State Consumer Disputes Redressal Commission
Smt. Nandita Arora And Another vs M/S Ats Estate Pvt. Ltd. And Others on 25 June, 2024
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.45 of 2022
Date of institution : 22.07.2022
Reserved On : 31.05.2024
Date of decision : 25.06.2024
1. Smt. Nandita Arora w/o Sh. Varun Arora;
2. Sh. Varun Arora S/o Sh. Mahesh Arora;
Both residents of Flat No.304, Tower D-1, Puri Pranayam,
Sector-85, Faridabad, Haryana-121002.
....Complainants
Versus
1. M/s ATS Estates Pvt. Ltd. (a Company incorporated and
registered under the Companies Act, 1956) Ambala-Chandigarh
Highway, near Sadashiv Complex, Derabassi, District SAS Nagar,
Mohali, Punjab-140507, through its Director/Authorized Signatory.
Registered Office: M/s ATS Estates Pvt. Ltd., 711/92, Deepali,
Nehru Place, New Delhi-110019, through its Managing
Director/Director/Authorized Signatory.
Email ID:[email protected] & sales @atsgreens.com
2. Sh. Vipul Maheshwari Kumar, Director of M/s ATS Estates Pvt.
Ltd. (a Company incorporated and registered under the
Companies Act, 1956) Ambala-Chandigarh Highway, near
Sadashiv Complex, Derabassi, District SAS Nagar, Mohali,
Punjab-140507. (Deleted vide order dated 07.12.2022).
Email ID:[email protected] & sales @atsgreens.com
Contact Nos.91-85913-58504, 01762-280231, 280332.
3. Sh. Adityajit Singh Tiwana, Director of M/s ATS Estates Pvt. Ltd.,
711/92, Deepali, Nehru Place, New Delhi-110019.
Email ID:[email protected] & sales @atsgreens.com
Contact Nos.91-85913-58504, 01762-280231, 280332.
Consumer Complaint No.45 of 2022 2
4. ICICI Bank, Corporate Office at ICICI Bank Tower, Bandra-Kurla
Complex, Mumbai-400051, having Registered Office at
Landmark, Race Course Circle, Vadodra 390007, through its
Manager.
....Opposite Parties
Consumer Complaint under Section 47 of the
Consumer Protection Act, 2019.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present:
For the Complainants : Sh. Varun Chawla, Advocate For OP No.1 : Sh. Sukhandeep Singh, Advocate For OP No.2 : Deleted vide order dated 07.12.2022 For OP No.3 : None For OP No.4 : Sh. Tushar Arora, Advocate.
JUSTICE DAYA CHAUDHARY, PRESIDENT The Complainants Smt. Nandita Arora and Sh. Varun Arora have filed the present Complaint under Section 47 of the Consumer Protection Act, 2019 (hereinafter to be referred as 'the Act') with the averments that a Scheme/Project namely 'ATS Golf Meadows Lifestyle' was launched by the OPs, whereby the Flats were to be allotted. The representatives of the OPs had approached the Complainants and induced them to book a Flat in their project. Believing his assurances, the Complainants had submitted an application to the Consumer Complaint No.45 of 2022 3 OPs and apartment No.7141, 14th Floor, Tower No.7, 'ATS Golf Meadows Lifestyle' was earmarked for the Complainants. The basic price of the said Unit was ₹64,07,300/- along with Power Backup charges of ₹1 lac with Maintenance amount of ₹50,000/- and as such the total price thereof was ₹65,57,300/-. After paying the initial amount, the 'Apartment Buyers Agreement' (Ex.C-4) was executed between the parties and the Allotment Letter dated 02.05.2013 (Ex.C-3) was issued.
It has been further mentioned that the OPs had assured to deliver the possession of the said Unit within a period of 3 years with the grace period of 6 months from the date of start of the construction i.e. December, 2015 on completion of the project in all respects. The Complainants had paid a total amount of ₹59,44,756/- to the OPs vide receipts Ex.C-7 to Ex.C-13. It has been further mentioned that the Complainants had obtained a loan of ₹51,25,840/- from HDFC Ltd. and the Tripartite Agreement was executed on 02.05.2013. Said loan was required to be repaid in total 360 equal monthly instalments (EMIs) of ₹46,506/-. It has been further mentioned that the loan of HDFC Ltd.
was taken over by OP No.4-ICICI Bank. Against the loan amount of ₹51,25,840/-, the Complainants had paid an approximate amount of ₹1.67 Crore. The Complainants had cleared the said loan and the Loan Clearance Certificate (Ex.C-16) was also issued to them. However, the OPs had failed to deliver the possession of the Unit within the stipulated period. The Complainants had been visiting the site of the project just to see its status but surprisingly the construction work was stopped by the OPs. On inquiry, it was informed by the OPs that the construction work Consumer Complaint No.45 of 2022 4 was stopped temporarily due to rains and thereafter, it was to be started. However, the construction was not started even after the rains.
The Complainants had sent email dated 25.08.2020 to the OPs but they had not responded to it. Thereafter, reminders were also sent but there was no response. The act and conduct of the OPs amounts to 'deficiency in service' and 'unfair trade practice'.
2. The Complaint has been filed with the following prayer:
i) The Opposite parties be directed to handover actual the physical possession of Residential Apartment No.7141, 14th Floor Tower No.7. 'ATS Golf Meadows Lifestyle' with one Car parking to the Complainants and to complete the project in all respects;
ii) To pay compensation by way of interest @18% p.a. on the amount of ₹59,44,756/- paid by the Complainants for delay in handing over the possession till the delivery of possession and completed of the project and till the date of realization;
iii) To pay compensation of ₹2,00,000/- for causing mental agony and harassment and financial loss to the Complainants; and
iv) To pay ₹50,000/- as litigation expenses.
OR in the Alternative:
i) The Opposite parties be directed to refund ₹59,44,756/- along with interest 18% per annum from the respective dates of deposit till its realization;
ii) To pay compensation of ₹2,00,000/- for causing mental agony and harassment and financial loss to the Complainants; and
iii) To pay ₹50,000/- as litigation expenses.
OR in the Alternative:
i) The Opposite parties be directed to Allot an alternate Apartment at the same price at which the Apartment in dispute was allotted;
ii) To pay compensation by way of interest @18% p.a. on the amount of ₹59,44,756/- paid by the Complainants for delay in handing over the possession till the delivery of possession and the project is completed and till the date of realization;Consumer Complaint No.45 of 2022 5
iii) To pay compensation of ₹2,00,000/- for causing mental agony and harassment and financial loss to the Complainants; and
iv) To pay ₹50,000/- as litigation expenses.
v) Any other order which may be deemed fit by this Commission may be passed.
3. Upon issuance of notice, OP No.1 had appeared through Counsel and filed written version, wherein certain preliminary objections were raised that the Complainants were not falling under the definition of 'Consumer' as defined under the Act. They had entered into the agreement out of their sweet will without any undue influence, coercion or pressure from the OPs. There was no 'deficiency in service' on the part of OPs and no cause of action had arisen in favour of the Complainant to file the present Complaint. The Complaint is beyond the jurisdiction of this Commission and as per Clause-37 of the agreement, only the Courts at Noida (UP) have the jurisdiction. The Complaint is misconceived and abuse of the process of law. All other averments as made in the Complaint have been denied and it has been prayed that the Complaint be dismissed with costs.
4. The name of OP No.2 was deleted from the array of parties as per the statement made by learned Counsel for the Complainant vide order dated 07.12.2022. OPs No.3 & 4 have not appeared despite service and as such they have been proceeded ex parte vide order dated 27.09.2022. Subsequently, OP No.4 had appeared through Counsel Mr. Tushar Arora and he was allowed to join the proceedings vide order dated 07.12.2022.
Consumer Complaint No.45 of 2022 6
5. To prove their claim, the Complainants have filed affidavit of Complainant No.2 Varun Arora dated 18.05.2022 along with the copies of documents Ex.C-1 to Ex.C-37. OP No.1 in support of its written version has also filed affidavit of Sh. Simranjit Singh, Authorized Signatory dated 12.09.2022 only.
6. Mr. Varun Chawla, learned Counsel for the Complainants has submitted that the Complainants had been paying the instalments well in time as per the Payment Schedule and there was no default on their part. However, the OPs had failed to develop the project and to deliver the possession of the Flat in dispute along with complete development and Completion Certificate within the stipulated period despite receipt of substantial amount from the Complainants. The Complainants had requested them to deliver possession of the Flat on number of times but to no effect. The OPs have utilized the amount so deposited by the Complainants for their own purpose but without bothering to complete the project. The OPs have also failed to obtain the requisite approvals/sanctions from the competent authorities prior to setting up the project. Learned Counsel has further submitted that on a number of occasions, the Complainants had met the OPs and also contacted through emails but there was no response. False assurances were made by the OPs but still the project/Unit was not completed within the undertaken period. Even no penalty amount has been paid to the Complainants due to delay in delivery of possession. The OPs have also misled a number of other similarly situated allottees. At the end, learned Counsel has submitted Consumer Complaint No.45 of 2022 7 that the OPs have committed 'deficiency in service' and have also indulged in 'unfair trade practice' and the Complainants are entitled to all the reliefs as prayed for in the Complaint. Learned Counsel has also relied upon the order dated 06.02.2023 passed by this Commission in CC No.6 of 2021 (Nagneet Saran v. M/s ATS Estate Pvt. Ltd. & Ors.) in support of his arguments.
7. Mr. Sukhandeep Singh, learned Counsel for OP No.1 has submitted that the Complainants are not falling under the definition of 'consumer' as defined under the Act as they had booked the Unit in dispute for commercial purpose. They had entered into the agreement out of their sweet will and without any undue influence, coercion or pressure from the OPs. No cause of action has arisen in favour of the Complainant to file the present Complaint. The Complaint is beyond the jurisdiction of this Commission and as per Clause-37 of the agreement, only the Courts at Noida (UP) have the jurisdiction. Learned Counsel has further submitted that the Complaint is also barred by limitation as the Complaint was filed in the year 2022, whereas the cause of action had arisen in favour of the Complainant in the month of December, 2015. Learned Counsel has further submitted that the construction in Tower-7 was in full swing and the Complainants have wrongly alleged that the work was stopped. The possession would be offered to the Complainants very shortly. All the necessary approvals have been obtained by the OPs before launching project. At the end, it has been submitted that there is no 'deficiency in service' on the part of OPs and the Complainants are not entitled to any relief and as such the Consumer Complaint No.45 of 2022 8 Complaint is liable to be dismissed.
8. We have heard the arguments raised by learned Counsel for both the Complainants as well as OP No.1. We have also gone through the averments as made in the Complaint and the written statement filed by OP No.1 as well as other documents available on the file.
9. The first objection which has been raised by OP No.1 is that the Complainants are not falling under the definition of 'consumer' as they had booked the Unit for commercial purpose. It is relevant to mention that the definition of 'consumer' is given under Section 2(7) of the Act, which reads as under:
"2. Definitions.- In this Act, unless the context otherwise requires,-
(7) "consumer" means any person who--
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.
Explanation.--For the purposes of this clause,-- (a) the expression "commercial purpose" does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
(b) the expressions "buys any goods" and "hires or avails any services" includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing."
10. The Complainants had applied for allotment of apartment in Consumer Complaint No.45 of 2022 9 dispute in the said project of OPs and vide Buyer's Agreement dated 02.05.2013 (Ex.C-4), they were allotted Unit No.7141, 14th Floor, Tower No.7, 'ATS Golf Meadows Lifestyle'. The basic price of the said Unit was ₹64,07,300/- along with power backup charges of ₹1 lac and Maintenance Deposit of ₹50,000/- and as such the total price thereof was ₹65,57,300/-. In the case of Narne Construction P. Ltd. etc. v. Union of India & Ors. AIR 2012 SC 2369, the Hon'ble Supreme Court has held that housing construction and building activities come under the definition of 'service', as defined under Section 2(1)(o) of the Consumer Protection Act, 1986 (now Section 2(42) of the Act of 2019). The Hon'ble National Commission has also held in Meghna Singh Khera and Ors. v. Unitech Ltd., 1 (2020) CPJ 93 (NC) as under:-
"....
15. Another contention of the Opposite Party was that the purchase of the residential Unit was for commercial purpose and the Complainants were not consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. The expression commercial purpose used in Section 2(1)(d) of the Act came up for consideration of this Commission in Kavita Ahuja Vs. Shipra Estates Ltd., CC 137 of 2010 decided on 12-02-2015 and the following view was taken:
"The expression 'commercial purpose' has not been defined in the Act and therefore, as held herein below by the Hon'ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, we have to go by the dictionary meanings, "In the absence of a definition, we have to go by its ordinary meaning 'Commercial' denotes "pertaining to commerce"
(Chamber's Twentieth Century Dictionary); it means "connected with, or engaged in commerce; mercantile, having profit as the main aim" (Collins English Dictionary) whereas the word 'commerce' means "financial transactions especially buying and selling of merchandise on a large scale" (Concise Oxford Dictionary)".
6. Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in Consumer Complaint No.45 of 2022 10 which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house
(s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).
7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity."
16. The Complainants are senior citizens. Complainant No.1 is a retired Professor and Complainant No.2 is a homemaker. No evidence, whatsoever has been adduced to show that they are involved in any commercial activity. There is no merit in the contention of the Opposite Party that they are not consumers as per the Consumer Protection Act, 1986. It is just another routine, technical objection raised in the reply."
11. The OPs have not produced any evidence to prove that the Complainants are indulging in any commercial activity. Therefore, the Complainants fall under the definition of "Consumer", as defined under the Act, as they have hired the "service" of the OPs under section 2(42) of the Act.
Consumer Complaint No.45 of 2022 11
12. The further objection, which has been raised by OP No.1 is that this Commission has no jurisdiction to try and adjudicate the Complaint and as per Clause-37 of the agreement, only the Courts at Noida (UP) have the jurisdiction. Admittedly, the Complainants were allotted the Unit in dispute in the project of OPs located in the area of Derabassi District S.A.S. Nagar (Mohali). The property in question is situated in the territorial jurisdiction of Punjab and the Complainants had paid ₹59,44,756/- to the OPs towards the sale price of the Unit and other charges. Moreover, the jurisdiction has been conferred by the Statute itself and not only by mutual arrangement between the parties. Even in view Section 47(4) of the Consumer Protection Act, 2019, this Commission has territorial jurisdiction to decide this Complaint. Reliance can be placed upon the judgment passed by the Hon'ble National Commission in the case of Polymech Plast Machines Ltd. and Anr. v. Apple Plast Pvt. Ltd. IV (2006) CPJ 172(NC) wherein it was held that any such clause restricting the jurisdiction to one of the District Forums/State Commissions is contrary to Section 11(2) [17(2)] of the Act of 1986.
13. The next issue is as to whether the Complaint has been filed within the period of limitation of not? It is relevant to mention that neither the possession of the Unit complete in all respects with agreed facilities and Completion and Occupation Certificates has been delivered nor the amount deposited by the Complainants has been refunded till date. Hon'ble National Commission in "Navin Sharma (Dr.) & others v. Unitech Reliable Projects Pvt. Ltd. & Anr." 2016(2) CLT 457 has held Consumer Complaint No.45 of 2022 12 that unless or until the Complainants get possession of the Flats, complete in all respects, it is a case of continuous cause of action. In Para-8 of the said judgment, it has been observed as under:-
"8. The first submission made by the Counsel for the opposite party was that the case is barred by time. This argument was raised merely for the sake of cavil. It is now well settled that unless or until the Complainants get the possession of the Flats, they have got continuous cause of action. This view finds support from this authority reported in "Raghava Estates Ltd. v. Vishnupuram Colony Welfare Association" Special Leave to Appeal (Civil) No.35805 of 2012, decided on 07.12.2012."
14. In another case Satish Kumar Pandey & Anr. v. M/s Unitech Ltd. 2015 (3) CPJ 440 (NC), the Hon'ble National Commission held in Para-17 as follows:
"17. It was next contended by the learned Counsel for the respondent that since the last date stipulated in the buyers agreement for giving possession of the Flat to them expired more than two years ago, the Complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act. It is now settled legal proposition that failure to deliver possession being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers can always approach a Consumer Forum. It is only when the seller Flatly refuses to give possession that the period of limitation prescribed in Section 24A of the Consumer Protection Act would begin to run. In that case, the Complaint has to be filed within two years from the date on which the seller refuses to deliver possession of the Flats to the Complainants at any point of time and, therefore, the cause of action continues to subsist in favour of the Complainants. Reliance in this regard may be placed upon the decision of the Hon'ble Supreme Court in Meerut Development Authority v. M.K. Gupta IV (2012) CPJ 12, where the Hon'ble Supreme Court held that in such a case the buyer has a recurrent cause for filing a Complaint for non-delivery of possession of the plot."
