National Consumer Disputes Redressal
Varun Gupta & Anr. vs Today Homes & Infrastructure Pvt. Ltd. on 13 November, 2019
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 3507 OF 2017 1. VARUN GUPTA & ANR. ...........Complainant(s) Versus 1. TODAY HOMES & INFRASTRUCTURE PVT. LTD. Through its Directors, R/o At Upper Ground Floor, 1 to 11, Ambadeep Building, K.G. Marg, New Delhi-110001 ...........Opp.Party(s) CONSUMER CASE NO. 3715 OF 2017 1. ASHU GULATI ...........Complainant(s) Versus 1. M/S. TODAY HOMES INFRASTRUCTURE PVT. LTD. Through its Authorised Signatory Director Mr. Alakh kumar, At Statesmen House, 8th Floor, Bara khamba Road, new delhi-110001 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER
For the Complainant : For the Complainants : Mr. Nipun Saxena, Advocate and
(In CC No.3507/2017) Ms. Serona Sharma, Advocate
For the Complainants : Mr. Neeraj Kumar Sharma, Advocate
(In CC No.3715 of 2017) For the Opp.Party : For the Opposite Party : Mr. Vivek Sibal, Ms. Ankita Bajpai and
(In both Complaints) Ms. Apoorva Chowdhury, Advocates
Dated : 13 Nov 2019 ORDER
(Pronounced on_13th day of November, 2019)
R.K. AGRAWAL, J. PRESIDENT
I.A. NO. 19645 OF 2018 IN C.C. NO. 3507 OF 2017 (MAINTAINABILITY OF COMPLAINT)
During the pendency of the Complaint, I.A. No. 19645 of 2018 was filed by the Opposite Party questioning the maintainability of the Complaint before this Commission in view of the provisions contained in the RERA, 2016.
In view of the order passed by the Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. & Anr. Vs. Union of India & Ors. - 2019 SCC Online SC 1005, wherein it has been held that remedies given to the allottees of the flats/apartments are concurrent and such allottees are in a position to avail of remedies under the Consumer Protection Act, RERA, as well as trigger the provisions of the Insolvency and Bankruptcy Code, 2016, the IA No.19645 of 2018 is dismissed.
I.A. NO. 14546 OF 2018 IN C.C. NO. 3715 OF 2017 (MAINTAINABILITY OF COMPLAINT ON PECUNIARY JURISDICTION)
In view of the decision of the Larger Bench of this Commission in the case of "Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Private Limited - I (2017) CPJ I NC", wherein it has been held that pecuniary jurisdiction should be construed keeping in view the total value and goods and services in addition to the compensation prayed for, the I.A.No.14546 of 2018 is dismissed. In this case, admittedly the Complainant has paid an amount of ₹78,84,904/- and has sought for damages by way of interest @ 12% p.a., compensation of ₹5,00,000/- and other reliefs which total goes beyond One Crore and definitely attracts the pecuniary jurisdiction of this Commission.
BRIEF FACTS OF THE COMPLAINTS
1. Both these Consumer Complaints, under Section 21(a)(i) of the Consumer Protection Act, 1986 (for short "the Act"), have been filed by the Complainants, the allottees of a Residential Flat/Apartment in the project, namely, "Today Homes, Callidora", to be developed and constructed by the Opposite Party at Sector 73, Sohna Road, Gurugram, Haryana, alleging deficiency in service and unfair trade practice on the part of the Opposite Party and seeking compensation for the losses suffered by them on account of failure of the Opposite Party to construct and deliver the flats booked by them way back in the year 2011, despite various reminders seeking delivery of the booked flats.
2. In both the Complaints, Complainants have entered into identical "Agreements to Sell"/"Flat Buyer Agreements" with the Opposite Party; the facts and question of law involved in their cases are similar, inasmuch as physical possession of the allotted Flats, has not been handed over within the committed period and almost similar reliefs have been prayed for in both the Complaints.
3. For the sake of convenience, the material facts, enumerated hereinafter, are taken from the Consumer Complaint No.3507 of 2017 titled as Shri Varun Gupta & Anr. Vs. Today Homes & Infrastructure Pvt. Ltd.
4. Factual matrix that culminates in the filing of the Consumer Complaint, starts in the year 2011, when one Shri Gurdeep Singh Batra, swayed by the representations, misleading and dubious statements contained in the brochure of the Opposite Party, booked a residential Flat No.901, Tower No.5, in "Today Homes, Callidora" project of the Opposite Party on 25th February, 2011, by paying initial booking amount of ₹19,74,274/-. The said payment was made by Shri Batra in fulfilment of the terms stipulated in the Construction Linked Payment Plan, as opted by him. After about two years from the date of making initial payment towards booking, a Builders Buyers Agreement was entered into between Shri Batra and the Opposite Party on 7th February, 2013. In terms of the Builder Buyers Agreement, the total sale consideration of the flat was stipulated at ₹78,50,798/-. It is averred in the Complaint that, subsequently, the Complainants purchased the said residential flat from Shri Batra by entering into an Agreement to Sell dated 19th April, 2014 and as a result thereof, the said flat was transferred in their name. Opposite Party issued a 'No Objection Certificate' on 22nd April, 2014 for transfer of the said flat in the name of the Complainants. The Opposite Party also acknowledged the said transfer vide 'Transfer Acknowledgement Sheet' executed by its representative on 9th May, 2014. Upon transfer, Complainants made a payment of ₹49,93,000/- to Shri Gurdeep Singh Batra, the predecessor in title, vide Cheque No.399134 dated 9th May, 2014 as well as additional payment of ₹8,50,000/- vide Cheque No.862397 dated 19th April, 2014. Thus, having obtained the 'No Objection Certificate' and the 'Transfer Acknowledgement Sheet', the Complainants stepped into the shoes of their predecessor in interest and they were supposed to pay the future demands to be raised by the Opposite Party, in accordance with the Construction Linked Payment Plan, appended to the Builder Buyers Agreement.
5. The Complainants, in order to make payment of the balance sale consideration, as per the demands to be raised by the Opposite Party, got a home loan sanctioned for an amount of ₹60,13,858/- on 29th April, 2014, from the ICICI Bank Ltd. and, thereafter, made various payments to the Opposite Party without any default, as and when demands were raised by the Opposite Party, allegedly, on completion of various levels of construction. By 14th July, 2017, Complainants made a total payment of ₹78,28,924/- to the Opposite Party including TDS and VAT charges. All the payments were duly received by the Opposite Party and due acknowledgements/receipts were issued to the Complainants.
6. As a part of the averments made in the Complaint, it is stated that as per Clause 23 of the Builder Buyers Agreement dated 7th February, 2013, the Opposite Party was under an obligation to handover the physical possession of the flat in question, complete in all respects, within 36 months (3 years) from the date of execution of Builder Buyers Agreement with a further grace period of six months for reasons beyond their control. However, the Opposite Party could not complete the construction of the Project and failed to hand over possession of the flat within the stipulated date i.e. 6th August, 2016. Further, the Opposite Party vide their emails dated 9th January, 2017 and 4th February, 2017 promised to the Complainants that the residential unit, duly completed in all respects, would be handed over in the month of April, 2017. It is stated in the Complaint that the construction status report, which was shared by the Opposite Party, vide its above stated emails, revealed that even the basic construction of Tower No.5 was incomplete. That the plaster work, both internal and external, were pending; the plumbing work, electrical work, flooring, pain and fire-fighting work were yet to be completed and even the boundary wall of the project was not constructed. The delivery of possession of the residential flat, thus, was far from reality and there was already a delay of 16 months. Complainants made several attempts to inquire about the actual status of the construction, but no satisfactory answer was given to them. On their visit to the construction site in November, 2017, the Complainants were shocked to see that no labour was deployed at the site and there was no construction work. Complainants were also shocked to realize that the stages of construction for which they had already paid for, had not even been completed by the Opposite Party and when they confronted the representatives of the Opposite Party about the said issue, they gave false assurances and frivolous excuses.
7. The Complainants are suffering substantial financial hardship inasmuch as pending delivery of possession of the flat booked, hefty EMIs to the tune of ₹1,20,000/- per month were deducted monthly from their account towards repayment of the home loan to the ICICI Bank Ltd.. On the other hand, the Opposite Party, despite receiving all the payments, failed to complete the construction of the project and handover possession to the Complainants.
8. It is submitted in the Complaint that as per Clause 23 of the Builder Buyer Agreement, the time period to handover possession could be extended by the Opposite Party beyond the stipulated time, without any penalty being imposed upon them for such delay in handing over possession on force majeure conditions which include passing of any law or rule which would affect the construction or the delay/default in payment on the part of the Complainants. However, none of such conditions have occurred in the instant case and, therefore, there is no justification for the delay in handing over possession on the part of the Opposite Party. Thus, feeling aggrieved, Complainants served a legal notice upon the Opposite Party on 3rd November, 2017 highlighting the financial hardship they were undergoing on account of delay in construction and handing over of the possession of the booked flat by the Opposite Party. However, no reply was given by the Opposite Party to the said notice. It is alleged that since February, 2016, the Complainants have been time and again requesting the Opposite Party to handover possession but the Opposite Party has failed to do so, as a result of which the Complainants have to undergo severe mental trauma and harassment apart from severe financial hardship. Thus, being aggrieved, Complainants have filed this Consumer Complaint praying following directions to the Opposite Party:
(a) to refund ₹1,69,65,590/- which is inclusive of interest @18% compound interest from the date of respective payments till refund or at such rate this Hon'ble Commission may deem fit on account of unfair trade practice and deficiency in service committed by the Opposite Party as well as pendent lite and future interest @24% p.a. till realization;
(b) to pay ₹5,00,000/- towards mental agony, financial hardship, harassment, etc., and (c) to pay ₹2,00,000/- towards costs of litigation.
9. In Consumer Complaint No.3715 of 2017, the Complainant has prayed the following directions to the Opposite Party:
(a) to pay interest on the deposit of ₹78,84,904/- paid towards the cost of the flat on account of delay and to disclose the period within which the above-said Project will be completed by the Opposite Party and possession is delivered to the Complainant, or, in the alternative; to refund the amount of ₹78,84,904/- with interest @12% p.a. from the date of payments till the date of filing of Complaint amounting to ₹29,83,120/- reserving the right to claim the enhanced interest till date of payment.
(b) to pay a sum of ₹5,00,000/- towards compensation for mental tension, agony and harassment, etc., and (c) to pay ₹1,00,000/- as costs of litigation.
10. Upon notice, the Complaint has been contested by the Opposite Party, Developer, by filing its Written Statement raising preliminary issues that (i) the Complainants are not "Consumers" as defined in Section 2(1) (d) of the Act, as the amount has been invested by them in the project for commercial purpose; (ii) that the Complainants are not the original alottees of the flat and resale of flat does not come within the purview of the Act; (iii) this Hon'ble Commission lacks pecuniary jurisdiction to entertain the Complaints as the value of the flat involved in dispute is less than ₹1,00,00,000/-; (iv) it is well settled law that for the purpose of determination of pecuniary jurisdiction, only the valuation of the subject matter of the Complaint is to be considered and further benefits claimed, such as compensation and interest are not to be taken into account; (v) the present Complaint is premature as the period of delivery of 36 months is not sacrosanct because the delay in any event is attributable to Force Majeure events (vi) as per the provisions contained in the Real Estate (Regulation and Development) Act, 2016 (for short, the "RERA"), the present complaint is not maintainable before this Hon'ble Commission. The said project is covered under the definition of an "Ongoing Project" for which the Developer had already filed its application for registration of its Project before Haryana Real Estate Regulatory Authority; (vii) the Developer has been made responsible for completing and giving possession of the Apartments in its ongoing Project "Today Homes, Callidora" in terms of its registration with RERA; (viii) Section 79 of the RERA stipulates that no court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating Officer of the Appellate Authority is empowered by or under the Act; (ix) the dispute deserves to be referred to Arbitration as per Arbitration Clause no.45 of the Agreement to Sell dated 07-02-2013 duly signed by both the parties and can be adjudicated only by the Arbitrator, so appointed under Haryana Real Estate (Regulation and Development) Rules, 2017.
11. Attributing the delay to the force majeure conditions, the Opposite Party contended that in terms of clause 22 of the Agreement to Sell, any dispute with the construction agency employed by the Opposite Party resulting in delay was to be treated as force majeure event and, in such view, the Opposite Party was entitled to reasonable extension of time. Due to dispute of the Opposite Party with the earlier contractor, who was appointed to complete civil, electrical, plumbing and sanitary work, the work at the site had been seriously hampered and the contractor abandoned the work at project site which lead to delay in the execution of the project in time, which is beyond the control of the Opposite Party. As a result of the continuous delay and non-mobilization of the work force and non-completion of work in time, the Opposite Party terminated the contract with the first contractor and a new contractor was appointed to complete the project. There was an inadvertent delay in completion of the project, which was duly intimated to the Complainants. Another factor, which resulted in the delay was the closure of brick kilns due to the norms of procuring permission from Ministry of Environment & Forest that resulted in non-availability of raw material. As such, the delay which had occurred on account of dispute with the contractor and non-availability of raw material is liable to be excluded from the total period as envisaged in Clause 22 of the Agreement to Sell.
12. On merits, it was, inter-alia, pleaded that delay in handing over the possession of the flat has occurred due to default on the part of the Complainants in timely making the payments; the Complainants did not adhere to the payment schedule and despite giving several reminders/demand notices, continuously delayed the payment of instalments; if the Complainants had made timely payments of the instalments, the construction would have continued, as timely payment of instalments was linked to the construction of the unit. The period of 36 months as mentioned in Clause 21 of the Agreement to Sell dated 7th February, 2013 is not sacrosanct as in the said Clause it is clearly stated that the physical possession of the said unit is proposed to be delivered by the Opposite Party to the allottee within 36 months and, therefore, the Opposite Party was not under an obligation to handover the physical possession of the unit, complete in all respects, within 36 months from the date of Builder Buyers Agreement. That time is not essence of the contract and the delay, in any event, is attributable to force majeure events and would at best entitle the Allottees to delay compensation as per the contract for the period excluding the period of delay due to force majeure events. The Opposite Party had a dispute with the contractor, which is a matter of record, resulting in delay which was to be treated as force majeure event and the Opposite Party was entitled to a reasonable extension of time on this count. Similarly, another force majeure event which resulted in the delay was the closure of brick kilns due to the norms procuring permission from Ministry of Environment & Forest, which was beyond the control of the Opposite Party and the Opposite Party was entitled to extension of time for the same.
13. It is further contended that the Complainants have entered into the agreement to purchase the unit in question after fully analyzing the profitability of the investment, but due to sluggish growth in the real estate sector, Complainants have been raising the false and frivolous issues to pressurise the Opposite Party to succumb to their unjust demands. The terms & conditions of the Builder Buyers Agreement were duly explained at the time of allotment and the same were signed by the Complainants out of their free will and after fully analysing the terms of the agreement. It is submitted that as per clause 21 of the Agreement to Sell, the Allottee shall not claim any compensation/damage against the Opposite Party on account of delay in handing over possession due to force majeure events. There is still a considerable amount outstanding which is left to be cleared by the Allottees for their respective flats, which they are trying to escape by filing a false and frivolous litigation.
14. All other averments made in the Complaint have been specifically denied by the Opposite Party and prayed dismissal of the Complaint with exemplary costs. The Complainant filed his Rejoinder denying all the rival contentions raised by the Opposite Party in its Reply and reiterating the averments made in the Complaint.
15. We have heard the learned counsel for the parties at length and have also gone through the material available on record.
16. The first contention of the Learned Counsel for the Opposite Party that the Complainant is not "Consumer" and only "investor" is not supported by any documentary evidence. As laid down by this Commission in a catena of judgments 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 it is held that the Complainant is a "Consumer" as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986. The second contention raised by the Opposite Party is that the Complainants are not the original allottees of the flat and resale of flat does not come within the purview of this Act. Having issued the "No objection Certificate" dated 22.04.14 and executing "Transfer Acknowledgement Sheet" dated 09.05.14, this plea does not hold any water. The stand taken by the Opposite Party that the period of delivery of 36 months as defined in clause 21 is not sacrosanct as it is stated in the said clause that "physical possession of the said unit is proposed to be delivered by the Company to the allottee within 36 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 hit by force majeure events. Except for stating that there were disputes with the contractors and non availability of raw material, which viewed from any angle, cannot be construed to be a "force majeure event", the Opposite Party has not filed any material on record to prove that there were any force majeure events beyond their control. Learned counsel for the Opposite Party vehemently argued that the Complainant delayed the payments and did not pay as per the Construction Linked Payment Plan and, therefore, the construction was delayed and the Complainant cannot take advantage of his own wrong doing, that the construction itself is not complete, this submission of the Opposite Party is not relevant to the facts and circumstances of the case, especially when it is seen from the record that the total sale consideration of the flat was ₹78,50,798/- and a sum of ₹78,28,924/- including TDS and VAT has been paid by the Complainants.
18. The preliminary objections raised by the Opposite Party regarding maintainability of the Complaint on the ground of pecuniary jurisdictions, provisions of RERA Act and the Arbitration clause have already been decided in the case in view of the various judgement of this Commission as well as the apex Court.
19. No material has been produced by the Opposite Party to prove that the completion of construction and offer of possession has been delayed on account of reasons beyond its control; there is no justification for the said delay. Keeping in view the judgment of this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery, it is the discretion of the Complainant whether he wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest, it is held that it is well within the Complainant's right to seek for refund of the principal amount with interest and compensation as construction is still not complete. We are of the view that the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on force majeure clause while retaining the amounts deposited by the Complainant, is not only an act of deficiency of service but also amounts to unfair trade practice, especially in light of the view of the fact that the Opposite Party charges interest @ 18% or 24% p.a. for any delay in the payments made by the flat purchasers, but at the same time, offers compensation of ₹5/- per sq. ft. per month of the super area for the period of delay, which approximately amounts to only 1.5% per annum. We are of the view that such terms in Clauses are extremely unfair and one sided and fall within the definition of 'unfair trade practice' as defined under Section 2(r) of the Act.
20. At this juncture, we find it a fit case to place reliance on the recent judgment of the Hon'ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2009) CPJ 34 (SC), wherein the Apex Court has observed as follows:
"6.7. A 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. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.
7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer's Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder cannot seek to bind the Respondent with such one-sided contractual terms."
21. For all the aforenoted reasons, this judgments squarely applies to the facts and circumstances of this case.
22. We further place reliance on the judgment of the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, in which the Hon'ble Apex Court has observed as hereunder:
".....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years in beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.
In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified."
23. In the instant case also the Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed. Therefore, we are of the considered view that the Complainants are entitled for refund of the principal amount with reasonable interest.
24. Now, we address ourselves to the percentage of interest that has to be awarded to meet the ends of justice.
25. In the light of the observations of the Hon'ble Supreme Court in a catena of judgments awarding interest keeping in view the current market situation and that the Banks have lowered the interest rates and considering the recent downtrend in the rates of interest and the erosion in the values of real estate in the market, we are of the opinion that the Complainants are entitled to the refund of the amount deposited by them with interest @ 12% p.a. from the respective dates of deposits till the date of realization. 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 fact that most of the Complainants, have taken housing loans paying EMIs with interest rates ranging from 10.25% to 12% p.a.; Clause 9 of the Agreement which entitles the Opposite Party to collect interest @ 24% p.a. on delayed payments; the loss of opportunity of the Complainant for not having been able to enjoy the fruit of owning a 'Home' 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/her in the same position as he would have been if he/she had not sustained the wrong. Hence, we are of the view that awarding interest @ 12% p.a. is not only reasonable but also justified.
Consumer Complaint No.3507 of 2017
26. Complainants purchased flat No. 901, Tower No.5, 9th Floor at Callidora, Sector 73, Gurgaon and entered into a Builder Buyer Agreement on 7.02.2013, paying a total amount of ₹78,28,924/- and the promised date of delivery was 06.08.2016 with grace period. For all the aforenoted reasons, this Complaint is allowed in part and the Opposite Party 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 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.
Consumer Complaint No.3715 of 2017
27. Complainant purchased a residential Flat No.0702, Tower- T 4 of 1640 sq. ft. and entered into a Builder Buyer Agreement on 7.12.2012, paying a total amount of ₹78,84,904/- and the promised date of delivery was 07.12.2015. For all the aforenoted reasons in Consumer Complaint No.3507 of 2017, this Complaint is allowed in part and the Opposite Party 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/-. 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.
28. The Complaints stand disposed of.
29. Before parting, we may make it clear that the interest @12% p.a. on the refund of the amount which has been awarded as compensation and not factually as interest on refund and, therefore, there is no question of deducting any tax on source.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER