National Consumer Disputes Redressal
Aditya Laroia vs Parsvnath Developers Ltd. on 11 May, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 263 OF 2015 1. ADITYA LAROIA D-8, GEETANJALI ENCLAVE, 2ND FLOOR NEW DELHI-110 017 ...........Complainant(s) Versus 1. PARSVNATH DEVELOPERS LTD. THROUGH ITS MANAGING DIRECTOR,
REGD. OFFICE -6TH
FLOOR, ARUNACHAL BUILDING, 19 BARAKHAMBA ROAD NEW DELHI-110 011 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE MR. Anup K Thakur, MEMBER
For the Complainant : Mr. Satvik Varma, Advocate
Ms. Neha Gupta, Advocate For the Opp.Party : Ms. Minakshi Jyoti, Advocate
Mr. Rahul Malhotra, Advocate
Dated : 11 May 2016 ORDER
JUSTICE V.K. JAIN (ORAL)
The complainant booked a residential flat in a project namely "Parsvnath Privilege" , which the opposite was to develop in Greater Noida and a Flat Buyer Agreement was executed between the parties on 17.07.2007. The booking was made on 01.05.2006 against payment of Rs.10 Lakhs. As per the terms and conditions agreed between the parties, the possession was to be delivered within 36 months from the date commencement of construction of the particular block in which the flat to be located, on receipt of requisite approvals including sanction plan, environment clearances etc. The grievance of the complainant is that the construction of the flat booked by him is far from complete and when he visited the site he found not a single worker employed at the site and was informed that the builder has stopped the construction work. Being aggrieved from failure of the opposite party to deliver upon its promise the complainant is before this commission seeking the following reliefs:
"
Refund of Rs. 42,37,575.28/- alongwith interest of Rs. 80,74,423/- (at the rate of 24% per annum compounded) in all, totaling to Rs. 1,23,11,998/- alongwith pendentlite and future interest at the rate of 24% per annum compounded till the date of actual realization of the payment.
Grant a sum of Rs. 5,50,000/- towards compensation at the rate of Rs. 5/- per square feet per month on the flat having super area of 1855 square feet, alongwith pendentelite and future compensation at the same rate till the date of actual realization of the amount.
Grant a sum of Rs. 10 lakhs towards mental agony suffered by the complainant.
Grant cost of litigation to the complainant.
2. The complaint has been resisted by the opposite party on several grounds. Primarily, these are the same grounds on which the opposite party had relied in a number of complaints filed against it including C.C. No.232 of 2014, Shri Puneet Malhotra vs. M/s. Parsvnath Developers Ltd. and connected matters decided on 29.01.2014. Two of the complainants in those matters had booked residential flats in this very project namely "Parsvnath Privilege" in Greater Noida. One of them was allotted a flat on 23.02.2007 followed by Buyers Agreement dated 22.09.2008, whereas the other one executed a Flat Buyers Agreement dated 28.05.2007. Since the developer failed to deliver possession of the flats to them, they approached this Commission seeking refund of the amount paid by them along with interest and compensation etc. The aforesaid judgment, to the extent it is relevant for the purpose of deciding this complaint, reads as under:
"4. The complaints have been resisted by the respondent company on the ground that the complainants are seeking refund with exorbitant interest. It is also claimed that since the basic value of the property is much less than Rupees one crore, this Commission lacks pecuniary jurisdiction to entertain the complaints. It is also pointed out in the reply that as per the tripartite agreement executed between the complainants and opposite party and the Banks from which the loan was taken by the complainants, the bank has lien over the refund amount, in the event of cancellation and/or termination of the agreement. As regards the delay in construction, it is claimed that the said delay occurred due to recession in Real Estate Sector. It is also submitted in the reply that in view of the terms of the agreement between the parties, a complainant cannot claim more than the compensation stipulated in the Flat-Buyer Agreement.
6. Vide Clause 10 (a) of the Flat-Buyers Agreement, the opposite party represented to the complainants that the construction of the flat was likely to be completed within thirty-six months from the date of commencement of the construction of the particular block in which the flat was located, on receipt of all requisite approvals but subject to force-majeure and restraints/restrictions from any Court/Authorities, non-availability of building material and any circumstances beyond the control of the Developers, subject to timely payment by the buyer. It is an admitted case that the opposite party failed to complete the construction within the aforesaid time. As far as the statutory approvals are concerned, the same were to be obtained by the opposite party and the complainants cannot be held responsible for any delay in grant of such approvals though, it is not the case of the opposite party that the construction could not be completed for want of aforesaid statutory approvals. The case of the opposite party is that the project could not be completed on account of the recession in the Real Estate market, including reduction in the number of bookings and default on the party of the some of the allottees in making timely payment. The terms of the agreement between the parties do not justify the delay in completion of the project on the aforesaid grounds and therefore, the opposite party was duty bound to complete the construction irrespective of the recession in the market, reduction in bookings and the alleged default on the part of some of the allottees in making timely payment. This is not the case of the opposite party; that the construction could not be completed due to any restriction from any Court/Authority or due to non-availability of building material. If some of the allottees had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating Inventory at a lower price. Therefore, the delay in completion of the projects cannot be justified.
7. Since the opposite party could not compete the projects in which the residential flats were booked by the complainants, either within the agreed time of thirty-six months or even within a reasonable time thereafter, and even today the projects are nowhere near completion, the complainants are entirely justified in seeking refund of the amount, which they had paid to the opposite party. In fact, during the course of hearing, the only contention on behalf of the opposite party was that the complainants are not entitled to interest at the rate claimed by them nor are they entitled to the compensation claimed by them and they can be awarded only the refund of the amount paid by them, along with compensation in terms of Clause-10(c) of the Flat-Buyer Agreement.
8. The Clause on which the reliance is placed by the opposite party, reads as under:
"In case of delay in construction of the Flat beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under Clause 10 (a), the Developer shall pay to the Buyer compensation @ Rs.53.82/- (Rupees Fifty three and paise eighty two only) per sq. meter or @ Rs.5/- (Rupees Five only) per sq. ft. of the super area of the Flat per month for the period of delay. Likewise, if the Buyer fails to settle the final account of the Flat within thirty days from the date of issue of the final call notice, the buyer shall be liable to pay to the Developer holding charges @ Rs.53.82/- (Rupees Fifty three and paise eighty two only) per sq. meter or @ Rs.5/- (Rupees Five only) per sq. ft. of the super area of the Flat per month on expiry of thirty days' notice. Further, in the event of his failure to take possession for any reason whatsoever, the Buyer shall be deemed to have taken possession of the Flat on expiry of thirty days of offer of possession for all intents and purpose under this Clause/Agreement including for liability to payment of maintenance and any other charges, levies in respect of the Flat".
9. In our opinion, the aforesaid Clause applies only in a case where construction of the flat is delayed but despite delay, the buyer accepts possession of the said flat from the seller, and consequently, accounts have to be settled between the parties. At that stage, the buyer would pay the agreed holding charges to the seller, who will pay the agreed compensation on account of delaying the construction of the flat. The aforesaid Clause, in our opinion would not apply to a case where the buyer, on account of the delay on the part of the seller in constructing the flat, is no more interested in the flat subject matter of the agreement and wants to take refund of the amount, which he had paid to the seller. In any case, such a clause, where the seller, in case of default on the part of the buyer, seeks to recover interest from him at the rate of 24% per annum will amount to an unfair trade practice since it gives an unfair advantage to the seller over the buyer. We may note here that the enumeration of the unfair trade practices in Section 2(r) of the Act is inclusive, not exhaustive.
10. The next question which arises for our consideration is as to how much interest the opposite party should pay to the complainants on the amount, which they had deposited with it. Admittedly, as per the agreement between the parties, the complainant was required to pay interest @ 24% per annum in the event of delay on his part in making payment to the opposite party. Logically, if the seller is charging interest from the buyer @ 24% per annum, it should have no hesitation in paying the interest at the same rate to him in the event of its failure to complete the construction of the flat within the time frame agreed between the parties. Moreover, we cannot be oblivious to the fact that had the opposite party not agreed to construct the flat in question within the time stipulated in the Flat-Buyers Agreement, the complainants who were in need of residential accommodation would have looked for alternative accommodation instead of tying their funds with the opposite party. It can hardly be disputed that there has been steep appreciation in the market value of the land and the cost of construction of the residential flats in Greater Noida in the last about 7-8 years and consequently, presently the complainants cannot get a comparable flat either at the same price from which the opposite party agreed to charge from them or even at the aforesaid agreed price plus interest thereon @ 18% per annum. Therefore, payment of interest to the flat buyer in such a case is not only on account of loss of income by way of interest but also on account of loss of the opportunity, which the said buyer had to acquire a residential flat at a particular price. In fact, in another case, CC/144/2011, Subhash Chander Mahajan Vs. Parsvnath Developers Ltd., another Bench of this Commission directed the opposite party to pay interest @ 18% per annum, besides compensation amounting to Rs.7.00 lacs and cost of litigation amounting to Rs.2.00 lacs, in a case where refund was sought from the opposite party Parsvnath Developers Ltd. on account of its failure to complete the construction within the agreed time frame. A Special Leave Petition filed by the opposite party before the Hon'ble Supreme Court vide Diary No.25053/2014 was withdrawn by the said opposite party on 12.09.2014, after arguing the matter for a while.
11. The learned counsel for the opposite party referred to the decision of the Hon'ble Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65. In the aforesaid case, the Hon'ble Supreme Court was primarily concerned with the question as to whether liability of a Development Authority to pay interest arises only if there is any default or omission on the part of that authority, which results in damage or prejudice to the allottee and whether this Commission was justified in grating interest @ 18% per annum in every case, without even going into the facts of the case before it. While holding power and duty to award compensation against such an authority, the Hon'ble Supreme Court held that the compensation at a uniform rate of interest at 18% cannot be awarded in every case and the Consumer Forum must determine that there has been deficiency in service and / or misfeance in public office which has resulted in loss or injury. Holding that the compensation cannot be uniform it was observed that it will have to be less in a case where possession is being directed to be delivered, since the purchaser is being compensated by increase in the value of the property he is getting but in a case where money is being simply returned, the purchaser is suffering a loss in as much as he had deposited the money in the hope of getting a flat / plot and therefore, he has been deprived of the benefit of escalation of the price. The compensation in such cases, therefore, would necessarily have to be higher. Noticing the facts of some of the cases in which interest @ 18% per annum was granted by this Commission, the Hon'ble Court felt that if facts are gross then 18% interest could be given but the Forum must first conclude the facts which justify grant of interest at such a rate. It was also observed in the course of Judgment that if the delay is only of one or two years, the escalation in the cost of construction will not be as much as in a case where the delay is of five years or more. The Hon'ble Supreme Court however, rejected the contention that interest should be awarded only at the current rate of interest in terms of the provision of the Interest Act, 1978. Thus, the Hon'ble Apex Court clearly upheld payment of interest even at the rate of 18% per annum in a case where the facts are gross. As noted earlier, the interest ought to be at a higher rate in a case where the delay is for five years or more.
12. In the case before us, the opposite party is a private builder and not a Development Authority. Had they delayed the payment, the opposite party would have charged interest from the complainants @ 24% per annum. The Development Authorities do not charge interest from its allottees at such a high rate. Moreover, the delay in the aforesaid cases is more than five years and this is not the case of the opposite party that the construction is already complete or is even nearing completion. The opposite party has already taken almost entire sale consideration from the complainants. However, despite making almost entire payment, the complainants have not been able to get the shelters they had sought to acquire and considering the steep increase in the value of land and the cost of construction in last 7-8 years, it is not possible for them to acquire another similar accommodation even after adding the amount of interest @ 18% per annum to the amount they had deposited with the opposite party. Therefore, the facts of these cases are really gross and justify grant of interest @ 18% per annum, inclusive of appreciation in the value of land and increase in the cost of construction in last about 7-8 years.
13. The learned counsel for the opposite party has also referred to decisions of the Hon'ble Supreme Court in State of Rajasthan & Anr. Vs. Ferro Concrete Construction Pvt. Ltd. (2009) 12SCC 1, State of Haryana & Ors. Vs. S.L. Arora & Co. (2010) 3 SCC 690 and Sree Kamatchi Ammam Constructions Vs. The Divisional Railway Manager (Works), Palghat & Ors. (2010) 8 SCC 767. However, in none of these cases, the Court was concerned with grant of interest by a Consumer Forum in a case where refund to the buyer is ordered on account of the abnormal delay on the part of the seller in completing the construction. Therefore, none of these judgments would really apply to the complaints before this Commission.
14. For the reasons stated hereinabove, the complaints are disposed of with a direction to the opposite party to refund the amount which the complainants had deposited with it, along with interest on the said amount @ 18% per annum from the date the deposit was made till the date the refund is made. This comprises 8% per annum on account of appreciation in the land value and increase in the cost of construction and 10% on account of interest. However, considering that compensation is included in grant of interest @ 18% per annum, we do not grant any separate compensation to the complainants over and above interest @ 18% per annum."
3. Since, all the plea taken by the opposite party have already been rejected by this Commission in Puneet Malhotra (Supra) and the complainants had made booking in the same project in which two of the complainants i.e. complainants in C.C. No.233 of 2014 and C. C. No.293 of 2014 had booked the residential flat, he is entitled to identical reliefs, on the principle of parity.
4. The learned counsel for the opposite party submits that they will be in a position to deliver the possession of the flat booked by the complainant to him by end of December 2016. The said offer however is not acceptable to the complainant whose counsel submits that (i) the opposite party having failed to perform its contractual obligation, the complainant is not bound to accept the offer made at such a belated stage, (ii) There is no assurance that the opposite party will be able to deliver possession of the flat complete in all respects by December, 2016 since it has not been able to do so in the last more than 9 years. He has also pointed out that though vide letter dated 10.06.2010 the opposite party had informed the complainant that as per the revised schedule plan they proposed to complete the project by March 2012, they did not adhere even to the revised schedule and in fact, even the dead line vide letter dated 10.06.2010 expired more than six years ago. In these circumstances, the complainant, in our view, is justified in refusing to accept the offer made by the opposite party.
5. For the reasons stated hereinabove, the complaint is disposed of with a direction to the opposite party to refund the entire amount received by it from the complainant along with compensation to him in the form of simple interest @ 18% per annum from the date of each payment till the date on which the said refund along with compensation in the form of interest is paid. The payment in terms of this order shall be made by the opposite party within three months from today failing which the complainant shall be entitled to seek execution of this order in accordance with law.
......................J V.K. JAIN PRESIDING MEMBER ......................J Anup K Thakur MEMBER