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Judgment
Sudip Ahluwalia, Member
This Consumer Complaint has been filed under Section 21 read with Section 12(1)(c) of the Consumer Protection Act, 1986 alleging deficiency in service, and unfair trade practice on the part of the Opposite Party and seeking refund of the deposited amounts along with ancillary reliefs.
The factual background in brief is that the Opposite Party launched a project named "FIT Independent Residential Floors" at Faridabad Industrial Town, Sector 57, Faridabad, Haryana, and promoted it through local newspapers and brochures. They began collecting booking amounts from the Complainants starting in 2013 and subsequently issued Allotment Letters to them between December 2013 and April 2014, assigning independent residential floors. According to the Allotment Letters and specifically Clause 6.2 of the Agreement, possession was supposed to be handed over within 24 months from the date of issuance of the Allotment Letter. Upon collecting a significant sum of money from the Complainants, the Floor Buyer Agreement was signed between March 2014 and June 2014. However, this agreement contained several one-sided, arbitrary, and unreasonable clauses, leaving no room for negotiation by the Complainants, as disagreement would result in forfeiture of the earnest money already paid to the Opposite Party. Despite the Complainants diligently meeting all payment demands, with some even availing loan services from banks and still paying EMIs, the Opposite Party failed to deliver possession of the units within the agreed-upon timeframe. Even when possession was offered, it was without an Occupancy Certificate. Disgruntled by the deficiency of service and unfair trade practices on the part of the Opposite Party, the Complainants have filed the present complaint.
In view of the aforesaid facts, the Complainants have prayed as following -
“i. Direct the Opposite Party for an immediate 100% refund of the total principal amount paid by all similarly situated consumers/ buyers in "FIT Independent Residential Floors" at Faridabad Industrial Town - Sector 57, Faridabad, Haryana, along with a penal interest of 18 % per annum from the date of receipt of payments made to the Opposite Party;
ii. Direct the Opposite Party to pay compensation of INR. 5,00,000/- (Rupees Five Lakhs Only) each to all similarly situated consumers/ buyers in "FIT Independent Residential Floors" at Faridabad Industrial Town - Sector 57, Faridabad, Haryana, for mental agony, harassment, discomfort and undue hardships caused to the Complainants as a result of the above acts and omissions on the part of the Opposite Party;
iii. Direct the Opposite Party, to pay a sum of INR. 1,00,000/- (Rupees One Lakh Only) each to all similarly situated consumers/ buyers in "FIT Independent Residential Floors" at Faridabad Industrial Town - Sector 57, Faridabad, Haryana, towards litigation costs;
iv. That any other and further relief in favour of all similarly situated consumers/ buyers in "FIT Independent Residential Floors" at Faridabad Industrial Town - Sector 57, Faridabad, Haryana, as the Hon’ble Commission may deem fit and proper in the fact and circumstances of the case.”
Ld. Counsel for Complainants has argued that according to Clause 6.2 of the Agreements, possession of the Units was to be delivered within 24 months from the date of issuance of the Allotment Letters, which should have occurred between December 2015 and April 2016. However, despite collecting a significant amount from the Complainants, the Opposite Party failed to fulfil its obligation of offering possession within the promised timeframe; That when the Opposite Party sent payment notices and possession invitations from February 2017, it was done without obtaining the Occupancy Certificate, rendering it not only invalid but also illegal and contrary to established legal principles as upheld by this Commission and numerous judgments of the Hon’ble Apex Court. The Opposite Party has still not obtained the Occupancy Certificate for the project till date; That the Agreements executed by the Complainants contained several one-sided, arbitrary, and unreasonable clauses, leaving them with no choice but to accept the Agreements in their entirety to avoid forfeiture of their earnest money. Despite this, the Opposite Party has failed to offer legal and valid possession to date, completely frustrating the purpose for which the Units were booked. It is a well-established legal principle that consumers cannot be asked to wait indefinitely for possession of a unit.
Ld. Counsel for Opposite Party has argued that the present complaint does not meet the criteria for a class action suit, as the relief sought by the Complainants is not in line with the guidelines established by this Commission in "Ambrish Kumar Shukla & Ors. v. Ferrous Infrastructure Pvt. Ltd., 2016 SCC OnLine NCDRC 1117". The relief sought by the Complainants pertains to their individual grievances rather than a collective issue. Moreover, the material on record indicates that the Complainants mentioned in the complaint do not share the same interests or grievances with the Opposite Party. Each Complainant has engaged with the Opposite Party on different aspects, and none of them has raised the grievance of a refund of the amount either individually or collectively; Additionally, in their email dated 18.11.2019, they stated their willingness to accept possession without an Occupancy Certificate, provided that electrification of the flat was completed, which, according to the Agreement, is their responsibility; That the Complainants deliberately omitted making Banks parties to the complaint, despite their knowledge that the Banks are necessary parties due to the existence of tripartite agreements. This omission suggests mala fides on the part of the Complainants, as they seek to retain public money obtained from the Banks, warranting dismissal of the complaint for non-joinder of necessary parties.
This Commission has heard both the Ld. Counsel for Complainants and the Opposite Party, and perused the material available on record.
There is clear evidence of a substantial delay in granting possession to the Complainants, well surpassing the agreed-upon 24-month timeframe from the date of the Agreements. Despite this prolonged delay, the Opposite Party has not furnished a satisfactory explanation for its cause. Additionally, their assertion regarding the Complainants being investors lacks substance. While the Opposite Party has argued in their submissions that possession has already been tendered, this Commission finds such claims unconvincing as these offers were made without the requisite Occupancy Certificate. This stance aligns with the ruling of the Hon'ble Apex Court in "Samruddhi Coop. Housing Society Ltd. v. Mumbai Mahalaxmi Construction (P) Ltd., (2022) 4 SCC 103" which underscores the necessity of possessing an Occupancy Certificate before offering possession to buyers. The relevant extracts of the said Order are set out as below –
“25. In the present case, the respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupancy certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant Society are well within their rights as “consumers” to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate.”
(emphasis supplied)
Therefore, based on these circumstances, this Commission is of the view that the failure of the Opposite Party to provide possession within the agreed-upon timeframe, coupled with their inability to obtain an Occupancy Certificate, represents a deficiency in service and unfair trade practice. Moreover, the Opposite Party has not placed the Occupancy Certificate for the project on record till date. Given these findings, the Complainants are deemed entitled to a refund of their deposited amounts, along with suitable interest. They have endured undue delay and inconvenience due to the Opposite Party's failure to fulfil its obligations.
Regarding the quantum of interest on the deposited amount, numerous Orders of this Commission, as well as rulings of the Hon’ble Apex Court, have consistently upheld the rate of interest of 9% p.a. as appropriate, particularly in cases where the relief sought is a refund without taking possession. Reference is placed on the Order of the Hon’ble Apex Court in "Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, (2022) 15 SCC 286". The relevant extracts of the said Order are set out as below –
“32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318] and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.”
The Complainants filed IA/2953/2020 seeking permission to institute Complaint in a representative capacity on behalf of other Allottees in the project which was allowed vide Order of this Commission dated 16.08.2022.
Therefore, the Allottees of the Project are similarly entitled to the reliefs as under the following directions -
(a) The Opposite Party is directed to refund to the Complainants the entire deposited amounts with simple interest @9% p.a. from the respective dates of deposits till the date of realization within two months from the date of this Order;
(b) The Opposite Party shall pay to each of the Complainants an amount of Rs. 10,000/- as litigation costs within two months from the date of this Order;
(c) Failure to comply with the directions within the specified timelines shall result in enhancement of the interest to 12% p.a.
Pending application(s), if any, stand disposed off having been rendered infructuous.