National Consumer Disputes Redressal
Prem Lata Arora vs Today Homes & Infrastructure Private ... on 10 May, 2019
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 2426 OF 2017 1. PREM LATA ARORA ...........Complainant(s) Versus 1. TODAY HOMES & INFRASTRUCTURE PRIVATE LIMITED Upper Ground Floor, 8 to 9 Pragati Tower, Rajender Place, New delhi-110008 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER
For the Complainant : Mr. Prince Arora, Advocate For the Opp.Party : Mr. Sumesh Dhawahn, Advocate
Ms. Ankita Bajpai, Advocate
Dated : 10 May 2019 ORDER
MRS. M. SHREESHA, MEMBER
This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short "the Act") against M/s Today Homes & Infrastructure Pvt. Ltd. (hereinafter referred to as "the Developer"), seeking the following reliefs:
a. As the Respondent have failed to comply with and honour the commitments and legal responsibility of handing over the possession of Apartment to the Complainant despite admittedly pocketing 95% of the total agreed sale consideration, it is an unfair trade practice, as held by the Hon'ble Supreme Court and this Hon'ble Commission. The Respondent be directed to refund the entire amount paid to them i.e. Rs.68,87,099/- along with interest @ 18% per annum (approx.. Rs.62,50,327 calculated as on 17th Aug, 2017) from date of each payment made by the Complainant to the Respondent.
b. Compensation of Rs.15 Lacs be awarded to the complainant for the inordinate delay in possession and for causing the undue mental agony, harassment, embracement caused at the hands of the builder/ Respondent c. Compensation of Rs. 3 Lacs be awarded to the Complainant towards the litigation and commutation cost.
d. Refund of Service Tax paid upto to July 2012 by the Complainant to the Respondent be granted along with 6% interest p.a. any enhancement in service tax rates post the original date of possession of borne by the Respondent himself e. Such other/further order as may be deemed fit and proper in the facts and circumstances of this case may also awarded in favour of the Complainant to uphold the rule of law.
2. Briefly stated the facts of the case, as stated in the Complaint, are that the Complainant, who is the second allottee of the unit, entered into a Buyer Agreement with the Developer on 19.09.2011 in the project titled as "Canary Greens" situated in Sector 73, Gurgaon, Haryana-122 001 for the unit bearing No. 02, having super area of 1640 sq. ft. in the 5th floor of Tower T 7. The total sale consideration was ₹70,97,800/- out of which the Complainant paid a sum of ₹68,87,099/-, which amounts to 95% of the total sale consideration, to the Developer. It is stated that as per clause 21 of the Buyer's Agreement, the Complainant was assured that the possession of the Apartment would be delivered within 36 months from the date of signing of the Agreement with a grace period of six months.
3. It is pleaded that despite having paid 95% of the total sale consideration on time and making several requests, the Developer has failed to deliver the possession to the Complainant till the date of filing of the present Complaint. It is pleaded that as per clause 21 of the Buyer's Agreement, it was agreed by the Developer that in case the Developer is not able to hand over the possession to the Complainant after the expiry of prescribed and grace period the Developer would pay her compensation @ ₹5/-per sq. ft. per month of the super area for the period of delay. However, as per clause 8, of the Buyer's Agreement, if any amount falls due from the buyers the Developer would charge interest @ 18% p.a. on the said amount. That the Complainant is suffering from tremendous financial losses due to the conduct of the Developer in not delivering the possession within the promised time.
4. It is averred that the Buyers Agreement was executed after the considerable delay of 11 months on 19.09.2011 from 18.10.2010, when the booking was made by paying ₹5,90,400/- as is evidenced from the Statement of Account (Ex CW-1/3); that the Developer was unduly delaying the execution of the Agreement, the Complainant cannot be penalized for that by increasing the dates for handing over of possession and therefore the time for physical possession be counted from the date of booking and not from the date of execution of the agreement, which was executed belatedly. The terms of the Agreement is one sided and she was compelled to execute the Agreement as in the event of his refusal to execute the Agreement the booking amount paid would be forfeited.
5. It is stated that the Developer has miserably failed to comply with its contractual obligations of handing over possession of the subject apartment in "Canary Greens", and even after several months, they have not completed the entire construction work, which clearly is an act of "deficiency in service" on the part of the Developer and as the Complainant has suffered a lot of mental harassment and agony at the hands of the Developer, she is entitled to be adequately compensated.
6. It is pleaded that as per Clause 8 of the Agreement, interest rate @ 18% p.a. was liable to be charged in case of any delay in payment of any amount from the Allottees. Therefore applying the same parity, the Opposite Party should refund the amounts collected with the same rate of interest. The Complainant also stated that despite repeated requests to the Developer for completing the construction and offering possession there was no specific response and after collecting the last installment, the Developer extended the date of possession unilaterally to March, 2018. Vexed with their attitude, the Complainant approached this Commission seeking the aforenoted reliefs.
7. The Complaint was contested by the OP on the following grounds:-
Preliminary objections raised by the Developers are that the Complainant is not a Consumer and just an investor in the project as the Complainant is presently residing in a posh colony at Karnal and it is only for investment purposes that she had booked the unit; that since the agreed sale consideration is ₹70,97,800/-, this Hon'ble Commission lacks pecuniary jurisdiction to entertain the Complaint. It is averred that this Complaint is not maintainable as the provisions of Section 79 of the Real Estate (Regulations and Development) Act, 2016, provides that no Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the Adjudicating Officer is empowered by under RERA and the Developer has already filed an application for registration of the Project before Haryana Real Estate Regulatory Authority and that the present Complaint is premature as the period of delivery of 36 months is not sacrosanct because the delay in any event is attributable to Force Majeure events as explained under Clause 21. It is averred that the work at the site had been seriously hampered as disputes had arisen with the earlier contractor who did not complete the work on time and as such there was a continuous delay and another factor which resulted in the delay was the closure of the brick kilns due to norms of procuring permission from Ministry of Environment & Forest which resulted in the non-availability of the raw materials. It is stated that the Complainant has signed the Agreement out of his free will and volition after fully analyzing the terms of the agreement and now cannot demand refund of the amount paid with interest and abnormal compensation. It is stated that the Opposite Party has the intention of giving delivery of possession and is working hard towards this end and expecting to start offering possession of Tower-7 from first quarter of 2019 subject to exceptions and unforeseen events beyond the control of the Developer. It is averred that this Commission has no jurisdiction to entertain the instant Complaint as Clause 38 of the Agreement dated 19.09.2011 provides that any dispute between the parties shall be adjudicated under the provision of the Arbitration and Conciliation Act,1996.
8. The Complainant filed Affidavit by way of Evidence and marked exhibits EX CW-1/1 (copy of the Buyer Agreement), EX CW-1/2 (copy of the Agreement of transfer), EX CW-1/3 (copy of the Statement of Account), EX CW-1/4 (copy of the demand letter), EX CW-1/5 (copy of email acknowledgment and reminders for receipt), EX CW-1/6 (copy of email extending the period to 2018), EX CW-1/7 (copy of email stating that EDC/IDC payments has been deposited with concerned departments), EX CW-1/8 (copy of the order of this Commission in CC/198/2015) and EX CW-1/9 (copy of the order of this Commission in CC/2043/2016 on her behalf.
9. The Developer filed Affidavit by way of Evidence and marked exhibits MARK- A (copy of the office Memorandum dated 24-06-2013), MARK -B ( copy of article printed in Tribune) and MARK-C (Copy of article by Vivek Shukla) on its behalf.
10. The brief point that falls for consideration in this Complaint whether there was any deficiency of service on behalf of the Opposite Parties and if the Complainant is entitle to the amount paid for in the Complaint?
11. In brief, it is the Complainant's case that despite paying an amount of ₹68,87,099/- out of the total sale consideration of ₹70,97,800/- for unit No. 02, 5th floor, Tower- T 7 for 1640 sq. ft. and executed the Agreement to Sell on 19.09.2011, with the promise time for delivery possession being 36 months from the date of Agreement, till date the Opposite Party did not complete the construction or offered possession, nor paid any amount towards delayed delivery and hence seeks for refund of the amount paid with interest @ 18% p.a., compensation and costs.
12. The first contention of the learned counsel for the Opposite Party that the Complainant is not a Consumer and is only an investor is not supported by any documentary evidence. The onus is on the Opposite Party to establish that the Complainant purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. However, the Opposite Party did not discharge its onus regarding this aspect. Hence it is held that the Complainant is a Consumer as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986. The second contention of the Opposite Party that this Commission does not have pecuniary jurisdiction to entertain the Complaint is unsustainable under the light of the larger bench decision of this Commission in "Ambrish Kumar Shukla & Ors. vs. Ferrous Infrastructure Private Limited I (2017) CPJ 1 (NC), wherein it was held that pecuniary jurisdiction should be construed keeping in view the total value and goods and services in addition to the compensation prayed for. In the instant case admittedly the Complainant paid an amount of ₹68,87,099/- and has sought for damages by way of interest @ 18% p.a., compensation of ₹15,00,000/- and other reliefs which totaled beyond Rs. One Crore and definitely attracts the pecuniary jurisdiction of this Commission. Stand taken by the Opposite Party that the period of delivery of 36 months as defined in clause 21 is not sacrosanct as it is stated in the said clause that "physical possession of the said unit is proposed to be delivered by the Company to the allottee within 36 months" and therefore time is not the essence of the contract and the delay is attributable to Force Majure Events, and therefore no deficiency of service can be attributed to them is totally unsustainable as the Opposite Party could not substantiate by means of any documentary evidence that the project was delayed by Force Majure Events. Except for stating that there were disputes with the contractors and non availability of raw material, which viewed from any angle, cannot be said to be a "Force Majure Events", the Opposite Party has not filed any material on record to prove that there were any Force Majure Events beyond their control.
13. Now we address ourselves to the objections raised by the learned counsel for the Developer that the clause of Arbitration bars this Commission from entertaining the Complaint. The Hon'ble Supreme court in its order dated 10.12.2018 in M/S Emaar MGF Land Limited vs Aftab Singh, I (2019) CPJ 5 (SC) has laid down the law that the Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint.
14. No material has been produced by the Opposite Party to prove that the completion of construction and offer of possession has been delayed on account of reasons beyond its control, there is no justification for the said delay. Keeping in view of the judgment of this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery it is the discretion of the Complainant whether he/she wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest. In the instant case, the Complainant sought for refund of the principal amounts with interest and compensation as construction is still not complete. We are of the view that the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on Force Majure clause while retaining the amounts deposited by the Complainant, we are of the opinion that it is not only an act of deficiency of service but also of unfair trade practice, especially in light of the view and the fact that the Opposite Party charges interest @ 18% p.a. for any delay in the payments made and offering a compensation period of Rs.5 per sq. ft. per month for the delayed period, their holding charges @ Rs.5 per sq. ft. in the event of delay in taking the possession of the Apartment in the event of completion.
15. Regarding the submission of the Counsel with respect to the fact that the Developer has applied for registration under The Real Estate (Regulation and Development) Act, 2016, we are of the considered view that this Complaint was instituted much prior to the Registration, if any, by the Developer, this Complaint is maintainable.
16. Learned Counsel for the Developer vehemently contended at the time of final hearing that the Bank should be impleaded as a party as there was a Tripartite Agreement entered into between the parties. We find force in the contention of the learned Counsel appearing for the Complainant that the entire amount taken as loan from the Bank has been discharged way back in the year 2015, the question of including Bank as a party herein does not arise. Be that as it may, we find from the Written Statement that there is absolutely no pleading with respect to the Tripartite Agreement or any Loan Arrangements having been made with the Bank. Additionally no Application has been filed in this case by the Developer seeking impleadment of the Bank. Even otherwise, keeping in view the facts and circumstances of the case and also the fact that the Complainant has discharged the loan, we are of the view that impleadment of the Bank at this stage, will not serve any purpose.
17. We are of the considered view that the following principles laid down by the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra II (2019) CPJ 29 (SC), squarely applies to the facts of the present case:
"..........It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.
In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified."
18. In the instant case also the Complainant cannot be made to wait indefinitely for possession of the unit, when the construction is not complete even after a period of more than 8 years from the date of Agreement and the Complainant is entitled for refund of the principal amount with interest. Though it is the Complainant's case that for any default, the Developer charged interest @ 18% p.a. from the buyers, having regard to the fact that Banks have lowered the interest rate and the Hon'ble Supreme Court has been awarding interest keeping in view the current market situation and considering the recent decline in the cost of borrowing and return on the investments made with the Banks, we are of the considered view that simple interest @ 12% p.a. would meet the ends of justice, together with costs of ₹25,000/-.
19. Hence, this Complaint is allowed in part directing the Opposite Party to refund the principal amount with interest @ 12% p.a. from the respective dates of deposit till the date of realization together with costs of ₹25,000/- to the Complainant. Time for compliance four weeks from the date of receipt of a copy of this order, failing which the amount shall attract interest @ 14% p.a. for the same period.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER