Ashay Shah vs Ireo Grace Realtech Pvt. Ltd. & Anr

Subhash Chandra, Member

This is a complaint u/s 21 (a) (i) of the Consumer Protection Act, 1986 filed by the complainant seeking refund of the amount deposited in respect of the flat booked by them with the opposite parties in a project promoted and developed by the opposite parties along with penal interest and other compensation, alleging deficiency in service and unfair trade practice on account of the delay in handing over possession of the flat.

In brief, the facts of the case are that the complainant had booked a flat in the project “The Corridors” promoted and developed by the Opposite parties viz. Ireo Grace Realtech Pvt., Ltd. located on Golf Course Extension Road, Sector 67 A, Gurgaon, Haryana on 28.02.2013 for their residential purpose. An allotment letter was issued by the opposite party to the complainant on 07.08.2013 allotting flat no. CD-C10 – 07 - 704 in Tower C 10,  admeasuring 1300 sq ft in the above said project for a total sale consideration of Rs.1,28,31,283/-. The complainant deposited Rs.1,26,03,836/- towards this flat by way of various instalments. Thereafter, an Apartment Buyer’s Agreement (in short ‘the ABA’) was entered into between the complainant and the opposite party on 14.04.2014. As per clause 13.3 of the ABA, the opposite party committed to offer possession of the flat within 42 months with an additional grace period of six months i.e. by 23.07.2017 failing which compensation at the rate of Rs.7.50 per sq foot was promised by the opposite party to the complainant. However, possession of the said flat was not offered by the opposite party till the date of filing of the present complaint. Hence, the complainant has approached this Commission alleging deficiency in service and unfair trade practice by the opposite party in not adhering to the committed date of handing over possession and imposing entirely one sided conditions in the ABA that are in favour of the opposite party which the complainant as a consumer was unable to contest and was compelled to accept. The complainant has sought full refund of the deposited amount and other reliefs and is before us with the following prayer:

(a) Direct the opposite party (s) jointly or severally, for an immediate 100% refund of the total amount of Rs.1,26,03,836/- paid by the complainant, along with a penal interest of 18% per annum from the date of the receipt of the payments made to the opposite party (s).

(b) Direct the opposite party (s) jointly or severally to pay compensation of Rs.5.00 lakh to the complainant for mental agony, harassment, discomfort and undue hardships caused to the complainant as a result of the above acts and omissions on the part of the opposite party;

(c )   Direct the opposite party (s) jointly and severally, to pay a sum of Rs.1.00 lakh to the complainant as a whole, towards litigation costs; and

(d) That any other and further relief in favour of the complainant as the Hon’ble Commission may deem fit and proper in the fact and circumstances of the case.

The opposite party has contested the complaint by way of reply and evidence by way of affidavit.  The contention of the learned counsel for the opposite party is that the earnest money deposited by the complainant was forfeited as the booking of the apartment was cancelled in accordance with the terms and conditions set out in the booking application form on account of default in payments. The complaint filed before this Commission is premature as the period of 48 months needs to be calculated with effect from 27.11.2014, the date on which the fire safety scheme was approved. He further states that this Commission has no jurisdiction under the CP Act, 1986 to amend/ modify/ re-write the terms of the agreement. It is averred that the allegations in the complaint are of a contractual nature and as such triable only in a civil court. It is also averred that the complainant is not a consumer since he is a resident of Mumbai and booked the flat for speculative gains. It has been submitted that under the CP Act 1986 compensation can only be as per Section 14 (1) (d) of the CP Act 1986. This section is not attracted in this case. The OP’s case is also that the ABA related to an agreement to sell an apartment by the OP and no ‘service’ was to be rendered within the meaning of Section 2 (1) (o) of C P Act, 1986 to the complainant. Therefore, there is no deficiency in service involved.

Both parties have led their evidences. The complainant has filed written submissions. We have heard the learned counsel for the complainant and perused the records. The learned counsel for the opposite party after seeking adjournments on several occasions, again prayed for time on the ground of non-availability of the senior counsel, even though the party was represented by a law firm with other advocates on record. None appeared even after a short adjournment to argue the case. Learned counsel for the complainant submitted that the complaint was squarely covered by a judgement of the Hon’ble Apex Court. Arguments were therefore heard on behalf of the complainant. The reply and evidence by way of affidavit filed by the opposite parties were considered as his final arguments. It was noted that on behalf of the opposite party a submission was made that occupancy certificate dated 27.01.2022 had since been obtained and an offer of possession sent to the complainant.

Learned Counsel for the complainant has relied on the judgement of the Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd., Vs Abhishek Khanna (2021) 3 SCC 241 dated 11.01.2021 which relates to the same project of the opposite party, i.e., ‘The Corridors’, Sector 67 – A Gurgaon, Haryana. It is his averment that as per this judgement, the Hon’ble Apex Court has taken cognizance of the fact that the project had both completed and incomplete/un-commenced towers in Phases I and II of the project. Based on the fact that the occupancy certificate from the statutory authority was available only in respect of certain towers and noting the fact that the builder-opposite party had not commenced/completed other towers in Phase II, the Apex Court had balanced the interests of both the consumer complainants and the builder opposite parties by equitably allocating the obligations for a full refund of payment to be made with penal interest in the case of incomplete/un-commenced flats for the interregnum between the committed date and the date of making of the offer of possession by the opposite party and the obligation to accept possession where the complainants had prayed for possession to be made with compensation for the delay in the case of flats/towers where construction was completed and occupancy certificate was available. In doing so the Hon’ble Apex Court reiterated its law with regard to the right of the consumer to seek refund in view of the inordinate delay on the part of the opposite party as laid down 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. It also reaffirmed that “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession” as laid down in  Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019. It was argued that the law is 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.

In addition, the complainant has relied upon the judgment of this Commission in Sanjay Gopinath vs Ireo Grace Realtech Private Limited – CC 2236 of 2016 which decided on 31.08.2021 that:

“………………apartment buyers whose allotment falls in phase II of the project comprised in Towers A 1 to A 5, B 5 to B 8 and C 8 to C 11 where the occupation certificate (O.C) has not been granted so far, are enlisted in following chart B………………”

“…………………..the developer shall, however, pay delay compensation in the form of simple interest @ 9% per annum on the deposited amount for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the complainants/ allottees.”

“…………The OP developer is directed to refund the entire amount deposited by the complainants/ allottees enlisted in chart B………….”

He has also relied upon the judgment of the Hon’ble Supreme Court in Marvel Omega Builders Pvt., Ltd., and Anr. vs Shrihari Gokhale and Anr., - 2019 SCC Online SC 1991 that:

“Even assuming that the villa is now ready of occupation (as asserted by the appellants), the delay of almost five years is a crucial factor and the bargain cannot now be imposed upon the respondents. The respondents were, therefore, justified in seeking refund of the amounts that they had deposited with reasonable interest on the said deposited amount. The findings rendered by the Commission cannot therefore be set to be incorrect or unreasonable on any count”.

Reliance has also been placed by the complainant on this Commission’s orders in EMAAR MGF Land Ltd., and Others vs Amit Puri – II (2015) CPJ 568 NC that:

“………………we have no hesitation in holding that if the developer fails to deliver the possession of the allotted plot/ flat within the stipulated time, the allottees under no obligation to except an alternate plot. Clause 8, comes into play only when an allottee is prepared to wait for possession. Nonetheless, the waiting period cannot be endless. At the cost of repetition, we may reiterate that in the event of a developer failing to deliver possession of the property within the stipulated period, for any reason, save and except a force majeure condition, agreed to between the contracting parties, an allottee cannot be compelled to accept an alternate site/ plot and he would be within his rights to seek refund of the amount deposited with the developer against the allotment…………….”

The opposite party has contested the averments of the complainants on the grounds that the complainant had forfeited the earnest money as booking of the apartment had been cancelled due to default in payments; the complaint filed before this Commission was premature since the stipulated committed period was not yet over; and that the complainant is not a ‘consumer’ as per section 2 (1) (d) of the CP Act, 1986 in view of the fact that he is a resident of Mumbai and had booked this flat only to speculate in real estate. It is also argued that this Commission lacks jurisdiction to amend/ modify/ re-write the terms of the agreement. With regard to the argument that the case was covered by the judgement of the Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd., Vs Abhishek Khanna (supra), it is submitted by the opposite party that in view of an occupancy certificate dated 27.01.2022 being available the complainant is obligated to take possession of the flat.

The admitted facts of the case are that the opposite party had through clause 13.3 of the ABA dated 14.04.2022 committed to 23.07.2017 as the date of handing over of the possession of the flat in 36 months with a further period of 6 months as the ‘Grace Period’. It is also an admitted fact that the complainants had continued to make deposits of various instalments with the opposite party between 2014-18. The opposite party also admits that the construction of Tower C10 in which the flat allotted to the complainants herein, viz., flat no 704 is located, had not been completed and that neither an OC in respect of this flat was available nor a letter offering possession had been issued. It is submitted by the opposite party that the period of 48 months including the grace period of 6 months expired on 27.11.2018 as reckoned with effect from the date of approval of the Fire Safety Scheme of 27.11.2014.

It is the case of the complainant that the judgement in Abhishek Khanna (supra) distinguishes towers/residential units which stand completed and possess an occupancy certificate and for which possession has been offered from those towers/residential units which have either not been completed with an occupancy certificate/have not commenced construction. As this judgement is in respect of the very same project in which the complainants had booked flats, the same covers the instant case and the relief provided by the Apex Court in Abhishek Khanna (supra) should also be extended to the complainant. The opposite party has not been able to argue against this position or produce any judgement of the Hon’ble Supreme Court that modifies or negates it. The accepted position of law as per Pioneer Urban land and Infrastructure Ltd (supra) and Devasis Rudra (supra) have also not been assailed by the opposite party. In the present case, complainant had booked the flat in the project ‘The Corridors’ on 14.03.2013 and were assured possession as per the ABA on 23.07.2017. However, the same has not been done even on date, i.e., after a lapse of approximately 15 months. No occupancy certificate has been obtained by the opposite party and no offer of possession made to the complainant. A sum of Rs 1,83,55,760/- amounting to nearly 95% of the sale consideration has been collected by the opposite party in the meanwhile which is a very substantial amount. No dispute regarding payments has been raised by the opposite party who has continued to accept deposits from the complainant. The delay in offering possession is, therefore, indisputably a case of deficiency in service as well as an unfair trade practice on part of the opposite party.

The opposite party has not been able to substantiate its averment that the complainant is not a ‘consumer’, the onus of which is squarely upon him in terms of Kavita Ahuja v Shipra Estate Ltd., and Jai Krishna Estate Developers Pvt. Ltd., - CC no.137 of 2010 dated 12.01.2015 NC. It is also a settled position of law that a relief sought under the CP Act, 1986 is not to be denied on the ground that relief is available under the Indian Contract Act, 1872, vide Hon’ble Supreme Court’s judgment in M/s EMAAR MGF Land Limited vs Aftab Singh - I (2019) CPJ 5 (SC). No documentary evidence has been provided by the opposite party in support of the assertion that the allotment of the flat had been cancelled due to default in payments and therefore earnest money deposited stands forfeited and hence this cannot be accepted in the light of Ankur Goswami vs Supertech Ltd., and Anr. – 2017 SCC online NCDRC 1240. Lastly, an oral submission to the effect that an occupancy certificate dated 27.01.2022 was now available in respect of the flat which is neither supported by an affidavit or documentary evidence cannot be accepted.  As there is neither an occupancy certificate in respect of the flat available nor has an offer of possession been made, this case would fall under the category of flats that are incomplete/ un-commenced for which the opposite party (Builder) is obligated to refund the amount deposited by the complainant along with interest and costs.

We have also gone through the order of the Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd., (Supra) and we are satisfied that the current appeal/ complaint is covered by this judgment as it relates to the same project in which the complainant had booked its flat and the Hon’ble Supreme Court has ordered full refund with interest from the date of the promise of offer of possession till repayment.

Accordingly, we consider it appropriate to allow the complaint with the following directions:

(a) Opposite Party shall repay the full amount of Rs.1,26,03,836/- deposited by the complainant along with simple interest @ 9% per annum thereon from 14.04.2014 (the scheduled date of possession) till the date of payment;

(b) Opposite party to pay litigation costs of Rs.50,000/- to the complainant;

(c) Order to be complied within 3 months of the receipt of the certified copy of the order;

(d) Opposite party shall be liable to pay a penal interest of 12% simple interest per annum in case of default.

With these directions, the consumer complaint stands disposed of.