National Consumer Disputes Redressal
Nishant Saini & Anr. vs Ss Group Private Limited & 2 Ors. on 18 March, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1306 OF 2016 1. NISHANT SAINI & ANR. S/o Mr. Narender Saini R/o property No. 1-2, 3rd Floor, South City I, Gurgaon Haryana 122001 2. Bhanoo Gogia W/o Mr. Nishant Saini R/o Property No. 1-2, 3rd Floor, South City 1, Gurgaon Haryana 122001 ...........Complainant(s) Versus 1. SS GROUP PRIVATE LIMITED & 2 ORS. Regd. Office at B-4/43, 2nd Floor, Safdarjung Enclave, New Delhi 110029 2. Ashok Singh Jaunapuria Director Office at: 77, SS House, Sector 44, Gurgaon Haryana 122003 3. Dayawati Director Office at: 77, SS, House, Sector-44, Gurgaon Haryana 122003 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainants
(In both the Complaints) : Mr. Lokesh Bhola and
Mr. Karan Grover Advocates For the Opp.Party : For the Opposite Parties : Mr. Faizan Nazir, Advocate
(In both the Complaints)
Dated : 18 Mar 2021 ORDER
R.K. AGRAWAL, J., PRESIDENT
The present Consumer Complaints have been filed under Section 21(a)(i) of the Consumer Protection Act, 1986 (for short "the Act") by the Complainants, the allottees of Residential Flat in the luxury residential Group Housing Complex, namely, "The Coralwood & Almeria" (hereinafter to be referred to as "the Project") to be developed and constructed by the Opposite Parties at Village Sihi, Sector 84, Gurgaon, against Opposite Party No.1, North Star Apartments Pvt. Ltd. (amalgamated in S.S. Group Pvt. Ltd. and now known as S.S. Group Pvt. Ltd) and Opposite Party Nos.2 and No.3, Directors of Opposite Party No.1, inter alia, alleging deficiency in service in not handing over the possession till today and seeking refund of the amount deposited by them with the Opposite Parties along with reasonable interest and compensation.
In both the Complaints, Complainants have entered into identical "Flat Buyer's Agreement" with the Opposite Parties; the facts and question of law involved in their cases are similar, inasmuch as physical possession of the allotted Flats, has not been handed over within the committed period and almost similar reliefs have been prayed for in both the Complaints.
For the sake of convenience, the material facts, enumerated hereinafter, are taken from the Consumer Complaint No. 1306 of 2016 titled as Nishant Saini & Anr. Vs. S.S. Group Private Limited and Ors.
Factual matrix as culminating from the Consumer Complaint is that on 10.04.2012, the Complainants, husband and wife, had applied for booking of a residential Flat in the Group Housing Complex, i.e, "The Coralwood & Almeria" in Sector 84, Gurgaon by paying the booking amount of ₹13,09,684/-. Vide Allotment Letter, dated 17.05.2012, Complainants were allotted Unit No. 17A on the ground floor admeasuring super area of 2,000 sq. ft. in the Building No. 17A in Almeria Residential Complex for a total consideration of ₹1,26,72,000/- including Preferential Location Charges of ₹300/- per sq. ft., External Development Charges of ₹271/- per sq. ft. and Infrastructural Development Charges of ₹35/- per sq. ft.. The Flat Buyer's Agreement (for short, the ""Agreement") was executed between the parties on 05.06.2012. As per Clause 8 of the Agreement, the construction of the allotted Flat to be completed and possession was to be handed over by the Opposite Parties within 36 months from the date of execution of the Agreement. The Opposite Parties were also entitled for a grace period of 90 days after the expiry of 36 months for applying and obtaining the Occupation Certificate in respect of the Group Housing Complex, meaning thereby that the possession should have been handed over to the Complainants on or before 05.09.2015. The Complainants have also obtained a home loan of ₹1,02,20,145/- from the Indiabulls Housing Finance Ltd. (for short, the "IHFL") for which a Tripartite Agreement was executed between the Complainants, Opposite Parties and IHFL on 23.06.2012. The Complainants were also liable to pay pre-EMI interest of ₹75,006/- to IHFL on the amount disbursed to them. It is averred that all the payments as demanded by the Opposite Parties were made by the Complainants without any default. According to the Complainants, they have paid a sum of ₹1,11,32,379/- to the Opposite Parties till 06.06.2014.
In June, 2016, the Complainant No.1 visited the Project Site and was utterly shocked and surprised to see the progress of the construction at the site. The construction of the Project was stopped and was far away from completion in the near future. Even the structure of the building was not complete and the rear courtyard attached to the allotted Unit was reduced to less than 600 sq. ft. from 900 sq. ft. It is stated in the Complaint that the Opposite Parties, despite having received the complete due amount, have miserably failed to construct the said Project and hand over the possession of the Flat, complete in all respect, in time and they have misappropriated the funds in other Projects. As there was no possibility of completion of the Project, the Complainants, vide email dated 17.07.2016, requested the Opposite Parties to refund the entire amount deposited by them along with interest @18% p.a. from the date of deposit till realization, however, the Opposite Parties neither refunded the amount nor furnish any reasonable explanation for inordinate delay in handing over the possession. The Complainants have also alleged that the Flat Buyer's Agreement was completely one sided, unfair, unreasonable, arbitrary and in favour of the Opposite Parties, completely violating the rights and interest of the Complainants. The Opposite Parties are enjoying the hard earned saving of the Complainants and since the possession has not been handed over to them they are bound to live in a rental accommodation for which they are paying rent of ₹28,000 per month. The Complainants have also been burdened with payment of pre-EMI interest @ ₹75,006/- per month on the loan availed from IHFL. Alleging Unfair Trade Practice and deficiency in service on the part of the Opposite Parties, the Complainants have filed the present Complaint with following prayer:-
"a) direct the Opposite Parties to refund the entire consideration amount of ₹1,11,32,379/- (Rupees One Crore Eleven Lakhs Thirty Two Thousand Three Hundred and Seventy Nine Only) to the Complainants along with interest @ 18% per annum from the date of respective payments till its full realisation;
b) direct the Opposite Parties to pay an amount of ₹4,90,000/- (Rupees Four Lacs and Ninety Thousand Only) along with interest @ 18% per annum to the Complainants for the monthly rental paid by the Complainants for the period from June 2015 till July 2016 and such further amount paid by the Complainants as monthly rent till complete refund with interest by the Opposite Parties to the Complainants;
c) direct the Opposite Parties to pay an amount of ₹10,00,000/- (Rupees Ten Lacs Only) to the Complainants for mental agony and harassment suffered by the Complainants on account of the gross breaches committed by the Opposite Parties;
d) award the cost of the litigation."
6. The relief sought for by the Complainants in Consumer Complaint No. 1307 of 2016 are as under:-
"a) direct the Opposite Parties to refund the entire consideration amount of ₹1,43,32,924/- (Rupees One Crore Forty Three Lacs Thirty Two Thousand Nine Hundred and Twenty Four Only) being principal amount of ₹94,18,501/- (Rupees Ninety Four Lacs Eighteen Thousand Five Hundred and One Only) as well as interest of ₹49,14,423/- (Rupees Forty Nine Lakhs Fourteen Thousand Four Hundred and Twenty Three Only) calculated at @ 18% per annum from the date of respective payments till 31.07.2016 along with future and pendent-lite interest @18% per annum thereon till its realissation;
b) direct the Opposite Parties to pay an amount of ₹ 10,00,000/- (Rupees Ten Lacs Only) to the Complainant for mental agony and harassment suffered by the Complainants on account of the gross breaches committed by the Opposite Parties;
c) award the cost of the litigation."
7. Upon notice, the Complaint has been contested by the Opposite Parties by filing their Written Statement raising preliminary issues that; (i) the Complainants are not the "Consumers" as defined under Section 2(1)(d) of the Act, as the amount has been invested by them in the Project for commercial purpose; (ii) the Complaint is not maintainable in terms of Clause 9 of the Tripartite Agreement dated 23.06.2012, which categorically states that "in the event of cancellation of the Residential Apartment, the entire amount advanced by Indiabulls Housing Finance Ltd. will be refunded by the Builder to IHFL itself and thereby disentitles the Complainants from seeking refund of the consideration; (iii) the Unit allotted to the Complainants, was mortgaged in favour of IHFL, however, they have not been impleaded as party and as such the Complaint is bad for non-joinder of the necessary party (iv) in terms of Clause 35 of the Agreement, any dispute which arises between the parties, has to be settled through Arbitration; (v) the procedure for seeking refund, as enumerated in Clause 8.3(b) of the Flat Buyer's Agreement, has not been followed by the Complainants; and (vi) this Hon'ble Commission has no jurisdiction to entertain and adjudicate upon the disputes since it has to be tried by a competent Civil Court, which in this case is an Arbitral Tribunal.
8. On merits, it has been, inter-alia, pleaded that the Opposite Parties are still ready and willing to deliver the possession of the allotted Unit to the Complainants as all the necessary work at their end has been completed.
9. All other averments made in the Complaint have been specifically denied by the Opposite Parties and a prayer has been made for dismissal of the Complaint with exemplary costs.
10. The Complainants have filed their Rejoinder denying all the rival contentions raised by the Opposite Parties in the Written Statement and reiterating the averments made in the Complaint.
11. We have heard the learned Counsel for the parties at some length and also perused the material available on record as well as the Written Arguments.
12. In brief, it is the Complainants' case that on 05.06.2012 they booked the Flat in the Group Housing Complex known as "The Carolwood and Almeria", Sector 84, Gurgaon to be developed by the Opposite parties. The Flat Buyer's Agreement was executed on 05.06.2012. In terms of Clause 8 of the Agreement, the Developer was committed to deliver the possession of the Apartment to the Complainants, complete in all respect, within 36 months from the date of execution of the agreement with grace period of 90 days meaning thereby, in any case, the possession was to be delivered to the Complainants on or before 15.09.2015. However, the Opposite Parties had failed to deliver the possession as committed despite receiving the amount of ₹1,11,32,379/- out of total consideration of ₹1,26,72,000/-. The Complainants have lost their faith and trust in the Opposite Parties and prayed for refund of the deposited amount instead of possession of the allotted Flat.
13. In support of his case, learned Counsel appearing for the Complainants has placed reliance on the decision dated 04.09.2019 rendered by a Coordinate Bench of this Commission in Consumer Complaint No. 2135 of 2016 (Mr. Deepanshu Saini & Anr. Vs. M/s. S.S. Group Private Ltd. & Ors. which relates to the same Project, i.e. "The Almeria". We find that the defence taken by the Opposite Parties in the present Complaint is more or less similar to that taken in the abovesaid Consumer Complaint. While dealing with the similar reasons taken by the same Opposite Parties for delay in handing over the possession in the afore referred Complaint, the Coordinate Bench of this Commission has observed as under:-
"8. Learned counsel stated that the company is still ready to handover the possession to the complainants and would also give compensation for the delayed possession as may be ordered by the Commission. It was also offered that the penalty of interest on delayed payment of the remaining amount shall also be waived. Learned counsel mentioned that these concessions are being offered to retain the allottee. If every allottee wants refund then the project shall collapse. It was further argued by the counsel for opposite parties that if the Clause 8.3(b) is strictly adhered to, then the amount can be refunded to the complainants only when the concerned unit is sold to a third party. Learned counsel stated that due to slump in the real estate market, the company has not been able to find buyer for the unit so far. Therefore, as per the agreement, the question of refunding the amount to the complainants does not arise.
9. Learned counsel for the opposite parties further stated that in the present case the complainants have taken loan from IHFL and tripartite agreement dated 19.06.2012 has been entered between the parties. Clause 9 of the tripartite agreement reads as under:-
"9. That if the Borrower fails to pay the balance amount representing the difference between the loan sanctioned by IHFL and the actual purchase price of the flat/residential apartment, or in the event of death of Borrower or in the event of cancellation of the residential apartment for any reason whatsoever the entire amount advanced by IHFL will be refunded by the Builder to IHFL forthwith. The Borrower hereby subrogates all its rights for refund with respect to the said residential apartment in favour of IHFL."
10. On the basis of the above clause, the learned counsel for the opposite parties argued that the complainants do not have any right to seek refund in the matter as this right has been subrogated to the IHFL. Learned counsel for the opposite parties also pointed out that the complainants have not made IHFL party in the present complaint and therefore, the complaint is liable to be dismissed on the ground of non-joinder of necessary party.
11. It was emphasized by the learned counsel for the opposite parties that it is wrong to say that no reasons have been given by the opposite parties for delay in the project. In fact, in para 12 of the written statement filed by the opposite parties, the reasons are given for such delay and the main reason has been the delay in obtaining the environmental clearance from the concerned authority. This was beyond the control of the opposite parties, therefore, this will come under force majeure. Hence, the complainants would not be entitled to any compensation for this delay. Learned counsel for the opposite parties further stated that the complaint has been filed mainly against the company i.e. opposite party No.1. However, the complainants have also made opposite parties Nos.2, 3 & 4 as opposite parties who are only the Directors of the company and they would not have been impleaded at this stage.
12. I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and examined the record. The admitted fact is that the possession was due on 30.5.2015 and the occupancy certificate has been obtained on 17.10.2018. Clearly, there is a huge delay in the project. Letter of offer of possession was issued on 22.11.2018. The complainants have not accepted offer of possession as the complainants have already given a notice for cancelling the agreement as per clause 8.3 (b) of the agreement. Now, the question arises as to when the opposite parties have agreed to have a clause like 8.3(b) in the agreement and if the complainants have acted in accordance with this clause, the opposite parties should also have acted in compliance of this clause. Even this Clause 8.3 (b) seems one sided because the complainants' money is already blocked and if the same is not returned till the unit in question is sold to a third party, this is clearly prejudicial to the interest of the consumer. The interest @ 15% is only payable when the flat is sold to a third party and the money is not refunded within 90 days from that sale. All these conditions are totally one sided and they are the result of the dominant position of the builder at the time of signing the builder-buyer agreement because by that time lot of money of the complainants is already blocked with the builder.
13. The main reason for delay in completion of the project has been told to be due to delay in obtaining environmental clearance for the project. Though, this may not be directly within the control of the opposite parties to get the clearance, however, the clear procedures are laid down and it depends on the management of the builder company how efficiently and meticulously they pursue the environmental clearance with the competent authority. Thus, this cannot be considered as force majeure, therefore, the delay on account of this factor cannot be excluded from the total delay in the project. Hon'ble Supreme Court in Civil Appeal No.12238 of 2018 titled as "Pioneer Urban Land & Infrastructure Ltd. versus Govindan Raghavan" has upheld the order of this Commission by observing the following:
"3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent - Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent - Flat Purchaser could not be compelled to take possession at such a belated stage. The grounds urged by the Appellant - Builder for delay in handing over possession were not justified, so as to deny awarding compensation to the Respondent - Flat Purchaser. The clauses in the Agreement were held to be wholly one - sided, unfair, and not binding on the Respondent - Flat Purchaser. The Appellant - Builder was directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent - Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation.
9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.
10. The Civil Appeals are accordingly dismissed, and the Final Judgment and Order dated 23.10.2018 passed by the National Consumer Disputes Redressal Commission is affirmed."
14. On the basis of the above observations of the Hon'ble Supreme Court, it is clear that if the occupancy certificate is sufficiently delayed say beyond two years then the complainants cannot be compelled to take possession of the property and they are entitled to refund. In the present case also, the occupancy certificate has been delayed by roughly three years, therefore, complainants cannot be compelled to take the possession. As the learned counsel offered certain concessions at the time of argument, learned counsel for the complainants was asked whether the complainants would consider offer given by the learned counsel for the opposite parties. It was categorically denied by the learned counsel for the complainants. The learned counsel for the complainants stated that the complainants are now only interested in refund of the amount as they have lost faith in the opposite parties. Learned counsel for the complainants further stated that he has no objection if the amount due to IHFL is directly remitted to IHFL by the opposite parties/ builder and the remaining amount be given to the complainants.
15. Learned counsel for the complainants has demanded interest @15% p.a. on the amount of refund as per clause 8.3 (b) of the agreement. However, as explained above, interest @15% p.a. is not available under this Clause for total period of delay and it is only applicable once the property is sold to a third party and amount could not be refunded by the opposite parties within 90 days. Otherwise also keeping in view the present interest scenario, the interest @15% p.a. is not justified. Hon'ble Supreme Court in Kolkata West International Pvt. Ltd. Vs. Deva Asis Rudra, II (2019) CPJ 29 (SC) has reduced the interest of 12% p.a. granted by this Commission to 9% p.a. on the amount of refund. Consequently, the interest @ 9% p.a. seems reasonable and sufficient on the amount of refund in the facts and circumstances of the case."
14. It is submitted by the learned Counsel appearing for the Complainants that the order passed by the Co-ordinate Bench of this Commission has not been challenged by the Opposite Parties in Appeal before the Hon''ble Supreme Court and as such it has attained finality.
15. Accordingly, following the decision rendered by a Coordinate Bench of this Commission in the aforesaid case, we dispose of both the Complaints and direct the Opposite Parties to refund the entire principal amount received from the Complainants alongwith compensation in the form of simple interest @ 9% p.a as awarded by the Coordinate Bench in the aforesaid case, from the respective dates of deposit till the actual date of payment together with costs of ₹25,000/- to the Complainants in both the cases. The aforesaid directions shall be complied with within a period of eight weeks from the date of receipt of a copy of this order failing which the amount shall carry interest @ 11% p.a. for the same period.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER