Arihant Superstructures Ltd vs Pushpa Agarwal

R.K. Agrawal, J., President

This Appeal has been filed by Arihant Superstructures Ltd., under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act”), challenging the Order dated 13.09.2021, passed by the Rajasthan State Consumer Disputes Redressal Commission, Circuit Bench at Jodhpur in Consumer Complaint No. 9 of 2017, whereby the State Commission has allowed the Complaint and directed the Appellant herein to refund the amount of Rs.26,80,340/-along with interest @ 9% per annum as also the compensation of Rs.,1,00,000/- for mental agony and litigation cost of Rs.10,000/-.

The relevant facts leading to the present First Appeal are that the Complainant/ Respondent herein, on 21.10.2012 had booked a Flat No. Belita-702, admeasuring 1090 sq. ft. in “Arihant Adita”, the project of the Opposite Party/ Appellant herein. Thereafter, on 07.11.2012, the Agreement for Sale was executed between the Appellant and the Respondent for the aforesaid Flat for a total sale consideration of Rs.26,00,000/-. Vide Letter dated 19.11.2012, the Appellant informed the Respondent that the Construction will be completed by 31.07.2014, and Completion Certificate will be provided by that time. Based on the said Letter, the Respondent took equitable mortgage loan from the State Bank of Bikaner and Jaipur, Kota Branch. It is averred by the Complainant/Respondent in the Complaint that she had timely deposited all the installments as per payment plan and in total she had paid an amount of Rs.26,80,340/- to the Appellant. It is alleged that despite collecting the entire sale consideration, the Appellant failed to give possession and the Completion Certificate of the Flat by 31.07.2014, due to which she was deprived of Income Tax Rebate. On 01.10.2015, the Appellant had offered the possession of the Flat without Completion/ Occupancy Certificate, which was not accepted by the Complainant/ Respondent on the pretext that she would not take possession of the flat until the Appellant provide a Completion Certificate. As the Appellant failed to obtain Completion Certificate and hand over possession of the Flat, the Complainant on 27.03.2017, through an Advocate, issued a Legal Notice to the Appellant, which was not responded by them.

Therefore, alleging deficiency in service and unfair trade practice on the part of the Appellant, the Complainant approached the State Commission seeking refund of amount of Rs.26,80,340/- with interest @ 24% per annum as also compensation of Rs.2,00,000/- for mental agony and litigation cost.

Upon notice, the Complaint was contested by the Appellant by filing a Written Version, wherein the Appellant had admitted, the booking of the Flat in question and receipt of amount as also the Letter dated 19.11.2012, indicating the date for Completion. It was alleged that the Complainant concealed the relevant facts and had not approached the State Commission with clean hands. It was further averred that the construction of the Flat was completed on time and possession was offered. Several letters were sent to the Complainant/ Respondent to take possession of the Flat, but the Complainant failed to take possession of the Flat and she is liable to pay FTTH, DCP, maintenance Charges, etc. in terms of the Agreement for Sale. It is averred that she cannot take advantage of her misdoings and claim for refund of the amount with interest and compensation. All the other averments made in the Complaint were denied as baseless and contrary to the facts and sought for dismissal of Complaint with cost.

It is recorded by the State Commission that the Complainant filed her Evidence by way of Affidavit. However, the Opposite Party has not filed any evidence in support of its claim. It is further recorded by the State Commission in the impugned Order that the Advocate, who was pursuing the case on behalf of the Appellant and filed Vakalatnama, on 12.03.2021, had submitted that he had no instructions in the matter. Thereafter, a fresh notice was issued to the Opposite Party/ Appellant to engage another Advocate but despite service of notice, when nobody had put in appearance on behalf of the Opposite Party/ Appellant, on 08.07.2021, the matter was proceeded ex parte.

Based on the material and evidence on record, the State Commission had allowed the Complaint with the aforenoted directions and observed that the Opposite Party had not made any averment regarding Completion Certificate in the Written Statement and only submitted that it had been offering possession since 2015. The State Commission has held that there is a deficiency of service on the part of the Opposite Party/ Appellant as it had failed to provide Completion Certificate.

Dissatisfied by the Order of the State Commission the Opposite Party/ Appellant has approached this Commission by filing this Appeal.

An Application being IA/3030/2022, has been filed by the Appellant, seeking to bring on record the certain documents. Heard the learned Counsel for the Parties and perused the averments made in the Application as also the documents filed along with the Application. In the interest of justice, the Application is allowed and the documents filed along with it are taken on record.

I have heard the learned Counsel for the Parties and perused the material on record.

Mr. Arpit Gupta, learned Counsel for the Appellant has submitted that the impugned Order dated 13.09.2021, is based on the finding that there is a delay in obtaining Completion Certificate. He further submitted that the Appellant has obtained a Completion Certificate with regard to the building “Belita” from “Dev Architects”, which is a valid Certificate as also the Fire NOC from Jodhpur Municipal Corporation and thereafter the Appellant has several time contacted the Respondent to come forward for taking possession but she refrained from accepting the possession. He further submitted that the Appellant has procured Completion and Occupancy Certificate on 22.10.2019 from “Spaces Architects and Interiors” an empanelled Architect authorized by “Urban Development and Housing Department, Government of Rajasthan” for issuance of Completion and Occupancy Certificate. He submitted that the Appellant has applied for Completion and Occupancy Certificate on time, however, the Jodhpur Development Authority did not have any procedure for granting Occupancy Certificate and no such certificates were being issued for any project in that area, therefore, any delay in obtaining Completion and Occupancy Certificate cannot be attributed to the Appellant and there is no deficiency of service on the part of the Appellant.

Mr. Dhruv Gupta, learned Counsel for the Respondent submitted that the order passed by the State Commission was based on the material facts and in accordance with law. Learned Counsel vehemently argued the Appellant offered possession without Completion/ Occupancy Certificate, which is clear from the perusal of offer of possession letter and its reminders as there is no mentioning of any enclosure of Completion/ Occupancy Certificate. He further argued that at the time of filing of the Written Statement, the Appellant did not have the Completion/Occupancy Certificate as the Appellant has not made a single averment regarding the Completion Certificate and even the alleged Completion Certificate dated 25.04.2015 issued by “Dev Architects”, which has been filed along with Appeal first time was not mentioned or place before the State Commission. The Alleged Completion Certificate dated 25.04.2015, is a vague document as it did not even record the inspection of site or whether the construction was as per the approved plan on not and it has no sanctity as “Dev Architects” were not authorized by the Competent Authority to issued Completion Certificate. Further, the Appellant has itself admitted that the alleged Completion and Occupancy Certificate has been issued by “Spaces Architects and Interiors” an empanelled Architect authorized by Competent Authority for issuance of Completion and Occupancy Certificate was issued on 22.10.2019 and therefore there was no Completion/ Occupancy Certificate till 22.10.2019. He further submitted that as the Flat was booked in the Year 2012 and there was no Completion Certificate till 22.10.2019, the Complainant cannot be compelled to take possession after an inordinate delay.

I have given my thoughtful consideration to the various pleas raised by the learned Counsels for the respective Parties. The controversy in the present matter revolves around the question of Completion/ Occupancy Certificate.

From perusal of documents, I find that the Completion Certificate dated 25.04.2015 issued by “Dev Architect”, on which the learned Counsel for the Appellant has placed reliance, cannot be termed as valid Completion Certificate as “Dev Architect” was not an empanelled Architects for issuance of Completion and Occupancy Certificate. Further, the Appellant has himself admitted that the Appellant has obtained Completion and Occupancy Certificate on 22.10.2019 from “Spaces Architects and Interiors” an empanelled Architect authorized for issuance of Completion and Occupancy Certificate. Therefore, in my view there was no valid Completion/ Occupancy Certificate till 22.10.2019.

At this juncture, I find it a fit case to place reliance on the decision of the Hon’ble Supreme Court in “Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725”, wherein the Hon’ble Supreme Court has held that the Complainant cannot be compelled to take possession after an inordinate delay from the due date of possession as the builder has failed to obtain Occupancy Certificate and offer possession within the stipulated time. The Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. (supra) has observed as under:

“3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent - Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent - Flat Purchaser could not be compelled to take possession at such a belated stage. The grounds urged by the Appellant - Builder for delay in handing over possession were not justified, so as to deny awarding compensation to the Respondent - Flat Purchaser. The clauses in the Agreement were held to be wholly one - sided, unfair, and not binding on the Respondent - Flat Purchaser. 6 The Appellant - Builder was directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent - Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation.

We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.”

The above observations of the Hon’ble Supreme Court are equally applicable to the present Case as the Flat was booked on 21.10.2012, the possession was to be delivered after completion of the construction by 31.07.2014 and the Completion and Occupancy Certificate was obtained on 22.10.2019, thus, there is a delay of more than 5 years in obtaining completion/ Occupancy Certificate from the promised date of delivery of possession, therefore the Complainant cannot be compelled to take possession of the Flat in question and the Complainant is entitled for refund of her money along with interest.

I do not find any infirmity or illegality in the Order passed by the State Commission holding that there is a deficiency in service on the part of the Appellant and the same is upheld. However, the State Commission has awarded refund of the amount of Rs.26,80,340/- with interest @ 9% per annum together with Compensation of Rs.1,00,000/- towards mental agony and litigation cost of Rs.10,000/-. As the interest @ 9% per annum has already been awarded by way of damages, no other amount ought to be awarded under other head of compensation as held by the Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda , II (2019) CPJ 117 (SC) , wherein it is observed that when interest is awarded by way of damages awarding additional compensation is not justified.

Therefore, following the aforenoted ruling, the compensation of Rs.1,00,000/- awarded by the State Commission for mental agony is set aside and the rest of the Order is confirmed.

In the result, the Appeal is allowed in part and the Order passed by the State Commission is modified to the extent indicated above.

The Statutory amount of Rs.35,000/- deposited by the Appellant shall be released in favour of the Complainant/ Respondent herein along with accrued interest, if any, within two weeks from today, which shall be adjusted from the decretal amount.