National Consumer Disputes Redressal
Suresh Kumar Kothari & Anr. vs Aarcity Builders Private Limited on 8 August, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 97 OF 2017 1. SURESH KUMAR KOTHARI & ANR. A-32, KARNI NAGAR, PAWAN PURI, BIKANER- - 334 001. 2. CROSSWORD DISTRIBUTORS PVT.LTD., O/AT : SITARAM BAHETI, DOHABURA CHOWK, MAHABDAV PATH, JORHAT ASSAM 3. DR. CHANDER KALA SINGH . 4. VIKAS CHAND SRIVASTAVA . 5. ALOK KUMAR JAIN . 6. DR. SUSHIL GARG . 7. VIJAY RAJ HASIJA . 8. BRIG. BIKRAM JIT . 9. SUMAN BIKRAM JIT . ...........Complainant(s) Versus 1. AARCITY BUILDERS PRIVATE LIMITED 301, KRISHNA APRA BUSINESS SQUARE, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI - 110 034. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER HON'BLE DR. INDER JIT SINGH,MEMBER
FOR THE COMPLAINANT : FOR THE COMPLAINANT NO.1 & 2 : MR. SUDHIR KATHPALIA, ADVOCATE
FOR THE COMPLAINANT NO.3, 4, 5 & 6 : MR. SANCHAR ANAND, ADVOCATE
FOR THE COMPLAINANT NO.7 : MR. VIPIN BHASKAR, ADVOCATE
FOR THE COMPLAINANT NO.8 : MR. VIKAS BHARDWAJ, ADVOCATE FOR THE OPP. PARTY : FOR THE OPPOSITE PARTY : MS. DEEPSHIKHA ADVOCATE, PROXY
COUNSEL
Dated : 08 August 2023 ORDER
DR.INDER JIT SINGH, MEMBER
1. The present Consumer Complaint (CC) has been filed under section 21(a)(1), 22(1) and 12(1)(c) of the Consumer Protection Act, 1986 by the Complainants against Opposite Party (OP) as detailed above, inter alia praying for directions to the OP to:-
(i) Refund the entire amount paid by the complainants within a period of three months of project Regency Park, Aarcity, 11A and 17, Delhi-Hisar Road, Hisar (Haryana) to the complainants and other allotees of the project "Regency Park";
(ii) Pay interest calculated @18% compounded quarterly on the amount deposited to the complainants and other allotees of the project "Regency Park";
(iii) Pay interest calculated @18% compounded quarterly on the amount deposited to other allotees of the project "Regency Park" till the date of possession from the expiry of 36 months from the date of agreement;
(iv) Award compensation of Rs. 5,00,000/- on account of causing financial risk, hardship, mental agony, harassment, emotional disturbance caused to each complainants due to OP's actions/omissions and to other allotees of the project "Regency Park";
(v) Pay Rs. 55,000/- as litigation expenses to the complainants due to OP's actions/omissions and other allotees of the project "Regency Park".
2. Notice was issued to the OP(s). Vide order dated 19.09.2017, the complaint under section 12(1)(c) was allowed and admitted. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in Annexure-A. The details of the flats allotted to the Complainant (s)/other relevant details, based on pleadings of the parties and other records of the case are also given in the Annexure-B.
3. It is averred/stated in the Complaint that:
The complainants booked apartments with OP's project Regency park, Aarcity, 11A and 17, Delhi Hisar Road, Hisar (Haryana). The possession was to be given within 36 months plus grace period of 90 days from the date of execution of allotment letter. The OP has failed to deliver the possession as per flat buyer agreement. A joint complaint was filed before National Commission seeking direction against OP to refund the entire amount paid with interest @18% along with compensation.
The agreement contains one-sided clauses that heavily favour the OP. Furthermore, there is a lack of construction progress in the project. Whenever the complainants visited the OP's office, the OP provided them with new delivery dates for the unit. The OP has allegedly withheld the complainants' funds and utilized them for personal gain. Despite making full payment, the complainants have suffered significant financial losses. The OP has made false promises and assurances to deceive the complainants, acting with malicious intent to unlawfully extract money. By misusing their position, imposing unfair terms, and engaging in deficient service and unfair trade practices, the OP has violated their obligations.
4. The OP in their written statement/reply stated that: --
The complainants have engaged in gross concealment of material facts and have failed to present accurate and truthful information. They are fully responsible for their misconduct, unfair disclosure, and excessive delay. The complainants have not provided any compelling documentary evidence to support their claim that filing the complaint is lawful. Furthermore, it is argued that complainant No.2 is not a consumer but rather a commercial entity operating for business purposes, and the intended purchase will solely serve that commercial purpose.
The complaint is liable to be dismissed for misjoinder of parties under provisions of consumer protection act. The claims of complainants are different and all documentations of complainants are different, hence the single complaint is not maintainable and the same is liable to be dismissed.
The complaint is barred by limitation and is liable to be dismissed.
The complainants are habitual defaulters and have not paid any instalments or any amount within the prescribed time.
Complaint is liable to be dismissed on ground of pecuniary jurisdiction.
The complainants are not consumers.
5. Complainant(s) in his rejoinder stated that the OP has failed to prove any kind of commercial relationship with respect to use of flat for commercial purpose. That the complainants can jointly file a petition under section 12(1)(c) of consumer protection act, against OP before this commission seeking reliefs of similar nature.
6. An application I.A. no. 5395/2023 was submitted during the hearing on 23.01.2023 by OP stating that out of 8 complainants, matter has already been settled with 4 complainants and one of the complainant (Complainant No.7, Dr. Chander Kala) is no more an allottee as the unit allotted to the said complainant is already transferred. Relevant documents in that regard were also filed along with written submissions dated 29.08.2022. In response to the aforementioned I.A., the complainants have stated that the submission made on behalf of the OP, claiming that Complainant No.4, Complainant No.5, and Complainant No.6 have resolved their disputes with the OP, is erroneous. The complainants argue that the settlement agreement in question is a fraudulent document, as it was executed by the OP with the intention to deceive and defraud the complainants. According to Clause (4) of the settlement deed, it was the OP's obligation to hand over possession of the flat to the complainants by 30.06.2020. However, even after more than three years have passed, the complainants have not received possession of the specified flat. As a result, the settlement deed dated 10.01.2020 is considered null and void, as neither possession has been offered nor any benefits arising from the settlement deed have been granted to the complainant. After hearing the parties, the Judgment was reserved on 23.01.2023. The complainants' counsel later informed the court that the OP had provided false statements regarding a settlement. The matter was rescheduled for rehearing on 28.04.2023. Meanwhile, the OP filed an Interim Application (IA/5395/2023) seeking to remove the names of complainants 3, 4, 5, 6 & 7 from the proceedings. The complainants replied that only complainant no. 3 (Dr. Sushil Garg) was involved in the settlement, except him, none of the complainants have entered into settlement.
7. Heard counsels of both sides again on 29.05.2023. Contentions/pleas of the parties, on various issues raised in the Complaint, based on their Complaint/Reply, Rejoinder, Evidence, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
7.1 The complainants' counsels argued that as per the buyer's agreement (Allotment Letter cum ABA), the OP had committed to deliver possession of the apartments within 36 months (with 3 month grace period) from the date of the execution of the allotment letter cum Buyer's Agreement. The counsel contended that the complainants never delayed their payment of any instalments to the OP and there are no outstanding amounts owed by the complainants to the OP. Furthermore, there are no force majeure conditions, court judgments, or injunctions by any authority that would prevent the OP from completing the construction on time. Despite more than 6 years having passed, the OP has failed to provide the flat to the complainants. This constitutes a clear deficiency of service on the part of the OP.
7.2 The counsel for the OP argued that disputes with 4 out of the 8 complainants have already been settled. That the complainants have a history of defaulting on their obligations. The counsel also stated that the project is in its final stages of completion, with the structure and other construction work already finished. That the OP is expecting to receive the occupancy certificate for the project within a few months. The OP expressed their willingness to offer an alternative ready-to-move property within the same project to the complainants. However, OP stated that providing a refund would have adverse effects on the possession of other buyers and the overall completion of the project.
8. The contention of OP that this Commission lacks pecuniary jurisdiction is not valid. Under Section 21 of the Act, Commission has the jurisdiction where value of goods and services and compensation, if any, claimed exceeds Rs. one crore. The objection that the Complaint is barred by limitation is also not accepted. The OP have failed to deliver the possession of the unit to the complainant till date and therefore, the cause of action is continuing. The contention that complainant(s) are not a consumer as he/they has purchased the unit for commercial/investment purposes is also rejected as no such evidence has been adduced by the OP in this regard. It has been observed by this Commission in various cases (Kavita Ahuja Vs Shipra Estates Ltd, CC 137 of 2010, decided on 12.02.2015, Santosh Johri Vs M/s Unitech Ltd, CC 429 of 2014 and connected Cases, decided on 08.06.2015, Aloke Anand Vs M/s Ireo Grace Pvt Ltd & Others, CC no 1277 of 2017 decided on 01.11.2021) that purchase of a house can only be for a commercial purpose if the purchaser is engaged in the business of purchasing and selling houses or plots on a regular basis, solely with a view to make profit by way of sale of such houses, if the house is purchased purely as an investment and the purchaser is not undertaking the trading of houses on regular basis, then it would be difficult to say that he had purchased it for commercial purpose.
9. As regards contentions of OP regarding Complainant no.2 not being a consumer, it was held by this Commission's Larger Bench in Springdale Core Consultants Pvt. Ltd. v. Pioneer Urban Land and Infrastructure Ltd. 2020 SCC OnLine NCDRC 1096, in its order dated 16.12.2019 as follow:-
1. It is the purpose for which the residential plot/house is booked/purchased, which is material for determining whether the purchaser is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. The legal status of the purchaser, be it an individual, a partnership, an Association of Persons, a Trust, a Society or a Company is immaterial for such determination.
2. If a house/residential plot is booked/purchased by a company for the residential use of its Directors/employees the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking/purchase is concerned.
3. If a house/residential plot is bought/booked by a company as a part of its business activities and such purchase/booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act as far as such a purchase/booking is concerned."
In Karnataka Power Transmission Corporation and Anr. V. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC 240, Hon'ble Supreme Court held that "While defining `person' in Section 2(1)(m), the Legislature never intended to exclude a juristic person like company. As a matter of fact, the four categories by way of enumeration mentioned therein is indicative, categories (i), (ii) & (iv) being unincorporate and category (iii) corporate, of its intention to include body corporate as well as body un-incorporate. The definition of `person' in Section 2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly." In Lilavati Kirtilal Mehta Medical trust v. M/s Unique Shanti Developers & Ors. (2020) 2 SCC 265, the Hon'ble Supreme Court held the medical Trust as consumer under the Act, though purpose was for housing the nurses.
OP has not adduced any evidence to show that company has purchased the unit for commercial purpose. As regards contention of OP that Complainant no.7 (Dr. Chander Kala) is no more an allottee as the unit allotted to the said complainant is already transferred, the Hon'ble Supreme Court in Laureate Buildwell Pvt. Ltd. v. Charanje, 2021 SCC OnLine SC479, has held that a subsequent transferee stepped in the shows of the transferor with same right and liability.
10. Even after a gap of more than 6 years from the committed date, possession of the unit has not been handed over. Construction of the project is still not completed, OC has not been obtained, not even applied yet. OP is still not in a position to give any firm commitment with respect to completion of the project and/or handing over of the possession. It was held by Hon'ble Supreme Court in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt. Ltd. & Ors. (2020) 16 SCC 512, "failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency". In Ireo Grace Realtech Pvt.Ltd. Vs. Abhishek Khanna & Anr. (2021) 3 SCC 241, Hon'ble Supreme Court held that "allottees who have not been given possession, cannot be made to wait indefinitely for possession, nor they can be bound to take possession in other phase of the project. Such allottees are entitled to refund of entire amount deposited by them". In the instant case, there is an inordinate delay in handing over the possession of flat by the OP. The complainant(s) cannot be made to wait for an indefinite time and suffer financially. Hence, the complainant(s) in the present circumstances have a legitimate right to claim refund alongwith fair delay compensation/interest from the OP.
11. As regards contentions of OP that some of the Complainants have settled the matter, considering that complainants (except Complainant No.3 Dr. Sushil Garg) have denied the settlement, stating further that even if some settlement took place earlier, the same having not been honoured by the OP, they have right to continue with this complaint on merits and seek the reliefs prayed for as per provisions of Consumer Protection Act. We tend to agree with the contentions of complainants in this regard. However, although the complaint in question was admitted under section 12(1)(c) of Consumer protection Act, 1986, as complainants have not been able to convincingly establish during the hearing for considering/continuing the complaint in a representative capacity, relying on the observations of the Hon'ble Supreme Court in Brigade Enterprises Ltd. v. Anil Kumar Virmani, (2022) 4 SCC 138, we are inclined to treat the complaint as Joint Complaint under section 12(1)(a), restricting the reliefs to only the complainants covered under this complaint, except complainant no. 3 Dr. Sushil Garg, who have admitted to have settled the matter. In view of observations of Hon'ble Supreme Court in Brigade Enterprises Ltd. (Supra), a joint complaint can be filed by two or more complainants. It was held by the Hon'ble Supreme Court in this case that there is nothing in the Act, which prohibits the few complainants from joining together and filing a joint complaint. The word Complaint includes plural i.e. Complaints also. Thus a joint complaint is maintainable. Hence, contentions of OP about pecuniary jurisdiction and misjoinder of parties are not valid.
