State Consumer Disputes Redressal Commission
Gurpreet Kaur vs Chandigarh Overseas Pvt. Ltd. And ... on 19 January, 2021
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.63 of 2020
Date of institution : 12.02.2020
Reserved on : 14.01.2021
Date of decision : 19.01.2021
Gurpreet Kaur wife of Sh. Surmukh Singh, aged about 52 years,
resident of Street No.4, Block-D, Guru Nanak Colony, Sangrur,
Punjab.
....Complainant
Versus
1. M/s Chandigarh Overseas Private Limited, SCO 196-197, Sector
34-A, Chandigarh (Regd. Office) and SCO 249, Basement,
Sector 44-C, Chandigarh.
2. Hardayal Singh Mann, Director, M/s Chandigarh Overseas
Private Limited, SCO 249, Basement, Sector 44-C, Chandigarh.
3. Tejinder Pal Setia, Director, M/s Chandigarh Overseas Private
Limited, SCO 249, Basement, Sector 44-C, Chandigarh.
4. Sanjeev Makool, Director, M/s Chandigarh Overseas Private
Limited, SCO 249, Basement, Sector 44-C, Chandigarh.
E-mail ID of OPs:[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 complainant : Sh. Brijesh Nandan, Advocate For OPs No.1, 3 & 4 : Ms. Priyanka Malik, Advocate For OP No.2 : Ms. Vertika H. Singh, Advocate.Consumer Complaint No.63 of 2020 2
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT The complainant has 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:
a) to hand over possession of the flat, in question, Or in the Alternative:
to refund the amount of ₹24,25,000/-, along with compensation on account of delay in delivery of the flat, in question, i.e. ₹32,25,000/- (at the rate of ₹1,000/- per day from 01.04.2011 to 01.02.2020 i.e. 3225 days) as per terms and conditions of 'Buyer Developer Agreement';
b) to pay compensation of ₹2,50,000/-, on account of mental agony, harassment etc. suffered by the complainant; and
c) to pay ₹50,000/- towards litigation expenses.
Facts of the Complaint
2. Brief facts, as set out in the complaint, are that the complainant booked a residential flat bearing No.520, Tower No.10, having super area of 2075 sq.ft. in project of the opposite parties namely "Industrial Knowledge (Fashion Technology) Park", Sector 90, S.A.S., Mohali, by paying booking amount of ₹1 lac, vide receipt dated 18.11.2009, along with Application Form of the same date. Provisional allotment letter was issued and 'Buyer Development Agreement' was executed on 05.12.2009. As per Clause-14 of the agreement, the project was to be completed by 31.3.2011, subject to force majeure circumstances; failing which the Developer was liable to pay to the Consumer Complaint No.63 of 2020 3 complainant a sum of ₹1,000/- per day for the period of delay. The complainant deposited a total sum of ₹24,25,000/- towards the price of the flat with the opposite parties on various dates, as per details given in Para-3 & 5 of the complaint. However, they failed to deliver possession of the flat within the stipulated period. The complainant received a demand notice dated 21.05.2014 for anticipated deposit of balance amount of ₹4,00,000/-. She immediately visited their office and they told that the said demand notice was mistakenly issued. However, a reminder/demand notice dated 15.12.2015 for depositing ₹4,00,000/- was again received by her, without offering the possession. She again approached the opposite parties, who assured to deliver the possession shortly and told that they had to obtain the requisite approvals/sanctions from GMADA to complete the project. The complainant also visited their office on 24.07.2016, but it was found locked. She made a telephonic call to the opposite parties and it was told that their office had been shifted to some new premises due to higher rent. The complainant even visited the site of the project, where some construction activities were going on and on inquiry, the possession was assured to be delivered by March, 2017 and she returned to Sangrur. Thereafter, the complainant visited the site of the project in the month of June, 2017, but could not contact the opposite parties even on telephone calls. Ultimately, she sent representation dated 02.08.2017 to the opposite parties, seeking refund of the amount deposited by her. On the very next day, opposite party No.2 informed that due to major family problem and financial issues, the Consumer Complaint No.63 of 2020 4 project has been sold and new partner has been appointed as Director and joint meeting with all buyers was to be held on last Sunday of August, 2017. The complainant reached the site of the project on the given date and opposite party No.2, while addressing the buyers, assured to deliver possession of the flats from November, 2018 onwards. He also introduced new partners of the project i.e. opposite parties No.3 & 4. However, the possession was not delivered even thereafter. The complainant could not visit the site in November, 2018 due to death of her close relative and later on heart attack suffered by her husband. On 04.01.2019, the complainant, along with her relative, visited the office of the opposite parties, but they avoided to meet her. Thereafter, she received a telephonic call from opposite party No.3 in January, 2019, assuring to refund half of the amount paid by her. The aforesaid act and conduct of the opposite parties amount to deficiency in service and unfair trade practice. Earlier, the complainant filed CC No.891 of 2019 before this Commission; which was dismissed as withdrawn, vide order dated 17.01.2020 with liberty to file a fresh one on the same cause of action with better particulars. Hence, the present complaint.
Defence of the Opposite Parties
3. Upon notice, opposite parties appeared through counsels. Opposite parties No.1 & 3 filed short joint reply to the complaint by way of affidavit of Sh. Vikram Kumar and opposite party No.2 filed its separate short reply, whereas no reply was filed by opposite party Consumer Complaint No.63 of 2020 5 No.4 within the prescribed period of 45 days and, hence, his right to file reply was closed, vide order dated 02.11.2020.
4. Opposite parties No.1 & 3, in their short reply, pleaded that the complaint is false and baseless. It involves complicated questions of facts and law; which cannot be decided in summary manner. A sum of ₹24,25,000/- only was received from the complainant against the requisite amount of ₹28,25,000/- and due to willful default of the complainant, the project of the opposite parties could not be completed. Last payment of ₹4 lac was received on 05.04.2010 and thereafter not even a single penny was paid by the complainant. Thus, the complaint, which is filed after lapse of 10 years from the date of last payment, is liable to be dismissed, being barred by limitation. The project, in question, has suffered from force majeure circumstances, as mentioned in the 'Buyer Developer Agreement'; which were beyond the control of the opposite parties. The State of Punjab, vide Notification dated 26.03.2003, notified an industrial policy, in pursuance of which opposite party No.1-Company submitted a proposal to the Government of Punjab for setting up of a Techno Knowledge Park for Fashion Technology in Mohali, with permission to use 60% of the area for industrial spaces/design studios/offices, 30% for residential purpose and 10% for commercial purpose (with regard to piece and parcel of land bearing Hadbast No.35 and 36 of village Sohana and Lakhanpur, Sector 90, Mohali, total measuring 13.76 acres equivalent to 66598.40 sq.yds. i.e. 55618.50 sq.mts.. The Government of Punjab granted Eligibility Certificate to opposite party Consumer Complaint No.63 of 2020 6 No.1-Company, vide letter dated 18.01.2005, under Clause 10.4 of the Industrial Policy, 2003. Vide Notification dated 04.02.2005, the Company was granted Change of Land Use from agricultural to industrial use of the said land. Vide another Notification of the same date, the Company was exempted from all provisions of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), except Section 32 thereof. It was also exempted from compulsory acquisition under the Land Acquisition Act, 1894. The Building Lay Out plan was sanctioned, vide letter dated 13.04.2006, by the Chief Town Planner, Government of Punjab. The Company started construction of the project and it was asked to deposit Urban Development Fund of ₹20,715/- and Licence Fee of ₹13,74,375/- by the Chief Town Planner, Punjab Civil Secretariat, Chandigarh; which was paid but had to be refunded by GMADA on 10.08.2010, because the said demand was illegal. The opposite parties had given the contract for construction of the project to M/s Star Construction. The Government and GMADA raised a demand of ₹2,87,69,475/- as licence fee on account of External Development and Change of Land Use. However, the said demand was totally uncalled for; as the project, in question, was exempted from such fee as per Notification dated 04.02.2005. However, due to non-payment of said demand, no further clearances were issued to the project. Opposite party No.1-Company submitted a representation against the said demand, but the work for commercial tower continued. A 'Buyer Developer Agreement' was executed between the Company and the respondent for sale of one flat, which Consumer Complaint No.63 of 2020 7 stipulated that a provisional allotment letter would be issued, subject to the directions, rules, provisions and terms and conditions laid down in the Industrial Policy, 2003 as well as approval letters and rules and regulations framed or to be framed in future by the Department of Industry and Commerce, Government of Punjab. The final allotment and possession of units also would be subject to the conditions, as mentioned above. However, M/s Star Constructions left the work in between and, as such, the opposite parties searched for a new contractor and they entered into a 'Joint Development Agreement' (JDA) with M/s Ionic Realty Ltd. to develop the property, as per the terms and conditions, as agreed by the parties therein. M/s Ionic Realty Ltd. filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 before the Additional District Judge, Chandigarh against opposite party No.1-Company, seeking grant of interim measures of protection for restraining the Company from causing any kind of obstruction/hindrance to development activities by M/s Ionic Realty Ltd. on the subject properties and further restraining the Company from entering into any contract with third party or creating third party rights with regard to subject property. The Additional District Judge, Chandigarh granted status quo order against opposite party No.1-Company, vide order dated 26.04.2011; which lasted till 23.08.2014. By then, the structure of residential complex had been completed and the work left was of 10-12 months and the project came to standstill. Opposite party No.1-Company submitted a revised layout/building plan to the Chief Town Planner. GMADA, vide its letter Consumer Complaint No.63 of 2020 8 dated 31.10.2012, informed the Company that the application for issuance of NOC for the sanction of revised plan would be considered only after the Company would deposit ₹2,69,73,475/- as licence fee and ₹9,04,316/- as social infrastructure fund, which was completely a new demand. GMADA issued another letter giving break-up for the demand of ₹2,87,69,475/- and demanded the same. The opposite party No.1-Company filed Writ Petition bearing No.5536 of 2013 against GMADA before the Hon'ble Punjab and Haryana High Court; which was allowed and the aforesaid demands raised by GMADA were quashed. Another Civil Writ Petition No.4856 of 2014 titled as "Rupinder Kaur & Ors. v. State of Punjab & Ors." was also filed before the Hon'ble Punjab and Haryana High Court, wherein order dated 14.03.2014 for status quo was passed with respect to the subject land of the Company; which lasted till the year 2018. The construction cost, since the execution of agreement till the force majeure circumstances were removed, has gone skyrocketing and it is impossible for the answering opposite parties to deliver possession of the unit, being commercial in nature, to the complainant or other similarly situated persons at the same price. However, since the complainant failed to pay the remaining sale consideration, so the amount paid by her was confiscated due to her own default. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.
5. Opposite party No.2, in his reply, pleaded that he is no more the Director of opposite party No.1-Company, as he has already Consumer Complaint No.63 of 2020 9 resigned. There were two other Directors, namely Mr. Gursharan Batra and Mr. Sumesh Chawla. Eventually, opposite party No.1-Company was bought by Mr. Tejinder Pal Setia, opposite party No.3 and M/s Mona Townships Private Limited, as per agreement dated 15.10.2014. The resignation of opposite party No.2 has been accepted by the Company, vide resolution dated 17.10.2014, Ex.OP-2/3. Form DIR-12, Ex.OP-2/4, also proves this fact. It is further pleaded that the complainant never executed any agreement with opposite party No.2 in his personal capacity. After the charge of the Company has been taken over by M/s Mona Townships Private Limited and Mr. Tejinder Pal Setia, opposite party No.3 and opposite party No.2 has resigned from the Directorship of the Company, he is not in a position to redress the grievances of the complainant. The complainant has concealed the changed status of opposite party No.2, in the complaint. It is further pleaded that the amount was deposited by the complainant with the Company and not with opposite party No.2 in his personal capacity. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.
6. Replications were filed, in which averments of the complaint were reiterated and pleadings of the replies filed by opposite parties No.1 to 3 were controverted.
Evidence of the Parties
7. To prove her claim, the complainant filed her own affidavit, along with copies of documents i.e. payment receipt dated 18.11.2009 Ex.C-1, Application Form dated 18.11.2009 Ex.C-2, Buyer Developer Consumer Complaint No.63 of 2020 10 Agreement dated 05.12.2009 Ex.C-3, other payment receipts/DDs Ex.C-4, Ex.C-4A (colly.), Ex.C-4B and Ex.C-4C, demand notice dated 21.05.2014 Ex.C-5, reminder dated 15.12.2015 Ex.C-6, representation dated 02.08.2017 Ex.C-7, list of buyers Ex.C-8, letter dated 27.03.2018 Ex.C-9, Company Master Data Ex.C-10, legal notice dated 05.08.2019 and original postal receipts Ex.C-11 (colly.) and order dated 17.01.2020, Ex.C-12.
8. Opposite parties No.1 & 3 filed short joint reply to the complaint by way of affidavit of Sh. Vikram Kumar, along with copies of documents i.e. order dated 26.04.2011 passed by ADJ Annexure OP- 1, order dated 23.08.2014 passed by ADJ Annexure OP-2, order dated 14.03.2014 passed by Hon'ble High Court Annexure OP-3 and Construction Material Price Index-2010-2018 Annexure OP-4.
9. Opposite party No.2, along with his reply, filed his self attested affidavit, along with copies of documents i.e. Share Sale Agreement Ex.OP-2/1, resignation dated 17.10.2014 Ex.OP-2/2, resolution dated 17.10.2014 Ex.OP-2/3 and Form DIR-12 Ex.OP-2/4. Contentions of the Parties
10. We have heard learned counsel for the parties and have gone through the written arguments submitted on behalf of opposite parties No.1 to 3 and record carefully.
11. Learned counsel for the complainant has vehemently contended that the opposite parties failed to develop the project and to deliver possession of the flat, in question, to the complainant within the stipulated period as per terms and conditions of its scheme, despite Consumer Complaint No.63 of 2020 11 receipt of substantial amount from her. The complainant so many times requested the opposite parties to deliver possession of the flat, but to no effect. They kept on utilizing the amount deposited by the complainant for their own use, without bothering to complete the project and to deliver possession of the flat to the complainant. The opposite parties also failed to obtain the requisite approvals/sanctions from the competent authorities before setting up the project, in question. The act and conduct of the opposite parties amount to deficiency in service and unfair trade practice and, as such, the complainant is entitled to all the reliefs, as prayed for in the complaint.
12. The written arguments submitted on behalf of opposite parties No.1 & 3 are on the lines of pleadings made in their reply. The sum and substance of oral and written arguments is that the complaint is time barred, as the last payment was received on 05.04.2010 and the complaint has been filed after lapse of ten years. It has been further contended that the project of the opposite parties has been hit by force majeure circumstances, as detailed in the reply; which were beyond their control; as a result of which the project got delayed. The project ran into dispute and on a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 by M/s Ionic Realty Limited, a stay was granted on 26.04.2011; which lasted till 23.08.2014. Further, the project was again stayed, vide order dated 14.03.2014 by the Hon'ble Punjab and Haryana High Court in CWP No.4856 of 2014. Copies of said orders are annexed with the reply. Due to delay in completion of project, the prices have gone skyrocketing and it is Consumer Complaint No.63 of 2020 12 impossible for opposite parties to deliver possession of the flat at the same price. There is no deficiency in service on the part of opposite parties No.1 & 3 and the complaint against them is liable to be dismissed.
13. The written arguments submitted on behalf of opposite party No.2 are on the lines of pleadings made in his reply. The sum and substance of oral and written arguments is that he has already resigned from opposite party No.1-Company and his resignation has been duly accepted by the Company, vide resolution dated 17.10.2014. It is further contended that the project, in question, has been taken over by M/s Mona Townships Pvt. Ltd.; Mr. Tejinder Pal Setia, opposite party No.3 and M/s Setia Buildcon Pvt. Ltd. As such, opposite party No.2 is no more in a position to redress the grievance of the complainant. Thus, the complaint against him deserves dismissal. Consideration of Contentions
14. We have given our thoughtful consideration to the respective contentions raised by the learned counsel for the parties.
15. So far as the plea of opposite parties No.1 & 3 that the complaint is time barred, on the ground that the last payment was made by the complainant on 05.04.2010, is concerned, admittedly the complainant has made the substantial payment towards the price of the flat, in question, to the opposite parties No.1 to 4, but neither the possession of the same has been delivered, nor the amount deposited by her 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 Consumer Complaint No.63 of 2020 13 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:-
"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."
16. 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 Consumer Complaint No.63 of 2020 14 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 the opposite parties to deliver the possession. Since neither possession has been delivered nor the amount deposited by the complainant has been refunded till date, so in view of the ratio of the law laid down in the above noted authorities, it is a continuous cause of action and the complaint filed by the complainant is within limitation.
17. Now, coming to merits of the case, the complainant booked a residential flat in the project of the opposite parties, vide Application Form dated 18.11.2009 Ex.C-2, along with payment of ₹1 lac, vide receipt of same date Ex.C-1. 'Buyer Development Agreement', Ex.C-3, was executed between opposite party No.1, through opposite party No.2, and the complainant on 05.12.2009, as per which residential flat No.520, having super area of 2075 sq.ft. was allotted to her in the above noted project of the opposite parties for sale price of ₹28,25,000/-. As per Clause-14 of the said agreement, the agreed date for completion of the project was 31.03.2011, subject to force majeure circumstances; failing which the developer was liable to pay to the buyer a sum of ₹1,000/- per day on account of delay in delivery of possession. The complainant deposited a total sum of ₹24,25,000/- with the opposite parties towards the price of the flat, as per receipts/DDs Ex.C-1, Ex.C-4, Ex.C-4A (colly.), Ex.C-4B and Ex.C-4C. Opposite parties No.1 & 3 have also admitted this fact in their reply. However, the opposite parties failed to deliver possession of the flat, in question, to the complainant within the stipulated period. Consumer Complaint No.63 of 2020 15
18. No doubt, opposite parties No.1 & 3 have taken shelter of force majeure circumstances in their reply, yet the fact remains that they have not led any cogent and convincing documentary evidence to prove that their project was actually hit by those force majeure circumstances. Opposite parties No.1 & 3 produced copies of orders dated 26.04.2011 and 23.08.2014 passed by ADJ Annexure OP-1 and Annexure OP-2 and order dated 14.03.2014 passed by Hon'ble High Court Annexure OP-3, along with their reply. Perusal of order dated 26.04.2011, Annexure OP-1, shows that the case was adjourned to 29.07.2011 and in the meanwhile the status quo order was passed. It is not proved that the status quo order was further extended beyond 29.07.2011 or not. Perusal of order dated 23.08.2014, Annexure OP-2, passed by the ADJ shows that the Interim Application under Section 9 of Arbitration and Conciliation Act, 1996 filed by Ionic Reality Limited & Anr. against opposite party No.1 was dismissed. However, it cannot be made out from this order that the stay order lasted till 23.08.2014. Perusal of order dated 14.03.2014 passed in case "Rupinder Kaur v. State of Punjab & Ors. by Hon'ble High Court, Annexure OP-3, shows that the case was adjourned to 05.05.2014 and in the meanwhile the status quo was ordered to be maintained. There is no evidence that the status quo order was further extended by the Hon'ble High Court beyond 05.05.2014. Thus, there is no such evidence on record to prove that the operation of the project of the opposite parties was stayed prior to 14.03.2014 and after 05.05.2014. Moreover, these orders pertain to the period after the stipulated date of delivery of Consumer Complaint No.63 of 2020 16 possession i.e. 31.03.2011. Opposite parties No.1 & 3 pleaded that the project, in question, was exempted from all provisions of PAPRA, except Section 32, vide Notification dated 04.02.2005, but no such Notification has been produced on record.
19. 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. For the sake of repetition, it is relevant to mention that opposite party No.4 failed to file reply to the complaint within the prescribed period of 45 days and, hence, his right to file reply was closed, vide order dated 02.11.2020. Thus, all the averments made in the complaint are deemed to have been admitted by him and the evidence led by the complainant stands unrebutted; for which an adverse inference is to be drawn against him.
20. 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 Consumer Complaint No.63 of 2020 17 a colony as approved by the prescribed authority in the case of a colony. However, the opposite parties failed to comply with Section 3 of the PAPRA.
21. As per Section 5 (Development of land into Colony) of PAPRA, the opposite parties 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 violated Section 5 of PAPRA.
22. 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 the opposite parties to prove that any account has been maintained by them in this respect. As such, they also violated Section 9 of the PAPRA.
23. 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 sub-section (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."
24. The Act came into being in the year 1986. It is one of the benevolent pieces 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 complainant has Consumer Complaint No.63 of 2020 18 made payment of substantial amount to the opposite parties, with the hope to get the possession of the unit within a reasonable time. The circumstances clearly show that the opposite parties made false statement of facts about the goods and services i.e. allotment of land and development thereof within a stipulated period and ultimate delivery of possession. The act and conduct of the opposite parties is a clear case of misrepresentation and deception, which resulted in injury and loss of opportunity to the complainant. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the flat within a reasonable period. From the facts and evidence brought on the record of the complaint, it is clearly made out that the opposite parties, i.e. builders, knew from the very beginning that they had not complied with various provisions of the PAPRA and the Rules framed thereunder and would not be able to deliver the possession within the stipulated period and, thus, by misrepresentation induced the complainant to book the flat, due to which the complainant has 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 complainant 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 complainant has to wage a long drawn and tedious legal battle.
Consumer Complaint No.63 of 2020 19
25. So far as the plea of opposite parties No.1 & 3 that since the construction cost has gone skyrocketing and they are not in a position to deliver possession of the flat to the complainant at the original cost, is concerned, it is relevant to mention that there is no default on the part of the complainant in payment of sale consideration and fault only lies on the part of the opposite parties in not completing their project within the stipulated period. On account of default of the opposite parties in not completing the project within the stipulated period, the complainant was justified in withholding further payment of instalments.
26. As discussed above, as per Clause 14 of the Buyer Developer Agreement, Ex.C-2, the project was to be completed and possession of the unit was to be delivered up to 31.03.2011; failing which opposite party No.1 was liable to pay ₹1,000/- per day on account of delay in delivery of possession; whereas as per Clause-13 of the agreement, they charge principal interest at the rate of 24% on account of delay in depositing the instalments by the buyers. This shows that the terms and conditions of the agreement, Ex.C-2, which has been drafted by the opposite parties, 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 the opposite parties 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 Consumer Complaint No.63 of 2020 20 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, hardship and financial loss 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."
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."
27. 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- Consumer Complaint No.63 of 2020 21 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 ....."
28. 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: Consumer Complaint No.63 of 2020 22
"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;
(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."
29. 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 ₹1,000/- per day, as per Clause 13 of the Consumer Complaint No.63 of 2020 23 agreement, Ex.C-2, is not sufficient to compensate the complainant 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 @ ₹1,000/- per day after the expiry of the stipulated date of delivery of possession i.e. from 01.04.2011 till the date of actual, physical and legal delivery of possession of the flat with all the agreed amenities and Completion and Occupation Certificate issued by the competent authorities, as per Clause 14 of the agreement, the complainant is also entitled to simple interest on the entire amount deposited by her at the rate of 6% per annum from 01.04.2011 till delivery of possession of the flat in the manner, as discussed above.
30. So far as the plea of opposite party No.2 that he is not responsible in this case, as he has already resigned as Director of opposite party No.1 on 17.10.2014 is concerned, it needs to be mentioned that the Buyer Developer Agreement, Ex.C-2, was executed between opposite party No.1, through opposite party No.2, and the complainant on 05.12.2009. The possession of the flat was to be delivered up to 31.03.2011, as per Clause-14 of the said agreement. The complainant had deposited a huge amount of ₹24,25,000/- with the opposite parties up to 30.03.2010. Although, opposite party No.2 had resigned on 17.10.2014 and his resignation was accepted by opposite party No.1-Company, vide Resolution dated 17.10.2014, Ex.OP-2/3. Opposite party No.2 has also produced on record "Share Purchase Agreement" dated 15.10.2014 Ex.OP-2/1; Consumer Complaint No.63 of 2020 24 which was executed between opposite party No.2, Mr. Gursharan Batra, Sumesh Chawla on one side and Tejinder Pal Setia, opposite party No.3, M/s Mona Townships Pvt. Ltd. and M/s Setia Buildcon Pvt. Ltd. on the other side. However, by virtue of Buyer Developer Agreement, Ex.C-2, and in view of the fact that all the activities pertaining to allotment of the flat, stipulated period for delivery of possession and payment of aforesaid amount by the complainant took place before the resigning of opposite party No.2, so opposite party No.2 cannot be absolved of his responsibility towards the complainant. It also needs to be mentioned that earlier, opposite party No.2 had also filed an application (Misc. Application No.1614 of 2020) for deletion of his name from the array of parties; which was dismissed, vide order dated 02.11.2020 on the similar observations.
31. In view of our above discussion, the deficiency in service and unfair trade practice on the part of the opposite parties have been fully proved. Thus, the complainant is entitled to the actual and physical possession of the developed flat, in question, complete in all respects, along with Completion/Occupation Certificate and execute the Sale/Conveyance Deed in her favour, subject to payment of balance sale consideration, without any interest or penalty. For delay in delivery of possession of the unit, in question, the opposite parties are liable to pay compensation, as discussed above. In case, they will not be able to deliver possession, then they shall refund the entire amount deposited by the complainant i.e. ₹24,25,000/-, along with compensation for causing financial loss and depriving the complainant Consumer Complaint No.63 of 2020 25 of the use of the said amount during the period the same remained with the opposite parties at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA. Besides this, the complainant is also entitled to suitable litigation costs and other expenses.
32. Accordingly, the complaint is allowed and following directions are issued to the opposite parties:
i) to deliver actual, legal and physical possession of the flat, in question, to the complainant, complete in all respects, along with agreed facilities and Completion/Occupation Certificates issued by the competent authorities and execute the Sale/Conveyance Deed in her favour, subject to payment of remaining sale consideration without any interest/penalty;
ii) to pay compensation for delay in delivery of possession @ ₹1,000/- per day with effect from 01.04.2011, as per Clause 14 of the agreement, Ex.C-2, till the delivery of possession of the flat, as ordered above. In addition to it, they shall also pay simple interest on the entire amount deposited by complainant, i.e. ₹24,25,000/- (Rupees Twenty Four Lac and Twenty Five Thousand only) at the rate of 6% per annum from 01.04.2011 till the delivery of possession of the flat in the manner, as ordered above; and
iii) to pay ₹22,000/- (Rupees Twenty Two Thousand only), as litigation costs and other expenses.Consumer Complaint No.63 of 2020 26
iv) The balance sale consideration payable by the complainant shall be adjusted from the above said liability of the opposite parties.
33. In case the opposite parties fail to comply with aforesaid directions, then in the alternative, they shall:
i) refund the amount deposited by the complainant, i.e. ₹24,25,000/- (Rupees Twenty Four Lac and Twenty Five Thousand only), along with compensation for causing financial loss and depriving her of the use of the said amount during the period the same remained with the opposite parties at the rate of 12% per annum from the respective dates of deposit till realization, as per Rule 17 of PAPRA; and
ii) to pay ₹22,000/- (Rupees Twenty Two Thousand only), as litigation costs and other expenses.
34. The compliance of this order shall be made by the opposite parties within a period of 45 days of the receipt of certified copy of the order.
35. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER (MRS. KIRAN SIBAL) MEMBER January 19, 2021.
(Gurmeet S)