National Consumer Disputes Redressal
Anuj Biswas & Anr. vs Kapstone Constructions Pvt. Ltd. & Anr. on 13 April, 2022
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 2760 OF 2018 1. ANUJ BISWAS & ANR. ...........Complainant(s) Versus 1. KAPSTONE CONSTRUCTIONS PVT. LTD. & ANR. Through its Manager/MD, Attn. Mr. Percy Chowdhry 702 Nataraj M.V. Road, Junction, Western Express Highway, Andheri (East) Mumbai-400069 2. ICICI BANK LTD. Attn. Mr. Milin Swant / Mr. Nitin Prabhu, Trans Trade Centre, 2nd Floor, Opp. Floral Deck Plaza, MIDC, Seepz, Andheri (E) Mumbai-400093 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainants : In Person For the Opp.Party : For the Opposite Party No.1 : Mr. Chetan Roy, Advocate
For the Opposite Party No.2 : Ms. Chetna Bhalla, Advocate
Dated : 13 Apr 2022 ORDER
1.The present Consumer Complaint has been filed under Section 21(a) of the Consumer Protection Act, 1986 (for short "the Act") by Mr. Anuj Biswas and Mrs. Somara Biswas (hereinafter referred to as the "Complainants") against Opposite Parties, M/s. Kapstone Construction Pvt. Ltd. (hereinafter referred to as the "Developer") and M/s. ICICI Bank (hereinafter referred to as the "Bank") seeking refund of the amount paid towards purchase of Residential Apartment in the Project, namely "Rustomjee Urbania Azziano" along with interest as the Opposite Party Developer has failed to complete the Project and hand over the possession of the Apartment to them within stipulated time.
2. The facts as narrated in the Complaint are that the Complainants, husband and wife, had purchased one self-contained Residential Flat bearing No. 1203 on the 12th floor in Wing G admeasuring 69.77 sq. mtrs for a total Sale Consideration of ₹1,32,17,203/- in the Residential Project under the name and style as "Rustomjee Urbania Azziano" (hereinafter referred to as the "Project") supposed to be developed by the Opposite Party Developer near Majiwadi Flyover, Mumbai - Nashik Bypass Highway, Majiwadi, Thane (West) Mumbai. Accordingly, an Agreement for Sale (hereinafter referred to as the "Agreement") was executed between the parties on 16.08.2013. Complainants initially paid an amount of ₹15,74,455/- to the Opposite Party Developer through Cheque Nos. 004035 dated 30.03.13 for ₹5,00,000/- and Cheque No.032549 dated 08.06.2013 for ₹10,74,455/-. It is averred that since the Building (Azziano, Wing G) was mortgaged with the ICICI Bank, the Complainants were asked to avail of financial assistance from the ICICI Bank. Under the Subvention Scheme, the Complainants obtained a loan of ₹99,37,366/- from the ICICI Bank which was released in one installment to the Opposite Party Developer on 17.09.2013. It is stated that the Complainants were not informed that the entire loan amount would be released to the Developer in one installment only in the very initial stage of Project in the year 2013 when excavation work was just started and the payment was linked with construction stage. As a result of this, the Complainants are burdened with huge interest amount and suffered a huge financial loss.
03. It is further alleged that at the time of flat booking in April, 2013, the Complainants were informed that the Flat in question would be handed over by 31st December, 2015 and maximum by a grace period of six months but in the actual Registration Document, the date of handing over the possession was indicated as 31.12.2016 without the information of the Complainants. Clause 9.1 of the Agreement is reproduced as under:-
"9. Possession:
9.1 The possession of the premises shall be delivered to the purchaser after the premises is ready for use and occupation provided all the amounts due and payable by the Purchaser under this Agreement and the stamp duty and registration charges in respect of the Premises are duly paid by the Purchaser. The Developer expects to give possession of the premises to the Purchaser on or before 31.12.2016 (with the further grace period of 12 (Twelve) months, subject to what is stated and agreed hereinabove."
04. It is further averred that at the time of signing of the Agreement, the Tower was supposed to be 28 stories, however, later on the Developer managed to get sanction for construction of 6 additional floors without the consent of the Allottees which amounts to Unfair Trade Practice. According to the Complainants, the terms of the Agreement are unfair unjust and arbitrary and in favour of the Opposite Party Developer. As per Clause 4.4 of the Agreement, the Opposite Party Developer is entitled to charge interest @ 24% p.a. from the Buyer for slight delay in payment, however, as per Clause 9.2 of the Agreement, if there is delay in handing over the possession by the Opposite Party Developer, the Buyer is entitled to give notice to the Developer for terminating the Agreement in which event, the Developer shall refund the amount of deposit along with simple interest @ 9% p.a. from the respective date of payment till payment. It is stated that in such cases, the Developer shall also be liable to pay interest @24% on the principle amount.
05. According to the Complainants, they had paid an amount of 1.15 crores (approximately) to the Developer out of the total Sales Consideration of ₹1.19 crores within 32 days from the date of execution of the Agreement, but the Developer has miserably failed to deliver the possession of the Flat, complete in all respect within stipulated time. Since, July 2017 to November, 2017, the Complainants sent numerous emails to the Developer to know the exact date of delivery of the possession of the purchased Apartment but the entire process has went fruitless. Ultimately, Vide Notices dated 30.01.2018 and 08.02.2019, the Complainants requested the Developer for termination of the Agreement and refund of the deposited amount along with interest but in vein. Again Notice was sent on 09.02.2018 but it was not responded by the Developer. Finally, in mid July 2018, the Developer wrote a letter to the Developer to resolve the issue of cancellation of Agreement amicably. However, in the meeting held on 21.08.2018 at Mumbai Office of the Developer, the Complainants were requested to take possession of the purchased Apartment subject to payment of possession charges but the Complainants did not accede to the said request.
06. On 31.08.2018 by an email, the Opposite Party Developer offered a settlement to the Complainants that on withdrawal of the legal notices and the proceedings before the International Consumer Right Protection Council, they can execute the cancellation deed and make refund the amount. On Complainants asking for the exact amount to be refunded by the Opposite Party Developer, they were threatened either to take possession immediately or the Developer would resort to cancellation/forfeiture of the flat by refunding the arbitrary amount. Feeling aggrieved, the Complainants have filed the present complaint with the following prayers:-
(I) Direction to the Opposite Party to refund a) A sum of ₹15,74,455 (earnest money) along with interest @ 18% from July 2013 till the date of realization; b) A sum of ₹99,37,366/- (remaining consideration money - ICICI loan amount) along with interest @ 24% (it is effectively 14.5% i.e. <18% only, as the Complainant is paying 9.5 interest to ICICI Bank) from September, 2015 till the date of realization; (II) Compensation to the tune of ₹10,00,000/- to the Complainant for the mental and physical agony the Complainant has suffered due to consult, insult, ridicule and harassment at the hands of the men and officials of the Opposite Parties; III) Damage to the tune of ₹5,00,000/- which the Complainant suffered due to consult insult, ridicule and harassment at the hands of the men and officials of the Opposite Parties; IV) Litigation costs of ₹1,00,000/-
07. Upon notice, the Complaint was resisted by the Opposite Party Developer by filing its Written Version and raising the preliminary objections that; (i) this Commission lacks jurisdiction to entertain the present complaint as the matter involves triable issues which are to be adjudicated by a Civil Court; the present Complaint is without any cause of action since the question of fault, mis-perfection, shortcoming or inadequacy in the quality, nature and manner of performance is required to be maintained in pursuance of a contract.
08. On merits, it is pleaded that; as per Clause 9 of the Agreement dated 06.08.2013, the tentative date of handing over the possession was 31.12.2016 with a further grace period of 12 months subject to the terms and conditions mentioned in Clause 9.3 of the agreement; the Project in question was completed in all respects on 31.12.2017 and the Occupation Certificate with regard to Wings F, G and H of the said Project, was applied to the concerned Municipal Corporation vide Architect's letter dated 11.12.2017; the Occupation Certificate VP No. S05/0022/10, TMC/TDD/OCC/0458/18 was issued by the Municipal Corporation on 06.02.2018 and thereafter final demand notice was sent to the Complainants on 28.02.2018 calling upon them to pay an amount of ₹11,71,940.08 within 15 days from the date of receipt of letter and take the possession; the delay, if any, was on the part of the Municipal Authorities in issuing the Completion Certificate which was beyond their control and covered under Clause 9.3 of the Agreement; the Complainant instead of taking the possession of the Flat opted to approach the International Consumer Rights Protection Council to put forth his illegal demands; since there was no delay in their part in completion of the Project and offering possession of the Flat, the Complainants are not entitled for refund or any compensation as claimed; sanction of the additional 6 towers was granted by the Municipal Corporation considering the Rules/Regulations/Bye Laws and the Complainants have failed to explain as to how they have been prejudiced by the extension of the Floor Numbers as alleged; without prejudice to its rights and contention and on insistence of the Complainants, the Opposite Party Developer, vide email dated 11.09. 2018,had agreed to refund the entire amount deposited along with interest @ 9% in terms of Clause 9.2 of the Agreement, however, inasmuch as the Complainants did not accept the said order, it was withdrawn; the notice sent by the International Consumer Rights Protection Council was duly replied vide its reply dated 30.06.2018 apprised them the facts and circumstances of the case and also offered to hand over possession to the Complainants upon payment of final demand; Complainants were never threatened to either take the possession of the Flat purchased or the agreement would be terminated and amount would be forfeited;
09. We have given our anxious consideration to the arguments advanced by the Complainant and learned Counsel for the Opposite Party Developer and ICICI Bank.
10. The admitted facts of the case are that the Opposite Party Developer launched a Residential Project under the name and style of "Rustomjee Urbania Azziano" Near Majiwadi Flyover, Mumbai-Nashik Bypass Highway, Majiwadi, Thane (W) Mumber-400601. The Complainant No.1 who was employed in Abu Dhabi, UAE at the relevant time, along with his wife, purchased a Residential Unit No. 1203, 12th Floor, Wing G of the Project admeasuring 69.77 Sq. Mtrs. for a total Sale Consideration of ₹1,32,17,202 by paying an initial amount of ₹15,74,455/-. Since, the said Building (Azziano, Wing G) was mortgaged with ICICI Bank by the Opposite Party Developer, the Complainants had to avail of financial assistant from ICICI Bank under the Subvention Scheme. Accordingly, the Complainants were sanctioned a loan of ₹99,37,366/- which was disbursed to the Opposite Party Developer in one installment on 17.09.2013. The Agreement for Sale was executed between the parties on 16.08.2013. As per Clause 9.1 of the Agreement, the possession of the aforesaid Flat, complete in all respect, was to be handed over to the Complainants on or before 31.12.2016 with a further grace period of 12 months subject to the reasons mentioned in Clause 9.3.
11. Complainants appearing in person fervently urged that despite having received a sum of ₹1.15 crores out of ₹1.19 Crores (excluding some possession charges) i.e, about 90% of the total Sale Consideration, the Opposite Party Developer has miserably failed to keep its promise to deliver the possession of the Flat purchased by them within the stipulated time as contemplated in the Agreement. It is further submitted that at the time of booking of the Flat, they were informed that the possession of the Flat in question would be delivered latest by 31st December, 2015 with a grace period of six months and in the draft Contract Agreement sent to them the date of handing over the possession was kept blank. However, to their utter surprise, the date in the actual Registration documents was mentioned as 31.12.2016 which was not informed to them and even they did not notice it at the time of signing the documents which were on dotted lines. Further, in the draft Contract, the grace period was mentioned as 6 months as against 12 months in the Actual Registration Document. According to them, the possession of the Flat was to be handed over to them latest by July 2016 including the 6 months grace period.
12. Complainants further submitted that in terms of Clause 9.2 of the Agreement they were entitled to give notice for terminating the Agreement in case of delay on the part of the Opposite Party Developer to hand over the possession within the stipulated time as mentioned in the Agreement and in that case the Opposite Party Developer was duty bound to refund the entire amount deposited along with interest @9% p.a. from the respective date of deposits till payment, within a period of three weeks from the date of receipt of such notice. The Developer was also liable to pay an amount of ₹30,000/- towards liquidated damages. As the construction of the Project was not complete till the committed period of possession, on 30.01.2018 they sent a letter to the Developer to cancel the Agreement and refund the amount along with interest, however, the Developer did not respond to the said letter. Resultantly, the Complainants sent a legal notice dated 09.02.2018 to the Developer calling upon them to cancel the Agreement and refund the deposited amount along with legitimate interest but in vein. Thereafter on a complaint, a notice dated 06.05.2018 was sent by the International Consumer Rights Protection Council to the Developer to refund the amount to the Complainant. It is further urged that despite a meeting on 21.08.2018, the Opposite Party Developer did not respond to his request for cancellation of Agreement and refund of the deposited amount. Finally, on 31.08.2018, the Opposite Party Developer sent an email to the Complainants offering a settlement only on withdrawal of the legal notice and the proceedings before the International Consumer Right Protection Council, which request was rejected by the Complainants.
13. As against this, Learned Counsel appearing for the Developer vehemently submitted that in terms of Clause 9 of the Agreement, the possession of the Flat was to be handed over on or before 31.12.2016 with a grace period of 12 months subject to force majeure reasons. The Project in question was completed in all respects on 31.12.2017 and the Occupancy Certificate in respect of Wing F, Wing G and Wing H was applied by its Architect vide Letter dated 11.12.2017 to the concerned Municipal Corporation. The Occupancy Certificate was issued by the Municipal Corporation on 06.02.2018 and thereafter an offer of handing over the possession was made to the Complainants vide letter dated 28.02.2018 subject to deposit of final balance amount. Since, there was no delay in completion of the Project and an offer of possession was also made to the Complainants within the stipulated time, the Complainants are not entitled for refund with interest and they are bound to take possession on payment of balance amount on obtaining the Occupancy Certificate by the Developer in respect of Wing G where their flat was situated. Therefore, the Complainants should be directed to take the possession on payment of final balance amount.
14. We do not find any substance in the submission made by the Learned Counsel for the Opposite Party Developer that since there was no delay in completion of the Project and making the offer of possession to the Complainants, they are not entitled for refund of the amount deposited by them as prayed and further they should be directed to take the possession of the Flat subject to the payment of the balance consideration. In our considered view, as per afore-extracted Clause 9 of the Agreement, the possession of the Flat purchased by the Complainants, was supposed to be handed over to them by the Developer latest by 31.12.2016. In terms of the said Clause, the Opposite Party Developer was further entitled for a grace period of 12 months which, in our view, is unjust, unfair and arbitrary. Generally, in all the identical or similar Agreements executed between the Developer and the Purchaser, 6 months' time is granted as grace period to complete the formalities of the registration and execution of the legal documents and thus, the Opposite Party Developer cannot be allowed to take the advantage of grace period of 12 months. As per Opposite Party's own admission, Project was completed, in all respect, on 31.12.2017, Occupation Certificate was applied for on 11.12.2017 and it was issued by the Municipal Corporation only on 06.02.2018. The offer of possession was made by the Opposite Party Developer to the Complainants on 28.02.2018. Hence, it is crystal clear that there was delay of more than one year in offering the possession of the Flat to the Complainants. The Opposite Party Developer has failed to adduce any evidence to show that the delay in completion of the Project was due to force majeure reasons or the reasons which were beyond their control. The only defence taken for the delay is attributable on the part of the Municipal Corporation in issuing the Occupation Certificate. The Hon'ble Supreme Court in "DLF Home Developers Ltd. Vs. Capital Green Flat Buyers Association, 2020 SCC OnLine SC 1125" has held that time taken in obtaining approval from the Competent Authorities is always expected. The builder cannot take this defence for delaying construction. Therefore, we do not find any force in this plea and the same is rejected.
