State Consumer Disputes Redressal Commission
Mahendra Gupta vs Jai Prakash Associates Ltd on 14 September, 2022
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UP C-1 Vikrant Khand 1 (Near Shaheed Path), Gomti Nagar Lucknow-226010 Complaint Case No. CC/401/2017 ( Date of Filing : 25 Sep 2017 ) 1. Mahendra Gupta Jalaun ...........Complainant(s) Versus 1. Jai Prakash Associates Ltd Noida ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 14 Sep 2022 Final Order / Judgement Reserved State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint Case No.401 of 2017 1- Mr. Mahendra Gupta, aged about 61 years, S/o Daya Ram Gupta, R/o 136, Tulsi Nagar, Orai, Jalaun, Uttar Pradesh-285001 2- Manjula Gupta, aged about 40 years, W/o Mr. Mahendra Gupta, R/o 136, Tulsi Nagar, Orai, Jalaun, Uttar Pradesh-285001 ...Complainants. Versus 1- Jaiprakash Associates Limited, Registered Office at Sector-128, NOIDA-201304 through its Managing Director. 2- Jaypee Infratech Limited (as confirming party), Commercial Department, Registered Office at Sector-128, NOIDA-201304 through its Authorized Signatory. 3- Commercial Department, Jai Prakash Associates Limited, Registered Office at Sector-128, NOIDA-201304 through its Authorized Signatory Mr. Sushant. ...Opposite parties. Present:- 1- Hon'ble Sri Rajendra Singh, Member. 2- Hon'ble Sri Vikas Saxena, Member. Sri Abhishek Singh, Advocate for the complainant. Sri Pratul Pratap Singh, Advocate for Opposite Party no.1. None for the opposite parties no.2 & 3. Date :06 .10.2022 JUDGMENT
Per Sri Rajendra Singh, Member- The brief facts of the case are that, that the complainants, a resident of 136, Tulsi Nagar, Orai, Jalaun was interested to purchase a flat in a project launched by the opposite parties. The opposite parties provisionally allotted one plot of land bearing unit no.P-119 in Country Homes-II at Jaypee Greens Sports City, Gutam BuddhNagar having its allotment letter reference no.JGSP CH20P119on May 9, 2012. The plot in question has been located as per location plan, having area of 167.06 sq. mtrs. for consideration of Rs.63,36,058.00 and the parties are ready for the same.
It is also stated that in the allotment letter that for the purpose of clause 6.8 of the Standard Terms and Conditions, any increase or decrease in the super area shall be payable or refundable on pro rata basis. From the perusal of allotment letter, it transpires that the opposite parties have never informed or provided the copy of standard terms and condition at any stage. It is further specifically mentioned in the provisional allotment letter in respect of the schedule of the payment as follows:
"The consideration and the other amounts (as defined in the standard terms and conditions) shall be payable on the dates as specifically mentioned in the payment plan enclosed as annexure III. All payments are to be made by local cheques/ demand drafts drawn in favour of Jaypee Sports InternationalLimited and payment at Delhi."
The complainant has been allotted a unique customer ID, which is "JGSPCH20P119" and opposite parties has further requested to the complainant that to quote customer ID and unit reference number in all future communication. It is further stated that subject to the standard terms and condition, the possession of the said plot is expected to be delivered to the complainant with in a period of 18 (eighteen) months thereof.
The opposite parties stated that "the standard terms and conditions, of provisional allotment include the undertaking given by the applicant. Further subject to the standard terms and condition and undertaking given by the applicant, this provisional allotment letter shall prevail over all over terms and conditions, specification, etc. given in our brochures, advertisement, price list and any other sale documents. This cancels and supersedes all other previous written and oral understandings in respect of the provisional allotment contemplated by this letter.
In respect of the terms and conditions as mentioned in the present provisional allotment letter the complainant has paid the part consideration amount as per the payment plan since April 20, 2012 till23.3.2013.
In respect of the payment plan, the complainant paid up to Rs.56,45,418.00 since the first installment i.e.April 20, 2012 till 23.3.2013 against the consideration amount. The complainant has paid maximum of the construction amount but the opposite parties failed to provide the possession of plot in question by execution of sale deed as per the terms and conditions and also failed to handover the possession of the plot in 18 months. The complainant made several requests to the opposite parties but in vein. The complainant met with the opposite parties but they have not paid any attention. The opposite parties were bound to provide the possession of the plot in the promised period of 18 months but they failed to do so. It is deficiency in service and also unfair trade practice. After the mail conversation the complainant met with the opposite parties several times but they did not pay any attention. Hence, the complainant has filed this complaint before this Hon'ble State Commission with the following releifs:
Opposite parties be directed to provide the possession of the plot by executing of sale deed as allotted provisionally bearing unit referenceno.P-119in Country Homes-II at Jaypee Greens Sports City, GutamBuddh Nagar having its allotment letter reference no.JGSPCH20 P119 on May 9, 2012.
Refund the cost of flat as exist today according to report of valuver as valuate with the interest of 9% on the amount which has been hold by the opposite parties as paid by the complainant till date.
Opposite parties be directed to pay the compensation for making delay in possession of plot i.e. Rs.5,00,000.00 along with 9% from the date of initial payment till the date of possession.
Opposite parties be directed to pay the cost of suit.
Any other order which this Hon'ble Commission may deem fit just and proper may kindly by passed in favour of the complainant.
The opposite party no.1 has filed itswritten statement stating that there is no deficiency in service on their part and they were not involved in any unfair trade practice. The purported delay in completion of flat due to force majeure conditions. It is submitted that moratorium has been imposed over the respondent no.2 vide order dated 9.8.2017 passed by NCLT, Allahabad and the same has been taken into consideration by the Hon'ble Supreme Court in the matter of Chitra Sharma&ors. vs. Union of India &ors. stay of proceedings against the respondent no.2 has been ordered vide its order dated 11.9.2017.
It is also pertinent to mention herein that, the order of possession of unit in question have been already issued to the complainants vide offer of possession letter dated 12.12.2014. Respondent have already performed its obligations but the complainants have not performed their obligations and did not complete the registration formalities with the respondent. The complainants have been violating the terms of the allotment by failing to make payment of the installments as per the payment plan opted by the complainants. As on dated i.e. 5.4.2018, the complainants have to make the payment of Rs.44,26,725.00. It is pertinent to mention herein that the complainants are already in default and in breach of the terms of the allotment and standard terms and condition agreed between the parties. Therefore, the complainants have no right to file the instant complaint against the respondents and the said complaint is liable to be dismissed on the ground alone.
It is also evident to mention that the respondent has also given rebate on delay possession of Rs.1,52,231.00 to the complainant. Respondent has always co-operate with the complainant but it is the complainant who is not perform his obligations and complete the registration formalities till date.
Further at that movement under the directions of the order of Hon'ble Supreme Court dated 10.1.2016 the home buyers who have invested in Jaiprakash Associates Limited (JAL) raised their grievance before the Hon'ble Suprme Court in the matter of writ petition Civil no.744/2017, Chitra Sharma &ors. vs. Union of India &ors. and contended that for redressal of their grievance a web-portal be created. The Hon'ble Supreme Court vide its order dated 10.1.2018 directed Mr. Pawan Shree Agarwal, learned Amicus Curie to create an independent web-portal in respect of the home buyer of JAL, which shall reflect the details of the home buyers.
Further the Hon'ble Supreme Court vide its order dated21.3.2018 has also directed as under:-
"We should intent to make it absolutely clear that for the present, we are only concerned with those home buyers who intent to have refund. In the next phase, we may consider the grievances, if any, of the home buyers who intent to have the flats. In that regards, we think it appropriate to hear Mr. Parag Tripathi, learned senior counsel appearing for interim resolution professional (IRP) and Mr. Jayant Bhushan and Mr. Sanjay Hegde and others, learned senior counsel appearing for some associations of home buyers who intend to have their flats."
As our order for deposit of Rs.2000 crores has not been complied with, we intend to pass the following directions:
JAL shall deposit a further sum of Rs.200 crores in two installments, as agreed by the Managing Director who is present in court today. The first installment of Rs.100 crores shall be deposited by 15th April, 2018 and the second installment of Rs.100 crores shall be deposited by 10th May, 2018;
It is submitted by Mr. Pawan Shree Agarwal, learned amicus curie that as per his portal an amount of Rs.1300 crores, at present, is required to be refunded towards the principal sum of those home buyers who, as of today, seek refund. The figure of Rs.1300 crores is a per record of JAL.
In view of the aforesaid, we would require Mr. Agarwal to prepare a project wise chart indicating the number of persons in respect of that project and the stage of completion of the respective projects so that appropriate order can be passed for disbursement of amount on prorate basis to the home buyers;
Mr. Agarwal, learned amicus curie shall keep the portal operational. However, the requests of only those persons on the portal who have sought refund as of today will be considered at this stage.
In view of the above, it is crystal clear that the grievance of the home buyers who have invested in Jaiprakash Associates Limited (JAL) is now being looked into and considered by Hon'ble Supreme Court. Therefore, the complainant have any grievance so he can file on the web-portal created by Supreme Court. It is desirable in view of the judicial propriety that the instant complaint is not proceeded further as the Hon'ble Supreme Court is ceased of the cases regarding housing projects of JAL.
It is submitted that the claim regarding mental agony being imaginative & without any basis, do not relate to claim regarding the subject apartment. It is to be proved by the claimant with strict proofs and therefore, the same is untenable in the eyes of law and liable to be dismissed.
The complainants have prayed a compensation of Rs.5 lacs alongwith 9% from the date of initial payment till the date of possession. It is submitted that Hon'ble Supreme Court in its various judgments has held that any compensation for delay in delivery is to be the loss incurred by the allottee, the complainants have failed ot submit any proof before this Hob'ble Commission ot show the loss incurred by it. Such prayers seeking unreasonable compensation only show the speculative intention f the complainant and as such it is clear that the complainants have filed the complaint for making undue profits and this is an abuse of the process of court and the provisions of the Consumer Protection Act, 1986.
It is also stated that as per the contents of the instant complaint the complainants are residing at 136,Tulsi Nagar, Orai, Jalaun, Uttar Pradesh. Further in the instant complaint the complainants have no where alleged that they are presently residing in any rented house and have not submitted any proof in this behalf. This shows the speculative/ commercial intention of the complainant.
From the facts detailed above, it is crystal clear that the complainants are not consumers and have filed the instant complaint only for making undue profits and this is an abuse of the process of court and the provisions of the Consumer Protection Act, 1986. Therefore, the complainants are not a consumers as defined in section 2(d) of the Consumer Protection Act, 1986 and the present complaint is liable to be dismissed on this ground alone.
The complainants herein approached respondent and submitted an application dated 17.4.2012 seeking allotment of one apartment in the said project of the respondent clause 6 of the undertaking given by the complainants attached with the said application read as under:
"6. I/we have seen and understood the scheme of development, tentative plans/other documents at Jaypee Greens and I/we also agree to abide by all the terms and conditions of NOIDA or any other statutory or civic authority, to which the JIL and consequently, the applicant, is subject to or any other condition which the company/JIL may prescribe."
Pursuant to the above, the respondent as promoters herein issued a provisional allotment letter dated 9.5.2012 allotting a plot bearing unit reference no.PCH02P0119 in Country Homes-II project of the respondent admeasuring a super area of 1370 sq. ft. in favour of the complainants herein. The provisional allotment letter provided the total consideration of the said unit as Rs.50,14,170.00 excluding other charges and a payment plan was also provided therein. The time period for possession was provided as 36 months in the said provisional allotment letter subject to the standard terms and conditions agreed by the complainants.
Clause 7.1 and 7.2 of the standard terms and conditions as agreed by the prospective buyer/customers/complainants provides that:
"7.1 The company/JIL shall make best efforts to deliver possession of the said premises to the applicant within the period more specifically described in the provisional allotment letter with a further grace period of 90 days. If the completion of the said premises is delayed by reasons of non-availability or scarcity of steel and/or cement and/or other building materials and/or water supply and for electric power and/or slow down, strike and/or due to dispute with the construction agency employed by the company, lock-out or civil commotion or nay militant action or by reason of war or enemy action or earthquake or any act of God or if non-
delivery of possession is as a result of any law or as a result of any restrictions imposed by a Government Authority or delay in the sanction of building/zoning plans/grant of completion/occupation certificates by any Governmental Authority or for any other reason beyond the control of the Company hereinafter referred to as "force Majeure Events" and each individual event referred to as a (force Majeure Event) the company/JIL shall be entitled to a reasonable extension of time for delivery of possession of the said premises."
"7.2 Nothing contained herein shall be construed to give rise to any right to a claim by way of compensation/damages/ loss of profit or consequential losses against the company/JIL on account of delay in handing over possession for any of the aforesaid conditions beyond the control of the Company. If however the company/JIL fails to deliver possession of the aid premises within the stipulated period as mentioned herein above, and within the further grace period of 90 days thereafter, the applicant shall be entitled to compensation for delay thereafter @ Rs.5/- per sq. ft. per month for the super area of he said premises ("rebate"). The time consumed by the occurrences of force majure events shall be excluded while computing the time delay for the delivery of possession of the said premises."
Apart from above, it is also relevant to mention herein that the Hon'ble National Green Tribunal (NGT) vide its order dated 11.1.2013 retrained all builders of Noida & Greater Noida, including the respondent, from extracting nay quantity of underground water for the purpose of construction or otherwise and the said restriction is operative even today.
Even otherwise, the respondent is duly paying delay compensation the allottee who had been payment the demanded raised on them as per payment plan in terms of clause 7.2 of the standard terms and conditions and therefore, the prayers made in the instant complaint are clearly untenable as the complainants therein is trying to extort money towards excess interest beyond the agreed terms of the contract executed between the parties. Further, as has been established herein above, there is no negligence on the part of the respondent herein and the delay has been only due to the orders passed by the National Green Tribunal subsequently affirmed by the Hon'ble Supreme Court as well as other factors not attributable to the respondent herein and therefore, the respondent cannot be directed to pay any compensation to the complainants herein.
