Disagreements Between Property Owners And Developers Do Not Justify Avoiding Contractual Commitments: NCDRC

Brief Facts of the Case

The Appellant's father, a landowner, entered into a Development Agreement with Respondent No.3/ Triputi Construction Company/Developer to construct a G+2 storied building. The Appellant granted the developer a Power of Attorney for this purpose. Subsequently, the developer began selling flats in the under-construction building. Complainants 1 and 2 bought two flats from the developer and took possession of their properties. However, when Complainant No.2 sought to pay the remaining ₹2,99,000 and requested the execution of the conveyance deed, complications arose. The Appellant refused, stating that the Development Agreement with the developer had been cancelled due to non-compliance. Furthermore, the developer had filed a civil suit against the Appellant Civil Court. Citing this ongoing litigation, the Appellant expressed his inability to execute and register the deed of conveyance, leaving the Complainants in legal limbo. The complainants and the developer approached the State Commission regarding the same. The State Commission allowed the complaint and directed the appellant and the dealer to execute and register the deed of conveyance of the property to the complainants.

Observations by the Commission

The Commission observed that the Development Agreement between the Appellant (landowner) Developer had been annulled, which had rendered the subsequent Agreements for Sale of flats invalid since the Appellant, who held a proportionate share in the land, was not made a party to these agreements. Despite this, the Commission found that the Appellant's claims that the building was not completed as per sanctioned plans and that the developer had sold apartments without his consent lacked substantiating evidence. Furthermore, the Commission noted that the privity of contract had existed between the late Ekkori Das (Appellant's father) and the dealer, with the Complainants having acknowledged the Development Agreement but having denied any General Power of Authority for flat sales. Most importantly, citing the case V. Kamala & Ors. Vs. K. Rajib & Ors., the Commission had held that inter se disputes between landowners and builders could not be used as a ploy to evade obligations under agreements, especially when it would be detrimental to home buyers. Finding no merit in the Appeal, the Commission affirmed the State Commission's order and directed the parties to execute and register the necessary deeds within eight weeks.

Case Title: Ekkori Das Vs. Sodipto Chatterjee & Ors.

Case Number: F.A. No. 293/2019