State Consumer Disputes Redressal Commission
Shashi Kanti Giri vs Gaytri Hospital Atity & Realcons Ltd on 31 August, 2022
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UP C-1 Vikrant Khand 1 (Near Shaheed Path), Gomti Nagar Lucknow-226010 Complaint Case No. CC/1/2015 ( Date of Filing : 05 Jan 2015 ) 1. Shashi Kanti Giri New delhi ...........Complainant(s) Versus 1. Gaytri Hospital atity & Realcons ltd Noida ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 31 Aug 2022 Final Order / Judgement Reserved State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint Case No.1 of 2015 Shashi Kant Giri aged about 36 years, S/o Sri Paras Nath Giri, R/o H. No.76 B/9, Kishangarh, Vasant Kunj, New Delhi-110070 ...Complainant. Versus M/s Gayatri Hospitality and Realcon Ltd., through its Managing Director, Corporate Office at H-133, Sector-63, Noida (U.P.) 201301 ...Opposite party. Present:- 1- Hon'ble Sri Rajendra Singh, Member. 2- Hon'ble Sri Vikas Saxena, Member. Sri Brijendra Chaudhary, Advocate for the complainant. None appeared for Opposite Party. Date : 29.9.2022 JUDGMENT
Per Sri Rajendra Singh, Member- This complainthas been filed by the complainantfor following prayer:-
To set aside the cancellation letter/order dated 19.4.2014 passed/issued by the opposite party and direct them to restore the allotment and allow the complainant to deposit the rest amount as per concerned plan; and/or To direct the opposite party to refund the whole amount @18% from the date of deposition.
To pay Rs.5,00,000.00 compensation for inconvenience felt by them and for mental agony.
To pay Rs.25,000.00 cost of the complaint case.
Any other remedy available to the complainant in the interest of justice.
In short, the brief facts of the complaint case are that, that the opposite party is a company incorporated under the (2) Companies Act, 1956 having its office at H-133, Sector-63, Noida (U.P.). One project of opposite party was commencing in the name of 'Gayatri Aura' Resort Style Living near at NOIDA Extension. The complainant was intended to purchase a residential flat in the area of NOIDA for that he applied/booked on 22.2.2011 one flat in a project of opposite party at 'Gayatri Aura' Resort Style Living at NOIDA Extension.
Total cost of the said flat was quoted by the opposite party Rs.26,40,950.00 out of this quoted amount the complainant deposited Rs.2,50,000.00 as booking amount with the application form having receipt no.657 dated 28.2.2011. The flat no.S-401 Type: 3BHK-affordable was allotted to the complainant in 'Gayatri Aura' having super area 1195 sq.ft.
The opposite party floated 4 types of payment plan, for ready reference the same are reproduced:
A- No EMI-Construction Linked Plan B- Down Payment Plan C- Flexi Plan D- Construction Linked Plan (CLP) Out of these options, the complainant opted 'No EMI Construction Linked Plan'. For this plan the opposite party had stated that after making payment of 10% booking amount, no equal monthly installments would be payable till the possession of the flat. The rate of flats, under the NO EMI Plan was more than other options. In the said advertisement/ offer the possession over the flat was promised within 30 months from the date of booking, it was also promised to pay the penalty in case of delayed possession as per penalty (3) clause of the agreement, rather no copy of such agreement was ever given to the complainant.' The complainant received a letter 25.10.2011 of the opposite party in which they made excuse for delay in the said project and appreciated the cooperation of the complainant in the said delayed project work. The complainant received a letter dated 12.12.2013 with subject- Provisional Registration of Flat no.S-401 (NO EMI) 1195 sq. ft. In the project 'Gayatri Aura', Greater Noida (West) by which they informed the said project is being approved for finance by public sector/private sector banks/financial institutions under CLP Plan and sought some documents for ascertaining the loan eligibility of the complainant, accordingly the documents were supplied to the opposite party.
All of sudden a letter dated 14.2.2014 was received to the complainant by which they informed the complainant that earlier allotted flat no.S-401 (having size of 1195 sq. ft.) has been reallocated as flat no.J-408 having size of 1162 sq. ft. They also informed the complainant that the earlier scheme/ plan 'NO EMI' has to be converted in CLP (Construction Linked Plan) and for the said conversion the complainant had to make a confirmation call to the opposite party on or before 28.2.2014 neither any phone number was mentioned in the said letter nor the name of person was given for any contact. As a sincere allottee, the complainant contacted the opposite parties on 27.2.2014 at the telephone no.0120-4377187 available with him and gave his oral consent to convert the earlier 'NO EMI' plan into 'CLP'.(4)
In the letter dated 13.3.2014 (received on 19.3.2014) the complainant was instructed to pay remaining 10% amount i.e. Rs.2,90,146.00 on or before 5.4.2014. The complainant was not ready for such unexpected changes in 'payment plan' and therefore vide letter dated 20.3.2014 he requested for extension of time till may 2014 to pay the remaining 10% demanded amount, but without responding the letter dated 20.3.2014 opposite party cancelled the allotment by issuing letter no.GA/NOEMI dated 19.4.2014. As the complainant was out of station and therefore, the information of such cancellation was received on 6.5.2014, immediately the complainant sent an e-mail on 6.5.2014.
