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Judgment
The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.
The Complainant is a non-resident Indian. Opposite Party No.1 is a developer and Opposite Party No.2 is a Bank. The case of the Complainant is that on 08.08.2009 he booked Apartment No.800 on 8th floor in “Beverly Hills Tower in Lodha Bellezza Complex” Kukatpally Hyderabad having a carpet area of 3282 sq. ft. along with 3 car parking for a total consideration of Rs.2,30,73,876 launched by Opposite Party No.1, by paying an advance of Rs.4,50,000/-. Thereafter, the Complainant paid two instalments of Rs.22,45,288/- and Rs.24,16,288/- on 25.08.2009 and 30.09.2009 respectively. The Complainant, thus, paid an amount Rs.51,11,576/-, which was 22 % of the total sale consideration. After receiving the payment, Opposite Party No. 1 sent the Agreement for Sale dated 21.10.2009.
According to the Complainant, Opposite Party No. 2 was major shareholder of the Project and offered housing loan to all purchasers. The Complainant applied for housing loan with Opposite Party No.2 who, vide letter dated 27.11.2009, approved the Housing loan of Rs.2,00,00,000/-. The Complainant accepted the Housing loan, after which a Tripartite Agreement dated 30.01.2010 was executed between the Complainant, Opposite Party No. 1 and Opposite Party No. 2. Payment would be directly disbursed by the Opposite Party No. 2 to Opposite Party No. 1 after satisfying itself regarding the progress of construction. The Complainant also entered into housing loan agreement dated 01.02.2010 with Opposite Party No. 2.
Opposite Party No. 2 disbursed all the 13 installments, amounting to Rs.1,68,80,531/- without verifying the progress of construction. The details of payment made to the Opposite Party No. 1 are as under:
Payment made on report of progress of construction
Date of Payment
Cheque No.
Paid through
Amount paid (Rs)
Booking Advance
08-Aug -09
487929
ING VYSYA
4.50,000
Within 21 days from booking
25-Aug-09
365929
HDFC
22,45,288
Within 51 days from booking
30-Sep-09
365931
HDFC
24,16,288
On initiation of the Footing (collected with basement slab payment on 01-Feb-10)
On initiation of Basement B1 slab
01-Feb-10
Direct
By OP-2
22,45,288
On initiation of Plinth
25-Feb-10
Direct
By OP-2
22,45,288
On initiation of 2nd slab
31-Mar-10
Direct
By OP-2
11,22,644
On initiation of 5th slab
25-May-10
Direct
By OP-2
11,22,644
On initiation of 9th slab
30-Jun-10
Direct
By OP-2
11,22,644
On initiation of 12th slab
30-Jun-10
Direct
By OP-2
11,22,644
On initiation of 16th slab
12-Aug-10
Direct
By OP-2
11,51,552
On initiation of 19th slab
25-Sep-10
Direct
By OP-2
11,51,552
On initiation of 23rd slab
30-Nov-l 0
Direct
By OP-2
10,64,828
On initiation of 26th slab
20-Dec-10
Direct
By OP-2
11,22,644
On initiation of 30th slab
02-Feb-11
Direct
By OP-2
11,22,644
On initiation of Brickwork
21-Feb-11
Direct
By OP-2
11,22,644
On initiation of Internal Plaster
15-Jul-11
Direct
By OP-2
11,22,644
On account of additional amount collected (not explained by Opposite Party 1)
15-Jul-11
Direct
By OP-2
40,871
TOTAL AMOUNT
2,19,92,107
Opposite Party No.1 also charged interest @ 12% p.a. By July, 2011, the Complainant paid principal amount of Rs.21,992,107/- and Rs.9,824,600/- as interest, totaling to Rs.31,816,707/-. As per Agreement for Sale, the possession was to be delivered on or before 30.06.2011, which Opposite Party No.1 failed to do. Opposite Party No. 1, vide letter dated 04.08.2011, intimated that there was delay in construction of the apartment and the possession would be handed over by March, 2012. Opposite Party No.1 further failed to deliver possession of the apartment. As per housing loan statement dated 23.03.2013, the interest debited to the Complainant’s loan account was Rs.41,34,940/- and the Complainant was pressurized to pay Rs.26,23,150/- out of the said amount under the threat of suffering penal interest. Alleging deficiency in service on the part of the Opposite Parties, Complainant filed the instant Consumer Complaint with following prayer:-
“(1) to declare that OP 1 as having committed default in complying with their obligations to deliver apartment bearing No.800 on 8th Floor, Beverly Hills, Lodha Bellezza East Block, Eden Square, Kukatpally Village, Hyderabad-72, together with all common amenities and complex fully constructed as per terms of agreement for sale dated 21.10.2009.
(2) To direct the Opposite Party-1 to refund the amount of Rs.2,19,92,107/- paid by the Complainant to the Opposite Party-1 for purchase of the apartment on various dates and the interest @ 12% p.a. compounded quarterly from the date of payment till date of this complaint i.e. 11.05.2013 amounting to Rs.98,24,600/- totalling to an amount of Rs.3,18,16,707/-.
(3) To direct the Opposite Party-1 to pay interest @ 18% p.a. on the above amount of Rs.3,18,16,707/- compounded quarterly from 11.05.2013 (date of complaint) up to the date of payment.
(4) The Opposite Party-1 to reimburse a sum of Rs.7,97,895/- being the house rent paid by the Complainant for the period 01.07.2011 till 30.04.2013 because the Opposite Party-1 did not deliver the possession of the apartment on 30.06.2011 and direct the Opposite Party-1 to pay further house rent from 01.05.2013 till the date of payment on the above amount of Rs.3,18,16,707/-.
(5) The Opposite Party-2 to reverse the interest amount of Rs.41,34,940/- debited to the housing loan account of the Complainant up to 23.03.2013 (as shown in Annexure-12)) and further direct Opposite Party-2 not to charge any further interest on the housing loan disbursed to opposite party-1 till the Opposite Party-1 refunds the entire amount as prayed for.
(6) To direct the Opposite Party-2 that the interest amount of Rs.26,23,150/- collected from the Complainant is treated as principal repayment of the housing loan by the Complainant.
(7) To direct Opposite Party-1 and Opposite Party-2 not to dispose off the apartment booked by the Complainant till the entire amount is refunded to the Complainant and declare that the apartment is subject to encumbrance and charged in favour of the Complainant.
(8) The Opposite Parties 1 & 2 jointly to pay a sum of Rs. 15,00,000/- for the mental trauma, agony and harassment caused to the Claimant by acting in collusion with each other to oppress, cheat, and deceive the complainant.
(9) Payment of costs of the Complaint.
(10) Granting such other relief or reliefs which are deemed to be just proper and fit in the circumstances of the case which the Claimant is entitled to based on the facts of the case.”
The Complaint was resisted by the Opposite Parties by filing separate written statements. Opposite Party No. 1 stated that the Complainant was not a Consumer as he purchased the Apartment for commercial purposes. This fact was admitted by the Complainant in the correspondence dated 03.11.2012. Regarding delay in handing over possession, Opposite Party No.1 stated that the delay occurred do to reasons beyond their control. The Fire Department installed the fire safety system in the first week of March 2013 and the NOC was issued in May 2013, as a result issuance of Occupancy Certificate got delayed. Opposite Party No.1 denied that they were in collusion with Opposite Party No.2. Opposite Party No.2 is merely a banker to facilitate loan to all apartment purchasers.
Opposite Party No.2 filed its separate reply stating that the Complaint is not maintainable before this Commission as the dispute in this case arose out of contractual obligations contained in the loan agreements. It was stated that the Complainant was not a "Consumer" within meaning of the Consumer Protection Act, 1986. Opposite Party No.2 further stated that it had no stake or share in the project as alleged by the Complainant. It was the obligation of the Complainant to monitor the progress of the construction and he cannot blame Opposite Party No. 2 for the same. Opposite Party No. 2 made all disbursements only after obtaining specific authorization from the Complainant. Opposite Party No.2 sanctioned a loan of Rs.2,00,00,000/- out of which an amount of Rs.1,68,80,531/- was disbursed. The allegations that the Opposite party No.2 released 95% of the total consideration is false.
Heard the Learned Counsel for both the Parties and carefully perused the record. Learned Counsel for Complainant submitted that he had booked the flat for residential purpose by investing all his hard earned money, therefore, he is a “Consumer” within the meaning of Consumer Protection Act, 1986. It was stated that as per the Agreement of Sale, Opposite Party No.1 was to handover the possession on or before 30.06.2011, which was not done by them. Moreover, no communication was made by Opposite Party No.1 stating the force majeure conditions leading to delay of the project. If there existed force majeure circumstances, Opposite Party No.1 would have intimated the delay to the allottees claiming force majeure. Contrary to this, Opposite Party No.1 wrote letters to the allottees that the project is progressing well and collected timely consideration from the allottees. It was only at the time of delivery, Opposite Party No.1 claimed force majeure clause. Learned Counsel relied on the judgment of this Commission in Emaar MGF Land Ltd. Vs Amtt Puri in FA/250/2014 and in Parsvnath Exotica Ghaziabad Residents Association Vs Parsvnath Buildwell Pvt Ltd wherein it was held that as the Opposite Party did not send any intimation to the Complainant for extension of time due to force majeure conditions, the Complainant was entitled for interest from the date of expiry of the stipulated period. Opposite Party No.1 by not offering physical possession of the flat even after receipt of 95% sale consideration was not only deficient in rendering service but had also indulged in unfair trade practice. The Complainant placed reliance on judgement passed by the Hon'ble Supreme Court in Lucknow Development Authority v. M.K. Gupta (1994) 1 SCC 243 wherein it was held that the provisions of the Consumer Protection Act enable a consumer to claim and empowers the Commission to award not only the value of goods or services but also to compensate a consumer for injustice suffered by him.
Learned Counsel for the Complainant further submitted that as per the loan agreement entered between the Complainant and Opposite Party No.2, it was clearly stipulated that the amount had to be disbursed after due verification of the progress of construction. Opposite Party No.2, hand in glove with Opposite Party No.1, disbursed the entire loan amount to Opposite Party No.1, without verifying the progress of construction and thereafter started demanding interest from the Complainant. This also amounted to deficiency of service and unfair trade practice committed by the Opposite Party No.2.
Learned Counsel for Opposite Party No. 1 submitted that the Complainant was not a Consumer as he purchased the Apartment for commercial purposes. This fact was admitted by the Complainant in the correspondence dated 03.11.2012, which reads as follows:
“c) Rental payments: further, I have lost the opportunity to rent my Apartment in Bellezza and estimate this to be in the range of 1.5L per month. This loss would not have resulted had you finished handing over the property in June 2011, the contracted date of completion. Over 16 months, this rental loss comes to 24 lakhs.”
Learned Counsel for Opposite Party No.1 further submitted that the Complainant had deliberately suppressed the fact regarding purchase of apartment for commercial purpose and other relevant facts including certain relevant documents, i.e. the correspondence/documents exchanged between the parties, crucial to decide the issues in this Complaint.
On merits, Learned Counsel for Opposite Party No. 1 submitted that as per Agreement, Opposite Party was to deliver possession by June, 2011. As per clause 24 of agreement to sale, Opposite Party No.1 was entitled for reasonable extension of time even beyond December 2011 if the delay was on account of reasons beyond the control of the Opposite Party No.1. Further, the Fire Department installed the fire safety system in the first week of March 2013 and the NOC was issued in May 2013, as a result the Occupancy Certificate was delayed. Opposite Party No.1 denied that they were in collusion with Opposite Party No.2. Opposite Party No.2 is merely a banker to facilitate loan to all apartment purchasers. It was submitted that the progress in construction of the superstructure, masonry and the internal plaster stages of the concerned tower had slowed down since the particular civil contractor in-charge, M/s Jain Engineers, could not ensure a steady supply of the required quantum of labour, as it was impacted by Telangana agitation. The agitation also caused severe restriction in the transportation of raw materials, goods, and workforce to the said Project/Tower. In 2010 and 2011, Andhra Pradesh Government put restrictions on the movement of heavy motor vehicles in Hyderabad. As a result of traffic restrictions, supply of materials, goods, labour and equipment was affected, which caused delay in completion of the project in stipulated period. The manufacture of ready mix concrete was also affected due to shortage of sand in 2010, one of the major components of RMC. It was submitted that the Complaint is devoid of any merits and liable to be dismissed.
Learned Counsel for Opposite Party No.2 submitted that the Complaint was not maintainable since the alleged dispute in the complaint arises out of the contractual obligations contained in the loan agreements. The Complainant and Opposite Party No.2 are borrower and creditor. The dispute can be adjudicated by the Civil Court. There was no deficiency of service or unfair trade practice on the part of Opposite Party No.2. He also submitted that the amount of Rs.1,68,80,531/- disbursed to Opposite Party No.1 on behalf of the Complainant, was based on his specific instructions and after verification of the progress of the construction. It was also submitted that the Complaint has no merit and deserves to be dismissed.
Admitted facts of the case are that the Complainant booked apartment No. 800 on 8th floor in "Berverly Hills" Tower in "Lodha Bellezza Complex", Kukatpally, Hyderabad for a total consideration of Rs.2,30,73,876/- and paid an amount of Rs.4,50,000/- towards earnest money to Opposite Party No.1. The Complainant made a further payment of Rs.46,61,576/- aggregating a total payment of Rs.51,11,576/- as on 30.09.2009. Thereafter, an Agreement of Sale was signed between the Complainant and Opposite Party No. 1. The Opposite Party No. 2, vide letter dated 27.11.2009, offered housing loan of Rs.2,00,00,000/- to the Complainant. On 30.01.2010, a Tripartite Agreement was entered between the Complainant, Opposite Parties Nos.1 and 2, whereby Opposite Party No. 2 was to disburse the loan amount to Opposite Party No.1. The Complainant paid Rs.2,19,92,107/- by June 2011. However, the Opposite Party No.1 failed to deliver the possession within the stipulated period.
The preliminary objection of the Opposite Party, that the dispute in the Complaint is barred due to existence of contractual relation between the Parties, does not stand. The Consumer Protection Act was enacted, inter alia, “to provide for better protection of the interest of the consumer”; to promote and protect the rights of consumers such as “the rights to seek redressal against unfair trade practices or unscrupulous exploitation of consumers”. It is settled law that the remedy under the Consumer Protection Act is an additional remedy and is not curtailed due to any specific law. Learned Counsel for Opposite Party No. 1 also contended that the Complainant was not a Consumer as he purchased the flat for earning profit by letting out the same. The Complainant, therefore, was not a “Consumer.” The expression “Commercial purpose” used in Section 2(1)(d) of the Act came up for consideration in Kavita Ahuja v. Shipra Estates Ltd., CC 137 of 2010 decided on 12.02.2015 by this Commission, and the following view was taken:
“In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.”
We find that the Complainant is a “Consumer” and the Complaint filed by the Complainant is maintainable.
On merits, the issue relates to delay in delivery of possession. Admittedly, possession was to be delivered by June, 2011. However, possession was not delivered even after the subsequent promises made by Opposite Party No.1. The ground taken by the Opposite Party No. 1 that the delay was due to force majeure circumstances is devoid of merit. The Complainant had stated that Opposite Party No.1 never informed the Complainant that the delay had occurred due to force majeure conditions, which is not contested by Opposite Party No.1. Neither any new legislation was enacted nor an existing rule, regulation or order was issued stopping/suspending or delaying construction. There was no evidence of any lock-out or strike by the labour at the site of the project. There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the construction of the project. The Opposite Party merely narrated a set of events and obstacles which are routinely faced by project developers. The Opposite Party failed to prove that there was any unforeseen and unexpected event which prevented the completion of the Project within the stipulated time period.
Moreover, this Commission in CC 379 of 2013 Sivarama Sarma Jonnalagadda & Anr vs. M/s Maruthi Corporation Limited & Anr decided on 21.09.2021 wherein it was held as follows:
“We are of the view that that the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on force majeure clause while retaining the amounts deposited by the Complainant , is not on only an act of deficiency of service but also amounts to unfair trade practice.”
The Complainant paid substantial amount of total consideration. As stated above, homebuyers’ cannot be made to wait indefinitely for possession of the flat. Opposite Party No.1 failed to produce any evidence to the effect that the delay had occurred due to force majeure conditions. Opposite Party No.1 also failed to show that the Occupancy Certificate has been received. 17. Opposite Party No.1 builder failed to fulfil its contractual obligation of delivering possession of the flat to the Complainants within the time stipulated in the agreement, or within a reasonable time thereafter. The construction of the apartment booked by the Complainant is getting indefinitely delayed and the Complainant cannot be compelled to wait indefinitely for taking possession of the flat. The Apex Court in a numerous cases held that a consumer cannot be kept to wait for taking possession of the apartment. In these circumstances, the respondent flat purchaser was entitled for the relief prayed i.e. refund of the entire amount deposited alongwith compensation. We are, therefore, of the considered view that the Complainant is entitled to refund of the principal amount with reasonable interest.
Regarding deficiency in service of Opposite Party No.2 for disbursement of instalments to Opposite Party No1 without verifying the progress of Construction, relevant extract of the Tripartite Agreement reads as follows:
“(H) The Borrower has requested HDFC to disburse the Said Loan in installment to the Builder/Promoter as per the stage of construction and such disbursement shall be deemed to have been directly done to the Borrower and, which the Borrower acknowledges unconditionally.”
Further, clause 2.4 of the loan agreement gives out the details of Disbursement as follows:
“The loan shall be disbursed in one lumpsum or in suitable instalments to be decided by HDFC with reference to the need or progress of construction (which decision shall be final and binding on the borrower). The borrower hereby acknowledges the receipt of the loan disbursed as indicated In the Receipt hereinbelow.”
Opposite Party No.2, in accordance to the agreement was to disburse the amount after verifying the progress of Construction. However, no evidence is produced by Opposite Party No.2 to establish any kind of verification done by them before disbursement of loan amount. Opposite Party No.2 also failed to produce any evidence that the Complainant authorised them to disburse the loan without verifying the stage of construction. We find that Opposite Party No.2 is also deficient in service in disbursing the loan amount to Opposite Party No.1 without verifying the stage of construction.
In view of the above, the Complaint is partly allowed. Opposite Party No.1 is directed to refund the entire amount deposited by the Complainant with interest @ 9% p.a. from the date of respective deposits till the date of realization within 3 months, failing with Opposite Party No.1 shall pay the principal amount with interest @ 12% p.a. Opposite Party No.2 is also directed to pay a compensation of Rs.2 lakhs to the Complainant for committing deficiency in service. There shall be no order as to costs.