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Judgment
The Complainant has filed the present Complaint, under Section 2(1)(g) read with Section 21(a)(i) of the Consumer Protection Act, 1986 (for short "the Act"). It has been, inter alia, averred in the Complaint that in the year 2011, the Opposite Parties launched a Group Housing Residential Apartment Project, namely, "NBCC Green View Apartments" for employees of Central/State Governments, Central/State PSUs, etc., to be constructed on a Plot measuring 17. 2985 acres in Sector 37D, Gurgaon, consisting of 786 flats of different sizes, after obtaining license from the Director General, Town & Country Planning, Haryana. The Opposite Parties, through their brochure as well as on their website, promised amenities like Metro Rail connectivity, location on 24 meters wide road, green belt along with 24 meters wide road, easy approachability from Dwarka Expressway, 15 minutes drive to the IGI Airport, etc., in respect of the said Project. As a part of the preliminary submissions, the Complainant has averred that out of the 786 flats to be constructed, the Opposite Parties have allotted only 290 flats till the filing of the Complaint and kept 496 flats for fetching more money at a later date, which means that the Opposite Parties have utilized the money invested by 290 allottees, including the Complainant, for construction of all 786 flats.
Swayed with the impressive publicity by the Opposite Parties, the Complainant booked a Flat in the above said Project of the Opposite Parties on 31 st March, 2011 and deposited the part application money of 1,00,000/- by cheque No.086353 dated 31 st March, 2011. The balance application money of 1,00,000/- was deposited by the Complainant by Cheque No.873640 dated 29 th June, 2012. Based on the result of the draw of lots, conducted by the Opposite Parties on 17 th October, 2012, the Complainant was allotted Flat No. C-7.2 measuring 1803 Sq. Yards with one covered car parking vide allotment letter dated 2 nd November, 2012, for a total cost of 76,16,007/- including Preferential Location Charges (PLC). In terms of Clause 19 of the Terms and Conditions of the Application Form, the Opposite Parties were to complete and hand over possession of the dwelling Unit within 30 months from the date of Allotment letter i.e. by 2 nd May, 2015. The payment schedule attached to the Allotment letter also indicated payment of last/final instalment on 2 nd May, 2015.
The Complainant has paid almost 95% of the total cost of the Flat amounting to 70,66,149/-, on the due dates, by arranging funds partly through the over drafts from the Bank against the Fixed Deposits held by the Complainant by paying interest @11.75% to the Bank and finally after encashment of all the remaining Fixed Deposits. The Complainant has, thus, parted with whole of the retirement benefits received by him on superannuation from service. As per the payment schedule, the last and final instalment of 5,57,379/- was left to be paid at the time of handing over of possession of the Flat. The Opposite Parties, however, failed to deliver possession of the Flat within the stipulated time period which was delayed by 24 months. The sale of Flats in the aforesaid Project was still open and Opposite Parties mentioned different completion period and dates for handing over of possession of the Flats in the Application Form prescribed for the same Project from time to time. In the Application Forms circulated in October, 2016, the time period for completion of dwelling Units was shown as 12 months from the date of issuance of Allotment letter i.e. on or after October, 2017 and for Allotment letters issued on 17 th December, 2013, the date of completion was 17 th December, 2015 i.e. 24 months from the date of issue of Allotment letter. The Opposite Parties also revised/enhanced the official cost of all types of Flats for the new Allottees, including the type of Flat which was allotted to the Complainant. The official cost of the type of Flat, allotted to the Complainant, was revised from 76,16,007/- in November, 2012 to 1,11,84,694/- plus service tax.
In order to console the grievances raised by the Allottees regarding delay in handing over of the Flats, the Opposite Parties called for a meeting of the Allottees on 2 nd July, 2016 and stated that the delay in handing over possession was due to Force Majeure reasons. They assured the Allottees that the remaining works would be completed by September, 2016. However, the revised date also could not be adhered to by the Opposite Parties. It is averred by the Complainant that the Opposite Parties knew from the very beginning that they would not be able to hand over possession within the stipulated period of 30 months i.e. by 2 nd May, 2015 as promised to the First Allottees and, therefore, they misrepresented the facts, which amounts to unfair trade practice and cheating on their part.
The Opposite Parties offered interim possession of the incomplete flats vide their letter dated 5 th January, 2016 (corrected as 5 th January, 2017) without getting Completion/Occupation Certificate from the Competent Authority, in order to allow the allottees for carrying out interior fit out work in their Flats. However, the same was not accepted by the Complainant. It is alleged by the Complainant that the Town Planner, Chandigarh, has so far not issued the Completion Certificate to the Opposite Parties due to various deficiencies in the interior and exterior works of the Project, although a letter for getting the Completion Certificate was sent by the Opposite Parties, which shows that the Opposite Parties were in a hurry to handover incomplete flats to the Allottees by giving false information regarding completion of Flats to the Town Planner, Haryana.
It is stated that the Complainant having lost hopes and feeling cheated with the hollow assurances of the Opposite Parties, requested the Opposite Parties vide his letter dated 27 th February, 2017 to refund the entire amount paid by him with interest @18% p.a., but the same was rejected by the Opposite Parties by their letter dated 28.02.2017. They advised to the Complainant to apply for cancellation/surrender of the Flat under clause 23 (b) of the T&C, under which the Opposite Parties shall deduct 2,00,000/- on account of cancellation charges. The same being not acceptable, the Complainant again approached the Opposite Party No.2 vide letter dated 10 th March, 2017, requesting that Clause 23(b) was not applicable in his case, as there was delay on the part of the Opposite Parties. The Opposite Party No.2, however, rejected the request again on 21 st March, 2017 stating that the construction work was delayed due to Force Majeure conditions , and, therefore, interest was not payable. On 23.03.2017, Complainant sent a notice to the Opposite Parties calling upon them to refund the entire amount paid with interest @18% p.a. along with compensation of 5,00,000/- and costs of 1,00,000/- including miscellaneous expenses, but the Opposite Parties neither refunded the amount nor replied to the said notice.
In the above stated background, the Complainant has filed the present Complaint praying directions to the Opposite Parties:
(a) to refund the entire amount paid by the Complainant from March, 2011 onwards till final settlement, along with interest @18% p.a., totalling to 1,11,56,718/- (principal amount of 70,66,149/- plus40,90,569/- towards interest @18% p.a. calculated upto 15.04.2017) and such other amount on account of interest beyond 15.04.2017, which may accrue till realization;
(b) to pay an additional amount of 5,00,000/- to the Complainant towards compensation for irreparable financial loss, harassment and mental agony, suffered on account of delay in handing over of the Flat and
(c) to pay 1,00,000/- towards the costs of litigation and other miscellaneous expenses, incurred by the Complainant.
Upon notice, the Opposite Parties contested the Complaint. The reply filed by Opposite Party No.2 was adopted by the Opposite Party No.1 also.
The Opposite Parties have raised the preliminary objections that (i) the Complainant has filed the present Complaint against persons, who have not provided and/or sold any services to him and, on this ground alone, the Complaint deserves to be dismissed; and (ii) the Complaint has been filed with a clear attempt to inflate the value of the relief with a view to directly file the Consumer Complaint before this Commission, which is against the spirit and object of the Act.
On merits, it has been pleaded that the Opposite Parties launched a Group Housing Residential Project, namely, "NBCC Green View Apartments" at Sector 37D, Gurgaon, and allotted a dwelling Unit to the Complainant @3,545/- per sq. ft. The Complainant had paid approximately 70,74,309/- to the Opposite Parties in instalments from June 29, 2012 to May 31, 2016, which turns out to approximately 93% of the total sale consideration.
Complainant had participated in the first Application cum Allotment process and was allotted the dwelling Unit by Allotment letter dated November 2, 2012. However, due to availability of Flats, as a normal practice among the Real Estate developers, the Opposite Parties again opened the Application cum Allotment process on December 17, 2013; March 31, 2014, December 19, 2014 and October 17, 2015, whereby they prescribed certain timelines for completion of construction to the respective Allottees. It is also pleaded that the sales rates of the dwelling Units were changed from time to time in successive Allotment cum Application process, because the same are decided on the recommendation of the Valuation Assessment Committee based on the Valuation Report submitted by an independent International Marketing Consultant and, thereafter, notified by the Board of the Committee after approval of the Valuation Report.
As on June 16, 2017, the expenditure incurred by the Opposite Parties on the said Project was approximately 3,62,06,62,964/- whereas the amount received from the Allottees was approximately 2,04,09,20,000/- and, thus, there was deficit of 1,57,97,42,964/- which means no surplus amount was collected from the Allottees.
In terms of Clause 19 of the Application form, it is accepted by the Complainant that NBCC shall endeavour to complete the construction of the subject Unit within 30 months and it does not envisage absolute obligation on the part of the Opposite Parties for handing over possession of the Flats within 30 month of issuance of Allotment letter. It is expressly agreed by the Complainant in their Application that any delay in completion of the said Project due to Force Majeure shall entitle the Opposite Parties for extension of time of delivery of the possession, which could be extended upto 42 months and for which no compensation could be claimed against the Opposite Parties.
All the issues and demands raised in relation to the completion of the Project by the Flat owners were addressed by the Opposite Parties in the meeting dated July 2, 2016 and all the Allottees had duly agreed and willingly consented as September, 2016 to be the deadline for completion of construction of the Project. It is further pleaded that the Opposite Parties had completed the physical work of the Project in September, 2016 and applied for occupation/completion certificate of the Project with the Director, Town & Country Planning, Haryana, Chandigarh on October 22, 2016, after completing all the formalities. Due to delay in grant of Occupation/Completion certificate, the Opposite Parties even facilitated the Complainant by handing over interim possession of the flats so that the interior work and fittings, etc., could be completed, as per their liking.
Dealing with the Force Majeure reasons, it is submitted by the Opposite Parties that due to heavy monsoon rains in August, 2012 and February, 2013, heavy water-logging took place at the Project site resulting into heavy slush formation in and around the project and huge expenditure was undertaken by the Opposite Parties to remove the slush and water-logging in order to resume the construction activities which were suspended for 34 days. The Lead Contractor, contracted for the work, had to be substituted due to several complaints from the officials of the Opposite Parties and for deficiencies/ discrepancies in the work allotted to him. Various other exigencies were also faced by the Opposite Parties during the period like various judicial decisions/ binding precedents on all Real Estate Builders in the NCR, such as ban on use of ground water, mining of coarse sand, etc., due to which supply of sand and water was seriously affected resulting in delay in completion of the construction of the project. In pursuance of the directions issued by the National Green Tribunal in M/s. Sandplast (India) Ltd. & Ors. Vs. Ministry of Environment & Forests & Ors., the Opposite Parties were required to use fly ash bricks instead of ordinary clay bricks in its construction work. The said directions were implemented by the Opposite Parties in June, 2014 and, thus, sourcing and ensuring continuous supply of the fly ash bricks at competitive prices led to unprecedented delay in completion of the Project . The said issues were beyond the control of the Opposite Parties; therefore, the delay cannot be attributed to the Opposite Parties. The construction was delayed on account of Force Majeure and the status of completion of the project was duly apprised of/informed to all the Flat owners. The issues raised by the Flat owners regarding electricity and water supply have been addressed by the Opposite Parties and they have installed a Diesel Generator set for power back up to 100% for the common areas. The construction of the Project was completed in September, 2016 and Opposite Parties have applied for Occupation/Completion Certificate on October 22, 2016. The delay in grant of Occupation/Completion Certificate is not under the control of the Opposite Parties for which the Opposite Parties should not be penalized for no fault of their own. All the basic amenities described in the Application have been completed by the Opposite Parties and obligations in respect of completion of construction/quality of construction, internal roads and drainage, common areas, etc., within the Project, have been duly attended to and completed by the Opposite Parties. The interlinking of the project with main arterial roads of Delhi i.e. proposed Dwarka Expressway/IGI Airport, etc., is not under the purview of the Opposite Parties and the Opposite Parties never represented itself for linking the Project with any upcoming Highway.
The Opposite Parties denied all the allegations made in the Complaint and prayed dismissal of the Complaint with exemplary costs.
We have heard the Complainant appearing in person and the Learned Counsel for the Opposite Parties at some length and also perused the material available on record as well as the Written Arguments.
In brief, it is the case of the Complainant that he had paid about 95% of the total sales consideration of the allotted flat No. C-7.2 to the Opposite Parties and as per Clause 19 of the Terms and Conditions of the Application Form, the possession of the dwelling Unit was to be delivered within 30 months from the date of Allotment letter dated 02.11.2012 that means by 2 nd May, 2015. However, the Opposite Parties have miserably failed to hand over the possession within the stipulated time and hence he is entitled for refund of the deposited amount with interest and reasonable compensation.
With regard to the preliminary objection raised by the Opposite Parties that this Commission does not have pecuniary Jurisdiction to entertain the present Complaint as the claim made by the Complainant is inflated, a larger Bench of this Commission in the case of " Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Private Limited - I (2017) CPJ 1 NC " has held that pecuniary Jurisdiction should be construed considering the total value and goods and services in addition to the compensation prayed for. In the present case also, undeniably the Complainant has paid an amount of 70,66,149/- to the Opposite Parties and has sought for damages by way of interest @ 18% p.a., compensation of 5,00,000/- and other reliefs which total goes beyond One Crore and definitely comes within the pecuniary Jurisdiction of this Commission.
The stand taken by the Learned Counsel appearing for the Opposite Parties that it was only an endeavour by NBCC to complete the subject project within 30 months (2½ years) from the date of Allotment letter and nowhere such a promise was specifically made and that the delay was on account of Force Majeure conditions for which they are entitled to extension of time of delivery of the possession upto 42 months, is not acceptable as there is no documentary evidence adduced on record proving that the Project was delayed due to Force Majeure conditions. The contention of the Learned Counsel for the Opposite Parties that there was suspension of construction work for 34 days due to heavy monsoon rains in August 2012 and February, 2013 resulting in heavy water logging at the project site and that the lead Contractor, M/s. Supreme Infrastructure (I) Ltd. was required to be substituted due to several complaints against them, in our view, by any stretch of imagination, cannot be construed as Force Majeure conditions. The dispute, if any, between the Opposite Parties and the Contractor engaged by it, cannot justify the delay in completion of construction. If the Opposite Parties suffer any loss or has to pay compensation/damages on account of the delay committed by the Contractor engaged by it, it will be entitled to avail such remedy as may be available to it in law against the Contractor responsible for the delay.
So far as, delay in construction work on account of shortage of water and raw material due to ban on use of ground water and mining of coarse sand etc. in the area of NCR are concerned, no material has been produced by the Opposite Parties to substantiate that the completion of construction and offer of possession has been delayed on account of reasons beyond its control. There is no evidence of the Opposite Parties having invited tenders for supply of bricks and water and there being no response to such tenders. In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the Opposite Parties. Therefore, we find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity. Even otherwise, the non-availability of raw material and water for some time cannot be considered as force majeure condition.
The Complaint has been resisted by the Opposite Parties taking the main plea of Force Majeure condition which has been rejected in number of identical matters by this Commission. Opposite Party has miserably failed to prove that the completion of construction and offer of possession has been delayed on account of reasons beyond its control and there is no justification for the delay in completion of construction.
The Complainant is not willing to take possession of the allotted Flat as according to him, the facilities promised by the Opposite Parties at the time of booking of the Flat, have not been provided. Vide letter dated 27.02.2017, he requested the Opposite Parties to refund the amount depositing by him stating as under:-
"4. That despite fulfilment of all the obligations from my end, NBCC has miserably failed to hand over the possession of the dwelling Units/Flats to me even after lapse of considerable time and more than 20 months delay over and above the scheduled date of handing over of the possession which was 2 nd May, 2015.
That there is no connectivity with Dwarka Expressway, Metro train, IGI Airport etc. and no green surrounding as promised by NBCC and all the assurances have been found to be hollow and perhaps, the same were given in the prospectus and the project walk through at the website of NBCC, just to attract the customers.
The NBCC, by this act and commission, has cheated me and other innocent consumers/customers like me, who are mostly from Government/PSUs, by indulging in Unfair Trade Practice, which attracts the provisions of MRTP Act and also the Consumer Act."
However, the said request was rejected by the Opposite Parties vide letter dated 28.02.2017 and the Complainant was advised to apply for cancellation/surrender of the Flat under Clause 23
(b) of the T&C which allows it to deduct 2,00,000/- as cancellation charges. It was strongly objected by the Complainant as the surrender was not voluntary and he was forced to make a request for refund due to incomplete construction and delay in handing over possession by the Opposite parties.
It is rigorously contended by the Complainant appearing in person that the Project is still not complete even today as there is no regular water and electricity connection, no sound barriers, no proper connectivity with Dwarka Expressway and NH-8 as promised in the "Project Walk Through" on the website of the Opposite Parties. Even the Committee of two Members constituted by the Chairman, State Environment Impact Assessment Authority (SEIAA), Panchkula has noticed violation of Environmental conditions, absence of sound barriers etc. in their report dated 03.07.2018 obtained through RTI by the Complainant. There are also visible cracks on load bearing concrete beams, pillars, walls etc. which have been brought to the knowledge of the CMD of NBCC recently by letter dated 18.05.2018 by the Allottees Welfare Association. It is stated that the Occupation Certificate obtained by the NBCC on 02.08.2017 is questionable and due to various complaints by the Allottees Association regarding serious deficiencies in the Project, the NBCC could not get the Completion Certificate for the said Project so far from the Competent Authorities. In our view, by not delivering the physical possession of a fully developed Flat to the Complainant even after receipt of 95% of the total consideration till
05.2016, the NBCC has been deficient in rendering the service and the demand of refund made by the Complainant is justifiable.
In the case of Emmar MGF Land Ltd. & Ors. vs. Amit Puri - [II (2015) CPJ 568 NC], this Commission has held that 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 as the construction is still not complete. In the matter of Mrs. Anila Jain Vs. Emaar MGF Land Ltd . - Consumer Complaint No. 2208 of 2017 decided on 11.11.2019 , the Coordinate Bench of this Commission confirming the said view of the Commission has observed as under:-
" In any case, the complainant cannot be compelled to accept possession when it is offered after such a long period of say at least three years from the timeline stipulated for this purpose, in the agreement executed between the parties. A reference in this regard can be made to the decision of the Hon'ble Supreme Court in Civil Appeal No. 12238 of 2018 Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Connected Matter decided on 02.04.2019 and the decision of the Hon'ble Supreme Court in Civil Appeal No. 3182 of 2019 Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra decided on 25.03.2019, in support of his contention that in a case of an unreasonable delay in offering possession of the allotted flat, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid by him to the builder with compensation.
The Hon'ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, - II (2019) CPJ 34 (SC), has observed as follows:-
"6.7. A terms 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 contractual terms of the Agreement dated 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 the flats by the Builder.
In view of the 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."
Further, in the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra - II (2019) CPJ 29 SC, the Hon'ble Apex Court has laid down the following principles:-
".....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 in 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 the SCDRC and by the NCDRC for refund of moneys were justified."
For the foregoing reasons, We are of the considered view that in the present case also, the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Parties in relying on Force Majeure clause while retaining the hard earned amount of the Complainant for a long period of eight years without any valid reason, is not only an act of deficiency of service but also amounts to Unfair Trade Practice, more pertinently when the Opposite Parties charge interest @ 15% p.a. for any delay in the payments on the part of Flat Purchasers and offers compensation only of 2/- per Sq. Ft. per month of the Super Area for the period of delayed possession, which is no doubt on the very much low side. Undisputedly, such terms in Clauses are extremely unfair and one sided and fall within the definition of 'Unfair Trade Practice' as defined under Section 2(r) of the Act.
Now, the question for consideration before us is for what compensation the Complainant is entitled for. It is trite that the word "Compensation" is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation of physical, mental or even emotional sufferings, insult or injury or loss. On the question of determination of compensation for the loss or injury suffered by a Consumer on account of deficiency in service, the following observations by a three Judge Bench of the Hon'ble Supreme Court in Charan Singh v. Healing Touch Hospital & Ors., - (2000) 7 SCC 668 are also apposite:
" While quantifying damages, Consumer Forums are required to make an attempt to serve the ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time, aims to bring about a qualitative change in the attitude of the service provider. Indeed, calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant is able to establish his charge."
Keeping in mind the observations of the Hon'ble Apex Court in a catena of judgments with respect to awarding compensation/interest, the current market situation, the lower rate of interest being charged by the Banks on loans, interest rates by the Banks on FDRs and remarkable downfall in the values of Real Estate in the market, we are of the opinion that awarding interest @ 18% p.a. as prayed for by the Complainant is on the higher side and hold that as the Complainant had to pay interest @ 11.75% to the Banks on the loan taken by him, the Complainant is entitled to the refund of the amount deposited by him with compensation by way of interest @ 12% p.a. from the respective dates of deposits till the date of realization.
Hence, this Complaint is partly allowed directing the Opposite Parties to refund the principal amount with compensation by way of interest @ 12% p.a. from the respective dates of deposit till the date of realization together with costs of 25,000/- to be paid to the Complainant, within a period of four weeks from the date of receipt of a copy of the order failing which the amount shall carry the compensation @ 14% p.a.