State Consumer Disputes Redressal Commission
Mr. Sandip Das vs Iq City Infrastructure Pvt. Ltd. on 25 November, 2019
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. CC/468/2016 ( Date of Filing : 25 Oct 2016 ) 1. Mr. Sandip Das S/o Lt. Bhabesh Chandra Das, 4/7, Vidyapati Road, B Zone, Durgapur, P.S. - Arabinda, Dist. - Burdwan, Pin -713 205. ...........Complainant(s) Versus 1. IQ city Infrastructure Pvt. Ltd. Corporate office at Mani Square, 9th Floor, 164/1, Manicktala Main Road, P.O.- Kankurgachi, P.S. Phool Bagan, Kolkata -700 054, rep. by its Director Mr. Sanjay Jhunjhunwala. Stands substituted as per order no. 15 dated 06/02/2019 by Legal Heir under Sl.No. 2 . 2. Mani Square Limited 164/1,Manicktala Main Road,Mani Square,9th Floor,P.O.Kankurgachi,PS Phool Bagan,Kolkata - 700054 . ............Opp.Party(s) BEFORE: HON'BLE MR. SAMARESH PRASAD CHOWDHURY PRESIDING MEMBER HON'BLE MRS. Dipa Sen ( Maity ) MEMBER For the Complainant: Mr. Sugata Shankar Roy, Advocate For the Opp. Party: Mr. Abhijit Sarkar, Advocate Dated : 25 Nov 2019 Final Order / Judgement PER: HON'BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDING MEMBER
The instant complaint under section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as, the 'Act') is at the behest of a purchaser against the Developer/builder on the allegation of deficiency of services in a dispute of housing construction.
Succinctly put, complainant's case is that being allured by an advertisement made by IQ City Infrastructure Private Limited (erstwhile OP) for construction of a housing project at Durgapur. Complainant filed an application on 30.01.2013 along with application money of Rs. 1,52,115/-. On 05.02.2013 the Opposite Party issued one provisional allotment of Unit in favour of the complainant measuring about 1022 sq. ft. super built up area(788 sq. ft. built up area) being flat No. 2B on the second floor in the tower 'Myrtle Croft-6' along with one upon car parking space in the project 'IQ City' lying and situated at Khatian No. 198, Mouza- Sovapur, P.S.- Durgap8ur, Dist- West Burdwan at a total consideration of Rs. 30,42,298/- comprising basic premium of the flat including car parking space at Rs. 29,34,400/- preferred allocation charges account floor Rs. 15,330/-, service tax of Rs. 92,568/-. It was assured in the allotment letter that the construction of the said Unit expected to be completed in area about on 31.12.2013. The complainant has stated that as per terms of the agreement he has paid Rs. 21,29,610/- as part consideration amount towards the said total consideration amount on diverse dates. The complainant has stated that he applied for housing loan from State Bank of India, Durgapur, RASMECCC Branch and on the basis of tripartite agreement the Bank has sanctioned a home loan limit of Rs. 15,30,000/- and the Bank has already disbursement Rs. 6,08,460/- to the OP Company and presently the complainant is making an equated monthly instalment payment of Rs. 13,541/- per month. The complainant has stated that the Opposite Party did not raise any demand of instalment Nos. 10 to 15 for which he could not make the balance payment of Rs. 9,12,690/- comprising 6 instalments of Rs. 1,52,115/- each to the Opposite Party. On 30.08.2016 he sent a notice to the Opposite Party through speed post requesting the OP to deliver the residential apartment and to register the deed of conveyance after acceptance of balance of payment of Rs. 9,12,690/- subject to adjustment of compensation for delay @ 18% p.a. for the delay of 32 months amounting to Rs. 10,22,212/- within 15 days of the same. The OP has duly received the same on 03.09.2016 but did not send any reply till date. Hence, the complainant approached this commission with prayer for following reliefs, viz.- (a) an order directing the Opposite Party to deliver the possession of the residential flat forthwith upon payment of balance payment of Rs. 9,12,690/-, comprising 6 instalments of Rs. 1,52,115/-. As per Schedule payment subject to adjusting of compensation and in the case of failure to deliver possession and to refund Rs. 21,29,610/- along with interest @ 18% p.a. from the date of deposit till the date of payment within 6 weeks from the date of order; (b) refund of service tax along with interest; (c) costs of the proceedings etc. The Opposite Party IQ City Infrastructure Private Limited by filing a written version disputed the claim of the complainant by stating that even after tentative time period of 31.12.2013, the complainant did not cancel the allotment/agreement in question. Instead, by mutual understanding it awaited the Completion of the project and continued to pay the instalments which fail due time to time and on the basis of the demands made by them. On 08.05.2017 they requested the complainant to take possession of the flat after payment of the amount due but despite receiving the said notice, complainant failed and neglected to make payment of all the balance amount to complete the transactions as agreed between the parties. Therefore, the complaint should be dismissed.
The substituted Opposite Party Mani Square Limited by filing a separate written version has stated that time was not essence of the contract and as the complainant himself has made progressive payment even after 31.12.2013 there can be no question of the complainant being entitled to terminate the said allotment agreement in terms of the provisions of Section 55 of the Indian Contract Act. It has also been stated that the offering of possession of the units to allottees is not in any manner fettered by the obligation of every developer to obtain Completion Certificate from the Municipal Authorities. The OP has also stated that the complaint is barred by limitation and this Commission has no jurisdiction to entertain the complaint as the complainant has not taken any steps for appointment of an Arbitrator in terms of the agreement between the parties. The OP has specifically stated that by a letter dated 08.05.2017 they called upon the complainant to take possession of the apartment upon payment of a sum of Rs. 8,78,566/- which remained outstanding on the basis of measurement of the said flat. The OP has also stated that they have filed a suit against the complainant in the court of Civil Judge (Senior Division), Durgapur for Specific Performance of contract being TS No. 4 of 2019 and the dispute can only be adjudicated by a competent Civil Court. Therefore, the complaint being malafide one should be dismissed.
Both the parties have tendered evidence through affidavit. They have given reply against the questionnaire set forth by their adversaries. The parties have relied upon several documents including the letter of allotment issued by Opposite Party dated 05.02.2013 including the payment schedule (instalment plan) etc. Both the parties have also filed brief notes of argument in support of their respective cases.
On the threshold of discussion, it would be pertinent to record that on 09.06.2008 the name of one SPS Infrastructure Private Limited was changed to SPS Mani Infrastructure Private Limited and thereafter the name of the said SPS Mani Infrastructure Private Limited was changed to IQ City Infrastructure Private Limited on 27.08.2013 which subsequently got amalgamated with the Mani Square Limited in terms of the order dated 12.12.2016 passed by the Hon'ble High Court at Kolkata in Company Petition No. 864 of 2016 connected with Company Application No. 320 of 2016.
The pleadings of the Parties and the evidence on record make it abundantly clear that the Opposite Party is a builder/developer, who has been allotted several pieces and parcels of land aggregating 49.946 acres or 3021.7 cottahs of land more or less lying and situated at Mouza- Sovapur, P.S.- Durgapur, Dist- Paschim Burdwan in terms of Memorandum of Understanding between the Government of West Bengal and the Opposite Party dated 29.05.2009 for raising construction of residential flats/apartments. The complainant submitted an application to the Opposite Party on 30.01.2013 along with application money of Rs. 1,52,115/- to purchase of a unit in the said project. On 05.02.2013 the Opposite Party issued one provisional allotment in favour of the complainant in respect of allotment of Unit measuring about 1022 sq. ft. super built up area (788 sq. ft. built up area) being flat No. 2B on the second floor in the tower 'MYRTLE CROFT-6" along with one open car parking space in the project 'IQ City' at Durgapur at a total consideration of Rs. 30,42,298/- comprising basic premium for the flat including one parking space in the open compound of the said building of Rs. 29,34,400/- preferred at the location charges account floors Rs. 15,330/-, service tax Rs. 92,568/- aggregating Rs. 30,42,298/-. In the said allotment letter it was mentioned that the construction of the said unit is expected to be completed in or about 31.12.2013.
