National Consumer Disputes Redressal
Sumesh Dewan vs M/S. Ireo Grace Realtech Private ... on 13 December, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 25 OF 2018 1. SUMESH DEWAN ...........Complainant(s) Versus 1. M/S. IREO GRACE REALTECH PRIVATE LIMITED & 2 ORS. Reg. off; 304, Kanchan House Karampura Commercial Complex New Delhi-110015 ...........Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainant : Ms. Pooja Singh, Advocate For the Opp.Party : For the Opposite Party : Mr. Palash Agarwal, Advocate Mr. Gaurav Sharma, Advocate Mr. Aditya Ramchandra, Executive Dated : 13 Dec 2021 ORDER The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short "the Act") by the Complainant, against the Opposite Party, M/s. Ireo Grace Realtech Private Ltd. (hereinafter referred to as the 'Developer') seeking refund of money paid as the Developer Opposite Party failed to hand-over the possession of the Flat booked by the Complainant in the Project launched by them in the name and style of "Ireo - The Corridors", within stipulated period.
According to the Complainant, the facts of the case are that in response to the Applications invited by the Opposite Party Developer for allotment of Flats in their upcoming Project, "The Corridors" (hereinafter referred to as the 'Project') located at Sector-67-A, Tehsil & District, Gurgaon, Haryana, the Complainant booked a Residential Flat in the Project vide application dated 22.03.2013. The Complainant was allotted Unit No. CD-D3-09-903 admeasuring 2415.98 Sq. Ft. The Apartment Buyer's Agreement (hereinafter referred to as the "Agreement") was sent by the Opposite Party Developer for getting the signatures of the Complainant. Complainant has alleged that the Agreement was one-sided and upon resistance, the Complainant was threatened by the Developer that the Unit shall be cancelled and whole money paid shall also be forfeited and the Complainant was forced to sign upon the dotted lines on the Agreement. Firstly, the Agreement was served upon the Complainant in December, 2013 and a fresh copy of the same was subsequently served in April, 2014 and finally it was executed between the Parties on 28.04.2014. As per Clause 13.3. of the Agreement, the possession of the booked Unit was to be handed over within a period of 42 months from the date of approval of the Building Plans subject to fulfilment of the pre-conditions imposed under the Agreement. Clause 13.3 of the Agreement reads as under:-
"Subject to Force Majeure, as defined herein and further subject to the allottee having complied with all its obligations under the terms and conditions of this Agreement and not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of all dues and charges including the total Sale Consideration, registration charges, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer the possession of the said Apartment to the Allottee within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the preconditions imposed thereunder ("Commitment period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company."
It is stated that the Complainant has paid an amount of ₹1,08,82,292/- to the Developer upto 31.03.2017 out of the total Sale Consideration of ₹2,49,60,426.00. According to the Complainant, he has paid an extra amount of ₹2,67,199.34/- along with actual amount of Installment of ₹28,75,157.66/- on 23.03.2017 as he has paid total amount of ₹31,42,717 to the Developer. The Complainant requested for refund of the extra amount vide email dated 24.04.2017 however there was no response from the Developer. It is averred by the Complainant that the said Project was launched in March 2013 and it is presumed that till that date all the approvals were obtained from the Competent Authorities by the Developer. It is stated that the Commitment period of 42 months from the date of booking and further the grace period of 180 days as per the Agreement, has expired on 12.03.2017 but till today the possession of the booked Flat has not been offered to him by the Developer. According to the Complainant, he has made all the payment as demanded by the Developer but despite having received the huge amount, the Opposite Party Developer could not complete the construction work at the Project within stipulated period and has failed to deliver the possession of the Unit. The Complainant has taken Home Loan from HDFC Bank and regularly paying the huge amount as installment. The Complainant has also sent a legal notice on 05.12.2017 to the Developer calling upon them to refund the amount of ₹1,08,82,292 along with interest @ 18% p.a., however, the Developer did not respond to the said notice. The Complainant having lost trust in the Opposite Party Developer and alleging deficiency in service and Unfair Trade Practice on the part of the Opposite Party Developer, has filed the present Complaint with following prayer:-
₹1,08,82,292.00/- (Rupees One Crore Eight Lacs Eighty Two Thousand Two Hundred and Ninety Two only), paid by the Complainant to the Opposite Party in respect to the instalment for the said unit, along with ₹64,08,618/- (Rupees Sixty Four Lacs Eight Thousand Six Hundred and Eighteen Only) for the period of delay in delivering the possession;
₹10,00,000/- (Rupees Ten Lacs Only) towards the mental agony suffered by the Complainant due to the actions of the Opposite Parties;
₹5,00,000/- (Rupees Five Lacs Only) towards the cost of litigation;
Upon notice, the Complaint was resisted by the Opposite Party by filing Written Statement. It is contended that; the Project has been duly registered under RERA and as such, this Commission has no jurisdiction to entertain the complaint; Occupancy Certificate has been applied for the first phase Tower A6 to 10, B1 to B4, C3 to C1 and Shopping Centre Phase 1. Complaint is bad for non-joinder of the necessary party as the loan was obtained by the Complainant from HDFC Bank and a Quadraparite Agreement was executed between the Complainant, HDFC and the Developer, however the HDFC Bank has not been impleaded in the array of parties; the application for the Apartment and the Agreement was entered by Sumesh Dewan (HUF) and all the receipts were issued in the name of the HUF, whereas the Complaint has been filed by the Complainant in his individual capacity and not HUF; the parties are bound by the terms and conditions of the Agreement and the Complaint filed by the Complainant is pre-matured in terms of Booking Application Buyer Agreement; the Building Plan was approved on 23.07.2013 and the Fire Safety Scheme Approval was granted on 27.11.2014 and hence the proposed time for handing over of possession is 27.11.2018 including grace period of 180 days from 27.11.2014; the revised Building Plan for Tower D-3 in which the Flat of the Complainant is located, was approved on10.07.2017 and the period of 48 months is to be calculated from the said date; the proposed date for handing over the possession to the Complainant is year 2021; Complainant is not a "Consumer" as the Flat was booked by him for commercial purpose and earning profit; if there was any delay on the part of the Opposite Party beyond 42 months and 180 days, they were liable to pay to the Complainant the delay compensation @₹7.5 per Sq. Ft of the Super Area per month till the actual date fixed by the Opposite Party for offer of possession. All other allegations made by the Complainant in the Complaint have been denied by the Opposite Party.
We have heard Ms. Pooja Singh, learned Counsel appearing on behalf of the Complainant, Mr. Palaash Agarwal, learned Counsel appearing on behalf of the Opposite Party Developer and have also given a thoughtful consideration to the arguments advanced by them.
All the aforesaid contentions raised by the Opposite Party Developer in respect of the Project 'The Corridor' have been dealt with in detail by this Commission in the cases, i.e., CC No.3873 / 2017 entitled "Abhishek Khanna & Ors. Vs. Ireo Grace Realtech Pvt. Ltd." CC No.1382 / 2018 entitled "Promila Kashyap vs. Ireo Grace Realtech Pvt. Ltd.", CC No. 525 / 2017 entitled "Ritu Hasija & Anr. Vs. Ireo Grace Realtech Pvt. Ltd.", CC No.696 / 2017 entitled "Amit Arora vs. Ireo Grace Realtech Pvt. Ltd.", CC No1488696 / 2017 entitled Sunita Sehgal and Anr. Vs. IReo Grace Realtech Pvt. Ltd. and CC No.1998 / 2016 entitled Subodh Pawar Vs. Ireo Grace Realtech Pvt. Ltd.
It is further to be mentioned here that the Opposite Party Developer challenged the Orders passed by this Commission in the aforesaid cases by way of filing Civil Appeals before the Hon'ble Supreme Court. The Hon'ble Supreme Court dealt with all the contentions raised by the Opposite Party and disposed off these Civil Appeals vide their Judgment dated 11.01.2021 in the case "Ireo Grace Realtech Pvt. Ltd. vs. Abhishek Khanna & Ors." - (2021)3SCC241. The Hon'ble Apex Court had held that 27.11.2018 would be the relevant date for offer of possession by observing as under:-
"On 27.11.2014, the Director, Haryana Fire Service granted approval to the Fire Fighting Scheme subject to the conditions mentioned therein. The computation of the period for handing over possession would be computed from this date. The Commitment Period of 42 months plus the Grace Period of 6 months from 27.11.2014, would be 27.11.2018, as being the relevant date for offer of possession."
Hon'ble Supreme Court also held that the Agreement is one-sided and the Opposite Party Developer cannot compel the Apartment Buyer to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement by observing as under :-
We are of the view that the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An ―unfair contract‖ has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act.
In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement"
Hon'ble Supreme Court on the issue "Whether the Apartment Buyers are entitled to terminate the Agreement, or refund of the amount deposited with Delay Compensation" held as under:-
In the present case, the allottees before this Court in the present batch of appeals, can be categorised into two categories:-
i) Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made, are enlisted in Chart A;
ii) Apartment Buyers whose allotments fall in Phase 2 of the project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far, are set out in Chart B below.
Chart A allottees (i) We are of the view that allottees at Serial Nos. 1 and 2 in Chart A are obligated to take possession of the apartments, since the construction was completed, and possession offered on 28.06.2019, after the issuance of Occupation Certificate on 31.05.2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from 27.11.2018 till the date of offer of possession was made to the allottees.
Chart B allottees
(i) Insofar as the allottees in Chart B are concerned, they have paid part consideration, in most cases up to the 4th instalment till 2017, when they found that there was no progress being made in respect of the Towers in which the apartments had been allotted to them. It is an admitted position that Occupation Certificate for Towers A1, A2, A3, B7, C9 and C11, in which the allotments have been made for this category has not been issued by the Municipal Corporation The apartments have not been ready for allotment even as on 30.06.2020, as per the date fixed before the RERA Authority.
(ii) The allottees submitted that they were facing great hardship since they had obtained loans from Banks for purchasing these apartments, and were paying high rates of interest. In 2017, when they realised that there was no construction activity in progress, they were constrained to file consumer complaints before the National Commission, and then discontinued payment of further instalments.
(iii) The Developer made an alternate offer of allotment of apartments in Phase 1 of the project. The allottees are however not bound to accept the same because of the inordinate delay in completing the construction of the Towers where units were allotted to them. The Occupation Certificate is not available even as on date, which clearly amounts to deficiency of service. The allottees cannot be made to wait indefinitely for possession of the apartments allotted to them, nor can they be bound to take the apartments in Phase 1 of the project. The allottees have submitted that they have taken loans, and are paying high rates of interest to the tune of 7.9% etc. to the Banks.
Consequently, we hold that the allottees in Chart B are entitled to refund of the entire amount deposited by them.
(iv) In so far as award of compensation by payment of Interest is concerned, clause 13.4 of the Apartment Buyer's Agreement provides that the Developer shall be liable to pay the allottee compensation calculated @ ₹ 7.5 per sq. ft. of the Super Area for every month of delay, after the end of the Grace Period. The compensation will be payable only for a period of 12 months.
The Apartment Buyers in their Complaint filed before the National Commission made a prayer for refund of the amount deposited alongwith Interest @ 20% p.a. compounding quarterly till its realisation. The Apartment Buyers, in their submissions have stated that they have obtained home loans on which Interest @ 7.90% p.a. is being paid, even as on date. We have considered the rival submissions made by both the parties. The Delay Compensation specified in the Apartment Buyer's Agreement of ₹ 7.5 per sq. ft. which translates to 0.9% to 1% p.a. on the amount deposited by the Apartment Buyer cannot be accepted as being adequate compensation for the delay in the construction of the project. At the same time, we cannot accept the claim of the Apartment Buyers for payment of compound interest @ 20% p.a., which has no nexus with the commercial realities of the prevailing market.
We have also taken into consideration that in Subodh Pawar v. IREO Grace, this Court recorded the statement of the Counsel for the Developer that the amount would be refunded with Interest @ 10% p.a. A similar order was passed in the case of IREO v. Surendra Arora. However, the Order in these cases were passed prior to the out-break of the pandemic.
We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry.
In these circumstances, it is necessary to balance the competing interest of both parties. We think it would be in the interests of justice and fairplay that the amounts deposited by the Apartment Buyers is refunded with Interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount.
The refund will be paid within a period of three months from the date of this judgment. If there is any further delay, the Developer will be liable to pay default interest @ 12% S.I. p.a. (v) The Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC."
In the present Consumer Complaint, the Complainant was allotted Unit No. CD-D3-09-903, which falls in Tower D3 and the Occupation Certificate for the said Tower has not been granted so far to the Developer. In the Written Statement filed by the Opposite Party, reliance has been placed on Applications for Grant of Occupation Certificates dated 21.07.2017 and 28.05.2018, however, the same do not pertain to grant the Occupation Certificate for Tower D3 in question. Therefore, the Complainant is entitled to refund of the deposited amount alongwith interest @9% p.a as directed by the Hon'ble Supreme Court in Abhishek Khanna's case(supra).
Respectfully following the ratio of the Judgment of the Hon'ble Supreme Court in the case of "Abhishek Khanna. (supra)", the Opposite Party Developer is directed to refund ₹1,08,82,292/- (Rupees One Crore Eight Lacs Eighty Two Thousand Two Hundred and Ninety Two Only), to the Complainant alongwith interest @ 9% S.I. p.a. within 8 weeks from the date of this Order failing which the Developer shall be liable for payment of default interest @12% S.I. p.a. till the payment is made. The Opposite Party Developer shall not deduct the Earnest Money of 20% from the principal amount, or any other amount as mentioned in Clause 21.3 of the Agreement, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC.
The Consumer Complaint is allowed in above terms, with no order as to Costs.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER