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Judgment
These eleven (11) appeals no. 23, no. 120, no. 222, no. 389, no. 390, no. 392, no. 393, no. 419, no. 832, no. 1064 and no. 1065 of 2019 have been filed under Section 19 of The Consumer Protection Act, 1986 in challenge to the Orders (11 nos.) dated 11.07.2018, dated 29.08.2018, dated 10.04.2018, dated 30.10.2018, dated 16.10.2018, dated 11.10.218, dated 29.11.2018, dated 24.12.2018, dated 13.02.2019, dated 12.04.2019 and dated 12.04.2019 of the State Commission in complaints no. 68 and no. 442 of 2018, no. 263 of 2017, no. 237, no. 537, no. 284, no. 580, no. 137 and no. 796 of 2018 and no. 33 and no. 34 of 2019.
The learned counsel for the appellant builder co. submits that, earlier, appeals no. 281, no. 282 and no. 1967 of 2019 filed by the same appellant had been decided by this Commission vide its Order dated 10.08.2022. The instant eleven (11) appeals have been filed in similar facts and on same questions of law. She has no additional arguments to make other than which had already been made and considered when the appeals no. 281, no. 282 and no. 1967 of 2019 were heard. Her submission is that as the facts are similar and the questions involved are the same she does not propose to unnecessarily dwell or dilate again on the same issues and raise the same arguments all over again when there is nothing material to add or subtract.
The learned counsel for the respondent complainants in the appeals no. no. 23, no. 222, no. 389, no. 390, no. 392, no. 393, no. 419, no. 832, no. 1064 and no. 1065 of 2019 submit that the facts in the instant appeals are similar to the facts of appeals no. 281, 282 and 1967 of 2019 which have been decided by this Commission on 10.08.2022. Their submission is that the appraisal made by this Commission in respect of appeals no. 281, 282 and 1967 of 2019 cannot be faulted on any ground, either on facts or on law, and as such the instant eleven (11) appeals may also be disposed of in terms of the examination and reasons contained in the Order dated 10.08.2022 vide which the earlier three (03) appeals had been decided as the facts germane to the issues in question are not distinguishable.
The learned counsel for the appellant builder co. and the learned counsel for the respondent complainants have shown the copies of this Commission’s Order dated 10.08.2022 vide which appeals no. 281, 282 and 1967 of 2019 were decided and have drawn our attention to the same.
For reference the said Order of 10.08.2022 may be reproduced below:
Dated: 10.08.2022
ORDER
These three (03) appeals no. 281, no. 282 and no. 1967 of 2019 have been filed under Section 19 of The Consumer Protection Act, 1986 in challenge to the Orders (03 nos.) dated 13.09.2018, dated 24.09.2018 and dated 24.07.2019 of the State Consumer in complaints no. 72, no. 436 and no. 295 of 2018.
We have heard Mr. Arjun Nanda, learned counsel for the builder co. (the appellant herein in all three appeals) and Mr. Shyam Kumar, learned counsel for the complainants in complaint no. 295 of 2018 (the respondents no. 1 and no. 2 herein in appeal no. 1967 of 2019). Mr. Maibam N. Singh, learned proxy counsel for the complainant in complaint no. 436 of 2018 (the respondent no. 1 herein in appeal no. 282 of 2019) also make his submissions on instructions. No one appears for the complainants in complaint no. 72 of 2018 (the respondents no. 1 and no. 2 herein in appeal no. 281 of 2019).
We have also perused the material on record, including inter alia the State Commission’s impugned Orders (03 nos.) dated 13.09.2018, dated 24.09.2018 and dated 24.07.2019 and the memoranda of appeals (03 nos.).
First appeals no. 281 of 2019; no. 282 of 2019 and no. 1967 of 2019:
Similar facts and same questions of law are involved in these three (03) appeals. As such they are being disposed of vide this common order, with appeal no. 281 of 2019 being taken as the lead case.
First appeal no. 281 of 2019 (lead case):
The appeal has been filed with self-admitted delay of 16 days. Mr. Arjun Nanda, learned counsel requests that the delay may be condoned. Mr. Shyam Kumar and Mr. Maibam N. Singh, learned counsel have no objection, and submit that they would prefer putting a period to the lis by a decision on merit.
In the interest of justice, to provide fair opportunity to the appellant builder co., to decide the matter on merit rather than to dismiss it on the threshold of limitation, the delay in filing the appeal is condoned.
The matter relates to a builder-buyer dispute. Briefly, the builder co. and the complainants entered into an agreement on 28.11.2014 in respect of a residential unit. The complainants paid an amount of Rs. 37,23,720/- to the builder co. The agreed and assured date for completing the project and for offering possession of the unit was 24 months from the date of execution of the agreement or the date of initiation of the work whichever was later. The exact date of initiation of the work was unclear. The date of execution of the agreement i.e. 28.11.2014 which in all contingencies was subsequent to the date of initiation of the work was taken by the State Commission for counting the 24 month period. The agreement also provided for a grace period of 06 months beyond the said 24 month period. Counting from the date of the agreement, the agreed and assured 24 month period for completing the project and offering possession of the unit expired on 27.11.2016 and the subsequent grace period of 06 months expired on 27.05.2017. The project was not completed and the offer of possession of the unit was not made within the agreed and assured period of 24 months, or even in the subsequent 06 month grace period, or even still within a reasonable period thence (reasonable period here would connote a period which appears reasonable per se and which a reasonable man of ordinary prudence would not normally agitate). The complainants went before the State Commission on 02.02.2018 i.e. 14 months after the expiry of the agreed and assured period of 24 months and 20 months after the expiry of the grace period of 06 months. Holding the abnormal unreasonable delay in completing the project and offering possession of the unit to be ‘deficiency in service’ on the part of the builder co. the State Commission ordered it to refund the amount of Rs.37,23,720/- deposited by the complainants with interest at the rate of 12% per annum from the respective dates of deposit till realisation along with lumpsum compensation of Rs. 40,000/-.
A perusal of the State Commission’s Order of 13.09.2018 shows that it is a well-appraised and reasoned order that has extensively dealt with the issues germane to the dispute.
The State Commission has considered and dismissed the preliminary objections regarding the ‘complainants’ not being ‘consumer’ under the Act 1986 (para 11 of its Order); the jurisdiction of the consumer protection fora being ousted because of the existence of an arbitration clause in the subject agreement (para 12 of its Order); and the complaint being outside the pecuniary jurisdiction of the State Commission (para 14 of its Order).
It is seen that no evidence whatsoever has been led by the builder co. to support its assertion that the complainants had availed the service of the builder co. for ‘commercial purpose’. The State Commission has rightly observed in para 11 of its Order that “no evidence from the side of the opposite parties to prove that the complainants are indulging in sale/purchase of property for commercial purpose and simple assertion in this regard in the reply of the builder co. is not sufficient to prove this fact”. Pertinently the unit in question was a residential unit and the complainants had also taken loan from a financial institution to fund their intended acquisition. There is nothing forthcoming to support the builder co.’s contention that the complainants were not ‘consumer’ within the meaning of section 2(1)(d)(ii) of the Act 1986.
Section 3 of the Act 1986 provides for an additional alternative remedy to ‘consumer’. It is no longer res integra that the existence of an arbitration clause in such agreements does not bar a ‘consumer’ from approaching the consumer protection fora.
The complainants had deposited an amount of Rs. 37,23,720/- with the builder co. and the prayer made in the complaint was for a total amount of Rs. 47,78,720/-. Clearly the case fell within the pecuniary jurisdiction of the State Commission.
As such, the preliminary objections taken on behalf of the builder co. fail miserably.
Mr. Arjun Nanda, learned counsel fairly submits that he is not pressing the preliminary objections in appeal. The submission is that he would prefer to argue on the substance in the complaint.
Mr. Arjun Nanda, learned counsel then argues that the delay in execution and completion of the project was principally due to non-availability of land from the state government in accordance with a memorandum of understanding undertaken by the builder co. with the state government and tries to draw support from the force majeure clause in the subject agreement. The submission is that the delay in offering possession of the subject unit was due to extraneous factors not within its control and was covered by the agreement.
The State Commission has extensively dealt with this and allied aspects in its impugned Order (in paras 16, 17, 19 and 24).
We may observe, to place the whole matter in perspective, that prior to, or, at the least, simultaneous to, getting the buyer-consumer to enter into its agreement and accepting the first payment towards the total cost of the subject unit, the builder co. was required and expected to have the due pragmatic and realistic assessment and preparation of the project planning. It was the prime responsibility of the builder co. to ensure that it was in a position to deliver the possession of the subject unit to the buyer-consumer within the agreed and assured period. Planning, execution and completion were the builder co.’s responsibility, and not of the consumer; (normal) impediments or problems that may arise in planning, execution and completion were again its own responsibility, and not of the consumer. Specifically, availability of land, as well as all approvals from the concerned government, development and municipal authorities, as and when due, being fundamental basic requirements of a residential housing project, were decidedly to be taken care of and dealt with by the builder co. Time and cost overruns were essentially within the domain of its own duty and obligation. Non-fulfilment of its overall responsibilities of project planning, execution and completion can not be and are not grounds for condoning or overlooking delay in completion and failure to offer possession within the agreed and assured period. All-encompassing blanket plea of force majeure, unforeseeable circumstances, irrespective of its various ‘liberal’ or ‘strict’ interpretations, and irrespective of its various interpretations in different sets of facts, cannot be nebulously and irrationally articulated in the agreement, or be successfully contended and argued as omnibus defence for anything and everything related to the builder co.’s failure to fulfil its responsibilities for completion of the project without occasioning time or cost overruns.
10.Mr. Arjun Nanda, learned counsel further argues that the occupancy certificate has since been obtained on 04.01.2019 by the builder co. and it has then also issued offer of possession to the complainants on 31.01.2019. The submission is that the State Commission’s Order for refund may be expunged and in its stead the complainants may be ordered to take possession of the subject unit.
11.However, the agreed and assured period for completion of the project was 24 months from the date of its initiation. There has been opacity on the part of the builder co. in not clearly indicating and showing the actual date of initiation of the work. This date was not furnished before the State Commission, and neither is the same being submitted before this Commission. The State Commission had taken the date of the subject agreement, which in all contingencies was subsequent to the date of initiation of the work, for counting the 24 month agreed and assured period for completion of the project and offering possession of the unit. The said period expired on 27.11.2016. The subsequent 06 month grace period provided for in the agreement also expired on 27.05.2017. The complaint was filed much afterwards on 02.02.2018. The State Commission decided the case on 13.09.2018. Till then no occupancy certificate had been obtained. In the absence of the occupancy certificate it was most obviously not feasible to offer legitimately meaningful possession. On the face of it itself, abnormal unreasonable delay beyond the agreed and assured 24 month period as well as beyond even the 06 month grace period is self-evidently writ large. It is also admitted that though the occupancy certificate has been (belatedly) obtained the completion certificate has still not been obtained. As such the project as a whole has still not been completed. That is to say, the site development and amenities and conveniences have still not been completed.
12.It may be observed that the grace period provided for in the agreement, by its very nature, is in itself an extended period for delay. That is to say, it itself provides to take care of a reasonable delay of upto 06 months. That being so, the delay of 19 months subsequent to the expiry of the grace period in obtaining the occupancy certificate, without any cogent or convincing reasons, is patently unjustifiable and untenable and hard to condone.
The material significance of the grace period needs to be understood in perspective. It by itself provides for a reasonable period of delay beyond the agreed and assured period and it is ab initio built into the agreement with the ‘consumer’. Any period beyond the grace period has to be fully justifiable and tenable with cogent and convincing reasons, which is not at all the case here.
13.After abnormal unreasonable delay and after the State Commission has already passed its Order, then obtaining the occupancy certificate and offering possession and still not having obtained the completion certificate and yet attempting to further trouble and prejudice the complainants by forcing them into accepting possession is totally unjustifiable and unsustainable and difficult to countenance with.
14.It is a well settled position that in case of unreasonable delay beyond the agreed and assured period, two parallel rights accrue to the consumer:
one : to wait for possession of the subject unit to be offered, if and when the project is completed and the offer of possession is made by the builder co., and to seek just and equitable compensation under the Act 1986 for the unreasonable delay and consequent loss and injury.
or
two : to claim refund of the amount deposited with just and equitable interest / compensation.
In the instant case the complainants have opted for refund of their deposited amount. The delay as already seen is unreasonable and unjustifiable. In the particular facts of the instant case there appears to be no good reason to undo the right which has accrued to the complainants by way of the State Commission’s Order just because the builder co. has now subsequent to the decision of the State Commission (most) belatedly obtained the occupancy certificate and that too when it is still yet to obtain the completion certificate.
15.It goes without saying that the builder co. would be the owner of the subject unit and would be free to dispose it as it wishes to. Hence no palpable prejudice is being caused to it.
16.Mr. Arjun Nanda, learned counsel submits that Hon’ble Supreme Court has favourably considered cases in which occupancy certificate has been obtained and has ordered for possession rather than refund. The submission is that the complainants may be ordered to take possession and the State Commission’s award for refund may be expunged.
On the other hand Mr. Maibam N. Singh, learned counsel submits that it is a settled position of law that after unreasonable and unjustifiable delay a ‘consumer’ cannot be forced to accept possession when he wishes for refund.
17.The unique facts of the instant case show patent deficiency on the part of the builder co. The occupancy certificate was not obtained within the agreed and assured period of 24 months, or even within the grace period of 06 months provided for in the agreement, or even within reasonable period thence still, but was obtained after abnormal unreasonable delay. Admittedly the completion certificate has not been obtained till even today and as such the warranted site development and amenities and conveniences are yet not in place.
In the given facts of the present case it is difficult to agree to Mr. Arjun Nanda, learned counsel’s submission that the award made by the State Commission be undone and possession on the subject unit be forced on the complainants rather than allowing them to obtain back their own deposited amount with equitable interest.
18.Mr. Arjun Nanda, learned counsel then argues that in awarding a rate of interest of 12% per annum the State Commission has erred by placing reliance on Rule 7 of the PAPRA (i.e. Punjab Apartment and Property Regulation Act, 1995) since the said Rule was not applicable on the builder co. as the subject project had been exempted from PAPRA vide a notification dated 11.08.2006 of the state government. He submits that a copy of said notification has been filed before this Commission vide an interlocutory application no. 2953 of 2019. The submission is that even if refund of the deposited amount is ordered the rate of interest may be reduced from 12% per annum.
Mr. Shyam Kumar and Mr. Maibam N. Singh, learned counsel submit that the notification which is now being relied on was not referred to in the written version before the State Commission. As such the complainants did not get the opportunity of rebuttal. They could neither get the opportunity to cite judicial pronouncements nor other relevant notifications etc. on the subject. This ground has not even been taken in the memorandum of appeal. It is now being argued at the stage of final hearing by filing an illegible photocopy of the notification accompanied with an unattested typed copy.
They further submit that notwithstanding the afore, even in the overall facts and circumstances of the case, inter alia considering that the complainants had taken loan from a financial institution to fund their intended acquisition and have been paying interest thereon, and taking into account the patent deficiency on the part of the builder co. by way of the abnormal unreasonable delay and the continuing protracted uncertainty and difficulty faced by the complainants, the rate of interest of 12% per annum is quite reasonable and justified per se and there is no good reason to disturb it. Learned counsel also argue that a consumer protection forum cannot take the provisions of PAPRA as mandatorily binding on it since it has to itself award compensation which it finds commensurate with the loss and injury suffered. The submission is that the duty of the consumer protection fora in awarding just and equitable compensation under the Act 1986 cannot be over-ridden by PAPRA. The further submission is that in the present case the compensation provided by way of interest at the rate of 12% per annum on the deposited amount is per se reasonable and justified and is commensurate with the loss and injury suffered by the complainants and as such there is no good ground to dilute it.
19.The copy of the notification dated 11.08.2006 placed before us appears to be an ‘n’th photocopy, not readily legible. The typed version is unattested. There appears to be weight in the submission made by Mr. Shyam Kumar and Mr. Maibam N. Singh, learned counsel that adequate opportunity of rebuttal, to cite relevant judicial pronouncements or other relevant notifications etc., has not been afforded to the complainants.
We also find weight in the argument made by them that even if the provisions of PAPRA are ignored, in the overall facts and circumstances of the case, inter alia seeing that the complainants had taken loan from a financial institution to make their deposit with the builder co. and are paying interest thereon, considering the continuing protracted uncertainty and difficulty faced by the complainants, the rate of interest of 12% per annum appears to be just and reasonable, commensurate with the loss and injury suffered by the complainants.
20.No ground for interference in the award made by the State Commission is forthcoming. There can be no two opinions that the builder co. is dutybound to refund the amount deposited by the complainants. And irrespective of whether or not the provisions of PAPRA are applicable, the rate of interest of 12% per annum appears just and equitable.
21.The appeal, being totally bereft of worth, is dismissed.
The award made by the State Commission is confirmed.
The amount if any deposited by the builder co. with the State Commission in compliance of this Commission’s Order dated 20.02.2019 along with interest if any accrued thereon shall be forthwith released by the State Commission to the complainants towards satisfaction of the award as per the due procedure. The balance decretal amount shall be made good by the builder co. within six weeks from today, failing which the State Commission shall forthwith undertake execution, for ‘enforcement’ and for ‘penalties’, as per the law.
First appeals no. 282 of 2019; and no. 1967 of 2019:
22.The appeals no. 282 of 2019 and no. 1967 of 2019 are disposed of in terms of the examination and reasons contained hereinabove apropos appeal no. 281 of 2019 (the lead-case) with similar directions mutatis mutandis.
First appeals no. 281 of 2019; no. 282 of 2019; and no. 1967 of 2019:
23.The Registry is requested to send a copy each of this Order to all parties in the appeals and to their learned counsel / learned proxy counsel as well as to the State Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.
We have perused the record including inter alia the State Commission’s impugned Orders (11 nos.) and the corresponding memoranda of appeal (11 nos.) as well as the Order dated 10.08.2022 referred to by the learned counsel present.
Similar facts and same questions of law are involved in the instant eleven (11) appeals as were in the earlier three (03) appeals which had been decided vide this Commission’s Order dated 10.08.2022.
As such the instant eleven (11) appeals are disposed of in terms of the examination and reasons contained in the Order dated 10.08.2022 with similar directions mutatis mutandis.
The Registry is requested to send a copy each of this Order to the parties in the appeals and to their learned counsel as well as to the State Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.