Final Relief Granted By The Supreme Court Need Not Be The Natural Consequences Of The Ratio Decidendi Of Its Judgment: SC Reiterates

The Court relied upon Sanjay Singh & Anr. v. U.P. Public Service Commission & Anr., (2007) 3 SCC 72 while holding, "It is settled law that final relief granted by this Court need not be the natural consequences of the ratio decidendi of its judgment."

Mr. ML Lahoti, Senior Advocate appeared for the Appellants, and Mr. Pinaki Mishra, Senior Advocate appeared on behalf of the Respondent.

The appeal was filed before the Apex Court against the judgment rendered by the then Monopolies and Restrictive Trade Practices Commission that dismissed a complaint filed by the Appellants under Section 36-A, 36-B(a) and (d), 36-D, and 36-E read with Sections 2(i) and 2(o) of the Monopolies and Restrictive Trade Practices Act, 1969.

The Respondent had issued an advertisement that proposed attractive schemes of payment for the sale of group housing apartments/flats namely Beverly Park-I in Gurgaon. The possession was to be handed over on payment of 40% of the cost of the flat within two and half years and the balance was to be paid in equal installments over the next 7 and half years.

Appellants applied for 4 apartments and an Apartment Buyer Agreement was executed. The Court noted that though the possession of the flats was to be handed over to the appellants in January 1996, according to the appellants, construction commenced only in June 1996. Appellants made payment of the installment.

The Respondent apologized for the delay in construction which was due to major improvements being carried out in specifications and facilities in order to provide a better product.

The Respondent demanded extra charges. The Appellants were asked to make payment of outstanding dues and complete documentation work. The agreement was canceled by the Respondent on the ground that outstanding amount was not paid and refunding cheques were issued that were not encashed.

A complaint was filed under relevant sections of the MRTP Act by the Appellants. An inquiry into the commission of various restrictive/unfair and monopolistic trade practices was sought.

A preliminary objection was raised concerning the jurisdiction of MRTP to entertain the Court. This was rejected by the Commission.

The Commission concluded that there was no misrepresentation by the Respondent and no material was produced to show that agreement was entered under duress and the delay in handing over possession did not amount to an unfair trade practice.

The Court relied upon the judgment rendered in M/s Lakhanpal National Limited v. M.R.T.P. Commission & Anr., (1989) 3 SCC 251 which discussed the law concerning unfair trade practices under the MRTP Act.

The Court then relied upon M/s Philips Medical System (Cleveland) v. Indian MRI Diagnostic & Research Limited, (2008) 10 SCC 227 wherein it was held, "The object of the amendment broadly was to prevent false or misleading advertisements, or false representations, claiming that the goods sold are of a certain standard or have certain qualities, which, in fact, they do not possess."

Upon noticing crucial facts of the case, Court made the following observations:

"There is no doubt that there has been a delay in completion of the project beyond three years. However, the appellants did not issue any notice for termination of the agreement. On the other hand, notices issued by the appellants on 24.02.1998, 22.04.1998 and 12.08.1998 related to demand of extra costs. The appellants did not, at any point of time, make a grievance relating to delay in handing over of possession of the apartment. The main relief in the complaint filed by the appellants is to declare the termination of the ABA by the respondent as void. A further direction was sought for handing over the apartments without any payments towards the remaining principal amount and extra charges alongwith damages and compensation."

The Court noted that though there was a clause stating that the possession was to be handed over in 2 and a half to three years, it cannot be said that time was the essence of the contract as a reasonable extension was permissible under Clause 16.

The Court noted that there was no misrepresentation made by the Respondent amounting to an unfair trade practice for the delay in handing over possession.

The Court noted that there was no quarrel with the proposition that an unconscionable term in a contract is void under Section 23 of the Contracts Act as held by Central Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly and Anr., (1986) 3 SCC 156. However, the Court noted, "There has been no specific reference to any clause in the ABA by which the appellants appear to be aggrieved so as to shock the conscience of this Court to travel beyond its terms in light of it being an unconscionable contract."

The Court also noted, "As the appellants have failed to prove unfair trade practice on the part of the respondent, they are not entitled to any compensation."

However, the Court held, "It is settled law that final relief granted by this Court need not be the natural consequences of the ratio decidendi of its judgment."

The Court proceeded to direct the Respondent to handover possession of flats to the appellants on payment of Rs. 25 lakhs for each flat.

The appeal was disposed of in the aforesaid terms. The amount of Rs. 25 lakhs was directed to be paid within period of 4 weeks and possession was directed to be handed over within a week from the date of payment.

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