M/S. Bagadia Proprieties( P) Ltd vs Ananthalakshmi Gopinath

V.K. Jain, Presiding Member

The complainant/respondent agreed to purchase a residential flat from the appellant in a project namely Alta Vista Residential Complex for a consideration of Rs. 32 lakhs and executed an agreement with the appellant in this regard on 09.12.2010. As per the agreement, the apartment was to be completed, in all respects, on or before 31.07.2011. Clause 2.1 of the agreement specifically provided for delivery of possession to the complainant by 31.07.2011. The possession having not been delivered to him the complainant approached the concerned State Commission by way of a consumer complaint seeking refund of the amount which he had paid to the appellant.

The complaint was resisted by the appellant primarily on the ground that the complainant had failed to pay the balance amount of Rs.213500/- and the appellant had already completed the construction in all respects besides obtaining the completion certificate.

The State Commission vide order dated 08.07.2019 directed the appellant to refund the principal amount of Rs. 29,86,500/- received by the appellant from the complainant along with interet @ 12% p.a. and the cost of litigation quantified at Rs. 10,000/-. Being aggrieved the appellant is before this Commission by way of this appeal.

The first submission of the learned Counsel for the appellant is that the construction was completed and even the requisite occupancy certificate was obtained by the appellant on 25.09.2013.

The occupancy certificate filed by the appellant and available at pages 77-78 of the paper book is in respect of Blocks No. 1 and 2 comprising GF+08UF & Club House GF+FF with 196 dwelling units. The agreement executed between the parties does not disclose the number of the block in which the flat allotted to the complainant was to be located. In the absence of such particulars it cannot be verified whether the occupancy certificate dated 07.12.2013 obtained by the appellant covered the flat allotted to the complaint or not.

Even if it is assumed that the above-referred occupancy certificate dated 07.12.2013 did cover the flat allotted to the complainant, there is no evidence of the appellant having offered possession of the allotted flat to the complainant at any time after 07.12.2013. I have perused the written version to the consumer complaint. There is no averment in the written version that on receipt of the occupancy certificate dated 07.12.2013 the possession of the allotted flat was offered by the appellant to the complainant. No letter offering possession of the allotted flat to the complainant after 07.12.2013 was filed by the appellant. Therefore, it would be difficult to say that the appellant had offered possession of the allotted flat to the complainant before institution of the consumer complaint which came to be instituted on 13.06.2014.

As noted earlier the possession was to be delivered to the complainant by 03.07.2011. Even if it is assumed that the occupancy certificate dated 07.12.2013 covered the flat offered to the complainant, it is evident that the said occupancy certificate was obtained after delay of about 2 years and five months from the date by which possession was to be delivered to the complainant. Considering the extent of the delay and in the absence of any explanation for the said delay the complainant was not under an obligation to take possession of the allotted flat even after it is assumed that it was offered to her after obtaining the occupancy certificate on 07.12.2013. A reference in this regard can be made to the recent decisions of the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matters, (2019) 5 SCC 725.

In Pioneer Urban Land & Infrastructure Ltd. (supra), the builder submitted before this Commission itself that since the construction of the apartment was complete and Occupancy Certificate had been obtained, the flat purchaser must be directed to accept the possession instead of directing refund of the amount deposited. In that case, there was a delay of about three years in offering possession and the flat purchaser had submitted that he was not interested in taking possession after delay of about three years. He also stated that he had taken an alternative property in Gurgaon. This Commission having allowed refund to the complainant/respondent, the appellant before the Hon'ble Supreme Court inter-alia contended that as per the terms of the agreement executed between the parties, the flat purchaser could claim refund only after expiry of twelve months from the grace period by terminating the agreement but the Consumer Complaint had been filed even before the said twelve months period after the grace period had come to an end. It was also submitted on behalf of the builder that this Commission had erred in granting interest at the rate of 10.7% per annum to the complainant when the agreement between the parties provided for payment of interest @ 6% per annum in case of delay in handing over possession. Rejecting the contentions advanced by the builder, the Hon'ble Supreme Court inter-alia held as under:

6.1. In the present case, admittedly the Appellant - Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer's Agreement. As a consequence, there was a failure to hand over possession of the flat to the Respondent - Flat Purchaser within a reasonable period. The Occupancy Certificate was obtained after a delay of more than 2 years on 28.08.2018 during the pendency of the proceedings before the National Commission.

In Lucknow Development Authority v. M.K. Gupta,2 this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a "service" as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.

In Fortune Infrastructure & Anr. v. Trevor D'Lima & Ors.,3 this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.

6.2. The Respondent - Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant - Builder. The Respondent - Flat Purchaser was justified in terminating the Apartment Buyer's Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent - Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.

It is next submitted by the learned Counsel for the appellant that out of the amount paid by the complainant only Rs. 27,73,000/- were paid as principal amount and the balance amount to Rs. 2,37,602/- was paid towards service tax which the appellant has also deposited with the concerned authorities. There is no evidence of the tax having been deposited by the appellant with the concerned authorities. In any case nothing prevents the appellant from recovering the tax from the person to whom it would be entitled to sale the flat which it had allotted to the complainant or seeking refund of the said tax on the ground that the transaction with the complainant had not materialized.

The learned Counsel for the appellant lastly submits that no interest at all should have been awarded to the complainant, since the money had been utilized for construction of the apartment. I, however, find no merit in the contention. The appellant having used the money received from the complainant and thereby the complainant having deprived of the said money the directions for payment of interest would be fully justified.

No other submission is made by the learned Counsel for the appellant.

From the submissions made by the learned Counsel for the appellant, no ground is made out to set aside the order passed by the State Commission. The appeal is dismissed with no orders as costs.