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Judgment
Avm J. Rajendra, Avsm, Vsm (Retd.), Member
These Seven Appeals, bearing Nos. FA/472/2018, FA/481/2018, FA/482/2018, FA/483/2018, FA/484/2018, FA/676/2018 & FA/677/2018 were filed by Heritage Cottages Pvt. Ltd. (Hereinafter referred to as the “Appellant”/ “Opposite Party”) against Satish Chandra Jain & Others (Hereinafter referred to as the “Respondents”/“Complainants”). These Appeals challenge the Orders dated 07.12.2017 in CC/48/2016 to CC/52/2016 and CC/178/2016 to CC/179/2016 respectively, which were passed by State Consumer Dispute Redressal Commission, Haryana Panchkula (hereinafter referred to as the “State Commission”). The State Commission had partly allowed all the Complaints.
Since the facts and questions of law involved in all the Appeals are substantially similar, except for minor variations in dates, events and unit numbers, these Appeals are being disposed of by this common Order. For ease of reference, First Appeal No. 472 of 2018 is being be considered as the lead case, and the facts stated below are derived from Consumer Complaint No. 48/2016.
Brief relevant facts of the case as per the Complainant are that the Complainant/Respondent Shri Satish Chandra Jain, booked an apartment with the Opposite Party (Builder /Developer) vide application dated 24.09.2007. He made payments on different dates, as mentioned below: -
Dated
Payment
23.10.2007
Rs.3,93,750/-
15.11.2007
Rs.1,96,875/-
15.12.2007
Rs.1,96,875/-
15.03.2008
Rs.3,24,275/-
Subsequently, the Opposite Party issued an Allotment Letter on 18.01.2008 to the Complainant and allotted Flat No. A-302, with area admeasuring 1500 Sq Ft. A Builder Buyer Agreement was executed between the parties on 04.06.2008. According to Clause No. 28 of the Agreement, the possession of the apartment was to be delivered within 36 months and the payment of installments was construction linked. The Complainant paid a total of Rs.31,69,211/-. However, it was alleged that possession was not offered till date. Consequently, being aggrieved the Complainant approached the learned State Commission with a Consumer Complaint praying for refund of the deposited amount along with interest, or, alternatively, the delivery of possession of the apartment along with compensation, among other reliefs.
The Opposite Party, in its written version before the State Commission made several counterclaims. They contended that the application dated 24.09.2007, presented by the Complainant as an Application Form issued by them, is a fraudulent and counterfeit document. The Opposite Party firmly asserted that no such application was ever issued or received by them. Contrary to the Complainant's assertion that allotment was declined, the OP stated that they indeed issued an allotment letter on 18.01.2008. The Complainant deposited the amount as specified in the agreement, and they had willingly signed the buyer's agreement after thorough consideration, with no concealment of information. The OP argued that any delays in possession delivery were not intentional on their part and were contingent on unforeseen circumstances.
The OP also countered the allegations related to the failure of the licensee's to renew the license. They claimed that the responsibility for the delay in license renewal did not rest with them. They emphasized their readiness to fulfil the contractual obligations and highlighted that the primary issue was linked to the bifurcation of the license held by the Government. The license had originally been issued in the name of M/s. Triveni Ferrous Infrastructure Pvt Ltd, now known as M/s Maximal Infrastructure Pvt Ltd. The sole liability of the OP pertained to the development and sale of projects as per the agreements with Triveni. The OP had communicated the licensee's failure to the complainant and that 80% of the work had already been completed. They are committed to hand over the possession as soon as the license was renewed and bifurcated. Lastly, the OP argued that the complainant is not a consumer. They denied various other claims made by the complainant and requested the dismissal of the Complaint filed in the matter.
After hearing all the Parties, the learned State Commission partly allowed the Consumer Complaint No.48/2016 filed in the matter and passed the following orders on 07.12.2017:-
“6. As a sequel to above discussion O.P. is directed to refund the amount deposited by complainant alongwith interest @ 9% per annum from the date of deposit till payment within 30 days from receipt of order. If before payment project is completed and complainant is ready to take possession, then the possession may be delivered. He is held entitled for compensation to the tune of Rs.21,000/- for mental as well as physical harassment and Rs.11,000/- as litigation expenses.”
Aggrieved by the Order of the State Commission, the Appellant / Opposite Party filed the present Appeal No.472/2018 before this Commission with the following prayer:
“In view of the submission made hereinabove, it is therefore, most respectfully prayed that this Hon’ble Commission may be pleased to allow the instant appeal and set aside the impugned order dated 07.12.2017 passed by the Ld. State Consumer Disputes Redressal Forum, Panchkula, Haryana in Complaint No. 48 of 2016, dismiss the complaint filed by the respondent with costs throughout.”
The Appellant in the Appeal mainly raised following grounds:
(a) The State Commission failed to consider that the Appellant has taken all steps for timely completion and prompt delivery of possession to consumers. The delay was not their fault. It was due to disputes between the licensees and actions by the Government of Haryana.
(b) The Appellant emphasized that they deposited all dues to the licensees, as per Supreme Court's order dated 05.05.2015 in WP(Crl) 5/2015. However, the licensees did not remit the deposited government charges to the government. They filed relevant applications for intervention and directions before Supreme Court regarding the ongoing dispute between the licensees, seeking an early resolution to benefit consumers.
(c) These facts demonstrate their diligent pursuit of the matter, and with 80% of the construction already completed, they had no incentive to delay possession handover.
(d) The learned State Commission erroneously held that the liability to hand over possession should have been specified in the agreement as that of the licensee and not the Appellant. The delay was due to circumstances beyond their control and constituted a clear case of force majeure.
(e) The learned State Commission overlooked the fact that the Appellant received a notice from an advocate representing the Respondent, incorrectly listing Respondent's address as indicated in the Complaint. They responded to this notice, and suggested that the Respondent's was intentionally concealed from the State Commission to avoid disclosing crucial facts.
(f) The State Commission failed to observe that the entire complaint is bereft of any pleading/averment as to how the Respondent is a consumer. The only statement made by the Respondent/Complainant is that "complainant is a consumer". Neither the complaint nor the accompanying affidavit states that the Respondent purchased or entered into the agreement to purchase the said flat for his own use/enjoyment.
The Appellant was not present for hearing on 09.08.2023 and thus vide order dated 09.08.2023, final opportunity was granted to be present and argue the matter on the next date of hearing on 01.09.2023. However, none appeared for Appellant on 01.09.2023 even after pass over. The matter was, therefore, heard finally in absence of the Appellant as well as the Counsel for the Appellant.
On the other hand, the learned Counsel for the Respondents/ Complainants reiterated the facts of each Complaint drawing specific reference to parties, dates of booking, date of BBA, total considerations involved, amounts paid and due date of Possession. He further argued that the builder is trying to shift the burden upon M/s Triveni Ferrous Infrastructure Pvt. Ltd. now known as M/s Maximal Infrastructure Pvt Ltd). It is and entirely commercial arrangement between them and entirely internal arrangement. It is evident that, even prior to the agreement dated 18.02.2008 between builder and Triveni, as disclosed in Para B of Buyers Agreement, the builder invited booking, accepted payments and issued Allotment Letter. The learned Counsel asserted that while the license might have lapsed on 22.01.2009, it was the for the builder to apply for renewal in time, as per Rule 13 of the Haryana Development & Regulation of Urban Area Rules, 1976 notified under Haryana Development and Regulation of Urban Areas Act, 1975. Despite taking bookings and accepting payments, the builder failed to produce any record to show that they have taken timely steps to renew the licence and other procedural mandates. The Appellant failed to notify the same and, however, continued to collect payments. The OP approached the Hon'ble Delhi High Court filing CM No. 543/2013 in COP No. 39 of 2009. Later, the Appellant had claimed that it applied for separation of interest before DTCP, Haryana in October 2015. However, they failed to explain the delay from 2007 till 2015. As regards the claim of force majeure, the Counsel for Complainant argued that the builder never informed the same and even continued taking instalments. He relied on "Satish Kumar Pandey Vs M/s Unitech Ltd", CC No.427/2014 decided on 08.06.2015 and Sanjay Kumar Vs. Supertech Ltd, CC No.40/2017, decided on 01.03.2018.
The learned Counsel for the Respondent/ Complainant further argued that it is a clear case where the builder delayed the project beyond the terms of contract and failed to even inform the delay and rather continued to collect the payments from them. He urged that, in such circumstances, in various judgments the NCDRC directed the builders to refund the money deposited along with interest @ 18% per annum. He relied on ‘Classic Homes Apartment Buyers' Association Versus Buildmore India Ltd. & Others' Original Petition No.393 of 2000, decided on 13.09.2013, and "Puneet Malhotra Vs. M/s Parsvnath Developers Ltd.", CC No.232/2014, decided on 29.01.2015. He further argued that the builder failed to develop the colony and delayed considerably, as admitted. Hence, the booking holder cannot be compelled to wait. The law as settled in "Kolkata West International Vs. Devasis Rudra", CA No.3182/2019, decided on 25/03/2019. In Chandan Gupta Vs. Supertech Ltd., Consumer Case No.2590/2017, decided on 01.05.2019 it was held that for failure to develop in time, the consumer is entitled for refund without any deduction. In Shalabh Nigam Vs Orris Infrastructure, CC No. 1702/2016, decided 06.05.2019, a finding was given that in case of One year delay in offering possession, the consumer is entitled for refund.
As regards certain citations relied upon by the Appellants, the learned Counsel for the Complainant/ Respondent argued that the orders dated 24.04.2020, 09.10.2022, 26.11.2021 and 13.12.2021 passed by the Hon'ble Supreme Court in ‘Ashish Seth Vs Sunil Mittal & Ors, Contempt Petition (Criminal) No.34/2016 in WP(Civil) No.5 of 2015 and asserted that the petition is in respect of inter-se dispute between the owner and the appellant builder wherein the Respondents were not even impleaded as a party. The Hon'ble Apex Court had not given any finding or remarks which affects the rights of consumers’ or which absolves the liability of the Appellant. Further, the Appellant builder did not disclose before the Hon'ble Apex Court that it was booking the Units and collecting the money and started issuing the allotment letter prior to the agreement dated 18.02.2008 of Heritage with the Licensee M/s Triveni Ferrous Infrastructure Pvt. Ltd. Further, the licence expired on 22.01.2009. However, they continued to collect the money even after expiry of Licence. It was also not disclosed that the Appellant builder had entered the buyer's agreement with the consumers. Hence, the critical facts were not placed before the Hon'ble Supreme Court to consider and examine all such issues.
We have examined the pleadings and associated documents placed on record and thoughtfully heard the arguments advanced by the learned Counsel for the Respondents.
It is an admitted fact that the Appellant and the Complainant entered into the subject contract for construction of a Flat on 04.06.2008 for total consideration of Rs.34,38,750/-. The due date for handing over possession was within 36 months from the date of contract i.e. by 03.06.2011. Towards consideration for the Flat, the Complainant had paid Rs.31,69,211/- to the Appellant. The Flat was, however, not delivered till date. It is the contention of the OP that the delay in handing over the possession was not intentional and was contingent to unforeseen circumstances. The licensee in the project failed to renew their license and the responsibility for the delay in license renewal did not rest with Appellant. While the Appellant is ready to fulfil the contractual obligations, the primary issue is linked to bifurcation of the license issued to M/s Triveni Ferrous Infrastructure Pvt Ltd (now M/s Maximal Infrastructure Pvt Ltd. As per their agreements with Triveni, the sole liability of the OP pertained to the development and sale of projects. 80% of the construction had already been completed and possession will be handed over as soon as the license was renewed and bifurcated.
This contention cannot come to the rescue of OP because the Flat Buyer Agreement was executed in between Complainant and the Appellant. It was clearly known to the OP at the time of execution of contract as to in whose favour the license was issued. As per Clause 28 of the Agreement, the OP was to deliver the possession to the Complainant within 36 months. The Complainant has nothing to do with any M/s Triveni Ferrous Infrastructure Pvt Ltd at that time. If it was a tripartite Agreement and the said Triveni Ferrous Infrastructure Pvt Ltd was also a party, then it could have been a different matter to certain extent. As far as the case of Complainant is concerned, he has the contract with the Appellant/OP and not any other person or firm. It was for the OP to ensure compliance with the terms of contract entered into between the OP and the Complainant. Had it been mentioned in Agreement itself that the liability to handover the possession to the Complainant within due date agreed upon will be of licensee and not the OP, it had different implication. Having entered into the subject contract and collected consideration thereto, now it cannot be alleged that fault was with M/s Triveni Ferrous Infrastructure Pvt Ltd and that it is not liable for any lapse on their part. If there is any dispute between the Appellant and the said M/s Triveni Ltd, it is between them. The Complainant has no locus standi for the same.
In this case, the Appellant and the Complainant are bound by the terms and conditions of Agreement in question. When OP failed to deliver possession as agreed in between them, the OP is liable to refund the amount deposited. The Complainant cannot be made liable to approach M/s Triveni for compensation. As per Agreement in this case, the Complainant was liable to pay Rs.34,38,750/-. Whereas, he had paid Rs.31,69,211/-. Therefore, it is an admitted position that the Appellant/OP entered into the contract with the Complainant, received agreed consideration and, however, failed to deliver possession of the flat to the Complainant. The deficiency in service on the part of the OP is clear. Therefore, the Appellant is liable to refund the amount paid to the Complainant with interest.
Therefore, the order of the learned State Commission in C.C. No. 48 of 2016 dated 07.12.2017 is based on evidence and law.
The crucial question at this stage is determining the amount of compensation that should be awarded to the Respondents for the deficiency in service by the Appellant. The State Commission had awarded compensation @ 9% per annum from the date of deposit till payment. Further, awarded compensation to the tune of Rs.21,000/- for mental as well as physical harassment and Rs.11,000/- as litigation expenses.
As regards compensation, in the recent Order of the Hon’ble Supreme Court in the case of Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 7.4.2022, has held as under:-
“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the Order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”
The Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 has held that multiple compensations for singular deficiency is not justifiable. Therefore, the award of Compensation Rs.21,000/- for mental agony as well as physical harassment given by the State Commission are found to be not tenable.
In view of the foregoing and the established precedents by the Hon’ble Supreme Court, the impugned Orders dated 07.12.2017 passed by the learned State Commission, Haryana in C.C. Nos.48 to 52, 178 and 179 of 2016 are modified with the following directions:
ORDER
I. The Appellant/Opposite Party is directed to refund the amount deposited by Complainants/Respondents in all the complaints respectively along with interest @ 9% per annum from the date of deposit till payment. This shall be done within one month from the date of this order. In the event of default, the interest applicable shall be @ 12% per annum for such period beyond one month till realization of the entire amount.
II. The Appellant is also directed to pay a sum of Rs.25000/- as litigation expenses to each the Complainants/ Respondents.
With the above Orders, the Appeals Nos. FA/472/2018, FA/481/2018, FA/482/2018, FA/483/2018, FA/484/2018, FA/676/2018 and FA/677/2018 also stand disposed of.
All the pending Applications, if any, are disposed of accordingly.
The Registry is directed to release the Statutory deposit amount, if any, in favour of the Appellant after due compliance of this order.