State Consumer Disputes Redressal Commission
Kuldip Singh And Anr. vs Lark Projects Pvt.L.Td. And Ors. on 17 November, 2020
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Misc. Application No.614 of 2020
In/and
Consumer Complaint No.88 of 2020
Date of institution : 27.02.2020
Reserved On : 11.11.2020
Date of decision : 17.11.2020
1.Kuldip Singh son of Sh. Balbir Singh, aged 55 years;
2. Seema Khurmi wife of Sh. Kuldip Singh, aged 50 years;
Both residents of House no.2812-B, T-III, Sector 42-C, Chandigarh.
Mobile No.09988866933 E-mail ID:[email protected] ....Complainants Versus
1. Lark Projects Private Limited, having its Corporate Office at D- 112, Vivek Vihar, New Delhi-110095, through its Managing Director/Director/Authorized Signatories.
Site Office: Sector 113, near Landran Chowk, Landran-Chunni Sirhind Road, Greater Mohali, Punjab-140307, through its Managing Director/Director/Authorized Signatories.
2. Kamaljeet Singh, Director, Lark Projects, having its Corporate Office at D-112, Vivek Vihar, New Delhi-110095.
3. Sanjay Garg, Director, Lark Projects, having its Corporate Office at D-112, Vivek Vihar, New Delhi-110095.
E-mail ID of OPs No.1 to 3: [email protected] ....Opposite Parties
4. Housing Development Finance Corporation Limited (HDFC), SCO No.153-155, Sector-8C, Chandigarh-160018, through its Authorized Signatory.
E-mail ID:[email protected] Telephone No.0172-3989123, 3011300.
....Proforma Opposite Party Consumer Complaint under Section 17 of the Consumer Protection Act, 1986.
Consumer Complaint No.88 of 2020 2Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
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 complainants : Sh. Deepak Aggarwal, Advocate For OPs No.1 to 3 : Sh. Amit Mahajan, Advocate For OP No.4 : Ms. Neetu Singh, Advocate.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT Misc. Application No.614 of 2020 (Joint Complaint) Since the unit, in question, has been allotted in the joint names of the complainants, so the application is allowed.
Relief Sought:
The complainants, who are husband and wife, have 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:
i) to hand over actual and physical possession of the flat, in question, complete in all respects, along with all the promised basic amenities and Occupation and Completion Certificate issued by the competent authorities;
ii) to pay interest at the rate of 12% per annum on the amount of ₹29,13,721/- for delay in delivery of possession, from 11.10.2017 till delivery of possession;
iii) to pay ₹2,00,000/- as compensation on account of mental agony, harassment, financial loss etc. suffered by the complainants and escalation in prices of real estate, deficiency in service and unfair trade practice; and Consumer Complaint No.88 of 2020 3
iv) to pay ₹50,000/- towards litigation expenses.
Facts of the Complaint
2. Brief facts, as set out in the complaint, are that opposite parties No.1 to 3 launched a project namely "Lark Projects Private Limited", "Bollywood Floors" situated in Sector 113, near Landran Chowk, Landran-Chunni Sirhind Road, S.A.S. Nagar, Mohali, Punjab and made vast publicity about the same through newspapers, telemarketing etc. They assured to provide lavish amenities in the said project such as clubs, swimming pools, badminton courts, central lawns, yoga/meditation courts, kids pool, sunken deck etc. Being allured by their tall claims, the complainants booked 3 BHK flat No.37- A, First Floor, measuring 1260 sq.ft. in the said project for a sum of ₹27 lac. The pre-printed Application Form was got filled/signed and signed from the complainants on 29.12.2015 and a sum of ₹4,55,950/- was paid through cheque dated 29.12.2015 as booking amount, vide receipt dated 14.03.2016 Ex.C-3. Later on, opposite parties No.1 to 3 changed the Master Plan of the project and Provisional Allotment Letter dated 12.01.2016 Ex.C-1 (colly.) was issued with regard to flat No.29-A in the said project, having same area and price. All the original documents pertaining to flat No.37-A were got surrendered by them. "Builder Buyer Agreement" Ex.C-2 was executed on the same day i.e. 12.01.2016 qua flat No.29-A. The complainants opted for "Construction Linked Payment Plan, as detailed in para-9 of the complaint. As per Clause-14 of the said agreement, possession of the flat was to be delivered within a period of 15 months with grace period Consumer Complaint No.88 of 2020 4 of 6 months i.e. up to 11.10.2017; failing which opposite parties No.1 to 3 were liable to pay ₹10/- per sq.ft. per month of the super area of the flat for the period of delay. Opposite parties No.1 to 3, vide letter dated 08.07.2016, Ex.C-4, raised a demand of ₹18,42,400/-, stating the last date as 08.07.2016. Vide e-mail dated 15.07.2016, the complainants asked them to give breathing time, as that letter was received by them only on 12.07.2016. It was also informed that a loan of ₹20 lac had been got sanctioned from opposite party No.4 in respect of flat No.37-A, but since the flat number was changed to 29- A, so they were requested to look into the matter, enabling the complainants to make the said payment. Opposite parties No.1 to 3 sent letter dated 07.09.2016, Ex.C-6, to opposite party No.4, permitting to mortgage flat No.29-A. Thereafter, Tripartite Agreement dated 07.09.2016 Ex.C-7 was executed between the parties, whereby loan of ₹20 lac was sanctioned. The complainants are repaying the said loan by way of EMIs of ₹19,596/-, starting from 01.10.2016. The amount of ₹18,42,400/- was paid by the complainants to opposite parties No.1 to 3, as per details given in Para No.16 of the complaint. By 29.09.2016, a total sum of ₹22,98,350/- stood paid towards the price of the flat. However, the possession of the flat was not delivered within the stipulated period. The complainants further paid a sum of ₹2,99,360/-, as per details given in Para-20 of the complaint, against the demand of ₹2,99,171/-. Another sum of ₹1,61,011/- was paid, vide cheque No.000039 dated 04.07.2018, Ex.C-18 against demand letter dated 16.06.2018. Vide letter dated 04.07.2018, Ex.C-19, the complainants Consumer Complaint No.88 of 2020 5 informed opposite parties No.1 to 3 that they visited the site on 16.06.2018 and found that the construction was very slow and incomplete and basic amenities etc. were not in existence. However, vide letter dated 14.07.2018, Ex.C-20, they replied that the project was nearing completion and the possession would be delivered after making remaining payment. The complainants further paid a sum of ₹1,51,200/-, vide cheques dated 27.07.2018 and 31.07.2018, Ex.C-22 (colly.). The complainants also sent letters/e-mails to them regarding non-completion of the project and requested to provide complete possession, with all the basic amenities etc. Later on, the complainants obtained information under RTI Act from GMADA, who informed, vide letter dated 26.04.2019 and 13.05.2019, that opposite parties No.1 to 3 have not obtained the Occupation Certificate from it, what to speak of Completion Certificate. Despite making payment of ₹29,12,721/- against the basic sale price of ₹27 lac, possession of the unit has still not been delivered. The complainants booked the flat, exclusively for the purpose of their residential purpose. The aforesaid act and conduct of the opposite parties amount to deficiency in service. Hence, the present complaint.
Defence of the Opposite Parties
3. Upon notice, the opposite parties appeared. Opposite parties No.1 to 3 filed their joint reply to the complaint, whereas opposite party No.4 filed its separate reply.
4. Opposite parties No.1 to 3 in their reply, raised preliminary objections that the complaint is bad for mis-joinder and non-joinder of Consumer Complaint No.88 of 2020 6 necessary parties. The complainants have not approached this Commission with clean hands and have concealed material facts. No allurement was ever given to them. Opposite parties No.1 to 3 duly apprised the complainants that once the project/possession is ready, it would have world class facilities and they are committed to provide the same. So, it was well within the knowledge of the complainants that the required certificate was yet to be granted, though the same has already been applied, vide application dated 08.01.2020, Ex.OP-1. Possession was offered without Occupation Certificate, only because the complainants had approached opposite parties No.1 to 3 for taking the same. The answering opposite parties have also applied for grant of extension to complete the entire project, vide letter dated 20.06.2020, Ex.OP-2. Due to slowdown of the real estate market as well as global pandemic, opposite parties No.1 to 3 are already suffering immensely and will get extension soon. They are having all the requisite approvals and sanctions with regard to the project, in question. Opposite parties No.1 to 3 are also ready to refund the amount deposited by the complainants, as this Commission may deem fit, as they will not be in a position to obtain Occupancy Certificate shortly. All the promised amenities, such as roads, streetlights, parks, round the clock security etc. are in place, as is evident from photographs, Ex.OP-3 (colly.). Opposite parties No.1 to 3 are well within their right to charge maintenance charges, but they have not charged even a single penny from the complainants in this regard. The complainants have deliberately not filed the Application Form, as per Consumer Complaint No.88 of 2020 7 which they made a request to allot flat No.29-A and not 37-A. Copy of said Application Form is Ex.OP-4. Complicated questions of facts and law are involved in the complaint; which can only be adjudicated by the Civil Court. No cause of action arose to the complainant to file the present complaint. They failed to prove any deficiency in service on the part of opposite parties No.1 to 3. Opposite parties No.1 to 3 have made huge investment by purchasing the land and for development of the infrastructure, payment of licence fee as well as External Development Charges (EDC) and CLU etc. The State of Punjab as well as GMADA/PUDA had regularized hundreds of illegal colonies, which had come up in the State, by accepting a nominal fee. There was ban on mining and minerals for a couple of years in the State of Punjab, causing shortage of building materials i.e. sand, gravels etc.; which is a force majeure circumstances, causing delay in completing the project. However, the project, in question, is coming up in full swing. On merits, similar pleas, as raised in preliminary objections, were reiterated. It was further pleaded that due to non-availability of the Occupation and Completion Certificates, opposite parties No.1 to 3 are compensating the complainants by not charging the maintenance charges from them. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.
5. Opposite party No.6, in its reply, pleaded that the complaint is mainly directed against opposite parties No.1 to 3, who have allegedly failed to honour their commitments, as per the terms of the agreement. It was further pleaded that the rights of the parties to the Consumer Complaint No.88 of 2020 8 present lis are governed by the Tripartite Agreement dated 07.09.2016. In case of any contingency or termination of the agreement, opposite party No.4 has the first charge/right to seek apportionment of its dues. Dismissal of the complaint against opposite party No.4 was prayed.
Evidence of the Parties
6. To prove their claim, the complainants filed their own self attested affidavits, along with copies of documents i.e. provisional allotment letter Ex.C-1, Builder Buyer Agreement dated 12.01.2016 Ex.C-2, payment receipts/cheques/Ledger Account, Ex.C-3, Ex.C-8 to Ex.C-11, Ex.C14, Ex.C-15 (colly.), Ex.C-18, Ex.C-22 (colly.) and Ex.C- 26, Tripartite Agreement dated 07.09.2016 Ex.C-7, letters/demand letters and e-mails Ex.C-4, Ex.C-5, Ex.C-6, Ex.C-12, Ex.C-13, Ex.C- 16, Ex.C-17, Ex.C-19 to Ex.C-21, Ex.C-23 to Ex.C-25, Master Data Ex.C-27 and calculation sheet Ex.C-28.
7. Opposite parties No.1 to 3, in support of their defence, filed affidavit of Sh. Sanjay Garg, Director, along with copies of documents i.e. letter dated 08.01.2020 for grant of Partial Completion Certificate Ex.OP-1, text message (receipt of Application Form) Ex.OP-2, photographs Ex.OP-3 (colly.), Registration/Application Form Ex.OP-4 and Minutes of Meeting dated 02.12.2019 Ex.OP-5.
8. Opposite party No.4, in support of its defence, filed affidavit of Sh. Aditya Kochar, Assistant Manager and Authorized Representative, along with copies of documents i.e. Tripartite Consumer Complaint No.88 of 2020 9 Agreement dated 07.09.2016 Ex.OP-4/1, Loan Account Statement Ex.OP-4/2 and Home Loan Agreement Ex.OP-4/3.
Contentions of the Complainants
9. I have heard learned counsel for the parties and have also perused the written arguments submitted on behalf of the opposite parties and record carefully.
10. Learned counsel for the complainants vehemently contended that the opposite parties failed to deliver possession of the unit, in question, within the stipulated period, despite receipt of substantial amount from them towards the price of the unit. The opposite parties also failed to obtain the necessary approvals and sanctions for setting up the said project. They kept on utilizing the amount deposited by the buyers, including the complainants, for their own cause, without bothering to carry out any development at the site. It was also contended that opposite parties No.1 to 3 changed the flat number from 37-A to 29-A, without the consent of the complainants. The deficiency in service and unfair trade practice on the part of the opposite parties is duly proved and, thus, the complainants are entitled to all the reliefs, as sought for in the complaint.
11. The written arguments submitted on behalf of opposite parties No.1 to 3 are on the lines of pleadings raised in their reply. The sum and substance of their written and oral arguments is that the complainants withheld material documents and made false statements. As such, as per law laid down by the Hon'ble Supreme Court in S.P. Chengaivaraya Naidu v. Jagannath AIR 1994 SC 853, Consumer Complaint No.88 of 2020 10 they are not entitled to any relief. It was further contended that the possession was already offered and opposite parties No.1 to 3 have also applied for grant of extension to complete the entire project, vide letter dated 20.06.2020, Ex.OP-2. Due to slowdown of the real estate market and ban on mining and global pandemic, the project could not be completed within the agreed time/period. All the requisite approvals and sanctions with regard to the project, in question, have already been obtained. Opposite parties No.1 to 3 are also ready to refund the amount deposited by the complainants, as they will not be in a position to obtain Occupancy Certificate shortly. All the promised amenities, such as roads, streetlights, parks, round the clock security etc. have been provided at the site, as is evident from photographs Ex.OP-3 (colly.). As per Application Form, Ex.OP-4, the complainants made a request to allot flat No.29-A and not 37-A. There is no deficiency in service on the part of opposite parties No.1 to 3 and the complaint is liable to be dismissed.
12. The written arguments submitted on behalf of opposite party No.4 are also on the lines of pleadings of its reply. It was further contended therein that the main dispute involved in the complaint is between the complainants and opposite parties No.1 to 3 only. Opposite party No.4, who is a proforma party, has only advanced the loan amount in favour of the complainants for making payment of the sale price of the unit, in question, as per terms and conditions of the agreement. The parties are bound by the terms and conditions thereof. The complaint against opposite party No.4 is liable to be dismissed. Consumer Complaint No.88 of 2020 11 Consideration of Contentions
13. I have given my thoughtful consideration to the respective contentions raised by the learned counsel for the parties.
14. So far as the plea of the complainants that they had booked flat No.37-A, in the project of opposite parties No.1 to 3, but they unilaterally issued provisional allotment letter, Ex.C-1, and executed "Bollywood Floors Builder Buyer Agreement" Ex.C-2, qua flat No.29-A, measuring approximately 150 sq.yds. (1260 sq.ft. approx.), is concerned, it needs to be mentioned that opposite parties No.1 to 3 have produced on record the Application Form, Ex.OP-4; which is filled and signed by the complainants. Perusal thereof shows that earlier under the head "Provisional Registration", plot/flat No.37-A was filled. However, by cutting, it has been changed to flat No.29-A. Even flat number has been written in words as "twenty nine-A". Signatures of complainant No.1 are appearing on the said cutting. Thus, it is clear that flat number was changed from 37-A to 29-A with the consent of the complainants and there is no illegality in it.
15. The basic sale price of the said unit was fixed as ₹27 lac. Besides this, additional charges, such as Service Tax at the rate of 3.625% (variable as per Govt. policy) and EDC of ₹60,000/-, were also payable. As per Clause-14 of the said agreement, possession of the flat was to be delivered within a period of 15 months with grace period of 6 months i.e. up to 11.10.2017; failing which opposite parties No.1 to 3 were liable to pay ₹10/- per sq.ft. per month of the super area of the flat for the period of delay. The complainants deposited a total sum Consumer Complaint No.88 of 2020 12 of ₹29,13,721/-, vide receipts/cheques/demand drafts Ex.C-3, Ex.C-8 to Ex.C-11, Ex.C-14 (colly.), Ex.C-15 (colly.), Ex.C-18 and Ex.C-22 (colly.). As such, the entire cost of the unit and other charges were paid by the complainants.
16. Opposite parties No.1 to 3 offered possession of the unit, in question, vide letter dated 14.07.2018, Ex.C-20, without Completion and Occupation Certificates issued by the competent authorities. They also admitted in their reply that they have applied for grant of Partial Completion Certificate, vide letter dated 08.01.2010, Ex.OP-1; which has not yet been issued. Section 14 of Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA") deals with responsibility of the builder/promoter to obtain Completion and Occupation Certificate from the competent Authority, which reads as under:
14. It is the responsibility of the promoter-
(i) in the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate from the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and
(ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5. (2) The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate."
17. Further, Clause 3.12 (i) of the Notification dated 07th July, 2015 published in the Punjab Government Gazette Extraordinary by Consumer Complaint No.88 of 2020 13 Department of Local Government (Town Planning Wing), which is applicable to the properties falling within the Municipal Limits, provides as under:
"No person shall occupy or allow other person to occupy any new building or part of a new building for any purpose whatsoever until such building or part thereof has been certified by the local authority or of any person authorized by it in this behalf to be in every respect completed according to the sanctioned plan and fit for the use for which it is erected."
18. A reference can also be made to Section 272 of The Punjab Municipal Corporation Act, 1976, which reads as under:-
"272. Completion Certificate.
(1) Every person who employs a licensed architect or engineer or a person approved by the Commissioner to design or erect a building or execute any work shall, within one month after the completion of the erection of the building or execution of the work, deliver or send or cause to be delivered or sent to the Commissioner a notice in writing of such completion accompanied by a certificate in the form prescribed by byelaws, made in this behalf and shall give to the Commissioner all necessary facilities for the inspection of such building or work. (2) No person shall occupy or permit to be occupied any such building or use or permit to be used any building or a part thereof effected by any such work until permission has been granted by the Commissioner in this behalf in accordance with bye-laws made under this Act: Provided that if the Commissioner fails within a period of thirty days after the receipt of the notice of completion to communicate his refusal in grant such permission, shall be deemed to have been granted."
19. The Hon'ble National Commission in its order dated 13.06.2018 passed in First Appeal No.855 of 2018 (Vision India Realtors Pvt. Ltd. & Anr. v. Sanjeev Malhotra), categorically held that legal possession cannot be delivered in the absence of Completion Certificate issued by the Competent Authority. It was held in Para No.5 as follows:
Consumer Complaint No.88 of 2020 14
5. During the course of hearing, it was submitted by the learned counsel for the appellant that the completion certificate in respect of the project was obtained by the appellant on 15.03.2016. A copy of the communication dated 15.03.2016 from Municipal Council, Kharar has been placed on record. It is therefore, evident that the completion certificate having been received only on 15.03.2016, the appellant could not have offered legal possession of the apartment to the complainant at any time before that date. As noted earlier, the amount of Rs.1,81,375/- was demanded on 20.04.2015 and the amount of Rs.2,12,489/- was demanded on 06.02.2016. The complainant was requested to pay the aforesaid amount so that the appellant could offer the possession of the flat. The said offer of possession was meaningless being unlawful as the requisite completion certificate had not been obtained by that date......."
20. However, no Completion/Occupation Certificate issued by the competent authority has been produced by opposite parties No.1 to 3 on the record, which itself is violation of above reproduced Section
14 of PAPRA and Clause 3.12 (i) of the Notification dated 07th July, 2015 published in the Punjab Government Gazette Extraordinary by Department of Local Government (Town Planning Wing) as well as Section 272 of The Punjab Municipal Corporation Act, 1976, reproduced above. Even till today, no Completion Certificate has been produced before this Commission. Thus, in view of the law laid down by the Hon'ble National Commission in the above noted authority, without issuance of such a certificate by the competent authority, opposite parties No.1 to 3 cannot be said to be in a legal position to hand over possession of the unit, in question, to the complainants. The photographs produced by opposite parties No.1 to 3 are also not of much help to them, in the absence of Completion/Occupation Certificate. Even as per letter dated 26.04.2019, Ex.C-25 (colly.), no Occupation Certificate has been issued by GMADA to opposite parties Consumer Complaint No.88 of 2020 15 No.1 to 3. Thus, without Completion Certificate, the possession of the unit offered to the complainant on 14.07.2018 was just a paper possession. In such circumstances, it is held that opposite parties No.1 to 3 failed to deliver possession of the unit, complete in all respects, to the complainants within the stipulated period.
21. Opposite parties No.1 to 3 also failed to prove that the requisite approvals and sanctions were obtained by them from the competent authorities before launching the said project. As per Section 5 (Development of land into Colony) of the Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA"), opposite parties No.1 to 3 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 3 (General Liabilities of Promoter) of PAPRA, opposite parties No.1 to 3 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 a colony as approved by the prescribed authority in the case of a colony. However, they failed to comply with Section 3 of the PAPRA.
23. As per Section 9 of PAPRA, every builder is required to Consumer Complaint No.88 of 2020 16 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 opposite parties No.1 to 3 to prove that any account has been maintained by them in this respect. As such, they also violated Section 9 of the PAPRA.
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 complainants have made payment of substantial amount to opposite parties No.1 to 3, with the hope to get the possession of the unit within a reasonable time. The circumstances clearly show that opposite parties No.1 to 3 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 opposite parties No.1 to 3 is a clear case of misrepresentation and deception, which resulted in injury and loss of opportunity to the complainants. There is escalation in the price of construction also. The builder is under obligation to deliver the possession of the unit within a reasonable period. From the facts and evidence brought on the record of the complaint, it is clearly made out that opposite parties No.1 to 3, i.e. builder, 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 Consumer Complaint No.88 of 2020 17 stipulated period and, thus, by misrepresentation induced the complainants to book the unit, due to which the complainants have 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 complainants 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 complainants have to wage a long drawn and tedious legal battle. As such, the complainants were at loss of opportunities.
25. As discussed above, As per Clause 14 of the agreement, Ex.C-2, possession of the unit was to be offered within a period of 21 months (15+6); failing which opposite parties No.1 to 3 were liable to pay compensation at the rate of ₹10/- per sq.ft. per month of super area of the flat for delay in delivery of possession; whereas as per Clause-9 of the agreement, they charge interest at the rate of 18% per annum on account of delay in depositing the instalments by the buyers. This shows that the terms and conditions of the agreement Ex.C-2, which has been drafted by opposite parties No.1 to 3, 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 Consumer Complaint No.88 of 2020 18 common parlance that for purchasing the flat/plot, the purchasers take loans 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. Sometimes, the purchasers take possession of the property in anticipation of fulfillment of remaining obligations of the builder/developer, only to secure the hard-earned money paid by them. 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." Consumer Complaint No.88 of 2020 19
26. In another case, reported as "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Geetu Gidwani Verma & Anr." II(2019) CPJ 34, it was held by the Hon'ble Supreme Court that the Builder could not seek to bind flat purchaser with such one- sided contractual terms. The relevant para of the said judgment is reproduced hereunder:-
"6.7 A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 8.5.2012 are ex facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.
XX XX XX XX XX XX
9. We see no illegality in the impugned dated 23.10.2018 passed by the National Commission. The Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take 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 ....."
27. 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 Consumer Complaint No.88 of 2020 20 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:
"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 Consumer Complaint No.88 of 2020 21 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."
28. In view of the observations of the Hon'ble Supreme Court in the above noted cases, I am of the view that the provision of penalty at the rate of ₹10/- per sq.ft. per month, as per Clause 14 of the agreement, Ex.C-2, is not sufficient to compensate the complainants 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 @ ₹10/- per sq. ft. per month of the actual area of the flat, in question, after the expiry of stipulated date of delivery of possession i.e. 11.10.2017 till the date of actual, physical and legal delivery of possession with all the agreed amenities and Completion and Occupation Certificate issued by the competent authorities, as per Clause 14 of the agreement, the complainants are also entitled to simple interest on the entire amount deposited by them at the rate of 6% per annum from 11.10.2017 till delivery of possession of the unit in the manner, as discussed above.
29. So far as the complaint against opposite party No.4-HDFC Limited is concerned, it needs to be mentioned that it only advanced loan to the complainants, vide Tripartite Agreement Ex.C-7, for making payment of sale consideration of the unit. No relief has been claimed against it, nor any specific deficiency in service has been alleged or proved against it. Therefore, the complaint against it is liable to be dismissed.
Consumer Complaint No.88 of 2020 22
30. In view of my above discussion, deficiency in service and unfair trade practice on the part of opposite parties No.1 to 3 have been fully proved. Thus, they are liable to deliver actual and physical possession of the developed unit, in question, complete in all respects, along with all the promised basic amenities and Completion/ Occupation Certificate issued by the competent authorities and to execute the Sale/Conveyance Deed in favour of the complainants. For delay in delivery of possession of the unit, in question, opposite parties No.1 to 3 shall pay compensation, as discussed above. Besides this, the complainants are also entitled to suitable litigation costs and other expenses.
31. In view of my above discussion, the complaint is allowed against opposite parties No.1 to 3 and the same is dismissed against opposite party No.4 Following directions are issued to opposite parties No.1 to 3:
i) to deliver actual and physical possession of the developed unit, in question, complete in all respects, along with all the promised basic amenities with Completion/Occupation Certificate issued by the competent authority and to execute the Sale/Conveyance Deed in favour of the complainants;
ii) to pay compensation for delay in delivery of possession @ ₹10/-
per sq. ft. per month of the super area of the flat, in question, after the expiry of stipulated date of delivery of possession i.e. 11.10.2017 till the delivery of possession of the unit, as ordered above, as per Clause 14 of the agreement Ex.C-2. In addition to Consumer Complaint No.88 of 2020 23 it, they shall also pay simple interest on the entire amount deposited by complainants at the rate of 6% per annum from 11.10.2017 till the delivery of possession of the unit in the manner, as ordered above; and
iii) to pay ₹22,000/-, as litigation costs and other expenses.
32. The compliance of this order shall be made by opposite parties No.1 to 3 within a period of 45 days of the receipt of certified copy of the order.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT November 17, 2020.
(Gurmeet S)