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Judgment
Dr. Inder Jit Singh, Member
The present Consumer Complaint (CC) has been filed by the Complainants against Opposite Party (OP) as detailed above, inter alia praying for directions to the OP(s) to:-
i. Refund the total amount of Rs.2,60,88,676/- with penal interest of 18% p.a. from the date of receipt of the payments;
ii. Pay compensation of Rs.10,00,000/- for mental agony, harassment, discomfort and undue hardships caused to the complainants and omissions on the part of the OP.
iii. Pay Rs.1,00,000/- towards litigation costs.
Notice was issued to the OP. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in the Table at Annexure-A. The details of the flats allotted to the Complainant (s)/other relevant details, based on pleadings of the parties and other records of the case are also given in the Table at Annexure-A.
It is averred/stated in the Complaint that:
i. The husband of Complainant No.1, Mr. Mahendra Pal Matta (deceased) booked a Unit on 17.05.2013 in the Project of OP namely, “Windchants” at Sector 112, Gurgaon, Haryana, for a total consideration of Rs.2,48,20,150/-. Apartment Buyer Agreement was executed on 29.07.2013 in favour of Deceased and Complainant No.1 and they were allotted Unit category ‘WAVING TEAK’ BEARING No. 0703 on the 7th Floor in Tower WT-03 admeasuring super area of 2650 sq.ft., with two car parking. Subsequent to execution of the Apartment Buyer in favour of the Complainant No.1, Complainant No.2 was included as a co-allottee vide endorsement dated 31.07.2013. Mr. Mahendra Pal Matta expired on 17.01.2018. The present complaint is represented by the Complainants who are the legal representatives of the Deceased, being his wife and son respectively, as Complainant No.1 & Complainant No.2. As per Agreement the OP was to hand over possession of the Apartment within 42 months from the date of approval of the Building Plans or the date of receipt of the approval of the Ministry of Environment and Forests or execution of this Agreement, whichever is later with a grace period of 180 days. The Building Plans were approved on 07.06.2012 and the Agreement was executed on 29.07.2013. Hence, the possession was to be made by the OP on 29.07.2017 (including the grace period).
ii. The Agreement contained various one-sided unilateral and arbitrary clauses in favour of the OP. The complainants having paid a substantial amount before the execution of the Agreement, were in no position to protest against such unfair clauses as any protest would have led to cancellation of allotment and forfeiture of earnest money (15% of the total BSP, Car parking Charges and PLC).
iii. The complainants had opted for a Construction Linked Payment Plan. The complainants strictly adhered to the payment plan and the demand notices of the OP and paid a total of Rs.2,60,88,676/- by 22.11.2016. Complainants by the time of stipulated time-period of offer of possession had paid over and above the total consideration of the Unit including even the amount of the then anticipated applicable taxes, however, the OP while adopting a malafide and frivolous approach, issued various Applicant Ledgers dated 12.07.2017, 06.10.2017, 20.07.2019 and 06.08.2019 wherein the total consideration of the Unit was escalated on each ledger. Such act on the part of the OP shows their malafide intention in trying to extort money from the complainants without any reason. According to the Construction Linked Plant, OP could raise payment demands only after achieving a particular construction milestone however, the OP time and again demanded the payment of various instalments without reaching the milestones as required and the same is clear as the Possession of the Apartment was offered after an inordinate delay of more than one year and the delay has been expressly admitted by the OP. The possession was offered vide letter of Notice of Possession dated 27.07.2018.
iv. An advance payment of Rs.31,32,943/- was made by the complainants on 19.10.2016 under the assurance that the possession of the Unit would be offered in a short span i.e. by January 2017. However, the OP not only failed to offer timely possession of the Unit but also declined to pay any interest to the complainants on the advance payment, which was initially done interest-free in good faith on assurances of timely completion.
v. With the hope of receiving the possession of the Unit by July 2017, the complainant No.2 availed a loan amounting to Rs.2,05,00,000/- from HDFC Bank on 29.08.2013. A Tripartite Agreement dated 29.08.2013 was entered into between the Complainant No.2, HDFC Bank and the OP.
vi. The deceased and complainant No.1 had booked the Unit for residential purpose and to provide ready access to give better medical facilities to the Deceased. The OP was aware about the condition of the Deceased. However, the uncertainty in completion and inordinate delay in completing the construction of the Project, caused grave financial and mental hardship to the Deceased and the delay caused by the OP worsened the medical condition of the Deceased. The complainants requested the OP to consider the situation and either cancel the allotment of the Unit and refund the total amount or give possession, but the OP failed to appreciate and address the situation faced by the complainants and refused to cancel the allotment and refund the amount. The Deceased met his untimely death in January 2018 burdened with the uncertainty of the fate of substantial life savings given to the OP in the hope of a peaceful accommodation in the last years of his life that had been irreparably denied to him due to sheer negligence of and disregard of humanitarian considerations by the OP especially when breach of the contracted terms is solely attributable to them. Afterward, as the purpose of the purchasing the Unit stood defeated and the complainants again requested for cancellation of the allotment and refund of the amount. But the OP refused to cancel the allotment and initiate refund of the amount. Complainant No.1 has been severely affected by the death of the Deceased and Complainant No.2 is working in Singapore and has availed every possible option available to him to settle the matter with the OP but all efforts have been in vain.
vii. Hence, the complainants filed this complaint.
The OP in their written statement/reply stated that: -
i. The complaint has been filed on 20.08.2019, is time barred for the only relief of refund of the money paid, as the cause of action to seek refund arose as per the complaint arose in July, 2017. The only relief claimed is for refund of money paid along with interest and damages.
ii. The complaint is liable to be dismissed on the ground that the complaint is not properly instituted as the complaint has not been signed, verified and filed by a duly constituted attorney of the complainants. The authority letters are in fact power of attorneys which are required to be stamped and notarized in accordance with law.
iii. The complaint is filed after offer of possession was made on 27.07.2018 upon receipt of OC dated 23.07.2018. The refund was sought by the complainants by e-mail dated 30.08.2018 depicting thereby that the complainants had no bonafide need of the apartment in question. Any bonafide homebuyer would have lapped-up the apartment being offered to them for which they had been making payment over the last 3-4 years. The conduct of the complainants gives away their position as investors who do not want to pay the balance sale consideration and get the flat registered in their name because it would require additional expenses towards stamp duty and registration. Since the complainants had made the booking of apartment for re-sale at a premium and were un-successful in achieving the objective, therefore they wanted to avoid the further expenses of about 10% as stamp duty & registration fees) and also avoid the payment of maintenance charges which become applicable on possession.
iv. The complainants are investors and speculators in Real Estate who had booked two apartments WT-03/703 and WT-03/0803 in the same project. It is contended by the OP that in view of multiple bookings made by the complainants they are required to furnish an explanation in accordance with the judgment titled as “Moran Plantation Vs. Ambience Pvt. Ltd.”
v. The complainants booked two flats in the same project for speculative purposes and when they were unable to make the payments and were facing difficulty in payment of EMIs of home loan, they requested for refund in respect of unit No. WT-03/0803. At that time the complainants raised emotional plea of illness of Sh. Mahendra Pal Matta in order to seek refund and the OP agreed to refund the entire amount without any deduction. The said amount of Rs.31,32,943/- was adjusted towards consideration for the flat No. WT-03/.0703. However, in case of cancellation of allotment, the OP was entitled to forfeit the earnest money and other applicable charges, but as a gesture of goodwill the OP refunded the entire amount paid by the complainants against apartment No. WT-03/0803. As agreed by the complainants, the OP on 19.10.2016 refunded the entire amount of bank loan to the Bank and adjusted the remaining amount against due instalments for the unit No. WT-03/0703. Now it has become apparent that the complainants were not interested in purchasing the apartment for their own use and booked the same for earning profit by re-sale within a short period of booking and therefore seeking refund of the amounts paid towards the second flat also.
vi. As per Agreement that the timely completion of the project is subject to timely payment of all amounts payable by the allottees including the complainants and delay in construction could also occur for reasons beyond the control of the OP. The complainants agreed and undertook to scrupulously comply with the same. No grievance has been raised qua the agreed terms and conditions of the agreement nor can it be raised at this stage as parties have acted upon the agreement. After fully satisfying themselves with regard to all aspects of the project but not confined to the capacity/capability of the OP to successfully undertake the construction, promotion, implementation of the residential project, the complainants/original allottee had offered to purchase the said Apartment. The complainants were extremely irregular in making payments and the OP was compelled to issue demand notices, reminders etc., calling upon the complainants to make payment of outstanding amounts which had fallen due and payable under the construction linked payment plan opted by the complainants. The complainants are liable to contribute in delay in construction of the apartment by not making timely payments of the due instalments.
vii. The OP cannot be held liable for the delay caused in construction/handing over of possession of the apartment in question. There were several factors/Force Majeure events due to which construction of the project/apartment was delayed, i.e. like repeated closure of construction work upon orders passed by NGT to alleviate air pollution, the re-mobilization of men and material takes time as the daily wage labourers go out of NCR region in search of work, demonetization, the contractor appointed by the OP caused some delay in construction as it also suffered from these difficulties and some operational delay. Considering the interest of both the parties, the OP awarded design and build construction methodology contract to L & T to avoid the risk of delay in execution and ensure timely delivery of the project. The OC was granted only on 23.07.2018. There was a delay of approximately 8 months on the part of Govt. authorities/DTCP. After completion of construction and obtaining OC the OP issued Notice of Possession dated 27.07.2018, the complainants were called to make due payments and take possession of the apartment booked by them. However, the complainants failed to make due payments and started to ask for refund of the amount without having any cause for the same. The OP issued Possession Reminders dated 29.01.2019 and 14.05.2019 was served upon the complainants but they did not make payment and take possession. As per statement of accounts maintained by the OP and generated on 06.11.2019, an amount of Rs.11,70,043/- is due and payable. The delay in making payments is also evident from the ledger account which shows that the complainants had paid a sum of Rs.37,065 as interest without any protest till date.
viii. The complainants have defaulted in their contractual obligations and they are merely trying to wriggle out of the contract and attempting to make an unlawful gain by demanding refund along with interest. Since the OP is not at fault, and the project is ready in all respect and possession offered to the complainants prior to filing of the complaint and present complaint is filed by hiding material facts and for malafide reasons and objects, therefore, it is liable to be dismissed with heavy costs.
ix. Instead of clearing the outstanding dues and taking possession of the apartment, the complainants have filed this false and frivolous complaint alleging delay in completion of construction.
x. The OP is not providing any service to the complainants, thus there is no relationship of service provider and customer between them. The agreement between the parties is a simple sale-purchase transaction in which the OP has to deliver the Apartment to the complainants as per agreed terms of the Agreement and the complainants are bound by the terms of the Agreement to make payments as per terms and conditions of the Agreement and Booking Application Form dated 14.05.2013 signed and submitted by the Complainant.
xi. Since in the last couple of years, the real estate investments have not given any returns and there is a general reduction in prices of the immovable properties, therefore the complainants are only looking to exit the investment allegedly made by them in the Apartment. Therefore all sorts of allegations have been incorporated in the complaint. Since the OP shall suffer a loss of about Rs.1,00,00,000/- in the event of re-allotment of the flat after cancellation of allotment of complainants, therefore, the OP is entitled to forfeit the earnest money as liquidated damages. Moreover the amounts paid as statutory taxes and levies cannot be refunded as the Govt. does not refund those amounts in the eventuality of cancellation of transaction, the brokerage paid by the OP is non-refundable. Therefore the complainants cannot in any event seek refund of the taxes.
Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the Complaint, based on their Complaint/Reply, Rejoinder, Evidence, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
7.1 The objection that the Complaint is barred by limitation is not accepted. The OP has failed to deliver the possession of the unit to the complainant till date and therefore, the cause of action is continuing. As regards plea of OP that complaint is not properly instituted as it has not been signed, verified and filed by duly constituted attorney of complainants, the complainants in the rejoinder submitted that these objections are wrong and denied in entirety. It is submitted that an authority letter has been duly executed in favour of Ms. Hasneeta Matta, who is the daughter of Complainant No.1. She has been authorized by the Complainants to represent them in the present matter. The authorization is tenable and legal in the eyes of law. We have gone through the two authority letters dated 16.08.2019 issued by both the complainants and accept the same.
7.2 The contention that complainant(s) is/are not a consumer as they have purchased the unit for investment purposes and have booked multiple units is also rejected as no such evidence has been adduced by the OP in this regard. It has been observed by this Commission in various cases (Kavita Ahuja Vs Shipra Estates Ltd, CC 137 of 2010, decided on 12.02.2015, Santosh Johri Vs M/s Unitech Ltd, CC 429 of 2014 and connected Cases, decided on 08.06.2015, Aloke Anand Vs M/s Ireo Grace Pvt Ltd & Others, CC no 1277 of 2017 decided on 01.11.2021) that purchase of a house can only be for a commercial purpose if the purchaser is engaged in the business of purchasing and selling houses or plots on a regular basis, solely with a view to make profit by way of sale of such houses, if the house is purchased purely as an investment and the purchaser is not undertaking the trading of houses on regular basis, then it would be difficult to say that he had purchased it for commercial purpose. ……… In any case, it is not appropriate to classify such acquisition as a commercial activity merely on the basis of number of houses purchased by a person unless it is shown that he was engaged in the business of selling and purchasing the houses on a regular basis.
7.3 The plea of OP that delay was due to force majeure circumstances is not valid. Construction has not been completed and possession of flat has not been given by the committed date. There is no documentary evidence to support the contention of the Opposite Parties that the reasons pleaded by them, can be construed as ‘Force Majeure.
7.4 As regards contentions of OP that complainants were extremely irregular in making payment and OP was compelled to issue demand notices and reminders calling upon complainants to make payments of outstanding amounts, therefore, OP stood absolved for delay compensation under Clause 13 of agreement, it is seen that complainants have already paid an amount of Rs.2,60,88,676/- against consideration amount of Rs.2,48,20,150/- as per agreement. OP has not clearly stated as to which demands, which were due as per particular stage construction as per agreement, were not paid by the complainants. At the same time, OP admits that an amount of Rs.2,19,257/- was paid towards delay compensation, which OP claim was a goodwill gesture.
7.5 Regarding escalation in the cost due to increase in super area, OP contends that the increase is minor, to the extent of about 5%, the tentative area at the time of booking was 2650 sq.ft. and at the time of completion is 2802 sq.ft., increase of 152 sq.ft. It is within agreed variation of 10% contained in clause 8.6 of the agreement and OP duly informed the complainants of same vide letter dated 27.04.2017 and furnished Architect’s certificate certifying the increase.
7.6 OP argued that complaint is filed after the offer of possession was made on 27.08.2018 upon receipt of OC dated 23.07.2018. The complainants sought refund by email dated 30.08.2018, therefore, request was declined by OP. In subsequent emails by OP, complainants were intimated that if they persist with refund request or cancellation, then it would be after forfeiture of Rs.46.87 lakhs in accordance with agreed terms of the agreement.
7.7 Contentions of OP that time is never essence in sale-purchase of immovable property are not tenable, if such contentions are accepted, there would be no relevance of committed dates for possession in the agreement and no builder will strict to his contractual obligations to deliver the possession as per committed timeline. It was held by Hon’ble Supreme Court in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors. (2020) 16 SCC 512, “failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency”.
7.8 The contention of the OP that the parties are bound by the agreement is also not acceptable. In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon’ble Supreme Court also observed that “a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder ......... the incorporation of one sided clause in an agreement constitute 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 ........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms.”
7.9 Complainants on the other hand, relying on the judgment of this Commission in Sushma Ashok Shiroor Vs. Experion Developers Pvt. Ltd. in CC 2648/2017 decided on 19.06.2019, which has been upheld by Hon’ble Supreme Court vide its order dated 07.04.2022 in C.A. No. 6044 of 2019 and C.A. No. 7149/2019, contended that they are entitled to refund on account of delay in delivery of possession as per committed date. Complainants also relied upon the judgment of this Commission in Pawan Gupta Vs. Experion Developers Pvt. Ltd. in CC 286/2018, which has also been upheld by Hon’ble Supreme Court. Relying on judgment of Hon’ble Supreme Court in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors. (2020) 16 SCC 512, Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725 and a few other judgments, complainants contended that OP is deficient in service, the ABA is one sided, OP has carried unfair trade practices, hence complainants have right to seek refund of entire amount with reasonable compensation and interest.
In Sushma Ashok Shiroor (supra), which pertained to same project of the same OP viz. Windchants in Sector 112, Gurgaon, which had almost similar terms and conditions of agreement and possession clauses, this Commission considering the delay in possession from the committed date, ordered refund of entire principal amount with interest @9%.
In the instant case, complainants have already paid an amount of Rs.2,60,88,676/- against consideration amount of Rs.2,48,20,150/- as per agreement. The complainants stated that the deceased and complainant No.1 had booked the unit for residential purpose and to provide ready access to give better medical facilities to the deceased. OP was aware of the condition of deceased. However, uncertainty and delay in completion of the project caused grave financial and mental hardship to the deceased, who unfortunately expired in January 2018 burdened with uncertainty of fate of the project. Afterwards, as the purpose of purchasing the unit stood defeated, the complainants requested for cancellation of allotment and refund of amount.
We have considered the rival contentions of the parties and carefully gone through the case records. The committed date of possession as per agreement, with grace period of 6 months, was 28.07.2017. OC was obtained on 23.07.2018 and possession was offered on 27.07.2018. Hence, there is a delay of one year form the committed date. It was held by Hon’ble Supreme Court in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana (supra), “failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency”. We find that though the delay in the present case is one year, the complainants have valid reasons for seeking refund. The instant case is covered as per the judgment of this Commission in Sushma Ashok Shiroor (supra). Hence, complainants are entitled to refund.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -
(i) The OP shall refund the entire principal amount of Rs.2,60,88,676/- (Rupees two crore sixty lakh eighty eight thousand six hundred seventy six only) to the complainants, alongwith compensation in the form of simple interest @ 9% per annum from the date of each payment till the date of refund. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainant based on receipts etc.
(ii) The OP(s) shall pay a sum of Rs.25,000/- as cost of litigation to the complainants.
(iii) The payment in terms of this order shall be paid within three months from today.
(iv) In case the complainants has/have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant. The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.
The pending IAs, in the Consumer Complaint, if any, also stand disposed off.
Annexure-A
Details of the Unit and other related details
Sr No
Particulars
1
Project Name/Location etc.
“WINDCHANTS”
Sector 112, Gurgaon, Haryana
2
Apartment no.
0703, 7th Floor in Tower WT-03, ‘WAVING TEAK’
3
Size (Built up/Covered/Super Area)
2650 sq.ft.
4
Date of application
17.05.2013
5
Date of signing Apartment Buyer Agreement (ABA)
29.07.2013
6
Committed date of possession as per Agreement (with Grace period of 180 days)
28.07.2017
7
D/o Obtaining OC by the OP
23.07.2018
8
D/o Offering Possession
27.07.2018
9
Total Consideration as per agreement
Rs.2,48,20,150/-
10
Amount Paid
Rs.2,60,88,676/-
11
D/o Filing CC in NCDRC
20.08.2019
12
D/o Issue of Notice to OP
23.08.2019
13
D/o Filing Reply/Written Statement by OP
02.12.2019
14
D/o filing Rejoinder by the Complainants
26.02.2020
15
D/o Filing Evidence by way of Affidavit by the Complainants
26.02.2020
16
D/o Filing Evidence by way of Affidavit by the OP
06.07.2020
17
D/o filing Written Synopsis by the Complainants
14.09.2021
18
D/o filing Written Synopsis by the OP
03.08.2022