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Judgment
V.K. Jain, J
The complainant entered into an agreement with OP No.1 on 04.03.2009 where-under a residential flat in a building at 100, Bull Temple Road was to be constructed by OP No.1 and sold to the complainant for a consideration of Rs.66,50,000/-. The land on which the building was to be constructed was owned by OP No.2 to 4. As per clause 3.4 of the said agreement, the possession, after completing registration and other statutory requirements, was to be delivered by 30.06.2009 and in the event of delay, OP No.1 was to pay a penal interest of 24% to the complainant on the total amount paid to him.
The possession of the flat was to be delivered to the complainant on 04.10.2010 and the possession certificate to the extent it is relevant, reads as under:
"He has been handed over the said apartment and the same has been occupied by him.
We are awaiting Occupancy Certificate and some final clearances from BBMP. Upon receiving the same we will be completing the registration process and duly transferring the title to his name."
Even after giving possession of the flat to the complainant, the OPs were not able to obtain the requisite Occupancy Certificate and consequently, the sale deed of the flat has not been executed in favour of the complainant. Being aggrieved, the complainant is before this Commission with the following prayers:
Direct the Opposite Parties to execute and register a sale deed conveying the Apartment bearing no.406, on the 4th floor of Brindavan Mansions, No.100, Bull Temple Road, Bangalore-560 019, admeasuring about 1900 sq. feet, along with undivided interest of 780 sq. ft. in the underlying property, free of all encumbrances, in favour of the complainant.
Direct the First Opposite Party to pay the Complainant interest at 24% p.a. on Rs.66,50,000/- from 30th June 2009 until the date of execution and registration of the sale deed in favour of the Complainant.
Direct the Opposite Parties to pay costs to the Complainant;
The complaint has been opposed by the OPs. In his written version, OP No.1 has admitted the agreement with the complainant as well as the payment received from him. The delivery of possession to the complainant on 30.06.2009 has also not been disputed. A preliminary objection has been taken that since there is an Arbitration clause in the agreement between the parties, the matter was liable to be referred to Arbitration. It is also admitted that till date, there is neither any fire clearance nor Occupancy Certificate in respect of the subject property. It is also alleged that under a corrigendum dated 27.01.2013, executed between OP No.1 on one hand and OP No.2 to 4 on the other hand, OP No.2 is absolved of his obligations of securing NOC from Fire Department on payment of a specified amount towards cost of the remaining work in other directions. In para 3 of the written version filed by OP No.1, it is specifically alleged that the present price of the flat is Rs.2.25 Crores and realizing his inability to perform his part of the contract due to such intervening factors, OP No.1 had sent a notice to the complainant on 12.04.2012 offering to pay back the amount received from the complainant under the agreement, alongwith reasonable interest. In their written version, OP No.2 to 4 have pleaded that there is no privity of contract between them and the complainant.
It is evident from a perusal of clause 3.4 of the agreement executed between the complainant and OP No.1 that the possession of the allotted flat was to be delivered to the complainant by 30.06.2009 after completing the registration and all other statutory requirements. Therefore, the requisite Occupancy Certificate in terms of the requirements of The Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 and Bangalore Mahanagara Palike Building Bye-Laws 2003, ought to have been obtained on or before 30.06.2009 and only thereafter the possession ought to have been delivered by that date. Admittedly, the possession was given to the complainant only on 04.10.2010. Therefore, the complainant is entitled to the agreed interest of 24% per annum for the period from 01.07.2009 to 03.10.2010.
The learned counsel for OP No.1 submits that award of interest for the delay in delivery of possession at the rate of 24% per annum will be unfair and exaggerated. In support of his contention, he relies upon the decision of this Commission in M/s Itina Properties Pvt. Ltd. & Ors. Vs. Vidya Raghupathi & Anr. & Connected Matters decided on 31.05.2018.
I have perused the judgment relied upon by the learned counsel for OP No.1. A perusal of the said judgment would show that in the above referred case, the OP had inter-alia pleaded that the complainants were defaulters in making payment which resulted in the delay in handing over flats on the agreed date, the State Government had widened the road and therefore, they had submitted an application for sanction of additional floors. Since that application was not considered for more than six months, they were constrained to file a Writ Petition followed by a Contempt Petition before the Hon'ble High Court which resulted in the plan being sanctioned only in November 2008. The OP therefore, sought exclusion of the period from 13.07.2006 which was the committed date for delivery of possession before the date on which the plans were sanctioned. This Commission however, allowed interest for the entire period of delay including the period which the builder had sought to execute on account of the above referred reasons which he had claimed to be beyond his control. It was in these circumstances that this Commission reduced the interest to 10% per annum. However, in the present case, no force majeure circumstances have even been pleaded by the Ops. Therefore, there is no reason for not giving the benefit of the contractual rate of interest to the consumer. I therefore, hold that the complainant is entitled to the contractual interest of 24% per annum for the period from 01.07.2009 to 03.10.2010.
As noted earlier, the requisite Occupancy Certificate has not been obtained so far by the Ops. It is also an admitted position in the written version filed by OP No.1 itself that even the fire safety clearance in respect of the building in question has not been obtained. Though the OP No.1 has sought to give justification in respect of the objections raised by the Fire Department, it is not for this Commission to go into the question as to whether refusal of the Fire Department to issue the requisite clearance/NOC was justified or not. If OP No.1 felt that the objection raised by the Fire Department was unjustified or impossible to fulfill, he ought to have availed appropriate legal remedy for obtaining the requisite clearance/NOC from the Fire Department and then he ought to have applied for the issuance of the requisite Occupancy Certificate. A reference in this regard can be made to the following view taken by this Commission in M/s Itina Properties Pvt. Ltd. (supra):
The Hon'ble Apex Supreme Court in Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. & Anr., III (2008) CPJ 48 (SC), has observed that a prayer for completion certificate and C & D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C & D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate Court or other Forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever that is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/ damage.
The application of the promoter of a building to obtain the requisite Occupancy Certificate is absolute in view of Section 3(i) of The Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 and Section 5.7 of the Bangalore Mahanagara Palike Building Bye-Laws 2003 which read as under:
3 (i) Not allow persons to enter into possession until a completion certificate where such certificate is required to be given under any law, is duly given to the local authority;
5.7 Occupancy or letting of the new buildings - No person shall occupy or allow any other person to occupy any new building or part of a new building for any purpose whatsoever until occupancy certificate to such buildings or part thereof has been granted by an officer authorised to give such certificate if in his opinion in every respect the building is completed according to the sanctioned plans and fit for the use for which it is erected. The Authority may in exceptional cases (after recording reasons) allow partial occupancy for different floors of a building.
Though the physical possession of the allotted flat has been taken by the complainant, he is unable to either mortgage or sell the said property even if he so desires. Moreover, he is also in breach of the relevant building Bye-laws though he is also responsible alongwith OP No.1 for being placed in that situation, he having taken possession without OP No.1 having obtained the requisite Occupancy Certificate. Despite that, it continues to be the legal and contractual obligation of the OPs to obtain the requisite Occupancy Certificate and then execute the Sale Deed in favour of the complainant.
As far as the alleged corrigendum between OP No.1 & OP No.2 to 4 is concerned, that is not binding upon the complainant, he not being a party to it.
For the reasons stated hereinabove, the complaint is disposed of with the following directions:
(i) OP No.1, which had received the entire sale consideration from the complainant and had constructed the building, shall pay contractual compensation in the form of simple interest @ 24% per annum w.e.f. 01.07.2009 till 03.10.2010 on the entire amount which the complainant had paid to OP No.1 on or before 01.07.2009.
(ii) OP No.1 shall obtain the requisite fire safety clearance/NOC and the requisite Occupancy Certificate at his own cost and responsibility, on or before 31.12.2019 and shall provide a copy of the said Occupancy Certificate to the complainant as well as to OP No.2 to 4.
(iii) On receipt of the Occupancy Certificate, all the OPs shall execute the Sale Deed of flat in question in favour of the complainant within four weeks of receipt of the said Occupancy Certificate.
(iv) OP No.1 shall pay, within three months, compensation quantified at Rs.10,00,000/- (Rupees ten lacs) to the complainant.
(v) In case OP No.1 is not able to obtain the requisite fire safety clearance/NOC and the requisite Occupancy Certificate on or before 31.12.2019, he shall refund a sum of Rs.2.25 Crores which, as per the written version filed by him, was the market value of the flat on the date written version was filed by him. The said amount shall, in that case be paid by 28.02.2020 failing which it shall carry interest @ 9% per annum from the date of institution of this complaint. The peaceful and vacant possession of the flat in question shall be delivered by the complainant to OP No.1 while receiving the amount of Rs.2.25 Crores from OP No.1.
(vi) OP No.1 shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainant.