National Consumer Disputes Redressal
Sujeet Jha & Anr. vs Ireo Pvt. Ltd. on 14 July, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 773 OF 2020 1. SUJEET JHA & ANR. S/o. Sh. Tarakant Jha,
R/o. #53, Royalton Estate,
DLF City Phase-V, GURGAON - 122 006 2. VINITA JHA W/o. Mr. Surjeet Jha,
R/o. #53, Royalton Estate,
DLF City, Phase-V, GURGAON - 122 006 ...........Complainant(s) Versus 1. IREO PVT. LTD. C-4, 1st Floor,
Malviya Nagar,
New Delhi, SOUTH DELHI - 110 017 ...........Opp.Party(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER
FOR THE COMPLAINANT : MR A R TAKKAR, ADVOCATE WITH
MR TEJASVI CHAUDHARY AND MS UNNATI
ANAND, ADVOCATES FOR THE OPP. PARTY : MS AASTHA AGARWAL, PROXY COUNSEL
Dated : 14 July 2023 ORDER
1.This complaint under section 21 read with section 2(G) and 2(R) of the Consumer Protection Act, 1986 (in short, the 'Act') has been filed against the opposite party alleging deficiency in service and unfair trade practice in delay in handing over possession of a residential flat booked by him in a project of the opposite party.
2. The brief facts, as per the complainant, are that one Ms. Monica Sachdeva had booked flat no. B-09-41, Ninth Floor, Tower-8 admeasuring 6388 sq ft in the opposite party's project 'Gurgaon Hills' on 03.07.2012 and as per the Apartment Buyer's Agreement (in short, 'the Agreement') dated 21.11.2012 the apartment was to be delivered within 42 months with 6 month grace period (180 days) of the approval of the building plans, on or before 17.11.2015. The sale consideration was Rs.5,72,17,193/-. The apartment was transferred in the name of the complainant on 01.12.2012 and the opposite party confirmed assignment of rights on 07.02.2013. The complainants have paid a sum of Rs.6,16,98,948/- till date including additional preferential location charges (PLC) Rs.211,70,256/- for change of apartment to B-18-42. According to the complainant, the 14th demand due on filing for occupation certificate (OC) was raised by the opposite party on 26.09.2018, a month in advance; however, no proof of the application was provided on enquiry since the project was incomplete. As the building plans were approved on 17.05.2012, according to the complainant, the period of 42 months expired on 17.11.2015. Alleging that the cause of action arose on 17.11.2015, the date of handing over of possession as per the Agreement, and in September 2018 when the 14th demand was raised, the complainant is before this Commission with the prayer to pass an order:
(i) allowing the present complaint and directing the opposite party to refund the total amount deposited by the complainants along with interest at 18% p.a. from the date of payment still realization;
(ii) directing the opposite party to pay compensation to the complaints towards mental harassment and agony to the tune of Rs 5,00,000/-;
(iii) directing the opposite party to pay the complainants Rs..1,00,000/- on account of cost of litigation;
(iv) directing the opposite party to pay the complainants Rs.10,00,000 as compensation for deficiency in service and unfair trade practice; and
(v) any such or further orders as deemed fit and proper in the pecuniary facts and circumstances in favour of the complainant No. 1 and 2 in the interest of justice and fair play.
3. The complaint was contested by the opposite party by way of a written statement. It was stated that the complaint was barred by limitation since the complaint was filed in July 2020 whereas the relief sought related to a cause of action that arose more than 2 years prior. It is contended that the commitment period for the possession of the flat was 60 months since it was 42 months from the date of approval of building plans and/or fulfillment of preconditions thereunder with a grace period of 6 months and a further extended delayed period of 12 months from the end of the grace period as per clause 14 of the Agreement. It is contended that since building approval was dated 17.05.2012 and one of the pre-conditions was the Fire Scheme Approval which was granted on 26.12.2013, the proposed date of handing over of possession should be computed from 26.12.2013 and therefore the 60 months period expires on 25.12.2018. Opposite party relies upon the judgment of Hon'ble Supreme Court in IREO Grace Realtech (P) Ltd. Vs. Abhishek Khanna, (2021) 3 SCC 241 which held that the date of handing over possession be calculated from the date of Fire Scheme Approval. It is also submitted that though this approval was applied for on 07.08.2012 the same was received only on 26.12.2013 due to height of 3 of the 4 towers in the project exceeding 100 meters for which guidelines were not available and this constituted a force majeure reason as the delay was due to the government authorities. It is also stated that the Occupation Certificate, though applied for on 24.09.2018, was delayed due to defaults by the complainant in contravention of clause 13 of the Agreement. According to the opposite party, the complainant was permitted to undertake interior and furnishing works on 03.10.2016. However, he failed to complete the same within the stipulated period of 9 months and was, therefore, in violation of contractual obligations. It is submitted that the Director of Town & Country Planning (DTCP) to whom the application for the OC was made, had, vide letter dated 14.02.2019, stated that the interior works of the apartments were not completed. It is contended that the opposite party was only required to construct the apartments as a bare shell and that it was the responsibility of the respective allottees to customize and finish the interiors, including the walls, etc. as per Annexure I of the Agreement for which no drawings were also submitted by the complainant. It is argued that the complainants cannot be permitted to take advantage of their own wrongs. It is also contended that there was default in payment of instalments by allottees which delayed the project and that the opposite party was not required to spend its money to get an occupation certificate which was the complainants' obligation to fulfill. It is also stated that clause 13.3 of the Agreement stipulates that the complainant was liable to pay a penalty @ Rs 25/- per sq ft for the first 3 months, Rs 40/- per sq ft for the next 3 months and Rs 50/- for 6 to 12 months after which the opposite party was entitled to cancel the allotment and terminate the contract. However, the opposite party did not penalize the complainant and completed the unit on its own. The complainant being a defaulter under the Agreement cannot claim to seek performance on part of the opposite party as also provided under section 51 of the Contract Act. Reliance is placed on the judgment of the Hon'ble Supreme Court in Bharathi Knitting Co. Vs. DHL Worldwide Express Courier (1996) 4 SCC 704 that laid down that parties are bound by the terms of the agreement. The complainant is stated to not be a 'consumer' under section 2(1)(d) of the Act as he had made multiple investments and as per Hon'ble Supreme Court's judgment in Morgan Stanley Mutual Fund Vs. Kartick Das (1994) 4 SCC 225 was a prospective buyer, and therefore, not a consumer. It is denied that any service is provided or agreed to be provided to the complainant by the opposite party and, therefore, the opposite party seeks to be covered under the judgment of the Hon'ble Supreme Court in Bangalore Development Authority Vs. Syndicate Bank (2007) 6 SCC 711. The complaint is alleged to be vexatious and without jurisdiction.
4. Parties led their evidence. Complainant filed his rejoinder and both parties filed their written synopsis of arguments. I have heard the learned counsel for both parties and perused the material on record carefully.
5. Complainant's case is that there has been deficiency in service by the opposite party in not handing over possession of the flat booked. He submits that the flat was to be constructed within 42 months from the date of the approval of the building plans which was done on 17.05.2012 and therefore this period should be considered to be on or before 17.11.2015. He argues that the 14th demand notice due at the time of the opposite party applying for the Occupancy Certificate (OC) was incorrectly made as the construction was not complete. The complainant submitted that the flat was financed though a housing loan in 2013 and 2014 from Axis and HDFC banks. Complainant no. 1 has since expired and his legal heirs have been brought on record.
6. Complainant contests the plea of the opposite party as per clause 13 to argue that the delay is attributable to the complainant not fulfilling its obligations in completing interior works and that the delay in the issue of the fire safety certificate, which was a pre-condition under the building plan, delayed the project. It is argued that there was no nexus between the completion of interiors by the complainant with the opposite party obtaining the OC and that it was not a condition in the agreement also. It is argued that the opposite party is using the pretext of the fire scheme approval dated 26.12.2013 to claim the completion date of the project as 25.12.2018 based on the judgment of the Hon'ble Supreme Court in Abhishek Khanna (supra). It is averred that the opposite party failed to hand over possession even in May 2017 and that even reckoned from this date, there is a delay of over 5 years. Complainant relies upon this Commission's order in Shamshul Hoda Khan Vs. M/s IREO Victory Valley Pvt. Ltd & Anr. 2019 SCC OnLine NCDRC 187, which was upheld by the Supreme Court, to argue that delay in construction due to fire safety approval/NOC did not apply where construction had commenced. The claim of the opposite party for an extended delay period under clause 14.3 on the grounds of orders of the National Green Tribunal (NGT) between 2015-18, non-payment of instalments by allottees, inclement weather conditions, Covid 19 outbreak and demonetization of currency is contested on the ground that all these events date post 2015 and, therefore, do not merit consideration.
7. Complainant relies on the Hon'ble Supreme Court's order in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, (2019) 5 SCC 725 that onerous clauses in a buyers agreement which allottees have no option but to sign having made a substantial payment constitutes unfair trade practice; in Kolkata West International City (P) Ltd. Vs. Devasis Rudra, (2020) 18 SCC 613 and Fortune Infrastructure & Anr. Vs. Trevor D'Lima & Ors., (2018) 5 SCC 442 which held a person cannot be made to wait indefinitely for possession of a flat allotted to him and that he is entitled to seek refund with compensation and that the allottee could not be compelled to take possession after almost 2 years of the expiry of the grace period. Reliance is also placed on this Commission's order in Aashish Bansal & Anr. vs. Ireo Pvt. Ltd. & Ors. dated 04.05.2022 in CC No. 653 of 2019 and on Hitpreet Singh Chadha & 2 Ors. Vs. Ireo Private Ltd. & Anr. dated 17.05.2023 in CC No. 802 of 2020 which held that the complainants were entitled to interest by way of compensation.
8. The opposite party on the other hand has argued that the cause of action arose more than two years prior to the filing of the complaint. The complaint was filed in July 2020 after the expiry of two years and the complaint is time barred. The opposite party proposed to hand over possession of the apartment in question with 42 months from the date of approval of building plan or fulfilment of the pre-conditions imposed. It was agreed between the parties that a grace period of six months would be given to the opposite party for unforeseen delays with further extended delayed period of 12 months from the end of grace period. Therefore, period of delivery of possession was 60 months from the date of approval of building plan. The proposed timing for handing over of possession was to be computed from 26.12.2013 which was the date of the approval of the fire scheme and accordingly possession was to be handed over within 60 months, i.e., by 25.12.2018. The opposite party has further contended that complainants had to finish interiors within 9 months and the opposite party was entitled to cancel the allotment for delay beyond a period of 12 months. Opposite party contends that complainants failed to complete their contractual obligation of completing the interior design and fit outs and as the opposite party could not wait indefinitely, it accordingly applied for the grant of occupation certificate on 24.09.2018. However, the competent authority delayed the occupation certificate in view of non-completion of works by the complainant.
9. The opposite party contends that complainant is bound by the terms of the agreement. Complainants are not 'consumers' as complainants have not bought any goods and have not hired any services. There is no deficiency on part of the opposite party. Complaint is vexatious, false, frivolous on the face of record. It is argued that jurisdiction has to be decided as the preliminary issue, and the complaint is liable to be dismissed in limine, inter alia on the ground of non-applicability of CPA.
10. The preliminary issues raised by the opposite party have been considered. The contention that the complainants are not 'consumers' as they booked flat for commercial gain needs consideration in the light of Kavita Ahuja vs Shipra Estate Ltd., (1) 2016 CPJ 31 wherein it was held that the onus of establishing that the complainants were dealing in real estate for commercial purpose tests on the opposite party which in the instant case, has not been discharged by any documentary evidence. This argument, therefore, does not sustain.
11. However, the opposite party has sought shelter under the force majeure clause citing delay due to the serious law and order problem due to the agitation by farmers, overall economic slow-down, orders of the National Green Tribunal (NGT) dated 11.01.2013, restraining all builders from utilising ground water for construction activities and orders of the NGT dated 14.08.2013 in MA no.970 of 2013 Amit Kumar vs Union of India and Ors., restraining construction within 10 kms of the Okhla Bird Sanctuary It is averred that the project was delayed due to reasons not attributable to the opposite party. These issues have been extensively considered in this Commission's orders in Anil Kumar Jain & Anr. Vs. M/s Nexgen Infracon Private Limited in Consumer Complaint No. 1605 of 2018 dated 23.12.2019 wherein it was held that in the absence of any proof to substantiate the claims of demonetisation and NGT adversely causing delay in completion of the project and impacting the date of handing over of flats, such reliance on force majeure conditions was not justifiable. In the present case, opposite party has failed to substantiate his contention with any specific evidence on record as to how these factors cited as force majeure events impacted the instant project and whether any steps to mitigate or overcome them were taken. Regarding opposite party's reliance on force majeure events to justify delay in completing the construction of the project, as per Manoj Kawatra and Others Vs Pioneer Urban Land and Infrastructure Ltd., in CC no.1442 of 2018 decided on 01.11.2021, this Commission held that a developer cannot take shelter under the force majeure clause unless it is able to show that the event was unforeseen and unexpected. Opposite party's contention during 2015 to 2018 the National Green Tribunal (NGT) passed various orders to protect the environment especially in the NCR Region entry and hence, the contractor could not undertake construction work for 3-4 months. and labour shortage between April - May 2015, November - December 2016 and November - December 2017 is not substantiated.
12. This Commission in Anil Kumar Jain and Anr., vs M/S. NEXGEN INFRACON PRIVATE LIMITED CC no.1605 of 2018 and connected matters decided on 23.12.2019 held that if the NGT had restrained builders from extracting underground water in Noida/Greater Noida, they were expected to arrange water from alternative sources so as to fulfil their contractual obligation to the flat Buyers. It is not as if no construction took place in Noida and Greater Noida during the period that the interim order passed by the NGT remained in force. Therefore, if the Opposite Party so wanted, it could have arranged water for construction purpose from the alternative sources. There is no evidence of the aforesaid interim order dated 11-01-2013 having been continued after 24-01-2013. In any case, it cannot be said that the delay in completion of the project was justified on account of this interim order of the NGT. The default of the Contractor, to cause delay on account of shortage of labour and material, no documents have been placed on record by the Opposite Party to show that it could not get adequate work force or sufficient building material to complete the construction of the project within the time stipulated in the Allotment Letter. There is no evidence brought on record that building material or manpower was not available in the market. Therefore, it cannot be accepted that due to default on the part of the Contractor, the Opposite Party could not arrange adequate labour or building material required for timely completion of the project, hence, these constitute a force majeure event. In the absence of such evidence, mere reliance on a bald assertion is not sustainable and cannot be accepted.
13. It is not disputed that the complainant deposited a sum of Rs.6,16,98,948/- towards the flat in question. Admittedly there has been delay in the offer of possession of the flat by the opposite party to the complainant. The opposite party admits that the complainant is entitled to delay compensation @ Rs 10 per sq ft of super area for the period of delay. The moot issue is the period of delay and the date from which it should be calculated. The contention of the complainant is that this period should be calculated from 21.11.2012 (the date of agreement) till 17.11.2015. Per contra, opposite party contends that the period should be reckoned from 26.12.2013 (the date of sanction of the fire safety scheme) till 25.12.2018 for the reasons summarized above. It is manifest that the Occupation Certificate obtained by the opposite party from the concerned authorities is dated 29.06.2022 whereas the date of handing over of possession as per the Agreement was November 2015 after allowing the grace period of 180 days or 6 months. Its plea for an extended grace period does not merit consideration as no evidence has been brought on record to establish how these impacted the specific project. The argument that the project was delayed on account of delay in the fire scheme approval is not of help to him in view of the judgment in Shamshul Hoda Khan (supra) and the fact that the instant matter is clearly distinguishable since construction had commenced much prior. Deficiency in service and unfair trade practice is thus writ large in the instant case. As held by the Hon'ble Supreme Court, the complainant cannot be expected to wait indefinitely for the flat and is entitled to seek refund with compensation from the opposite party. For these reasons the complaint is liable to succeed.
14. The opposite party has admitted that it raised the demand for casting of basement roof slab on 25.09.2014, i.e., after the fire safety scheme approval was received on 26.12.2013 and that environmental clearance was dated 26.06.2013. Thus, construction had commenced much prior to the requisite approvals. There is merit in the complainant's averment that the judgment in Abhishek Khanna (supra) will not apply to the instant case since that judgment applied to cases where construction had not commenced whereas, in the case in hand, construction had already reached basement roof slab. Therefore the judgment in Shamshul Hoda Khan (supra) has rightly been argued to be applicable in the instant case by the complainant. Other grounds for delay relied upon by the opposite party such as delay on account of orders of the National Green Tribunal, demonetization of the currency, Covid 19 pandemic, etc., cannot be considered as valid since these reasons are general in nature and are not specifically supported by evidence to support the averment of specific application to the project.
15. As regards the payment of compensation it is contended by the complainant that he is entitled to the same with effect from 18.11.2015 till date since the period of construction was to be from 17.05.2012 to 17.11.2015. Per contra, the opposite party's contention is that the construction period needs to be reckoned from the date of obtaining of the clearance of the fire department (fire NOC) which was obtained on 26.12.2013. If the period of 60 months is reckoned from this date, the date of completion should be 25.12.2018. The compensation payable should therefore be with effect from 26.12.2018 till the date of offer of possession. As per records, no copy of offer of possession has been brought on record by the opposite party. The date of occupation certificate is dated 29.06.2022. The claim of the complainant is for refund of the amount on the grounds that the project was inordinately delayed beyond 17.11.2015 due to there not being an offer of possession. However, as peer clause 13 of the Agreement the builder was to hand over the shell of the building to the respective buyer/ allottees to undertake construction of the internal walls and complete the fit outs based on which the occupation certificate would be applied. It is the contention of the opposite party that the delay on the part of the complainant to do the fit outs delayed his filing for occupation certificate and its eventual receipt. However, the opposite party has not been able to bring on record any documentary evidence to establish the date on which the flat was handed over for fit outs and when it was completed. It is, however, contended that the occupancy certificate was delayed on this account. The prayer of the complainant is for refund as possession was not handed over. As per letter dated 16.10.2014 filed by the complainant from the Housing Development Finance Corporation Limited (HDFC) the complainant has repaid the loan in full and there is no amount is due from the complainant and there is no charge on the re-payment on the Bank.
16. In view of the foregoing reasons, the complaint is liable to be allowed in the facts and circumstances of the case. The complaint is accordingly allowed partly and opposite party is directed to refund the amount of Rs.6,16,98,948/- deposited by the complainant with interest @ 9% simple interest p.a. from the respective dates of deposit till the date of this order within a period of 8 weeks from the date of this order failing which the amount shall be paid with interest @ 12 % p.a. simple interest. Opposite party shall also pay with litigation cost of Rs.50,000/- to the complainant. All pending IAs, if any, are also disposed of with this order.
...................................... SUBHASH CHANDRA PRESIDING MEMBER