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Judgment
V.K. Jain, J
The complainants booked a residential flat with the OP in a project namely 'The Corridors' which the OP was to develop in Sector-67A of Gurgaon. Apartment No.CD-B7-07-704 of the said project was allotted to them. The parties then executed an Apartment Buyers Agreement on 14.04.2014 incorporating their respective obligations. The sale price for the flat was agreed at Rs.1,38,83,798.04p which was payable in installments.
The terms and conditions of the agreement, to the extent they are relied upon by the parties, read as under:
13.3 Subject to Force Majeure, as defined herein and further subject to the allottee having complied with all its obligations under the terms and conditions of this Agreement and not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the Allottee within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company.
13.4 Subject to clause 13.3, if the Company fails to offer possession of the said Apartment to the Allottee by the end of the Grace Period, it shall be liable to pay to the Allottee compensation calculated at the rate of Rs.7.50/- (Rupees Seven & Half only) per sq. ft. of the Super Area ("Delay Compensation") for every month of delay until the actual date fixed by the Company for offering possession of the said Apartment to the Allottee. The Allottee shall be entitled to payment/adjustment against such 'Delay Compensation' only at the time of 'Notice of Possession' or at the time of payment of the final installment, whichever is earlier.
13.5 Subject to Clause 13.3, in the event of delay by the Company in offering the possession of the said Apartment beyond a period of 12 months from the end of the Grace Period (such 12 month period hereinafter referred to as the 'Extended Delay Period"), then the Allottee shall become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment(s) paid by it against the said Apartment after adjusting the interest on delayed payments alongwith Delay Compensation for 12 months. Such refund shall be made by the Company within 90 days of receipt of intimation to this effect from the Allottee, without any interest thereon. For the removal of doubt, it is clarified that the Delay Compensation payable to the Allottee who is validly opting for termination, shall be limited to and calculated for the fixed period of 12 months only irrespective of the date on which the Allottee actually exercised the option for termination. This option may be exercised by the Allottee only up till dispatch of the Notice of Possession by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever, monetary or otherwise shall lie against the Company and/or the Confirming Parties nor be raised otherwise or in any manner by the Allottee.
21.1 Notwithstanding anything contained in this Agreement, timely performance by the allottee of its obligations under this Agreement, including without limitation, its obligations to make timely payment of the Sale Consideration, maintenance charges and other deposits and amounts, including any interest, in accordance with this Agreement shall be of essence under this Agreement. If the Allottee neglects, omits, ignores, or fails in the timely performance of its obligations agreed or stipulated herein for any reason whatsoever or acts in any manner contrary to any undertaking assured herein or fails to exercise the options offered by the Company within the stipulated period or to pay in time to the Company any of the installments or other amounts and charges due and payable by the Allottee by respective due dates or in case of default by the Allottee as described in Clause 7.7 herein, the Company shall be entitled to cancel the allotment and terminate this Agreement in the manner described hereunder:
21.1.1 In case any failure or breach committed by the Allottee is incapable of rectification or is in the opinion of the Company unlikely to be rectified by the Allottee or where the Allottee is a repetitive defaulter or such failure or default is continuing despite the Allottee being given an opportunity to rectify the same, then this Agreement may be cancelled by the Company with immediate effect as its sole option by written notice ("Notice of Termination") to the Allottee intimating to the Allottee the decision of the Company to terminate the Agreement and the grounds on which such action has been taken.
21.1.2. In all other cases not covered under the Clause 21.1.1, the Company shall give to the Allottee a notice calling upon it to exercise the option or rectify the breach set out in the said notice within the time given therein. In the event that the Allottee fails to establish to the satisfaction of the Company that the said failure or breach has been rectified by it within the stipulated time, the Company may proceed to terminate this Agreement in the manner set out in Clause 21.1.1 above and to the same effect.
21.3 The Allottee understands, agrees and consents that upon such termination, the Company shall be under no obligation save and except to refund the amounts already paid by the Allottee to the Company, without any interest, and after forfeiting and deducting the Earnest Money, interest on delayed payments, brokerage/commission/charges, service tax and other amounts due and payable to it, only after resale of the said Apartment. Upon termination of this Agreement by the Company, save for the right to refund, if any to the extent agreed hereinabove, the Allottee shall have no further right or claim against the Company and/or the Confirming Parties which, if any, shall be deemed to have been waived off by the Allottee and the Allottee hereby expressly consents thereto. The Company shall thenceforth be free to deal with the said Apartment in any manner whatsoever, in its sole and absolute discretion and in the event that the Allottee has taken possession of the said Apartment, then the Company shall also be entitled to re-enter and resume possession of the said Apartment and everything whatsoever contained therein and in such event, the Allottee and/or any other person/occupant of the said Apartment shall immediately vacate the said Apartment and otherwise be liable to immediate ejectment as an unlawful occupant/trespasser. This is without prejudice to any other rights available to the Company against the Allottee.
It would thus be seen that the possession of the apartments ought to have been delivered to the aforesaid complainants within 42 months from the date of approval of the building plans and/or fulfillment of the pre-conditions if any, imposed under the approval of the building plans. The OP was entitled to a grace period of 180 days but only for the unforeseen reasons beyond their control. The grievance of the complainants is that not only the possession of the apartments was not offered to them, even the construction is not complete despite they having made substantial payment to the OP. The complainants are therefore, before this Commission seeking refund of the amount paid by them to the OP alongwith compensation in the form of interest etc.
The complaints have been resisted by the OP primarily on the grounds on which CC No.1998 of 2016 Subodh Pawar Vs. M/s Ireo Grace Realtech Pvt. Ltd. & connected matters, decided on 24.09.2018 were contested. It is also alleged in the written version filed by the OP that the complainants had defaulted in payment of the 9th installment demanded on 19.12.2016 and payable by 10.01.2017.
The decision of this Commission in Subodh Pawar (supra), to the extent it is relevant, reads as under:
The complaints have been resisted by the OPs which have admitted the allotment made to the complainants as well as the payment received from them. The OPs have contested the complaints inter-alia on the ground that since the fire safety approval came to be accorded on 27.11.2014, the complaints were pre-mature, the proposed date of delivery being 27.05.2018. Thus, according to the OPs, they proposed to deliver possession by 27.05.2018 as against the case of the complainants that since the building plans for this project were approved on 23.07.2013, the possession ought to have been delivered latest by 23.07.2017 even if the grace period of six months is given to the OPs. This is also the case of the OPs that the parties are bound by the terms of the agreement executed between them, extracts from which have already been reproduced hereinabove.
It is an admitted position that the building plans for this project were approved by Directorate of Town and Country Planning, Haryana vide its memo dated 23.07.2013. Therefore, in my opinion, the possession of the apartments, complete in all respects, ought to have been offered to the complainants by 23.01.2017. As noted earlier, the benefit of grace period was available to the OPs only in the event of the delay happening on account of the reasons which the parties could not have foreseen at the time the allotments were made. No such unforeseen circumstance however, has been established by the OPs.
The learned counsel for the OPs has drawn my attention to condition no. 3 of the memo dated 23.07.2013 related to fire safety which reads as under:
On receipt of the above request the Commissioner, Municipal Corporation, Gurgaon after satisfying himself that the entire fire protection measures proposed for the above buildings are as per NBC and other Fire Safety Bye Laws, and would issue a NOC from the Fire Safety and means of escape/access point of view. This clearance/NOC from the File Authority shall be submitted in this office alongwith a set of plans duly signed by the Commissioner, Municipal Corporation, Gurgaon within a period of 90 days from the date of issuance of sanction of building plans. Further, it is also made clear that no permission for occupancy of the building shall be issued by Commissioner, Municipal Corporation, Gurgaon unless he is satisfied that adequate fire-fighting measures have been installed by you and suitable external fire-fighting infrastructure has been created at Gurgaon, by Municipal Corporation, Gurgaon before grant of occupation certificate by the Director General.
The contention of the learned counsel is that the period stipulated for offering possession should start from the date on which the clearance from fire authority was issued. She also submits that the said clearance came to be issued only on 27.11.2014 though according to the learned counsel, the same was applied on 24.10.2013. It would be seen from the condition relating to fire safety condition in the approval dated 23.07.2013 that an NOC from the Fire Safety Department was to be obtained by the OPs and submitted to the Directorate of Town and Country Planning, Haryana within a period of 90 days from the issuance of the said approval. The aforesaid period of 90 days expired on 21.10.2013. The OPs thus, did not even apply for the requisite NOC from fire authority within the period stipulated for obtaining and submitting the said approval. More importantly, there was no such stipulation in the approval dated 23.07.2013 that the builder could not commence construction without obtaining the said fire safety NOC. Only the Occupancy Certificate could not have been issued without the Municipal Corporation, Gurgaon satisfying itself that adequate fire safety measures had been installed and suitable external fire-fighting infrastructure had been created at Gurgaon by the said Corporation. The OPs therefore, could have started the construction immediately after the aforesaid approval dated 23.07.2013 was obtained. The possession therefore, ought to have been offered by 23.01.2017 since in the absence of unforeseen circumstances, the benefit of the grace period was not available to the OPs.
As far as clause 44 of the indicators from the terms and conditions of the Apartment Buyers Agreement is concerned, this Commission has vide its order dated 18.09.2018 passed in CC No.190/2017 and connected matters, has already held that the said clause is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite the said clause The decision of this Commission in CC No.190/2017, to the extent it is relevant, reads as under:
The learned senior counsel for the OP has drawn my attention to clause 44 of the terms and conditions, extracted hereinabove and he submits that the aforesaid clause gives only a limited right to the complainants to terminate the agreement and seek refund of the amount paid by them. He also submits that in terms of the aforesaid clause, the contract could be terminated after a delay of at least 12 months, and only the delay compensation in terms of the agreement, for twelve months, is payable alongwith installments refundable to the allottee without any interest. However, in my view, since the OP failed to deliver possession of the allotted flats to the aforesaid complainants, it amounted to a deficiency in rendering service to them and therefore, this Commission is entitled to direct refund of the amount paid by them to the OP alongwith appropriate compensation. In my view, clause 44 which postpones the right of the flat buyer to terminate the agreement and seek compensation even after the grace period has expired, is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite clause 44 extracted hereinabove.
Clause 44 of the indicators from the terms and conditions is identical to clause 13.5 of the Buyers Agreement.
As far as clause 21.3 of the Buyers Agreement extracted hereinabove is concerned, the said clause, when read in conjunction with the other clauses of the agreement extracted hereinabove, is patently unfair, besides being one sided. If these clauses are given effect, it would result in a situation where a flat buyer, despite the failure of the builder to offer possession within the time stipulated in this regard and without there being any justification for doing so, will be practically remediless for 1½ years from the date of the default, no interest or compensation will be paid to him for the period his money is utilized by the builder, and even the principal amount will be repaid to him in an uncertain future, when the builder has already sold the apartment which was allotted to him. Such a term in the contract would be wholly one sided, unfair and unjust particularly when examined in the light of the fact that as far as the builder is concerned, he has a right to terminate the transaction in the event of even a single default on the part of the flat buyer and not only forfeit the earnest money but also deduct the other charges specified in clause 21.3 of the Buyers Agreement.
The learned counsel for the OPs refers to the decision of the Hon'ble Supreme Court in DLF Universal Limited Vs. Ekta Seth & Anr. (2008) 7SCC 585 in support of her contention that such a clause cannot be said to be unfair. However, on a careful perusal of the aforesaid judgment, I find that the clause upheld by the Hon'ble Supreme Court in the aforesaid case was different from the clauses appearing in the Buyers Agreement executed in these cases. In DLF Universal Limited (supra), the right of the buyers to terminate the agreement in the event of default on the part of the builder was not postponed as is the position in the present cases, though of course, it permitted the builder to deduct the earnest money and also deny any interest to the buyer on the amount paid by him. Considering the aforesaid distinction between the terms subject matter of the agreement in DLF Universal Limited (supra) and the terms subject matter of these transactions, the benefit of the above referred decision, in my view, would not be available to the OPs.
The learned counsel for the OPs submits that the parties having agreed to all the above referred stipulations, are bound by the same and cannot be allowed to have a grievance at a later date claiming the same to be unfair or one sided. No doubt the parties are ordinarily bound by the terms and conditions agreed between them in respect of a particular transaction, but the position would be altogether different where such terms are found to be wholly one sided and unfair, operating only to the detriment of the flat buyers without any corresponding detriment to the builder.
If a builder fails to deliver possession of the flat/plot booked with him, within the time period committed for this purpose and is unable to justify the said delay, this, in my opinion, would constitute a defect or deficiency in the services rendered by him to the buyer and in such a case, this Commission, in exercise of the powers conferred upon it by Section 14(1)(c)&(d) of the Consumer Protection Act would be competent to direct refund of the amount paid by the buyer to the builder, alongwith appropriate compensation for the loss or injury suffered by the buyer due to the defect/deficiency in the services rendered to him by the builder.
During the course of hearing, the learned counsel for the OPs submitted that since the amount of refund being sought is less than Rs.1 Crore, this Commission lacks the pecuniary jurisdiction to entertain these complaints. The aforesaid contention was examined and rejected by this Commission vide order dated 27.08.2018 in Pradeep Kumar Verma & Anr. Vs. M/s Supertech Limited, CC/508/2017, which to the extent, it is relevant, reads as under:
The first plea advanced by the learned counsel for the opposite party is that this Commission lacks pecuniary jurisdiction to entertain this complaint. In support of her contention she relies upon the decision of a Coordinate Bench of this Commission in CC/1195/2017 Narendra Shah & Anr. Vs. Supertech Ltd. decided on 24.5.2017. The aforesaid decision, in my view, is contrary to the decision of a Three-Members Bench of this Commission in Ambrish Kumar Shukla Vs. Ferrous Infrastructure Pvt. Ltd. CC No. 97 of 2016, decided on 07.10.2016 and therefore, does not constitute a binding legal precedent. In terms of Section 21 of the Consumer Protection Act, this Commission possesses the requisite pecuniary jurisdiction to entertain a consumer complaint where the value of the goods or services, as the case may be, and the compensation, if any, claimed, in the consumer complaint exceeds Rupees one crore. It was held by the Three-Members Bench of this Commission in Ambrish Kumar Shukla (supra) that the value of the service in such cases would mean the sale consideration agreed to be paid by the flat buyer to the builder. The amount actually paid by the flat buyer to the builder would have absolutely no relevance in such a case, the only relevant factors being the value of the service i.e. the sale price agreed to be paid by the flat buyer to the builder and the compensation claimed in the consumer complaint. For instance, if a flat buyer agrees to purchase a residential house for a consideration of more than Rupees one crore, but pays only Rs.10.00 lacs to the builder and is aggrieved on account of the builder having failed to honour his contractual commitment, the appropriate Forum, if he wants to file a consumer complaint, would be this Commission, since the value of the service i.e. the price which he had agreed to pay to the builder for the flat was more than Rupees one crore. In the present case, admittedly, the sale price of the flat was agreed at more than Rs.1,38,00,000/-. Therefore, it is only and only this Commission which would have pecuniary jurisdiction to entertain a consumer complaint.
The payment plan agreed between the parties reads as under:
INSTALLMENT PAYMENT PLAN
INSTALLMENT PAYMENT PLAN
SL. NO.
LINKED STAGES
%
TOTAL
1
AT THE TIME OF BOOKING
10% OF BASIC
1215191.20
2
WITHIN 45 DAYS OF BOOKING
10% OF BASIC
1215191.20
3
COMMENCEMENT OF EXCAVATION
10% OF BASIC + 50% OF DEVELOPMENT CHARGES + 25% OF PLC
1644411.26
4
CASTING OF LOWER BASEMENT ROOF SLAB
10% OF BASIC + 50% OF DEVELOPMENT CHARGES + 25% OF PLC
1644411.26
5
CASTING OF 2ND FLOOR ROOF SLAB
10% OF BASIC + 25% OF PLC
1427849.66
6
CASTING OF 5TH FLOOR ROOF SLAB
10% OF BASIC + 25% OF PLC
1427849.66
7
CASTING OF 8TH FLOOR ROOF SLAB
10% OF BASIC + 50% OF CLUB MEMBERSHIP
1340191.20
8
CASTING OF 11TH FLOOR ROOF SLAB
10% OF BASIC
1215191.20
9
CASTING OF TOP FLOOR ROOF SLAB
10% OF BASIC
1215191.20
10
ON COMPLETION OF STONE/TILE FLOORING IN APARTMENT
5% OF BASIC + 50% OF CLUB MEMBERSHIP
732595.60
11
ON OFFER OF POSSESSION
5% OF BASIC + 100% OF IFMS + 100% OF IBRF
805724.60
TOTAL
13883798.04
It would thus be seen that 80% of the basic sale price + 10% of the development charges + 100% of the PLC and 50% of the Club Membership charges were payable upto the stage of 8th installment. The 9th installment comprising 10% of the basic sale price was payable on completion of top floor roof level whereas the 10th installment was payable on completion of stone/tile flooring and comprised only 5% of the basic + 50% of the Club Membership charges. The contention of the learned counsel for the complainants is that having already paid 80% of the basic price, 100% of the development charges and 100% of PLC, and 50% of Club Membership, the complainants when they received the demand for payment of the 9th installment, did not pay the said installment since the construction was not progressing satisfactorily and there was no reasonable probability of the construction being completed and the possession being offered to the complainants by 23.01.2017, the date by which the possession was expected to be delivered in terms of the agreement. It is an admitted position before me that the 10th installment has not been demanded till date. This would mean that even the stone/tile flooring in the apartments has not been completed till date, though more than two years and three months have already expired since the time the 9th installment was demanded. It is therefore, evident that at the time 9th installment was demanded, the construction had not reached the level which would have enabled the builder to complete the same and offer possession by 23.01.2017 or within a reasonable time thereafter. Considering that the OP was to complete the construction in all respects and offer possession by 23.01.2017, the construction ought to have progressed much master and the 9th installment which was demanded on 19.12.2016, ought to have been demanded much earlier, after casting the top floor roof slab. The delay which has already happened in this case, leave no reasonable doubt that the allottees were justified in inferring that even if they paid the 9th installment on or before the last date for making payment of the said installment, the builder will not be able to honour its commitment even within a reasonable time after 23.01.2017, the date by which the possession ought to have been offered after completing the construction in all respects. Though it was a contractual obligation of the complainants to pay the 9th installment on the casting of 9th floor roof slab, that obligation also imposed corresponding obligation on the builder to raise construction at such a pace that it would be able to deliver possession within the time-line committed by him or at best, within a reasonable period thereafter. The allottee cannot be expected to keep on sinking more and more of his hard earned money in a project which he feels, is not likely to be completed within the stipulated time period or a reasonable time thereafter.
Another aspect which cannot be over-looked is that as per the payment plan stipulated in the Buyers Agreement, as much as 80% of the basic price, 100% of the Development Charges and 100% of PLC was payable upto the stage of 8th installment. It can hardly be disputed that the cost of the super-structure of the building cannot be 80% of the entire cost of construction. This would include the profit which the builder was expecting to make. The work which remains to be executed after completion of the construction, requires a lot of expenditure and may even exceed the cost of super-structure alone. Therefore, it would be difficult to even say that the builder had utilized the entire amount which he had received from the complainants upto the stage of 8th installment comprising 80% of the basic price + 100% of the development charges, 100% of PLC and 50% of Club Membership only on the super-structure constructed till that time. Obviously, he had utilized or retained with him, at least part of the payment received from the buyers, the cost of super-structure being much less than 80% of the basic price + 100% of the development charges + 100% of the PLC.
Considering above referred facts and circumstances, I am of the considered view that the default in payment of the 9th installment would not dis-entitle the complainants from seeking refund of the amount paid to the builder when there has already been a delay of more than two years and three months in completion of the project and it is not known when the project would be completed and possession would be offered to the allottees.
It is also submitted by the learned counsel for the OP that the demand notice for the 9th notice was followed by two reminders and a final notice dated 28.04.2017 only whereafter this complaint was instituted. However, the fact remains that despite default in the payment of the 9th installment, the allotment was not cancelled by the OP and the same continuous to survive till date.
The learned counsel for the complainants states on instructions that the complainants are restricting their claim to the principal amount paid to the OP alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund and the cost of litigation. He also states that in order to avoid further litigation on the part of the OP, the complainants are also ready to make a concession and accept compensation in the form of simple interest @ 10% per annum w.e.f. 10.07.2017 till the date of entire payment, as per the consent order dated 28.01.2019 passed by the Hon'ble Supreme Court in Civil Appeal No.48101 of 2018 provided that the OP gives an undertaking to make payment within four weeks from today. The learned counsel for the OP however, expresses his inability to give such undertaking. Therefore, no concession from the complainants is forthcoming.
For the reasons stated hereinabove, the complaint is, therefore, disposed of with the following directions:
(i) The opposite party shall pay the entire principal amount of Rs. 1,16,87,089/- to the complainants alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.
(ii) The opposite party shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants.
(iii) The payment in terms of this order shall be made within three months from today.