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Judgment
V.K. Jain, Presiding Member
On 6.8.2010, the complainant applied to the OP for allotment of a residential flat in a project, namely, 'Ireo Victory Valley', which the opposite parties were developing in Sector-67 of Gurgaon. Vide allotment letter dated 17.8.2010, flat No.B-0503 in the above-referred project was allotted to him for a total sale price of Rs.20896128/-. The parties then executed an agreement on 6.7.2011 incorporating their respective obligations. The price of the flat was to be paid in installments linked with stage of construction. The said payment plan reads as under:-
"Linked Stages
Basic Sale Price %
Other
Basic
Others
Total
At the time of booking
9.58%
1788660.00
1788660.00
Within 45 days of booking
9.58%
1788660.00
1788660.00
On commencement of exaction
7.61%
50% EDC
1419945.00
513015.93
1932960.93
Casting of Basement Roof slab
7.61%
50% IDC 1
1419945.00
513015.93
1932960.93
Casting of 1 Floor Roof st slab
7.61%
50% IDC 1
1419945.00
42598.35
1462543.35
Casting of 6 Floor th Roof slab
7.61%
50% IDC 1
1419945.00
42598.35
1462543.35
Casting of 12 Floor th Roof slab
7.61%
0% Parking
1419945.00
400000.00
1819945.00
Casting of 18 Floor th Roof slab
7.61%
50% Parking
1419945.00
400000.00
1819945.00
Casting of 24 Floor th Roof slab
7.61%
1419945.00
1419945.00
Casting of 32 Floor nd Roof slab
7.61%
1419945.00
1419945.00
Casting of top Floor Roof slab
7.61%
1419945.00
1419945.00
On completion of Stone/Tile Flooring in Apartment
7.61%
1419945.00
1419945.00
On offer of possession
4.79%
RFMS
894330.00
313800.00
1208130.00
Total
100%
18671100.00
2225028.56
20896128.56"
Clause 13.3 of the Agreement pertains to delivery of possession of the flat and reads as under:-
"13.3. Subject to Force Majeure, as defined herein and further subject to the Allottee having complied with all its obligations under the terms and conditions of this Agreement and the Allottee not being in default under any part of this Agreement including but not limited to the timely payment of the total Sale Consideration, Stamp Duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to hand over the possession of the said Apartment to the Allottee within a period of 36 months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment Period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 (One Hundred and Eighty) days ("Grace Period"), after the expiry of the said Commitment Period to allow for unforeseen delays in obtaining the Occupation Certificate etc., from the DTCP under the Act, in respect of the IREO-Victory Valley Project."
The complainant made payment of Rs.14366374/- on different dates, the last payment having been made on 2.9.2013.
Vide demand letter dated 26.9.2013 which was later followed by reminders, the OP-1 hereinafter referred to as the "Developer", demanded payment of the 9 th installment which was payable on casting of the 24 th floor roof slab. The said installment was not paid despite reminders. Vide letter dated 5.1.2015, the Developer cancelled the allotment forfeiting more than Rs.45 lakhs out of the amount paid by him and informed him that only a sum of Rs.9723281.34 would be refundable to him and the cheque for that amount would be sent to him in due course.
The complainant sought restoration of the allotment and on his request, the Developer vide letter dated 21.9.2015 agreed to restore the unit subject to his making payment of outstanding installment of Rs.2956440/- alongwith interest amount of Rs.820111/-. That amount, however, was not paid. Vide letter dated 17.1.2017, the Developer informed the complainant that since the payment in terms of the letter dated 21.9.2015 had not been made by him, the notice of cancellation dated 5.1.2015 stood and the allotment of the unit stood cancelled.
Being aggrieved from the cancellation of the allotment, the complainant is before this Commission seeking refund of the entire amount paid by him to the opposite parties alongwith interest on that amount.
The complaint has been resisted by the opposite parties primarily on the grounds that (i) the allotment having been cancelled in January, 2015 the complaint instituted in April, 2017 is barred by limitation and (ii) the complainant has defaulted in making payment of the installments demanded from him and as a result, the Developer is entitled to make forfeiture in terms of the letter dated 5.1.2015 which is based upon the terms of the agreement executed between the parties. It is also stated in the written version that the opposite party has since completed the construction and has obtained the requisite Occupancy Certificate on 28.9.2017. The written version, however, does not contain an offer to the complainant to take possession of the flat which was allotted to him and was later cancelled.
As far as limitation is concerned, in my opinion, not only the letter dated 21.9.2015 whereby the allotment was conditionally restored even the letter dated 17.1.2017 gave a fresh cause of action to the complainant to institute a consumer complaint. Had the Developer not restored the allotment vide its letter dated 21.9.2015 probably there could be merit in the contention that the complainant ought to have approached this Commission even two years of the cancellation letter dated 5.1.2015. Even if the period of limitation is computed from 21.9.2015 when the allotment was conditionally restored, the complaint is well within the limitation the complaint having been instituted in April 2017.
Coming to the defaults in making payment after paying the 8 th installment, admittedly two installments were demanded from the complainant before institution of this complaint, the 9th installment having been demanded on 26.9.2013 and the 10 th installment having been demanded on 24.2.2014. On a careful consideration of clause 13.3 of the agreement, I have no doubt that the construction was to be completed in all respects within a period of 36 months from the approval of the building plan and/or fulfillment of the pre-conditions imposed thereunder. Though a grace period of 180 days was available to the Developer after the said period, the said grace period was available for the limited purpose for obtaining the Occupancy Certificate from DTCP in respect of the project - 'Victory Valley'. The grace period, therefore, was not available for the purpose of completing the construction. It is an admitted position that the building plans for the project were approved on 29.11.2010. The construction, therefore, ought to have been completed in all respects by 29.11.2013. Since the 9 th installment which was payable on casting of 24 th floor roof slab itself was demanded on 26.9.2013 and the 10 th installment which was payable on casting of 32 nd floor roof slab was demanded on 24.2.2014, it cannot be disputed that the construction was not progressing as per the schedule and was not likely to be completed by 29.11.2013 or even within a reasonable time thereafter. The flat allotted to the complainant was situated in a high rise building which was to have at least 32 floors.
The 11th installment which was payable on casting of top floor roof slab had not been demanded even till 17.1.2017 when the Developer informed the complainant that he having not made the payment in terms of the notice dated 5.1.2015, the said notice stood and his allotment also stood cancelled. The Developer has obtained the Occupancy Certificate in Sept., 2017. Though the date on which the Developer applied the Occupancy Certificate is not disclosed, it can be safely presumed that the Occupancy Certificate must have been applied sometime in the year 2017 itself. This would mean that there was delay of more than three years in completing the construction since the same ought to have been completed by 29.11.2013.
In my opinion, considering the stage of construction at that time, the complainant was justified in withholding the payment of further installments after he had already paid 8 th installment and had already parted with as much as Rs.14366374/-. Considering the stage of the construction, at the time when the 9 th and 10 th installments were demanded from him, the complainant could reasonably infer that there was no reasonable probability of the construction being completed by November, 2013 or even within a reasonable time thereafter. In fact this is the case of the complainant that on receipt of the letter dated 21.9.2015 whereby the allotment was conditionally restored, he visited the site and found that the construction was nowhere near completion. The complainant, therefore, could not be expected to sink more and more of his hard earned money into a project which he found not progressing as per the expected schedule. Though it was contractual obligation of the complainant to pay all the installments including the 9 th and
10 th installments in time, the Developer also had a corresponding obligation to raise the construction at such a pace which would result in the construction being complete and the possession being delivered to the allottee within the time frame committed by him or at best within a reasonable period thereafter. The allottee cannot be expected to keep on paying more and more money to the Developer, if he finds that the Developer is not in a position to complete the construction within the stipulated time or even within a reasonable time thereafter.
Though the complainant had committed to make payment of the 9 th instalment to the developer, he having visited the site and seen the stage of construction at that time, was justified in not paying the said instalment and the 10 th instalment. Therefore, the default on the part of the complainant in payment of the 9 th and 10 th installments was justified in the facts and circumstances of this case and cancellation of the allotment on account of non-payment of the 9 th installments was not justified.
This is also the submission of the learned counsel for the Developer that since the fire NOC came to be issued to the Developer only on 28.10.2013 despite having been applied on 2.11.2011, the time period for completion of the construction should be reckoned from the date on which the fire NOC was issued and not from the date on which the building plans were approved. This plea has already been considered by this Commission and rejected. A reference in this regard may be made to the decision of this Commission in Consumer Complaint No.2110 of 2016 - Shamshul Hoda Khan Vs. M/s Ireo Victory Valley Pvt. Ltd. & Anr. decided on 17.01.2019, which to the extent it is relevant, reads as under:-
It is an admitted position that the requisite sanction for construction of the buildings was granted on 29.11.2010 by Directorate of Town and Country Planning, Haryana. Condition No.3 of the sanction, reads as under:-
"On receipt of the above request the Commissioner, Municipal Corporation, Gurgaon after satisfying himself that the entire fire protection measures proposed for the above buildings are as per NBC and other Fire Safety Bye Laws, and would issue a NOC from the Fire Safety and means of escape/access point of view. This clearance/NOC from the File Authority shall be submitted in this office alongwith a set of plans duly signed by the Commissioner, Municipal Corporation, Gurgaon within a period of 90 days from the date of issuance of sanction of building plans. Further, it is also made clear that no permission for occupancy of the building shall be issued by Commissioner, Municipal Corporation, Gurgaon unless he is satisfied that adequate fire-fighting measures have been installed by you and suitable external fire-fighting infrastructure has been created at Gurgaon, by Municipal Corporation, Gurgaon before grant of occupation certificate by the Director General."
A similar condition imposed in the approval of the building plans recently came up for consideration of this Commission in CC/189/2017 Pradeep Kumar Gupta Vs. Ireo Grace Realtech Pvt. Ltd. & other connected matters decided on 10.1.2019, and the following was the view taken by this Commission in this regard relying upon its earlier decision in CC/1998/2016 - Subodh Pawar Vs. Ireo Grace Realtech Pvt. Ltd. & Ors., decided on 24.9.2018:-
"The contention of the learned counsel is that the period stipulated for offering possession should start from the date on which the clearance from fire authority was issued. She also submits that the said clearance came to be issued only on 27.11.2014 though according to the learned counsel, the same was applied on 24.10.2013. It would be seen from the condition relating to fire safety condition in the approval dated 23.07.2013 that an NOC from the Fire Safety Department was to be obtained by the OPs and submitted to the Directorate of Town and Country Planning, Haryana within a period of 90 days from the issuance of the said approval. The aforesaid period of 90 days expired on 21.10.2013. The OPs thus, did not even apply for the requisite NOC from fire authority within the period stipulated for obtaining and submitting the said approval. More importantly, there was no such stipulation in the approval dated 23.07.2013 that the builder could not commence construction without obtaining the said fire safety NOC. Only the Occupancy Certificate could not have been issued without the Municipal Corporation, Gurgaon satisfying itself that adequate fire safety measures had been installed and suitable external fire-fighting infrastructure had been created at Gurgaon by the said Corporation. The OPs therefore, could have started the construction immediately after the aforesaid approval dated 23.07.2013 was obtained. The possession therefore, ought to have been offered by 23.01.2017 since in the absence of unforeseen circumstances, the benefit of the grace period was not available to the OPs."
In Pradeep Kumar Gupta (supra), the learned counsel for the opposite party relied upon the provisions contained in Haryana Fire Service Act, 2009, in support of his contention that construction could not have commenced without obtaining the required fire safety approval. Rejecting the contention, this Commission interalia held as under:-
"As noted by this Commission in Subodh Pawar (supra), the building plan approval which was issued by Directorate of Town and Country Planning, Haryana on 23.07.2013 did not prohibit the builder from commencing the construction before obtaining the requisite fire safety approval, though it required the builder to obtain the requisite Clearance / NOC from the fire authority within a period of 90 days from the issuance of the sanction of the building plans and it also stipulated that the permission for occupancy of the building shall not be issued by the Commissioner, Municipal Corporation, Gurgaon unless he was satisfied with respect to the adequacy of fire-fighting measures and external fire-fighting infrastructure, before grant of occupation certificate. The learned counsel for the OP has not been able to draw my attention to any provision of Haryana Fire Service Act prohibiting commencement of construction without first obtaining the fire safety approval. Section 15 on which reliance is placed by the learned counsel for the OP, requires the builder to apply for the requisite approval before commencement of the construction and issuance of the NOC but does not put an embargo on the start of the construction without first obtaining the said approval, provided that the application, meeting requirements of the Act is submitted before starting the construction. Therefore, once the approval was applied for, the builder could commence the construction. In fact, sub-section (2) of Section 15 envisages issuance of a provisional NOC, before the construction is taken up. The said provisional NOC is mandated to be issued within 60 days of submission of the application giving all details of the construction being undertaken as well as the rescue fire provision and fire safety details required to be incorporated during the period of construction. It also provides that during the process of construction, the inspection of the construction may be conducted and advice about additions, deviations etc. can be tendered. On completion of the construction of a high rise building, a NOC is required to be obtained in terms of sub-section (5) of Section 15 of the Act. Therefore, if the opposite party had submitted the requisite application in terms of Section 15(2) of the Haryana Fire Service Act, giving all the details mentioned in sub-section (3) of Section 15, the concerned authority would have issued a provisional NOC to the builder. This is not the case of the opposite party that despite it having submitted an application with the all the required details in terms of sub-section (3) of Section 15, the provisional NOC was not issued to it by the competent authority under Haryana Fire Service Act, 2009. As noted earlier, the building plans came to be approved on 23.7.2013. The opposite party applied for the fire safety clearance on 23.10.2013 though considering the requirement of submitting the NOC within 90 days from the approval of the building plans it ought to have applied for the fire safety NOC/Clearance immediately after the building plans were approved. In any case, if the opposite party did apply for the requisite fire safety clearance on 23.10.2013, along with all the prescribed details in terms of sub-section 3 of Section 15, the provisional NOC would have been issued to it by the competent authority, the same being the mandate of law.
Therefore, either the opposite party did not initially give all the prescribed details in its application seeking fire safety clearance or it had actually received the provisional NOC in terms of sub-section (3) of Section 15. If the opposite party had not given the prescribed details required in terms of sub-section (3) of Section 15, it is only itself to blame for the delay in issuance of the provisional NOC. If it had given the prescribed details, there is no reason why the provisional NOC would not have been issued to it."
In the present case, the written version filed by the opposite party does not indicate as to whether the provisional NOC in terms of sub-section (2) of Section 15 of Haryana Fire Service Act, 2009 was issued to them or not. If the said provisional NOC was not issued, the obvious inference would be that the application submitted by the opposite party for grant of the fire safety approval did not meet all the requirements of the said Act. If the said provisional NOC was issued, the opposite party had no difficulty in going ahead with the construction even if the final fire safety clearance came to be issued at a later date.
What is relevant for purpose of deciding the issue involved in this complaint is as to whether the opposite party was unable to commence construction for want of the final fire safety clearance which came to be issued on 28.10.2013 or not. It is an admitted position that the opposite party had been raising demand based upon the stage of construction even prior to 28.10.2013 when the first safety clearance came to be issued. The payment plan agreed between the parties envisaged payment of the 3rd installment on commencement of excavation, 4th on casting of basement roof slab and the 5th on casting of ground floor roof slab. The 6th installment was payable on casting of 3rd floor roof slab. It is an admitted position that even the 4th installment which was payable on casting of basement roof slab was demanded on 5.2.2013. The 5th and 6th installment were demanded on 21.3.2013 and 18.9.2013 respectively. Admittedly, the fire safety clearance had not been received by that time. Thus the opposite party had actually started the construction of the buildings even before receipt of the fire safety clearance on 28.10.2013. This would mean that either the fire safety clearance was not mandatory before commencement of construction and could be obtained thereafter before issuance of the Occupancy Certificate or a provisional NOC in terms of sub-section (2) of Section 15 of Haryana Fire Service Act, 2009 had been issued to it which enabled it to commence construction, even before receipt of the fire safety clearance on 28.10.2013. From whatever angle I may look at it, the fact remains that the fire safety clearance which came to be issued on 28.10.2013 did not come in the way of the opposite party starting and continuing the construction of the buildings in which a unit was allotted to the complainant.
The contention of the learned counsel for the opposite party is that irrespective of the opposite party having started the construction before receiving the fire safety clearance on 28.10.2013, the requisite period of 36 months in terms of Clause 13.3 of the Buyers Agreement has to be computed only from the date on which the said clearance was obtained. In my view, the above-referred clause contained in the Buyers Agreement cannot be interpreted in the manner suggested by the learned counsel for the opposite party. The obvious purpose behind giving time period of 36 months from the date of approval of the building plans or fulfillment of the preconditions if any imposed thereunder was to give a clear period of 36 months to the builder for completing the construction. Even thereafter the builder was allowed a grace period of six months thereby giving it a total time period of 42 months for completing the construction. Had the opposite party been legally prohibited from commencing the construction without obtaining the fire safety clearance and it had actually not started the construction before receiving the said fire safety clearance, it could have been justified in saying that the requisite period of 36 months should be computed from the date on which the said clearance was actually obtained by it. However, the opposite party having already started the construction, it would be only fair and reasonable to say that the said construction could have been started within 60 days of the date on which the fire safety clearance was applied. This is so, considering the provisions contained in sub-section (2) of Section 15 of Haryana Fire Service Act, 2009 which envisage issuance of a provisional NOC within 60 days of submission of the application giving all details of construction as well as the rescue fire provision and fire safety details. The opposite party admittedly applied for the fire safety clearance on 17.12.2010. The time period of 36 months for completing the construction therefore would commence from 17.2.2011. Therefore, the construction ought to have been completed by 17.2.2014 and after giving benefit of the grace period of six months, it ought to have been completed by 17.8.2014."
Civil Appeal No.4801 of 2019 was preferred by the opposite party against the decision of this Commission in Shamshul Hoda Khan (supra) , and was dismissed by the Hon'ble Supreme Court vide order dated 3.5.2019. The Developer filed a review petition before the Hon'ble Supreme Court seeking review of the order passed by it. The said review petition was also dismissed on 15.10.2019. The order dismissing the review petition, to the extent it is necessary for the purpose of this complaint, reads as under:-
"Delay in filing the review petition is condoned.
The principal submission raised in the review petition is on the basis of Section 15(1) of the Haryana Fire Service Act, 2009. It is submitted that the construction of a building could only begin after the Fire Scheme was approved by the concerned authority and as the Fire Safety Scheme in the present case was approved on 28.10.2013 the period ought to be reckoned from that date.
The submission was dealt with by the National Commission and the relevant portion from para 10 was as under:
"It is an admitted position that the opposite party had been raising demand based upon the stage of construction even prior to 28.10.2013 when the first fire safety clearance came to be issued. The payment plan agreed between the parties envisaged payment of the 3 rd instalment on commencement of excavation, 4 th on casting of basement roof slab and the 5 th on casting of ground floor roof slab.
The 6 th instalment was payable on casting of 3 rd floor roof slab. It is an admitted position that even the 4 th instalment which was payable on casting of basement roof slab was demanded on 5.2.2013. The 5 th and 6 th instalments were demanded on 21.3.2013 and 18.9.2013 respectively. Admittedly, the fire safety clearance had not been received by that time."
In view of the circumstances on record this Court refused to interfere and dismissed the civil appeal.
We have gone through the review petition and do not find any substance in the submissions raised therein. This review petition is, therefore, dismissed."
For the reasons stated hereinabove, I hold that the complainant is entitled to refund of the entire amount which he has paid to the opposite parties alongwith compensation in the form of appropriate interest notified under Rule 15 of Haryana Real Estate (Regulation And Development) Rules 2017. The said rate of interest is now stated to 10.3% p.a. The complaint is, therefore, disposed of with the following directions:-
(i) The OPs shall refund the entire principal amount of Rs.14366374/- to the complainant alongwith compensation in the form of simple interest @ 10.3% per annum from the date of each payment till the date of refund.
(ii) The OPs shall pay a sum of Rs.25,000/- as the cost of litigation to the complainant.
(iii) The payment in terms of this order shall be made within three months from today.