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Judgment
Heard Mr. Sanjay R. Hegde, Senior Advocate, assisted by Mr. Govind Jee, Advocate, for the complainants and Mr. Shekhar G. Devasa, Advocate, for opposite parties.
62 sets of home buyers of the opposite parties have filed above complaint as a representative complaint. The permission as required under Section 12 (1) (c) of the Consumer Protection Act, 1986 has been granted by this Commission on 01.12.2020 and notices have been published in two local newspapers. Above complaint has been filed for directing the opposite parties to (i) handover possession to the complainants of their flats, complete in all respect as per specifications forthwith, (ii) to pay compensatory interest @18% per annum, on the deposit of each complainant from due date of possession till the date of handing over of the possession, due to delay in delivery of possession, (iii) to refund car parking charges deposited by the complainants along with interest @18% per annum, (iv) to pay Rs.10/- lacs per flat, as compensation, for mental agony and harassment, (v) to award cost of litigation and (iii) any other relief which may be deemed fit and proper in the facts and circumstances of the case. Relief (iii) has not been pressed at the time of the arguments.
The complainants stated that M/s. Mantri Castles Private Limited (opposite party-1) (the developer) was a company, incorporated under the Companies Act, 1956 and engaged in the business of development and construction of group housing building and selling its unit to the prospective buyers. M/s. Gokulam Shelter Private Limited (opposite party-2) was a company, incorporated under the Companies Act, 1956 and was owner of the land, over which group housing project namely “Mantri Serenity” was being developed. M/s. Gokulam Shelter Private Limited executed a Joint Development Agreement dated 29.09.2010, a Rectification Deed dated 19.07.2012 and Power of Attorney dated 29.09.2010, in favour of M/s. Mantri Castles Private Limited for development and construction of group housing project over Sy. Nos.56(P), 57(P), 58(P) and 60(P), situated at Doddakallasandra Village, Uttarahalli Hobli, Off Kanakpura Road, Bangalore. The developer launched a project of group housing in the name of “Mantri Serenity” Phase-2 on above land, in the year 2012. Phase-2 project was divided in two blocks i.e. Block-4 (consisting wings I, J, K, L, M) and Block-5 (consisting wings N, O, P, Q, R). The developer widely advertised the project and represented for on time delivery of possession and world class modern facilities and amenities. Believing upon the representation and tall promises of the developer, all the complainants booked one flat each for them. The details of date of booking, flat number etc. are given in Annexure to the complaint.
The facts relating to complainant-1 is stated herewith. The developer allotted Unit No.-R-402 (super built up area 1710 sq.ft.) to complainant-1. The developer and the owner executed an Agreement for Sale dated 20.10.2012, in respect of undivided proportionate saleable area for Rs.4770900/- and the developer executed a Construction Agreement dated 20.12.2012, in favour of complainant-1, for construction of above flat, showing total cost of construction as Rs.3378000/-. Schedule-B of these agreements contained “Construction Linked Payment Plan” under which, 25% of the sale consideration had to be deposited till agreement for sale and 5% at the time of possession. Remaining 70% had to be deposited in 7 equal instalments at different level of the construction. Schedule-B-1 provided date of possession as 31.12.2015. The developer, vide emails dated 04.09.2013 and 08.07.2014, 19.08.2014, informed that necessary approvals were awaited and after obtaining approvals, the construction would be started. The developer, vide email dated 12.02.2016, provided various dates of “Construction Linked Payment Plan”, under which, foundations of Block-4 had to be laid on 11.01.2016 and of Block-5 on 18.01.2016 and possession had to be handed over of both the blocks on 28.02.2018. According to this payment plan, 95% of total cost was realized till October, 2016. When the possession was not offered on extended date, the home buyers made inquiry in respect of the possession. The developer, vide email dated 22.06.2017, informed the expected date of possession of Block-5 as June, 2019. Some of the complainants gave legal notice dated 21.06.2019. Thereafter, this complaint was filed on 20.08.2019.
The opposite parties filed their joint written reply on 04.03.2021, and contested the complaint. It has been stated that the construction was delayed for force majeure reasons i.e. (i) Karnataka Industrial Area Development Board issued Preliminary Notification dated 09.01.2013, proposing to acquire 4259.88 sq.mtrs. land in Sy.No.56 and 60 of the project, for the purposes of Bangalore Metro Rail Corporation Limited. By final Notification dated 16.06.2015 acquired that land, which was challenged in High Court. Due to Preliminary Notification the construction could not proceed. (ii) The local residents obtained restraint order from Assistant Executive Engineer, BBMP dated 03.07.2015, stopping constructions, which was challenged in Writ Petition No.28603 of 2015, in which interim order was granted. (iii) Due to demonetization of currency in November, 2016, there was shortage of labour and raw materials etc. (iv) In the year 2017 and 2018, there was continuous rainfall in rainy season, due to which, the work was stopped, for whole rainy season. (v) Karnataka State Pollution Control Board issued restraint order stopping construction, which was challenged in Writ Petition No.50207 of 2019 (vi) Many allottees are defaulter in payment of instalments due to which there was shortage of money (vii) Implementation of GST, increase in VAT, increase the liability of the developer. Despite above problems, the opposite parties completed more than 95% of the construction with financial help under Government Real Estate Stress Fund Scheme. Delay in offer of possession had occurred for the reasons beyond the control of the opposite parties and is liable to be condoned under Clause-6.4 of the Construction Agreement and the complainants would not be entitled for any compensation. Under Clause-14.5, delayed compensation was agreed @ Rs.3/- per sq.ft. of saleable area, per month. Claim of interest @18% per annum on the deposit is highly exorbitant. The complainants have booked flat on different dates and due date of possession was different to them. Some of the complainants have availed benefits of Pre-EMI under the scheme and the builder is regularly depositing their Pre-EMI as such there was no sameness of interest for them and permission under Section 12 (1) (c) of the Consumer Protection Act, 1986, granted in this complaint is liable to be recalled. The complainants have suppressed material facts. Issue relating to charges of “car parking” has been decided in favour of the developer by this Commission in CC/913/2016, R.V. Prasannakumar Vs. Mantri Castles Pvt. Ltd. (decided on 08.06.2018), which has been affirmed by Supreme Court in Civil Appeal No.1232 of 2019 R.V. Prasannakumar Vs. Mantri Castles Pvt. Ltd. (decided on 11.02.2019). It has been denied that the opposite parties have committed any unfair trade practice.
The complainants filed Rejoinder Reply on 23.03.2021, in which, the facts stated in the complaint were reiterated. They stated that under Pre-EMI scheme, the developer has collected 95% of total cost as such the developer is paying Pre-EMI as they have failed deliver possession on due date. The ground of shortage of fund cannot be raised as the developer had realized money from the home buyers at the different levels of the constructions. So far as order of Karnataka State Pollution Control Board issued, stopping construction is concerned, it was passed after due date of possession.
The complainants filed Affidavit of Evidence of Jyothidas Mohandas Jain and various documentary evidence. The opposite parties filed Affidavit of Evidence of Girish Gupta H.S. and various documentary evidence. Both the parties filed their short synopsis. In short synopsis, the opposite parties have stated that they had applied for issue of “Occupation Certificate”, in 2021, which has not been issued till today.
We have considered the arguments of the parties and examined the record. The argument that the order 01.12.2020, granting permission under Section 12 (1) (c) of the Consumer Protection Act, 1986, to file the complaint as a representative complaint, is liable to be recalled, is concerned, the relief in the complaint is mainly for possession over the flats booked by the complainants and for delayed compensation. As such there is sameness of the interest for all the complainants. Although it is alleged that the complainants were allottees of the flat in separate blocks/wings and due date of possession was different for different complainants but it has not been denied that due date of possession has expired for all of them on the date of filing of the complaint. Different payment mode opted by the different complainants does not change the sameness of the interest. The reasons that date of booking and mode of payment are not similar for all the complainants are immaterial; as the complainants are interested in same reliefs. The case law in Brigade Enterprises Limited Vs. Anil Kumar Virmani, (2022) 4 SCC 138, relied by the counsel for the opposite parties, have no application, in the fact of this case. We do not find any reason to recall the order dated 01.12.2020.
The developer took plea that Karnataka Industrial Area Development Board issued Preliminary Notification dated 09.01.2013, proposing to acquire 4259.88 sq.mtrs. land in Sy.No.56 and 60 of the project, for the purposes of Bangalore Metro Rail Corporation Limited. By final Notification dated 16.06.2015 acquired that land, which was challenged in High Court. Due to Preliminary Notification the construction could not proceed. The complainants in paragraph-25 of Rejoinder Reply filed on 25.02.2020 and in paragraph-24 of Rejoinder Reply filed on 23.03.2021, admitted that Commencement Certificate for Phase-2 of the project was issued on 27.11.2015/02.12.2015. Then the developer, vide email dated 12.02.2016, provided various dates of “Construction Linked Payment Plan”, under which, foundation of Block-4 had to be laid on 11.01.2016 and of Block-5 on 18.01.2016 and possession had to be handed over of both the blocks on 28.02.2018. Commencement Certificate was withheld by the Statutory Authority due to proposal of acquisition of part of the project land. As such the developer is entitled for extension of this period under Clause-6.4 of the Construction Agreement.
The complainants have nowhere stated that how many complainants had paid in Pre-EMI scheme and how many had paid under “Construction Linked Payment Plan”. But at the same time, the developer has also not given details of the defaulters as such there is no reason to disbelieve the statement of the complainants that all of them had deposited amount except the amount payable at the time of offer of possession. The developer is paying Pre-EMI to those who had paid under this scheme, which was their contractual obligation. The home buyers, who opted under “Construction Linked Payment Plan” were required to pay instalments from January, 2016 till October, 2016. Without making full payment, they cannot ask for delivery of possession as due date for possession would be 28.02.2018 for all the home buyers under the project in question.
Supreme Court in Wg. Cdr. Arifur Rahman Khan Vs. DLF Southern Homes, Pvt. Ltd., (2020) 16 SCC 512, IREO Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna, (2021) 3 SCC 241 and Civil Appeal No.1232 of 2019 R.V. Prasannakumar Vs. Mantri Castles Pvt. Ltd. (decided on 11.02.2019), held that delayed compensation is payable in the shape of interest @6% per annum on the deposit of home buyers from due date of possession till the offer of possession. In Banglore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 442, held that in the matter of contractual obligation, there is no scope for compensation for mental agony and harassment. In DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, II (2019) CPJ 117 (SC) held when interest is awarded as compensation then awarding additional compensation was not justified.
ORDER
In view of the aforesaid discussions, the complaint is partly allowed. The opposite parties are directed to obtain ‘Occupancy Certificate’ and offer possession complete in all respect as per specification to the complainants within three months from the date of this judgment. While offering possession, the opposite parties shall give Statement of Account to the complainants, strictly in terms of the agreement, adjusting delayed compensation in the shape of interest @6% per annum on the deposit of the complainants from 28.02.2018 till the offer of possession, giving at least one month time to deposit the balance amount, if any. On deposit of the amount, the opposite parties shall execute conveyance deeds in favour of the complainants and handover possession to them.