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State Consumer Disputes Redressal Commission

Sonakshi Sahani vs M/S Pratham Buildcon Pvt. Ltd. & Anr. on 13 April, 2021

      IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
                       COMMISSION

                                    JUDGMENT RESERVED ON: 10.02.2021
                                 JUDGMENT PRONOUNCED ON: 13.04.2021

                            COMPLAINT NO. 1146/2017

     IN THE MATTER OF

     Ms. SONAKSHI SHAHANI                                    ....COMPLAINANT

                                       VERSUS

     M/S PRATHAM BUILDCON
     PVT. LTD. & ORS.                                    ....OPPOSITE PARTIES

     CORAM:
     HON'BLE DR. JUSTICE SANGITA DHINGRA                                  SEHGAL
     (PRESIDENT)
     HON'BLE SH. ANIL SRIVASTAVA, (MEMBER)

     Present: Mr. Brajesh Tiwari, Counsel for the Complainant.
              Mr. Sachin Anand, Counsel for the OP.

     PER: HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,
          PRESIDENT
                        JUDGMENT

[Via Video Conferencing]

1. The present complaint has been filed before this commission under Section 17 of the Consumer Protection Act, 1986 by Ms. Sonakshi Shahani (hereinafter referred to as 'complainant') against M/s Pratham Buildcon Pvt. Ltd. & Ors. (hereinafter referred to as 'opposite parties') seeking the following reliefs:

a) To pass an order against the opposite parties, thereby directing them to pay a sum of Rs. 61,25,018/- (sixty one lakhs twenty five thousand eight rupees only) to the complainant till the date of its actual realization/payment.

b) Award Rs. 10,00,000/- to the complainant as compensation towards mental harassment.

c) To direct the opposite party to pay the actual cost of the litigation to the complainant.

d) To pass any other order or relief, which this Hon'ble commission deem fit and proper in favour of the complainant against the opposite parties in the interest of justice.

2. Brief facts necessary for the adjudication of the present complaint are that the complainant booked a flat bearing no. 203 with the opposite party no. 1 in the housing project named as "THE ALIAN COURT" at Tronica City, Ghaziabad for a total consideration of Rs. 28,71,250/-. Thereafter flat buyer agreement was executed between the parties on 08.09.2012. As per clause 9.1 of the flat buyer agreement the Opposite Party no. 1 had to hand over the possession of the said flat to the complainant within a period of 36 months from the date of execution of this agreement. The complainant over the time had paid a sum of Rs. 27,87,000/- to the Opposite Party no. 1 as and when demanded by him. The complainant took a loan of Rs. 21,48,689/- from Diwan Housing Finance Corporation Limited to fulfill his obligations. The possession of the flat has not been handed over by the Opposite party no. 1 till date and therefore, the complainant CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 2 of 12 approached this commission alleging deficiency of service on the part of opposite parties.

3. The Opposite Parties have contested the present case and has raised some preliminary objections as to the maintainability of the complaint case. The counsel for the Opposite Party contended that this commission lacked pecuniary as well as territorial jurisdiction to adjudicate this present complaint and the delay in the project happened due to force majeure circumstances, which are beyond the control of the opposite parties.

4. The counsel for the Opposite Party contended that the flat has been purchased solely for the purpose of investment, merely for "Commercial Purpose", hence, the complainant is not a Consumer within the provisions of the Consumer Protection Act, 1986. He further contended that the possession was already offered to the complainant vide letter dated 14.09.2019. Pressing the aforesaid objections, the counsel appearing on behalf of the Opposite Party prayed that the complaint should be dismissed.

5. The complainant filed his Rejoinder rebutting the written statement filed by the Opposite Parties. Both the parties filed their Evidence by way of Affidavit in order to prove their averments on record.

6. We have heard the counsel for both the parties and perused through the material on record.

7. The fact that the complainant has booked a flat with the Opposite Party no. 1 is not in dispute from the evidence on record. Payment to the extent of Rs. 27,87,000/- by the complainant is admitted by the Opposite Party no. 1 (Para 2 of the written statement).

8. Before delving into the merits of the case, we deem it appropriate to adjudicate preliminary issues of law as to the maintainability of the consumer complaint.

WHETHER THIS COMMISSION HAS THE TERRTITORIAL JURISDICTION TO ADJUDICATE THE PRESENT COMPLAINT?

9. The issue with respect to territorial jurisdiction in case of a consumer complaint has been dealt with by this commission in a series of judgments wherein it has been held that this Commission is empowered to entertain a consumer complaint against a person/company whose Registered Office is situated within the territory of NCT of Delhi. (Reference: CC-1375/2016 titled Mr. Raghavendra Rengaswamy vs. M/s ORS Infrastructure Pvt. Ltd decided on 25.03.2021, CC-621/2016 titled Abhaya Srivastava & Anr. vs. M/s Supertech Ltd. decided on 09.03.2021).

10. In the present case, the registered office of the Opposite Party no. 1 is at C-4-D, 5, DDA Commercial Complex, Janakpuri, New Delhi

- 110058, which falls within the territory of Delhi, hence, this commission is not paralyzed from entertaining the present consumer complaint for want of territorial jurisdiction. WHETHER THIS COMMISSION HAS THE PECUNIARY JURISDICTION TO ADJUDICATE THE PRESENT COMPLAINT?

11. We deem it appropriate to refer to Section 17(1) of the Consumer Protection Act, 1986 which provides as under:

"(1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction--

(a) to entertain-

(i) complaints where the value of the goods or services and compensation, if any, claimed [exceeds rupees twenty lakhs but does not exceed rupees one crore]; and

(ii) appeals against the orders of any District Forum within the State; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State, where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity."

12. Analysis of Section 17(1) of the Consumer Protection Act, 1986 leads us to the conclusion that this commission shall have the pecuniary jurisdiction in cases where the total claim including the compensation is more than twenty lakhs and less than One Crore. Having discussed the statutory position, the facts of the present case reflect that the value of the flat and the compensation prayed for by the complainant is beyond Rs. 20 Lakhs but does not exceed Rs. 1 Crore, accordingly, this commission has the pecuniary jurisdiction to deal with the present complaint.

COMPLAINANT- A CONSUMER OR NOT?

13. The Opposite Party has contended that the complainant is not a Consumer as defined under the Consumer Protection Act, 1986 since the flat was purchased for investment, which constitutes commercial purpose.

14. It is imperative to refer to the dicta of the Hon'ble National Commission in CC-1122/2018 titled Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. decided on 01.11.2019, wherein, the Hon'ble National Commission has held as under:

"19. The contention of the Learned Counsel that the said Apartments were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainants have purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. The Opposite Parties failed to discharge their onus and we hence hold that the Complainants are 'Consumers' as defined under Section 2(1)(d) of the Act."

15. From the aforesaid dicta of the Hon'ble National Commission, it flows that it is for the Opposite Party no. 1 to prove that the flat purchased was for commercial purpose, by way of some documentary proof and a bald statement is not sufficient to raise adverse inference against the Complainant.

16. In the present case also, the Opposite Party no. 1 has merely made a statement that the Complainant has purchased the flat for commercial purpose and on perusal of the record before us, we fail to find any material which shows that the Complainant is engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such houses. Mere allegation, that the purchase of the property is for CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 6 of 12 commercial purpose, cannot be the ground to reject the present consumer complaint. Consequently, the objection raised on behalf of the Opposite Party no. 1 is answered in the negative.

FORCE MAJEURE-GROUND FOR DELAY?

17. The Opposite Party no. 1 has also contended that the delay is attributable to the force majeure circumstances which is beyond the control of the opposite party no. 1. The present issue is no more res integra and has been discussed by the Hon'ble National Commission in plethora of judgments. We tend to rely on CC-1328/2017 titled Pratima Rajpal and Ors. vs. Parsvnath Developers Limited decided on 30.05.2019, wherein, a similar stand was taken by the present developer before the Hon'ble National Commission, which was finally adjudicated as under:

"9. .........The stand taken by the Opposite Party that the period of delivery of possession is 36 months as defined in clause 10 (a) is not sacrosanct as it is stated in the said clause that "Construction of the Flat is 'likely' to be completed within a period of thirty six months" and therefore 'Time is not the essence of the contract' and the delay is attributable to Force Majeure Events, and therefore no deficiency of service can be attributed to them is totally unsustainable as the Opposite Party could not substantiate by means of any documentary evidence that the project was delayed by Force Majeure Events. Except for stating that there was global recession in the year 2009, which affected the real estate sector and there was financial crunch experienced by the Developer which led to the delay, which submission, viewed from any angle, cannot be said to be a "Force Majeure Event". The Opposite Party has not filed any material on record to prove that the reasons were beyond their control."

18. Even in the present case also, the Opposite Party no. 1 has not brought forth any documentary evidence to prove that the project in question was directly impacted by the force majeure events. Having regard to the aforesaid binding dicta of the Hon'ble National Commission, we are of the view that the contention of the Opposite Party no. 1 holds no concrete ground and is answered in the negative.

DEFICIENCY OF SERVICE

19. The question which arises is whether the Opposite Party No. 1 is actually deficient in providing its services to the complainant or not. The expression Deficiency of Service has been dealt with by the Hon'ble Apex Court in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:

"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:

(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression 'service' in Section 2(1) (o) means a service of any CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 8 of 12 description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation."

20. At this stage, we deem it appropriate to refer to clause 9.1 of the floor buyer agreement dated 08.09.2012 entered into by both the contesting parties. The perusal of clause 9.1 of the flat buyer agreement, which has been brought on record by the complainant reflects that the Opposite Party no. 1 was bound to handover the possession of the said floor within 36 months from the date of execution of this agreement.

21. On perusal of the record before us, we find that the possession was offered by the Opposite Party no. 1 vide letter dated 14.09.2019 along with a demand of Rs. 3,78,131/-. We further note that the possession as per the flat buyer agreement in question was to be handed over by the Opposite party no. 1 by September 2015 and CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 9 of 12 the possession was actually offered by the Opposite party no. 1 on 14.09.2019, which is not within the stipulated period as provided by the agreement dated 08.09.2012.

22. We deem it appropriate to refer to Aashish Oberai vs. Emaar MGF Land Limited reported in I (2017) CPJ 17 (NC), wherein the Hon'ble National Commission has held as under:

"I am in agreement with the learned senior counsel for the complainant that considering the default on the part of the opposite party in performing its contractual obligation, the complainant cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.

23. The complainants cannot be expected to wait for an indefinite time period to get the benefits of the hard earned money which they have spent in order to purchase the property in question. (Ref:

Fortune Infrastructure v. Trevor D'Lima reported at (2018) 5 SCC 442).

24. Relying on the above settled law, we hold that the Opposite Party no. 1 is deficient in providing its services to the Complainant as the Opposite Party No. 1 had given false assurance to the complainant with respect to the time for delivery of possession of the flat and kept the hard earned money of the complainant for about 7 years. Moreover, the Opposite Party no. 1 failed to handover the possession of the said flat to the complainant within the stipulated time period and therefore, now the complainant is not bound to take the possession of the said flat after the stipulated period.

25. Having discussed the liability of the Opposite Party no. 1, the only question left to adjudicate is as to how the complainant is to be compensated for the deficient acts of the Opposite Party. It is imperative to refer to the recent pronouncements of the Hon'ble Supreme Court in terms of "Interest" which is being allowed on the refunded amount. In Arifur Rahman Khan and Ors. (supra) which is the latest pronouncement (24.08.2020) on the cause, the Hon'ble Apex Court has allowed an interest @ 6% p.a. on the amount received by the Opposite Party, payable within one month and in case of default to pay within the stipulated period, an interest @ 9% p.a. was payable on the said amount.

26. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party no. 1 to refund the entire amount paid by the complainant i.e. Rs. 27,87,000/- along with interest as per the following arrangement:

A. An interest @ 6% p.a. calculated from the date on which each installment/payment was received by the Opposite Party no. 1 till 13.04.2021 (being the date of the present judgment);

B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party no. 1 pays the entire amount on or before 12.06.2021;

C. Being guided by the principles as discussed above, in case the Opposite Party no. 1 fails to refund the amount as per the aforesaid clause (A) on or before 12.06.2021, the entire amount is to be refunded along with an interest @ 9% p.a. calculated from the date on CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 11 of 12 which each installment/payment was received by the Opposite Party no. 1 till the actual realization of the amount.

27. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party no. 1 is directed to pay the following sum to the complainant :-

A. Rs. 1,50,000/- as cost for mental agony and harassment to the complainant; and B. The litigation cost to the extent of Rs. 50,000/-.

28. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.

29. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.

30. File be consigned to record room along with a copy of this Judgment.

(DR. JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (ANIL SRIVASTAVA) MEMBER Pronounced On: 13.04.2021 CC 1146/2017 SONAKSHI SHAHANI V. M/S. PRATHAM BUIDCON PVT LTD. & ORS. Page 12 of 12