Capt. Vikram Singh Toor & Anr vs M/S. Kashish Developers Ltd. & 2 Ors

V.K. Jain, J

The complainants namely Captain Vikram Singh Toor and his wife Mrs. Inderbir Kaur Toor booked a residential apartment with the OP in a project namely 'Manor One', which OP No.1 M/s Kashish Developers Ltd. was to develop in Sector-111 of Gurgaon. Unit No. C2-11B in Tower C2 of the above referred project was allotted to them pursuant to their application dated 03.09.2012, for a total consideration of Rs.1,53,03,175/-. They then executed an agreement with the OPs namely M/s Kashish Developers Ltd., M/s Vinman Construction Pvt. Ltd. & M/s Elite Villas Pvt. Ltd. on 07.05.2013. The agreement was signed by M/s Vinman Construction Pvt. Ltd. and M/s Elite Villas Pvt. Ltd. as the confirming parties. As per clause 3(a) of the agreement, the possession was proposed to be delivered to the complainants within 36 months of its execution though a grace period of six months was also available to the developer. The possession therefore, ought to have been delivered to the allottees by 07.11.2016 inclusive of the grace period. The grievance of the complainants is that the possession has not even been offered to them and the construction is not even complete despite they having already paid a sum of Rs.1,13,01,621/- to the developer. The complainants are before this Commission, seeking refund of the said amount, with compensation etc.

The complaint has been resisted by the OPs but it is pointed out that the complaint has been opposed on the grounds which this Commission has already rejected in a number of Consumer Complaints including CC No.1739 of 2016 Ashima Sharma & Anr. and connected matters decided on 12.12.2018. The written version has already been filed by OP No.1 but OP No.2 & 3 have not filed their written version.

The decision of this Commission in Ashima Sharma (supra) to the extent it is relevant, reads as under:

"........

The grievance of the complainants is that the possession of the allotted flats has not even been offered to them despite they having made substantial payments to OP-1 - Kashish Developers Ltd. which has not disputed the allotments made to the aforesaid complainants, the agreements executed with them and the amount received from them. The learned counsel for the OP submits that the construction could not be completed within the time stipulated in the agreements as (i) more than 100 flat buyers did not make full payment as per their contractual obligations with the Developer and (ii) there was slump in the real estate on account of demonetization which led to the delay in completing the construction. The learned counsel for OP-1 also states that vide order dated 8.11.2016, the National Green Tribunal had stayed construction activity for a week following heavy smog in Delhi. No other ground is advanced by the learned counsel for the OP to justify the delay in completion of the construction.

As far as the stoppage of work for one week in terms of the order of the NGT is concerned, that would be hardly of any consequence, the duration of the said order being very very short whereas the delay in completion of the construction runs into several years if computed from the date committed by the Developer for the delivery of possession.

As regards the default on account of several flat buyers in making payment to the Developer, the complainants who admittedly did not commit any default cannot be penalised for the default on the part of the other flat buyers. This is more so when the delay in completing the construction is for an unreasonably long period. If there was default on part of other flat buyers, nothing prevented the Developer from cancelling their allotments in terms of the agreements it had with them and then selling those flats to other potential buyers in the market. The Developer could also have arranged the requisite finance from alternative sources but it cannot, in my view, penalise the flat buyers who believing the promise made by the Developer parted with their hard earned money and paid the same to the Developer in the hope of having a shelter on their head, within a reasonable time. Therefore, such alleged default, in my view, cannot justify the delay in completion of the construction.

As far as demonetisation of the currency is concerned, I fail to appreciate how the demonetisation could have in any manner affected the construction of the houses which the Developer was to construct for the allottees. The Developer is expected to account for every payment received by him from the flat buyers and, therefore, there is no way the demonetisation could have affected the pace of construction.

In terms of the date committed in the agreements, the possession of the apartments ought to have been delivered in the year 2016 in most of the cases, by July 2017 in a few cases and by September 2018 in one case. Only in CC/2065/2017 - Dinesh Kumar Paliwal, the possession can be delivered by 17.3.2019. However, his case is that the flat was booked by him in May 2012 and the Developer delayed the execution of the buyers agreement for a long period.

The construction of the apartments allotted to these complainants was not complete when these complaints were instituted. The concoction is not complete even today. The learned counsel for the Developer states on instructions that they will complete the construction within 9 months and deliver possession soon thereafter after obtaining the requisite occupancy certificate. However, in my view, these complainants cannot be compelled to wait any more for the possession of the flats. The learned counsel for the complainants states on instructions that the complainants are not agreeable to wait for 9 more months for the possession of the flats and having lost trust in the developer, they want immediate refund of the amount paid by them to the Developer along with appropriate compensation so that they are in a position to acquire some other accommodation to meet their respective requirements. In my view, considering the abnormal delay on the part of the Developer, in completing the construction, the complainants cannot be compelled to wait any more for the possession of the apartments allotted to them and therefore they are entitled to refund of the amount paid by them to the Developer along with appropriate compensation.

Relying upon the decision of the Hon'ble Supreme Court in Kailash Nath Associates Vs. Delhi Development Authority [(2015) 4 SSC 136] decided on 9.1.2015, the learned counsel for the Developer submits that the complainants having condoned the delay till the date of institution of the complaints by not coming to this Commission immediately after the date committed by the Developer to them for delivery of possession, they are entitled to compensation only as per the contractual rate of Rs.10/- per sq.ft. per month of the super area of the flat. I, however, find no merit in the contention. In para 26 of the Kailash Nath (supra) which is relied upon by the learned counsel for the Developer, the Hon'ble Supreme Court interalia observed as under:-

"26. Similarly in S. Brahmanand v. K.R. Muthugopal, (2005) 12 SCC 764 the Supreme Court held: "34. Thus, this was a situation where the original agreement of 10-3-1989 had a "fixed date" for performance, but by the subsequent letter of 18-6-1992 the defendants made a request for postponing the performance to a future date without fixing any further date for performance. This was accepted by the plaintiffs by their act of forbearance and not insisting on performance forthwith. There is nothing strange in time for performance being extended, even though originally the agreement had a fixed date. Section 63 of the Contract Act, 1872 provides that every promisee may extend time for the performance of the contract. Such an agreement to extend time need not necessarily be reduced to writing, but may be proved by oral evidence or, in some cases, even by evidence of conduct including forbearance on the part of the other party. [See in this connection the observations of this Court in Keshavlal Lallubhai Patel v. Lalbhai Trikumlal Mills Ltd., 1959 SCR 213 : AIR 1958 SC 512, para 8. See also in this connection Saraswathamma v. H. Sharad Shrikhande, AIR 2005 Kant 292 and K. Venkoji Rao v. M. Abdul Khuddur Kureshi, AIR 1991 Kant 119, following the judgment in Keshavlal Lallubhai Patel (supra).] Thus, in this case there was a variation in the date of performance by express representation by the defendants, agreed to by the act of forbearance on the part of the plaintiffs. What was originally covered by the first part of Article 54, now fell within the purview of the second part of the article. Pazhaniappa Chettiyar v. South Indian Planting and Industrial Co. Ltd. [AIR 1953 Trav Co 161] was a similar instance where the contract when initially made had a date fixed for the performance of the contract but the Court was of the view that "in the events that happened in this case, the agreement in question though started with fixation of a period for the completion of the transaction became one without such period on account of the peculiar facts and circumstances already explained and the contract, therefore, became one in which no time was fixed for its performance" and held that what was originally covered by the first part of Article 113 of the Limitation Act, 1908 would fall under the second part of the said article because of the supervening circumstances of the case."(at Page 777)"

It would thus be seen that the Hon'ble Supreme Court in S. Brahmanand (supra) was referring to a case where the promisor seeks postponement of the performance to a future date and the said offer is accepted by the promisee by its act of forbearance and by not insisting upon forthwith performance. However, in the present case, there is not even an allegation of the Developer having sought postponement of the date committed for delivery of possession of the apartments and the flat buyers having accepted such a request of the Developer. Therefore, the reliance upon the aforesaid judgement of the Hon'ble Supreme Court, in my opinion, is wholly misconceived.

Relying upon the decision of the Hon'ble Supreme Court in Bharathi Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd. [(1996) 4 SCC 704] decided on 9.5.1996, the learned counsel for the Developer submits that having not exercised the option to exit from the project in terms of the agreement executed between the parties, the complainants are bound by the terms of the contract and, therefore, are entitled only to the contractual compensation. Again, I find no merit in the contention. Such arguments have repeatedly been rejected by this Commission in numerous cases and it has been held that such a clause in a Builder Buyer Agreement amounts to an unfair trade practice when the Developer himself charges a hefty interest from the flat buyers in the event of default on his part in making payment and also retains the right to cancel the allotment itself after deducting the prescribed earnest money. Therefore, as far as this Commission is concerned, it is competent to award appropriate compensation in a case where the builder is found to be deficient in rendering services to the allottees by not delivering possession of the allotted flats on or before the date committed for this purpose and within a short period thereafter.

As noted earlier, in these cases, the booking of the flats started way back in 2012. The Developer has not been able to complete the construction of the flats even in more than six years. The construction is not complete even as on today. There is no guarantee that the builder will complete the construction and obtain the requisite occupancy certificate even if further time of nine months is given to it for the purpose. Considering all the facts and circumstances, the complainants in my view, are entitled to refund of the amount paid by them to OP-1 along with appropriate compensation in form of simple interest. The learned counsel for the complainants states on instructions that in order to avoid further litigation in the matter and considering the interest rates on FDR prevalent at the relevant time, the complainants are restricting their claim to the refund of the principal amount paid by them to OP-1 along with compensation in the form of simple interest @ 10% p.a. with effect from the date of each payment till the date of refund inclusive of compensation for the mental agony and harassment suffered by them at the hands of the Developer.

The learned counsel for the OPs states on instructions that the construction which is in full swing, is likely to be completed by 31.12.2019 and they have already raised a loan of more than Rs.200 Crores from DHFL for the said purpose. He also states that the requisite purchase orders have also been placed by the developers by the suppliers. The learned counsel for the complainants states on instructions that considering the substantial delay which has already happened in these matters and also considering that the construction is not complete even as on today, the complainants are not willing to wait any more for the possession of the allotted flat and want only the refund of the entire amount paid by them to the OPs with compensation.

The learned counsel for the complainants states that they are restricting their claim to the refund of the principal amount paid by them to the OP No.1 alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund. They are pressing their prayer for refund only against OP No.1. Hence, the complaint is disposed of with the following directions:

(i) The OP No.1 M/s Kashish Developers Ltd. shall refund the entire principal amount of Rs.1,13,01,621/- to the complaints alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.

(ii) The OP No.1 shall also pay a sum of Rs.25,000/- as cost of litigation to the complainants.

(iii) The payment in terms of this order shall be made within three months from today.