The Opposite Party issued a payment plan to the complainant wherein the payment schedule will break up of consideration amount and the service tax has been detailed and in terms of the said payment plan complainant make payment as detailed below:
Money Receipt Details Description Bank Details Receipt Amount (Rs.) 01242 dated 21st January 2013 Booking Money Cheque No. 691053 Dated 21st January 2013 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,52,115 01259 dated 11thFebruary 2013, 10 per cent against Allotment Cheque No. 594787 dated 9th February 2013 drawn on Yes Bank, City Centre, Durgapur Branch 2,04,230 01260 dated 11th February 2013
-do-
Cheque No. 691055 dated 9th February 2013 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,00,000 01276 dated 22nd February 2013 10 per cent against completion of foundation Cheque No. 122701 dated 20th February 2013 drawn on UCO Bank, Durgapur Steel Plant TS, B Zone Branch 3,04,230 01539 dated 21st May 2013 10 per cent against completion of 8th floor casting Cheque No. 016122 dated 20th May 2013 drawn on HDFC Bank, City Centre, Durgapur Branch 1,80,000 01540 dated 21st May 2013 10 per cent against completion of 8th floor casting Cheque No. 564401 dated 20th May 2013 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,24,230 01970 dated 29th August 2013 On completion of brick work upto 4th floor of the designated tower Cheque No. 691057 dated 28th August 2013 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,00,000 01971 dated 29th August 2013 On completion of brick work upto 4th floor of the designated tower Cheque NO. 564402 dated 28th August 2013 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 52,115 02438 dated 20th February 2014 On completion of brick work upto 8th floor of the designated tower Cheque No. 842840 dated 19th February 2014 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,52,115 02543 dated 24th April 2014 On completion of super structure of the designated tower Cheque No. 307212 dated 23rd April 2014 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 3,04,230 02709 dated 27th June 2014 On completion of the brick work of the designated tower Cheque No. 307412 dated 26th June 2014 drawn on SBI, Durgapur Steel Plant TS, B Zone Branch 1,52,115 Total 21,29,610 It is not in dispute that the Opposite Party did not raise any demand after 09.06.2014 till the date of filing the complaint. However, during the pendency of the instant proceeding, on 10.02.2017 a demand notice was issued. It should be recorded here that the complaint was lodged in this commission on 25.10.2016. It is also relevant to note here that in order to defraud the expenses to purchase the flat, complainant has obtained loan from the State Bank of India and in this regard a tripartite agreement was held on 05.02.2014 by which the complainant has obtained loan of Rs. 15,30,000/- out of which the Bank has disbursed Rs. 6,08,460/- to the Opposite Party and presently the complainant is making equated monthly instalment payment of Rs. 13,541/-.
Mr. Sougata Shankar Roy, Ld. Advocate for the complainant has submitted that as per terms of the agreement, OP was under obligation to handover the subject flat within 31.12.2013 and despite payment of the instalments in time when the OP themselves stopped the construction and no initiative was taken to handover the possession after accepting the balance consideration, under compelling circumstances the complainant issued a notice on 30.08.2016 asking the OP/developer to deliver the residential apartment after receipt of balance consideration amount of Rs. 9,12,690/- comprising 6 instalments of Rs. 1,52,115/- each subject to adjustment of compensation for delay @ 18% p.a. on the amount already paid for the delay of 32 months within 15 days. However, no reply was given to that letter. Therefore, when the complainant has lost his interest to purchase the flat due to such long delay, the complainant is entitled to refund of the amount. In support of his contention the Ld. Advocate for the complainant has placed reliance to two decisions of the Hon'ble Supreme Court in the case of Civil Appeal No. 3182 of 2019 (Kolkata West International City Private Limited -vs- Devasis Rudra) and Civil Appeal No. 12238 of 2018 (Pioneer Urban Land and Infrastructure Limited -vs- Govindan Raghavan).
Mr. Arindam Banerjee, Ld. Advocate for the Opposite Party, on the other hand, has contended that the Opposite Party has lodged a suit for specific performance of contract against the complainant bring TS No. 4 of 2019 before the Court of Ld. Civil Judge (Senior Division), Durgapur and the instant complaint involves highly disputed questions of fact which cannot be adjudicated by this Forum. In this regard, Ld. Advocate for the OP has placed reliance to a decision of the Supreme Court reported in (2002) 2 SCC 1 (Synco Industries -vs- State Bank of Bikaner and Jaipur and others).
Needless to say, the parties are bound by the agreement. A person who signs a document contain certain contractual terms is normally bound by them even though he is ignorant of their precise legal effect. In a decision reported in AIR 1996 SC 2508( Bharati Knitting Company -vs. - DHL Worldwide Express Courier Division of Airfreight Ltd. ) the Hon'ble Supreme Court has observed thus :
"It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F.Nariman, Ld. Senior Counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit. When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established. The question we need to consider is whether the District Forum or the State Commission or the National Commission could go behind the terms of the contract? It is true, as contended by Mr. M.N.Krishanmani, that in an appropriate case, the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy. But each case depends upon it own facts. In an appropriate case where there is an acute dispute of facts necessarily the Tribunal has to refer the parties to original Civil Court established under the CPC or appropriate State law to have the claims decided between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract"
The complainant in order to purchase the flat approached the OP and hired their service on consideration and it was agreed by OP that they would deliver possession expectedly within 31.12.2013 but after expiry of the said date despite receipt of a bulk consideration amount of Rs. 21,29,610/- (only a paltry amount of Rs. 8,78,566/- is due) when the OP has failed to fulfil their promise, the complainant has rightly set the law in motion by lodging the instant complaint. In fact, we do not find any disputed questions of facts and law involved in this case. The decision in the case of Synco Industries (supra) has no application in our case because in the said case the nature of the claim in the complaint and the prayer for damages in the sum of rupees fifteen crore and further additional sum of rupees sixty lakhs for covering the cost of travelling and other expenses incurred by the appellant which required very detailed evidence and the same cannot be decided in a summary manner.