It is evident that the complainants herein has deliberately suppressed material facts in his complaint and has made fake allegations against the respondent herein. It is therefore evident that he has not approached this Hob'ble Commission with clean hands and therefore the instant complaint is liable to be dismissed.
In view of above, it is evident that the respondent has always acted in a bonafide manner and has acted in a professional and efficient manner keeping the best interests of its consumer in sight. It is therefore, incorrect to allege that the respondent has committed any deficiency in service. On the other hand, it is the complainant who has filed the instant complaint as an afterthought, raising completely false and specious allegations in order to launch a malicious prosecution against the respondent herein and to extort illegal benefits on the basis of the same. Such illegal design of the complainant is clearly an abuse of the process of law and is liable to be rejected.
We have heard ld. Counsel for the complainant Mr. Abhishek Singh and ld. Counsel for the Opposite Party no.1 Mr. Pratul Pratap Singh. None appeared for the opposite parties no.2 & 3. We perused the pleadings, evidence and documents on record.
This case has been filed under Consumer Protection Act 1986. First we have to see the aim and object of the Consumer Protection Act.
This Consumer Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered. The main objects of the consumer protection act are ;
To Provide better and all round protection to consumer.
To Provide machinery for the speedy redressal of the grievances.
To Create framework for consumers to seek redressal.
To Provide rights to consumers.
To Safeguarde rights of Consumers.
Let us know more about the rights and responsiblities of consumer . Listed below are the Rights of the Consumer Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.
Listed below the responsibilities of the consumers Responsibility to be aware - A consumer has to be careful of the safety and quality of products and services before purchasing.
Responsibility to think independently- Consumer should be well bothered about what they want and need and hence make independent choices.
Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want Responsibility to complain- It becomes the consumer's responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.
The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers' disputes and for matters connected therewith (Preamble).
The Act Inter alia, seeks to promote and protect the rights of consumers such as --
right to be protected against marketing of goods which are hazardous to life and property;
(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
(3) right to be assured, wherever possible, access to variety of goods at competitive prices;
(4) right to be heard and to assured that customers' interests will receive due consideration at appropriate forums.
(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and (6) Right to consumer education The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.
The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.
Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers' grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.
The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.
Extent of Consumer Protection:
While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.
Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate it in accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.
The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act. Whenever there is clash between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.
After taking account the main objects of the Consumer Protection Act, the composite the present case. The opposite party has objected that this flat has been taken by the complainant for the commercial use. As per his version, the complainant has booked a flat in some scheme in his name and now the second flat has been booked by him. After perusal it is clear that this flat has been booked by joint name of complainant and his wife while the other was only in the name of the complainant. It does not prove that this flat has been taken for commercial use or for reselling.
We have seen the provisional allotment letter DTD 09.05.2012 which has been issued on the letterhead of Jaypee Greens and below there is name of Jaiprakash associates Ltd. So it is clear that the area is 167.06 m², consideration is ₹ 6,336,058/- and it has been directed to the complainant to make payments of in favour of "Jaypee Sports International Limited". In this provisional allotment letter it is also written that the possession of the said plot is expected to be delivered within a period of 18 months here of. This provisional allotment letter has been issued jointly by Jaiprakash Associates Ltd and Jaypee Sports International Limited. We have seen the payment demand notice dtd 09.05.2012 issued by" Jaiprakash Associates Ltd" and in this letter the complainant has been directed to pay in accordance with the payment plan forming part of the aforesaid Provisional Allotment Letter. So it is clear that all the work is being handled mainly by" Jaiprakash Associates Ltd" and later on to save their skin they formed other companies but this will not exaggerate" Jaiprakash Associates Ltd". The amount of consideration is ₹ 6,336,058/- the complainant has paid ₹ 5,645,418/- meaning thereby more than 80% amount has already been paid till 23.03.2013 . The possession of the plot was to be given within 18 month but it has not been delivered after now. Taking into consideration the date of allotment letter and after adding 18 months in it, the effective date of delivery of possession comes 08.11.2013 .So this is the cut of date by which the possession of the plot was to be handed over to the complainant but it has not been done and it shows clear deficiency of service on the part of opposite parties and also it is unfair trade practice including unfair trade contract.
The opposite parties have stated that the Hon'ble Supreme Court in the matter of Chitra Sharma &Ors Vs Union of India &Ors stayed the proceeding against the respondent number two.
In the light of above mentioned facts we have to see the latest judicial pronouncement of Hon'ble NCDRC in First Appeal no 380 of 2019 , Judgement dated 26.09.22 Jaiprakash associates Ltd Vs Deepti Kumar & two ors. In this case the matter rates to " Garden Isles" and in the present case the matter rates to " Kasa Isles". Both these Isles are stated in JP Greens .So they are very much closely related to each other. The Hon'ble NCDRC has held in this case , "ThecomplainantstatedthatJaypeeInfratechLimited(respondent-2)andJaiprakashAssociatesLimited(theappellant)(hereinafterreferredtoasthebuilders)werecompanies,registeredunderCompaniesAct,1956andengagedinthebusinessofdevelopingandconstructinggrouphousingproject.Theylaunchedagrouphousingprojectinthenameof"GardenIsles"atJaypeeGreens,Sector-131&133,Noidaandmadewidepublicityintheyear2011.Alluredwithlucrativeadvertisementsandbelievingonit,thecomplainantappliedforaflatanddepositedtherequiredmoneyofRs.2.5/-lacson06.02.2012.ThebuildersprovisionallyallottedUnitNo.-GDI25-2103(superarea1205sq.ft.,BasicSalePriceofRs.4359690/-TotalConsiderationofRs.4898890/-,includingRs.2.5/-lacsforCarParkingSpace)on16.05.2012.Undertheallotmentletterdated16.05.2012,thebuilderspromisedtodeliverpossessionwithin42monthsfromthedateofallotment.Thebuildersprovidedsubventionscheme,underwhich,loanwasadvancedfromAxisBankLimited(oppositeparty-3).Aquadripartiteagreementdated29.06.2012wasexecutedbetweenthepartiesandAxisBankLimiteddirectlyadvancedRs.3889200/-on03.08.2012tothebuilders.ThecomplainantpaidRs.490000/-on18.06.2012,Rs.134233/-onRs.29.08.2012andRs.12847/-on28.03.2013(totalRs.4776280/-includingloanamount).The periodof42monthsexpiredon16.11.2015andgraceperiodof180daysasgivenunderClause-
7.2ofStandardTermsandConditionsexpiredon16.05.2016.ThebuildersdidnotgiveanyinformationregardingprogressoftheconstructionnorofferedpossessiontillthenandpaiddelayedcompensationasperClause-7.2.Thecomplainant,videletterdated01.09.2016inquiredaboutdateofdeliverypossessionandrequestedforpaymentofdelayedcompensationbutthebuildersdidnotrespond.Thenthecomplaintwasfiled,claimingdeficiencyinserviceandunfairtradepractice.
TheappellantandJaypeeInfratechLimited(respondent-2)fileditsjointwrittenreplyinthecomplaint,inwhich,materialfactsrelatingbooking/allotmentoftheflatandpaymentsmadebythecomplainant,includingmoneyadvancedbyAxisBankLimitedhavenotbeendisputed.However,theytookpleathatthecomplainantmadepaymentwithdelayforwhich,shewasliabletopayinterestofRs.78515/-.Theydeniedofcommittingdeficiencyinserviceandunfairtradepractice.TheystatedthatTajExpresswayProjectwasconceivedbyGovernmentofU.P.,intheyear2002,forconnectingNoidatoAgra.Theprojectalsoenvisageddevelopmentof25millionSq.Mtrs.landalongwiththeexpresswayon"Build-Operate-Transfer"basis,forwhichbidswereinvited.BidofM/s.JaiprakashIndustriesLimitedwaslowestassuchtheprojectwasawardedtoitandConcessionAgreementdated07.02.2003wasexecutedbetweenTajExpresswayAuthority(nowrenamedasYamunaExpresswayIndustrialDevelopmentAuthority)andM/s.JaiprakashIndustriesLimited.Byaschemeofamalgamation,approvedbyAllahabadHighCourt,videorderdated10.03.2004,M/s.JaiprakashIndustriesLimitedwasamalgamatedwithJaypeeCementLimitedw.e.f.01.04.2002andthenameofJaypeeCementLimitedwaschangedasJaiprakashAssociatesLimitedw.e.f.11.03.2004.StateofU.P.appointedanEnquiryCommissionofJusticeSiddheshwarNarayan(retd.)tolookintotheConcessionAgreement.Hesubmittedhisreportdated12.10.2006,recommending,setupaSpecialPurposeVehicle,forthepurposesofcarryingouttheproject.AsperdirectionofYamunaExpresswayIndustrialDevelopmentAuthority,inthelettersdated06.11.2006and15.02.2007,JaypeeInfratechLimitedwasincorporatedon05.04.2007asaSpecialPurposeVehicleforcompletionoftheproject.ByProjectTransferAgreementdated19.10.2007(registeredon17.12.2007),thedevelopmentworkoftheprojectofexpresswayfromNoidatoAgrawasassignedtoJaypeeInfratechLimited,whowasrequiredtofundtheProjectbydevelopmentandsaleofflats/landinfivetownships.Entirelandfordevelopmentatfivelocations,includingthelandofJaypeeGreensWishTownProjectwasleasedtoJaypeeInfratechLimitedon27.11.2007.ADevelopmentAgreementdated01.05.2009wasexecutedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,underwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimited.Afterobtainingnecessaryapproval,developmentworkofthe"GardenIsles"wasstarted.However,forthereasonsbeyondtheircontroli.e.duetoforcemajeureevents,viz.shortageoflabour,scarcityofwater,restrictionsinexcavations,villager'sagitations,legalimpedimentsetc.,theconstructionwasdelayed.Thefundingofthedevelopmentoftheprojecthadtobedonepartlyfromsaleofapartmentandpartlyfromsaleofland.Intheyear2010,saleofparcelsoflandwashaltedandseriouslawandorderproblemwascreatedduetofarmer'sagitation.Governmentof U.P.issuedorderdated29.08.2014forpaymentofadditionalincentiveof64%tothefarmers,whichresultedtotalscarcityoffundsfordevelopmentoftheproject.Thevillagersstoppedtheworkofdevelopmenttillpaymentoftheamount.StateGovernmentdecidednottohandovertheExpresswayconnectingNoidaandGreaterNoidatothebuildersin2012,resultingsubstantialloss ofrevenuetoJaypeeInfratechLimited.NationalGreenTribunal,videorderdated11.01.2013,restrainedallthebuildersofNoidaandGreaterNoidafromextractingundergroundwater.
NationalGreenTribunalvideorderdated14.08.2013,restrainedallconstructionworkswithinaradiusof10kmfromOkhlaBirdSanctuaryandvideorderdated28.10.2013restrainedtheauthoritiesfromgrantingcompletioncertificatetoanybuilding.Byanorderdated03.04.2014directedtheauthoritiestocreateaneco-sensitivezoneforOkhlaBirdSanctuary.Thebuildersfiled M.A.No.240of2014formodificationoftheorderdated03.04.2014,whichwasrejectedon30.05.2014.AgainsttheseordersCivilAppealNos.5822-5823of2014werefiled,whichweredismissedbySupremeCourton10.06.2014.StateGovernmentnotifiedeco-sensitivezoneon19.08.2015.UnderClauses-7.1and7.2ofStandardTermsandConditions,thebuilderswereentitledforextensionofperiodforwhichtheconstructionwasobstructedduetoforcemajeurecauses.ThebuildersgaveadiscountofRs.327760/-tothecomplainantasperClause-7.2ofStandardTermsandConditionsandthebuildersthroughoutactedinfairandbonafidemanner.Therewasnounfairtradepractice.ThebuilderswerereadytorefundtheamountasperStandardTermsandConditions.Thebuilderswereknownfortheirqualityandcommitmentandtheyweretryingtocompletetheprojectandhandoverpossessionattheearliest.Thepreliminaryissuesthatthecomplainanthadbookedtheflatforcommercialpurpose,asisprovedfromthefactthatduetodownfallofmarketinrealestate,thecomplaintwasfiledforrefundofmoneyandnotforpossessionandsheisnotaconsumerandStandardTermsandConditionscontainedanarbitrationclauseandsheberelegatedforarbitration,havealsobeenraised."
" 9. ThecounselfortheappellantsubmittedthatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingisstillgoingon.Section-63barsjurisdictionofCivilCourtandbyvirtueofSection238,theprovisionsoftheCode,2016haveoverridingeffect.SupremeCourtinHirakundIndustrialWorksVs.VarshaFabrics(P)Ltd.(2020)14SCC198andGhanshyamMishraandsons.Pvt.Ltd.Vs.EdelweissARCLtd.(2021)9SCC657,heldthattheprovisionsoftheCode,2016hadoverridingeffectoverallotherstatuteincludingConsumerProtectionAct,1986.TheremedyofthehomebuyeristosubmithisclaimbeforeInterimResolutionProfessional.DeeptiKumar(respondent-1)hassubmittedherclaimofRs.4776280/-alongwithinterest,on21.08.2017beforeInterimResolutionProfessional.Homebuyersare'financialcreditors'withinthemeaningofSection5(7)readwithExplanationtoSection5(8)(f)oftheCode,2016.CommitteeofCreditorsapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,SurakshaRealtyLimitedproposedtocompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatwithoutanydelayedcompensation.Resolutionofapprovaloftheplanisbindingonall'financialcreditors'.Inviewofmoratoriumdated09.08.2017,StateCommissionoughttohaveabatedtheproceedingofthecomplaintbeforeit.SomeofthehomebuyersfiledwritpetitionbeforeSupremeCourt,i.e.inChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575,byfinalorder,SupremeCourtdeclinedtodisbursetheamountdepositedbytheappellanttothehomebuyersofJaypeeInfratechLimited,holdingthathomebuyerswere'financialcreditors'andmemberofCommitteeofCreditorsanddirectingthemtosubmittheirclaimbeforeInterimResolutionProfessional.SupremeCourtinInnoventiveIndustriesLimitedVs.ICICIBankandanr.,(2018)1SCC407,heldthattheCode,2016isacompletecode.UnderSection-28oftheCode,2016,CommitteeofCreditorssupervisestheaffairsofInterimResolutionProfessional,inrespectofcorporatedebtor.UnderSection30(4)oftheCode,2016,theresolutionplanhastobeapprovedbyCommitteeofCreditorsbyamajorityvotingshareofatleast66%.Inthepresentcase,thereweremorethan21000homebuyer'svotes.CommitteeofCreditorshasapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,homebuyerwouldbegivenpossessionoftheirflat.ThisisbindinguponthemasheldbySupremeCourtinJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.InCommitteeofCreditorsofEssarSteelIndiaLtd.Vs.SatishKumarGupta,(2020)8SCC531,heldthatCommitteeofCreditorsalonesdeterminesitsfeasibilityandviabilitybasedonitsowncommercialwisdom.EvenNationalCompanyLawTribunalhaslimitedjurisdictiontointerferewiththeapprovedplan.ItisnotopenforthehomebuyertoclaimflatfromJaypeeInfratechLimitedandalsotakerefundfromJayprakashAssociatesLimited.SupremeCourtinSAILVs.UnionofIndia,(2006)12SCC233,heldthatalitigantisestoppedfromraisinginconsistentandmutuallydestructiveplea.RelyinguponDevelopmentAgreementdated01.05.2009,executedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,inwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimitedaswellasvariousclausesofprovisionalallotmentletterandStandardTermsandCondition,ithasbeensubmittedthatJaiprakashAssociatesLimitedwasanagentofJaypeeInfratechLimited.ThehomebuyerpaidentiremoneytoJaypeeInfratechLimited.ThisCommissionhastakenviewthattheperson,whohadreceivedmoney,wasliabletoreturnit.In viewofSection230ofContractAct,1872,recoveryproceedingcannotbeinitiated/continuedagainstanagentfortheactsofadisclosedprincipal.HerelieduponthejudgmentsinMarineContainerServicesSouthPvt.Ltd.Vs.GoGoGarments,(1998)3SCC247,PremNathMotorsVs.AnuragMittal,(2009)16SCC274,VivekAutomobilesVs.IndianInc.,(2009)17SCC657,forthepropositionthatanagentcannotbeheldliablefortheactsofadisclosedprincipal.Clause-9.1.5ofStandardTermsandConditionsprovidesforreturnofthemoneywithoutanyinterestorcompensationandearnestmoney.StateCommissionhasillegallydirectedforpaymentofinterest@18%perannum.DelaywascausedforthereasonsofforcemajeureandtheperiodwasliabletobeextendedunderCluase-7.1ofStandardTermsandConditions.ThejudgmentsofthisCommissioninCC/1495/2015,ArvindDhingraVs.JAL(decidedon01.10.2018)hasbeensetasidebySupremeCourt.CC/2194/2016AnishSinghalVs.JAL(decidedon01.10.2019)wasnotrelatedtotheprojectofJaypeeInfratechLimited.JudgementinCC/11320-11329/2018GauravGoel&anr.vs.JALwaschallengedinCivilAppealDiaryNo.
5804of2020,whichwasdecidedintermsofsettlementvideorderdated25.10.2021.JudgmentinCC/976/2017RajeevKumarSinghVs.JAL,(decidedon15.06.2020)hasbeenstayedbySupremeCourtinCivilAppealNo.4724-4725of2021,videorderdated16.08.2021.Noneofthesejudgmentscanbeconsideredasbindingprecedent.JudgmentofAnjaliRathiVs.TodayHomes,(2021)SCCOnLineSC729,isdistinguishableasthepromoterhadgivenundertakingbeforeSupremeCourttobeartheliability,inthatcase.
ThecomplainantdoesnotdisputethatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingwasgoingon.However,thecomplainantarguedthatJaiprakashAssociatesLimitedwasoneofajointpromisorassuchheisseverallyliabletorefundtheamountunderSection43oftheContractAct,1872.JaiprakashAssociatesLimitedwasthe'promoter"asdefinedundertheRealEstate(RegulationandDevelopment)Act,2016andthecomplainantisentitledtoclaimrefundofmoneyfromhimunderSection19(4)ofthisAct.ThecomplaintisnotliabletobeabatedduetopendencyofinsolvencyproceedingagainstJaypeeInfratechLimitedastheappellantisindependentlyliabletoreturnthemoney.
13. UnderSection-14(a),institutionofsuitetc.againstcorporatedebtorcanbeprohibitedwhileunderSection-14(b)prohibitioncanbeimposeduponthecorporatedebtorfromtransferringetc.itsassets.SupremeCourtinChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575andJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.,didnotheldthattheproceedingagainsttheappellantforrefundofmoneyisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.Innoneofthecases,relieduponbytheappellant,ithasbeenheldthattheproceedingagainstapromoterorco-promisorforrefundisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.AforesaidprovisionsoftheCode,2016barsuitetc.againstcorporatedebtoronlynotagainsttheappellant,whowasnotacorporatedebtor.
15. Section43oftheContractAct,1872andtherelevantprovisionsoftheRealEstate(RegulationandDevelopment)Act,2016arequotedblow:-.
"Section43.Anyoneofjointpromisorsmaybecompelledtoperform-Whentwoormorepersonsmakeajointpromise,thepromisemay,intheabsenceofexpressagreementtothecontrary,compelany[oneormore]ofsuchjointpromisorstoperformthewholeofthepromise.
Eachpromisormaycompelcontribution.-Eachoftwoormorejointpromisorsmaycompeleveryotherjointpromisortocontributeequallywithhimselftotheperformanceofthepromise,unlessacontraryintentionappearsfromthecontract.
Sharing of loss by default in contributions.-if any one of two or more joint promisors makesdefault in such contribution, the remaining joint promisors must bear the loss arising from suchdefaultinequalshares.
Explanation-Nothinginthissectionshallpreventasuretyfromrecovering,fromhisprincipal,paymentsmadebythesuretyonbehalfoftheprincipal,orentitletheprincipaltorecoveranythingfromthesuretyonaccountofpaymentmadebytheprincipal.
