National Consumer Disputes Redressal
Nikhil Kumar Garg & Anr. vs Gardenview Abode Private Limited on 31 January, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 344 OF 2020 1. NIKHIL KUMAR GARG & ANR. SC 279,SHASHTRI NAGAR,GAZIABAD 201002 U.P ...........Complainant(s) Versus 1. GARDENVIEW ABODE PRIVATE LIMITED EARLIER KNOWN AS DEVADATTA BUILD TECH PRIVATE LIMITED AND MANTRI GARDEN HOMES PRIVATE LIMITED HAVING TIE REGD OFFICE AT:"MANTRI HOUSE" #41, VITTLA MALYA ROAD, BANGALORE-560001, KARNATAKA ...........Opp.Party(s) BEFORE: HON'BLE MR. BINOY KUMAR,PRESIDING MEMBER HON'BLE MR. JUSTICE SUDIP AHLUWALIA,MEMBER
For the Complainant : Mr. Aditya Parolia, Advocate Ms. Sumbul Ismail, Advocate Ms. Ishita Singh, Advocate. For the Opp.Party : Mr. Shekhar G. Devasa, Advocate Mr. Thashmitha Muthanna, Advocate Mr. Shashi Bhushan Nagar, Advocate. Dated : 31 Jan 2023 ORDER JUSTICE SUDIP AHLUWALIA, MEMBER
This Consumer Complaint has been filed by Complainants namely Nikhil Kumar Garg and Nidhi Tayal (hereinafter together referred as 'Complainants') under Section 21 r/w section 12(1)(a) of the Consumer Protection Act 1986, against M/s Gardenview Abode Pvt. Ltd., seeking refund of the entire amount collected by the Opposite Party from the Complainants towards consideration of the dwelling Unit along with other ancillary reliefs.
The brief facts leading upto the Complaint are that the Complainants made a joint booking in a project being developed by the Opposite Party namely 'Mantri Blossom' situated at Lalbagh Fort Road, Sudhama Nagar, Bangalore (hereinafter referred as 'Project'). They were allotted unit bearing no.-D-1003, 10th Floor, Buiding D, admeasuring a super build up area of 2700 sq. ft. The opposite Party executed the Construction Agreement dated 29.06.2016 with the Complainants. The Complainants averred that sale price of the unit was Rs. 2,61,50,000/- excluding tax and other charges. However, the Opposite Party claimed the basic cost of the Unit to be Rs.2,70,19,020 excluding deposit, statutory and other charges.
3. The Complainants have further stated that the Opposite Party promised to deliver the unit in November, 2018.
The Opposite Party, however, failed to complete the construction and deliver possession even after delay of more than one year.
5. The Complainants further submitted that they have taken a home loan from ICICI Bank for Rs.2,40,00,000/- and subsequently entered into a Memorandum of Understanding dated 12.06.2016 stating that there will be no EMI till the possession of the said flat The Complainants claim to have paid Rs.2,81,23,870 till date. And further submit that the project is still on going and the possession will not be granted in near future. Hence, aggrieved by the delay, the Complainants have filed the present complaint before this Commission with the following prayers -
a. Direct the Opposite Party for an immediate 100% refund of the total amount paid by the complainants for the unit is INR 2,81,23,870 (Rupees Two Crore eighty One Lacs Twenty Three Thousand Eight Hundred and Seventy Only) along with a penal interest of 18% per annum from the date of receipt of each payment;
b. Direct the Opposite Party to pay compensation of Rs. 10,00,000/- (Rupees ten Lakhs only) to the complainants for mental agony, harassment, discomfort and undue hardships caused to complainants as a result of the above acts and omissions on the part of the Opposite Party;
c. Direct the Opposite Party to litigation costs to the tune of Rs. 2.00 Lakhs.
7. The Opposite Party has filed its written version and raised the following objections-
The Complainants are not 'consumers' as the unit was purchased for investment purposes, for making profit ,and they do not want to take possession of the flat;
The Complainants should have invoked the arbitration clause as provided in Agreement of Construction;
The dispute raised by the Complainants is purely civil in nature and a commercial dispute, and the facts in issue require a full-fledged trial before a competent Civil Court for a proper adjudication;
The parties had entered into Agreement for Buy Back Scheme dated 12.07.2016, which was after the Agreement for sale dated 29.06.2016, and the Agreement for Construction dated 29.06.2016;
The Complainants have not disclosed about the litigation between the parties pending before the NCLT, Bengaluru;
The Complainants have suppressed material facts including receipt of amount Rs.50,13,534/- from Opposite Party under the pre EMI clause;
The basic cost of the unit was Rs.2,70,19,020 and Opposite Party had allotted the said flat on 12.05.2016;
The Opposite Party failed to complete the project due to circumstances beyond its control. The Real Estate Regulatory Authority vide its order dated 17.10.2017 for approval of the project had granted time upto 19.09.2021. Due to lockdown during Covid-19, works again stopped from February, 2020. The Opposite Party has stated that it is making sincere efforts to complete the project as per the extension of time as granted by the concerned Authorities. The Opposite Party has further stated that the construction of project is substantially complete and it will be delivered as agreed by it before the RERA.
8. Hence, the Opposite Party contends that the complaint is not maintainable and the same is to be directed to appropriate Forum for a proper adjudication of the dispute.
9. Rejoinder has been filed behalf of the Complainants. The Complainants have further stated that the Opposite Party has failed to provide any reason or force majeure conditions responsible for the delay in handing over of possession.
10. In addition to the objections as stated above, Ld. Counsel for Opposite Party has also argued that Complainants had approached Opposite Party to invest in the project and purchased a unit for an amount Rs.29,64,115/- for a period of 36 months for assured fixed returnable amount of Rs.59,28,230/- at the end of 36 months from date of entire investment i.e. by 12.06.2019. It was further argued that the complainant's another case bearing No. CC/474/2020 for refund is also pending before this Hon'ble Commission. Hence, the Complainants are strategic investors.
11. Affidavit in Evidence has been filed by Mr. Nikhil Kumar Garg on behalf of the complainants. Affidavit in Evidence has been filed by Mr. Girish Gupta H.S. on behalf of the Opposite Party.
12. Heard the Ld. Counsel for the parties. Perused the material available on record and the written arguments filed by both the parties.
13. Ld. Counsel for the Complainants has argued that as per Clause 6.1 read with Annexure B1 enclosed with the Agreement, the possession was to be offered by November, 2018. However the Opposite Party has failed to deliver the possession despite payment of substantial sum of Rs. 2,81,23,870/-.
14. It has not been denied on behalf of the Opposite Party that as per the Agreement/understanding between the Parties, possession of the dwelling Unit was to be delivered to the Complainants by 30.11.2018. In his Affidavit in Evidence, the Authorised Representative of the Opposite Party; Mr. Girish Gupta, HS, has stated that there has been no deliberate delay in completion of the Project by the Opposite Party. In Para 11 of the Affidavit, he has also stated that the delay occurred on account of Force Majeure reasons like demonetisation and delay in sanctions/approvals by the concerned Local Municipal and Government Departments, the circumstances of which are/were beyond the control of the Opposite Party. He has also stated that "market conditions also contributed to the delay which is beyond the control of the Opposite Party". In addition, the delay has been ascribed to lockdown situation due to outbreak of COVID, scarcity of labour and supply of materials to speed-up the construction and completion of the Project. Further, from the Affidavit in Evidence of the said OPW-Mr. Girish Gupta, which is seen to have been attested on 19.2.2022, it transpires that the Project was still not complete, although it had been mentioned in Para 11 therein that the Real Estate Regulatory Authority had granted time till 29.9.2021 for completing the same. So, it is more than four years now after expiry of the due date in November, 2018 as promised to the Complainants.
15. In such circumstances, the present case would appear to be squarely covered by the decisions of the Hon'ble Supreme Court in C.A No.3182 of 2019 dated 25.03.2019 "(Kolkata West International City Pvt. Ltd. Versus Devasis Rudra)", and in C.A. No. 12238 of 2018 dated 02.04.2019 "(Pioneer Urban Land & Infra Ltd. versus Govindan Raghavan)", in which it has been observed that a Purchaser/allottee cannot be made to wait for an indefinite time.
16. The Hon'ble Supreme Court in "Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra", II (2019) CPJ 29 SC, decided on 25.03.2019 had observed as hereunder -
".....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March, 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified.......".
17. Regarding the contention that the Complainants are not 'consumers' since they had entered into a Buy-back Agreement with the Opposite Parties, it may be mentioned that the same Agreement was entered into on 12.7.2016 in which an option was given to the Complainant to return the property in question to the Developer in case they intended to sell the same after a period of 30 months i.e. after the month of January, 2019, in which event they would have been entitled to an amount of Rs. 59,28,230/-, but the sale price would go to the Developer. It is also noteworthy that such option to sell was to have been exercised by the Complainants in 30 months' time. They never exercised such option which itself would indicate that he did not have any intention to sell the said flat.
18. Further, the fact that the Complainants had booked two residential flats would not ipso facto mean that their intention was necessarily to make any strategic profit making investment with a view to sell any unit, from the very time they opted for purchase. There is nothing on record, much less in documents, filed on behalf of the Opposite Parties to show that the Complainants are engaged in the business of buying and selling properties with a view to earn profits therefrom. The fact that at the relevant time the one of the Complainants was based in Singapore, or is subsequently now residing in Ghaziabad cannot ipso facto give rise to any presumption that his intention was never to personally shift into the Apartment in question at Bangalore, at any subsequent stage.
19. As such, the contention of the Opposite Party that the Complainants are not a "Consumers" within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986, in as much as they had booked the property in question for commercial purposes i.e. only for resale, is untenable especially in view of an earlier decision of this Commission in "Kavita Ahuja Vs. Shipra Estates" III (2016) CPJ 31, in which it has been laid down that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots in his normal course of business to earn profits, shifts upon the Opposite Party, which in the instant case the Opposite Parties have failed to discharge by any documentary evidence in this regard. Therefore, we are of the considered view that the Complainant is a 'Consumer' as defined under Section 2(1)(d) of the Act.
20. The Opposite Parties have also claimed that the Complainants are not entitled to any delayed compensation at the rate claimed by them, but any compensation on that account, if at all awardable, cannot exceed Rs. 3/-per sq.ft. per month as per Clause 14.5 of the Agreement for Construction. A bare perusal of the aforesaid Agreement goes to show that its terms and conditions are wholly one-sided and unfair, considering that in the event of any default in payment of instalments, the Complainants/allottees were liable to pay interest @ 1.5.% per months, which therefore would be 18% p.a. from the due date of payment of instalment. Such inequitable condition in the Agreement is certainly not an enforceable against the Complainants in view of two decisions of the Apex Court in "Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors., Civil Appeal No. 5785 of 2019, decided on 11.1.2021" and "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No. 12238 of 2018" With "Pioneer Urban Land & Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 1677 of 2019, decided on 2.4.2019"; the relevant portion of the both the judgments are re-produced as below-
"Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors.
"19.7 We are of the view that the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An ―unfair contract‖ has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act.
In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement."
"Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan "6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder."
21. The grounds for delay as made out on behalf of the Opposite Parties to make out a case of 'Force Majeure' conditions are also not convincing and the same grounds have been rejected by not only this Commission but even by the Hon'ble Supreme Court of India in innumerable other matters. In any event, nothing on part of the Complainants at any stage contributed to the failure of the Opposite Parties to complete the Project within a reasonable time.
Consequently, the Opposite Parties are directed to refund to the Complainant Rs. 2,81,23,870/- (Rupees Two Crores Eighty One Lakhs Twenty Three Thousand Eight Hundred Seventy Only) alongwith interest @ 9% p.a. from the respective date of each deposit till realisation, within six weeks from the date of passing of this Order.
Any return payments made by the Opposite Parties to the Complainants shall be set-off against the Complainant's decretal amount alongwith, the same rate of interest i.e. 9% p.a. on each such returned amount, if any, from each respective date.
The Opposite Party is also directed to pay to the Complainants Rs. 50,000/- as litigation costs.
25. In the event of non-compliance of this Order, the amounts to be paid shall attract an interest rate of 12% p.a. for the same period.
Pending applications, if any, also stand disposed off.
...................... BINOY KUMAR PRESIDING MEMBER ......................J SUDIP AHLUWALIA MEMBER