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Judgment
The present appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as the ‘Act’) by Eden Real Estates Pvt. Ltd. assailing the Order dated 30.05.2019 of the State Consumer Disputes Redressal Commission, West Bengal (hereinafter to be referred to as “State Commission”) in complaint No. 317/2015, whereby the complaint of the complainant was allowed.
We have heard the learned counsel for the appellant – Eden Real Estates Pvt. Ltd. (hereinafter referred to as the ‘builder company’) and the learned counsel for the respondent – complainant (hereinafter referred to as the ‘complainant’) and perused the record including the State Commission’s impugned Order dated 30.05.2019 and the memorandum of appeal.
There is a delay of 19 days in filing the present appeal.
In the interest of justice and considering the reasons mentioned in the application for condonation of delay, the delay in filing the appeal is condoned.
According to the complaint, the facts are that the complainant had booked a flat along with one open car parking space in the project, namely, "Eden City Housing Project" situated at Holding No. B1-90/A/1, New Budge Budge Trunk Road, Kolkata within the local limits of Ward No. 31 of Maheshtala Municipality, for a total consideration of Rs. 22,55,520/-. On 18.02.2008 the builder company issued an allotment letter allotting flat No. 603 on the 6th Floor of Tower E-7, with a saleable area of approximately 1524 sq. ft. (approx.) along with General Terms and Conditions (GTC) to the Complainants. As per the allotment letter, the builder company was obligated to deliver possession of the flat within 36 months from the date of commencement of construction of each tower and it was explicitly mentioned that in the event of failure to deliver the possession within the stipulated period, the builder company would be liable to pay Rs.5,000/-per month as compensation, subject to the provisions of Force Majeure circumstances outlined in Clause-10 of the agreement.
The complainant has asserted that on 17.11.2012, builder company sent a letter demanding total Rs.4,66,759/- (i.e. Rs. 4,09,546/- towards the said flat, club membership, club subscription for the first year, caution deposit, maintenance charges for common areas for the first year, reimbursement of diesel generator power backup generator, electricity, cable line charges, and documentation charges and a sum of Rs.57,213/- for overdue interest on delayed payments). Upon receiving the said letter, the complainant by a letter dated 30.11.2012 requested the builder company to provide a detailed statement of interest. However, on 08.12.2012, the complainant also informed the builder company through an email that he wanted to visit the flat, roof terrace, and club house. After visiting the flat, the builder company provided a pre-handover snag checking form to the complainant. The complainant noted down several deficiencies / shortcomings in the bedroom, bathroom, and kitchen. However, these issues were not addressed by the builder company. Subsequently, on 29.03.2013, the complainant, through their Advocate, served a legal notice raising his grievances. The complainant did not receive any response to the said legal notice.
The complainant filed the complaint before the State Commission with the following prayer :-
I. The opposite party Nos. 1 and 2 jointly or severally be directed to deliver peaceful vacant possession of the 'A' schedule flat and car parking space as per agreed terms in favour of the complainant.
II. The OP No.1 and 2 jointly or severally be directed to execute and register the proper deed of conveyance In respect of the 'A' schedule flat and car parking space with other amenities, facilities, rights etc, as per terms of the Agreement in favour of the complainant upon receiving the balance consideration money from the complainant.
III. The OP No.1 and 2 jointly or severally be directed to complete the flat in habitable condition and to provide all amenities and facilities as agreed upon.
IV. The Opposite party No.1 and 2 jointly or severally be directed to finish the un finished work or works as mentioned in paragraph 19 of the petition of complaint.
V. The OP No.1 and 2 jointly or severally be directed to perform their part as per terms of the agreement.
VI. The Opposite Party No.1 and 2 jointly or severally be directed to withdraw its monitory claim as illegally demanded from the complainant subsequent to allotment letter.
VII. The Opposite Party No.1 and 2 jointly or severally be directed to pay Rs.5,00,000/- to the compliant as compensation on account of mental agony, pain, anxiety and unnecessary harassment.
VIII. The Opposite Party No.1 and 2 jointly or severally be directed to pay a sum of Rs.20,000/- as litigation cost to the complaint.
IX. The OP Nos. 1 and 2 their men and agents be retrained by an interim order in the shape of injunction from transferring, alienating and parting with possession in respect of the flat and car parking space as mentioned In the schedule 'A' below In favour of any third person and from dealing with the same otherwise and from changing the nature and character of the same and from doing any illegal acts and from doing any mischief In any manner In respect of 'A' schedule property for ends of justice.
X. Any other relief to which the complainant is entitled to get under law, equity and natural justice.
Upon notice, the builder company filed their reply, raising preliminary objections about jurisdiction of the State Commission and stated that there was an arbitration clause in the agreement, and therefore, in accordance with the Section 8 of the Arbitration & Reconciliation Act, 1996, the State Commission has no jurisdiction to adjudicate the complaint.
Learned counsel for the builder company argued that complainant had made a total payment of Rs.20,41,548/- from 21.12.2007 to 30.05.2011 and the complainant had defaulted in making the payments and that there was a delay of 292 days in making payments. Thereafter, on 17.11.2012, the builder company issued notice of possession along with “Final Demand for payment of possession dues”, and requested to submit requisite documents in order to take possession of the said flat was in habitable condition and ready to deliver but the complainant, instead of clearing the outstanding dues, sent a legal notice dated 19.03.2014 denying and disputing the outstanding dues.
After appreciation of the facts of the case, the State Commission partly accepted the complaint and directed the opposite parties as under:-
i) The Opposite Party No.1 is directed to deliver Letter of Possession and to execute the Deed of Conveyance in respect of the flat and car parking space as per Agreement (GTC) in favour of complainant within 90 days from date subject to payment of the amount as mentioned in Annexure-A & A/1 to the notice of possession dated 17.11.2012.
ii) The Opposite Party No.1 is directed to pay compensation in the form of simple interest @ 15% p.a. over the amount already paid from the committed date of possession i.e. from 18.02.2011 to 17.11.2012;
iii) The Opposite Party No.1 is directed to pay Rs.10,000/- as cost of litigation to the complainant;
iv) The balance amount payable by the complainant, if any, shall be adjusted by OP No.1 out of the compensation payable to them in terms of this order. The balance compensation, if any, shall be paid at the time of offering possession of the flat to the complainant, in terms of this order.
Being aggrieved by the said Order, the builder company has filed the present appeal before this Commission with the following prayer:
a. Allow the present appeal and set aside the impugned Order dated 30.05.2019 passed by the West Bengal State Consumer Disputes Redressal Commission, Kolkata in Complaint Case No. 317 of 2015 (Prakash Chand Abhani Vs. Eden Real Estates Pvt. Ltd. & Anr);
b. Call for records of the Complaint Case No. 317 of 2015 from the West Bengal State Consumer Disputes Redressal Commission, Kolkata; and
c. Pass such further order or orders as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the present case.
The builder company’s main ground against the impugned Order of the State Commission was that the State Commission failed to appreciate that the complainant has failed to perform his part of obligations as per general terms and conditions as he did not make timely payments and there was a fault on part of the complainant. Hence, there is no deficiency in service or unfair trade practice on the part of builder company.
The learned counsel for the builder company argued that they have been offering possession since 17.11.2012 in accordance with the terms of the agreement and as the complainant has not made the timely payment, builder company issued a letter dated 12.02.2013 vide which the builder company requested the complainant to clear the total dues amounting to Rs.4,66,759/-. Again, the builder company sent another letter dated 11.03.2013. As the complainant had failed to make the payment, the builder company could not deliver the possession of the flat to the complainant even after issuance of notice of possession along with “Final Demand for payment of possession dues”.
Learned counsel for the complainant reiterated the facts of the case and relied on the order the State Commission.
It is admitted fact that there was delay on the part of the builder in handing over the possession of the flat to the complainant. The possession of the flat was not handed over to the complainant on the scheduled date i.e. 18.02.2011 and the notice of possession was eventually offered on 17.11.2012 after receipt of occupancy certificate on 03.10.2012. As per allotment letter/agreement between the builder and the complainant, the construction of the flat was to be completed within a period of 36 months from the date of commencement of construction of each tower. The agreement was executed on 18.02.2008 with the condition that the physical possession be handed over within 36 months i.e. on or before 18.02.2011 but possession was only offered on 17.11.2012 indicating a substantial delay on the part of the builder company and therefore, complainant has rightfully claimed compensation for delay in handing over possession. Admittedly, there is delay for approximately 1 years and 9 months beyond the initially promised possession date ( i.e. 18.02.2011) till the offer of possession (i.e. 17.11.2012). Therefore, the complainants are justified in claiming compensation for delay in handing over possession.
There are a number of landmark judgments of the Hon’ble Supreme Court holding builders responsible for compensation for delay in delivery of possession.
Before us, the question which falls for consideration is the quantum of compensation to be awarded to the complainant for delay in handing over the possession of the flat in question.
In this regard, we would like to quote the recent judgment of the Hon’ble Supreme Court in the case of Wing Commander Arifur Rahman Khan and Aleya Sultana and Ors. Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512 wherein it was held as:
“54. …. The general appreciation in land values results in an increase in the value of the investment made by the buyers. Difficulties in determining the measure of compensation cannot however dilute the liability to pay. A developer who has breached a clear representation which has been made to the buyers of the amenities which will be provided to them should be held accountable to the process of law.”
“69.1. ….the first and second respondents shall, as a measure of compensation, pay an amount calculated @ 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate.”
In a similar case of the Hon’ble Supreme Court DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537 decided on December 14, 2021, wherein it was held as under:
“It is true that in the present case, the contractual rate of Rs.10 per square foot per month is double the rate fixed in the agreements in the above case. On the other hand, the court must be conscious of the fact that the situation in the real estate market in Delhi is very distinct from that in Bengaluru both in terms of rentals and land values. This has not been disputed. The flat buyers had to suffer on account of a substantial delay on the part of the appellants. In such a situation, they cannot be constrained to the compensation of Rs.10 per square foot provided by the agreements for flat purchase. However, having regard to all the facts and circumstances, we are of the view that the compensation on account of delay should be brought down from 7% to 6%. Moreover, the amount, if any, which has been paid in terms of the contractual rate shall be adjusted while computing the balance”
The Buyer’s Agreement represents a legally binding contract that imposes obligations on both buyers and builders/developers.
In view of the law laid down by the Hon’ble Supreme Court in the case Wing Commander Arifur Rahman Khan and Aleya Sultana and Ors. Vs. DLF Southern Homes Pvt. Ltd. (supra) and DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn. (supra), we are of the view that the compensation in the form of simple rate of interest at the rate of 6% per annum for delay in delivery of possession would be just and appropriate. The compensation should be applicable up to the date of offer of proper possession from the date of possession as stipulated in the allotment letter as the complainant was not obligated to make payments when the builder company failed to meet its obligation of delivering possession of the flat as promised within the stipulated period.
As such we modify the award made by the State Commission to the extent that the builder company shall pay compensation in the form of simple interest at the rate of 6% per annum from the date of possession as stipulated in the allotment letter i.e. 18.02.2011 till the date of offer of possession i.e. 17.11.2012 and the other directions of the State Commission are not disturbed.
The appeal stands disposed of in above terms. All pending applications, if any, stand disposed of.