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Judgment
Subhash Chandra, J
This complaint has been filed under section 21(a) (i) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in service and unfair trade practice in respect of a flat booked by them with the opposite party viz., Forte Point India Pvt. Ltd., in a project promoted and developed by it and seeking refund of the amount deposited along with interest and other compensation.
Briefly, the facts of the case are that the complainant had booked a three bedroom residential flat admeasuring 1762 sq ft in a group housing project ‘The Olive Spire’ in Sector 70A, Gurgaon (in short, the ‘project’) being developed and promoted by the opposite party as the first Residential Green Building Project. The construction was promised to be completed within 36 months along with various facilities of club building, sports complex, park, community center, shopping arcade, park, etc. Opposite party no. 1 assured the complainant that the project was being developed through opposite party no. 5, a registered company, under an agreement dated 03.10.2009 read with addendums dated 22.01.2010 and 22.07.2010 and that in the eventuality the agreement between them was frustrated for any reason, opposite party no. 1 will refund the amount to the complainant.
The sale consideration for the flat was Rs.88,10,000/- inclusive of EDC/IDC, club house charges, IBMS and other charges. A 12% rebate was offered by opposite party no.1 on payment of 95% down payment and accordingly on 04.02.2013 the complainant opted for the same and paid 95% down payment of Rs.63,00,000/- against the sale consideration of Rs.73,00,739/- for which a receipt was issued on 06.02.2013. Apartment No. C-505 was allotted by the opposite party. Thereafter, on 14.02.2014 an Apartment Buyer Agreement (in short, the ‘Agreement’) was sent by the opposite party which was signed by the complainant in good faith as 95% of the consideration had already been paid. As construction did not commence, the complainant made enquiries only to learn that there was a land dispute between opposite parties nos.1 and 5. On 19.01.2016 the complainant served a legal notice demanding refund with interest at 24% rate of interest and costs of Rs.40,00,000/- as nearly 3 years had elapsed to compensate him for the loss of opportunity. Since the opposite party refused to admit any liability, the complainant approached this Commission in Consumer Complaint No. 124 of 2016 which ultimately came to be withdrawn on 22.02.2016 as being premature as the period of 36 months for construction had not expired.
The complainant has averred that the delay in offering possession has been inordinate and amounts to deficiency in service in not offering possession within the stipulated time. He is therefore before this Commission with the following prayer:
(a) direct the opposite parties to pay Rs 1,66,00,000/- (Rupees one crore sixty six lakh only) towards refund of 95% down payment, interest and compensation to the complainant with interest @ 24% till its realization;
(b) award cost of litigation in favour of the complainant; and
(c) pass any other order(s) or direction(s), which this Hon’ble Commission deems fit and proper under the circumstances.
The opposite party has contested the complaint by way of reply. It is contended that the complaint is without merit and is vexatious. Preliminary objection has been taken that the complainant is not a ‘consumer’ but a speculative investor since he is already a resident of New Delhi and his previous complaint was intended only to make gains from the investment in the booking of the present flat. It is contended that the complainant is selectively relying on the Agreement regarding the date of possession while ignoring other provisions pertaining to delay compensation. It is contended that this Commission lacks jurisdiction as the case involves interpretation of the contractual terms of the Agreement which cannot be re-written at this stage and there is a provision for arbitration under clause 41 of the Agreement.
It is contended that as per clause ‘E’ and 8.4 of the Agreement, opposite party no.1 reserves the right to refund the money with 9% interest with no compensation. It is contended that as per clause 1.13 of the Agreement dated 14.02.2014, the contractual period for possession of the flat was 36 months with a grace period of 6 months. It is admitted that there has been delay in meeting this commitment; however, the delay is not due to reasons that can be ascribed to the opposite party. It is the case of the opposite party that the opposite party no. 5 did not execute the GPA in his favour and breached the terms of the agreement with it which resulted in delay. Even the period for offering possession was tentative. The building licence was cancelled by the DTCP, Haryana on 29.05.2011 due to non-payment of EDC/IDC charges by opposite party no. 5 which was had renewed on 30.08.2011 by the opposite party on payment of Rs.3 crores outstanding dues. However, this licence was also cancelled on 27.05.2015 which caused delay. There were also other issues between him and the opposite party no. 5 relating to the project land which delayed the project. It is contended that the slowdown in the real estate sector further aggravated the situation.
Opposite party has contended that as per clause 1.18 of the Agreement, it can be held liable to pay compensation only if delay in handing over possession is on account of negligence or non-performance on his part. As the delay is on account of opposite party no. 5, he cannot be held liable. There is no deficiency in service for this reason. It is also contended that the complaint has failed to establish unfair trade practice as per section 2(r) of the Act.
On merits, it is argued similarly that the delay is on account of the opposite party no. 5 which resulted in cancellation of the licence. Reliance is placed on clauses D, E, K and 8.4 of the Agreement which permit opposite party to suspend construction for a reasonable period of time. The complaint according to the opposite party is premature and liable to be dismissed.
Parties led their evidence. Written synopses of arguments were also filed by both the parties. We have heard the learned counsel for the parties and given thoughtful consideration to the documents and evidence on record.
On behalf of the complainant it is argued that the terms of agreement between the parties has been frustrated as the project is inordinately delayed. It is argued that the opposite party is wrong in attempting to fasten the blame on the opposite party no. 5 since the Agreement dated 14.02.2014 specifically mentions in clause A that it is the ‘owners’ who are developing the project and in clause E that in case the principal agreement between opposite parties 1 and 5 gets frustrated due to any reason, the entire amount paid by the buyer shall be refunded with simple interest @ 9%. As the opposite party is in no position to execute the project and offer possession to the complainant as per its own admission, there is both deficiency in service and unfair trade practice. It is therefore prayed that the complaint be allowed.
Opposite party contends that the filing of CC 124 of 2016 by the complainant which was dismissed as withdrawn indicates that the complaint is filed primarily to make speculative gains and that the complainant is not a bona fide consumer. It is his contention that as the GPA was not executed by opposite party no 5, the issue of date of possession of 36 months and 6 months grace is not applicable. The delay according to him is due to the fault of opposite party no. 5. In this connection reliance is placed on Hon’ble Supreme Court’s judgment in Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna in Civil Appeal 5785 of 2019 dated 21.01.2021 and Union Bank of India Vs. Seppo Rally OY & Ors, AIR 2000 SC 62 which held that there is no liability in case damage is caused due to some other’s fault. It is also argued that as the complainant has only paid Rs 63,00,000/- towards the flat and interest @ 9% works out to Rs 22,68,000/-, this Commission lacks pecuniary jurisdiction in the matter. Reliance is also placed on Gopal Singh Verma Vs. Experion Developers Pvt. Ltd. in CC 724 of 2917 dated 23.08.2017 which was affirmed by the Hon’ble Supreme Court in Civil Appeal No. 37416 of 2017.
The preliminary objection of the opposite party that the complainant is not a ‘consumer’ but an investor needs consideration in light of the Hon’ble Supreme Court’s judgment in Laxmi Engineering Works Vs. PS G Industrial Institute Civil Appeal No of 4193 of 1995 (1995) 3 SCC 583 which defines ‘commercial purpose’ and this Commission’s orders in in Kavita Ahuja vs Shipra Estates – I (2016) CPJ 31, wherein it was held that the onus of establishing that the complainant was dealing in real estate, i.e., in the purchase and sale of plots/ flats for commercial purposes to earn profits lies upon the opposite party. This Commission in Rajnish Bhardwaj and Ors vs M/s CHD Developers Ltd., and Ors., in CC no. 3775 of 2017 decided on 26.11.2019, had also observed that:
“13. The first contention of the Learned Counsel for the Opposite Party that the Complainants are not “Consumers” and only “investors” is not supported by any documentary evidence. In a catena of judgments, this Commission has laid down that the onus of proof shifts to the Opposite Party to prove that the Complainant is “investor” and it is observed that the Opposite Party did not discharge their onus of proof regarding this aspect. Hence, we are of the considered view that the Complainants are “Consumers” as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986”.
The opposite party has not established that complainant had booked the flat as an ‘investor’ through evidence in the present case. Only a bald assertion is made. The contention of the opposite party therefore does not sustain.
The contention that this Commission lacks jurisdiction and the issue needs consideration by a civil court has also been considered. This issue was put to rest by the Hon’ble Supreme Court in M/s Emaar MGF Land Limited Vs. Aftab Singh I (2019) CPJ 5 (SC) wherein it was held that even an arbitration clause in the Agreement does not bar the jurisdiction of the consumer fora to entertain the complaint. This contention is therefore not justified and is not accepted. As far as pecuniary jurisdiction is concerned, the arguments of the opposite party do not sustain in the light of the orders of this Commission in Ambrish Kumar Shukla & 21 Ors. Vs. Ferrous Infrastructure Pvt. Ltd. dated 17.10.2016 in CC No 97 of 2016 which was reiterated in Renu Singh Vs. Experion Developers Pvt. Ltd. dated 26.10.2021 in CC 1703 of 2018 which laid down that the aggregate of all claims shall determine pecuniary jurisdiction. The contentions regarding jurisdiction therefore do not sustain.
It is contended by the opposite party that as the agreement was voluntary and is not one-sided, it does not constitute any unfair trade practice. This contention needs consideration in light of the judgement of the Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd., vs Govindan Raghavan and other connected matters – in CA no. 3182 of 2019 dated 02.04.2019, wherein it has been categorically held that “… terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder” (para 6.7) and that “The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms” (para 7). In the instant case, the Agreement was presented by the opposite party to the complainant after collecting 95% of the sale consideration which clearly left him with no option but to sign the document. The terms of the Agreement do not leave any doubt that the document is one-sided and in favour of the opposite party.
Admittedly, there has been a delay in the execution of the project due to land related issues between the opposite parties nos. 1 and 5. No offer of possession has been made nor is likely to be made soon as the land issues continue as per admission by opposite party no. 1. In a catena of judgements, the Hon’ble Supreme Court and this Commission have upheld the right of a complainant to be compensated for inordinate delay in the offer of possession of a residential apartment booked by them due to inordinate delays by builders when the complainants are bona fide consumers who have duly paid the instalments and waited for the promise of allotment to fructify. Undeniably, the opposite party had indicated a period of 36 months with a 6 month period of grace from the date of the Agreement (14.02.2014), i.e. by 15.08.2017. Possession was, however, not offered till the filing of the complaint or on date. The intervening period of nearly 5 years is not a short period and the complainant is justified in seeking compensation for the same. The opposite party cannot expect the complainant to wait indefinitely for the possession to be offered. The Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra – II (2019) CPJ 29 SC has also laid down that
“…it would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession…A buyer can be expected to wait for a reasonable period. A period of seven years is beyond what is reasonable”.
In Fortune Infrastructure Vs Trevor D’Lima (2018) 5 SCC 442 the Hon’ble Supreme Court had held that
‘a buyer cannot be expected to wait indefinitely for possession and in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation’.
We are also guided by the law laid down by the Hon’ble Supreme Court in Fortune Infrastructure Vs Trevor D’Lima (supra) that in a case of an unreasonable delay in offering possession, a buyer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation. As the project is admittedly not complete, the complainant’s exercising of his option to seek a refund cannot be construed to be unjustified. The prayer of the complainant for refund with compensation in the form of interest is therefore justified.
In real estate projects where the opposite party/builder collects deposits against a time committed project, the management of risks is his liability. By his own admission, the opposite party has claimed that delay was also on account of its own issues with another partner. It had also categorically committed in the Agreement with the complainant that in case of any dispute with opposite party no. 5, the responsibility of refund and compensation would be his responsibility. This cannot qualify as a force majeure event. He cannot also resile from this commitment at this stage. The argument of the opposite party therefore does not merit consideration.
The contentions of the complainant seeking refund with compensation in the form of interest and cost of litigation are therefore valid and liable to succeed. The opposite party has held the deposited money for over 5 years with the promise of offering a residential flat without any progress even after over 5 years citing its differences with a business partner as the ground for the cause of delay and seeking indemnity from negligence or deficiency in service on his part. Considering that the project was promoted by the opposite party as the owner with the clear commitment of refund and compensation in case of default, it is patently erroneous for it to now claim immunity from any liability of deficiency or unfair trade practice. The complainant’s prayer for the refund of his money with interest as compensation is completely valid since he cannot be expected to wait indefinitely, especially since the project does not appear to have taken off even as on date.
I therefore find merit in the complaint and allow the same with the following directions:
(i) opposite party shall refund the amount deposited by the complainants with interest @ 9% on the deposited amount from the date of deposit till the date of realization;
(ii) opposite party shall pay litigation costs of Rs 50,000/- to the complainant
(ii) this order shall be complied within two months failing which penal interest of 12% shall be paid.
With these directions, the above consumer complaint stand disposed of.