12. OP has not been able to clearly bring out as to which demands of instalments were not paid and whether the construction stages/conditions linked to such demands were met at the time of such demand. If timely payment of instalments is the essence of contract, timely delivery of possession also has to be the essence. In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan (2019) 5 SCC 725, Hon'ble Supreme Court observed that "a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder ......... the incorporation of one sided clause in an agreement constitute an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling flats by the builder ........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms."
13. For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -
(i) The OP shall refund the entire principal amount to all the complainants herein, [except Complainant No.3 Dr. Sushil Garg, who by his own admission has settled the matter with the OP, and have withdrawn the complaint vide Application (Diary No. 22704) dated 07.07.2023], alongwith compensation in the form of simple interest @ 9% per annum from the date of each payment till the date of refund. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainant based on receipts etc.
(ii) The OP shall pay a sum of Rs.10,000/- as cost of litigation to each of the complainants, (except Complainant No.3 Dr. Sushil Garg) The payment in terms of this order shall be paid within three months from today.
(iv) In case the complainant(s) have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant. The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.
14. The pending IAs, in any of the Consumer Complaint, if any, also stand disposed off.
Annexure-A Relevant Details Pertaining to Consumer Complaint Sr No Particulars 1 Project Name/Location etc Regency Park, Aarcity, 11A & 17, Delhi Hisar Road, Hisar, Haryana 2 D/o Filing CC in NCDRC 12.01.2017 3 D/o Issue of Notice to OP 19.09.2017 4 D/o Filing Reply/Written Statement by OP 05.04.2017 5 D/o filing Rejoinder by the Complainant(s) 10.12.2018 6 D/o Filing Evidence by way of Affidavit by the Complainant(s) 21.05.2021 (Complainant no. 8) 08.05.2019 (Complainant no. 2) 10.06.2019 (Complainant no. 3 & 7) 06.09.2019 (Complainant no. 6) 28.06.2021 07.05.2019 (Complainant no. 1) 7 D/o Filing Evidence by way of Affidavit by the OP Not filed 8 D/o filing Written Synopsis by the Complainant(s) 16.03.2022 12.01.2022 (Complainant no. 8) 9 D/o filing Written Synopsis by the OP 29.08.2022 Annexure B Details of Units Allotted to the Complainants Particulars Complainant 1 Complainant 2 Complainant 3 Complainant 4 Complainant 5 Complainant 6 Complainant 7 Complainant 8 Suresh Kothari Crossword Sushil Garg Vijay Raj Alok Kumar Bikram Jit Chander Kala Mr. Subhash Sharma 1 Apartment no 0504,Tower G 203, Tower E 1108, Tower A2 1204, Tower D 0308, Tower A 0306, Tower A 0304, Tower E 0103, Tower G 0204, Tower C-1 2 Size (Built up/Covered/Super Area) N.A. N.A. 1272 sq. ft.
1625 sq. ft.
1272 sq. ft.
1272 sq. ft.
2094 sq. ft.
1625 sq. ft.
1030 sq. ft.
3Date of signing Agreement 27.09.2013 27.09.2013 25.02.2013 23.11.2012 14.11.2012 28.08.2015 30.05.2013 05.11.2012 4 Committed date of possession as per Agreement (with Grace period, if any) ∞ 26.12.2016 26.12.2016 05.05.2016 21.02.2016 12.02.2015 26.11.2018 28.08.2016 03.02.2016 5 D/o Obtaining OC by the OP Not obtained Not obtained Not obtained Not obtained Not obtained Not obtained Not obtained Not obtained 6 D/o Offering Possession Not offered Not offered Not offered Not offered Not offered Not offered Not offered Not offered 7 Total Consideration as per agreement Rs.43,71,062/-* Rs.57,26,173/-* Rs.33,59,296/-* Rs.34,75,048/-# Rs.35,06,848/-# Rs.51,79,509/-* Rs.49,04,613/-# Rs.29,49,500/-# 8 Amount Paid Rs.33,95,847/-* Rs.35,72,385/-* Rs.20,64,000/-* Rs.21,10,103/-# Rs.19,50,233/-# Rs.11,31,838/-* Rs.26,16,192/-# Rs.17,69,459/-# * Taken from evidence filed by complainants # Taken from IAs filed by complainants ∞ To be counted from D/o Allotment letter, in the absence of Allotment Letters on record in all cases, (except in case of Complainant no.7) the committed D/o possession has been calculated tentatively from D/o Agreement ..................................................J RAM SURAT RAM MAURYA PRESIDING MEMBER ................................................ DR. INDER JIT SINGH MEMBER