National Consumer Disputes Redressal
Sandeep Mittal vs Ireo Grace Realtech Pvt. Ltd. on 30 July, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1916 OF 2016 WITH
IA/15206/2018(Discharge) 1. SANDEEP MITTAL 15-16, NEW SUBZI MANDI, AZADPUR, DELHI-110033. ...........Complainant(s) Versus 1. IREO GRACE REALTECH PVT. LTD. 5TH FLOOR, ORCHID CENTRE, GOLD COURSE ROAD, SECTOR-53, GURGAON-122002(HARYANA). ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Complainant : MR. DEEPAK KR. KHUSHALANI For the Opp.Party : Mr.P.Vinay Kumar, Advocate
Ruchi Kumar, Legal Manager &
Kamlesh Kumar, Advocate
Dated : 30 Jul 2019 ORDER
The complainant Mr.Sandeep Mittal booked a residential flat with the OPs in a project namely 'The Corridors' which the OP was to develop in Sector-57A of Gurgaon. Apartment No.1204 in Tower D-4 of the said project was allotted to him pursuant to his application dated 06.03.2013. The parties then executed an Apartment Buyers Agreement on 03.04.2014 incorporating their respective obligations. The sale price for the flat was agreed at Rs.2,82,71,711.90 paise which was payable in instalments. As per clause 13.3 of the agreement, the possession ought to have been offered within a period of 42 months from the date of approval of the building plans. Clause 13.3 reads as under:
Subject to Force Majeure, as defined herein and further subject to the allottee having complied with all its obligations under the terms and conditions of this Agreement and not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the Allottee within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company.
The possession having not been offered to her, the complainant is before this Commission seeking refund of the amount paid by her to the OPs alongwith compensation etc.
(2) The complaint has been resisted by the OPs admittedly on the grounds which this Commission has already rejected in several other Consumer Complaints including CC No.3873 of 2017 Abhishek Khanna & Anr. Vs. M/s Ireo Grace Realtech Pvt. Ltd. decided on 28.03.2019 and CC No.1998 of 2016 Subodh Pawar Vs. M/s Ireo Grace Realtech Pvt. Ltd. & connected matters, decided on 24.09.2018 and followed in several other Consumer Complaints decided by this Commission.
(3) Clauses 21.1, 21.3 & 22.1 of the Agreement read as under:
21.1 Notwithstanding anything contained in this Agreement, timely performance by the allottee of its obligations under this Agreement, including without limitation, its obligations to make timely payment of the Sale Consideration, maintenance charges and other deposits and amounts, including any interest, in accordance with this Agreement shall be of essence under this Agreement. If the Allottee neglects, omits, ignores, or fails in the timely performance of its obligations agreed or stipulated herein for any reason whatsoever or acts in any manner contrary to any undertaking assured herein or fails to exercise the options offered by the Company within the stipulated period or to pay in time to the Company any of the installments or other amounts and charges due and payable by the Allottee by respective due dates or in case of default by the Allottee as described in Clause 7.7 herein, the Company shall be entitled to cancel the allotment and terminate this Agreement in the manner described hereunder:
21.1.1 In case any failure or breach committed by the Allottee is incapable of rectification or is in the opinion of the Company unlikely to be rectified by the Allottee or where the Allottee is a repetitive defaulter or such failure or default is continuing despite the Allottee being given an opportunity to rectify the same, then this Agreement may be cancelled by the Company with immediate effect as its sole option by written notice ("Notice of Termination") to the Allottee intimating to the Allottee the decision of the Company to terminate the Agreement and the grounds on which such action has been taken.
21.1.2. In all other cases not covered under the Clause 21.1.1, the Company shall give to the Allottee a notice calling upon it to exercise the option or rectify the breach set out in the said notice within the time given therein. In the event that the Allottee fails to establish to the satisfaction of the Company that the said failure or breach has been rectified by it within the stipulated time, the Company may proceed to terminate this Agreement in the manner set out in Clause 21.1.1 above and to the same effect.
21.3 The Allottee understands, agrees and consents that upon such termination, the Company shall be under no obligation save and except to refund the amounts already paid by the Allottee to the Company, without any interest, and after forfeiting and deducting the Earnest Money, interest on delayed payments, brokerage/commission/charges, service tax and other amounts due and payable to it, only after resale of the said Apartment. Upon termination of this Agreement by the Company, save for the right to refund, if any to the extent agreed hereinabove, the Allottee shall have no further right or claim against the Company and/or the Confirming Parties which, if any, shall be deemed to have been waived off by the Allottee and the Allottee hereby expressly consents thereto. The Company shall thenceforth be free to deal with the said Apartment in any manner whatsoever, in its sole and absolute discretion and in the event that the Allottee has taken possession of the said Apartment, then the Company shall also be entitled to re-enter and resume possession of the said Apartment and everything whatsoever contained therein and in such event, the Allottee and/or any other person/occupant of the said Apartment shall immediately vacate the said Apartment and otherwise be liable to immediate ejectment as an unlawful occupant/trespasser. This is without prejudice to any other rights available to the Company against the Allottee.
22.1 Except to the extent specifically and expressly stated elsewhere in this Agreement allowing the Allottee to withdraw from this Agreement, the Allottee shall only have the very limited right to cancel this Agreement solely in the event of the clear and unambiguous failure of the warranties of the Company/Confirming Parties that leads to frustration of this Agreement on that account. In such cases, the Allottee shall be entitled to a refund of the instalments actually paid by it alongwith interest thereon @ 8% per annum, within a period of 90 days from the date of a determination to this effect. No other claim, whatsoever, monetary or otherwise shall lie against the Company and/or the Confirming Parties nor shall be raised otherwise or in any manner whatsoever by the Allottee.
(4) The decision of this Commission in Subodh Pawar (supra), to the extent it is relevant, reads as under:
4. Clauses 43, 44 & 49 of the terms and conditions of the agreement as contained in the applications, read as under:
43. XXXXXXXXXX
44. Subject to the above, in the event of delay by the Company in offering the possession of the said Apartment beyond a period of 12 months from the end of the Grace Period (such month period hereinafter referred to as the 'Extended Delay Period' then the applicant shall become entitled to opt for termination of the Agreement and refund of the actual paid up installment paid by it against the said Apartment. It is clarified that the delay compensation calculated for the fixed period of 12 months only shall be paid by the Company alongwith the installments refundable under this Clause without any interest. This option may be exercised by the applicant only up till dispatch of the Notice of Possession by the Company to the Applicant. No other claim, whatsoever, monetary or otherwise shall lie against the Company nor be raised otherwise or in any other manner by the Applicant.
49. XXXXXXXXXX
5. It would thus be seen that the possession of the apartments ought to have been delivered to the aforesaid complainants within 42 months from the date of approval of the building plans and/or fulfillment of the pre-conditions if any, imposed under the approval of the building plans. The OPs were entitled to a grace period of 180 days but only for the unforeseen reasons beyond their control. The grievance of the complainants is that not only the possession of the apartments was not offered to them, even the construction is not complete despite they having made substantial payment to the OPs. The complainants are therefore, before this Commission seeking refund of the amount paid by them to the OPs alongwith compensation in the form of interest etc.
6. The complaints have been resisted by the OPs which have admitted the allotment made to the complainants as well as the payment received from them. The OPs have contested the complaints inter-alia on the ground that since the fire safety approval came to be accorded on 27.11.2014, the complaints were pre-mature, the proposed date of delivery being 27.05.2018. Thus, according to the OPs, they proposed to deliver possession by 27.05.2018 as against the case of the complainants that since the building plans for this project were approved on 23.07.2013, the possession ought to have been delivered latest by 23.07.2017 even if the grace period of six months is given to the OPs. This is also the case of the OPs that the parties are bound by the terms of the agreement executed between them, extracts from which have already been reproduced hereinabove.
7. It is an admitted position that the building plans for this project were approved by Directorate of Town and Country Planning, Haryana vide its memo dated 23.07.2013. Therefore, in my opinion, the possession of the apartments, complete in all respects, ought to have been offered to the complainants by 23.01.2017. As noted earlier, the benefit of grace period was available to the OPs only in the event of the delay happening on account of the reasons which the parties could not have foreseen at the time the allotments were made. No such unforeseen circumstance however, has been established by the OPs.
8. The learned counsel for the OPs has drawn my attention to condition no. 3 of the memo dated 23.07.2013 related to fire safety which reads as under:
On receipt of the above request the Commissioner, Municipal Corporation, Gurgaon after satisfying himself that the entire fire protection measures proposed for the above buildings are as per NBC and other Fire Safety Bye Laws, and would issue a NOC from the Fire Safety and means of escape/access point of view. This clearance/NOC from the File Authority shall be submitted in this office alongwith a set of plans duly signed by the Commissioner, Municipal Corporation, Gurgaon within a period of 90 days from the date of issuance of sanction of building plans. Further, it is also made clear that no permission for occupancy of the building shall be issued by Commissioner, Municipal Corporation, Gurgaon unless he is satisfied that adequate fire-fighting measures have been installed by you and suitable external fire-fighting infrastructure has been created at Gurgaon, by Municipal Corporation, Gurgaon before grant of occupation certificate by the Director General.
The contention of the learned counsel is that the period stipulated for offering possession should start from the date on which the clearance from fire authority was issued. She also submits that the said clearance came to be issued only on 27.11.2014 though according to the learned counsel, the same was applied on 24.10.2013. It would be seen from the condition relating to fire safety condition in the approval dated 23.07.2013 that an NOC from the Fire Safety Department was to be obtained by the OPs and submitted to the Directorate of Town and Country Planning, Haryana within a period of 90 days from the issuance of the said approval. The aforesaid period of 90 days expired on 21.10.2013. The OPs thus, did not even apply for the requisite NOC from fire authority within the period stipulated for obtaining and submitting the said approval. More importantly, there was no such stipulation in the approval dated 23.07.2013 that the builder could not commence construction without obtaining the said fire safety NOC. Only the Occupancy Certificate could not have been issued without the Municipal Corporation, Gurgaon satisfying itself that adequate fire safety measures had been installed and suitable external fire-fighting infrastructure had been created at Gurgaon by the said Corporation. The OPs therefore, could have started the construction immediately after the aforesaid approval dated 23.07.2013 was obtained. The possession therefore, ought to have been offered by 23.01.2017 since in the absence of unforeseen circumstances, the benefit of the grace period was not available to the OPs.
11. As far as clause 44 of the indicators from the terms and conditions of the Apartment Buyers Agreement is concerned, this Commission has vide its order dated 18.09.2018 passed in CC No.190/2017 and connected matters, has already held that the said clause is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite the said clause The decision of this Commission in CC No.190/2017, to the extent it is relevant, reads as under:
7. The learned senior counsel for the OP has drawn my attention to clause 44 of the terms and conditions, extracted hereinabove and he submits that the aforesaid clause gives only a limited right to the complainants to terminate the agreement and seek refund of the amount paid by them. He also submits that in terms of the aforesaid clause, the contract could be terminated after a delay of at least 12 months, and only the delay compensation in terms of the agreement, for twelve months, is payable alongwith instalments refundable to the allottee without any interest. However, in my view, since the OP failed to deliver possession of the allotted flats to the aforesaid complainants, it amounted to a deficiency in rendering service to them and therefore, this Commission is entitled to direct refund of the amount paid by them to the OP alongwith appropriate compensation. In my view, clause 44 which postpones the right of the flat buyer to terminate the agreement and seek compensation even after the grace period has expired, is wholly unfair besides being one sided and therefore, refund of the principal amount with appropriate compensation can be directed by this Commission despite clause 44 extracted hereinabove.
The above referred clause of the indicators is identical to Clause 13.5 of the Buyers Agreement.
12. As far as clause 21.3 of the Buyers Agreement extracted hereinabove is concerned, the said clause, when read in conjunction with the other clauses of the agreement extracted hereinabove, is patently unfair, besides being one sided. If these clauses are given effect, it would result in a situation where a flat buyer, despite the failure of the builder to offer possession within the time stipulated in this regard and without there being any justification for doing so, will be practically remediless for 1½ years from the date of the default, no interest or compensation will be paid to him for the period his money is utilized by the builder, and even the principal amount will be repaid to him in an uncertain future, when the builder has already sold the apartment which was allotted to him. Such a term in the contract would be wholly one sided, unfair and unjust particularly when examined in the light of the fact that as far as the builder is concerned, he has a right to terminate the transaction in the event of even a single default on the part of the flat buyer and not only forfeit the earnest money but also deduct the other charges specified in clause 21.3 of the Buyers Agreement.
13. The learned counsel for the OPs refers to the decision of the Hon'ble Supreme Court in DLF Universal Limited Vs. Ekta Seth & Anr. (2008) 7SCC 585 in support of her contention that such a clause cannot be said to be unfair. However, on a careful perusal of the aforesaid judgment, I find that the clause upheld by the Hon'ble Supreme Court in the aforesaid case was different from the clauses appearing in the Buyers Agreement executed in these cases. In DLF Universal Limited (supra), the right of the buyers to terminate the agreement in the event of default on the part of the builder was not postponed as is the position in the present cases, though of course, it permitted the builder to deduct the earnest money and also deny any interest to the buyer on the amount paid by him. Considering the aforesaid distinction between the terms subject matter of the agreement in DLF Universal Limited (supra) and the terms subject matter of these transactions, the benefit of the above referred decision, in my view, would not be available to the OPs.
14. The learned counsel for the OPs submits that the parties having agreed to all the above referred stipulations, are bound by the same and cannot be allowed to have a grievance at a later date claiming the same to be unfair or one sided. No doubt the parties are ordinarily bound by the terms and conditions agreed between them in respect of a particular transaction, but the position would be altogether different where such terms are found to be wholly one sided and unfair, operating only to the detriment of the flat buyers without any corresponding detriment to the builder.
15. If a builder fails to deliver possession of the flat/plot booked with him, within the time period committed for this purpose and is unable to justify the said delay, this, in my opinion, would constitute a defect or deficiency in the services rendered by him to the buyer and in such a case, this Commission, in exercise of the powers conferred upon it by Section 14(1)(c)&(d) of the Consumer Protection Act would be competent to direct refund of the amount paid by the buyer to the builder, alongwith appropriate compensation for the loss or injury suffered by the buyer due to the defect/deficiency in the services rendered to him by the builder.
16. During the course of hearing, the learned counsel for the OPs submitted that since the amount of refund being sought is less than Rs.1 Crore, this Commission lacks the pecuniary jurisdiction to entertain these complaints. The aforesaid contention was examined and rejected by this Commission vide order dated 27.08.2018 in Pradeep Kumar Verma & Anr. Vs. M/s Supertech Limited, CC/508/2017, which to the extent, it is relevant, reads as under:
4. The first plea advanced by the learned counsel for the opposite party is that this Commission lacks pecuniary jurisdiction to entertain this complaint. In support of her contention she relies upon the decision of a Coordinate Bench of this Commission in CC/1195/2017 Narendra Shah & Anr. Vs. Supertech Ltd. decided on 24.5.2017. The aforesaid decision, in my view, is contrary to the decision of a Three-Members Bench of this Commission in Ambrish Kumar Shukla Vs. Ferrous Infrastructure Pvt. Ltd. CC No. 97 of 2016, decided on 07.10.2016 and therefore, does not constitute a binding legal precedent. In terms of Section 21 of the Consumer Protection Act, this Commission possesses the requisite pecuniary jurisdiction to entertain a consumer complaint where the value of the goods or services, as the case may be, and the compensation, if any, claimed, in the consumer complaint exceeds Rupees one crore. It was held by the Three-Members Bench of this Commission in Ambrish Kumar Shukla (supra) that the value of the service in such cases would mean the sale consideration agreed to be paid by the flat buyer to the builder. The amount actually paid by the flat buyer to the builder would have absolutely no relevance in such a case, the only relevant factors being the value of the service i.e. the sale price agreed to be paid by the flat buyer to the builder and the compensation claimed in the consumer complaint. For instance, if a flat buyer agrees to purchase a residential house for a consideration of more than Rupees one crore, but pays only Rs.10.00 lacs to the builder and is aggrieved on account of the builder having failed to honour his contractual commitment, the appropriate Forum, if he wants to file a consumer complaint, would be this Commission, since the value of the service i.e. the price which he had agreed to pay to the builder for the flat was more than Rupees one crore. In the present case, admittedly, the sale price of the flat was agreed at more than Rs.1,38,00,000/-. Therefore, it is only and only this Commission which would have pecuniary jurisdiction to entertain a consumer complaint.
(5) The learned counsel for the opposite party submits that in view of the order dated July 30, 2018 passed by the Hon'ble High Court of Punjab & Haryana at Chandigarh in Civil Writ Petition No.18650 of 2018 decided on 30.07.2018 the only remedy available to the complainant is to approach RERA Authority and the complainant before this Commission cannot be continued. The above referred Order inter-alia reads as under :
The grievance of the petitioner appears to be that respondent No.6 has illegally transferred the project to respondent No.7 to 10 without any authority in law and also in violation of the provisions of Haryana Development and Regulation of Urban Areas Act, 1975.
The writ petition has raised multifarious issues. However, what it appears is that the project has not been completed within the prescribed time and the petitioner is running from pillar to post to get possession of flat. It is averred that the Director, Town and Country Planning, Haryana has issued several show cause notices to respondent Nos.7 to 10 including dated 04.05.2018 (P-10 Colly.) on the complaints made by the petitioner and other aggrieved allottees but no final decision or action is being taken by the Prescribed Authority in furtherance thereto.
CWP No.18650 of 2018Most of the issues raised in the writ petition can be effectively redressed by the Real Estate Regulatory Authority, Gurugram. Nevertheless, taking notice of the fact that show-cause notices have already been issued to the private respondents, the writ petition is disposed of with a direction to the Director, Town and Country Planning, Haryana, to take a final decision pursuant to those show cause notices including dated 04.05.2018 within a period of three months from the date of receiving a certified copy of this order.
It would thus be seen that though the Hon'ble High Court felt that most of the issues which has been raised in the writ petition could be redressed by RERA. It did not direct the petitioner to approach RERA nor did the Hon'ble High Court in any manner exclude the jurisdiction of this Commission in the matter. The writ petition was disposed of with a direction to the Director, Town and Country Planning, Haryana, to take a final decision pursuant to the directions issued to the Respondent Nos.7 to 10 in the writ petition. Therefore, the aforesaid order in my opinion does not come in the way of complainant prosecuting this complaint which had been instituted much before the writ petition was filed. Though a review is stated to be pending before the Hon'ble High Court of Punjab & Haryana at Chandigarh to the order passed in D.T.C.P. in Sandeep Mittal -vs- State of Haryana and others passed in Civil Writ Petition No.18650 of 2018 that would be hardly of any reason for this purpose.
(6) The learned counsel for the complainant states on instructions that the complainant is restricting her claim to the principal amount paid to the OP alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund and the cost of litigation.
(7) Admittedly, the possession of the tower in which allotment has been made to the complainant is not yet complete and the requisite occupancy certificate is even been applied. It is also admitted position before me that the said tower will not be constructed. The learned counsel for the opposite party states that they can offer an alternative flat to the complainant in another tower for which the occupancy certificate has been obtained. The said offer is not acceptable to the complainant.
(8) For the reasons stated hereinabove, the complaint is, therefore, disposed of with the following directions:
(i) The opposite party shall pay the entire principal amount of ₹87,76,002/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.
(ii) The opposite party shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainant.
(iii) The payment in terms of this order shall be made within three months from today.
......................J V.K. JAIN PRESIDING MEMBER