Ld. Advocate for the Opposite Party has also submitted that time is not essence of the contract would appear from the intention of the parties as expressed in the written terms of the contract. He has further submitted that time is presumed not to be an essence of the contract relating to immovable property. He has also submitted that on conjoint reading of clause 6.1 and the provisional allotment letter where it has been specifically mentioned that - "please note that instruction of the said unit is expected to be completed in or about 31st December, 2013", it is apparent that time line was a tentative one subject to Force Majeure conditions and subject to making payment of the premium. However, the Opposite Party has failed to advance any Force Majeure circumstances. The complainant is a Government Employee and working as an Assistant Engineer in WBSEDCL and he obtained loan of Rs. 15,30,000/- from State Bank of India itself indicates that the complainant was ready and willing to perform his part of contract. Therefore, when the OP did not issue any demand notice after 09.06.2014 till the date of filing complaint, it cannot be accepted that the principle 'time is not essence of the contract' is befitting in the facts and circumstances of the case.
Ld. Advocate for the OP has taken a plea that even after 31.12.2013 i.e. the committed date, the complainant has made several payments and as such that time limit should not be construed in a pedantic manner. In this regard clause 15.4 appears to be relevant, which reproduces below:
"15.4 In case the Allottees complied with and/or are ready and willing to comply with their respective obligations contained in the STC and the respective Allotment Letter (s) and the Company fails to construct their respective units within the stipulated period, then the Company shall be allowed automatically an extension of 6 (six) months and in the case of failure on the part of Company to construct their respective units even within such extended period then and only in such event-
(i) if the Company shall have prevented from constructing their respective units within the stipulated period due to Force Majeure and/or circumstances beyond the control of the company then the Allottees shall be entitled to terminate their respective contract, when and in which event, the companies shall be liable on demand to refund the amount of premium paid by the allotees till then with simple interest thereon @ 9% p.a. arising from the date of payment of the amount by the Allottees to the company till the date of refund of the amount and interest and such amount and interest shall be a charge on their respective units until payment thereof ..........".
Clause 16 of STC relates to Force Majeure. We have already recorded that the OP has failed to advance any Force Majeure circumstances. It is also quite apparent that as there was an extension of period of time of 6 months (within 30.06.2014), the complainant on good faith has paid the amount till 27th June, 2014. However, there is no evidence that after expiry of June, 2014, complainant has ever made any payment to the OP. In fact, the OP did not raise any demand of instalment nos. 10 to 15 and as such question of payment of balance amount of Rs.9,12,690/- comprising six instalments as per schedule does not arise.
Ld. Advocate for the Opposite Party has contended that the provisions of the Indian Contract Act, 1872 will apply in the proceeding under the Act and to substantiate his contention he has placed reliance to two decisions of the Hon'ble Supreme Court reported in (1998) 3 SCC 247 (para-4) [Marine Container Services (South) Pvt. Ltd. - Vs. - Go Go Garments] and (2009) 4 SCC 684 (paras - 18 to 21) [Secretary, Bhubaneswar Development Authority - Vs. - Susanta Kumar Mishra] . In this regard, it has been submitted that the provisions of Section 55 of the Contract Act are equally applicable in the instant case.
Section 55 of the Contract Act reads as under -
"55. Effect of failure to perform at a fixed time, in contract in which time is essential . -
.. .. ... ...
.. ... ... .... ..
Effect of acceptance of performance at time other than agreed upon - If, in case of a contract voidable on account of the promisors failure to perform his promise at the time agreed, the promise accepts performance of such promise at any time other than that agreed, the promise cannot claim compensation for any loss occasion by the non-performance of the promise at the time agreed, unless he gives notice to the promisor of its intention to do so".
