Raman Arora vs Delco Realtors Private Limited

The present Consumer Complaint has been filed under Section 21 (1) (A) read and Section 22 of the Consumer Protection Act, 1986 (for short “the Act”) by the Complainant, Raman Arora against the Opposite Party, M/s. Delco Realtors Private Limited (hereinafter referred to as “the Developer”) seeking refund of the deposited amount as the Developer has failed to hand over the possession of the booked Residential Plot in terms of the Agreement.

The facts as narrated in the Complaint are that the Complainant had booked a Residential Plot admeasuring 440.50 Sq. Mrs. in the Project, namely, “Samavana” proposed to be developed by Opposite Party Developer at Shakrila, Kuthar, P.O. Kuthar, Tehsil Kasuali, District Solan, Himachal Pradesh. Vide Allotment Letter dated 12.04.2012, Complainant was allotted Plot No. SK-A-30 for the total Sale Consideration of 1,08,03,856.70/-including miscellaneous charges. The Complainant paid the booking amount of 20,00,000/-and rest of the amount was to be paid in terms of Instalment Payment Plan attached with the Allotment Letter. Subsequently, the Plot Buyer’s Agreement (hereinafter referred to as the “Agreement”) was executed between the parties on 13.10.2012. According to Clause 10(a) of the Agreement, possession of the allotted Residential Plot was supposed to be handed over to the Complainant within 24 months from the date of the Application with a grace period of 90 days. Clause 10 (a) is reproduced as under:-

“ The Company shall endeavour to offer possession of the said plot, within twenty four months from the date of the Application subject to timely payment by the Allottee of Total Price, Stamp Duty, Government Charges and any other charges due and payable according to the Payment Plan/this Agreement”

It is averred by the Complainant that despite having received the huge amount of 1,00,12,878.60 i.e. approximately 92% the total Sale Consideration of 1,08,03,856/-, the Opposite Party Developer has failed to hand over the possession of the allotted Plot on or before January 2015 in terms of the Agreement. Addressing the inordinate delay being caused by the Opposite Party, the Complainant had approached them with their grievances on various occasions, however, to no avail. According to the Complainant, all the demands raised by the Opposite Party Developer made in time without any delay.

Aggrieved, the Complainant issued Legal Notice dated 07.07.2017 to the Opposite Party seeking refund of the amount paid along with 18% interest, however, neither any reply has been given nor the deposited amount has been refunded. It is further stated by the Complainant that he is now no more interested in taking the possession of the booked Plot and wants the refund of the deposited amount with interest @18% as the Opposite Party was charging the same rate of interest for delayed payment of the instalment. The Complainant has, thus, alleged to have been cheated and deceived due to deficient in service on the part of the Opposite Party Developer.

Therefore, the Complainant is before us praying as under:-

(a) direct the opposite party to refund the amount of a sum of 1,00,12,879.60/- paid by the Complainant towards the purchase of the plot being No. SK-A 30, Samavana, Shakrila, Kuthar, P.O., Kuthar, Tehsil-Kasauli, District Solan, Himachal Pradesh-173206;

(b) direct the Opposite Party to pay a sum of 87,70,682/- towards an interest at the rate 18% per annum on the amount i.e., 1,00,12,879.60/- paid by Complainant towards the cost of the flat with effect from the date of each payment till its realization;

(c) direct the Opposite Party to pay a sum of 25,00,000/- to the Complainant as compensation for harassment, inconvenience, mental agony and trauma caused by the Opposite Party;

(d) direct the Opposite Party to pay a sum of  2,00,000/- towards the costs of litigation;

(e) other Exemplary damages that this Hon’ble Commission deems fit in the facts and circumstances where Opposite Party has committed breach of trust and cheating the Complainant and may other innocent people like the Complainant in the interest of justice;

f) any other reliefs that this Hon’ble Commission deems fit and proper in favour of the Complainant in the circumstances of the case.

g) pass such other Orders or further Orders in favour of the Complainants and against the Opposite Parties as this Hon’ble Commission may deem fit and proper in facts and circumstances of the case.

Upon notice, the Complaint has been resisted by the Opposite Party Developer by filing its Written Statement and raising the Preliminary Objections that; the Complainant has booked the Apartment in question for investment and not for his personal use, as such he does not fall under the definition of ‘Consumer’ as defined under section 2(1)(d) of the Act, the terms & conditions of the Agreement to be treated as sacrosanct and are binding upon the parties as held by Hon’ble Supreme Court of India in the matter of Bharti Knitting Vs DHL Courier World Wide Express Courier” reported at [1996] 4 SCC 704 ; parties are bound by terms of contract; there is no power or jurisdiction to the Consumer Fora under the Act to direct modification of any Clause of the Agreement; the Complaint filed in September 2017, is barred by limitation and there was no continuing cause of action in favour of the Complainant; Sale of Plot of land of land-simpliciter is outside of the purview of Act as laid down by the Apex Court in the case of Ganesh Lal Vs. Shyam – Civil Appeal No. 331 of 2007 – decided on 26.09.2013 ; Clause 44 of the Agreement clearly provides that any dispute arising in relation to the terms of the Agreement including interpretation and validity of the terms thereof and the respective rights and obligations of the Parties would be settled through Arbitration; in terms of Sections 5 and 8 of the Arbitration and Conciliation (Amendment) Act 2015, the matter is ought to be referred to the Arbitration; Complainant has defaulted in making the payments of due installments, therefore, he cannot insist that the Developer perform its obligations in the manner that the Contract originally contemplated;

With regard to the status of the Project, it is submitted that the Opposite Party Developer has already completed the development and construction of the Plots, Villa and Apartments in the said Project and they have received part Completion Certificate on 12.09.2017; the Opposite Party Developer has also applied, vide letter dated 12.10.2017, for Occupation Certificate; the delay in handing over the possession of the Plot in question to the Complainant was due to the reasons beyond the control of the Opposite Party Developer; Clause 10 (d) of the Agreement clearly provides that in case the Opposite Party Developer fail to perform its obligation and to hand over the possession of the Plot allotted to the Complainant, within the stipulated time, it shall be liable to pay compensation @ 150/- per Sq. Mts. per month on the full area of the plot for the delayed period; since the delay in handing over the possession of the Plot was due to force-majeure reasons, therefore, there is no deficiency in service or Unfair Trade Practice on their part.

I have heard Ms. Kajal Chandra, learned Counsel appearing for the Complainant, Mr. Pravin Bahadur, learned Counsel for the Opposite Party Developer and have given a thoughtful consideration to the various submissions made by the learned Counsel for the Parties.

The contention of the Learned Counsel for the Opposite Party Developer that the Complainant is not a ‘Consumer’ and he has booked the subject Plot merely for commercial purpose and earning profits is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots/ flats in his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case they had failed to discharge by filing any documentary evidence to establish their case. Therefore we are of the considered view that the Complainant is a ‘Consumer’ as defined under Section 2 (1)(d) of the Act.

So far as, the plea of the learned Counsel for the Opposite Party Developer that the Complainant is bound by the terms of the Agreement and it did not give any rise to any cause of action to the Complainant to file the present Complaint, is concerned, I have gone through the various clauses of the Agreement. Clause 16 and 10 (d) of the Agreement read as under:-

“16 Without prejudice to company’s aforesaid rights, the company may at its own sole discretion waive the breach by the Allottee in not making payments as per the Payment Plan, but on the condition that the Allottee shall pay to the Company, interest which shall be charged for the first nine (90) days from the due date @15% per annum with quarterly rests and for all periods exceeding first ninety (90) days after the due date @ 18% p.a. with quarterly rests”

10(d) In the event the Company fails to offer possession of the said plot, within twenty four (24) months from the date of the application, then after ninety (90) days from the expiry of twenty four (24) months subject to the Allottee having made all payments as per the Payment Plan, and subject to the terms, conditions of this Agreement and barring force majeure circumstances, the company shall pay compensation to the Allottee, calculated at the rate of Rs.150/- per sq. mtr. Per month (Rs.125/- per sq. yd. approx.. per month) on the area of the said plot which both parties have agreed is a just and equitable estimate of the damages that the allottee may suffer and the allottee agrees that he/they shall not have any other claims/rights whatsoever. The adjustment of compensation shall be done at the time of execution of the conveyance deed.

A bare perusal of the above extracted Clauses makes it clear that as per Clause 16 in case of delay, the Purchaser was liable to pay interest @15%/18%, whereas as per Clause 10(d) in case of delay in possession, the Opposite Party Developer is liable to pay meager compensation in the form of 125/- per sq. yd per month. This shows that the terms of the Agreement are wholly one-sided and unfair and arbitrary. Therefore, the Complainant cannot be made bound to the terms of the Agreement, which is one-sided and unfair in the light of the recent Judgment of the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34 (SC), wherein the Apex Court 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. ”

With regard to the submission made by the learned Counsel for the Opposite Party Developer that the Complainant has defaulted in timely making payment of the installments due which has in turn resulted in delay in handing over the possession of the allotted Plot, I am of the considered view that if there was default in making the timely payments by the Complainant, the Opposite Party Developer was empowered in terms of Agreement either to charge interest on the delayed payment to or cancel the allotment and refund the deposited amount, however, the Opposite Party Developer has neither cancelled the allotment nor refunded the amount. Therefore, I see no force in on the said submission and it is rejected.

13. During the proceedings in the Complaint, Interim Application No. 20663 of 2017 under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 (as amended by the Arbitration and Conciliation (Amendment) Act, 2015) was filed on behalf of the Opposite Party Developer praying to refer the matter to the Arbitrator for adjudication because of existence of Arbitration Clause in the Agreement. Vide Order, dated 25.05.2018, the said Application was dismissed placing reliance upon the judgment of the Hon’ble Supreme Court in the case of M/S Emaar MGF Land Limited vs. Aftab Singh – I (2019) CPJ 5 (SC) whereby the law has been laid down that an Arbitration Clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint. Hence, the objection raised is unsustainable.

An objection has also been taken by the Learned Counsel for the Opposite Party Developer on the maintainability of the complaint on the ground that it suffers from limitation as the cause of action has arose in January, 2015 and the Complaint was filed in September, 2017. In the case of Satish Kumar Pandey & Anr. Vs. M/s Unitech – Consumer Complaint No. 427 of 2014 – decided on 08.06.2015, this Commission has held that so long as the possession is not delivered, the buyer can always approach a Consumer Forum. It is only when the Seller flatly refuses to give possession that the period of limitation prescribed in Section 24A of the Act would began to run. As such, there is no merit even in the said objection.

Now, coming to the question of delay in handing over the possession of the Plot allotted to the Complainant and the delayed compensation, if any, payable to the Complainant, it is an admitted fact that vide Application dated 18.12.2011, Complainant had booked a Residential Plot with the Opposite Party Developer in the Project, namely, Samavana situated at Shakrila, Kuthar, P.O.Kuthar - Kausali, District Salon, Himachal Pradesh, by paying the booking amount of 20,00,000/-. The total Sale Consideration of the Plot in question was 1,08,03,856.70/- including miscellaneous charges out of which the Complainant paid an amount of 1,00,12,879.60 to the Developer till 30.06.2013. As per Clause 10 of the Plot Buyer Agreement dated 19.07.2012, the possession of the Residential Plot was promised to be delivered within a period of 24 months from the date of application with a further grace period of 90 days that means by any stretch the possession of the Plot was to be delivered in January, 2015. However, the Opposite Party Developer has completely failed to keep its promised to hand over the possession of the plot within the stipulated time.

During the proceedings, the Opposite Party Developer has moved an Interim Application No. 7279 of 2020 seeking permission to place on record certain additional documents including Offer of Possession letter dated 30.01.2018 along with the final statement of Account dated 30.01.2018 and the Occupation Certificate dated 17.04.2018. In the said Application, it is stated by the Opposite Party Developer that pursuant to receiving of the partial Occupancy Certificate and the Occupancy Certificate, an offer of possession was made to the Complainant on 30.01.2018 along with final statement of Account and he was requested to take possession after payment of the outstanding amount. As such, an inference can be manifestly drawn that the Project was not complete till 17.04.2018 and admittedly there was delay of more than three years on the part of the Opposite Party in handing over the possession of the Residential Plot to the Complainant for which they are undoubtedly liable to compensate Complainant. The only defence taken by the Opposite Party Developer is that the delay was due to force-majeure reasons which were beyond their control, however, they have failed to substantiate the same by adducing and cogent and valid documentary evidence. It is settled position that only bald assertion cannot be construed as an evidence and party has to support his contention with documentary proof. Learned Counsel for the Complainant submitted that the Complainant is not interest to take the possession of the Plot at this belated stage and he wants refund of the amount deposited along with interest. Keeping in view the Judgment passed by this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery, it is the discretion of the Complainant whether he wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest, it is held that it is well within the Complainants’ right to seek for refund of the principal amount with interest and compensation as admittedly there was delay of more three years in making offer of possession.

Further, the Hon’ble Supreme Court in Pioneer’s Case (Supra) has held as under:-

“ We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent-Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent-Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.”

In the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, the Hon’ble Apex Court has held that the Complainant cannot be made to wait indefinitely for the delivery of possession and is entitled for refund of the deposited amount with reasonable interest. It was observed as under :-

“ The essential aspect of the case which is required to be analysed is whether the buyer was entitled to seek a refund or was estopped from doing so, having claimed compensation as the primarily relief in the consumer complaint.

The Buyer’s Agreement is dated 02.7.2007. In terms of the Agreement, the date for handing over possession was 31st December, 2008 with a grace period of six months. Even on 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. 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.”

In the present case also, the Complainant cannot be compelled to take possession of the Plot after a delay of more than three from the prescribed period of January, 2015 and he has discretion either to accept the offer of possession with delayed compensation or seek refund with reasonable compensation. The Complainant in the present case is no more interested to take possession of the Plot and as such, in my opinion, he is entitled for refund of the principal amount along with compensation in the form of reasonable interest which we quantify @9% p.a. from the date of respective date of deposit till the date of actual refund. Consequently, the Opposite Party Developer is directed to refund the entire deposited amount alongwith interest @9% p.a. from the respective dates of deposit till the date of actual refund within 6 weeks from the date of passing of this Order failing which the amount shall attract interest @12% for the same period. The Complainant is also entitled for a costs of 50,000/-.

The Consumer Complaint is allowed in above terms. The pending applications, if any, also stand disposed of.