National Consumer Disputes Redressal
Harsh Malhotra & Anr. vs Housing Development And ... on 3 July, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 3188 OF 2017 1. HARSH MALHOTRA & ANR. RESIDENTING AT B-183,KALPATARU SPARKLE,MIG GR II CHS,N.DHARMADHIKARI ROAD,GANDHI NAGAR BANDRA MUMBAI ...........Complainant(s) Versus 1. HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED THROUGH ITS MANAING DIRECTOR,
9-01,HDIL TOWERS,
ANANT KANEKAR MARG,
BANDRA,(EAST) MUMBAI-400051 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Complainant : Mr. Vidur Bhatia, Advocate For the Opp.Party : NEMO
Dated : 03 Jul 2019 ORDER
JUSTICE V.K.JAIN (ORAL)
The complainants booked a residential flat with the OP in a building namely 'Metropolis' which the OP was construct in C.T.S. No. 866/B, Village Ambivali, Andheri (West), Mumbai. Flat No. 2202 on 22nd Floor in B Wing of the said building and having saleable area of 96.65 sq.mtrs. was allotted to them for a consideration of Rs.1,26,24,030/- exclusive of maintenance deposits, parking charges etc. The terms of the transaction executed between the parties were incorporated in the Agreement for Sale dated 10.06.2009. Clause 6 of the agreement which referred to delivery of the possession of the premises, reads as under:-
"6. The possession of the said premises, subject however to the fact that the construction of the building is not delayed on account of non-availability of steel, cement and other building material, water or electricity supply or due to acts of God, Civil Commotion, Riot, War or any notice, order, rule, notification of the Government and/or any other Public Body and/or Building completion Certificate by M.C.G.M. and/or planning Authority and for other circumstances beyond the control of the Developer, is expected to be handed over by the Developer to the Purchaser/s by 30th Day of December 2013 provided the developer has received the full purchase price of the said premises and the other amounts payable by the Purchaser/s. The Developer agrees that if, for the reasons beyond their control, they are unable to give possession of the said premises by the date stipulated hereinabove, they shall be liable, on demand by the Purchaser/s, be liable to refund to the Purchaser/s the amounts already received by them in respect of the said premises without any interest. It is agreed that upon refund of the said amount, as stated hereinabove, the Purchaser's shall have no right, title, interest, claim or demand of any nature whatsoever either against the Developer or against the said premises or against the said property in any manner whatsoever and the Developer shall be entitled to deal with and dispose off the said premises to any person or persons as the Developer, may at their absolute discretion desire."
2. The primary grievance of the complainants is that the possession of the allotted flat has not been offered to them despite they having already paid Rs.12623996/- to the OP. The complainants are also disputing the demand of maintenance charges by the OP besides seeking refund of the amount of Rs.431961/- collected towards VAT and Rs.163914/- towards interest on the VAT. This is also the case of the complainants that the OP constructed a building consisting of 31 storeys as against the proposed building of 27 storeys at the time the agreement was executed between the parties. The complainants are, therefore, before this Commission with the following prayers:-
Direct the Respondent to remove physical deficiencies and regularise the FSI violation and obtain the Occupation Certificate for Metropolis building and thereafter grant the Complainants possession of the Flat No B-2202 in Metropolis Building
Restrain the Respondent from demanding payment or deposit of any maintenance charges since this falls within the domain of the Metropolis Co-operative Housing Society incorporated in June 2017;
Award compensation in an amount of Rs.78,01,606 by way of interest at 12% per annum for the delay in granting possession of the Flat from 31 December 2011 until 30 September 2017 and further interest for the period from 1 October 2017 until possession is handed over to the Complainants;
Award compensation in an amount of Rs.32,72,670 being the Complainants' proportionate share in the value of 58 flats realised and 6 flats to be realised by the Respondent from sale of flats constructed on 28 to 31 floors without the Complainants' prior consent and proportionate interest thereon at 12% per annum amounting to Rs.9,90,905 until 30 September 2017 and further interest until the date of payment;
Direct refund of Rs.4,31,961 towards VAT and Rs.1,63,914 towards interest of VAT illegally collected from the Complainants together with interest at 12% from 31 October 2012 until 30 September 2017 amounting to Rs.2,55,200 on the VAT amount and Rs.96,839 on the interest on VAT amount and further interest until the date of payment;
Award compensation in an amount of Rs.5,00,000 for mental harassment suffered by the Complainants for the gross delay of six years in project completion, illegal charges imposed and illegal construction undertaken by the Respondent;
Award costs of Rs.1,00,000 for pursuing the present proceedings;"
3. The OP did not file its written version despite service and, therefore, its right to file the sale written version was closed vide order dated 20.4.2018.
4. I have heard the learned counsel for the complainants and have considered the affidavit and the documents filed by them. No one is present for the OP when the matter is called.
5. The learned counsel for the complainants has submitted that some of the issues arising for consideration in this complaint are covered by the decision of this Commission dated 8.10.2018 passed in Consumer Complaint No.1501 of 2017 - Firoza Pradeep Kumar Roy & Anr. Vs. Housing Development and Infrastructure Ltd. which pertained to an allotment made in this very project of the OP. The decision of this Commission in Firoza Pradeep Kumar Roy (Supra), to the extent it is relevant, reads as under:-
"3. The complaint has been resisted by the OP which has admitted the allotment made to the complainants, agreement executed with them as well as the payment made by them. It is alleged that because of a notification dated 25.10.2010, issued by the State Government, there was scarcity of sand for construction activity from October 2010 to almost a year and hence, the construction activities in Mumbai City were stopped and the OP could not complete the construction and could not deliver possession within the stipulated time. It is also alleged in the written version that the construction of the building was completed in the year 2015 and the OP has already applied for part Occupancy Certificate on 09.11.2015. It is also alleged that the complainants are responsible for not paying the balance amount. It is alleged that since the complainants failed to pay the balance amount due on their part, the termination notice was issued to them and they are liable to pay 21% interest on the payment delayed by her. A reference is made to clause 8 & 9 of the agreement to claim default on the part of the complainants. It is further alleged that the complainants are also liable to pay the amount spent by the OP on extra maintenance/facilities provided for the flat. A demand of Rs.30 lacs is alleged to have been raised for the additional facilities/fixtures such as premium quality of tiles, Gypsum Plaster, Mahanagar Gas Pipeline and water proofing particularly in bathroom and for outside railing with glass which, according to the OP, the buyer has to bear. It is also alleged that the OP had agreed to sell the flat and not the car parking.
4. The first question which arises for consideration in this case is as to whether the complainants have defaulted in making payment to the OP. Clause 8 & 9 of the agreement on which reliance is placed by the OP read as under:
8. A) The Purchaser/s shall at the time of delivery of the possession of the said premises pay to the developer the following amounts:
Rs.91,410/- Towards Deposit for Municipal Tax, Water Bill, Common Electric Bill, Maintenance Charges and other Society Expenses.
B) The aforesaid amount (in Sub Clause 8(A) after deduction therefrom arrears of taxes and maintenance expenses incurred will be transferred by the developer to the society as and when such Co-operative or Limited Company or Condominium of Apartment is formed and after the said property is finally transferred to such Co-operative Society or Limited Company Condominium of Apartment as the case may be. If, however such Organisation is not formed, the said amounts will be retained by the Developer and the same will not be refunded to the Purchaser/s.