The relevant section has no manner of application in our case because in view of the provisions of the Act and the decision of the Apex Court in the case of Bharati Knitting Company (supra), the OP cannot absolve their responsibility by invoking the provisions of Section 55 of the Contract Act. The decision in the case of Marine Container Services (South) Pvt. Ltd. (supra) is also distinguishable with the facts and circumstances of our case because in the said case, the Hon'ble National Commission declined to consider the applicability of Section 230 of the Contract Act. Needless to say, the Contract Act applies to all the litigants approaches before a Forum constituted under the Act but by applying that provisions, the beneficial legislation aimed to protect the interests of 'consumer' cannot be defeated. Equally, the decision in the case of Secretary, Bhubaneswar Development Authority (supra) is also not relevant in the facts and circumstances of the case.
Ld. Advocate for the OP has referred several decisions to justify that the time is not the essence of the Contract and in this regard placed reliance to several decisions - (1) (2006) 11 SCC 181 (para-83 onwards) [Mcdermott International Inc. - Vs. - Burn Standard Company Ltd.], (2) (2006) 5 SCC 340 (para -20 to 22 & 31) [Panchanan Dhara - Vs. - Manmatha Nath Maity].
We have gone through the decisions referred above. The decision in the case of Mcdermott International Inc (supra) relates to a arbitration proceeding having no resemblance with our case. Similarly, the decision in the case of Panchanan Dhara (supra) relates to a suit for Specific Performance of Contract where principally a question arose for adjudication as to whether a suit for Specific Performance of Contract will be barred by limitation or not would not only depend upon the nature of the agreement but also the conduct of the parties. We must not be obsessed with the proposition of law that a consumer complaint is meant for disposal of the complaint in a summary way for a limited purpose and if it is found that the person approaches before a Forum constituted under the Act is a 'consumer', the duty casts upon the Forum to consider whether there was any deficiency in services in accordance with Section 2(1)(g) read with Section 2(1)(o) of the Act and in the process, no hypertechnical approach should be taken into consideration.
In the case beforehand, the OP has obtained Completion Certificate only on 21.06.2019. In this regard, on a specific question, one of the directors of the OP company who has given reply, in Answer No.17 has specifically admitted that they obtained the Completion Certificate on 21.06.2019 almost five and half years after the date stipulated in the Allotment Letter and in the STC. As a consequence, there was a failure to handover the possession of the flat to the complainant within a reasonable period. In the celebrated case reported in (1994) 1 SCC 243 [Lucknow Development Authority - Vs. - M.K. Gupta], the Apex Court has observed that when a person hired the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a 'service' as defined by Section 2(1)(o) of the Act. Again in another landmark decision reported in II (2018) CPJ 1 [Fortune Infrastructure - Vs. - Trevor D'Lima] the Apex Court has held that a person cannot be made to wait indefinitely for possession of the flat allotted to him and is entitled to seek refund of the amount paid by him along with compensation.
In the case of Kolkata West International City Private Limited (supra), the complainant sought primary relief for delivery of possession alternatively for the refund of the amount paid to the developer together with interest thereon. The developer being appellant took a plea before the Hon'ble Supreme Court that the purchaser sought primary relief for delivery of possession and in such a situation a direction for refund was not warranted. In the said case the date of handing over possession was 31.12.2008 with a grace period of six months. However, the Completion Certificate was received on 29.03.2016 nearly 7 years after the extended date for the handing over the possession. The order of refund passed by this Commission which has been upheld by the National Commission was given affirmative view by the Hon'ble Supreme Court directing the developer to pay interest at 9% p.a. instead of 12% over the amount paid by the respondent/complainant. The said decision is somewhat similar in the facts and circumstances of the present case.
Evidently, the complainant has made out a clear case of deficiency of services on the part of OP. The complainant was justified in terminating the agreement by letter dated 30.08.2016 and he cannot be compelled to accept the possession whenever it is offered by the builder. The complainant is legally entitled to seek refund of the money deposited by him along with appropriate compensation. Keeping in view the authority referred above, we think an order of refund of the amount paid by the complainant to the tune of Rs. 21,29,610/- along with compensation in the form of simple interest @ 9% p.a. from the date of each payment till its realisation will meet the ends of justice. As the situation compelled the complainant to lodge complaint, complainant is entitled to litigation costs which we quantify at Rs. 20,000/-.
In view of the above discussions, the complaint is allowed on contest with the following directions:
(i) The Opposite Party is directed to refund Rs. 21,29,610/- along with compensation in the form of simple interest @ 9% p.a. from the date of each payment till its total realisation;
(ii) The Opposite Party is directed to pay Rs. 20,000/- to the complainant as costs of litigation;
(iii) The above payments must be paid within 45 days from date.
[HON'BLE MR. SAMARESH PRASAD CHOWDHURY] PRESIDING MEMBER [HON'BLE MRS. Dipa Sen ( Maity )] MEMBER