Sujeet Jain vs M/s DB Realty Limited

Heard Mr. Gopal Jain, Senior Advocate, assisted by Ms. Sonam Gupta, Advocate, for the complainant and Mr. Sukumar Pattjoshi, Senior Advocate, assisted by Ms. Swati Sinha, Advocate, for opposite party.

Sujeet Jain has filed above complaint for directing the opposite party to pay (i) Interest @21% per annum, on the total cost of Rs.31813151/-, for the delay in delivery of possession of the Flat No.-B-2201, (ii) Rs.20/- lacs, as compensation, for mental agony and harassment and (iii) any other relief which may be deemed fit and proper in the facts and circumstances of the case.

The complainant stated that M/s. D B Realty Limited (the opposite party) 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. The opposite party launched a project of group housing in the name of “Orchid Woods” (now named as “D B Woods”) at Gokuldham, Goregaon East, Mumbai-400063, in the year 2009. The opposite party propagated and represented that the said project would be completed in all respect with amenities and possession would be handed over till 30.06.2011. The complainant was in need of a 4BHK flat in that locality for his own use. The complainant booked a 4BHK flat on 25.08.2011 and deposited booking amount of Rs.15/- lacs on 25.08.2011 and 30.09.2011 through two cheques. The opposite party allotted Flat No.B-2201, carpet area 1609.59 sq.ft., total cost of Rs.29353100/- on 30.09.2011.  Out of remaining sale consideration, Rs.208/- lacs was payable till 15.12.2011, Rs.18/- lacs was payable till 15.03.2012 and balance amount of Rs.3853100/- was payable at the time of offer of possession as per payment schedule supplied along with allotment letter. Agreement for Sale was executed on 26.12.2011. Vide clause-14 of the agreement due, date of possession was 30.06.2012. The complainant made timely payment of remaining instalments but the construction was delayed. The opposite party vide email dated 05.10.2013, informed that construction was completed and internal finishing work was in progress and possession would be delivered from January, 2014. The opposite party issued Letter for Possession dated 25.03.2015 and handed over possession on 21.04.2015. The opposite party did not give any compensation for delay in possession. Under the agreement, the complainant had to pay interest @21% per annum, if payment of the instalment is not made on due date as such the complainant was also entitled for same rate of interest on his deposit as compensation for delay in giving possession. The complainant filed CC/859/2017 and CC/860/2017, seeking compensation within the limitation as provided under Section 24-A of Consumer Protection Act, 1986, which were got dismissed on 19.04.2017, with liberty to file fresh complainants. Thereafter, this complaint was filed on 08.06.2017.

M/s. D B Realty Limited (the opposite party) filed its written reply on 21.09.2017 and contested the complaint. It has been stated that Gokuldhan Real Estate Development Company Pvt. Ltd. was amalgamated with D. B. Realty Limited w.e.f. 01.04.2013, as per order of High Court of Judicature at Bombay dated 16.10.2015, which has been taken on record by Registrar of Companies on 23.12.2015. After being satisfied with the project “Orchid Woods”, the complainant booked tow 2BHK flat Nos. C-2801 and C-2802 and Agreement for Sale was executed this respect of it on 25.03.2010. Thereafter the complainant booked a 4BHK flat and deposited booking amount on 25.08.2011 and 30.09.2011 through two cheques. The opposite party allotted Flat No.B-2201, carpet area 1609.59 sq.ft., total cost of Rs.29353100/- on 30.09.2011, in B wing of the building “Orchid Woods”. Agreement for Sale was executed between the parties on 26.12.2011 and was registered as per MOFA Act. The opposite party obtained ‘occupation certificate’ on 23.12.2014 and issued possession letter to the complainant on 25.03.2015. After completing formalities, possession was handed over on 21.04.2015 to the complainant over all the three flats. Thereafter, the complainant let out Flat No.-C-2802 to Jasmeet Singh Sidhu on 25.02.2016 on the rent of Rs.47000/- per month and Flat No.-C-2801 to Mitesh Dabrai on 29.03.2017 for the rent of Rs.48500/- per month. From these facts, it is proved that the complainant had not purchased these flats for his own residence rather it were purchased for commercial purpose as such the complainant is not a ‘consumer’ and the complaint is not maintainable. After signing satisfaction letter dated 25.03.2015, which also contained a clause that the complainant left with no claim against the builder, he cannot claim compensation for delayed possession, after expiry of about two years. According to the complainant, he paid total Rs.29353100/- for the flat and he has claimed compensation of Rs.20372094/- from the builder in this complaint. No relief can be granted to the complainant on the doctrine of waiver. Out of total 630 flats, the purchasers of 585 flats have taken possession without any objection. Only 9 flat owners are demanding delayed compensation. The construction was delayed for the reasons (i) Due to non-availability of sand as mining was banned in Coastal Regulated Areas across the State of Maharashtra. (ii) Bombay High Court in PIL No.138 of 2006 banned mining operation of stones, which was finally lifted in February, 2014. (iii) Quarrying of stones was simultaneously banned by Environment Ministry. Due to which State Environment Impact Assessment Authority withheld clearance of Stone Quarrying. (iv) Steep increase in price of stone, sand, steel, cement and other building materials. Despite above problems, the opposite party completed construction of three towers of “DB Woods” in May, 2012 and applied for issue of “Occupation Certificate”, which was received on 23.12.2014. Delay in offer of possession had occurred for the reasons beyond the control of the opposite party. Due to delay, the opposite party offered the complainant for refund of his amount along with interest @9% per annum as per the provisions of MOFA, which was not accepted by the complainant. It has been denied that the opposite party has committed any unfair trade practice.

The complainant filed Rejoinder Reply on 20.02.2018, in which, the facts stated in the complaint were reiterated. He stated that “Jodi flats” were booked on 23.03.2010 and another 4BHK flat was booked on 30.09.2011 and were not bought together. “Jodi flats” were booked for future residential requirement of his elderly father, unmarried sister and elderly in-laws. The complainant is residing in 4BHK flat after taking its possession as prior to it he was living in a rented accommodation. “Jodi flats” were booked on two conditions namely (i) The opposite party would remove common wall of two flats end to end, including balcony wall and (ii) Possession would be delivered till 30.06.2011. But the opposite party failed to satisfy both the above conditions. The opposite party unnecessarily furnished kitchen in Flat No.-C-2801 although the complainant vide letter dated 28.07.2011, clearly told for not to furnish kitchen in this flat. 80-85% of total costs of these flats were deposited taking home loans from the banks/Financial Institutions/Housing Finance Corporations, mortgaging the flats and the complainant was paying EMI. Satisfaction letter dated 25.03.2015 has no binding effect, as being one sided and arbitrary. The opposite party has failed to prove any exceptional cause beyond their control to delay the construction. The delay was caused due to shortage of fund as admitted in the minutes of meeting dated 27.09.2014 by Mr. Vinod Goenka, CMD, who in his letter dated 21.06.2014 also admitted that internal finishing work was not completed and in his letter dated 27.09.2014 apologised to the flat owners for delay in construction.

The complainant filed Affidavit of Evidence of Sujeet Jain and various documentary evidence. The opposite party filed Affidavit of Evidence of Vijender Sharma and various documentary evidence. Both the parties filed their short synopsis. The complainant filed his Affidavit on 26.11.2021 in CC/1657/2017, admitting that both the Flat Nos.-C-2801 and C-2802 along with its parking spaces had been sold by the complainant on 29.07.2019, for Rs.233/- lacs and Rs210/- lacs. But stated that he was not doing business in real estate.

We have considered the arguments of the parties and examined the record. This Commission in Jag Mohan Chhabra Vs. DLF Universal Ltd. 2007 (2) C.P.C. 733 [affirmed by Supreme Court in Civil Appeal No.6030-6031 of 2008 Jag Mohan Chhabra Vs. DLF Universal Ltd., (decided on 29.09.2008)], Chilkuri Adarsh Vs. M/s. Ess Ess Vee Constructions, 2012 SCC OnLine NCDRC 301, Satish Kumar Gajanand Gupta Vs. M/s. Srushti Sangam Enterprises (India) Ltd., 2012 SCC OnLine NCDRC 311, Ms. Saavi Gupta Vs. M/s. Omaze Azorim Developers Pvt. Ltd., 2012 SCC OnLine NCDRC 670, Ved Kumari Vs. M/s. Omaxe Buildhome Pvt. Ltd., 2014 SCC OnLine NCDRC 120, Smt. Madhu Saigal Vs. M/s. Omaxe Buildhome Pvt. Ltd., 2014 SCC OnLine NCDRC 134, Sunil Gupta Vs. Today Homes & Infrastructure Pvt. Ltd., 2014 SCC OnLine NCDRC 269, Indrajit Dutta Vs. Samriddhi Developers Pvt. Ltd., 2015 SCC OnLine NCDRC 961, Dr. Pramod Kumar Arora Vs. DLF Homes Panchkula Pvt. Ltd., 2015 SCC OnLine NCDRC 3098, M/s. TDI Infrastructure Pvt. Ltd. Vs. Rajesh Jain, 2015 SCC OnLine NCDRC 4656, Manohar Damecha Vs. Lavasa Corporation Ltd., 2016 SCC OnLine NCDRC 764 and CC/567/2015 Rohit Kapoor Vs. BPTP Ltd. (decided on 07.12.2017), in which more than one unit of residential flat/villa were purchased and this Commission held that the purchases were for commercial purpose and the complainant was not a ‘consumer’. However, this Commission in Kavita Ahuja Vs. Shipra Estate Ltd., 2015 SCC OnLine NCDRC 930, held that the complainant had purchased of three residential flat for herself and her family members, is not a commercial purpose. In FA/1287/2014, Rajesh Malhotra Vs. Acron Developers (decided on 05.11.2015), Jiwan Kant Jain Vs. Vatika Ltd., 2016 SCC OnLine NCDRC 1424, Pranab Basak Vs. Suhas Chatterjee, 2017 SCC OnLine NCDRC 6, Pranav Mittal Vs. M/s. Dynamic Infrastructure (P) Ltd., 2017 SCC OnLine NCDRC 140, Akshay Sood Vs. M/s. Pal Infrastructure & Developers Pvt. Ltd. 2017 SCC ONLine NCDRC 328,  Sai Everest Developers Vs. Harbans Singh Kohli, 2015 SCC OnLine NCDRC 1895, in which the complainant purchased more than one flat for his purpose or for the purpose of his family, was held as the consumer. In FA/783/2015 Col. Kuldeep Singh Vs. EMAAR MGF LTD. (decided on 11.01.2018) in which, the complainant owned one house and booked one flat for the purposes of letting was not held as the commercial purpose.

The word “consumer” has been defined under Section 2 (1) (d) and word “service” has been defined under Section 2 (1) (o) of the Consumer Protection Act, 1986, (hereinafter referred to as the Act) which are quoted below:-

Section-2 (1) (d).- “consumer” mean any person who,-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such use is made with approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails such services for any commercial purpose;

Explanation.- For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning livelihood by means of self employment.

Section 2(1) (o):- “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

The term “housing construction” has been added by Act No.50 of 1993, under Section-2(1) (o) of the Act. Earlier the Explanation was added by Act No. 50 of 1993 w.e.f. 18.06.1993 under Sction-2(1) (d) (i) of the Act. By Act No. 62 of 2002, w.e.f. 15.03.2003, Section-2(1) (d) (ii) was also amended and the term “but does not include a person who avails such services for any commercial purpose” has been added in it and the Explanation was placed in last. Scope of the Explanation as well as expressions “commercial purpose” and “the purposes of earning livelihood by means of self-employment” came up for consideration before Supreme Court in relation to purchase of goods in Laxmi Engineering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583. In which, it has been held that the Explanation was an exception to an exception. Expression “commercial purpose” has not been defined, as such, its dictionary meaning has to be taken into consideration. “Commerce” means financial transaction, especially buying and selling of merchandise on large scale. As in the Explanation, the purposes of earning livelihood by means of self-employment, has been excluded from the purview of commercial purpose as such purchase of commercial goods for earning livelihood by means of self-employment, will not exclude such buyer from the purview of the “consumer” so long as it is used by the buyer or his family members or with the help of one or two other persons. It is question of fact and has to be decided in each case independently. In this case, three generator sets were purchased for the purposes of the factory by the complainant and it was held that it was for commercial purpose. In Lilavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developer, (2020) 2 SCC 265, where more than one flats were purchased for personal use by the trust, who was engaged in commercial activities, was held as the consumer.

A four Members Bench of this Commission in Synco Textiles Pvt. Ltd. Vs. Greaves Colton & Company Ltd., 1990 SCC OnLine NCDRC 3, held that the expression “for any commercial purpose” are wide enough to take in all cases, where goods are purchased for being used in any activity directly intended to generate profit. Going to the plain dictionary meaning of the words used in the definition section, the intension of the Parliament must be understood to be to exclude from the scope of the expression ‘consumer’ any person who buys goods for the purposes of their being used in any activity engaged on a large scale for the purposes of making profit. The Parliament wanted to exclude from the scope of the definition not merely persons who obtains goods for resale but also those who purchase goods with a view of using such goods for carrying on any activity on a large scale for the purposes of earning profit. This judgement has been approved in Laxmi Engineering’s case (supra). This Commission in M/s. Grand Venezia Buyer’s Association Vs. M/s. Grand Venezia Commercial Tower Pvt. Ltd., 2017 SCC OnLine NCDRC 1644, held that buying commercial space for the purposes of leasing and earning rent was commercial purpose.

In view of the aforesaid case law, the number of flat purchased are not decisive. In view of the Explanation to Section 2 (1) (d) of the Act, the purpose for purchasing Flat No.-B-2201 has to be examined, for deciding as to whether the complainant is ‘consumer’ within the meaning of the Act or not. The complainant has stated that after taking possession of Flat No.-B-2201, the complainant or his family members are residing in it. As such, it is proved that the complainant had purchased Flat No.-B-2201 for self-use and is a consumer.

The opposite party took plea that after signing satisfaction letter dated 25.03.2015, which also contained a clause that the complainant left with no claim against the builder, the complainant cannot claim compensation for delayed possession, after expiry of about two years. The complainant does not dispute signing of satisfaction letter dated 25.03.2015 but took plea that while getting signature on possession letter, the term “no claim against the opposite party except claim if any under the defect liability” has been surreptitiously added in it. Due dated of possession was 30.06.2016, while possession letter was issued on 25.03.2015. There was unreasonable delay in issuing possession letter. The complainant was residing in a rented accommodation and was paying rent. For taking possession, he had signed satisfaction letter dated 25.03.2015, which was one sided and arbitrary clause and it is not binding. Supreme Court in Central Inland Water Transport Corporation Vs. Brojo Nath Ganguly, (1986) 3 SCC 156, Pioneer Urban Land & Infrasture Ltd. Vs. Govind Raghavan, (2019) 5 SCC 725, held one sided and arbitrary clauses in the agreement are not binding.

Clause-14 of the agreement is quoted below:-

“14. The developer shall offer possession of the said flat/shop/office to the purchaser before 30th day of June 2012. Provided always that the Developer shall be entitled to reasonable extension of time, if the completion of the said building and or receipt of Occupation Certificate thereof from BMC is delayed on account of situation beyond the control of the Developer including non-receipt or in ordinate delay in receiving payment of instalment/s from the purchaser herein and/or purchaser of other flat/shop/office in the said building as also on account of,

a) non-availability of steel, cement, other building material, water or electric supply;

b) war, civil commotion or Act of God;

c) any notice, order, rules, notification of the Government and/or other public competent authority or Court/s;

d) any force majeure or vis majeure cause or circumstances.”

The grounds taken by the opposite party for delay in offer of possession, in written reply is not covered the aforesaid clauses except delay in issue of Occupation Certificate. The causes of delay as shown in the written reply existed prior to the agreement dated 26.12.2011 and are irrelevant. The opposite party did not take any plea that the complainant was defaulter in payment of instalment.

Supreme Court in Wg. Cdr. Arifur Rahman Khan Vs. DLF Southern Homes Pvt. Ltd. (2020) 16 SCC 512 held that buyer is entitled for delayed compensation in the shape of interest @6% per annum on his deposit for the delayed period.  In the present case, due date of possession was 30.06.2012 and the builder applied for occupation certificate on 23.12.2014 as such for this period the complainant is entitled for interest on his deposit.

ORDER

In view of the aforesaid discussions, the complaint is partly allowed.  The opposite party is directed to pay interest @6% per annum on the deposit of the complainant from 01.07.2012 till 22.12.2014 within a period of two months from the date of judgment.