Rajat Babbar & Anr vs Parsvanath Developers Ltd

The present Complaint has been filed under Section 21 (a) of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act") against the Opposite Parties, namely, M/s. Parsvnath Developers Ltd. and M/s Parsvnath Hessa Developers Pvt. Ltd. (hereinafter referred to as "the Developer") seeking the following reliefs:

a. "Direct the Opposite Parties to refund  2,28,28,746.29 to the Complainants;

b. Direct the Opposite Parties to pay interest of 2,80,12,963.14 (Calculated @ 18% per annum from the respective installments upto August, 2017);

c. Direct the Opposite Parties to pay a sum of Rs.25 lacs towards opportunity loss caused to Complainants due to the acts of omission/ commission on the part of the Opposite Parties;

d. Direct the Opposite Parties to pay a sum of Rs. 10 lacs towards undue hardship, injury and agony both physical and mental caused to the Complainants.

e. Direct the Opposite Parties to pay at least a sum of Rs. One Lac to the Complainants towards the cost of litigation.

f. Pass such order or further order as this Hon'ble Commission deems fit and proper in the facts and circumstances of the present case."

The facts as enumerated in the Complaint are that allured by the advertisements and promises made in the Brochure, the Complainants applied for booking of a Flat in August, 2010 in the Project "Parsvnath Exotica", to be developed by the Developer at Golf Course Road, Gurgaon, Haryana. In October, 2010 the Complainants were allotted Flat bearing No. B6-302, 3 rd Floor in Tower B-6, admeasuring 3390 sq. ft. at the basic cost of 2,46,62,250/- in the aforesaid Residential Project. The Complainants had opted for down payment plan and by May, 2011 they paid a total sum of 2,28,28,746.29 as demanded by the Developer. It is stated that belatedly after almost 15 months of payment of substantial amount, on 29.08.2012, the Complainants were coerced to sign Unfair and One-sided standard form of Flat Buyer Agreement (hereinafter referred to as "the Agreement") on the threat of forfeiture of huge money on account of earnest money and other charges in case the Complainants have any objection to sign the Agreement. It is alleged that most of the Clauses of the Agreement are totally one-sided, unfair and unjust and are made to suit the whims of the Developer. It is further averred in the Complaint that unfairness and one-sidedness of the Agreement can be seen from bare perusal of the Clauses 5 and 10 of the Agreement which stipulate that on the one hand, the Developer shall be liable to pay a meager compensation of 10/-per Sq. Ft. per month for any delay in handing over of possession of the Flat on their part and on the other hand, the Allottees are charged an exorbitant interest @ 24% p.a. for any delay in payment of installments. According to the Complainants, as per Clause 10 (a) of the Agreement the construction of the Flat was to be completed within a period of 36 months from the date of commencement of the construction of the particular Block in which the booked flat was located or 24 months from the date of booking of the Flat, whichever is later, with a grace period of six months, i.e. by March, 2013.

The Complainants repeatedly visited the construction site and office of the Developer during the period from the year 2012 and 2016 to take note of the construction stage but there was no construction at the site. On 10.05.2016, the Complainants wrote a letter to the Developer expressing their serious concern and requesting the Developer to inform for definite date of handing over the possession of the Flat within six months. The Developer, vide letter dated 9.07.2016 informed the Complainants that due to some technical reasons, the construction was on hold and now construction had started in Tower B5 and B6 and the possession of the Flat is likely to be delivered by third quarter of 2017.

In September and December, 2016, the Complainants were shocked to see that there was no construction going on at the site and consequently frustrated by the false promises and attitude of the Developer, on 05.12.2016, they asked for refund of the amount paid by them with interest @ 24% p.a., to which there was no response from the Developer. It is alleged by the Complainants that the Developer does not have the necessary statutory Environment Clearances for the Tower in which the Flat of the Complainants is situated. It is asserted by the Complainants that they have lost the faith in the Developer and they want refund of the amount deposited by them. Consequently, faced with the situation and vexed with the attitude of the Developer, alleging Unfair Trade Practice and deficiency in service on the part of the Developer, the Complainants have approached this Commission seeking the aforenoted reliefs.

The Complaint was contested by the Developer by filing Written Statement admitting the booking and allotment of the subject Flat and execution of the Agreement and its Clauses. It has also been admitted that the Developer had received a sum of 2,28,28,746.29 in respect of the Flat in question. However, it is denied that the Clauses of the Agreement are one-sided and the Complainants were forced to sign the Agreement under the threat of forfeiture and they have signed the Agreement out of their own free will and volition after fully analyzing the terms of the Agreement. It is pleaded that the delay in completion of construction and handing over the possession of the booked Flat was due to economic slowdown and recession in the real estate sector, which has caused financial crunch and the same is beyond their control and cannot be attributed to them. It is submitted that the Complainants have not adhered to the payment schedule and continuously delayed the payments despite giving several reminders and demand notices and now they cannot demand refund of the amount paid with interest and compensation for any delay in completion of the construction. It is further submitted that out of 18 multi-storied residential Towers, 11 towers have been handed over and physical possession of more than 450 flats have been given to various Allottees. It is contended that in view of the judgement of the Hon'ble Supreme Court in Bharathi Knitting Vs. DHL Courier World Wide Express Courier - (1996) 4 SCC 704 , the parties are bounded by the terms and conditions of the Agreement and in case there is some delay in completion of construction and handing over the possession, the Complainants are entitled for compensation as per terms of the Agreement. All the other averments made in the Complaint have been denied and dismissal of the Complaint has been sought with cost.

The brief facts of the case are that the Complainants were allotted a Flat bearing No. B6-302, 3 rd Floor in Tower B-6, admeasuring 3390 sq. ft. at the basic cost of 2,46,62,250/- in "Parsvnath Exotica" situated at Golf Course Road, Gurgaon, Haryana; the Complainants paid a total sum of 2,28,28,746.29 by May, 2011; the Agreement was executed on 29.08.2012 and as per Clause 10 (a) of the Agreement, the construction of the Flat was to be completed within a period of 36 months of commencement of construction of the particular Block in which the Flat is located or 24 months from the date of booking of the flat, whichever is later, with a grace period of 6 months.

We have heard the learned Counsel for the parties at some length and also perused the material available on record and evidence adduced by the parties.

Before adverting to the rival contentions of the learned Counsel for the parties, it would be relevant to produce here the Clause 10 (a) of the Agreement for ready reference which is as under:-

"10 (a) Construction of the Flat is likely to be completed within a period of thirty six (36) months of commencement of construction of the particular Block in which the Flat is located or 24 months from the date of booking of the flat, whichever is later, with a grace period of six (6) months, on receipt of sanction of building plans/revised building plans and approvals of all concerned authorities including the Fire Service Deptt., Civil Aviation Deptt., Traffic Deptt., Polution Control Deptt., as may be required for commencing and carrying on construction subject to force majeure, restraints or restrictions from any courts/authorities, non-availability of building materials, disputes with contractors/ work force etc. and circumstances beyond the control of th e Developer and subject to timely payments by the Flat Buyers........."

It is, thus, be seen that the construction of the Project in question was required to be completed by the Developer within 36 months of commencement of the construction of Block B6, in which the Flat of the Complainants was located or within 24 months from the booking of the flat, whichever was later, with a grace period of six months, though of course subject to force majeure circumstances mentioned hereinabove. It is neither mentioned in the Complaint nor in the reply, as to when the construction of Tower B6 was commenced. To ascertain the date of completion of the construction and delivery of possession in terms of Clause 10 (a) of the Agreement we rely on the decision of a Co-ordinate Bench of this Commission in Rohit Agarwal & Anr. Vs. M/s. Parsvnath Developers Ltd. & Anr., III (2018) CPJ 511 (NC), decided on 30. 07.2018 , which relates to the same Project and wherein it was held that the construction of Tower B6 in the said Project commenced on 04.05.2011. As such, the construction ought to have been completed by the Developer latest by 04.11.2014, including the grace period of six months. Admittedly, the construction is not complete and the possession has not been offered despite the Complainants having already paid a substantial amount of 2,28,28,746.29 to the Developer. The grounds urged by the Developer for delay in completion of the Project in the present case are identical to the grounds taken in the said case. Rejecting the defence taken by the Developer for delay in completion of the Project in the said case, the Co-ordinate Bench of this Commission held as under:-

"2. The OP has filed written version resisting the complaint but has admitted the allotment made to their predecessor in interest as well as the transfer of the said allotment in favour of the complainants. The payment received in respect of the above-referred flat has also not been disputed by the OPs. It is alleged that the construction was delayed on account of the reasons beyond the control of the opposite party. The aforesaid reasons are stated to be (i) lack of adequate sources of finance (ii) shortage of labour (iii) rise in manpower material cost and (iv) approval and procedural difficulties.

The grounds on which the complaint has been resisted have already been rejected by this Commission in Consumer Complaint No. 91 of 2009 Col. Rajyavardhan Singh Rathore Vs. M/s. Parsvnath Developers Ltd. decided on 21. 1.2016 and C onsumer Complaint No.127 of 2017 - Mallika Raghavan Vs. Parsvnath Developers Ltd. decided on 19.4.2018 . The decision of this Commission in Mallika Raghavan (supra) to the extent it is relevant, reads as under:-

" The learned counsel for the Complainant has drawn my attention to the decision of this Commission dated 21.1.2016 in Consumer Complaint No. 91 of 2009 Col. Rajyavardhan Singh Rathore Vs. M/s. Parsvnath Developers Ltd. , wherein the opposite party had allotted a flat in Tower D-4 of this very project to the complainant therein but had failed to deliver possession of the said flat to hm. The complaint instituted by Col. Rajyavardhan Singh Rathore was resisted by the opposite party, primarily on the ground that the recession had hit Indian economy over past two years and Real Estate Sector was one of the worst hit sectors, as a result of said slow down. The aforesaid plea taken by the opposite party was rejected by this Commission, noticing that the slowdown in the economy was not one of the grounds which could justify the delay in completion of the construction, since Clause 10(a) of the Agreement between the parties referred only to restrictions/restraints from any Court / Authority, non-availability of building material, disputes with contractors / workforce etc., and the circumstances beyond the control of the developers. It was noted that there was no evidence of the opposite party having constraints on account of such a reason in carrying out or completing the construction of the flat. It was further noticed that there was no evidence of non-availability of building material or the opposite party having dispute with any contractor/workforce deployed at the site of the construction. It was held that the delay in completion of the project unjustified. The opposite party was therefore, directed to complete the construction of the flat in all respects, deliver its possession within eight months from the order of this Commission and also pay compensation in terms of the said order to the complainants therein namely Col. Rajyavardhan Singh Rathore.

In my view, lack of adequate sources of finance with the opposite party cannot be a justified ground for the delay in completion of the construction. It was for the opposite party to arrange the finance required for completion of the project within the time stipulated in this regard and it has only to blame itself if it could not arrange the requisite finance. As far as shortage of the labour is concerned, there is no evidence of the labour not being available during the relevant period. Rise in the man power and material cost or approval and procedural difficulties cannot justify the delay in completion of the project."

Further, as per Clause 5 of the Agreement the Developer was charging interest @ 24% p.a. for any delay in the payments by the Allottees and on the contrary was offering a meager compensation of 10/- per sq. ft. per month for any delay in handing over of possession of the Flat in terms of Clause 10 of the Agreement, which comes to approximately to interest @ 1.7%, is totally unfair and one sided. Such type of Clauses present in the Builder Buyer Agreements had been examined by the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2009) CPJ 34 (SC) , and it was held as under:-

"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."

As there has already been inordinate delay of more than seven years from the stipulated date for delivery of possession i.e. 04.11.2014 and the Developer has yet to obtain the Occupancy Certificate and no definite date is given for offer of possession of the allotted Flat, we find it a fit case to place reliance on the Judgment of the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 (SC) , in which the Hon'ble Apex Court has observed as hereunder:-

"..........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 Opposite Party, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.

In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified."

In the instant case also, the Complainants cannot be made to wait indefinitely for possession of the booked Flat, as even till date the construction is incomplete. As there in an inordinate delay of more than seven years from proposed date of handing over the possession to the Complainants by the Developer and the construction is still incomplete, we are of the considered view that the Complainants are entitled for refund of the deposited amount with reasonable interest.

The next question which arises for our consideration is the rate of interest, which is to be paid to the Complainants on the principal amount. It is the Complainants' case that keeping in view the parity, they should be awarded interest @ 24% p.a., as the Developer is charging the same rate of interest in case there is any delay in payment of payments by the Allottees, but having regard to the fact that Banks have lowered the interest rates; the Hon'ble Supreme Court has been awarding lower rate of interest keeping in view the current market situation and considering the recent decline in the cost of borrowing and return on the investments made with the Banks and further keeping in mind the decisions of the Co-ordinate Benches of this Commission with respect to the same Project" Parsvnath Exotica" in Rohit Agarwal's case (supra) and Ashwani Kapoor Vs. Parsvnath Hessa Developers Private Limited, Consumer Complaint No. 2133 of 2017, decided on 14.08.2018 , wherein this Commission has directed refund of the principal amount with interest @ 10 % p.a. from the respective dates of deposit, we are of the considered opinion that the Complainants in the present case are also entitled for compensation in the form of interest @ 10 % p.a.

Accordingly, the Complaint is partly allowed with a direction to the Developer to refund the entire amount paid by the Complainants along with interest @ 10 % p.a. from the respective dates of deposit till the date of payment, within a period of six weeks from the date of receipt of a copy of this Order failing which the amount shall attract interest @12%- p.a. for the same period. The Developer shall also pay a sum of 50,000/- to the Complainants towards litigation cost.