State Consumer Disputes Redressal Commission
Mr. Neeraj Manchanda & Anr. vs Ireo Grace Realtech Pvt. Ltd. on 27 May, 2024
C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
Date of Institution: 18.01.2021
Date of hearing: 14.05.2024
Date of Decision: 27.05.2024
COMPLAINT CASE NO.- 9/2021
IN THE MATTER OF
1. DR. NEERAJ MANCHANDA,
W/O MR. NISHANT MISHRA,
2. MR. DHEERAJ GANDOTRA,
S/O MR. H.K. GANDOTRA,
R/O F-2555, PALAM VIHAR,
NEAR COLUMBIA ASIA,
HOSPITAL, GURGAON,
HARYANA-122017.
(Through: The Guild, Advocates & Associate Counsel)
...Complainant
VERSUS.
IREO GRACE REALTECH PVT. LTD.,
C-4, 1ST FLOOR, MALVIYA NAGAR,
NEW DELHI-110017.
(Through: Mr. Vibhu Jaiswal, Advocate)
...Opposite Party
ALLOWED PAGE 1 OF 11
C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MR. J.P. AGRAWAL, MEMBER (GENERAL)
Present: Mr. Kapil Khen, counsel for the Complainant.
Mr. Prakhar and Mr. Chaitanya, counsel for the OP.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
JUDGMENT
1. The present complaint has been filed by the Complainants before this commission alleging deficiency of service on the part of the Opposite Party and has prayed the following reliefs:
a. "Direct Opposite Party to refund the amount of INR 1,61,05,928.15/- (One Crore Sixty One Lakhs Five Thousand Nine Hundred and Twenty Eight Rupees and Fifteen Paise Only) to Complainant;
b. Direct the Opposite Party to pay interest @12% per annum on the total amount deposited by Complainant from the respective date of each installment till the date of actual realization;
c. Direct the Opposite Party to pay compensation of Rs.20,00,000/- (Rupees Twenty Lacs Only) to the Complainant for mental agony, harassment, distress and inconvenience caused/suffered by the Complainant and her family members;
d. Direct the Opposite Party to Rs.5,00,000/- (Rupees Five Lacs Only) as litigation cost to the Complainant; and e. Pass any other order or direction that may be deemed fit and proper in the facts and circumstances of the present case."
2. The brief facts necessary for the adjudication of the present complaint are that in the year 2013, the Complainants booked an apartment with the Opposite Party in the project "The Corridors"
situated at 67A, Gurgaon, Haryana. Thereafter, the Opposite Party ALLOWED PAGE 2 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024 MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
allotted an Apartment bearing no. CD-A8-06-603 in the said project to the Complainant No.2 vide Allotment Letter dated 07.08.2013. Thereafter, on 24.09.2014 Unit No. CD-A8-06-603 was transferred in the name of Mrs. Sumitra Gandotra, W/o Mr. Dheeraj Gandotra, Complainant No.2. Accordingly, on 20.10.2014, the Unit being Unit No. CD-82-08-804 was surrendered and the funds deposited therein were transferred to the Unit owned by Mrs. Sumita Gandotra for the aforesaid Unit. Further, the project being delayed, the Complainants approached the Opposite Party and converted the allotted apartment to a smaller apartment. The smaller unit bearing bearing no. CD- C11-02-202 admeasuring 1632 Sq. ft. was allotted to the Complainants, with total cost of subject unit being Rs.1,58,89,693.30/- to the Opposite Party. The Complainants have already paid an amount of Rs.1,59,59,048.15/- as and when demanded by the Opposite Party. Further, an Apartment Buyer Agreement was executed between the parties vide Agreement dated 01.12.2015. The Opposite Party assured the complainant that the possession of the said apartment will be handed over to him within 42 months from the date of approval of the building plans and/or fulfilment if the preconditions imposed thereunder along with a grace period of 6 months i.e. by 23.07.2017.
3. The complainant visited office of the opposite party numerous times to know about the construction of the said project but no satisfactory response was given by the builder. It is further submitted that both the Project and the Apartment were nowhere near completion or habitable and that the possession could not be delivered by the opposite Party in the near future. Aggrieved by this, the ALLOWED PAGE 3 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024 MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
Complainants approached this Commission alleging deficiency in service on the part of the Opposite Party.
4. The Opposite Party has filed written submissions and contended that the Complainant is not consumer under the Consumer Protection Act, 1986 as the Complainant invested the money to earn profit, which amounts to commercial purpose. The counsel for the opposite party further submitted that the said project is registered under HRERA and therefore, the present complaint cannot be adjudicated by this commission. He also submitted that the delay in the completion of the project was due to Force Majeure conditions i.e., litigations between the farmers and greater Noida industrial authority, orders passed by hon'ble NGT etc.
5. We have perused the material available on record and heard the counsel for the parties.
6. The fact that the Complainants had booked an apartment bearing no.
CD-C11-02-202 with the Opposite Party is evident from the letter dated 06.09.2016 (Annexure I/D with the present complaint). Payment to the extent of Rs. 1,59,59,048/- by the Complainants to the Opposite Party is also evident from the Statement of Account issued by the Opposite Party attached with the complaint (Annexure I/E).
7. The first issue which needs our adjudication is whether the Complainants falls in the category of 'consumer' provided by the Consumer Protection Act, 1986. The Opposite Party contended that the Complainants are not Consumer as defined under the Consumer Protection Act, 1986 as it invested the money to earn profit, which amounts to commercial purpose. It is imperative to refer to the dicta of the Hon'ble National Commission in CC-1122/2018 titled ALLOWED PAGE 4 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024 MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. decided on 01.11.2019, wherein, the Hon'ble National Commission has held as under:
"19. The contention of the Learned Counsel that the said Flats were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainant have purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. The Opposite Parties failed to discharge their onus and we hence hold that the Complainant are 'Consumers' as defined under Section 2(1)(d) of the Act."
8. From the aforesaid dicta of the Hon'ble National Commission, it flows that it is for the Opposite Party to prove that the flat purchased was for commercial purpose, by way of some documentary proof and a mere bald statement is not sufficient to raise adverse inference against the Complainant.
9. In the present case, the Opposite Party has merely made a statement that the Complainants purchased the apartment for commercial purpose and on perusal of the record before us, we fail to find any material which shows that the Complainants are engaged in the business of purchasing and selling houses and/or plots on a regular basis, solely with a view to make profit by sale of such flats. Mere allegation, that the purchase of the property is for commercial purpose, cannot be the ground to reject the present consumer complaint. Consequently, the objection raised on behalf of the Opposite Party is answered in the negative.
ALLOWED PAGE 5 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
10. The counsel for the Opposite Party further contended that the project in question is registered under RERA and therefore, this commission cannot adjudicate the present complaint. The law is no more res integra on this issue and is well settled by the dicta in Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors." reported in (2021) 3 SCC 241, wherein the Apex Court has held as under:
"42. In a recent judgment delivered by this Court in Imperia Structures Ltd. Vs. Anil Patni, it was held that remedies under the Consumer Protection Act were in addition to the remedies available under specials statutes. The absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear. Section 18 of the RERA Act specifies that the remedies are "without prejudice to any other remedy available". We place reliance on this judgment, wherein it has been held that: (SCC p.811, paras 31-32). "31. Proviso to Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file RCA No.3/2020 Smt. Manju Gupta & Anr. Vs. M/s Parsvnath Developers Ltd. Page No.10 of 14 an appropriate application before the adjudicating officer under the RERA Act. The proviso thus gives a right or an option to the complainant concerned but does not statutorily force him to withdraw such ALLOWED PAGE 6 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024 MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that the mandate in Section 12(4) of the CP Act to the contrary is quite significant.
32. Again, insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a civil court and express saving under Section 88 of the RERA Act, make the position quite clear. Further, Section 18 itself specifies that the remedy under the said section is "without prejudice to any other remedy available". Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act".
11. It is clear from the above dicta that the remedies available under the Consumer Protection Act are in addition to the remedies provided under the special statutes and if the proceedings under the Consumer Protection Act are initiated after RERA Act came into force, there is nothing in the RERA Act which bars such initiation. Relying on the above settled law, the contention of the Opposite party that this commission cannot adjudicate the present complaint complainant on the ground that the project is registered under RERA is devoid of any merit and dismissed.
ALLOWED PAGE 7 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
12. The last issue which is to be adjudicated is whether the Opposite Party is actually deficient in providing its services to the Complainant. The expression Deficiency of Service has been dealt with by the Hon'ble Apex Court in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:
"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression 'service' in Section 2(1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony ALLOWED PAGE 8 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024 MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation.
13. In the present case, the Complainants contended that Opposite Party assured him to hand over the possession of the said apartment on or before 23.07.2017. However, the Opposite Party failed to handover the possession of the said apartment till date.
14. Relying on the above settled law, we hold that the Opposite Party is deficient in providing its services to the Complainants as the Opposite Party had given false assurance to the Complainants with respect to complete the construction of the said project and had kept the hard-earned money of the Complainants.
15. The Opposite Party further submitted that the delay in the completion of the project was due to Force Majeure conditions i.e., litigations between the farmers and greater Noida industrial authority, orders passed by Hon'ble NGT etc. however, on perusal of record we do not find any evidence which shows us that any force majeure condition caused delay in the said project. We are of the considered view that neither any new legislation was enacted nor any existing rule, regulation or order was amended stopping, suspending or delaying the construction of the said project. It is the sole responsibility of the Opposite Party to complete the construction of the said project within time. The Complainants cannot be tormented due to the faults of the Opposite Party.
ALLOWED PAGE 9 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
Therefore, this contention of the Opposite Party is devoid of any merit and is dismissed.
16. Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party to refund the entire amount paid by the Complainants i.e., Rs. 1,59,59,0488.15/- along with interest as per the following arrangement:
A. An interest @ 6% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till 27.05.2024 (being the date of the present judgment);
B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party pays the entire amount on or before 27.07.2024;
C. Being guided by the principles as discussed above, in case the Opposite Parties fails to refund the amount as per the aforesaid clause (A) on or before 27.07.2024, the entire amount is to be refunded along with an interest @ 9% p.a. calculated from the date on which each installment/payment was received by the Opposite Party till the actual realization of the amount.
17. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to pay a sum of A. Rs. 5,00,000/- as cost for mental agony and harassment to the Complainants; and B. The litigation cost to the extent of Rs. 50,000/-.
18. Applications pending, if any, stand disposed of in terms of the aforesaid judgment.
ALLOWED PAGE 10 OF 11 C. NO. 9/2021 D.O.D.: 27.05.2024
MR. NEERAJ MANCHANDA & ANR. VS. IREO GRACE REALTECH PVT. LTD.
19. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
20. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (J.P. AGRAWAL) MEMBER (GENERAL) Pronounced On:
27.05.2024 L.R.SM ALLOWED PAGE 11 OF 11