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Judgment
Subhash Chandra, Presiding Member
This consumer complaint under section 21(a) (i) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleges unfair trade practice and deficiency in service in delay in handing over possession of a flat booked in a project promoted and executed by the opposite party within the promised time and seeking refund of the amount deposited with compensation and other costs.
The facts, as stated by the complainants are that they booked a flat admeasuring 2375 sq ft @ Rs 2600/- per sq ft on 25.12.2006 in “Wave Gardens”, a project promoted by the opposite party in Sector 85 and 89, SAS Nagar, Mohali, Punjab by deposit of Rs 2,00,000/-. Registration no. MA0072 was allotted and after depositing Rs 6,17,500/- by 25.01.2007, the opposite party entered into an Apartment Allottee Agreement (in short, the ‘Agreement’) on 30.10.2013. Apartment no. 702, 7th floor, Tower Laurel admeasuring 3160 sq ft (super area) comprising 4 bedrooms and one car park was allotted for a sale consideration of Rs 99,18,749, including EDC. Complainants opted for Construction Linked Payment Plan. As per clause 5.1 of the Agreement, possession was promised within 30 months with grace period of 6 months from the date of Agreement, i.e., on or before 29.10.2016. A total of Rs 39,80,764/- was paid by 02.01.2014. However possession was not handed over and complainant states that opposite party abandoned construction of Tower Laurel and offered an alternative to shift to apartment F 1402 admeasuring 1990 sq ft which was not acceptable and hence a legal notice was served on 06.05.2017.
On grounds of deficiency in service, the complainant is before this Commission with the prayer for directions to opposite party to
i. refund Rs 39,80,764/- with 18% interest from the dates of payment along with pendente lite and future interest @ 18%;
ii. pay Rs 10,00,000/- as compensation for mental harassment and trauma;
iii. pay Rs 1,10,00,000/- as litigation expenses; and
iv. any other orders deemed fit.
Resisting the complaint by way of a reply, opposite party denied all averments and raised preliminary objections that (i) the complainant is not a ‘consumer’ under section 2(1)(d) being an investor; (ii) lack of pecuniary jurisdiction of this Commission in view of having paid only Rs 39,80,764/- and including interest the threshold of Rs 1 crore would not be met in terms of Ruhi Seth Vs. Ireo Grace Realtech Pvt. Ltd. CC No. 1464 of 2017 dated 13.11.2017; (iii) the Agreement provides for compensation for delay in clause 5.5 @ Rs 5/- per sq ft per month; (iv) force majeure conditions being applicable since the land was to be acquired by the State Government under the Land Acquisition Act, 1894 which did not take place and the Greater Mohali Area Development Authority (GMADA) failed to develop proper external access roads.
On merits, it is contended that the booking of the flat was not for personal use by the complainants. The delay in the signing of the Agreement is denied and contended that the complainant booked the flat early. The sale consideration is stated to be Rs 91,18,749/- on the basis of clause 3.1 of the Agreement. The period of 30 months for construction is stated to not be a commitment but only an endeavour. The complainants are stated to have defaulted in making timely payments. It is stated that the opposite party is entitled to relief under the force majeure clause. Accordingly, the complaint is stated to be liable to be dismissed with costs.
Parties led their evidence by way of affidavits and filed rejoinder and short synopsis of arguments. I have heard the learned counsel for both the parties and given thoughtful consideration to the submissions and material on record.
The preliminary objections of the opposite party have been considered. The contention that the complainant is not a ‘consumer’ is a bald statement that has not been supported by any evidence, the onus of which is on the opposite party to show that the complainant was in the business of buying and selling flats, in terms of this Commission’s orders in Kavita Ahuja Vs. Shipra Estates, I (2016) CPJ 31 and Sanjay Rastogi Vs. BPTP Limited & Anr., CC No. 3580 of 2017 dated 18.06.2020. This argument cannot be sustained. The settled law on pecuniary jurisdiction as held by this Commission in Ambrish Kumar Shukla & 21 Ors vs Ferrous Infrastructure Pvt. Ltd., I 2017 CPJ 1 (NC) and Renu Singh vs Experion Developers Pvt. Ltd., CC no.1703 of 2018 is that the principle for determining the pecuniary jurisdiction is the total consideration paid by the complainant or persons who have joined the complaint in a joint complaint and other damages claimed to determine such jurisdiction. In view of this position of law the contention of the opposite party regarding pecuniary jurisdiction does not sustain. It has been held by the Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd. Vs Abhishek Khanna & Ors., CA No. 5785 of 2019 decided on 11.01.2021 that the developer is obligated to pay delay compensation for the period of delay from the date of handing over possession till the date of offer of possession and that compensation at the rate specified in the apartment buyers’ agreement (of 0.9-1%) cannot be accepted as adequate compensation. This contention of the opposite party is therefore not valid.
On the issue of force majeure, According to the opposite party, under the Memorandum of Agreement (MoA) dated 03.02.2006 between it and the Government of Punjab, 23.21 acres land was to be acquired for development by the opposite party which did not happen and GMADA failed to provide external roads. It is contended that in view of this, force majeure conditions are applicable. However, when considered in light of its own documents such as the Agreement which stipulated delivery in 36 months from the signing of the agreement and the opposite party abandoning the construction of Tower 7, this contention cannot be accepted as valid.
From the record it is apparent that the project “Wave Gardens” was abandoned in respect of Tower Laurel in which the opposite party had allotted a flat (No. 701, 7th Floor) to the complainant. It is not denied that payments amounting to Rs 39,80,764/- were received by the opposite party from the complainant and that possession had been assured on or before 29.10.2016. No offer of possession or occupation certificate has been brought on record by the opposite party. It is also not denied by the opposite party that an option to shift to another tower and a smaller flat was offered to the complainant. Therefore, it is manifest that the opposite party failed to comply with the assurances in the Agreement with regard to the flat originally booked. It is also established that there was a delay in the handing over of the flat and that the complainant is entitled to relief on account of deficiency in service by the opposite party.
The Hon’ble Supreme Court has held in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019 that
“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession”.
In the present case, the delay is of nearly 6 years 10 months. Considering that the amount paid is substantial, seeking compensation for delay is not unwarranted. The Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 12238 of 2018 with No. 1677 of 2019 dated 02.04.2019 has laid down that a buyer cannot be compelled to take possession of a flat when there is delay in delivery of possession by the builder and the buyer is entitled to refund along with compensation/interest for such delay.
The claim of the complainant for compensation in the form of interest @ 18% p.a. has been considered. In Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, CA No. 6044 of 2019 decided on 07.04.2022 the Hon’ble Supreme Court held that laid down that interest payable should be restitutionary and also compensatory and paid from the date of deposit. It was also held that interest of 9% is fair and just. In DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, CA Nos. 4910-4941 of 2019 decided on 10.05.2019 the Hon’ble Supreme Court held that the interest payable would be from the date of respective deposit. Respectfully following these judgments, compensatory interest of 9% is considered appropriate in the instant case.
In the facts and circumstances of this case, for the aforesaid reasons, this complaint is allowed partially and disposed of with the following directions:
(i) opposite party no. 1 shall repay the complainants the sum of Rs 39,80,764/- with interest @ 9% p.a. compensation for the delay in possession from the respective dates of deposit till the date of payment;
(ii) this order shall be complied within 2 months from the date of this order failing which the rate of interest will be 12% p.a.;
(iii) opposite party shall also pay the complainants litigation cost of Rs 50,000/-.
All pending IAs shall stand disposed of with this order.