15. In view of the law as laid down in the aforesaid judgments, since neither the possession of the Unit complete in all respects along with Completion and Occupation Certificates has been delivered nor the amount has been refunded, so it is a case of continuous cause of action and the Complaint is within limitation.
Consumer Complaint No.45 of 2022 13
16. Now, coming to the merits of the case, admittedly vide Buyer's Agreement dated 02.05.2013 (Ex.C-4), the Complainants were allotted Unit in dispute in the said project of the OPs. Total price of the Unit was fixed as ₹65,57,300/-. The Complainants had obtained loan of ₹51,25,840/- from HDFC Ltd. vide sanction letter dated 02.05.2013 (Ex.C-14) and a Tripartite Agreement dated 02.05.2013 (Ex.C-15) was executed between the Complainants, OP No.1 and HDFC Ltd. Said loan amount was taken over by ICICI Bank Ltd., who had agreed to advance the loan of ₹36,25,400/- in favour of the Complainant vide email dated 25.07.2018. The loan taken by the Complainants from HDFC Ltd. was cleared by them as is evident from letter dated 22.09.2018 (Ex.C-16). Thereafter, a fresh Tripartite Agreement was executed on 07.12.2018 between the Complainants and OP No.1 as well as OP No.4-ICICI Bank Ltd. The Complainants had paid a total amount of ₹59,44,756/- to the OPs vide receipts/cheques Ex.C-7 to Ex.C-13. As per Clause-4 (d) of the Tripartite Agreement, in case of non-compliance of the terms and conditions of the agreement, the Bank was having the right to recover the outstanding loan amount from the borrower/owner/ developer.
17. Further, as per Clause 14 of the Buyer's Agreement dated 02.05.2013 (Ex.C-4), the possession of the Unit was proposed to be delivered within a period of 36 months with grace period of 6 months from the date of actual start of construction of a particular tower/building, subject to timely payment of all charges, including basic sale price, stamp duty, registration fee etc.; failing which the Company Consumer Complaint No.45 of 2022 14 was to pay compensation at the rate of ₹5/- per sq.ft. of super area (1 sq.mt.=10.764 sq.ft.) per month as per Clause 15. There is no date of actual start of construction on the record. Therefore, the date of possession is to be decided/inferred in view of date of execution of Buyer's Agreement Ex.C-4. Said agreement was executed on 02.05.2013 and as such the possession was required to be delivered up to 01.11.2016. However, OPs No.1 & 3 have failed to deliver the possession of the Unit within said period and no sufficient explanation has been given for causing delay in delivery of possession. The Complainants had sent a number of emails to OPs No.1 & 3 with regard to delay in delivery of possession but without any result. Even no 'Completion Certificate' and Occupation Certificate have been produced by OPs No.1 & 3 on record to prove that their project was complete in all respects. Non-obtaining of 'Completion Certificate' by them amounts to a case of violation of provisions of Section 14 of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA), which deals with the responsibility of the builder/promoter to obtain 'Completion Certificate' from the competent Authority. The same is reproduced as under:
14. It is the responsibility of the promoter-
(i) in the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate from the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and
(ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5.Consumer Complaint No.45 of 2022 15
(2) The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate."
18. Clause 3.12 (i) of the Notification dated 07th July, 2015 published in the Punjab Government Gazette Extraordinary by Department of Local Government (Town Planning Wing) is also applicable to the properties falling within the Municipal Limits. The same is reproduced as under:
"No person shall occupy or allow other person to occupy any new building or part of a new building for any purpose whatsoever until such building or part thereof has been certified by the local authority or of any person authorized by it in this behalf to be in every respect completed according to the sanctioned plan and fit for the use for which it is erected."
19. Further, Section 272 of The Punjab Municipal Corporation Act, 1976 is also relevant in this context, which reads as under:-
"272. Completion Certificate. -
(1) Every person who employs a licensed architect or engineer or a person approved by the Commissioner to design or erect a building or execute any work shall, within one month after the completion of the erection of the building or execution of the work, deliver or send or cause to be delivered or sent to the Commissioner a notice in writing of such completion accompanied by a certificate in the form prescribed by byelaws, made in this behalf and shall give to the Commissioner all necessary facilities for the inspection of such building or work. (2) No person shall occupy or permit to be occupied any such building or use or permit to be used any building or a part thereof effected by any such work until permission has been granted by the Commissioner in this behalf in accordance with bye-laws made under this Act: Provided that if the Commissioner fails within a period of thirty days after the receipt of the notice of completion to communicate his refusal in grant such permission, shall be deemed to have been granted."
20. The Hon'ble National Commission in First Appeal No.855 of 2018 (Vision India Realtors Pvt. Ltd. & Anr. v. Sanjeev Malhotra) decided on 13.06.2018 has held that the legal possession cannot be delivered in the absence of 'Completion Certificate' issued by the Consumer Complaint No.45 of 2022 16 Competent Authority. Relevant portion of said order as mentioned in Para No.5 is reproduced as under:
5. During the course of hearing, it was submitted by the learned Counsel for the appellant that the completion certificate in respect of the project was obtained by the appellant on 15.03.2016. A copy of the communication dated 15.03.2016 from Municipal Council, Kharar has been placed on record. It is therefore, evident that the completion certificate having been received only on 15.03.2016, the appellant could not have offered legal possession of the apartment to the Complainant at any time before that date. As noted earlier, the amount of Rs.1,81,375/- was demanded on 20.04.2015 and the amount of Rs.2,12,489/- was demanded on 06.02.2016. The Complainant was requested to pay the aforesaid amount so that the appellant could offer the possession of the Flat. The said offer of possession was meaningless being unlawful as the requisite completion certificate had not been obtained by that date......."
21. Therefore, in absence of the 'Completion Certificate', an adverse inference is to be drawn against OPs No.1 & 3 that they had failed to complete the project/Unit in dispute within the stipulated period and had also failed to provide the basic/agreed amenities at the site.
22. OPs No.1 & 3 have also failed to prove on record that necessary permissions and approvals were obtained by them from the competent authorities before launching the said project. It amounts to violation of various provisions of PAPRA.
23. As per Section 3 (General Liabilities of Promoter) of the PAPRA, OPs No.1 & 3 were required to disclose the authenticity of their title over the land, on which such colony was developed/constructed or was to be constructed and also to disclose all encumbrances on such land, including any right, title, interest or claim of any party in or over such land. They were also required to give inspection after giving 7 days' notice and to supply the layout of the colony as approved by the prescribed authority. As such, OPs No.1 & 3 have failed to comply with Consumer Complaint No.45 of 2022 17 the provisions of Section 3 of the PAPRA.
24. As per Section 5 (Development of land into Colony) of PAPRA, OPs No.1 & 3 were liable to obtain necessary sanctions/ permissions from the competent authority for developing the colony but OPs No.1 & 3 have failed to produce on record any such permissions. So, they have also violated the provisions of Section 5 of PAPRA.
25. As per Section 9 of PAPRA, every builder was required to maintain a separate account in a scheduled Bank, for depositing the amount paid by the buyers, who intend to purchase the plots/Flats. However, no evidence has been produced on the record by OPs No.1 & 3 to prove that any such account has been maintained by them in this respect.
26. As mentioned above, as per Clause 14 of the Buyer's Agreement dated 02.05.2013 (Ex.C-4), the possession of the Unit was proposed to be delivered within a period of 36 months with 6 months' grace period from the date of actual start of construction of a particular tower/building, failing which the Company was to pay compensation at the rate of ₹5/- per sq.ft. of super area (1 sq.mt.=10.764 sq.ft.) per month as per Clause 15. However, as per Clause 6 (iii) of the agreement, OPs No.1 & 3 had to charge the interest at the rate of 18% per annum on account of delay in depositing the instalments by the buyers. It is apparent that the terms and conditions of the agreement (Ex.C-4) are one-sided and are in favour the OPs. It is matter of common knowledge that the buyers have no option but to sign on the Consumer Complaint No.45 of 2022 18 dotted lines or pre-drafted agreements prepared by the developer/builder. Failure of OPs No.1 & 3 to provide the complete and effective possession of the Unit within the stipulated period amounts to 'deficiency in service'. It is also matter of common parlance that for purchasing the Unit/Flat/plot, the purchasers take loans from their family members, relatives and friends or financial institutions. In some of the cases, the purchasers live on rent in the absence of timely delivery of possession. On account of delay in delivery of the possession within the stipulated period, they suffer mental agony, hardship and financial loss at the hands of the developers/builders. Sometimes, the purchasers take possession of the property in anticipation of fulfillment of remaining obligations of the builder/developer, only to secure the hard-earned money paid by them. In case Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon'ble Supreme Court has discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Further in Ghaziabad Development Authority v. Balbir Singh (2004) 5 SCC 65 (SC), the Hon'ble Supreme Court observed as follows:
"6...The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done."
8...... No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in Consumer Complaint No.45 of 2022 19 rented premises then on basis of rent actually paid by him. Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical."
27. In another case, reported as "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Geetu Gidwani Verma & Anr." II(2019) CPJ 34, it was held by the Hon'ble Supreme Court that the Builder could not seek to bind Flat purchaser with such one-sided contractual terms. The relevant para of the said judgment is reproduced hereunder:-
"6.7 A term of a contract will not be final and binding if it is shown that the Flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.
The contractual terms of the Agreement dated 8.5.2012 are ex facie one- sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the Flats by the Builder. XX XX XX XX XX XX
9. We see no illegality in the impugned 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 ....."
28. Even in Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt Ltd (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, while discussing the abovesaid authorities and discarding the one-sided terms of the Buyer's Agreements, the Hon'ble Supreme Court has awarded simple interest at the rate of 6% per annum on the amount deposited by the buyers, in addition to penalty, Consumer Complaint No.45 of 2022 20 as prescribed in the agreement, for delay in delivery of possession till delivery of actual and physical possession of the Unit/plot/property. It was held in Para-32 as under:
"32. In the present case, there exist, clear and valid reasons for not holding down the Flat buying consumers merely to the entitlement to receive compensation at the rate of 5 per square foot per month in terms of clause 14 of the ABA:
(i) There has been a breach on the part of the developer in complying with the contractual obligation to hand over possession of the Flats within a period of thirty-six months of the date of the agreement as stipulated in clause 11(a);
(ii) The failure of the developer to hand over possession within the contractually stipulated period amounts to a deficiency of service within the meaning of Section 2 (1) (g), warranting the invocation of the jurisdiction vested in the NCDRC to issue a direction for the removal of the deficiency in service;
(iii) The triggering of an obligation to pay compensation on the existence of delay in handing over possession is admitted by the developer for, even according to it, it has adjusted compensation at the agreed rate of Rs 5 per square foot per month to 145 out of the 171 appellants;
(iv) The agreement is manifestly one-sided: the rights provided to the developer for a default on the part of the home buyer are not placed on an equal platform with the contractual right provided to the home buyer in the case of a default by the developer;
(v) There has been a gross delay on the part of the developer in completing construction ranging between two and four years. Despite successive extensions of time to deliver possession sought by the developer, possession was not delivered on time;
(vi) The nature and quantum of the delay on the part of the developer are of such a nature that the measure of compensation which is provided in clause 14 of the ABA would not provide sufficient recompense to the purchasers; and
(vii) Judicial notice ought to be taken of the fact that a Flat purchaser who is left in the lurch as a result of the failure of the developer to provide possession within the contractually stipulated date suffers consequences in terms of agony and hardship, not the least of which is financial in nature. Having paid a substantial amount of the purchase price to the developer and being required to service the debt towards loan installments the purchaser is unable to obtain timely possession of the Flat which is the subject matter of the ABA."
29. In view of the law as laid down in the above noted cases, we are of the considered view that the provision of penalty at the rate of ₹5/- per sq.ft. per month, as per Clause 15 of the agreement (Ex.C-4) is not sufficient to compensate the Complainants for the delay caused in delivery of possession and the mental agony, harassment and financial Consumer Complaint No.45 of 2022 21 loss suffered by them on account of this reason. Therefore, keeping in view the facts and circumstances of the present case, we deem it appropriate that OPs No.1 & 3 are liable to compensate the Complainants for delay in delivery of possession by paying interest at the rate of 9% per annum on the amount so paid by them after the expiry of the agreed date of delivery of possession i.e. 01.11.2016 till the date of actual, physical and legal delivery of possession of the Unit in question, with all the agreed amenities and Completion and Occupation Certificate issued by the competent authorities. Besides this, the Complainants are also entitled to suitable compensation including litigation costs.
30. As per the payment receipts, out of the sale consideration of the Unit, some amount was paid towards Service Tax etc. The possession of the Unit was not delivered within the agreed period and even thereafter and the Complainants were deprived of the use and comforts of the Unit as well as the amount paid by them for the delayed period. OPs No.1 & 3 have not given any cogent and convincing explanation as to why the possession was not delivered within the agreed period. They could have made efforts to deliver the possession of the Unit within the agreed but no sincere efforts were made and as such they are liable to suffer for the consequences of the same. Had the possession been delivered within the agreed period, then the purpose of paying Service Tax could have been fulfilled. However, due to non-delivery of the possession, the risks on the amount Service Tax paid by the homebuyers are to be borne by the builders/developers and Consumer Complaint No.45 of 2022 22 not by the homebuyers, who take loans for purchasing the dwelling Units at heavy rates of interest and even are compelled to live on rent and had to incur other expenses due to non-delivery of the possession within the agreed period.
31. Accordingly, finding force in the contentions raised by learned Counsel for the Complainants, the Complaint is partly allowed by issuing following directions to OPs No.1 & 3:
i) To deliver actual and physical possession of the Unit allotted to the Complainants complete in all respects, along with agreed facilities and Completion and Occupancy Certificates issued by the competent authorities and execute Sale/Conveyance Deed in favour of the Complainants, subject to payment of remaining sale consideration, if any, without any interest/penalty;
ii) To pay compensation for delay in delivery of possession interest at the rate of 9% per annum on the amount so paid by them to OPs No.1 & 3 after the expiry of the agreed date of delivery of possession i.e. from 01.11.2016 till the date of actual, physical and legal delivery of possession of the Unit in question, with all the agreed amenities and Completion and Occupation Certificate issued by the competent authorities in the above manner;
iii) To pay ₹50,000/- towards composite compensation and litigation expenses;
iv) The balance sale consideration payable by the Complainants, if any, shall be adjusted from the above said liability of opposite parties No.1 & 3.
v) Compliance of aforesaid directions shall be made by OPs No.1 & 3 within a period of 30 days from the date of receipt of the certified copy of the order.Consumer Complaint No.45 of 2022 23
32. In case opposite parties No.1 & 3 fail to deliver the possession of the Unit in dispute, then in the alternative, they shall:
i) Allot and deliver actual and physical possession of an alternative Unit to the Complainants of the same size/specifications at the same price in the same project, complete in all respects, along with agreed facilities and Completion and Occupancy Certificates issued by the competent authorities and execute Sale/Conveyance Deed in favour of the Complainants, subject to payment of remaining sale consideration, if any, without any interest/penalty;
ii) to pay compensation for delay in delivery of possession interest at the rate of 9% per annum on the amount so paid by them to OPs No.1 & 3 after the expiry of the agreed date of delivery of possession i.e. from 01.11.2016 till the date of actual, physical and legal delivery of possession of the Unit in question, with all the agreed amenities and Completion and Occupation Certificate issued by the competent authorities in the above manner;
iii) to pay ₹50,000/- towards composite compensation and litigation expenses;
iv) The balance sale consideration payable by the Complainants, if any, shall be adjusted from the above said liability of opposite parties No.1 & 3.
v) Compliance of aforesaid directions shall be made by OPs No.1 & 3 within a period of 30 days after expiry of aforesaid period.
33. In case opposite parties No.1 & 3 fail to comply with aforesaid directions, then in the alternative, they shall:
i) Refund the amount deposited by the Complainant i.e. ₹59,44,756/- along with compensation for causing financial loss and depriving the Complainants of the use of the said amount during the period the same remained with opposite parties No.1 Consumer Complaint No.45 of 2022 24 & 3 at the rate of 9% per annum from the respective dates of deposit till realization.
ii) It is made clear that out of the refundable amount, first of all, the outstanding loan amount advanced by opposite party No.4-ICICI Bank shall be refunded to it, as per terms of the Tripartite Agreement (Ex.C-18) and thereafter the remaining amount, if any, shall be refunded to the Complainants.
iii) To pay ₹50,000/- towards composite compensation and litigation expenses.
v) Compliance of aforesaid directions shall be made by OPs No.1 & 3 within a period of 30 days after expiry of aforesaid period.
34. Since the main case has been disposed off, so all the pending miscellaneous Applications, if any, are accordingly disposed off.
35. The Complaint could not be decided within the stipulated period due to heavy pendency of Court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER June 25, 2024.
(Gurmeet S)