National Consumer Disputes Redressal
Vinod Kumar Chopra & Ors. vs Ireo Grace Realtech Pvt. Ltd. & Ors. on 25 October, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 2607 OF 2018 1. VINOD KUMAR CHOPRA & ORS. ...........Complainant(s) Versus 1. IREO GRACE REALTECH PVT. LTD. & ORS. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainants : Mr. Ram Phal Sheoran, Advocate
Mr. Vinod Kumar Chopra, Complainant No. 1 in person For the Opp.Party : For the Opposite Parties : Mr. Sameer Chaudhary, Advocate
Ms. Nandini Nagar, Advocate
Dated : 25 Oct 2021 ORDER
(Pronounced on 25th October 2021)
R.K. AGRAWAL, J., PRESIDENT
The present Consumer Complaint has been filed under Section 21(a)(i) of the Consumer Protection Act, 1986 (for short "the Act") by the Complainants, against the Opposite Party M/s. Ireo Grace Realtech Private Ltd. (hereinafter referred to as the 'Developer'), for refunding of money as the Opposite Party Developer failed to hand-over the possession of the Flat booked by them in the Project launched by the Developer in the name and style of "The Corridor ", within stipulated period.
According to the Complainants, the facts of the case are that the Opposite Party Developer launched a Residential Housing Project in the name and style of "The Corridors" (hereinafter referred to as the 'Project') located at Golf Course Extension Road, Sector-67-A, Tehsil & District Gurgaon, Haryana.The Opposite Party Developer drawn very rosy picture of the Project and represented that it would be a unique project with world class amenities and assured timely delivery and lots more.Attracted by the representation and assurances given by the Opposite Party Developer, Vinod Kumar Chopra and Ritu Chopra (hereinafter referred as the Complainant Nos. 1 & 2) jointly booked a residential flat in the Project by paying a sum of ₹14,50,000/- on 18.03.2013.The Complainant Nos. 1 & 2 were allotted Unit No. CD-A3-10-1003 having super area of 1700 sq. ft.Ms. Shivani Ahuja (hereinafter referred to as the Complainant No. 3) also booked a residential flat in the said Project by paying a sum of ₹12,00,000/- on 13.03.2013.The Complainant No. 3 was allotted Unit No. CD-C5-03-301 having super area of 1300 sq. ft.As per demand of the Opposite Party Developer, the Complainant No. 1 & 2 and Complainant No. 3 made payment of ₹59,42,313/- and ₹48,29,664.03/- on different dates to the Opposite Party Developer towards their respective flats.Apartment Buyer's Agreements (hereinafter referred as the Agreement) were executed between the Parties.It is the say of the Complainants that the Apartments were originally booked @ ₹8750/- per sq. ft. but in the Agreement, the rate of booking was mentioned as ₹9200/- per sq. ft. and the super area of the flats booked by them were increased to 1920 sq.ft. and 1592 sq.ft. respectively.It is the say of the Complainants that due to increase in size and change in price of the Apartment, the Complaints found themselves under-budget and requested the Developer to merge both the flats.Vide letter Adj.Memo/Corr/00112 dated 30.12.2014, the Developer accepted the requests of the Complainants and Unit No. CD-C5-03-301, allotted to the Complainant No.3 was merged with Unit CD-A3-10-1003, allotted to the Complainant No. 1 & 2 and ₹48,29,664/-, i.e., the whole amount paid towards Unit No. CD-C5-03-301, was adjusted towards the cost of Unit No. CD-A3-10-1003 allotted to the Complainants No. 1 & 2.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 having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the Allottee within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company."
The Complainants made payment of ₹1,08,13,076.91ps. on different dates 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.The Complainants requested the Opposite Party Developer to refund the amount paid by them alongwith interest but the Developer refused to accede to the Complainants' request and threatened to forfeiture of high amount.The Complainants had lost trust in the Opposite Party Developer.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.) Grant a sum of ₹1,08,13,077 (Rupees one crore eight lacks thirteen thousands seventy seven only) plus quarterly compounding interest @20% p.a. on this amount of ₹1,08,13,077/- from the date of each payment till the date of actual realisation of amount;;
ii.) Grant a sum of ₹25,00,000/- (Rupees Twenty Five Lacs) towards exemplary damage for fraudulent behaviour of Opposite Party;
iii.) Grant a cost of this litigation;
iv.) Any other relief, compensation, order or direction as the Hon'ble Commission may deem fit, just and proper under the Circumstances of the case may kindly be passed in favour of the Complainant and against the Opposite Party."
Upon notice, the Complaint was resisted by the Opposite Parties by filing Written Statement. The Opposite Party Developer took preliminary objection that the Complainants were facing financial difficulty, therefore, they had initially merged their two allotments into one and probably failing in availing bank loan, the Complainant No. 3 had surrendered her allotment and merged her finances with the allotment of her parents and the Complainants had full idea that construction of Tower C-5 was advancing quickly whereas the construction of Tower A-3 was at a slow pace.Therefore, the Complainants willingly and in a calculative manner opted for flat allotted in Tower A-3 so that the time frame for paying instalment would increase.It was also stated that the Complainants have filed the present complaint as an escape route from performing their part of obligation.Since the construction is completed and only finishing work is going on and OC will be applied soon and accordingly possession will be handed over soon.Rest of the defence taken by the Opposite Party Developer were similar to the defence as were taken by them in several other Consumer Complaints, i.e., CC No.3873 / 2017 entitled "Abhishek Khanna & Ors. Vs. Ireo Grace Realtech Pvt. Ltd.", CC No.1382 / 2018 entitled "Promila Kashyap vs. Ireo Grace Realtech Pvt. Ltd.", CC No. 525 / 2017 entitled "Ritu Hasija & Anr. Vs. Ireo Grace Realtech Pvt. Ltd." CC No.696 / 2017 entitled "Amit Arora vs. Ireo Grace Realtech Pvt. Ltd." and CC No. 2236 / 2016 entitled "Sanjay Gopinath vs. Ireo Grace Realtech Pvt. Ltd. and connected matters" which were filed by several other Allottees of the same project 'The Corridor'.
We have heard Mr. Ram Phal Sheoran, learned Counsel appearing on behalf of the Complainants, Mr. Sameer Chaudhary, learned Counsel appearing on behalf of the Opposite Party Developer and have given a thoughtful consideration to the arguments advanced by them.
Regarding the contention of merger of the two flats, we found that vide letter Adj.Memo/Corr/00112 dated 30.12.2014, the Developer has accepted the requests of the Complainants and Unit No. CD-C5-03-301 was merged with Unit CD-A3-10-1003, and the whole amount paid towards Unit No. CD-C5-03-301, i.e. ₹48,29,664/- was adjusted towards the cost of Unit No. CD-A3-10-1003. Now at this stage, the Developer cannot take plea that the Complainants willingly and in a calculative manner opted for merger of Flats and opted for allotted in Tower A-3 and the Complainant had filed the present Complaint as an escape route from performing their part of obligation. Admittedly, till date OC has not been received for the Tower A-3, in which Flat has been allotted to the Complainants. It is an afterthought and a clear case of Deficiency in Service and Unfair Trade Practice on their part.
All the other contentions raised by the Opposite Party Developer in respect of the Project 'The Corridor' have been dealt with in detail by this Commission in the cases, i.e., CC No.3873 / 2017 entitled "Abhishek Khanna & Ors. Vs. Ireo Grace Realtech Pvt. Ltd." CC No.1382 / 2018 entitled "Promila Kashyap vs. Ireo Grace Realtech Pvt. Ltd.", CC No. 525 / 2017 entitled "Ritu Hasija & Anr. Vs. Ireo Grace Realtech Pvt. Ltd." CC No. 696 / 2017 entitled "Amit Arora vs. Ireo Grace Realtech Pvt. Ltd." and CC No. 2236 / 2016 entitled "Sanjay Gopinath vs. Ireo Grace Realtech Pvt. Ltd. and connected matters"
The Opposite Party Developer challenged the Orders passed by this Commission by filing Civil Appeals before the Hon'ble Supreme Court.
The Hon'ble Supreme Court dealt with all the contentions raised by the Opposite Party Developer and disposed off these Civil Appeals vide their Judgment dated 11.01.2021 in the case "Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors." [Civil Appeal No. 5785 / 2019 & other connected Appeals].The Hon'ble Supreme Court had held that 27.11.2018 would be the relevant date for offer of possession by observing as under:-
"On 27.11.2014, the Director, Haryana Fire Service granted approval to the Fire Fighting Scheme subject to the conditions mentioned therein. The computation of the period for handing over possession would be computed from this date. The Commitment Period of 42 months plus the Grace Period of 6 months from 27.11.2014, would be 27.11.2018, as being the relevant date for offer of possession."
Hon'ble Supreme Court also held that the 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"
Hon'ble Supreme Court on the issue "Whether the Apartment Buyers are entitled to terminate the Agreement, or refund of the amount deposited with Delay Compensation" held as under:-
"In the present case, the allottees before this Court in the present batch of appeals, can be categorised into two categories:-
i) Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made, are enlisted in Chart A;
ii) Apartment Buyers whose allotments fall in Phase 2 of the project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far, are set out in Chart B below.
...........
Chart A allottees (i) We are of the view that allottees at Serial Nos. 1 and 2 in Chart A are obligated to take possession of the apartments, since the construction was completed, and possession offered on 28.06.2019, after the issuance of Occupation Certificate on 31.05.2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees.
........
Chart B allottees
(i) Insofar as the allottees in Chart B are concerned, they have paid part consideration, in most cases up to the 4th instalment till 2017, when they found that there was no progress being made in respect of the Towers in which the apartments had been allotted to them. It is an admitted position that Occupation Certificate for Towers A1, A2, A3, B7, C9 and C11, in which the allotments have been made for this category has not been issued by the Municipal Corporation The apartments have not been ready for allotment even as on 30.06.2020, as per the date fixed before the RERA Authority.
(ii) The allottees submitted that they were facing great hardship since they had obtained loans from Banks for purchasing these apartments, and were paying high rates of interest. In 2017, when they realised that there was no construction activity in progress, they were constrained to file consumer complaints before the National Commission, and then discontinued payment of further instalments.
(iii) The Developer made an alternate offer of allotment of apartments in Phase 1 of the project. The allottees are however not bound to accept the same because of the inordinate delay in completing the construction of the Towers where units were allotted to them. The Occupation Certificate is not available even as on date, which clearly amounts to deficiency of service. The allottees cannot be made to wait indefinitely for possession of the apartments allotted to them, nor can they be bound to take the apartments in Phase 1 of the project. The allottees have submitted that they have taken loans, and are paying high rates of interest to the tune of 7.9% etc. to the Banks.
Consequently, we hold that the allottees in Chart B are entitled to refund of the entire amount deposited by them.
(iv) In so far as award of compensation by payment of Interest is concerned, clause 13.4 of the Apartment Buyer's Agreement provides that the Developer shall be liable to pay the allottee compensation calculated @ ₹ 7.5 per sq. ft. of the Super Area for every month of delay, after the end of the Grace Period. The compensation will be payable only for a period of 12 months.
The Apartment Buyers in their Complaint filed before the National Commission made a prayer for refund of the amount deposited alongwith Interest @ 20% p.a. compounding quarterly till its realisation. The Apartment Buyers, in their submissions have stated that they have obtained home loans on which Interest @ 7.90% p.a. is being paid, even as on date. We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of ₹ 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market.
We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic.
We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry.
In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fairplay that the amounts deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount.
The refund will be paid within a period of three months from the date of this judgment. If there is any further delay, the Developer will be liable to pay default interest @ 12% S.I. p.a. (v) The Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC."
In the present Complaint Case, the Complainants were allotted Unit No. A-3-10-1003, which falls in Phase 2 of the Project, where the Occupation Certificate (O.C.) has not been granted so far.Therefore, the Complainants are entitled to refund of the deposited amount alongwith interest @9% p.a. Respectfully following the ratio of the Judgment of the Hon'ble Supreme Court in the case of "IREO Grace Realtech Pvt. Ltd. (supra)", the Opposite Party Developer is directed to refund ₹1,08,13,077/- (Rupees One Crore Eight Lacs Thirteen Thousand Seventy Seven only), alongwith interest @9% S.I. p.a. within 3 months from the date of this Order failing which the Developer shall be liable for payment of default interest @12% S.I. p.a. till the payment is made. The Opposite Party Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC.
The Consumer Complaint is allowed in above terms, with no order as to Costs.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER