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Judgment
Dr. Sadhna Shanker, Member
These two appeals have been filed under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) by M/s Genesis Infratech Pvt. Ltd. & Ors. (hereinafter referred to as the “Appellant”) assailing the Order dated 23.10.2018 passed by the State Consumer Disputes Redressal Commission, Jaipur, Rajasthan (hereinafter referred to as the “State Commission”) in Complaints No. 59 and 60 of 2017, whereby the Complaints filed by the Complainants were allowed.
Brief facts of the case as narrated in the Complaints by the Complainants are that the Complainants, namely, Mohd. Zaki and Gangeshwar Singh booked Flats in the Project ‘M/s Genesis Infratech Pvt. Ltd.’ with the Appellant situated in Geneis Flora, Village Dagamhedi, Tehsil Tijara, District Alwar, Rajasthan, for a total sale consideration of Rs.23,88,720/- and Rs. 22,20,000/-, respectively, as per the agreement dated 10.01.2013. The Complainants paid a total amount of Rs.22,59,000/- and Rs. 22,09,000/- as per the demand raised by the Appellant. The Complainants were allotted Flats No. D-302 and no. D-306 on the 3rd Floor, with a super area of approximately 936 sq. ft.
The Complainants submitted that as per the terms and conditions specified in the Agreement, the Construction work of the Unit was to be completed and physical possession of the same was to be delivered to them within 36 months from the date of the Agreement i.e. on or before 10.01.2016. The relevant portion of clause 5 of the Agreement reads as under:
“14. That the possession of the said premises is proposed to be delivered by the DEVELOPER to the ALLOTTEE(S) within 36(Thirty Six) months from the date of this Agreement.”
The Complainants stated that they made multiple visits to the office of the Appellant requesting for physical possession of the flat. However, the Appellant failed to hand over the physical possession as per agreement and for the same Complainants suffered a loss of Rs.20,000/- per month. The Complainants further stated that according to clause 51 of the Agreement the Company shall be liable to pay compensation payment for delay at the rate of Rs.5/- per sq. ft. per month of the super area to the allottee(s) till the date of notice offering the possession to the allottees. As per the Complainant’s averments, the aforesaid acts, on the part of the Appellant amounts to deficiency in service.
Being aggrieved, the Complainants filed Complaints before the State Commission, Jaipur, Rajasthan with the following prayer :-
i. Direct the opposite parties to hand over flat No.302, Genesis Flora, Bhiwadi, Rajasthan or to pay Rs.22,59,000/- alongwith interest @ 18% p.a. since 01.05.2014 i.e. Rs. 4,06,620/- till 01.05.2017;
ii. Direct the opposite parties to pay Rs.20,000/- per month since 01.10.2015 plus interest @ 18% per annum till 31.05.2017 i.e. Rs.1,80,000/- in the interest of justice.
iii. Direct the opposite parties to pay Rs.2,50,000/- (Rupees two lacs fifty thousand only) as damages / compensation towards mental and physical harassment, deficiency in service, etc. sustained by the complainant due to the poor practice adopted by the opposite parties with interest to the complainant;
iv. Direct the opposite parties to pay a sum of Rs.21,000/- towards the cost of the complaint to the complainant;
Proper be also passed in favour of the complainant and against the opposite parties under the facts and circumstances of the case and in the interest of justice.
The Appellant resisted the Complaints by filing written statement stating therein that they had applied for an occupation certificate as per legal requirements from the competent authority. They also informed the Complainants that possession would be handed over as soon as the certificate became available from the competent authority. Additionally, the Appellant contended that the delay was attributed to the Complainants failure to make payments as required in the agreement. They asserted that the delay occurred due to the Complainants own negligence and their failure to fulfill the terms and conditions of the agreement regarding timely payments. The Appellant controverted the other averments of the Complaints and prayed for dismissal of the Complaints with cost.
The State Commission allowed the Complaints and directed the Appellant to refund Rs.22,59,000/- alongwith 15% interest from the date of each deposit along with Rs. 2 lakhs as compensation towards mental agony and Rs.50,000/- as cost of proceedings.
Aggrieved by this Order passed by the State Commission, Appellant has filed First Appeal No. 2245 and 2246 of 2018 before this Commission with the following prayer:
a. Call for records of Complaint Case No. 59/2017 titled "Mohd. Zaki v. M/s. Genesis Infratech Pvt. Ltd.” decided by the State Consumer Disputes Redressal Commission, Rajasthan, Jaipur Bench No.1 (decided on 23.10.2018);
b. Allow the present appeal and set aside impugned judgment dated 23.10.2018 passed by State Consumer Disputes Redressal Commission, Rajasthan, Jaipur Bench No.1.in Complaint Case No.59/2017 titled ''Mohd. Zaki v. M/s. Genesis Infratech Pvt. Ltd.";
c. Pass an ad-interim stay order thereby staying the operation and execution of impugned final judgment dated 23.10.2018 passed by State Consumer Disputes Redressal Commission, Rajasthan, Jaipur Bench No.1.in Complaint Case No.59/2017 titled 'Mahd. Zaki v. M/s. Genesis Infratech Pvt. Ltd.” pending the adjudication of the present appeal;
d. Costs throughout be awarded in favour of the appellants;
e. Pass such other and further order as deemed fit & proper.
The Appellants’ main contention against the impugned order of the State Commission is that the State Commission failed to appreciate that the construction of the project in question had been finished. However, the possession could not be handed over to the Complainants due to the non-receipt of the occupation certificate. They emphasized that the processing of the application for occupancy was not within the control of the Appellant. Consequently, they asserted that there was no deficiency in service on the part of the Appellant since the delay in possession was due to delay in grant of occupation certificate.
We have heard the learned Counsel for both the Parties and perused the material available on record.
The learned counsel for the appellant submits that the issuance of Occupancy Certificate/Completion Certificate being a ministerial exercise is beyond the control of the appellant and the appellant cannot be held liable for the same.
Learned counsel for the complainant vehemently argued that the Complainant/Allottee cannot be made to wait indefinitely. In this regard, attention is drawn to Order of this Commission in Faqir Chand Gulati vs. Uppal Agencies Pvt. Ltd. & Anr. LNIND 2008 SC 1369, wherein it was held that:
“27. A prayer for completion certificate and C&D forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever that is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage. Therefore, the assumption of the State Commission and the National Commission that the obligation of the builder was discharged when he merely applied for a completion certificate is incorrect.”
We find that there is no doubt to the fact that there has been an unreasonable delay in handing over the possession of the Unit to the Complainants as per the agreement. The Complainants cannot wait for an indefinite period as they have invested hard earned money with the intention to get the possession of the Unit within stipulated period. Also, reliance is placed on the Judgment of the Hon’ble Supreme Court in the case of Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan LNIND 2019 SC 311, in which it has been held as under :
“.....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified.”
The Hon’ble Supreme Court in the recent case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Anr. in Civil Appeal No. 5785 of 2019 decided on 11.1.2021, has held as under:
“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant Builder failed to fulfill 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 Respondent Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.”
We find that there has been an unreasonable delay in handing over physical possession of the unit. The Unit was booked by the complainants by signing an agreement on 10.01.2013. As per clause 5 of the Agreement the Unit was to be allotted within 36 month from the date of signing of the Agreement. The Unit was to be delivered on 10.01.2016. The Appellant/Opposite Party has not obtained Occupancy Certificate/Completion Certificate even after delay and it has not given any reasonable justification for such inordinate delay in their appeals. Therefore, the Complainants are entitled for a fair and reasonable delay compensation apart from getting refund of the amount deposited.
In so far as the interest, reliance is placed in the case of Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Anr. in Civil Appeal No. 5785 of 2019, decided on 11.01.2021 while dealing with the question of awarding compensation for delay in handing over the possession has held as under:
“(i) We are of the view that allottees at Serial Nos.1 and 2 in Chart A are obligated to take possession of the apartments, since the construction was completed, and possession offered on 28.6.2019, after the issuance of Occupation Certificate on 31.5.2019.The Developer is however obligated to pay delay compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees.”
In its Order, it further held that:
"We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer‘s Agreement of Rs. 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market. We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic. We are cognizant of the prevailing market conditions as a result of Covid–19 Pandemic, which have greatly impacted the construction industry. 53 In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fair play that the amount deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount."
The Hon’ble Supreme Court has taken similar view in M/s BPTP Limited and Another V. Sanjay Rastogi in Civil Appeal No. 1001-1002 of 2021 decided on 04.12.2021, wherein it was held as under:
“…..The appellant failed to deliver possession within the contractual period. There is no error in the finding on the basis of which a refund of consideration has been directed. However, in the alternative, it has been submitted Mr Siddharth Bhatnagar, learned senior counsel that the rate of interest may be suitably scaled down having regard to the earlier decisions of this Court including the decision in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna, (2021) 3 SCC 241. Having regard to the rate of interest of which has been fixed in other cases such as the present, we reduce the interest from 10% to 9% per annum. The Appellant is, however directed to ensure that full payment in compliance with the Order of the NCDRC with interest at the rate of 9% per annum is paid over to the respondent on or before 15 July 2021.
The Hon’ble Supreme Court has taken similar view in M/s Nexgen Infracon Pvt. Ltd. Vs Manish Kumar Sinha in Civil Appeal No. 62 of 2021 decided on 11.01.2021, wherein it was held as under:
“…. This take us to the next question whether the rate of interest awarded by the Commission be maintained or whether such rate is required to be scaled down. In keeping with the directions issued by this Court in the case of Prateek Infra projects, we scale down the interest from 12% & 14% as ordered by the Commission to 9% per annum. We also modify the direction restraining the appellant from deduction the tax at source.
It is, therefore, directed that the amounts deposited by the respondents in respect of the apartment in question shall be refunded to them along with interest @ 9% per annum from the dates of respective deposits. The other direction issued by the Commission as regards of cost of litigation is maintained.
In view of the law laid down, we are of the opinion that the rate of interest @ 9% per annum is just and reasonable and commensurate with the loss and injury to the complainants. The Order of the State Commission is modified to that extent.
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. In the instant case, the award of compensation of Rs. 2 lakhs for mental agony and Rs.50,000/- as cost of proceedings given by the State Commission were found to be not tenable.
We, therefore, dispose of the appeals by modifying the Order of the State Commission by directing the appellants to refund the entire amount deposited by the Complainants from the respective dates of deposit till realization alongwith interest at the rate of 9% per annum within six weeks’ time, failing which, it shall carry interest at the rate of 12% per annum. There will be no order as to compensation towards mental agony and cost of litigation.
The appeal stands disposed of in above terms. All pending applications, if any, stand disposed of.