Zainub Bai vs East & West Builders

V.K. Jain, J

The complainant in CC/1356/2017, namely, Madhavi Ohri booked a residential apartment with the OP in a project, namely, 'RNA Metropolis' which the Opposite Party was to develop off P. D'Mello Road, D.J. Mahajani Path, Sewri(W), Mumbai. A residential flat in the aforesaid project was allotted to her on 22.12.2011 for a consideration of Rs.18742403/-.

The complainant in CC/1118/2016, namely, Sai Giridhar booked a residential apartment in the same project and an apartment was allotted to him on 13.2.2013 for a consideration of Rs.31497270/-.

The complainant in CC/1117/2016, namely, Mrs. Zainub Bai also booked a residential apartment in the aforesaid project which was allotted to him on 14.10.2014 for a consideration of Rs.30112125/-. Allotments letters were issued to the complainants on different dates and they also made part payment to the OP. The payment made by them was 25% or more in every case, the said amount being Rs.4806255.23/- in CC/1356/2017, Rs.81,17,634/- in CC/1118/2016 and Rs.7760647/- in CC/1117/2016. No specific time period for delivery of the possession of the flats was stipulated in the allotment letters but according to the complainants, the possession was promised to be delivered within 42 months from the allotment. The case of the complainants is that the completion of the construction is nowhere in sight despite several years from the date of allotment having already expired. According to the complainants, no work is presently going on at the site. The learned counsel for the OP maintains that the work is going on. Being aggrieved, the complainants are before this Commission with the following identical prayers:-

A. This Hon'ble Commission may be pleased to declare that the opposite party is deficient in providing services as contemplated under the provisions of Consumer Protection Act, 1986;

B. This Hon'ble commission may be pleased to pass appropriate directions against the opposite party mandating it to execute a Flat sale agreement, contents of which are approved by this Hon'ble Commission and pass appropriate direction for registering the same as per the provisions of the Indian Registration Act as amended from time to time at the sale price identified in the Allotment Letter.

C. This Hon'ble Commission may be pleased to pass appropriate directions mandating the opposite party to follow the schedule of construction and to deliver quite vacant and peaceful possession of the subject flat to the complainants after obtaining all the requisite permissions from all authorities to use and occupy the subject flat;

D. In the alternative and strictly without prejudice to the prayer clauses B and C above this Hon'ble Commission be pleased to grant appropriate compensation to the complainants by deducting the value of the subject flat as indicated in the Allotment Letter from the market value of the flat as on the date when the present complaint gets decided, or such other appropriate compensatory value as may be deemed fit and appropriate by this Hon'ble Commission.

E. This Hon'ble Commission may be pleased to declare that the standard terms or any other documents containing clauses contrary to the interest of the complainants with respect to the subject flat are illegal, unenforceable and not binding upon the complainants so far the same in any way limit / takeaway the rights of the complainants over the subject flat.

F. This Hon'ble Commission may be pleased to pass appropriate directions mandating the opposite party to pay to the complainants compensation of Rs.1,55,00,000/- or such other amount as may be deemed fit and appropriate by this Hon'ble Commission towards the deficiency in service caused by the opposite party.

The complaints have been resisted by the OP primarily on the ground on which this Commission has already rejected in CC No. 1105 of 2016- Neeta N. Mohnani & Anr. and connected matters , decided on 23.10.2017 and CC No.1355 of 2017 - Prabakar Devokar & Anr. Vs. East & West Builders decided on 10.8.2018. It is also contended by the learned counsel for the complainants that CC/1117/2016 & CC/1118/2016 were premature when they were instituted since 42 months from the date of allotment had not expired by the date on which the said complaints were instituted.

It is not dispute that the period of 42 months computed from the date of allotment had not expired by the time when CC/1117/2016 & CC/1118/2016 were instituted, though the said period had already expired by the time when CC/1356/2017 was instituted.

However, since the aforesaid period of 42 months has already expired during pendency of these complaints, no useful purpose will be served from returning the complaints at this stage with liberty to the complainants to file them afresh. The said course of action if adopted would only inconvenience the complainants without any advantage to the OP. Therefore, I am not inclined to return the complaints at this stage.

As far as the merits are concerned, the matter is squarely covered by the decisions of this Commission in Neeta N. Mohnani & Anr. (supra) which this Commission followed in Prabakar Devokar & Anr. (Supra).

The decision of this Commission in Neeta N. Mohnani & Anr. (supra) to the extent it is relevant, reads as under:-

"3. The complaint has been resisted by the opposite party which has admitted the allotments made to the complainants as well as the payment received from them. It is alleged in the written version filed by the opposite party that the project got delayed because in or around 2012, the DCR (Development Control Regulations) underwent some changes, which led to compulsory changes to be made in the layout structure of the flats and the opposite party had to submit fresh drawings and designs in respect of the said project to the BMC. The changes in the DCR, according to the opposite party, also resulted in reduction of the useable area. It is also stated in the written version that if any complainant wants to exit, the opposite party is prepared to take back the flat and refund the money received from him. It is further alleged that at present, the construction is in full swing though the opposite party has changed its contractor. Thus, according to the opposite party the delay has happened on account of reasons beyond its control. It is clarified in the written version that the IOD was granted on 28.3.2007 whereas the commencement certificate upto plinth level was issued on 29.3.2007. The amended plans are stated to have been issued on 31.5.2014 and the new commencement certificate upto plinth level is stated to have been issued thereafter on 25.3.2015, followed by further commencement certificate upto second parking upper floor level on 06.11.2015.

The main question which arises for consideration in this case is as to whether the opposite party was justified in delaying construction of the apartments on account of the amendment in the Development Control Regulations. During the course of hearing, the learned counsel for the opposite party has placed on record the Notification dated 06.1.2012 issued by the Government of Maharashtra, Urban Development Department whereby certain amendments were carried out in the Development Control Regulations for Greater Mumbai, 1991. There is nothing in the aforesaid Notification requiring that the provisions contained therein would also apply to the projects which had already been sanctioned and for which the commencement certificate had already been issued. As noted earlier, according to the opposite party, the commencement certificate upto plinth level was issued on 29.3.2007. The IOD for the said project was granted by the concerned Executive Engineer on 28.3.2007. In the absence of any provision in the Notification making it applicable even to the projects already sanctioned by BMC, it is not possible to accept the contention that the aforesaid Notification dated 6.1.2012 was imposed upon the opposite party.

The learned counsel for the opposite party has drawn my attention to the Regulations 35(2), 35(3) and 35(4) out of which Regulations 35(2), 35(3) were substituted whereas 35(4) was added as a new Regulation vide Notification dated 06.1.2012. Vide Regulation 35(2), certain areas were excluded from computation while computing the FSI whereas, vide Regulation 35(3) certain areas were included while computing the FSI. No report from a qualified Architect has been produced to prove that the net effect of the Regulation 35(2) and 35(3) as substituted vide Notification dated 06.1.2012 was to reduce the overall constructible area of the flats allotted to the complainants. As far as new Regulation 35(4) is concerned, it appears to be beneficial to the builder since additional FSI has been permitted to the extent of 35% on payment of specified premium. Therefore, in my opinion, neither the Notification dated 06.1.2012 was applicable to the project in question, for which commencement certificate had already been issued on 29.3.2007 upto plinth level nor is there any evidence to prove that as a net result of the amendments made in the Development Control Regulations, the net area of the flats allotted to the complainants got reduced or that the opposite party was compulsorily required to submit a revised building plans, in order to bring them in conformity with the amended DCR.

Even if it is assumed for the sake of arguments that the amended DCR were made applicable to the project in question and the opposite party was obliged in law to submit revised plans conforming to the amended DCR, the whole exercise should not have taken more a few months and the abnormal delay of years together cannot be justified only on account of the aforesaid amendments in the DCR.

For the reasons stated hereinabove, I hold that the opposite party has failed to establish that the construction of the apartments has been delayed on account of reasons beyond its control. Consequently, the opposite party is liable to pay appropriate compensation to the complainants for the period the possession of the apartment is delayed.

The next question which arises for consideration is as to what would be the reasonable time for completion of the construction when no such time is stipulated in the allotment letter. According to the learned counsel for the opposite party, they had envisaged a time period of five years from the date of obtaining all the necessary approvals, for completing the construction, whereas, according to the learned counsel for the complainants, the opposite party had committed to deliver possession of the apartment within 42 months from the date of allotment. The alleged oral commitment is however disputed by the opposite party. Considering all the facts and circumstances of the case including the fact that the building in question was supposed to be a multi-storied building, a period of four years from the date of allotment, in my opinion, was a reasonable time for completing the construction in all respects, obtaining the requisite occupancy certificate and offering possession of the apartments to the flat buyers.

The next question which arises for consideration is as to what should be the compensation to be paid to the complainants for the delay in construction of the flats and offering possession of the said flats to them. Considering the rates of interest prevailing in the market at the relevant period, the opposite party, in my view, should pay compensation in the form of simple interest @ 8% per annum on the entire amount already paid to her by the complainants with effect from four years from the date of allotment till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite occupancy certificate.

It transpired during the course of arguments that in Consumer Complaint No.1109 of 2016 the complainants were required to pay 17% of the agreed sale consideration as the booking amount but they have paid only 16% of the said consideration. Therefore, they must pay the appropriate interest on 1% of the sale consideration. The aforesaid complainants therefore are required to pay interest @ 8% per annum on 1% of the agreed sale consideration from the date of allotment till the date of this order.

It also transpired during the course of arguments that since the opposite party did not execute the agreement in terms of MoFA, it is now required to execute such agreement in terms of Section 13 of the Real Estate (Regulation & Development) Act, 2016. Such an agreement for sale has to be in the prescribed format and contain the specified particulars. The learned counsel for the opposite party states on instructions that the agreement in terms of Section 13 of RERA as per the prescribed format shall be executed within three months from the date of this order, wherever 10% or more of the agreed sale consideration has already been received and in the remaining cases, the agreement will be executed on receipt of the requisite 10% payment.

The learned counsel for the opposite party states on instructions that they require five years to comply with the aforesaid directions. In my view, a time period of five years would be very unreasonable considering the substantial time period which has already elapsed from the date of allotment was made to the complainants. Considering all the facts and circumstances of the case, a time period of three years, in my opinion, would be sufficient for the purpose."

At this stage, the learned counsel for the OP having taken instructions from the OP on telephone states that the OP is ready to refund the entire amount received from the complainants along with compensation in the form of simple interest @ 8.5 % p.a. from the date of each payment till the date of refund. The said offer is acceptable to the complainants. Hence the complains are disposed of with the following directions:-

In CC/1356/2017, the OP shall refund the principal amount of Rs.4806255.23/- along with compensation in the form of simple interest @ 8.5% per annum from the date of each payment till the date on which the aforesaid amount is refunded along with compensation in terms of this order.

In CC/1118/2016, the OP shall refund the principal amount of Rs.81,17,634/- along with compensation in the form of simple interest @ 8.5% per annum from the date of each paymenttill the date on which the aforesaid amount is refunded along with compensation in terms of this order.

In CC/1117/2016 the OP shall refund the principal amount of Rs.7760647/- along with compensation in the form of simple interest @ 8.5% per annum from the date of each payment till the date on which the aforesaid amount is refunded along with compensation in terms of this order.

The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants in each complaint.

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