By DR. K. SHIVARAM | Senior Advocate
RAHUL K. HAKANI
SASHANK DUNDU | Advocates
15 Deficiency of service – Delay in obtaining
occupation certificate – Reasonable cause for termination of agreement –
Eligible for refund with interest [Consumer Protection Act, 1986, S. 2(1)(g)]
Pioneer Urban Land and
Infrastructure Ltd. vs. Govindan Raghavan and Ors. AIR 2019 Supreme Court 1779
A builder entered into an
agreement with a purchaser to deliver the possession of the flat along with the
occupancy certificate within 39 months from the date of excavation, with a
grace period of 180 days. The builder, however, failed to apply for the
occupancy certificate as per the stipulations in the agreement.
The purchaser filed a
consumer complaint before the National Commission alleging deficiency of
service on the part of the builder for failure to obtain the occupancy
certificate and hand over possession of the flat. Admittedly, the
appellant-builder offered possession after an inordinate delay of almost three
years (on 28th August, 2018). On account of the inordinate delay,
the respondent (flat purchaser) had no option but to arrange for alternate
accommodation in Gurugram. Hence, he could not be compelled to take possession
of the apartment after such a long delay.
It was observed that the
builder had obtained the occupancy certificate almost two years after the date
stipulated in the agreement with the purchaser. As a consequence, there was a
failure to hand over possession of the flat within a reasonable period. The
purchaser has made out a clear case of deficiency of service on the part of the
builder. The purchaser was justified in terminating the agreement by filing the
consumer complaint and cannot be compelled to accept the possession whenever it is offered by the builder. The purchaser was
legally entitled to seek refund of the money deposited by him along with
appropriate compensation.
It was held that the
builder failed to fulfil his contractual obligation of obtaining the occupancy
certificate and offering possession of the flat to the purchaser within the
time stipulated in the agreement or within a reasonable time thereafter. The
purchaser could not be compelled to take possession of the flat, even though it
was offered almost two years after the grace period under the agreement
expired. During this period, the purchaser had to service a loan that he had
obtained for purchasing the flat by paying interest @ 10% to the bank. In the
meanwhile, the purchaser also located an alternate property in Gurugram. In
these circumstances, the purchaser was entitled to be granted the relief prayed
for, i.e., refund of the entire amount deposited by him with interest.
16 Dishonour of cheques – Cheques issued
in pursuance of agreement to sell is also a duly enforceable debt or liability
[Negotiable Instruments Act, 1881, S.138]
Ripudaman Singh vs.
Balkrishna AIR 2019 Supreme Court 1625
The issue pertained to
dishonour of cheques for part payment of sale consideration. Two people sold
their agricultural land to one Mr. X (respondent). Part payment was already
done by Mr. X. Two post-dated cheques were issued to the sellers. However, on
the due date the cheques were returned unpaid with the remark ‘insufficient
funds’. Legal notices were issued and complaints were initiated u/s. 138 of the
Negotiable Instruments Act, 1881 before the judicial magistrate. The magistrate
dismissed the applications seeking discharge of the complaint cases and charges
were framed u/s. 138. The respondent then filed a petition u/s. 482 before the
High Court.
The High Court held that
the cheques had not been issued for creating any liability or debt but for the
payment of balance consideration and hence the respondent did not owe any money
to the complainants. Accordingly, the complaint u/s. 138 was quashed.
On appeal, the Supreme
Court held that the cheques were issued under and in pursuance of the agreement
to sell. Though it is well settled that an agreement to sell does not create
any interest in immovable property, it nonetheless constitutes a legally enforceable
contract between the parties to it. A payment which is made in pursuance of
such an agreement is hence a payment made in pursuance of a duly enforceable
debt or liability for the purposes of section 138. Hence, the order quashing
the complaint was set aside.
17 Hindu Law – Right of daughter to
coparcenery property – Amendment not applicable to cases where the transfer of
such property had already taken place [Hindu Succession Act, 1956, S.6]
Jayaraman Kounder vs.
Malathi and Ors. AIR 2019 Madras 113
A property which was
inherited from the parents was sold by the son and grandchildren on 2nd
June, 1994. All the children were male. Thereafter, the Hindu Succession Act
got amended wherein section 6 brought the daughters on par with the sons as
coparceners.
After the amendment in the
Hindu Succession Act, the daughters filed a suit against the father / brothers
in connection with the sale of property which was done 18 years prior to the
amendment.
The High Court while
answering the question whether the sale deed dated 2nd June, 1994
executed in favour of the appellant by the father and brothers of the first and
second respondents / sisters is valid or whether, by virtue of becoming
coparceners, they are entitled to set aside the same even after getting a
decree of partition; the Court held that the proviso to sub-section 4 of
section 6 of the Hindu Succession Act made it clear that the properties which
have been alienated, including through partition, will be affected by virtue of
the amendment which came into force on 20th December, 2004.
Admittedly, the properties were sold by the father and brothers as early as on
2nd June, 1994. De hors the theory of the Will, the property
was already alienated on 2nd June, 1994. Therefore, the properties,
which had been sold to the appellant are exempted from the amendment.
18 Power of Attorney
holder – Only a right to appear but not plead [Advocates Act 1961; S.29; High
Court (Original Rules) 1914, Ch.1 R.5]
Usha Kanta Das and Ors. vs. Sefalika Ash AIR 2019 Calcutta 145
The issue before the Court
was whether appearance, application or acting by a recognised agent of a party
would include within such scope the right to plead and argue before a court of
law as defined in rule 2 of order III?
In the present case, Mr. N
admittedly was a power of attorney holder on behalf of the caveatrix and claims
a right to argue the case of the caveatrix, including examining witnesses in
the proceedings on the basis of the authorisation arising from the power of
attorney.
It was observed that three
propositions emerge: first, order III rule 1 specifically excludes the
expression ‘plead’ from the purview of ‘appearing’ or ‘acting’. The expression
‘plead’, on the other hand, arises from the definition of ‘pleader’ u/s. 2(15)
of the CPC. Second, advocates, vakils and attorneys of a High Court have
been specifically included in the class of those who are entitled to plead for another before a court. Third, ‘pleading’ as an
exclusive domain has been formalised under chapter I rule 1(i)(a) of the
Original Side Rules which has specifically excluded ‘pleading’ from ‘acting’.
It was held that only a
special class of persons, namely, advocates enrolled under the Advocates Act,
1961, have been authorised to plead and argue before a court of law. It should
further be noted that the ‘special reason’ of permitting ‘any other person’
under rule 5 of chapter 1 of the Original Side Rules relates only to appearance
and not pleading.
19 Surety /
Guarantor – Liability co-extensive with original borrower [Contract Act, 1872;
S.128]
Bharatbhai Sagalchand
Thakkar vs. State of Gujarat AIR 2019 Gujarat 81
A co-operative society had
advanced money to one of its members where two guarantors had also given surety
for the same. Later, the original borrower defaulted in payment of the loan. A
question for consideration was that since the loan was disbursed in favour of
the original borrower, whether there is a duty cast upon the co-operative
society or the bank, as the case may be, first to recover the loan advanced to
the borrower and then to take steps against the guarantor or steps may be taken
against anyone?
It was held that the
liability of a guarantor is co-extensive with that of the original borrower. It
is always open for the co-operative society to first proceed against the guarantor for
the recovery of the loan amount. It is not necessary that the co-operative
society should first go after the original borrower and only thereafter proceed
against the guarantor.
