2024 (10) TMI 43 - SC - Indian Laws

Appellants cannot disclaim liability for developer's acts when joint agreement remains in force despite attempting power of attorney revocation.

AKSHAY & ANR. Versus ADITYA & ORS.

SC dismissed appeals challenging NCDRC order regarding joint liability in property development dispute. Appellants executed irrevocable power of attorney ... Appeal against the judgment of the National Consumer Disputes Redressal Commission (NCDRC) dismissing the appeals challenging the Maharashtra State Consumer Disputes Redressal Commission's order - HELD THAT:- Undisputedly an irrevocable power of attorney dated 6-7-2013 was executed by the appellants in favour of the Respondent No.2 along the JAV of the same date, pursuant to which the Respondent No.2 had undertaken to develop the land in question. It further appears that though allegedly the said power of attorney was revoked by the appellants vide the letter dated 12-8-2014, the JAV has not been revoked so far and the same still continues to be in force. As rightly submitted by the learned counsel for the respondents, in the letter daeted 12-8-2014, the appellants had stated to be not liable “Henceforth”, i.e. after the said letter was sent - It is also not denied that the appellants have not taken any action whatsoever against the respondent No.2 with regard to the alleged non-compliance of the terms and conditions of JAV by the said Respondent. Under the circumstances, it does not lie in the mouth of the appellants to say that the appellants are not liable for the acts of Respondent No.2. The `NCDRC’ having considered all the issues with regard to the joint liability of the appellants as well as the Respondent No.2, there are no good ground to interfere with the same. The Appeals being devoid of merits and are dismissed. Issues:Appeal against the judgment of the National Consumer Disputes Redressal Commission (NCDRC) dismissing the appeals challenging the Maharashtra State Consumer Disputes Redressal Commission's order. Joint liability of landowners and a development company for construction of flats. Validity of complaints under the Consumer Protection Act. Revocation of Power of Attorney and its implications on liability.Analysis:1. The appeals arose from a common judgment of the NCDRC dismissing appeals against the State Commission's order. The landowners entered a Joint Venture Agreement with a development company for construction. The State Commission held the parties liable for completing construction and providing possession to complainants. It also ordered compensation for harassment and costs to complainants.2. The NCDRC upheld the State Commission's order, emphasizing the binding nature of the Joint Venture Agreement and the Irrevocable Power of Attorney. The appellants' attempt to revoke the Power of Attorney was deemed ineffective as the Joint Venture Agreement remained in force. The NCDRC rejected arguments citing previous Supreme Court judgments as inapplicable to the present case.3. The appellants contended that they should not be held liable for actions of the development company after revoking the Power of Attorney. However, the NCDRC found that the appellants remained bound by the Joint Venture Agreement until legally terminated. The failure to take action against the development company's non-compliance further supported their liability.4. The NCDRC concluded that the appellants could not evade responsibility for the development company's actions under the Joint Venture Agreement. Considering all aspects, the NCDRC found no grounds to interfere with the joint liability of the appellants and the development company. Consequently, the appeals were dismissed for lacking merit.