State Consumer Disputes Redressal Commission
Aniraj Sharma vs Sushma Buildtech Limited on 9 February, 2022
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint No. : 231 of 2019 Date of Institution : 15.10.2019 Date of Decision : 09.02.2022 Aniraj Sharma S/o Prem Chand Sharma; Neelam Kumari W/o Aniraj Sharma; Both Resident of House No.1295, Sector 11, Panchkula (Haryana). .....Complainants. Versus Sushma Buildtech Limited, Office Address: Unit No.B-107, 1st Floor, Business Complex, Elante Mall, Industrial Area, Phase I, Chandigarh 160002 through its Manager/Authoried Signatory/Office-in-charge/Director Sales and Marketing. ...Opposite Party. Complaint under Section 17 of Consumer Protection Act, 1986. BEFORE: MRS. PADMA PANDEY, PRESIDING MEMBER.
MR. RAJESH K. ARYA, MEMBER.
Argued (Through Video Conferencing):
Sh. Sandeep Malik, Advocate for the complainants.
Sh. Sanjeev Sharma, Advocate for the opposite party.
PER RAJESH K. ARYA, MEMBER Briefly stated the facts are that the complainants have filed the instant complaint seeking possession of residential flat bearing No.H103, 1st Floor, in Tower H, booked and allotted to them by the opposite party on 13.09.2017 in its project i.e. Sushma Crescent situated in Gajipur & Kishanpura Zirakpur, Distt. SAS Nagar, vide allotment letter, Annexure C-1. Against the price of the said unit fixed at Rs.44,01,914/-, the complainants, in all, paid an amount of Rs.39,80,000/ to the opposite party as per detail given in Para 14 of the complaint. It has been averred that the complainants paid all the due installments from time to time and without any kind of delay on their part. It was further averred that Apartment Buyer's Agreement was executed between the parties on 13.09.2017, Annexure C-2, as per Clause 14(d) whereof, the possession of the unit, complete in all respects, was supposed to be delivered within a period of 18 months plus 6 months grace period (total 24 months) from the date of the said agreement. It was further averred that the opposite party offered possession vide letter dated 16.08.2019, Annexure C-5 but it illegally raised a demand of Rs.9,99,830/- vide Possession Demand document annexed with the said possession letter by wrongly mentioning the date of booking as 25.06.2017 & amount paid in cash as Rs.5,000/-, which were actually 26.07.2017 & Rs.1,00,000/-. It was further averred that there is no adjustment of remaining 16 monthly cheques in the final demand raised as there are total 24 cheques committed by the opposite party as monthly payment but the complainants have only received 8 cheques. It was further averred that the opposite party also illegally demanded an amount of Rs.1,90,185/- as delayed interest when the complainants have paid all the installments without any delay and thus, have paid more than 85% of the total amount within six months of booking.
2. It was further averred that on visiting the site, the complainants were surprised to see that the said floor was not complete and lot of work is still pending as there is no wooden work in master bedroom and no password protected door locks etc in the said flat, as committed at the time of booking, have been provided. It was further averred that the complainants being government employees have suffered a huge financial loss as well as huge mental pain and harassment. It was further averred that the construction quality is very poor and most of the promised services/amenities/ facilities are lacking. Apart from seeking possession, complete in all respects, with promised amenities and facilities, the complainants have also sought a direction to the opposite party to withdraw the illegal demand of Rs.1,90,985/- raised on account of delayed interest besides praying for Rs.5 lakhs and Rs.75,000/- towards mental agony on account of deficiency in service and litigation cost respectively.
3. On the other hand, the opposite party filed its written statement, wherein, while admitting the factual matrix of the case, it has raised certain preliminary objections to the effect that the complaint is not maintainable as the complainants are not consumers as envisaged in Consumer Protection Act, 1986; that consumer complaint is liable to be dismissed as no cause of action has arisen in favour of the complainants and against the opposite party; that the complaint is liable to be dismissed for want of pecuniary and territorial jurisdiction and that since in cases of sale of immovable property and construction, time is never regarded as the essence of contract, therefore, the complainants are not entitled to claim possession within any time-bound manner as same would amount to specific performance of the contract. On merits, it has been pleaded that possession of the unit has already been offered on 16.08.2019 as per the terms and conditions of the Buyers Agreement and the complainants have failed to pay the due amounts and take physical possession of the flat. It has further been pleaded that the complainants have not disclosed to the Commission that the preferential location charges and Floor Premium Charges for the unit were already waived of vide letter dated 21.12.2017 and they were given concession of Rs.10 Lakhs. It has further been pleaded that an amount of Rs.5,000/- was paid in cash by the complainants on 25.06.2017 at the time of submitting application and Rs.1,00,000/- was paid by them on 26.07.2017. It has further been pleaded that the complainants also availed home loan of Rs.25 Lakhs from Punjab National Bank for which Tripartite Agreement was also got executed. It has further been pleaded that due to non-payment of installments in time, the delayed interest has been rightly charged in terms of allotment/payment/plan/buyer's agreement. It has further been pleaded that the allegations of wooden work in master bedroom and password protected locks are baseless. Rest of the allegations made in the complaint have been denied. Pleading no deficiency in rendering service and unfair trade practice on its party, prayer for dismissal of complaint has been made.
4. The complainants filed rejoinder wherein the averments made in the complaint have been reiterated and those of the written statement filed by the opposite party have been repudiated.
5. The parties led evidence in support of their case.
6. We have heard the Counsel for the parties and have gone through the material and evidence available on record as well as the written arguments very carefully. The following issues and questions of law emerge for consideration by this Commission:-
Whether the complainants are not consumers as envisaged in Consumer Protection Act, 1986?
Whether the complaint is liable to be dismissed for want of cause of action?
Whether this Commission has the pecuniary jurisdiction to entertain and try this complaint?
Whether this Commission has the territorial jurisdiction to entertain and try this complaint?
Whether time is the essence of contract for handing over actual physical possession of the unit, in question?
Whether the possession offered on 16.08.2019 by the opposite party i.e. within the stipulated period of 24 months as agreed upon in the Buyers Agreement, could be said to be complete and genuine?
Whether the opposite party rightly raised the demand towards delayed interest?
Whether the complainants are entitled to compensation on account of mental agony and physical harassment on aforesaid counts?
7. As regards the first objection raised by the opposite party is that the complainants are not consumers as defined by Section 2(1)(d)(ii) of 1986 Act, it may be stated here that there is nothing, on the record to show, that the complainants are property dealers and are indulged in sale and purchase of property, on regular basis. The complainants in Para 16 of the complaint have clearly stated they had bought the unit, in question, with a hope that they would get shelter over their head alongwith the family. In the absence of any cogent evidence, in support of the objection raised by the opposite party, mere bald assertion to that effect, cannot be taken into consideration. Otherwise also, in case titled as Kavit Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd., 2016 (1) CPJ 31 , it was held by the Hon'ble National Commission that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. The principle of law, laid down, in Kavit Ahuja's case (supra) is fully applicable to the present case. Under these circumstances, by no stretch of imagination, it can be said that the flat, in question, was purchased by the complainants, by way of investment, with a view to earn profit, in future. Similar view was reiterated by the Hon'ble National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta, 2016 (2) CPJ 316 and Aashish Oberai Vs. Emaar MGF Land Limited" , Consumer Case No.70 of 2015, decided on 14 Sep. 2016. The complainants, thus, fall within the definition of 'consumer', as defined under Section 2(1)(d) of the Act. Such an objection, taken by the opposite party, in its written statement, therefore, being devoid of merit, is rejected.
8. Now coming to the second objection raised by the opposite party that no cause of action has accrued in favour of the complainants and against the opposite parties for filing the present complaint, it may be stated here that since in the complaint, the complainants are seeking physical possession of their unit, complete in all respect, with promised amenities and facilities besides compensation on said account alleging the possession offered to be a paper possession and not complete, therefore, definitely a cause of action has accrued in favour of the complainants for filing the present complaint. Thus, the objection raised in this regards stands rejected.
9. The next objection taken by the opposite party with regard to pecuniary jurisdiction deserves rejection. It may be stated here that as per Section 17 (1) (a) (i) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. In the present case, the complainants are seeking possession of the unit in question besides other relies i.e. compensation of Rs.5 Lakhs and litigation cost of Rs.75,000/-. The sum total of the value of the unit in question and the relief claim is less than 1 Crores, which is well within the pecuniary jurisdiction of this Commission under the Consumer Protection Act, 1986, as this complaint filed on 15.10.2019 comes under the purview of the Act of 1986. Thus, the objection raised in this regard being devoid of any merit stands rejected.
10. The next objection raised by the opposite party is as regards the territorial jurisdiction of this Commission, which also deserves rejection for the simple reason that the Apartment Buyer's Agreement dated 13.09.2017, Annexure C-2, was executed at Chandigarh and the same was signed and delivered by the builder named Sushma Buildech Limited at Chandigarh as is clear from the last page of the said agreement at 29 of the paper-book. Not only this, the receipts, Annexure C-3 Colly. were also issued by the opposite party at Chandigarh. In this view of the matter, this State Commission has the territorial jurisdiction to entertain and try the present complaint and the objection raised to the contrary stands rejected.
11. Coming to the next objection raised by the opposite party that the time was not the essence of the contract, it may be stated here that the objection raised is contrary to Clause 14(d) of Apartment Buyer's Agreement dated 13.09.2017, Annexure C-2, as per which, the possession of the unit in question was to be given to the complainants within a period of 18 months from the date of its execution plus six months grace period, totaling 24 months i.e. up-to 12.09.2019, failing which, the opposite party (developer) was to pay compensation/penalty @Rs.5/- per sq. ft. of the super built-up area per month for the entire period of such delay. We may add here that as per Section 3 of Consumer Protection Act, 1986, the provisions of this Act are in addition to and not in derogation of the provisions of any other law for the time being in force. Therefore, time was definitely the essence of the contract as the possession of the unit was to be given in a time bound manner as per Clause 14(d) of the Agreement. The objection raised in this regard being devoid of any substance stands rejected.
12. Now, the question, which needs to be decided by this Commission is, as to whether the possession offered on 16.08.2019 by the opposite party i.e. within the stipulated period of 24 months as agreed upon in the Buyer's Agreement, was complete and genuine one. Opposite party has failed to place on record any evidence to establish that on the date of offer of possession, all the amenities and facilities as promised were there at the site/unit allotted to the complainants. It may be stated here that it is settled law that onus to prove the stage and status of construction and development work at the project site and that all the permissions/approvals have been obtained in respect thereof, is on the builder/developer. It was so said by the Hon'ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. As stated above, it is very strange that in the present case not even an iota of evidence has been placed on record by the opposite party to prove that development works and basic amenities were completed at the project site, in the year 2019. In case, the development/construction activities were undertaken and completed at the project site by September 2019 or even thereafter, then it was for the opposite party, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, are completed at the site or not but it failed to do so. During pendency of this complaint also, this Commission vide order dated 17.10.2019, directed the opposite parties to produce on record the following documents, duly authenticated:-
"Registration Certificate of the project with the competent authority.
Copy of requisite Licence issued by the Competent Authority under Punjab Apartment and Property Regulation Act 1995.
Change of Land Use (CLU) pertaining to the project in question.
Letter of Intent (LOI).
Copy of approved site plan of the project.
Completion Certificate of the project.
Latest photographs of the site/unit in dispute.
Current list of Managing Director/Director(s) of the Company.
Detail of Bank Accounts of the Company.
List of properties both moveable and immoveable of the company and its Managing Director/Director(s) which can be attached in execution of the decree. "
However, it is significant to mention here that even thereafter also during pendency of this complaint, despite the fact that number of opportunities were available with the opposite parties to place on record the aforesaid documents, yet, they failed to furnish the same for the reasons best known to them except copy of one letter dated 15.12.2017 vide which Partial Completion Certificate, Annexure R-9, was granted to the opposite party by Municipal Council, Zirakpur subject to certain conditions vis-à-vis maintaining fire safety and environment clearance machinery; obtain NOC from respective departments as mandated under law and as per government guidelines; take permission of any addition alteration in building; till the time due charges towards the construction of EWS flats as per Govt. policy of EWS flats are paid, the sale purchase of such flats shall not be carried out etc. etc. and in non-compliance of same, the completion certificate shall be cancelled without any notice. Under these circumstances, we are of the considered view that by not placing on record the aforesaid documents, the opposite parties have attracted an adverse inference that the project in question had been launched by them in contravention of the relevant Rules and Regulations and also Punjab Apartment and Property Regulation Act, 1995 i.e. they have failed to obtain necessary approvals/sanctions for launching the said project and selling the units/plots therein to the prospective buyers.
13. Not only as above, it is settled law that before offering possession of the residential unit/plot, the builder/developer is legally bound to obtain completion certificate from the competent authorities. An allottee is not obliged to take possession of a residential plot/flat, unless it is complete in every respect, including the completion certificate. It was so said by the Hon'ble National Commission, in Inderjit Singh Bakshi Versus S.M.V. Agencies Private Limited, FA No. 729 of 2013, decided on 30.11.2015. Relevant part of the said order reads as under:-
'....An allottee is not obliged to take possession of a flat unless it is complete in every respect, including the completion certificate....'
14. The Hon'ble National Commission in its order dated 13.06.2018 passed in First Appeal No.855 of 2018 (Vision India Realtors Pvt. Ltd. & Anr. v. Sanjeev Malhotra) also, categorically held that legal possession cannot be delivered in the absence of completion certificate issued by the competent authority. It was held in Para No.5 as follows:
5. During the course of hearing, it was submitted by the learned counsel for the appellant that the completion certificate in respect of the project was obtained by the appellant on 15.03.2016. A copy of the communication dated 15.03.2016 from Municipal Council, Kharar has been placed on record. It is therefore, evident that the completion certificate having been received only on 15.03.2016, the appellant could not have offered legal possession of the apartment to the complainant at any time before that date. As noted earlier, the amount of Rs.1,81,375/- was demanded on 20.04.2015 and the amount of Rs.2,12,489/- was demanded on 06.02.2016. The complainant was requested to pay the aforesaid amount so that the appellant could offer the possession of the flat. The said offer of possession was meaningless being unlawful as the requisite completion certificate had not been obtained by that date......."
15. Furthermore, Section 14 of Punjab Apartment and Property Regulation Act, 1995 (in short, "PAPRA") deals with responsibility of the builder/promoter to obtain completion and occupation certificate from the competent authority, which reads as under:
14. It is the responsibility of the promoter-
(i) in the case of apartments, to obtain from the authority required to do so under any law completion and occupation certificates for the building and if a promoter, within a reasonable time, after the construction of the building, does not apply for an occupation certificate from the aforesaid authority, the allottee of an apartment may apply for an occupation certificate from the said authority; and
(ii) in the case of a colony, to obtain completion certificate from the competent authority to the effect that the development works have been completed in all aspects as per terms and conditions of the licence granted to him under section 5. (2) The authority referred to in sub-section (1) shall, after satisfying itself about the agreement of sale between the promoter and the allottee, and the compliance of the building regulations and all other formalities, issue an occupation certificate."
16. However, in the present case, no completion certificate and occupation certificate, if any, issued by the competent authority has been produced by the opposite party on the record, except the partial completion (Annexure R-9), which itself is violation of above reproduced Section 14 of PAPRA. Even till the date of arguments in this complaint, no completion certificate has been produced before this Commission. Thus, in view of the law laid down by the Hon'ble National Commission in the above noted authorities, without issuance of such a certificate by the competent authority, the opposite party cannot be said to be in a legal position to hand over possession of the unit, in question, to the complainants.
17. Thus, in view of findings given above, we are of the considered opinion that in the absence of any evidence to prove that the project in question was complete in all respects by August 2019 and also in the absence of any completion certificate, it can safely be said that the possession so offered vide letter dated 16.08.2019, was nothing but a paper possession, which is not sustainable in the eyes of law and is accordingly quashed. It is therefore held that the complainants were not obliged to take over the said incomplete possession and was also right in not getting the sale deed executed in respect of the plot in question. Plea taken by the opposite party, in this regard stands rejected.
18. Now coming to the next issue with regard to the demand raised by the opposite party towards delayed interest, it may be sated here that since it has been held above that possession so offered was not genuine one, as such, in our considered opinion, the Company cannot expect the allottee to keep on making payment in the absence of completion of construction and development work. If the allottee after making payment of substantial amount stops making payment of remaining small amount due to be paid at the time of possession only, when he/she came to know that the company is not in a position to deliver possession of their respective units/plots, as there will be a huge delay in completing the construction and development activities, he is well within the right to do so, in view of principle of law laid down by the Hon'ble Supreme Court of India in Haryana Urban Development Authority Vs. Mrs. Raj Mehta, Appeal (Civil) 5882 of 2002, decided on 24.09.2004, wherein it was held that if the builder is at fault in not delivering possession of the units/plots by the stipulated date, it cannot expect the allottee(s) to go on paying installments to it. Similar view has also been taken by the Hon'ble National Commission, in Prasad Homes Private Limited Vs. E. Mahender Reddy and Ors., 1 (2009) CPJ 136 (NC), wherein it was held that when development and construction work was not carried out at the site, the payment of further installments was rightly stopped by the purchaser. Thus, in the present case also, if the complainants after making substantial payment of more than 95% allegedly stopped to make the remaining payment, they were right in doing so and on account of this reason, they cannot be burdened with any kind of penalty, holding charges or delayed interest as charged by the opposite party. In view of above, the Possession Termination letter dated 04.10.2019, Annexure R-7, vide which interest amount against the unit, in question and holding charges @Rs.5/- per sq. ft. have been levied upon the complainants, is quashed. However, it is made clear that the remaining dues i.e. installment amount and other charges legally due as per agreement are payable by the complainants.
19. Now the next question that falls for consideration is as to what amount of compensation should be granted to the complainants for the period of delay in delivery of possession, starting from 12.09.2019. It may be stated here that failure of the opposite party to provide complete/effective possession of the unit within the stipulated period amounts to deficiency in service, as the possession offered on 16.08.2019 though within the stipulated period of 24 months, was nothing but a paper possession. It is also matter of common parlance that for purchasing the plot, the purchasers take loans from their family members, relatives and friends or financial institutions. In some cases, the purchasers live on rent in the absence of timely delivery of possession. On account of delay in actual delivery of possession within the stipulated period (in the present case by 12.09.2019), the complainants suffered mental agony, hardship and financial loss at the hands of the developers/builders. In the case titled as Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon'ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Recently in Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd. (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, while discussing the above authorities and discarding the one-sided terms of the Buyer's Agreements, the Hon'ble Supreme Court awarded simple interest @6% per annum on the amount deposited by the complainants therein, in addition to the penalty amount, as prescribed in the agreement for delay in delivery of possession till delivery of actual and physical possession of the unit. In view of the observations of the Hon'ble Supreme Court in the above noted case, we are of the view that the provision of penalty @Rs.5/- per sq. ft. per month of the super built up area of the said unit as per Clause 14(d) of the Apartment Buyer's Agreement, Annexure C-2, is not sufficient to compensate the complainants for the delay in delivery of possession and the mental agony, harassment and financial loss suffered by the complainants on account of this reason. Therefore, in addition to aforesaid penalty @Rs.5/- per sq. ft. per month of the super built up area of the said unit, after the expiry of stipulated date of delivery of possession i.e. 13.09.2019 till the date of actual, physical and legal delivery of possession, the complainants are also entitled to simple interest on the entire amount deposited by them @ 6% per annum from 13.09.2019 till delivery of possession of the unit in the manner, as discussed above. As regards the contention of the complainants that 24 monthly discount cheques were committed by the opposite party and only 8 monthly cheques were given, it may be stated here that the complainants could not substantiate their claim regarding remaining monthly discount cheques.
20. For the reasons recorded above, this complaint is partly accepted with cost and the opposite party is directed as under:-
To deliver actual physical possession of the unit in question, complete in all respects i.e. after providing all the basic amenities referred to above, to the complainant, within a period of 3 months from the date of receipt of a certified copy of this order, on making remaining payment, if any, by them.
To pay compensation @Rs.5/- per sq. ft. per month of the super built up area of the said unit, as per clause 14(d) of the Apartment Buyer's Agreement, Annexure C-2 and also interest @6% p.a. on the entire deposited amount, starting 13.09.2019 till 31.01.2022, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry penal interest @9% p.a. from the date of default till this payment is made.
To pay compensation @Rs.5/- per sq. ft. per month of the super built up area of the said unit aforesaid and also interest @6% p.a. on the entire deposited amount w.e.f. 01.02.2022, onwards (per month), by the 10th of the following month to the complainants till actual delivery of physical possession of the unit, complete in all respects.
To pay lump-sum compensation for mental agony and harassment; and cost of litigation to the tune of Rs.50,000/- to the complainants, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry interest @9% p.a. from the date of passing of this order till realization.
21. Certified copies of this order be sent to the parties free of charge.
22. File be consigned to the Record Room after completion.
Pronounced.
09.02.2022.
(PADMA PANDEY) PRESIDING MEMBER (RAJESH K. ARYA) MEMBER