Vimal Marwah & 2 Ors vs Logix Infratech Pvt. Ltd. & 2 Ors

V.K. Jain, J

The complainants applied to the opposite party Logix Infratech Pvt. Ltd. for allotment of residential apartment in a project namely 'Blossom Greens', which the opposite party was to develop in Sector 143 of Noida. Vide allotment letter dated 21.7.2011, apartment No. K 601 in the above referred project was allotted to them for a consideration of more than Rs.1.00 crores. The parties then executed a flat-buyers agreement dated 25.8.2011, incorporating their respective obligations in respect of the said transactions. As per Clause 17 of the terms and conditions of allotment, the developer was endeavour to complete the construction and deliver possession within a period of eighteen months, though a grace period of six months was also available for this purpose. Thus, the possession ought to have been delivered within two years from the execution of the agreement on 25.8.2011. The grievance of the complainants is that the possession of the allotted flat has not even been offered to them despite they having already paid Rs.96,74,631/- to the opposite party. The complainants are therefore, before this Commission, seeking refund of the said amount, with compensation etc.

The complaint has been resisted by the OP which has admitted the allotment made to the complainants as well as the payment received from them. It is however, claimed that the complainants had committed delay in making payment for which interest amounting to Rs.70,159/- was levied on them. It is also alleged vaguely that the project got delayed as NGT ordered use of only recycled water for construction purposes and rapidly changing price of the material further hit the progress of the work.

Though the complainants had allegedly delayed payment of some instalments, interest was for the said delay debited in their account. If the complainants had defaulted in making timely payments of the instalments, nothing prevented the OP from cancelling the allotments made to the complainants, forfeiting the Earnest Money and returning the balance amount to the complainants. That having not been done and delayed payment having been accepted with interest, the alleged default was condoned by the OP. Hence, the relief sought by the complainants cannot be denied on account of the alleged delay.

The opposite party has not placed on record the order of the NGT referred in its written version. In the absence of the said order, it cannot be known when the NGT directed use of only the recycled water for the construction purposes. In any case, if a ban was imposed on the use of the ground water for the construction purposes, it was for the builder to arrange the water from such alternative sources where it could be available. The flat buyers cannot be penalised for the order of the NGT, prohibiting use of the ground water for construction purposes.

As per the terms and conditions of allotment, the possession ought to have been delivered within two years of 25.8.2011, when the agreement was executed between the parties. The possession therefore, ought to have been delivered latest by 25.8.2013. More than five years have since expired but the possession of the allotted flat has not been offered and the construction is not complete, even as on today. The complainants cannot be made to wait indefinitely for the possession of the allotted flat when there has already been a delay of more than five years. The complainants are entitled to refund of the amount paid by them to the OP, along with compensation.

In Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra Civil Appeal No. 3182 of 2010 decided on 25.3.2019, the possession of the flat was to be delivered by the builder by 30.6.2009. However, the completion certificate was received by the builder only on 29.3.2016. On a consumer complaint filed by the respondent, the State Commission directed refund of the amount paid by the complainant to the appellant, before the Hon'ble Supreme Court, with interest and compensation. The order passed by the State Commission was maintained by this Commission to the extent payment of interest was directed. Being aggrieved, the appellant approached the Hon'ble Supreme Court by way of an appeal and submitted that the developer having made substantial investment in the project, a direction for refund was not warranted. It was also contended before the Hon'ble Supreme Court that the builder was not liable to pay interest at more than the saving bank interest of the State Bank of India, the parties having agreed so at the time of execution of the buyers agreement. Rejecting the contention, the Hon'ble Supreme Court inter-alia observed and held as under:

"While considering the rival submissions, we must at the outset advert to the following clause which was contained in the Buyer's Agreement:

"Unless prevented by circumstances beyond the control of the company and subject to force majeure, KWIC shall ensure to complete the said unit in all respects within 31stDecember, 2008 only for the cluster D. Further there will be a grace period of six months (up to 30th June, 2009) from the date of completion. In case the possession is not transferred after expiry of the said grace period, KWIC will be liable to pay prevailing saving bank interest of the State Bank of India for each month of delay on the money given by the allottee as compensation but no compensation will be paid on account of force majeure reasons."

It is the above clause which is pressed in aid by the developer. Under the aforesaid clause, any delay beyond 30 June, 2009, would result in the developer being required to pay interest at the prevailing savings bank interest of the State Bank of India. Interestingly, where the buyer is in default, the agreement stipulates that interest at the rate of 18 percent from the date of default until the date of payment would be charged for a period of two months, failing which the allotment would be cancelled by deducting 5% of the entire value of the property. The agreement was evidently one sided. For a default on the part of the buyer, interest at the rate of 18% was liable to be charged. However, a default on the part of the developer in handing over possession would make him liable to pay interest only at the savings bank rate prescribed by the SBI. There is merit in the submission which has been urged by the buyer that the agreement was one sided. The clause which has been extracted in the earlier part of this order will not preclude the right and remedy available to the buyer to claim reasonable interest or, as the case may be, compensation.

The essential aspect of the case which is required to be analysed is whether the buyer was entitled to seek a refund or was estopped form doing so, having claimed compensation as the primary relief in the consumer complaint. The Buyer's Agreement is dated 2 July, 2007. In terms of the agreement, the date for handling over possession as 31 December, 2008, with a grace period of six months. Even in 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29.3.2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.

In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified."

In the present case there has already been a delay of more than five years, and the possession is still not offered.

Clause 35 of the terms and conditions of allotment reads as under:

"The Allottee (s) agrees and acknowledges that in the event that the developer is unable to allot the apartment applied for, the developer shall consider allotment of an alternative apartment or refund the amount, deposited by the allottee (s) along with simple interest @ 10% per annum, and shall not be liable for any other damages / compensation on account of such inability (on the part of the developer) to provide the apartment applied for by the allottee(s)."

In view of the above referred clause, the complainants have pressed for refund of the principal amount paid by them to the OP, along with interest @ 10% per annum, as no alternative allotment has been offered to them.

It was contended by the learned counsel for the OP that in view of the provisions contained in Real Estate Regulatory Authority Act (RERA), this Commission lacks jurisdiction to entertain a complaint, in respect of the project subject matter of this complaint. Similar contentions were urged before this Commission and rejected vide order dated 15.04.2019 passed in CC 1764 of 2017 Ajay Nagpal Vs. M/s. Today Homes & Infrastructure Pvt. Ltd. and connected matters. The following was the view taken by this Commission while rejecting such contentions:

"40. From the various decisions of the Hon'ble Supreme Court referred to above, the following principles emerge:-

(i) The Consumer Protection Act, 1986 is a supplement Act and not in derogation of any other Act;

(ii) Any Consumer who is aggrieved by any defect in goods purchased or deficiency in service as also regarding unfair trade practice, can approach the Consumer Fora by filing the complaint under the Act. Even a Class Action Complaint is permissible under the Act.

(iii) The Consumer Fora constituted under the Consumer Protection Act, 1986 are not Civil Courts.

(iv) The Consumer Fora can provide for the reliefs as contemplated under Section 14 of the Act.

(v) A Consumer cannot pursue two remedies for the same cause of action. However, if a Consumer has not approached for redressel of its grievance under the particular Statute, the Consumer can approach the Consumer Fora under the Consumer Protection Act. But, if the Consumer had already approached the Authority under the relevant Statute, he cannot simultaneously file any complaint under the Consumer Protection Act.

(vi) Mere availability of a right to redress the grievance in a particular Statute will not debar the Complainant/Consumer from approaching the Consumer Fora under the Act.

(vii) Even though under Sections 14, 15, 18 and 19 of RERA, various provisions have been made which are to be followed by the Developer/Promoters and the rights and duties and the return of amount as compensation as also rights and duties of Allottees, yet same cannot mean to limit the right of the Allottee only to approach the Authorities constituted under the RERA, he can still approach the Consumer Fora under the Consumer Protection Act.

(viii) Section 71 of RERA which gives the power to adjudicate, does not expressly or impliedly bar any person from invoking the provisions of the Consumer Protection Act. It has also given a liberty to the person whose Complaint is pending before the Consumer Fora to withdraw it and file before the RERA Authorities.

(ix) Section 79 of RERA only prohibits the jurisdiction of Civil Court from entertaining any suit or proceeding in respect of any matter which can be decided by the Authorities constituted under the RERA. As the Consumer Fora are not Civil Courts, the provisions of Section 79 which bar the jurisdiction of Civil Courts, will not be attracted. So far as to grant injunction is concerned, only that power has been taken away by Section 79. But, it does not, in any manner, effect the jurisdiction of the Consumer Fora in deciding the Complaints. Both, the Consumer Protection Act, 1986 and the Real Estate (Regulation and Development) Act, 2016 are supplemental to each other and there is no provision in the Consumer Protection Act which is inconsistent with the provisions of RERA.

Applying the aforesaid principles to the present case, we are of the considered opinion that this Commission has jurisdiction to proceed with the Complaint Cases filed by the Consumers and neither Section 71 nor Section 79 and nor Section 89 creates any embargo or prohibits the jurisdiction of the Consumer Fora."

For the reasons stated hereinabove, the complaint is disposed of with the following directions :

(i) The OP shall refund the entire principal amount received from the complainants to them, along with compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.

(ii) The OP shall pay Rs.25,000/- as the cost of litigation to the complainant.

(iii) The payment in terms of this order shall be made within three months from today.