State Consumer Disputes Redressal Commission
Ms. Manisha Das vs The Manager, Rosedale Developers Pvt. ... on 15 May, 2018
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. CC/400/2014 ( Date of Filing : 05 Dec 2014 ) 1. Ms. Manisha Das APT -1A, Tower-2, Rose Dale Garden Complex, AA-III, Block-3, Rajarhat, New Town, Kolkata, West Bengal -700 156. ...........Complainant(s) Versus 1. The Manager, Rosedale Developers Pvt. Ltd. Srachi Tower, 9th Floor, 986, Anandapur, Kolkata-700 107. 2. The Managing Director, Rosedale Developers Pvt. Ltd. Plot No.III, Block-3, Rajarhat, Newtown, P.O. Kolkata, West Bengal-700 156. ............Opp.Party(s) BEFORE: HON'BLE MR. SAMARESH PRASAD CHOWDHURY PRESIDING MEMBER For the Complainant: Jit Roy, Advocate For the Opp. Party: ,Mr.Ved Sharma., Advocate Dated : 15 May 2018 Final Order / Judgement The instant complaint under Section 17 of the Consumer Protection Act, 1986 (for brevity, 'the Act') is at the instance of an intending purchaser against the Developer/Builder Company and its Managing Director on the allegation of deficiency in services on the part of them in respect of a flat and car parking space in a dispute of housing construction.
Succinctly put, the complainant's case is that on 22.09.2010 she had entered into an Agreement for Sale with the Opposite Party/Builder to purchase of a flat being numbered 01-A in Tower No. 02 in Rosedale Garden Complex at Plot No. Action Area-III/Block-III, New Town, Kolkata, Dist - North 24 Parganas at a total consideration of Rs. 82,85,360/-. At the time of booking and executing the agreement, it was agreed that possession of the flat would be delivered within 12 months from the date of allotments of flat with an additional grace period of three months and in case of failure, the developer will pay compensation @ 6% or the prevailing bank rate of SBI, whichever is lower of the amount paid by the applicant from the end of grace period till actual possession of the apartment. The complainant has stated that she had been to the site office to point out for replacement of damaged areas, ceramic tiles for toilets, PWF for bedrooms as well as rust affected wood covered steel frames of doors and etc. but the developer did not take appropriate action. The complainant has stated that she has suffered a huge monetary loss and frustration with the entire episode and the letter sent by her on 13.10.2014 went in vain. Hence, the complainant has approached this Commission with prayer for several reliefs, viz. - (a) to direct the opposite party to compensate the complainant a total amount of Rs. 12,06,682/- detailed as under:
Towards cost of delay @ 6% per year for 1.5 years on the total cost of Rs. 82,85,360/- i.e. Rs. 7,45,682/-;
Towards cost of an accommodation under 'leave and licence agreement' @ Rs. 14,500/- per month for 18 months Rs. 2,61,000/-;
Compensation of Rs. 2,00,000/- for extreme stress and mental agony covering all court fees and other incidental expenses.
The opposite party no. 1/development company by filing a written version has stated that as per clause 9.i of the terms and conditions the company was under obligation to give possession of the apartment to the complainant in 12 months from the date of allotment of apartment with a further grace period of three months and if the company fails to deliver possession of the apartment after the grace period then it shall pay compensation to the applicant @ 6% or the prevailing bank interest rate of State Bank of India, whichever is lower of the amount paid by the applicant from the end of grace period till the actual handing over of the apartments. It has also been stated that due to Force Majeure circumstances, the construction could not be completed within the time frame. However, when the possession was delivered on 28.12.2012 and Deed of Conveyance was executed on 20.11.2013, the complaint should be dismissed.
During hearing of the case, complainant has tendered evidence on affidavit. However, no questionnaire has been filed by the opposite parties. On the other hand, on behalf of O.P. No. 1 evidence on affidavit has been filed. The reply against the questionnaire set forth by the complainant was given.
On perusal of pleadings and the evidence on record it would reveal that the complainant had entered into an agreement with Rosedale Developers Pvt. Ltd. to purchase of an apartment being unit number T2-01-A measuring about 2255 sq. ft. in Tower - II at Rosedale Garden Complex lying and situated at Plot No. Action Area-III/Block-III, New Town, Kolkata, Dist - North 24 Parganas at a total consideration of Rs. 82,85,360/-. It is not in dispute that the as per terms of the agreement the company was under obligation to hand over the possession of the apartment to the applicants within 12 months from the date of allotment of apartment. The evidence on record indicates that on payment of entire consideration amount, the possession of the apartment was handed over to the complainant on 28.12.2012 and the Deed of Conveyance in favour of the complainant was executed on 20.11.2013. The non-delivery of possession within the stipulated period led the complainant to come up in this Commission with the instant complaint.
In the written version, the opposite party took the plea of Force Majeure circumstances - (a) in the year 2010 the real estate and infrastructure projects in and around Kolkata had been almost came to a standstill because of an acute shortage of stone chips following a series of disputes at the main source that is Pachami in Birbhum; (b) on 13.04.2010 the company wrote to the Managing Director, WB HIDCO to ascertain current status of basic facilities like electricity, water, sewerage, drainage, road, telecommunication, transportation, security etc. to which on 19.05.2010 WB HIDCO replied that due to unavoidable circumstances the infrastructure development works has been slowed down; (c) under building rules unless occupancy certificate is received, the builder cannot give possession for habitation. Accordingly, the possession of flat could not handed over on account of those Force Majeure circumstances conditions.
It is trite law that the parties are bound by the terms of agreement. When either of the parties did not pick up any quarrel with the terms and conditions of the agreement, they are certainly bound to follow the terms and conditions contained in the agreement. In a case reported in AIR 1996 SC 2508 (Bharti Knitting Co. - vs. - DHL World Wide 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"
For appreciation of the present dispute, let us see the relevant terms and conditions of the agreement. Clause 8 relates to delay in payment of instalments which reproduces below -
"8.1. Payment of instalments and all other dues shall have to be made within 14 (fourteen) days from the due dates. In case of delay in payment, the applicant shall pay interest on the amount due @ 18% (eighteen per cent) per annum. Failure to make payments within two months of due date will cause automatic cancellation of the allotment and the apartment may be allotted to other applicants."
Clause 9 of the agreement pertains to possession and compensation for delay which rewrites below-
"9.1. The company shall endeavour to give possession of the apartments to the applicants in 12(twelve) months from the date of allotment of apartments. Further, there will be a grace period of 3 (three) months at the end of 12 (twelve) months. If the company fails to deliver possession of the apartments after the grace period to the applicants (subject to force majeure as stated hereinbelow) then it shall pay compensation to the applicant @ 6% (six per cent) or the prevailing bank interest rate of State Bank of India, whichever is lower of the amount paid by the applicant from the end of the grace period till the actual handing over of the apartments......."
Clause 9.2 stipulates that in case of Force Majeure circumstances, no compensation of any nature whatsoever will be claimed by the applicant for such delay/suspension.
The fact remains that the O.P./Developer has failed to advance any evidence as to reasons on delay in handing over the apartment to the complainant as per clause 9.1 of the terms of agreement. The O.P Company has raised some Force Majeure circumstances but none of them appeared to be acceptable. There is no document to show that due to acute shortage of stone chips the construction of the complex was suffered. A citation of a newspaper cannot be a ploy to wriggle out the obligations of a developer. The O.P. Company has also not filed any document showing the communication in between them and New Town Kolkata Development Authority (NKDA) as to obtaining of occupancy certificate/completion certificate. The O.P. Company has themselves admitted that they had applied for partial occupancy certificate on 02.11.2011 and the same was obtained only on 04.09.2012 meaning thereby the O.P. Company could not complete the construction of the project with all facilities and amenities as per terms of the agreement. Therefore, the Force Majeure circumstances are totally inapplicable in the facts and circumstances of the present case.
The delay in handing over the possession of the apartment could be justified if there was to be new legislation, regulation or order suspending, stopping of delaying the construction of the complex and the apartments. In case of delay, the opposite party is bound to pay only the agreed compensation has been rejected by the Hon'ble National Commission in a number of cases including Satish Kumar Pandey & Anr. - vs. - Unitech Ltd. (CC/427/2014) and Swarn Talwar & Ors. - vs. - Unitech Ltd. (CC/347/2014) the following was the view taken by the Hon'ble National Commission in this regard:
It can hardly be disputed that a term of this nature (clause 8.1 vis-a-vis clause 9.1) is wholly one sided, unfair and unreasonable. The builder charges interest @ 18% per annum in the event of delay on the part of buyer in making payment to them but seeks to pay less than 6% per annum of the capital investment, in case they does not honour their part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the agreement also encourages the builder to divert the funds collected by them for one project to another project being undertaken by them. They will be able to finance in a new project at the cost of the buyers of the existing project and that to at a very low cost of finance if the builder is to take loan from banks or financial institutions, it will have to pay the interest which the banks and financial institutions charges on terms loan or cash credit facilities etc. The interest being charged by the banks and financial institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation.
If the builder is made to pay only the paltry compensation stipulated in the buyer's agreement, this may result in a situation where completion of the flats is unjustifiably delayed by the builder for an indefinite time since they know that compensation they will have to pay to the flat buyer, on account of the delay in offering possession to him/her would only be a fraction of the cost of the borrowing in the market. Such a view may also encourage the builder to divert funds collected from the flat buyers in one project to the other projects promoted them or even for their own purpose.
An appeal preferred by the opposite party against the decision of the Hon'ble National Commission in the case of Swarn Talwar & Ors. (supra) being civil Appeal D. No. 35562 of 2015 was dismissed by the Hon'ble Supreme Court vide its order dated 11.12.2015 which reads as under :
"We have heard Ld. Counsel for the appellant and perused the record. We do not see any cogent reason to entertain the appeal. The judgment impugned does not warrant any interference.
The civil Appeal is dismissed."
In the case before hand, however, the complainant has claimed an interest @ 6% per annum over the amount of Rs. 82,85,360/- from the committed date of possession i.e. from 22.09.2010 to 28.12.2012 i.e. for 15months and as there is hardly any scope to impose an interest more than the prayer clause, the complainant is entitled to interest @ 6% p.a. in respect of Rs. 82.85.360/- from committed date of possession i.e. from 22.09.2010 to 28.12.2012 i.e. the date of delivery of possession. As the complainant has failed to substantiate the claim of Rs. 2,61,000/- with regard to their accommodation for 18 months as 'leave and licence' @ Rs. 14,500/-, the complainant is not entitled to the same. However, due to unethical approach of the builder which compelled the complainant to lodge complaint, certainly the complainant is entitled to litigation cost which I quantify at Rs. 20,000/-.
With the above observations, I dispose of the complaint with the following directions:
The opposite parties are directed to pay compensation in the form of interest @ 6% p.a. over the amount of Rs. 82,85,360/- from 22.09.2010 to 28.12.2012 (for fifteen months) in favour of the complainant within 30 days from date otherwise the amount shall carry interest @ 12% p.a. from date till its realisation;
The opposite parties are directed to pay Rs. 20,000/- within 30 days to the complainant as cost of litigation in default the amount shall carry interest @ 8% p.a. from date till its recovery.
[HON'BLE MR. SAMARESH PRASAD CHOWDHURY] PRESIDING MEMBER