Firoz Ahmad vs Paramount Propbuild Pvt. Ltd. & Anr

These cross appeals have been filed under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as the ‘the Act’) assailing the Order dated 26.09.2022 passed by the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the ‘State Commission’) in complaint No. 10 of 2022.

Firoz Ahmad, the complainant (hereinafter referred to as the ‘complainant’) has filed appeal no. 816 of 2022 for enhancement in compensation while Paramount Propbuild Pvt. Ltd and its Director Mr. Mukesh Kumar Agrawal, the opposite parties before the State Commission (hereinafter referred to as the ‘builder’), have filed appeal No. 935 of 2022 for setting aside the Order dated 26.09.2022 of the State Commission.

On the final date of hearing i.e. 06.11.2023, it was seen that vide order dated 15.09.2023, a final opportunity was granted to the Paramount Probuild Pvt. Ltd. to be represented on the next date of hearing and file their short synopsis of arguments. They were not present and had also not filed their short synopsis.

We have heard the complainant in person and perused the material available on record.

Brief facts of the case as narrated in the complaint by the complainant, are that the complainant had booked a residential villa in the Project ‘Paramount Golfforeste’ situated in Greater Noida, Uttar Pradesh, with the builder company, for a total sale consideration of Rs.47,22,552/-, as per the allotment letter dated 10.06.2011. The complainant paid a total amount of Rs.51,63,148/- as per the demand raised by the builder company. The complainant was allotted unit No. B-294 having super area of 2452 sq. ft. As per the terms and conditions specified in the allotment letter, the construction work of the unit was to be completed and physical possession thereof was to be delivered to them within 30 months from the date of the allotment latter i.e. on or before 10.12.2013. However, on 09.07.2013 the complainant filed a complaint before the District Forum, against the illegal demand letter by the builder. Thereafter, vide a letter dated 08.09.2014 builder issued a cancellation letter cancelling the allotment of the said unit. However, the possession of the unit was not delivered till 2015 and thereafter, a settlement agreement was entered between the parties and the same unit was re-allotted to the complainant. The relevant portion of the settlement agreement is reproduced below:

“3. That, after the dismissal of the complaint by Ld. DCDRF, Second Party had cancelled the bookings of above units in the name of First party vide its letter dated 28.08.2014 and allotted the above units on 06.09.2014 in the name of third persons. However, it is hereby agreed and assured that the Second Party will take back the above units from the existing allottee and thereafter will re-allot the same units in the name of First Party after the withdrawal of the above appeals by the First Party.”

It is averred before the State Commission that despite the settlement dated 23.07.2015 and the fact that the complainant had paid a sum of Rs. 51,63,148/- to the builder, the builder failed to handover the possession of the said villa till pronouncement of order by the State Commission. Moreover, the complainant duly purchased stamp papers of Rs.2,33,500/- and sent letters dated 25.12.2015 & 25.01.2016 to the builder seeking possession of the said unit as per the settlement agreement arrived between the parties but was of no avail. It is further stated that even after issuance of Occupancy Certificate by competent authority in year 2015, the builder company failed to deliver the actual, valid and physical possession of the said villa to the complainant.

Being aggrieved, the complainant filed a complaint before the State Commission.

The builder contested the complaint by filing their written statement stating that the settlement agreement was arrived between the parties on 23.07.2015 and the complainant had made payment of Rs.9,11,897/- and Rs.1,03,708/- but the actual amount due and payable as per the said settlement was Rs.24,78,160/-.  Since the Complainant failed to make the payment of Rs.14,62,555/- the possession of the unit has not been handed over to the complainant.

The State Commission after hearing both the parties, partly allowed the complaint and directed the builder to hand over the possession of the said villa to the complainant within two months from the date of judgment and to pay interest @ 6% p.a. calculated on Rs. 51,63,148/- from 28.09.2015 towards the compensation for delay in handing over the possession of the said villa, failing which, the interest @ 9% p.a. calculated from 28.09.2015 till the actual date on which possession is handed over to the complainant. The compensation of Rs. 2,00,000/- towards mental agony and Rs. 50,000/- towards litigation costs were also awarded.

The complainant, who is present in person, has argued that despite the execution of agreement for sale and receipt of the entire payment, the builder deliberately and intentionally withheld the possession of the subject villa as a result of which the complainant was deprived of the rightful use and enjoyment of his property for a period of eight years. Further, he argued that the State Commission failed to grant appropriate compensation despite finding the builder guilty of deficiency in service. The compensation ought to be higher given the conduct of the builder. Furthermore, he argued that due to builder’s non-compliance, the cost of stamp duty rates had been increased for which the builder is solely liable to bear the increased cost of Rs. 93,400/- towards stamp duty.

The main question for consideration is as to whether the builder was deficient in handing over physical possession of the unit.

In this regard, the relevant extracts of the letter issued by the builder regarding allotment restoration is as under:

“In this regard please note that the total amount now due against the above units (at the offer of possession) is as under:

B-294: Rs. 8,61,897/- + Rs. 50,000/- (interest amount as agreed by you during the settlement).

Besides the above, Cheques towards the maintenance charges are also payable by you as under:-

B-294: Rs. 1,03,708/- in favour of M/s Premium Facility Pvt. Ltd.

You are requested to handover the DD in favour “Paramount Golforeste, a unit of Paramount Propbuild Pvt. Ltd.” for the above due amount and also the cheques towards the maintenance charges to us on the next date of hearing i.e. 28.09.2015. On receipt of the same we shall handover to you the Allotment Restoration letter for the above units on the same day, in the court itself.

Hence, with the above transactions the matter would stand settled as per the settlement agreement.”

From a perusal of the letter regarding reallotment, it is clear that only Rs. 8,61,897 and Rs. 1,03,708/- are due.

From a perusal of the record including money receipts, it is clear that upto 26.11.2012, the complainant had made the total amount of Rs.41,47,543/- and after the settlement, on 28.09.2015 and on 30.10.2015, the complainant further paid Rs.9,11,897/- towards consideration and Rs. 1,03,708/- towards maintenance, the total being Rs.51,63,148/-. It is not in dispute that the unit was restored in the name of the complainant after receiving the due payment and the maintenance charges. It is admitted by the builder that the said payments had been made by the complainant. It is apparent from the record that the allotment letter was issued on 10.06.2011 and the physical possession of the unit was to be handed over within 30 months from the date of allotment letter i.e. on or before 10.12.2013 but the builder had failed to produce any documentary evidence that the physical possession was offered to the complainant on or before 10.12.2013. Even after the settlement reached between the parties i.e. 28.09.2015, the builder had not been able to produce any document to show that the possession had been offered to the complainant. It was only on 19.04.2023 when the learned counsel for the builder submitted that the possession had been handed over to the complainant and the same was confirmed by the learned counsel for the complainant.

The Order dated 19.04.2023 of this Commission reads as under:

“Dated: 19.04.2023

ORDER

Learned counsel for the appellant (builder co.) submits that, without compromising its rights and contentions, possession of the subject residential unit has been handed over by the appellant (builder co.) to the respondent (complainant).

Learned counsel for the respondent (complainant) confirms that possession of the subject residential unit has been handed over by the appellant (builder co.) to the respondent (complainant).

In the obtaining situation it is deemed apt that execution proceedings before the State Commission shall remain stayed and also that no third-party interest shall be created on the subject residential unit by the respondent (complainant) till further orders.

List on 10.05.2023, the date already fixed.”

In the case of Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan LNIND 2019 SC 311, the Hon’ble Supreme Court has held as under :

“.....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified.”

The Hon’ble Supreme Court in the recent case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Anr. in Civil Appeal No. 5785 of 2019 decided on 11.1.2021, has held as under:

“9. 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.”

We find there has been an unreasonable delay in handing over the possession of the unit to the complainant as per the agreement. The complainant cannot wait for an indefinite period as he has invested hard earned money with the intention to get the possession of the unit within stipulated period. As per the terms and conditions specified in the allotment letter, the construction work of the unit was to be completed and physical possession of the same was to be delivered to them within 30 months from the date of the allotment latter, therefore, the unit was to be delivered on i.e. on or before 10.12.2013. It is averred by the complainant that the possession of the unit was not delivered till the date of filing of this appeal before this Commission. It is manifest that the builder has inordinately delayed handing over the possession and executing the conveyance deed. Therefore, the complainant is entitled for a fair and reasonable compensation on account of delay on the part of the builder in handing over the 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.  The issue to be decided in the present appeals is what would be the reasonable quantum of interest.  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”

In view of the law laid down, we are of the opinion that the compensation, for the delay in handing over possession of the premises, in the form of interest @ 6% per annum granted by the State Commission vide its Order dated 26.09.2022, is just and reasonable and commensurate with the loss and injury suffered by the complainant.

The State Commission has awarded the compensation of Rs.2,00,000/- towards mental agony separately besides interest.

In this regard, we would like to place reliance on the Order of the Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019, wherein it was held that multiple compensations for singular deficiency is not justifiable. In the instant case, once the compensation in the form of interest at the rate of 6% per annum has been awarded to the complainant, the award of Rs. 2,00,000/- for mental agony given by the State Commission is not tenable in the light of the D.S. Dhanda (supra). Therefore, the Order of the State Commission dated 26.09.2022, is modified to the extent that the builder shall pay compensation in the form of interest at the rate of 6% per annum calculated on Rs. 51,63,148/- from the respective dates of deposits till the actual date of handing over possession to the complainant within four weeks, failing which, the interest at the rate of 9% per annum calculated from the respective dates of deposit till the actual date of handing over physical possession of the said villa shall be paid. The direction given by the State Commission to pay Rs.2,00,000/- towards compensation for mental agony is set aside. The other directions of the State Commission are sustained. The order shall be complied with within four weeks from today.

In view of the above, the appeal no. 816 of 2022 of the complainant is dismissed. The appeal no. 935 of 2022 of the builder stands disposed of in above terms. All pending applications, if any, stand disposed of.

Appeal Execution No. 09 of 2023

The builder has filed an appeal execution against the against the impugned Order dated 13.12.2022 in Execution Application No. 137 of 2022, (arising out of order dated 26.09.2022 of the State Commission), whereby the warrants of attachment were issued.

In view of the appeal being decided in the above terms, the appeal execution before this Commission does not survive and dismissed as abated.