Shalini Singh vs M/S. Arena Super Structures Pvt. Ltd. & Anr

R.K. Agrawal, President

Sometime in the year 2012-13, a Group Housing Project under the name and style of "Lotus Arena" situated in Sector-79, Noida, was being developed by Opposite Party No.1, namely, M/s Arena Super Structures Pvt. Ltd., and marketed by Opposite Party No.2, namely, M/s Lotus Greens Developers Pvt. Ltd. The Complainant approached the Opposite Parties and booked a residential Apartment in the Project, for which a sum of Rs.2,00,000/- was paid by the Complainant on 28.02.2014. The receipt for the said transaction was issued on 09.08.2014, allotting Apartment No. 701 in Tower-7, admeasuring Super Area 1995 sq. ft., in the Project. The Complainant was required to pay the sale consideration of Rs.98,15,715/- plus other charges and taxes, if any. Besides the initial payment of Rs.2,00,000/- made on 28.02.2014, the Complainant also made payments of Rs.5,00,000/-, Rs.1,80,000/-, Rs.30,000/-, Rs.6,20,000/-, Rs.2,18,148/- and Rs.8,74,074/- to the Opposite Parties between 09.08.2014 and 16.04.2015. The receipts are annexed as Annexure-B (colly.). In this way, the Complainant paid to the Opposite Parties a total sum of Rs.26,22,222/-. On 09.04.2015, Apartment Buyer Agreement (Annexure-A) was executed between the Complainant and Opposite Party No.1. Initially, the Apartment was booked by the Complainant on construction-linked plan basis, which, on the request of the Opposite Parties, was subsequently changed to 30+30+40 ratio and the 30% cost price of the land stands paid to the Opposite Parties. However, the Opposite Parties, for the reasons best known to them, did not develop the Project and also did not raise further demands from the Complainant. The Apartment in question was to be handed over to the Complainant in 42 months plus grace period of 6 months from the date of booking, i.e. 28.02.2014. On visit to the site, the Complainant found that there was negligible construction and possession was not possible in near future, necessitating her to write various mails to the Opposite Parties, including the legal notice dated 12.10.2018 (Annexure-D), but there was no response to the same.

Alleging deficiency in service on the part of the Opposite Parties on the aforesaid counts, the present Complaint has been filed by the Complainant, seeking a direction to the Opposite Parties to refund the amount paid by her, together with interest % 18% p.a. and litigation costs.

Upon notice, both the Opposite Parties contested the Complaint by filing their respective Written Versions. It was inter alia stated on behalf of Opposite Party No.1 that: (i) the Complainant is not a 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986 as she has purchased the apartment only for investment purposes; (ii) as the Complainant has prayed for return of the money paid, i.e. Rs.26,22,222/- with interest @ 18% p.a., this Commission has no pecuniary Jurisdiction to entertain the Complaint; (iii) the Project is still within the time period, as agreed to in the Buyer Agreement and, therefore, the Complaint is premature; (iv) Clause 5.1 read with Clause 5.2 of the Buyer Agreement stipulates for completion of the project within 48 months from the date of execution of the Agreement, subject to the Complainant complying with her obligations and Force Majeure and reasons such as delay on the part of Government Authorities in granting necessary Approvals/Sanctions etc.; (v) owing to the slowdown in the Real Estate Market, the Investors have started filing cases before the Consumer Fora as well as RERA Authorities with a view to seek refund and interest; (vi) refund would deplete the funds for completion of the construction of the Project and would have a cascading impact on the Project's financial health; (vii) the Project is registered with the Uttar Pradesh Real Estate Regulatory Authority and the provisions of the Real Estate (Regulation and Development) Act, 2016 (for short "RERA") provides overriding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force, and if any Complaint is entertained by this Commission, would conflict with the objective and purpose of RERA; (viii) as against 9 Residential Towers, for which Building Plans were sanctioned by the Noida Authority on 29.04.2014, superstructure of 3 towers is complete and that of other towers is partially raised; (ix) construction work of the Project was severally affected on account of various reasons, including non-acquisition of approach roads by Noida Authority, Farmers' protest and agitation, demonetization of Rs.500/- and Rs.1000/- legal tenders, NGT orders, whereby construction of all buildings was stopped, etc., for which Opposite Party No.1 was entitled to seek extension of time to complete the construction; (x) most of the Buyers, who booked Apartment under the Construction Linked Plan, did not make timely payment, inasmuch as against the demanded sum of Rs.438 Crores from the Buyers, only a sum of Rs.380 Crores has been received, which resulted in delay in the Project; and (xi) Opposite Party No.1 is eligible to avail the "zero period" benefit till 08.01.2018, as the land for this project, except for about 200 meters, was finally given after 7 years of allotment on the said date.

On behalf of Opposite Party No.2, it was inter alia stated that Opposite Party No.1 and Opposite Party No.2 are separate Entities and have separate Books of Accounts. There is no privity of contract between the Complainant and Opposite Party No.2 and, therefore, the Complainant is not eligible to seek any relief under the Consumer Protection Act, 1986 against Opposite Party No.2. Further, while Opposite Party No.2 is not a party to the Apartment Buyer Agreement, the Project land is in the name and ownership of Opposite Party No.1, which has carried out the construction work and taken all the Sanctions/Approvals etc., and, therefore, there is no deficiency in service on the part of Opposite Party No.2.

I have heard the Learned Counsel for the Parties and perused the material available on record.

In support of its plea that the Complainant is not a 'consumer' under the Consumer Protection Act, 1986, as she has purchased the Apartment only for investment purposes, no documentary evidence has been annexed by Opposite Party No.1. It is well settled that such a plea has to be supported with documentary evidence, showing that the property has been purchased by the purchaser only for investment or commercial purposes and not for her personal use. As there is no such evidence in this behalf, it cannot be accepted that the Complainant is not a 'consumer'.

In view of the Larger Bench decision of this Commission in ¬Ambrish Kumar Shukla Vs. Ferrous Infrastructure Pvt. Ltd. - I (2017) CPJ 1 (NC), for determining the pecuniary jurisdiction of this Commission, the cost of the Apartment (which is Rs.98,15,715/-) and the Reliefs claimed in the Complaint (i.e. refund of deposited amount of Rs.26,22,222/- with interest @ 18% p.a.) have to be taken into consideration and, if the same are taken into consideration, the value exceeds ₹1.00 Crore. Thus, this Commission has the pecuniary Jurisdiction to entertain and decide the present Complaint.

The contention of Opposite Party No.1 that the Project was within the time, as the construction was required to be completed within 48 months from the date of execution of Apartment Buyer Agreement, and, therefore, the Complaint is premature, also holds no merit. Indisputably, the Apartment Buyer Agreement was executed between the Complainant and Opposite Party No.1 on 09.04.2015 and going by the same, the Project was required to be completed and possession handed over by 09.04.2019. However, it is not so. In view of further averments made in the reply, filed by Opposite Party No.1, it is not in dispute that as on 06.05.2019, the date when the reply was filed by the said Opposite Party, the Project was not complete, inasmuch as superstructure of only 3 Towers was complete and rest of the Towers were partially constructed. For the sake of argument, even if it is accepted that the Project was within the time, it is not the case of Opposite Party No.1 that as on date it has handed over possession to some Buyers in the Project, after the withdrawal of the Complainant from the Project. In such a situation, the withdrawal by the Complainant from the Project has not made any difference and, therefore, it cannot be accepted that the Project was within time and the Complaint is premature. The request for refund of the amount was made by the Complainant when she noticed that there was no progress in the Project and the possession was not possible in near future.

As regards the plea that the Project was required to be completed within the aforesaid period of 48 months, subject to the Complainant complying with her obligations and Force Majeure conditions and reasons, such as delay on the part of Government Authorities in granting necessary Approvals/Sanctions, it may be noted that while there is no denial in its reply by Opposite Party No.1 that it had raised any demand to the Complainant, after she made last payment on 16.04.2015, the Opposite Parties were not expected to launch the Project before obtaining necessary Approvals/Sanctions from the concerned Authorities.

Further, the plea that construction work was severally affected on account of various reasons, such as slowdown in the Real Estate Market, non-acquisition of approach roads by Noida Authority, Farmers' protest and agitation, demonetization, NGT orders etc., stands negated by a catena of decision of this Commission. It is for the Purchasers either to wait for possession or seek refund of the amount deposited, in accordance with law. Accordingly, the Complainant is justified in seeking refund of the amount deposited by her, more so when the Project is still not complete, and as noted above, the possession has not been handed over to any Buyer in the Project.

Insofar as the plea that refund would deplete the funds for completion of the Project, is concerned, Opposite Party No.1 was required to adhere to the stipulations agreed to in the Agreement executed with the Buyers for completion of the Project. If the Project is complete and the Buyers are withdrawing from the Project, then the Developer can proceed as agreed to between the parties in the Agreement executed between them. However, in the present case the situation was not so and the Complainant had withdrawn from the Project before expiry of the agreed period of 48 months because there was no considerable development in the Project and no demand had been made by Opposite Party No.1. Accordingly, the Complainant was not estopped from seeking refund of the amount deposited by her, even if the refund results in depletion of funds meant for construction/development of the Project.

As far as Registration of the Project with the Uttar Pradesh Real Estate Regulatory Authority is concerned, vide order dated 15.04.2019 passed in Complaint Case No. 1764 of 2017 (Ajay Nagpal Vs. Today Homes & Infrastructure Pvt. Ltd.) and other connected Cases, it has been held that the provisions of Consumer Protection Act, 1986 are not at all affected with RERA coming into force and the Consumers are at liberty to file the Complaints before the Consumer Fora and merely because the Project of the Developer has been registered under the RERA would not come in the way of the Consumers under the Consumer Protect Act, 1986. Recently, the Hon'ble Supreme Court in Writ Petition (Civil) No. 43 of 2019 (Pioneer Urban Land and Infrastructure Ltd. & Anr. Vs. Union of India & Ors. and other connected matters) decided on 09.08.2019, has also held that the provisions of the Consumer Protection Act, 1986 are in addition and is not hit by the provisions of RERA. Accordingly, the present Complaint is maintainable before the Consumer Fora.

The plea of Opposite Party No.1 that most of the Buyers did not make timely payment, is also of no use. Bearing in mind the fact that the Project was required to completed within a fixed time period, the Developer could have cancelled the allotment in respect of such Buyers and take further action as regards re-allotment and refund to the said Buyers, in terms of the Agreements executed with those Buyers, but, the Developer cannot deny refund of the amount deposited by the Complainant on the aforesaid ground, as she had sought for the same in view of peculiar facts and circumstances of this case.

As regards "zero period" eligibility of the Opposite Parties till 08.01.2018, when the land for the Project was given, it is reiterated that the Opposite Parties were expected to launch the Project only after completing necessary formalities and taking necessary Sanctions/Approvals, including the land, from the Authorities concerned. In this case, when the basic land (which had been given to the Opposite Parties after 7 years in the year 2018) was not available with the Opposite Parties, what so say about obtaining necessary Sanctions/Approvals (which were admittedly obtained in the year 2014), the Opposite Parties were not justified to launch the Project and, therefore, cannot deny refund of the amount deposited by the Complainant on account of "zero period" eligibility.

Coming to the defence taken by Opposite Party No.2, it is found that in its reply nowhere it has been denied that the said Opposite Party had not marketed the Project, for and on behalf of Opposite Party No.1. In this view of the matter, even if the pleas taken by Opposite Party No.2 are taken as gospel truth, both the Opposite Parties are jointly and severally liable to comply with the directions, which may be passed in the present Complaint.

In view of the foregoing discussions, the conclusion is that the Complainant is entitled for refund of amount deposited by her with the Opposite Parties with some reasonable compensation. In my considered opinion, refund of the amount, along with compensation in the form of simple interest @ 10% per annum would meet the ends of justice.

Accordingly, the present Complaint is partly allowed, with a direction to both the Opposite Parties to jointly and severally refund the entire amount of ₹26,22,222/-, collected from the Complainant, with compensation in the form of simple interest @ 10% per annum from the date of respective deposits till realization, as also Rs.25,000/- towards litigation costs, within a period of two months from today, failing which the compensation payable on the amount of refund will be at the rate of 12% per annum.