TheRealEstate(RegulationandDevelopment)Act,2016 Section:2(zk)"promoter"means,--
apersonwhoconstructsorcausestobeconstructedanindependentbuildingorabuildingconsistingofapartments,orconvertsanexistingbuildingorapartthereofintoapartments,forthepurposeofsellingallorsomeoftheapartmentstootherpersonsandincludeshisassignees;or apersonwhodevelopslandintoaproject,whetherornotthepersonalsoconstructsstructuresonanyoftheplots,forthepurposeofsellingtootherpersonsallorsomeoftheplotsinthesaidproject,whetherwithorwithoutstructuresthereon;or anydevelopmentauthorityoranyotherpublicbodyinrespectofallotteesof--(a)buildingsorapartments,asthecasemaybe,constructedbysuchauthorityorbodyonlandsownedbythemorplacedattheirdisposalbytheGovernment;or
(b)plotsownedbysuchauthorityorbodyorplacedattheirdisposalbytheGovernment, forthepurposeofsellingallorsomeoftheapartmentsorplots;or(iv)anapexStatelevelco-operativehousingfinancesocietyandaprimaryco-operativehousingsocietywhichconstructsapartmentsorbuildingsforitsMembersorinrespectoftheallotteesofsuchapartmentsorbuildings;or anyotherpersonwhoactshimselfasabuilder,coloniser,contractor,developer,estatedeveloperorbyanyothernameorclaimstobeactingastheholderofapowerofattorneyfromtheownerofthelandonwhichthebuildingorapartmentisconstructedorplotisdevelopedforsale;or suchotherpersonwhoconstructsanybuildingorapartmentforsaletothegeneralpublic.
Explanation.--Forthepurposesofthisclause,wherethepersonwhoconstructsorconvertsabuildingintoapartmentsordevelopsaplotforsaleandthepersonwhosellsapartmentsorplots aredifferentperson,bothofthemshallbedeemedtobethepromotersandshallbejointlyliableassuchforthefunctionsandresponsibilitiesspecifiedunderthisActortherulesandregulationsmadethereunder;"
Section19.Rightsanddutiesofallottees;(1)............
(2)....................
(3).....................
(4)TheallotteeshallbeentitledtoclaimtherefundofamountpaidalongwithinterestatsuchrateasmaybeprescribedandcompensationinthemannerasprovidedunderthisAct,fromthepromoter,ifthepromoterfailstocomplyorisunabletogivepossessionoftheapartment,plotorbuilding,asthecasemaybe,inaccordancewiththetermsofagreementforsaleorduetodiscontinuanceofhisbusinessasadeveloperonaccountofsuspensionorrevocationofhisregistrationundertheprovisionsofthisActortherulesorregulationsmadethereunder.
. UnderDevelopmentAgreementdated01.05.2009,taskofdevelopment,construction,marketing,saleetc.ofthevariousprojectsofJaypeeInfratechLimitedwereassignedtoJaiprakashAssociatesLimited,whowasalsosharingtheprofitoncostplusbasis.UnderProvisionalallotmentletterandStandardTermsandConditions,JaiprakashAssociatesLimitedhaspowertocancelallotmentofthehomebuyer.Inparagraph-8(ii)ofthewrittenreply,theappellanthasstatedthatJaypeeInfratechLimitedwasitssubsidiarycompany.Inparagraph-2ofmemorandumofappeal,theappellantclaimedtobeholdingcompanyofJaypeeInfratechLimited.However,theappellantarguedthatitwasanagentofJaypeeInfratechLimitedunderDevelopmentAgreement.
TheRealEstate(RegulationandDevelopment)Act,2016,hasbeenenactedtoprovidebetterprotectiontothehomebuyersinefficientandtransparentmanner.TheappellantfallswithinthedefinitionofthepromoterunderthisAct.ThehomebuyerisentitledtoclaimrefundofmoneywithinterestfromtheappellantunderSection-19(4)oftheRealEstate(RegulationandDevelopment)Act,2016.TheprovisionsoftheCode,2016donotbarinitiationofproceedinganditscontinuationforrefundagainstthepromoter.RealEstate(RegulationandDevelopment)Act,2016isaspeciallaw.Evenif,forthesakeofarguments,itistakenthattheappellantwasanagentofJaypeeInfratechLimitedundertheDevelopmentAgreement,thenalsotheappellantisfallingwithinthedefinitionof"promoter"asgivenunderRealEstate(RegulationandDevelopment)Act,2016.SpecialLawwillprevailovergenerallawasheldbySupremeCourtinVodaphoneIdeaCellularLtd.Vs.AjayKumarAgrawal,(2022)6SCC496.ThepositionoftheappellantaspromoterandliabilitytorefundSection-19(6)ofRealEstate(RegulationandDevelopment)Act,2016willoverrideoveritspositionasanagentofJaiprakashInfratechLimited.Theappellantbeingaco-promisorisjointlyandseverallyliabletorefundthemoneytothehomebuyerunderSection43oftheContractAct,1872.InPioneerUrbanLandandInfrastructureLtd.andOrs.Vs.UnionofIndia,(2019)8SCC416,heldthatRERAandIBCareparallelremedy.
SupremeCourtinBankofIndiaVs.KetanParekh,(2008)8SCC148andS.VanithaVs.DeputyCommissioner,Bengaluru,2020SCCOnLineSC1023,heldthatthecasesmightarise, whereboththeenactmentshavethenon-obstanteclause,theninthatcase,properperspectivewouldbethatonehastoseethesubjectandthedominantpurposeforwhichthespecialenactmentwasmadeandincasethedominantpurposeiscoveredbythatcontingencythennotwithstandingthattheActmighthavecomeatalaterpointoftime,stilltheintensioncanbeascertainbylookingtotheobjectsandreasons.
RelyinguponthejudgmentsofthisCommissioninCC/3879-3880/2017DeepakAgrawalandOrs.Vs.ThreeCShelters(decidedon21.01.2020)andCC/1702/2016ShalabhNigamVs.OrrisInfrastructurePvt.Ltd.andOrs.(decidedon06.05.2019),thecounselfortheappellantsubmittedthatthepersonwhohadreceivedthemoneywouldbeliabletorefund.Werespectfullydisagreewithit,inasmuchasithasnottakennoticeofSection43oftheContractAct,1872,whereco-promisorisjointlyandseverallyliable,Section-19ofRealEstate(RegulationandDevelopment)Act,2016,wherethepromoterisindividuallyliableandwellsettledprincipleoflawoftortrelatingtovicariousliability.(SeeCanaraBankVs.CanaraSalesCorporation,(1987)2SCC666andPradeepKumarVs.PostMasterGeneral,(2022)6SCC351.)Assuchthesecasesareperincurium.
SurakshaRealtyLimitedinitsPlandated09.07.2021proposedthecompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatswithoutanydelayedcompensation.Duedateofpossessionwas16.05.2016asperallotmentletterdated16.05.2012.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,FortuneInfrastructureVs.TrevorD'Lima,(2018)5SCC442,KolkataWestInternationalCityPvt.Ltd.Vs.DevasisRudra,2019SCCOnLineSC438andPioneerUrbanLand&InfrastructureLtd.Vs.GovindRaghavan,(2019)5SCC725,heldthatahomebuyercannotbemadetowaitforpossessionoftheflatforindefiniteperiod.
InviewoflawlaiddownbySupremeCourt,thehomebuyerisentitledtoclaimrefundofhismoneyalongwithinterestincaseofunreasonabledelayinhandingoverpossession.However,StateCommissionhasawardedinterest@18%perannum,whichisonhigherside.CompensationofRs.20000/-formentalagonywasalsonotpayable.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,heldthatinthematterofcontractualobligation,thereisnoscopeforcompensationformentalagonyandharassment.InDLFHomesPanchkulaPvt.Ltd.Vs.D.S.Dhanda,II(2019)CPJ117(SC)heldwheninterestisawardedascompensationinthecasesofrefundofmoney,thenawardingadditionalcompensationwasnotjustified.NowSupremeCourtinthecasesofIreaoGraceRealteck(P)Ltd.Vs.AbhishekKhanna,(2021)3SCC241andCivilappealNo.2324of2021M/s.BarnalaBuildersandPropertyConsultantsVs.Lt.Col.SameerBalodi(decidedon06.06.2021),fixedtheinterest@9%perannuminthecasesofrefund.
ORDER Inviewoftheaforesaiddiscussions,theappealispartlyallowed.TheorderofStateCommissiondated24.10.2018ismodified.Theappellantisdirectedtorefundentireamountdepositedbythecomplainantwithinterest@9%perannumfromthedateofrespectivedeposittillthedateofactualpayment,withinaperiodoftwomonthsfromthedateofthisjudgment.Respondent-1wouldalsobeentitledforaconsolidatedcostofRs.20000/-.Whilemakingpayment,loanofAxis BankLimitedshallbeadjustedfirst."
In the above-mentioned case the Hon'ble NCDRC has also taken into consideration the case of Chitra Sharma. In the above mentionedcase the builder is promised to deliver possession within 42 months from the date of allotment while in the present case they promised to deliver the possession within 18 months from the date of allotment letter. The Hon'ble NCDRC after discussing so many case laws and provisions of the act, passed the judgement. So it is clear that it is a foul play of the opposite parties that they develop a new company and then put lame excuses that the new company will be liable for payment. When the allotment letter was issued by the opposite party, there will be liable for giving the possession of the plot.
Now it has been established that the opposite parties are liable for the compensation and damages. The opposite parties totally failed to carry out their promise and the complainant cannot be left unattended for long period. There is clear defeciency on the part of the opposite parties and it is a matter of unfair trade practice and unfair contract. What should be the amount of compensation and what should be the rate of interest, will depend on the facts and circumstances of each case as held by on the Supreme Court in the following judgement, Hon'ble Supreme Court has held in Ghaziabad Development Authority Vs Balbir Singh (2004) 4 SCC 65-
"The Supreme Court, at the outset, reiterated the position taken in the case of Lucknow Development Authority v. M.K. Gupta, and held that "the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities". It further held that the power of the NCDRC extends to awarding compensation to consumers for misfeasance in the public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. Therefore, it upheld the appeals filed before it to the extent that it confirmed the jurisdiction of the NCDRC to award compensation in cases of service rendered by statutory & public authorities (the land development authorities in the present case).
As to the issue of whether the grant of interest at the rate of 18% per annum by the NCDRC in all cases is justifiable, the Supreme Court held in the negative. It stated that "the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum." It held it to be unsustainable. The Court further stated that the "Award of compensation must be under different separate heads and must vary from case to case depending on the facts of each case." The purpose of awarding compensation is to recompense for a loss or injury suffered and such compensation would therefore be proportional to the amount of loss and injury.
While considering the compensation to be awarded to the consumers in cases of deficiency of service by Development Authorities, the Court laid down a range of principles for the determination of the amount of compensation, summarised below:
To award compensation, the Forum or the Commission must determine that service has been deficient and/or misfeasance in public office which has resulted in loss or injury. While no hard and fast rule can be laid down, the Court gave a few instances where the award of compensation would be justifiable, including where possession is not handed over within the intimated period even though allotment is made and the price is paid. In such cases, the loss could be determined based on loss of rent which could have been earned if possession was given. Compensation could also be the scheme has been canceled without any justifiable cause, after the allotment.
Compensation cannot be uniform and to illustrate this, the Court lays down the principle to be followed for the determination of compensation in two cases- - (a) where the delivery of possession is being directed, and (b) where only the monies are directed to be returned or refunded by the Court. In case (a), the compensation for harassment will necessarily have to be less since in a way the aggrieved party is being compensated by an increase in the value of the property he is getting. In case (b) however, the party is suffering a greater loss since he has been deprived of the flat/plot, and his expectation of delivery of possession. He would also be denied the benefit of an increase in the value of land and the compensation thereof. Therefore, the compensation to be awarded in such cases would have to be higher than in case (a).
The Court held that "such compensation has to be worked out after looking into the facts of each case and after determining what is the amount of harassment/loss which has been caused to the consumer."
Compensation would include compensation for physical, mental, or even emotional suffering, insult, or injury or loss."
"The consumer protection laws have a wide reach and the consumers are entitled to receive compensation for deficiency in services rendered by statutory and public authorities. The Consumer Commissions have been vested with the jurisdiction to award the value of goods or services and compensation. On being satisfied that a complainant is entitled to compensation for loss or injury or harassment or mental agony or oppression, it must direct the authority to pay compensation. A wide discretion has been given to determine the quantum of compensation for any loss or damage suffered by a consumer, to redress any injustice. However, it is a well-established principle that the computation of compensation has to be fair, reasonable, and must reconcile with the loss or injury suffered. The Consumer Forum is cast with the duty to take into account all relevant factors for arriving at the compensation to be paid.
This landmark decision has set a precedent on the matter of compensation to be awarded in matters relating to allotment of land by development authorities and has been relied upon in many subsequent cases of the Supreme Court. In the case of H. P. Housing Board v Varinder Kumar Garg[(2005) 9 SCC 430] and Haryana Urban Development Authority vs Darsh Kumar[(2005) 9 SCC 449], the Supreme Court directed the Commission to follow the principles laid down in the case of Ghaziabad Development Authority vs. Balbir Singh in future cases."
Hon'ble Supreme Court in the case of Haryana Urban Development ... vs Darsh Kumar, Etc. Etc , Civil Appeal no 5796 of 2002 decided on on 28 July, 2004 has held ;
"This Court has, in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant damages/compensation for mental agony/harassment where it finds misfeasance in public office. This Court has held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases.
We are informed that in spite of there being no stay, to payment of interest beyond 12% and in spite of clarification given by this Court's order (reported in (2004) 5 SCC 65), the amounts have still not been paid. We feel that for the lapse Appellants must pay interest at the rate of 15% from 17th March, 2004 till payment. Appellants shall also pay costs fixed at Rs.500/- in each case to the Legal Aid Society of the Supreme Court. The Appellants must recover the amount paid towards costs personally from the officer/s, who were responsible for not paying even after clarification by this Court. We clarify that this Order shall not be taken as a precedent in any other matter as the order has been passed taking special features of the case into account. The Forum/Commission will follow the principles laid down by this Court in the case of Ghaziabad Development Authority vs. Balbir Singh (supra) in future cases. The Appeals are disposed off in above terms. There will be no order as to costs."
So it is clear that the compensation and rate of interest shall depend on the facts and circumstances of each case and no hard and fast rule can be framed. In this connection some of the judgement of the Supreme Court and Hon'ble NCDRC should be taken into account.
In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC).These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 34 of 2013- Jasleen Viswanathan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. &Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. &Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. &Anr.; 86 of 2010- Priyanka Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 101 of 2011- Mohd. Aslam Khan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 130 of 2012- Dr. Sunil Kr. Singh &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 49 of 2012- Neera Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. &Anr.; 87 of 2010- Syed Gufran Ali Alvi&Anr. Vs. Parsvnath Developers Ltd. &Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. &Anr.; 175 of 20130- Umesh Chandra Dixit &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 97 of 2011- Pravin Kumar Goel &Anr. Vs. Parsvnath Developers Ltd. &Anr. which complaints were partly allowed.
The Hon'ble NCDRC held that:
"Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses.
The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate complaints before State Commission. Aggrieved by the order of Hon'ble State Commission, these appeals preferred before Hon'ble National Consumer Disputes Redressal Commission.
Hon'ble NCDRC discussed various case laws and after hearing the parties held, "Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under Section 2 (nnn) of Consumer Protection Act and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under Section 2(nnn) of Consumer Protection Act. "
"Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10 ( c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession. "
Against this judgment, parties went to Hon'ble Supreme Court. The judgment of Hon'ble Supreme Court is:-
In Nalin Bhargava vs. Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon'ble Supreme Court held:-
"Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc. It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahotywould insist that there should be imposition of costs as compensation.
Mr. Sachin Datta, learned senior counsel appearing for the developer has raised objections with regard to imposition of costs.
Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say "cost", we mean costs alone and nothing else."
These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of "The Merchant of Venice" The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer "a pound of flesh" as collateral against a loan. These acts of builders also remind us the age of Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers, so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages. Now in the background of all the facts and also the facts of the present case, we will also discuss something more. We should also see the objects of the Consumer Protection Act 1986."
After discussing all the facts and circumstances of the case it is clear that the opposite parties failed to fulfil their promise and after getting the money from the complainant , failed to deliver the possession of the plot in time. Now they have taken so many lame excuses but they are primary responsible towards the complainant. The opposite party has stated that the complainant are already in default and in breach of the terms of the allotment and standard terms and condition agreed between the parties. But the person who has deposited more than 80% of the amount, cannot be said defaulter but the defaulter is the opposite party who could not deliver the possession of the plot in time. The condition mentioned in the allotment letter are one-sided and such conditions cannot be binding on the complainant.
We can see highhandedness of the opposite parties. The opposite party vide letter dtd 19.03.2014 to the complainant has said "keeping in the fact that you have failed to make the payment as per payment plan, despite various opportunity is having been granted to you, we are constrained to issue a final notice as per the standard terms and conditions to you to make the payment of the amount due as on date along with interest from the respective dates the amount became due and payable. The amount due and payable as on 12.03.2014 comes to ₹ 1,143,189/- as per details. Hence, by means of this letter, we hereby give you final notice to make the aforesaid payment within 30 days of the date of this notice failing which the provisional allotment shall stand cancelled."
This is purely a letter of extortion. The plot was to be delivered by 08.11.2013 and this letter has been issued on 19.03.2014 , which shows that the opposite parties can do any thing for the benefit of their own but there is rule of law and court of law which always comes to the rescue of the aggrieved person. The opposite parties have never disclosed as to how much interest he will pay to the opposite parties on the deposition from the date of their deposits. So all these rules are one-sided. The terms and conditions made by the opposite parties are totally for their benefit and against the principle of natural justice. After considering all the facts and circumstances of the case and also keeping in mind the various judicial pronouncements of the Hon'ble Supreme Court and Hon'ble NCDRC we come to conclude that the complainant is entitled for the following reliefs are against the opposite parties jointly and severally.
The complainant is entitled to get the possession of the plot within eight weeks from the date of judgement of this complaint case after getting sale deed executed by the opposite parties regarding unit number P-119 , Country Homes -II at Jaypee Greens Sports City, Gautam Budh Nagar on depositing the rest amount as per allotment letter and if the possession was not delivered to him with complainant will be entitled to get ₹ 1 lakh per month after eight weeks from the date of judgement ..
IN ALTERNATIVE The complainant is entitled to get the present market value of the flat that exist today as per valuer report with interest at a rate of 9% on this amount from 08.11.2013 till actual payment.
The complainant is entitled to get ₹ 15,000 per month starting from 08.11.2013 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled for interest at a rate of 15% from 08.11.2013 till the date of actual payment.
The complainant is entitled to damages ₹ 1.5 lakhs as per judgement of the Hon'ble Supreme Court.
For relief number 4 we are of the opinion that the complainant is entitled to get ₹ 30 lakhs from the opposite parties within eight weeks from the date of judgement of this complaint case towards the mental torture, agony, harassment and depression and this amount if not paid within eight weeks from the date of judgement, the complainant will be entitled to receive interest at a rate of 10% on this amount after eight weeks from the date of judgement of the complaint case.
Therefore the complaint case is allowed accordingly and the following order is being passed .
ORDER The opposite parties are directed jointly and severally to hand over the possession and execution of the sale deed of unit number P-119 , Country Homes -II at Jaypee Greens Sports City, Gautam Budh Nagar within eight weeks from the date of judgement of this complaint case on depositing the balance amount as per allotment letter only and if the possession was not delivered to him with completion and occupancy certificate , the opposite parties shall pay damages at a rate of ₹ 1 lakh per month after eight weeks from the date of judgement.
In Alternative the opposite parties are directed jointly and severally to pay the amount of the flat at market rate as exist today on the basis of a valuer of report within eight weeks from the date of judgement of this complaint case with interest at a rate of 9% on this amount from 08.11.2013 till actual payment.
The opposite parties jointly and severally are directed to pay ₹ 15,000 per month starting from 08.11.2013 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled for interest at a rate of 15% from 08.11.2013 till the date of actual payment.
The opposite parties are jointly and should level to pay ₹ 1.5 lakhs as damages to the complainant which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.
The opposite parties are jointly and severally are directed to pay ₹ 30 lakhs to the complainant towards mental agony, torture, cost of the case, harassment and depression which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.
All the decreetal amount shall be paid within eight weeks from the date of judgment of this complaint case, otherwise the opposite parties shall pay interest as mentioned in the judgement. If it is not paid within eight weeks from the date of judgment of this Complaint Case , the complainant shall be entitled to present Execution proceedings before this court at the cost of the opposite parties.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh) Member Presiding Member Judgment dated/typed signed by us and pronounced in the open court. Consign to the Record Room. (Vikas Saxena) (Rajendra Singh) Member Presiding Member Dated October 06 , 2022 JafRi, PA II C-2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER