The West Bengal State Consumer Disputes Redressal Commission reaffirmed that the cause of action for flat registration persists until the conveyance deed is executed and registered, even after physical possession is delivered. This judgment underscores that developers cannot evade liability by citing delays or revocation of power of attorney, as the obligation to register remains unresolved.
Background & Facts
The Dispute
The complainants, Mr. Vinay Bazaz and Mrs. Sita Devi Bazaz, residents of Siliguri, West Bengal, filed a consumer complaint under the Consumer Protection Act, 1986 against Sri Anjan Kumar Singhi and others (Opposite Parties). The OPs were joint and co-owners of a property at 48/3, Gariahat Road, Kolkata, intended for development into a multi-storied residential building. OP No. 12, Usha Singhi, acted as the attorney for the OPs to construct the building and procure buyers.
Key Facts
- The complainants, along with Mr. Bhagabati Prasad Bazaz (since deceased), booked Flat No. S-4-C on the 4th floor of the South Block of the property, with a covered area of 1805 sq. ft., for a total consideration of Rs. 9,02,500.
- The parties agreed to execute two separate agreements:
- An agreement for sale for undivided land share at a consideration of Rs. 2,25,625.
- A construction agreement for the flat at a cost of Rs. 6,76,875.
- Both agreements were executed on 04.01.1994.
- The complainants paid the full consideration amount, and possession of the flat was handed over to them upon completion of construction.
- Despite repeated requests, the OPs failed to execute and register the conveyance deed in the complainants' names.
- Mr. Bhagabati Prasad Bazaz passed away on 24.06.2018, leaving the complainants as his legal heirs.
- On 25.09.2018, the complainants issued an advocate’s notice to OP No. 12, demanding registration of the flat, which went unheeded.
Procedural History
- 15.03.2019: Consumer complaint (CC No. 210/2019) filed before the West Bengal State Consumer Commission.
- 03.04.2019: Complaint admitted, and notices issued to the OPs.
- Only OP Nos. 5 and 12 appeared and contested the case; the remaining OPs proceeded ex-parte.
- The OPs filed a written version, admitting the execution of the sale and construction agreements, payment of consideration, and delivery of possession but citing the revocation of the power of attorney on 13.09.2004 as the reason for their inability to register the deed.
- The complainants submitted evidence, including copies of the agreements, death certificate of Mr. Bhagabati Prasad Bazaz, and the advocate’s notice.
- Both parties filed replies to each other’s questionnaires and submitted final arguments.
Relief Sought
The complainants sought:
- A direction to the OPs to execute and register the conveyance deed for Flat No. S-4-C in their names.
- Compensation for the delay and harassment caused.
- Litigation costs.
The Legal Issue
The primary legal question was whether the cause of action for the complainants' claim persisted despite the long delay in executing the conveyance deed, particularly after the revocation of the power of attorney granted to OP No. 12. The Commission had to determine if the OPs' failure to register the deed constituted a continuing deficiency in service under the Consumer Protection Act, 1986.
Arguments Presented
For the Complainants
The complainants argued that:
- The OPs had a legal obligation to execute and register the conveyance deed as part of the sale transaction.
- The cause of action continued until the deed was registered, as physical possession alone did not complete the sale.
- The delay in registration was a deficiency in service under Section 2(1)(g) of the Consumer Protection Act, 1986, entitling them to relief.
- They relied on the precedent set in M/s Vivekanand Construction Company v. Suraj Ratan Mundra & Anr., where the National Consumer Disputes Redressal Commission held that the cause of action for flat registration continues until the conveyance deed is executed.
For the Opposite Parties
The OPs contended that:
- The complainants had already taken possession of the flat and failed to take timely steps to register the deed.
- The power of attorney granted to OP No. 12 was revoked on 13.09.2004, making it impossible for her to execute the deed.
- The complainants' claim was time-barred as they had not approached the Commission within the stipulated period.
- The OPs were not liable for compensation or litigation costs, as the delay was not attributable to them.
The Court's Analysis
The Commission examined the continuing cause of action doctrine, emphasizing that the sale of a flat is not complete until the conveyance deed is registered. The Court noted that:
"The sale of the flat to the respondent/complainant, receipt of the agreed price by the vendor/appellant and physical delivery of the flat by the vendor/OP to the purchaser/Complainant, are facts established on the record. While the appellant has failed to prove that the respondent was responsible for the delay, non-execution of the conveyance deed remains an admitted fact. More than anyone else, the appellant, being a construction company, should know that sale of a flat is completed with registration of the sale deed and not with mere transfer of physical possession. Clearly, the cause of action, which began with delivery of physical possession, continues till the deed of conveyance is registered. Therefore, the question of limitation does not arise."
The Commission held that the OPs' failure to execute the deed, despite the revocation of the power of attorney, did not absolve them of their obligation. The complainants had established a prima facie case of deficiency in service, as the OPs had received full payment and delivered possession but failed to complete the registration.
The Verdict
The Commission allowed the complaint on contest against OP Nos. 5 and 12 and ex-parte against the other OPs. The OPs were directed to execute and register the conveyance deed for Flat No. S-4-C, measuring 1805 sq. ft., situated on the 4th floor of the South Block at 48/3, Gariahat Road, Kolkata-700019, in the complainants' names within 45 days of the order. The complainants were directed to bear the stamp duty, registration fees, and other legal expenses. The Commission declined to award compensation or litigation costs due to the complainants' failure to explain the long delay in approaching the OPs. Non-compliance with the order would entitle the complainants to seek execution as per law.
What This Means For Similar Cases
Cause of Action Continues Until Registration
- Developers and sellers cannot argue that the cause of action ceases once physical possession is delivered. The obligation to register the conveyance deed continues until completion.
- Buyers can seek relief under the Consumer Protection Act, 1986 for delays in registration, even if possession has been handed over.
Revocation of Power of Attorney Does Not Absolve Liability
- The revocation of a power of attorney does not automatically relieve the seller or developer of their obligation to execute and register the conveyance deed.
- Courts may still direct the execution of the deed if the buyer has fulfilled their obligations, including payment of consideration.
No Automatic Compensation for Delay
- While buyers may succeed in obtaining directions for registration, compensation for delay is not guaranteed. Courts may deny such claims if the buyer fails to justify the delay in seeking relief.
