National Consumer Disputes Redressal
Jai Prakash Kaushik & Anr. vs Umang Realtech Private Limited on 16 May, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1655 OF 2016 1. JAI PRAKASH KAUSHIK & ANR. L-40/189, FIRST FLOOR, STREET NO. 7, MAHIPALPUR EXTN., NEW DELHI-110037 2. SONIK TOMAR L-40/189, FIRST FLOOR, STREET NO. 7, MAHIPALPUR EXTN., NEW DELHI-110037 ...........Complainant(s) Versus 1. UMANG REALTECH PRIVATE LIMITED Through its Director/Authorized Signatory B-72,7th Floor, Himalaya House, Kasturba Gandhi Marg, Connaught Place, , NEW DELHI-110001 ...........Opp.Party(s)
BEFORE: HON'BLE DR. INDER JIT SINGH,PRESIDING MEMBER
For the Complainant : MR. ARKAJ KUMAR, ADVOCATE For the Opp.Party : MR. KARAN RAJPUROHIT, ADVOCATE
Dated : 16 May 2023 ORDER
DR.INDER JIT SINGH, MEMBER
1.The present Consumer Complaint (CC) has been filed by the Complainants against Opposite Party (OP) as detailed above, inter alia praying for directions to the OP to:-
Refund the entire deposited amount of Rs.1,23,14,372/- with interest @18% p.a. compound interest thereon calculated from the date of each deposit till the date of actual realization of the same by the complainants;
Refund the tax amount deposited by the complainants against the subject apartment which is lying surplus with the OP with interest @18% p.a. compound interest calculated from the date of deposit made by the complainants till the actual date of realization of the same by the complainants.
Restrain the OP from cancelling or creating any third party right in the allotted Apartment.
Compensation of Rs.10 lakh for causing intense mental torture, severe pain, endless agony, harassment and huge financial loss.
Litigation cost of Rs.5.00 Lakhs.
2. Notice was issued to the OP. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in the Table at Annexure-A. The details of the flats allotted to the Complainants/other relevant details, based on pleadings of the parties and other records of the case are also given in the Table at Annexure-A.
3. It is averred/stated in the Complaint that:
Vide application dated 01.09.2012, the complainants booked an Apartment in the multi-storey housing project of the OP, namely, "Winter Hills Dwarka" situated at Dwarka Morh, Near Dwarka City, New Delhi, for total consideration of Rs.1,13,06,320/-. The complainants opted for the 'construction linked payment plan'.
On 17.09.2012, the OP issued an allotment letter confirming the allotment of an apartment bearing No. D-404, admeasuring 1457 sq.ft. on 4th Floor of Tower-D in the project 'Winder Hills Dwarka'.
On 29.04.2013, Apartment Buyer's Agreement was executed between the parties. Although the complainants wanted to seek amendment in some of the terms and conditions of the said allotment but the opposite party officials bluntly refused to entertain any such request of the complainants seeking amendment in the terms and conditions of the allotment/Apartment Buyer's Agreement and the complainants were told that in case the complainants refuse to accept all the terms and conditions of the Agreement, the allotment of the said apartment shall be cancelled immediately and the total deposited amount shall be forfeited. Under the compelling circumstances, the complainants had no option but to accept the terms and conditions of the said Apartment Buyer's Agreement at that point of time.
In the Agreement, the OP had undertaken to complete the construction work of the project and to apply for the completion certificate by 31.03.2014, subject to a grace period of six months, and as and when the completion certificate is received, possession of the said apartment to the complainants shall be offered.
Vide letter dated 12.07.2014, complainant issued his objections over the irrelevant and baseless demand letters being issued by the OP. However, the complainant paid further amount to the OP. Vide e-mail dated 21.06.2015, the complainants objected to the irrelevant demand. Despite paying the amount, the possession of the apartment had not been delivered.
The complainants requested the OP to immediately complete the construction of the apartment and deliver the possession of the same. It was also categorically stated by the complainants that in view of the order being passed by the Hon'ble Supreme Court, the OP have to pay to the complainants and interest @18% on the amount that they had paid so far as the delay in construction was causing huge inconvenience to the complainants. Vide e-mail dated 22.06.2016, the OP responded to the complainants stating that the work on the project is in action with the intention of completing the same and handing over the apartment to the complainants alongwith other facilities as agreed in the Agreement, shall be initiated soon. However, the OP adamantly stated that interest on the delayed payments will be charged as per the clause 5 of the Agreement and as far as delay charges to be paid by the OP, the same is covered in Clause 8.1 to 8.7 of the Agreement.
Vide email dated 02.03.2016 the complainants asked the OP as to when the possession of the apartment would be delivered. The staff of the OP told that it would be ready within 6 months. The OP wrongly stated that they are concentrating on the final finish of the apartment/project, for which the company will apply for OC to the Civil Authorities by the end of April/May 2016 and shall handover the apartments as soon as the same is obtained from the said authorities. The OP also wrongly stated that they will keep the complainants apprised with the progress at the site from time to time, which promise they never kept and in fact always misguided the complainants.
Vide e-mail dated 08.09.2016 the complainants stated that although they have already paid to the OP more than 95% of the total agreed consideration amount of the apartment, which is more than Rs.1.00 crore but the OP failed to honor its commitments under the said contract within the stipulated time as per the agreement.
It is an admitted fact that the status of the construction is way behind its schedule and the complainants have been compelled by the OP to suffer irreparable loss due to deficiency in service on the part of the OP.
On 08.09.2016 the complainants visited the site and were very saddened and disappointed to see the actual status of the project. However, they were not allowed to enter the gate of the premises as the security guards refused to open the gate and cited strange reasons such as "no permission rules". Under the said compelling circumstances, the complainants were compelled to register their complaint against the OP.
Hence, the complainants are before this Commission.
4. The OP in their written statement/reply stated that:
The averments made in the complaint are false and erroneous and hence denied, except those admitted expressly by the OP. The complaint lacks a cause of action and as such, deserves to be dismissed at the very threshold.
It is contended by the OP that since there is Arbitration Clause in the Agreement, complaint without invoking arbitration is liable to be dismissed. Both the parties are contractually bound by the conditions/clauses of the Agreement. In view of the clause 16.10 of the Agreement, the captioned complaint is barred. The complainant ought to have resorted the Arbitration instead of having approaching this Commission.
OP is entitled for reasonable extension of time for handing over the possession in terms of the agreed terms of the agreement as per clause 8.1 and 8.2 of the Agreement. The delay was due to (a) lack of adequate sources of finance, (b) shortage of labour (c) rising manpower and material costs, (d) approvals and procedural difficulties. In addition to the above challenges the other factors also played major role in delaying the offer of possession, i.e., (a) extreme shortage of water in the region which affected the construction works, (b) shortage of bricks due to restrictions imposed by Ministry of Environment and Forest on bricks kiln, (c ) demonetization policy, (d) recession in economy also resulted in availability of labour and raw-materials becoming scarce and (e ) shortage of labour due to implementation of social schemes like National Rural Employment Guarantee Act (NREGA) and Jawaharlal Nehru Urban Renewal Mission (JNNURM).
The complainants themselves violated the terms of the Apartment Buyer's Agreement and hence their claim is not bonafide one. The complainants are habitual defaulters and they have made a number of defaults in making timely payment even after repeated demands. The complainants are liable to pay about Rs.15,87,444/- towards interest liability on account of the delayed payments. Only as an attempt to evade the above liability, the present complaint is filed. OP sent several demand letters/reminders, asking for payment of the instalments. The complainants defaulted to make timely payment even after receipt of the demand letters and used to send emails raising false and frivolous allegations as an attempt to justify the illegal violation of the obligation under the Agreement.
The complainants have approached this Commission with unclean hands. It is a settled law that a party who approached the Court with unclean hands, disentitles himself from getting any relief whatsoever.
The allegations in the complaint cannot be decided summarily and hence complaint is out of the jurisdiction of this Commission.
It is also contended by the OP that the requirements of Section 14 (1) (d) of the Consumer Protection Act are not satisfied in the complaint. In order to seek relief of compensation, the mandatory conditions prescribed in the above section, to be satisfied i.e. loss of injury to be suffered by the consumer and the said loss/injury should be suffered only due to the negligence of the OP, on account of which any loss or injury is caused to the complainant.
The complainants have prayed for relief for damages which have to be claimed in a suit for damages after paying appropriate court fees. The complaint is not sustainable in view of the fact that the complainants are seeking exorbitant rate of interest for delay caused as compensation in violation of the law laid down by the Hon'ble Supreme Court of India and this Commission respectively.
The liability of the OP on account of delay is specified in the clause 8.6 of the Agreement and as such the complainants cannot claim reliefs which are beyond the compensation agreed upon by the complainants.
The complaint is filed with oblique motive to tarnish the goodwill and image of the OP on the basis of imaginable assumptions and unjustified contentions. OP has already applied for Completion Certificate and awaiting for the same. The complaint is frivolous, vague and vexatious in nature and there has been no 'Unfair Trade Practice or deficiency of service on the part of the OP. The complaint is liable to be dismissed in limine.
5. Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the Complaint, based on their Complaint/Reply, Rejoinder, Evidence, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
6. Before we go into the merits of the case, it is essential to see whether in view of certain orders of NCLT and NCLAT referred to by the OP in their written submissions filed through its Interim Resolution Professional (IRP) Mr. Manish Kumar Gupta, the present case can be proceeded further.
6.1 In the written submissions it is stated that OP and Uppal Housing Pvt. Ltd. (UHPL) entered into a Collaboration Agreement dated 18.01.2010 whereby the OP undertook to develop and construct a residential project on the Project Land. In pursuance to which the present project viz 'Winter Hills Dwark Morh' was launched. It is stated by the OP that they have completed the project sometime during 2016-17 and have received the Occupation Certificate from the competent authority on 16.10.2017 and have offered the possession of the apartment to the complainants on 28.10.2017. However, the complainants instead of taking possession filed the instant complaint. It is further stated that apartment of complainants is ready for handover and the OP is ready and willing to offer the possession of the apartment within a period of 30 days in case complainant comes forward to take possession of the apartment. The IRP of OP is ready and willing to handover the possession of the apartment to the complainants after providing some concession to the complainants, for which even certain communications took place between the IRP of the OP and the complainants but it did not materialize. The OP further states that the Company is under Reverse CIRP and is facing liquidity crunch.
6.2 OP states that without prejudice to above (i.e. its willingness to handover the possession to the complainants), the present complaint cannot be proceeded and adjudicated by this Commission in view of admission of Corporate Insolvency Resolution Process (CIRP) against the OP.
6.3 During the pendency of the present complaint, National Company Law Tribunal (NCLT) vide order dated 20.08.2019 in CP No. IB-1564(PB)/2018 titled Rachna Singh & Anr. Vs. Umang Realtech Pvt. Ltd., admitted the Petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC) against Umang Realtech Private Limited (OP) in view whereof whilst initiating CIRP, a Moratorium came to be imposed against it. The said order of NCTL was challenged by the Flat Buyer's Association, "Winter Hills 77", Sector-77, Gurugram before the National Company Law Appellate Tribunal (NCLAT) wherein vide order dated 04.02.2020, NCLAT in Company Appeal (AT) (Insolvency) No. 926 of 2019 titled Flat Buyers Association Winter Hills - 77, Gurgaon Vs. Umang Realtech Pvt. Ltd. through IRP & Ors. has restricted the CIRP initiated against the OP to 'Winter Hills - 77' Project only. NCLAT vide this order has held that CIRP should not be applicable upon all the projects of the OP other than Project of OP, namely, 'Winter Hills - 77' situated at Sector 77, Gurgaon, Haryana. Further, a Civil Appeal bearing No. 2942 of 2020 was filed before the Hon'ble Supreme Court challenging the said order dated 04.02.2020 passed by NCLAT. The said Civil Appeal was dismissed by the Hon'ble Supreme Court on 11.08.2020 holding that there are no grounds to interfere with the impugned order passed by NCLAT.
6.4 OP further stated that the Reverse CIRP Procedure, as evolved by the NCLAT in the complaint is not stipulated under the scheme of IBC. However, this is an innovative mechanism devise by the NCLAT. In terms of the orders passed by NCLT and NCLAT, the status of OP on website of Ministry of Corporate Affairs is also being reflected as 'Company under CIRP'. The very fact that moratorium/admission order passed by NCLT has not been modified or lifted by the NCLAT, clarifies that moratorium subsists against the OP.
6.5 In view of above, OP in its written submissions contends that given the scope and purport of the subsisting orders of the NCLT and NCLAT and the statutory framework, it will be wholly untenable to seek to confine the moratorium to only specific project or to only to a part of the OP. This Commission in similarly placed matters recognized the fact that the moratorium is still in effect and have adjourned the proceedings sine die. The IBC does not contemplate any partial or limited moratorium and the fundamental premise of any resolution process is that moratorium would prevail from the date of admission of Insolvency against the OP/Corporate Debtor till the time completion of CIRP process. Had it been the intent of NCLAT to dilute the moratorium, that NCLAT would have modified or varied the order dated 20.08.2019 passed by NCLT whereby moratorium upon OP/Corporate Debtor was imposed.
6.6 In view of this, OP contends that since it is facing liquidity crunch, this Commission may hold that if the Project is complete and OC is received with reasonable delay, the allottees/home buyers are bound to take possession and in such cases no orders/directions for refund may be passed by the Commission.
6.7 From the above submissions/contentions of the OP through its IRP, it is very clear that the OP is wanting to take the plea of moratorium only if refund is to be given while it is willing to handover the possession even now, notwithstanding its own contention of moratorium. This prima-facie is a selective plea of the OP to its own advantage only and cannot be accepted. Once it is decided to proceed with the case, whether to grant possession or refund or any other relief, will depend on the merits of the case.
6.8 We have carefully gone through the orders of NCLT and NCLAT cited. No doubt as per the order of NCLT, with the initiation of CIRP process, moratorium in terms of Section 14 of IBC has been declared with necessary consequences following under this Section. Relevant extract of NCLT order dated 20.08.2019 is reproduced below:-
"24.We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) and thus the following prohibitions are imposed which must be followed by all and sundry:
"(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002;
d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor."
6.9 The relevant para of NCLAT order dated 04.02.2020 is also reproduced below :-
"21. In Corporate Insolvency Resolution Process against a real estate, if allottees (Financial Creditors) or Financial Institutions/Banks (Other Financial Creditors) or Operational Creditors of one project initiated Corporate Insolvency Resolution Process against the Corporate Debtor (real estate company), it is confined to the particular project, it cannot affect any other project(s) of the same real estate company (Corporate Debtor) in other places where separate plan(s) are approved by different authorities, land and its owner may be different and mainly the allottees (financial creditors), financial institutions (financial creditors, operational creditors are different for such separate project. Therefore, all the asset of the company (Corporate Debtor) are not to be maximized. The asset of the company (Corporate Debtor - real estate) of that particular project is to be maximized for balancing the creditors such as allottees, financial institutions and operational creditors of that particular project. Corporate Insolvency Resolution Process should be project basis, as per approved plan by the Competent Authority. Any other allottees (financial creditors) or financial institutions/ banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained.
So, we hold that Corporate Insolvency Resolution Process against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved. For example - in this case the Winter Hill - 77 Gurgaon Project of the 'Corporate Debtor' has been place of Corporate Insolvency Resolution Process. If the same real estate company (Corporate Debtor herein) has any other project in another town such as Delhi or Kerala or Mumbai, they cannot be clubbed together nor the asset of the Corporate Debtor (Company) for such other projects can be maximised."
6.10 It is to be noted that the said NCLT and NCLAT orders are in respect of another/different project to the OP viz 'Winter Hills-77', in Sector -77, Gurgaon while the present project is 'Winter Hills Dwarka Morh', New Delhi.
6.11 Hence, in view of the categorical findings of NCLAT which have been upheld in subsequent judgement of the Hon'ble Supreme Court, we are of the considered view that the present Consumer Complaint/case need not be adjourned sine die and can be proceeded further on merits.
7. As per ABA dated 29.04.2013, OP had undertaken to complete the construction work of the Project and apply for the Completion Certificate by 31.03.2014, subject to a grace period of 6 months, and as and when the Completion Certificate is received, the possession of the said apartment to the complainants was to be offered. Hence, the committed date of possession as per the Agreement was 31.09.2014. It is admitted by OP that the OC has been received on 16.10.2017 i.e. after the delay of 3 years and possession was offered on 28.10.2017. It was held by Hon'ble Supreme Court in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors. (2020) 16 SCC 512, "failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency". In Ireo Grace Realtech Pvt.Ltd. Vs. Abhishek Khanna & Anr. (2021) 3 SCC 241, Hon'ble Supreme Court held that "allottees who have not been given possession, cannot be made to wait indefinitely for possession, nor they can be bound to take possession in other phase of the project. Such allottees are entitled to refund of entire amount deposited by them". In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon'ble Supreme Court held that "flat purchaser could not be compelled to take possession of the flat, when it was offered almost 2 years after the grace period under the agreement expired". In view of this, the complainants are well within their rights to seek refund of their amount rather than take possession. It is to be held that complaint was filed on 04.10.2016, i.e. before the OC was obtained and possession was offered, which was on 28.10.2017 i.e. after a gap of one year.
8. The OP in their written submissions have contended that complainants are habitual defaulters, have made number of defaults in making timely payments even after raising various demands. Till date, the complainants are liable to pay an amount of Rs.15,66,189/- towards outstanding dues of said apartment, Rs.15,87,440/- interest liability on account of delayed payments and Rs.9,32,690/- as Holding Charges including maintenance charges paid by the OP to RWA of the Society. To this the complainants have responded that the complainants objected to the irrelevant demand and interest obligation from the complainants being raised by the OP. The complainants categorically stated that the OP not only raised the demand in quick succession but also put interest obligation on the complainants for late payment, as if the allotted apartment was ready for possession. The complainants submitted that despite paying the amount, the possession of their said apartment had not been delivered. The complainant No.1, vide letter dated 12.07.2014, issued his objections over the irrelevant and baseless demand letters being issued by the OP. In their Rejoinder, the complainants have denied the averments made by the OP that the complainants are habitual defaulters and they have made a number of defaults in making timely payments even after repeated demands. It is to be noted that against a total consideration of Rs.1,21,18,445/- as per Agreement, Complainants have already paid an amount of Rs.1,23,14,372/-.
9. The plea of OP that delay was due to force majeure circumstances is not valid as even after a gap of more than 03 years from the committed date given in the ABA, possession of flat was not offered. There is no documentary evidence to support the contention of the Opposite Parties that the reasons pleaded by them, can be construed as 'Force Majeure. The contention of the OP that the parties are bound by the agreement is also not acceptable. In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon'ble Supreme Court also observed that "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 incorporation of one sided clause in an agreement constitute 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 flats by the builder ........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms." Plea of the OP for Arbitration as per conditions in the Agreement is also not accepted. It was held by Hon'ble Supreme Court in Imperia Structures Ltd Vs Anil Patni and Anr (2020)10 SCC 783 "Remedies under the Consumer Protection Act are in addition to the remedies under special statutes". In Emaar MGF Land Ltd Vs Aftab Singh (2019) 1 CPJ 5 (SC), Hon'ble Supreme Court held "Arbitration Clause does not exclude the jurisdiction of Consumer Fora."
10. In the instant case, there is a delay of more than 3 years in handing over the possession of flat by the OP. The complainant cannot be made to wait for an indefinite time and suffer financially. Hence, the complainants in the present circumstances have a legitimate right to claim refund alongwith fair delay compensation/interest from the OP(s).
11. For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -
(i) The OP shall refund the entire principal amount of Rs.1,23,14,372/- (Rupees one crore twenty three lakhs fourteen thousand three hundred seventy two only) to the complainant, alongwith compensation in the form of simple interest @ 9% per annum from the date of each payment till the date of refund. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainant based on receipts etc.
(ii) The OP shall pay a sum of Rs.25,000/- as cost of litigation to the complainants.
(iii) The payment in terms of this order shall be paid within three months from today.
(iv) In case the complainants have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant. The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.
(v) Liability of OP and its IRP shall be joint & several.
12. The pending IAs, in the Consumer Complaint, if any, also stand disposed off.
Annexure-A Details of the Unit and other related details Sr No Particulars 1 Project Name/Location etc. 'Winter Hills' Dwarka, Dwarka Morh, Near Dwarka City, New Delhi 2 Apartment no 404, 4th Floor, Tower -D 3 Size (Super Area) 1457 sq.ft.
4Date of application 01.09.2012 5 Date of allotment 17.09.2012 6 Date of signing Apartment Buyer's Agreement (ABA) 29.04.2013 7 Committed date of possession as per Agreement (with six months' Grace period) 30.09.2014 8 D/o Obtaining OC by the OP 16.10.2017 9 D/o Offering Possession 28.10.2017 10 Total Consideration as per agreement Rs.1,21,18,445/-
11Amount Paid as per Complainant Rs.1,23,14,372/-
12D/o Filing CC in NCDRC 04.10.2016 13 D/o Issue of Notice to OP(s) 26.10.2016 14 D/o Filing Reply/Written Statement by OP 06.11.2017 15 D/o filing Rejoinder by the Complainant(s) 09.05.2018 16 D/o Filing Evidence by way of Affidavit by the Complainant(s) 09.05.2018 17 D/o Filing Evidence by way of Affidavit by the OP 09.07.2019 18 D/o filing Written Synopsis by the Complainant(s) 25.09.2019 19 D/o filing Written Synopsis by the OP 21.12.2022 ................................... DR. INDER JIT SINGH PRESIDING MEMBER