The High Court of Bombay directs the Promoter/Developer to pay Rs. 5 Crore as Compensation for loss of rent after not handling over possession on time
In
the case of M/s Renaissance Infrastructure through its Partners & Others
Vs. Shri Parth B. Suchak & Another, the complainant had purchased six plots
of land together known as ‘warehousing building’, from the respondent promoter
under an agreement for sale. The possession of the suit premises was to be
handed over to the complainant-allottee on or before 9 March 2010 and since the
possession was not so handed over, as per Condition No.4 of the agreement, the
promoter was liable to compensate the complainant for loss of rent, which was
agreed at the rate of Rs.10/- per sq. ft. per month which worked out to Rs.5.04
Crores, calculated upto 30 June 2018.
The
Adjudicating Officer ordered the Appellant herein to pay compensation to the
complainant-allottee from 9 September 2010 and till handing over possession of
the warehousing building at the rate of Rs.6,30,000/- per month in addition to
the direction for handing over possession of the plots with the warehousing
building and execution of conveyance in favour of the applicants. Therefore,
Appellant preferred Second Appeal before the High Court.
Contentions
of the Appellant:
Mr.
Dani, learned Senior Counsel appearing for the Appellant, submits that the
Appellant was not liable to make any pre-deposit under the proviso to Section
43 (5) based on 3 main grounds. Firstly, the Appellant is not a promoter, since
the agreement between the parties, which gave rise to the complaint, was not an
agreement for sale, but an agreement in lieu of the Respondent’s share in the
partnership of the Appellant.
Secondly,
the original claim of the Respondent was pre-mature and devoid of merit.
Thirdly,
the order is in the nature of liquidated damages and the adjudicating officer
had no jurisdiction to order such damages.
Observations/Findings
of the Court:
The
Court observed that since the agreement is “agreement for sale”, the Appellant
was bound to hand over possession of the suit premises to the Respondent within
an agreed period and execute a conveyance in respect of the same. Prima facie
this agreement is nothing, but an agreement for sale between a promoter and an
allottee.
The
consideration of an agreement for sale, instead of money, may well be any
valuable consideration, including satisfaction of the allottee’s share in the
promoter’s partnership.
The
project is very much a real estate project; it is being developed by the
Appellant as a promoter; and the Respondent is an allottee, to whom plots of
land together with a building have been allotted and agreed to be sold. Prima
facie all ingredients of promotership of the Appellant are satisfied in the
present case.
Further
on the question whether the original complaint before the adjudicating officer
was premature and whether damages/compensation awarded by the adjudicating
officer were within his jurisdiction, are but matters of merit in the appeal.
These matters, even if some of them may go to the root of the order impugned in
the appeal, do not call for dispension of pre-deposit under the proviso to
sub-section (5) of Section 43, which is mandatory.
The
orders do not give rise to any substantial question of law for the
consideration of this court. The Second Appeal is, accordingly, dismissed.
Read
the full Order here.
-By
Ronak Tyagi
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