Alok Kumar & Anr vs Vatika Limited

Subhash Chandra, Presiding Member

This consumer complaint under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) is filed against the opposite party alleging deficiency in not handing over possession of the flat booked by the complainants within the promised time and seeking refund of the amount deposited with interest as compensation and other costs.

The complainants’ state that they paid a booking amount of Rs.8,00,000/- towards a flat in the opposite party’s project, “Tranquil Heights”, Vatika India Next, Sector 82 A, Gurugram and were allotted flat no 1602, Tower E on 13.10.2014 tentatively measuring 2150 sq ft for a sale consideration of Rs 1,47,22,500/-. A Builder Buyers’ Agreement (in short, ‘Agreement’) was provided by the opposite party in June 2015 which was signed by them even though it was one-sided and imposed unfair conditions of deduction of earnest money, service tax, brokerage, if any, and other charges in case booking was cancelled and 18% penalty on delay in payments as Rs 34,56,091/- had already been paid by them. Possession was promised within 48 months. On 16.02.2015 a sum of Rs 2,21,831/- was demanded by the opposite party on account of increase in the built up area of the flat to 2265 sq ft. In view of the project not taking off and follow up by the complainants, the complainants wrote to the opposite party seeking details on 18.09.2017 and thereafter issued a notice on 23.10.2017 which was refused. Complainants are before this Commission with the prayer that:

(i) the complaint be allowed with costs;

(ii)  the opposite party be directed to refund the amount of Rs 34,56,091/- deposited along with interest @ 24%;

(iii)  the opposite party be directed to pay damages of Rs.5,00,000/- with 24% interest on account of mental agony and financial loss due to the actions of the opposite party;

(iv) the opposite party pay compensation for depriving the complainants for not being able to reside in their own house; and

(v)  any other relief deemed fit in the interest of justice.

The complaint was resisted by the opposite party by way of a written statement denying averments of the complainants. Preliminary objections were taken that (i) the complaint was based on conjectures and surmises; (ii) the Commission lacked the pecuniary jurisdiction to entertain this complaint under section 21(1)(a) as the amount was less than Rs 1,00,00,000/-; (iii) complainants were not ‘consumers’ under section 2(1)(d) of the Act as they were residents of Dubai who had invested in the flat for speculative gains through a broker; (iv) all necessary approvals had been obtained by the opposite party and (v) no deficiency in service had been proved by the complainants. On merits, it was argued that (i) the Agreement dated 07.09.2015 had promised possession on 07.09.2019 after 48 months; (ii) clause 2 made the allottee liable for forfeiture of the earnest money in case of cancellation; (iii) clause 7 mentioned that time was of the essence and provided for interest to be levied for default in payments; (iv) clause 9 was specific in stating that the super area of the flat was tentative and would be finally known on completion; (v) clause 16 provided for delays in the project’s execution in case of force majeure conditions; and (vi) the complainants were in default of not paying Rs 31,13,998.36 since 20.08.2014 despite a waiver of Rs 56,563/- having been extended.

Parties led their evidence. Complainants filed rejoinder and both parties filed their short synopses of arguments. I have heard the learned counsel for both the parties and carefully considered the material on record.

5 The learned counsel for the complainant argued that the project had been abandoned by the opposite party and had not been delivered even though it was due to have been completed by December 2017. It is stated that all demands raised by the opposite party have been paid diligently and that the size of the apartment was changed arbitrarily and unilaterally. The Agreement is stated to be one-sided with unfair clauses which they had no option but to sign since deposit of Rs.34,56,091/- had been made by them and there was a threat of levy of 18% interest. Despite promising to permit switchover to other projects, no firm proposal was made, including to a project called ‘Gurgaon 21’, as no Occupation Certificate was available for them. Complainants were forced to cancel the booking and are now seeking refund without any deductions with compensation and damages for this reason. Reliance is paid on this Commission’s judgments in Amit Kansal Vs. M/s Vatika Limited, CC No. 1244/2015 dated 23.10.2017; Amit Gupta & Anr. Vs. M/s Vatika Limited, CC No. 425/2018 dated 30.10.2019; Apoorv Bansal Vs. Vs. M/s Vatika Limited, CC No. 1119 of 2018 dated 28.01.2022; Rakesh Kumar Bohre & Anr. Vs. M/s Vatika Limited, CC No. 710/2020 dated 15.02.2022 wherein similar prayers against the opposite party have been upheld.

Learned counsel for the opposite party argued as per his written statement and submitted that the Agreement sent to the complainants on 23.06.2015 was delayed by 3 months and signed on 07.09.2015. It was argued that the opposite party was entitled to forfeit the earnest money deposited as the complainants had failed to make payment of Rs.31,13,998.36 since 20.8.2014 against the total demand of Rs.65,70,089.36. It is argued that the burden of proof was on the complainants to show that the booking was not done for commercial reasons. Reliance was placed on this Commission’s judgment in Siddhartha Loiwal Vs. M/s Vatika Ltd. in CC 1344 of 2017 dated 15.03.2023 wherein refund of amount was allowed with interest @9% after deducting 10% of basic sale price and brokerage, if any.

The preliminary issues raised by the opposite party have been considered. The contention that the complainants are not ‘consumers’ as they booked flat for commercial gain needs consideration in the light of Kavita Ahuja vs Shipra Estate Ltd., (1) 2016 CPJ 31 wherein it was held that the onus of establishing that the complainants were dealing in real estate for commercial purpose tests on the opposite party which in the instant case, has not been discharged by any documentary evidence. This argument, therefore, does not sustain.

As regards the argument that the complaint does not meet the pecuniary jurisdiction of this Commission, the settled law on pecuniary jurisdiction as held by this Commission in Ambarish Kumar Shukla and 21 Ors vs Ferrous Infrastructure Pvt. Ltd., I 2017 CPJ 1 (NC) and Renu Singh vs Experion Developers Pvt. Ltd., CC no.1703 of 2018 is that the principle for determining the pecuniary jurisdiction is the total consideration paid by the complainant or persons who have joined the complaint in a joint complaint and other damages claimed to determine such jurisdiction. In view of this position of law the contention of the opposite party regarding pecuniary jurisdiction does not sustain. The opposite party‘s contention that in view of the provision of a clause for arbitration in the Agreement, this complaint does not lie before this Commission has been considered. The Hon’ble Supreme Court has held in its judgment in Emaar MGF Land Ltd. Vs. Aftab Singh,  (2019) 12 SCC 751 that the remedy under the Consumer Protection Act, 1986 is not restrained by the existence of an arbitration clause and that the remedy under the Act is in addition to other provisions under the law. It has also reiterated this view in M/s Imperia Structures Ltd. Vs. Anil Patni & Anr., (2020) 10 SCC 783 decided on 02.11.2010 that “remedies under the Consumer Protection Act were in addition to the remedies available under special statutes (and) the provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force”. Hence, this argument cannot be sustained. As for the contention of the opposite party that the complainant is not entitled to claim interest for the delay in possession, the Hon’ble Supreme Court has laid down in Pioneer Urban land and Infrastructure Ltd. Vs. Govindan Raghavan, (2019) 5 SCC 725 in Civil Appeal no. 12238 of 2018 decided on 02.04.2019 that an allottee as a consumer is entitled to seek refund of the money paid by him to the opposite party/builder in case of inordinate delay on the part of the opposite party to hand over possession. The Hon’ble Supreme Court has also held in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019 that “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession”. In the present case, the delay is of nearly 8 months. However, considering that the amount paid is substantial, seeking compensation for delay is not unwarranted.  The Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 12238 of 2018 with No. 1677 of 2019 dated 02.04.2019 laid down that a buyer cannot be compelled to take possession of a flat when there is delay in delivery of possession by the builder and the buyer is entitled to refund along with compensation/interest for such delay. The complainants who are similarly placed, cannot, therefore, be denied the option of seeking refund of the money deposited by them with interest.

The Hon’ble Apex Court has also laid down regarding the right of the consumer to seek refund in view of the inordinate delay on the part of the opposite party in Pioneer Urban land and Infrastructure Ltd., vs Govindan Raghavan in Civil Appeal no. 12238 of 2018 decided on 02.04.2019 (2019) 5 SCC 725 that “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession” in Devasis Rudra (supra). It was argued that the law was well settled that if construction had not been completed and neither an occupation certificate obtained nor possession offered to the consumers, the opposite party could not compel the complainant to accept possession. The complainant-allottee was, rather, entitled to full refund with compensation.

On merits, the argument that the complainants are defaulters who failed to make timely deposits does not sustain since the opposite party did not cancel the booking or impose a penalty. It is, therefore, not open to it at this stage to contend thus. While time was of the essence under the Agreement, there is no offer of possession or even a letter of offer of possession. No averments with regard to the delay or its justification have been made by the opposite party. Seeking recourse to the provisions of the Agreement under such circumstances is of no help to the opposite party. It is manifest that the project is inordinately delayed and there is no possibility of its completion despite the acceptance of a substantial amount of money towards the sale consideration by the opposite party. As on date, there is neither any occupation certificate on record or has any offer of possession been made by the opposite party to the complainant. Under such circumstances, the averments of the opposite party cannot be appreciated. For the foregoing reasons the complaint is liable to succeed.

In view of the reasons stated, in the facts and circumstances of this case, the complaint is allowed in part with the following directions:

(i) opposite party shall refund the entire amount of Rs.34,56,091/- deposited by the complainant along with interest @ 9% simple interest per annum from the respective dates of deposit till the date of this order;

(ii)  this order shall be complied within eight weeks failing which penal interest of 12% shall be paid; and

(iii) opposite party shall pay litigation costs of Rs 50,000/- to the complainant.

All pending IAs, if any, stand disposed of with this order.