AI Structured Summary
Not yet generated for this judgment
Judgment
Subhash Chandra, Presiding Member
This complaint is filed under section 21 (a) (i) of the Consumer Protection Act, 1986 (hereinafter ‘Act’) alleging deficiency in service and unfair trade practice by M/s Advance India Projects Ltd., New Delhi, the opposite party, in respect of a residential flat booked by the complainant in project ‘The Peaceful Homes’, Sector 70 A, Gurgaon, Haryana (in short ‘the project’) promoted and developed by the opposite party no.3 of which opposite party 1 is the Promoter, opposite party 2 the CEO and opposite party 4 Haamid Real Estates Private Limited.
The facts of the case in brief are that the complainant had booked a residential flat with the opposite party in the project in July, 2012. Apartment no.A 204 in Tower A, admeasuring 2925 sq ft approximately (super area) with 2 car parking was booked on 23.07.2012 on payment of Rs 10,00,000/-. The basic sale price for the apartment was Rs 6324/- per sq ft plus charges for PLC, EDC, club membership, etc as per allotment letter dated 20.06.2013. This rate was thereafter revised to Rs 6024 on 27.02.2015 and subsequently to Rs 5100/- on 08.09.2015. The booking was against a construction linked payment plan. A Flat Buyer Agreement (in short, ‘the Agreement’) was signed on 09.09.2015 as per which the commitment period for handing over possession was 36 months from the date of commencement of excavation (10.05.2017) with a further grace period of 6 months, i.e. by 10.11.2017. The complainant submits that as on 25.12.2018 he had paid Rs.1,70,411,04/- amounting to 95% of the sale consideration to the opposite party which had been financed through a home loan from ICICI bank.
The complainant avers that as there has been an inordinate delay in the project and deviations from the building plan with consequent impact on promised facilities as per the sale brochure and the number of floor had been increased from 20 floors to 30 floors with reduction in the project land size, he had decided to exit from the project under clause 10 of the Agreement. It is also averred that the Agreement was one-sided and biased in favour of the builder-opposite party and that the complainant had no option but to sign it as it was presented after over 3 years of the booking of the flat in July 2012 by which time he had paid a substantial amount to the opposite party. He has claimed the amount deposited with the opposite party along with interest @ 18% amounting to Rs.1,70,411,04.91.
The complainant has averred that as per this Commission’s order in in Geetu Gidwani Verma Vs. Pioneer Urban Land and Infrastructure Ltd in CC No. 238 of 2017 wherein it was held that as the opposite party relied on clauses that were one sided and unfair, the complainants would not be bound by them and if the delay was not justifiable, refund of the amount paid with appropriate compensation would be justified. It is contended that this order attained finality in Civil Appeal No. 12238 of 2018 and CA No. 1677 of 2019 before the Hon’ble Supreme Court. The complainant is before us with the following prayer:
(a) It is most respectfully prayed that the Hon’ble Court may kindly admit my application;
(b) The Hon’ble Court may kindly direct the builder to pay me Rs.1,70,411,04.91 as refund of money paid by me under the provisions of Clause 14 (c ) of the Act. The money due to ICICI Bank may kindly be paid directly to the Bank;
(c) The Hon’ble Court may kindly direct the builder to pay me interest amounting to Rs.1,55,88,099.39 under the provisions of para 14 (d) of the Act. This interest has been worked out upto 31.12.2019 in conformity with paragraph 10 of the Flat Buyer Agreement. The same amount may be amended depending upon the date of payment and the orders of this Hon’ble Court;
(d) The Hon’ble Court may kindly direct the builder to pay Rs.7,60,000/- as cost for mental agony and harassment and other costs under the provisions of paragraph 14 (1) (hc) (i) of the Act. Paragraph 50 above refers;
(e) The Hon’ble Court may kindly consider taking up this case under the provisions of paragraph 14 (hb) and paragraph 14 (hc) since a large number of unknown consumers are also affected;
(f) The Hon’ble Court may kindly penalise the builder for false statements and gross violations of the Consumer Protection Act, 1986. He may be penalised/ advised under the provisions of paragraph 14 (f) of the Act;
(g) The Hon’ble Court may kindly direct the builder to place plans of the complete project before and after the violations on record as requested in paragraph 38 to 41 of this complaint;
(h) The Hon’ble Court may kindly grant permission to Colonel (retired) R K Nayar to appear on my behalf in this case; and
(i) Any other order or orders as this Hon’ble Court may deem fit.
The complaint has been resisted by the opposite party by way of reply. In a common reply on behalf of opposite parties 3 and 4 all allegations have been denied. Preliminary objections have been taken on the grounds that the complainant is not a ‘consumer’ as per section 2(d) of the Act but an investor for speculative gains and that this Commission lacks jurisdiction to adjudicate in the matter as it involves complex questions of law. It is contended that the completion of the project has been delayed on account of several reasons beyond the control of the opposite parties. It is submitted that these include default in payments by over 60% of the allottees in making payments under the construction linked payment plan; disputes with the original civil contractor Shri Balaji Buildmate Pvt. Ltd. necessitating engaging of a new contractor, M/s RSV Builders Pvt. Ltd; delay on account of an accident on site resulting in two fatalities; demonetization of currency notes in November, 2016 and ban on construction activities consequent to orders of the National Green Tribunal (NGT).
It is contended that opposite party is entitled to extension of time as per clause 11(b) read with clause 46 of the Agreement. It is stated that the complainant being aware of these terms cannot raise such issues now. It is denied by the opposite parties that there was any deficiency in service or unfair trade practice in the revision of building plans as a notice was issued to the complainant on 13.06.2014 and therefore the complainant has waived his right to object now. Reliance is placed on the Agreement dated 09.09.2015 to state that the project had all along been contemplated to be developed over 8.37 acres and that there has not been any reduction in area. It is also contended that the construction linked payment plan that was part of the application dated 23.07.2012 mentioned the number of floors as 30 and hence the contention of the complainant of subsequent increase in number of floor is incorrect. It is also contended that the complainant has incorrectly referred to Brochure 4 which pertains to another project (“Zen Residences”) of the opposite party in the same sector of Gurgaon. It is stated that the Agreement is not unfair or one-sided and that there has not been any unfair trade practice on its part.
Parties led their evidence and filed their written synopsis. We have heard the authorised representative for the complainant and learned counsel for the opposite parties and perused the records carefully.
The case of the complainant is that there has been an inordinate delay in handing over possession of a flat for which he deposited instalments as per the construction linked plan and that they are entitled to compensation. It is also contended that there have been deviations from the plans of the project as advertised/presented in the brochures without intimation to the complainant. This has drastically altered the amenities and facilities including the density of occupancy, views of open spaces, etc. It is alleged that the opposite party has done this to siphon off the money collected from home buyers like him and amounts to unfair trade practice. It is also averred that the Agreement included one-sided clauses biased in favour of the opposite party which the complainant was not able to contest as had already deposited a substantial amount of money with the opposite party. It is his case that the delay is inordinate and amounts to deficiency in service and that he is now exercising his right to claim a refund with compensation. He contends that he has opted out of the project as per clause 10 of the Agreement.
The opposite party has argued that the complainant’s claim for interest at 18% rate of interest is unjustified in view of the judgment of the Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, Etc. in Civil Appeal No.4910-4941 of 2019, (2019) SCC OnLine SC 689 wherein this Commission’s order awarding compensation under various heads on account of a singular default of not handing over possession was held to be not sustainable and compensation at 9% rate of interest was awarded. The authorised representative of the complainant argued that he was entitled to interest at 18% in view of this Commission’s orders in Subhash Chandra Mahajan & Anr. Vs. Parsvnath Developers Ltd. in CC 144 of 2011 dated 05.05.2014 and Rakesh Kumar Agarwal Vs. Parsvnath Developers Ltd. in CC 457 of 2014 dated 26.04.2016.
The opposite party has admitted that there has been a delay in the handing over of the apartment. As on, date the delay is of nearly 5 years as the subject flat was committed to be handed over on 10.11.2017 after the grace period of 6 months after the 36 months stipulated for construction. The opposite party has not denied the receipt of Rs.1,70,41,104/- towards the sale consideration of the subject flat. The contention of the opposite party is that the delay is on account of force majeure circumstances. It is contended that these were circumstances beyond its control and that he cannot be held liable for the delay on this account and should be given the benefit of clause 46 of the Agreement providing for force majeure. It is, however, relevant to note that while the committed date of possession as per the Agreement with grace period was 10.11.2017, the Occupation Certificate has been obtained by the opposite party by its own admission on 29.10.2019. Even the Registration with Haryana Real Estate Regulatory Authority (H-RERA) has been admittedly been obtained only on 29.10.2019.
The contention of the opposite party that there has not been any unfair trade practice or that the Agreement is not one-sided or biased in his favour cannot be accepted in light of the clauses that provide for penalty for delay in payment by the complainant at 18% while providing for compensation for delay in handing over possession upto 6 month from the end of grace period is Rs.53.82/- per sq mtr or Rs.5/- per sq ft and delay between 6 and 12 months, Rs.80.73 per sq mtr or Rs.7.50 per sq ft and delay beyond 12 months then Rs.107.64 per sq mtr or Rs.10/- per sq ft per month of delay. In view of judgment of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd Vs. Govindan Raghavan – II (2009) CPJ 34 (SC) wherein it has been categorically held that “… terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder” (para 6.7) and that “ The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms” (para 7), the argument that the Agreement is not one-sided cannot be sustained and must be rejected.
The preliminary objections of the opposite party have been considered. The first contention that the complainant is not a consumer under the Act but a speculative investor are seeking to profit from the booking of the flat, has been settled by this Commission in Kavita Ahuja vs Shipra Estates – I (2016) CPJ 31, wherein it was held that the onus of establishing that the complainant was dealing in real estate, i.e., in the purchase and sale of plots/ flats for commercial purposes to earn profits lies upon the opposite party. This has not been done by the opposite party, on whom the onus lies, in the present case. Further, in Rajnish Bhardwaj and Ors vs M/s CHD Developers Ltd., and Ors in CC no. 3775 of 2017 decided on 26.11.2019, this Commission has observed as under:
“13. The first contention of the Learned Counsel for the Opposite Party that the Complainants are not “Consumers” and only “investors” is not supported by any documentary evidence. In a catena of judgments, this Commission has laid down that the onus of proof shifts to the Opposite Party to prove that the Complainant is “investor” and it is observed that the Opposite Party did not discharge their onus of proof regarding this aspect. Hence, we are of the considered view that the Complainants are “Consumers” as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986”.
The opposite party has also not been able to establish that the complainant had booked the flat with a commercial objective. ‘Commercial purpose’ has been examined by the Hon’ble Supreme Court in Laxmi Engineering Works vs P S G Industrial Institute - (1995) 3 SCC 583 and it has been laid down that a home buyer may book more than one flat if the requirements of his family necessitate it and can be justified. Mere booking of more flats than on, in other words, cannot be construed to constitute ‘commercial purpose’. In the instant case, the opposite party has only made bald allegations without any evidentiary proof. Its contentions cannot therefore, be accepted.
The contention that this Commission lacks jurisdiction since clause 57 in the Agreement provides for an arbitration mechanism has also been considered. This issue was put to rest by the Hon’ble Supreme Court in M/s Emaar MGF Land Limited Vs. Aftab Singh I (2019) CPJ 5 (SC) wherein it was held that an arbitration clause in the Agreement does not bar the jurisdiction of the consumer fora to entertain the complaint. This contention is therefore not justified and is not accepted.
The contention of the opposite party that the delay in completion of the construction was on account of extraneous factors that qualify for force majeure have also been considered. In real estate projects where the opposite party/builder collects deposits against a time committed project, the management of risks is his liability. The contention of the opposite party on force majeure grounds of demonetisation and restrictions on account of orders of the National Green Tribunal (NGT) cannot be considered as being valid in the present case. There has been no documentary evidence adduced by the opposite party to substantiate its claim for relief on the basis of these reasons. These issues have also been extensively considered in this Commission’s orders in Anil Kumar Jain & Anr. Vs. M/s Nexgen Infracon Private Limited in Consumer Complaint No. 1605 of 2018 dated 23.12.2019 wherein it was held that in the absence of any proof to substantiate the claims of demonetisation and NGT adversely causing delay in completion of the project and impacting the date of handing over of flats, such reliance on force majeure conditions was not justifiable. In the instant case no proof has been adduced before us to the effect that there was any specific order of the NGT against the opposite party, such as a ban on construction or any related activity. We are, therefore, of the view that the contention of the opposite party is without merit and cannot be sustained.
There is an admitted delay in handing over possession. The opposite party during arguments submitted that an Occupation Certificate dated 29.10.2019 is now available. Apparently, even with this document being available, a formal offer of possession has not been made. The opposite party cannot expect the complainant to wait indefinitely for the project to be completed in light of the judgement of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra – II (2019) CPJ 29 SC wherein it was laid down that
“…it would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession…A buyer can be expected to wait for a reasonable period. A period of seven years is beyond what is reasonable”.
Further, in the case of Fortune Infrastructure Vs Trevor D’Lima (2018) 5 SCC 442 the Hon’ble Supreme Court has held that:
‘a buyer cannot be expected to wait indefinitely for possession and in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation’.
The prayer of the complainant for refund with compensation in the form of interest is, therefore, justified and sustained.
Compensation at the rate of 18%, however, would be excessive and not in line with prevailing market conditions. We would respectfully follow the Hon’ble Supreme Court in this regard in light of D.S. Dhanda (supra) and consider that interest rate at 9% would adequately compensate the complainant.
In view of the foregoing we are of the considered view that there has been deficiency in service as well as unfair trade practice on part of the opposite party in respect of the flat booked by the complainants. For the aforesaid reasons, I am inclined to accept the contentions of the complainants and allow complaint with the following directions:
(i) opposite party shall refund the amount of Rs.1,70,411,04.91 deposited by the complainant towards the sale consideration of the flat with interest @ 9% from the respective dates of deposit till the date of realisation;
(ii) opposite party shall also pay Rs 50,000/- as litigation costs to the complainant;
(iii) this order be complied with within 8 weeks failing which the amount to be repaid shall be repaid with 12% rate of interest.
The complaint is disposed of with these directions.