In reply to the e-mail dated 6.5.2014 the officials of the opposite party assured the complainant for amicably settlement and advised his to come with arranging the requisite amount. The complainant arranged the demanded amount by 26.5.2014 from his relatives and friends and sent a letter to the office of opposite party for restoration of earlier allotted flat which was cancelled on 19.4.2015. When no reply was made by the opposite party he also approached to the office of the opposite party at NOIDA on 2.6.2014 and queried about the reconsideration of the cancellation, whereas Marketing Executive/Officer Mr. Pankaj Upadhyay, of the opposite party said that the cancelled flat may be restored upon payment of extra restoration charges @Rs.250 for newly converted 1162 sq. ft. super area i.e. total Rs.2,90,500.00 extra to overall cost of the flat, complainant gave his consent and seeks the same in writing but they did not supply it in writing.(5)
The opposite party became greedy as they know very well that the price of the flat is increased 2 to 3 times in past 3 years and the illegal act of the opposite party is apparent and need not to prove. The complainant booked the said flat in the month of February, 2011 and the opposite party were duty bound to complete the project within 30 months which expired in the month of August, 2013 and with a dishonest intention he delayed the project and the complainant was required to deposit the demanded money but when the complainant sought some time for making payment, which was demanded unexpectedly, they did not consider the constraint of the complainant, even the representation dated 20.3.2014, 6.5.2014 and 26.5.2014 made by him has not been disposed off. The attitude and the act of the opposite party show their arbitrariness behavior towards their customers.
The complainant was/is ready to deposit the requisite amount of Rs.290146.00 but having wrong intentions the opposite part is not ready to take the sum, additionally they are demanding the restoration charges of Rs.290500.00. The act of the opposite party proves their deficiency and inadequate business practice. The complainant has paid consideration in part for the said flat and therefore, he is the consumer of the opposite party under the definition of Section2(1)(d) of the Consumer Protection Act, 1986.
The opposite party filed their written statement wherein it is stated that the complainant booked a flat no.S-401 having super area of 1195 sq. ft, with the respondent and paid the booking amount of Rs.2,50,000.00. The complainant booked the flat under "No EMI Till Possession' Scheme offered by the respondent at that time. An allotment letter dated (6) 23.5.2011 was issued to the complainant and cost of the flat mentioned in the allotment letter was Rs.27,10,185.00. It was also clearly referred in the allotment letter that in case loan was not sanctioned, the complainant may either take booking amount back alongwith 9% simple interest or may opt for change in payment plan as per his convenience.
Unfortunately, the land where the construction was to be started came under dispute with the farmers and various petitions were filed before the Hon'ble Allahabad High Court against the proposed/on going constructions in the area. The High Court of Allahabad stayed all the constructions in the area therefore, no construction was started immediately as planned by the respondent. The petitions were finally disposed by the Hon'ble Allahabad High Court in July, 2013 and construction was allowed to start in the area.
The respondent obtained all the necessary sanctions from the competent authorities to start the construction and to expedite the project and also replanned the building plans. It is also stated that in September, 2013 a circular was issued by Reserve Bank of India by which scheme like 'No EMI Scheme' offered by the respondent and other similar situated builders, was objected since as per the circular it is likely to exposes the banks as well as loan borrowers to additional risks. Since the RBI objected to the No EMI Scheme offered by the respondent, the respondent issued a letter dated 14.2.2014 to the complainant asking him to give his consent to convert no EMI plan to construction link plat (CLP). It was also informed to the complainant that the project was also approved by HDFC Ltd. and Canara Bank for finance. It was further informed that approvals from various statutory bodies (7) like GNIDA, Air Port Authority, Fire Department and environment department has already been obtained. The complainant was requested to get the required formalities done on or before 28.2.2014. The complainant did not respond to the said letter, therefore, again a letter dated 13.3.2014 was issued to the complainant explaining the change of payment plan due to RBI guidelines and also requested him to give consent for conversion from No EMI plan to CLP and get new allotted flat number under CLP scheme by 31.3.2014.
The complainant neither responded to the aforesaid letters sent to him nor contacted the respondent till date. He never raised any objections to the plan change and kept silence for more than a year. The complainant never approached the respondent before filing the present complaint before this Hon'ble Commission. It is pertinent to mention that originally the size of the plot was 70771.95 sq. mtr. but later on it was revised to 36002.95 sq. mtr. The revised map has no flats of size 1195 sq. ft. The area of said flat is revised to area of 1162 sq. ft. and the respondent is passing benefit of revised cost to the customers.
It is also stated that the complainant has not supplied the various annexures mentioned in the complaint therefore, respondent reserve its right to file a further reply after receiving the annexures if needed. The complainant has already admitted that he is ready to pay the amount and accept the change of plan. Therefore, nothing remain to be decided by this Hon'ble court. The present complaint is not maintainable since the complainant has concealed the material facts from this Hon'ble court. If the complainant is (8) not agree to the offer of respondent then the respondent is also offering to refund the deposited amount to the complainant along with simple interest of 9% as agreed between the parties. Therefore, the complaint is not maintainable since there is no cause of action occurred in favour of complainant.
The booking of complainant was cancelled because despite letters dated 14.2.2014 and 13.3.2014 duly received by the complainant, he refused to complete the required formalities or responded the letters. It is further submitted that due to the circular issued by the RBI the respondent is unable to continue with the No EMI scheme offered by it earlier. As stated above the complainant is free to take his amount back along with 9% simple interest as per terms and condition of agreement.
It is also stated that the respondent was ready to carry out the constructions as per plan but due to stay granted by the Hon'ble Allahabad High Court could not start the construction at site. It is also submitted that since RBI raised objections to the No EMI plan offered by respondent and other similar companies therefore, the respondent changed the plan and sent the letter for the consent of complainant. But despite receiving the said letter no response was given by the complainant.
The complainant never visited the office of the respondent and making a false story at this stage only to put pressure on the respondent. The said constructions got delayed due to circumstances mentioned above which were out of control of the respondent.
(9)It is therefore, most respectfully prayed that in view of the above stated facts and circumstances that the present complaint may kindly be dismissed with costs in the interest of justice.
We have heard ld. Counsel for the complainant Sri Brijendra Chaudhary. None appeared for the opposite parties. We have perused the pleading, evidence and documents available on record.
Before discussing the merits of the case, it is important to note some dates regarding this complaint case. These are:
22.02.2011 - complainant applied to book a flat 28.02.2011 -complainant deposited ₹ 250,000 /.
23.05.2011 -allotment letter issued to complainant for Flat no S-401 ,Area 1195 square feet, Setor-63 , Noida in " GyatriAura" under " No EMI Till Possession." Cost of the flat mentioned ₹ 2,710,185/ 12.12.2013- opposite party issued a letter to the complainant informing him that the map of the project has been approved by Greater Noida Industrial Development Authority and the said project has been approved forfinance by public sector/private sector banks/financial institutions under CLP plan.
14.02.2014 -opposite party issued a letter to the complainant asking him to give his consent convert EMI plan to Construction Linked Plan (CLP) in view of the circular issued by Reserve Bank of India in September 2013.(Copy of circular not filed). Opposite party also informed the complainant that he was provisionally allocated flat-401 having size of 1195 ft² at the initial stays and thereafter the allotted flat no J-408 having size of 1162 ft².
13.03.2014 -opposite party issued another letter asking complainant to his consent to convertEMI plan to Construction Linked Plan (CLP) and to get new allotted flat number under the scheme by 31.03.2014.
20.03.2014 -the complainant sent a letter accepting the change in payment plan and also the size of flat and requested to provide time till May 2014 to deposit the amount of ₹ 290,146/as demanded by letter dated 13.03.2014 .
19.04.2014 - the opposite party issued a letter to the complainant informing him the cancellation of booking of flat NO s-401 AT " Gayatri Aura " , GH-11, Sector-1 , Greater Noida.
13.08.2015 -respondent sent a letter to the complainant offering to settle the matter but did not get any respond.
It is important to note here that the opposite party promised that the possession will be offered within 30 months from the date of booking or Flat Buyer Agreement. If there is delay in possession there is a penalty clause. Though the complainant has deposited the booking amount on 28.02.2011, but the provisional allotment letter has been issued by the opposite party on 23.05.2011 so we take this date for counting 30 months regarding the promise of delivery of possession of the flat. It means that the flat was (11) to be delivered on or before 22.11.2013. The initial plan was" No EMI Till Possession."
The total cost of the said flat has been mentioned in the application for provisional booking/allotment of residential apartment project dated 22.02.2011 as ₹ 2,640,950/. In the registration/provisional booking form the same amount has also been mentioned. The possession of the flat was to be delivered by 22.11.2013. If the possession has not been delivered by the said promised date, it comes under the deficiency of service and unfair trade practice on part of the opposite party. Surprisingly the opposite party issued a letter dated 14.02.2014 ( after expiring promised date of delivery of possession) asking him to give his consent to convert EMI plan to Construction Linked Plan (CLP) in view of the circular issued by Reserve Bank of India in September 2013.(No such circular has been filed by the opposite party). The complainant under duress and having no other option accepted it though the opposite party was defaulter in this is because he cannot provide the possession of the flat by the said promised date.
This Consumer Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered. The main objects of the consumer protection act are ;
(11)To Provide better and all round protection to consumer.
To Provide machinery for the speedy redressal of the grievances.
To Create framework for consumers to seek redressal.
To Provide rights to consumers.
To Safeguarde rights of Consumers.
Let us know more about the rights and responsiblities of consumer. Listed below are the Rights of the Consumer Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.
Listed below the responsibilities of the consumers (13) Responsibility to be aware - A consumer has to be careful of the safety and quality of products and services before purchasing.
Responsibility to think independently- Consumer should be well bothered about what they want and need and hence make independent choices.
Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want Responsibility to complain- It becomes the consumer's responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.
The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers' disputes and for matters connected therewith (Preamble).
The Act Inter alia, seeks to promote and protect the rights of consumers such as --
right to be protected against marketing of goods which are hazardous to life and property;
(14)(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
(3) right to be assured, wherever possible, access to variety of goods at competitive prices;
(4) right to be heard and to assured that customers' interests will receive due consideration at appropriate forums.
(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and (6) Right to consumer education The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.
The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.
Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers' grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the (15 feeling of responsibility of the manufacturer, trader, supplier or businessman.
The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.
Extent of Consumer Protection:
While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the (16) Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.
Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate it in accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.
The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act. Whenever there is clash (17) between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.
Somewhat similar situation aroused in front of Supreme Court in the case of Aftab Singh and Others v. Emaar MGF Land Limited and Another ( Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017) . In this case the Supreme Court cleared out the battle between arbitration and the statutory remedy when it comes upon solving the consumer disputes, which also upheld the decision of the National Consumer Disputes Redressal Commission (NCDRC). In this case, the apex body for the consumer dispute in India (NCDRC) ruled in the favor of the statutory remedy over the arbitration.
The beneficial legislation of Consumer Protection Act aims at reducing the grievances of the all classes of customers by providing them the preferential treatment. According to the Consumer Protection Act, the consumer dispute is the entity where the consumer/ customers have been given the convenient safeguards against ample exploitation like bad customer service, faulty goods or any unfair trade practices. The interest of the customers is protected by setting up, the three tier quasi-judicial consumer Redressal machinery which are at national, state and district levels as per section 9 of Consumer Protection Act. The Consumer Protection Act, (18) 1986 (CPA) has been enacted in light of certain concerns related to public policy and the benefit of consumer.
In India, people are least aware with the consumer's rights and lags behind having low general understanding of arbitration as dispute resolution mechanism. The arbitration clause can curtail the grounds on which the consumers can raise the disputes, whereas on the other side the consumer protection act may grant the consumer various grounds on which he can file the complaint which may not be otherwise permitted in the standard form agreement having the arbitration clause."
The Hon'ble Supreme Court in CIVIL APPEAL NO(S). 3533-3534 OF 2017 M/S. FORTUNE INFRASTRUCTURE (NOW KNOWN AS M/S. HICON INFRASTRUCTURE) & ANR. VS TREVOR D'LIMA & ORS.( Judgment March 12 , 2018 ) has held:
In the above-mentioned case Hon'ble Supreme Court also held regarding payment of compensation or quantum of compensation as follows:
"15. Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as (19) to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/complainants is entitled to ?"
Further the Hon'ble Supreme Court has held regarding payment of compensation:
"18. This Court in Ghaziabad Development Authority v. Balbir Singh, (2004) 5 SCC 65, has observed that there is no fixed formula for fixing damages in the following manner '8. However, the power and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above, what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on finding of loss or injury and has to correlate with the amount of loss or injury. Thus, the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. 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 rented premises then on basis of rent actually paid by him.(20)
Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury, both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore, the compensation in such cases would necessarily have to be higher. ... We clarify that the above are mere examples. They are not exhaustive. The above shows that compensation cannot be the same in all cases irrespective of the type of loss or injury suffered by the consumer." (emphasis supplied) In this case the opposite parties have not committed any layout plan or any letter showing that they did any work towards acquiring the said land for the construction of the project. The cause of action in this case is continuing cause of action because the unit has not been allotted to the complainant within the stipulated period of 30 months as promised by the opposite parties or in view of the Hon'ble Supreme Court a reasonable time of three years and the (21) complainant has requested many times to the opposite parties to allot the unit. After a period of 30 months , everyday cause of action is arising. The complainant is a consumer and he paid consideration for the allotment of a unit. Till 2022 the complainant did not get the possession of his developed plot for which he deposited the amount. This is a clear case of deficiency of service and unfair trade practice.
In Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan, (2019) 5 SCC 725, there was a delay of almost two years in obtaining an occupancy certificate after the date stipulated in the ABA. As a consequence, there was a failure to provide possession of the flat to the purchaser within a reasonable period. This Court dwelt on the terms of the ABA under which the builder was entitled to charge interest at 18 per cent per annum for the delay in payment of instalments by the purchaser. On the other hand, the failure to provide possession on the part of the developer was subject to a grace period of twelve months followed by a termination notice of ninety days and a further period of ninety days to the developer to effect a refund. Adverting to these clauses, the court noted:
"6.4. A perusal of the apartment buyer's agreement dated 8-5- 2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4(ii) of the agreement entitles the appellant builder to charge interest @18% p.a. on account of any delay in payment of instalments from the respondent flat purchaser. Clause 6.4(iii) of the agreement entitles the appellant builder to cancel the allotment and terminate the agreement, if any instalment remains in arrears for more than 30 days. On the (22) other hand, as per Clause 11.5 of the agreement, if the appellant builder fails to deliver possession of the apartment within the stipulated period, the respondent flat purchaser has to wait for a period of 12 months after the end of the grace period, before serving a termination notice of 90 days on the appellant builder, and even thereafter, the appellant builder gets 90 days to refund only the actual instalment paid by the respondent flat purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the appellant builder is liable to pay interest @9% p.a. only. Another instance is Clause 23.4 of the agreement which entitles the appellant builder to serve a termination notice upon the respondent flat purchaser for breach of any contractual obligation. If the respondent flat purchaser fails to rectify the default within 30 days of the termination notice, then the agreement automatically stands cancelled, and the appellant builder has the right to forfeit the entire amount of earnest money towards liquidated damages. On the other hand, as per Clause 11.5(v) of the agreement, if the respondent flat purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the agreement thereafter, and shall be bound by the provisions of the agreement."
Hon'ble Justice Indu Malhotra speaking for the Court noted:
"6.8. 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 (23) 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(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder." The Court observed that in these circumstances, the flat purchasers could not be compelled to obtain possession which was offered almost two years after the grace period under the agreement had expired. Hence, the NCDRC was held to have correctly awarded interest at the rate of 10 percent per annum.
