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Judgment
Deepa Sharma, Presiding Member
The brief facts of the case are that the Complainants had booked a villa in the project “Belle Vue Chalets” (later renamed as “Bhowali Valley Chalets”) of the Opposite Party located at Village Nagari Gaon, Bhowali Tehsil, District Nainital, Uttarakhand in June 2015. The promised date of handing over of possession, as per the Opposite Party, at the time of booking was 36 months from the date of booking i.e. the possession was to be handed over by June 2018. It is further stated that the total consideration cost of the villa was ₹86,17,750/- and the Complainants had paid almost 85% of the consideration amount by 22.09.2017. Yet the villa was nowhere near completion. At the time of booking, in the advertisement in their brochure, the Opposite Party had promised various facilities like modular kitchen along with kitchen garden, swimming pool, barbeque pit, fireplace, adventure zone, club house, mini golf course besides other facilities. The Complainants were allotted residential villa C-47, Block-C having built up area of 1960 sq. ft. At the time of booking, the Complainants had paid ₹1 Lakh on 01.06.2015 and ₹6,99,500/- on 23.06.2015 and thus paid total registration amount of ₹7,99,500/- by 23.06.2015 to the Opposite Party. They were allotted the unit vide Provisional Allotment Letter dated 23.06.2015. The Opposite Party did not execute any agreement for two years and it was only after payment of ₹71,19,500/- by 22.09.2017 that an agreement was executed between the parties on 03.10.2017. It is apparent that till that time also, the building plans of the project were not approved and the Opposite Party had arbitrarily changed the date of possession by mentioning in the agreement that the possession would be handed over after three years from the date of execution of the agreement i.e. by 03.10.2020. It is submitted that even without approvals from the authorities of the project, the Opposite Party had started the booking and raised money from the proposed buyers which was an illegal act in the eye of law and it amounts to unfair trade practice as well. The Complainants had opted for construction linked payment plan and whenever there was a demand from the Opposite Party, duly made the payments. It is submitted that the Opposite Party did not raise any demand for payment after 22.09.2017 which clearly shows that the construction of the project had been stalled. The Opposite Party had demanded the payment of the instalments without reaching to the milestone which fact is clear from the status of construction at the project site. As per the terms of clause 11.1 of the agreement, the construction of the villa was to be completed in 36 months from the date of signing of the agreement and the Opposite Party also added 6 months as grace period for completion of villa to 36 months. It is submitted that this clause of the agreement was in clear violation of the clauses of Allotment Letter dated 23.06.2015 wherein the Opposite Party had promised to hand over the possession within 36 months from the date of allotment. It is submitted that the Opposite Party had failed to hand over the possession in terms of the Allotment Letter and thus has caused mental agony to the Complainants. The prime object of the Complainants was to provide timely and quality standard holiday home for their family members and this object got frustrated due to the delay on the part of the Opposite Party. The Opposite Party had also charged Preferential Location Charges @ 5% of the total consideration amount even when the allotted unit was not located at the preferential location. The Opposite Party had also imposed mandatory membership fee of the club house of ₹50,000/- which the Complainants had paid. The Complainants also noticed variation in the material being used in the project. The Complainants sent an e-mail dated 13.06.2016 to the Opposite Party. The Opposite Party duly replied the said e-mail on 14.06.2016 stating various reasons for shifting from the AAC blocks in the construction which were not convincing and not acceptable. When the Complainants visited the project site on 10.12.2017, they found that there was no construction work going on at the site, also they were assured that the handover would be done by the end of year 2018. The Complainants sent various e-mails dated 13.06.2016, 14.06.2016, 23.09.2016, 26.10.2016 and 30.01.2018 to the Opposite Party in enquiring about status of the project. They were given false assurances. Several of their e-mails were not replied. It is submitted that as per the clause 2 (b) of the agreement, the Opposite Party had promised to pay the compensation @ ₹5 per sq. ft. per month of the super area till the date of offer of possession, however in case of delay on the part of buyer to timely make payment, it authorised itself to charge 18% compounded quarterly interest as a penalty. This further shows unfair trade practices on the part of the Opposite Party. It is submitted that vide e-mail dated 11.06.2019 the Opposite Party had admitted that the project had been delayed and also informed that the name of the project had been changed from “Belle Vue Chalets” to “Bhowali Valley Chalets”. It is submitted that no permission of the Complainants was sought before changing the name of the project. It is submitted that that no offer of possession has so far been made to the Complainants. A legal notice dated 25.06.2019 was sent to the Opposite Party. It is submitted that the conduct of the Opposite Party amounts to deficiency in service. On these contentions, it is prayed that the Opposite Party be directed to refund their deposited amount of ₹71,90,746/- along with interest @ 18% p.a. from the date of receipt of payments till the date of refund and also pay compensation of ₹1 Lakh to the Complainants for mental agony, harassment and ₹1,50,000/- towards litigation costs.
The claim is contested by the Opposite Party No.1. No Written Statement has been filed by the Opposite Party No.2. In the Written Statement, the Opposite Party has taken preliminary objection that the Complainants did not fall within the definition of consumers under the Consumer Protection Act. The Complainants have invested in the said villa only as an investor and for commercial gain and not for personal use. The Complainants are speculative investors and invested with the intention to sell the said villa in the real estate market when it is booming and since the real estate market is hit by downfall, the Complainants are seeking refund and therefore, the present Complaint deserves dismissal. It is not disputed that the villa had been booked by the Complainants in their project and that the villa had been allotted by them to the Complainants vide an Allotment Letter dated 23.06.2015 and subsequently, an agreement dated 03.10.2017 had been executed. It is submitted that that delay in completion of the project cannot be attributed to the Opposite Party. It is submitted that a sum of ₹7,99,500/- was paid by the Complainants and thereafter they did not adhere to the payment plan and thus were defaulters. The Opposite Party had waived off the interest levied upon the Complainants on account of delay in making the payments. It is further contended that the alleged delay in completing the villa was beyond their control on account of force majeure circumstances as it got delayed on account of regulatory factors. When the project was conceived, there was no RERA and the project was to be approved and constructed under the provision of Section 143 (b) of the Zamindari Abolition and Land Reforms Act. It is submitted that the said approval had been granted to the Opposite Party and in pursuant to that almost 1/3rd of the plots were registered to individual buyers. However, the RERA had also become applicable. In order to comply with the directions of the RERA, the Lake District Authority required the project to be reviewed and under new set of rules, required new approvals to be procured which could be done only after cancellation of the old and existing approval under provisions of Section 143 (b) and new applications to be filed with LDA. As a result, while the application for cancellation of approval under provision for Section 143 (b) was moved, a fresh application was moved for approval under RERA and therefore, valuable time was lost in these activities. However, even during this period, the Opposite Party had been spending money from their pockets in order to ensure that the work and development continue at the site. The project was further delayed on account of supply and transportation issues which were beyond their control. It is submitted that there is no deficiency in service on the part of the Opposite Party. It is submitted that that at the end of 2017, the Complainants had approached the Opposite Party seeking cancellation of the allotted villa and refund of the sale consideration amount on account of financial crunch. The Opposite Party was agreeable to pay the same only after deduction of the necessary cancellation charges as per agreement. The Complainants thereafter revoked their request for cancellation and thereafter, did not make any payment towards construction of the said villa and then approached this Commission with unclean hands. As per the BBA dated 03.10.2017, the project was to be completed within 36 months from the date of agreement with further grace period of 6 months therefore latest by 03.04.2021 and therefore, the Complaint is pre mature and deserves to be dismissed. It is submitted that the BBA supersedes any previous agreement. It is further submitted that they are liable to pay only ₹5 per sq. ft. on account of delay if any. On these contentions, it is submitted that the Complaint is liable to be dismissed.
Rejoinder had been filed in which all the contentions of Written Statement have been denied and the averments made in the Complaint have been reiterated.
Parties led their evidences. We have heard the arguments and perused the record.
The admitted facts of the case are that the Complainants had been allotted unit property no.C-47, Block-C in the project “Belle Vue Chalets” which was later on renamed as “Bhowali Valley Chalets” located at Village Nagari Gaon, Bhowali Tehsil, District Nainital, Uttarakhand vide Provisional Allotment Letter dated 23.06.2015. The consideration amount of the said unit was ₹86,17,750/- and at the time of booking an amount of ₹7,99,500/- was paid to the Opposite Party. Subsequently on various dates, the payments had been made by the Complainants and by 03.10.2017 on which date the Allotment Agreement was executed, a sum of ₹71,90,746/- in total had been paid by the Complainants to the Opposite Party. It is also admitted fact that the Complainants had opted for the construction linked payment plan and had been making the payments as per demand.
It is argued on behalf of the Complainants that despite receiving substantial amount of ₹71,90,746/- when they visited the site on 14.05.2016 and 15.05.2016, they found that the construction work at the project site was very slow and there were various defects and variations in the material being used in the project and had immediately sent an e-mail dated 13.06.2016 which was duly replied by the Opposite Party vide e-mail dated 14.06.2016. When the project was visited by them on 10.12.2017 they were shocked to find that no construction work was going on and they learnt that the project had been abandoned but they were assured that the unit would be handed over to them by end of 2018. It is argued that despite that the possession had not been delivered. It is also argued that as per the Allotment Letter, the possession was to be handed over within 36 months. However, the Opposite Party unilaterally extended the period of possession of 36 months + 6 months from the date of Allotment Agreement dated 03.10.2017 and it is contended that it amounted to unfair trade practice. On these contentions, it is prayed that the Complaint be allowed.
It is argued on behalf of the Opposite Party that the Complainants are not consumers. It is submitted that the Complainants had booked the villa with the intention purely for investment purpose and commercial gain and not for personal use and that the said villa had been booked for being used as holiday home. The Complainant are speculative investors and therefore, not consumers who had intended to sell the villa on booming of the market and the since the market was down, they had filed the Complaint wherein they sought for refund of the money. It is further submitted that the construction could not be completed since the Complainants had defaulted in making the payments. It is further submitted that the construction of the said project was delayed on account of various reasons as mentioned in the written version. It is submitted that the Complaint is liable to be dismissed.
The first contention of the learned Counsel for the Opposite Party is that the Complainants are not consumers. It is a settled proposition of law, as held by this Commission in the case of “Kavita Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd.,2015 SCC Online NCDRC 2747”, that the burden of proof is always upon the Opposite Party. The Opposite Party is required to prove that the Complainant had been indulging in the commercial activities of sale and purchase of the flats and that the plot had been purchased or booked with the intention to sell it to earn profit as per the commercial activities. The same finding has been confirmed in the case of “Aloke Anand vs. Ireo Realtech Ltd., Consumer Complaint No.1277 of 2017” decided on 01.11.2021 by this Commission. In the present case, it is contended by the Opposite Party themselves that the Complainants had booked the villa with the intention to use it as a holiday home. The villa is situated in Uttrakhand and the Complainants are situated at Delhi and therefore, the Complainants could only use it as a holiday home and a person can own as many houses as he wishes to own for his own use. The Opposite Party has not produced any evidence to prove on record that the Complainants had been indulging in the business of sale and purchase of the flats and thus indulged in commercial activities of the said nature. The contention of the Opposite Party that the Complainants are not consumer has no merit and the same is dismissed.
Admittedly, as per the Provisional Allotment Letter dated 23.06.2015, the construction of the unit was to be completed within 36 months and the possession was to be handed over by 23.06.2018. It is argued on behalf of the Opposite Party that the Allotment Agreement had been executed between the parties on 03.10.2017 and this fresh Allotment Agreement has superseded the earlier Provisional Allotment Letter and the terms and conditions elaborated in the Allotment Agreement dated 03.10.2017 binds the parties and as per this agreement, the project was to be completed within 36 months + 6 months w.e.f. 03.10.2017 and therefore, there was no delay. It is, however, argued by the learned Counsel for the Complainants that the said Agreement was executed two years after the Provisional Allotment Letter dated 23.06.2015 and the execution of the Allotment Agreement after two years of the Provisional Allotment Letter itself amounts to unfair trade practice. It is argued that unilaterally the said act was done and the Complainants had no option at that time but to sign at the dotted lines. It is further submitted that it was mentioned in the Agreement that the building plan was not approved and was tentative and that even after two years of the commencement of the construction on the project site the building plans were not approved and therefore, the conduct of the Opposite Party also amounts to unfair trade practice and since they had collected the sum of ₹71,90,746/- for the construction of the unit and there was no sanctioned plan. The case of the Opposite Party is that the delay had occurred due to the fact that the Opposite Party had to take fresh permission under RERA after it had come into operation. It is submitted that the RERA was not operative at the time when the project was conceived and the approvals from the various authorities took time and therefore, the delay was beyond the control of the Opposite Party. it is pertinent to note that the RERA had come into force in the year 2016 and as per the Provisional Allotment Letter dated 23.06.2015 the date of completion was June 2018 and even if it is presumed that the Opposite Party needed to take fresh sanctions under the Real Estate (Regulation And Development) Act 2016, they had never attempted to do so and now cannot hide behind RERA. It is also apparent that despite being RERA coming into operation and the Opposite Party being required to do the needful under the Act, they continued to demand money from the Complainants without completing the formalities required to be done under the Act. The act of the Opposite Party that they demanded money from the Complainants towards the construction of the said project without having appropriate sanctions under the RERA Act after 2016, clearly shows that they have not been acting fairly and that they have been adopting unfair trade practice. The Opposite Party knew while collecting the money from the Complainants, after RERA came into operation that they cannot continue with the construction without first complying with the requirements under the RERA Act, still they continued demanding money from the Complainants under the construction linked plan. It is also apparent that till the date of filing of the Complaint in the year 2019, the Opposite Party has not completed the said project. The Hon’ble Supreme Court in “Pioneer Urban Land An Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725” has clearly held that the Commission has a right to declare any terms of a contract not binding if it is shown that the flat purchasers had no option but to sign the dotted lines of a contract unilaterally prepared by the builder and incorporation of such one sided clauses constitute unfair trade practice. In this case, clearly on the date when the Allotment Agreement dated 03.10.2017 was signed by the Complainants whereby the Opposite Party had extended the date of completion of the unit by 36 months + 6 months, the Complainants had already paid a sum of ₹71,90,746/- out of the consideration amount of the unit which was ₹86,17,750/- and at that time, naturally, the Complainants had no option but to sign the said Allotment Letter. The terms of this agreement by which the Opposite Party had further extended the period of completion of project to further 36 months + 6 months, from the date of signing this letter, though in the Provisional Allotment Letter dated 23.06.2015, they had already promised to hand over the possession of the unit within 36 months from that date i.e. 23.06.2015, certainly amounts to unfair trade practice. The argument of learned Counsel for the Opposite Party that after execution of the Allotment Agreement dated 03.10.2017, the terms and conditions of this Agreement Letter would be binding and not that of Provisional Allotment Letter dated 23.06.2015, thus has no merit.
As is clear from the record, no offer of possession has so far been made by the Opposite Party. It has been held by the Hon’ble Supreme Court that a flat buyer cannot be compelled to take delivery of flat where there is a delay and also cannot be made to wait indefinitely for offer of possession. Reliance is placed on finding of the Hon’ble Supreme Court in the case of “Fortune Infrastructure vs. Trevor Dlima (2018) 5 SCC 552”. In terms of the findings of the Hon’ble Supreme Court in the case of “Bangalore Development Authority vs. Syndicate bank (2007) 6 SCC 711”, the Complainant is entitled for the refund.
From the above discussion, it is apparent that the Complainants have successfully proved their contentions in the Complaint. The Complaint is allowed and the following directions are issued:
(i) The Opposite Party No.1 is directed to refund to the Complainants sum of ₹71,90,746 (Rupees Seventy One Lakhs Ninety Thousand Seven Hundred and Forty Six only) along with simple interest @ 9% p.a. from the date of respective deposits till its payment;
(ii) The Opposite Party No.1 is directed to pay ₹50,000/- (Rupees Twenty Five Thousand only) as litigation costs.
The entire payment shall be made within eight weeks from the date of this order, failing which the amount shall carry interest @ 12% p.a.
With these terms, the Complaint stands disposed of.