AI Structured Summary
Not yet generated for this judgment
Judgment
R.K. Agrawal, J., President Member
The present Appeals have been filed against the Orders dated 22.10.2021 passed by the Rajasthan State Consumer Disputes Redressal Commission Mumbai (hereinafter referred to as State Commission), whereby the State Commission allowed the Complaints filed by the respective Complainants/Respondents and directed the Opposite Parties, i.e., Unique Affordable Homes Private Limited and Unique Builders and Developers (hereinafter referred to as the Appellant Developer) to refund the amount deposited by the respective Complainants/Respondents alongwith interest @10% p.a. with effect from the date of respective date of deposit till realization. The Opposite Parties were also directed to pay ₹2,00,000/- towards compensation of for mental agony and ₹50,000/- towards cost of litigation.
Since the facts and questions of law involved in all these Appeals are similar, these Appeals are being disposed off through this common Order. However, for the sake of convenience, FA No. 275 of 2022 is treated as the lead case and the facts enumerated hereinafter are taken from Consumer Complaint No. 54/2020.
Brief facts of the case as enumerated in CC No. 54/2020 are that the Appellants Developer had launched a Residential Housing Project under the name and style of “My Haveli” (hereinafter referred to as the Project) located at Village Ramchandrapura, Ajmer Road, Tehsil Sanganer, District Jaipur in the year 2008. Alluring by the assurance and information by the Appellants, the Complainant/Respondent herein, by paying a sum of ₹3,60,000/- towards booking amount to the Appellants on 05.03.2012, booked a 3 BHK Luxury Flat No. 5618 at 6th Floor in Tower A of the Project for a total sale consideration of ₹28,57,500/-. Agreement to Sell (hereinafter referred to as the Agreement) was executed between the Parties on 08.04.2013. It is the say of the Complainant that at the time of booking, he was assured that the possession of the Flat would be handed over in the month of December, 2015 but as per terms of the Agreement, the delivery of the possession was to be offered after expiry of 60 months alongwith a grace period of 12 months from the date of Agreement, i.e., by 07.04.2019. It was also averred that although most of the terms of the Agreement were unfair, one-sided and only in favour of the Appellants, yet the Respondent/Complainant had to sign the said Agreement under the threat of forfeiture of earnest money. The Respondent/Complainant had deposited 90% of the sale consideration, i.e., ₹24,79,397/- on different dates upto 15.07.2015 as per demand of the Appellants Developer. Despite that the Appellants Developer miserably failed to deliver the possession of the Flat upto December 2015, i.e., assured time. Rather the Appellants could not complete the construction nor delivered the possession till 07.04.2019, i.e. even after expiry of 12 months of grace period as per terms of the Agreement. Alleging deficiency in service on the part of the Appellants, Consumer Complaint was filed before the State Commission seeking directions to Appellants to refund the amount of ₹25,14,087/- alongwith interest @18% p.a. from the date of respective payments; to pay a sum of ₹10,00,000/- as compensation for mental and physical harassment; ₹2 lakh towards Advocate Fee alongwith ₹25,000/- as litigation expenses.
The Appellants contested the Complaint before the State Commission by submitting that the present Complaint is not maintainable as the Complainant had booked the flat for investment purpose; as per terms of the Agreement the Appellants were liable to deliver the Possession of the Flat by 07.04.2019 but the delay caused due to demonetization, stay order on Bajri mining, Covid-19 Pandemic outbreak in the month of 2020. It was contended that they offered the possession on April 2021 after completion of construction but the Respondent / Complainant did not accept the possession and has filed the present Complaint. It was submitted that the reasons for delay was beyond their control and for this delay they are ready of compensate the Respondent/Complainant by paying compensation @ ₹5,000/- per month as per terms of the Agreement. It was prayed that the Complaint be dismissed.
After hearing both the Parties and perusal of material on record, the State Commission allowed the Complaint in aforenoted terms by observing as under:-
“Admittedly, the opponents had failed to complete the construction work of the flat in question till the alleged date 07.04.2019 which included grace period of 12 months neither had offered for delivery of possession nor any written letter was sent to the complainant in connection to delay or requesting for condonation of delay. According to Exhibit C-5 no letter for condoning delay has been given rather Exhibit C-5 has been sent to the complainant through email on 30th May, 2016 and which has been sent in reply to complainants email dated 26th May, 2016 vide which the complainant has been clearly assured that “we`d like to update you that we`re tentatively expecting to announce possession of our "My Haveli-A Tower" by this year end.” Accordingly the complainant was assured by the opponents through email for delivery of possession by the end of year 2016. When the complainant has been assured of delivery of possession by year end vide email sent on the last day of May 2016, in the said circumstances, when only the work related to paint left to be carried out during the last month wherein much labor is not required. Accordingly raising the said contention that the construction work could not have been completed due to effect of demonetization prima facie does not appear to be acceptable.
In addition to it also like it is argued by ld. Counsel for the complainant during the arguments that other projects of the opponents namely Unique Prime and Unique Pristine have been completed within Jaipur by their sister concern Companies and when these projects remained unaffected due to demonetization in the said circumstances their business cannot be presumed to have been effected due to outcomes of demonetization when the opponents who are not possessing any black money and do not invest any black money in their business.
So far the question relates to non-availability of bajri where in the said context, Shri Prateek Kasliwal, Ld. Counsel for the opponents has produced on record the judgment passed by the Single Bench of the Hon'ble Rajasthan High Court titled as Messers Shyam Lal Dad Vs. Urban Improvement Trust, Bhilwara & Ors. Civil Writ No.6674/2018 which has been passed by the main Bench of Jodhpur on 04th September, 2018 wherein it was prayed by the petitioner in his petition before the Hon`ble High Court for vacating the stay passed by the Hon'ble Rajasthan High Court on 13.07.2018 and which was rejected by the Hon`ble Rajasthan High Court. According to said order the petitioner had contended before the Hon'ble Rajasthan High Court that petitioner was required to complete the construction work on or before dated 22.07.2017 but due to non-availability of bajri because of the ban on excavation of bajri imposed by the Hon'ble Supreme Court the work could not be completed within the stipulated time and the situation was beyond his control and for the said reason because of his failure to complete the work within stipulated time he requested UIT, Bhilwara for not cancelling his work allotted to him as per its tender and not to blacklist him as he is till date ready and willing to complete the remaining work and the plea which was rejected by the Hon`ble High Court. According the Hon`ble Rajasthan High Court also rejected the plea of the petitioner on the grounds of non-availability of bajri because as per the terms of tender the work as per tender was ought to have been completed prior to bajri crisis. In the case in hand also according to Letter Exhibit-5 the opponents had informed the complainant about completing the construction work by the end of year 2016. Hence the said citation does not provide any benefit to the opponents.
……..
In the case in hand it is pleaded and contended on behalf of the complainant that opponents have failed to deliver possession of flat to him well within the stipulated time and in addition to monetary burden he had to suffer physical and mental agony. Hence in the said circumstances, the complainant cannot be compelled for taking delivery of possession of the flat in question. The Hon'ble Supreme Court in the matter of Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & Civil Appeal No.1677 of 2019- Pioneer Urban Land & Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr. (supra) has implied that:-
“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill 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.
In the case in hand also the opponents have received the completion certificate after a delay of two years and two months despite after the expiry of stipulated period of 60 months from the date of agreement i.e. dated 07.04.2019 and further expiry of grace period of 12 months. Hence now the complainant cannot be compelled for taking possession of the flat.
……..
In the case in hand no pleading is submitted with regard to any other flat purchased by the complainant in addition to the flat in question nor any such evidence has been produced on the basis of which the purchase of flat is presumed for commercial purposes. Hence the citations produced by the opponents do not provide any benefit to them.
In addition, in one other citation similar to the citation of Rohit Kapoor Vs. BPTP & 4 Ors. (above) produced by the Ld. Counsel for the opponents wherein the same complainant in addition to booking two flats in the project of opponents had also booked a flat in JP Prakash Associates which is situated in Greater Noida and the said fact was not brought in the knowledge of the Hon'ble National Commission and by concealing the said fact a separate complaint was instituted in its connection i.e. three flats were booked by the same person at the same time. Complainant had booked another flat in Greater Noida whereas her wife had booked two separate flats in the project of the Opponents and the fact which was concealed and on the grounds of which complainant was not held as consumer but the facts of the case in hand are different and are not applicable in the case in hand; whereas in the matter of Kiran Joshi the Hon`ble National Commission had decided the said case while relying upon the judgment of the Hon`ble Supreme Court in the case of Laxmi Engineering Works wherein commercial purpose has been discussed in detail and due to which the citation in the case of Rohit Kapoor is not considered by the Hon'ble National Commission. Hence for the said reason also the above citation in the case of Rohit Kapoor does not provide any benefit to the opponents and merely on the said ground alone that the opponents have alleged that the complainant to have purchased the flat with the intention of making profits is not acceptable.
…..
Now we have to examine whether the said clause is unfair and being unfair whether the complainant is entitled for an award of compensation from the opponents as prayed for in the complaint?
The said Clause No.20 has two parts, one is the Delay and the second is the Compensation. So far as the question relates to the Delay, like it is already analyzed above that the delay cannot be held as condoned merely on the grounds of non-availability of bajri or demonetization. Hence on the said ground the opponents cannot take benefit of Clause No.20. As far as the question relates with regard to Compensation where in the said respect the said clause provisions for a delay compensation of Rs.5000/- per month. In the said respect the provisions of section 74 of the Indian Contract Act, 1872 are attracted, which reads as follows:-
"Section 74. Compensation for breach of contract where penalty stipulated for-When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case be, the penalty stipulated for."
Wherein there is no dispute but it is provisioned under section 3 of the Consumer Protection Act, 1986, that:-
“Section-3: Act not in derogation of any other law.- The provisions of this Act shall be in addition to and not in derogation of the provisions of other law for the time being in force."
Accordingly the provision of Consumer Protection Act, 1986 are in addition to and not in derogation of the provisions of the said Indian Contract Act. Hence the said complaint will not be governed merely by the provisions of the Indian Contract Act but shall also be governed by the additional provisions of the Consumer Protection Act.
It is provisioned in the section 18 of the Consumer Protection Act, 1986 that:-
"Section-18:- Procedure applicable to State Commissions. The provisions of Sections 12, 13 and 14 and the rules made thereunder for the disposal of complaints by the District Forum shall, with such modifications as may be necessary, be applicable to the disposal of disputes by the State Commission."
It is provisioned in the section 14 of the Consumer Protection Act, 1986 that:-
……
According to the said provisions despite of the provisions of section 74 of the Indian Contract Act this Commission according to section 14 r/w section 18 of the Consumer Protection Act is empowered to issue an order to the opposite party directing him to pay such amount as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party. Hence despite of presence of clause for a compensation of ₹5000/- per month in the Clause No.20, this Commission can issue an order for an award of additional compensation to the complainant in accordance with the provisions of Act of 1986.
……….
Likewise has deposited a total amount of ₹2479397/- (Twenty Four Lakhs Seventy Nine Thousand Three Hundred Ninety Seven). The said amounts have remained deposited with the opponents since the date of deposit otherwise also the complainant has been deprived of the use and enjoyment of the said amount and which he is entitled for refund along with interest thereon.
Now what will be the interest rate; with regard to the said aspect the Ld. Counsel for the opponents relying on the Judgment of NBCC (India) Limited Vs. Shri Ram Trivedi (supra) wherein the appellant/opponent had failed to deliver the possession of the property in question to the Respondent/complainant well within the stipulated time and the completion certificate was also produced after institution of the complaint thus the possession was got delivered to him vide the award of the Hon'ble National
Commission and which was awarded with an interest at the rate of 10 per cent and the interest rate which was modified and directed by the Hon'ble Supreme Court for payment at the rate 7 per cent but in the case related to said judgment the possession of the flat in question was taken by the complainant and he was not compelled to purchase another flat. In addition, the Hon'ble Supreme Court in the year 2019 has passed an order for awarding interest at the rate of 10 per cent because the purchaser taking a loan from the bank had paid instalments to the builder. Hence the facts of the citations of the Hon`ble Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd Vs. Govindan Raghavan & Civil Appeal No.1677 of 2019-Pioneer Urban Land & Infrastructure Ltd Vs. Geetu Gidwani Verma & Anr., are completely applicable to the case in hand; whereas the citation in the case of NBCC (India) Limited Vs. Shri Ram Trivedi (supra) in the said manner does not provide any benefit to the opponents.
……..
In the mater related to the said Judgment since the causes for late delivery of possession was beyond the control of the builder even then interest is awarded in favour of the purchaser at the rate of 9 per cent. In the case in hand like it has been analyzed above it is not held that it was beyond the control of builder, hence, in the case in hand as per the citations produced by the Complainant i.e. Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & civil Appeal No. 1677 of 2019 Pioneer Urban Land & Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr. The complainant is found entitled for an award of interest at the rate of 10 per cent per annum.
……
The Hon'ble National Commission in the case of Hitesh RamjiJaveri&Anr. Vs. Macrotech Construction Pvt. Has implied that:-
"15. As regards non-delivery of elevators by Mitsubishi of Japan, plea of the opposite party is that the delivery of elevators got delayed because of floods in Japan at the relevant time due to Tsunami. We do not find merit in the plea, firstly because the allegations in the written statement and even the affidavit evidence of the opposite party is bereft of the dates on which the Tsunami came, the period till which the effect of flood lasted and the period of closure of the plant of Mitsubishi elevators. Otherwise also, if Mitsubishi because of floods was unable to deliver elevators, the opposite party was required to make some other arrangements from other vendors instead of delaying the project for two years. It is pertinent to note that opposite party has not led any evidence to show that cause of delay was ever informed to the complainants.
As regards the delay in construction due to shortage of sand as a result of interim stay order against sand mining passed by Mumbai High Court, it will suffice to say that this plea is of no avail to the opposite party because the opposite party has led no evidence to show that during the relevant period, sand was not available. The opposite party has not led any evidence to show that a serious effort was made by the opposite party to procure sand from the areas where and mining stay order was not operative. Similarly, plea of construction due to labour shortage is not acceptable because no evidence has been led by the opposite party to establish that there was shortage of skilled and unskilled labour for more than a decade from year 2001 onwards."
In the case in hand also due to lack of evidence it cannot be presumed that the flat could not be completed well within the stipulated time due to shortage of bajri.
….
Now the question for consideration before us is How much amount of compensation the complainant is entitled from the opponents on account of mental and physical agony and as a result of the unfair trade practices adopted by the opponents and on account of which the complainant in his complaint has prayed for an award to ₹10.00 Lakhs but in our courteous opinion the said amount appears quite exaggerated. Specifically in those circumstances when an interest is also awarded in favor of the complainant. In the said circumstances, it appears justified for awarding an amount of ₹2.00 Lakhs as compensation on account of mental and physical agony suffered by the complainant.
AWARD
As per aforesaid analysis the complaint of the complainant is allowed and the opponents are directed to ensure refunding to the complainant each amount accepted by them on account of sale of flat in question along with an interest at the rate of 10 per cent per annum from the date of deposit till the date of final realization.
For the physical and mental agony suffered by him as a result of monetary burden and unfair trade practices and deficiency in services the complainant is entitled for a compensation of ₹2.00 Lakhs (Two Lakhs).”
Aggrieved by the Impugned Orders passed by the State Commission, the Appellants Developers have filed the present Appeals.
Mr. Sukumar Pattjoshi, learned Sr. Counsel appearing on behalf of the Appellants submitted that the State Commission erred in rejecting the pleas taken by the Appellants for the delay caused in completing the construction, i.e., demonetization, stay Order on Bajri mining, Covid-19 Pandemic outbreak in the month of 2020, which were beyond the control of the Appellants. It was further submitted that the State Commission failed to appreciate that as per terms of the Agreement the possession of the Flat was to be handed over by 07.04.2019 but due to the reasons which were beyond the control of the Appellants, the possession was offered on 01.04.2021 but the Respondents/Complainants were not interested in taking the possession of the Flat. Although the Appellants were ready to compensate the Respondent/Complainant as per terms of the Agreement yet the State Commission erred in awarding compensation by way of interest @10% p.a. on the deposited amount alongwith additional compensation of ₹2,00,000/- together with cost of ₹50,000/- which is contrary to principle laid down by the Hon’ble Supreme Court in catena of judgments, recently being in ‘M/s. Laureate Buildwell Pvt. Ltd. vs. Charanjeet Singh [2021 SCC OnLine SC 479], wherein the Hon’ble Apex Court has directed to refund the principle amount alongwith compensation in the form of simple interest @9% p.a. Relying upon the Judgment passed by the Hon’ble Supreme Court in “DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda, II (2019) CPJ 117 (SC)” it was submitted that the State Commission has erred in awarding additional compensation of ₹2,00,000/- in addition to compensation in the form of interest @10% p.a. It was prayed that the Impugned Orders passed by the State Commission be set aside.
Per Contra, learned Counsel appearing on behalf of the Respondents/Complainants supported the Orders passed by the State Commission as according to him the State Commission has passed well-reasoned orders which are based on a correct and rightful appreciation of evidence and material available on record and do not call for any interference.
Heard the learned Counsel for the Parties at length, perused the Impugned Orders passed by the State Commission, the Complaints, all the documents available on record and have given a thoughtful consideration to the various pleas raised by the Parties.
Undisputedly the Appellants Developers failed to deliver the possession of the Flats even after lapse of grace period of 12 months as stipulated in the Agreements, i.e., by 07.04.2019, despite having received 90% of the sale consideration by 15.07.2015. The Appellants Developers offered the possession only on 01.04.2021 during the pendency of the Complaints before the State Commission. In view of the principle laid down by the Hon’ble Supreme Court in Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, wherein it was held that the Allottees cannot be made to wait indefinitely for taking of the possession of Flats as also the principle laid down by this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery, it is the discretion of the Complainant whether he wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest, the Respondents/Complainants are entitled to refund of the deposited amount alongwith reasonable compensation. All the contentions raised by the Appellants, except awarding Compensation, have been rightly dealt in detail by the State Commission in the Impugned Orders, which, in my considered view, do not want any interference.
So far as the Compensation is concerned, having considered the rival contentions of both the Parties, it is observed that the Hon’ble Supreme Court vide Order dated 05.06.2020 passed in Civil Appeal No. 2504/2020 entitled “Prateek Infra Projects India Pvt. Ltd. vs. Nidhi Mittal and Anr.”, has scaled down the rate of interest awarded towards damages by this Commission to 9% per annum. Similar view was also taken in Civil Appeal No. 62/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Manish Kumar Sinha & Anr.” and in Civil Appeal No. 5109/2021 entitled “M/s. Nexgen Infracon Pvt. Ltd. vs. Sanjay Dhall”. In ‘M/s. Laureate Buildwell Pvt. Ltd. vs. Charanjeet Singh [2021 SCC OnLine SC 479]’ the Hon’ble Apex Court has awarded compensation in the form of simple interest @9% p.a. on the amount deposited by the Respondents/Complainants. In “Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors.” (2021) 3 SCC 241”, the Hon’ble Supreme Court has also awarded compensation in the form of simple interest @9% p.a. on the deposited amount, by observing as under:-
…….We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market. We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic.
We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry.
In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fair play that the amount deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount…..”
Keeping in view the principles laid down by the Hon’ble Supreme Court in afore-noted Judgments, it is observed that the State Commission erred in awarding Compensation by way of simple interest @10% on the deposited amount, appears to be on the higher side. Since the compensation in the form of interest has already been awarded, the Respondents/Complainants shall not be entitled for any other compensation, in view of the Judgment passed by the Hon’ble Supreme Court in “DLF Homes Panchkula Pvt. Ltd Vs. D.S. Dhanda, II (2019) CPJ 117 (SC)”, wherein it is observed that when interest is awarded by way of damages awarding additional compensation is unjustified.
For the reasons stated hereinabove, the Impugned Orders dated 22.10.2021 passed by the State Commission in CC Nos. 54/2020, 55/2020, 57/2020, 58/2020, 59/2020, 61/2020, 62/2020, 63/2020 and 64/2020 are modified to the extent that the Appellants are directed to refund the amount deposited by the respective Complainants/Respondents alongwith interest @9% p.a. with effect from the respective date of deposit till realization with cost of ₹50,000/- to the Respondent/Complainant in each of the cases.
All the Appeals are partly allowed in above terms. Keeping in view the facts and circumstances of the case, the Appellants shall also pay a sum of ₹25,000/- towards cost of litigation to the Respondent/Complainant in each of the cases.
In compliance of Order dated 02.05.022, the Appellants are stated to have deposited the awarded amount in terms of Impugned Orders, with the State Commission. In such circumstances, the Appellants shall be liable to pay interest @9% only till the date of deposit of the awarded amount with the State Commission. The State Commission shall release the amount as directed hereinabove alongwith accrued interest, if any, in favour of the Respondents/Complainants and the balance amount, if any, be released in favour of the Appellants within four weeks from today.