State Consumer Disputes Redressal Commission
Gurpreet Singh Sodhi vs Ats Estates Private Limited on 22 January, 2021
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Misc. Application No.706 of 2020
In/and
Consumer Complaint No.841 of 2019
Date of institution : 21.11.2019
Date of decision : 22.01.2021
1. Gurpreet Singh Sodhi S/o Sh. Ajit Singh Sodhi, aged 47 years,
R/o Flat No.1102, Hazel, Rosewood Heights, Plot No.270,
Sector-10, Taluka-Panvel, District Raigad, Navi Mumbai-410210.
2. Sukhvinder Kaur W/o Sh. Gurpreet Singh Sodhi, aged 44 years,
R/o Flat No.1102, Hazel, Rosewood Heights, Plot No.270,
Sector-10, Taluka-Panvel, District Raigad, Navi Mumbai-410210.
....Complainants
Versus
1. M/s ATS Estates Private Limited, through its Managing
Director/Directors, Site Office Address: ATS Golf Meadows,
Chandigarh-Ambala Highway, opposite Sadashiv Complex, near
Derabassi, Derabassi, District SAS Nagar, Mohali, Punjab-
140507.
Corporate Office: ATS Tower Plot No.16, Sector 135, Noida.
Registered Office: 711/92, Depali Nehru Place, New Delhi-
110019.
E-mail ID:[email protected]
2. Getamber Anand, Managing Director, M/s ATS Estates Private
Limited, Site Office Address: ATS Golf Meadows, Chandigarh-
Ambala Highway, opposite Sadashiv Complex, near Derabassi,
Derabassi, District SAS Nagar, Mohali, Punjab-140507.
3. Sameer Puri, Director, M/s ATS Estates Private Limited, Site
Office Address: ATS Golf Meadows, Chandigarh-Ambala
Highway, opposite Sadashiv Complex, near Derabassi,
Derabassi, District SAS Nagar, Mohali, Punjab-140507. (Deleted
vide order dated 04.11.2020).
4. Vipul Kumar Maheshwari, Director, M/s ATS Estates Private
Limited, Site Office Address: ATS Golf Meadows, Chandigarh-
Ambala Highway, opposite Sadashiv Complex, near Derabassi,
Derabassi, District SAS Nagar, Mohali, Punjab-140507.
5. Poonam Getamber Anand, Director, M/s ATS Estates Private
Limited, Site Office Address: ATS Golf Meadows, Chandigarh-
Ambala Highway, opposite Sadashiv Complex, near Derabassi,
Derabassi, District SAS Nagar, Mohali, Punjab-140507.
Consumer Complaint No.841 of 2019 2
6. Adityajit Singh Tiwana, Director, M/s ATS Estates Private
Limited, Site Office Address: ATS Golf Meadows, Chandigarh-
Ambala Highway, opposite Sadashiv Complex, near Derabassi,
Derabassi, District SAS Nagar, Mohali, Punjab-140507. (Deleted
vide order dated 04.11.2020).
7. Housing Development Finance Corporation Limited, having its
Registered Office at Raman House, 169, Backbay Reclamation,
Mumbai-400020, through its Manager.
E-mail ID:[email protected]
....Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Rajinder Kumar Goyal, Member
Mrs. Kiran Sibal, Member.
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued By:
For the complainants : Sh. Anirudh Gupta, Advocate For OP No.1 : Sh. Sukhandeep Singh, Advocate For OPs No.2,4&5 : Ex parte For OPs No.3 & 6 : Deleted vide order dated 04.11.2020 For OP No.7 : Ms. Neetu Singh, Advocate.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT The complainants, who are husband and wife, have filed this complaint, under Section 17 of the Consumer Protection Act, 1986 (in short, "the Act"), against the opposite parties, seeking following directions to them:
i) to deliver possession of the unit, in question, along with interest at the rate of 18% for the period of delay on the amount Consumer Complaint No.841 of 2019 3 deposited by the complainants from the respective dates of deposit;
Or in the Alternative:
ii) to refund the entire amount of ₹49,51,088/-, along with interest at the rate of 12% per annum from the respective dates of deposit till realization;
iii) to pay penalty for delay in delivery of possession at the rate of ₹5/- per sq.ft. from the date when the opposite parties were supposed to deliver the possession;
iv) to pay compensation of ₹2,00,000/-, on account of mental agony and harassment etc. suffered by the complainants; and
v) to pay ₹1,00,000/- on account of unfair trade practice adopted by the opposite parties; and
vi) to pay ₹55,000/- towards litigation expenses.
vii) It has also been prayed that any other relief, as may be deemed fit in view of facts and circumstances of the case, may also be awarded.
Facts of the Complaint
2. Brief facts, as set out in the complaint, are that opposite party No.1 launched a project namely "ATS Golf Meadows Lifestyle", situated in village Madhopur, Tehsil Dera Bassi, District S.A.S. Nagar, Punjab and made vast publication about the same. The complainants were in dire need of an apartment/house for their own residential purpose and being allured by the representations made by opposite party No.1 in its prospectus, they booked apartment No.7061, 6th Consumer Complaint No.841 of 2019 4 Floor, Tower No.7, having super area of 1900 sq.ft. along with 1 car parking earmarked in the basement area in the said project. The basic sale price of the said unit was ₹56,72,000/- and additional amount of ₹1,50,000/- i.e. ₹1,00,000/- towards power back up and ₹50,000/- towards maintenance deposit was also payable. Thus, the total sale consideration of the unit was fixed as ₹58,22,000/-. The complainants got sanctioned a loan of ₹45,37,600/- from opposite party No.7- Housing Development Finance Corporation Limited (in short, "HDFCL") and opted for subvention scheme, vide Tripartite Agreement dated 15.02.2013. Out of that amount, a sum of ₹40,73,998/- was disbursed by opposite party No.7 to opposite party No.1 on 27.02.2013. The complainants also paid a sum of ₹8,77,090/- from their own pocket. Details of payments are given in Paras-5 & 6 of the complaint. Opposite party No.1 promised to deliver possession of the said unit within a period of three years from the date of booking, as per Buyer Agreement dated 15.02.2013; which already expired on 15.08.2016. Opposite party No.1 had assured to deliver the possession at an early date, but the complainants were surprised to see that the construction had not yet finished. The complainants had already paid almost the entire sale price, but there was no sign of possession. The complainants have been charged the Pre-EMI interest, which were to start from the date of possession. Irrespective of the stage of construction of the project and date of handing over of possession, the complainants were liable to pay the EMIs regularly to HDFCL, as laid down in the loan agreement. The complainants sent Consumer Complaint No.841 of 2019 5 an e-mail to opposite party No.1, who assured that the Pre-EMI interest would be its responsibility. However, for few months, no pre- EMI was paid by opposite party to HDFCL, which is affecting the credibility of the complainants. The complainants sent another e-mail to opposite party No.1 on 19.09.2019 regarding delivery of possession, but neither any satisfactory reply was given, nor the possession of the unit was delivered. The aforesaid act and conduct of the opposite parties amount to deficiency in service and unfair trade practice. Hence, the present complaint.
Defence of the Opposite Parties
3. Upon notice, opposite parties No.1 & 7 appeared and filed their separate replies to the complaint. Opposite parties No.2, 4 & 5 did not appear despite their service and they were proceeded against ex parte, vide order dated 17.11.2020; whereas names of opposite parties No.3 & 6 have been deleted from the array of the opposite parties, as per order dated 04.11.2020.
4. Opposite party No.1, in its reply, raised preliminary objections that the complaint is gross abuse of the process of law. The complainants have not come to the Commission with clean hands and have concealed material facts. They have manipulated certain facts to mislead this Commission and have not produced complete documents executed between the parties. The complainants do not fall under the definition of the 'consumer', as defined in the Act, as they purchased the said unit for investment purpose only. The complainants have concealed the other residential properties owned by them or their other Consumer Complaint No.841 of 2019 6 family members. They also concealed their financial position, statement of Income Tax and assets, Income Tax Returns for the last 5 years prior to the date of booking. The dispute involved in the complaint is complicated and technical in nature, which is liable to be referred to Civil Court. Furthermore, the present dispute, relating to contractual obligation, can only be dealt with by an Arbitrator, as per terms of the agreement. The territorial jurisdiction of this Commission is barred and only the Courts at Noida are competent, as per "Ouster Clause" of the agreement. The complaint is barred by limitation, being not filed within two years of accrual of cause of action. The pecuniary jurisdiction of this Commission is also barred, as the value of total relief claimed in the complaint exceeds ₹1 Crore. As per Clause-3 of the Tripartite Agreement, the builder assumed the liability of payments under the Loan Agreement, as payable by the borrower to HDFCL during 36 months. Accordingly, opposite party No.1 has made payment of ₹11,24,076/- to HDFCL out of the total disbursed loan amount of ₹40,37,600/-. On merits, allotment of the unit, in question, in favour of the complainants is admitted. Payment of amount, as mentioned in the complaint, is not disputed. It is pleaded that due to force majeure circumstances, there is delay in completing the project. Construction of Tower No.7 is in full swing and it is expected to be completed soon. Due to implementation of new governmental policies and laws for real estate industries, there is an adverse effect in the sale of apartments, as a result of which the developers across the region are unable to raise the funds, which also slowed down the pace Consumer Complaint No.841 of 2019 7 of construction. Further, due to slump in real estate market, many builders have become insolvent, but opposite party No.1 is striving hard to fulfill its commitments. It is ready to pay compensation for delay in delivery of possession, as per Clause-15 of the Buyer Agreement till delivery of possession. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.
5. Opposite party No.7, in its reply, pleaded that the complaint is mainly directed against opposite parties No.1 to 3, who have allegedly failed to honour their commitments, as per the terms of the Buyer Agreement. It was further pleaded that the rights of the parties to the present lis are governed by the Tripartite Agreement dated 15.02.2013.The loan account of the complainant is amortized as on 13.01.2020. Loan of ₹40,73,998/- has been availed out of sanctioned limit of ₹45,37,600/-. There is an inter-se arrangement between opposite parties No.1 and 6 and the complainants, whereby the liability to pay Pre-EMI was upon opposite parties No.1 to 6 for the period of 36 months. Dismissal of the complaint against opposite party No.7 was prayed.
Evidence of the Parties
6. To prove their claim, the complainants filed their joint affidavit along with Buyer Agreement dated 15.02.2013 Ex.C-1, payment schedule Ex.C-2, Tripartite Agreement dated 15.02.2013 Ex.C-3, Subsidiary Ledger/payment receipts Ex.C-4 (colly.) and e-mail dated 19.09.2019 Ex.C-5.
Consumer Complaint No.841 of 2019 8
7. Opposite party No.1, in support of its defence, filed self attested affidavit of Sh. Shubham Gaur, Authorized Representative, along with copies of documents i.e. resolution dated 08.03.2016 Ex.OP-1 and Interest Calculation Chart Ex.OP-2.
8. Opposite party No.7, in support of its defence, filed affidavit of Sh. Aditya Kochar, Assistant Manager and Authorized Representative, along with copies of documents i.e. Tripartite Agreement dated 15.02.2013 Ex.OP-7/1, Loan Account Statement Ex.OP-7/2 and Home Loan Agreement Ex.OP-7/3.
Contentions of the Parties
9. We have heard learned counsel for the contesting parties and have gone through the written arguments submitted on their behalf and record carefully.
10. The written arguments submitted on behalf of the complainants are on the lines of averments made in the complaint. The sum and substance of oral and written arguments is that opposite parties No.1, 2, 4 & 5 failed to deliver possession of the flat, in question, within the stipulated period, despite receipt of substantial amount towards the price of the flat. They also failed to obtain the necessary approvals and sanctions for setting up the said project. They kept on utilizing the amount deposited by the buyers, including the complainants, for their own cause, without bothering to carry out any development at the site. No Completion/Occupation has been obtained by them from the competent authorities. It is further contended that the entire loan amount along with interest has been Consumer Complaint No.841 of 2019 9 cleared by the complainants and nothing is due against them. The deficiency in service and unfair trade practice on the part of opposite parties No.1, 2, 4 & 5 is duly proved on record and, thus, the complainants are entitled to all the reliefs, as sought for in the complaint.
11. The written arguments submitted on behalf of opposite party No.1 are on the lines of pleadings made in its reply. The sum and substance of oral and written arguments is that as per terms of the agreement, the proposed time for delivery of possession of the flat, in question, was 36 months with grace period of six months from the date of booking. It is settled principle of law that the agreement has to be read as a whole and not one term is to be construed independently. As per Clause-15 of the agreement, in case of delay in delivery of possession of the flat, the allottees shall be compensated at the rate of ₹5/- per sq.ft. per month of the super area thereof. However, the delay in completing the project and delivering the possession is due to force majeure circumstances beyond the control of opposite party No.1. Slump in real estate market also hampered the pace of completion of the project. All the requisite approvals have been obtained by opposite party No.1. There is no deficiency in service on its part and the complaint is liable to be dismissed.
12. The written arguments submitted on behalf of opposite party No.7 are also on the lines of pleadings of its reply. It was further contended therein that the main dispute involved in the complaint is between the complainant and opposite parties No.1, 2, 4 & 5 only. Consumer Complaint No.841 of 2019 10 Opposite party No.7 has only advanced the loan amount in favour of the complainants for making payment of the sale price of the unit, in question, as per terms and conditions of the Tripartite Agreement. The parties are bound by the terms and conditions thereof. The loan account of the complainants has been amortized. It is further contended that the entire loan amount along with interest has been cleared by the complainants and nothing is due against them. The complaint against opposite party No.7 is liable to be dismissed. Consideration of Contentions
13. We have given our thoughtful consideration to the respective contentions raised by the learned counsel for the contesting parties.
14. So far as the objection of opposite party No.1 that the complainants do not fall under the definition of 'consumer', as defined in the Act, on the ground that they purchased the flat, in question, for investment purposes, is concerned, it needs to be mentioned that no evidence has been led by opposite party No.1 to prove that the complainants have indulged in sale/purchase of property for commercial purpose and simple assertion in this regard in their reply is not sufficient to prove this fact. Hon'ble National Commission in M/s IREO FIVERIVER PVT. LTD. v. SURINDER KUMAR SINGLA & OTHERS First Appeal No.1358 of 2016, decided on 29.11.2016, while relying upon its earlier decision in KAVITA AHUJA & OTHERS v. SHIPRA ESTATE LTD. & JAI KRISHNA ESTATE DEVELOPERS PVT. LTD. & OTHERS Consumer Case No.137 of 2010, decided on Consumer Complaint No.841 of 2019 11 12.02.2015, held the complainants as consumers, observing that the appellant failed to show any cogent evidence, which may indicate that the respondents/complainants or any of them has been indulging in sale/purchase of the properties or that the complainants or any one of them had booked the subject plots in the development project undertaken by the appellant with the intention to sell the plot on subsequent date for earning profit. In the instant case also, as already said above, there is no evidence led by opposite party No.1 to prove that the complainants are indulging in sale purchase of properties and that they purchased the unit, in question, for further sale or for earning profits. Accordingly, this contention of opposite party No.1 is rejected and the complainants are held to be 'consumers', under the Act.
15. The other objection of opposite party No.1 is that the matter is to be referred to arbitration, as per terms of the Buyer Agreement. It needs to be mentioned that the Larger Bench of the Hon'ble National Commission, vide order dated 13.07.2017, passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh Versus EMAAR MGF Land Limited & Anr. held that an Arbitration Clause in the afore-stated kind of Agreements between the complainants and the builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed against the said order of the Hon'ble National Commission was also dismissed by the Hon'ble Apex Court, vide order dated 13.02.2018. The Review Petitions (C) Consumer Complaint No.841 of 2019 12 Nos.2629-2630 of 2018 have also been dismissed by the Hon'ble Apex Court on 10.12.2018. Consequently, the existence of an Arbitration Clause is not a bar to resolution of this dispute by this Commission. Accordingly, this objection of opposite party No.1 is also rejected.
16. Further objection raised by opposite party No.1 is that this Commission does not have territorial jurisdiction to adjudicate upon this complaint and only the Courts at Noida are competent, as per terms of the Buyer Agreement. It needs to be mentioned that that the value of the unit allotted to the complainants is more than ₹20,00,000/- and the project, in which the allotment was made, is situated in Village Madhopur, Tehsil Derabassi, S.A.S. Nagar, Mohali, Punjab. Hence this Commission is competent to try the complaint, as per the Act. Moreover, jurisdiction is conferred by the Statute and not by mutual arrangement by parties. Still further, Hon'ble National Commission (Polymech Plast Machines Ltd. and Anr. v. Apple Plast Pvt. Ltd.) IV (2006) CPJ 172(NC) held that any such clause restricting the jurisdiction to one of the District Forums/State Commissions is contrary to Section 11(2) of the Consumer Protection Act, 1986. Accordingly, this objection raised by opposite party No.1 is also rejected, holding that this Commission has territorial jurisdiction to entertain and decide this complaint.
17. Opposite party No.1 also filed Misc. Application No.706 of 2020 for dismissal of the complaint on the ground that pecuniary jurisdiction of this Commission is barred, alleging that the value of the Consumer Complaint No.841 of 2019 13 entire relief claimed in the complaint exceeds ₹1 Crore. Similar objection has also been raised by it in its reply. It needs to be mentioned that the main relief sought by the complainants is delivery of possession of the unit, in question, and in that case, the interest on the deposited amount is to be awarded after the expiry of stipulated period fixed for delivery of possession. The prayer for refund of the deposited amount, along with interest etc. is just an alternative prayer in case possession of the unit, in question, is not delivered. In such circumstances, the relief claimed in the complaint does not exceed ₹1 Crore. Therefore, the aforesaid application/objection of opposite party No.1 for dismissal of the complainant on the above referred ground is also rejected.
18. So far as the other objection of opposite party No.1 regarding limitation is concerned, admittedly the complainants have made the substantial payment towards the price of the unit, in question, to it, but neither the possession of the same has been delivered, nor the amount deposited by them has been refunded till date. It is now well settled that in such cases there is a continuous cause of action till the possession is delivered or the amount is refunded along with interest, compensation and costs etc. Hon'ble National Commission in "Navin Sharma (Dr.) & others v. Unitech Reliable Projects Pvt. Ltd. & Anr." 2016(2) CLT 457 has held that unless or until the complainants get possession of the flats, they have got continuous cause of action. In para 8 of the said judgment it has been observed by the Hon'ble National Commission as under:- Consumer Complaint No.841 of 2019 14
"8. The first submission made by the counsel for the opposite party was that the case is barred by time. This argument was raised merely for the sake of cavil. It is now well settled that unless or until the complainants get the possession of the flats, they have got continuous cause of action. This view finds support from this authority reported in "Raghava Estates Ltd. v. Vishnupuram Colony Welfare Association" Special Leave to Appeal (Civil) No.35805 of 2012, decided on 07.12.2012."
19. In another case Satish Kumar Pandey & Anr. v. M/s Unitech Ltd. 2015 (3) CPJ 440 (NC), the Hon'ble National Commission held in Para-17 as follows:
"17. It was next contended by the learned counsel for the respondent that since the last date stipulated in the buyers agreement for giving possession of the flat to them expired more than two years ago, the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. It is now settled legal proposition that failure to deliver possession being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers can always approach a Consumer Forum. It is only when the seller flatly refuses to give possession that the period of limitation prescribed in Section 24A of the Consumer Protection Act would begin to run. In that case, the complaint has to be filed within two years from the date on which the seller refuses to deliver possession of the flats to the complainants at any point of time and, therefore, the cause of action continues to subsist in favour of the complainants. Reliance in this regard may be placed upon the decision of the Hon'ble Supreme Court in Meerut Development Authority v. M.K. Gupta IV (2012) CPJ 12, where the Hon'ble Supreme Court held that in such a case the buyer has a recurrent cause for filing a complaint for non- delivery of possession of the plot."
Similarly, in the present case, there is no denial on the part of opposite party No.1 to deliver the possession. Since neither possession has been delivered nor the amount deposited by the complainants has been refunded till date, so in view of the ratio of the law laid down in Consumer Complaint No.841 of 2019 15 the above noted authorities, it is a continuous cause of action and the complaint filed by the complainants is within limitation.
20. Now, coming to merits of the case, the unit, in question, was allotted to the complainants and Buyer Agreement, Ex.C-1, was executed between them and opposite party No.1 on 15.02.2013. Total cost of the unit was fixed as ₹58,22,000/-, which also included power backup charges of ₹1,00,000/- and maintenance deposit of ₹50,000/-. as discussed above. The complainants had obtained loan of ₹45,37,600/- from opposite party No.7 and Tripartite Agreement dated 15.02.2013, Ex.C-3/Ex.OP-7/1, was executed between them and opposite parties No.1 & 7. Out of that loan amount, a sum of ₹40,73,998/- was disbursed as per Statement of Account Ex.OP-7/2. Thus, the complainants paid a total sum of ₹38,27,012/- towards the price of the unit with opposite party No.1, as is evident from receipts Ex.C-4 (colly.). The complainants have also produced copy of Subsidiary Ledger, Ex.C-4 (colly.), as per which a sum of ₹11,24,076/- was deducted by HDFCL towards subvention charges out of disbursed loan amount of ₹40,73,998/- on 03.09.2013, as per terms and conditions of the Tripartite Agreement. Thus, it can be said that a total sum of ₹49,51,088/- stood deposited towards the price of the unit, in question. Opposite party No.1 has not denied this fact in its reply. Even as per Interest Calculation Chart, Ex.OP-2, produced by opposite party No.1 itself, the amount of ₹49,51,088/- is shown to have been deposited on various dates. As per Clause 14 of the agreement, Ex.C- 1, possession of the unit was proposed to be delivered within a period Consumer Complaint No.841 of 2019 16 of 36 months with 6 months' grace period from the date of actual start of construction of a particular tower/building, in which the registration for allotment has been made, subject to timely payment of all charges, including basic sale price, stamp duty, registration fee etc.; failing which the Company was to pay compensation at the rate of ₹5/- per sq.ft. of super area (1 sq.mt.=10.764 sq.ft.) per month, as per Clause-
15. There is no date of actual start of construction on record. Therefore, it is inferred that possession date is to be decided in view of date of execution of agreement Ex.C-1, i.e. 15.02.2013. Thus, the possession was required to be delivered up to 14.08.2016. However, opposite party No.1 failed to deliver possession of the unit within that period, without any sufficient cause. The defence of slump in real estate market is not tenable, as the builder/developer is required to make arrangement of the funds/infrastructure etc. This reason is not a force majeure circumstance and the same can well be foreseen by opposite party No.1 before commencing the project and receiving amounts from the purchasers, including the complainants.
21. The whole purpose of pleadings is to give fair notice to each party of what the opponent's case is and to ascertain with precision the point(s) on which the parties agree and those on which they differ. The purpose is to eradicate irrelevancy. The complaint is a concise statement of facts and if no reply is filed to the complaint, the averments made therein are deemed to have been admitted. At the sake of repetition, it is relevant to mention here that in the present case, opposite parties No.2, 4 & 5 failed to appear despite service, as Consumer Complaint No.841 of 2019 17 such, they were proceeded against ex parte. There is no defence on the record on their part. Thus, all the averments/evidence of the complainant are deemed to have been admitted/unrebutted and an adverse inference is to be drawn against them.
22. Opposite parties No.1, 2, 4 & 5 have also failed to prove on record that necessary permissions and approvals were obtained by them from the competent authorities, before setting up the said project. As per Section 5 (Development of land into Colony) of Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"), opposite parties No.1, 2, 4 & 5 were liable to obtain permission from the competent authority for developing the colony, but they failed to produce on record any such permission. So, they also violated Section 5 of PAPRA.
23. As per Section 3 (General Liabilities of Promoter) of the PAPRA, they were required to make full and true disclosure of the nature of their title to the land, on which such colony is developed or such building is constructed or is to be constructed, make full and true disclosure of all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection on seven days' notice or demand of the layout of the colony and plan of development works to be executed in a colony as approved by the prescribed authority in the case of a colony. However, opposite parties No.1, 2, 4 & 5 failed to comply with Section 3 of the PAPRA.
Consumer Complaint No.841 of 2019 18
24. As per Section 9 of PAPRA, every builder is required to maintain a separate account in a scheduled Bank, for depositing the amount deposited by the buyers, who intend to purchase the plots/flats, but no evidence has been led on the record by opposite parties No.1, 2, 4 & 5 to prove that any account has been maintained by them in this respect. As such, they also violated Section 9 of the PAPRA.
25. As per Rule 17 of the "Punjab Apartment and Property Regulation Rules, 1995", framed under Section 45 of the PAPRA, it has been provided as under:-
17. Rate of interest on refund of advance money upon cancellation of agreement.-
The promoter shall refund full amount collected from the prospective buyers under subsection (1) of section 6 together with interest thereon at the rate of twelve per cent per annum payable from the date of receipt of amount so collected till the date of re-payment."
26. The Act came into being in the year 1986. It is the benevolent piece of legislation to protect the consumers from exploitation. The spirit of the benevolent legislation cannot be overlooked and its object is not to be frustrated. The complainants have made payment of substantial amount to opposite parties No.1, 2, 4 & 5 with the hope to get the possession of the unit in a reasonable period. The circumstances clearly show that they made false statement of facts about the goods and services i.e. allotment of flat/plot and delivery of possession in a stipulated period. The act and conduct of these opposite parties is a clear case of misrepresentation and deception, which resulted in the injury and loss of opportunity to Consumer Complaint No.841 of 2019 19 the complainants. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the plot/unit/flat within a reasonable period. From the facts and evidence brought on the record of the complaint, it is clearly made out that opposite parties No.1, 2, 4 & 5 i.e. builders knew from the very beginning that they had not complied with the provisions of the PAPRA and Rules and would not be able to deliver the possession within the stipulated period, thus, by misrepresentation induced the complainants to book the unit, due to which the complainants have suffered mental agony and harassment. It is the settled principle of law that compensation should be commensurate with the loss suffered and it should be just, fair and reasonable and not arbitrary. The builder is bound to compensate for the loss and injury suffered by the complainants for failure to deliver the possession, so has been held in catena of judgments by the Hon'ble Supreme Court and the Hon'ble National Commission. To get the relief, the complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities.
27. As discussed above, as per Clause 14 of the Buyer Agreement, Ex.C-1, possession of the unit was to be offered within a period of 42 months (36+6); failing which opposite parties No.1, 2, 4 & 5 were liable to pay compensation at the rate of ₹5/- per sq.ft. per month of super area of the flat (1 sq.mt.=10.764 sq.ft.) for delay in delivery of possession, as per Clause 15; whereas as per Clause-6(iii) of the Buyer Agreement, they charge interest at the rate of 18% per Consumer Complaint No.841 of 2019 20 annum on account of delay in depositing the instalments by the buyers. This shows that the terms and conditions of the agreement Ex.C-1, which have been drafted by opposite parties No.1, 2, 4 & 5, are one-sided and favour them. It is matter of common knowledge that the buyers have no option but to sign on the dotted lines or pre-drafted agreements prepared by the developer/builder. Failure of opposite parties No.1, 2, 4 & 5 to provide complete/effective possession of the flat within the stipulated period amounts to deficiency in service. It is also matter of common parlance that for purchasing the flat/plot, the purchasers take loans from their family members, relatives and friends or financial institutions. In some cases, the purchasers live on rent in the absence of timely delivery of possession. On account of delay in delivery of possession within the stipulated period, they suffer mental agony, hardships and financial loss etc. at the hands of the developers/builders. In case Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon'ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Further in Ghaziabad Development Authority v. Balbir Singh (2004) 5 SCC 65 (SC), the Hon'ble Supreme Court observed as follows:
"6...The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done."
Consumer Complaint No.841 of 2019 21
8...... No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him. Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical."
28. In another case, reported as "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Geetu Gidwani Verma & Anr." II(2019) CPJ 34, it was held by the Hon'ble Supreme Court that the Builder could not seek to bind flat purchaser with such one- sided contractual terms. The relevant para of the said judgment is reproduced hereunder:-
"6.7 A term 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 8.5.2012 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.
XX XX XX XX XX XX
9. We see no illegality in the impugned dated 23.10.2018 passed by the National Commission. The Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent-Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent -Flat Purchaser was entitled to be granted the relief prayed for ....."Consumer Complaint No.841 of 2019 22
29. Even recently in Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt Ltd (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, while discussing the above authorities and discarding the one-sided terms of the Buyer's Agreements, the Hon'ble Supreme Court awarded simple interest at the rate of 6% per annum on the amount deposited by the buyers, in addition to penalty at the rate of ₹5/- as prescribed in the agreement for delay in delivery of possession till delivery of actual and physical possession of the unit/plot/property. It was held in Para-32 as under:
"32. In the present case, there exist, clear and valid reasons for not holding down the flat buying consumers merely to the entitlement to receive compensation at the rate of 5 per square foot per month in terms of clause 14 of the ABA:
(i) There has been a breach on the part of the developer in complying with the contractual obligation to hand over possession of the flats within a period of thirty-six months of the date of the agreement as stipulated in clause 11(a);
(ii) The failure of the developer to hand over possession within the contractually stipulated period amounts to a deficiency of service within the meaning of Section 2 (1)
(g), warranting the invocation of the jurisdiction vested in the NCDRC to issue a direction for the removal of the deficiency in service;
(iii) The triggering of an obligation to pay compensation on the existence of delay in handing over possession is admitted by the developer for, even according to it, it has adjusted compensation at the agreed rate of Rs 5 per square foot per month to 145 out of the 171 appellants;
(iv) The agreement is manifestly one-sided: the rights provided to the developer for a default on the part of the home buyer are not placed on an equal platform with the contractual right provided to the home buyer in the case of a default by the developer;
(v) There has been a gross delay on the part of the developer in completing construction ranging between two and four years. Despite successive extensions of time to deliver possession sought by the developer, possession was not delivered on time;Consumer Complaint No.841 of 2019 23
(vi) The nature and quantum of the delay on the part of the developer are of such a nature that the measure of compensation which is provided in clause 14 of the ABA would not provide sufficient recompense to the purchasers; and
(vii) Judicial notice ought to be taken of the fact that a flat purchaser who is left in the lurch as a result of the failure of the developer to provide possession within the contractually stipulated date suffers consequences in terms of agony and hardship, not the least of which is financial in nature. Having paid a substantial amount of the purchase price to the developer and being required to service the debt towards loan installments the purchaser is unable to obtain timely possession of the flat which is the subject matter of the ABA."
30. In view of the observations of the Hon'ble Supreme Court in the above noted cases, we are of the view that the provision of penalty at the rate of ₹5/- per sq.ft. per month, as per Clause 15 of the Buyer Agreement, Ex.C-1, is not sufficient to compensate the complainants for the delay in delivery of possession and the mental agony, harassment and financial loss suffered by them on account of this reason. Therefore, in addition to aforesaid penalty @ ₹5/- per sq. ft. per month of the super area of the flat, in question, after the expiry of the stipulated date of delivery of possession, i.e. from 15.08.2016 till the date of actual, physical and legal delivery of possession with all the agreed amenities and Completion and Occupation Certificate issued by the competent authority, as per Clause 15 of the agreement, the complainants are also entitled to simple interest on the entire amount deposited by them at the rate of 6% per annum from 15.08.2016 till delivery of possession of the unit, in the manner as discussed above.
31. In view of our above discussion, deficiency in service and unfair trade practice on the part of opposite parties No.1, 2, 4 & 5 have Consumer Complaint No.841 of 2019 24 been fully proved. Thus, they are liable to deliver the actual and physical possession of the developed unit, in question, complete in all respects, along with Completion/Occupation Certificate, and execution of the Sale/Conveyance Deed in favour of the complainants, subject to payment of balance sale consideration, without any interest or penalty. For delay in delivery of possession of the unit, in question, opposite parties No.1, 2, 4 & 5 are liable to pay compensation, as discussed above. In case, they will not be able to deliver possession, then they will be liable to refund the entire amount deposited by the complainants, along with compensation for causing financial loss and depriving the complainants of the use of the said amount during the period the same remained with opposite parties No.1, 2, 4 & 5 calculated at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA. Besides this, the complainants are also entitled to suitable litigation costs and other expenses.
32. So far as the complaint against opposite party No.7 is concerned, neither any deficiency in service nor any unfair trade practice been alleged or proved against it on the record nor any specific relief has been sought against it. Opposite party No.7 just advanced the loan amount in favour of the complainants for making payment of sale price of the unit, in question, to opposite party No.1, as per terms and conditions of the Tripartite Agreement, Ex.OP-7/1. Moreover, as per the statements made by the learned counsel for the complainants and opposite party No.7 today, the entire disbursed loan Consumer Complaint No.841 of 2019 25 amount along with interest has been cleared by the complainants and nothing is due against them. So, the complaint against opposite party No.5 is liable to be dismissed.
33. Opposite party No.1 pleaded in its reply that it has made payment of ₹11,24,076/- to opposite party No.7 under the subvention scheme. Clause-3 (relevant part) of Tripartite Agreement Ex.OP-7/1 reads as under:
"The Borrower has informed HDFC about the scheme of arrangement between the Borrower and the Builder in terms whereof the Builder hereby assumes the liability of payments under the loan agreement as payable by the Borrower to HDFC during the (36 months) (the period be referred to as the "Liability Period" and the Liability be referred to as "Assumed Liability"). It is however agreed that during the liability period the repayment liability is joint and several by and between the Borrower and the Builder. The assumption of liability by the Builder in no manner whatsoever releases, relinquishes and/or reduces the liability of the Borrower and that same shall not be reflected in any manner on account of any differences and/or dispute between the Borrower and the Builder under the arrangement between them.
The parties are bound by the terms and conditions of the Tripartite Agreement. In compliance of aforesaid Clause of the Tripartite Agreement, sum of ₹11,24,076/- was deducted by HDFCL out of the disbursed loan amount under the subvention scheme, as is evident from the Subsidiary Ledger Ex.C-4 (colly.). Therefore, it is held that the aforesaid amount is liable to be adjusted.
34. In view of our above discussion, the complaint is allowed against opposite parties No.1, 2, 4 & 5 and the same is dismissed against opposite party No.7. Following directions are issued to opposite parties No.1, 2, 4 & 5:
Consumer Complaint No.841 of 2019 26
i) to deliver legal, actual and physical possession of the unit, in question, to the complainants, complete in all respects, along with agreed facilities and Completion and Occupation Certificates issued by the competent authorities and execute the Sale/Conveyance Deed in favour of the complainants, subject to payment of remaining sale consideration without any interest/penalty;
ii) to pay compensation for delay in delivery of possession at the rate of ₹5/- per sq. ft. per month of the super area of the flat, in question, after the expiry of the stipulated date of delivery of possession i.e. from 15.08.2016 till the delivery of possession of the unit, as ordered above, as per Clause 15 of the Buyer Agreement, Ex.C-1. In addition to it, they shall also pay simple interest on the entire amount deposited by complainants, i.e. ₹49,51,088/-(Rupees Forty Nine Lac Fifty One Thousand and Eighty Eight only), at the rate of 6% per annum from 15.08.2016 till the delivery of possession of the unit in the manner, as ordered above; and
iii) to pay ₹50,000/- (Rupees Fifty Thousand only), as litigation costs and other expenses.
iv) The balance sale consideration payable by the complainants shall be adjusted from the above said liability of opposite parties No.1, 2, 4 & 5.
v) The aforesaid amount of ₹11,24,076/- adjusted against pre-EMIs interest out of the loan amount under subvention scheme, as per Consumer Complaint No.841 of 2019 27 Subsidiary Ledger Ex.C-4 (colly.), shall also be adjusted, as per terms of the Tripartite Agreement.
35. In case opposite parties No.1, 2, 4 & 5 fail to comply with aforesaid directions, then in the alternative, they shall:
i) refund the amount deposited by the complainants i.e. ₹49,51,088/- (Rupees Forty Nine Lac Fifty One Thousand and Eighty Eight only), along with compensation for causing financial loss and depriving the complainants of the use of the said amount during the period the same remained with opposite parties No.1, 2, 4 & 5 at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA.
The aforesaid amount of ₹11,24,076/- adjusted against pre-EMIs interest out of the loan amount under subvention scheme, as per Subsidiary Ledger Ex.C-4 (colly.), shall be adjusted, as per terms of the Tripartite Agreement. The parties shall be bound by the terms and conditions of the Tripartite Agreement, with regard to settlement of their accounts; and
ii) to pay ₹50,000/- (Rupees Fifty Thousand only) as litigation costs and other expenses.
36. The compliance of this order shall be made by opposite parties No.1, 2, 4 & 5 within a period of 45 days of the receipt of certified copy of the order.
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37. The complaint could not be decided within the statutory period due to heavy pendency of court cases and pandemic of COVID-
19. (JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER (MRS. KIRAN SIBAL) MEMBER January 22, 2021.
(Gurmeet S)