15. It will not be out of place to mention that as per Clause 9.2 of the Agreement, if there was any delay beyond 31.12.2016, the Complainant was entitled to give notice for terminating the Agreement and in that case, the Developer was liable to refund the amount deposited by the Complainants along with interest @ 9% p.a. from the date of receipt till payment, within a period of three weeks from the date of receipt of notice. The relevant clause 9.2 of the Agreement is reproduced as under:-
" If the Developer fails or neglects to give possession of the Premises to the Purchaser on the above referred date and after the expiry of the grace period of 12 months (subject to force majeure) or within any further date or dates as may dates as may be mutually agreed between the parties hereto, then in such case the Purchaser shall be entitled to give notice to the Developer terminating this Agreement, in which event the Developer shall within three weeks from the receipt of such notice, refund to the Purchaser the amount of deposit or earnest money and the further amounts, if any, that may have been received by the Developer from the Purchaser as installments in part payment in respect of the Premises along with the simple interest at the rate of 9% p.a. from the date of receipt till payment. The Developer shall also pay liquidated damages of Rs.30,000/- in respect of termination and neither party shall have any further claim against the other in respect of the premises or arising out of this Agreement and the Developer shall be at liberty to dispose off the premises to any other person or persons at such price and upon such terms and conditions as the Developer may deem fit."
16. A bare perusal of the afore-extracted Clause would reveal that if there was any delay in offering possession of the premises/Flat beyond the committed period, i.e. 31.12.2016 and after the expiry of grace period of 12 months (which should be six month), the Complainants were entitled to give notice to the Developer for termination of the agreement and refund of the amount and the Developer was under an obligation to refund the amount within three weeks from the date of receipt of the notice along with interest @9% p.a. from the respective date of deposit till payment and liquidated damages of ₹30,000/-. It is an admitted fact that the Flat was not ready for possession till the committee date and even expiry of the grace period. Therefore, vide letter dated 30.01.2018 and legal Notice dated 09.02.2018, the Complainants requested the Opposite Party Developer to terminate the Agreement and refund the deposited amount with legitimate interest. However, the Opposite Party Developer did not terminate the agreement and refund the deposited amount in terms of Clause 9.2 of the Agreement which amounts to deficiency in service on their part. Keeping in view the Judgment passed by this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery, it is the discretion of the Complainant whether he wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest, it is held that it is well within the Complainants' right to seek for refund of the principal amount with interest and compensation.
17. Recently, in the case of Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor - Civil Appeal No. 6044 of 2019 decided on 07.04.2022, the Hon'ble Supreme Court while rejecting the appeal of the Complainant for enhancement of interest awarded on refund of the deposited amount, by this Commission has held as under:-
" 22.2 At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in appeal filed by the Consumers for enhancement of interest."
18. Consequently, respectfully following the decisions of the Hon'ble Supreme Court and this Commission as well as for the reasons stated above, we partly allow the present Consumer Complaint with a direction to the Opposite Party Developer to refund the deposited amount with interest @9% p.a. from the respective date of deposit till payments, within a period of six weeks from the date of passing of this order failing which the amount shall carry interest @12% p.a. for the same period. Besides, Complainants shall also be entitled for a costs of ₹50,000/-.
19. The Consumer Complaint is disposed of in above terms. The application, if any pending, shall also stands disposed of.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER