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Judgment
Heard Ms. Pratiksha Chaturvedi, Advocate, for Shubham Setia and Mrs. Raj Setia and Ms. Shaguftha H. Badhwar, Advocate, for M/s MB Infrabuild Private Limited and its Director, in both the appeals.
Mr. Shubham Setia and Mrs. Raj Setia have filed FA/341/2024 and M/s MB Infrabuild Private Limited and its Director have filed FA/426/2024 against the order dated 23.02.2024 passed in CC/60/2021 of State Consumer Disputes Redressal Commission, Punjab, partly allowing the complaint and directing M/s MB Infrabuild Private Limited and its Director to (i) deliver possession of the Apartment No.0830, in group housing project “Beverly Golf Avenue” as allotted to the complainants after obtaining ‘completion/occupation certificate within two months, subject to payment of balance sale consideration, if any without interest and penalty; (ii) to pay remaining as well as future Pre-EMI to the financial institution till handing over possession; (iii) withdraw the letter for releasing the maintenance charges till handing over possession; (iv) pay Rs.51000/- as compensation for mental agony and harassment; and (v) pay Rs.21000/- as litigation costs. As both the appeals arise out of same order, it were consolidated and heard together.
The office has reported that FA/341/2024 is 12 days’ time barred. The appellants have filed IA/7855/2024, for condoning the delay in filing the appeal. FA/426/2024 is allegedly 19 days’ time barred. The appellants have filed IA/8727/2024 for condonation of delay. Delays have been sufficiently explained in both the IAs. IA/7855/2024 & IA/8727/2024 are allowed. Delays in filing the appeals are condoned.
M/s MB Infrabuild Private Limited was a company, registered under the Companies Act, 2013 and Mr. Harvinder Arora, Mr. Sunil Kumar Verma and Mr. Sachin Bahmba were its directors (hereinafter referred to as the builder). The builder obtained the land in Sector 65, Mohali (near golf range) for developing group housing residential project from Greater Mohali Area Development Authority (GMADA), through auction on 20.10.2015. Punjab Regional and Town Planning Board granted approval for change of land use on 30.04.2016 and sanctioned building plan 15.03.2017. The builder then launched group housing project in the name of “Beverly Golf Avenue” on above land.
Mr. Shubham Setia and Mrs. Raj Setia have filed CC/60/2021 for directing the builder to (i) hand over possession of the flat allotted to them in fully developed and habitable condition as per specifications after obtaining the completion/occupation certificate, (ii) to clear outstanding dues with the bank and honour the condition of subvention scheme, (iii) to withdraw the letter dated 27.06.2021 issuing revised demand after adjusting the penal delayed charges further to calculate the GST @5% as assured on the demand money, (iv) to withdraw the amount of maintenance charges of GMADA Golf range membership till the actual possession of the unit, (v) to pay Rs.20 lacs as compensation for physical and mental harassment, (vi) to pay Rs.55000/- as litigation cost and (vii) any other relief which is deemed fit and proper in the facts of the case.
The complainants stated that the builders launched a group housing project in the name of “Beverly Golf Avenue” at Sector-65, SAS Nagar, Mohali in the year 2017 and made vide publicity of it. Coming to know about the project, the complainants booked a flat on 22.02.2018 and deposited the booking amount of Rs.5 lacs. The builder issued an allotment letter on 05.05.2018 and allotted apartment no.830 area 1556.89 sq. ft. and parking number P-830 area 121 sq. ft. for a total consideration of Rs.15091673/- in Tower-10. On the same day, an agreement to sell has also been executed between the parties. The builder had different payment plan. The complainants had opted for subvention scheme in which the complainants had to deposit 15% of the total consideration, 75% had to be financed by the financial institutions approved by the builder and 10% of the consideration had to be paid on offer of possession. Further, under this scheme, the builder had to pay pre-EMI till the date of possession. Clause 7 of the agreement shows the due date of possession as on 31.07.2020. By the time of the agreement, the complainants had deposited Rs.20 lacs. Subsequently, the builder processed for loan under the subvention payment plan with Dewan Housing Finance Corporation Ltd., opposite party no.5 and a tripartite agreement was executed between the parties on 20.06.2018 under which 75% of the consideration had to be advanced by the financial institution. Financial institution has to pay 30% on completion of the plinth level and balance consideration has to be paid on completion of 5th floor slab, 11th floor slab, brick works and completion of plaster works. The following payments have been made by the complainants as well as the financial institution:
Sr.
No.
Date
Amount
Total
1.
22.02.2018
Rs. 500000/- by complainants
Rs.500000/-
2.
20.03.2018
Rs. 1096861/- by complainants
Rs.1096861/-
3.
21.03.2018
Rs. 500000/- by complainants
Rs. 500000/-
4.
01.07.2018
Rs. 5938233/- by bank
Rs.5938233/-
5.
15.01.2019
Rs. 1571641/- by bank
Rs.1571641/-
6.
26.02.2019
Rs. 409269/- by complainants
Rs.409269/-
7.
26.09.2019
Rs. 16866/- by complainants
Rs.16866/-
8.
31.03.2021
Rs. 242145/- by bank
Rs.242145/-
Grand Total
Rs.10275015/-
The opposite party however, delayed the project and could not complete it on the due date as provided in the agreement. Although under the subvention payment plan, the opposite party had committed to pay the pre-EMI of the financial institution, till the delivery of possession, but they stopped payment of pre-EMI. When the complainants discussed the issue relating to demand of pre-EMI dated 09.02.2021, of Rs.131582/- which was amount of January 2021, then the opposite party issued a demand letter dated 24.02.2021 for Rs.5308432/-. As under the subvention payment scheme, the balance consideration on 10% was payable on offer of possession. The complainants gave email dated 29.04.2021 to the opposite party to hand over possession of the flat allotted to them complete in all respects as per specifications but the opposite party has insisted to deposit the amount as demanded vide letter dated 24.02.2021. The opposite party issued a fresh demand notice dated 22.04.2021 for Rs.3648261/- which included interest of Rs.16 to 17 lacs for the period of 2019 to 2021. This demand was also contrary to the subvention payment scheme. Therefore, the complainants has protested this demand. In the meantime, the opposite party has issued another letter dated 27.06.2021 demanding Rs.2240433/- towards GST @ 12% per annum. Although in the agreement, the service tax was payable @ 5% per annum. The complainants again vide email dated 19.10.2021 protested the demand. However, their game plan was exposed and when the complainants asked the opposite parties that how the complainants can shift to the allotted unit when the unit is not even furnished. The washroom is incomplete, floor work is incomplete. There is no approach road. Other basic amenities for habitation were not developed. Although the opposite party has not handed over possession but raising demand on maintenance charges of Rs.4248/- per month. All these demands are illegal. Therefore, the complaint was filed for above reliefs on 15.12.2021.
The builders filed their reply and stated that the land was allotted to it under the auction vide letter dated 20.10.2020. They obtained the approval for change of land use from GMADA on 30.04.2016 and building plan was approved on 15.03.2017 from Punjab Regional and Township Completion Board. Thereafter, the builder launched the group housing project ‘Beverly Golf Avenue’. The project was registered with PRERA under the provisions of Real Estate (Development and Regulation) Act, 2016 on 28.07.2017 and the same was approved on 22.09.2017 under which the completion date of the project was given as 31.07.2021. Due to pandemic Covid-19, PERERA extended the completion date upto 31.01.2023. The complainants booked unit no.830, 3 BHK (Maxima) carpet area 1556.89 sq. ft. alongwith parking area P-830 area 121 sq. ft. @ Rs.9060/- per sq. ft. on 22.02.2018 by depositing Rs.5 lacs. Thereafter, the agreement to sell was executed on 05.05.2018 in which total consideration was mentioned as Rs.15091673/. Under the subvention payment scheme, Dewan Housing Finance Corporation Ltd. sanctioned a loan of Rs.9445596/-. Upto March 2021, opposite party no.5 disbursed only Rs.7509874/- and balance sanctioned loan of Rs.2024629/- has not been disbursed which included pre-EMI of Rs.242145/- towards interest of May, June, July and August of 2020 i.e. during Covid-19 period. The builder, vide e-mail dated 25.11.2020 followed up by reminders dated 23.02.2021 and 19.03.2021, requested opposite party no.5 to disburse balance sanctioned loan but opposite party, vide e-mail dated 19.03.2021, informed the builder to ask the complainants to visit the branch of opposite party no.5. The builder informed the complainants about the e-mail dated 19.03.2021 of opposite party no.5. As opposite party no.5 stopped payment of the balance sanctioned loan, therefore, the construction milestone could not be achieved. In the meantime, opposite party no.5 went into Insolvency & Bankruptcy Code, 2016 proceedings and vide order dated 12.03.2019 passed by NCLT, Mumbai, moratorium has been imposed. The complainants were informed vide letter dated 24.02.2021 for payment of balance amount of Rs.3648261/- as on 24.02.2021 but the complainants avoided payment. Although the builder has agreed to hand over possession within 36 months from the date of the agreement with grace period of 180 days, but due to non-payment of the balance disbursed amount as well as spread of pandemic Covid-19 from March 2020, the construction was delayed. PERERA has already considered the genuineness of reason for delay and extended the completion period upto 31.01.2023. Due to delay as well as Covid-19, prices of the building materials have also increased from 30% to 40% and there was acute shortage of labour during this period. Government of India imposed GST w.e.f. 01.04.2019. Therefore, it was a tax imposed by the Government and payable by the complainants which has been agreed in clause 1.11 of the agreement dated 05.05.2018. In the agreement, it has also been mentioned that membership of the GMADA golf range was only to the extent of one time membership payment. The complainants were accordingly, informed in this respect. None of the demands raised by the opposite party was illegal. Due to force majeure reasons, the construction could not be completed on time and the opposite parties are entitled for extension of period.
The State Commission, after hearing the parties, by the impugned order dated 23.02.2024, found that the subvention scheme of payment was sponsored by the builder in which the buyer was liable to pay 15% of the basic sale consideration and the builder has to arrange balance 75% of consideration by way of loan from the financial institution as approved by the builder. In the tripartite agreement dated 20.06.2018, the builder has agreed to pay pre-EMI till the date of offer of possession. The scheme also provides that if the builders failed to provide ready to move possession of the apartment to the allottees within the time period in a habitable condition and complete in all respects as per specifications and occupation/completion certificate, it has to be considered as default of the builder. Since the builder has committed default in not handing over possession within the stipulated period. Therefore, the builder was liable to pay the pre-EMI till the date of offer of possession. As possession has not been offered, therefore, the complainants are not liable to pay maintenance charges. On this finding, the complaint has been allowed and order as stated above has been passed. Both the complainants and the builder have filed their respective appeals.
So far as FA/341/2024 filed by the complainants is concerned, the complainants have prayed for delay compensation from due date of possession till the offer of possession as well as for reimbursement of Rs.542533/- the amount of GST and compensation of Rs.1 lac for mental agony and harassment.
As per the opposite party, due to non-disbursement of balance amount on loan of Rs.2024629/- by Dewan Housing Finance Corporation Ltd., the project was initially delayed. From March 2020, Covid-19 spread in the country and consequently, lockdowns were imposed from time to time which created paucity of labour as well as it also increased the cost of building material upto the extent of 30% to 40%. The project was delayed on the spot. Since it was a force majeure reason, therefore, the opposite party was entitled for extension of this period.
We have considered the arguments of the counsel for the parties. Admittedly, only 15% of the consideration was paid by the complainants. The State Commission has already directed the opposite party to pay pre-EMI till the offer of possession. Therefore, looking into the force majeure reasons of Covid-19 and OP-5 stopped payment after March 2021, we do not find any reason to grant delay compensation to the complainants. So far as GST is concerned, it was a tax imposed by the Government of India after the agreement which is payable as per clause 1.11 of the agreement. Therefore, the liability of the complainants to pay the tax is a statutory liability and cannot be absolved. The appeal of the complainants has no merit and is liable to be dismissed.
So far as FA/426/2024 filed by the builder is concerned, the builder has raised ground that as Dewan Housing Finance Corporation Ltd. went into the proceedings under the Insolvency & Bankruptcy Code, 2016 and moratorium was imposed vide order dated 03.12.2019. Dewan Housing Finance Corporation Ltd. has stopped disbursement of balance sanctioned loan. The letter of the resolution plan has been accepted by the NLCT, Mumbai Bench and Dewan Housing Finance Corporation Ltd. has been merged with Piramal Capital and Housing Finance Ltd. On 03.11.2021, the name of Dewan Housing Finance Corporation Ltd. had been changed to Piramal Capital and Housing Finance Ltd. Since Piramal Capital and Housing Finance Ltd. has not been arrayed in the complaint, therefore, the complaint was liable to be dismissed for non-joinder of necessary party. Since payment of balance sanctioned loan was stopped and the construction was seriously affected due to Covid-19 as such, the builder stopped payment of pre-EMI. The direction to the builders to pay the pre-EMI was illegal.
The builders themselves have provided a subvention payment scheme and Dewan Housing Finance Corporation Ltd. was a financial institution of the choice of the builder. Under this scheme, the builder has undertaken to arrange 75% of consideration by way of loan for which the complainants have already signed the tripartite agreement dated 20.06.2018. The complainants had no further obligation after 20.06.2018 for raising the balance consideration of 75%. The complainants had to pay 10% on offer of possession. Dewan Housing Finance Corporation Ltd. stopped payment of balance sanctioned loan and it went into proceedings under Insolvency & Bankruptcy Code, 2016. No liability in this respect can be shifted upon the complainants. The builder has to arrange the balance finance. Looking into the facts of the case, the State Commission has not awarded any delay compensation and has only directed the builder to pay the pre-EMI till offer of possession in terms of subvention scheme of the builder. Since Dewan Housing Finance Corporation Ltd. was a financial institution of the choice of the builder and which was impleaded as opposite party, therefore, there could not be non-joinder of necessary party inasmuch as if any subsequent company has undertaken it, then it is merely a pendentelite transfer and does not affect the complaint. The appeal has no merit.
ORDER
In view of the aforesaid discussions, FA/341/2024 and FA/426/2024 are dismissed.