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Judgment
Sudip Ahluwalia, Member
This Complaint has been filed under Section 21(a)(i) of the Consumer Protection Act 1986, seeking refund of the deposited amount due to delay in offering possession, along with other ancillary reliefs.
The factual background in brief, is that the Complainants entered into a booking agreement with the Opposite Party for an apartment in the "Eminence Kimberly Suites" project in Gurugram, Haryana. They applied for the apartment on 23.05.2012, and a Builder-Buyer Agreement was executed on 13.08.2013. Under this agreement, the Complainants were allocated Unit No. 804 on the 8th floor of Tower B, with a total area of 795 square feet. The total consideration for the unit amounted to Rs. 56,90,100/-, out of which the Complainants had paid Rs. 53,43,169/-. The Agreement, however, contained several clauses that were heavily biased in favor of the Opposite Party. Moreover, the Agreement was presented to the Complainants only after they had made a substantial payment, and refusal to sign it would have resulted in cancellation of the allotment and forfeiture of the Ernest money. According to Clause 27 of the Agreement, possession of the apartment was to be handed over to the Complainants within 36 months from the commencement of the construction, specifically from the start of the ground floor roof slab of the tower. While demands for payments were made for the stilt floor and the 3rd floor levels on 02.01.2014 and 12.06.2014, respectively, the construction was not completed by the promised date of 12.06.2017, despite the Complainants having made full payment. The Complainants had specifically purchased the apartment for the purpose of using it as their home while they were residing abroad, intending to avail themselves of a professionally managed service apartment. Clause 33 of the agreement provided for compensation to the Complainants at the rate of Rs. 15/- per square foot per month for any delay in possession. However, the Complainants regard this compensation clause to be manifestly arbitrary, especially given the fixed sum offered. Despite multiple requests and communications, the Opposite Party failed to provide possession of the apartment. Consequently, after years of delay and the Complainants being forced to make alternative living arrangements, they sought a refund of the entire amount deposited, along with interest, through the present complaint.
The Complainants have therefore prayed as follows
a. Direct the O.P to refund the entire amount collected from the complainants towards the apartment sale consideration along with compensation in form interest @18% p.a. on the amount paid by complainants from the date of collection of each amount till it is actually returned to the complainants.
b. Direct the O.P.to pay a sum of Rs.5,00,000/- (Rupees five lakhs only) to the complainants towards mental agony and harassment.
c. Direct the O.P to pay a sum of Rs.1,00,000/- to the complainants towards the cost of litigation.
d. Any other order(s) as may be deemed fit and appropriate may also kindly be passed.
Ld. Counsel for the Complainants has argued that the possession of the flat offered by the Opposite Party on 24.07.2019 was inordinately belated and lacked compensation for the years of delay. Besides, even the basic facilities such as electricity and water were not provided, making the offer of possession merely symbolic and an attempt by the Opposite Party to evade liability for the delay compensation; That the Clause Nos. 3 and 16 of the Occupancy Certificate dated 11.07.2019 clearly state that the Opposite Party was required to apply for electricity and sewage connections within 15 days, which itself shows that these basic amenities were not available at the time the Occupancy Certificate was granted; That the extension letter dated 12.06.2019 issued by Haryana RERA, as admitted by the Opposite Party, also acknowledges that the project was not complete in all respects; That upon visiting the project site in the last week of July 2019, after receiving the offer of possession, the Complainants found that the project was far from complete. Basic construction work, such as plastering, was unfinished, and promised amenities like swimming pools, gyms, yoga centers, and café lounges were non-functional. Even the construction update from the Opposite Party's website for the month of July 2019 confirms that the project was not habitable at the time the possession was offered; That in light of these circumstances, the delay in offering possession, coupled with the lack of basic amenities and incomplete construction, constitutes a deficiency in service on the part of the Opposite Party. This argument is supported by the judgment of the Honble Apex Court in "M/s Chintels India Ltd. v. Sangeeta Agarwal & Anr.", where it was held that delay in offering possession, even if there was a delay in obtaining Completion Certificate/Occupancy Certificate, constitutes a deficiency in service.
Heard the Ld. Counsel for the Complainants and the Opposite Party, and perused the material available on record.
The Written Version which was filed on behalf of the Opposite Party was not taken on record on account of the delay, vide the detailed Order passed by the then Hon'ble President on 27.5.2022.
It has, however, been contended on behalf of the Opposite Party that even according to Clause 25 of the original Buyer's Agreement entered into by the parties on 13.8.2013, it was clear that the service Apartment in question had been booked for commercial/rental purpose on account of which the Complainant could not have been a 'Consumer' within the meaning of Section 2(1) (d) of the Consumer Protection Act, 1986.
But, this submission at this stage cannot be considered since it is a matter of record that earlier IA No. 6581 of 2021 had been filed on behalf of the Opposite Party seeking dismissal of the Complaint on the self same ground that the Complainants are not 'Consumers' and reliance had been placed upon the same Clause 25 of the Apartment Buyers Agreement. Such application was however dismissed by the Division Bench hearing the matter on 30.1.2023 vide the Order passed on that date, in which the contents of the Clause 25 were also noted, and the Division Bench ultimately observed, ".....Admittedly, there is nothing on record to prove that the Complainants have entered into an Agreement with the Opposite Party giving their consent to let out their Unit for the purpose of Hotel. This argument is therefore misconceived and IA is rejected.....".
The aforesaid Order has, by now, attained finality since it was never challenged on behalf of the Opposite Party. Consequently, it cannot agitate at this stage that the Complainants are not 'Consumers'.
Even if the defence of the Opposite Party had not been struck off by not accepting their Written Version, still it is undeniable that there was an inordinate delay in offering possession of the Apartment to the Complainants notwithstanding that the Occupation Certificate had been issued by the Competent Authority on 11.7.2019. This is so because according to Clause 27 of the Apartment Buyer's Agreement, the time permissible for possession of the Unit was 36 months with a further grace period of 06 months the Agreement was dated 13.8.2013. Consequently, even including the grace period of 06 months the possession ought to have been delivered by February, 2017 at the latest. So there was already an inordinate delay of over 2 years and 5 months by the time the Occupation Certificate was purportedly issued.
The Complainants were therefore well within their right to seek refund of the money paid by them towards purchase of the concerned dwelling Unit.
Considering the facts of the present case as well as the reliefs claimed, it is appropriate to place reliance on the Order of the Honble Apex Court in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, 2019 SCC OnLine SC 458, the relevant extracts of which are set out as below -
8. We also reject the submission made by the appellant builder that the National Commission was not justified in awarding interest @10.7% SI p.a. for the period commencing from the date of payment of each instalment, till the date on which the amount was paid, excluding only the period during which the stay of cancellation of the allotment was in operation. In BDA v. Syndicate Bank [BDA v. Syndicate Bank, (2007) 6 SCC 711] a Coordinate Bench of this Court held that when possession of the allotted plot/flat/house is not delivered within the specified time, the allottee is entitled to a refund of the amount paid, with reasonable interest thereon from the date of payment till the date of refund.
In the present case, the National Commission has passed an equitable order. The Commission has not awarded any interest for the period during which the order of stay of cancellation of the allotment was in operation on the request of the respondent flat purchaser. The National Commission has rightly awarded interest @10.7% SI p.a. by applying Rule 15 of the Haryana Real Estate (Regulation and Development) Rules, 2017 from the date of each instalment till 5-2-2017 i.e. till the date after which the order of stay of cancellation of the allotment was passed; and thereafter, from the date of the Commission's final order till the date on which the amount is refunded with interest.
We see no illegality in the impugned order dated 23-10-2018 [Geetu Gidwani Verma v. Pioneer Urban Land and Infrastructure Ltd., 2018 SCC OnLine NCDRC 1164] passed by the National Commission. The appellant builder failed to fulfil his contractual obligation of obtaining the occupancy certificate and offering possession of the flat to the respondent purchaser within the time stipulated in the agreement, or within a reasonable time thereafter. The respondent flat purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the agreement expired. During this period, the respondent flat purchaser had to service a loan that he had obtained for purchasing the flat, by paying interest @10% to the Bank. In the meanwhile, the respondent flat purchaser also located an alternate property in Gurugram. In these circumstances, the respondent flat purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with interest...
As noted above, the delay of over 2 years certainly entitles the Complainants for refund of their deposited amount. However, with regard to the 18% interest that has been prayed for in the complaint, this Commission is of the view that 9% interest is appropriate in view of the Honble Apex Courts judgment in Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, (2022) 15 SCC 286, the relevant extract of the judgment are set out as below
32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318] and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.
For the aforesaid reasons, the Complaint is partly allowed with the following directions
a. The Opposite Party shall refund to the Complainants the deposited amount of Rs. 53,43,169/- along with simple interest @ 9% p.a., from the date of each respective deposit, till the date of realization within two months from the date of passing of this Order;
b. In the event of non-compliance of this Order within the aforesaid time, the outstanding amount to be paid shall attract a penal interest of 12%;
c. The Opposite Party shall pay to the Complainants an amount of Rs. 50,000/- towards mental agony and litigation costs.
Pending application(s), if any, also stand disposed off as having been rendered infructuous.