State Consumer Disputes Redressal Commission
Arvind Airy vs M/S Orbit Apartments Construction ... on 6 September, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.1319 of 2009
Date of institution : 16.09.2009
Date of decision : 06.09.2013
Arvind Airy son of Shri Bhupinder Airy, resident of Flat No.5, 3rd
Floor, Block-A, Orbit Apartments, Chandigarh-Ambala Highway, VIP
Road, NAC Zirakpur, Tehsil Dera Bassi, District SAS Nagar, Mohali.
.......Appellant-Complainant
Versus
1. M/s Orbit Apartments Construction Private Limited having its
registered office at # 1123, Phase V, Mohali (SAS Nagar),
Punjab through its Managing Director.
........Respondent/Opposite Party No.1
2. ICICI Home Finance Company Limited having its registered
office at ICICI Towers, Bandra Kurla Complex, Bandra (East)
Mumbai-400 051.
......Proforma Respondent- Opposite Party No.2
First Appeal against the order dated
11.08.2009 of the District Consumer
Disputes Redressal Forum, SAS Nagar,
Mohali.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President.
Shri Baldev Singh Sekhon, Member.
Mrs. Surinder Pal Kaur, Member.
Present:-
For the appellant : Shri Aman Arora, Advocate. For respondent No.1: Shri A.R. Takkar, Advocate. For respondent No.2: Proforma Respondent JUSTICE GURDEV SINGH, PRESIDENT :
This appeal has been preferred by the appellant/complainant, Arvind Airy, against the order dated 11.8.2009 passed by District Consumer Disputes Redressal Forum, SAS Nagar, Mohali (in short, First Appeal No.1319 of 2009. 2 "District Forum"), vide which the complaint filed by him under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") for the issuance of directions to respondent No.1/opposite party No.1, detailed in the prayer clause of the complaint, was dismissed with costs of Rs.10,000/-; out of which sum of Rs.5,000/- was ordered to be paid to opposite party No.1 and the remaining amount of Rs.5,000/- was ordered to be deposited in the Legal Aid Account of the Forum.
2. As per the averments made by the complainant, in his complaint, opposite party No.1 advertised the selling of flats/apartments in its building project known as 'Orbit Apartments' situated at Chandigarh- Ambala Highway, VIP Road, NAC, Zirakpur, Tehsil Dera Bassi, District SAS Nagar, Mohali with great propaganda and promised and assured multiple facilities, including safety and security, air/water, electricity back up etc. He was tricked into highly exaggerated assurances and he booked one such flat by advancing a cheque dated 27.12.2005 of Rs.1,00,000/-. He was allotted Flat No.5, vide allotment letter dated 2.1.2006 and the basic sale price thereof was fixed at Rs.31,50,000/-, which was to be paid as per the schedule of payment attached to the allotment letter. In continuation of that letter, they entered into an agreement to sell on 20.1.2006 and the schedule of payment was again attached with that agreement. As per that agreement, opposite party No.1 promised to complete the building and handover the possession of the flat to him at the earliest possible date and also assured that in any case the possession shall not be delayed by First Appeal No.1319 of 2009. 3 more than 18 months commencing from the date of allotment. Therefore, the possession of the flat was to be delivered to him at the most on or before June, 2007. Even the schedule of payment suggested that the possession of the flat was to be given within 18 months from the date of commencement of the allotment itself. To make timely payment to opposite party No.1, he applied for home loan from opposite party No.2 and a loan of Rs.25,64,725/- was duly sanctioned, vide letter dated 10.1.2006. As a result of the deficiency in service and unfair trade practice on the part of opposite party No.1, he was to take further loan of Rs.4,50,000/-, which was sanctioned by opposite party No.1, vide letter dated 18.8.2008. All of them entered into a tripartite agreement dated 6.1.2006 for making the instalments/payments in respect of the flat to opposite party No.1. As per mutual understanding between them, 15% of the amount of the due instalments was to be made by him and the balance amount of 85% of the instalments was to be made directly by opposite party No.2 to opposite party No.1 on his behalf. All the instalments/payments were made in time as per the schedule or as and when, demanded by opposite party No.1 and there was not even a single default in making any such payment by him. Despite various requests and reminders made by him opposite party No.1 did not handover the possession of the flat in the month of June, 2007, which resulted immense harassment to him. Ultimately, the possession was delivered on 28.8.2008 and the sale deed was also effected on the same date. First Appeal No.1319 of 2009. 4 Despite the execution of the sale deed he could not enter the flat and was allowed to enter only on 20.10.2008. After entering the flat, he found that there was neither any electrical connection nor there was any provision for getting the same from the Electricity Department. When he approached the Electricity Department, he found that opposite party No.1 did not have the approval of the electricity connection for this housing project and, therefore, no electricity connection could be issued to him. He had to survive for almost three months without any proper electricity and the connection was given only in January 2009. Even no water connection was available and it took 4-5 months to make available the bare and basic necessities to start living properly in the flat. No power back-up has been provided as promised by opposite party No.1. The electricity cuts are quite usual and he had to purchase an inverter by spending Rs.13,300/- from his own pocket. As per the Scheme, the elevators/lift was the condition precedent for booking but there were no such elevators/lifts for four months from the date of sale. Even the elevators installed thereafter do not work properly and most of the times remain out of order. On account of the non-availability of power back-up there is a fear of getting stuck inside the elevator in case of such power failure. He himself and his family members got stuck up in the lift for a number of times on account of electricity cut/failure. The washing area of all the Society cars has been provided just below his apartment, which was not in the original construction plan and the same is First Appeal No.1319 of 2009. 5 creating nuisance to him as the drivers and other people keep on washing their cars all the day long making interference in his personal life. The construction is also faulty. In all the three washrooms provided in the flat the water seldom flows through the drain and the same is collected in whole of the washroom forcing him to collect it and put it into drain manually. Even the locks provided to the washrooms are of faulty designs as those cannot be opened with key from outside for want of key hole. The rainy water enters the apartment during the rain due to faulty designing of the building. The other defects in the flat were detailed by him in para no.8 of the complaint. He further averred that at the time of booking of the flat he was residing with his mother in House No.3271, Sector 24-D, Chandigarh, which Government accommodation had been allotted to her. She retired on 31.10.2007 and after the vacation of that accommodation, they were to shift to this flat but they could not do so on account of the above said reasons and her mother had to pay penal rent for the occupation of that Government accommodation. That rent/penal rent for the said period comes to Rs.34,704/-. No doubt, the possession was given to him on the above said date but as the same was in dilapidated condition and the basic amenities were made available only in the month of January 2009, so the de facto possession of the flat is said to have been given to him only at that time. On account of the non-giving of the possession of the flat, he had to pay huge amount of Rs.4,01,686/-, on account of interest, to opposite party First Appeal No.1319 of 2009. 6 No.2. Similarly situated allottee; namely, Rashmi Mittal has already been awarded compensation by the District Forum, Chandigarh, vide order dated 4.12.2008. On the basis of all these facts, he prayed for the issuance of following directions to opposite party No.1:-
i) to pay Rs.4,01,686/-, which he had to pay as interest on the loan taken from opposite party No.1 on account of the delay of 19 months in giving possession of the flat;
ii) to pay Rs.82,205/- on account of the instalments on the principal amount of loan taken from opposite party No.2, which was on account of the said delay in delivering the possession;
iii) to pay Rs.34,704/- as the rent/penal rent, which her mother paid on account of the non-vacation of the Government accommodation, which was on account of non-delivery of the possession of the flat;
iv) to pay Rs.4,00,000/- on account of the material difference in price of flat as the similar flats were sold to other persons at the rate of Rs.27,50,000/-;
v) to pay Rs.3,00,000/- on account of deficiency in service;
vi) to pay Rs.4,00,000/- on account of the causing of harassment, mental agony and playing unfair trade practice by exaggerated claims and standards of the housing project;
vii) to pay Rs.14,000/- on account of R.O. water system; First Appeal No.1319 of 2009. 7
viii) to pay Rs.13,300/-on account of the purchase of inverter by him;
ix) to pay exemplary costs.
3. In the written reply submitted by opposite party No.1, it admitted that the advertisements for the flats in the housing project were issued by it, in pursuance of which the complainant got the flat in question booked and paid price thereof in instalments after taking loan from opposite party No.2 and that a tripartite agreement was entered into between all of them. It also admitted the issuance of letter of allotment in favour of the complainant, execution of the agreement and the execution of the sale deed in his favour and the delivery of the possession of the flat on the date mentioned in the complaint. While denying the other averments made in the complaint, it pleaded that there was no promise either oral or in writing made by it for handing over the possession of the flat on or before June, 2007 nor the same was possible as the construction could not be completed and it was not possible to obtain all statutory sanctions in such a short period of time.
As per clause 5 of the agreement, only an endeavour was to be made to complete the building and handover the possession of the flat to the complainant at the earliest possible date subject to the conditions mentioned in that clause. It was also stipulated in that clause that no claim by way of penalty or compensation was to be made by the buyer in case of delay in handing over the possession on account of the reasons mentioned therein. The best possible construction material has First Appeal No.1319 of 2009. 8 been used including steel from Tata and SAIL, cement from J.K. Laxmi, sanitary fittings from Jaquar, tiles from Orient and Kajaria, electrical modular fittings from Schenider, power back-up generator set from Sudhir and Cummins etc. Every flat has been given a power back-up of 1 K.W. and the security round the clock is with CCTV surveillance, metal detectors and panic alarms. Beautifully land scaped parks have been set-up and there is supply of pre-treated water to all the flats. There are other facilities also such as sewerage treatment plant, earmarked parking etc. The electricity connection was obtained from Punjab State Electricity Board in November 2008 and before that there was temporary connection, which was provided to the apartment holder free of cost. As per the terms and conditions of the allotment letter and the agreement, the complainant himself was required to apply for electric connection and he delayed the matter as he was enjoying free electricity. There was no delay in handing over the possession of the flat. As per the settled law, such like projects take a minimum of about three years for completion as external development of the land is also to be undertaken in coordination with the various external agencies, including Government authorities, over which the builder has no control. The work on the project was started in February/March 2006 and the flats were completed by using the best possible material in January/February 2008. The possession could not be handed over immediately after the completion as consent to operate from the Punjab Pollution Board as well as provision of First Appeal No.1319 of 2009. 9 electric connection by PSEB took almost six months, despite all the formalities have been completed way back. The moment the electricity connection was provided by the PSEB, the formalities of handing over possession to the allottees started in October 2008. The best quality elevators have been provided to the flat holders. Keeping in view the power failure, Kone elevators have been installed, which are unique with exclusive safety features and rescue device. In case of power failure, the rescue device moves elevator to the floor and opens the door automatically without any human intervention. It's staff never allowed flat holders to wash the cars in the Society. Cylindrical locks have been provided in the washrooms, which can be locked from inside as well as from outside. The building has been constructed in appropriate design keeping in view all the aspects. The complainant had given his consent to all the designs etc. by executing the agreement containing that clause. All the amenities, as promised, have already been provided and there is no such deficiency on its part. Fresh and clean water is being provided to all flat holders. Report in respect of the samples of that water was obtained from AES Laboratory Pvt. Ltd., which is a recognized laboratory and no fault was found with those samples. Space has been provided in every flat for installation of RO and it can be installed at the cost of the flat holder. Neither it promised to install any such RO nor it was its duty to do the same. It was at the time of pre-launch of the project and by way of normal trade practice that a discount price was offered, which First Appeal No.1319 of 2009. 10 was approximately Rs.27,50,000/- to Rs.30,00,000/-, depending upon the flat/location of the flat, for a limited period of time. The people who availed of that offer got the flats at that price and all other flats were booked at the normal prevailing price starting from Rs.35,50,000/-. The complainant purchased the flat for that amount with open eyes and that issue cannot be raised by way of this complaint. It prayed for the dismissal of the complaint with costs.
4. Both the sides produced their evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, dismissed the complaint, vide aforesaid order.
5. We have heard learned counsel for both the sides and have carefully gone through the records of the case.
6. Before starting the arguments, it was submitted by the learned counsel for the complainant that the complainant is confining his grievance only to the extent that there was delay in handing over the possession of the flat, which amounted to deficiency in service on the part of opposite party No.1 and from the evidence produced on the record, it stands proved that there was such a delay. The District Forum committed an illegality while misinterpreting the judgment rendered by the Hon'ble Supreme Court in "BANGALORE DEVELOPMENT AUTHORITY v. SYNDICATE BANK" [(2007) 6 Supreme Court Cases 711]. The general principles as laid down in that judgment were to be applied. As there was breach of the First Appeal No.1319 of 2009. 11 commitment regarding the delivery of possession on a particular day, so opposite party No.1 was to be directed to pay suitable compensation for that deficiency in service. The District Forum was required to give harmonious construction to the allotment letter, the agreement and the tripartite agreement, which were proved on the record as Ex.C2, Ex.C3 and Ex.C6, respectively. Contra Proferentem is a Rule of contractual interpretation, which provides that an ambiguous term will be construed against the party that imposed its inclusion in the contract and or more accurately against the interests of the party who imposed it. If harmonious construction is given to all the above said documents, it becomes clear that opposite party No.1 promised to deliver the possession of the flat within 18 months of the issuance of the letter of allotment itself. That letter of allotment is dated 2.1.2006 and, as such, the possession was to be delivered in the month of June 2007 whereas, in fact, it was given in August 2008. The time was essence of the contract and the breach on the part of opposite party No.1 amounts to deficiency in service. On account of that delay, the mother of the complainant had to pay penal rent in respect of the Government accommodation, which she was required to vacate after her retirement, the complainant had to pay the interest on the borrowed amount and was deprived of the use of the flat for all this period. For this deficiency in service, the complainant was entitled to compensation under Section 14 of the Act. The District Forum invoked the principle contained in para no.10(b) of the judgment; First Appeal No.1319 of 2009. 12 which was not applicable to the facts of the present case. Had it applied the correct principle as laid down in para no.10 (j) the position would have been different. He prayed that the appeal be accepted, the order of the District Forum be set aside and after the acceptance of the complaint, the directions as contained in para no.21(i) to (iii) and (v) of the complaint be issued.
7. On the other hand, it was submitted by learned counsel for opposite party No.1 that the District Forum after properly scrutinizing the evidence produced by the parties correctly applied the principles as contained in para no.10(b) of the judgment. There was no stipulation in the allotment letter Ex.C-2, agreement Ex.C-3 or in tripartite agreement Ex.C-6 that the possession of the flat was to be delivered within 18 months of the date of the allotment letter. A perusal of all these documents makes it very much clear that the time was not the essence of the contract and there was no stipulation regarding the time within which the possession of the flat was to be given. Once the complainant accepted the belated performance in the terms of the contract, there is no question of any breach for payment of damages under the general low governing the contracts. It was clearly provided in clause 5 of the agreement to sell that an endeavour was to be made by opposite party No.1 to complete the building and handover the possession of the flat to the complainant at the earliest possible date subject to the conditions mentioned therein. From the evidence produced on the record, it is very much clear that the building was First Appeal No.1319 of 2009. 13 completed in shortest possible time. As per the judgment of the Supreme Court, such like housing projects take at least three years to complete the building but opposite party No.1 was able to complete the same and to deliver possession of the flat to the complainant within two years. Therefore, it cannot be held that there was any deficiency in service on the part of opposite party No.1 entitling the complainant to any such compensation as claimed in the complaint. The complaint was correctly dismissed by the District Forum by giving detailed reasoning and there is no ground to differ with the same.
8. As per clause 10 of the allotment letter Ex.C-2, the possession of the flat was to be handed over on receipt of the total sale price and the documents mentioned in clause 5 thereof. As per the schedule of payment, which forms part of this allotment letter, out of the total amount of Rs.31,50,000/-, the sum of Rs.1,00,000/- was payable with the application and the 15% (less amount paid with the application) was to be paid on allotment. The balance price was payable in 7 instalments, which were spread over a period of 18 months. Similarly as per clause 7 of the Agreement Ex.C-3, the possession was to be delivered only after all the payments have been made by the complainant. The same schedule, which was the part of the allotment letter, was also made the part of this agreement. It is the admitted case of the parties that for payment of the price of the flat, the complainant raised a loan from opposite party No.2 and at that time a tripartite agreement was executed between all of them on 6.1.2006. First Appeal No.1319 of 2009. 14 As per this agreement, the complainant authorized opposite party No.2 to make disbursement of the sanctioned loan to opposite party No.1. Learned counsel for the complainant tried to draw an inference from 5th para of the first page of this agreement, which is reproduced below, that the possession of the flat was to be delivered between 18 months as the payment of the price was to be made within that period:-
"AND WHEREAS under the terms and conditions of the above allotment letter, the Borrower has to make the payment of Rs.31,50,000/- in 8 instalments spread over a period of 18 months out of which the Borrower has already made a payment of Rs.1,00,000/- to the Developer against the allotment of the said flat."
9. No such inference can be drawn from that para. It was only a reproduction of as to what were the terms and conditions of the allotment letter. It was not something to which opposite party No.2 also agreed. We are unable to endorse the view of the learned counsel for the complainant that the harmonious construction of these three documents lead to the conclusion that the possession of the flat was to be given within 18 months of the date of the allotment letter itself. It was the price of the flat, which was to be paid during that period.
10. Clause No.5 of the Agreement to Sell Ex.C-3 is very important clause for deciding this question and the same is reproduced below:- First Appeal No.1319 of 2009. 15
"5. COMPLETION OF BUILDING The PROMOTERS shall endeavour to complete the building and hand over the possession of the flat to the buyer at the earliest possible date, subject to payment by all flat buyers in time, availability of cement, steel or other building materials, supply and installation of lifts electric sub-station, electric and or power, water and sewer connections, issuance of occupation/completion certificate by the competent local authority and subject also to force majeure including any act of God, such as earthquake, floods or any other natural calamity, and/or civil commotion, war, restriction by Government/Notified Area Committee or any other cause whatsoever beyond the control of the PROMOTERS. No claim by way of penalty or compensation shall be made by the buyer or be payable by the PROMOTERS in case of delay in handing over possession on account of aforesaid reasons or any other reason beyond the control of the PROMOTERS. In case the building does not get completed or the flat to be acquired by the buyer is not constructed, amount received by the First Appeal No.1319 of 2009. 16 PROMOTERS shall be refunded to the buyer with simple saving banks interest rate. No other claim shall be made by the buyer or entertained by the PROMOTERS."
A perusal of this clause makes it clear that there was no time limit for handing over the possession of the flat though the same was to be delivered at the earliest possible date but subject to the conditions contained therein. From our above discussion, we conclude that no time was stipulated for the delivery of possession of the flat to the complainant.
11. While dealing with the similar point, the Hon'ble Supreme Court in Bangalore Development Authority's case (supra) laid down the principles, which were to govern the proceedings before the District Foras under the Act. Those principles were detailed in para no.10 of the judgment. It was only in case the possession of the flat had not been delivered to the complainant within the stipulated time or within a reasonable time that he was entitled to the compensation. However, the principle contained in sub para (b), which is applicable to the facts of the present case and the same is reproduced below:-
"(b) Where no time is stipulated for performance of the contract (that is for delivery), or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated First Appeal No.1319 of 2009. 17 performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts.
However, if some statue steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statute."
12. It is not the case of the complainant that at the time of accepting the possession of the flat he reserved his right to claim the compensation. There was no period stipulated for the delivery of possession and the complainant did not issue any notice making time the essence by fixing a reasonable time for performance and he accepted the belated performance of the contract without reserving his right to claim damages. Therefore, there was no question of any breach or payment of damages under the general law governing the contracts. The principle as contained in sub para (j) of para 10 is not applicable in the present case as there was no assurance or commitment given by opposite party No.1 in regard to the date of delivery of the possession. Moreover, there was justifiable reason, as per the evidence produced on the record by opposite party No.1, for delay in the delivery of possession. It is a matter of common knowledge that such like housing projects take some time to complete the construction and as per the observations made by the Hon'ble Supreme Court such period can be taken as three years. However, in the present case, the housing project was completed by opposite party First Appeal No.1319 of 2009. 18 No.1 in two years and the possession was delivered to the complainant.
13. In view of our above discussion, we come to the conclusion that there is no illegality or infirmity in the order passed by the District Forum. We uphold that order and dismiss this appeal, which is without any merit. However, no order is made as to costs.
14. The sum of Rs.5,000/- deposited at the time of filing of the appeal along with interest which has accrued thereon, if any, shall be remitted by the registry to opposite party No.1-M/s Orbit Apartments Construction Private Ltd. by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the District Forum and the appellant/complainant.
15. The arguments in this case were heard on 6.9.2013 and the order was reserved. Now, the order be communicated to the parties.
16. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER (MRS. SURINDER PAL KAUR) September 06 , 2013 MEMBER Bansal First Appeal No.1319 of 2009. 19