State Consumer Disputes Redressal Commission
Ravinder Singh vs Imperial Housing Ventures Pvt. Ltd. & ... on 6 January, 2021
Cause Title/Judgement-Entry IN THE STATE COMMISSION DELHI Constituted under Section 9 of the Consumer Protection Act, 1986 Complaint Case No. CC/602/2015 ( Date of Filing : 19 Aug 2015 ) 1. RAVINDER SINGH R/O E-122 FIRST FLOOR GREATER KAILASH PART-1 N.D. ...........Complainant(s) Versus 1. IMPERIAL HOUSING VENTURES PVT. LTD. & ANR. ROOM No.205, WELCOME PLAZA S551 SCHOOL BLOCK 2nd SHAKARPUR DELHI. ............Opp.Party(s) BEFORE: HON'BLE MR. ANIL SRIVASTVA PRESIDING MEMBER PRESENT: Dated : 06 Jan 2021 Final Order / Judgement IN THE STATE COMMISSION: DELHI (Constituted under section 9 of the Consumer Protection Act, 1986) Date of Hearing:21.12.2020 Date of Decision:06.01.2021 Complaint No.602/2015 IN THE MATTER OF RAVINDER SINGH S/o Labh Singh R/o E-122, First Floor Greater Kailash part-1 New Delhi....Complainant VERSUS IMPERIAL HOUSING VENTURES PVT. LTD. M/s Paras Buildtech and Ors. Harendra Nagar Nilam Nagar Kunal Rishi Mr. Rajesh Kaul Assistant Vice President Sales Nitin Bhatia CRM Sales Head ....Opposite Parties HON'BLE SH. ANIL SRIVASTAVA, MEMBER 1. Whether reporters of local newspaper be allowed to see the judgment? Yes 2. To be referred to the reporter or not? Yes Present: Sh. Ravinder Singh, Counsel for the complainant Sh. Kamal Katyan, Counsel for the OPs ANIL SRIVASTAVA, MEMBER JUDGEMENT
This complaint under Section 17 of the Consumer Protection Act 1986, the Act, has been filed by Sh. Ravinder Singh, resident of New Delhi, for short complainant, against Imperial Housing Ventures Pvt. Ltd., M/s Paras Buildtech and ors, hereinafter referred to as OPs, alleging deficiency of service and unfair trade practice on the part of the OPs, they having delayed handing over possession of the flat booked by him despite payment as per schedule having been made and praying for the relief as under:-
It is most respectfully prayed that the Hon'ble State Commission may kindly be pleased to:-
Direct the respondent company to pay the compensation by way of penalty for delay in completion of project and handing over the possession;
Direct the respondent company to pay interest @ 18% as the same is charged by the respondent company to the complainant on the amount so taken by him.
Direct the respondent company to complete the project, within a time bound manner, with all the facilities before handing over the possession;
Direct the respondent company to deduct the interest amount as stated above so shown in the account of the complainant.
Direct the respondent company to not levy any interest/penalty on the due amount as shown in demand note dated 20.07.2015.
To issue a revised final demand note payable by the complainant;
Grant compensation for the mental, financial hardship to the complainants herein as per applicable law;
Grant compensation to the tune of Rs. 3,00,000/- per annum as the complainant is forced to stay in rented premises on account of delay in construction.
Pass such further order or orders, which the Commission may deem, fit in the circumstances of the case.
Facts of the case necessary for the adjudication of the complaint are these.
The complainant responding to an advertisement and advancement issued by the OPs for the sale of a residential flat in their upcoming project at Sector 137 NOIDA, District Gautam Budh Nagar, had booked a three BHK Duplex Flat admeasuring 1725 sq. ft. for a total sale consideration of Rs. 56,92,500/-, by paying first basic instalment of Rs. 5,40,000/- on 24.04.2011. Later the complainant and the OPs entered into a Flat Buyer Agreement on 31.05.2011 with regard to flat number T-26/2206 Type G. Later the complainant paid further amount of Rs. 43,83,122/- to the OPs on their demands received on different dated from 16.06.2011 to 09.06.2014 making total payment having been made to the extent of Rs. 49,23,122/-. However the complainant did not pay the interest levied by the OPs on the ground of delay done at their level.
The complainant on receipt of the advance intimation from the OPs regarding handing over possession of the flat, sought the clarification on the following points:-
In one of your letter you have arbitrarily charged me interest which was not reflecting in previous letters.
Whether the area so constructed is in compliance of UP Apartment Act 2010.
The amount so paid by yourself to the Noida Authority towards lease rent.
Amount so due from your side, for delay in construction.
Provide the basis on which the amount in point|(d), if any, is calculated.
Whether there has been any change in lay out plan, super area.
Whether the facilities so to be provided are ready at the project.
No clarification on the aforesaid issues were furnished. Finally on 27.07.2015 the OPs issued offer of possession of the flat requiring the complainant to part with the balance amount. However the OPs made no mention of the interest the complainant is entitled to by virtue of the agreement there being apparently delay of more than one year in handing over the possession. Secondly the complainant was not allowed inspection of the site despite insistence and the denial was solely on the ground that the payment as sought for was not made. When despite several efforts made could yield no results, this complaint has been filed for the redressal of his grievances praying for interest there being delay in handing over possession and for waiving the maintenance charges for the period prior to handing over possession.
OPs were noticed and in response thereto they have filed their reply resisting the complaint both on technical ground and on merit stating that as per agreement the matter is first required to be taken up in an arbitration. Secondly the issues involved in the given case being complicated cannot be adjudicated before this Forum in summary proceedings. Third no cause of action subsists as against them as there has been no breach of agreement on their part. Fourth the complaint has been filed by the complainant in order to escape the obligation to paying the outstanding amount. Fifth, this Commission since lacks the territorial jurisdiction, having been filed in Delhi whereas the property is situated in NOIDA, the complaint is liable to be dismissed. Sixth, the complainant was found wanting as he did not take possession of the flat within 30 days from the date of issue of offer to take possession. Seventh the presumption of the complainant for calculating interest is improper and thus the edifice built falls to the ground. On merit they have denied the averments and pressed that there is no case made out as against them.
The complainant has also filed rejoinder thereafter rebutting the contentions averments contained in the complaint. Both sides have filed their evidence by way of affidavit in support of their pleadings. Their written arguments are also on record.
This matter was listed for final hearing before this Commission on 21.12.2020 when the counsel for both sides appeared and advanced their arguments, the complainant for the compensation and interest for the delayed period and the OPs for dismissal of the complaint as according to them no case has been made out for the relief claimed. I have heard the arguments, perused the records and given thoughtful consideration to the subject matter.
Short question for adjudication in this complaint is whether the allegation of the complainant alleging unfair trade practice as contemplated under Section 2(1)(r) of the Act is substantiated and, if so, whether the complainant is entitled to the relief as claimed.
In the first instance I may advert to the defence of the OPs in the subject matter.
Their first objection that the matter is first required to referred to an Arbitrator is overruled relying on the authority of the Hon'ble NCDRC in the matter of Aftab Singh and ors versus Emaar MGF Land Limited and another as reported in III [2017] CPJ 270 (NC) holding in para 53 as under:-
"Consequently....., we hold that an arbitration clause in the agreement between the complainant and the builder cannot circumscribe the jurisdiction of the consumer forum, notwithstanding the amendments made to Section 8 of the Arbitration Act."
The next objection of the OP that the issues involved in the given case involving complicated question of law cannot be adjudicated by this Commission in summary procedure cannot be accepted relying on the judgment of the Hon'ble NCDRC in the matter of Rishab Kumar Sogani versus State Bank of India as reported in I [2020] CPJ 496(NC) holding in para 9 as under:-
At the outset, we first address ourselves to the issue whether both the fora below were right in relegating the matter to a Civil Court. The Hon'ble Supreme Court in Dr. J.J. Merchant & Ors. Vs. Shrinath Chaturvedi (2002) 6 SCC 635, wherein the Hon'ble Apex Court inter-alia observed as under:-
Further, under the Act the National Commission is required to be headed by a retired Judge of this Court and the State Commission is required to be headed by a retired High Court Judge. They are competent to decide complicated issues of law or facts. Hence, it would not be proper to hold that in cases where negligence of experts is alleged, consumers should be directed to approach the Civil Court.
It was next contended that such complicated questions of facts cannot be decided in summary proceedings. In our view, this submission also requires to be rejected because under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that Commission or Forum is required to have summary trial would hardly be a ground for directing the consumer to approach the Civil Court. For trial to be just and reasonable long drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would also be totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of facts are required to be dealt with or decided. The Act provides sufficient safeguards."
There next objection that there subsists no cause of action in the subject is liable to be overruled since the possession of the property not having been handed over cause of action as against the OP does exist. In the matter of Jay Grih Nirman Pvt. Ltd. versus Arunoday Apartment Owners Association-RP-3949/2008- decided on 13.01.2014 the Hon'ble NCDRC was pleased to hold that 'cause of action' is cause of action which gives occasion for and forms the foundation of the suit.
The objection of the OP to the effect that this Commission lacks territorial jurisdiction to hear and to dispose of this case, the property being situated at NOIDA, is overruled relying on the provisions of Section 17 of the Consumer Protection Act 1986 laying down that the complaint is entertainable if filed before the State Commission where the OP resides or carries or business which in the given case happens to be Delhi.
Further the objection of the OP that the complainant failed to accept the offer of possession can also not be accepted for two reasons, namely, the possession was offered after the agreed period was over and without intimating whether the occupation certificate and completion certificate are received at their end secondly, the complainant was not allowed inspection of the site before he could accept the offer to evaluate whether the construction done is in conformity with the agreed plan. There does not appear to be no attempt to avoid accepting the offer.
Having broadly dealt with the objections of the OPs and those having been found to be not maintainable I proceed to examine whether the complaint on merit can be accepted.
The fact that the complainant had booked a flat with the OPs is undisputed. It is also uncontroverted fact that the possession was not offered within the time as agreed to, something evident from the letter of the OPs offering the possession. Further offering of the possession without obtaining the occupation certificate is no valid offer. Further the objection that the complainant had been defaulter cannot be accepted as the complainant having opted for construction linked plan had to make the payment as per the progress done in the project. Secondly their argument that they had offered the possession of the flat within the time agreed to cannot be stretched beyond a point since that offer was, without the occupancy certificate or completion certificate and if that be the case the offer of possession was not valid. For this purpose reliance is placed on the judgment of the Hon'ble NCDRC in the matter of Treaty Construction and Anr. Versus Ruby Tower Co- op Hsg. Society Ltd. and ors as reported in II [2018] CPJ 54 (NC) holding in para 11 as under:-
So far as the question of obtaining the occupancy certificate is concerned, as per the provisions of MOFA the possession should not have been handed over to the members of the complainant society without obtaining occupancy certificate and this is a clear unfair trade practice. It is being argued on behalf of the OP that there are additions and modifications in the building and therefore, it is difficult to obtain the certificate and the matter is getting situation has been created by the OPs themselves as they offered possession without the occupancy certificate. Clearly, not obtaining occupancy certificate is the deficiency on the part of the OP/appellant.
Similar view was taken by the Hon'ble NCDRC in the matter of Kamal Kishore and anr versus Supertech Limited as reported in II [2017] CPJ 483 (NC) holding inter alia that no payment is required to be made unless the possession is offered after obtaining the requisite occupancy certificate.
In that view of the matter the inevitable conclusion is that there was gross deficiency as defined in Section 2(1)(g) of the Act on the part of the OPs in its failure to deliver possession of the flat to the complainant in terms of the allotment letter. It is trite law that where possession of property is not delivered within the stipulated period, the delay so caused is not only deficiency of service, such deficiencies or omissions as per the law settled by their Lordships in the Apex Court in the matter of Lucknow Development Authority versus M.K. Gupta as reported in (1994) 1 SCC 243 tantamount to unfair trade practice as defined in Section 2(1)(r)(ii) of the Act as well.
Having arrived at the said conclusion, the point for consideration is as to how the Complainants are to be compensated for the monetary loss, mental and physical harassment he has suffered at the hands of OPs on account of non-delivery of the allotted flat.
The provisions of the Act enable a consumer to claim and empower the Commission/Forum to redress any injustice done to a consumer. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The word compensation is of very wide connotation. It may constitute actual loss or expected loss and may extend the compensation for physical, mental or even emotional suffering, insult or injury or loss. Therefore, for the purpose of determining the amount of compensation, the Commission/Forum must determine the extent of sufferance by the consumer due to action or inaction on the part of the Opposite Party. In Ghaziabad Development Authority Vs. Balbir Singh - (2004) 5 SCC 65, while observing that the power and duty to award compensation does not mean that irrespective of facts of the case, compensation can be awarded in all matters on a uniform basis, the Hon'ble Supreme Court gave certain instances and indicated the factors, which could be kept in view while determining adequate compensation. One of the illustrations given in the said decision was between the cases, where possession of a booked/allotted property was directed to be delivered and the cases where only monies paid as sale consideration, are directed to be refunded. The Hon'ble Court observed, in this behalf, that in cases where possession is directed to be delivered to the Complainant, the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply refunded, then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is not only deprived of the flat/plot, he has been deprived of the benefit of escalation of the price of the flat/plot. Additionally, in my view, in such a situation, he also suffers substantial monetary loss on account of payment of interest on the loans raised; depreciation in the money value and escalation in the cost of construction etc. From the above it is apparent that this Commission can pass orders regarding the refund of the amount deposited to the company by the complainants, notwithstanding the proceedings pending in any other forum.
The Hon'ble NCDRC in the matter of Lakadwala Developers Pvt. Ltd. and ors versus Amarjeet Singh and Baryam Singh as reported in II [2020] CPJ 338 (NC) is pleased to the form of simple interest @ 9% p.a. to the complainant on the amount paid w.e.f. three years from the date of booking till the date on which possession is offered.
The Hon'ble Supreme Court in Bangalore Development Authority versus Syndicate Bank; (2007) 6 SCC 711 has laid down the principles on the basis of which compensation can be claimed in cases similar to that of the complainants herein:-
Where a development authority forms layouts and allots plots/flats by inviting applications, the following general principles regulate the granting of relief to a consumer who complains of delay in delivery or non-delivery and seeks redressal under the Consumer Protection Act, 1986.
Where the redevelopment authority having received the full price, does not deliver possession of the allotted plot/flat/house within the time stipulated or within a reasonable time, or where the allotment is cancelled or possession is refused without any justifiable cause, the allottee is entitled for refund of the amount paid, with reasonable interest thereon from the date of payment to date of refund. In addition, the allottee may also be entitled to compensation, as may be decided with reference to the facts of each case.
Where no time is stipulated for performance of the contract, or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts. However, if some statue steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statue.
Where an alternative site is offered or delivered (at the agreed price) in view of its inability to deliver the earlier allotted plot/flat/house, or where the delay in delivering possession of the allotted plot/flat/house is for justifiable reasons, ordinarily the allottee will not be entitled to any interest or compensation. This is because the buyer has the benefit of appreciation in value.
Though the relationship between Development Authority and an applicant for allotment is that of a seller and buyer, and therefore governed by law of contracts, (which does not recognise mental agony and suffering as a head of damages for breach), compensation can be awarded to the consumer under the head of mental agony and suffering, by applying the principle of Administrative Law, where the seller being a statutory authority acts negligently, arbitrarily or capriciously.
Where an alternative plot/flat/house is allotted and delivered, not at the original agreed price, but by charging current market rate which is much higher, the allottee will be entitled to interest at a reasonable rate on the amount paid towards the earlier allotment, from the date of deposit to date of delivery of the alternative plot/flat/house. In addition, he may be entitled to compensation also, determined with reference to the facts of the case, if there are no justifiable reasons for non-delivery of the first allotted plot/flat/house.
Where the plot/flat/house has been allotted at a tentative or provisional price, subject to final determination of price on completion of the project (that is acquisition proceedings and development activities), the Development Authority will be entitled to revise or increase the price. But where the allotment is at a fixed price, and a higher price or extra payments are illegally or unjustifiably demanded and collected, the allottee will be entitled to refund of such excess with such interest, as may be determined with reference to the facts of the case.
Where full payment is made and possession is delivered, but title deed is not executed without any justifiable cause, the allottee may be awarded compensation, for harassment and mental agony, in addition to appropriate direction for execution and delivery of title deed.
Where the allotment relates to a flat/house and construction is incomplete or not in accordance with the agreed specifications, when it is delivered, the allottee will be entitled to compensation equivalent to the cost of completing the building or rectifying the defects.
The quantum of compensation to be awarded, if it is to be awarded, will depend on the facts of each case, nature of harassment, the period of harassment and the nature of arbitrary or capricious or negligent action of the authority which led to such harassment.
While deciding whether the allottee is entitled to any relief and in moulding the relief, the following among other relevant factors should be considered;
Whether the layout is developed on 'no profit no loss' basis, or with commercial or profit motive; whether there is any assurance or commitment in regard to date of delivery of possession; whether there were any justifiable reasons for the delay or failure to deliver possession; whether the complainant has alleged and proved that there has been any negligence, shortcoming or inadequacy on the part of the developing authority or its officials in the performance of the functions or obligations in regard to delivery; and (v) whether the allottee has been subjected to avoidable harassment and mental agony.
Having regard to the discussion done and the legal position explained I am of the view that the ends of justice would be met if a direction is issued to the OPs:-
to complete the project if not already done;
to pay to the complainant interest for the delayed period @ 9% from the date the possession was to be handed over till the date the possession is handed over;
to pay Rs. 10,000/- as the litigation cost.
Ordered accordingly leaving the parties to bear the cost.
A copy of this order be forwarded to the parties to the case free of cost as is statutorily required. File be consigned to records.
(ANIL SRIVASTAVA) MEMBER PRONOUNCED ON 06.01.2021 sl [HON'BLE MR. ANIL SRIVASTVA] PRESIDING MEMBER