State Consumer Disputes Redressal Commission
Abhai Kumar Gupta vs Surya Infra Build (I) Pvt Ltd And Oth. on 18 July, 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/101/2016 ( Date of Filing : 13 Apr 2016 ) 1. Abhai Kumar Gupta Agra ...........Complainant(s) Versus 1. Surya Infra Build (I) Pvt Ltd And Oth. Agra ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 18 Jul 2022 Final Order / Judgement RESERVED State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint no. 101 of 2016 Abhay Kumar Gupta aged about 64 years S/o Late Sri Keshav Dev Gupta R/o 10/8, ADA, HIG Flats, Sanjay Palace, Agra -282 002............Deceased 1/1-Anjana Gupta aged about 67 years W/o Late Abhay Kumar Gupta, 10/1 HIG Flats, Sanjay Palace, Civil Lines, Agra -282 002 1/2- Amit Gupta aged about 42 years S/o Late Shri Abhay Kumar Gupta, 10/8, HIG Flats, Sanjay Palace, Civil Lines, Agra -282 002 1/3- Manish Gupta aged about 37 years S/o Late Shri Abhay Kumar Gupta, 10/8, HIG Flats, Sanjay Palace, Civil Lines, Agra -282 002 ... Complainants. Versus 1-Surya Infra Build (I) Pvt Ltd., 18/160A /1-C, MP Pura, Tajganj, Fatehabad Road, Agra, Service to be effected through- its Managing Director Sri Pramod Kumar Agarwal R/o 18/160A /1-C , MP Pura, TajganjFatehabad Road, Agra-282001. 2-Sri Pramod Kumar Agarwal S/O Sri Haresh Chand Agarwal R/o 18/160A /1-C, MP Pura, Tajganj Fatehabad Road, Agra-282001. 3-Shri Vinod Kumar Gupta S/o Shri Ram Gopal Gupta, M/S Surya Infra Build (I) Pvt Ltd., R/o E-14/15, Rashmi Nagar, Kamla Nagar, Agra -282005 ....Opposite parties. Present:- 1- Hon'bleMr. Rajendra Singh, Presiding Member. 2- Hon'ble Mr. Vikas Saxena, Member. Sri Amol Kumar, Advocate for the complainant. Sri Neeraj Agarwal & Sanjay Kumar Srivastava, Advocate for the Opp. Parties. :2: Date : 08.08.2022 JUDGMENT
Per Mr. Rajendra Singh, Member:
This complaint has been filed by the complainant under Consumer Protection Act, 1986, for the following reliefs:
To provide the physical possession of the disputed property completed in all respect to the complainant by handing over the key of the booked to flat pursuant to the registered sale deed dated 09.04.2014.
To pay quarterly compound interest at a rate of 24% per annum on the amount paid by the complainant from 09.04.2014 till the date of actual delivery of physical possession of the flat in dispute in all respect so as it become habitable To pay damages of ₹ 2000 per day from 09.10.2014 till such time the opposite parties allow the complainant to have actual physical possession of the property by handing over the keys of the flat allowing access to the complainant.
To pay the cost of petition.
To pass such other and further orders as this media fit and proper in the facts and circumstances of the case.
The brief facts of the complaint case are that, that the complainant booked a three BHK flat consisting of three bedrooms, one drawing room, dining room cum living room, one servant room , four toilets , 1 Pooja Ghar , 1 store,1 kitchen, 1 box room, 2 dress room and 3 balconies and common approaching road , stairs, lift, swimming pool, car parking, jogging tracks with landscaped gardens, indoor and outdoor games parks, fountain , and greeneries etc . Which was described as "Island of luxury" on 06.08.2012 for the sale consideration of ₹ 53 lakhs in a residential colony known as "Surya Gold Apartment" , by the opposite parties, situated at Vijay Nagar Colony , Sultanganj Crossing ,Hariparvatward , Agra and towards the booking amount the complainant paid ₹ 5 Lacs through cheque no 070026 dt. 06.08.2012 . The opposite parties allotted the complainant, flat number 303 block 'B' having covered area of 231.75 m² on the same date. On the date of allotment, it was guaranteed by the opposite parties that the aforesaid flat would be constructed with all amenities as stated in the brochure, and actual physical possession of the flat would be delivered to the complainant within two years. As :3: per the demand raised by the opposite parties, the complainant paid ₹ 5 Lacs on 03.10.2012 , ₹ 5 Lacs on 01.02.2013 , ₹ 5 Lacs on 03.05.2013 , ₹ 5 Lacs on 05.05.2013 and ₹ 5 Lacs on 11.05.2013 through cheques aggregating ₹ 30 lakhs which includes the booking amount paid by the complainant.
However the opposite parties requested the complainant to pay the balance amount for the execution of the sale deed in favour of the complainant with the assurance that the actual possession of the flat would be delivered to the complainant within six months from the date of the execution of the sale deed. The complainant was unaware of the modus operandi and the ill intention of the opposite parties and entered into a trap by giving the entire amount to the opposite parties i.e, ₹ 23 lakhs through bankers cheque excluding the amount already paid. Consequently the opposite parties executed the sale deed on 09.04.2014 with symbolic possession of "incomplete and unfinished flat" in favour of the complainant. It was not the intention of opposite parties to adhere the clauses of the sale deed, wherein, it had been particularly mentioned that the possession of the flat would be delivered to the complainant within six months from the date of the execution of the sale deed with all amenities. The opposite parties neither completed the aforesaid flat nor took any step to get it completed within six months or to date, although the opposite parties adhere to complete the flat in all respect in the sale deed itself. At present there is neither internal not external completion of any part, such as, neither approaching road nor parking place nor the railing on stairs nor swimming pool nor lift facilities nor water supply in the flat nor electric connection nor plastering on walls nor wooden work in kitchen nor flooring in rooms, kitchen, dining and drawing rooms, which is a deficiency in service and for which the complainant is entitled to claim damages from the opposite parties.
Even after the payment of the total sale consideration, a huge amount of ₹ 53 lakhs, the complainant after retirement from judicial service is compelled to live with his son, thus, feeling humiliation and pain, due to the negligence/deficiency in service by the opposite parties. The complainant is entitled to claim damages at the rate of Rs 2000/ per day after leaving the grace period of six months that is from 10.10.2014 to the date of actual delivery of physical possession with all amenities internal and external; so as to it become livable. The opposite parties are utilising the amount of ₹ 53 lakhs. Paid by the complainant and the complainant is entitled :4: to recover quarterly compound interest on this amount at the rate of 24% per annum on the date of payment to the date of actual delivery of actual physical possession as aforesaid after leaving the grace period of six months. The complainant, several times, requested to the opposite parties to complete the flat in all respect and also served a legal notice dtd 26.11.2015 which served upon the opposite parties 1 & 2 on 30.11.2015 and upon opposite party 3 on 29.11.2015 . The complainant being a retired judicial officer and had invested in the flat so that he could live his rest of the life peacefully in the said flat. The complainant is being made to run from pillar to post to get the actual physical possession of the flat from the opposite parties but the opposite parties ardently not following their own terms and conditions, which are stipulated in the brochure, as well as in the sale deed, thus the opposite parties are also liable to pay the compensation for mental agony and harassment caused to the complainant. Therefore the complainant prays to grant the reliefs claimed in the complaint.
The opposite parties 1 to 3 file their written statement in which they have stated that the complainant has not paid any sale consideration for the luxuries and amenities viz swimming pool, jogging tracks with landscaped gardens, indoor and outdoor games, parks, fountain and greenery et cetera. The aforesaid sale deed dtd 09.04.2014 in respect of the flat is not in respect of the aforesaid luxuries and amenities. The stamp duty for the sale consideration of the aforesaid luxuries and amenities have not been paid by the complainant. No document in respect of the aforesaid luxuries and amenities has been executed by the opposite parties in favour of the complainant. There is no contract between the complainant and the opposite parties to provide the luxuries and amenities to the complainant and the opposite parties are not contractually bound to provide the luxuries and amenities to the complainant. The complainant is not entitled to use the luxuries and damages as he has paid sale consideration only for the flat and parking and not for the luxuries and amenities. The complainant is not a consumer of the aforesaid luxuries and amenities as such he cannot and is not entitled to file the complaint in respect of the luxuries and amenities before the Hon'ble State Commission and it is not a consumer dispute. The complainant is barred by Specific Relief Act and The Indian Stamp Act.
It is totally wrong and incorrect to alleged that the answering opposite parties have described the flat as "Island of luxury". The opposite parties never :5: sold the luxuries and amenities to the complainant nor the prices of the luxuries and amenities are included in the sale consideration of ₹ 53 lakhs of the flat. The price of ₹ 53 lakhs is the price of the flat and car parking only. The complainant relies upon an alleged brochure but the copy of the same has not been provided by the complainant to the opposite parties for the reasons best known to him. However, it is submitted that the answering opposite parties do not admit the alleged brochure and any alleged content is allegedly mentioned there in. The allegations regarding the alleged guarantee for the period of two years commencing from 06.08.2012 is wrong, false, incorrect, not admitted and therefore denied and the complainant is put to strict proof of them. It is submitted that the flat is complete, and finished and the complainant can take possession of it at any time whenever he desires. It is submitted that the complainant never made the payment of the sale consideration within time and as per the demand of the opposite parties and all the times, he delayed the payment and he was bad pay master.
The flat is fully complete in all respects and the answering opposite parties have always been ready and willing to deliver the actual possession of the flat .It is submitted that the complainant has agreed specifically that if any of the constructions as mentioned in the aforesaid sale deed is not done by the opposite parties, the complainant will get it done himself and he will be entitled to recover the aforesaid amount spent by him in the construction and interest thereon from the opposite parties. The flat was got fully complete and finished in all respects within six months as mentioned in the aforesaid sale deed. The complainant can take possession of it at any time whenever he desires. The complainant is not entitled to use the swimming pool and the luxuries and amenities. The complainant is a judicial officer and he has been misusing his skill and art to harass, coerce , vex and blackmail the opposite parties, so that he may be able to use the luxuries and amenities without the payment of the price. The allegations regarding alleged compulsion to live with son alleged humiliation, alleged pain, alleged negligence, alleged deficiency have been concocted to lend colour to the false case. The opposite parties have not caused any delay and the flat is complete and finished. The complainant has not suffered any mental agony and harassment and the opposite parties are not liable to pay any compensation to the complainant or any :6: score of any kind whatsoever.
The complainant and the allegations therein does not disclose any cause of action. The complainant is based on wrong, false incorrect, baseless, malafide allegations. The complainant is not entitled to any of the reliefs claimed in the complaint. The complaint deserves to be dismissed with heavy and special costs.
We have heard the learned counsel for the complainant Mr Amol Kumar . The counsels for the opposite parties are Sri Neeraj Agarwal & Sanjay Kumar Srivastava, but they did not appear to argue the case. We perused the pleadings, evidence and documents on record carefully. During pendency of the case, the complainant expired and his legal heirs have been substituted vide court order dtd 25.10.21.
We start from the written statement of the opposite parties in which they have said that they never sold the luxuries and amenities to the complainant nor the prices of the luxuries and amenities are included in the sale consideration of ₹ 53 lakhs. Further the opposite parties have said in their written statement that it is submitted that the answering opposite parties do not admit the alleged brochure and any alleged content as allegedly mentioned there in. It is really surprising. The opposite parties did not submit any brochure. We have seen a brochure on record which is being scanned here.:7:
It is the first phase of the brochure or the cover page of the brochure where it is specifically mentioned"Your Island of Luxury". The next page of the brochure is scanned below:
"Live in Your Island of Luxury" . It says that it is ultra luxurioussun washed premium apartments with the finest textures and finishes...... Lavish outdoor and indoor spaces, Parks, sports facilities, shopping complexes, schools/colleges, hospitals, persistence and registration all a short walk away complete living experience at Surya Gold .:8:
Now this page of brochure shows all the facilities including jogging track with landscaped garden, swimming pool and its kids pool , children's play area, indoor and outdoor games, high speed deep car and passenger elevators and fire escape, provision for gas pipeline and gas bank, high-tech security system, 75% open space, etcetc . These facilities are provided in the township and these are not saleable. So it is useless to say that no price of these facilities have not been taken from the complainant and he is not entitled to use these facilities. It is really ridiculous. In every society, they provide the facilities, for the use of all the inhabitants and these facilities are not sold to any of the inhabitants of the society. They charge maintenance charge from the inhabitants/residents of society through RWA. This brochure is lucrative and no doubt it will attract the person for applying in the project of the opposite parties.
The area of the flat is 231.75 m². The cost of the property is ₹ 53 lakhs as mentioned in the sale deed. According to the sale deed the flat is semifinished. The :9: opposite parties were liable to get it finished at their own cost or complainant may also got it finished at his own cost and thereafter the opposite parties will reimburse this cost. Now the opposite parties have admitted in their written statement that the sale deed has been executed on 9 April 2014. We have seen the information tendered by torrent Power Ltd dated 24.11.2016 in reply to RTI application that "it is to bring to your notice that as per our records, the building " Surya Gold" is under construction and temporary electric connection having service no 675001636 has been provided, however, no transformer has been installed till date for the building and will only be provided after completion of construction." It clearly shows that the building was not constructed till 24.11.2016 and the opposite parties executed the sale deed beforehand without completing the building.
The chief fire officer vide its letter 25.11.2016 has informed the complainant that no NOC has been issued by this department. It means that there is no NOC issued by the fire department which is a necessary for a new building. There is also a letter issued in reply of RTI of the complainant regarding Sewer connection in the apartment. This letter is of 05.11.2016 stating that no sever has been given to this apartment. Another letter issued in reply to RTI of the complainant by the public information officer of the Development Authority, Agra dated 29.09.2016 stating that, that the completion certificate has not been issued till date. It clearly establishes the fact that without completion certificate, the opposite parties executed the sale deed in favour of the complainant. When there is no completion certificate, no question arises regarding of occupancy certificate on the said date. Some photographs have also been filed by the complainant showing incomplete and unfinished construction of the apartment. The photographs are of 13.09.2016.
Now we come to the point that the opposite parties have filed their written statement and they have not said about the period of construction of the apartment and the exact date of delivery of possession of the flat. Nothing has been said about the completion certificate and occupancy certificate. No copy of flat buyer agreement has been filed. No copy of any agreement deed has been filed. No allotment letter has been filed.The opposite parties very cleverly and shrewdly stated that the sale deed has been executed and possession has been given but actually no possession has been given and the photographs filed shows incomplete :10: construction in the year 2016. Whenever any person falls in trouble the court comes to his rescue. It is not at the sweet will of the builders to construct the flat in infinite period.
If in any project there is no date of delivery of possession has been given, whether it means infinite time? In such cases the Court observes reasonable time to deliver the possession to a allottee.However the Hon'ble Supreme Court in CIVIL APPEAL NO(S). 3533-3534 OF 2017 M/S. FORTUNE INFRASTRUCTURE (NOW KNOWN AS M/S. HICON INFRASTRUCTURE) & ANR. VS TREVOR D'LIMA & ORS. ( Judgement March 12 , 2018 ) has held:
"15. Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no development of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/complainants is entitled to ?"
In the above-mentioned case Hon'ble Supreme Court also held regarding payment of compensation or quantum of compensation as follows:
"18. This Court in Ghaziabad Development Authority v. Balbir Singh, (2004) 5 SCC 65, has observed that there is no fixed formula for fixing damages in the following manner:
'8. However, the power 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. As seen above, what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on finding of loss or injury and has to correlate with the amount of loss or injury. Thus, the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss :11: or injury. No hard-and-fast rule can be laid down, however, a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him along with recompensing the loss the Commission/Forum may also compensate for harassment/injury, both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore, the compensation in such cases would necessarily have to be higher. ... We clarify that the above are mere examples. They are not exhaustive. The above shows that compensation cannot be the same in all cases irrespective of the type of loss or injury suffered by the consumer." (emphasis supplied) Before discussing further, we have to see the basic object of the Consumer Protection Act.
The Consumer Protection Act, came into existence and implemented in 1986, provides Consumer Rights to prevent consumers from fraud or specified unfair practices. It safeguards and encourages and gives an opportunity to consumers to speak against insufficiency and flaws in goods and services. If traders, manufacturers and distributors follow any foul trade, this act protects their rights as a consumer.
This 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 :12: 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 objectives of the consumer petition act may be summarised as -
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.
What are the rights of consumers?Let us know more about the rights 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.
So it is clear that the Consumer Protection Act has been passed to safeguard the interest of the consumers.
Now we come to the facts of the present case. There is not a single word regarding completion certificate, occupancy certificate, NOC from pollution department, NOC from civil aviation Department and NOC from fire department. Without these, offer of giving possession is no offer in the eye of law.
In the case of Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. &Anr., Civil appeal no.3302 of 2005, judgment dated 10.06.2008, Hon'ble Supreme :13: Court has held that a prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage.
Hon'ble Supreme Court in the case of Ireo Grace Realtech Private Limited Vs. Abhishek Khanna & Ors., civil appeal no.5785 of 2019, with other civil appeals, judgment 11.01.2021,has held where the development makes an alternate offer of allotment of apartment, the allottees are however not bound to accept the same because of inordinate delay in completing the construction of the towers or units were allotted to them and if the Occupation Certificate is not available even as on date, clearly amounts to deficiency of service.
Now it is clear that the reasonable period for handing over the possession of the flat/plot is three years from the date of allotment order and also a grace period of six months. The first amount of ₹ 5 Lacs has been deposited on 03.10.2012 so we will take this date for the purpose of calculation of compensation, damages, delivery of possession et cetera .
Therefore the total period Comes 42 months from the first date of the deposition of ₹ 5 Lacs is06.08.2012. So we will presume this date as the date of allotment. So the possession should have been given on 06.02.2016 (the date of first deposit is 06.08.2012 ), it has not been given on the said cut off date and there is inordinate delay in handing over the possession of the said flat.
In the evidence filed by the opposite parties, it is reiterated that the sale deed has been executed on 09.04.2014 , but nothing has been said about letter of delivery of possession. So it is clear that letter of offer of possession has never been sent. Not a single word has been said about the completion certificate, occupancy certificate and no objection certificates of Environmental Department , Civil Aviation Department, Fire Department etc. it is better to have a look on the :14: The U.P. Government enacted U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010.
The U.P. Government enacted U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, ("2010 Act)"Statement of Objects and Reasons whereof are:
"Housing is a basic human necessity and the quality of the house as well as of its environment plays an important role in the growth of individuals, both physically and mentally. The widening gap between the rising urban population and the housing stock added every year has gradually reached such a critical stage that the problem of providing proper shelter and desirable standard of living seems very difficult of be solved. Moreover, majority of the citizen of urban areas of the State cannot thinks in terms of owing houses on individual basis because of the shortage of land in the urban areas. The efforts made by the Government as well as different agencies have not made much dent into the housing problem. Uttar Pradesh is predominantly an agricultural State; is no advisable to use fertile lands more and more for housing purposes which ultimately will affect the production of food grains. It is essential investment should be observed, for which Group Housing development will have to be promoted. With a view to promoting the Group Housing, it has been decided to make a law to provide for the ownership of an individual apartment in a building of an undivided interest in the common areas and facilities appurtenant of such apartment and to make such apartment and interest heritable and transferable."
As it is clear that the Government wanted to promote Group Housing where the minimum number of apartments would be four, but the maximum number is left on the capacity of the builder/promoter. The State Government vide Local Building Bye-laws like NOIDA Building Bye-laws or Lucknow (LDA) Building Bye-laws has allowed Group Housings to be constructed with the maximum possible number of apartments therein. It has prompted the private builders and promoters to construct Group Housing comprising of over 10,000 apartments in a single project.
The State Government realized that maintenance of common areas and facilities of such large group housing may become a permanent profit-making :15: ground for the promoters, as such in the U.P. Apartment Act, it made provisions for maintenance of the apartment buildings/ group housing through Apartment Owners Association ("AOA"). However, due to the lack of awareness amongst the apartment owners and AOA's, most of the promoters have been able to delay-dally the handover process of the common areas and facilities, sinking fund and IFMS to the Apartment Owners Associations.
As per Section 4(6) of U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, it is the obligation on the builder to handover the originals of the plans and documents to the AOA which shall include but not limited to following documents:
Completion Certificate of the project Occupancy Certificate, if applicable NOC of the Fire Department issued just before the issuance of Completion Certificate All maps and map sanctioning letter of the Development Authority Permission of the State Level Impact Assessment Committee or as may be applicable NOC of the Pollution Control Board Sewage Treatment Plant Functional Certificate Rain Water Harvesting Plant Operational Certificate NOC from the Central Ground Water Board in case of any boring in the Group Housing Certified copy of the Deed of Declaration NOC from the Mining Department for the construction of the project Purchasable FARs, related payment receipt Earth Quake Resistance , related document NOC from Airport Authority Structural Design verified from IIT or equivalent Lease Deed / Sale Deed of the land Allotment letter of land Lease plan and dimension plan Land Possession Certificate Documents pertaining to registration for green building Soft copy of the drawings (checked and working) Name and address of the architect and contractor AMC documents of all equipment installed in the Group Housing and purchase bills thereof Any other document as per the project or advised by the handover consultant Affidavit from the promoter that it has made no alteration in construction of the project post issuance of the Completion Certificate from the Development Authority Affidavit from the promoter declaring that there is no encumbrances either of any of the apartment owner / buyer or on the land of the Group Housing project Affidavit that there are no payment due against water charges, sewage charges and electricity charges as on the date of handover Affidavit that the electricity line/feeder has been laid as per the Electricity Supply Code Now we see that the provisions are mandatory. In this case the opposite parties have stated that the sale deed has been executed but as we have seen that on the date of sale deed there was no completion certificate, no NOC has been issued by the fire department and the opposite parties did not file any completion/occupancy certificate and any NOCs . Nowhere it has been mentioned that the copy of at least completion and occupancy certificate has been sent to the complainant. These two certificates are very important before offering delivery of possession.
The Hon'ble Supreme Court in Civil Appeal no6044 of 2019 Experion Developers Pvt Ltd VERSUS Sushma Shiroor WITH Civil Appeal no. 7149 of 2019 ( Judgement 07.04.2022) has held :
" 7. Clauses 10.1 and 13.1 of the Apartment Buyers Agreement relating to project completion period and delay compensation may be noticed:
"10 Project Completion Period 10.1 "Subject to Force Majeure, timely payment of the Total Sale Consideration and other provisions of this Agreement, based upon the Company's estimates as per present Project plans, the Company intends to hand over possession of the Apartment within a period of 42 (forty two) months from the date of approval of the Building Plans or the date of receipt of the approval of the Ministry of Environment and Forests, Government of India for the Project or execution of this Agreement, whichever is later ('Commitment Period'). The Buyer further agrees that the Company shall additionally be entitled to a time period of 180 (one hundred and eighty) days ('Grace Period'), after expiry of the Commitment Period for unforeseen and unplanned Project realities. However, in case of any default under this Agreement that is not rectified or remedied by the Buyer within the time period as may be stipulated, the :17: Company shall not be bound by such Commitment Period.
13 Delay Compensation : 13.1 If the Company fails to offer the possession of the Apartment to the Buyer by the end of the Grace Period (or an alternate apartment within the meaning of this Agreement), it shall be liable to pay to the Buyer liquidated damages calculated at the rate of Rs. 7.50/- (Rupees Seven and Fifty Paise only) per sq. ft. of Sale Area as full and final settlement of any loss of whatsoever nature ('Delay Compensation') for every month of delay or part thereof until the date of Notice of Possession. The Buyer shall be entitled to payment/adjustment of the Delay Compensation only at the time of payment of the final installment and other dues and charges payable to the Company before assuming the possession of the Apartment. No other claim of any description shall be raised against the Company".
8.1. On the question of reckoning the date for handing over of possession of the apartment, the Commission recorded the fact admitted by the Developer in Para 2 of its reply that "the trigger date for clause 10.1 is 26.12.2012, which is the date of execution of the apartment buyer's agreement". The Commission calculated 42 months from this period, which turns out to be 26.06.2016. Further, adding the grace period of 180 days, the time for delivery would expire on 26.12.2016. It is again an admitted fact that the occupancy certificated was obtained only on 23.07.2018 and notice for possession was issued to the Consumer on 24.07.2018. Given the factual position and having examined the terms of the Agreement, the Commission found the judgment of this Court in Pioneer is a relevant and conclusive precedent.
8.2. In somewhat similar factual as well as legal context, this Court in Pioneer held as under:
"6.1 In the present case, admittedly the appellant builder obtained the occupancy certificate almost 2 years after the date stipulated in the apartment buyer's agreement. As a consequence, there was a failure to hand over possession of the flat to the respondent flat purchaser within a reasonable period. The occupancy certificate was obtained after a delay of more than 2 years on 28-8-2018 during the pendency of the proceedings before the National Commission. In LDA v. M.K. Gupta, this Court held that :18: when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a "service" as defined by Section 2(o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service. In Fortune Infrastructure v. Trevor D'Lima, this Court held that 8 of 24 persons cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation.
6.2 The respondent flat purchaser has made out a clear case of deficiency of service on the part of the appellant builder. The respondent flat purchaser was justified in terminating the apartment buyer's agreement by filing the consumer complaint, and cannot be compelled to accept the possession whenever it is offered by the builder. The respondent purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.
6.3 The National Commission in the impugned order dated 23-10-2018 held that the clauses relied upon by the builder were wholly one-sided, unfair and unreasonable, and could not be relied upon.........
6.8 A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the agreement dated 8-5-2012 are ex facie one-sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder.
7. In view of the above discussion, we have no hesitation in holding that the terms of the apartment buyer's agreement dated 8-5-2012 were wholly one-sided and unfair to the respondent flat purchaser. The appellant builder could not seek to bind the respondent with such one-sided contractual terms."
9.1 The principle laid down in Pioneer's case has been followed consistently in many cases where the terms of the Apartment Buyer's Agreement were found to be one-sided and entirely loaded in favour of the :19: Developer, and against the allottee at every step. The following are instances where the terms of the 9 of 24 Apartment Buyer's Agreement were found to be oppressive, constituting unfair trade practice and the Court has not given effect to such terms of the Agreement:
9.2 In Wing Commander Arifur Rahman Khan and Aleya Sultana &Ors. v. DLF Southern Homes Private Limited (2020) 16 SCC 512 , this Court held that there is no embargo on the award of compensation beyond the rate stipulated in the Apartment Buyer's Agreement where handing over the possession of the flat has been delayed. The Court observed that the Consumer Forums must take a robust and a common-sense approach by taking judicial notice of the fact that flat purchasers obtained loans and are required to pay EMIs to financial institutions for subserving their debts. The Delay Compensation Clause provided for Rs. 5 per square foot per month. This Court found that this stipulation is clearly one-sided and does not maintain a level platform or even reflect a bargain between the parties. The Court granted additional compensation @ 6% p.a. simple interest to each buyer therein, over and above the Delay Compensation Clause.
9.3 In NBCC (India) Ltd. v. Shri Ram Trivedi (2021) 5 SCC 273, the Court found that the agreement fastening liability on the purchaser to pay simple interest @ 12% p.a. if he failed to pay instalments on time and at the same time, if the seller failed to hand over the possession on time, he would have to pay compensation only @ of Rs. 2 per square feet would constitute an unfair trade practice. The Court held that a term of a contract would not be final and binding if it is shown that the flat purchasers have no option but to sign on the dotted line of a contract framed by the builders. The Court further held that Consumer Forums were empowered to award just and reasonable compensation as an incident of its power to direct removal of a deficiency in service; they are not constrained by the rate prescribed in the agreement. The Court held that the compensation could be granted even if possession had been delivered. The same principle followed in a subsequent decision in DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association &Ors. (2021) 5 SCC 537.
9.4 A three-judge bench of this Court in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna &Ors. (2021) 3 SCC 241 noticed the delay :20: compensation clause, which is similar to the clause in the present case, which provided that the Developer would be liable to pay delay compensation @ Rs 7.5 per square foot which works out to approximately 0.9 to 1% p.a. The Court held that this Clause is one-sided and entirely loaded in favour of the Developer and against the allottee. The Court concluded that the powers of the Consumer Court were in no manner constrained to declare a contractual term as unfair and one-sided as an incident of the power to discontinue unfair or restrictive trade practices. It was held:
"34. We are of the view that the incorporation of such one-sided and unreasonable clauses in the apartment buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An "unfair contract" has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act. 35. In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the apartment buyer's Agreement." Having examined various decisions of this Court which considered similar clauses in Apartment Buyer's Agreement and following the ratio laid down in Pioneer case, the submission made on behalf of the Developer has to be rejected. We hold that the Commission is correct in its approach in holding that the clauses of the agreement are one-sided and that the Consumer is not bound to accept the possession of the apartment and can seek refund of the amount deposited by her with interest.
" 20. In the appeal filed by the Consumer, the learned counsel prayed that: (i) the payment of interest must be from the date of payment of each instalment and (ii) the rate of interest must be 24% p.a. He has referred to the dates on which he has made payments, and sought interest from the :21: said dates:
21. On the other hand, the Appellant-Developer submitted that (i) period for interest should be linked to the estimated date of possession and not the date of Page 23 of 24 payments and (ii) the rate of interest must be the rate provided in the Interest Act, 1978.
22.1 We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. v. DS Dhanda and Ors. (2020) 16 SCC 318 (at para 21) and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.
22.2 At the same time, we are of the opinion that the interest of 9 per cent granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the Consumer for enhancement of interest.
23. We were informed that the Appellant-Developer deposited a sum of Rs. 50,000/- in the registry of this Court as per proviso to Section 23 of the Act. This amount shall be made over to the Respondent-Consumer, to be adjusted against the final amount payable by the Developer to the Consumer."
Hon'ble Supreme Court in the case of Ireo Grace Realtech Private Limited Vs.Abhishek Khanna&Ors., (supra) ,has held where the development makes an alternate offer of allotment of apartment, the allottees are however not bound to accept the same because of inordinate delay in completing the construction of the towers or units were allotted to them and if the Occupation Certificate is not available even as on date, clearly amounts to deficiency of service. So it is clear that without occupation certificate, offer of delivery of possession is no offer in the eye of law. We shall also the difference between completion certificate and occupancy certificate.
:22:When buying a home, it is vital to obtain documents, such as the Occupancy Certificate (OC) and Completion Certificate (CC). These are essential documents that allow you to mortgage or sell your home. Hence, homebuyers are advised to take possession of their flat or property only after these documents have been issued.
According to Vikas Bhasin, CMD, Saya Group, "Completion Certificate and Occupancy Certificate are some of the most important documents for a home buyer. Civic authorities can evict the occupants in case of non-availability of the necessary approvals. Before investing in a property, people must be doubly assured that all the certificates and approvals are in place."
Let us dive a little deeper into the details of these documents and their importance before you make a move to buy your dream home.
Owning a home is the culmination of years of savings, research, and paperwork. After patiently waiting for the construction to be complete, you finally register the property and take possession of your flat. But what if your dream home is declared unauthorised, and you are evicted by the authorities? This is not as far-fetched as it sounds. This nightmare could turn into reality without a crucial link in the property sale process - the Occupancy Certificate (OC).
The majority of apartments in different Indian cities have been occupied by owners without any occupancy certificate. This oversight can turn into a costly mistake, jeopardising the legal status of your dream home. The importance of the occupancy certificate cannot be overstated as it seals the legal status of your property and protects your ownership rights.
Decoding legal documents To understand the importance of an occupancy certificate and other legal documents, let's decode the legal jargon and understand their meaning in simple terms. Here's a ready reckoner of the most important legal documents related to your property:
:23:Occupancy Certificate An OC certifies that the construction of the building has complied with the approved plans. It is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied. Simply put, without an OC, your building has not been awarded a 'pass certificate'.
Completion Certificate A Completion Certificate (CC) is issued only after the construction meets other building standards like distance from the road, the height of the building, and rainwater harvesting system. A CC alone cannot legalise occupation; the OC is a must.
Commencement Certificate If you are buying an under construction property, make sure you check the Commencement Certificate before signing the agreement. Many builders do not wait for a Commencement Certificate. This is illegal and can create serious problems in obtaining an OC at a subsequent stage.
Why is it unsafe to buy a flat without OC?
In the absence of a valid OC, the local municipal body can initiate serious action against flat owners. In 2014, residents of a well-known building complex in Mumbai's upscale Worli area were hit with a bolt from the blue after their complex was declared unauthorised. At the time of possession, buyers overlooked the issuance of an OC from the builder. It was only after that they were forced to evacuate their flats that the writing on the wall became clear to them.
This is just one instance, and if buyers are not careful about getting the OC, they may face the following repercussions:
• In the absence of a valid OC, your building can be demolished as it can be classified as an unauthorised structure.
• The OC is crucial while applying for a home loan or loan to purchase a resale flat. If you wish to sell or hypothecate the property after a lapse of :24: time, you will not be able to do so without a valid OC.
• The water connection, sanitary connection or electricity supply can be disconnected in the absence of an OC.
How to obtain an OC The OC is obtained from local municipal bodies by submitting an OC application form along with the following documents:
• Commencement Certificate • Completion Certificate • Built and Section plan • NOC for fire and pollution • Area calculation sheet of floor signed by an authorised architect • Photographs of the completed building • Tax assessment with tax paid receipt • Photographs of rain harvesting and solar panels • Copy of the sanctioned plan After submitting the form, authorities inspect the complex and confirm if it has conformed to the approved plan before issuing an OC. Legally and ideally, a builder should submit an application with the municipal commissioner for the OC within 30 days of completion of the property.
How you can apply for an OC As a flat owner, you can also apply for an OC by approaching the local corporation or municipality, and if all approvals are in place, an OC is issued within 30 days of application. You will have to submit the same documents as the builder to procure an OC.
Know your rights If the builder refuses to provide an OC, you should consider exercising your legal rights. You can issue a notice against the builder asking him to apply and hand over the copy of the OC within a month. You can also :25: approach consumer forums and file a writ petition demanding the OC.
Some canny builders simply present the receipt of the OC and dupe gullible customers. But you shouldn't accept anything less than the actual OC as the receipt may be dated.
Landmark legislations like the Real Estate Regulatory Act (RERA) have been passed to regulate the sector, promote transparency and protect consumer rights. However, consumers must be vigilant and understand their rights and responsibilities towards owning a property. Documents like OC are essential and ensure the security of your investment.
Going forward, real estate experts believe that the OC should be made mandatory for the registration of flats and essential services. Until then, buyers must ensure builders get all the necessary approvals before handing over a property.
A Completion Certificate (CC) is an important legal document that certifies that a building is constructed according to the laid down norms and master plan of the city. This document has all the information related to the project, such as the building materials used, building height, and building plan, among other things like provision for green belt.
In a nutshell, this document certifies that the building adheres to all the prevailing rules and has not violated any norms. In fact, this document is to be shown compulsorily to the authorities to obtain electricity and water connection.
Builders are allowed to obtain a provisional Completion Certificate when there are minor works left in the project. Authorities then provide a provisional certificate valid for six months. After the expiry of the six months, the developer is bound to get a final CC.
Who issues a Completion Certificate?
Local authorities issue the Completion Certificate after a thorough inspection of the premises. If the developer violates no rules, authority issues a Completion Certificate.:26:
Why is Completion Certificate important?
Buyers must be aware of the fact that if they are buying or moving into a property that does not have a Completion Certificate, they might be making a risky investment choice. The civic authorities hold the power to slap heavy penalties on the developer, leading to stalling or cancellation of the registered layout of the project. In case the building is already occupied, residents may also have to face eviction in extreme cases.
Difference between Occupancy Certificate and Completion Certificate Occupancy Certificate examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances. On the other hand, a Completion Certificate is a document that certifies that a property is fit for possession by the buyers.
Clarifying the difference, Deepak Kapoor, Director, Gulshan Homz, says, "Completion Certificate is just a reaffirmation that the building has been constructed as per the building byelaws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants.
Generally, these documents are not required at the time of registry, and hence, buyers tend to overlook or ignore these. But for their own benefit and peace of mind, it is warranted that buyers of both ready-to-move-in as well as under-construction properties check these documents before taking possession. This would help avoid any unnecessary dispute or confrontation in the future."
It is clear in this case that the possession has not been delivered up till now. Sending a letter for the proposed offer of possession is not a valid offer of possession in the eye of law unless accompanied with completion certificate, occupancy certificate and required NOCs. The final statement of account attached with the alleged letter of offer of possession, there is no indication as to how much interest is being paid to the complainant on his deposits. Once the required time for :27: delivery opposition has been passed over, the builder is liable to pay interest on the deposits of the complainant but here no such interest shown to be paid by the builder to the complainant.
Now some case laws of Hon'ble Supreme Court and Hon'ble NCDRC are to be discussed in this light.
In R. V. Prasannakumaar v. Mantri Castles Pvt. Ltd., 2019 SCC on Line SC 224, under the terms of the ABA, possession of the flats was to be handed over to the buyers on 31 January 2014. However, the developer received an occupation certificate only on 10 February 2016 and it was thereafter from May 2016 that the developer started issuing letters offering possession. Based on this, the NCDRC awarded compensation in the form of interest at the rate of 6 per cent per annum. The developer had pleaded that since the agreement provided compensation at the rate of Rs.3 per square foot per month for delayed possession, the purchasers were not entitled to anything in addition. Dealing with the submission, this Court observed:
"9. We are in agreement with the view of the NCDRC that the rate which has been stipulated by the developer, of compensation at the rate of Rs.3 per sq. ft. per month does not provide just or reasonable recompense to a flat buyer who has invested money and has not been handed over possession as on the stipulated date of 31 January 2014. To take a simple illustration, a flat buyer with an agreement of a flat measuring a 1000 sq. ft. would receive, under the agreement, not more than Rs. 3000/- per month. This in a city such as Bangalore does not provide just or adequate compensation. The jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 cannot in the circumstances be constrained by the terms of the agreement. The agreement in its view is one sided and does not provide sufficient recompense to the flat purchasers."
The Court observed that there was a delay of two years and hence the award of interest at the rate of 6 per cent was reasonable and justified.
In Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan, (2019) 5 SCC 725, there was a delay of almost two years in obtaining an occupancy certificate after the date stipulated in the ABA. As a consequence, there was a failure to provide possession of the flat to the purchaser within a reasonable period. This Court dwelt on the terms of the ABA under which the :28: builder was entitled to charge interest at 18 per cent per annum for the delay in payment of instalments by the purchaser. On the other hand, the failure to provide possession on the part of the developer was subject to a grace period of twelve months followed by a termination notice of ninety days and a further period of ninety days to the developer to effect a refund. Adverting to these clauses, the court noted:
"6.4. A perusal of the apartment buyer's agreement dated 8-5- 2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4(ii) of the agreement entitles the appellant builder to charge interest @18% p.a. on account of any delay in payment of instalments from the respondent flat purchaser. Clause 6.4(iii) of the agreement entitles the appellant builder to cancel the allotment and terminate the agreement, if any instalment remains in arrears for more than 30 days. On the other hand, as per Clause 11.5 of the agreement, if the appellant builder fails to deliver possession of the apartment within the stipulated period, the respondent flat purchaser has to wait for a period of 12 months after the end of the grace period, before serving a termination notice of 90 days on the appellant builder, and even thereafter, the appellant builder gets 90 days to refund only the actual instalment paid by the respondent flat purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the appellant builder is liable to pay interest @9% p.a. only. Another instance is Clause 23.4 of the agreement which entitles the appellant builder to serve a termination notice upon the respondent flat purchaser for breach of any contractual obligation. If the respondent flat purchaser fails to rectify the default within 30 days of the termination notice, then the agreement automatically stands cancelled, and the appellant builder has the right to forfeit the entire amount of earnest money towards liquidated damages. On the other hand, as per Clause 11.5(v) of the agreement, if the respondent flat purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the agreement thereafter, and shall be bound by the provisions of the agreement."
Hon'ble Justice Indu Malhotra speaking for the Court noted:
"6.8. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the agreement dated 8-5-2012 are ex facie :29: one-sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder." The Court observed that in these circumstances, the flat purchasers could not be compelled to obtain possession which was offered almost two years after the grace period under the agreement had expired. Hence, the NCDRC was held to have correctly awarded interest at the rate of 10 percent per annum.
The decision of this Court in Dhanda Case, 2019 SCC On Line SC 689 has been relied upon by learned Senior Counsel appearing on behalf of the developer as elucidating the principle that where a flat buyers agreement stipulates a consequence for delayed possession, exceptional and strong reasons must be established before the forum constituted under the Act of 1986 awards compensation in addition to what has been contractually agreed. In Dhanda's case, the SCDRC issued a direction for handing over physical possession of the residential unit to the complainant and for execution of a sale deed. In addition, compensation was awarded by way of interest at the rate of 12 per cent per annum with effect from twelve months after the stipulated date under the agreement. In an appeal by the developer, the NCDRC directed that the rate of interest for a house building loan for the corresponding period in a scheduled nationalised bank would be appropriate and if a floating rate of interest was prescribed, the higher rate of interest should be taken for the computation. A sum of Rs.1 lac per annum from the date for handing over possession to the actual date of possession was regarded as appropriate in the facts of the case. In that case under the terms of the buyer's agreements, possession was to be delivered within twenty-four months of the execution of the agreement i.e. 10 February 2013 - failing which the developer was liable to pay compensation at the rate of Rs.10 per square foot per month for the delay. The developer contended that construction activities were delayed as a result of an injunction granted by this Court over a period of eight months and consequently sought an extension of the period for handing over possession by one year. Alternatively, the developer offered to refund the money deposited with interest at 9 per cent per annum. Construction of 258 independent floors was completed while about 1,500 units were nearing completion. In two sets of Civil :30: Appeals which came up before this Court earlier, agreed terms were arrived at providing for the award of interest at 9 per cent per annum from the date of deposit till refund. While considering the order of the NCDRC, this Court observed:
"16. The District Forum under the Consumer Protection Act, 1986 is empowered inter-alia to order the opposite party to pay such amount as may be awarded as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party including to grant punitive damages. But the forums under the Act cannot award interest and/or compensation by applying rule of thumb. The order to grant interest at the maximum of rate of interest charged by nationalised bank for advancing home loan is arbitrary and no nexus with the default committed. The appellant has agreed to deliver constructed flats. For delay in handing over possession, the consumer is entitled to the consequences agreed at the time of executing buyer's agreement. There cannot be multiple heads to grant of damages and interest when the parties have agreed for payment of damages at the rate of Rs. 10/- per sq. ft. per month. Once the parties agreed for a particular consequence of delay in handing over of possession then, there has to be exceptional and strong reasons for the SCDRC/NCDRC to award compensation at more than the agreed rate."
Now the interest may be 6% to 10% in favour of the allottees if they have not been given possession of the flat/plot within promised or within a reasonable time. The complainant has deposited the entire agreed cost of the flat before June 2009. Now it is the duty and obligation of the opposite party to deliver the possession within stipulated time but they failed to do so.
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 :31: 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 :32: 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 :33: 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, :34: Mr. Lahoty would 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."
In the case of Kolkata West International City Pvt. Ltd. Vs. DevasisRudra[Civil Appeal No. 3182 of 2019 @ SLP (C) No(S). 1795 of 2017] judgment delivered on 25.03.2019, the Hon'ble Supreme Court has held:-
"Interestingly, where the buyer is in default, the agreement stipulates that interest at the rate of 18 per cent from the date of default until the date of payment would be charged for a period of two months, failing which the allotment would be cancelled by deducting 5% of the entire value of the property. The agreement was evidently one sided. For a default on the part of the buyer, interest at the rate of 18% was liable to be charged. However, a default on the part of the developer in handing over possession would make him liable to pay interest only at the savings bank rate prescribed by the SBI. There is merit in the submission which has been urged by the buyer that the agreement was one sided.
In the Case of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. Versus DLF Southern Homes Pvt. Ltd (now Known as BEGUR OMR Homes Pvt. Ltd.) and Ors. (Civil Appeal No. 6239 of 2019 With Civil Appeal No. 6303 of 2019); The Hon'ble Supreme Court has held:-
"24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression "service" in Section 2 (1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to :35: direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfillment of a contractual obligation. To uphold the contention of the developer that the flat buyer is constrained by the terms of the agreed rate irrespective of the nature or extent of delay would result in a miscarriage of justice."
"Undoubtedly, as this court held in Dhanda, courts ordinarily would hold parties down to a contractual bargain. Equally the court cannot be oblivious to the one-sided nature of ABAs which are drafted by and to protect the interest of the developer. Parliament consciously designed remedies in the CP Act 1986 to protect consumers. Where, as in the present case, there has been a gross delay in the handing over of possession beyond the contractually stipulated debt, we are clearly of the view that the jurisdiction of the consumer forum to award just and reasonable compensation as an incident of its power to direct the removal of a deficiency in service is not constrained by the terms of a rate which is prescribed in an unfair bargain."
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 :36: 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.
Now it has been very well established that the opposite party completely failed to deliver the possession of the said flat on 06.02.2016. So in the circumstances they are not entitled to demand any further amount in any head whatsoever it may be. They have not filed the copy of the completion/occupancy certificate and NOC from the various departments as said earlier. The opposite parties denied the contents of the brochure and even they have not admitted the brochure. It is clear that whenever any building the scheme is lost, a brochure is issued to the allottees to let them know about the infrastructure of the builder. The opposite parties simply denied the brochure but they did not file the brochure and other hand bills or any other booklet describing the facilities and amenities in the building. So the brochure filed which is on record, cannot be brushed aside. The opposite parties are not entitled to take maintenance charge from the allottees before providing each facilities and amenities which have been described in the brochure. Keeping in view the judgment of the different Hon'ble higher courts and also the Clause (5) of the prayer of the complainant in the complaint case ,we come to the conclusion that the complainant is entitled to the following reliefs are:-
01.We are of the view that the complainant is authorised to get the possession of his flat along with completion certificate, occupancy certificate and all NOCs as required under the lawwithin 60 days from the date of judgement of this complaint case. If the delivery of possession is not given within 60 days with all the accompanying documents, the opposite party shall be liable to pay ₹ 1 lakh per month as penalty to the complainant until proper and legal delivery of possession.
02.The complainant is also entitled to get interest at a rate of 10% on all the amounts deposited by him from their respective date of deposition till the date of delivery of possession within 60 days from the date of judgement of this complaint and if not paid within 60 days from the date of judgement of this complaint, the opposite parties shall liable to pay interest at a rate of 15% per annum on these amounts from their date of the deposition.
03.We are of the view that the complainants are entitled to get monthly damage according to the area. The area of the said unit is less than 238.75 m² and keeping in view the judgment of Hon'ble NCDRC in the case of Priyanka Mittal (supra), the opposite parties are jointly and severally directed to pay Rs.20,000/- per month from 06.02.2016 ( though prayed for only Rs 2000 per month but in view of relief clause (5) and in the light of judgement supra , this amount is fixed ) till the actual date of delivery of possession and the order shall be complied with, within 60 days from the date of judgment of this complaint case otherwise the opposite parties shall be liable to pay interest at a rate of 15% per annum on this amount.
04.The complainants are entitled to get ₹ 150,000/- in view of Nalin Bhargava Case (supra) as cost .
05.In the relief clause of the complaint, the complainant has prayed " To pass such other and further orders as this media fit and proper in the facts and circumstances of the case" So keeping in view all the fraud, unfair trade practice and deficiency in service committed in this case, all the harassment , torture, depression, and mental agony given to the allottee we find that the complainants are also entitled to get Rs.30 lakhs towards payment of rent of the flat, mental harassment, agony and sufferings.
06.No amount shall be adjusted by the opposite parties to these amounts whatsoever it may be.
The present complaint is decided accordingly.
ORDER The opposite parties are directed to hand over the possession of the said flat along with completion certificate, occupancy certificate and all NOCs as required under the law within 60 days from the date of judgement of this complaint case. If the delivery of possession is not given within 60 days with all the accompanying documents, the opposite party shall be liable to pay ₹ 1 lakh per month as penalty to the complainant until proper and legal delivery of possession.
The opposite parties are directed to pay interest at a rate of 10% on all the amounts deposited by him from their respective date of deposition till the date of delivery of possession within 60 days from the date of judgement of this complaint and if not paid within 60 days from the date of judgement of this complaint, the opposite parties shall liable to pay interest at a rate of 15% per annum on these amounts from their date of the deposition.
The opposite parties are directed to pay damages at a rate of Rs 20,000 per month from 06.02.2016 till the date of delivery of possession within 60 days from the date of judgement of this complaint and if not paid within 60 days from the date of judgement of this complaint, the opposite parties shall liable to pay interest at a rate of 15% per annum on these amounts from their date of the deposition.
The opposite parties are directed to pay interest at a rate of 10% on all the amounts deposited by the complainant from their respective dates of deposit till the possession of the flat and execution of the sale deed is not performed within 60 days from the date of judgement of this complaint and if not paid within 60 days from the date of judgement of this complaint, the opposite parties shall liable to pay interest at a rate of 15% per annum on these amounts from the date of the deposition.
The opposite parties are directed to pay₹ 30 lakhs towards deficiency of service, unfair trade practice , payment of rent of the flat, mental harassment, agony and sufferings within 60 days of the judgement of this complaint without interest and if not paid within 60 days from the date of judgement of this complaint, the rate of interest shall be 15% per annum on this amount from the date of judgement till actual payment No amount shall be adjusted by the opposite party to these amounts whatsoever it may be.
All the decretal amount shall be paid within 60 days from the date of judgment of this appeal, otherwise the opposite parties shall pay interest at a rate of 15% per annum on all the decretal amount. If it is not paid within 60 days from the date of judgment of this appeal, the complainant shall be entitled to present execution proceedings before this court at the cost of the :39: 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 August, 2022 Jafri, PA II C-2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER