Vishal Gupta & Anr vs M/S. Imperia Structures Ltd

M. Shreesha, Member

Consumer Complaint No. 2439 of 2017

This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short "the Act") against M/s. Imperia Structures Ltd. (hereinafter referred to as "the Developer"), having its office at A-25, Mohan Co-operative Industrial Estate, New Delhi-110044, seeking the following reliefs:

Pass an order directing the O.P to refund Rs.92,61,507/- deposited by the Complainant along with interest @ 18% from the date of deposit till the date of realisation.

Pass an order directing the O.P for compensation amounting to Rs.25,00,000/- for the loss of opportunity in finding similar accommodation at high price due to rise in value of land and cost of construction, for deficiency in service, unfair trade practise mental agony and harassment faced by the Complainant.

Direct the opposite Party to bear the litigation cost to the tune of Rs.1,00,000/-.

Or in the Alternate:

Direct the Opposite Party in immediately handover the possession of the above apartment to the Complainants on payment of final instalment amount, complete in all respects and in conformity with the Apartment Buyers Agreement and for the consideration mentioned therein, with all additional facilities and as per quality standards promised, and execute all the necessary and required documents in respect of the said apartments in favour of the complainant;

Direct the Opposite party to pay penalty @18% per annum on account of delay calculated on the amount deposited by the Complainant (i.e. Rs.92,61,507/-) till the date actual physical possession as per clause (iv) above is handed over by the opposite party, along with all the necessary documents and common areas and facilities.

Direct the opposite party to immediately withdraw/ cancel the interest of Rs.3,29,563/-being unlawfully imposed and demanded from the Complainant.

Direct the O.P to pay damages to the tune of Rs.5,41,273/- towards the rent paid by the Complainant No. 1 till the filing of the present complaint due to failure of the O.P in handing over the possession in timely manner.

Direct the O.P to further pay the damages towards the rent paid by the Complainant No. 1 till the pendency of the present complaint.

Such any other/ further relief which this Hon'ble Court may deem fit and proper be passed in favour of the Complaint."

The brief facts as set out in the Complaint are that the Developer launched a housing project known as "Esfera" in in Sector 37-C, Gurugaun, Haryana. It is stated that the project was widely publicised by the Developer and lured by the advertisements, the Complainants on 19.01.2012 booked an Apartment for their personal use having its total super area measuring 2400 sq. ft. It is averred that all the necessary approvals have been obtained from the competent authorities. The Apartment Buyers Agreement dated 02.07.2013 was executed between the Complainants and the Developer, wherein Apartment No. 603, 6 th floor in Tower 'B' was allotted to the Complainants with the total sale consideration of 1,02,57,200/-, out of which the Complainants have paid an amount of 92,61,507/- including service tax towards major part of the sale consideration on the due dates as and when demanded by the Developer without any delay. It is averred that the Developer had intentionally and deliberately delayed the execution of the Builder Buyer Agreement dated 02.07.2013 for one and half years, therefore the period of 42 months for handing over of possession ought be taken from the date of booking i.e. 19.01.2012 and not from the date of execution of the Builder Buyers Agreement.

It is averred that vide email dated 12.07.2017, the second Complainant enquired about the status of the construction from the Developer, but there was no response. It is stated that the Complainants have paid all their instalments on time and paid almost 95% of the total sale consideration despite the fact that the super structure of the tower was not ready. It is further averred that the Developer has demanded interest from the Complainants @ 18% p.a. vide demand letter dated 06.05.2017. On 05.06.2017, the Complainants issue a legal notice to the Developer for withdrawal of the interest demanded. Thereafter, instead of withdrawing the said demand the Developer sent another demand notice dated 02.08.2017.

It is pleaded that the Complainants have purchased the subject Apartment for their residential use and due to delay in handing over of possession the Complainants were compelled to live in a rented accommodation as the Complainants have no permanent accommodation and paying rent put an additional burden on the Complainants.

Vexed with the attitude of the Developer in not completing the construction within the time frame, the Complainants approached this Commission seeking the aforenoted reliefs, as the value of all goods and services together with the compensation claimed is more than 1 crore and attracts the Pecuniary Jurisdiction of this Commission.

The Developer filed its Written Version admitting the Allotment, receipt of the amount of 92,61,507/- and the execution of the Apartment Buyer's Agreement dated 02.07.2013. It is denied that the Developer ever assured or promised to handover possession of the Apartment within 42 months from the date of booking. It is stated that possession of the Apartment was to be offered within three and a half years from the date of execution of the Builder Buyer Agreement subject to force majeure events . It is averred that this Commission lacks pecuniary jurisdiction as the Complainants have filed this Complaint for recovery of 92,61,507/- which is less than the pecuniary jurisdiction of 1,00,00,000/- of this Commission; that the Complainants are not Consumers as they have booked two units in the project only for earning profit by reselling the units; that the delay in completion of construction was beyond the control of the Developer such as various orders passed by NGT, demonetization, delay in approvals and sanction, labour strike etc.; that the Complainants have not exercised their right of cancelling the booking under Clause 11.4 of the Agreement; that the Complainants have regularly defaulted in the timely payments of instalments; that as on date an amount of 16,67,034/- is due from the Complainants; that the Developer is committed to complete the construction at earliest and that they have offered the Complainants an alternative accommodation till the completion of construction of the subject Apartment, which was not accepted by the Complainants.

It is stated that the delay in possession is to be dealt with as per Clause 11.4 of the Builder Buyer's Agreement dated 02.07.2013, according to which the Developer would pay a sum of 5/-square foot per month, provided that the delay is not on account of existence of any force majeure event.

All the other averments made in the Complaint have been denied. It is stated that the construction of tower has been completed till the masonry works and the outside painting of the tower is being done. Therefore, there is no deficiency of service on their behalf and prayed for dismissal of Complaint with exemplary costs.

The Complainants filed their Affidavit by way of Evidence and marked exhibits as EX CW-1/1 (copy of the Apartment Buyer's Agreement), EX CW-1/2 (statement of account), EX C-2/A (copy of demand letter dated 02.08.2007), EX Mark-A (copy of email dated 12.07.2017), EX Mark-B (Copy of legal notice dated 05.06.2017 sent to the Developer), and EX Mark-C (copy of bank pass book showing the payment towards rent) on their behalf.

The Developer filed their Affidavit by way of Evidence and marked Exhibits EX/OP-1 (copy of the Application Form for bookings of two units in the project), EX/OP-2 (copy of the Application Form for the booking bearing ID IWF-0104), EX/OP-3 (copy of reminders and notices), EX/OP-4 (Copy of email dated 02.08.2017), EX. Mark A (colly) (copy of photographs of the project)and EX. Mark B (Copy of the Board Resolution dated 09.12.2013).

Heard counsel for the parties at length.

The facts not in dispute are the booking of the Apartment on 19.01.2012 at "The Esfera", Sector 37-C, admeasuring 2400 sq. ft., the total sale consideration being 1,02,57,200/-. It is also an admitted fact that the Builder Buyer Agreement was executed on 02.07.2013. and that the Complainants paid an amount of 92,61,507/-. It is the Complainants' case that the delivery of possession should be given within 42 months from the date of booking and the learned counsel for the Complainants submitted that as on date, the construction is still incomplete and possession has not been offered and the Complainants seek refund of their money paid with interest.

The contention of the learned Counsel for the Developer that the Complainants are not 'Consumers' and that they have booked two Apartments in the project for earning profits is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates, I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainants were dealing in real estate i.e. in the purchase and sale of plots/ flats in his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case they had failed to discharge by filing any documentary evidence to establish their case. It is further held in Kavita Ahuja (supra) that 'merely because of the Complainants had agreed to purchase three flats in the same complex the said acquisition was for a commercial purpose'. Therefore, we are of the considered view that though, the Complainants being father and son had booked two Apartments in the same project, they are 'Consumers' as defined under Section 2 (1)(d) of the Act.

The next contention of the learned Counsel appearing for the Developer that the delay is attributable to Force Majeure Events, and therefore no deficiency of service can be attributed to them is totally unsustainable as the Developer could not substantiate by means of any documentary evidence that the project was delayed by events beyond their control . Except for stating that there were orders of the NGT, demonetization, delay in approvals and sanction, labour strike etc., which led to the delay, which submission, viewed from any angle, cannot be said to be a "Force Majeure Event" . There is no material on record to establish that the aforenoted reasons were beyond their control.

It is seen from the record that as per Clause 11.4 of the Apartment Buyers Agreement, if the Developer is unable to handover the possession of the Apartment within three years from the date of execution of the Agreement and terminate the Agreement the Developer is liable to refund the amount with simple interest @ 9% p.a. and if the Developer decides not to terminate the Agreement the Developer is liable to pay compensation @ 5/- per sq. ft. For better understanding of the said clause, the same is reproduced as hereunder:

"The Intending Allotee(s) agrees that in consequence of the Developer/Company abandoning the Scheme or becoming unable to give possession within three years from the date of execution of this Agreement or such extended periods as permitted under this Agreement, the Developer/Company shall be entitled to terminate this Agreement whereupon the Developer/Company's liability shall be limited to the refund of the amounts paid by the Intending Allottee(s) with simple interest @ 9% per annum for the period such amounts were lying with the Developer/Company and to pay no other compensation whatsoever. However, the Developer/Company may, at its sole option and discretion, decide not to terminate this Agreement in which event the Developer/Company agrees to pay only to the original Intending Allottee(s) and not to anyone else and only in cases other than those provided in Clauses 11.1 11.2, 11.3 and Clause 41 and subject to the Intending Allottee(s) not being in default under any term of this Agreement, compensation @ Rs.5/- per sq. ft. equal to Rs.53.8/- per sq. meter of the super area of the said Apartment per month for the period of such delay beyond three and half years or such extended periods as permitted under this Agreement. The adjustment of such compensation shall be done only at the time of settling the final accounts for handing over/conveying the said Apartment to the Intending Allottee(s) first named in this Agreement and not earlier."

We find force in the contention of the learned Counsel for the Complainants that awarding compensation @ 5 per sq. ft. per month for the period of delay amounts to unfair trade practice as the Developer is charging interest @ 18% p.a. on any delayed payments to be made to them. This meagre sum of 5/- per sq. ft. for every month of delay is approximately 1.4% rate of interest per annum, whereas the Developer is charging interest @ 18% p.a. on any amounts due. At this juncture we find it a fit case to place reliance on the principle laid down by the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2009) CPJ 34 (SC) , wherein the Hon'ble Apex Court had examined such Clauses present in the Builder Buyer Agreements and has observed that such one-sided Clauses amount to unfair trade practice. Keeping in view the facts and circumstances of the case we have no hesitation to hold that Clause 37 of the subject Apartment Buyer's Agreement falls within the definition of unfair trade practice as defined under Section 2 (r) of the Act.

Learned Counsel for the Developer also contended that the Developer is committed to complete the construction within a short span of time. Even in the Written Version there is no specific date given for the handing over of possession of the subject Apartment. Even if we take into consideration the submission of the learned Counsel that the date of possession of the unit is to be taken from the date of the Agreement and not from the date of booking of unit, taking into consideration the 42 months' time period, still the fact remains that the Developer is unable to give a specified date by which time they can handover legal possession with the Occupation Certificate. Hence the decision of the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 (SC), wherein the Hon'ble Apex Court has laid down that the flat purchaser cannot be made to wait indefinitely for delivery of possession, squarely applies to the facts of this case.

This Commission in Consumer Complaint No. 137 of 2017 Tanvir Singh & Ors. Vs. Imperia Structures Ltd. which has been preferred against the same Developer with reference to the same Project has directed the Developer to refund the amount deposited by the Complainants with interest @ 12% p.a. The same has not been challenged and, therefore, has attained finality.

Keeping in view the aforenoted reasons, we are of the considered opinion that there is a deficiency of service on behalf of the Developer and the Complainants are entitled to refund of the amount paid with interest @ 12% p.a. and costs of 25,000/-. It is relevant to note that this interest @ 12% p.a. is being awarded to meet the ends of justice specially keeping in view the submission of the learned Counsel appearing for the Complainants that the Complainants, are residing in the rented accommodation and paying rent; the loss of opportunity of the Complainants as had the Complainants invested the same amount of money elsewhere or if they had purchased the house in another project, would have a better opportunity of exercising their options and could fulfil their dream of owning a house and finally taking into consideration the principal of restitutio in integrum which specifies that the aggrieved person should necessarily be compensated for the financial loss suffered due to the event and get that sum of money which would put him in the same position as they would have been if they had not sustained the wrong. Hence, We are of the view that awarding interest @ 12% p.a. is not only reasonable but also justified. It is pertinent to mention that no additional amounts are being awarded under the head of 'Compensation' and rent paid. At the cost of repetition this interest rate @ 12% p.a. is being awarded by way of damages and compensation.

In the result, this Complaint is allowed in part directing the Developer to refund the principal amount with interest @ 12% p.a. from the respective dates of deposit till the date of realisation together with costs of 25,000/-. This amount is directed to be paid within four weeks from the date of receipt of a copy of this order, failing which, the amount shall attract interest @ 14% p.a. for the same period.

Consumer Complaint No. 2440 of 2017

Vikas Mohan Gupta and Vishal Gupta booked a residential Unit No. 501, Floor 5, Tower B of 2400 sq. ft. and entered into a Builder Buyer Agreement on 27.08.2013, paying a total amount of 92,89,779/-. For all the aforenoted reasons, in Consumer Complaint No. 2439 of 2017, this Complaint is allowed in part and the Developer is directed to refund the amounts paid with interest @ 12 % p.a. from the respective dates of deposit till the date of realization together with costs of 25,000/- to be paid to the first Complainant. Time for compliance four weeks from the date of receipt of a copy of this order, failing which the amount shall attract interest @ 14% p.a. for the same period.