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Judgment
This Order shall decide three Complaints, wherein the Parties and the facts are same.
The Complainant Ankur Goyal booked three residential flats in "Rise Sky Bunglows" a Project floated by M/s Rise Project Pvt Ltd. (hereinafter referred to as the Opposite Party- Builder Co.) in Village Sarai Khwaja, Faridabad, Sector 41, Faridabad, Haryana. The construction was started in 2015 and the Builder Co. allotted three Flats / Bungalows mentioned in paragraph no. 2 at the construction stage to the Complainant and on 25.2.2016 Builder Buyer Agreement was executed. The Builder Co. assured to handover possession by the end of year 2018 i.e. within 36 months, however the Builder Co. unilaterally enhanced the period to 42 months.
The property details are as below:
CC No. 2094 of 2019:
Property detail-
VS-4/Bungalow No. G (Ground Floor) -Area - 1520 sq. ft.
Total consideration as per agreement
Rs. 1,59,48,176/-
Booking amount paid on 24.02.2016
Rs. 23,95,783/-
Home loan disbursed by ICICI Bank to builder
Rs. 1,21,33,294/
Total amount paid by the Complainant till December 2018
Rs. 1,45,29,077/-.
CC No. 2149 of 2019:
Property detail-
VS-5/Bungalow No. G (Ground Floor) -Area - 1520 sq. ft.
Total consideration as per agreement
Rs. 1,59,48,176/-
Booking amount paid on 24.02.2016
Rs. 3,00,000/-
Home loan disbursed by ICICI Bank to builder
Rs. 1,25,00,000/-
Total amount paid by the Complainant till December 2018
Rs. 1,28,00,000/-
CC No. 2181 of 2019:
Property detail-
VS-11/Bungalow No. 5 (Fifth Floor)
Area - 3100 sq. ft.
Total consideration as per agreement
Rs. 2,98,16,975/-
Booking amount paid on 24.02.2016
Rs. 59,50,000/-
Home loan disbursed by DHFL to builder
Rs. 2,22,46,485/-
Total amount paid by the Complainant till December 2018
Rs. 2,81,96,485/-
The Complainant availed Home Loan from the Financial Institutions namely ICICI Bank for VS4 and VS5 Flats / Bungalow and Dewan Housing Finance Corporation Ltd. (hereinafter referred to as the DHFL) for VS-11 Flat / Bungalow. In the year 2016 itself, the entire loan amount with respect to each flat was disbursed by the concerned Financial Institution to the Builder Co. Till December, 2018, the Complainant paid about 90% of the total price of the respective Flats / Bungalows. The Complainant visited the construction site and found that there was no progress at the construction site as per the agreed time schedule. The grievance of the Complainant was that the Builder Co. failed to fulfil the contractual obligation. There was no remarkable progress at the site in question. Though the construction was not completed, the Builder Co. was demanding full payment prior to agreed payment schedule. At the end of 2018, the Complainant enquired for possession of the Flats / Bungalows, but the Builder Co. did not offer it to him. The Complainant made frequent requests for the possession but of no avail. Thus Complainant served a legal Notice upon the Builder Co. on 21.08.2019 but there was no response. Being aggrieved by the attitude and deficiency in service by the Builder Co., the Complainant on 22.10.2019 filed three separate Complaints against the Builder Co. under Section 21(a)(i) of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act 1986") before this Commission, seeking refund of entire amount paid to the Builder Co. along with interest @ 24% per annum and compensation etc.
This Commission, vide Order dated 05.11.2019, admitted the Complaints and issued Notices to the Opposite Party to file its reply within 30 days of receipt of the Notices.
However, the Builder Co. failed to file its Written Version within the Statutory Period of 30 days and the extended period of 15 days thereafter i.e. within a total period of 45 days as prescribed under Section 13(1)(a) of Act 1986 which expired on 02.01.2020 (service effected on 18.11.2019 in Complaint Case No. 2094 of 2019), 04.01.2020 (service effected on 20.11.2019 in Complaint Case No. 2149 of 2019) and 16.01.2020 (service effected on 02.12.2019 in Complaint Case No. 2181 of 2019) respectively whereas the Builder Co. had filed its separate Written Version / Reply in all the three Complaint Cases on 06.03.2020. Therefore vide Order dated 18.08.2020 the right to file the Written Versions by the Opposite Party in all the Complaints forfeited with the following Order:
ORDER
As per the Office report, notice sent to the Opposite Party in Complaint Cases No. 2094, 2149 and 2181 of 2019 was served on 18.11.2019, 20.11.2019 and 02.12.2019 respectively whereas the Written Version in these cases has been filed on 06.03.2020, which is beyond the maximum period of 45 days, as provided under Section 13(1)(a) of the Consumer Protection Act, 1986, which had expired on 02.01.2020, 04.01.2020 and 16.01.2020 respectively.
In view of the Constitution Bench decision of the Hon'ble Supreme Court in Civil Appeal No. 10941-10942 of 2013 (New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd.) and other connected matters (MANU/SC/0272/2020), decided on 04.03.2020, the Consumer Fora, including this Commission, has no power to condone the delay beyond the period of 45 days from the date of receipt of the notice.
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List all the Complaint Cases on 26.08.2020.
We have heard the arguments advanced by the learned Counsel for both the sides. The learned Counsel for the Complainant reiterated the facts stated in the Complaints. We have permitted the learned Counsel for the Builder Co. to make legal submissions based on the documents filed by the Complainant.
The learned Counsel for the Builder Co. submitted that the Complainant has concealed the entire true facts and filed a false and frivolous Complaint without any basis. The Complainant is not a genuine buyer and is in fact a Real Estate Investor; he booked 3 Apartments / Flats in the Project of same Builder Co. to earn commercial benefits/gains and not for his personal use. Thus the Complainant is not a Consumer. The learned Counsel further submits that as per the terms in the Builder Buyer's Agreement, the possession was to be given after 42 months i.e. in year 2019, but the Complainant had filed the Complaint prematurely. Thus the present Complainant has no cause of Action to approach this Commission.
We have perused the material on record, inter alia, the sale Agreement between the Complainant and the Builder Co. Admittedly the Complainant booked flats in a Residential Group Housing Project of the Opposite Party. On 25.02.2016 Allotment Letter cum Apartment Buyer Agreement was executed in favour of the Complainant for each Flat, thereby confirming the allotment of the respective Flat.
Firstly let us see when the Complainant - the Consumer purchased three flats whether it would constitute the Commercial Purpose within the meaning of Section 2(1)(d) of the Act, 1986. The Hon'ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583 has held that the 'commercial purpose' is a question of fact to be decided in the facts of each case and it is not the value of the goods that matters but the purpose for which the goods brought are put to. The same would be equally applicable to for hiring or availing services.
We would like to rely upon the decision of the Co-ordinate Bench of this Commission in the case, Kavita Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd., I (2016) CPJ31(NC), wherein three flats were booked by the Complainant and the Complainant was held as a Consumer within the meaning of Section 2(1)(d) of the Act, 1986 and it was observed as:
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" In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
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In any case, it is not appropriate to classify such acquisition as a commercial activity merely on the basis of the number of houses purchased by a person, unless it is shown that he was engaged in the business of selling and purchasing of houses on a regular basis. If, for instance, a person has two-three children in his family and he purchased three houses one for each of them, it would be difficult to say that the said houses were purchased by him for a commercial purpose. His intention in such a case is not to make profit at a future date but is to provide residential accommodation to his children on account of the love and affection he has for his children. To take another example, if a person has a house say in Delhi but he has business in other places as well and therefore, purchases one or more houses at other places where he has to live presently in connection with the business carried by him, it would be difficult to say that such acquisition is for commercial purpose. To give one more example, a person owning a house in a Metropolitan city such as Delhi, or Mumbai, may acquire a house at a hill station or a place, which is less crowded and more peaceful than a Metropolitan city, in my view, it cannot be said that such acquisition would be for commercial purpose. In yet another case, a person may be owning a house but the accommodation may not be sufficient for him and his family, if he acquires one or more additional houses, it cannot be said that he has acquired them for commercial purpose. Many more such examples can be given. Therefore, it cannot be said that merely because of the complainant had agreed to purchase three flats in the same complex the said acquisition was for a commercial purpose.
In the instant case the Builder Co. had failed to show any cogent evidence, which may indicate that the Complainant has been indulging in sale purchase of the properties and/or that he has purchased the Unit, in question, for further sale or for earning benefits or indulged in sale purchase of properties. Thus, in our considered view, the Complainant is a Consumer within the meaning of Section 2(1)(d) of the Act, 1986.
Secondly, whether the Complaints were filed prematurely?
We note the Buyers Agreement was executed on 25.02.2016.
Clause (i) of Possession of Apartment provides as follows:
That the possession of Apartment is proposed to be delivered by the Developer to the Allottee(s) within 42 months of date of Flat Buyer Agreement/ start of excavation (whichever is later) subject to force majeure or circumstances beyond the control of the developer, provided all amounts due and payable by the AlLottee (s) as provided herein have been paid to the developer. It is however, understood between the parties that various Towers comprised, in the Complex shall be ready and completed in phases and handed over accordingly. The developer shall be entitled to a grace period of 180 days' after the expiry of 42 months for finishing construction work & applying the occupation certificate in respect of the project from the concerned authority.."
It is pertinent to note that the Complainant visited the site of construction several times but there was no progress till December 2018. Thus, the anxiety and apprehension of the Complainant about impossibility of the completion of Project before the agreed date was justified. The instant Complaints were filed in October 2019 i.e. after 42 months from the date of Agreement, thus the same were not prematurely filed. On bare perusal of the Buyer's Agreement, it is visible that the terms are unconscionable and unilateral to favour the Builder Co. only. We note that even after the lapse of 4 ½ years (54 months) i.e. on the day of arguments, the Builder Co. has not produced any cogent evidence about the completion of Project. The conduct of the Builder Co. is clearly discernible to be malafide or in violation to the terms of the Agreement. Thus, in our considered view, any aggrieved Consumer has a right to approach at any stage the Forum or Commission for the redressal.
Thirdly, the refund of deposited amount with the Builder Co.
For an ordinary common Buyer - Consumer, the two fundamentals, which are significant and material the 'Cost' i.e. the total cost, read with the schedule of making payment and the 'Time' that the total time period in which possession would be delivered. Therefore, in the instant case two natural corollaries flow therefrom; the Consumer-Complainant has the fundamental option to obtain the possession of the Unit as and when it is offeredby the Builder Co. and in addition seek just and equitable compensation under the Act, 1986 for delay in offering possession beyond the conveyed and understood period of 42 months if the delay was unreasonable; the Consumer-Complainant has the other option to claim refund of the principal amount; interest thereon; and compensation, if the offer of possession of the Unit is unreasonably delayed beyond 42 months.
In the instant case the Complainant is not interested in taking possession, thus the Builder Co. has to refund the entire amount received from the Complainant. This Commission in the case, Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], which has since attained finality, has observed that any delay beyond the promised date of the delivery, the Complainant can seek refund of the amount paid.
Fourthly, the quantum of Compensation the Complainant is entitled to. To say that the possession can be delayed indefinitely or unreasonably and a token compensation for delay can be paid indefinitely or for an unreasonably protracted period is misconceived and erroneous. Thus, in our view, indefinite or unreasonable delay with token compensation for delay cannot continue ad nauseam, ad infinitum (such situation would be absurd).
In the instant case, the Complainant availed loan from the Financial Institutions and paid the interest as levied. Thus, the Complainant is entitled to get refund of the amount along with the interest which he has deposited with the Bank. The Complainant is also entitled to receive certain interest on the booking amount which he has paid to the Builder Co. In this context, we would like to rely upon the recent decision of the Hon'ble Supreme Court in the matter of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt Ltd (now Known as BEGUR OMR Homes Pvt. Ltd.) and Ors., Civil Appeal No. 6239 of 2019, decided on 24th August 2020, wherein the Hon'ble Supreme Court has held that where there is a delay ranging between periods of two years and four years in the handing over of possession of Flat, the jurisdiction of the Consumer Forum to award reasonable compensation cannot be foreclosed by a term of the Agreement. The Court must take a robust and common-sense based approach by taking judicial notice of the fact that flat purchasers obtain loans and are required to pay EMIs to Financial Institutions for servicing their debt. Delays on the part of the Developer in handing over possession postpone the date on which purchasers will obtain a home. Besides servicing their loans, purchasers have to finance the expenses of living elsewhere. It further observed in para 31 that: 31. The judgment in Dhanda's case does not prescribe an absolute embargo on the award of compensation beyond the rate stipulated in the flat buyers‟ agreement where handing over of the possession of a flat has been delayed. Dhanda's case was preceded by consent terms which were presented before this Court in two earlier civil appeals under which interest at the rate of 9 per cent had been granted. The decision lays down that the award of interest cannot be arbitrary and without nexus to the default which has been committed. Hence, the award of interest at the maximum rate of interest charged by a nationalised bank for advancing home loans was construed to be arbitrary. It was in this context that the court observed that the parties having agreed to a consequence for delay, exceptional and strong reasons must exist for the consumer fora to depart from the agreed rate. The decision, in other words, does not lay down that there is an absence of jurisdiction in the adjudicatory fora constituted under the CP Act 1986 to award remedial compensation to a flat buyer for the delay of the developer in handing over possession on the agreed date.
In the instant case the subject Units are residential dwelling Units, the subject Project is a Residential Housing Project. The Complainant, who entered into the Buyer's Agreement with the Builder Co. was 'Consumer' within the meaning of section 2(1)(d) of the Act 1986. On the face of it, he was not barred on the ground of "commercial purpose" (exception and 'explanation' to section 2(1)(d) etc.). It may be added here that the Buyer's Agreement and the amount deposited by the Complainant with the Builder Co. are admitted by both sides. The Builder Co.'s contention to the contrary that 'time is not the essence of the contract' is misconceived and erroneous.
From the afore discussion, an axiom flows that the Builder Co. had to hand over possession of the Unit within a period of 42 months from the date of Agreement as provided for in clause (i) of possession of Apartment. Prior to getting a Consumer to enter into its Buyer's Agreement and accepting the first payment towards the total cost of the Unit, the Planning, Execution and Completion are responsibility of Builder Co. and not of the Consumer. Any impediments or problems that arise in Planning, Execution and Completion are its responsibility, and not of the Consumer. The Cost and Time overruns are its responsibility, not of the Consumer. Thus, non-fulfilment of its overall responsibilities of Project Planning, Execution and Completion cannot be and are not grounds for condoning or overlooking delay in completion and handing over possession. The Hon'ble Supreme Court in Wg. Cdr. Arifur Rahman Case (supra) has held that where there has been a gross delay in the handing over of possession beyond the contractually stipulated date, the jurisdiction of the Consumer Forum to award just and reasonable compensation as an incident of its power to direct the removal of a deficiency in service is not constrained by the terms of a rate which is prescribed in an unfair bargain.
In our considered view, the Opposite Party Builder Co. is, therefore, liable to refund the amount which the Complainant had paid to them for purchase of the Flats in question, along with appropriate interest on that amount. Since committed default in performing their contractual obligation by not completing the construction within the stipulated time or even within a reasonable period thereafter, they have no legal right to forfeit any part of the money deposited by the Complainant with them, even if the Complainant is not willing to take possession of the said Flats.
Here we may however add that the rate of interest also cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimised, a logical correlation has to be established. We have perused the Tripartite Agreement, the loan disbursement from ICICI Bank / DHFL to the Builder Co. We feel it appropriate that, considering that the subject Units in question are dwelling Units in a Residential Housing Project, the rate of interest for House Building Loan availed by the Complainant from ICICI Bank / DHFL would be appropriate and logical.
It is also to add that it would be inappropriate not to protect the lawful interests of the Financial Institutions that provided loan to the Complainant, for the subject Units in the normal wont of its functioning. We are, thus, of the considered view the first charge on the amount payable, to the extent, should be of the Financial Institutions.
For the reasons stated hereinabove, the Builder Co. - M/s Rise Project Pvt. Ltd. is directed as follows:
i. Refund to the Complainant the entire booking amount deposited by the Complainant till December 2018 alongwith interest @ 8% per annum from the date of deposit till the date of payment.
ii. If the Complainant has paid any amount towards the loan account to the Financial Institutions, the same shall be refunded by the Builder Co. with the amount of interest actually paid to the Financial Institutions to the Complainant.
iii. The Builder Co. shall pay the entire balance loan amount disbursed to it alongwith the agreed rate of interest (Home Loan), as mentioned in the Tripartite Agreement to the Financial Institutions namely ICICI Bank and DHFL respectively.
iv. As we have directed the Builder Co. to pay the entire balance amount of Loan alongwith interest to the Financial Institutions namely ICICI Bank and DHFL, the Financial Institutions shall not demand any amount as also interest if any due thereon from the Complainants.
The aforementioned directions shall be complied within eight weeks from today (date of pronouncement of this Order), failing which the Builder Co. shall be liable to pay interest @ 10% per annum to the Complainant instead of 8%. The onus of calculating the correct and full interest and paying the same to the Complainant with clear and cogent calculation shall be on the Builder Co.
In view of the foregoing discussions, all the three Complaints are allowed in part.
The Builder Co. shall pay Rs. 25,000/- towards the cost of litigation in each case to the Complainant.