M/s Deepak Buildcon Infrastructure & Anr vs Harminder Kaur Sidhu

Avm J. Rajendra, Avsm Vsm (Retd.), Presiding Member

The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 21.07.2017 passed by the learned State Consumer Disputes Redressal Commission, Punjab, Chandigarh (“the State Commission”), in Consumer Complaint No.303 of 2016 whereby the State Commission partly allowed the complaint.

For Convenience, the parties are being referred to as stated in the Complaint before the State Commission. Mrs. Harminder Kaur Sidhu is referred to as the Complainant. M/s. Deepak Buildcon Infrastructure through & its Proprietor Mr. Deepak Singal are referred to as the Opposite Parties (OPs)/ Builder.

Brief facts of the case, as per the Complainant, are that late Shri Raminder Singh Sidhu, husband of the Complainant, had applied for allotment of a flat in OPs project vide application dated 16.04.2007 for total sale consideration of Rs. 44 Lakhs. Along with application, Rs.13 Lakhs was paid by a DD on 16.04.2007, and Rs.11 Lakhs was paid by cheque on 17.04.2007. Subsequently, a buyer’s agreement was entered into on 14.09.2007, wherein the OPs agreed to sell Flat No. 5, 5th Floor, Block No. 3 in their group housing scheme ‘Crosswinds Luxury Home’ at Sunet, Shaheed Bhagat Singh Nagar, Ludhiana. Following an initial payment of Rs. 24 Lacs, the balance sale consideration was paid by late Shri Raminder Singh Sidhu through EMIs of Rs. 1,29,167/- by way of postdated cheques, all duly encashed by the OPs. In terms of Clause 4(a) of the agreement dated 14.09.2007, the possession of the Flat was to be delivered by the end of 2009. As per Clause 4(b), the OPs were obligated to issue a notice specifying the possession delivery date, which they failed to fulfill. Meanwhile, Shri Raminder Singh Sidhu passed away in London on 22.02.2010. He designated his wife, Smt. Harminder Kaur Sidhu as his nominee. In April 2010, during the initial stages of construction, the Complainant visited India and submitted a request on 15.04.2010, supported by an affidavit, to substitute her name in the buyer’s agreement. The OPs executed a supplementary Buyer’s Agreement dated 15.04.2010 substituting the Complainant's name. His visits to the construction site during 2010 and 2011 revealed limited progress. Regular inquiries about the construction continued, and in February 2015, the Complainant was assured by OPs, that the Flat would be ready in March 2015. Upon arriving on 28.03.2015, the Complainant faced demand for an additional Rs.5,26,300/-, which she contested as not being part of the original agreement. The OPs insisted on this payment for initiating registration and on 02.04.2015, a detailed breakdown of additional charges of Rs.3,44,000/- was provided.

In addition to delay, the Complainant incurred expenditures to stay in hotels in Ludhiana to visit the OPs' office several times. On 09.04.2015, she expressed dissatisfaction with poor quality of work, including visible patches on the wall paint, scratches on wardrobes, cracked kitchen tiles, raised wooden flooring, improperly installed kitchen and bathroom fittings etc. She met Shri Deepak Singal, Proprietor and raised concerns about poor work, late possession and requested compensation. OPs unequivocally refused to address the issues and insisted on payment of additional charges. On she issuing a legal notice on 22.06.2015, the OPs replied on 13.07.2015 that the Flat was completed and ready for possession and sought additional charges. They imposed maintenance charges from January 2013 to March 2015, despite the flat not being ready at least till January 2013. Feeling aggrieved about deficiency in service, she filed Consumer Complaint No.303 of 2016 through the SPA holder Shri Harshan Singh Bajwa. She sought specific directions to OPs to pay interest @ 24% per annum on Rs.44,00,000/- from 01.01.2010 for non-delivery of the Flat. Alternatively, she sought refund of Rs.44,00,000/- along with interest @24% per annum from the date of receipt until payment. She claimed Rs.1,30,000/- as compensation; Rs.40,000 for local travel; Rs. 2,50,000/- for loss of earnings; Rs.3,00,000/- for mental agony and harassment; and Rs. 55,000/- towards litigation expenses.

In their reply before the State Commission, OPs contended that as the cause of action arose in December 2009, the complaint is time barred. The Complainant was to deposit Rs. 5,26,360/- before the execution of sale deed. Later, to assist her, this was reduced to Rs.3,26,360/-. Regrettably, she failed to make this payment, leading to the non-delivery of possession. Additionally, she failed to pay towards stamp duty and registration charges. The OPs referred to specific clauses in the Buyer’s Agreement (2.b, 5.k, and 5.1) that it was the purchaser's responsibility for additional levies, charges, or taxes imposed by the Govt or statutory/local authorities. She was liable to pay Rs.1,54,000/- for service tax and Rs. 44,000/- for labour cess as per Govt regulations. Further, under Clause 3.b, she was liable to pay a membership fee of Rs. 25,000/- and security deposit of Rs.25,000/- to the RWA. Maintenance charges from January 2013 to March 2015 was her responsibility, as per Clause 3.a. Further, she sought installation of two ACs @ Rs.5,000/- per AC. As per OPs, they deposited Rs.17,11,889/- through the daughter of Mr Deepak Singal, and a completion plan was issued on 28.12.2011. She visited the site in April 2010. While the Flat was ready for possession, she sought to execute the sale deed after issue of Completion Certificate and failed to pay the said charges. Until those were settled, the sale deed could not be executed, and thus possession was could not be handed over.

The State Commission vide impugned Order dated 21.07.2017 partly allowed the Complaint and directed Appellant/ OPs as under:-

“(i) to deliver the possession of the flat, complete in all respect to the satisfaction of the complainant within a period of 2 months from the date of receipt of the copy of the order. A written notice will be given to the complainant for the date of delivery of the possession. Membership fee and security will be paid to Resident Association as and when it formed. Maintenance charges as agreed will be paid to the Maintenance Agency to be notified by way of Agreement at the time of delivery of possession.

(ii) the Ops will pay late delivery possession charges @ Rs. 10,000/- per month from 1.1.2010 till the date of actual delivery of possession.

(iii) pay Rs. 2,00,000/- as compensation; and

(iv) pay Rs. 21,000/- as litigation expenses.

OR

(i) In case the possession of the flat complete in all respects is not offered to the complainant within the time specified above then the Ops will refund a sum of Rs. 44 Lacs received from the complainant along with interest @ 12% p.a. from the various dates of receipt till payment.

(ii) Rs. 2,00,000/- as compensation; and

(iii) Rs. 21,000/- as litigation expenses.”

Dissatisfied by the Impugned Order, the Appellants/OPs filed the present Appeal seeking the following:

“It is therefore, respectfully prayed that the appeal may kindly be accepted, and the impugned order dated 21.07.2017 attached as Annexure A-1 may kindly be set aside and the complaint filed by the complainant may kindly be dismissed.”

The Appellants/OPs have mainly raised the following objections in the instant Appeal that the learned State Commission:

(a) The State Commission failed to note the delay and holding it to be a recurring cause of action is incorrect. The complaint filed on 26.09.2016 is time-barred u/s 24A of the Act, 1986, as the cause of action allegedly arose on 01.01.2010.

(b) The Complainant did not deny that possession was not offered when the supplementary/additional agreement was made on 15.04.2010, implying she was uninterested in possession.

(c) In terms of Clause 3.b, the amounts for membership fee and security were payable at the time of possession delivery, as indicated by the remittance to the Association on its formation.

(d) The State Commission erred in holding that the Complainant is not liable to pay maintenance charges. The charges were due from 2011 but charged from January 2013 to March 2015. These charges were to be settled at the time of notice of possession.

(e) Highlighting that a notice under Registered Post (02.12.2015) and an email (17.12.2015) requested execution of the sale deed, implying possession was handed over, but the complainant allegedly showed no interest in taking possession

In response to the Appeal, the Respondent/Complainant have not filed a reply. However, they filed written submissions reiterating the primary issues raised in the original complaint.

The learned Counsel for the Appellant emphatically reiterated the grounds of instant appeal. The Complainant took possession on 27.03.2018 after the execution of the sale deed, following the orders of this Commission. He contended that the State Commission lacked pecuniary jurisdiction to decide the complaint, given that its value exceeded Rs.1 crore. Additionally, the filing of the complaint through SPA was challenged for lack of proof on record. He emphasized that the cause of action for the Complainant arose on 15.04.2010 when the transfer was made in her favor after her husband's death. The learned Counsel contended the State Commission's findings were perverse. Specifically, the rejection of service tax of Rs.1,54,000/- to be paid was challenged as was introduced in 2011, whereas the possession was to be delivered by the end of November 2009 and service tax was introduced in 2007. The order on Compensation of Rs.10,000/- p.m., Rs. 44,000/- for labor cess and Rs. 86,400/- for maintenance charges from January 2013 to March 2015 was deemed contrary to the terms of agreement. Furthermore, it was asserted that the State Commission exceeded its authority by questioning the fixation of the maintenance charges at Rs. 3200/- per month. The completion certificate for the project, issued by Municipal Corporation, Ludhiana on 28.12.2011, was highlighted to argue that maintenance charges were wrongly charged from 01.01.2013. The learned Counsel contended that the Complainant’s visit from U.K. was not for taking possession, and the claim of spending Rs.1,30,000/- on traveling was denied. He emphasized that the Complainant, being an NRI, had been visiting her parental/in-law's house, and if possession were the intention, they would have brought stamp papers earlier.

The Complainant in person (along with SPA holder) reiterated the issues raised in the pleadings and strongly supported the State Commission's order. She argued that the complaint was filed well within the limitation period as there was a recurring cause of action since 01.01.2010 when the Appellant failed to deliver possession by the end of 2009, as per the agreement. The cause of action arose on 09.04.2015 when an email was sent by OPs to take possession, subject to payment of additional charges and taxes. The flat was not in a liveable condition when possession was offered. The demand for additional charges and taxes was unjustifiable. She asserted that the Service Tax liability of Rs.1,54,000/- was on OPs as they failed to deliver possession on time. Labour cess of Rs.44,000/- was also OPs liability. Demands for Development charges, Generator Accessories, and Air conditioner provisioning were considered unjustifiable as they were included in the total sale consideration already paid. The claim of Additional Maintenance Charges of Rs.86,400/- was contested, stating it did not apply as per the Sale Agreement terms.

The Complainant argued against the Appellant's claim of the Completion Certificate, asserting it was a No Objection Certificate (N.O.C.) for completion plans, not a certificate of project completion. They challenged the pecuniary jurisdiction, asserting that the demand for interest should not be included in the calculation. The SPA's competency to have knowledge of the facts was stressed, given their role in subsequent/supplementary agreement and communications. Therefore, she prayed for the dismissal of Appeal, costs to be awarded, and interest at 9% per annum for the delayed period.

I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.

The central dispute revolves around the OPs alleged failure to hand over possession of the said Flat, in compliance of agreement dated 14.09.2007. The OPs contended that possession was offered, contingent to payment of additional charges and taxes, a claim the Complainant contested. Disputed amounts include Service Tax (Rs.1,54,000), labour cess (Rs.44,000) and maintenance charges (Rs.86,400). The Appellant challenged the jurisdiction of the State Commission and asserted that possession was taken by her only after the orders of this Commission on 27.03.2018. Conversely, the Complainant alleges delay in possession, prompting a complaint on 26.09.2016. The validity of Completion Certificate dated 28.12.2011 was also questioned. She sought dismissal of the appeal, costs, and interest at 9% per annum for delayed possession. The core issue lies in conflicting claims regarding possession and the associated financial demands between the Appellant and the Complainant.

The learned State Commission vide order dated 21.07.2017, made the following observations: -

“13.   Whether the OPs offered the possession as required under Clause 4 of the Buyer’s Agreement. As per Clause 4(a), the OPs were required to deliver the possession by the end of 2009. Certainly, by the end of 2009, the possession was not offered. The Ops in the written reply have referred to force majeure circumstances i.e. due to non-availability of the sand, gravel etc. due to ban imposed by the Government. However, no notification as issued by the Government of Punjab before December 2009 imposing any ban upon the mining has been placed on the record. Even by notification, the mining is regulated and there is no blanket ban upon the mining. What is force majeure? A reference has been made to Section 56 of the Indian Contract Act, where under force majeure circumstances, a party cannot perform the particular act required to be performed by that party. Therefore, mining is not force majeure circumstances, therefore, the plea taken by the Ops is not covered under the force majeure. As per para 12, they had completed the construction by December 2011 and completion certificate to this effect has been placed on the record by Op Annexure Op-2. Then according to Clause 4(b), the developer is required to give notice to the complainant about the date on which the developer would be affecting possession of apartment to the purchaser and the purchaser is required to take over the possession within 30 days from the date of issuance of the notice. However, Ops have placed on the record email Annexure Op-3 vide which the complainant was asked to clear the balance payment. Similar is the email Ex. Op-4, therefore, no notice in writing as required under Clause 4(b) of the agreement has been issued to the complainant to get the possession of the completed flat. Further as averred in the complaint, a notice on telephone was received by the complainant from Mr. Sudhir, Personal Assistant to the Proprietor in February, 2015 to visit India in March, 2015 and that they assured the possession of the apartment. Accordingly, complainant with his son visited India on 28.3.2015. Sufficient time was consumed in negations with regard to the additional payment asked for by the Ops, firstly, Rs. 5,26,360/- and then Rs. 3,44,400/- and further reduced to Rs. 3,28,000/-. However, the complainant visited the flat on 9.4.2015 and she was completely dissatisfied with the repair work, which was of very poor quality. The patch work was clearly visible through the wall paint, kitchen worktop was chipped, there were scratches on the wardrobes, kitchen tiles were cracked, damp wall has been taking without taking damp prevention measures, wooden flooring was bubbled and raised at some places, kitchen and bathroom fittings were not properly installed. To support this contention, the complainant has placed on the record, the photograph chart Ex. C-12 where these deficiencies are clear. Ops in its reply have simply denied and no evidence of any Engineer or Photographer has been placed on the record to say that on 9.4.2015 when the complainant had inspected the flat in question, there was no flaw in the construction specifically the flaws alleged by the complainant in the complaint. In the absence of any rebuttal evidence, we does not fell any hesitation to accept the version of the complainant that when the offer of possession was offered to the complainant, it was not complete in all respects and it had number of flaw and Ops cannot compel the complainant to get possession, in case it is not completed in all respects. Therefore, we return the findings in favour of the complainant that firstly no offer of possession was given as required under Clause 4(b) and when oral possession was given, it was not complete in all respects as referred above.

In the agreement holding charges has been specified @ Rs. 10,000/- per month in case the complainant does not get the possession within a period of 14 days after the notice. However, no penalty clause has been referred in the agreement in case the delay is there on the part of Ops, similar penalty should be imposed upon the Ops, in case they delayed the delivery of possession. Therefore, the complainant will be entitled to holding charges @ Rs. 10,000/- per month w.e.f. 1.1.2010 till the delivery of possession.

The complainant in the complaint has asked for compensation of Rs. 1,30,000/- on account of travelling expenses from U.K., Rs. 40,000/- on account of local expenses for travelling, Rs. 2,50,000/- on account of loss of earning, Rs. 3,00,000/- towards mental agony and harassment. In case the complainant had come to India to get the possession of the flat booked by her with the Ops then he will not be entitled to travelling charges from U.K. to India. However, the complainant held number of meetings with the Ops with regard to unjustified demand of additional charges, she has to reside in the Hotel at Ludhiana as she had come from abroad, when she was unable to get the possession, there was harassment, mental and physical tension, therefore, these factors are to be considered while considering the compensation to be allowed to the complainant. Considering all these facts, we assess Rs. 2 Lacs as compensation to the complainant i.e. visiting office of Ops number of times in connection with unjustified demand of additional amount, mental and physical harassment on account of not getting the possession when the complainant had specifically come from U.K .

Without doubt, there was delay in the construction and handing over of the Flat in question as per “the Buyer’s Agreement”. The Complainant had invested heavy amount with the intention to get the possession of the Apartment on time. There are a number of Case Laws wherein the Hon’ble Supreme Court and this Commission has decided favourably on the right of the buyers to get a refund of their money in case of delay by the Developer in giving possession in terms of the Buyer’s Agreement.

In the case of Emmar MGF Land Ltd. & Ors. Vs. Amit Puri- {(II 2015 CPJ 568 (NC)}, Decided on 30.03.2015, this Commission has held as under:

“After the promised date of delivery, it is the discretion of the Complainant whether to accept the offer of possession, if any, or to seek refund of the amounts paid by him with some reasonable compensation and it is well within his right to seek for refund of the principal amount with interest and compensation.”

Reliance is placed on the judgement of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, ll (2019) CPJ 34 (SC), decided on 02.04.2019 it was held as under:

“We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfil his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent – Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent – Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the 22 Respondent – Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest”.

Further, para 6.7 of the Order reads as :

“A term of a contract will not be final and binding if it is shown that the flat purchasers had no option to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement of 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an Agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling flats by the Builder.

Further, para 7 of the Order reads as under :

“In view of above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms.”

It is an admitted position that the contract - Buyer’s Agreement between the parties was entered into on 14.09.2007. In terms of Clause 4(a) of the said contract the Flat in question was to be handed over by the end of 2009. That is to say, the apartment ought to have been handed over by the end of the year 2009. However, the project was not completed within the time prescribed, and it is an admitted position of the Appellant that the possession of the Flat was offered to the Respondent only on 09.04.2015 after obtaining ‘Completion Certificate on 28.12.2011. Therefore, there is a delay of around over three years in offering possession. Subsequently, additional payment asked by the OPs, firstly Rs.5,26,360/-, reduced to Rs.3,44,400/- and further reduced to Rs.3,28,000/-. However, upon the Complainant’s  visit on 09.04.2015 she was completely dissatisfied with the repair work which was very poor quality and other works also. Therefore, the learned State Commission returned the finding in favour of the Complainant that no offer of possession was made as required under clause 4(b) of the Agreement in question.

It is worth noting that, the Complainant has taken possession of the apartment on 27.03.2018 after execution of the sale deed in view of the orders passed by this Commission. Now the questions remain whether the Complainant is entitled for delay compensation and whether the Appellants/OP demanding additional charges as maintenance, service tax, labour cess etc. are legally tenable.

The delay of over seven years from the promised date of possession i.e. end of 2009 till 27.03.2018, the date of delivery of possession of the Apartment in question. As per the principle laid down by the Hon’ble Supreme Court in DLF Home Developers Ltd. v. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537 decided on 14.12.2020, wherein it was held as under:

“Insofar as the parking and club charges are concerned, in view of the decision of the court in Wing Commander Arifur Rahman Khan (Supra), the direction of the NCDRC in that regard shall stand set aside.

Accordingly, we allow the appeals in part to the following extent:

The compensation on account of delay in handing over possession of the flats to the flat buyers is reduced from 7% to 6%; and

The direction for the refund of parking charges and club charges and interest on these two components shall stand set aside.

We clarify that the directions of the NCDRC are upheld, save and expect, for the above two modification in term of clauses (1) and (2) above. The payment at the rate of 6% per annum shall be made after making due adjustments for the compensation for delay at the contractual rate…..”.

On the issue of additional charges levied by the Appellants/ OPs, this Commission in Kamal Kishore & Anr. Versus M/s. Supertech Limited, Consumer Case No. 1009 of 2016, has held:-

“…….10. It would thus seen that maintenance charges are required to be paid by the allottee from the date of issue of letter of offer of possession. As stated earlier, the possession in my view could not have been offered to the allottee without completing the construction of the villa in all respects and obtaining the requisite occupancy certificate. Offering possession without obtaining occupancy certificate is meaningless since the allottee is not permitted in law to occupy the house which does not have the requisite occupancy certificate.

Therefore, the maintenance charges, in my opinion, would be payable only from the date on which the possession is offered to the complainants after obtaining the requisite occupancy certificate and provided the construction of the villa complete in all respects at that time…..”.

In this case, the OPs asserted that the completion certificate was obtained on 28.12.2011. Later, they additional payments of Rs.5,26,360/- was demanded This was reduced to Rs.3,44,400/- and further reduced to Rs.3,28,000/-. The State Commission, in its order noted that no offer of possession was made as required under clause 4(b) of the agreement. Additionally, it was observed that during the Complainant's visit on 09.04.2015, the construction was not fully completed. So, the question of charging additional payment related to maintenance charges etc untenable and should not have been collected and should not be collected until actual possession of the Flat on 27.03.2018.

Furthermore, the Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 has held that multiple compensations for singular deficiency is not justifiable. Therefore, award of Rs.10,000/- per month from 01.01.2010 till the date of actual delivery of possession and Rs.2,00,000/- as compensation by the learned State Commission are untenable.

In view of the foregoing, the Order of the learned State Commission dated 21.07.2017 is modified as below:

ORDER

I. The Appellants/ Opposite Parties are directed to pay simple interest @ 6% on the amount deposited by the Complainant/ Respondent from the end of 2009 i.e. the date the Apartment was due to be handed over till the actual date of handing over the possession i.e. 27.03.2018 within a period of one month. In the event of delay beyond one month, the rate of interest applicable shall be @ 9% for such extended period.

II. The Appellant/Opposite Party is directed to pay Rs.25,000/- to the Complainant as litigation expenses.

III. The Respondent/Complainant is directed to pay the additional charges including Membership Fee, Security, Service Tax, Labour Cess, Provision for 2 Nos. AC in two Bed Rooms and Maintenance Charge with effect from the date i.e. 27.03.2018 as per agreement executed between the parties to the Appellants/OPs, within four weeks from the date of receipt of this Order.

IV. The orders for late delivery possession charges @ Rs. 10,000/- per month to the Complainant/Respondent w.e.f. 01.01.2010 till the actual handing over the possession of the Apartment and compensation of Rs. 2,00,000/- to the Complainant are set aside.

Consequently, the instant First Appeal No. FA/1813/2017 stands disposed of.

All the pending Applications, if any, also stand disposed of.

The statutory amount as well as the amount deposited towards grant of stay by the Appellant, if any, be refunded after due compliance of the order as per law.