State Consumer Disputes Redressal Commission
Rajeshwar Salaria vs Parkwood Developers Pvt. Ltd. on 1 July, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Misc. Application No.285 of 2022
In/and
Consumer Complaint No.545 of 2019
Date of institution : 17.07.2019
Reserved On : 10.06.2022
Date of decision : 01.07.2022
Rajeshwar Salaria son of Late Sh. Kuldeep Singh Salaria, aged 44
years, resident of Block H-302, Ivory Towers, Sector-70, SAS Nagar
(Mohali).
....Complainant
Versus
1. Parkwood Developers Pvt. Ltd., through its Managing Director,
1001, Hemkunt Chambers 89, Nehru Place, New Delhi.
2. Parkwood Glade through its Manager-Sales, Kharar-Landran
Road, Mohali, run by Parkwood Developers Pvt. Ltd.
3. Dewan Housing Finance Corporation Ltd., through its Director,
Registered Office at Warden House, Second Floor, PM Road
Fort, Mumbai.
E-mail ID:[email protected]
....Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mr. Rajinder Kumar Goyal, 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 Present:
For the complainant : Sh. Rajeshwar Salaria, in Person For O.Ps No.1 & 2 : Sh. I.P. Singh, Advocate For OP No.3 : None.Consumer Complaint No.545 of 2019 2
JUSTICE DAYA CHAUDHARY, PRESIDENT Misc. Application No.285 of 2022 This application has been filed by the complainant for placing on record the short points as well as the photographs of the project [Annexure A-10 (colly.)].
Heard.
For the reasons recorded in the application, the same is allowed the shorts points and the photographs [Annexure A-10 (colly.)] are taken on record.
Main Case The complainant Rajeshwar Salaria has filed the present complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be referred as "The Act of 1986") with the grievances that a Flat Buyers Agreement was executed by him with opposite parties No.1 & 2 for allotment of Unit No.H-604 on 07.09.2011. This unit was at 6th floor with super built up area of 1675 sq.ft. Opposite parties No.1 & 2 agreed to accept ₹36,49,825/- being the basic price of said flat at the rate of ₹2,179/- per sq.ft. for the super built up area.
The complainant paid an amount of ₹6,15,000/- to opposite parties No.1 & 2 on the date of execution of the Flat Buyers Agreement on 07.09.2011. In Clauses 19 and 20 of said agreement, certain terms and conditions were also mentioned with regard to delivery of possession, payment of the amount etc. etc. Along with the Flat Buyers Agreement, Schedule-I was also appended mentioning therein Consumer Complaint No.545 of 2019 3 the price of the unit, payment plan/schedule, amount to be imposed by opposite parties No.1 & 2 for Club Membership, covered area and power back-up charges. The price of the flat, which was to be paid by the complainant, was also mentioned.
2. A Tripartite Agreement was executed between both the parties. In the said Tripartite Agreement, the rights and liabilities of the parties were also mentioned.
3. As per Clause-3 of said agreement, the developer (opposite parties No.1 & 2) was required to pay pre-EMIs on behalf of the complainant till handing over of possession of the flat to the complainant. The allotment letter was issued to the complainant by opposite parties No.1 & 2 on 11.12.2012 for the utility room having super built up area of 110 sq.ft. of price of ₹3,24,500/-. A separate agreement was also executed for the said utility room. As per said agreement, the possession of the utility room was to be delivered on 31.12.2014. Opposite parties No.1 & 2 issued the offer of fitment possession of the flat vide letter dated 28.06.2017. According to said possession letter, the area of the Flat in dispute was increased from 1675 to 1725 sq.ft. The reason of increase in the area was also mentioned. Opposite parties No.1 & 2 also appended the Statement of Account and demanded ₹5,27,306/- as well as Service Tax from the complainant. It was further mentioned in the complaint that in-spite of receiving the amount and time schedule, still possession was not handed over to the complainant. Not only the amount was increased but interest thereupon was also increased, which was to be paid by the Consumer Complaint No.545 of 2019 4 complainant. Thereafter, a period of 30 days was extended for handing over the possession. Again on 28.06.2017, the respondents issued the offer of fitment possession of utility Flat and also demanded extra amount of ₹72,792/- from the complainant along more amount. Thereafter again, a letter was issued on 10.10.2018 by informing about handing over the possession of the flat. The complainant was directed to take physical possession within a period of 15 days from the date of receipt of letter dated 10.10.2018.
4. A prayer has been made in the complaint that opposite parties No.1 & 2 be directed to deliver possession of the unit in dispute and also to pay compensation and litigation expenses.
5. The complaint filed by the complainant has been contested by the opposite parties by way of filing replies. In support of their contentions, both the parties led their respective evidence by way of affidavits and documents.
6. Mr. Rajeshwar Salaria, complainant while appearing in person submits that opposite parties No.1 & 2 have failed to complete the project within the undertaken period and even after lapse of a period of approximately 6 years. A number of e-mails were sent since 11.07.2017 but nothing was done. The complainant further submits that he has been residing in rented accommodation with the hope that he would get the possession of the flat by September, 2013 but to no effect. The complainant has been paying monthly rent at the rate of ₹11,500/- since October, 2013 till April 2014 and thereafter it was revised from time to time. Rent has been enhanced/revised to Consumer Complaint No.545 of 2019 5 ₹16,800/- per month and up to now he has paid an amount of ₹10,30,600/- and has also been paying Society charges at the rate of ₹1,200/- per month from the financial year 2016-2017 till date.
7. The complainant also submits that due to the act and conduct of opposite parties No.1 & 2, he has suffered huge financial loss and has also suffered physical and mental agony. His account has also been declared Non-Performing Asset (NPA) due to non- payment of pre-EMI by opposite parties No.1 & 2 and due to delay caused in delivery of possession. His application for grant of personal loan has also been rejected by the Bank. The complainant also submits that due to delay in handing over of possession, he has suffered a lot as he has paid an amount of ₹11,25,000/- to the opposite parties and interest of ₹6,55,000/-. The complainant has also paid approximately an amount of ₹3,30,000/- plus interest, which comes to ₹1,50,000/- for utility room. He has also paid the rent for the accommodation since October, 2013 to June, 2019 and total amount comes to approximately ₹10,35,000/- plus society maintenance charges paid by him till date, which is approximately ₹40,000/- and total amount comes to ₹10,75,000/-. The complainant further submits that he is not only entitled for compensation for non-compliance of the terms and conditions of the Tripartite Agreement but also for suffering mental and physical harassment caused to him due to action/inaction on the part of opposite parties to the tune of ₹5,00,000/-. The CIBIL score of the complainant was also spoiled due to action of the opposite parties. The total amount of compensation comes to ₹31,90,000/-. Consumer Complaint No.545 of 2019 6 There is deficiency in service on the part of the opposite parties and the complainant is entitled to all the reliefs as prayed in the complaint.
8. Mr. I.P. Singh, learned counsel for opposite parties No.1 & 2 has opposed the submissions made by learned counsel for the complainant. A preliminary objection of territorial jurisdiction has also been raised. As per the agreement entered into between the parties, the jurisdiction was with Courts at Chandigarh only, as the mortgage of flat was at Chandigarh. Learned counsel further submits that as per the settled law, the parties can confer jurisdiction to one of such Courts, where a part of cause of action has taken place. In the present case, the Flat Buyer's Agreement was executed at New Delhi and project is situated at Mohali, which is in the State of Punjab and mortgage was created by way of Tripartite Agreement at Chandigarh. Both the parties to the agreement consented for jurisdiction for the Courts at Chandigarh, as per Clause 39 of the agreement. Hence this Commission has no territorial jurisdiction to entertain the complaint filed by the complainant. Learned counsel further submits that it is the complainant only, who has not come forward to take the possession of the flat after clearing the balance sale price and maintenance charges etc. and also for getting NOC from opposite party No.3, with whom the Flat in dispute stands mortgaged. The delay was there on the part of opposite parties No.1 & 2 in offering the possession of the flat, for which the complainant had already been compensated by paying the pre-EMIs (loan instalments) to opposite party No.3 under Subvention Scheme in terms of the Tripartite Agreement during period of 7 years Consumer Complaint No.545 of 2019 7 with effect from December, 2011 to November, 2018 till handing over the possession as it was offered vide letter dated 10.10.2018. Learned counsel also submits that opposite parties No.1 & 2 cannot be held liable to pay compensation for the delay in offering the possession of the flat as it is for the complainant to make payment of balance amount to the opposite party No.1 & 2-Company as well as opposite party No.3. The amount paid by opposite parties No.1 & 2 is approximately ₹26,50,000/-, which has been calculated at the rate of ₹27,500/- per month. At the end, learned counsel submits that there is no deficiency in service on the part of opposite parties No.1 & 2 and the compliant being devoid of any merit is liable to be dismissed.
9. Heard the arguments of learned counsel for the parties except opposite party No.3 as none has appeared on its behalf at the time of arguments. We have also perused the relevant documents available on the file, including the agreements entered into between the parties and the written submissions filed on behalf of the complainant and opposite parties No.1 & 2.
10. Facts relating to agreements entered into between the parties, terms and conditions of the agreements, dates of handing over of possession, offer of possession and payment of amount at different phases are not disputed.
11. The 1st issue to be determined by this Commission in this case is as to whether this Commission has jurisdiction to entertain and decide the complaint or not?
Consumer Complaint No.545 of 2019 8
12. By relying upon Clause-39 of the Flat Buyers Agreement dated 12.12.2012 Ex.A-1, opposite parties No.1 & 2 have raised an objection that this Commission has no territorial jurisdiction as the Flat Buyers Agreement was executed between the parties at New Delhi and the project in question is situated in the State of Punjab. Said Clause-39 is reproduced as under:
"39. It is agreed that Courts at Chandigarh alone shall have jurisdiction for adjudication of all matters out or in connection with this agreement."
13. It is pertinent to mention here that the present complaint has been filed under Section 17 of the Act of 1986. Section 17 (2) of the Act of 1986 is relevant for the purpose of determining the territorial jurisdiction of the State Commission, which is reproduced as under:
"(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction:--
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally work for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.Consumer Complaint No.545 of 2019 9
14. Admittedly, the opposite party No.2 is having its office at Kharar-Landran Road, Mohali. Even the project in question is situated in District S.A.S. Nagar, Mohali, Punjab. Moreover, the jurisdiction has been conferred by the Statute itself and not only by mutual arrangement between the parties. Even in view Section 47(4) of the Consumer Protection Act, 2019, this Commission has territorial jurisdiction to decide this complaint. The Hon'ble National Commission in the case of Polymech Plast Machines Ltd. and Anr. v. Apple Plast Pvt. Ltd. IV (2006) CPJ 172(NC) has held that any such clause restricting the jurisdiction to one of the District Forums/State Commissions is contrary to Section 11(2) [17(2)] of the Act of 1986. Further, the wording of Clause-39 of the Flat Buyers Agreement only refers to words "Courts at Chandigarh". Nowhere it specifically says about filing of case in the Civil Court/High Court at Chandigarh. The State Commission is a Quasi-Judicial Court, which is situated in Chandigarh. Therefore, this Commission has the territorial jurisdiction to entertain and decide the present complaint.
15. The other plea of opposite parties No.1 & 2 is that complicated question of facts and law are involved in the case. This plea is also not acceptable, as it is a simple dispute of allotment of flats/units and non-delivery of possession thereof and it can easily be decided on the basis of evidence available on the record, for which no detailed evidence is required.
16. Now, coming to merits of the case, undisputedly, the complainant booked a flat in the residential project of opposite parties Consumer Complaint No.545 of 2019 10 No.1 & 2. Flat Buyers Agreement Ex.A-1 was executed between both the parties on 07.09.2011. Flat/Unit H-604 measuring 1675 sq.ft. in Block/Tower-H was allotted to the complainant. As per the Schedule-I annexed with the said agreement, the basic sale price of the unit was ₹36,49,825/-, including the Club Membership Fee. A sum of ₹50,000/- was payable towards Covered Parking and a sum of ₹75,000/- was payable towards other charges i.e. power back-up:5KVA etc. The total sale consideration of the unit was fixed as ₹37,74,825/-. The complainant had paid a sum of ₹6,15,000/- towards price of said unit at the time of booking as is mentioned in Clause-6(a) of the said Flat Buyers Agreement.
17. Apart from the unit in dispute, the complainant was also allotted one Utility Unit bearing No.HU-601 measuring 110 sq.ft. for the basic sale price of ₹3,24,500/- at the rate of ₹2,950/- per sq.ft. Allotment letter dated 11.12.2012 (Ex.A-3) was issued in this regard and a separate Flat Buyers Agreement (Ex.A-4) was executed between both the parties on 12.12.2012. It is mentioned in Clause 6(a) of said agreement that a sum of ₹50,179/- was paid by the complainant at the time of booking of said Utility Unit.
18. The complainant has produced Applicant Ledger (Page-83) on record. Perusal thereof shows that area of the unit No.H-604 in question was enhanced/increased from 1675 sq.ft. to 1725 sq.ft. Basic price of the unit was also increased to ₹38,72,625/-. It is also mentioned in the said Applicant Ledger that a sum of ₹37,11,981/- stood paid towards the price unit No.H-604 as on 14.08.2017 and the Consumer Complaint No.545 of 2019 11 balance amount was shown as ₹5,32,338/- only. Similarly, as per the Statement of Account (Page-88-90), a sum of ₹2,83,970/- was paid by the complainant towards unit No.HU-601 and balance amount of ₹73,910/- due as on 14.08.2017. Meaning thereby, major portion of sale price of the unit has already been paid to opposite parties No.1 & 2 and only a small portion remains to be paid.
19. As per the Clause 19(a) of the Flat Buyers Agreement dated 07.09.2011 (Ex.A-1) the possession of the unit No.H-604 was required to be delivered to the complainant by 07.09.2013 on payment of sale price subject to force majeure circumstances. If the developer failed to deliver possession within said period, the complainant/purchaser was entitled to receive a compensation at the rate of ₹5/- per sq.ft. per month for the period of such delay after allowing the developer a grace period of 90 days from the date of expiry of stipulated period fixed for delivery of the possession, as per Clause 20(b) of said Flat Buyers Agreement.
20. Similarly, as per Clause 19(a) of the Flat Buyers Agreement dated 12.12.2012 (Ex.A-4) the possession of the Utility Unit No.HU-601 was required to be delivered to the complainant by 31.12.2014 on payment of sale price subject to force majeure circumstances. If the developer failed to deliver possession within the stipulated period, the purchaser was entitled to receive a compensation at the rate of ₹5/- per sq.ft. per month for the period of such delay after allowing the developer a grace period of 90 days Consumer Complaint No.545 of 2019 12 from the date of expiry of stipulated period fixed for delivery of the possession, as per Clause 20(b) of said Flat Buyers Agreement.
21. Opposite parties No.1 & 2 have failed to deliver possession of both the above said units within the respective stipulated periods without any sufficient reason. The ban on mining as alleged by opposite parties in their reply was not for a continuous period. A long period of 11/12 years had already elapsed since the dates of booking of units as well as execution of Flat Buyers Agreements but still the project/units have not been completed in all respects to enable the complainant to enjoy the comforts of his own dwelling unit.
22. As far as the plea of opposite parties No.1 & 2 that the project has been adversely affected on account of Demonetization Policy of Government of India framed in the year 2016 is concerned, it is relevant to mention that the units were allotted in the year 2011/2012, whereas the aforesaid Demonetization Policy was formulated by the Government of India in November, 2016 i.e. after about 4/5 years therefrom. No explanation has been given as to why the project could not be completed between the years 2011/12 to 2016. Even after formulation of above said policy, a period of more than 5 years has passed but there is no evidence on record to prove that the project has been completed in all respects.
23. Opposite parties No.1 & 2 issued the Offer of Fitment Possession of Flat No.H-604 and Utility Unit No.UH-601 vide letters dated 28.06.2017 (Ex.A-5 and Ex.A-6 respectively). The complainant was asked to clear the pending dues within 15 days and thereafter a Consumer Complaint No.545 of 2019 13 period of 30 days was provided to complete the fit-outs. Thereafter, they issued an offer of possession vide letter dated 10.10.2018 Ex.A-7. The stand of opposite parties No.1 & 2 that the complainant himself had delayed the taking over the possession and defaulted in payment of balance sale consideration is not acceptable, as the major portion of sale price has already been paid and 4.25%-5% of total sale consideration was to be paid after issuance of offer of possession. Moreover, the Offers of Fitment Possession were issued without obtaining Completion Certificate from the competent authorities. Opposite parties No.1 & 2 have produced only the Partial Completion Certificate dated 12.02.2018, which was issued subject to compliance of certain terms and conditions mentioned therein. Firstly, the Partial Completion Certificate is not sufficient to prove that the project including the units in dispute has been completed in all respects. Secondly, it is also not proved on record that all the terms and conditions mentioned in the Partial Completion Certificate were complied with by the builder/developer in letter and spirit. Section 14 of Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA") deals with responsibility of the builder/promoter to obtain Completion/Occupation Certificate from the competent Authority. The same is reproduced as under:
14. It is the responsibility of the promoter-
(i) in the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate Consumer Complaint No.545 of 2019 14 from the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and
(ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5.
(2) The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate."
24. Clause 3.12 (i) of the Notification dated 07th July, 2015 published in the Punjab Government Gazette Extraordinary by Department of Local Government (Town Planning Wing) is also applicable to the properties falling within the Municipal Limits. The same is reproduced as under:
"No person shall occupy or allow other person to occupy any new building or part of a new building for any purpose whatsoever until such building or part thereof has been certified by the local authority or of any person authorized by it in this behalf to be in every respect completed according to the sanctioned plan and fit for the use for which it is erected."
25. Further, Section 272 of The Punjab Municipal Corporation Act, 1976 is also relevant in this context, which reads as under:-
"272. Completion Certificate. -
(1) Every person who employs a licensed architect or engineer or a person approved by the Commissioner to design or erect a building or execute any work shall, within one month after the completion of the erection of the building or execution of the work, deliver or send or cause to be delivered or sent to the Commissioner a notice in writing of such completion accompanied by a certificate in the form prescribed by byelaws, made in this behalf and shall give to the Commissioner all necessary facilities for the inspection of such building or work.Consumer Complaint No.545 of 2019 15
(2) No person shall occupy or permit to be occupied any such building or use or permit to be used any building or a part thereof effected by any such work until permission has been granted by the Commissioner in this behalf in accordance with bye-laws made under this Act: Provided that if the Commissioner fails within a period of thirty days after the receipt of the notice of completion to communicate his refusal in grant such permission, shall be deemed to have been granted."
26. The Hon'ble National Commission in First Appeal No.855 of 2018 (Vision India Realtors Pvt. Ltd. & Anr. v. Sanjeev Malhotra) decided on 13.06.2018 has categorically held that the legal possession cannot be delivered in the absence of Completion Certificate issued by the Competent Authority. Relevant portion of said order as mentioned in Para No.5 is reproduced as under:
5. During the course of hearing, it was submitted by the learned counsel for the appellant that the completion certificate in respect of the project was obtained by the appellant on 15.03.2016. A copy of the communication dated 15.03.2016 from Municipal Council, Kharar has been placed on record. It is therefore, evident that the completion certificate having been received only on 15.03.2016, the appellant could not have offered legal possession of the apartment to the complainant at any time before that date. As noted earlier, the amount of Rs.1,81,375/- was demanded on 20.04.2015 and the amount of Rs.2,12,489/- was demanded on 06.02.2016. The complainant was requested to pay the aforesaid amount so that the appellant could offer the possession of the flat. The said offer of possession was meaningless being unlawful as the requisite completion certificate had not been obtained by that date......."
27. Hon'ble Supreme Court in the cases of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Ltd. 2020 (3) RCR (Civil) 544 and Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (2019) 5 SCC 725 has Consumer Complaint No.545 of 2019 16 also held that failure to obtain Occupation Certificate on the part of the builder/developer amounts to 'deficiency in service'.
28. Further the Hon'ble National Commission in the case of "Suman Kumar Jha & another Vs. Mantri Technology Constellations Pvt. Ltd." CC No.54/2018, decided on 29.10.2021, has held that the offering of possession of incomplete construction/unit without obtaining Completion Certificate amounts to 'unfair trade practice'.
29. In view of the law laid down by the Hon'ble Supreme Court and Hon'ble National Commission, it is clear that in absence of Completion/Occupation Certificate issued by the competent authority, the offers of possession issued to the complainant were just the paper transactions and nothing more than that. The photographs, Ex.OP-7 to Ex.OP-9 and Offers of Fitment Possession letters issued to other allottees, which have been produced by opposite parties No.1 & 2, are also of no help to them in absence of Completion/Occupation Certificates.
30. It is also relevant to mention here NOC for raising construction of building was issued to opposite parties No.1 & 2 vide letter dated 11.07.2014 (Ex.O-4), whereas the Flat Buyers Agreements Ex.A-1 and Ex.A-4 were executed with the Complainant on 07.09.2011 and 12.12.2012 respectively. Meaning thereby, the opposite parties No.1 & 2 adopted 'unfair trade practice' by receiving booking amount of said units from the complainant without obtaining proper sanctions for the project. It also amounts to violation of provisions of PAPRA. Consumer Complaint No.545 of 2019 17
31. It is also relevant to mention here that a Tripartite Agreement (Ex.A-2) was executed between the complainant, opposite party No.1 and opposite party No.3-Dewan Housing Finance Corporation Limited (DHFCL) on 30.11.2011, whereby a loan of ₹26,55,000/- was sanctioned in favour of the complainant. Later on, said loan was enhanced to ₹29,27,000/- and this fact is evident from Individual Loan Statement Ex.OP-3/1 at Page-223 of the file. Out of said loan amount, a sum of ₹27,87,950/- was disbursed to opposite parties No.1 & 2.
32. As per Clause-3 of the Tripartite Agreement, opposite parties No.1 & 2 agreed to pay Pre-EMI towards the loan sanctioned in favour of the complainant to opposite party No.3-DHFCL till delivery of possession of the unit. Said Clause is reproduced as under:
"The housing loan advanced to the borrower by DHFL shall be repayable by the borrower by way of Equated Monthly Instalments (EMI). The date of commencement of EMI shall be the first day of the month following the month in which the disbursement of the loan will have been completed and consequently the due date of payment of first EMI shall be as per the terms of the loan agreement executed by the Borrower. Till the commencement of EMI the Borrower shall pay Pre-EMI which is calculated at the rate of interest as mentioned in the aforesaid loan agreement under the Scheme finalized with the Developer, the Pre-EMI shall be paid by the Developer on behalf of the Borrower for a limited period of......months from the date of first disbursement of the loan OR till such time the Developer does not hand over possession of the residential apartment/flat to the Borrower, whichever period of lesser. This amount may be subject to Income Tax and the liability to bear with the Borrower.Consumer Complaint No.545 of 2019 18
33. Since opposite parties No.1 & 2 have not obtained Completion and Occupation Certificates from the competent authorities, so it is proved on record that they are not in a position to deliver legal and actual possession of the units. Therefore, opposite parties No.1 & 2 are liable to pay the Pre-EMI along with interest to opposite party No.3-DHFCL till delivery of legal and physical possession of the units after obtaining the Completion and Occupation Certificates and not till the date of offers of possession, as the same were just paper possessions in the absence of Completion/Occupation Certificates.
34. On perusal of reply dated 06.11.2019 filed by opposite party No.3-DHFCL, no EMI was received during period of last 34 months and the total outstanding of loan till October, 2019 was ₹36,94,808/-. The account of the complainant has been declared Non- Performing Asset (NPA) on 01.07.2017. It is also mentioned in the reply filed by opposite party No.3 that proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, "SARFAESI Act) have already been initiated against the complainant and a notice under Section 13 (2) of the SARFAESI Act, 2002 was issued to the complainant on 26.11.2018. Even the publication notice has been issued for said purpose.
35. As discussed above, as per Clause-3 of the Tripartite Agreement, until and unless the legal possession of the units is Consumer Complaint No.545 of 2019 19 delivered to the complainant, the primary liability to pay the Pre-EMIs is of opposite parties No.1 & 2. Therefore, the act of opposite party No.3 by issuing notices under Section 13(2) of the SARFAESI Act, 2002 is in contradiction to the terms and conditions of the Tripartite Agreement executed between the parties. Clause-15 of the Flat Buyers Agreement Ex.A-1 is also relevant in this context and the same is reproduced as under:
"Unless a conveyance deed is executed and registered, the Developer shall for all intents and purposes continue to be the owner of the land and also the construction thereon and this Agreement shall not give to the Purchaser any right or title or interest therein, except that all taxes and levies shall be paid by the Purchaser as stated hereinbefore."
36. In view of aforesaid Clause, the developer is owner of the units in question till the execution of Conveyance Deed in favour of the complainant. Since the complainant has not become lawful owner of said units as neither possession of units has been delivered nor the Conveyance Deeds have been registered, so the issuance of notices under the provisions of SARFAESI Act, 2002 by opposite party No.3 is not proper and legal. Therefore, opposite party No.3 is restrained from issuing further notices under the provisions of SARFAESI Act, 2002 till delivery of legal, actual and physical possession of the unit. The liability of the complainant for payment of EMIs will start only after taking legal and physical possession of the units with Completion/Occupation Certificates. Thereafter, in case the complainant fails to pay outstanding loan amount, the opposite party Consumer Complaint No.545 of 2019 20 No.3 will be at liberty to initiate the proceedings under the SARFAESI Act, 2002 against him, in accordance with.
37. Due to fault of opposite parties No.1 & 2 in not paying the Pre-EMIs as per the terms and conditions of the Tripartite Agreement, the account of the complainant has been declared NPA and his application for grant of personal loan has also been rejected by Yes Bank, vide letter dated 22.01.2019 Ex.A-12. This has happened only due to the fault of opposite parties No.1 & 2 in not paying the Pre-EMIs to the financer.
38. As far as increase in the area of unit No.H-604 is concerned, the same is squarely covered under Clause-8 of the Flat Buyers Agreement Ex.A-1. The relevant portion of said Clause is reproduced as under:
"If as a result of above alteration etc. there is either reduction or increase in the super area of the said premises or its location, no claim, monetary or otherwise will be raised or accepted except that the original agreed basic price rate per sq.mtr./sq.ft. and other charges will be applicable for the changed area i.e. at the same rate at which the Unit was registered/booked or as the Developer may decide and as a consequence of such reduction or increase in the super area, the Developer shall be liable to refund without interest only the extra basic price and other pro- rata charges recovered or shall be entitled to recover the additional basic price and other proportionate charges without interest as the case may be.
39. The complainant himself has agreed for any increase or decrease in the area of the units as per above said Clause of the agreement. Therefore, he is liable to pay price of increased area of the Consumer Complaint No.545 of 2019 21 unit. However, no cogent and convincing reason/explanation and details have been given by opposite parties No.1 & 2 as to how the rate of per sq.ft. area of the unit has been increased and on what basis. The perusal of aforesaid Clause itself shows no claim with regard to increase or decrease in area of the unit will be accepted, except that the original agreed basic price rate per sq.mtr./sq.ft. and other charges will be applicable for the changed area i.e. at the same rate at which the Unit was registered/booked or as the Developer may decide. In the absence of cogent and convincing reason/explanation and details qua increase of rate of per sq.ft. of the unit, the same cannot be accepted. Therefore, opposite parties No.1 & 2 are entitled to charge only the sale price of the unit as per rate as agreed at the time of booking/execution of the Flat Buyers Agreements Ex.A-1 and Ex.A-4.
40. As far as the version of the complainant that he is living in rented house and has been paying considerable amount towards rent since long is concerned, there is no agreement between the complainant and opposite parties No.1 & 2 to pay the rent amount to him. However, it is relevant to mention that since the Flat Buyers Agreements contain specific clauses for payment of compensation for delay in delivery of possession and opposite parties No.1 & 2 are also liable to pay the Pre-EMI to opposite party No.3 till delivery of legal, actual and physical possession of the units, so the financial loss suffered by the complainant due to payment of rent, if any, will be covered by the award of said compensation.
Consumer Complaint No.545 of 2019 22
41. Perusal of e-mails Ex.A-9 shows that other Utility Room bearing unit No.HU-602 was offered to the complainant but the same was not accepted by him, as is evident from e-mail dated 31.01.2019 (Page-102).
42. Further, on perusal of Clauses 20(b) of the Flat Buyers Agreements, Ex.A-1 & Ex.A-4, it is clear that on failure of the developer to deliver the possession within the stipulated period, the purchaser/complainant is entitled to receive compensation at the rate of ₹5/- per sq.ft. per month for the period of such delay after allowing a grace period of 90 days to the developer. On the other hand, as per Clause-2(a) of the said agreement, the developer charges interest at the rate of 18% per annum on account of delay in depositing the instalments by the buyers. This shows that the terms and conditions of the Flat Buyers Agreements Ex.A-1 and Ex.A-4, which have been drafted by opposite parties No.1 & 2 are one-sided and favour them. The buyers have no option but to sign on the dotted lines or pre- drafted agreements prepared by the developer/builder. For purchasing the flat/plot, the purchasers take loans from their family members, relatives and friends or financial institutions and this has happened in the present case. 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 Consumer Complaint No.545 of 2019 23 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."
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."
43. 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 Consumer Complaint No.545 of 2019 24 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 ....."
44. Even 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. Relevant portion of said judgment as mentioned in Para-32, 55 & 56 is reproduced 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;Consumer Complaint No.545 of 2019 25
(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;
(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."
55. For the above reasons we have come to the conclusion that the dismissal of the complaint by the NCDRC was erroneous. The flat buyers are entitled to compensation for delayed handing over of possession and for the failure of the developer to fulfil the representations made to flat buyers in regard to the provision of amenities. The reasoning of the NCDRC on these facets suffers from a clear perversity and patent errors of law which have been noticed in the earlier part of this judgment. Allowing the appeals in part, we set aside the impugned judgment and order of the NCDRC dated 2 July 2019 dismissing the consumer complaint. While doing so, we issue the following directions:
(i) Save and except for eleven appellants who entered into specific settlements with the developer and three appellants who have sold their right, title and interest under the ABA, the first and second respondents shall, as a measure of compensation, pay an amount calculated at the rate of 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate;
(ii) The above amount shall be in addition to the amounts which have been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts; and Consumer Complaint No.545 of 2019 26
(iii) The amounts due and payable in terms of directions (i) and
(ii) above shall be paid over within a period of one month from the date of this judgment failing which they shall carry interest at the rate of 9 per cent per annum until payment.
56. The civil appeals are accordingly allowed in the above terms."
45. In view of the law laid down by the Hon'ble Supreme Court in the above said cases, we are of the view that the provision of penalty at the rate of ₹5/- per sq.ft. per month, as per Clause 20(b) of the Flat Buyers Agreements is not sufficient to compensate the complainant for the delay in delivery of possession as well as the mental agony, harassment and financial loss suffered by him on account of this reason. In addition to it, the complainant is also entitled to simple interest on the entire amount deposited by him from his own pocket towards the unit No.H-604 and unit No.HU-601, at the rate of 6% per annum from 07.12.2013 and 31.03.2015 respectively till delivery of legal actual and physical possession of the units with Completion/Occupation Certificates. It is made clear that the above said interest is awarded only on the amount paid by the complainant out of his own pocket and not on the amount paid by raising loan, as all the pre-EMIs along with interest are required to be paid by opposite parties No.1 & 2 to opposite party No.3 till delivery of legal and actual possession, as per terms and conditions of the Tripartite Agreement Ex.A-2.
46. In view of the facts and circumstances as mentioned above, the 'deficiency in service' and 'unfair trade practice' on the part of opposite parties No.1 & 2 have clearly been proved on record, Consumer Complaint No.545 of 2019 27 as they failed to deliver legal, physical and actual possession of the units within the stipulated periods with Completion and Occupation Certificates. On account of delay in delivery of possession within the stipulated period, the complainant has suffered mental agony, hardships and financial loss etc. at the hands of the opposite parties No.1 & 2.
47. Accordingly, the complaint is allowed and the following directions are issued:
i) Opposite parties No.1 & 2 are directed to deliver legal, actual and physical possession of the units, in question, complete in all respects, along with agreed facilities/amenities and Completion and Occupation Certificates issued by the competent authorities and execute the Sale/Conveyance Deed in favour of the complainant, subject to payment of remaining sale consideration by the complainant as per terms and conditions of the Flat Buyers Agreements Ex.A-1 and Ex.A-4 without any interest/penalty;
ii) Opposite parties No.1 & 2 are further directed to pay Pre-EMI along with interest to opposite party No.3 as per Clause-3 of the Tripartite Agreement Ex.A-2 till delivery of possession of the units to the complainant in the above manner.
iii) Opposite parties No.1 & 2 are also directed to pay compensation for delay in delivery of possession at the rate of ₹5/- per sq. ft.
per month for Unit No.H-604 after the expiry of the stipulated date of delivery of possession i.e. from 07.12.2013 till the Consumer Complaint No.545 of 2019 28 delivery of possession of the said unit, as per Clause 20(b) of the Flat Buyers Agreement, Ex.A-1.
In addition to it, they shall also pay simple interest on the entire amount paid by complainant from his own pocket towards price of the said unit at the rate of 6% per annum from 07.12.2013 till the delivery of possession of the said unit in the manner as ordered above.
iv) Opposite parties No.1 & 2 are also directed to pay compensation for delay in delivery of possession at the rate of ₹5/- per sq. ft. per month for Unit No.HU-601 after the expiry of the stipulated date of delivery of possession i.e. from 31.03.2015 till the delivery of possession of said unit, as per Clause 20(b) of the Flat Buyers Agreement, Ex.A-4.
In addition to it, they shall also pay simple interest on the entire amount paid by complainant from his own pocket towards price of the said unit at the rate of 6% per annum from 31.03.2015 till the delivery of possession of the said unit in the manner as ordered above.
v) The balance sale consideration payable by the complainant shall be adjusted from the above said liability of opposite parties No.1 & 2.
vi) Opposite party No.3 is also restrained from issuing any further notices under the provisions of SARFAESI Act, 2002 till delivery of legal, actual and physical possession of the unit(s) to the complainant.
Consumer Complaint No.545 of 2019 29
vii) Opposite parties No.1 & 2 are directed to pay ₹20,000/- as the litigation costs and other expenses.
48. The compliance of the order shall be made by the opposite parties within a period of 60 days from the receipt of certified copy of the order.
49. Since the main case has been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
50. The complaint could not be decided within the statutory period due to heavy pendency of court cases and pandemic of COVID-
19. (JUSTICE DAYA CHAUDHARY) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER July 01, 2022.
(Gurmeet S)