National Consumer Disputes Redressal
Nitin Juneja vs Ireo Pvt. Ltd. & 2 Ors. on 22 November, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 417 OF 2017 1. NITIN JUNEJA Through Power of Attorney Holder Mr. Sammit Kumar Mansharamani R/o C-2647, sushant Lok Phase-1, Gurgaon Haryana 122001 ...........Complainant(s) Versus 1. IREO PVT. LTD. & 2 ORS. Through its director Regd. off. A-11, First Floor, Neeti Bagh New Delhi 110049 2. M/s High Responsible Realtors Pvt. Ltd. Through its Director A-11, First Floor Neeti Bagh, New Delhi 110049 3. M/s Fiverivers Buildcon Pvt. Ltd. Through its Director 305, 3rd Floor, Kanchan House, Karampura Commercial Complex New Delhi 110015 4. M/s High Responsible Realtors Pvt. Ltd. Through its Director A-11, First Floor Neeti Bagh, New Delhi 110049 ...........Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainant : Mr. Vaibhav Gaggar and Ms. Isha Mittal, Advocate For the Opp.Party : For the Opposite Parties : Mr. Saurabh Kalia and Mr. Rahul Ahuja, Advocates Dated : 22 Nov 2021 ORDER R.K. AGRAWAL, J., PRESIDENT
The present Consumer Complaint has been filed under Section 12 (1) (c) read with Section 21 of the Consumer Protection Act, 1986 (for short "the Act") by the Complainant, against the Opposite Party, M/s. Ireo Private Limited (hereinafter referred to as the 'Developer'), for refunding of deposited amount as the Opposite Party Developer has failed to hand-over the possession of the Apartment booked by him in the Project launched by the Developer in the name and style of "The Ireo Skyon", within stipulated period as prescribed in the Apartment Buyer's Agreement.
According to the Complainant, the facts of the case are that the Opposite Party Developer launched a Residential Housing Project in the name and style of "The Ireo Skyon" (hereinafter referred to as the 'Project') located at Golf Course Extension Road, Sector- 60, Gurgaon, Haryana.The Opposite Party Developer drawn very rosy picture of the Project and represented that it would be a unique Project with "sweeping balconies, corridors overlooking a Central Golf Park, swimming pool, gymnasium, coffee bar, massage rooms, snooker room, table tennis, squash courts, badminton court, dance and yoga room etc. and also assured timely delivery. Attracted by the representation and assurances given by the Opposite Party Developer, Complainant booked a Residential Apartment in the Project by paying a booking amount of ₹24,45,501/- on 28.02.2013. Vide Allotment Offer Letter dated 28.03.2013, the Complainant was allotted UnitNo. SY-D-1205, 12th Floor in Tower D admeasuring Super area of 2088 Sq. Ft. for a total Sale Consideration of ₹2,38,28,256/-. According to the Complainant, before execution of the Buyers Agreement, he paid a sum of ₹1,00,48,255/- to the Developer during the period from February 2013 to September 2013. After a lapse of period of 7 months from the date of booking, Apartment Buyer's Agreements (hereinafter referred as the Agreement) was executed between the Parties on 06.09.2013. As per Clause 13.3 of the Agreement, the possession of the Unit was to be handed over within a period of 42 months from the date of approval of the building plans.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 being in default or 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."
The Complainant made payment of ₹2,20,88,865/- till May 2015 as per demand of the Opposite Party Developer, despite that the Opposite Party Developer could not complete the construction work at the Project within stipulated period and failed to deliver the possession of the Unit to the Complainant in terms of the Agreement. The Complainant also requested the Opposite Party Developer to refund the amount paid by him along with interest but the Developer threatened to forfeit the earnest money i.e. 20% of the total Sale Consideration of the Apartment. The Developer has arbitrarily demandeda sum ₹5,00,000/- as a onetime Club Membership Charges and Routine Club usage charges without giving any justifiable reason for the same. It is alleged by the Complainant that the terms of Application Form and Apartment Buyers Agreement were one-sided, unfair, illegal and arbitrary and he was forced to sign them. As per Clause 7.4 of the Agreement, he was liable to pay interest @ 18% for the delayed payment of the demands raised by the Developer, however, the Developer was offering compensation @₹7.50 per Sq. Ft. of the Super Area for every month of delay in handing over possession in terms of Clause 13.4 of the Agreement. The Complainants had lost trust in the Opposite Party Developer.Thus, alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party Developer, the Complainants have filed the present Complaint with following prayer:-
"i.) Allow the present Complaint and declare the conduct of the OP 1 to be an unfair trade practice and declare that they have rendered deficient service;
ii.) Allow the Complainant to exit the said Project without forfeiture of the earnest money and refund of the entire amount paid by the Complainant to the OP 1 together with interest calculated at 18% p.a. commencing from the date of first payment made by the Complainant to the OP No.1;
OR If the OP 1 undertakes to deliver the apartment in strict accordance with the representations made through their brochure and advertisement read along with the specifications mentioned in the ABA that this Hon'ble Commission may be pleased to direct the OP 1 to complete the apartment as per the specifications and undertaking in a time bound manner. Further, direct the OP 1 to compensate the Complaiannt by paying 18% interest as compensation from the date of payment until handing over of possession without seeking any additional arbitrary charges such as club charges, interest on delayed payment charges, service tax charges, holding charges and any other charges, over and above the total sale consideration;
iii.) Direct the OP 1 to compensate for the arbitrary delayed interest charged from the Complainant;
iv.) Award compensation for mental agony and harassment;
Upon notice, the Complaint was resisted by the Opposite Parties by filing their Written Statement. It is contended, inter-alia, that;as per agreed terms of Booking Application and Agreement the time for handing over the possession of the Apartment to the Complainant is on or before 24.09.2017; the Apartment of the Complainant has been fully constructed and the Occupation Certificate has been received from the Competent Authorities; the Offer of Possession was made to the Complainant Vide letter dated 06.09.2016 but he did not come forward to take possession; the Complainant is a chronic defaulter and has not paid dues as per notices; a request was made by the Complainant vide his Email dated 30.01.2015 to cancel the allotment due to financial constraint but as a good gesture the allotment was not cancelled; the Developer is still ready and willing to execute the Conveyance Deed in favour of the Complainant subject to payment of outstanding amount by him; Possession of Apartments has already been offered to about 254 Allottees in the said Project and about 100 Conveyance Deeds have already been executed; the present Complaint suffers from a defect as it has not been filed by the Complainant himself and has been filed by one Sammit Kumar by virtue of Special Power of Attorney executed by the Complainant in his favour; the Complaint has been signed by the Complainant but the Vakalatnama as well as Affidavit in support of Complaint has not been signed by him; the terms & conditions of the Agreement is binding upon the parties as held by Hon'ble Supreme Court of India in the matter of Bharti knitting Vs DHL Courier World Wide Express Courier" reported at [1996] 4 SCC 704 ; parties are bound by terms of contract; there is no power or jurisdiction to the Consumer Fora under the Act to direct modification of any Clause of the Agreement; clause 35 of the Agreement clearly provides that any dispute arising in relation to the terms of the Agreement including interpretation and validity of the terms thereof and the respective rights and obligations of the parties would be settled through Arbitration; in terms of Sections 5 and 8 of the Arbitration and Conciliation (Amendment) Act 2015, the matter is ought to be referred to the Arbitration; there is no averment in the Complaint that the Apartment in question has been booked by the Complainant for his personal use and not as an investment or for any commercial gain; levy of service tax is as per the law of the land and the same is deposited with the Government Department; Club Membership Charges is optional for the allottees of the Skyon Project; the payment of labour Cess is a pre-requisite for receiving the Occupation Certificate; under the Clauses of the Agreement, the Complainant has agreed that there could be changes in the drawings, payout, elevations, specifications, height dimensions, finishing etc of the Apartment; there is no allegation of negligence on the part of the Opposite Party on account of which any loss or injury is caused to the Complainant and hence, he is not entitled for the relief, as claimed; the construction activity is being done by the Developer on its own account and not 'for and on behalf' of the Allottees and as such the Agreement does not involve rendering of service; the complaint is liable to be dismissed.
05. We have heard Mr. Vaibhav Gaggar learned Counsel appearing on behalf of the Complainant, Mr. Saurabh Kalia, learned Counsel appearing on behalf of the Opposite Party Developer and have given a thoughtful consideration to the arguments advanced by them.
06. Learned Counsel appearing for the Complainant vigorously urged that in the light of totally changed nature of the Project and especially in the absence of promised Golf Course, other sporting amenities and the completely compromised aesthetics of both, the Project and the individual Units, the Complainant is not interested in the Project anymore and he seeks refund of the amount deposited by him along with interest @ 18% which was being charged by the Developer for default in making any payment by him. It is also submitted by him that the Developer has no intention of bringing the Project's specifications and facilities to the standards represented to the homebuyers. It is submitted that Developer promised him a high end luxury apartment with a Golf Course but without the Golf Course, the Apartment is nothing more than a mid-level Apartment. Placing reliance upon the decisions of this Commission in the cases of Brig. (Retd.) Kamal Sood Vs. DLF Universal - 2007 SCC Online NCDRC and Ashok Kumar Shivpuri Vs. Ashok B. Chajjar, CMD, Arihant Enterprises - 2019 SCC Online NCDRC 324, learned Counsel for the Complainant submitted that the Brochure is the part of the promise on which the contract is based and the specifications promised in the brochure have been completely done away with by the Developer. In the Written Submissions filed on 08.03.2021, he has furnished a tabular chart showing the deviation from the Brochure by the Developer which is reproduced as under:-
Specifications Promised Page Number Specifications Delivered Page Number Unique Sweeping Balconies, with pinwheel shape Page.65 (Brochure) Anodised hinged doors 96-100 (Website Pages) Floor to ceiling windows with weather/soundproof insulated glass Page 68 (Brochure) 4 foot high glass, destroying the aesthetics of the apartments and changes the façade of the Complex. Change of specifications without informing the Allottes.
289-290 (Photographs) Page 351 of Reply Central premium ducted VRC AC units Page 77 (Brochure) High wall non-ducted low quality VRV. The big bulky AC units present in the balcony completely ruining the aesthetics of the apartments.
Page 351 of Reply; no denial of placement of AC unit.
Kitchen with imported modular fixtures and specifications, and high class costly floor tiles, with Italian marbled kitchen counter.
Page 70 (Brochure) Page 189 (ABA) Ordinary granite top with local cabinets/fixtures with chimney and hobs, and low cost flooring.
Page 352 of Reply; no denial of promise of high class aesthetics Italian marbled flooring in the living room.
Page 70 (Brochure) Page 189 (ABA) Vitrified tiles Page 352 of Reply; no denial vitrified tiles had been added Community amenities like par 3 golf course, tennis courts, squash courts, Page 69-71 Brochure Page 107, Not present Page 352 of Reply; bald Badminton courts, gym, swimming pool, 113 (Website page) Page 189 (ABA) Averment that golf course was never promised; no mention of other promised amenities Club still under construction at the time of filing.
Page 69-70 Brochure page 108, 113 (Website page) page 189-192 (ABA) Should have been part of common areas Page 352 of Reply; even at time of filing Reply, Club area incomplete, and funds demanded well before.
Home automation electronics like portable home console, remote door lock, digital keypads, curtain, sensor, light sensors, emergency buttons, fire/gas alerts.
Page 73-80 Brochure) Page 160-161 (ABA), Recitals M and N. Not provided Page 352-353 of Reply; bald averment that many amenities are being provided.
Water sprinklers Mandatory requirement Not installed Sr. NO.47, Page 395 of Reply; sprinklers not installed in Tower D, where complaint's apartment is situated.
Infrastructure like intelligent wiring, high speed connectivity, centrally insulted Wi-Fi, copper phone line.
Page 82-88 Not installed Page 352 of Reply; mere averment that "Infrastructure like intelligent wiring: provided"
Water seepage on the external faced of the building, doing a lot of damage.
Page 278 (Photograph Seepage still present Page 352 of Reply: Mere averment that water Seepage: No Pedestrian path jogging trail, children's play area Page 70 (brochure) page 189 (ABA) Not present No mention in the Reply.
07. Learned counsel for the Complainant further submitted that the terms of the Application for Booking of Residential Apartment, Allotment Offer Letter and Apartment Buyers' Agreement were one sided, unfair, illegal and arbitral and the Complainant was not in a position to negotiate the terms therein. The Complainant has made timely payments but despite of that he was charged the penal interest for delay in payment and the Developer has admitted to its negligence and apologised for taking extra payment. From February 2013 to May 2015, the Complainant had paid a total sum of ₹2,20,88,865/- i.e. almost 92% of the total sale consideration but the Developer has failed to hand over the possession of the Apartment complete in all respects and as per specifications mentioned in the Brochure and the promises/representations made by them. At one stage of time due to financial hardship, the Complainant requested the Developer to cancel the booking/allotment but he was threatened to forfeit the earned money i.e. 20% of the total Sale Consideration in terms of clause 6 of the Agreement. Learned Counsel for the Complainant strongly contended that when the possession was offered vide Letter dated 06.09.2016, the Complex was nowhere near completion and was uninhabitable and Complainant was also not supplied the copy of the Occupation Certificate. Moreover, in the possession letter it was mentioned that the Apartment is in the final working stage and it would take about 4 more weeks to complete the same. The Complainant requested the Developer to inspect the Apartment before making the final payment, however, the said request was declined by the Developer. Finally, he added that the Complaint was not defective as the Affidavit was signed by the Special Power of Attorney Holder at a later date when the Complainant had already left for the USA. Further, the Apartment was booked by the Complainant for personal use and not for investment or earning profit.
08. As against this, Learned Counsel appearing for the Developer urged that the Apartment allotted to the Complainant is fully constructed and the Occupation Certificate with respect to the Apartment has also been received from the Competent Authorities. He also submitted that the Notice of possession has been issued by the Developer to the Complainant on 06.09.2017 well before the proposed date of handing over possession on 24.09.2017. The Complainant has defaulted in making final payment of ₹56,88,621/-. The total number of Apartments in Skyon Project is 750 out of which 600 physical possession has been given and 412 Conveyance Deed had already been executed. Learned Counsel for the Developer further submitted that the Complaint suffers from a defect as the Affidavit sworn in support of the Complaint has not been signed by him.
09. Learned Counsel for the Developer also urged that the Building Plan was approved on 27,09,2011 and the Fire NOC was obtained on 25.09.2013 and hence, the proposed time for handing over the possession in terms of Clause 13.3 of the Agreement, has to be computed from 25.03.2017 and therefore 48 months from 25.09.2013 (including the 6 months grace period) would expire only on 24.09.2017. However, the possession was offered to the Complainant on 06.09.2016. With regard to levy of Service Tax and the other charges, it was submitted that the same are payable to the Government and not retained by the Developer.
10. We have given our thoughtful consideration to the arguments advanced by the Learned Counsel for the parties and examined the material available on record, evidence adduced by the parties as well as the Written Arguments and the photographs of the construction site filed by the learned Counsel for the parties.
11. With regard to the issue raised by the learned Counsel for the Developer that the Complainant is not a "Consumer" as he has not purchased the Apartment for his personal use and for the investment or earning profit, we are of the considered view that it does not hold any water in the light of the judgment of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which the principle laid down is that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots/flats in his normal course of business to earn profits, shifts to the Opposite Party, which in the instant case they had failed to discharge by filing any documentary evidence to establish their case. Therefore, we decide this issue in favour of the Complainant.
12. The plea of the learned Counsel for the Developer regarding binding nature of the Agreement/Contract whereby the Parties are bound by the terms and conditions of the Agreement also does not have any merit. We have carefully perused the terms of the Agreement and an analysis of the same reveals that:
a) Clause 6 provided that the Allottee hereby agree that 20% of the Sale Consideration of the Apartment shall be deemed to constitute the "Earnest Money";
b) Clause 7.4 of the Agreement provides that if there is a delay in payment of an installment, the Apartment Buyer would be required to pay Interest on every delayed payment of such installment @ 18% p.a.;
c) Clause 13.2 of the Agreement provides that if the allottee fails, ignores or neglects to take possession of the said Apartment in accordance with the Notice of Possession, the allottee shall be liable to pay "Holding Charges" on the super area @ Rs. 7.5 per sq. ft. per month.
d) In contrast, Clause 13.4 of the Agreement provides that if the Company fails to offer possession by the end of the Grace Period i.e. 42+6 months, it would be liable to pay Delay Compensation @ Rs. 7.5 per sq. ft. of the super area for every month of delay.
f) Clause 13.8 of the Agreement provides that the allottee shall be deemed to have waived all its claims in respect of the area, specifications, quality, construction, any other provision in the apartment against the Developer upon taking possession of the apartment.
g) Clause 21 provides for termination of the Agreement and forfeiture of earnest money by the Developer, if the allottee neglects or fails to make timely payments as stipulated in the Agreement, or fails to exercise the options offered by the Developer.
13. The Hon'ble Supreme Court in the case of "Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors." - (2021) 3 SCC 241 has held that such Agreement is one-sided and the Opposite Party Developer cannot compel the Apartment Buyer 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"
14. So far as, the contention of the Learned Counsel for the Developer that the Complainant was a chronic defaulter is concerned, we are of the opinion that the said contention is devoid of any merit as the Developer was at liberty to cancel the booking and refund the deposited amount If there was any default in making the payment of installments by the Complainants. Having not opted to such exercise, the Developer cannot take shelter under this ground.
15. The issue regarding the Arbitration Clause in the Agreement and the amendment in Sections 5 and 8 of the Arbitration and Conciliation (Amendment Act) 2015, has already been decided by this Commission against the Developer vide Order dated 04.09.2017 relying upon the decision of this Commission in the case of Aftab Singh Vs. Emaar MGF Land Ltd. - CC No. 701 of 2015.
16. The plea taken by the Developer that the Complaint suffers from a defect is also rejected being a technical ground.
17. Now adverting to the merit of the case, we find that the main thrust of arguments of the Learned Counsel for the Developer is that the Complainant is not entitled for the any relief as claimed inasmuch the Apartment was constructed within prescribed time, Occupation Certificate has been obtained from the Competent Authorities on 26.08.2016 and the possession was offered to the Complainant on 06.09.2016. However, the say of the Learned Counsel for the Complainant is that at the time of offering of possession by the Developer, the Project was not near the completion and it was not habitable. Even in the Letter dated 06.09.2016 offering possession of the Apartment, it was mentioned that it would take about 4 weeks to complete the Apartment, The same also contained additional charges which were not part and parcel of the Agreement. According to the Complainant, the Project was supposed to be a very high end, one of its kind developments and hence there was a huge premium paid for the property @11,600/- per Sq. Ft while other properties in the region would not be more than approximately ₹6,500/- per Sq. Ft. As per the Brochure published by the Developer and the Apartment Buyers Agreement executed between the parties, the Project was meant to be a modern, high-efficiency and technology driven Project with facilities like Smart Home Automation, Hi-Speed Elevators, Sweeping Balconies, VRFT Air Conditioning Technology, World Class Club with a range of recreational and sports option etc. But there was total deviation from the specifications and the amenities mentioned in the Brochure and the Apartment Buyers' Agreement and more particular in the absence of Golf Course as promised, the Project was a mid-level Project.
18. Having perused the afore-extracted Chart showing the deviation from specifications and non-provision of amenities as mentioned in the Brochure and the Agreement as well as the Photographs filed by the parties, we find substance in the submission made by the Counsel for the Complainant that there were substantial changes in the specifications, drawings and layout plan of the Project and many of amenities which were promised in the Agreement have not been provided by the Developer in the Apartments. In the Brochure (page 69 of the Paper Book) under the heading "Legend" of the Building, among other amenities, the Golf Park is also mentioned. However, in the Written Version in reply to the para 8.3 of the Complaint, the Developer has stated that "it was never represented/agreed by the Opposite Party". Similarly, with regard to Italian Marble, it has been replied that it was never part of agreed specifications thought it is mentioned in the Brochure and the Agreement. It has also been mentioned in reply to para 8.3 of the Complaint that the Developer looking at the collective interest of all apartment owners, for planning and safety reasons decided that the master bedroom of the Apartment shall be provided with punch glass window instead of full length glass wall. The main reason was that keeping in view the proximity of the neighbouring towers, safety during earth quakes and privacy of the Allottees had to be ensured. The defence taken by the Developer for making such changes is that as per Clause 13.8 of the Agreement the allottee have deemed to waive all its claims in respect of the area, specifications, quality, construction, any other provision in the Apartment against the Developer. However, we have already stated above that such clause is one-sided, unfair and is illegal. A bare perusal of the Occupation Certificate dated 26.08.2016 would also reveal that the Developer was granted permission for the occupation of the buildings mentioned therein after charging the composition charges amounting to ₹28,03,028/- for the variations vis-a-vis approved building plans with the conditions mentioned in the Occupation Certificate. Besides, the Complainant has also requested to the Developer to permit him to inspect the Apartment before making the final payment, however, the said request was rejected which also indicates a suspicion about completion of the Apartment and its being habitable. In the prayer clause, the primary prayer of the Complainant is for refund of the entire deposited amount with the interest @ 18% p.a as he is no more interested in the Project due to absence of Golf Course and the aesthetics of the Apartment as promised by the Developer. In our considered view, the Complainant cannot be compel to take the possession of the Apartment in the absence of facilities promised by the Developer in the Brochure as well as Apartment Buyers Agreement which induced him to purchase the Apartment at high rate even though the Occupation Certificate has been obtained by the Developer.
19. For the aforesaid reasons, we find it a fit case to direct to Developer to refund the entire deposited amount along with reasonable interest as compensation.
20. The Co-ordinate Bench of this Commission in the case of Siddharth Vasisht vs. Ireo Pvt. Ltd. & Ors. - I (2020) CPJ 73 (NC) which relates to the same Project, the "Skyon", while directing the Developer to refund the deposited amount to the Complainant, has awarded interest @ 10.25% p.a. which is stated to be interest rate under RERA, in Haryana. The said Order was affirmed in Civil Appeal Diary No (s) 21634 of 2020 by the Hon'ble Supreme Court vide its Order dated 11.12.2020.
21. Respectfully, following the decision of the Co-ordinate Bench of this Commission which was affirmed by the Hon'ble Apex Court, we direct the Developer to refund the entire deposited amount to the Complainant with interest @10.25 p.a. from the respective date of deposits till payment, within a period of eight weeks from the date of passing of this order. The Complainant shall also be entitled for ₹50,000/- towards cost of litigation.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER