Kavighei & Anr vs M/S. Uppal Housing Pvt. Ltd. & Anr

M. SHREESHA, J

This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short "the Act") against M/s. Uppal Housing Pvt. Ltd., having its office at S-39A, Panchsheel Park, New Delhi-110017 and M/s. Umang Realtech Pvt. Ltd., having its office at B-72, 7th Floor, Himalaya House, Kasturba Gandhi Marg, New Delhi-110001, seeking the following reliefs:

Pay to the complainants the principal amount of Rs. 1,18,45,419/- (Rs. One crore eighteen lacs forty five thousand four hundred nineteen only) along with interest @ 18% per annum from the date of actual payment which has now become Rs. 2,30,63,698/- (Rs. Two Crore thirty lacs sixty three thousand six hundred and ninety eight only) till 31.08.2017;

Pay pendentelite and futureinterest @ 18% per annum on the said amount of Rs. 2,30,63,298/-(Rs. Two Crore thirty lacs sixty three thousand six hundred and ninety eight only);

Pay compensation of Rs. 10,00,000/- (Ten Lacs only) to the Complainants for the losses suffered by them due to deprivation, harassment, mental agony, inconvenience and frustration caused due to the acts of the respondents;

Pass an award of Rs. 1,55,000/- towards the cost of the litigation;

Any other relief(s) as deemed fit in the facts and circumstances of the case may kindly be also granted in favour of the Complainant."

The brief facts as set out in the Complaint are that the officials of the first Opposite Party approached the Complainants and informed them that the Opposite Parties were developing a residential Project known as "Uppal's Metro Park, New Delhi" situated near Dwarka Metro Station, Uttam Nagar, New Delhi. It is stated that the project was widely advertised by the Opposite Parties and lured by the advertisements and promises made by the officials of the first Opposite party, the Complainants booked an Apartment having three bedrooms with servant quarter in tower MP3 of the said Project vide application dated 29.04.2006 and paid a sum of Rs. 13,65,525/- through cheque, the same was duly acknowledged by the first Opposite Party. Thereafter the first Opposite Party allotted an Apartment at the 4th floor of tower MP3 having super area of 2200 sq. ft. to the Complainants. An Apartment Buyer's Agreement was entered into on 05.07.2006 for a total sale consideration of Rs. 1,12,20,000/-. It is averred that at the time of Allotment, the first Opposite Party promised that the possession of the Apartment would be delivered within 36 months from the date of allotment i.e. latest by April, 2009. The Complainants have duly paid in total an amount Rs. 1,18,45,419/- as per the demands raised by the Opposite Parties from time to time by 26.06.2014, the same was duly acknowledged by the Opposite Party.

It is stated that the first Opposite Party entered into an alleged collaboration agreement in the year 2010, with the second Opposite Party, i.e. M/s. Umang Realtech Pvt. Ltd. for developing the project. It is averred that the first Opposite Party had sold the project to the second Opposite Party in the name of collaboration. After selling the project, the first Opposite Party distanced itself from the said project and the second Opposite Party took over all the affairs of the Project. It is also averred that the first Opposite Party did not seek permission of the buyers before selling the project to the second Opposite Party.

It is pleaded that in the year 2013 the second Opposite Party approached the Complainants to sign a new Apartment Buyer's Agreement and threatened them that their booking would be cancelled and the amount paid by them would be forfeited if they did not sign a new Apartment Buyer's Agreement. The Complainants did not have any other option than to sign the new Apartment Buyer's Agreement dated 14.03.2013. It is averred that as per the new Apartment Buyer's Agreement, the possession would be delivered by 31st March, 2014 but till the filing of the Complaint, the same was not delivered. It is pleaded that the Opposite Parties have not obtained the necessary approvals, permissions and No Objection Certificates from the concerned authorities for developing the project. It is also pleaded that the Opposite Parties have reduced the size of the Apartment from 2200 sq. ft. to 2047 sq. ft.; that the Apartment of the Complainants was shifted from 4th to 8th floor and that the rate of the Apartment was considerably increased by the second Opposite Party as compared to the price offered by the first Opposite Party. The Complainants visited the office of the Opposite Parties and met the concerned officials but no satisfactory reason was given for the inordinate delay nor was any date given for handing over of the possession of the apartment. The Complainants wrote several letters and email to the Opposite Parties and requested them to hand over possession of the Apartment with the compensation and for the delay @ 18% but there was no specific response. It is pleaded that as per Clause 5 of the Agreement, interest rate @ 18% p.a. was liable to be charged in case of any delay in payment of any amount by the Allottees. Therefore applying the same parity, the Opposite Party should refund the amounts collected with the same rate of interest.

Vexed with the attitude of the Opposite Parties, the Complainants approached this Commission seeking the aforenoted reliefs, as the value of all goods and services is more than Rupees one crore and attracts the Pecuniary Jurisdiction of this Commission.

The first Opposite Party filed its reply stating that the first Opposite Party is not a necessary party in the present Complaint and the Complaint is liable to be dismissed on the ground of mis-joinder of parties. It is averred that the first Opposite Party entered into a Lease Agreement dated 19.05.2006 with the Delhi Metro Rail Corporation Limited for a period of 90 years expiring on 19.05.2096 for development of residential complex on the plot of land admeasuring approx. 21,954.8 sq. mts. located near Dwarka City, New Delhi; that the first Opposite Party entered into a Collaboration Agreement dated 18.01.2010 after obtaining No Objection Certificate from Delhi Metro Rail Corporation Limited and after properly intimating all the flat buyers who had booked flats; that as per the Collaboration Agreement the second Opposite Party is entitled to construct and develop the housing complex on the said land; that as per Clause 9.1.1 of the said Collaboration Agreement it was agreed that the second Opposite Party shall be liable to indemnify first Opposite Party against any claims, action, demand, liability, civil or criminal including agreements entered into with the prospective buyers etc.; that though the Complainants have booked flat with the first Opposite Party on 29.04.2006, after the Collaboration Agreement, on 14.03.2013 the Complainants entered into a Flat Buyer Agreement with the second Opposite Party and the first Opposite Party is the Consenting Party in the said Flat Buyer Agreement; that as per the said Flat Buyer Agreement the second Opposite Party is solely responsible for grant of possession of the flat and that the dispute raised by the Complainant is only between the Complainant and the second Opposite Party, therefore the first Opposite Party seeks dismissal of Complaint qua them.

The second Opposite Party filed its Written Version admitting to the booking of an Apartment, execution of the Flat Buyer's Agreements dated 05.07.2006 and 14.03.2013 and to Clause 8.1 of the Flat Buyer's Agreements dated 14.03.2013, wherein the Opposite Parties has agreed to apply for the Completion Certificate by 31.03.2014. It was averred that as per this Clause the Opposite Party is entitled for a grace period of six months and this Clause was subject to force majeure circumstances. It is averred that this Commission has no jurisdiction to entertain the instant Complaint as Clause 16.10 of the Agreement dated 14.03.2010 provides that any dispute between the parties shall be adjudicated under the provision of the Arbitration and Conciliation Act. It is stated that the delay in possession is to be dealt with as per clause 8.6 of the Flat Buyer's Agreement dated 14.03.2013, according to which the second Opposite Party would pay a sum of Rs. 10/- sq. ft. per month, provided that the delay is not on account of existence of any force majeure event. It was further averred that the delay in giving possession was directly attributed to the reasons which are beyond the control of the Opposite Parties such as lack of adequate sources of finance, shortage of labour approvals and procedural difficulties, extreme shortage of water in the region, shortage of bricks unexpected demonetization, recession in economy etc. All the other averments made in the Complaint have been denied. It is stated that the project is at the stage of fit outs and Occupancy Certificate has already been obtained and Opposite Party has already issued offer of possession vide offer letter dated 28.10.2017. Therefore, there is no deficiency of service on their behalf and prayed for dismissal of Complaint with exemplary costs.

The Complainants filed their Affidavit by way of Evidence and marked Exhibits CW-1/1 (Brochure of Uppal's Metro Park), CW-1/2 (copy of the letter dated 22.06.2011 sent by the second Opposite Party to the Complainant), CW-1/3 (copy of the letter dated 05.02.2013 sent by the second Opposite Party to the Complainant), CW-1/4 (Copy of the Apartment Buyer's Agreement dated 14.03.2013), CW-1/5 (Copy of the environment clearance), CW-1/6 (copy of the letters and emails sent to the Opposite Parties by the Complainants), CW-1/7 (copy of the letters and email sent to the Opposite Parties by the Complainants requesting to hand over possession and compensation for delay) and CW-1/8 (copy of the charge documents) on their behalf.

The first Opposite Party filed its Affidavit by way of Evidence and marked Exhibits OP-1/1 (copy of the Board Resolution), OP-1/2 (copy of the NOC) and OP-1/3 (Copy of the collaboration Agreement dated 18.01.2010) on its behalf.

The second Opposite Party filed its Affidavit by way of Evidence and marked Exhibits OP-2/1 (copy of the Board Resolution), OP-2/2 (copy of the final call letter dated 28.10.2017 offering possession), OP-2/3 (Copy of the letter dated 18.02.2013), OP-2/4 (Copy of the letter dated 20.02.2013) and OP-2/5 (Copy of the letter dated 01.02.2016) on its behalf.

Heard counsel for the parties at length.

It is an admitted fact that the Complainants booked an Apartment of three bedrooms in tower MP-3, of the project namely 'Uppal's Metro Park, New Delhi' vie application dated 29.04.2006 and paid a sum of Rs. 13,65,525/- by cheque and the first Opposite Party allotted a three bedroom Apartment with the super area of 2200 sq. ft. on 05.07.2006 and an Apartment Buyers' Agreement was executed between the Complainant and the first Opposite Party on the same date. It is also an admitted fact that between 29.04.2006 and 26.06.2014, the Complainant totally made a payment of Rs. 1,18,45,419/-as per the demands made by the Opposite Parties. While so, the first Opposite Party entered into a lease Agreement with DMRC for a period of 90 years for development of residential complex.

Learned counsel appearing for the Opposite Parties contended that for the subject land DMRC granted a No Objection Certificate dated 13.01.2010 to the first Opposite Party for entering into a Collaboration Agreement with the second Opposite Party for the construction and development of the residential complex and sale of saleable space thereof. On 18.01.2010, admittedly both the Opposite Parties entered into a Collaboration Agreement whereby the second Opposite party was entitled to construct and develop a housing complex and is entitled to book, sale, allot, transfer or otherwise deal with the lease hold right in the dwelling units and other saleable areas in the said complex. Learned counsel vehemently contended that the first Opposite Party is not a necessary part to the present Complaint as they have no liability towards any parties in terms of the Clause 9.1.1 Collaboration Agreement and sought a direction for deletion of the first Opposite Party from the array of parties.

It is the case of the learned counsel appearing for the Complainants that though the first Opposite Party projected before the Buyers that it has entered into a Collaboration Agreement/ joint venture with the second Opposite Party for developing said project, but in fact it had sold the entire project to the second Opposite Party after taking the hard earned money of the buyers. The first Opposite Party cannot side-line itself from the said project on the ground of Collaboration Agreement entered into between both the Opposite Parties. Learned Counsel also contended that on 14.03.2013 the second Opposite party approached the Complainants and a new Apartment Buyers' Agreement was entered into and it was only under undue influence and pressure and compelling circumstances that the Complainants signed a new Apartment Buyer's Agreement dated 14.03.2013, according to which the Promised date of delivery of possession of the said Apartment was 31.03.2014. It is the case of the Complainants that though 11½ years have passed and initially the promise date of delivery of possession was 2009 and even if we take that date into consideration there is still no sign of completion and delivery of the subject project.

It is evident from the record that as on the date of filing of the Complaint in September 2017, there was no Completion Certificate given by the Opposite Parties. The contention of the learned counsel for the Opposite Parties that the delay is not deliberate or wilful and that the extension of time is attracted by Clause 8.1 and 8.2 of the Agreement is untenable as the reasons stated in these two Clauses is only subject to force majeure conditions and there is no documentary evidence on record to substantiate that the reasons were beyond the control of the Opposite Parties and that they fall within the definition of 'force majeure'.

Learned counsel also relied on Clause 8.6 of the Apartment Buyers' Agreement and submitted that the liability of the second Opposite Party on account of delay is limited only to that extent. For better understanding of the Clause, the same is reproduced as hereunder:

"8.6 In case any delay is caused by the Company in offering possession of the Said Apartment to the Buyer beyond the stipulated time period, the Company shall be liable to pay a sum of Rs.10 per square foot of super area of the said Apartment per month as penalty provided this delay not on account of existence of any force majeure event. "

As per this clause, the Developer is liable to pay a sum of Rs. 10 per sq. ft. of super area of the said Apartment per month as penalty. This Compensation is for the period of delay provided the Complainant accepts possession. But in the instant case, the Complainants are seeking refund of the amount paid, as the amounts were paid way back in the years 2006 to 2014 and there was no Completion Certificate as on the date of filing of the Complaint. The Complainants do not want to take delivery of possession of the subject Apartment not only because of the delay in completion but also because they contend that the size of the Apartment stands reduced from 2200 sq. ft. to 2047 sq. ft. and that the second Opposite Party has increased the price of the Apartment substantially as compared to the offer of the first Opposite Party at the time of launching of the Project. It is also an admitted fact that the Opposite Party charged interest @ 18% p.a. for any delayed payments made by the purchasers and there is no justification in offering a meagre Rs. 10 per sq. ft., which is only a paltry percentage of what the Opposite Party are charging for any delayed payments. Clause 8.6 in our opinion does not apply to the facts of this case because the Complainants on account of the delay on the part of the Opposite Parties in completing the flat is no more interested in the flat, which is a subject matter of the Agreement and seek refund of the amounts paid. In any case such a Clause (8.6), where the seller, in case of default on the part of the buyer seeks to recover interest from 18% p.a. amounts to unfair trade practice since it gives an unfair advantage to seller over the buyer. We may note here that the enumeration of unfair trade practice in Section 2 (o) of the Act is inclusive and not exhaustive. This Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], has laid down that once the promised date of delivery of possession is exhausted, it is the discretion of the Complainant to exercise his choice to take refund or wait for the delivery of possession. This ratio has attained finality and in the instant case the Complainant had sought for refund of the amount paid with interest @ 18% p.a.

The next question which arises for consideration is how much interest is to be paid to the Complainants on the principal amount. Logically, if the seller is charging interest from the buyer @ 18% p.a., we should have no hesitation in awarding the same rate. Though the learned counsel appearing for the Complainant has relied on the judgement of the Hon'ble Supreme in Ghaziabad Development Authority vs. Balbir Singh [2004 (5) SCC 65] and judgement of this Commission in Shri Puneet Malhotra Vs. M/s Parsvnath Developers Ltd. reported in Consumer Case No.232 of 2014 decided on 29.06.2015, wherein interest @ 18% p.a. was awarded. Having regard to the fact that Banks have lowered the interest rate and the Hon'ble Supreme Court has been awarding interest keeping in view the current market situation and considering the recent decline in the cost of borrowing and return on the investments made with the Banks, we are of the view that interest @ 12% p.a. would meet the ends of justice, together with compensation of Rs. 1,00,000/- and costs of Rs. 25,000/-.

Now we address ourselves to the liability of the first Opposite Party. Learned counsel for the first Opposite Party argued that the Collaboration Agreement entered into between both the Opposite Parties according to terms of which the rights to sell, transfer and receive payments has been assigned to the second Opposite Party and therefore the first Opposite Party cannot be made liable to refund any amounts received. A perusal of the Application Form dated 29.04.2006 shows that the first Opposite Party had allotted the subject Apartment to the Complainant after receiving a payment of Rs. 13,65,525/-. The Collaboration Agreement dated 18.10.2010 dated was subsequent to this Allotment. Be that as it may, the first Apartment Buyers' Agreement dated 05.07.2006 was entered into only between the Complainant and the first Opposite Party. There is a specific pleading by the Complainant that they were forced to enter into a second Apartment Buyers' Agreement dated 14.03.2013, only because they were coerced into doing so on account of the Collaboration Agreement between the first Opposite Party and the second Opposite Party, which was entered into on 18.01.2010. The contention of the learned counsel that the first Opposite Party should be deleted from the array of parties and no liability can be fastened upon them is totally unsustainable, keeping in view that the first amount of Rs. 13,65,525/- for allotment was received by the first Opposite Party and that the first Apartment Buyers' Agreement entered into between the first Opposite Party and the Complainant is prior to the Collaboration Agreement dated 18.01.2010. Be that as it may, the second Apartment Buyers' Agreement which is subsequent to the Collaboration Agreement is a Tripartite Agreement signed by the first Opposite Party, the second Opposite Party and the Complainant. It is pertinent to note that the first Opposite Party was defined as the 'Confirming Party' in the Apartment Buyer's Agreement dated 14.03.2013 and as per Clauses 3.1 and 5.1.1 of the Collaboration Agreement dated 18.01.2010, it is relevant to mention that a consideration of Rs. 75,00,00,000/- towards non-refundable security deposit was paid by the second Opposite Party to the first Opposite Party towards lease rights of the subject land. For better understanding of the consideration paid/ shared by both the Opposite Parties Clauses 3.1 and 5.1.1 of the Collaboration Agreement are reproduced as hereunder:

"3.1 That the subject matter of the Agreement is collaboration between Uppal and Umang for the execution of the Project by Umang on the Land admeasuring 21954.8 sq. mtr. Near Dwarka Morh Metro Station, Delhi more particularly described in the Schedule C, and the sharing of the revenue realised from the sale of the Developed Saleable Area (defined herein below) in the ratio as provided hereinafter in clause 5.1.1 of this Agreement. The Project shall be developed by Umang in a manner that is fully complaint with the terms and conditions contained in the Lease Deed and all relevant approvals at all times and any activity which may be in conflict with any obligation or duty contained therein shall not be undertaken at any time.

5.1.1 In consideration of the contribution of the Land by Uppal for execution of the Project and Umang bearing the costs, expenses and responsibility of execution of the Project and on simultaneous payment to Uppal by way of non refundable security deposit, a sum of Rs.75,00,00,000 ("Security Deposit") and discharge of their respective obligations by the parties under this Agreement, the Parties shall share the proceeds from the lease, sale, and/or transfer of Developed Saleable Area under the Project, in the ratio mentioned hereinbelow:

(i) Uppal : 15%

(ii) Umang : 85% "

At the cost of repetition, having signed the Tripartite Agreement as a Confirming Party and when the Collaboration Agreement is mentioned in the Apartment Buyers' Agreement, we are of the considered view that both the Opposite Parties are jointly and severally liable to pay the amounts received. Any other arrangement is only inter se between the Opposite Parties and shall not bind the Complainants.

In the result, this Complaint is allowed in part directing the both the Opposite Parties jointly and severally to refund the amount paid by the Complainant i.e. Rs. 1,18,45,419/- with interest @ 12% p.a. from the respective dates of deposit till the date of realisation together with compensation of Rs. 1,00,000/- and costs of Rs. 25,000/-. This amount is directed to be paid within four weeks from the date of receipt of a copy of this order, failing which, the amount shall attract interest @ 14% p.a. for the same period.