National Consumer Disputes Redressal
Shefali Syal & Anr. vs M/S. Ireo Grace Realtech Pvt. Ltd. on 20 December, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 793 OF 2018 1. SHEFALI SYAL & ANR. W/O MR. RAJIV SYAL
R/O C-102, ANAND NIKETAN, NEW DELHI-110021 2. MR. RAJIV SYAL S/O LATE MR.K.K. SYAL,
R/O C-102, ANAND NIKETAN, NEW DELHI-110021 ...........Complainant(s) Versus 1. M/S. IREO GRACE REALTECH PVT. LTD. 304, KANCHAN HOUSE,
KARAMPURA COMMERCIAL COMPLEX, NEW DELHI-110015 DELHI 2. . . ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER
For the Complainant : For the Complainants : Mr. Amarjeet Kumar, Advocate For the Opp.Party : For the Opposite Party : Mr. Rajiv Sikri, Sr. Advocate
Mr. Sameer Chaudhary, Advocate
Ms. Nandini Nagar, Advocate
Ms. Ruchi Kumar, Legal Manager
Dated : 20 Dec 2021 ORDER
1. The present Consumer Complaint has been filed under Section 12 read with Sections 21 and 22 of the Consumer Protection Act, 1986 (for short "the Act") by the Complainants, against the Opposite Party, M/s. Ireo Grace Realtech Private Ltd. (hereinafter referred to as the 'Developer') seeking refund of the amount deposited by them with the Developer as they have failed to hand-over the possession of the Flat booked by the Complainants in the Project launched by the Developer in the name and style of "Ireo-The Corridors", within the stipulated period.
2. According to the Complainants, the facts of the case are that in response to the Applications invited by the Developer for allotment of Flats in their upcoming Project, "Ireo-The Corridors" (hereinafter referred to as the 'Project') located at Golf Course Extension Road, Sector-67-A, Tehsil & District Gurgaon, Haryana, the Complainants booked a Residential Flat in the "Project" via Application dated 08.03.2013 by paying booking amount of ₹10,00,000/- (Rupees Ten Lacs Only). Pursuant thereto, via Allotment Letter dated 07.08.2013, the Complainants were allotted Unit No. CD-A2-10-1004 in the tenth Floor of Tower A-2 of the Project having Super Area of 1868.82 sq. ft. Complainants have made the requisite payments towards the first and second installment being ₹5,00,000/- (Rupees Five Lacs Only) and ₹21,21,946/- (Rupees Twenty One Lacs Twenty One Thousand Nine Hundred and Forty Six Only) on 08.03.2013 and 06.05.2013 respectively. However, despite making several enquiries, the Apartment Buyer's Agreement (hereinafter referred to as the "Agreement") was not sent for execution. Distressed, the Complainants visited the construction site in April 2016, only to realize that even excavation work had not been commenced for which the huge amount was collected from the Complainant. Consequently, the Complainants aggrieved by such inactions on the part of the Developer, sought refund of the amounts paid by them but to no avail.
3. On 26.07.2017, the Complainants received demand letter for payment of third installment along with a copy of "Agreement" for execution and on 23.08.2017, the Complainants received reminder for the payment of the third installment. It is averred that such demands of the Developer were illegal and unlawful and that the Developer have been deceiving the common public from its inception by making false promises. Hence, the Complainants serving a Legal Notice dated 25.11.2017 upon the Developer, sought refund of the monies paid, along with interest. Contrarily, the Developer did not accede to the request of the Complainants and by Reply letter dated 14.12.2017, they informed to the Complainants that they will charge 20% interest p.a. for delayed payments of the third installment. It is the contention of the Complainants that the Developer unlawfully induced large sums of money from the general public even when the Project did not have the requisite approvals and had legal disputes with the Owners of the land. Pertinently, as per Clause 43 of the Application for Booking of Residential Apartment (hereinafter referred to as "Application Form") the possession of the Unit was to be handed over within a period of 42 months from the date of approval of the Building Plans. Clause 43 of the Application Form reads as under:-
"Subject to Force Majeure, as defined herein and further subject to the Applicant having complied with all its obligations under the terms and conditions of this Agreement and the Applicant not having defaulted under any provision(s) of this Agreement including but not limited to the timely payment of total Sale Consideration, stamp duty and other charges and also subject to the Applicant 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 Applicant within a period of 42 (Forty Two) months from the date of approval of the Building Plans and/or fulfillment of the pre-conditions imposed thereunder ("Commitment period"). The Applicant further agrees and understands that the Company shall additionally be entitled to a period of 180 (6 months) days ("Grace period"), after the expiry of the said Commitment Period to allow for unforeseen delays beyond the reasonable control of the Company. Subject to the condition contained herein, if the Company fails to offer possession of the said Apartment to the Applicant by the end of the Grace Period, it shall be liable to pay to the Applicant compensation calculated at the rate of Rs. 7.5/- (Rupees Seven and Firty Paisa Only) per sq. ft. of Super Area ("Delay Compensation") for every month of delay thereafter until the actual date fixed by the Company for offering the possession of the said Apartment to the Applicant. The Applicant shall be entitled to payment/adjustment against such 'Delay Compensation' only at the time of 'Notice of Possession' or at the time of payment of the final installment, whichever is earlier."
4. Factually, the Complainants have paid ₹36,21,946/- (Rupees Thirty Six Lacs Twenty One Thousand Nine Hundred and Forty Six Only) in toto on different dates upto 06.05.2013 out of the total sale consideration of the Unit being ₹1,87,10,035.78 (Rupees One Crore Eighty Seven Lacs Ten Thousand and Thirty Five Only). The Complainants have made payments to the Developer as per its demands, despite that the Developer could not complete the Construction work at the Project within the stipulated period and failed to deliver the possession of the Unit allotted to the Complainants. The Complainants having lost trust in the Developer and alleging deficiency in service and Unfair Trade Practice on the part of the Developer, have filed the present Complaint with the following prayer:-
"a. Direct the Opposite Parties to refund the amount of Rs.36,21,946/- payment made with regard to the Plot, along with interest @18% interest per annum from 06.05.2013 till the actual date of refund of the said amount;
b. Direct the Opposite Parties to pay a sum of ₹ 10 Lakhs to the Complainant as compensation for gross deficiency in service, unfair trade practices, mental agony and trauma suffered by the Complainant;
c. Direct the Opposite Parties to pay the cost of this litigation to the Complainant; and
d. Pass any other order(s) which this Hon'ble Commission deems fit in the interest of justice."
5. Notice, in terms of Section 13(1) of the Act, was issued to the Developer via Order dated 13.04.2018. However, since the Written Version was not filed by them within the time as prescribed under the Act, their right to file Written Version was forfeited vide Order dated 05.10.2018.
6. We have heard Mr. Amarjeet Kumar, learned Counsel appearing on behalf of the Complainants, Mr. Ravi Sikri, learned Senior Counsel appearing on behalf of the Developer and have given a thoughtful consideration to the arguments advanced by them.
7. Learned Counsel for the Complainants submitted that as per the Clause 43 of the Application Form, the construction of the Project was to be completed and possession of the booked Flat was to be given within a period of 42 months from the date of approval of the Building Plans. The approval of the Building Plan was obtained by the Developer on 23.07.2013 and a such the possession of the Flat was to be handed over latest by 22.07.2017 including the grace period of 180 days. However, till date the construction of the Project is not complete and the Developer is not in a position to give the exact date of handing over the possession of the booked Flat, complete in all respect. The Complainants have no faith in the Developers and they wants refund of the amount deposited by the them with interest and compensation.
08. As against this, learned Senior Counsel appearing for the Developer rigorously urged that the possession of the booked Apartment was to be offered within 42 months from the date of Building Plan approval and/or fulfilment of pre-conditions imposed thereunder. The Building Plan for the Project was approved on 23.07.2013 with certain conditions imposed directing the Licensee to seek approvals from various authorities and last of such approval from the Fire Safety Scheme was received on 27.11.2014. The Commitment Period as per the agreed terms of the Booking Application Form is to be calculated from 27.11.2014. The construction of the Project is on full swing and possession is proposed to be delivered very soon. The delay, if any, in completion of the Project was due to force majeure conditions which were beyond the control of the Developer.
09. The question of delay in completion of the Project "Ireo-The Corridor" to be developed by the Developer, has already been dealt with in detail by this Commission in various cases, i.e., Consumer Complaint 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." and CC No.696 / 2017 entitled "Amit Arora vs. Ireo Grace Realtech Pvt. Ltd."
10. The Opposite Party Developer challenged the Orders passed by this Commission in these cases by way of filing Civil Appeals before the Hon'ble Supreme Court.
11. The Hon'ble Supreme Court dealt with all the contentions raised by the Opposite Party Developer with regard to delay in completion of Project "Ireo-The Corridor" 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." [Civil Appeal No. 5785/2019 & other connected Appeals]. The Hon'ble Supreme 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."
12. 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"
13. 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 categorized 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."
14. In the present case, the Complainants were allotted Unit No. CD-A2-10-1004 which falls in Phase 2, A-2 Tower of the Project. As observed by the Hon'ble Supreme Court of India in afore-extracted Abhishek Khanna's case (supra), Occupation Certificate has not been granted so far to the Developer. Therefore, the Complainants are entitled to refund of the deposited amount along with interest @9% p.a. as awarded by the Apex Court in the said case.
15. Respectfully following the ratio of the Judgment of the Hon'ble Supreme Court in the case of "Abhishek Khanna's case (supra)", the Developer is directed to refund ₹36,21,946/- (Rupees Thirty Six Lacs Twenty One Thousand Nine Hundred and Forty Six Only), along with interest @9% S.I. p.a. within 3 months 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 Developer shall not deduct the Earnest Money of 20% from the Principal Amount, or any other amount as mentioned in Clause 43 of the Application Form, on account of the various defaults committed by the Developer, including the delay of over 7 months in obtaining the Fire NOC.
16. The Consumer Complaint is allowed in above terms, with no order as to Costs.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER