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Judgment
Dr.Inder Jit Singh, Member
These two Consumer Complaints (CCs) have been filed by the Complainant(s) against Opposite Parties as detailed above, inter alia praying for following directions:-
Prayers in CC 1041 of 2016
i. To hold and declare OPs guilty of deficiency in service as well as unfair trade practice under the provision of said Act;
ii. Restrain cancellation of the allotment of apartment and to forfeit the amounts deposited with OP based on illegal demands;
iii. Direct the OPs to pay costs/compensation of Rs. 2,00,29,554/- as detailed below;
a. Refund of the total amount deposited with the OPs – Rs. 84,80,215/-
b. Interest @ 18% p.a. on Rs. 84,80,215 from 08.03.2013 to 31.03.2016 – Rs. 26,69,124/-
c. Opportunity loss suffered – Rs. 84,80,215/-
d. Damages for mental agony and pain – Rs. 3,00,000/-
e. Towards expenses on telephone consultancy, postage, traveling Rs. 1,00,000/-
(iv) Direct the OPs to pay interest @ 18% p.a. on sum of Rs. 2,00,29,554/- from 01.06.2016 till the realization of the same in full;
Prayers in CC 1042 of 2016
i. To hold and declare OPs guilty of deficiency in service as well as unfair trade practice under the provision of said Act;
ii. Restrain cancellation of the allotment of apartment and to forfeit the amounts deposited with OP based on illegal demands;
iii. To pay back the amount deposited of Rs.70,088,077/-;
iv. To pay interest @ 18% p.a. on sum of Rs. 70,88,077/- from 01.06.2016 till realization of same in full;
v. To direct the OP to pay an amount of Rs. 3,00,000 towards compensation, mental agony and cost of the complaint and further an amount of Rs. 1,00,000 towards incidental expenses incurred by the complainants.
Since the facts and question of law involved and the reliefs prayed for in these complaints are similar/identical and against the same Opposite Parties except for minor variations in the dates, events, amount involved and flat numbers etc., which are summarized in the Table at Annexure-A, these complaints are being disposed off by this common order. However, for the sake of convenience, Consumer Complaint (CC) No. 1041 of 2016 is treated as the lead case and facts enumerated herein under are taken from CC 1041/2016.
Notice was issued to the OP(s) on 29.08.2016. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in the Table at Annexure-A. The details of the flats allotted to the Complainant (s)/other relevant details, based on pleadings of the parties and other records of the case are also given in the Table at Annexure-A.
It is averred/stated in the Complaint that:
i. The complainant booked an apartment on 08.03.2013 in a project called “Sovereign Park” in sector 99, Gurugram, Haryana developed by OP-1 and OP-2. OP-1 allotted a Unit No. 1001, Tower-A with a super area of 2610 sq. ft. at a total sale consideration of Rs. 2,37,95,200/-. The BBA was executed on 01.08.2014 and possession was to be handed over within a period of 48 months i.e. by 31.07.2018. That the complainants paid a sum of Rs. 84,80,215/- till 19.02.2016.
ii. On 09.03.2015, the OPs issued and Addendum to the said BBA changing status and constitution of parties without knowledge and notice of complainants. M/s Vatika Ltd. Changed its as M/s Vatika Sovereign Park Pvt. Ltd. Similarly M/s Planet Earth Estate Pvt. Ltd. who were earlier owner of land and confirming party to the agreement was substituted by M/s Vatika Ltd. The complainants were informed that the site visit could only be possible at the time of handing over the possession of apartment. That the complainants out rightly rejected involvement of any third party in BBA dated 01.08.2014 and changes made in the legal status of parties without their written consent. The acceptance of payments made in the name of M/s Vatika Ltd. and issuance of receipts by M/s Vatika Sovereign Park Pvt. Ltd. was an open cheating and criminal misappropriation of funds.
iii. That the OPs started sending threatening calls to deposit instalments with M/s Vatika Sovereign Park Pvt. Ltd. failing which the allotment of apartment will be cancelled and deposited amounts will be forfeited. It is clear case of negligence and deficiency in the manner of performance of contract on part of OPs.
The OPs in their written statement/reply stated that:
i. The present complaint suffers from vice of misjoinder of necessary parties. OP-2 is known as Vatika Sovereign Park Pvt. Ltd. since 07.11.2014 as can be seen from certificate issued by Registrar of Companies, Delhi under Rule 29 of Companies Rules, 2014, a copy of which is filed as Annexure I. Despite being aware of same and aforesaid being in public record, complainants have filed the present compliant against Planet Earth Estates Pvt. Ltd., which name does not exist anymore. The complaint is not maintainable before this Commission since complainants paid a sum of Rs. 84 lacs towards cost of apartment in question and have defaulted in rest. They have not sought relief of possession as they want to wriggle out of the contract on superfluous grounds. The said sum is far below the pecuniary jurisdiction of this Hon’ble Commission.
ii. The complainants are not consumers as they are speculators who had booked the apartment in question for purpose of speculation and to trade its booking in secondary market. Mr Ritesh Soin had booked three apartments in the same group housing project of OP. The Commission noticed the frivolous nature of complaint and observed the same to be premature as date of possession was August, 2018 and complainants had filed the present complaint in June, 2016 alongwith other compliant no. 1042/2016. Commission did not admit the present complaint on aforesaid grounds and had rather directed the OPs on 31.08.2016 to file an undertaking to the effect that they shall accept the payment from complainants as per BBA thus removing the very grievance alleged in both the complaints.
iii. In compliance with the said directions, OPs filed an undertaking dated 15.09.2016 of Mr. Gautam Bhalla, Managing Director of OP-1 and Director of OP-2, which is a subsidiary company of OP-1, undertaking on their behalf to fully honour the BBA and to accept all payments from the complainants in the name of OP-1 which will issue proper printed receipts in respect thereof. The addendum in question was sent to all the allottees/ executants of BBA, including complainant, to effectuate the position.
iv. The construction of the building is nearing completion and OPs will deliver the possession of apartments therein within stated date of August, 2018. The complainants are holding out such excuses and making wild and unsubstantiated allegations with malafide motives.
Heard counsels of both sides. Contentions/pleas of the parties, based on their Complaint/Reply, Rejoinder, Evidence, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
The main reason for seeking refund by complainants is the alleged material alterations in the legal position of parties without knowledge and notice of complainants by way of issuing addendums to BBA dated 01.08.2014. Complainants argued that by way of the addendum, M/s Vatika Ltd. (OP-1), who was the Developer Builder/ Vendor changed its name as M/s Vatika Sovereign Park Pvt. Ltd. and M/s Planet Earth Estate Pvt. Ltd. (OP-2), who was earlier owner of the land and confirming party to the agreement, was substituted by M/s Vatika Ltd. To this, the OPs have responded that OP-2 is a subsidiary of OP-1 and is fully controlled by OP-1. Under an inter-se and mutual arrangement between them, it was initially agreed between them that even though the land and the license and plans to construct are in the name of OP-2, OP-1, the parent/owner company, would do the development, construction and sale of apartments in the group housing colony, “The Sovereign Park”. The BBA was thus executed with the allottees accordingly in which OP-1 was the developer and OP-2 was the confirming party. Subsequently, partly due to a technical objection from DTCP, Haryana and partly due to a considered mutual decision taken by the OPs, it was decided that OP-2 would construct the group housing colony itself without, however, extinguishing the overall control of OP-1, which is even otherwise the parent company. To effectuate the above, the allottees of the project were fully briefed about the said development and were requested to sign an Addendum. Under the said Addendum, the parent company i.e. OP-1, did not withdraw itself from the contract or diluted its overall responsibility to complete the project and to hand over the same to the allottees. Rather, to give the said assurance to the allottees in black & white, OP-1, the parent company, became the confirming party in the said addendum. The addendum in question was sent to all the allottees/ executants of the BBA, including complainants, to effectuate the above position. The entire controversy raised by the complainants about the said addendum is false, frivolous, malafide and motivated. The Complainants have knowingly and deliberately tried to misinterpret/misread the said addendum. They have also falsely tried to project as if Vatika Sovereign Park Pvt. Ltd. is a new company which has substituted OP-1 , whereas Vatika Sovereign Park Pvt. Ltd. is the changed name of Planet Earth Estates Pvt. Ltd., OP-2 vide certificate issued by the Registrar of Companies, Delhi. OP-2 was the confirming party in the BBA while vide the aforesaid addendum, it became the Developer and OP-1 became the confirming party. Even otherwise, this hardly affected any allottee as OP-2 is a fully controlled subsidiary of OP-1 in terms of section 2(87) of the Companies Act, 2013 and later having majority share holding therein as well as common directorship.
We have carefully gone through the BBA dated 01.08.2014 and letter dated 09.03.2015 from OP-1 addressed to complainants vide which a draft of the addendum to BBA has been enclosed, as submitted by the complainants along with their complaint. It is true that although the copy of addendum as submitted by complainant himself, bears his signature, it does not bear the signature of authorised signatory of OPs/ their successors company. This issue was considered by the commission vide its order dated 21.07.2016. Extract of relevant portion of the order is reproduced below.
“The grievance of the complainants as it appears from the allegation is that after the execution of BBA and after having received the substantial amount from the complainant, M/s Vatika Ltd. has entered into an agreement with M/s Vatika Sovereign Park Pvt. Ltd. whereby the latter has been substituted in place of the service provider. In this regard learned counsel for the petitioners has referred to the addendum to BBA sent to him for signatures alongwith letter dated 09.03.2015. On perusal of copy of aforesaid addendum agreement we find that it bears the signatures of authorized signatory of the allottee. Learned counsel for the complainants when confronted with this fact has tried to explain that signed addendum was not sent to the OPs. This aspect needs consideration before admission of compliant. Therefore, we direct that pre-admission notice to be issued to the OPs for 29.08.2016.”
Thereafter, vide order dated 17.10.2017, the complaint was admitted. OP has not produced any copy of addendum to BBA which bears signature of both sides. Hence, it appears addendum was not signed by both sides to become legally binding agreement. Subsequent Communication between the parties also show that. We have also perused communication dated 25.03.2016 from the OP wherein it is mentioned as follows:
“In regards to the below email, we conduct site visit at the time of possession. Currently we won’t be able to accede to your request for site visit. Possession of your unit will be tentatively by October, 2018.”
We have also noted content of letter dated 09.03.2015 vide which draft addendum agreement was sent to complainants, relevant portions of which are reproduced below:
“We would request you that please sign and return the agreement within 15 days of dispatch of the said agreement by the Builder/Developer. In case of default in returning the Agreement within the assigned time, the Builder/Developer shall be constrained to terminate the booking and refund the amount paid by the allottee after deduction of earnest money, brokerage and any other non refundable charges, as specified in the terms and conditions mentioned in the said BBA.”
We have also gone through the communication dated 09.04.2015 of the complainants, wherein, in the context of OP’s letter dated 09.03.2015 regarding signature of addendum agreement, they have stated that they shall abide by the original agreement and continue to deal with Vatika Ltd. (OP-1) only, as well undertaking dated 15.06.2016 filed by the OPs, filed in pursuance to orders dated 31.08.2016 of the Commission and which was taken on record vide order dated 23.11.2016. It is stated in this undertaking that:
"That to allay the apprehensions expressed by the complainants in the instant compliant, OP-1 on behalf of the OPs undertakes to fully honour the BBA dated 01.08.2014 executed between the parties. It is also stated in the undertaking that OP-1 shall accept all the payment from the complainants towards the sale consideration of the subject apartment possession of which is to be delivered as per agreement on 01.08.2018."
However, during the hearing of 23.11.2016, the counsel for complainants stated that he is not satisfied with the undertaking because M/s Vatika Ltd. (OP-1) has entered into an agreement with a third party and transferred the interest in the entire project.
On going through the above and entire facts and circumstances of the case, we are of the view that change to BBA brought in by the OPs through addendum agreement are/will not adversely affect the interest of the complainants and their demand for seeking refund on this ground is not justified. We tend to agree with the contentions of OPs in this regard. Hence, the complainants are obligated to take possession of the unit in question, provided it is ready for possession in all respects as per the scope & specifications and provision of amenities/ facilities as promised in the original agreement and/or brochure and a valid OC issued by the competent authority as on the date of this order. (latest status of completion of construction and obtaining of OC by the OPs is not on record.)
The contention of OP(s) that this Commission lacks pecuniary jurisdiction is not valid. Under Section 21 of the Act, Commission has the jurisdiction where value of goods and services and compensation, if any, claimed exceeds Rs. one crore. The contention that complainant(s) is/are not a consumer as he/they has purchased the unit for commercial purpose is also rejected as no such evidence has been adduced by the OP(s) in this regard. It has been observed by this Commission in various cases (Kavita Ahuja Vs Shipra Estates Ltd, CC 137 of 2010, decided on 12.02.2015, Santosh Johri Vs M/s Unitech Ltd, CC 429 of 2014 and connected Cases, decided on 08.06.2015, Aloke Anand Vs M/s Ireo Grace Pvt Ltd & Others, CC no 1277 of 2017 decided on 01.11.2021) that purchase of a house can only be for a commercial purpose if the purchaser is engaged in the business of purchasing and selling houses or plots on a regular basis, solely with a view to make profit by way of sale of such houses, if the house is purchased purely as an investment and the purchaser is not undertaking the trading of houses on regular basis, then it would be difficult to say that he had purchased it for commercial purpose.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, both the Consumer Complaints viz CC 1041/2010 and 1042/2010 are disposed off with the following directions/reliefs: -
(i). The OP(s) shall hand over the actual physical possession of the unit in question to the complainants, complete in all respects as per the scope & specifications and alongwith all the facilities/amenities as promised in the brochure/original agreement, along with valid OC obtained from the competent authority, within three months of date of this order, subject to the complainants paying the balance amount as per agreement, within 45 days of this order. OP(s) shall also, within 15 days of this order arrange joint inspection of the unit with the complainants/their representative to satisfy them about the completeness of the unit as per the specifications and alongwith amenities/facilities as per brochure/agreement. If any deficiencies are noticed as a result of such joint inspection, the same shall be got rectified within 15 days of date of such joint inspection.
(ii). In case the unit is not ready for possession in all respects along with promised amenities/facilities and a valid OC, the complainant shall have the right to refund of amount deposited by him without any deductions/forfeiture of earnest money as applicable under para (iv) below, along with interest @ 9% p.a. from the date of deposit till date of refund.
(iii) OP(s) shall also be liable to pay delay compensation in the form of simple interest @6% from 01.08.2018 (Committed date of possession) till the date of obtaining a valid OC.
(iv) In case the unit is fully ready for possession with valid OC, but the complainants do not wish to seek possession of the flat in question and want refund of their money. OP shall be entitled to deduct an amount limited to a maximum of 10% of BSP towards deduction/forfeiture of earnest money. For this, the complainants shall make a specific request in writing, within 30 days of date of this order.In such a situation, the OP(s) shall refund the principal amount paid by complainants after forfeiture of 10% of BSP out of this alongwith simple interest @9% p.a. from the date of deposit till the date of refund, within 30 days of receipt of such request.
(v) Parties to bear their respective cost of litigation.
(vi) The liability of the OP(s) shall be joint as well as several. Also the successor companies of OPs shall be liable jointly as well as several.
(vii) In case the complainant(s) has/have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount (in case of refund under para 11(ii) or 11(iv) above) will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant.The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP(s) four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.
The pending IAs, in any of the Consumer Complaints, if any, also stand disposed off.
Annexure-A
Details of the Unit and other related details
Sr No
Particulars
Case No/ Complainant
Case No/ Complainant
CC/1041/2016
Subhash Chander Malik
CC1042/2016
Virendra Kumar Soin
1
Project Name/Location etc
“Sovereign Park” situated in sector 99, Gurugram, Haryana
“Sovereign Park” situated in sector 99, Gurugram, Haryana
2
Apartment no
1001, Tower-A
701, Tower- A
3
Size (Built up/Covered/Super Area)
2610 sq. ft.
2600 sq. ft.
4
Date of application
08.03.2013
08.03.2013
5
Date of allotment
27.06.2013
27.06.2013
6
Date of signing Agreement (BBA)
01.08.2014
01.08.2014
7
Committed date of possession as per Agreement (with Grace period, if any)
01.08.2018
01.08.2018
8
Total Consideration as per agreement
Rs. 2,37,95,200/-
Rs. 2,33,95,000/-
9
Amount Paid
Rs. 84,80,215/-
Rs. 70,88,077/-
10
D/o Filing CC in NCDRC
28.06.2016
28.06.2016
11
D/o Issue of Notice to OP(s)
29.08.2016
29.08.2016
12
D/o Filing Reply/Written Statement by OP(s)
09.11.2017
10.10.2016
13
D/o filing Rejoinder by the Complainant(s)
10.05.2018
30.01.2017
14
D/o Filing Evidence by way of Affidavit by the Complainant(s)
10.05.2018
10.10.2017
15
D/o Filing Evidence by way of Affidavit by the OP(s)
18.06.2018
31.10.2017
16
D/o filing Written Synopsis by the Complainant(s)
13.01.2023
24.05.2018
17
D/o filing Written Synopsis by the OP(s)
27.10.2022
18.05.2018