National Consumer Disputes Redressal
R V Prasannakumaar & 47 Ors. vs Mantri Castles Pvt. Ltd. on 8 June, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 913 OF 2016 1. R V PRASANNAKUMAAR & 47 ORS. A 704, GOPALAN JEWELS, NEAR KONANAKUNTE CROSS, KANAPURA MAIN ROAD, BANGALORE-560062 2. SREEKALA BABU Lakshmi, Ramanichiramadhom Lane, Veliyannur, Trichur - 680021 3. BABU BHASKAR Lakshmi, Ramanichiramadhom Lane, Veliyannur, Trichur - 680021 4. REVATHI GANESH D - 1107, Jardine Bock, Brigade Gardenia Complex, RBI Layout, J.P. Nagar, , J.P. Nagar - 8th Phase, Bangalore - 560078 Karnataka 5. R. GANESHAN D - 1107, Jardine Bock, Brigade Gardenia Complex, RBI Layout, J.P. Nagar, , J.P. Nagar - 8th Phase, Bangalore - 560078 Karnataka 6. AMBIKA MENON Villa No. 6, Sobha Emarald, Vedapatti, Thondamuthur Rd, Coimbatore - 641007 7. RAJENDRA MENON Villa No. 6, Sobha Emarald, Vedapatti, Thondamuthur Rd, Coimbatore - 641007 8. Mukund Gopal R/o. # 288/D, 10th Main, 5th Block, Jayanagar, Bangalore - 560041 Karanataka 9. MALAVIKA MUKUND R/o. # 288/D, 10th Main, 5th Block, Jayanagar, Bangalore - 560041 Karanataka 10. MEGHA PRABHAKAR E - 214, Dheeraj Uphar, Ak Vaidya Marg, Malad East, Mumbai - 400097 Maharashtra 11. KARTHIK BHAT E - 214, Dheeraj Uphar, Ak Vaidya Marg, Malad East, Mumbai - 400097 Maharashtra 12. SUNDARESAN V . 13. SHOBHA SUNDARESAN . 14. KIRAN SUNDARRAJAN . 15. SWAPNA BELVADI . ...........Complainant(s) Versus 1. MANTRI CASTLES PVT. LTD. (THROUGH CHAIRMAN & MD)
MANTRI HOUSE, VITTAL MALLYA ROAD, BANGALORE-560001 2. MANTRI DEVELOPERS PVT. LTD. (THROUGH CHAIRMAN & MD)
MANTRI HOUSE, VITTAL MALLYA ROAD, BANGALORE-560001 ...........Opp.Party(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Complainant : Mr. Chandrachur Bhattacharya, Advocate For the Opp.Party : Mr. Gopal Jain, Sr. Advocate with
Mr. Shekhar G. Devasa, Mr. N. Swaminathan, Ms. Prashanti P.
Mr. Ashok Kumar Singh and Mr. Manish Tiwari, Advocates
Dated : 08 Jun 2018 ORDER
This consumer complaint has been filed originally by 48 complainants against the Opposite Parties under Section 21 read with Section 12(1) (c) of the Consumer Protection Act, 1986 alleging that the complainants had booked apartments with the OPs, however, the possession has not been delivered to the complainants by the OPs despite the committed date of possession having expired much earlier. The following prayers have been made in the complaint:
Direct opposite parties to handover possession of the fully constructed; completed flats without any further delay alongwith all permanent utilities promised as per agreement, copies of all relevant plans, approvals and Occupancy certificate issued by the relevant authorities.
Direct the opposite parties to grant to the 48 complainants/flat owners and other flat owners with same interest who will be impleaded after issuance of public notice, compensation for the entire period of delay @ 18% per annum on the amount deposited by the complainants with the opposite parties till the time actual possession is given.
Direct the opposite parties to provide to the complainants/flat owners and other flat owners with same interest who will be impleaded after issuance of public notice, at the time of possession each of the facilities and amenities which were promised in the agreement.
Direct the opposite parties to pay to the complainants and other flat owners with same interest who will be impleaded after issuance of public notice additional compensation @ 18% interest per annum on the amount deposited for the delay in provision of the promised facilities and amenities. Or in the alternative, in case of non-provision of the promised amenities and facilities, direct opposite parties pay to the 48 complainants a lump sum compensation of Rs.4,80,00,000/- (Rs. Four crore eighty lakhs ) to be distributed equally among the complainants in the same proportion to the other flat owners with same interest who will be impleaded after issuance of public notice.
Direct the opposite parties to refund to the complainants /flat owners a sum of Rs.1,44,00,000/- (Rs. One crore Forty Four Lakhs) alongwith 18% interest charged illegally towards car parking space alongwith further compensation inthe same proportion to the other flat owners with same interest who will be impleaded after issuance of public notice.
Direct the opposite parties to pay to the complainants/flat owners a lump sum compensation of Rs.4,80,00,000/- (Rs. Four Crore Eighty Lakhs) by way of compensation for mental harassment and agony, to be distributed equally among the complainants alongwith 18% interest and further compensation in the same proportion to the other flat owners with same interest who will be impleaded after issuance of public notice.
Award cost of the complaint to the complainants.
Pass any such further order or orders which this Hon'ble Commission deems fit and proper in the facts and circumstances of the present case.
2. It has been further alleged that this complaint is being filed in the representative capacity and there are some more similarly placed consumers who seek similar relief and therefore, the complaint be admitted under Section 12(1)( c) of the Consumer Protection Act, 1986.
3. A reply to the application under Section 12(1)( c) of the Consumer Protection Act, 1986 was filed by the OPs. It was submitted that seven complainants have already got the possession and therefore, the commonality of interest was not there amongst all the complainants. Written statement was filed by the OP. After considering the reply as well as averments made in the complaint and after hearing both the parties, this Commission vide order dated 30.11.2016 allowed the application moved by the complainants u/s 12(1)(c) of the Consumer Protection Act, 1986 and also directed the complainants to publish the public notice under Order 1 Rule 8 of CPC.
4. After publication of public notice, certain new complainants joined the complaint and after impleadment finally there are 58 complainants. Affidavit evidence was filed on behalf of complainants on 27.9.2016 and on behalf of the OPs on 12.6.2017.
5. Heard the learned counsel for both the parties and perused the record.
6. Learned counsel for the complainants stated that as per the Builder Buyer Agreement, the due date of possession was 31.1.2014 and the same has been admitted by the OPs in their written statement. Learned counsel further submitted that accordingly, delay of four years has already occurred, however, possession has not been given to the 49 complainants as yet. The complainants had given legal notice on 2.5.2016 and in the legal notice interest @ 18% per annum was demanded on the amount paid by the complainants from the due date of possession i.e. 31.1.2014. The OPs extended the due date of possession many times and no consent was taken for the same from the complainants. Last extension was taken till 7.5.2015 and even by that date, the possession was not delivered.
7. Learned counsel argued that the OPs in their affidavit evidence have stated that they are not obliged to complete all the amenities in one go as the project is very large and has to be completed in phases. It was argued that the stand taken by the OPs is not legally tenable as each allottee is entitled to use the amenities right form the very beginning and there is no such clause in the Agreement. Learned counsel further argued that in the construction agreement signed between the developer and the purchaser, all the amenities are mentioned and therefore, it is implied that all these amenities are to be completed before the due date of possession. Thus, the possession given to 9 complainants is also not the complete possession.
8. Learned counsel for the complainants further argued that the OPs have illegally charged for the car parking spaces and the same be refunded to the complainants. Learned counsel referred to the judgement of Nahulchand Laloochand Pvt. Ltd. vs. Panchali Cooperative Housing Society Ltd. (2010) 9 SCC 536, wherein he pointed to the following portion of the judgement:
"58. Then it was submitted that if a parking space is sold to a flat purchaser, it is to the exclusion of other flat purchasers and, therefore, logically also it cannot be part of "common area". This submission is founded on the assumption that parking space (open/covered) is a "garage" and sellable alongwith the flat. We have, however, held in our discussion above that open to the sky parking area or stilted portion usable as parking space is not a "garage" within the meaning of Section 2(a-1) and, therefore not sellable independently as a flat or alongwith a flat."
9. In respect of the car parking space, the learned counsel further mentioned that car parking space will be treated as common area as per Section 3(f)(3) of the Karnataka Apartment Ownership Act, 1972. It was further argued by the learned counsel that the area of the flat for which the money has been paid includes proportionate area of the common spaces as well, as mentioned in clause 19.1 of the Construction Agreement and therefore, if parking space is separately charged, it would mean double charging by the OPs for the same common area. Therefore, charging separately for the car parking space clearly is an unfair trade practice adopted by the OPs. Concluding the arguments, learned counsel for the complainants stated that the complainants are entitled to compensation by way of interest on the deposited amount by the complainants from the due date of possession till actual date of possession and also the refund of the amount towards car parking spaces. The learned counsel further stated that the complainants are also entitled for compensation for mental agony and harassment at the hands of the OPs.
10. Learned counsel for the complainants further stated that the question of admission of the complaint under Section 12(1)(c) of the Consumer Protection Act, 1986 is now not open to be raised by the OPs as the order dated 30.11.2016 passed by this Commission allowing the permission under Section 12(1)(c) of the Consumer Protection Act, 1986 has become final as the same has not been challenged by the OPs. It was further pointed out by the learned counsel that the reasons given for delay in construction and consequent delay in possession have already been considered in the judgment of this Commission in Shri Satish Kumar Pandey and others Vs. M/s. Unitech Ltd., 2015 SCC Online NCDRC 4 and the same have not been considered as genuine as they do not represent force majeure conditions.
11. On the other hand, learned counsel for the OPs stated that out of the original 48 complainants, 7 complainants had already taken possession even before filing of the complaint. Even when the complaint was filed under Section 12(1)(c) of the Consumer Protection Act, 1986, there were two types of complainants and therefore, no commonality of interest could have been established amongst all the 48 complainants. The learned counsel for the OPs argued that some persons have taken possession under protest and some persons have only signed the possession letter and therefore, all the persons are not similarly situated in the complaint and therefore, the complaint is not maintainable under Section 12(1)( c) of the Consumer Protection Act, 1986. It was contended that the present complaint did not fulfil the criteria of the decision of the larger Bench in the matter of Ambrish Kumar Shukla & Ors. vs. Ferrous Infrastructure Pvt. Ltd., Consumer Complaint No.97 of 2016 decided on 7.10.2016. Learned counsel further stated that out of the total allottees, 73% of the allottees have taken possession and complainants are the limited number of allottees who are not taking possession deliberately just in the hope of getting a court order for interest on the deposited amount for the delay in possession. After the public notice, only 13 persons have got themselves impleaded and out of 13, 7 persons have already got possession and accordingly on 2.5.2017, 6 persons have withdrawn from this complaint.
12. The project in question is a very big project and is being completed in phases and the amenities are being placed on ground in phases. There was no commitment by the OPs to make available all the amenities right from the first day of handing over the possession. In fact, the commitment is only to give the possession of the apartment before the stipulated date.
13. Learned counsel asserted that the completion certificate was issued on 10.2.2016 and the OPs started giving possession from 2.5.2016. Learned counsel for the OPs further stated that there is a clear agreement signed by both the parties and as per clause no. 14.5 of the construction agreement, the OPs are obliged to pay damages @ Rs.3/- per sq ft. per month from the due date of possession till the date of possession. The delay has occurred due to the conditions beyond the control of the OPs and the same would come under force majeure conditions and accordingly no compensation is payable for the delayed possession.
14. Learned counsel for the OPs further argued that the order dated 4.12.2012 of the Hon'ble High Court of Karnataka had put certain restrictions on various works relating to construction and this has also caused the delay in completion of the project. As this was a court order, the delay caused due to implementation of this order was beyond the control of the OPs. Hence, this will come under force majeure conditions. There was labour problem and there were restrictions on the construction work due to dust and noise pollution. Apart from shortage of labour, one contractor left the work and time was taken to engage the second contractor. All these situations were unforeseen and they would be covered under force majeure conditions.
15. In respect of the car parking spaces, learned counsel for the OPs stated that every complainant has not purchased the car parking space. In fact, option was given to the flat purchasers to purchase car parking space and amounts were clearly mentioned in the agreement. Accordingly, the agreements were signed and as per option, they have paid the amount and therefore, now they cannot wriggle out of this contract and ask for refund of money paid for the car parking spaces. Learned counsel further stated that clause 11.3 of the agreement reads as under:
"11.3 The Developer shall have the exclusive right to retain and/or to sell or construct on the open space/roof terrace/basement area as per approved plans including the right to put up further construction in future in the event of additional F.A.R/T.D.R. being sanctioned to Owner/Developer. In case, the Developer decides to sell the exclusive right to use the said terrace area or any part thereof to any person, it shall sell the same to the purchasers of the Pent House or Top floor Apartment. The Owner/Developer may also sell the right to use the open/covered car park area and the Purchaser shall not have any objection thereto. The Purchaser shall be entitled only to such car park as allotted to him/her/them/it under the Construction Agreement."
16. From the above, it was argued that the complainants cannot object to the sale of car parking spaces. It was further argued by the learned counsel for the OPs that it is wrong to say that car parking spaces have been sold illegally because the same have been purchased by the complainants under the contract. Coming to the judgment cited by the learned counsel for the complainants in Nahulchand Laloochand Pvt. Ltd. vs. Panchali Cooperative Housing Society Ltd. (supra), learned counsel argued that this judgment is not applicable in the present case as the same was only applicable in respect of the Model Agreement, whereas in the present case a specific contract has been made between the parties for selling and purchasing of the car parking spaces.
17. Learned counsel for the OPs pointed out Schedule 'D' of the Agreement wherein the following conditions are specifically mentioned :
"1.0 The Purchaser and all persons authorized by the Purchaser (in common with all other persons entitled, permitted or authorized to a similar right) shall have the right at all times, to use the staircases, lifts, passages and common area (except specifically allotted 'Terrace and Car Parking Spaces)".
18. On the basis of the above, learned counsel further asserted that as the car parking space was only optional and there cannot be any commonality amongst the complainants in this regard, therefore, the application under Section 12(1)(c) of the Consumer Protection Act, 1986 is not prima facie maintainable. In respect of the common facilities and amenities, learned counsel states that the obligation was to handover the apartment alone within a specific date under the contract and not the common areas and the amenities as the project is developing in phases. It is well informed in the contract clause 15.3. The clause 6.1 of the contract also mentions handing over of the apartment only and it does not indicate amenities. Clause 14.5 also expresses about compensation in case of delay in delivery of apartment and not in construction of the amenities. Therefore, the compensation claimed due to alleged incompletion of amenities has no basis.
19. Learned counsel for the OPs further mentioned that all the amenities are complete except for the club house which will also be completed shortly. Obviously, the amenities were to be developed in phases and the OPs are sincerely developing these amenities and there is no deficiency on the part of the OPs in this regard.
20. Coming to the question of compensation for delay in possession, the learned counsel for the OPs stated that complainants cannot claim the interest on the deposited amount as well as the compensation. The agreement already provides for compensation @ Rs.3/- per sq. ft. per month which has been agreed by the complainants by way of signing the agreement. Thus, the complainants were aware that if the possession is delayed, they will get compensation @ Rs.3/- per sq. ft. per month. They cannot go beyond the agreement and cannot demand interest on the deposited amount. In this regard, the learned counsel referred to the judgment of Hon'ble Supreme Court in Bharati Knitting Company vs. DHL Worldwide Express Courier Division of Airfreight Ltd. II (1996) CPJ 25 (SC, wherein the Hon'ble Supreme Court has observed as under:
"When the complainant signs the agreement/contract document, he would be bound by the terms and onus would be on him to prove the terms and the circumstances in which he signed the contract."
Learned counsel specifically referred to the following portion of the judgment :
In view of the above consideration and findings we are of the opinion that the National Commission was right in limiting the liability undertaken in the contract entered into by the parties and in awarding the amount for deficiency service to the extent of the liability undertaken by the respondent. Therefore, we do not think that there is any illegality in the order passed by the Commission. Shri Krishnamani has brought to our notice that there are number of judgments covering divergent views. In view of the view we have expressed above, it is now settled law and the Tribunals would follow the same. Lastly, it is Contended that besides the amounts awarded by the State Commission, liberty may be given to the appellant to pursue the remedy available in law. It is needless to mention that the remedy available at law would be pursued according to law.
21. I have carefully considered the arguments advanced by the learned counsel for both the parties and have examined the material on record. Coming to the first question of admissibility of the complaint under Section 12(1)(c ) of the Consumer Protection Act, 1986, I find that the order dated 30.11.2016 passed by this Commission has already become final as IA No.12278/2016 filed by the OP for modification of order dated 30.11.2016 was dismissed by this Commission vide order dated 9.2.2017. By way of this order, this Commission has accepted the maintainability of complaint under Section 12(1)(c ) of the Consumer Protection Act, 1986 and has allowed the permission required under Section 12(1)(c) of the Consumer Protection Act, 1986. Thus, now the complaint is to be decided on merits.
22. The argument on behalf of the OPs that delay in handing over the project has been caused by force majeure conditions is not acceptable as this Commission has held in Shri Satish Kumar Pandey and others Vs. M/s. Unitech Ltd., (supra) that shortage of labour and non-availability of construction material etc. do not come in the ambit of force majeure conditions. So far as the order of the Karnataka High Court is concerned, that was a general order applicable to all the builders for protecting the rights and interests of the ordinary citizens of the state. This order only puts reasonable restrictions on the activities of the building construction so that the normal citizens are not harassed due to such activities. Obviously, builders are supposed to perform construction activities keeping in view the rights and convenience of the normal citizens in mind. In this context, I do not find the order of the Karnataka High Court as a force majeure condition.
23. So far as directing the OPs to handover possession is concerned, the occupancy certificate has already been obtained and OPs have already issued offer letters for possession, however, if the possession has not been taken by the complainants, OPs are directed to handover the possession within a period of 60 days from the date of this order and the complainants are also directed to complete the formalities for taking the possession.
24. The main prayer in the complaint is in respect of compensation to be awarded to the complainants for delay in handing over possession. It is seen that even from the original complainants, many complainants have taken over the possession. Apart from these complainants, there may be other consumers who might have taken the possession. The Occupancy Certificate has been issued on 10.2.2016 and the OPs started giving possession from May, 2016 and have given the possession to many consumers. Once the occupancy certificate has been given by the competent authority, it is to be presumed that the project is complete and legal possession can be given by the OPs to the allottees. As per the agreement, the possession was to be given by 31.01.2014. However, there is a delay in completion of the project and in getting the occupancy certificate. Consequently, the complainants are definitely entitled to some compensation for this delay. It has also been stated by the OPs that the offer letters were issued to all the complainants. In this situation, even after getting the occupancy certificate, if an allottee does not take possession when offered, the OPs cannot be held responsible for this delay. As most of the offer letters have been issued in May and June, 2016 , I am inclined to allow the compensation to the complainants of this complaint upto 31.07.2016 and not beyond that.
25. Now coming to the question of compensation, there is already a provision for compensation for delay in handing over possession @ Rs.3/- per sq. ft. per month. It has been held in many judgments of this Commission that this amount is unproportionately insignificant in contrast to the exorbitant interest charged by the builders on the delayed payment of instalments. This compensation seems to be very meagre and reflects the clear unfair trade practice on the part of the builder being in the dominant position. This Commission has held that apart from this, compensation in the form of interest is also required to be given on the amount paid by the complainants before the due date of possession at a reasonable rate. This Commission in Similar cases for delay in possession has allowed interest @ 6% p.a. in Vihesh Sidhu Vs. M/s. Unitech Ltd., CC No.363 of 2016 decided on 26.3.2018 and interest @ 5% p.a. in Mohan Lal Batra vs. Ramesh Chandra and others, R.A. No.110 of 2017 in CC No.1202 of 2016 decided on 13.11.2017 on the amount deposited before the due date of possession. Accordingly, looking at the current scenario of interest rates, I deem it appropriate to allow interest @ 6% p.a. on the deposited amount before the due date of possession from 01.02.2014 till 31.7.2016.
26. Coming to the prayer relating to the amenities and facilities of the project, it is seen that the occupancy certificate has already been issued on 10.2.2016 by the competent authority. In this regard, the OPs have claimed that facilities and amenities are also complete and it is only the club house that is taking some more time and the same will also be completed in the near future. It has been claimed by the OPs that the common facilities and amenities were to be completed in phases and the possession clause was only in respect of the apartment. It is seen that clause 6.1 of the Construction Agreement mentions only the construction and possession relating to apartment. The complainants in their complaint have not mentioned any specific clause under which the common facilities and amenities were to be completed before a particular date. It is true that if the project is very big and there are common facilities and amenities proposed for the whole project and if there is no commitment to complete the facilities and amenities before a particular date, the OPs cannot be held liable for deficiency in service in this regard. However, from the point of view of the consumer, if no date of completion of common facilities and amenities is given, it should be understood that they will also be completed within the time frame given for handing over of the apartment or at least by the date of registration of the conveyance deed. In the facts and circumstances of the case, it is ordered that the common facilities and amenities as per the agreement shall be completed within a period of six months from the date of this order and if the same are not completed, the OPs shall pay @ Rs.1,000/- per month to each of the complainants under the present complaint.
27. So far as the payment in respect of car parking is concerned, it is seen that the car parking was not compulsory and every complainant was not required to pay for the car parking. Therefore, without going into the legality of the question relating to payment for car parking, I am of the view that this part of the complaint cannot be considered under Section 12(1)( c) of the Consumer Protection Act, 1986 as common relief claimed by all the complainants. Moreover, the payment of car parking spaces has already been made as per the agreement to save their parking spaces and after getting the facility of car parking spaces, the complainants cannot claim refund of the same without surrendering the car parking spaces. The Hon'ble Supreme Court in case of State of Punjab and Ors. Vs. Dhanjit Singh Sandhu, Civil Appeal Nos.5698-5699 of 2009 decided on March 14, 2014, has held the following:-
"21. .................The said demand was rejected by the Estate Officer by passing the reasoned order in compliance of the directions of the High Court. In the facts of the instant case, we have no doubt in our mind in holding that the ratio decided in Tehal Singh's case will not apply in the instant case. In our considered opinion defaulting allottes of valuable plots cannot be allowed to approbate and reprobate by first agreeing to abide by terms and conditions of allotment and later seeking to deny their liability as per the agreed terms.
25. It is evident that the doctrine of election is based on the rule of estoppel the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppel in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had."
28. On the basis of the principle laid down by the Hon'ble Supreme Court in the above judgment, I do not find any force in the claim of the complainants for refund of the amount paid for car parking spaces.
29. The complainants have also prayed in the complaint that complainants be given Rs.4,80,00,000/- (Rupees four crores eighty lakhs only) in total towards mental agony and harassment. It is seen that no break up of this amount has been given and moreover, when the compensation in the form of interest for delayed possession is awarded, there is no justification for awarding any separate compensation for mental agony and harassment as interest awarded is also in the form of compensation as held by the Hon'ble Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh, (2004) 5 SCC 65.
30. Based on the above discussion, the complaint is partly allowed in the following manner:
ORDER
The OPs are directed to handover the possession to the complainants (if not already handed over) within a period of 60 days from the date of this order and the complainants are also directed to complete all the formalities for taking the possession.
The complainants are entitled to get compensation for delayed possession from 01.02.2014 till 31.07.2016 as per the agreement i.e. @ Rs.3/- per sq. ft. per month. Over and above this amount, the opposite parties shall be liable to pay interest @ 6% p.a.from 01.02.2014 till 31.07.2016 oncomplainants' deposited amounts with the OPs before the due date of possession i.e. 31.01.2014.
OPs are directed to complete the common facilities and amenities as per the agreement within a period of six months from the date of this order, failing which the OPs shall pay compensation @ Rs.1,000/- per month to each of the complainants under the present complaint.
The OPs are also directed to pay Rs.2,000/- (Rupees two thousand only) to each of the complainants towards cost of litigation in the present case.
All these amounts except compensation for common facilities and amenities shall be adjusted against the amount due on the complainants, if any, at the time of handing over of the possession and if no amount is due on the complainants, thenthe amount shall be paid by the OPs to the complainants on the date of possession.
...................... PREM NARAIN PRESIDING MEMBER