State Consumer Disputes Redressal Commission
Mandip Singh vs M/S Parkwood Developers Pvt. Ltd. on 19 January, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
Consumer Complaint No. 329 of 2015
Date of institution: 21.12.2015
Date of order reserved: 12.01.2017
Date of Decision: 19.01.2017
1. Mandip Singh
2. Charandeep Kaur w/o Mandip Singh
Resident of Bharo Mazara Ranva, P.S. Behram, District
Nawanshahr, now resident of House No. 101, MK Block, IISER,
Sector 81, Mohali.
Complainants
Versus
1. M/s Parkwood Developers Pvt. Ltd., 10th Floor, Hemkunt Towers, 89,
Nehru Place, New Delhi through its Authorized Representative.
2. M/s Parkwood Glade Mohali, Kharar Landran Road, Sante Majra,
Tehsil Kharar, Sector 116, Greater Mohali, through its authorized
representative.
3. Dewan Housing Finance Corporation, S.C.O. No. 811-812, Sector
22-A, Chandigarh through its Branch Manager.
Opposite Parties
Consumer Complaint under Section 17 of the
Consumer Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Mrs. Surinder Pal Kaur, Member
Present:-
For the complainants : Sh. Mukand Gupta, Advocate
For opposite parties No.1&2: Sh. I.P. Singh, Advocate with
Sh. M.P. Singh, Asstt. General
Manager.
For opposite party No.3 : None.
Consumer Complaint No. 329 of 2015 2
Gurcharan Singh Saran, Presiding Judicial Member
ORDER
Complainants have filed this complaint under Section 17 of the Consumer Protection Act, 1986 (for short 'the Act') against Opposite parties/respondents (hereinafter referred as Ops) on the averments that Op Nos. 1 & 2 had floated one Housing Project called as Parkwood Glade, Mohali located at Kharar-Landran Road, Mohali. Allured by the scheme and facilities being provided by Op Nos. 1 & 2 in their project, the complainants booked for allotment of flat of two bedrooms on 19.12.2011. On the basis of that, Op No. 1 had issued allotment letter dated 19.12.2011 with the super built up area of 1260 sq. ft. with basic sale price @ Rs. 2245/- per sq. ft. costing Rs. 28,28,700/- and after adding club and parking fee, the total price was Rs. 29,18,700/-. Op Nos. 1 & 2 were to construct as many as 13 towers whereas complainants were allotted flat in Tower-A at 4th floor. The complainant deposited Rs. 4,35,250/- on 19.12.2011. After that parties entered into buyer's agreement dated 28.12.2011. The payment was construction linked payment plan. The complainant was required to pay 15% of the price at the time of booking, 10% within 45 days and 10% at the time of commencement of excavation, 10% at the time of casting of the plinth slab and so on and they had agreed to deliver the possession of the flat on 30.6.2014. The complainant had been paying the amount as and when demanded by Ops. They paid Rs. 2,90,154/- within 45 days i.e. 3.2.2012. The complainant further raised housing loan from Dewan Housing Finance Corporation i.e. Op No. 3 in order to pay the instalments to Op Nos. 1 & 2. Op No. Consumer Complaint No. 329 of 2015 3 3 had tied up with them. Op No. 3 had sanctioned a loan of Rs. 23 lacs on 29.10.2012. Op No. 3 after sanction of the Home Loan disbursed the amount to Op Nos. 1 & 2. Op Nos. 1 & 2 raised demand of RS. 5,83,204/- on 16.11.2012. They put another demand on 25.3.2013. Op No. 3 disbursed a sum of Rs. 3,17,384/- to Op Nos. 1 & 2 on 19.4.2013. Op Nos. 1 & 2 further issued another demand notice dated 7.5.2013 and a sum of Rs. 2,91,611/- and Rs. 25,773/- was disbursed to Op Nos. 1 & 2 on 1.6.2013 and 10.6.2013. Op Nos. 1 & 2 raised a demand on 1.7.2013 and a sum of Rs. 2,41,180/- was paid to Op Nos. 1 & 2 on 11.7.2013. On demand by Op Nos. 1 & 2, Op No. 3 disbursed a sum of Rs. 2,41,180/- on 21.10.2013. In this way, Op No. 3 disbursed a sum of Rs. 17,00,332/- in addition to the amount already paid by the complainant and in all a sum of Rs. 24,25,698/- was paid upto 21.10.2013. Op Nos. 1 & 2 did not deliver the possession of the flat within the agreed time and complainants are paying interest to Op No. 3 on the amount borrowed by them @ 11.50% p.a. and they are residing in Government accommodation. They are paying Rs. 1100/- as licence money and are at loss of Rs. 9280/- on account of house rent allowance. So far Nagar Council, Kharar has not granted any completion certificate and no sewerage/water connection to the project. NOC was not taken from the Pollution Control Board with regard to the Tower. The flat was to be allotted to the complainant. Not to deliver the possession of the flat after obtaining more than 80% of the consideration amount way back upto 2015, amounted to deficiency in service on the part of Ops. Accordingly, this complaint has been filed before this Commission Consumer Complaint No. 329 of 2015 4 seeking directions against Op Nos. 1 & 2 to deliver the actual possession of the flat, pay interest @ 18% p.a. on the amount deposited by the complainant as per terms and conditions and specifications agreed between the parties, reimburse the house rent allowance and licence money, pay escalation cost to the tune of Rs. 1,75,350/- per year w.e.f. June, 2014, Rs. 5 lacs on account of mental agony and litigation expenses of Rs. 50,000/-.
2. Complaint has been contested by the Op, who filed their written reply. Whereas no reply was filed by Op No. 3 as no relief was sought against Op No. 3. Op Nos. 1 & 2 in their written reply took the objections that complaint is not maintainable as it is a joint complaint and no permission was sought from the Commission to file a joint complaint; the complaint is bad for mis-joinder of Op No. 3; there is neither any unfair trade practice or deficiency in service on the part of these Ops. The project was duly approved by Government Authorities i.e. Municipal Council, Kharar vide approval letter dated 21.3.2007 and Op Nos. 1 & 2 are duly registered as Promoter vide registration certificate No. 2006/103 by the Competent Authority i.e. GMADA, Mohali; the complainants have failed to pay the instalments regularly despite various letters. The delay in handing over of the possession of the flat due to force majeure, due to ban on sale of sand and granule by the State of Punjab. Ops have already completed 4 towers. With regard to Tower-A, the entire construction is complete only internal finishing and furnishing is pending, which is run at full swing and is likely to be completed within a period of six months. As per Buyer's agreement in case of delay, the Ops are liable to pay Consumer Complaint No. 329 of 2015 5 penalty @ Rs. 5/- per sq. ft. per month. On merits, booking of the flat by the complainant with Ops is admitted. The payments made by the complainants as referred in the complaint are also admitted. It has been reiterated that delay in completion of the flat is due to delay in payment of instalments and due to force majeure circumstances. The construction is complete and only internal finishing and furnishing work is pending, which is likely to be completed within a period of six months. Already 4 Towers have been completed and this Tower is likely to be completed within a period of six months, otherwise, all the sanctions have been taken from the Municipal Council, Kharar. Therefore, there is no deficiency in service on the part of these Ops. Complaint is without merit, it be dismissed.
3. Parties led their respective evidence.
4. Complainant in his evidence has tendered the evidence affidavit of Sh. Mandip Singh as Ex.CW-1, Brochure as Ex.C-1, allotment letter Ex.C-2, receipt Ex.C-3, Buyers agreement as Ex.C-4, receipt as Ex.C-5, Home loan letter sanction as Ex.C-6, statement of Account of OP No.3 Ex.C-7, certificate of HRA by the employer as Ex.C-8, photographs as Ex.C-9, information under RTI as Ex.C-10, information under RTI by PPCB as Ex.C-11, information under RTI by SIEIAA as Ex.C-12, information under RTI by GMADA as Ex.C-13, Legal Notice as Ex.C-14, postal receipt as Ex.C-15, advertisement in the newspaper as Ex.C-16, advertisement in the newspaper as Ex.C-17, certificate of the Architect as Ex.C-18, photograph as Ex.C-
19. On the other hand, Op Nos. 1 & 2 had tendered into evidence affidavit of Sh. Manminder pal Singh, Assistant General Manager, Consumer Complaint No. 329 of 2015 6 M/S Parkwood Developers Pvt. Ltd. as Ex. OP1&2/A alongwith documents i.e. copy of letter of approvals dated 21.03.2007 as Ex.OP-1, copy of statement of account as Ex.OP-2, copy of statement of ledger interest as Ex.OP-2(A), Photographs (Colly) as Ex.OP-3 to Ex.OP-7, copy of consent of pollution control board dated 25.03.2014 as Ex.OP-8, copy of consent of pollution control board dated 25.03.2014 as Ex.OP-9, copy of consent of pollution control board dated 25.03.2014 as Ex.OP-10, copy of consent of pollution control board dated 19.02.2015 as Ex.OP-11, copy of consent of pollution control board dated 19.02.2015 as Ex.OP-12 and copy of environment clearance certificate dated 06.02.2014 as Ex.OP-13
5. We have heard the counsel for the complainants Sh. Mukand Gupta, Advocate, counsel for Op Nos. 1 & 2 Sh. I.P. Singh, Advocate with Sh. M.P. Singh, Asstt. General Manager and have carefully gone through the averments made in the complaint, written reply filed by Op Nos. 1 & 2, evidence and documents on the record.
6. Before coming to the facts of the complaint, what are the reasons not to deliver the possession of the flat to the complainants, some preliminary objections have been taken, which are required to be addressed first. It is stated that joint complaint has been filed by the complainants without permission from the Commission. It is pertinent to mention here that the flat was booked jointly in the name of complainant whereas it is only one property. The permission from the Commission is required to be taken, if more than one complainant filed a complaint for more than one property. Since only one property is involved in this complaint but it is in the name of both the Consumer Complaint No. 329 of 2015 7 complainants jointly, in such circumstances, no separate permission from the Commission is required, otherwise, complaint was admitted and it was proceeded with, therefore, there is presumption that in case, if any permission was required, it was impliedly granted by the Commission. Therefore, we do not see any merit in this objection raised by the counsel for the Ops.
7. As per the version of the complainant, the complainant had booked one flat with Ops on the basis of voucher giving highlights of the project. Accordingly, allotment letter was issued to the complainants on 19.12.2011 (Ex. C-2), it is two bedroom, 2 bathroom flat, total super built up area 1260 sq. ft. and basic price has been mentioned as Rs. 28,28,700/- and after adding the club membership and open car parking, it has been mentioned as Rs. 29,18,701/-. The complainant paid the booking amount of Rs. 4,35,231/- vide receipt dated 19.12.2011 (Ex. C-3) and then buyer's agreement was executed between the parties. As per Clause 19A of the agreement, the possession was to be delivered by 30.6.2014, subject to payment of the sale consideration amount. The schedule of payment was as under:-
S. Installments Charge % Amount Total
No. (Rs.) Amount
(Rs.)
1 At the time of Booking Basic 15.00% 424,305.00 424,305.00
2 Within 45 days of Basic 10.00% 282,870.00 282,870.00
Booking
3. On commencement of Basic 10.00% 282,870.00 282,870.00
Excavation
4. On casting of Plinth Basic 10.00% 282,870.00 282,870.00
Slab
5. On casting 3rd Floor Basic Open 10.00% 282,870.00 282,870.00
Roof Slab Car Parking 50.00% 25,00.00
6. On casting 5th Floor Basic Open 10.00% 282,870.00 307,870.00
Roof Slab Car Parking 50.00% 25,00.00
7. On completion of Basic Club 7.50% 212,152.00 232,152.00
Consumer Complaint No. 329 of 2015 8
Super Structure Membership 50.00% 20,000.00
8. On commencement of Basic Club 7.50% 212,152.00 232,152.00 Brick Work Membership 50.00% 20,000.00
9. On commencement of Basic 7.50% 212,152.00 212,152.00 Wall Painting
10. On commencement of Basic 7.50% 212,152.00 212,152.00 Flooring
11. On final offer for Basic 5.00% 141,437.00 141,437.00 possession TOTAL (Rs.) 2,918,700.00
8. The complainant has further paid a sum of Rs. 2,90,135/- vide receipt dated 3.2.2012 (Ex. C-5). Then the complainant had arranged the loan from Op No. 3 and on the basis of that Op No. 3 has paid a sum of Rs. 17,00,332/- as per statement of Op No. 3 (Ex. C-7). In this way, the complainant had paid a sum of Rs. 24,25,698/- out of total consideration of Rs. 29,18,700/-. The counsel for the complainant stated that he did not pay any further amount as no intimation was received from Op telling the stage of the construction as given in the payment schedule, rather, the written statement filed by the Ops still shows that it will take six months more to complete it. The written statement was filed on 13.4.2016 and AGM of Ops further made a statement on 12.1.2017 that it will get another six months to complete the flat in all respects as per the terms and conditions of the agreement between the parties. The Op has not placed on the record any letter, written by Ops to the complainants telling the stage of the construction and to make the payment. Therefore, there is no delay on the part of the complainant to make the payment. But certainly, there is delay on the part of the Ops in completion of the flat and the plea taken by Ops that the complainant did not pay the timely instalment is not corroborated on the record. Second plea taken by the Ops is that due to force majeure circumstances, due to ban on Consumer Complaint No. 329 of 2015 9 sale of gravel and sand. However, Ops have not brought any evidence on the record that it was not available to it, therefore, this plea is also without any substance.
9. Now the question arises that in case there is delay, how much penalty is to be imposed upon the Ops. Counsel for the Ops has stated that according to Clause 20(b) of the agreement, in case there is delay, the complainants will be entitled to compensation from the Developer @ Rs. 5/- per sq. ft. per month after giving a grace period of 90 days from the date of expiry, therefore, 90 days will be completed by 30.9.2014. Therefore, from 1.10.2014 till the date of delivery of the possession, the complainant will be entitled to compensation @ Rs. 5/- per sq. ft. per month, which comes to Rs. 6300/- per month. Whereas counsel for the complainants has relied upon Consumer Case No. 603 of 2014 "Capt. Gurtaj Singh Sahni & Anr. versus Manager, Unitech Limited & Anr." and many others, decided by the Hon'ble National Commission vide its order dated 2.5.2016 against Unitech Limited and apart from direction to Ops to give the possession, they were directed to simple interest @ 12% per annum from the expected date of possession till date of possession is actually offered. Whereas counsel for the Ops stated that no extra amount could be paid to the complainants than the agreed Clause. However, the counsel for the complainants referred to "PUDA Vs. Mrs. Shabnam Virk", II (2006) CPJ 1 (SC) wherein Hon'ble Supreme Court has observed as under:-
"However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not Consumer Complaint No. 329 of 2015 10 really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice. It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment. He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest/resist the inclusion of such a term in the Buyer's Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd. He also submitted that the format of the Buyer's Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer's Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder. I find merit in the above referred submissions of the learned counsel. A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat. It is only natural and logical for him to look for an apartment in a project Consumer Complaint No. 329 of 2015 11 being developed by a big builder such as the opposite party in these complaints. Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than .25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer's Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment.
12. It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable. The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a term in the Buyer's Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him. He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance. If the builder is to take loan Consumer Complaint No. 329 of 2015 12 from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc. The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation. In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project. This gives credence to the allegation of the complainants that their money has been used elsewhere. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word "including" before the words "any of the following practices".
14. As noted earlier, the cost of the borrowing for individual home buyers is about 10% per annum though it had gone upto 11.5% in last few years. In my view, if the opposite party, pays simple interest @ 12% per annum to the complainants, that would not only take care of the additional financial burden on them but also give some monetary compensation to them for Consumer Complaint No. 329 of 2015 13 their sufferings on account of the delay in handing over possession of the flat purchased by them."
In the above referred judgment also, there was a Clause to give the compensation @ Rs. 5/- per sq. ft. Therefore, in view of the reasoning given by the Hon'ble Supreme Court in the judgment referred above, it will not be justified to give compensation to the complainant @ Rs. 5/- per sq. ft. as agreed between the parties. Therefore, specifically when complainant is paying interest @ 11.5% p.a. on the loan arranged by him, interest @ 12% p.a. can be awarded to properly compensate the complainants in view of the law laid down in the judgment "PUDA Vs. Mrs. Shabnam Virk" (supra).
10. The complainant has further demanded rent he has paying and escalation cost. Once the compensation in the form of interest has been allowed to the complainant then no further compensation in the form of rent can be allowed to the complainants and once the complainants will get the same flat booked by the complainants with the Ops, then the cost of escalation does not arise. On the other hand, the counsel for the Ops did not raise much issue before us, rather, he alongwith their AGM has made a statement to deliver the possession of the flat within a period of six months.
11. Sequel to the above, we accept the consumer complaint and direct the Ops as under:-
(i) to delivery the possession of flat No. 406 to the complainants within a period of six months from the date of order fully completed as per the specifications agreed between the parties with all amenities, including occupation certificate Consumer Complaint No. 329 of 2015 14 from the Competent Authority on deposit of the balance amount at the time of offering the possession to the complainants;
(ii) pay interest @ 12% on the deposited amount from 1.10.2014 till the date of delivery of the possession;
(iii) Rs. 21,000/- as litigation expenses.
OR
(a) In case the flat is not delivered to the complainants within the specific time referred in Clause 1 then Ops will refund the amount to the complainants deposited with Ops alongwith interest @ 15% from the date of deposit till payment.
(b) pay Rs. 3 lacs as compensation and escalation cost of construction.
(c) Rs. 21,000/- as litigation expenses.
At the time of delivery of possession, Ops will adjust the amount to be paid by them on account of late delivery of possession and compensation with the balance amount to be paid by the complainants.
12. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
13. Order be communicated to the parties as per rules.
(Gurcharan Singh Saran)
Presiding Judicial Member
January 19, 2017. (Surinder Pal Kaur)
as Member