National Consumer Disputes Redressal
Preeti Rastogi & 2 Ors. vs Experion Developers Pvt. Ltd. on 31 August, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 2305 OF 2017 1. PREETI RASTOGI & 2 ORS. ...........Complainant(s) Versus 1. EXPERION DEVELOPERS PVT. LTD. Through its M.D.,Regd.Office: F-9,First Floor, Manish Plaza 1,Plot No.7 MLU, Sector-10,Dwarka,New Delhi ...........Opp.Party(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER
FOR THE COMPLAINANT : MR. B.P. AGARWAL, ADVOCATE FOR THE OPP. PARTY : MR AMIT BHATNAGAR, ADVOCATE WITH
AUTHORITY LETTER
Dated : 31 August 2023 ORDER
1.This complaint under section 12 of the Consumer Protection Act, 1986 (in short, the 'Act') has been filed against the opposite party alleging deficiency in service and unfair trade practice delay in handing over possession a residential flat booked by him in a project of the opposite party.
2. The opposite party is a company incorporated under the provisions of Indian Company Act dealing in real estate business. The complainant executed an application form for the provisional booking of a 3BHK unit (1758 sq ft) bearing no.B6/0602 in the project called 'The Heartsong' situated at Sector 108, Gurgaon, Haryana, vide booking no. EXTHBKG/ 00311/12-13 at a basic sale price of Rs.1,00,78,614/- at the rate of Rs.5733/- per sq feet for a total sale consideration of Rs.11,375,764/- and paid the booking amount through cheque drawn on HDFC Bank Ltd. The opposite party issued a provisional allotment letter dated 04.01.2013 confirming the booking of the flat and the handing over possession of the flat within 36 months from the date of issue of provisional allotment letter dated 04.01.2013. The complainants were asked to deposit an amount of Rs.3,39,004/- which was done on 26.01.2013 against receipt dated 30.01.2013 issued by the opposite party. The opposite party again requested the complainant to deposit an amount of Rs.7,86,170/- which was also done on 14.03.2013. Complainants were asked to deposit various amounts on different dates which were also complied with. An Apartment Buyers Agreement (in short, the 'ABA') was signed between the parties on 29.05.2013. The project was to be completed within 36 months of signing of the initial agreement with complainants. The complainants allege that the opposite party demanded Rs.9,32,059/- on 31.12.2013 without completing the 1st basement roof slab and therefore, the complainants stopped making the payment of the installment. However, on 03.06.2015, the complainants paid an amount of Rs.1,32,065/-. The complainants allege that the quality construction of the flat was not as per the one shown to the complainants by the opposite party and was substandard and hence the complainants were not interested to take possession of flat or pay the balance amount. The complainants also approached various banks for loan against the project which was refused by them due to the project being substandard and they were left with no other option but to seek refund of the amount of Rs.31,50,221/- in 2015 along with interest. No action was taken by the opposite party to cancel the booking and refund the aforesaid amount. Since the complainants were not interested any more in the project, they sought refund of the amount of Rs.31,50,221/- deposited along with compounding interest @ 18% per year from the date of payment, compensation of Rs.5,00,000/- for mental tension, agony, harassment and deficiency in service. Complainants allege that at the time of booking of the flat, the terms and conditions were not shown to them and they were required to sign the provisional allotment letter. The complainants sent a legal notice on 19.01.2017 to the opposite party for refund of the amount paid by the complainant. The opposite party in their reply has also alleged that the complainants were defaulters under the project and had failed to make timely payments.
3. The complainants filed a complaint before the State Commission, but withdrew it on 29.05.2017 with liberty to approach the National Commission as the total sale consideration of the flat was Rs.1,13,75,764/- which was beyond the pecuniary jurisdiction of the State Commission for consumer disputes. Hence, the complainants are before this Commission with the following prayer:
To refund the entire amount of Rs.31,50,221/- paid by the complainants to the opposite party along with compounding interest @ 18% per annum with effect from the date of payments till realization;
To pay the damages Rs.5,00,000/- for the highly negligent deficiency service, illegal and unlawful acts and for harassment, humiliation, stress strain, mental agony caused to the complainants and also differences of the present market value of the flat with the value of the flat at the time of booking of the flat;
To pay the cost of litigation cost of Rs.1,00,000/-; and Any other order, relief or directions which this Hon'ble Commission may deem fit and proper under the circumstances of the case may kindly be passed in favour of the complainant and against the opposite party.
4. The complaint was resisted by the opposite party by way of a written statement. The opposite party contends that this Commission does not have the pecuniary jurisdiction to entertain the complaint as the complainants were asking for refund of Rs.31,50,221/- which was less than Rs.1 crore. It is averred that in cases of refund, the value of the complaint has to be the value of the amount deposited and not the value of the apartment. The opposite party states that the complainants have paid only Rs.30,18,156/- to the opposite party. Opposite party submits that it has received the Occupation Certificate (OC) for the apartment on 02.03.2017. It is also stated that the complainants are chronic defaulters, who despite various requests, reminders and final notices, failed to deposit the dues and hence, the opposite party was constrained to cancel the allotment of the complainants on 10.06.2014 due to non-payment of the instalments. Opposite party further stated that as per clause 5.1 of the ABA of the total amount of Rs.30,11,623/- paid, Rs.15,64,292/- was towards earnest money and Rs.74,000/- towards interest on delayed payment which stood forfeited. Hence, the balance amount refundable was Rs.13,73,330/-. According to the opposite party the current outstanding amount as on 16.01.2018 was Rs.1,38,24,985.91 towards various installments. It is also alleged that the complainants were not 'consumers' as defined in the Act qua the opposite party and therefore, the complaint was false, frivolous and liable to be dismissed.
5. Parties led their evidence and filed written submissions. I have heard the learned counsel for the parties and perused the records carefully.
6. Learned counsel for the complainant argued that the complainant had booked a flat at basic sale price of Rs.1,00,78,614/- with the opposite party and paid an amount of Rs.7,00,000/-. Provisional allotment letter dated 04.01.2013 was issued by the opposite party confirming booking and promising possession within 36 months from the date of issue of provisional allotment letter. The opposite party demanded Rs.9,32,059/- in December 2013 without completing the 1st Basement roof slab. Complainants submits that he had paid Rs.31,50,221/- till June 2015. A legal notice was issued on 19.01.2017 for refund of Rs.31,50,221/- with 18% interest and compensation. The opposite party failed to complete the project within the stipulated period of 36 months from the date of booking of the flat in December 2012 even though it had promised to execute the project through L & T Co. Learned counsel for the complainant relied upon various judgments of this Commission that have held that amounts exceeding 10% of the total price cannot be forfeited by the seller and only the amount which was paid at the time of concluding the contract can be said to be the earnest money. Reliance is placed upon the judgment of this Commission in the case of DLF Ltd., vs Bhagwanti Narula RP no. 3860 of 2014. Learned counsel for the complainants prays that the complaint of the complainants be decreed with compensation and cost.
7. Learned counsel for the opposite party submitted that the complainants have paid only a sum of Rs.30,18,156/- to the opposite party which was less than Rs.1.00 crore and therefore, the National Commission did not have pecuniary jurisdiction to entertain and adjudicate the complaint. He also submits that possession of the apartment had already been offered to the complainant subject to payment of outstanding dues of Rs.1,27,34,269/-. He alleges that the complainants were habitual defaulters in making payments. Learned counsel for the opposite party submits that the complainants vide their email dated 12.06.2014 had sought 30 days' time to clear the dues; however, even after the expiry of 30 days the complainants failed to do so and the last payment made was on 22.05.2013 towards the fourth instalment after which no payments have been made.
8. Learned counsel for the opposite party submits that the complainants are not 'consumers' but are investors. He also states that the proposed time for construction was 42 months, inclusive of grace period of 6 months from the date of ABA, and accordingly 29.11.2016 was the date for handing over the possession from the date of ABA, i.e., 29.05.2013, subject to timely payments by the customers, which the complainants have failed to do. Therefore, the complainants are not entitled to raise the issue of delay in handing over of possession. Learned counsel for the opposite party submitted that the complainants prevented the opposite party from allotting the apartment in question to any other suitable customer at the rate prevalent at that time and thus the opposite party suffered huge financial loss on account of breach of contract by the complainant. Opposite party relied upon the judgment of this Commission in Ruhi Seth vs IREO Grace Realtech Pvt. Ltd., in CC no. 1464 of 2017 decided on 13.11.2017 and the judgment of the Hon'ble Supreme Court in the case of Ireo Grace Realtech Pvt. Ltd., vs Abhishek Khanna and Ors., in Civil Appeal nos. 5785, 7615, 7975, 8454, 8480, 8482, 8785-94, 9139, 9216, 9638 of 2019 and 3064 of 2020 decided on 11.01.2021 to argue that where occupation certificate was available, the possession of the flat should be taken by the allottee.
9. It is apparent from the record that there has been delay in the completion of the project and the offer of possession. It is also manifest that the complainants stopped making payments towards instalments alleging slow progress of the project. The amount paid by the complainant is admittedly Rs.31,50,221/- till June 2015. On the preliminary objection of the opposite party on pecuniary jurisdiction, the argument of the opposite party that this Commission has no pecuniary jurisdiction cannot sustain in view of the judgment passed in Ambrish Kumar Shukla vs Ferrous Infrastructure Pvt. Ltd., 2016 SCC Online NCDRC 1117, wherein it was held that:
"The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint, to determine the pecuniary jurisdiction of a consumer forum".
This position was also reiterated by a five Member Bench of this Commission in the case of Renu Singh vs Experion Developers Pvt. Ltd. in CC no. 1703 of 2018, decided on 26.10.2021.
10. Possession of the flat has been delayed by the opposite party beyond 31.12.2015 till date. The opposite party cannot make the complainants wait for an indefinite period for possession as has been held by the Hon'ble Supreme Court in a catena of judgments. There is already a delay of more than 7 years beyond the promised date of possession as on date. Admittedly, the occupation certificate has been received by the opposite party on 02.03.2017. This was prior to the filing of the complaint on 03.08.2017. The complainant cannot be faulted in seeking refund of his principal amount with interest. The Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra , II (2019) CPJ 29 SC has laid down that:
"...it would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession...A buyer can be expected to wait for a reasonable period. A period of seven years is beyond what is reasonable".
The opposite party cannot expect the complainant to wait indefinitely for the possession to be offered. In Fortune Infrastructure Vs Trevor D'Lima (2018) 5 SCC 442 the Hon'ble Supreme Court had held that:
'a buyer cannot be expected to wait indefinitely for possession and in a case of an unreasonable delay in offering possession, the consumer cannot be compelled to accept possession at a belated stage and is entitled to seek refund of the amount paid with compensation'.
Similarly, in Pioneer Urban Land and Infrastructure Ltd., vs Govindan Raghavan and other connected matters CA no. 3182 of 2019 dated 02.04.2019, the Hon'ble Supreme Court categorically held that:
"the flat purchasers cannot be made to wait for inordinate period of time hoping to seek possession and that refund of amounts deposited is a valid redressal".
Therefore, the complainant cannot be forced to accept possession at a belated stage. The project is admittedly delayed and occupation certificate is dated 02.03.2017. The complainant's exercising of his option to seek a refund cannot be construed to be unjustified. The prayer of the complainant for refund with compensation in the form of interest is therefore justified. Therefore, this argument of the opposite party cannot sustain.
11. The reliance of the opposite party on force majeure events to justify delay in completing the construction of the project has also been considered. In the case of Manoj Kawatra and Others Vs Pioneer Urban Land and Infrastructure Ltd., in CC no.1442 of 2018 decided on 01.11.2021, this Commission hold that a developer cannot take shelter under the force majeure clause unless it is able to show that the event was unforeseen and unexpected. The opposite party has failed to do so. Hence, this argument of the opposite party does not sustain.
12. As for the contention of the opposite party that the complainants were defaulters as they failed to pay the instalments on time, it is evident that the opposite party did not take any penal action for the default in payments by the complainants. As held by this Commission in Ankur Goswami vs Supertech Ltd., Anr. 2017 SCC Online NCDRC 1240 it is not open for the opposite party to contend that the complainants are defaulters who should be denied the benefit of seeking refund when the opposite party had not declared them defaulters at that stage.
13. Insofar as the issue of deduction of earnest money from the refund is concerned, it has been held by the Hon'ble Supreme Court in Maula Bux vs Union of India 1969 (2) SCC 554 and in the case of Ramesh Malhotra and 2 Ors., vs Emaar MGF Land Ltd., and Anr., in CC no. 438 of 2019 decided on 29.06.2020 that in instances of refund due to delay on part of the opposite party/ builder in the completion of a project and offer of possession as per the agreement, the complainant/ allottee shall be entitled to refund of the entire money deposited by him without any deduction of money towards earnest money. Therefore, the contention of the opposite party that the complainant was entitled to refund only after deduction of earnest money cannot be considered.
14. The contentions of the complainant seeking refund with compensation in the form of interest and cost of litigation are therefore valid and liable to succeed. I, therefore, find merit in the complaint and allow the same with the following directions:
(i) opposite party shall refund the entire amount deposited by the complainant with simple interest @ 9% per annum on the deposited amount from the respective dates of deposit till the date of this order;
(ii) this order shall be complied within two months failing which the amount shall be paid at the rate of 12% shall be paid; and
(iii) opposite party shall also pay litigation costs of Rs 50,000/- to the complainant;
15. The consumer complaint stands disposed of along with all other pending IAs.
...................................... SUBHASH CHANDRA PRESIDING MEMBER