Economic Duress

Concept of Economic Duress : One party can withhold payment due to other party and can release it only if other party signs "full discharge voucher". Courts will grant relief in such cases. DICITEX FURNISHING LTD case. Supreme Court dtd.13/11/19 in CA No.8550/19

Source: https://www.linkedin.com/feed/update/urn:li:activity:6610072513546416128

Supreme Cour_Consumer Protection Act, 1986 _ services hired or goods purchase by employers for its employees are not commercial

The Hon'ble Supreme Court referring services hired or goods purchase by employers for its employees  in Civil Appeal No. 12322 of 2016 titled as Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and Others

decided on 14-11-2019 clarifed at Para 6 thereof:

 ".......As discussed earlier, if in all such cases the third party service-provider disclaims liability before consumer forums on the ground that the hirer of the service is engaged in trade and commerce, it will open a Pandora's box wherein the employer as well as the employees will not have any remedy. This would defeat the object of providing a speedy remedy to consumers, as outlined in the provisions of the 1986 Act. Further, setting such a precedent may discourage employers from undertaking to provide any facilities for their employees. Hence, it is necessary to clarify that the provision of such services would not usually be included in the definition of 'commercial purpose."

Para 7 To summarize from the above discussion, though a straightjacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is 'for a commercial purpose':

(i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, 'commercial purpose' is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities.

(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity.

(iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.

(iv) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of 'generating livelihood by means of selfemployment' need not be looked into.

Source

https://www.advocatekhoj.com/library/judgments/announcement.php?WID=12244

Supreme court _ Interest is not a penalty or punishment at all, but it is the normal accretion on capital

14.    I find some force in the argument of the learned counsel for the petitioner that the State Commission has not awarded any interest on the amount of refund on the ground that there was no concluded contract in the matter.  The fact of the matter is that amount remained deposited with the opposite parties for quite sometime and therefore, the complainant is entitled to some interest on the deposited amount as held by Hon’ble Supreme Court in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) as follows:-

“9.  It may be mentioned that there is misconception about interest.  Interest is not a penalty or punishment at all, but it is the normal accretion on capital.  For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount.  Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period.  Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.”

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 3290 OF 2013

(Against the Order dated 23/07/2013 in Appeal No. 971/2010 of the State Commission Maharashtra)

1. YOGESH NANDLAL HEDA R/O 1466, 'C' WARD, LAXMIPURI, TALUKA-KARVEER, DISTRICT : KOLHAPUR MAHARASTRA	...........Petitioner(s)
Versus
1. M/S. SUBAL CONSTRUCTION & 3 ORS. ADD: 2104/13, 'E' WARD. RUKMINI NAGAR, KOLHAPUR MAHARASTRA 2. SHRI SUNIL BALRAM MAHAJAN, ADD: 2104/13, 'E' WARD. RUKMINI NAGAR, KOLHAPUR MAHARASTRA 3. SHRI SATISH VIJAYKANT MOOG, R/O BAJAR GATE, BEHIND KOHLAPUR, MUNICIPAL CORPORATION KOHLAPUR, MAHARASTRA 4. SHRI CHETAN SUNDARLAL KAJARIA, R/O PLOT NO-5, ANKIT APARTMENTS, NAGLA APARTMENTS, NAGLA PARK, KOHLAPUR MAHARASTRA	...........Respondent(s)

BEFORE:
	HON'BLE MR. PREM NARAIN,PRESIDING MEMBER

Dated : 23 Oct 2019

Home Loan Against The Security Of The Allotment Latters

City and Industrial Development Corporation of Maharashtra State Ltd., (For short: CIODCO), besides being the Development Authority, has been constructing the apartments and allotting the same to the intending purchasers and, similarly, Maharashtra Housing And Development Authority, (For short: MHADA) with the main objective of providing affordable housing to the public. CIDCO initially issues an allotment letter on payment of EMD and the Agreement for Sale is executed after the payment of the full and final sale consideration with the miscellaneous charges and it grants permission to the allottee to mortgage the apartment to any of the 44 financial institutions, as per the names mentioned therein. Though MHADA is also a wholly owned company of the State Government, it, initially, issues only provisional Offer letter and on the payment of the balance sale consideration and other requirements, it issues the final allotment letter. The Banks, both in public sector and private sector, and the housing finance companies (For short Financial Institutions) have been advancing loans to such allottees for making the payment of the sale consideration etc. to CIDCO or MHADA, as the case may be, to acquire such apartments against the deposit of the allotment letters and the permission to mortgage issued by such bodies. The question arises whether legally enforceable equitable mortgage is created by simply depositing the allotment letter and letter permitting mortgage.

This issue arose in the case of an industrial plot allotted by the Government of Andhra Pradesh with the Industrial Development Area, at NACHARAM (A.P), subsequently, vest with Andhra Pradesh Industrial Infrastructure Corporation ( For short: APIIC), to a Company named United Auto Tractor Ltd., to set up an industrial unit by way of an Order dated 18.7.1972, followed by an unregistered agreement dated 3.8.1972 entered into between the State Government and the said Company, inter-alia, providing that only on the completion and full payment of the entire consideration amount, sale deed shall be executed and registered in the name of the company and till such time, the ownership of the property shall continue to remain with the Government. On the said day, the said Government, through the Director of the Industries, issued a letter to the Company permitting the mortgage of the said land to any scheduled Bank to obtain financial assistance. Accordingly, the said Company availed of a loan from the Syndicate Bank by mortgaging the said land by depositing the said allotment letter-cum-agreement (unregistered) and the permission to mortgage as an equitable mortgage. Since the said Company could not keep up its commitment, the Syndicate Bank filed a Petition in the year 1995 before the Debt Recovery Tribunal, Bangalore, for the recovery of more than Rs.2.5 crores and the Bank intended to enforce it charge on the property. The petition was allowed by the DRT and a Recovery Certificate was issued on 1.7.1997. It resulted into multiplicity of litigation and the Division Bench of Andhra Pradesh High Court took up all the writ petitions for consideration and after hearing all the parties, it held that Syndicate Bank did not act diligently in advancing huge financial assistance to the Company on the strength of a letter of no-objection purported to have been issued by the Director of Industries and it was surprising that Syndicate Bank equated that letter to that of a title deed and, accordingly, advanced monies without taking proper care and caution as the Government merely granted permission by putting the Company in possession of the land and the property always remained with the Government. No sale deed was executed by the Government in favour of the Company and the Company had taken APIIC, as well as the Syndicate Bank, for a ride. In the circumstances the Hon’able High Court held the Proclamation of Sale Notice dated 21.1.1998 issued by the Recovery Officer as ultra virus. It further held that the Letter dated 3.8.1972 by no stretch of imagination could be characterized as a document of title so as to enable the Company to mortgage the same by deposit of title deeds in order to secure financial assistance from the Syndicate Bank.

Aggrieved by the said judgment of Andhra Pradesh High Court, the Syndicate Bank went to the Supreme Court of India by way of various appeals, mainly, being Civil Appeal No.7824 of 2004 (Supreme Court - Daily Orders Syndicate Bank vs Estate Officer And Manager ... on 20 February, 2019 https://indiankanoon.org/doc/85953436/). The matter was listed before Hon’able Mr. Justice S.B. Sinha and Hon’able Mr. Justice Markandey Katju on 30.8.2007. It was pleaded on behalf of Syndicate Bank that a valid equitable mortgage was created by deposit of the allotment/Agreement dated 3.8.72 with the permission letter of the same date from the Director of Industries for the mortgage in favour of the financial institutions and these documents were the documents of title within the meaning of section 58 (f) of the Transfer of Property Act. The learned Solicitor General and Senior Counsel Shri A.K.Ganguli, appearing on behalf of State Government and APIIC, submitted that the Agreement dated 3.8.72 being not registered, no title was conferred on the Company and pursuant whereto, the company had not derived any assignable title. The letter dated 3.8.72 issued by the Director of Industries was not being a document of title, the judgment of the High Court could not be assailed. The main question which arose for consideration of the Hon’able Supreme Court was whether for satisfying the requirements of the said Section 58 (f), it was necessary to deposit documents showing complete or good title and whether all the documents of title to the property w2ere required to be deposited. A ‘fortion’ the question which would arise for consideration is as to whether in all such cases, the property should have been acquired by reason of a registered document.

After weighing various arguments and the case laws cited on behalf of both the parties, the Hon’able Supreme court in this case, reported as CDJ-2007-SC-948 on 30.8.2007 observed that Section 58 of the Transfer of Property Act does not speak of mortgage of an owner’s interest. If any interest in property can be created by reason of a transaction or otherwise which does not require registration, in our opinion, it may not be necessary to have a full title before such a mortgage is created by deposit of title deeds. In a case of this nature where valuable rights is created which may or may not confer an assignable right, the question requires clear determination having regard to the equitable principle in mind and would have far reaching consequences, as a large number of banks and financial institutions advance a huge amount only on the basis of allotment letters. Keeping in view the importance of the questions raised at the Bar, the question require the consideration by a larger bench so that an authoritative pronouncement can be made there upon”.

It is a well known fact that the apartments constructed by the government bodies or the builders in the present day context cannot be acquired without availing of the financial assistance from the financial institutions, who would require security for the same by way of mortgage of the property to be purchased from the amount so advanced. The question arises why the government bodies such as CIDCO or MAHADA cannot just have a fresh look to its terms and conditions inasmuch as CIDCO permits mortgage of the apartment but it contains a rider reading as

“it may please be noted that no lien of whatever nature will be created on the above apartment allotted to you unless you pay in full the sale price and other miscellaneous charges and execute agreement for sale with CIDCO. It is necessary for you to inform your employer/bank/financial institution, as the case may be, to inform to the corporation (CIDCO) the details of the housing loan sanctioned and released so as to enable us to take a note therein in our records.”

On the one hand permission to mortgage is granted and details are sought to take a note in the records, but on the other hand it refuses for the creation of any lien or the charge against the apartment. Is it not contradictory in itself. MAHADA goes a step further inasmuch as it issues only a provisional offer letter and the allotment letter is issued only on the payment of full sale consideration and the compliance of the other requirements. It is disputable that such a provisional offer letter will create any valuable right in the allottee, leaving aside the question of assigning of such a right yet to be determined by larger bench of the Hon’able Supreme Court of India. It would be appropriate that when the matter comes up for determination before the larger bench, the judgment of the Hon’able Supreme Court in the case of H.L.Joshi v/s. R.H.Shah reported as AIR-1975-SC-1470 wherein it has been held that the occupancy rights in a flat in a cooperative housing society are heritable transferable and attachable in an auction sale is brought to its notice.

Be that as it may, till the authoritative pronouncement of the larger bench of the Hon’able Supreme Court of India is available it would be advisable for the financial institutions to advance housing loans against the allotment letters issued by such government bodies on the basis of a collateral security of equal amount to their satisfaction as a stop-gap arrangement, till the sale deed in case of the apartment allotted by such government bodies is executed. Because if the judgment of the larger bench is not on expected lines, all such finance will become clean loans out the purview of SARFAECI Act and the legal action in default cases will add more weight on the existing over-burdened judicial system. Hence, it would be prudent for the financial institution to err on safer side.

Source https://accommodationtimes.com/home-loan-against-the-security-of-the-allotment-latters/

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.7824-7828 OF 2004 

SYNDICATE BANK    VERSUS   ESTATE OFFICER AND MANAGER (RECOVERIES) & ORS RESPONDENT(S)

How to prove right of easement?

On considering the rival submissions and on close scrutiny of the evidence, it would reveal that the plaintiff did not adduce satisfactory evidence to show that he has acquired easement by prescription. An easement can be acquired by prescription under Section 15 of the Easements Act.Every occupier of the land is prima facie entitled to the exclusive use and enjoyment thereof and of the natural advantages arising from its situation and environments without let or hindrance. Every right of easement claimed is a restriction on such exclusive right and is an evasion of it. Hence, the burden of proof of the element constituting a right of easement lies on the person who asserts that right and thereby invades the natural right of the occupier of the land on which the right is claimed. The law is jealous of a claim to an easement, and the burden is on the party asserting such a claim to prove it clearly. This, he must do by showing a grant conferring an easement in express term or by necessary implication, or where an easement is claimed by prescription, he must prove the facts essential to the acquisition of the prescriptive title. Thus, he must show that the user was open and notorious, that it was with the knowledge and acquisition of the owner of the servient tenement that the use was continuous and uninterrupted hostile and under a claim of right, exclusive and continued for the period requisite for the acquisition of an easement by prescription, without change or material variation. Where an easement is claimed as a partenant to certain land, the burden is on the party claiming it to show that the original grantee of an easement was the owner of the land in question at the time of the grant. When the party claiming the easement had made prima facie showing of a prescriptive title, it is then incumbent on the owner of the survient tenement to show by sufficient affirmative proof that the use has been by virtue of a licence or permission or any other defence which would destroy the prima facie showing. On the other hand, where the servient owner sets up the defence of bona fide purchaser and proves the purchase, payment for, and ownership of the land, the burden then shifts to the claimant to show that such owner had actual or constructive notice of the easement before the purchase. The question whether a cultivator has access to his field through the field of another has to be decided on the basis of convenience and not on the basis of acquisition of right of way by prescription. A right of way may be acquired by prescription where the same has been peaceably and properly enjoyed by any person claiming title thereto as an easement, and as of right, without any interruption and for 20 years. Thus, in the present case it is for the plaintiff to prove that the disputed path way was being used openly and peaceably for 20 years.

Bombay High Court

 

Tanba S/O Nusaji Mahajan vs Pandhari S/O Nusaji Mahajan on 5 May, 2004

Equivalent citations: 2004 (6) BomCR 782, 2004 (4) MhLj 109

Source https://www.lawweb.in/2016/07/how-to-prove-right-of-easement.html?m=1

RERA Act_details of the proposed project available for public viewing

Below details of the proposed project shall be available for public viewing under The Real Estate (Regulation and Development) Act, 2016

*Section 11 "Functions and duties of promoter" - The Real Estate (Regulation and Development) Act, 2016*

(1) The promoter shall, upon receiving his Login Id and password under clause (a) of sub-section (1) or under sub-section (2) of section 5, as the case may be, create his web page on the website of the Authority and enter all details of the proposed project as provided
under sub-section (2) of section 4, in all the fields as provided, for *public viewing*, including-

(a) details of the registration granted by the Authority;
(b) quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked;
(c) quarterly up-to-date the list of number of garages booked;
(d) quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate;
(e) quarterly up-to-date status of the project; and
(f) such other information and documents as may be specified by the regulations made by the Authority.

*Sub-section (2) of section 4 under heading of Application for registration of real estate projects* mandates:

(2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely:-
(a) a brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority), and the particulars of registration, and the names and photographs of the promoter;
(b) a brief detail of the projects launched by him, in the past five years, whether already completed or being developed, as the case may be, including the current status of the said projects, any delay in its completion, details of cases pending, details of type of land and payments pending;
(c) an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approvals and commencement certificate from the competent authority for each of such phases;
(d) the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority;
(e) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;
(f) the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project;
(g) proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees;
(h) the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any;
(i) the number and areas of garage for sale in the project;
(j) the names and addresses of his real estate agents, if any, for the proposed project;
(k) the names and addresses of the contractors, architect, structural engineer, if
any and other persons concerned with the development of the proposed project;
(l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:-
(A) that he has a legal title to the land on which the development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person;
(B) that the land is free from all encumbrances, or as the case may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details;
(C) the time period within which he undertakes to complete the project or phase thereof, as the case may be;
(D) that seventy per cent of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:
Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project:
Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project:
Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.
Explanation.- For the purpose of this clause, the term "schedule bank" means a bank included in the Second Scheduled to the Reserve Bank of India Act, 1934;
(E) that he shall take all the pending approvals on time, from the competent authorities;
(F) that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; and
(m) such other information and documents as may be prescribed.

*Section 34 "Functions of Authority" - The Real Estate (Regulation and Development) Act, 2016*

The functions of the Authority shall include-
(b) to publish and maintain a website of records, for *public viewing*, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted;
(c) to maintain a database, on its website, for *public viewing*, and enter the names and photographs of promoters as defaulters including the project details, registration for which has been revoked or have been penalised under this Act, with reasons therefor, for access to the general public;
(d) to maintain a database, on its website, for *public viewing*, and enter the names and photographs of real estate agents who have applied and registered under this Act, with such details as may be prescribed, including those whose registration has been rejected or revoked;

Jurisdiction of Consumer Forum_State Commission

18.         No doubt, in the written version, an objection was also taken by the Opposite Parties, that as per Clause 35 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh alone, shall have the exclusive Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In  Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between  Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainant, within the territorial Jurisdiction of this Commission, at Chandigarh. In  Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

19.         In  Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D. Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to  Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainant had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to   him, to file the complaint, under the provisions of the Act. The submission of Counsel for the Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

State Consumer Disputes Redressal Commission U.T., CHANDIGARH

Harmohinder Singh vs Puma Realtors Pvt. Ltd. on 10 March, 2017

https://indiankanoon.org/doc/133018129/                    

HRERA_execution of agreement prior to the commencement of the Real Estate Act, 2016_No penal proceedings

Since the builder buyer’s agreement was executed on 10.08.2015 i.e. prior to the commencement of the Real Estate (Regulation and Development) Act, 2016, therefore, the penal proceedings cannot be initiated retrospectively. Hence, the authority has decided to treat the present complaint as an application for non-compliance of contractual obligation on the part of the promoter/respondent in terms of section 34(f) of the Real Estate (Regulation and Development) Act, 2016


BEFORE THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGRAM

Complaint no. : 1986 of 2018 Date of first hearing : 19.03.2019 Date of decision : 19.03.2019 1.

Mr. Pankaj Kansal, s/o. Shri Raj Kumar Kansal.
2. Mrs. Dimpy Kansal, w/o. Mr. Pankaj Kansal
Address:- House no. 503, Swarn Jayanti Apartment, Sector- 54, Gurugram, Haryana- 122001.
                                                                                                                                 
                                                                                                                                         Complainants
                                                                  Versus

1. M/s Vatika Limited, through its authorized representative.
2. Office at: Vatika Triangle, 4th Floor,
3. Sushant Lok, Phase-I, Block-A,
4. MG Road, Gurugram,
5. Haryana-122002.
                                                                                                                                       Respondent CORAM:
 Shri Samir Kumar Member
 Shri Subhash Chander Kush Member

https://haryanarera.gov.in/uploads/complaints/RERA-GRG/2018/1986/orders/7214.pdf