE & AID v. GRANITE GATE 903
PROPERTIES PVT. LTD. [DR. DHANANJAYA Y. CHANDRACHUD, J.]

       19. The appeal shall stand disposed of in similar terms as the            A
order passed in the companion appeal. There shall be no order as to
costs.
       20. Pending application(s), if any, shall stand disposed of.

                                                                                 B
Devika Gujral                                             Appeals disposed of.




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