9. It is agreed between the Developer and the Purchaser/s that, commencing a week after the notice in writing is made by the Developer for the Purchaser/s that the premises is ready for use and occupation, the Purchaser/s shall be liable to take possession of the said premises and pay the proportionate share (i.e. in proportion to the floor area of the said premises) of all outgoing in respect of the said property, the proposed building including local taxes and cesses, rates all other levies by the local authority, government, water charges, insurance charges, common lights, repairs, salaries of clerks, Bill Collector's charges, Chowkidar and Sweeper charges, maintenance charges and all other expenses necessary and incidental to the administration, management and maintenance of the said property and the said building and until the said property and the said building is transferred to the said organization (the term "Said Organisation"" wherever used in this agreement shall mean and include a Co-operative Housing Society, Limited Company or Condominium of Apartment as the case may be), the Purchaser/s shall continue to pay to the Developer the proportionate share of outgoing as may be determined by the developer. The purchaser/s further agrees that till the purchaser/s share is so determined by the purchaser/s shall pay to the developer the provisional monthly contribution of Rs.15,235/- per month towards such outgoings and taxes. The amount so paid by the purchaser/s to the Developer shall, subject however to the provisions of Section 6 of MOFA Act, without any interest, remain with the developer till a Document of Transfer, as provided herein, is executed in favour of the Said Oganisation. On such Document of Transfer being executed, the aforesaid deposits (less deductions provided for in this Agreement) shall as provided in Clause 8(B) be paid over by the Developer to the said Organization. The purchaser/s undertakes to pay such provisional monthly contribution and charges regularly on the 5th day of each and every month in advance and shall not withhold the same for any reason whatsoever.
5. It is evident from a bare perusal of clause 8 extracted hereinabove that an amount of Rs.91,410/- towards Municipal taxes etc. payable at the time of delivery of possession. The possession having not even been offered to the complainants and the same cannot otherwise be offered without obtaining the requisite Occupancy Certificate, the complainants cannot be said to be defaulters in payment of the said amount. The OP shall be entitled to the aforesaid amount only when possession is offered after obtaining the requisite Occupancy Certificate.
7. As far as the demand of Rs.30 lacs for additional facilities/fixtures such as premium quality of tiles, Gypsum Plaster, Mahanagar Gas Pipeline and water proofing particularly in bathroom and for outside railing with glass is concerned, there is no agreement between the parties for the payment of the said amount or even for payment of the said additional facilities/fixtures by the flat buyers. This is not the case of the OP that it was on the request of the complainants that the said additional facilities/fixtures were provided in the flat. Therefore, the OP, in my view, is not entitled to the aforesaid amount of Rs.30 lacs.
9. As far as the delay in completion of the construction is concerned, reliance upon the notification dated 25.10.2010 is wholly misplaced in the facts of this case since the agreement between the parties itself came to be executed much much later on 07.11.2013. Despite the aforesaid notification, which had been issued on 25.10.2010 more than three years of the execution of the agreement and the alleged scarcity of sand for one year, the OP agreed to deliver possession of the flat to the complainants by 30.12.2013. Therefore, no benefit on account of the aforesaid notification is available to the OP in the facts and circumstances of this case.
11. For the reasons stated hereinabove, I hold that the OP is liable to deliver possession of the flat allotted to the complainants after obtaining the requisite Occupancy Certificate without raising any additional demand upon them. The complainants are also entitled to compensation for the period the possession is delayed. No evidence has been led by the parties to prove the actual loss sustained by the complainants on account of the said delay. Therefore, it would be appropriate to grant compensation based upon the FDR rates of interest."
6. As far as the demand towards maintenance charges is concerned, the learned counsel for the complainants has drawn my attention to Clause 8A of the Agreement, which reads as under:-
"The Purchaser/s shall at the time of delivery of the possession of the Said Premises pay to the Developer the following amounts:
Rs.100980/- towards Deposit of Municipal Tax, Water Bill, Common Electric bill, Maintenance charges and other Society expenses."
It would thus be seen that only a sum of Rs.100980/- was payable by the complainants to the OP towards municipal tax, water bill, common electric bill, maintenance charges and other society expenses. The OP, therefore, was not entitled to demand a higher amount of Rs.331049/- towards Instalments, VAT, Maintenance Charges, Service Tax on Maintenance Charges, Mahanagar Gas Charges and Service Tax on Mahanagar Gas Charges. The amount demanded towards maintenance charges was Rs.242220/- and the challenge in this complaint is limited to the maintenance charges. Therefore, it is directed that the complainants shall be required to pay only a sum of Rs.100980/- to the OP towards the charges referred in Clause 8A of the agreement.
7. As far as the prayer for refund of the VAT and interest on the amount of VAT collected from the complainants is concerned, it admittedly the VAT came to be imposed vide an amendment carried out in Maharashtra Value Added Tax Act, 2002 w.e.f. 20.6.2006. Since the possession of the flat to the complainants could be delivered by 30.12.2011, the amount of VAT as well as interest on the VAT amount was payable by them the same being a statutory levy and they are not entitled to refund of the said amount.
8. It is submitted by the learned counsel for the complainants that the levy of VAT by way of amendment of Maharashtra Value Added Tax Act, was challenged before the Hon'ble Bombay High Court and the challenge was lost but an appeal against the order of the Hon'ble Bombay High Court is pending before the Hon'ble Supreme Court in which an interim order dated 28.8.2012 has been passed. It is, therefore, directed that in case the levy of VAT is quashed by the Hon'ble Supreme Court and consequently, the OP becomes entitle to seek refund of the amount which it has paid to the government in respect of the flat allotted to the complainants, the OP shall apply for refund of the said amount. If and when it is refunded by the government to the OP, the same shall immediately be refunded to the complainants.
The OP, however, shall furnish proof of having deposited the amount collected towards VAT and interest on the VAT amount to the complainants within six weeks from today.
9. Another prayer made by the complainants is for payment of proportionate share in the value of the additional flats realized/to be realized by the OP by constructing 31 floors instead of 27 floors alongwith interest on that amount. There is no evidence of the complainants having suffered any loss or damage on account of construction of additional floors by the OP. This is also not the case of the complainants that the additional floors were constructed without obtaining the requisite approval from the concerned authorities. Obviously, the infrastructural requirements of the project would also have increased in proportion to the increase in the number of residential flats constructed in the complex. In the absence of any loss or damage to them on account of construction of additional floors, the complainants, in my opinion, are not entitled to a share in the profit, if any, made by the OP by constructing and selling additional flats by adding four storeys above 27 floor of the building. The learned counsel for the complainants submits that additional floors were raised without obtaining the consent of the complainants which was necessary for amending the building plans, in view of the provisions contained in Section 7 of the Maharashtra Ownership Flats Act, 1963. Even if that be so, the complainants, in my opinion, are not entitled to any compensation in the absence of proof of loss or damage to them on account of construction of additional floors with the approval of the competent authority. This is more so, when there is no evidence of the infrastructure having not been increased in proportion to the increase in the dwelling area of the building.
10. For the reasons stated hereinabove, the complaint is disposed of with the following directions:-
(i) The OP shall obtain the requisite Occupancy Certificate/part Occupancy Certificate in respect of the flat allotted to the complainants at its own cost and responsibility and then deliver possession of the flat complete in all respects to them within four months from today.
(ii) The OP shall pay compensation in the form of simple interest @ 8% per annum to the complainants on the entire principal amount of Rs.12623996/- with effect from 31.12.2011 till the date on which the possession in terms of this order is actually offered to them after obtaining the requisite Occupancy Certificate/part Occupancy Certificate.
(iii) The OP shall be entitled to recover only a sum of Rs.100980/- towards maintenance charges and other charges referred in Clause 8A of the agreement dated 10.6.2009.
(iv) If the levy of VAT is quashed by the Hon'ble Supreme Court and the OP becomes entitled to seek refund of the amount deposited by it with the government in respect of the flats allotted to the complainants, it shall apply for refund of the said amount. If and when the said amount is refunded to the OP by the government, it shall refund the same to the complainants without any delay.
(v) The OP shall furnish proof of having deposited the entire amount of VAT and interest on VAT collected by it from the complainants, with the government within six weeks from today.
(vi) The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants.
(vii) The compensation in the form of interest shall be paid at the time of offering possession to the complainants in terms of this order.
......................J V.K. JAIN PRESIDING MEMBER