The decision of this Court in Dhanda Case, 2019 SCC On Line SC 689 has been relied upon by learned Senior Counsel appearing on behalf of the developer as elucidating the principle that where a flat buyers agreement stipulates a consequence for delayed possession, exceptional and strong reasons must be established before the forum constituted under the Act of 1986 awards compensation in addition to what has been contractually agreed. In Dhanda's case, the SCDRC issued a direction for handing over physical possession of the residential unit to the complainant and for execution of a sale deed. In addition, compensation was awarded by way of interest at the rate of 12 per cent per annum with effect from twelve months after the stipulated date under the agreement. In an appeal by the developer, the NCDRC directed that the rate of interest for a house building loan for the corresponding period in a scheduled nationalised bank would be appropriate and if a floating rate of interest was prescribed, the higher rate of interest should be taken for the computation. A sum of Rs.1 lac per annum from the date for handing over possession to the actual date of possession (24) was regarded as appropriate in the facts of the case. In that case under the terms of the buyer's agreements, possession was to be delivered within twenty-four months of the execution of the agreement i.e. 10 February 2013 - failing which the developer was liable to pay compensation at the rate of Rs.10 per square foot per month for the delay. The developer contended that construction activities were delayed as a result of an injunction granted by this Court over a period of eight months and consequently sought an extension of the period for handing over possession by one year. Alternatively, the developer offered to refund the money deposited with interest at 9 per cent per annum. Construction of 258 independent floors was completed while about 1,500 units were nearing completion. In two sets of Civil Appeals which came up before this Court earlier, agreed terms were arrived at providing for the award of interest at 9 per cent per annum from the date of deposit till refund. While considering the order of the NCDRC, this Court observed:
"16. The District Forum under the Consumer Protection Act, 1986 is empowered inter-alia to order the opposite party to pay such amount as may be awarded as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party including to grant punitive damages. But the forums under the Act cannot award interest and/or compensation by applying rule of thumb. The order to grant interest at the maximum of rate of interest charged by nationalised bank for advancing home loan is arbitrary and no nexus with the default committed. The appellant has agreed to deliver constructed flats. For delay in handing over possession, the consumer is entitled to the (25) consequences agreed at the time of executing buyer's agreement. There cannot be multiple heads to grant of damages and interest when the parties have agreed for payment of damages at the rate of Rs. 10/- per sq. ft. per month. Once the parties agreed for a particular consequence of delay in handing over of possession then, there has to be exceptional and strong reasons for the SCDRC/NCDRC to award compensation at more than the agreed rate."
Now the interest may be 6% to 10% in favour of the allottees if they have not been given possession of the flat/plot within promised or within a reasonable time. The complainant has deposited the entire agreed cost of the flat before June 2009. Now it is the duty and obligation of the opposite party to deliver the possession within stipulated time but they failed to do so.
In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC). These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 34 of 2013- Jasleen Viswanathan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. &Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. &Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. &Anr.; 86 of 2010- Priyanka Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 101 of 2011- Mohd. Aslam Khan &Anr. Vs. ParsvnathDevelopers Ltd. &Anr.; 130 of 2012- Dr. Sunil Kr. Singh &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 49 of (26) 2012- Neera Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. &Anr.; 87 of 2010- Syed Gufran Ali Alvi&Anr. Vs. Parsvnath Developers Ltd. &Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. &Anr.; 175 of 20130- Umesh Chandra Dixit &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 97 of 2011- Pravin Kumar Goel &Anr. Vs. Parsvnath Developers Ltd. &Anr. which complaints were partly allowed.
The Hon'ble NCDRC held that:
"Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the (27) opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses.
The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate (28) complaints before State Commission. Aggrieved by the order of Hon'ble State Commission, these appeals preferred before Hon'ble National Consumer Disputes Redressal Commission.
Hon'ble NCDRC discussed various case laws and after hearing the parties held, "Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under Section 2 (nnn) of Consumer Protection Act and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not (29) fall within the purview of restrictive trade practice under Section 2(nnn) of Consumer Protection Act. "
"Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10 ( c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 (30) sq. after 54 months of execution of agreement till delivery of possession."
Against this judgment, parties went to Hon'ble Supreme Court. The judgment of Hon'ble Supreme Court is:-
In Nalin Bhargava vs. Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon'ble Supreme Court held:-
"Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc. It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahoty would insist that there should be imposition of costs as compensation.
Mr. Sachin Datta, learned senior counsel appearing for the developer has raised objections with regard to imposition of costs.
Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say "cost", we mean costs alone and nothing else."
These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts (31) deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of "The Merchant of Venice" The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer "a pound of flesh" as collateral against a loan. These acts of builders also remind us the age of Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers, so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages. Now in the background of all the facts and also the facts of the present case, we will also discuss something more.
In the present case in spite of giving delivery of the flat, the opposite party cancelled the flat though the opposite party had full knowledge that the date of promised date of delivery has already been expired and after that they compelled complainant to accept construction linked plan in place of no EMI plan. Every person does not live at his place all the time waiting the letter of the builder. When everything has already been settled regarding price of the flat, date of delivery of possession etc., and if the builder wants any change in any of the terms and condition of the allotment order, it is his duty to send his personnel to see the complainant and brief him about the change circumstances.
(32)Sending a letter is not an excuse for the builder. When he already has become a defaulter, he cannot change the plan without the consent of the allottee. The allottee has sent a letter for seeking more time and the builder, the defaulter in this case, cancelled his flat. Surprisingly when the allottee met the builder to reconsider the cancellation, the builder being in dominating position, asked the allottee to deposit extra amount of ₹ 290,500/. The builder did not tell as to how much interest has already been accrued on the deposition made by the complainant but he was builder and he thought that he can do everything. Every person does not know about the law but ignorance of law is no excuse. But in this case the builder was defaulter and there was deficiency in service and unfair trade practice when he could not deliver the possession on the due date as promised by him. There is no copy of any stay order of the Hon'ble High Court on the file. Further the builder has stated that he has got the required NOC's of fire department, involving Department and civil aviation department but he did not file any such NOCs.
NOCs from different departments are necessary documents for handing over possession. The important document is completion certificate and occupancy certificate. We have to see what the certificates are.Now we come to the facts of the present case. There is not a single word regarding completion certificate, occupancy certificate, NOC from pollution department, NOC from civil aviation Department and NOC from fire department. Without these, offer of giving possession is no offer in the eye of law.
In the case of Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. &Anr., Civil appeal no.3302 of 2005, (33) judgment dated10.06.2008, Hon'ble Supreme Court has held that a prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage.
Hon'ble Supreme Court in the case ofIreo Grace Realtech Private Limited Vs.Abhishek Khanna&Ors., civil appeal no.5785 of 2019, with other civil appeals, judgment 11.01.2021,has held where the development makes an alternate offer of allotment of apartment, the allottees are however not bound to accept the same because of inordinate delay in completing the construction of the towers or units were allotted to them and if the Occupation Certificate is not available even as on date, clearly amounts to deficiency of service.
We should know the importance of completion and occupancy certificate. Both are not the same but different certificates and it is important to discuss about these two certificates which are necessary before giving possession of any flat of the buyer.
(34)When buying a home, it is vital to obtain documents, such as the Occupancy Certificate (OC) and Completion Certificate (CC). These are essential documents that allow you to mortgage or sell your home. Hence, homebuyers are advised to take possession of their flat or property only after these documents have been issued.
According to Vikas Bhasin, CMD, Saya Group, "Completion Certificate and Occupancy Certificate are some of the most important documents for a home buyer. Civic authorities can evict the occupants in case of non-availability of the necessary approvals. Before investing in a property, people must be doubly assured that all the certificates and approvals are in place."
Let us dive a little deeper into the details of these documents and their importance before you make a move to buy your dream home.
Owning a home is the culmination of years of savings, research, and paperwork. After patiently waiting for the construction to be complete, you finally register the property and take possession of your flat. But what if your dream home is declared unauthorised, and you are evicted by the authorities? This is not as far-fetched as it sounds. This nightmare could turn into reality without a crucial link in the property sale process - the Occupancy Certificate (OC).
The majority of apartments in different Indian cities have been occupied by owners without any occupancy certificate. This oversight can turn into a costly mistake, jeopardising the legal status of your dream home. The (35) importance of the occupancy certificate cannot be overstated as it seals the legal status of your property and protects your ownership rights.
Decoding legal documents To understand the importance of an occupancy certificate and other legal documents, let's decode the legal jargon and understand their meaning in simple terms. Here's a ready reckoner of the most important legal documents related to your property:
Occupancy Certificate An OC certifies that the construction of the building has complied with the approved plans. It is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied. Simply put, without an OC, your building has not been awarded a 'pass certificate'.
Completion Certificate A Completion Certificate (CC) is issued only after the construction meets other building standards like distance from the road, the height of the building, and rainwater harvesting system. A CC alone cannot legalise occupation; the OC is a must.
Commencement Certificate If you are buying an under construction property, make sure you check the Commencement Certificate before signing the agreement. Many builders do not wait for a Commencement Certificate. This is illegal and can create serious problems in obtaining an OC at a subsequent stage.
Why is it unsafe to buy a flat without OC?(36)
In the absence of a valid OC, the local municipal body can initiate serious action against flat owners. In 2014, residents of a well-known building complex in Mumbai's upscale Worli area were hit with a bolt from the blue after their complex was declared unauthorised. At the time of possession, buyers overlooked the issuance of an OC from the builder. It was only after that they were forced to evacuate their flats that the writing on the wall became clear to them.
This is just one instance, and if buyers are not careful about getting the OC, they may face the following repercussions:
• In the absence of a valid OC, your building can be demolished as it can be classified as an unauthorised structure.
• The OC is crucial while applying for a home loan or loan to purchase a resale flat. If you wish to sell or hypothecate the property after a lapse of time, you will not be able to do so without a valid OC.
• The water connection, sanitary connection or electricity supply can be disconnected in the absence of an OC.
How to obtain an OC The OC is obtained from local municipal bodies by submitting an OC application form along with the following documents:
• Commencement Certificate • Completion Certificate • Built and Section plan • NOC for fire and pollution (37) • Area calculation sheet of floor signed by an authorised architect • Photographs of the completed building • Tax assessment with tax paid receipt • Photographs of rain harvesting and solar panels • Copy of the sanctioned plan After submitting the form, authorities inspect the complex and confirm if it has conformed to the approved plan before issuing an OC. Legally and ideally, a builder should submit an application with the municipal commissioner for the OC within 30 days of completion of the property.
How you can apply for an OC As a flat owner, you can also apply for an OC by approaching the local corporation or municipality, and if all approvals are in place, an OC is issued within 30 days of application. You will have to submit the same documents as the builder to procure an OC.
Know your rights If the builder refuses to provide an OC, you should consider exercising your legal rights. You can issue a notice against the builder asking him to apply and hand over the copy of the OC within a month. You can also approach consumer forums and file a writ petition demanding the OC.
Some canny builders simply present the receipt of the OC and dupe gullible customers. But you shouldn't accept anything less than the actual OC as the receipt may be dated.(38)
Landmark legislations like the Real Estate Regulatory Act (RERA) have been passed to regulate the sector, promote transparency and protect consumer rights. However, consumers must be vigilant and understand their rights and responsibilities towards owning a property. Documents like OC are essential and ensure the security of your investment.
Going forward, real estate experts believe that the OC should be made mandatory for the registration of flats and essential services. Until then, buyers must ensure builders get all the necessary approvals before handing over a property.
A Completion Certificate (CC) is an important legal document that certifies that a building is constructed according to the laid down norms and master plan of the city. This document has all the information related to the project, such as the building materials used, building height, and building plan, among other things like provision for green belt.
In a nutshell, this document certifies that the building adheres to all the prevailing rules and has not violated any norms. In fact, this document is to be shown compulsorily to the authorities to obtain electricity and water connection.
Builders are allowed to obtain a provisional Completion Certificate when there are minor works left in the project. Authorities then provide a provisional certificate valid for six months. After the expiry of the six months, the developer is bound to get a final CC.(39)
Who issues a Completion Certificate?
Local authorities issue the Completion Certificate after a thorough inspection of the premises. If the developer violates no rules, authority issues a Completion Certificate.
Why is Completion Certificate important?
Buyers must be aware of the fact that if they are buying or moving into a property that does not have a Completion Certificate, they might be making a risky investment choice. The civic authorities hold the power to slap heavy penalties on the developer, leading to stalling or cancellation of the registered layout of the project. In case the building is already occupied, residents may also have to face eviction in extreme cases.
Difference between Occupancy Certificate and Completion Certificate Occupancy Certificate examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances. On the other hand, a Completion Certificate is a document that certifies that a property is fit for possession by the buyers.
Clarifying the difference, Deepak Kapoor, Director, Gulshan Homz, says, "Completion Certificate is just a reaffirmation that the building has been constructed as per the building byelaws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants.(40)
Generally, these documents are not required at the time of registry, and hence, buyers tend to overlook or ignore these. But for their own benefit and peace of mind, it is warranted that buyers of both ready-to-move-in as well as under-construction properties check these documents before taking possession. This would help avoid any unnecessary dispute or confrontation in the future."
Supreme Court: The bench of Dr. DY Chandrachud* and AS Bopanna, JJ has held that failure on the part of the builder to provide occupancy certificate is a continuing breach under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 and amounts to a continuing wrong.
Factual Background The appellant is a co-operative housing society. The respondent constructed Wings 'A' and 'B' and entered into agreements to sell flats with individual purchasers in accordance with the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 (MOFA). The members of the appellant booked the flats in 1993 and were granted possession in 1997. According to the appellant, the respondent failed to take steps to obtain the occupation certificate from the municipal authorities.
There was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided, however, the respondent (41) time and again failed to provide the occupancy certificate to the appellant society. For this reason, a complaint was instituted in 1998 by the appellant against the respondent. The NCDRC on 20 August 2014 directed the respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the respondent failed to provide the occupancy certificate.
In the absence of the occupation certificate, individual flat owners were not eligible for electricity and water connections. Due to the efforts of the appellant, temporary water and electricity connections were granted by the authorities. However, the members of the appellant had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 50% higher than the normal charge.
Analysis Obligations of Promoter under MOFA Section 3 of the MOFA imposes certain general obligations on a promoter. These obligations inter alia include making disclosures on the nature of title to the land, encumbrances on the land, fixtures, fittings and amenities to be provided, and to not grant possession of a flat until a completion certificate is given by the local authority. The responsibility to obtain the occupancy certificate from the local authority has also been imposed under the agreement to sell between the members of the appellant and the respondent on the latter.(42)
Sections 3 and 6 of the MOFA indicate that the promoter has an obligation to provide the occupancy certificate to the flat owners. Apart from this, the promoter must make payments of outgoings such as ground rent, municipal taxes, water charges and electricity charges till the time the property is transferred to the flat-owners. Where the promoter fails to pay such charges, the promoter is liable even after the transfer of property.
Limitation n the instant case, the appellant submitted that since the cause of action is founded on a continuing wrong, the complaint is within limitation.
Section 24A of the Consumer Protection Act 1986 provides for the period of limitation period for lodging a complaint. A complaint to a consumer forum has to be filed within two years of the date on which the cause of action has arisen.
Section 22 of the Limitation Act 1963 provides for the computation of limitation in the case of a continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues A continuing wrong occurs when a party continuously breaches an obligation imposed by law or agreement. The continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the respondent under the MOFA and amounts to a continuing wrong.(43)
The appellants, therefore, were entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation.
"Rejecting the complaint as being barred by limitation, when the demand for higher taxes is made repeatedly due to the lack of an occupancy certificate, is a narrow view which is not consonance with the welfare objective of the Consumer Protection Act 1986."
Consumer Section 2(1)(d) of the Consumer Protection Act defines a 'consumer' as a person that avails of any service for a consideration. A 'deficiency' is defined under Section 2(1)(g) as the shortcoming or inadequacy in the quality of service that is required to be maintained by law.
In the present case, the NCDRC had held that the appellant is not a 'consumer' under the provisions of the Consumer Protection Act as they have claimed the recovery of higher charges paid to the municipal authorities from the respondent. Extending this further, the NCDRC observed that the respondent is not the service provider for water or electricity and thus, the complaint is not maintainable.
The respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as 'consumers' to pray for compensation as a recompense for the consequent liability (such as payment of (44) higher taxes and water charges by the owners) arising from the lack of an occupancy certificate.
[Samruddhi Co-operative Housing Society Ltd v. Mumbai Mahalaxmi Construction Pvt. Ltd, 2022 SCC OnLine SC 35, decided on 11.01.2022] Now in the light of all the circumstances mentioned in the complaint and any statement, and also going through the various documents, evidences on record and various judgments of the Hon'ble Supreme Court and Hon'ble NCDRC the conclusion is that, in this case the builder is totally defaulter and he has no right to cancel the allotment order without any genuine excuse. Once he has become a defaulter he cannot do any thing adverse to the interest of the allottee. The builder is liable to hand over the possession of the said allotted flat within a period of eight weeks from the date of judgment of this complaint case. He is also not liable to take ₹ 290,500/ as mentioned in the complainant for restoring the possession because the builder himself was defaulter and defaulter cannot impose any condition on the allottee. So in our view the complainant are entitled for the following reliefs:-
The complainant is entitled to get the possession of the said unit within eight weeks from the date of judgment of this complaint case otherwise he will be entitled to get damages at a rate of ₹ 1 lakh per month starting after eight weeks from the date of judgment of this complaint case. The opposite party can take the rest amount of the allotted flat after deducting the amount already paid and except this the opposite party cannot claim any other amount whatsoever it (45) may be excepted the maintenance charges which shall be enforced after delivery of possession of the said flat.
The complainant is entitled to get interest at a rate of 10% from the respective date of deposit made by him till delivery of the possession of the flat with completion certificate and occupancy certificate and all the required NOC's and execution of the sale deed. If if this interest is not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled to get interest at a rate of 15% from the date of respective deposit made by him to the opposite party.
IN ALTERANATE The complainant entitled to get the refund of his whole amount with interest at a rate of 10% from the date of booking i,e.28.02.2011 till the date of actual payment and shall be paid within eight weeks from the date of judgment of this complaint case otherwise the complainant shall be entitled to interest at a rate of 15% from28.02.2011 till the date of actual payment.
The complainant is entitled not to pay extra amount of ₹ 290,500/to the opposite party.
The complainant is entitled to get ₹ 15,000 per month from 23.11.2013 (in the light of judgment discussed above ) till the date of actual payment with interest at a rate of 10% from 23.11.2013 to be paid within eight weeks from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum.(46)
The complainant is entitled to ₹ 1.5 lakhs as damages in the light of Hon'ble Supreme Court judgment with interest at a rate of 10% from 23.11.2013 and if this interest is not paid within eight weeks from the date of judgment of this complaint case, the complainant will be entitled to get interest at a rate of 15% per annum from 23.11.2013 till the date of actual payment.
The complainant is entitled to get ₹ 20 lakhs towards mental agony, torture, depression, cost of the complaint case et cetera we shall be paid within eight weeks from the date of judgment of this complaint case otherwise the rate of interest shall be 10% after expiry of eight weeks from the date of judgment of this complaint case.
ORDER The opposite party is directed to hand over the possession of the said unit with completion certificate, occupancy certificate and NOC's of fire department, environment department, civil aviation department etc. within eight weeks from the date of judgment of this complaint case otherwise he will be liable to pay damages at a rate of ₹ 1 lakh per month starting after eight weeks from the date of judgment of this complaint case. The opposite party can take the rest amount of the allotted flat after deducting the amount already paid and except this the opposite party cannot claim any other amount whatsoever it may be except the maintenance charges which shall be enforced after delivery of possession of the said unit.
IN ALTERNATE The opposite party is directed to refund the complainant , his whole amount with interest at a rate of 10% from the date of booking i,e. 28.02.2011 till the date of actual payment and shall be paid within eight weeks from the date of judgment of this complaint case otherwise the opposite party shall pay interest at a rate of 15% from28.02.2011 till the date of actual payment.
The opposite party shall pay interest on the deposits made by the complainant towards opposite party from their respective dates of deposits with interest at a rate of 10% and it shall be paid within eight weeks from the date of judgment of this complaint case otherwise the party shall pay interest at a rate of 15% per annum.
The opposite party is directed to pay ₹ 15,000 per month from 23.11.2013 (in the light of judgment discussed above) till the date of actual payment with interest at a rate of 10% from 23.11.2013 to be paid within eight weeks from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum.
The opposite parties shall pay to the complainant ₹ 1.5 lakhs as damages in the light of Hon'ble Supreme Court judgment with interest at a rate of 10% from 23.11.2013 till the date of actual payment and if this amount is not paid within eight weeks from the date of judgment of this complaint case, the opposite parties shall pay interest at a rate of 15% per annum from 23.11.2013 till the date of actual payment .
The opposite party is directed to pay ₹ 20 lakhs towards mental agony, torture, depression, cost of the complaint case et cetera and it shall be paid within eight weeks from the date of judgment of this complaint case otherwise the rate of interest shall be 10% after expiry of eight weeks from the date of judgment of this complaint case and the date of actual payment.
If the opposite party failed to comply with the order of this judgment, the complainant shall be entitled to file execution case after eight weeks at the cost of the opposite party.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh) Member Presiding Member Judgment dated/typed signed by us and pronounced in the open court. Consign to record. (Vikas Saxena) (Rajendra Singh) Member Presiding Member Date: September 29, 2022 JafRi, PA II Court 2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER