Skip to main content

Developer can't escape liability by outsourcing

A developer cannot escape his contractual obligation towards the buyer in a developed property by claiming that he had outsourced the development work to another builder, the Pune district consumer disputes redressal forum has held.

In a recent order, the forum, headed by president V P Utpat, ordered a construction firm in Mundhwa to deliver the possession of a 180 sq ft shopping block to the complainant, Meena Harish Bhujbal, with whom he had a registered sale agreement.

"As an alternative, if the developer expresses his inability to deliver possession of the block then he should pay the prevailing market price," the forum, which also comprised Mohan Patankar and Kshitija Kulkarni as members, ordered.

The three-member bench further directed the firm, Sai Constructions, to pay Rs 25,000 damages to Bhujbal on account of deficiency in service by not delivering possession of the shopping block as promised and causing physical and mental agony to the complainant. The damages are to be paid within six weeks from July 7 when the order was passed.

On January 26, 1996, the construction firm had entered into an agreement with Kashinath alias Shivaji Tukaram Gaikwad, owner of a land at city survey numbers 1172 to 1177 in Hadapsar, for development of a residential-cum-commercial property. Gaikwad had executed a power of attorney in favour of the developer.

For the residential and commercial blocks, the construction firm had entered into individual agreements with the buyers, including Bhujbal, who had decided to purchase a 180 sq ft shopping block for Rs 2.16 lakh.

An agreement was signed between Bhujbal and the construction firm on December 29, 2001 and the same was also registered with the sub-registrar's office in Haveli. Bhubal paid Rs 50,000 to the firm through a cheque and the latter had agreed to deliver possession by December 31, 2002. However, after the block was ready, the firm's partner Anil Tukaram Zhodge started giving evasive replies when Bhujbal asked for delivery of the block.

Bhujbal had sent notices to the firm but, the latter responded with false replies and on November 4, 2004, informed her that the development work of the property was given to another builder, Sudam Associates. Since year 2003 till February 2014 when Bhujbal eventually moved a consumer complaint through her lawyer Mahendra K Tilekar, the construction firm kept ignoring her notices. Bhujbal demanded Rs 9.90 lakh compensation and cost of litigation.

Zhodge, the respondent, did not turn up despite notices by the forum and the latter proceeded ex-parte against him. The forum observed that by not delivering possession of the block, the construction firm was liable for deficiency in service.

It ordered that Bhujbal should deposit with the forum the Rs 1.66 lakh remainder of the amount payable towards the block and hand possession of the block over or pay the prevailing market price to Bhujbal.

Article referred: http://timesofindia.indiatimes.com/city/pune/Developer-cant-escape-liability-by-outsourcing/articleshow/48106090.cms

Comments

Most viewed this month

Amendment of plaint under Order VI Rule 17 of the CPC explained

Cause Title :  Ganesh Prasad vs Rajeshwar Prasad, SLP (C) NO. 28377 OF 2018, Supreme Court Of India Date of Judgment/Order : 14/3/2023 Corum : J. B. Pardiwala, J. Citied:  Revajeetu Builders and Developers v. Narayanaswamy & Sons and Others reported in (2009) 10 SCC 84 North Eastern Railway Administration, Gorakhpur v. Bhagwan Das reported in (2008) 8 SCC 511 P.A. Jayalakshmi v. H. Saradha and Others reported in (2009) 14 SCC 525 B.K. Narayana Pillai v. Parameswaran Pillai and Another reported in (2000) 1 SCC 712 A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation reported in AIR 1967 SC 96 Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Another, Civil Appeal No. 5909 of 2022 dated 01.09.2022 Firm Sriniwas Ram Kumar v. Mahabir Prasad and Others reported in AIR 1951 SC 177 G. Nagamma and Another v. Siromanamma and Another reported in (1996) 2 SCC 25 Praful Manohar Rele v. Krishnabai Narayan Ghosalkar and Others reported in (2014...

Interim order staying the operation of an impugned order vs quashment of an impugned order

In Deific Abode LLP vs Union of India & Ors., while discussing on the issue of interim order staying the operation of an impugned order and the quashment of an impugned order, the Calcutta High Court observed that :- These salient principles emerge: i. As per the law laid down in Shree Chamundi Mopeds Ltd (supra) by the Supreme Court, the effect of an interim order staying the operation of an impugned order and the quashment of an impugned order are considerably different from one another. While the former merely ensures that the order impugned would not be operative from the date of the passing of the order of stay, without annihilating the said impugned order from existence, the latter ensures that such quashment results in the restoration of the position as it stood on the date the impugned order was passed, with the impugned order ceasing to exist in the eyes of the law. ii. Quashment of such impugned order would revive the appeal before the appellate authority and would be con...

Ruling on applicability of threshold limit for withholding obligation in relation to sale of immovable property

In Vinod Soni and others (Taxpayer) v. ITO, the issue before the Delhi Income Tax Appellate Tribunal was whether any withholding obligation triggers on the joint buyers if the cost of the immoveable property is more than specified limit of INR5M but the share of each co-owner is less than that value. Income tax laws cast an obligation on the buyer to withhold tax on payment to seller of consideration for transfer of immoveable property if value of consideration exceeds INR5M. The Tribunal held that in a case of joint acquisition of an immovable property by various co-owners, the threshold limit of withholding obligation (i.e. INR5M) is applicable with reference to share of each co-owner and not with reference to consideration of entire property. Accordingly, the Tribunal deleted tax withholding demand raised on co-owners by the Tax Authority. Article referred: https://www.ey.com/Publication/vwLUAssets/delhitrib/%24FILE/delhitrib.pdf