This case revolves around a legal dispute where the complainant claims ownership of a flat as compensation for legal services provided by her late father, who was an advocate, to the builder. The builder, however, denies any contractual obligation, arguing that no payment was made for the flat and that he has no legal responsibility toward the complainant.
Case Law Details
- Case Name: Madhavi Prabhakar Karandikar vs. M/S Vinita Builders (NC)
- Date of Decision: January 4, 2024
Facts of the Case
Prabhakar M. Hegde, the complainant’s father, was a practicing advocate. He had provided legal assistance to the builder for about eight years, particularly in securing land for a project. In return for his services, the builder had agreed to transfer ownership of a flat valued at Rs 8,65,800 to him.
After Prabhakar M. Hegde passed away, the builder agreed to transfer the flat to the complainant and her mother. Consequently, on December 9, 2002, an agreement was signed between the builder and the complainant’s family regarding Flat No. 2, which measured 444.91 sq. ft. and was located on the second floor of Vinita Apartment in Thane.
However, after the complainant’s mother passed away, leaving no other legal heirs, the complainant became the sole owner of the flat.
According to the agreement, the builder was supposed to hand over possession of the flat by September 30, 2003. In case of delay, the builder was liable to pay compensation of Rs 5,000 per day. However, rather than fulfilling this obligation, the builder illegally allowed Opposite Party-4 to occupy the flat.
Feeling wronged, the complainant filed a consumer complaint on April 17, 2012, against OP 1 to 4. Later, OP 5 to 7 were also added to the case.
Responses from the Opposite Parties (OPs)
Builder (Opposite Party-1)
- A partnership firm engaged in construction in Thane.
- Denied any legal contract with the complainant.
- Claimed that no valid payment or agreement was ensuring the flat’s transfer.
Opposite Party-2 & Opposite Party-3
- OP-2: Argued that he had no role in the firm and was only dragged into the case after his brother, Satish Narayan Joshi, who was a partner in M/s Vinita Builders, passed away.
- OP-3: Filed a separate reply, asserting that he was never a partner in the firm and had no involvement in the matter.
Opposite Party-4 (Alleged Occupant of the Flat)
- Stated that he was a bona fide buyer who purchased the flat on September 30, 2003, for Rs 42,18,000.
- Claimed he legally acquired the property and had no connection to the complainant’s claims.
Opposite Party-5 (Sleeping Partner of the Firm)
- Declared that she was merely a “sleeping partner” and retired from the firm on March 31, 2011.
- Stated that she was not actively involved in any firm-related decisions.
Opposite Party-6 & Opposite Party-7
- Both are brothers who stated that they managed certain affairs of M/s Vinita Builders.
- However, they denied being legal partners in the firm.
Observations & Final Order by the National Commission
The National Consumer Disputes Redressal Commission (NCDRC) closely examined the case and the agreement dated December 9, 2002, which was signed between the builder (OP-1) and the complainant’s family. The key points in the order were:
1. The Agreement Established Consideration
The builder had explicitly agreed to transfer ownership of the flat in exchange for the legal services rendered by the complainant’s late father. The agreement mentioned:
“In consideration of professional services rendered by late Adv. Shri Prabhakar M. Hegde for the last about 8 years in acquiring the land, the builder has agreed to sell, transfer, assign & convey flats worth Rs 8,65,800…”
This indicated that the legal services provided by the advocate were a valid form of consideration, making the builder legally obligated to hand over the flat.
2. Builder’s Failure to Deliver the Flat
Despite signing an agreement, the builder did not transfer the flat to the complainant and instead sold it to OP-4.
Since the original flat was no longer available, the commission ruled that the builder was liable to provide another identical flat of the same size in the same locality.
3. Delay Compensation Must Be Paid
As per the contract, the builder was required to hand over possession by September 30, 2003. Since this did not happen, the opposite parties were held liable to pay the agreed compensation of Rs 5,000 per day until possession was given.
4. The Case Was Not Barred by Limitation
The builder tried to argue that the complaint was filed too late. However, the commission ruled that since the builder never fulfilled his obligation, the cause of action remained ongoing, making the case valid under the limitation period.
5. Pecuniary Jurisdiction Was Valid
The opposite parties questioned whether the case fell under the appropriate jurisdiction. However, referring to Sujir Keshav Nayak vs. Sujit Ganesh Nayak (1992) 1 SCC 731, the commission clarified that in cases filed before courts with unlimited pecuniary jurisdiction, the valuation disclosed by the plaintiff is generally accepted unless proven to be arbitrary.
Final Verdict
After considering all aspects, the National Commission ruled in favor of the complainant and ordered that:
- The builder must provide an identical flat in the same locality to the complainant.
- The compensation of Rs 5,000 per day must be paid from the due possession date until the complainant is given rightful ownership.
- The complaint was valid and within the limitation period since possession was never granted.
- The plaintiff’s valuation was legally acceptable, making the case legitimate under pecuniary jurisdiction.
Thus, the builder and other liable parties were instructed to comply with the ruling and fulfill their contractual obligations.