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Judgment
Prem Narain, Presiding Member
The First Appeal No.823 of 2016 has been filed by the complainants against the order dated 26.04.2016 and First Appeal No.851 of 2016 has been filed by the opposite parties against the same impugned order dated 26.04.2016 passed by the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') in Complaint Case No.CC/14/24.
The brief facts of the case are that the complainants have booked a 3BHK flat no. 304 on 3rd floor in B Tower building on 07.10.2011 being developed by the OPs as Shamit Octozone for a total consideration of Rs.35,51,000/-. The complainants took a housing loan of Rs.28,43,697/- and the same was sanctioned by Deutsche Bank vide its letter dated 27.03.2012. The complainants have deposited a sum of Rs.37,54,657/- towards the sale consideration.
As per clause 11 of the agreement to sell which was executed between the parties on 24.02.2012, the possession of the said flat was required to be handed over within 18 months from the date of agreement i.e. by 23.08.2013, but OPs failed to do so. The complainants sent a legal notice dated 14.10.2014 to OPs to refund a sum of Rs.41,85,878/- and intimated about the cancellation of the booking of the said flat, but OPs did not respond to the notice. Due to the deficiency in service on the part of OPs, the complainants filed a consumer complaint before the State Commission.
The State Commission vide its order dated 26.04.2016 partly allowed the complaint against OP nos. 1-3. The State Commission directed OP nos. 1-3 to refund jointly and severally the amount of Rs.37,54,697/- to the complainants with interest @ 12% per annum from the date of legal notice i.e. 14.10.2014. The State Commission also directed to pay to the complainants jointly and severally a compensation of Rs.1,00,000/- towards mental & physical harassment and Rs.30,000/- towards the cost of litigation.
The complainants and the opposite parties both preferred appeals against the above impugned order.
Heard the learned counsel for the parties and perused record. For clarity, the parties will be referred to as they are arrayed in the order of the State Commission. The learned counsel for the complainants stated that the State Commission has not given any cost of the complaint and even a meagre compensation of Rs.1.00 lakh has been granted. The complaint was filed for refund of Rs.41,85,878/- from the opposite parties however, the State Commission has only allowed refund of Rs.37,54,697/-. The amount of about Rs.4.00 lakh has been paid as interest to the bank on the home loan, but the State Commission has not ordered refund of that amount. The State Commission has refunded the paid amount along with 12% per annum interest and that too from the date of legal notice whereas the amount should have been refunded from the date of the respective deposits. The rate of interest of 12% per annum does not really compensate the complainants for the price rise in the real estate market hence, the State Commission should have ordered refund with 24% interest per annum.
On the other hand, the learned counsel for the opposite parties stated that the State Commission has not taken into consideration the documentary evidence on record which depicted the delayed payment on the part of the complainants. The State Commission has further failed to consider that the delay in completion of the construction of the project was due to specific directions from the government authorities i.e. MOEF and MPCB to stop the construction. These reasons were beyond the control of the opposite parties and they are to be considered as force majeure conditions and complainants cannot be granted any compensation for this delay. It was further argued by the learned counsel for the opposite parties that the State Commission has ordered refund of the amount paid by the complainants even though the agreement to sell is still in existence. It is all the more surprising that the State Commission has also ordered refund of the taxes and the stamp duty paid by the complainants which was actually deposited with the government exchequer and it was not available for use of the opposite parties. In fact the complainants have taken a loan of Rs.28,43,697/- from the bank and therefore this money cannot be refunded to the complainants. Another legal point was raised by the learned counsel that opposite party No. 3 is the GPA holder only for submission of documents before the Registrar and he has also been arrayed as opposite party to refund the amount in joint and several capacity whereas he does not have any role in the financial transactions between the parties.
I have carefully considered the arguments advanced by both the sides and have examined the record. As per clause 11 of the agreement signed between the parties dated 24.02.2012, the possession of the said flat was required to be handed over within 18 months from the date of agreement that is by 23.08.2013, however, the opposite parties could not give possession within this period and the complainants filed the complaint for refund of the paid amount in 2014 itself. The project has been delayed due to restriction on construction ordered by the government agencies. The opposite parties should have obtained these clearances before starting of the construction. Thus, if the project has been delayed due to these reasons, it will go against the opposite parties themselves because they did not take these approvals before starting the project. Thus, this delay cannot be taken out of the total period of delay and opposite parties are liable to compensate the complainants for this delay as well. The opposite parties have admitted that the clearance of the environment department was given vide letter dated 16.01.2016. Thus, clearly there was an inordinate delay in completion of the project and therefore the complainants were justified in seeking refund. Complainants cannot be compelled to take possession after such a long delay as held by the Hon'ble Supreme Court in Civil Appeal No.12238 of 2018 - Pioneer Urban Land & Infrastructure Ltd. versus Govindan Raghavan that if the occupation certificate is obtained after a long delay from the date of due possession, then, the complainant cannot be compelled to take possession. The order reads 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."
From the aforesaid discussion, it is clearly brought out that the project was inordinately delayed and complainants were entitled to seek refund of their deposited amount. From this aspect, the order of the State Commission does not suffer from any infirmity. However, the questions in respect of the amount of refund and in respect of the interest allowed by the State Commission are to be examined. From the order of the State Commission, it is clear that the total consideration of the flat is Rs.35,51,000/- and against this, the complainants have paid an amount of Rs.33,68,992/-. An amount of Rs.3,85,705/- has also been paid by the complainants towards stamp duty, registration charges, etc. The State Commission has allowed the refund of these charges as well. The argument of the learned counsel for the opposite parties is that this money has gone to the government and opposite parties have not utilized this amount nor have they kept this amount with them and therefore, the State Commission should not have ordered refund of this amount. On the other hand, the State Commission has observed that the opponent builders are liable to refund this amount with interest because due to failure on the part of the builders to give possession in time, they are liable to refund the amount incurred by the complainants towards stamp duty, registration of agreement to sell and other connecting expenditure. Though this amount of Rs.3,85,705/- has gone to the government, it is possible for the opposite party to adjust the amounts of vat and service tax etc., in their total liability of these taxes, but clearly the money spent in stamp duty and registration cannot be adjusted as the agreement has already been registered. The expenditure on stamp duty and registration charges is about Rs.2,25,660/-. In my view, the expenditure on stamp duty and registration charges should be shared on 50:50 basis between the builder and the complainants because it is the complainant who has requested for cancellation of the agreement and refund of the paid amount. Thus, from this aspect, the complainants would be entitled to get refund of Rs.36,41,867/-.
The learned counsel for the complainants has also argued that the complainant has already paid about Rs.4.00 lakh as interest to the bank and the same should also be refunded by the opposite parties. The opposite parties have objected to the refund of the amount which was taken by the complainants on loan to the complainant on the ground that the loan amount should be refunded to the bank. The liability to pay the interest as well as the principal of the loan amount rests with the complainants. From this aspect, I do not find any merit in the argument of the learned counsel for the complainants that the interest on loan paid by the complainants should also be refunded by the opposite parties.
Coming to the question of rate of interest, it is seen that the Hon'ble Supreme Court in the case of Kolkata West International City Pvt. Ltd., vs Devasis Rudra - Civil Appeal no.3182 of 2019 - 2019 SCC online SC 438 decided on 25.03.2019, has reduced the rate of interest @12% per annum granted by this Commission on the amount of refund to 9% per annum. Moreover, Hon'ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. & anr. Vs. D S Dhanda, ETC; Sudesh Goyal, ETC, 2019 Law Suit (SC) 1207, has observed that in cases of refund, 9% interest per annum is sufficient and reasonable. Accordingly interest rate of 12% as awarded by the State Commission is required to be reduced to 9% per annum. The State Commission has granted interest from the date of the legal notice however, in refund cases, the interest is to be granted from the date of deposit of the amounts. Accordingly, the interest of 9% per annum will be paid on the amount deposited by the complainant from the date of respective deposits till actual payment.
Interest is also in the form of compensation and if reasonable rate of interest has been granted to the complainants on the amount of refund, then separate compensation for mental agony and harassment is not justified. Accordingly the order for compensation of Rs.1.00 lakh is set aside.
Based on the above discussion, the order dated 26.04.2016 of the State Commission is modified the extent that the opposite parties will be liable to refund an amount of Rs.36,41,867/- to the complainants along with interest at the rate 9% per annum from the date of respective deposits till actual payment. The award of Rs.1.00 lakh as compensation to the complainants is set aside. The order of the State Commission as modified by this order be complied by the opposite parties within a period of 45 days from the date of receipt of this order. Both the appeals No. 823 of 2016 and 851 of 2016 are disposed of accordingly.