National Consumer Disputes Redressal
Kulwant Kaur & Anr. vs M/S. Ireo Grace Realtech Pvt. Ltd. on 7 February, 2022
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1043 OF 2019 1. KULWANT KAUR & ANR. ...........Complainant(s) Versus 1. M/S. IREO GRACE REALTECH PVT. LTD. 304,KANCHAN HOUSE,KARAMPURA COMMERCIAL COMPLEX,NEW DELHI-110015 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MR. BINOY KUMAR,MEMBER
For the Complainant : For the Complainants : Mr. Deepak Kumar Khushalani, Advocate For the Opp.Party : For the Opposite Party : Mr. Aarush Bhatia and Mr. Abhimanyu
Bhandari, Advocates
Dated : 07 Feb 2022 ORDER
The present Consumer Complaint has been filed under Section 21(a) of the Consumer Protection Act, 1986 (for short "the Act") by the Complainants against the Opposite Party, M/s. Ireo Grace Realtech Pvt. Ltd. seeking the following reliefs:-
" a) Allow the present complaint;
b) Direct the Opposite Party to grant refund of the amount of Rs.1,49,89,816/- (Rupees One Crore Forty Nine Lakh Eighty Nine Thousand Eight Hundred and Sixteen Only) paid by the Complainants till date at the rate of 18% from the date of making the payment till the date of refund of the amount;
c) Direct the Opposite Parties to pay compensation to the tune of Rs.10,00,000/- for the mental and financial harassment faced by the Complainants till date;
d) Direct the Opposite Party to pay the litigation expenses to the Complainants to the tune of Rs.50,000/- and
e) Pass such other or further order/orders as may be deemed fit and proper on the facts and in the circumstances of this case;
2. According to the Complainants, the facts of the case are that in response to the Applications invited by the Opposite Party Developer for allotment of Flats/Apartments in their upcoming Project, "The Corridors" (hereinafter referred to as the 'Project') located at Golf Course Extension Road, Sector-67-A, Tehsil & District Gurgaon, Haryana, the Complainants had applied for an Apartment on 22.03.2013. Vide Allotment Offer Letter dated 07.08.2013, the Complainants were allotted a Residential Apartment No. CD-B4-08-803 having Super Area of 1966.68 Sq. Ft for a total Sale Consideration of ₹1,60,44,349.12. It is averred that after one year from the date of booking, the Apartment Buyer's Agreement (hereinafter referred to "the Agreement") was entered into between the parties on 07.07.2014. As per Clause 13.3 of the Agreement, the possession of the allotted Apartment was to be handed over to the Complainants within a period of 42 months from the date of approval of the Building Plans with an additional 180 days as "Grace Period". Clause 13.3 of the Agreement reads as under:-
" Subject to Force Majeure, as defined herein and further subject to the allottee having complied with all its obligations under the terms and conditions of this Agreement and not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the Allottee within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company."
3. On 22.08.2016, the Complainants requested the Opposite Party Developer to exchange the allotted Apartment No. CD-B4-08-803 to CD-C11-10-1002 which request was accepted by the Opposite Party Developer vide letter dated 02.09.2016. The consideration paid by the Complainants towards the earlier allotted Apartment was also adjusted by the Opposite Party Developer against the payment for new exchanged Apartment. According to the Complainants, the Building Plans of the Project had been approved by the Competent Authorities on 23.07.2013 and in terms of the Agreement the possession of the Apartment was to be handed over to the Complainants on or before 23.07.2017 including the grace period of 180 days. It is averred that the Complainants made payment of ₹1,49,89,816/- out of the total Sale Consideration of ₹1,60,44,349.12 on different dates upto the date of filing of the Complaint as per demands raised by the Developer. However, despite having received such a hefty amount i.e. almost 93% of the total Sale Consideration, the Developer has miserably failed to complete the construction of the Project and hand over the possession of the allotted Apartment, complete in all respect, to the Complainants. It is further stated by the Complainants that though they had paid a sum of ₹1,49,89,816/- to the Opposite Party Developer but in the Statement of Account furnished by them only an amount of ₹1,36,06,956.56 has been reflected by the Opposite Party Developer and as such there is discrepancy of ₹13,82,859.44. It is stated by the Complainants that they have lost the trust in the Opposite Party Builder as despite making various attempts to contact the Opposite Party Developer to ascertain the exact date of completion of Project and delivery of the possession of the Apartment, except the false and vague assurances nothing more has been conveyed to them. It is further alleged that the various Clauses of the Agreement executed between the Parties are unjust, unilateral, unfair and arbitrary. On the one hand, as per Clause 7.4 of the Agreement, the Opposite Party Developer is charging the exorbitant interest @20% p.a. on the delayed payment but on the other hand, they are liable to pay a meager amount in case of delayed possession to the tune of ₹7.50 per Sq. Ft. p.m of the Super Built Up Area of the Flat to the Complainants in terms of Clause 13.4. Alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party Developer, the Complainant has filed the present Consumer Complaint with the aforesaid reliefs.
4. Upon notice, the Complaint was resisted by the Opposite Party Developer by filing Written Statement. We are not going to mention here the defence taken by the Opposite Party Developer in its Written Version in respect of the Project, the Corridors, as the Preliminary Objections raised by the Opposite Party Developer such as the Complainants are only the speculative Investors and not the Consumers; the present Complaint is ex-facie completely pre-mature; Parties are bound by the terms of the Agreement; the issues in the present Complaint relate to the interpretation and implementation of the terms of the Agreement which can only be decided in a Civil Court or by Arbitration, this Commission has no jurisdiction to entertain the complaint and appropriate authority is Haryana Real Estate Regulatory Authority as well as all the contentions that Complainants are the wilful defaulter in making the payment of the instalments; there is no question of any delay in delivery of possession or a claim of compensation; no cause of action has ever accrued in favour of the Complainant etc., have already been discussed in detail and rejected by this Commission in CC No.3873/2017 entitled "Abhishek Khanna & Ors. Vs. Ireo Grace Realtech Pvt. Ltd .", CC No.1382/2018 entitled "Promila Kashyap vs. Ireo Grace Realtech Pvt. Ltd.", CC No. 525/2017 entitled "Ritu Hasija & Anr. Vs. Ireo Grace Realtech Pvt. Ltd ." and CC No.696 / 2017 entitled "Amit Arora vs. Ireo Grace Realtech Pvt. Ltd.". The Opposite Party Developer filed Civil Appeals against these Orders before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court dealt with all the aforesaid Preliminary Objections and the contentions raised by the Opposite Party Developer with regard to delay of the Project, the Corridors and disposed off the Appeals vide their Judgment dated 11.01.2021 in the case " Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors. " [Civil Appeal No. 5785 / 2019 & other connected Appeals] upon which the strong reliance has also been placed by the Learned Counsel for the Complainants. The Hon'ble Supreme Court in Abhishek Khanna's case (Supra) had held that 27.11.2018 would be the relevant date for offer of possession by observing as under:-
" On 27.11.2014, the Director, Haryana Fire Service granted approval to the Fire Fighting Scheme subject to the conditions mentioned therein. The computation of the period for handing over possession would be computed from this date. The Commitment Period of 42 months plus the Grace Period of 6 months from 27.11.2014, would be 27.11.2018, as being the relevant date for offer of possession."
5. Hon'ble Supreme Court also held that the Agreement is one-sided and the Opposite Party Developer cannot compel the Apartment Buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement by observing as under :-
" We are of the view that the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An―unfair contract has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act.
In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement"
6. Hon'ble Supreme Court on the issue "Whether the Apartment Buyers are entitled to terminate the Agreement or for refund of the amount deposited, with Delay Compensation" held as under:-
" In the present case, the allottees before this Court in the present batch of appeals, can be categorised into two categories:-
i) Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made, are enlisted in Chart A;
ii) Apartment Buyers whose allotments fall in Phase 2 of the Project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far, are set out in Chart B below.
...........
Chart A allottees:
(i) We are of the view that allottees at Serial Nos. 1 and 2 in Chart A are obligated to take possession of the apartments, since the construction was completed, and possession offered on 28.06.2019, after the issuance of Occupation Certificate on 31.05.2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees.
........
Chart B allottees
(i) In so far as, the allottees in Chart B are concerned, they have paid part consideration, in most cases up to the 4th instalment till 2017, when they found that there was no progress being made in respect of the Towers in which the apartments had been allotted to them. It is an admitted position that Occupation Certificate for Towers A1, A2, A3, B7, C9 and C11, in which the allotments have been made for this category has not been issued by the Municipal Corporation The apartments have not been ready for allotment even as on 30.06.2020, as per the date fixed before the RERA Authority.
(ii) The allottees submitted that they were facing great hardship since they had obtained loans from Banks for purchasing these apartments, and were paying high rates of interest. In 2017, when they realized that there was no construction activity in progress, they were constrained to file consumer complaints before the National Commission, and then discontinued payment of further installments.
(iii) The Developer made an alternate offer of allotment of apartments in Phase 1 of the Project. The allottees are however not bound to accept the same because of the inordinate delay in completing the construction of the Towers where units were allotted to them. The Occupation Certificate is not available even as on date, which clearly amounts to deficiency of service. The allottees cannot be made to wait indefinitely for possession of the apartments allotted to them, nor can they be bound to take the apartments in Phase 1 of the project. The allottees have submitted that they have taken loans, and are paying high rates of interest to the tune of 7.9% etc. to the Banks.
Consequently, we hold that the allottees in Chart B are entitled to refund of the entire amount deposited by them.
(iv) In so far as, award of compensation by payment of Interest is concerned, clause 13.4 of the Apartment Buyer's Agreement provides that the Developer shall be liable to pay the allottee compensation calculated @ ₹ 7.5 per sq. ft. of the Super Area for every month of delay, after the end of the Grace Period. The compensation will be payable only for a period of 12 months.
The Apartment Buyers in their Complaint filed before the National Commission, made a prayer for refund of the amount deposited alongwith Interest @ 20% p.a. compounding quarterly till its realization. The Apartment Buyers, in their submissions have stated that they have obtained home loans on which Interest @ 7.90% p.a. is being paid, even as on date. We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of ₹7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market.
We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic.
We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry.
In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fairplay that the amounts deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount.
The refund will be paid within a period of three months from the date of this judgment. If there is any further delay, the Developer will be liable to pay default interest @ 12% S.I. p.a.
(v) The Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC.
7. In the present Consumer Complaint, the Complainants who were allotted Apartment in Tower C 11 fall in Phase 2 of the Project and as observed by the Hon'ble Supreme Court in afore-extracted para 6 (ii) the Occupation Certificate has not been granted for more than three years from the committed date of possession which is 27.11.2018 as held by the Hon'ble Supreme Court in respect of the Project, the Corridors. As such, the Complainants cannot be compelled to wait indefinitely for possession of the allotted Apartment and as prayed in the Complaint, they are entitled for refund of the deposited amount with reasonable compensation.
8. With regard to the discrepancy of the payment of ₹13,82,859.44 shown in the Statement of Account furnished by Opposite Party Developer, there is no specific denial of the receipt of the aforesaid amount in the parawise reply in the Written Statement. This apart, the Complainant has placed on record the receipts of payment of ₹1,49,89,816/- issued by the Opposite Party Developer which are reproduced as under:-
Sl.
No. Receipt No. Date of Receipt Amount (in ₹)
1.
13211139 18.03.13 15,00,000
2. 14211652 14.06.13 23,11,607
3. 15211258 05.05.14 22,74,482
4. 15212440 23.02.15 22,51,631
5. 1400000660 22.07.15 19,26,324
6. 1400000998 22.08.16 40,00,000
7. 1400002329 15.12.16 6,64,153
8. 1400002333 15.12.16 61,619 TOTAL 1,49,89,816 Hence, from the above extracted chart, it is crystal clear that the Complainants have paid an amount of ₹1,49,89,816/- to the Opposite Party Developer towards the purchase of the allotted Apartment.
9. Respectfully following the ratio of the Judgment of the Hon'ble Supreme Court in Abhishek Khanna's case (Supra), we direct the Opposite Party Developer to refund the entire amount of ₹1,49,89,816/- deposited by the Complainants/Allottees alongwith interest @9% S.I. p.a. within 3 months from the date of this Order failing which the Developer shall be liable for payment of default interest @12% S.I. p.a. till the payment is made. The Opposite Party Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC.
10. The Consumer Complaints are disposed off in above terms, with no order as to Costs.
......................J R.K. AGRAWAL PRESIDENT ...................... BINOY KUMAR MEMBER